Document of The World Bank FOR OFFICLAL USE ONLY Report No. 5379-MAG MADAGASCAR IRRIGATION REHABILITATION PROJECT STAFF APPRAISAL REPORT April 3, 1985 Eastern Africa Projects Central Agriculture Division This document has a restricted distribution and may be used by recipients only - t! perfornance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Document of
The World Bank
FOR OFFICLAL USE ONLY
Report No. 5379-MAG
MADAGASCAR
IRRIGATION REHABILITATION PROJECT
STAFF APPRAISAL REPORT
April 3, 1985
Eastern Africa ProjectsCentral Agriculture Division
This document has a restricted distribution and may be used by recipients only - t! perfornance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS/EQUIVALENCES MONETAIRES*
Currency Unit M Halagasy Francs (FMG)US$1.00 FMG 650 (at first quarter, 1985)FMG 1,000 = US$1.54 (at first quarter, 1985)
AAA Parastatal Construction Company for AgricultureAHVR Aire de Mise en Valeur Rurale (Area for Rural Development)ASO Agricultural Sector OperationBTM Bankin' Ny Tantsaha Mpamokatra
(Rural Development Bank of Madagascar)CCCE Caisse Centrale de Cooperation Economique
(French Development Fund)CFDT Compagnie Francaise de D6vRloppement de Fibres de TextilesCIRVA Circonscription de Vulgarisation Agricole (Group of Fivaisan)COROI Comptoir de Commerce et de Representation de l'0cean Indien
(State Marketing Company)DP DirectiGn de ProgrammationDFP Direction des Finances et du PersonnelDIR Direction de l'Infrastructure Rurale (Irrigation Services)DVA Direction de la Vulgarisation Agricole
(Directorate of Agricultural Extension)EDF European Development Fund, orFED Fonds Europeen de DeveloppementERR Economic Rate of ReturnFAC Fonds d'Aide et de Cooperation (French Government
Agency for-Grant Aid)FAO Food and Agriculture OrganizationFIDA Fonds International pour le Developpement AgricoleFIFAMANOR Dairy and Agricultural Extension Projects (Projet d'Assistance
Norvegienne au D&veloppement de l'Agriculture sur lesHauts-Plateaux)
FNDE Fonds National de D6veloppement Economique (InvestmentBudget)
GOPR Groupement Operational pour la Productivite Rizicole (OperationalGroup for Rice Productivity)
* The kapoaka is a Nestle's milk tin which is commonly used to measurerice in rural areas; there are about 3.5 kapoakas of rice to thekilogram.
FOR OMCLAL USE ONLY
ABBREVIAlIONS (ccat 'd)
ICB InternationaL Competitive BiddingIDA ITternational Development Association
IEAD International Fnd for Agricultural DevelopmentFOFIFA National Center for Applied Research oD Rural Developmnt
(also CEBIRADER)KOBA State Wheat MillLCB Local Competitive BiddingNPAEF M1instare de la Production Animale et des Enux et Fordts
(Ministry of Livestock, Fisheries, and Forests)!PARA NinistAre de La Production Agricole et de la RUforue Agraire
(Minlstry of Agricultural Production and Agrarian Reform)KwP Ministtre des Travaux Publics (Ministry of PubLic Works)ODR Opfwation, de Development Rizicole (Project to Develop Rice
Production0 and N Operatiot and MaintenanceSAMAGOKY SocihtS pour l'Ak &ageuent et la Hise en Valeur de la Vallfie du
Bas-Nangoky (Society for the Development of the Lover MangokyRiver Valley)
T and V Training and Visit Method of ExtensionNEC Water manaemet Comm4ttee
OVERNMONT ADKMIISTRATION
Fokontany . villageFiraisau-pokontanzy group of Fokontany
(or Firaisana) - (former canton)Fivondronaw-pokontany - group of Firaisana
(or Fivondronans) (former sub-prefecture)Faritany group of Fivondronana
(former province)
FISCAL YE
Government of Madagascar January. 1 - December 31SAMANGORY January 1 - December 31
PADDY: RICE CONVERSION
One ton of paddy gives about 670 kg rice. One ton of rice isderived from about 1.5 tons of paddy.
I This document has a restriced distribution and may be used by recipients only in the perfonnhnce of |Lheir of iia duties Its contents may not otherwise be disclosed without World Bank authorization.
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MADAGASCARIRRIGATION REHABILITATION PROJECT
STAFF APPRAISAL REPORTTABLE OF CONTENTS
Page No.
I. *BACKGROUND
A. Project Background ............................ 1B. The Agricultural Sector ...................... IC. Bank Group Operations in Agriculture .......... 5
II. THE IRRIGATION SUBSECTOR
A. Irrigation Practices *......................... 7B. Physical Deterioration of Schemes ............. 8C. Institutional Deterioration of Schemes ........ 9D. Subsector Institutions .**.....**........*. 10E. Medium Schemes: Maintenance, Operation, Finances,
A. Rational for Bank Group Involvement ........... 15B. General Description .*..... ... .... ............ 16C. Detailed Description .* ............. ...... 17
Management Suppor: for MPARACivil Works: Medium SchemesRehabilitation of the Mangoky SchemeParticipation of Co-financiers
D. Project Costs a ....................... 23E. Proposed Financing ....................... . 25F. Procurement and Disbursement Profile .......... 27G. Budgetting, Accounting and Disbursement Procedures 30H. Environmental and Health Impact .................. 32
IV PROJECT IMPLEMENTATION
A. The Sequence of Scheme Rehabilitation ............ 33B. Ad hoc Coordinating Committee ............ r.. *.... 36C. Scheme Finances, Operations and Maintenance .. *... 37D. Organization of Work Planning ................... 38E. Training and Manpower Development 39F. Monitoring, Evaluation and Reports ............... 41
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Page No.
V. ECONOMIC ANALYSIS
A. Benefits and Rates of Return .... ............ 42B. Risks and Sensivity Analysis ................ 44C. Proposed User Charge for 0 and N and Efficiency 45
Ta 4 Sc Rhbelitation - HagkY 56T3ble 5 AU Sdhm RehabiLitation 58Table 6 ILnstitutim alildfrg. MPARA. 59Table 7 Projert Coaenms by Year. Incuding 62Table 8 Suz5y =oim=s by Project Corent 63
F=cmxc Aktalysis
Table 9 Clculation - the Emnac Price of Pady at the FamrGate 64Table 10 Faxm Budgets Per Ha of Irrigaced Paddy Productio 65Table 1 1 Aloptlcin-es. Yields, Benefits and Costs, per Fkanomic 66
Hectire, *r E3dsrIrg aid Future Tecdial PadckgesTable 1.2 E Rate of Petumn Cacul.alons 67Table 13 Saaaoky PRehabitacica, Ecom2ic Cost akd Benefits 68Tahle 14 Samngk:y Projected Average Ha and Yields by Crop ard 69
ProjectDescriptiou: (i) Objectives: The Project would help develop a
systematic approach to rehabilitaciou of 116 existingmedium scale irrigation schemes (142,000 ha under canals)and is the first phase of a long-term program of theirrehabilitation. A key project objective is to develop newinstitutions for self-admiaistration and to assise thefarmers to provide self-financing to ensure adequatefuture maintenance of the schemes rehabilitated. tuaddicion one Large scale irrigatiou scheme i.-uld berehabilitated and management of the scheme improved.
Components:
a) strengthening of existing institutions to select thepriority irrigation schemes to be rehabilitated;
b) rehabilitation in the first phase of 16 mediumirrigation schemes covering about 17,100 ha.;
c) rehabilitation of the large scale Samangoky cottonand rice scheme. -
(ii) Benefits: By increasing rice production 32,000 tonsper year the project will reduce Madagascar's dependenceon imported rice and enhance income for a group of over 2Xof the farm population whose income per capita is lessthan half the country average.
(iii) Risks: Project sustainability depeads oa waterusers effectively operating and maintaining the irrigationschemes. This risk is being reduced by requiringsubscantial wacer user pareicipation at several stages:user review of engineering design; user commitment toself-finance; user prepayment of part of maintenance costsbefore rehabilitation is completed; TA to support theseactivities as well as formation of water userassociations; and developme.t of individual scheme manualsfor operation a-d maintenance. Part of :rne benefics aredependent on the development and diffusion of higheryielding new variecies and of increased double cropping.Nevertheless, selec:ion of schemes for rehabilitationwould be such that even if the benefits from bettervarieties and double cropping are not realized, theeconomic rate of return would exceed 14%.
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E.stimacd Proj ecr Costs
percen. of- USS millin aforeip % of cotal
local fore toral eharge bselie csrts
gD Supprt toMtIz.rzy of igriculruwe 0.9 3.0 3.9 78 18
Iwesed tW!9, resultig frem project eqm&iures are estiuted at 54.7 mfillfIo.
Estim Dirrseis
us$ mi 11 nr.Pl o eulative
1986 1.4 1.4
1987 2.5 3.9
1988 3.2 7.1
1989 2.8 9.9
1990 1.4 11.3
1991 0.7 12.0
F .cc Rate of Return: 24%
Staff Appraisal Reprt:ps: MM 18285
1828618378
MADAGASCAR
IRRIGATION REHABILITATION PROJECT
STAFF APPRAISAL REPORT
I. BACKGROUND
A. Project Background
1.01 For more than a decade the Government of Madagascar and the Bankhave discussed a project to rehabilitate the medium size irrigationschemes, which are an important part of Madagascar's Irrigation system.Because of the tumultuous political and ecoromic circumstances inMadagascar during this period, preparation bas been slow and sporadic.Agreement on basic project objectives was reached in 1979. By 1982 apreparation report was completed, which concentrated on rehabilitating fivemedium irrigation schemes as a pilot endeavor. A pre-appraisal mission,including representatives of the French 'Caisse Centrale de CooperationEconomique", visited Madagascar in November 1982 and reco_mended: (i) costreductions of about 25% for the five by reducing low priority irrigationinvestments (canal linings, water inlets, weir designs); (ii) that theproject's complex organization required further study; and (iii) that aninventory of the medium size schemes should be carried out to determinetheir priority for future rehabilitation. The Government agreed to anadditional study to cover the above items. The study was carried out andthe resulting report was submitted in January 1984. It became the basicdocument supporting the appraisal mission of April 1984, which was led byA. de Largentaye, and included J. Meerman, J. Weijenberg, J. Porter and H.Boumendil (consultant). Representatives of the Caisse Centrale deCooperation Economique (CCCE) and of the European Development Fund (EDF)accompanied the mission and participated in discussions. This was followedby two post appraisal missions led by J. Meerman in July and October, 1984,again with participation of the CCCE and the EDF.
B. The Agricultural Sector
General
1.02 Madagascar, an island more than 1,500 km long, is slightly largerthan France, although its climate, topography and soils are all far morediverse than those of France. Rainfall, for example, varies from that oftropical wet-forest to near desert conditions. With a population of 10million, the country is sparsely populated but there is great pressure onproductive land in some regions. About half the population is below the
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poverty line. Rice, most of which is produted under irrigation, is themost important crop. (In 1983 total production was 1.4 million tons, about140 kg per capita.) It is followed by cassava, most of which is consumedoa the farm. For 1980-82, coffee exports contributed almost half ofMadagascar's total export earnings. Cloves and vanilla accounted for mostof the remainder. Other important cash crops, not currently exported,include sugar, cotton and tobacco. The cattle herd, of about 10 millionhead, is almost entirely owned by herders - accounting for a large part ofthe popuLation - who employ traditional, extensive husbandry systems. As aresult, productivity and off-take are low. Beef exports are a fraction offormer levels, notwithstanding increased foreign demand. Noonetheless thereis excellent potential for augmenting production through improved herdmanagement, and for iacreasing output of other forms of livestock, notablypigs and poultry.
1.03 Most of the estimated 1.5 million farm families--about 80% of thepopulation-are small holders engaged in subsistence farming. Atraditional land tenure system prevails with individual, heritable rightsto cultivated land and collective rights to pasture. Smallholder farmingtechniques range from irrigated rice cultivation involving elaborateterracing and partial water control to slz3h and burn cultivation andsemi-nomadic cattle raising. There is some large-scale mechanized farming,usually oa Government-owned farms. During the 1970s, the Government's roleexpanded substantially; most noteworthy were the nationalization oflarkecing of foodcrops (especially rice), of the sugar industry, of inputsupply, of meat processing, and of export marketing.
Irrigation Subsector
1.04 Past agricuLtural development has concentrated on irrigation withheavy investment by both Government and external agencies. Out of a totalcultivated area of roughly three million ha, official irrigation systemsserve about 250,000 ha, nearly all of it to produce paddy. In addition,about 700,000 ha of traditional paddy fields have some form of watercoatrol. At present, the key issue in this subsector is deterioration:Madagascar's decaying irrigation infrastructure is yielding far less thanit should, in part as a result of failure to maintain the schemes which inturn results from the deterioracion in management, and the lack of budgetfunds and foreign exchange for inputs and equipmeat. Although thetraditional paddy fields have fewer problems, their yields have droppedbecause of reduced supply of inputs, and negative price and marketincentives. Looking to the far future, it is probable that furtherdevelopment of irrigation, drainage, and flood control, will beconcentrated on relatively large schemes siace most areas suitable forsmall-scale farming (terraced rice fields in small valley boctoms) havealready been developed. The scope for further devel_pment, however, willremaia uncertain untit basic cost and benefit data are generated onpotential areas for development.
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1.05 With assistance from cofinanciers, the Ministry of Agriculture(MPARA) has begun the rehabilitation of the larger-scale networks, whichonce produced most of the marketed rice and which suffer the most acutemanagement problems.. The proposed Project would begin the rehabilitationof the medium-sized schemes by improving management arrangements, improvingoperation and maintenance, and by carrying out rehabilitation. Theserehabilitation efforts are likely to occupy the Government for many years.It would also provide assistance to one large scale network, SAMANGOKYwhich has been supported by IDA but stands in urgent need of rehabilitationinvestments and a new approach to management.
Recent Sector Performance
1.06 In production of the staple, rice - as with other crops - theGovernment's marketing monopoly and price controls from the early 1970s to1983 led to wholesale disruption of marketing. By the early 1980s,official prices were so low and official marketing so disorganized thatproduction stagnated and much rice entering into trade was sold on theparallel market. Simultaneously, lack of modern inputs and credit,deteriorating extension service, and poor irrigation scheme management andmaintenance, left farmers few means to increase production, even if priceand market incentives had been adequate. Hence, notwithstanding Governmentallocation of some 40% of the public investment budget for rice productionin recent years, production stagnated. Paddy production in Madagascar,which grew 5% per year in the 1960s and increased from 1.2 million tons in1960 to almost 2.0 million tons in 1970, did not grow thereafter, in spiteof the growth of population and the labor force. Madagascar, a netexporter of rice until the early 1970s, thereafter imported increasingquantities, reaching a peak of 350,000 toos in 1982, over 20% of totalconsumption. Since then, reduced rice imports reflect changed policy butalso an overwhelming foreign exchange shortage: 183,000 tons were importedin 1983, and about 110,000 tons were imported in 1984.
New Agricultural Strategy
1.07 By 1982, the Government accepted as a fact the failure ofagricultural development policies and the need for basic policy change.For 1983-85, it has set the restoration of production of key crops tolevels reached in past years as an overall goal. For rice, the goal is areturn to self-sufficiency. For the past two years the Government has beendiscussing with the Bank, and other aid agencies, how to achieve these.The main elements of Government's new strategy, as accepted by the donorcommunity, were announced at the April, 1983 meeting of the ConsultativeGroup for Madagascar:
Short Term
- concentration on rehabilitation of agro-industrial enterprisesand large-scale production units, including the very largeparastacaL irrigation schemes;
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- emphasis squarely on rehabilitation through existing agents,including private enterprises, with priority to rice, cotton,coffee, and livestock;
- regular price reviews aad increases to ensure adequate producerincentives, particularly of rice, cotton, coffee and sugar;
- rehabilitation of rural infrastructure, particularly rural accessand feeder roads.
