Folder Title: India - Agriculture and Agricultural Projects - General - Correspondence1969 / 1971 - Volume 3
Folder ID: 1845916
Dates: 01/06/1971-12/30/1971
Fonds: Records of the South Asia Regional Vice Presidency
ISAD Reference Code: WB IBRD/IDA SAR
Digitized: 10/16/2020
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IN REPLY PLEASE QUOTI.: Research School of PacificStudies
Mr. N.E. Reynolds,South Asia Department,International Bank for Reconstruction
and Development,1818 H Street, N.W.WASHINGTON D.C. 20433
U.S.A.
Dear Mr. Reynolds,
Since returning to Canberra I have discussed the matter of
an extension of the Indian HYVP study and your reservations
concerning this with Sir John Crawford. I am now writing to
clarify the issues you raised in your letter of 15 October.
In reviewing correspondence between Dr. Lockwood and
the Bank, I believe I can see where the misunderstanding over
the coverage in Part 1 of the study took place. As late as
March 1970, the objectives of the study remained as originally
proposed in 1969. This was confirmed in a letter from Sir John
to Mr. Gilmartin on 3 March which enclosed a proposal for the
continuation of the project.
On 2 July 1970, Lockwood sent an Interim Report on the
project for 1969-70 to Mr. Kirk in which he again confirmed
these objectives. However, it was around this time that
difficulties were encountered which placed the question of
project completion in some doubt, though it was not possible
to judge accurately the likely extent of the set-back at that
time. In an attachment to the Interim Report sent to Kirk,
('Structural Changes in Indian Foodgrain Production 1965-66
to 1969-70') some of these doubts were made explicit. Lockwood
and Mukherjee reiterated the general objectives in this document
and then went on to propose four stages for the work (pp9 onwards).
Stage 4 was to cover policy issues but on p.9, Lockwood/Mukerjeewarned that 'there may not be time to complete work on some of
the topics listed in stage 4.'
As it happened, the study fell considerably behind schedule
during the months which followed. The reasons for this were
three-fold and come under the heading of 'unknown elements and
numerous bottlenecks' you mentioned in your letter.
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(a) unavailability of the computer in New Delhi overlong periods,
(b) hesitancy in the PEO over a full commitment of datato analysis in depth despite an original agreementto do this,
(c) the great volume of processing and tabulation requiredas a preliminary to analysis.
You will appreciate that these problems involved the ANU insome financial wastage over this period.
Individual officers of the Bank were apparently made aware ofthe difficulties but there is nothing on file here to suggest thatthis awareness was widespread at the Bank. The current problemhas arisen because no official approach was made to explain theseproblems and to request agreement to the submission of a lesscomprehensive report for the above reasons. In the light ofexperience it has to be admitted that the original programme forthe study was too ambitious for the time allotted.
You also queried the larger request for 1971-73. This is alsoexplained by our 1969-71 experience as follows :
(a) The 1969-71 budget did not include the PEO contribution.In terms of computer time and commitment of staff, thecosts were high, particularly in 1970-1. While no preciseestimate is available, it is believed to have been at leastequal to that of the ANU, if not greater.
(b) There was a serious underestimation of the financialcommitment of the ANU owing to an inadequate allowancein the estimates for clerical assistance in Australia.In fact, over and above the IBRD assistance given forthe purpose, two or three of the clerical staff of theDepartment of Economics were almost exclusively concernedwith the tasks of preparing and typing the drafts andfinal version of the Report over a six month period.The total ANU commitment was in the vicinity of US$30,000rather than US$21,400 as estimated.
(c) Given the Bank's contribution of US$18,800 over the twoyears, the total costs for the three participants weremost likely well in excess of $70,000 for the period.In this light the total projected cost of $85,000 for1971-3 as submitted can be better understood.
- 3 -
(d) For 1971-3, the IBRD has been requested to contributesome US$64,300 as against US$18,800 for 1969-71.The increased commitment is required for two reasons:
(i) The burden of computer work, data processing,tabulation and analysis will be carried in
Canberra during this period. This will meanthat the computer assistant's work willsubstitute for PEO computer staff's work donein 1969-71. Further, the clerical assistance
supplied in 1971 of necessity by the Departmentof Economics, ANU, will not be available in
1971-3. Together, these items account for a
total of US$20,000 of the IBRD request overthe two years.