Longer Term
- concentration oG smallholders and other privateLy owxedproduction units; corollary, sharp curtailment of investmnet inlarge scale, and particularly Governmeat-owned and operated,farming ventures;
- a development strategy promotirg many crops and taking intoaccouat regional variations; encouragement of diversification ofproduction systems;
- conversion -of unsuccessful and unprofitable parastatal venturesthrough sales to private operators and use of managementcontracts;
- reduction in state marketing; increased reliance on commercialcompanies; and
- improvemenLt of agricultural extension in key production areas andreestablishment of agricultural research.
1.08 By 1984 there was some progress in implementating the overallstrategy. The prices of rice and beef were alLowed co rise to marketclearing levels; and free trade in these foods was re-introduced.Sigmificant increases in producer prices and improvements ia price settingmechanisms were made for cotton. Studies were completed on rice and exportcrops to provide the basis for :heir pricing and marketing reform. Inputsupplies have been imported with external aid. Input subsidies are beingphased out, and fertilizer distrLbution by commercial firms hasre-started. Veterinary product supply has improved, again with externalaid. A review of ways to revive extension services is underway and underBank supervision IFAD is financing a Training and Visit (T and V) extensionprogram. A detailed review of the agriculture investment program has beencarried out. New legislation for irrigation water charges has beenenacted. In 1983 the Ministry of Agriculture reduced staff by about3,000.
Sector Lending Strategies
1.09 The Bank Group lending strategy for agriculture and specificallyfor irrigation is consistent with the Government strategy discussed in para1.07. The Bank Group accepts that Madagascar has a strong comparativeadvantage - at realistic exchange rates - in the production of manyagricultural commodities including irrigated rice. Consequently the BankGroup supports the Government goal of self-sufficiency in rice productionto be achieved within several years. To exploit this comparative advantagerequires policy evolution, again along the lines set out above. Theemphasis on rehabilitation of both capital and institutions, including therehabilitation of the Ministry of Agriculture (MPARA) is highly desirable.In the context of such rehabilitation, there is the need for a newinstitutional division of labor in which the burden on Government is muchreduced through increased reliance on suallholders as the group which willrealize production increases; increased reliance on private entities toprovide inputs and to market output; and increased reliance on marketclearing decentralized prices to guide the movement of resources betweensectors and within agriculture itself. The proposed project would helpimplement this strategy. It is based on increasing smallholder productionat the medium sized schemes through their permanent rehabilitation.
C. Bank Group Operations in Agriculture
1.10 The Bank Group has supporced fourteen agricultural projects inX2dagascar. Five projects have been completed: The Lac Alaotra IrrigationProject (US$5.0 million), the Morondava Irrigation Project (US$15.3million), the Beef Cattle Development Project (US$2.8 million), the FirstForestry Project (US$13.0 million) and the First Village Livestock andRural revelopment Project (US$9.6 million). Eight are underimplementation: the Mangoky Agricultural Development Project (USS12.0million); the Agricultural Credit Project (USSI0.0 million); a TechnicalAssistance Project of studies to improve irrigation on the Plain ofAntananarivo (US$2.3 million); a Second Forestry Project (US$20.0 milLion);an Agricultural Institutions Technical Assistance Project (US$5.7 million);a Second Village Livestock Project (US$15.0 million); the Lac Alaotra RiceIntensification Project (USS18.0 million) and a Cotton Development Project($17.8 million). In addition, the Bank has appraised and is supervisingthe IFAD-financed Highland Rice Project (US$30.0 million) to increase riceproduction by providing agricultural inputs and by reorganizing andstrengthening agricultural extension services using the Training and Visitsystem of extension.
1.11 Four agriculture projects financed by the Bank Group have beencompleted and audited by the Operations Evaluation Department: the LacAlaotra Irrigation Project, the Beef Cattle Development Project, theMorondava Irrigation and Rural Development Project, and the VillageLivestock and Rural Development Project. The Audit Report and a recentImpact Evaluation Report on the Lac Alaotra Irrigation Project criticizedboth poor project design and supervision, and insufficient attention tosocio-economic and institut!tnrta aspects of the project. These lessonshave been taken into account in the project design of the Lac Alaotra Rice
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Intensification Project, in which great emphasis is given toinstitution-building, to farmer involvement, to producer incentives and toself-management to reduce the burden of recurrent costs on the Government.The lesson of the Beef Cattle Project where large-scale cattle ranchingfailed dismally, have long since been reflected in our approach toagriculture operations in Madagascar. The PPARs for the MorondavaIrrigation Project and the Village Livestock Project emphasize the enormousproject implementation problems during the tumultuous 1970s. The Morondavaproject was a profoundly disappointing experience with cost overruns andpoor management the most serious problem. The Village Livestock Projectfared much better and established a sound basis for veterinary andlivestock services in a key cattle producing region.
1.12 A_sociated with the recent policy and institutional changes hasbeen a resurgence of the lending program of which a key element is theAgricultural Sector Operation (ASO) which is now nearing appraisal. It isdesigned to support continued policy changes which would help lead to anagricultural sector characterized by market-clearing pricing anddecentralized, competitive marketing of inputs and production. Thesechanges would contribute to the s' tess of the proposed Project, sinceproject success requires substantial increase in produCtion by smallholdersin response to increased market opportunities on the one hand; and on theother hand to increased availability of inputs. To support the many policychanges, the ASO would finance import of the agricultural inputs andequipment most needed for restoration of agricultural production, of bothrain-fed and irrigation systems.
1.13 Agriculture's renaissance and its future development requiresinitiative, support and management from effective agricultural ministrieswhich in turn require stability, good internal organization, goodleadership, and. many skilled and dedicated people. The World Bank Grouphas been supporting such institutional development thorough the FirstAgricultural Institution Project. Much of the analytical underpinning forthe recent Ministerial reorganization in 1982, for example, was promotedand financed through that project. Analysis carried out under the projecthas also helped the Ministry in its decisions on certain policy reforms, inthe rice sector for example (para 1.08). The project has also financed astudy of parastaEal performance in agriculture leading to a number ofrecommendations which are beginning to be implemented: some managementaudits and reorganizations are underway. It has financed a study of issuesand constraints in agricultural research, and recommended several changesin management anc organization. This process of institutional developmentwill be reinforced through the Second Institutional Development TechnicalAssistance Project now in preparation. In addition to continuing theongoing work, through the project, Government will seek to (a) come togrips with the many problems of reforming the parastatal enterprises; (b)to make agricultural research address the country's agricultural productionproblems; (c) improve procurement and disbursement procedures; (d) developa capacity for carrying out the agro-economic analysis MPARA needs foroperations and for investment planning to promote agricultural development.
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It. THE IRRIGATION SUBSECTOR
A. Irrigation Practices
2.01 Irrigation is practiced throughout Madagascar on about a third ofthe island's cultivated land. Most irrigation is carried out bysmall-holders on schemes which vary in size from a few ha to severalthousand, but there are also several large parastatal schemes using moderntechniques of water control and maintenance. The kinds of irrigationwhich are feasible vary according to the three main ecological regions ofthe country: the Highlands, the west and the narrow east coast. Becauseof the high altitude, in the Highlands the dry season, or austral winter,is cooL which greatly reduces the yields of rice and many other crops grownat this time. Hence, in the Highlands most agricultural production occursduring the rainy season. The agricultural population of the Highlands arehighly skilled traditional cultivators. Population growth on the limitedcultivable land available has led to substantial emigration to the westernpart of the Highlands where land of somewhat lower quality is available.Soavina-a scheme completed in 1962 but now to be rehabilitated under thefirst tranche of the project-is one such westward settlement, composedprincipally of immigrant rice growers from the densely populated faritanyof Ambositra. The second region, the west, is hot; rainfall is usuallyunder 700 mm annually; and the dry season is very long. There, farmingconditions are excellent in the river valleys, the -baiboho, where muchElood recession cultivation is practiced. There are also several largeirrigation schemes in the west. Livestock rearing in this area is widelypracticed by populations which are somewhat nomadic. The Androy of Behara,another scheme to be rehabilitated under the first tranche, are anexample. Many such cattle owners, however, are slowly becoming sedentaryfarmers. The settlers in the Onilahy valley, which includes Belamoty, athird rehabilitation scheme also in the west, are an example of livestockowners who have become cultivators within the last century. In the west,the main irrigated crops are rice and cotton, while pois .du cap (butterbeans) are produced for export. The third region, the warm and wet humideast coast, has a highly productive agriculture. Westbound winds drop muchof their moisture in this area, before they reach the Highlands. Annualrainfall in excess of two meters is the rule. Certain areas, such as theports of Toamasina and Moroantsetra, receive three meters or more.Agriculture is relatively intensive, and most export crops, cloves,vanilla, coffee, are produced in this area. Rice irrigation is practicedin river bottoms; rainfed rice is also common.
2.02 Throughout the island, family farms are small, nearly always lessthan ten hectares and frequently less than a hectare, including both ricepaddies and the -tanety- or rain-fed fields. Animal traction is common. -Rapid population growth has contributed to the small size of individualfarm plots, especiallv in the Highlands where population has been sedentaryfor centuries-. In tile recently settled areas of the west, plots and farmstend to be larger.
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2.03 Rice is by far the most important irrigated crop, although thereare small areas of irrigated cotton and sugar cane. Abouc two-thirds ofthe population cultivates at least some paddy. Traditional yields of paddyon irrigated land are generally close to two tons per hectare in the warm(rainy) season, the so called second" seasoa because it begins late in thecaleadar year, and about 1.5 tons in the dry season ("first" season). Asnoted, in the Highlands, low temperatures in the dry season makerice-cultivation a risky and low yielding crop. In. the lower parts of theSoavina scheme, at an altitude of 1100 m, some double cropping is practicedaLthough the length of crop cycles may require laad preparation of thesecond season before completion of the harvest of the first season.Irrigated dry season yields in Soavina are typically 1.3 t of paddy perhectare. L/ On average rainfed rice yields about 1 t paddy per hecrare,although yields may be subscantially higher if such rice is grown in thesemi-irrigated conditions of river bottoms or in the water-retainirgpaddies of the deteriorated schemes. Paddy yields on the large parastatalschemes (para 2.06) probably exceed 2.5 c on average, and may exceed 3 t.This is however much below their potectial because of substantialdeterioration of these schemes.
B.. Physical Decerioration of Schemes
2.04 The deterioration of the schemes, both large and small, may takethe form of a catastrophic event. The pressures--literally--on che variousirrigation works are heaviest during the Periods of maximum river flowduring the high rainy season. Followiag storms, the dikes, canals, intakeworks, any of these, may suddenly collapse because of the water pressure,with consequences such as iaundation, croP land covered with sand, andgreatly reduced flow-through into the irrigatioa canals. Thenon-parastacal schemes have largely relied on their own devices for repairsafter such events. The repairs have oftea been inadequate so that theability to withstand future shocks is dirairjshed. Hence with the pasSageof time the probability of disaster and che economic loss associated Withany given period of high water-flow has increased. There is also 510wdeterioration which gradually reduces the hectares which can be irrigatedin any scheme: canals gradually silt up with sand carried into the System;they also lose water at leaky seams and breaks along their courses. As aconsequence the capacity for carrying wacer by any given canal system hasdiminished. Finally, the drainage systems - drains and outlets of variouskinds - have deteriorated so that land has become marshy and unsuitable forcultivation or may be inundated at flood-crests, when the river backs intothe drainage svstem or breaks through proteccive dikes.
2.05 In the three schemes of che Project's first tranche (para 2.01),the combined effect of these various kinds of deterioration has reducedpaddy irrigation to nearly half of design capacity. In Soavina, of the1,200 hectares served bv canals, about 200 hectares cannot now be used inthe wet season because of regular back-up inundationr by the river. Another100 ha are lost because they have been covered with river sand. Ia
1/ One ton of paddy equals about .65 cons of rice.
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Belamoty and in Behara, sand in the canal-system has reduced their capacityfor carrying water so that much of the down-stream land ia the schemes doesnot receive enough water to permit paddy irrigation. For the three onlyabout 60Z of the areas served by canals can now be irrigaced (Annex Table21).
C. Institutional Deterioration of Schemes
2.06 The Government of Madagascar has classified irrigation schemesinto four types:
(a) Family rice fields developed and maintained by farmersthemselves, may cover as much as 500,000 ha and range in sizefrom one are to perhaps 5 ha. They involve terracing of valleybottoms, diverting water from streams and simple storage dams.
(b) Small schemes, developed through local initiative with andwithout Government support. Their size varies from 5 ha to 1,000ha; the total is about 300,000 ha. In many cases thesetraditional systems are operated by local commuaities, andrequire few nom-labor inputs for their maintenance.
(C) Medium schemes were largely built with financing from FNDE (FondsNational de Developpement Economique, that is the investmentbudget), although frequently FNDE resources had their origia inforeign aid. The surplus rice produced in such schemes isusually sold at local markets. There are about 116 such schemeswith a total area under canals of about 142,000 ha (an average of1,224 ha); in part because of deterioratioa of the irrigationworks, actual amount irrigated is about 79,000 ha. In theory atleast, the Ministry of Agriculture has primary responsibility forrunning these schemes with some support from the localauthorities. The proposed Project would coacentrate onrehabilitating about 16 of these schemes.
(d) Large schemes were designed and constructed with externalfinancing, and are operated and maintained by parastatalauthorities reporting to the Ministry of Agriculture (MPARA).Land irrigated is about 80,000 ha and most of che surplus riceproduction is consumed in the large cities. The most importautschemes are SOMALAC (Lac Alaotra area), FIFABE (Marovoay area),SAMANGOKY (Maagoky scheme), SODEMO (Morondava scheme) and theAndapa Basin Authority.
2.07 The large and medium schemes, (c) and (d) above, form theofficial system. Their management, maintenance, operation, repair, andfinances are responsibilities of the Ministry of Agriculture (MPARA). Inthe case of the large schemes, SAMANGOKY, SOMALAC and so forth, theseresponsibilities rest with the associated parastacals. Low output prices,poor Labor discipline, inflated cost structure, including substantial
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overmanning, inadequate maintenance, weak cost recovery and shortage ofexperienced middle management have brought extremely high financial losses,sharp decreases in output and grave deterioration in the physical works.The main large irrigation schemes are receiving external assistance forphysical rehabilitation and management support. IDA is currently active intwo of these: the Lac Alaotra Rice Intensification Project which includessubstantial civil works to reconstruct irrigation and drainage structures.The rehabilitation work at SAMANGOKY is described in para 2.16.
2.08 The problems in the medium schemes are-similar, if lessspectacular, to those of the large schemes. TIeir operation, maintenanceand repairs have been the responsibility of the XPARA acting through itsDirectorate of Rural Infrastructure (DIR). Maintenance and repairs ofthese schemes have been defective in part because of inadequate financialallocations. But deterioration has increased further because of thefailure to encourage cultivators to carry out that maintenance of whichthey are capable. The traditional irrigation schemes usually are small andare managed by the farmers themselves. They do not have the managementproblems of the larger schemes. Since the traditional schemes havesubstantial potential for increasing production, they have also attractedGovernment and external support. The resultiag projects have been limitedto the improvement of water inlet structures and, in certain cases,drainage outlets, whose construction is beyond the technical ability of thefarmers. At least 2,000 traditional schemes have been improved in thismanner, affecting more than 80,000 ha of irrigated land. The FED has beenthe largest foreign donor in chis area.
D. Subsector Institutions
2.09 GovernmeLt reorganized the Ministry of Agriculture (MPARA) in1982. Four of the five resulting Directorates would be heavily involved inthe project and are therefore described here. The Directorate of RuralInfrastructure (DIR), the successor to Genie Rural, has three centralservices (Chart 2). Its Service de l'Irrigation is in charge of planningand implementing engineering works in all Government-managed schemes. TheService includes a "division des &tudes(design division), a rehabilitationdivision and an irrigation infrastructure division. The rehabilitaciondivision is in charge of supervising rehabilitation work, whereas theirrigation infrastructure division, with the assistance of threeexpatriates, is in charge of supervising studies and works on new schemes.Oa large schemes, managed by parastatals, the DIR is responsible forsupervising feasibility and other studies, inviting and evaluating tendersand preparing contracts, and supervising irrigation work. The Directorateicself has usually prepared the detailed designs and supervised thecontractors for medium schemes. It is clear that the DIR has muchexperience and competence in managing firms to carry out the engineeringaspects of scheme rehabilitation (design work, execution, supervision).Notwithstanding the existence of the Rehabilitation Division, following thetransfer of most construction and land preparation equipmeat of the mobilebrigades of Genie Rural to a parastatal, the Ministry virtually has ceased
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to carry out scheme repair and maintenance. The Service de Gestion desReseaux Hydrauliques (Irrigation Scheme Management Service) is responsiblefor operation, maintenance and development of the medium irrigationschemes. Its functions include managing the DIR's irrigation personnel atthe medium schemes, coordination with other agricultural services, andassistance in the yet to be established scheme-level water managementcommittees (para. 2.14). In 1983 the budget for operation and managementof the service was FMG 600 million ($US1.1 million), almost all of whichwent to pay staff. The Service de l'Ame'nagement Rural operates theToamasina grain silo, and several edible oil mills. Each of the aboveservices also has corresponding provincial level services. In turn the sixregional services, one in each faritany, are responsible for the 17administrative circonscriptions'. The Directorate's staff of 1,400includes 33 engineers, many trained in Strasbourg, France, as well as threeFrench expatriate engineers. Many senior level staff are recent graduateswho lack experience and need professional guidance. The DIR's experiencein setting up and supervising civil works, and its grass roots organisationwould be important positive elements in implementing the proposed Project.
2.10 The Directorate for Agricultural Extension (Direction de laVulgarisation Agricole, DVA) has a total staff of about 4000 (ldd 1984) anda budget (in 1983) of FMG 927 million. At the national level, theDirectorate has three services: Plant Protection, Support to Extension,and Coordination with Research. As with the DIR, these services are alsofound at the faritany levels. At the next lower level there are the"circonscriptions de vulgarisation agricole" (CIRVA). Below the CIRVAs areextension zones (corresponding approximately to fivondronana) and finallythe extension cells, with each cell having - ideally - five extensionagents. Usually one or two cells work on a medium irrigation scheme.There are about twenty agronomists based in Antananarivo and about fifty inthe provincial services and CIRVA. Zone chiefs often have six years ofsecondary school and extension agents usually have three. With over 80% ofthe DVA budget used to pay salaries, the extension service lacks funds fortransport and field activities. Hence the field services are out of touchwith the central services and their activity is neither monitored norevaluated. Applied research is very limited, and in the last decade, DVAhas developed few, if any, new extension themes. Lack of agriculturalinputs, of improved seeds and of agricultural credit have compounded theproblems of the extension services. The IFAD Highland Rice Project, activein two CIRVA in the Highlands (Antsirabe and Ambositra), is providingoperating and transport support and a new approach (training and visit) forextension work. Under the proposed project, the DVA would work intenselyto increase yields on schemes to be rehabilitated. Hence the proposedproject would provide considerable technical assistance to the DVA.
2.11 The Programming Directorate (DP) prepares the investment programsin agriculture. It has received IDA support under the First AgriculturalInstitutiops Technical Assistance Project which provides technicala3sistance for training in this task. Technical assistance is also being
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provided to improve the Directorate's monitoring and evaluation ofprojects. The statiscical service within the Directorate of Programming ischarged with processing agricultural data generated by the agriculturalextension service. The DP Is to be the coordinator for the proposedproject (paras 3.05-3.08).
2.12 MPARA's recencly created Directorate for Finance and Personnel 'sresponsible for establishing the Ministry's budget, for administering andcoatrolling its execution, and for managing all external financialresources supporting agriculture. (This would include the proposedproject.) Under the First Agricultural Institutions Technical AssistanceProject, the Directorate also is receiving technical assistance to carryout these tasks.
E. Medium Schemes: Maintenance, Operations, Finances, Land Tenure
2.13 Most medium schemes were built between 1945 and 1970, typicallyduring the colonial period (Annex Table 18.) The approach to cheiroperation has been a ihighly centralized one in which the cultivators on theschemes were initially considered as tenants or wards while the mobileconstruction brigades of the Ministry of Agriculture's Genie Rural were toperform required repairs and maintenance. The effectiveness of thesebrigades dropped dramatically during the 1970's, and they have been phasedout. In addition a "chef de reseau", was posted to each scheme --and stillis-- to provide scheme management. Scheme maintenance has been verydefective and largely limited to the cleaning of the primary and secondarycanals by the water-users. The irrigation works (water intakes, desiltingbasins, weirs, dikes, drains, overpasses, access tracks) have coasequentlydeteriorated. When damaged, they have frequently not been repaired,although in most cases had funds been available, purchase of equipment andsupplies would have been possible. Cost recovery has not been practiced onthe schemes due in part to past Government policy and the power of localinterest groups, but perhaps more recently also because -of Governmentinability to collect the money. The problems of handling receipts throughthe public fiaance and accounting systems are grave and the tax collectionmechanisms ia the rural areas are very weak: the national property taxesonce collected at the local level have largely disappeared, as well as thetax rolls according to which they were levied.
2.14 By 1981, the widespread deterioration of the medium schemes hadtouched off a discussion within Government towards developing a viablealternative approach to scheme operation and maintenance (O and M). Theresult was the body of legislation of 1981-1982 (Annex 2). Thislegislation foresees establishment of scheme level Water ManagementCommittees (WMC) consisting of Government representatives, including theDIR's "chef de reseau' and representacives elected by the users. Ideally,the WMC takes decisions based on discussions in which user-representativeswould voice their demands; 0 and M proposals are presented by the -chef dereseau'; users receive guidance for management of the tertiary and
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quarternary networks. A dina - a traditional solemn contract - wouldspell out the mutual obligations of the Government and the WMC. In brief,WMC are to manage water-distribution, and provide for adequate schemeoperation, maintenance and repairs. To make this possible, the legislationstipulates that user charges for water are to be collected under Governmentauthority and would be administered by the WMC under the direction of theon-site -chef de r&seau" but Government would also substantially subsidizeO and M. Paradoxically, the laws also include provision for collection ofcharges to cover some part of the costs of scheme rehabilitation. IDA'sposition is that both the proposed subsidy and the proposed development taxare undesirable (paras. 4.07-4.08). The laws do not give the WMC or theusers, say as an association, the right to make contracts, collect funds,or disburse them. Nor do they delegate this to local government. To thepresent the WMC have not been organized except in perhaps four schemes; andthese four have not been effective. The need to develop institutions forscheme 0 and M remains, since failure to develop such institutions is thebasic reason why there has been such widespread deterioration at the mediumschemes. This is addressed under the proposed project.
2.15 Most land is cultivated by the de facto owner on the majority ofthe schemes to be rehabilitated under the Project, and ownership rightshave evolved according to Madagascar's traditionil land tenure rights. Insome cases, such as Soavina (para 2.01), which was developed under theGovernment's program of "Aire de Mise en Valeur Rurale (zone for ruraldevelopment), land tenure contracts between the Government and the userswere established at the time the scheme was constructed but are now out ofdate. In selecting schemes for rehabilitation under the proposed Project,land tenure arrangements and any issues specific to the scheme would bereviewed. The impact of the proposed rehabilitation on land values-andthe likely community production response to these opportunities will beassessed initially during scheme-selection and evaluated in the associatedbase-line survey (para 3.07).
F. The Mngoky Scheme
2.16 As mentioned, the proposed project would assist therehabilitation of the Lower Mangoky River Valley Development Agency(SAMANGOKY), the large parastatal irrigation scheme in the fertile delta ofthe Mangoky, on the western coast. Of SAMANGOKY's 7,770 ha under canals,7,000 can be irrigated productively about equally divided between paddy andcotton cultivation. Deterioration at SAMANGOKY, as a direct result of poormaintenance, is illustrative Of the kinds of physical deterioration foundon the medium schemes. The Mangoky scheme is a gravity irrigation networksupplied by a river intake. A dike for protection from river flood waterssuffered a break of several hundred m in 1983 and required emergencyrepairs to avoid a second break in the coming rainy season. The intake onthe Mangoky river feeds water into a main canal through a desilting basin.As the dredger for the desilting basin has broken down, the basin and muchof the primary canal have silted up and are no longer effective.Irrigation is through concrete-lined and prefabricated concrete canals,
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most of which are above ground. Many of these leak and require resealing.The drainage system is excensive, but has become in part ineffective. Theresulting high water table has caused soil salinisation and reduced yieldsof cotton.
2.17 SAMANGOKY has suffered large annual losses which continue (AnnexTable 15). To restore financial balance, the scope of SAMANGOKY's tasksand responsibilities have been reduced: Civil works for extension of theirrigation scheme, which were to be executed by SAMANGOKY, have beencontracted out. SAHANGOKY's cropping activity is being reduced and acreageis leased to large enterprises, such as SOTEMA, a cotton textile company.These will be responsible for all aspects of land preparation. In riceproduction, farmers are substituting draught oxen and human labor formechanical land preparation by SAMANGOKY. In irrigation, theresponsibilicy nf SAMANGOKY will be limited to operation and maintenance ofthe main it:rigation and drainage canals. Farmers will be required tomaintain I..ertiary and quaternary canals and to pay higher water-fees thanin the pAst. SAMANGOKY's staff is gradually being brought down to areasonatle level. In late 1984 total employees were 460, Less than half ofthe tot-lI of two years earlier.
2.18 SAMANGOKY is also introducing individual standard contracts whichshould encourage production, by giving cultivators incentives to improvetheir plots. It gives usufruct rights to the surviving spouse or one ofthe adult children of farmers who paid regularly their water fees providedthe heirs continue to meet such payments. The demand for these newcontracts far exceeds the number available and only farmers who have paidtheir debts to SAMANGOKY are being considered for the new contracts. Inthe case of cotton, farmers with a history of low yields (less than 1.8 tper ha) are being discouraged from signing contracts, since at lower yieldsthe high water charges would mean a relatively low return to their labor.
G. Subsector Issues
2.19 The main current issues peculiar to the sub-sector can besummarized as follows:
(i) Planning. The Government needs to establish a general strategyfor dealing with the many issues involved in irrigation, floodcontrol, and erosion conctrol. This strategy should guide theGovernment in carrying out daily activities, in dealing with therecurring hurricanes and in development programs. A planconsistent with the strategy is also ceeded for carrying outeffectively the many rehabilitation investments which donors arelikely to support ia the near future. This is particularlyurgent as an aid to improved coordination of external financing.The proposed Project would contribute substantially toward thisgoal (paras 3.01 and 3.02).
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(ii) Operation. Operation of the schemes can be improved at alllevels. A strategy is needed to clarify institutionalarrangements, help strengthen and coordinate Government servicesto the schemes, and develop appropriate management systems. Abasic consideration here is the optimal distribution of tasksbetween Government and others. Hitherto, Government andparastatals have clearly been overburdened. But alternativearrangements for irrigation maintenance and operation (0 and M)remain to be developed. The proposed Project would move fromadministrative procurement to greater reliance on decentralizedmarket activities for provision of agricultural inputs andirrigation services. It would also institute scheme levelmanagement of 0 and M.
(iii) Finance. Insufficient cash flow and inability to acquire inputsare a serious and pervasive problem, most clearly seen in thelarger schemes. The legislation of 1981-82 to introduceirrigation cost recovery on the official schemes needs to becompleted. In part because of the strong political resistencewhich its engenders, adequate cost recovery merely to fund 0 andK remains one of the risky elements in the proposed Project. Toreduce this risk, several institutional innovations are includedto support'scheme level finance of 0 and M at the schemes to berehabilitated (paras. 4.06-4.10).
(iv) Economic considerations. Investment cost per hectare depends onthe degree of rehabilitation and improvement, including thedegree of water control desired. There has been considerablediscussion in Madagascar on the trade-off between more capitalintensive irrigation works, with greater demands forsophisticated management compared to simpler improvements whichare less demanding of 0 and M but less promising for boostingproduction. This issue would be addressed in the proposedProject's studies of the individual schemes. It is believed thatpriority should usually be given to rehabilitation rather thannew developments, because of presumably lower costs per benefitgained. This is probably true, but the possibility of developingnew schemes with superior benefit-cost ratios should not bedismissed as a long run consideration.
III. THE PROJECT
A. Rationale for Bank Group Involvement
3.01 Production of irrigated rice on the medium-sized schemes makesan important contribution to one of Madagascar's immediate agriculturalgoals: food self-sufficiency. In part the means to this goal are toconsist of restoring infrastructure and returning to agriculture'sproduction frontier", that is attain the level of production implied byefficient use of all existing resources. In this perspective the proposed
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Project has potential which goes well beyond the 17,100 ha to berehabilitated through it in that it is designed to develop a systematicapproach to scheme rehabilitation which could be progressively applied tothe estimated 140,000 ha in medium schemes and part of the 300,000 ha inthe small schemes. Hence it also could directly benefit a substantial partof the farming population. In order to realize this approach the Projectincludes a heavy technical assistance component at MPARA to developministerial machinery to select, prepare and implement schemerehabilitations, both during and after Project implementation. Thismachinery is to be designed so as to encourage other external financingagencies to participate in the overall rehabilitation program, assuring agood economic rate of return to any funds so invested. In its emphasis onself-finance and self-management at the scheme level, the Project is todevelop a general alternative to the reliance on government management andfunding which has led to the maintenance failure and widespreaddeterioration in the infrastructure of the schemes. This approach, ifsuccessful, would assure adequate operation and maintenance for the mediumschemes. The Project is, therefore, the pilot phase in a long term programfor rehabilitation of the medium schemes, and perhaps some of the smallschemes as well.
B. General Description
3.02 The project would support the rehabilitation of and about 16medium sized irrigation networks, irrigating a total area of about 17,100ha, and of the large-scale SAMANGOKY scheme. It would include an importantinstitution-building component to reinforce planning and managementcapacity, for the Ministry of Agriculture and for individual schemes, andspecific irrigation rehabilitation works. For each network, therehabilitation cycle would start with a planning exercise, involving bothMPARA technicians and on-scheme representatives. It would include asocio-economic review leading to a feasibility study and conclusions onscheme-management arrangements, and then execution of civil works per se.The result of this exercise would be, for each scheme, a rehabilitatedirrigation network and agreed mechanisms for financing and maintaining iton a self-sustaining basis in the future. Project investment costs alsoinclude certain expenditures in support of agricultural development(preparation studies, travel support to extension staff), although mostsuch expenditures are to be financed through parallel programs like theon-going IFAD-supported Highland Rice Project, or the FED technicalassistance in the Toliary region, and through input-purchases by farmersthemselves. Output increases including that of SAMANGOKY would beachieved by expanding the area under irrigation in the schemes, byincreasing yields per ha and by additional double cropping.
3.03 Reconstruction would normally be designed to restore existingstructures and to avoid further deterioration of the schemes, but in someinstances would also include correction of design flaws (for exampleimprovement of desilting structures). Works to improve water control abovethe original standa-ds would be undertaken if they prove economicallyjustified and if it is probable that users will have the higher degree ofdiscipline required for successful management and increased production.Detailed engineering design is being completed on the three first schemes
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selected under this process which would be rehabilitated during 1985 and1986. These will be a model for the additional rehabilitation works, whichwould nonetheless, be the subject of individual planning exercises. Theexpectation is that rehabilitation programs and management arrangementswill vary substantially, according to local circumstances, from relativelysophisticated schemes involving substantial capital investments, torelatively inexpensive repair works to support a simple gravity scheme.Criteria governing choice of technology appropriate to each scheme havebeen discussed and would be reviewed at negotiations; the central issueswould be ability to maintain schemes and the economic return to proposedinvestments.
3.04 The Project includes, therefore, the following components:
(a) Management support for the MPARA, primarily through abroad-based technical assistance program to support theseveral dimensions of the rehabilitations (civil works,scheme finances and 0 and M, agricultural development);
(b) Civil works for reconstruction of medium irrigationschemes including pre-investment studies and planning forscheme operations and maintenance to be carried out byconsultants; and
Cc) Rehabilitation of the Mangoky scheme, including technicalassistance, rehabilitation works, maintenance equipmentand studies.