(ii) During the 1969-71 period there were 1 and 1/3research workers engaged on the project who
were paid wholly by the ANU. It is considered
that there will be an even greater requirementduring 1971-3 to cope with the volume of work.
While Shand's salary will be met by the ANU,that of the proposed Research Fellow will
(unlike Lockwood's) have to be met from outsidefunds. This adds a further US$22,000 which,
with the extra clerical costs of US$20,000virtually explains the whole additionalcontribution of US$46,000 requested of the
Bank (i.e. beyond the US$18,800 for 1969-71).
As you are aware, we are keen to continue this project but
on review we consider it will be necessary to give further thought
to the programme of study. In this connection we appreciated
Professor Mellor's constructive comments and suggestions. Where
possible his hypotheses will be amongst those we examine,
though at this point I am not in favour of narrowing down
those studied since there is a lot of field data to be examined
which should prove a fertile source of such hypotheses. We
wish to examine the performances shown in Part 1 in terms of
a wide range of possible influences which were listed in the
Part II proposal, particularly water supplies, credit, research
and extension, HYVP administration, tenancy and HYVP input
availability and distribution systems. Our analysis will
interpret the influence of these factors singly or in
combination as specifically as data will allow.
- 4 -
I agree with Mellor that analysis arising from PEO data
largely allows problem delineation rather than solution but
usefully, it shows up areas requiring further intensive research.
This is true not only with respect to specific factors affecting
HYVP participation but the analysis will also be suggestive of
geographical areas which would be fruitful for research. Thiswas behind our decision to present participation data on a
disaggregated basis i.e. by districts. It will hopefully berelevant to the area 'constraints' approach which the Ford
Foundation are concerned with at present. Again, I fully agree
that we can and should interact with other research workers,such as Dr. Desai of the Indian Institute of Management, who
are engaged on more intensive research projects.
With respect to Mellor's query (Part 2) on whether the
PEO will be integrated into the project in such a way as to
ensure a feed-back to policy I would offer two comments :
(a) We certainly plan to actively engage the PEOin Part 2 through the secondment of Mr. Sastriwho has been intimately connected with the threePEO surveys and the tubewell study.
(b) Whether such integration will lead to a policyfeed-back depends upon the relation of the PEO
to other parts of the Planning Commission.I suspect on the basis of discussions I had in
New Delhi a fortnight ago, that the full
utilisation, analysis, and publication of PEO
data on participation in the Report Part 1 has
already concentrated wide attention on the HYVP
far more than the existing PEO reports on the
topic have done in the past. Perhaps we might
help to improve the standing of PEO in the
planning framework by ensuring the quality oftheir work is more widely appreciated.
At present we can continue the study in Canberra for some
months using data already available. The grant to Lockwood will
enable the mechanisation/employment topic to be covered and I will
be analysing other factors, while tapes of PEO data now approved
will extend substantially the information available in Canberra
in the coming months. In the longer term we certainly would
require financial assistance along the lines set out in the
request for 1971-3. However at this point we now feel that further
action on the request should be deferred for some months to enable
a detailed outline of Part 2 of the study to be developed and
submitted with a revised financial statement.
- 5 -
So far as the PEO data taping is concerned I will pass on
the requests of the Computer Activities Department to the PEO
Computer Centre in New Delhi and ask them to communicate directly.The ANU computer will have no trouble in handling the seven-tracktapes.
I hope the foregoing will help to explain the state of the
project and I look forward to further co-operative work with youand would like to express my personal thanks for the mechanisationand taping grants.
Yours sincerely,
R.T. Shand
P.S. I would be grateful if you would arrange for themechanisation study grant to be forwarded to theaccountant of this University.
cc. Sir John Crawford
KS
CHWalton:hkNovember 29, 1971
Mr. Chairman and Members of the Board:
The Economic Report which you are considering today confirms quite clearly what
I believe most of us had come to accept - that India's agricultural economy has indeed made
considerable progress since the drought years of the mid-sixties. That achievement has,
of course, centered on the increased production of food grains and the year 1970/71 may well
prove to be a landmark in India's history with production at some 105 million tons about
sufficient to meet the country's immediate needs. It may also be significant for another
reason, however, in that whereas past progress has mainly been based on increases in wheat
production, the year's result give us cautious reason to believe that there may at least be
the beginnings of a similar breakthrough in rice. If the next few years confirm this trend
we may indeed be on the threashold of a much greener revolution, for rice accounts for about
40% of India's food grain production - double that of wheat- and some 30% of the area sown.