C. Detailed Description
3.05 Management Support for MPARA. MPARA, the executing agency forthe project, would manage implementation through four of its fiveDirectorates and a Coordinating Committee, most of whose members are MPARADirectors (para. 4.05). (Project organization is shown in Chart 1.) ThisCommittee has overall steering responsibility to assist a ProjectCoordinator, in the MPARA Programmes Directorate (DP), who as the generalmanager of the Project, would be responsible for overall projectimplementation, planning, management and coordination. He also serves asSecretariat to the Coordinating Committee. Line responsibility for thefunctions set out below will be handled by the MPARA Directoratesindicated:
(a) Directorate of Rural Infrastructure (DIR) --engineeringdesign, civil works, and on-scheme arrangements forself-finance and management;
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(b) Extension Service (DYA) -al' aspects of agriculturaldevelopment related to the project; and
3.06 Effective management by MPARA's directorates and the CoordinationCommittee is of critical importance for successful impleamentation of theproject. But MPARA's shortage of experienced personnel, office-space,office equipment, vehicles, and support for staff travel (official travelindemnities for civil servants can cover only a small part of per-diemexpenses) would greatly reduce Project effectiveness. The Projecttherefore includes measures to alleviate each of these shortcomings whereit bears most directly ou implementation. The proposed technicalassistance to MPARA of 29 man/years would be on board for four years andincludes:
(i) a senior advisor to the Project coordinator to assist himin financial control, preparation of the annual Projectbudgets and work programs, review of feasibility studies,and contract preparation and management;
(ii) an agricultural economist to assist the DVA in organizingand supervising the baseline agro-economic studies (para.3.07' on schemes to be rebabilitated, including trainingof interviewers; formulating and reviewing theagricultural development plans for each scheme;introducing effective monitoring and evaluationmechanisms; preparing annual work plans and reports forthe directore's activities under the project, includingworking out support activities with cooperating services;
(iii) a training/extension specialist in the DVA to re-train thelocal extension services for the various planning tasks(ii above) and their implementation;
(iv) a senior advisor to the DIR to assist in supervising theengineering consultants firms, in reviewing the list ofpriority schemes for future rehabilitation, in reviewingpreliminary and detailed engineering designs and inpreparing the directorate's annual work program andreports under the project;
(v) a rural institutions advisor to the DIR to assist watermanagement committees in organization and operations(para. 4.09);
(vi) two senior irrigation engineers to assist provincialirrigation services in appraising, selecting andsupervising the consulting engineers for irrigationrehabilitation works; and
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(vii) an advisor, in the DP, in project evaluation andmonitoring (para. 4.14).
3.07 Under the Project those members of the extension services workingon schemes t;o be rehabilitated will receive additional training, guidanceand equipment from MPARA to carry out or to help carry out the baselinesurveys and work out the agricultural development plans [para 3.06 (ii)].The baseline surveys will include a brief history of the scheme; data onproduction, population, production techniques and inputs used; land tenuresituation; marketing channels, input availabilities, prices, storagecapacities, family incomes, principal cash crops. These surveys will beused in the economic feasibility study, and as basic inputs in developing aFive Year Plan of agricultural development of the scheme. In additionthere will be an annual implementation plan based on the Five-Year Plan(para. 4.11). Implementation of the agrecultural development plan willrequire the cooperation of existing organizations, includingmarket-oriented operators, for its execution and will use resourcesindependently available. Government has agreed that the Five YearAgricultural Plan for each scheme to be rehabilitated would be submitted tothe relevant cofinancier for review. Governmet also agreed that IDA wouldreview and approve the Five Year Agricultural Plans for the schemes to befinanced under the IDA credit.
3.08 The agricultural development plan of each scheme would define thetechnical packages and their delivery system. In the Highlands,agricultural technical packages are well known as a result of intenseresearch carried out until ten years ago under the GOPR program. 2/ Thereare also technical packages which remain cost effective for areas outsidethe highlands area. The agricultural research institute, FOFIFA, and theFAO-financed Madagascar Fertilizer Program are doing research in the areato confirm the validity of the existing packages and to develop new ones.The Norwegian-financed FIFAMANOR dairy and wheat extension Project and theFrench-financed KOBAMA flour mill project are conducting research oncultivation of wheat as an off-season irrigated crop in the Highlands.
3.09 Capital investment under this component includes pick-upvehicles, four-wheel drive sedans, motorbicycles, bicycles, construction ofoffices and office equipment (Annex, Table 6).
3.10 Civil Works: Medium Schemes. Preliminary engineering designshave been completed for three schemes, Soavina, Belamoty and Sehara, with3,100 ha under canals. Their rehabilitation will constitute the firstcivil works tranche. Rehabilitation works will normally be limited toessential i.rigation structures including primary and secondary canals, butnot tertiary and quarternary canals which are entirely maintained by theusers. For the first phase program, the civil works would include repairof:
2| 'Groupement Operationel pour la Productivite Rizicole, a FEDsupported program during 1965-73 to provide increased rice productionthrough extension work and dissemination of technical packages.
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(i) 1.5 km of flood protection dikes (1,500,000 m3 ofearth-fills);
(ii) river intakes and drain outlets;
(iii) desilting structures (cleaning and enlargement);
Civ) 40 km of canal embankments (100,000 m3 of earth-fills);
(v) concrete lining of 20 km of canals (100,000 mi2 );
(vi) water-level control structures; and
(vii) scheme service roads.
The content of the civil works for the remaining 13 schemes would vary byscheme and would be defined during the planning for scheme rehabilitation(paras. 4.01 to 4.03).
3.11 Rehabilitation of access roads would not be financed under theProject. If access is a serious problem, however, the scheme in questionwould not be rehabilitated until repair of the needed access road hadbegun. Agreement on this point was reached at negotiations. The Ministryof Public Works, which is a member of the ad hoc Coordinating Committee,will be consulted in situations where access is a problem.
3.i2 Reihabilitation of the Kangoky Irrigation Scheme: The most urgentworks in the Mangoky scheme are being carried out in 1984-85 with fundsfrom the Mangoky Agricultural Development Project. These includere-outfitting the dredge; closing the breaks in the protective dike; andreconstruction of a secondary canal. The proposed Project would finance:
ij the cleaning of the desilting basin, of the headworks, and of theaccess canal;
Cii) resealing the concrete section joints, primarily for the 100 kmof raised canals which require special polyethylene andpolyurethane seals;
Ciii) rehabilitation of 45 km of service roads;
(iv) repair of the river-intake gate and of irrigation gates;
(v) improving the main drain outlets;
(vi) equipment to make possible improved maintenance of irrigationstructures (spare parts for the floating dredger in thede-silting basin; power shovels to clean drains and canals;specially equipped boats to mow weeds growing in the largerdrains; graders, trucks, motorcycles and other vehicles; smallcompressors and other small civil works equipment, and paintingequipment);
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(vi) technical assistance in cost accounting.
3.13 The three senior technical assistants-hitherto financed by theCCCE--will be financed in late 1985 through 1987 under the IDA supportedCotton Development Project. They include an agronomist who is responsiblefor agricultural operations; an engineer responsible for planning andcarrying out the maintenance of the irrigation system; an engineerresponsible for restoring the repairs garage and spare parts depot toeffective operations. Under the proposed Project the fourth long-termtechnical assistant is being financed to develop a system of analyticalcost accounting for SAM&NGOKY and to oversee its implementation- involvingtraining on the job - and integration into SAMANGOMY's operations. (Tothe present it is difficult for SAMANGOKY to distribute its costs bycategories such as maintenance, extension, agricultural production,marketing and so forth. Determination of costs of services and inputsreceived by different producers - farmers by size of plot, large farms andso forth - is also a time consuming and ad hoc cxercise).
3.14 In complement to the physical restoration and basicreorganization, SAMANGOKY's management has redefined and reduced itsobjectives (para 2.17). SAMANGOKY now provides water for irrigation (whichrequires managing and maintaining the irrigation network); providesextension services; and sells agricultural inputs and equipment.Managemnat has also worked out a Five Year Work Program with a view toobtaining full recovery of operating costs (para 3.15). The updatedversion of this plan was reviewed at negotiations. It requires a furtherreduction in SAMANGOKY employees from 408 at the end of 1984 to 313 by1988. It includes payment by Government of the local costs of projectitems to be imported in 1985 (FMG 183 million); a capital contribution bythe Government (FMG 597 million); conversion of part of Samangoky's shortterm debt into a 10 year loan to the BTM (FMG 260 million) for FMG 1,040million in total. It also includes annual payments from Government formaintenance of the headworks structures (FUG 245 million in 1986, and FMG67 million in succeeding years). SAMANGOKY would be profitable by 1988(Annex, Table 15 ) given valuation of capital at historical prices.
3.15 Several elements in the Five-Year Rehabilitation Plan arecrucial. In 1984, 46% of SAMANGOKY's useful land was cultivated. In thePlan 97% is to be cultivated by 1986, while because of double cropping,ha cultivated would be 112% of ha available. By 1988, ha cultivated shouldbe 124% of ha available (7,700 ha), at which time most rice land would bedouble cropped. In addition, substantial increases in cotton yields and,to lesser degree, rice yields are foreseen. To achieve these objectivesSAMANGOKY is radically reorganizing its relations with its clients. Inaddition to individuals, private and public farms are entering intolong-term contracts with SAMANGOKY in which SAMANGOKY supplies land and
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water against a fixed rent. These would account for about 60Z of totalcultivation in 1988. (In late 1984, such contracts covered five firms for2,150 ha). Individual cultivators would still till 40Z of SAMANGOKY's landin 1988. They are being selected on the basis of past performance (para2.18) and will pay higher water charges than in the past. !i the case ofpaddy these will be 500 kg per ha per crop cycle. Average yields atSAMANGOKY are 3.6 t per ha. This makes returns per ha, after payment ofthe user charge, far higher than returns on Highland irrigation whereyields are 2 t per ha. Notwithstanding the continuing fiscal burden ofSAMANGOKY, Government believes that further increases in user-charges arenot currently feasible, perhaps because of the radical changes incultivator relations at SAMANGOKY which are still underway (paras2.17-2.18). At negotiations it was agreed that execution of this planincluding the cash contribution of FKG 597 million to Samangoky would be acondition of disbursement for the Samangoky component of the project.
3.16 Participation of Cofinanciers. The principal cofinanciers (CCCE,FED and IDA) have worked together intensively through Project preparationand appraisal and have expressed agreement in detailed joint aide-memoireson Project objectives; on division among cofinanciers of financing; on themode of operations from selection of scheme through completion of the civilworks. 3/
3.17 IDA would be the principal supporter of institution-building. Itwould finance the technical assistance to MPARA and some of the preparationstudies for future rehabilitation. IDA, along with the other cofinanciers,would also finance reconstruction of medium schemes. Initially the FEDwould concentrate on rehabilitation in the faritany of Toliary, and theCCCE in the Highlands. The rehabilitation program, updated every year,would specify the distribution of studies and civil works amongcotinanciers. The Project has been designed with sufficient flexibility sothat if an additional cofinancier wishes to participate, it will befeasible to engage an additional consulting firm to carry out the studiesneeded to permit expanded operation. It would also be possible to use thesame sequence (selection, studies, construction, execution of works) forsome of the traditional schemes should this prove desirable at a latertime.
3/ The basic aide-memoire of the co-financiers is contained in theProject Implementation Volume.
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D. Project Costs
3.18 As indicated in Table 1, total Project costs are estimated at FKG22.1 billion (US$29.6 million), of which 61X are in foreign exchange.Physical contingencies equal to 13% of base-line costs are provided for.Local inflation is assumed at 14Z per year. International inflation istaken at SZ and 7.5% for 1985 and 1986, and 8% annually for 1987-1989. Theexchange rate was adjusted for these different rates to preserve itspurchasing power parity of mid-1985. It moved, therefore, from FM(' 650 tothe US dollar in 1985 to FMG 846 in 1989. Consequently, combined five yearbaseline costs in US dollars were inflated only 22Z for pricecontingencies. No provisiou for physical contingencies has been includedfor staff and equipment for which numbers are clearly established. Becausevalue added tax and duties on locally procured imported equipment andmaterial are substantial, taxes are estimated at 16% of total costs, andburden principally the civil works category. Taxes and duties on technicalassistance, vehicles and equipment directly imported by MPARA or SAMANGOKYare excluded. Costs by project component are detailed in Annex Tables 1-8.
3.19 The unit or mean investment costs per ha of medium scbemerehabilitation for a total of 17,100 ha are assumed equal to thoseestimated for the first tranche rehabilitation at the schemes of Behara,Belamoty and Soavina. Total costs for the medium scheme rehabilitation areestimated at about $800 per ha. in 1985 prices. The unit costs by categoryare detailed in Annex Table 5.'
lbble 1. Sumry Project Costs
Share of ForeignProJect Conut loa Fore Total I Foreg Tbtal Ba sote Etxce
3.20 The IDA Credit of US $12.0 million would finance 41% of Projectcosts (Table 2). For the management support component (MPARA), this wouldcover 65Z of civil works (para 3.09); 95Z of expatriate staff and studies(para 3.06); 75Z of vehicles, equipment and furniture (para 3.09); and 36%of operating costs (travel allowances, para 3.06). Of the schemerehabilitation component the IDA credit would cover 30X of rehabilitationworks (para 3.10) and 40% of preinvestment studies and associatedconsultant fees (para 4.04). Finally, the Credit would cover 65% of therehabilitation works on the Mangoky Scheme (para 3.12) and 100% ofconsultant fees, vehicles and equipment (paras 3.12, 3.13). with theexception of funds for assistance to the Mangoky Scheme, which would bepassed onto SAMANGOKY as a grant, the Government of Madagascar would passon all funds to the Ministry of Agriculture (MPARA). A PPA request isbeing processed, primarily for funding for the T.A. Team to MPARA and forengineering studies for scheme rehabilitation to enable timely Projectstart-up and preparatory studies needed for the second tranche ofrehabilitation.
3.21 Co-Financing. Under parallel arrangements CCCE would finance 25%of vehicles and equipment for the institution building component (para3.09), and FAC would finance the monitoring and evaluation advisor (para3.06, vii). The EDF allocation for 1985 would be ECU 5.3 million (US$4.0million) to cover the cos0s of rehabilitating the Behara and BelamotySchemes in 1985-86; and three additional schemes, also in Toleary Province,in 1987 and 1988. In 1984 CCCE has committed FF 24 million (US$2.4million) to the scheme rehabilitation component to cover the-costs of theSoavina Scheme in 1985-86 and the pre-investment studies of four addition.alschemes for rehabilitation in 1986 and 1987. CCCE has also scheduled in1986 about FF 36 million (US$3.6 million) for rehabilitation of fouradditional schemes in 1986-88.
3.22 Government's Share. Over the five year implementation period,Government's participation is estimated at 10% of total project costs, netof taxes, as indicated below (US dollar millions):
financial contribution for civil works 3.9working capital, SAMANGOKY (para 3.14) 2.2incremental operating costs of MPARA 1.0
7.1taxes 4.7net contribution 2.4
This amount is reasonable, given the extreme scarcity of Government budgetresources which is expected to continue throughout the project period. IDAapproval of the annual budgets and financing plans of the Projectcomponents would be a condition of disbursement for uncommittedexpenditures financed under the IDA credit. Assurances were obtained atnegotiations that the Government would make available funds required forproject implementation. The level of budget support required andprovisions for it would be specifically reviewed each year as part of th.eannual work plan exercise.