No one would wish to underestimate the significance of this achievement but it
is important that it should be seen against the background of three main considerations.
The first is that despite the food grain increases, these have not done much
more than keep abreast of the increase in population. As Dr. I. G. Patel remarked at a
recent Consortium neeting, India may have learned to live within her means, but for most -
and particularly the rural poor - the living has not been very good.
The second fact is that this progress has been much helped by a succession of
four good monsoons: one only has to be reminded of the serious effects which even limited
regional droughts can have - as occurred this year in Maharashtra for example - to be aware
that India is still perilously dependent on good rains. A recurrence of the country-wide
drought such as occurred in the mid-sixties could still have devastating effects, even in
areas of major irrigation facilities which cannot provide complete insurance against the
worst of nature's rigours.
And third, we should remember that the base on which progress has so far been
achieved is small both geographically and socially. Because wheat has been its main
component, it has been centered on the north-western parts of the country and those who
have benefitted most have been the larger farmers with access to credit and technical
- 2 -
knowledge. Even now in 1971, five years after the take-off of the so called green revo-
lution, some three quarters of the country's rural population remains largely unaffected
by it.
It is in this setting therefore that I propose briefly to review the prospects
for India's agricultural economy.
As you will be aware, the cornerstones of the technological changes which have
been taking place, have been the application of improved annual inputs when combined
with irrigation water. India has consequently given and continues to give high priority
to the extension of areas under irrigation. Since independence in 1947 the amount of land
ander the command of irrigation of various types has about doubled so that today some 40
million hectares or about one quarter of India's cultivable area of 160 million hectares
is technically capable of irrigation. Even so, this is considered to be but half of the
country's irrigation potential, while a sizeable part of the area already under irrigation
command is not yet able to receive water owing to work which remains to be done in building
canals and levelling land.
Surface irrigation schemes which both now and potentially account for about
two-thirds of the command areas have always figured predominantly in development plans but
,heir implementation has frequently fallen short of expectations. This has partly been
because of divided administrative responsibility for their execution, usually with a
critical lack of coordination, and partly because the development of such large public
works schemes is mere subject to bureaucratic controls and delays. In addition, their
planning can often give rise to inter-state riparian disputes which can delay implementation
for many years.
For quite the opposite reasons, experience in developing various types of wells
for the exploitation of groundwater has been more satisfactory. The advantage here is
that wells can usually be installed by individual farmers or small groups of farmers who,
providing they have access to the necessary credit, require only a small amount of Govern-
ment services and assistance to obtain appreciable - if not optimum - benefits. These
types of schemes have become much more important in the last few years and, with a
- 3 -
further command potential of some 11 million hectares, they are likely to remain so for
some time to come.
For both these types of development, whether surface or groundwater exploitation,
there are however mounting problems to be overcome and formidable demands to be met. Most
important of these is the need for greatly improved standards of water management to obtain
a more effective water use and distribution and prevent the otherwise serious probability
that large areas of land will be lost to cultivation through water-logging or soil salinity -
already a serious problem in many part of the country. Related is the need for improved
cropping patterns and to devising new organizational systems whereby small farmers who
of themselves cannot utilize the minimum discharge of economic wells, can have access to
irrigation on a group sharing basis.
These, together with a range of other tasks, will require a greatly increased
allocation of Governmental research and technical services while it has been estimated in
India that to complete the utilization of the country's remaining irrigation potential
will cost not less than six thousand billion US dollars.
But even given the fullest realization of India's irrigation potential, there
will remain some 100 million hectares or nearly 600 of its cultivable land which will
remain entirely dependent on the uncertainties of annual rainfall. An increasing aware-
ness of the importance of this situation has led the Government of India, if not to effect
a major switch in the allocation of resources at least to give a much higher priority to
the potential and needs of rainfed and dry farming. The dramatic results which can be
achieved by the combination of high quality inputs with irrigation should not obscure the
fact that soil and water conservation measures with drought resistant seed varieties can
also bring to the non-irrigable areas the benefits of multiple cropping and greatly increased
yields. A start, even though modest, has been made on such schemes in various parts of
country and although it is already clear that they are going to present a number of new
problems, their potential importance cannot be underestimated.