Table 2. Proposed Project F'ianeing
Project C9!!!ent: Totcal IDA - cS FAC C4 Beneficiaries iDATui milLion 2
3.23 Procurement procedures are summarized in Table 3. All civilworks to be financed by IDA (US$10.9 million including GOM contribution)would be under bidding documents, divided into lots to be proposed by theconsulting engineers and allowing bidding for one, several or all of thelots. Procurement would be through international competitive bidding anddomestic civil works contractors would be allowed a preferential margin 7*Zorer the lowest evaluated bid of competing foreign contractors.Sut-contracting to small regional contractors would be encouraged on thebasis of rules clearly stated in the tender documents. IDA would review:(i) bidding documents and bid award procedures; and (ii) the bid evaluationand proposed contracts prior to contract award, for all civil worksestimated to cost over US$100,000. International consultants to befinanced by IDA (US$1.8 million) for the institution building component arebeing recruited following IDA guidelines. Consulting services forpre-investment studies and supervision of works to be financed by IDA(US$1.1 million) would be procured from local engineering firms, possiblyin joint venture with international firms, following procedures acceptableto IDA. Four annual lots of vehicles would be procured throughinternational competitive bidding or shopping among all locally representedmanufacturers with adequate repair facilities. Office equipment andfurniture would be procured based on price quotations from at least threelocal or foreign suppliers. Grouped vehicles, equipment and furniturepurchases exceeding US$100,000 would require international competitivebidding following IDA guidelines and prior IDA approval of biddingdocuments, bid evaluation and draft contracts. Purchase of specializedirrigation and drainage maintenance equipment (US$0.3 million) for theMangoky scheme from a single manufacturer would be allowed. Assurances onthese procedures were obtained at negotiations.
V Snppdxg (thee aw1is), sole surce or cmaatat s ;orcst.2/ InCreawd local staff, l1, office ad vicle operawtig aosts.31 Travel inammitj ; trainig.4/ Tes local c uettiv bLdddr,g and abo1izg.
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3.24 The IDA credit would be disbursed as follows (SDR millions):
Schime Rehabilitation and Management Support Components (MPARA)
Category I Civil Works, 65% of total expenditures 4.2
Category II : Consultant Services, 100% oftotal expenditures 2.0
Category III : Vehicles, Equipment and OfficeFurniture, 100% of foreignexpenditures and 90X of localexpenditures 0.5
Category IV : Travel Cost and Training,90Z of total expenditures 0.5
Category V Civil Works, 65% of totalexpenditures 1.;5
Category VI : Consultant Services, 1002 oftotal expenditures 0.2
Category VII : Vehicles, Equipment, Office Furniture,100% of foreign expenditures and902 of local expenditures 0.7
Category VIII: Special Account 0.85
Category IX : Refunding of the ProjectPreparation Advance 0.84
Category X Unallocated 1.310
TOTAL: 12.6
The schedule of disbursements is at Annex Table 20. The averagedisbursement period for Bank Group financed irrigation projects is 9years. The proposed credit would disburse more rapidly: The SAMANGOKYcomponent is in large part for emergency civil works in which time is ofthe essence. Detailed engineering work was completed in February, 1985 andworks are scheduled to start in the fall and 93% of the component's
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expenditures would occur during the first three project years. The MPARAmanagement support component is scheduled to fully disburse during thefirst four years. This should pose few problems since the technicalassistance team and the Malgache group which they are to support would beon board from project year one. Most expendit6re for the schemerehabilitation component will be for civil works. Work on the last schemesto be rehabilitated under the project would be scheduled to begin inproject year three. Normally two years would be needed to execute thesimple kind of civil works to be expected under this component.Nevertheless, three years have been allotted in the Project for each of the16 schemes to be rehabilitated. The closing date would be June 30, 1991.Final payments would be completed 6.6 years after Board presentation onApril 30, 1985, that is December 31, 1991.
C. Budgetting, Accounting and Disbursement Procedures
3.25 Accounts will be kept separately for the management support andscheme rehabilitation components of the Project by the Directorate ofFinance and Personnel (DFP) of the Ministry of Agriculture which isreceiving technical assistance from international consultants under theongoing Agricultural Institutions Technical Assistance Project(Cr.1249-MAG). However, the Project Coordinator will have ultimateresponsibility for project budgetting and accounting. He will submitannually by September 30, a project execution program, budget and financialplan for the following year approved by IDA (para 3.22). Project accountswill be audited annually by independent auditors acceptable to IDA, andtheir reports would be submitted six months after the end of Government'sfiscal year. Assurance to this effect was obtained at negotiations.
3.26 Disbursement Procedures MPARA and Imprest Account. Noexpenditures for vehicles, equipment and operating expenditures andnon-committed expenditures for civil works and consultant services relatingto any year will be eligible for financing under the IDA credit before theprogram, budget and financing plan for that year (as prepared by theProject coordinator para 3.25) have been approved by IDA (para 4.12).Withdrawals for expenditures will be claimed under the usual Bankprocedures, including reimbursement of expenditures pre-financed by MPARA,direct payment to suppliers, etc. To facilitate disbursement and to reducethe number of withdrawal applications to be processed, soon after credit2ffectiveness, IDA would advance US$0.8 million into a special account withthe Central Bank or other banking institution acceptable to IDA. Thesefunds would be utilized to begin Project implementation. This shouldenable DFP to group claims for reimbursement and submit applications forwithdrawals from the special account of not less than US$20,000 through theTreasury in the Ministry of Finance (usual channel). The account will beused to pay for expenditurea in both local and foreign currency directly orthrough the commercial banking system, and against all categories ofexpenditures. Transactions for all expenditures will be effected using theexchange rate of the day.
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3.27 Disbursements on Statements of Expenditures (SOEs). DPF wouldclaim reimbursement on the basis of Statements of Expentitures for:
(i) civil works contracts costing less than US$50,000equivalent (Disbursement Category I);
(ii) consulting services contracts costing less than US$50,000equivalent (Disbursement Category II);
(iii) vehicles, equipment, furniture and operating costs (travelallowances) for single items costing less than US$15,000equivalent (Disbursement Categories III and IV).
Withdrawals for local expenses above these limits and for expenditures inforeign currency in excess of US$5,000 equivalent would be fully documented(invoices, evidence of payment, etc.). The suitable format for this wasagreed at negotiations as part of the disbursement letter. DFP will retainall the relevant supporting documents for reimbursement claims under SOEsfor inspection by supervision missions. During the course of the annualaudit of the Project's accounts, the auditor will be requested to certifythat all expenditures claimed under SOEs during the year have been properlyincurred for the Project.
3.28 Disbursement Procedures SAMANGOKY. SAMANGOKY's accountingsystem, which was instituted under the ongoing Mangoky AgriculturalDevelopment Project (Cr.881-MAG), is adequate for its current activities.Bank supervision and appraisal missions have, however, identified need foran analytical budgetting and cost-accounting system. Under the Project,IDA would finance additional consultant support to design and implementsuch a system (para 3.16). SAMANGOKY's 1983 accounts have been audited andcertified by independent auditors.
3.29 Budget review, auditing and disbursement procedures for theSAMANCOKY component would be similar to those describe- in paras 3.26 and3.27:
(i) annual submission by June 30 of the next annual workprogram, budget and financing plan, including Governmentcash contribution to maintenance and/:r extensionservices, for IDA approval (disbursement condition);
(ii) accounts audited annually and the audLt report submittedto IDA within 6 months of the end of SAMANGOKY's fiscalyear;
(iii) upon credit effectiveness, SAMANGOKY would also drawagainst the Special Account (para 3.26);
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(iv) withdrawal applications grouped into lots of not less thanUS$20,000 as submitted by SAMANGOKY to the DFP forprocessing;
Cv) disbursement on SOEs to be allowed for civil works andconsulting services costing less than US$50,000(categories VI and VII) and for single items of vehiclesand equipment costing less than US$15,000 (category VII),expenditures in foreign exchange above US$5,000 would befully documented. At the annual audit, the auditor willcertify all expenditures claimed under SOE's. Assuranceson these arrangements were obtained at negotiations.
H. Environmental and Health Impact
3.30 Through rehabilitation of schemes and through improvingirrigation practices, the Project would slow the degradation of irrigationland. The increased food production, will lead to improved nutrition forfarm families. The level of health care and hygiene among farmers remainslow, so that schistosomiasis and malaria infections are comon. Since thepopulations on the schemes to be rehabilitated are already exposed to thesediseases, increasing the area under irrigation - and the stagnant waterwhich is necessary for their propagation - would bave slight effect ontheir incidence. The overall impact of the Project on the environment andhealth status of those affected would be positive.
IV. PROJECT IMPLEMENTATION
4.01 The principal responsibility for project implementation would bewith 4 of MPARA's 5 Directorates; for example project management, planningand coordination by the Programming Directorate, irrigation-worksrehabilitation by the DIR (Para. 3.05 and Chart 1). A project cQordinator,already appointed, in the DP would have specific responsibility fo-r overallproject planning, coordination and management. It was agreed atnegotiations that the Project coordinator would have adequateresponsibilities, experience and qualifications and that the borrower wouldconsult with IDA before makiSng any employment for the position of projectcoordinator. A basic project objective is to strengthen the Ministry'scapacity to handle the range of responsibilities involved in rehabilitationof the medium schemes. Thus a substantial technical assistance componentis included (para. 3.06). In order to ensure that project preparation andexecution of works are well coordinated, an ad hoc coordinating committeehas been established and would meet periodically to consider annual plansand key documents (para. 4.05). The technical assistance team would alsopromote effective coordination in that the advisors would be working in the
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several directorates. In addition consulting engineers would be engaged toprepare individual scheme rehabiltiation design, supervision ofconstruction, manuals for scheme operation and maintenance, andagricultural development plans. Although establishment of water managementcommittees involves local government responsibility, at the Faritany orfivondronam-pokontany level, In practice the DIR has sheparded water 0 andM legislation through its various stages of approval and has exercisedleadership in the very limited development, hitherto, of the WMC. Underthe Project, the DIR would continue to exercise this function but withreinforcement from the technical assistance team and the consultingengineers (para 4.07, 4.09).
A. The Sequence of Scheme Rehabilitation
4.02 Selection of Schemes for Rehabilitation. Three teams set-up bythe Directorate of Rural Infrastructure, each including an economist, anagriculturalist, an irrigation engineer and a sociologist are carrying outthe inventory of all the medium irrigation schemes. The inventory providesinter alia basic agro-economic data for each scheme; a preliminary estimateof the costs of rehabilitating the civil works and the increase in hairrlgated as a result (Annex Table 19). The complete inventory should beready by 1987. Preliminary selection of schemes for rehabilitation fromthe inventory would involve judgment on several criteria. Access, that isthe cost of transportation, will be an important consideration (para3.11). Motivation of the scheme's cultivators will be a selectioncriterion. Whether the scheme fits into a regional rehabilitation strabegy- is one of a cluster of schemes to be rehabilitated- and the quality anddensity of supporting infrastructure, e.g. extension services, availabilityof credit, will also be considered. Schemes will also be selected by theirbenefit - cost relationships roughly estimated, initially for the option inwhich the scheme is restored to its original scope of operations; andsecondly for the option in which restoration would be to the most desirablelevel of improvement. To be selected for further processing the ERR mustexceed 14% assuming the persistance of traditional yields; deterioration at7% a year stopping in 1992; and double cropping at historical rates. Atnegotiations agLwament was reached to apply these criteria.
tMUNWE or gW9 We l1ltILTATI3N OV A DIl) IMZ4TICN SUllW.
Otmth of Ravtuv ai Approvalclalttxn fhrdnittir Ebr cdca t be finof tak) WAW/DIR IA'IA /LNA fiult1rw FVjIneery Gxtnctnionfim f. ClawW itterar 'inu Cdmitte" __r IDA credit
I -seluct edna tru X
bsrentory
5 e-bmllmr sLuv X
-retrainizrq witarlion trM afflaltn ctdff
7 -prellirary ergl- XreerlrE desiDI
8 -leaslbillbty oituy, OMH K Xplan (preliminary)
9 -5 yr. 41rl.,d- X X (UVA) Xelopiunt plan
10 ,Ietallal erlrnr- X Xtra dcalV' tr
11 -prepar bidd% X&cwenhI
-bId evutlion/Wntract it X X
13 -ansl agric. plan X X-I4,mtatIa of
14 aicisir, plt n _ puon of llg tla w
16
17 t biplerntaltion),>
la-fomitlon Of allr.
aoa tlon202122 -Zlactin of OC2324 96rs/owt.contract X
(dim)
2b
U~~~~~~~~~~~~~~~~~~~~~~~~~- ml N prvptm~depwited
36 -pnrupw O/H Mmu K X
37 %rzka cizlsctI
42 -Gcmpa wise -e$pt$ wil X
j/ lz ss RWMu d Oftrs Tauhr surd.3' Itzt to pay fuU onrUw wnd mlnuarm cts, as well - a prepsynt
to ib d=LtMi before cvil wtdA amu am ted.y l wdvw aciLiw an xi ano of p rUwr. ericulbual directorato.
Ur vM rni ad 4pns bid evalatim ad draft ntrsct only.ft Lh lm of the foto& tsw wIs IlJicble. ith DDt wuld nro go t tk tatwpu dAt. for ghir achlwvan four sach whistIn ruiablillAtiun.
kim | u.ar cr aLe Ia)Imt bam.t
p - 35 -
4.03 Baseline Surveys. After the scheme is selected from theinventory for further processing, MPARA would carry out a baseline surveyof the scheme to determine its agricultural, economic and sociologicalcharacteristics. Agreement on the terms of reference for these surveys,has been reached (para 3.07). This work would be supported by anexpatriate agricultural economist specially recruited under the Project,(para 3.06) with field extension agents from the DVA and census agents fromthe Directorate of Programming. The Project includes supplementaryoperational and travel funds to carry out the surveys and funding forconsultant assistance should this prove desirable. A baseline survey forone scheme is likely to last four months of which two months would be inthe field.
4.04 Preinvestment Studies, Construction and Supervision. Jointventures between Malagasy and expatriate firms would carry out this workwhich would include:
(i) preliminary engineering design (avant projet soma-ire); a schemefive year agricultural development plan, based on the findings ofthe baseline survey; and a feasibility study including a rate ofreturn and sensitivity analysis and a discussion of alternativerehabilitation options;
(ii) detailed engineering design (avant projet detaillU), and revisedcost estimates; (Revised cost estimates should not exceed theinitial cost estimates by more than 15%, if the scheme is tocontinue to be processed for rehabilitation withoutreconsideration. Reconsideration would involve re-doing thefeasibility study and further the processing of the scheme inquestion only if the economic rate of return still exceeds 14%.Assurances of this were obtained at negotiations).
(iii) final engineering design (dossier d'execution), preparation ofbidding documents, tendering, bid evaluation and contract award;
(iv) a survey of the capacity of local construction firms and laborgangs in the area, to carry out irrigation rehabilitation worksand routine maintenance and repairs;
(v) supervision of works; and
(vi) preparation of scheme operation and maintenance manuals (para4.08).
For each scheme to be financed under the IDA credit, IDA's review andconcurrence would be required for the selection of the scheme from theinventory; the decisiou based on the feasibility study; for constructionfirms, terms and conditions, bid evaluation and draft contract forconstruction. Government's acceptance of these conditions was obtained atnegotiations. (A schema indicating the sequence of steps forscheme-rehabilitation is included above.)
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B. Ad hoc Coordinating Committee.
4.05 Project implementation would lead to a final product: physicalrehabilitation of meditm irrigation schemes with substantialself-management and self-finance and a program of agricultural developmenttailored to the environment of the individual scheme. This will requiretimely inputs from several directorates of the MPARA in cooperation withseveral other organizations. To facilitate this, MPARA has set up an AdHoc Coordinating Committee, chaired by the Secretary General of theMinistry of Agriculture and including the four Directors (chart 1); plusthe Director of Livestock and the Director of Forestry from the Ministry ofLivestock and Forestry, and a representative of the Ministry of PublicWorks. The DP through the Project coordinator (para. 3.06) would providethe secretariat to the Coordinating Committee. At appraisal it was agreedthat the Committee would approve:
(i) the master plan or plan directeur, which would cover at least tenyears and indicate in broad brush terms the entire set ofrehabilitation activities to be undertaken for the medium schemesincluding the policies to be pursued with respect to types ofreconstruction, with respect to agricultural development and withrespect to scheme organisation and funding of 0 and M;
(ii) the moving three year plan for rehabilitation, which would becoordinated with the Government's 3 year investment programs;
(iii) the annual execution program and associated financing plan(para. 4.11);
Civ) the consultants recommended by the DIR for pre-investment andengineering studies, as well as their terms of reference;
Cv) schemes selected from the inventory for possible furtherprocessing;
(vi) feasibility studies;
(vii) Five Year Agricultural Development Plans;
(viii) bidding documents and contract awards for construction;
(ix) the programs and manuals for scheme 0 and M.