Since 1967, India's agricultural strategy has been based on the country's over-
riding determination to become self-sufficient in food, and with 70% of its cropped area
devoted to food grains, relatively little attention has been given to commercial crops
which, with one or two exceptions, have not shown much progress. The time has not yet
arrived when India can afford to slacken her efforts towards food self-sufficiency but,
nevertheless, commercial crops must become increasingly important as a means to foreignand savings
exchange earnings and because there remains a large part of the rural population whose
standard of living can only be improved by increased productivity of these crops. Cotton
and oilseeds are notable examples but less obviously are tree crops such tea, cashew nuts
and rubber which, given suitable organizational innovation could, in limited areas be
adopted to small farmer cultivation - as has happened in other countries during the last
.ecade.
The total effort which is now required to further develop the high yielding and
improved seed varieties - and gain their acceptance by farmers - has therefore to be seen
against the background of the whole agricultural economy and not merely that of certain
food grains in irrigated areas. In my opening remarks I referred to the particular impor-
tance of a potential breakthrough in rice production. If this can be achieved in the next
few years, it will be of tremendous importance, not only because it will enable India to
build up food stocks to meet the drought shortages which inevitably must be expected from
Jime to time but also because such a breakthrough would massively contribute towards an
improvement in the living standards of small farmers, particularly in Eastern and Southern
India, millions of whom are wholly dependent on this crop. And to a lesser extent the
same is true of many other crops, some of which I have just referred to. Technological
improvements combined with changed cropping patterns will also be the means to higher
nutritional standards towards which among other crops, pulses - a victim of the price
support system in recent years could make a particularly valuable contribution. Even in
1970, probably no more than 15% of land devoted to food grain production was sown with
high yielding or improved seed varieties and of that about half was devoted to wheat.
Much therefore remains to be done.
It is against this range of investment opportunities that we have to recognize
that India enjoys two particular advantages which have made agricultural credit an impor-
tant element in project implementation. These advantages are a set of institutions
- 5 -
capable of being transferred into useful development tools and a large strata of credit-
worthy farmers. At the village level, the institutions are cooperatives, many with a
tradition of agricultural lending going back to the twenties but their activities have
been much strengthened by the more recent emergence of strong apex institutions, such
as the Agricultural Refinance Corporation which is guiding imaginative development on
sound banking principles. The cooperative system does however have an important defect
in that up to the State level there are totally separate institutions for short-term
credit and long-term financing, making the essential coordination of the two components
difficult to achieve. This defect is going to be difficult to remedy though the recent
dvent of the commercial banks into agricultural lending may help for, despite their
lack of experience, they do demonstrate the advantage of combining under one roof both
types of credit facility.
As the green revolution reaches out to more and more farmers, the demand for
credit is going to accelerate and it is estimated that by the end of the Fourth Year Plan
in 1974, it will reach the staggering annual amount of 400 million US dollars for long-
term and of 15 billion US dollars for short-term. Up to now most of the long-term credit
has been lent for investments in wells and land development but the range of investment
pportunities continues to widen not only for on-farm needs but also for a wide range of
rural services including such purposes as crop processing, marketing and storage, the
demand for which grows as the pace of agricultural development quickens.
It is partly because agricultural credit has been so important that the small
or otherwise non-creditworthy farmer has so far largely been left out of the changes
which have been taking place. The Report details many aspects of this problem and
discusses the various ways in which it is being tackled by such measures as land reform
with ceilings on ownership, the strengthening of tenants security, the provision of credit
on concessionary terms and the setting up of the new Small Farmers Development Agencies.
No one who knows the dismal plight of the rural poor in India can face with equanimity
their situation, yet the problem is not alone going to be alleviated by the redistribution
of land or the channeling of large amounts of credit. As I have endeavored to show in
my earlier remarks, it will also depend on continued technological advance to extend the
range of improved seeds, on organizational change and innovation to make the maximum use
of resources and of appropriate fiscal and pricing measures to mobilize savings and place
real values on valuable assets. It will also depend on a wise allocation of priorities
so that this valuable human resource can be harnessed to the purposes of development and
not become a barrier to its fulfillment. Above all it depends on an integrated admin-
istration and a united political will to tacle the tasks with the determination they
,quire.
And this brings me to the last point that I have to make this morning. All of
us are aware of a wide range of measures which from time to time is it felt that India
should adopt - measures such as the introduction of an agricultural income tax, the
economic pricing of irrigation water, the need for effective controls and adequate exper-
tise to assure sound groundwater development and other matters either referred to in the
Report or in the context of agricultural projects which have been submitted for your
approval. We should remember however that in India matters relating to agriculture and
land are generally the responsibility of the individual states and, to say the least,
their enthusiasm for these various causes is at best variable. This situation of course
cannot be expected to change but those of us who are closely associated with India are
at least reassured by the greater sense of determination and the unity of purpose now
displayed in attempting to overcome the problems. It is therefore with sustained optimism
that we shall continue to play as useful a role as we can in the further development of
Tea Economy dated June 30, 1971 which has been sent to
me for comments by the Government of India. However,
We have not yet received in the Tea Board any copy of
this useful and interesting study. May I, therefore,
request you to be good enough to send me two copies of
the Report as early as possible?
With kind regards,
Yours faithfully,
P. R. Sengupta )
Mr. Dieter Elz,Economic Department,International Bank for Reconstruction & Development,2rgx Washington,D.C. 20433,
PRS/SS:
I Headq uart ers: V
Washington, D.C., U.S.A.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
RESIDENT REPRESENTATIVE IN INDIA
53 Lodi Estate, New Delhi 3Telephone 617241 Cable Address - INTBAFRAD NEW DELHI - Postal Address - P.O. Box 416
November 23, 1971
Letter No.,x
Mr. Jochen KraskeInternational Bank for Reconstruction
and Development1818 H Street NWWashington DC
Dear Jochen,
I am being pressed by the Department of Economic Affairsfor answers to the questions I posed in my letter No. 438 ofOctober 26 to you.
If you have any answers to even part of the letter yet Iwould be glad to have them as soon as possible.
Yours sincerely,
P.in; Naylor
A - A~
-
Form No. 27(3-70)INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE
ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
OUTGOING WIRE
TO: RENDELL DATE: November 19, 1971VELOP
LONDON Wl CLASS OF hTSERVICE:
COUNTRY: ENGLAND
TEXT: MR P DAMRY DEPUTY GOVERNOR RESERVE BANK OF INDIA AND CHAIRMAN OF INDIASCable No.:
AGRICULTURAL REFINANCE CORPORATION, WITH WHOM WE HAVE BEEN CLOSELY CONCERNED
IN OUR AGRICULTURAL LENDING, WILL BE VISITING LONDON TUESDAY TWENTYTHIRD AND
WOULD APPRECIATE DISCUSSING WITH CDC THAT DAY ANY HELP IT MIGHT GIVE ON
SMALLHOLDER TEA STOP HE WILL TELEPHONE YOU ON ARRIVAL STOP WE WOULD BE
GRATEFUL ANY COURTESIES AND ASSISTANCE YOU CAN GIVE HIM
REGARDS
EVANS
NOT TO BE TRANSMITTED
AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION:
CC: Mr. P. N. DamryNAME L. J. C. Evans bcc: Mr. Wapenhans
Director Mr. GoffinDEPT. Agricul re Proj Cts Department Mr. Parsons
Mr. Thomas
( SIGNATP E O iv0DUAL AUTHORIZED To APPROVE)
REFERENCE:CHWalto hk For Use By Communications Section
ORIG L File Copy)(IMPORTANT: See Secretaries Guide for preparing form) Checked for Dispatch:
A4) U
(2
Iler- jarters:
Vasbington, D.C., U.S.A.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
RESIDENT REPRESENTATIVE IN INDIA
53 Lodi Estate, New Delhi 3Telephone 617241 Cable Address - INTBAFRAD NEW DFLHI - Postal Address - P.O. Box 416
November 16, 1971
Letter No.
Mr. Gregory B. VotawInternational Bank for Reconstruction
and Development1818 H Street NWWashington bC
Dear Greg:
I have been thinking further about the paper I started writing inWashington on future agricultural lending for India. I do not know whatstate it has new reached or if I can still influence its content but forwhat they are worth I would like to put a few ideas to you on how wecould proceed to build up our pipeline of projects to an extent thatwill meet the level of lending projected in the CPP.