IDA would also review and approve the annual work program, budget andfinancing plan (para 4.11).
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C. Scheme Finances, Operations and Maintenance
4.06 Government accepts that moving to a decentralized approach ofreliance on scheme self-finance, self-maintenance, and self-administrationis the best direction to take. The irrigation legislation (Annex 2 andpara 2.14) and its implementation regulations are designed to bring thisabout. The initiative with the cost-recovery legislation came from theGovernment and reflects substantial public discussion and support for thedecentralized alternative. This Implies a better environment for movingforward on cost-recovery than was the case in the past. Nevertheless, itremains necessary to grant to the users the right to association with theright to act as a legal entity which can collect funds, disburse them,enter into contracts, and borrow money. In this way self-administrationand self-finance will become possible. This issue was discussed atnegotiations and it was agreed that a legal entity (structure d'operation)would be established for each medium scheme to be rehabilitated which wuldbe empowered with the requisite authorities. The amendment of existinglegislation to be consistent with this approach would be a condition ofcredit effectiveness.
4.07 The rehabilitation sequence includes, as a necessary step,water-user review and approval. Following completion of preliminaryengineering design and the feasibility study, MPARA personnel includingconsultants would go to the scheme and discuss the engineeringrehabilitation plans with the water-user representatives. At this stagethe consulting engineers would indicate the annual irrigation budget andthe activities to be financed as well as an indication of what work couldbe done manually. The WMC would review the plans and might suggestdesirable changes. If the water-users wished the work to go forward, they,through the WMC, would approve the plans; and their user representativeswould sign a document to commit thpmselves to use their own resources tofinance fully and carry out the scheme-maintenance as foreseen in theplans. The users would also make a din&, a traditional collectivecommitment, with the sane content. The commitment would also include anadvance payment equal to the financial costs of one full year ofmaintenance, whlch would be deposited into an account of the users'association before completion of the rehabilitation civil works and whichwould be reserved for finance of the needed scheme upkeep. Assurances onthese procedures were received at negotiations. Both the FED and the CCCEhave endorsed this approach.
4.08 Government also has an irrigation improvements tax on the books(para 2.14, Annex 2). Because beneficiary incomes are so low, capitalrecovery is not recommended (para 5.05). Nevertheless, water users
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would be expected to cover the full costs of scheme operation andmaintenance.
4.09 The rural institutions advisor would assist in (a) bringing aboutthe elections for the WMC in timely fashion; (b) developing a simple budgetand expenditure system to be used by the WMC; (c) contribute to thedevelopment of the user-charge collection-mechanisms; (d) train the WMC(treasurer, president) in the application of the cost-recovery procedures;(e) sensitize the water-users to the need for formal, regular, andcompulsory cost-recovery; (f) help organize the users association. Asexecution of the civil works nears completion, the supervisory engineerswould prepare a manual of 0 and M which would describe in detail themaintenance and other operations, their cost, in labor and cash, theirsequencing and the manner in which repairs could be carried out. They willalso propose a division of responsibilities and functions for 0 and M, andprovide training for the water-users in the use of tht 0 and x manual. TheDIR with the assistance of the rural institution specitist would developwith the WMC the associated annual budget of 0 and M. Assurances werereceived at negotiations, that Government agrees to IDA review and approvalof the manuals and budgets for 0 and M, for the schemes whoserehabilitation would be financed under the IDA credit.
4.10 Scheme operations would be guided by annual work plans preparedby the extension services (chef de secteur) and the DIR irrigation head(chef de reseau). They would be approved by the WMC. On the agriculturalside, the plans would reflect the implementation of the scheme's five yearagricultural development plan, derived from the baseline survey. Both theextension and the irrigation services would report annually by June 15, totheir respective central directorates on the performance of the scheme interms of areas irrigated, yields, production and 0 and M finance during theprevious year. These results would be reported in the semi-annual progressreport and provide feedback for the Project's annual work plan in thefollowing year.
D. Organisation of Work Planning
4.11 The annotated list below indicates the proposed organization ofwork planning, including review responsibilities. IDA would review MPARA.'sannual execution program and financing plan because of their key importancefor the success of the scheme rehabilitation part of the Project. TheProgram would indicate the entire work program for the coming yearorganized by 4 categories: (a) scheme rehabilitation per se[identification of schemes to be rehabilitated and related tasks(engineering design, feasibility study, construction)]; (b) schemeagricultural development (baseline surveys, agricultural plans, retrainingfor extension agents, implementation-plan); (c) development of scheme levelO and M (formation of users associations, (structures d'operation)users-Government contract, 0 and M prepayment, 0 and M manual and budget);(d) incremental and extraordinary expenditures ox MPARA for program
S -39 -
execution (travel indemnities, fuel). This annual work program would beconsistent with the human, material and financial resources to be madeavailable through Government budgetting procedures (para. 3.22). The firstsuch annual execution plan would be for 1986 and would be forwarded to IDAbefore end September, 1985 for approval. Execution plans for thesucceeding years would also be subject to the annual review process,following their receipt by IDA during September. It was agreed atnegotiations that disbursements in the beadget year (the calendar year) forgoods and services to be procured with IDA funding for disbursementcategories I through IV and, for which no prior contractual commitmentexists, would be contingent on IDA approval of the annual execution programfor that budget year (para 3.25).
E. Training and Manpower Development
4.12 Much of the training and manpower development under the Projectwould be done on-the-job through joint ventures between Malagasy andexpatriate firms for the preinvestment studies and through subcontractingto small regional firms. These contracts may include an explicit componentfor on-the-job training. The capacity to train and delegate would be acriterion in the selection and evaluation of the technical assistancerecruited to strengthen MPARA. The withdrawal of this technical assistancein the fourth year of the Project would indicate the success of this effortand the need for technical assistance ir- an anticipated follow-up project(para 4.13). The Project would also require possible specific trainingactivities including (i) field agent training for baseline surveys; (ii)budgeting and accounting training of WMC; (iii) retraining of extensionagents. Responsibility for these training activities will restrespectively with the agricultural economist, the rural institutions
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Organization of Work Planning
Formulation Reviewed and/or Implementedresponsibility Approved by bY
MEDIUM SCHEMES
Plan Directeur (para 4.05) DP CC, technical Alldirectorates All
Three Year Plan (para 4.05) DP CC All
Annual Execution Program and DP/DFP CC, technical AllFinancing Plan (para 4.11) 11 directorates, IDA
Five Year Agricultural Consultants 2I CC WMC, DVADevelopment Plan (para 3.07) and DVA
Annual Agricultural DVA WMC, DVADevelopment Plan (para 3.07)
Manual for Scheme 0 and M Consultants 2/ CC, DIR WMC, DIR(para 4.09)
Consultants 2,Scheme 0 and M Standard Budget DIR CC, WMC/DIR WMC, DIR(para 4.09)
SAMANGOKY
Five Year Rehabilitation Plan SAMANGOKY GOM, BD, 3/ SAMANGOKY(paras 3.14-3.15)
Annual Work Program, Budget SAMANGOKY BD 3/ SAMANGOKYand Financing Plan (3.29)
1/ Includes planning for carrying out inventories, base-line surveys, engineeringdesigns, feasibility studies and so forth. Includes as components work plans of DIR,DVA, VP. .
2/ Consultants for studies, engineering design supervision and so forth, of schemerehabilitation
3/ All of SAMANGOKY's plans would also be reviewed by its Board of Directors.
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advisor, and the training/extension specialist (para 3.06). Centers withfacilities capable of housing small groups of trainees would be selected,and per diems would be provided for participants in training courses.
F. Monitoring, Evaluation and Reports
4.13 Three years after the date of credit effectiveness MPARA wouldsubmit the Special Report to the Government including the Planning Agencyand to the co-financiers. Coordinated by the DP, it would evaluate projectperformance and draw upon lessons learned in designing a follow-onproject. The report would su"mrize achievement under the rehabilitationcontracts, analyze difficulties encountered and suggest measures toovercome them in the future. Specifically it would assess the work ondeveloping scheme-level self-finance, maintenance and management, and reacha conclusion on how such institutional development could best proceed in afollow-on project. It would also address the degree to which the technicalassistance to MPARA had been adequate for training and its other functions,would include a plan for TA phase-out (para 3.13) and possibly a plan forphasing in additional TA for a second project. It would also evaluate theprograms of agricultural development and physical rehabilitation of theindividual schemes. Following receipt of the Special Report (1988), theGovernment would convene a work-shop with the co-financiers to discuss thefeasibility and content of a second irrigation rehabilitation project.
4.14 Project monitoring and evaluation would be the responsibility ofMPARA's Directorate of Programming, and specifically of an officerresponsible for this aspect, who would be assisted and advised by atechnical assistant financed by the PAC. Operating costs related to thisposition, such as housing, transport and travel indemnities would befinanced out of the proposed credit. The DP would prepare the annualreport on project implementation. Consistent with para 4.13, the annualreport and the monitoring and evaluation function would include measures ofprogress in developing water-user associations; in collecting user charges,in kind and in cash; an assessment of 0 and M performance; and certainagricultural data (scheme level production, introduction of technicalpackages and so forth). SAMANGOKY will submit semi-annual progress reportsas well as a timely project completion report. Assurance on the format andtiming of reports was obtained at negotiations.
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V. ECONOMIC ANALYSIS 4/
A. Benefits and Rates of Return
5.01 Benefits resulting directly from the Project would consist inpart of increased production of cotton and rice in SAMANGOKY. But the bulkof the benefits would result from the reha',ilitation of 17,100 ha of themedium irrigation schemes. Economic analysis was carried out for the threeschemes for which detailed costs and benefits have been estimated (Behara,Belamoty, and Soavina), that is for a total of 3,100 ha under canals.Costs and benefits per ha for the remaining schemes to be rehabilitatedthrough the Project will be similar to these first three, because of theselection criteria which will be applied (para 4.02), and because theselection process for these first three schemes was not biased towardsschemes with above average ERR. Projecting the expected average resultsfor the three, annual paddy production will be 48,000 tons more at fulldevelopment (year 9) than it otherwise would be. This would be about 2% ofpaddy production in 1983 with an economic value of about FMG 6.7 billion(US$12 million) in 1984.
5.02 At SAMANGOKY, failure to carry out the proposed rehabilitationinvestment would reduce yields and the amount of land cultivated for thefollowing reasons: the increasing amount of sand in the headworks andaccess canals continually reduces through-flow; beginning in 1985, it willbe insufficient to irrigate the total irrigable area. With each additionalyear, the water shortage would increase. The leaks in the canals, reduceddrainage and poorer canal maintenance would cause increasing salinisationand excessively high water tables with an associated reduction in yields ofcotton. An increasing amount of land would become undrainable, andtherefore uncultivable, for either cotton or rice. It is assumed that as aconsequence of the proposed rehabilitation investment (para 3.15),SAMANGOKY would maintain all land under canals in production at goodyields. (Yield information in Annex, Table 14.) It is also assumed thatfailure to carry out the proposed rehabilitation investment would mean areduction in hectares cultivated such that the decrease in productionbenefits would be 20% of annual benefits. SAMANGOKY's costs are assumed tobe independent of the reduction in ha cultivated. The ERR under theseconditions is 32X (Annex, Table 13).
4/ The detailed economic analysis is included in the ImplementationVolume.
- 43 -
5.03 For the entire project (SAMANGOKY included) the economic rate ofreturn is estimated at 24%. Excluding SAMANGOKY, it is 23%, that is thecombined average rate of return estimated for Behara, Belamoty andSoavina (Table 5). In making this estimate for the three schemes the costsof construction, design, and supervision were included, plus the additionalcosts directly resulting from the project to the Directorate ofAgricultural Extension. One half of the costs of strengthening theDirectorate of Rural Infrastructure were also allocated to the economiccosts. The recurrent costs associated with these inve.tients were alsoevaluated and included. All labor, family and paid, was valued at on-sitemarket wages in early 1984. Being competitively determined, they are theopportunity cost of labor. Foreign exchange costs and benefits were valuedat US$1=FMG 657 (as opposed to the rate prevailing in April 1984 of FMG542-US$1). The three year average price-centered on 1983-of Thai 5%brokens (US$ 345 per ton, CIF Malagasy ports) was used to calculate thefarmgate value of the lower quality local rice, assumed to be US$ 274 perton, CIF Malagasy ports. This price is assumed to hold over the projectlifetime. The derivation of the farmgate price of rice, the economic rateof return calculations for the first three schemes, and farm budgets areincluded in the economic analysis tables of the annex (Tables 9 to 12).
5.04 Based on the engineering assessment, it is assumed that withoutrehabilitation, the deterioration will be such that ha irrigated decrease7% annually through 1992, then stabilize, at which level villagers keep theschemes in production indefinitely. In the case of the three first trancheschemes, this means a further reduction in production of 30% (Annex Table12). The associated decrease in production is only 4% annually, becauseland going out of irrigation goes into production of rainfed paddy.Rehabilitation will arrest further deterioration and restore irrigationcapacity (Option A) and in the more-extensive alternative, furtherimprovements will permit more effective water management permitting alarger area irrigated, above all in the counter-season (Option B). Yieldsper ha in both Options A and B remain at traditional levels. In Option C,improved practices are adopted above all a new technical package involvingthe re-introduction of high yielding varieties (in year 5). By fulldevelopment (year 8) average yields of paddy are assumed to have increased42% or 940 kg per ha (Annex Table 11). Option B plus crop development,that is Option C, is recommended for Behara, Belamoty and Soavina. In theHighlands benefits from Option B are reduced because dry season yields arelow, due to cool weather. But Option B will also permit a greater degreeof water management which can permit higher yields.
Beneficiaries
5.05 Because the average on scheme holding is small (0.5 ha forBehara, Belamoty and Soavina combined,) it is estimated that more than34,000 farm families will directly benefit from Project activities, morethan 2% of the farming population. This corresponds to the existingpopulation farming on the schemes to be rehabilitated. The number ofbenefitting families is expected to be higher because of migration to the
- 44 -
areas being rehabilitated in response to enhanced opportunities forgenerating income. The beneficiary population probably has, on average,per capita incomes which are about one third of the national average percapita: Per capLta income in Soavina is higher than ia either Belamoty orBehara. In 1982 it was FHG 41,000 (US$76). Per capita GNP in 1982 isestimated at $320. The national income concept most nearly comparable toSoavina's estimate is national income per capita, (net of depreciation andindirect taxes) which was probably about $220 per capita in 1982.
B. Risks and Sensitivity Analysis
5.06 An important risk of the Project lies LA the implementation ofeffective self-finance and self-management at the scheme level. TheGovernment is not expected to maintain and repair the schemes. Either theuser will play a far larger role in scheme operation, maiatenance andfinance than hitherto, or history will repeat itself, and the schemes willdeteriorate again. The new approach described La paras 4.05 to 4.08implies an extraordinary amount of difficult change in behavior of thewater users, and local authorities. To reduce this risk five measureswould be implemeated: enabling legislation for forming water-userassociations; prior approval of scheme rehabilitation by the WHC's; advancepayment by the water-users; long term technical assistance for formingWMC's and scheme budgeting for 0 and M; scheme level manuals for 0 and M.
5.07 The traditional practice of mostly single cropping impLies anadditional risk. Under Option B, the additional Lnvestment would permitmore economical use of water in the cool or counter-season and substantialdouble cropping is projected during the counter-season in Option B. Thiswould provide an-important part of the incremental benefits from Option Bas opposed to Option A. (Table 4 below). Achievement of such doublecropping will be difficult because it implies a radical reorganization ofthe traditional ways in which farmers use their time, including a possiblereduction in some highly valued activities. It also implies change incultivation techniques including use of shorter cycle varieties andre-organization of tanedy (off-scheme) cultivation. To promote thesechanges there would be a high producer price of rice (para 4.15); andcareful selection of schemes in which motivation of water-users would be animportant selection criterion (para 4.02). Sensitivity analysis on thisrisk was made for Behara and Belamoty, in that the expected benefits fromOption B were halved. The ERR from the unchanged incremental costs anddecreased benefits were 13% and 24Z for Behara and Belamoty respectively.The continuing growth of rural population may also be forcing changes infarming systems in Madagascar which reduce this risk. For example atBelamoty irrigated land is in very short supply. The average fanm familyhas 0.24 ha it irrigated paddy land and 0.14 ha iG ralifec paddy. There,.double cropping (average per family 0.20 ha) is already practiced to thelimits of water availability.
- 45 -
5.08 There is risk that che increases in yields expected under OptionC will be less than assumed either because of failure to develop the newvarieties; failure to make the seeds and other necessary iaputs available;or failure of the agricultural-extension organization to propagatesuccessfully the desired changes. The expected rate of return from fullimplementation of Option C is extremely high. Even if only half theexpected benefits are achieyed, the resulting incremental ERR's (benefitsand costs of C alone) of 29% and 30% greatly exceed the opportunity cost ofcapital. Nevertheless, in the limiting case of-no agricultural developmentwhatsoever, the expected ERR (Option A or B) continues to justify theproject.
C. The Burden of the Proposed User Charge for 0 and M and Efficiency
5.09 Short run production efficiency will not be reduced by theproposed user charge: the burden on household income would be low. It isestimated that the water charge will be less than 5 x of average familyincome of the cultivators on the schemes. Cash incomes have been less thana fifth of total income, but could be higher because the local markets forrice are well developed. Irrigation with a user change which fully coversthe cost of 0 and M-would still remain a very profitable undertaking:irrigation doubles traditional yields from about 1 t of paddy per ha ongood rain-fed land to about 2 t per ha. The value of the increased paddyproduction would be at least 7 times the proposed 0 and M charge; while chereturn per work day on owner occupied irrigated land would also remain veryhigh in that it includes an elemeat of renc (Annex Table 10). In factirrigated land commands substar.tial rent; FMG 40,000 per ha was a commonrent in 1983. Hence following rehabilitatioa, producers would cover allcosts including the full charge for irrigation 0 and N and realize asubstancial net rent on land. The strong financial incentives to put asmuch land in irrigation as possible would persist, notwichscanding theuser-charge equal to a substantial proportion of recent cash income.
5.10 The proposed 0 and M charge would also be distributionallyefficient, in that it would be a linear function of amount of landirrigated while per capita income is clearly a positive function of chesame variable. The latter condition is met since most medium scheme landis owaer operated. Hence the charge would not make farm income moreunequal. Allocational efficiency would be served as well: tocal usercharges would be a positive function of scheme area. For any given scheme,average user charges per ha would decrease as the number of productive hawhich are actually irrigated increases. Users as a group would, therefore,be given a strong incentive to conserve water so as to maximize the numberof ha irrigated and minimize the charges paid by the individual users perha. Specifically, upstream users who consume more water than is essentialfor their production might reduce their consumption in aa effort to reducethe user-charges which they would otherwise have to bear.
- _ - 46-Tlble 4 EtCMIC ALYIS: EOICl RMMS OF RMI5
BASIC DSA AtlD ASSWXSM BY 1GFG( SCEME, F1M N
- ~~~~~~~~~~~Soavina &banoy Bhra
Interal Rates of Retu M):
Qpticn A (restore s&aw to forw level) 14 07 15Optio B (A+ water ontiol ks) 13 I/ 16 21Optica C (B + crop deelopwt 19 23 26Optim Cl (A + crop development) 21 18 20
Basc Data amd Ass :tions:
Ar oclygnaUy served by wrater anddrainae cala (he) 1,100 1,2M0 800
Witout project In year surface 1rr4pted (ha) - 750 640 450surface, cultivated but rt
Wittxut project In year eightsurfaoe irrigated (ha) 475 320 225surface cultivated but rot irript (ha) 575 730 475surface irrlgated in double culture 100 260 -
Sirfae irrigjted (ha) durirg the rainyson after rehabilitation
Optiom A 1,100 900 650(yr.2) (yr.2) (yr.3)
Option B 1,100 1,20M 700(yr.2) (yr.2) (yr.4)
Surface irrigated (ha) in courer-seac after rehabiLitation
OptioaA 500 520 -(yr.5) (yr.2)
Option B 900 1,100 280(yr.8) (yr.4) (yr.3)
Ozrent Yields (kg of padd7 per ha)arigated, rainy season - 2,000 2,000 2,000Rainfed 1,000 .200 -Coamter-season 1,300 1,500 1,900
Fangate parity price of paddy (f}k 136 127 145Eoc altS of rehablitation 2J
(H milio_s)Optica A - 400 345 273Option B 575 463 426Option C 527 (C1) 601 507
I/ In fioancirg the rehabilitation of Soavizia. tbe4O3E is exeadigcoosiderable resources to ase encedch eincreases in yields following crop devielopment above those assumed in theecocaic analysis. lhe amoun of this increase has not been detennLned.Because of the indetermlinate and pilot- nature of the undertaking. the rateof returm calculation rsmains based on the gerera]l assumption of maincrease in yields of 4C7. followirg adoptior, of Improved practices inOption C.
2/ Construction costs only; shadow e>Xch1re rate (CR3 657 to US dollars)- apDlied; prices at avoralsal, sprirg, 1984.
- 47 -
VI. AGREEMENTS REACHED AND RECOMMENDATION
6.01 At negotiations assurances were received from Government on thefollowing:
(i) For the technical assistance in the component formanagement support to MPARA, IDA would review and approvethe tender documents, bid-evaluation and draft contract(para 3.06);
Cii) Review and approval by IDA of tbe Five Year AgriculturalDevelopment Plan for schemes to be financed by the credit(para 3.07);
(iii) No scheme would be scheduled for rehabilitation for whichroad-access would remain a problem (para 3.11);
(iv) Government will make the necessary annual budgetallocation as required by the annual project financingplans of MPARA and SAMANGOKY (para 3.22);
Cv) IDA review and approval of bidding documents and bid awardprocedures and review prior to contract award of bidevaluations and proposed contracts for all civil worksestimated to cost over US$100,000 - (para 3.23);
(vi) Annual auditing of MPARA project accounts by anindependent auditor acceptable to IDA; report would besubmitted within six months of the end of the fiscal year,auditor to certify expenditures claimed under SOE's(paras. 3.25, 3.27);
(vii) Auditing conditions of (vii) above will also be applied toSAMANGOKY (para. 3.29);
(viii) IDA to be consulted on the appointment of the projectcoordinator (para 4.01);
(ix) Application of inventory selection criteria including ERRof 14Z minimum (para 4.02);
tx) For schemes to be financed under the IDA credit, priorapproval by IDA to proceeding with a scheme'srehabilitation processing in event of 15X or more increasein costs estimates of detailed engineering design, overpreliminary engineering design (para 4.04, ii);
(xi) For each scheme to be financed under the IDA credit,approval by IDA of the decision on a scheme's furtherprocessing based on the results of the feasibility study;
-48 -
approval by IDA also of preselection of constructionfirms, terms and conditions, bid evaluation and draftcontract for construction (para 4.04);
(xii) Requirement that water-users review and approverehabilitation plans; commit themselves to fully fund andcarry out scheme-maintenance as foreseen in the plans;agree to advance payment to be paid in before completionof rehabilitation (para. 4.07);
(xiii) IDA review and approval of the manuals and budgets forscheme operation and maintenance for the schemes to befinanced under the IDA credit (para. 4.09);
(xiv) For MPARA semi-annual progress reports, special report,project completion report; for SAMANGOKY semi-annualprogress reports and the project completion report Cpara.4.14);
(X7 Housing, transport and travel indemnities for thetechnical assistant for M and E to be financed out of theproposed credit (para 4.14).
6.02 The folUoving is a condition of credit effectiveness:
Government has established the necessary preconditions toallow the formation of water-user associations with therights to carry out basic financial operations (para4.06).
6.03 The conditions of disbursement would be:
Mi) Initial disbursement for the SANANGOKY component would becontingent on deposit of the Government cash contributionrequired for achieving financial balance of SAMANGOKYthrough implementation of the Five Year Work Program(para. 3.15);
(ii) Annual submission by September 30 and approval by IDA ofannual execution program, and of the budget and financingplan for the HPARA management support and schemerehabilitation components before considering eligible forfinancing non-comuited expenditures for disbursementcategories I through VI (para. 4.11);
- 49 -
(iii) Annual submission by June 30 and approval by IDA of annualprogram, budget, and financing plan for the SAMANGOKYcomponent before considering eligible for financingexpenditures for vebicles, equipment, and operatingexpenditures and non-committed expenditures for civilworks and consultant services (para. 3.29).
6.04. Subject to the above agreements being reached and the conditionsof effectiveness heing met, the proposed Project would be suitable for anIDA credit of SDR 12.6 million (US$12 million) to the GDvernment ofMadagascar.
MfuKMIHISAtION ItMOILIlAlIM PIUCV
tS PIIUIIPIII lIIMSKSt to, kiM ocww WMIPA UIIlAbiA 101. SO*VWIIl PItSINIFIUl l0t1NnIltHAPILOIIA11 IV KkIlqD It StA91II
ktnlled Cotl 1I."1111 cootl
trmo 1001~~~~~~~~~~~~~~Pewlr
tw"Ilt Irrr terl« ~~~~~~~~~~~~~~~~ittierkuonllo fill Coils v
_ .......................... ... c.. .. - - - -. e.n. for o Ormss S_arwhAIt IM5 IM 1"? 1t 1 01 l S t hit AilCst IMU I5 1P lA It" le ttl Role Each. low *I# Acomta
1010!E SIt 610(1 t13.5 111004 -* 51,40 S. MIMISt PUNKS. Few/ I-
PSI, PASPEELESP VMS! 0 ........ ........... . .
I. fItWals/mlP U Sf il lA r 2 IISm to0 o ".* * - 31.40 9 .n5 0.25 cv?. OCIW W IMUAI LLIIK KIM MNW A* I * * * I SO *-I- 50 * SO 0I 9.25 CV3 ULWU1SIn0OIS PYWS! I 14t 540 * * I 9 t .75 0.25 CV4. tClflUtSUIU N T hNSALLAIIU
II EPLIEA PiN CImilt * * 235 650 * 2.9 I * *0 s t05 CV
Ia 5 S 111t OV F IIIL M VuKe ICLUDIE PIam Or EA ITWILL/Rt1 LA lAtiOl MI SKI K ti DIl 31.1 Y ItIII MA MNIS rA p/b MIAWlgA1A406 5 CilMIE nu1 S 1 rON O COWACK L.1 1 4IS:2J£/ESlIIllI09M1 WAIIA-IR SAR rcUl5 P S 1 It K EUWTEII W12N1 0 OIc lWWATIU S3 IIIIEIIIO CAIEI 0UT I A W AI FUNDING1 (CR. 1241-116. AMEC1AIWM IlN urIoIUI rD/d AIIIIML rmMi? lOlt INW11 miii mEu1i1 Nal FM EWE-Inv v 0w 321 IPS/L 130 Po rKnoo 11 *A 00 1i rrB/0ooo msa,2 50 roa Mi1i(tWAIt 101i AL MI Ay 20 000 rWI.Djtoo KR O
... .w ........................................................................................ 9 ..........................................................................................ftrwri 51 IM 1110
rANA
1413 0 UIMIUIL3IAIII NOiCIFucS K MIUILI11301KS PI1O1imI MI"M
132m. KIK KWilitiUA *UXNAMIlU 1t1011 II nilU1 K UELAM11
k3aile Coslt 1431
ins~~~~~~~~~~~~~~~~~v w @@Xe@@e@"@
kMIIwb lw C.o9. h..owtiti* hill . lo.......... ........
UtlAi IM 15 6 I"1 9M I Total nuit Cost In it1 I" I1 39 Total laW Excl. Tax late AetotBass 8888 3848 a38 mass 8s8ae 38ga3 38.888888 3a1 8ss8 3a88gag81 s33"8W 8 1ast1s 88338s a11183388 saga8 see88 3ea8se1s 383588
i. IST !1l
* . TWOIUCM. SItUISMMusI lsuIISE do
3. FIUIML IECIIWoiI TI FIWIU (WiMMII I I I I - 4 12100 12,000 12000 12,00 1?OX0 4000 0 0.2 0 1T
s. KUIS IEIEJMLIOMEuWS CA 3 - - - - I 7.000 21.000 - - - - 213CO0 0 0.9 0 t06 I I nE u 3KS tfLus CA 5 - - - - 5 I30 540 - - - - 50 0 0.e5 0 El7. KNulz I 1E11EIdl W aN
El 11 3C31.35l1l1 EA I - - - I 12.000 121000 - - - - 12.000 0.1 0.55 0 EDS.CUKU 452 CY) Y CtPiS
SIKSTMLS AMll [A I - - - - 3 7.044 7.0 - - - - 7.04 0 0.3s 0 t9. IWEIEK WILE MO L E1VII A AISJILUE IA I - - - - 1 36 1.62 6 - - - 362I 0 0.95 0 El
lo WUWE EA I - - - - I 1126 1424 - - - - 10626 0 0.f5 0 El
/a 110-SI2Y UN1IRK OrF02E WILDING 4276 121 I23M.2(S 15 rFIC2S1 A LIAE 2001IN2 EeANM IW OIL1Slb POIK1 . WFFlCE 2I2MIm 12224 ) JULUI II 011201FIISt A M R t A RWOC FOR AM I.AD S t83141 VMSSic IEUKCI maIEI MIERIA.. uTIEl IUIPENT. 2 PINOCTO MlIOIES. S2IETCII 11AC IESI.IP`IEf IRDS 1.'0 MIE CX MCULAATSId INUIES lU i I6 MII. 1W11115 CSJIPMKNi 2 PlIIC HAD)IIES. 2 SUKIL CIC Kil. 1 S CACULAIOISdo Wt (AM FOR 2HI1 or PRYIKIL SERVICE MS CIRCOSIPT1ON,it ISlIMhClS A1 I ff TIH WHItELE S IO ISTIE A 151 O LA VIEUR 14 WHIMUlEs IS INATIM Al 151 or HE HIItNIC S MTWISIIIM A 251 KLA VAILIN P! WH2ICLLElb 25 12 oFIM5 1(3 EACH oF IN[ 92Z2(S OUISIE IFA, RE62GNIt MIKIAL rr1E WUILlIS 4126 112 IENVUS 1 OFFI ASIP 30011 A M FOR ARwCWI M rt*M AITAIIUN WORKS/e IN2122S SIEtIL l 5Illt KIU CAlCILATRs. IlKilll1 PAK. IIISC. FOR (tlO oF Fr CIlMOISILK IfAO REGON.71 FOR fIlilIS UICOLM IWS U I IA ULIHE W YS1 1F0115 CH KE StIIEUSIo FOR c1 IXK log MO cKrs DE C01 [I2In cuinHllelIN6 AO Ema U IIlI SKCIAL)SI/t 24 1LeN 110 3 2s500 WOO 8 210 L 321 1r1/L a 61 410/5O X 1180 * 1750 OO0/1 FOR FULLMD 40.000 FrR MIR (ICE a s I.MOO2O./UAR1. (1l1kL LEVELI NWINCIIL LUIEL/t PI0IIIL LEYEL/s 14 L/lO 1 I I2O0 UVIIO a 210 L 321 FrG/L * 67 420N I 11 NO a 750 000/lk FOR FIELID 4o0oo0 rIR MINTEVICI a ,2Qo0eO/IEAR P PIt PINCI1L LEYEL co
NIaftf t I29 15125 022'
Ith
a Li~~~~~~~~~~~~~~
IRRIGATION REMIIILITATION PROLCTPROECT BE REHAIILITATIONDES PERINETRES IRRIGES
February 5.195 1-631 .4................................... .................