The principal way in which we have filled the agricultural(though not the irrigation) project pipeline over the past three yearscan be described in an oversimplified way as follows. Each year we holda high-level meeting in Delhi at which the Ministry of Agriculture isasked to produce a list of possible projects. These projects are thendiscussed and a timetable for further preparation is drawn up for thosewhich appear promising. This meeting is very often the first time wehave heard of these projects and the time available for discussion atthe meeting is minimal. Further consideration of them is thereforeusually undertaken separately by one or more reconnaissance missions.The objective of these reconnaissance missions is more or lessrestricted to determining whether the projects proposed are suitable forour financing and if so to working out the steps needed to get themready for appraisal, yt to logk).ng at, agrgiy This proceduresuffers from a number of drawbacks. On the one hand the list ofprojects prepared by the Ministry has, at least in the past, beenhastily prepared. When presented to us the projects usually lacksufficient supporting data to allow us to judge if they are worthwhileor not. This is true both as regards technical information about theproject as well as regards its priority rating within the all-India, orthe individual state, context. I strongly suspect for instance theChilka Lake Project is of marginal significance to Orissa and was onlypresented to us because it happened to be "ready" at a time when theMinistry was asked to look out projects for us - not that it isn't auseful and interesting project in itself but I doubt if it is one wewould have chosen if we had had any alternatives from which to choose.While we do follow up with a reconnaissance mission after the high-levelmeeting, the mission is essentially restricted to deciding whether the
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projects under consideration are technically and economically viable. Once
again they lack the opportunity to look at a range of possible projects in
a sub-sector and pick these they think most suitable for IDA lending (thisis less true of the irrigation reconnaissance missions than of the agro-industry reconnaissance missions).
The second drawback of this kind of high-level meeting is that we
do not have enough time to exchange ideas on the areas which either U01 or
IDA think are most appropriate for Bank lending. One or two particular
areas may be looked at in the context of whether a specific type of projectis of interest or not but we lack the opportunity to put across our own
predilictions as to high priority or interest-worthy areas. This largely
arises because we have not been able to devote sufficient staff time to
developing a comprehensive set of predilictions which can be interpreted
in terms of specific projects, e.g. we think groundwater development is
worthy of support but the states where we have been financing groundwater
development are those which satisfy our criteria as to the viability of
the LDB financing the farmer and not those which we would consider to
have the highest priority for developing groundwater (e.g. the Indo-
.Gangetic Plain).
I do not deny that, despite these drawbacks, we have financed orare in the process of financing a series of worthwhile projects. But I
do not think we can honestly claim that we have any long-term strategybehind our lending program.
What I wonder though is whether we can continue to operate in this
apparently ad hoc fashion, in conditions where our lending program will
represent a significant part of the public funds available for investmentin agriculture. To meet our agricultural lending target is going torequire a large number of new projects over the next five years. Are weto be content with allowing GOI to pick these for us or do we want to takea more active role in their selection? If the answer is yes, and I
presume it will be, then what can we do about it? How do we set about
formulating an agricultural lending strategy?
Obviously we shall have to operate largely within the basic Indian
plan framework and targets although, with preparations for the Fifth FiveYear Plan beginning, I would not rule out possibilities of our influencingthese in some directions. Even within this framework, however, I thinkthere is scope for us to influence policies in directions we consider
desirable, e.g. jb_,providing support to the emerg~ing private seed industryor by directing attention to the need for investment in "post-harvest
technology".
The Bank has been developing a procedure to deal with similarsituations in other countries through sector studies. Obviously if wepossessed a comprehensive study of the Indian agricultural sector thistogether with GOI's own plan objectives could be the basis of ouragricultural lending strategy. But we do not nor do I believe it isfeasible in the Indian setting to attempt one at one go. Resource
allocation within the agricultural sector is now almost entirely
- 3 -
determined at the state level - albeit with Central Government approval
which in most cases amounts to no more than a rubber stamp. Thus a full
sector study would involve separate studies for each of the eighteen
states. This is not practicable and even if it were we should still be
left with the problem of how to allocate our resources between states.
Up to now we have not made any particular effort to spread our projectson any "fair" basis between states. With the emerging GOI emphasis on
reducing regional disparities I think there will be pressure on us in
future to spread our lending to cover all states. We may not want to
follow this GC0I lead and there is no particular reason why the onus for
spreading should all fall on agricultural projects. But still I think
that we sIould try and develop some views on a statewise basis as to
projects wnich are important on a state basis but which do notnecessarily fit in with our national predilictions (e.g. the HimachalPradesh Apple Project; or most irrigation projects).
While not ruling out specific state sector studies entirely Ithink an alternative strategy of sub-sector studies would be moreprofitable. A model for the type of study I am suggesting exists in the
proposed Indian grain storage study, in the abortive Pakistan livestocksector study or the proposed Pakistan cotton sector study. But insteadof only starting these after we have financed a project we would have to
be prepared to finance them ourselves without requiring any commitmentfrom GOI. I think this type of effort would make good sense in Indiaand could be used to direct our lending in a purposive and constructiveway. 'e could obviously not undertake more than perhaps two of theseper year, depending on their size and scope even though we would have torely principally on consultants and not Bank staff, but with a long-range program worked out in advance we could cover some of the mainareas of potential lending in about five years.