Febrtiarv S, 1985 16:14
- 64 -
Table 9
Economic Analysis
CALCULATION OF THE ECONOMIC PRICE OF PADDY AT THE FARM-GATE(import parity in 1983 prices)
Soavina Belamoty Behara
Price FOB Bangkok, 5% brokens, US dollars 1/ 285 285 285Quality adjustment 2/ (71) (71) (71)Freight and insurance 60 60 60Price CIF Malagasy port, US dollars 274 274 274Price CIF Malagasy port, FMG 3/ 180,000 180,000 180,000Financial charges (5.5% of price CIF) 9,900 9,900 9,900Port handling 14,000 14,000 14,000Importer's margin (5% of price CIF) 9,000 9,000 9,000Transport to center of consumption 41 16,000 - 6,200Storage, selling cost, and margins 9.100 9.100 9,100
Retail price of rice, center of consumption 238,000 222,000 228,200
Hilling cost (10,000) (10,000) (10,000)Value of by-products 5/ 4,000 4,000 4,000Bag depreciation (990) (990) (990)Collection costs to transport point 6/ (15,000) (15,000) - 7/Transport to center of consumption 47 (5,100) (11,740) - 71Storage and selling costs (7,700) (7,700) (4,400)8/
Farm-gate price of rice 203,210 181,570 216,810Farm-gate price of paddy 9/ 136,151 121,652 145,263
It EPD's prices for Thai 5% brokens per ton at May 1984 were $293 (1982,average); $272 (1983, average); $285 (1984, projection). The priceabove is their average.
2/ Quality adjustment of 25% reflects lower quality of domestic rice (30%brokens).
3/ The shadow exchange ratt is FMG 657 to the US dollar. Seeexplanation in the Implementation Volume.
4/ Transport costs are consistent with data on actual charges. The t/kmcharge for the railroad is 20 FMG; truck transport charges vary from50 FMG to 80 FMG t/km. See data on transport charges inImplementation Volume.
5/ 10 kg husks at FMG 50/kg and 70 kg bran at 50/kg.6/ According to AIRD Final Report.71 Behara will continue to import rice for self-consumption following
rehabilitation.8/ Storage losses of 2% of value.9/ Assumes milling outturn of 67%.
7 June 1984
Table 10
NERIAL FA1M 3DGE1S PE RA EH& PFDCL PAMY FOr , 1983-84 Ecoranc AiaLysis(values in RIG)
Irriati-on
UnLit Rainfed Traditioral Fxisting Improved I. Future Tmprov'ed IPrc Quatic tos guur C- qutt Cost unit Gs
_0. Ocher inputs al 6.000 6,000 6.0C0 9.200 11.20U
U1. Total Costs f/ 91,990 114,840 128,090 174.570
12. Value of paddy (kg) 100 dl 1,010 100,000 2,000 200,000 2,280 228,000 2.840 2B4,000
13. Surplus 8,010 85,160 99,910 109,410return OD labor per day(includirg surplus) e/ 604 1,274 1,312 1,282
a/ Chemical treatcenrs, manure, use of aIgady sickIes and otber equipment.S/ scheme labor for clearirg ard repair only canals, drains. etcetera.C To be institted during project implecntation. DDes wt inlude returm to schm capital.
TI Indicative only. Price differences of several htwdred percent within several mronths; arid over several hundred kitannn durirg the period 1983-1984. Change to free marketirg ard heary change in imports imreased rormalseasonal ard spatial differenaces. For price data durirg this period by month ard place see A.I.R.D., MP-RA.Direction de la Prograumation Service de Coordinati.on du Secteur Riz, Ecude Secceur Rizicole, Rapport Final.Anr.ee E.
e/ Most of this is faTily labor.1/ Does not inclucle land-cre
ADOnI'N RAll:, YIE1J, ENI£FIIS AND MMlS, PER EXM)IC IIECrARE; FOR FtonamLc AnalysisEXIrSI AND nMRE TOtICAL PAXKA Table 15
*t Fai for enterprise -986 795 1,149 1.146 1,166 1,166
Projece bfts 413 576 576 576 576 576
Projecr costs N 1565 293 78 20
e Flow for Pmwecr -1152 283 498 556 576 576ER: 41 (for project)
a/ Yields rr pt 3.38 cm of pM; SMMI c3 thateS/ Fauta vilm of pddy FR 130 per Kt (1984). atm to hold ar project-life.
F Fm ota var ha for rmy mm effttad by SWM1M at RG 145,455. Slngle craw Is asmd, althoughdo.i ctoprg In lkely.
d/ 9mo c SM W* 's yLeld eatm (2.5 r. at ful prect Iqaenitation)./ SWR, .apm:Ctton Devel_p't ProJect. llJ30J83, p.55: FEae prcm eqofvalect of seed-totem U5S526
per ti. S e chnge das of RS 657 per US doUar. Pe walue Is RC 31.5,52 per ton. This Iscsistent ESth XCS C tty Price Forects (R. Thxm, upate, 3 Octob 1984) idth follcmg pdm for
aoce flIe per Kg in US dollAr: 1.65 (1983); 1.77 (1986); 1.75 (1995).B amd on StfWf pw t s of 213 wo* dpys mc n 72D r day ph. Ind preparatia (mzi traction)of RC 45,880, or DC 199,240 per be.
~( FmorL cot of SMWIflW rbaiiteion:
Civil u.odc, eu*lpne (foreigd g S1.435 -. li 943CIvil wc, quldpnt, lcal meta I a 419Tedrdcal assista (forelip I g 0.6 dillion) 394Ted_ic1l asstaxo, local J,st 200
MMEL 1,956h/ Defir-i s 2I of oal. pSductton ans (pars 6.0.r Souzrcs for dara an S&AM1 -. 1-R.1.ltac2o, d la SAW fgg Q. d.qLwmW Terive, 1984(draft) pp. 9-16; S tM =, D1StCC de Is Produlcon Agriaol, -Project d'lnrodn LM de 1 OAg1e AchxII, 'mondaa. 20 Jly, 1984; Cxt tiW , IR. PSM
- 69 -
Table 14
FROJEcIM AYEMM
SAM.a: PRDJEC) AVER?" RO AND YElDS IY ClOF AND WE OF CJLTXIMM2 ni 1986 AND IS : YEARS a/
at Assmes S 1 4I-aC4ni, su Implemted In pcopose projec
b/ Yields suh dat value of pro&xzron cirm fazn osts.
C/ TrI:l4l . y levelled rid serviced by secmwtary casl olLy and ha overed over with sand.
Fbre: Cotton Yields ar SAI9N exceede 2.5 t before 1976. For c years 1972-73 anl 1973-74 theyaveraged 3.0 mm. Average rice yiels in eess of 4 tom tare ic m throgh c &k 1970's.Tu 1980-84 yields were oxsiderably beLiw thse of thm table for coctcrm; bar pidd, --Lds wareneirly 3.6 t./ha. 1t probbility of these yields beWy r&"chlewa Is increased :ae ofSdMANGCK's EV system of user c s iLch are larely f** acnrding w awunt of lamdculrivated and its selecr.ln of only the mom productive peants for cmied operations (para3.18).
- 70 -
SAMANGOKY Table 15A
COMPTE PREVISIONNEL D'EXPLOITATION(DIRECTION PRODUCTION AGRICOLE)
PROJECTED INCOME STATEMENT, AGRICULTURAL PRODUCTION DEPARTMENT
Note: Values are In current FMG. 11e value of the lC is assuml to depreciate 5.5 amrially with respect to foreip exchange.lF; dollars FF aid EO mintan coristant value with respect to each other.No attempt has hem wade to eattnate the tlnreased taxes on the increased economlc output generated after project lmplemntatlon.'he debt service, homever, for 997 would be equivalent to about 6X of the value of lditional rice productton foreseen underthe project. Uhkder many fiscal reglaim the assoclated increase Ln taxes would fully cover the project's debt uervice.
- 79 -
Tal 20
MN)AGISC Page 1
etuted Schdt&ze of IaPlan d.e D{seo
CU$ nrfl l)
T. ffscal year ac2d quartier Qjarterly Camxdlative di ts at end of quarterEmrcEse et trlzestre MDs trizestriels cumlatifs en fin de trimstze
1985
June 3D, 1985 0.1 0.1
1986
9bptsi~er 30, 1985 a/ 0.1 0.2
December 31, 1985 b/ 0.8 1.0
March 31, 1986 - 1.0
Jime 3D, 1986 0.4 1.4
1987
Pet'Pr 30, 1986 0.6 2.0
Decemter 31, 1986 0.6 2.6
March 31, 1987 0.6 3.7
Jtme 30, l987 0.7 3.9
1988
SepceiSe 30, 1987 0.8 4.7
Dzi-.er 31, 1987 0.8 5.5
arch 31, 1988 0.8 6.3
Juae 30, 1988 0.8 7.1
1989
Septe*ier 3D, 1988 o.q 7.9
Deerw 31, 1988 0.9 8.8
Ma1c 31, 1989 0.6 9.4
Table 20- 80 Page 2
IDA ff scl yewaad quarter Qarterly Omlative at ecd of quarterExercie et tr1wstre IDs trimestriels cum.atlfs en fin de trhastre
Jun 30, 1989 0.5 9.9
1990
Septemer 30, L989 0.5 10.4
Decezter 31, L989 0.4 10.8
March 31, 1990 0.3 11.1
June 30, 1990 0.2 11.3
1991
Septer 30, 1990 C/ 0.2 11.5
D3aube 31, 199D 0.2 11.7
Marzch 31, 1991 0.1 11.8
Jue 30, 1991 d/ 0.2 12.0
/Disbursemu 1 PPF, expected date of .ief vsaw PPA, date d'entre en vigueur dui cr&dit.
b/ Initial deposit irto project Special Accuwcs (US$ 0.8 mio).-Dpot iridil dams les Coqpes Spia: du Projet (EI 0.8 millioc).
cf Expectel dae of Project Cmpletim-Date d'eNiton du Projet.
d, Expected clisrg date of QIet.Ibte de clure du Qgdit.
- 81 -
ihhie 21
IEIIRKfNI IN P1mW aTLVAItI, SOAVIN, BEALY, liA(hectares)
Paddy Oldwvat± (6)Irrigatio Sirgle.WWod Ibtal Ha Iripted Total Ha Irrilated
Irr tion rgaio In Rainfed lble Dry Season In Rainy Seon 3/ at E:LIer Seasn b/mm 1/ Wet Sesom Wet p Ig 2/ Total Ha in Basin Total Ha iu Basin
33 Sch&a d'A&nagemenc de Soavina. Mai 1982 107.924 3
B4 Sch6ima d'AinFageuenu de Behara. Mai 1982 107.924 C
B5 Schema d'Aa6nagement de Belamoty. Kai 1982 107.924 F
B6 Projet de Reha?'ilitation des Petits P6rlmAtres. 102.635 IEU2ROCONSULT. Fevrl,ec 1984
37 Rapport de Mission. E. Boumendil, ConsultantSenior en Irrigation. 26 Juillet 1982(Madagascar Irrigation (3) Bank Reports)
83-
Annex 1Page 2
B8 Pre-appraisal Report. B. Bounendil, Consultanten Irrigation. February 14, 1983 (MadagascarIrrigation (3) Bank Reports)
39 Rapport de Mission. L. Peyrichou. Agronome.Dfcembre 1982. (Madagascar Irrigation (3)correspondence file, Vol III)
B10 Note sur lea Aspects Socio-Economiques, V.A.Rabotoanisoa, ConsuLtant. Deceabre 1982(Madagascar Irrigation (3) Bank Reports)
BLI Techniques de la Riziculture AnmliorEe (Ministeray 108.224Ny Faapandrosoans my Ambanivohicra sy myFanavaozana ny Fizakan-Tamy). Octobre 1978
312 Rapport de Mission. E. Boumendil, Consultant enIrrigation. Decembre 1983. (MadagascarIrrigation (3) correspondence file, Vol IV)
B13 Rapport de la Mission SAMANCOKY de MM. CHavancy ec 109.021 AEsrun, f&ibrier/oars .1983
B14 Rapport d'Expertise sur La Rehabilitation du ??? 108.887 B
B15 Etude de l'efficacitc du drainage dans la zone cocoan dup6r±titre de la SAMANGOKY en vue du danger de salinite ec del,entretien mfcanisLs des reseaux hydrauliques de cep4rimatre. EUROCONSILT. Mars 1984 (rapport provisoire).
C. Detailed Cost Tables
D. Madagascar FLrst Irrigacion Rehabilitation Project, AnalysisAssumptions and Data Used in the Economic Analysis, June 19,1984 Jacob Meerman
E. Aide-HeMoires of Co-financiers
-84-Annex 2Page 1
Irrigation legislation
The Government promulgated 'Ordonnance no. 81 026" regulating theZclassification, management, and police of the irrigation schmes- in 1981and 'Decree no. 8 2 353 to implemant Ordonnance no 81 026," in 1982. Interalia thesa texts provide for the maintenance, operation, and taxation ofthe users of the irrigation schemes and for their organization into wacermanagement committees.
The texts provide for the establishment of a water managementcommittee (UMC) for each irrigation scheme to be chaired by arepresentative of the users. The WKC is made up of:
(i) a representative of the firaisana (local governmenc) concerned;
(ii) the administrative delegate from the firaisana (appointed by theMinistry of the Interior);
(ii) a second representative of the - administrative structure' of thescheme,presumably the head of the DIR's irrigation services on thescheme;
(iii) a representative of the Ministry of Agriculture; and
.(iv) a representative of the users for each. aaille vho is elected forthree years. ( A maille is an irrigation unit often about 200 hai in size, a tertiary network, depending on a coinon water intake.
_ The president of the WMC members.
The texts stipulate that the main responsibilities of the WMC are:
(i). to manage water-distribution from the scheme's main water intakedown to the individual plcts;
(ii) to provide for the opetAtion and maintenance of the irrigationsystem and the observance of the agriculture calencar (periods forplanting and transplanting);
(iii) to establish annually the list of users with their taxablecropping areas; and
(iv) to prepare the budget for the operation and msaintenance of thescheme.
User obligations are to be stipulated in an "arratf de classemenc(implementation regulations) and in a -dina- (traditional collectivecontract among villagers) adopted by the WKC.
85 - Anxex 2Page 2
The texts define two wacer charges. One is to repay, at least inpart, infrastructure improvements according to conditions stipulated in thecontract for rehabilication of the civil works (Article 6, Ord. 81 026).The other is to cover scheme manage_ nt and maintenance costs. Bothcharges are defined on a per hectare and user basis. The charge forreimbursing the costs of irrigation infrastructure improvements is to beborne solely by those users who will have beneficted from agriculturalcivil works. The contractual payments are to be in cash per crop cycle(Article 10, Decree 82 353). Bur Article 11 of the decree also states thata second charge for reimbursing some of the same costs is to be levied andto be equivalent to 50 kg of paddy per crop cycle. All proceeds from theimprovement tax are to be deposited in the National Treasury and reservedfor a rice developmenc fund. The Ordonance foresees sanctions againstusers who fail to meec their payments, including seizure of crop.
In the Ordonnance, the water charge to cover costs of schememaintenance and management is to be set by the president of the executivecommittee of the faricany based on the recomoendation of the localtechnical services of the mdnistry responsible for rural development, andon the advice of the WMC. In the decree, however, the still futureimplementation regulations to be-adopted jointly by the Ministers ofAgriculture, Finance, and the Interior, are also co specify the share oftotal maragement and maintenance costs to be borne by the users. TheOrdonnance foresees contributions by both natioval and Local governmentsfor the part of administration and maintenance costs not covered by theuser-charge. The Ordonnance also states that payment for either usercharge - investment or management and maintenance - can be in money, iak'ind, or in labor. As concerns the resulting fund for administration andmaintenance, it is to be managed by the person - responsible for thescheme, presumably the DIR's local official, who will be accountable to theWMC.
The establishment of the contributor rolls for the scheme leveladministration/maintenance charge is the responsibility of the localrepresencative of the Xinistry of Finance, working at the fivondronanalevel (former sub-prefecture). Rolls are to be prepared on the basis ofthe list of users submicted by the WMC. According to the decree, actualcollection of users charges is to be carried out by the local goverumentauthorities according to the roles after they have been approved by thePresident of the Executive Comeittee of the fivondrona concerned.
- 86 -
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- 87 _
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