We need to distinguish between sub-sectors where we have alreadyhad some experience in India in which we can move ahead to projectswithout any more extensive study than would be forthcoming from anidentification mission (e.g. seeds, forestry, fisheries (?) rice milling)and those sub-sectors where we are uncertain as to where, how and forwhat to lend. To get projects to the appraisal stage even in the sub-sectors where we have experience will I admit involve several man-monthsof effort, but there are a good many other sub-sectors where I feel wecould usefully be lending where the effort needed to get projects to theappraisal stage will have to be measured in man-years. The sub-sectorsI propose we study first (i.e. during FY 1973 and 1974) are :
I have not included in this list the river basin oriented studieswhich I am sure we need in order to give direction to our irrigationlending, nor the pre-investment studies listed in the 1971 economic
report for land reclamation and drainage projects (para 4.80). Since it
is highly prebable that this procedure would still leave us withrelatively small lending programs in two or three states (e.g. Rajasthan,Orissa, West Bengal) we would also need some kind of special state
approach in such areas if we have to maintain any kind of "equity" in our
lending between states.
In short, we have before us an enormous task to get flesh onto the
bones of the lending program outlined in the CPP and one we need to start
planning for now if we are to have the projects coming forward when we
need them.
I would suggest that we use the high-level meeting to discuss
further agricultural lending that was under consideration when I was in
Washington, to start a discussion with iUUI on this program for two or
three years ahead, %.V. hamakrishna told me the other day that he hadinstructed the Ministry of Agriculture to start preparing a set of fresh
projects for our consideration at this meeting and I fear that, unlesswe take the initiative, we shall have another meeting like the earlierones in which no one has time to look at the projects on their merits orto take a longer look ahead. I would propose that we prepare a paper forthis meeting setting forth our future lending intentions and the broad
headings (e.g. credit, irrigation) into which we think it could bedivided, it would cover much the same ground as the agricultural lending
paper now under preparation within SAD/ APD but go beyond it in settingout our proposed program of identification/reconnaissance missions, ofstudies and the steps needed to get these going as well as our program ofpreparation and appraisal missions. This paper would be widelycirculated within l1 long enough in advance of the meeting to allow GUI
to prepare a considered reply. Indeed there would be considerableadvantages in making the paper almost a joint dOI/Delhi Office effortsince for the meetings to be useful the work program would require abroad measure of prior GOI acceptance. This would be particularly true
in respect of any statewide balance which GOI might consider desirable,to the extent that this could be considered within the context ofagricultural projects alone.
The meeting would naturally not be confined to a discussion ofthis work program since there is a whole range of other topi.cs we needto cover, e.g. the problems the Bank and (01 are experiencing in getting
disbursements going according to schedula, our criteria for lending tostate land development banks, new projects to put into the pipeline for
1974 or 1975 etc. But I would like to make the development of a programof studies and identification/review missions the main thame of themeeting and would measure its success by the extent to which we couldagree on a long-term strategy for these as a basis for expanding ouragricultural lending.
Much would depend upon the quality of the paper that wascirculated prior to the meeting. If you like the idea, I could start
preparing such a paper but of necessity this would require close
cooperation with SAD) and Agriculture Projects as well as 00I and I
could not complete it on my own, although I would necessarily needto assume prime responsibility for coordination.
I look forward to hearing your reactions.
Yours sincerely,
P.E. Naylor
cc : Mr. WapenhansMr. KraskeMr. Blebel
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/ 36
November 9, 1971
M4r. 1. LocwoodDept. of Economicsdesearch School of Pacific Studies.e Australian National University
2.0. Box 4Canberra A.C.T.
Dear Brian,
I sendig you herewith a copy of a letter wehave received from John Mellor, cmaenting on your draft reporton The high Yielding Varieties Program, which we had abown him.I hope you. find them helpful.
Touzrs sincerely,
oert H. Cassen
c.c. Sir J. CrawfordMessrs. Darnell
DuaneGoffinHaynes
GlHageen: lhw ui
RECEIV 1CENTr AL~ FILES
November 4, 1971
austras an National i iversity'ieDseach School of P'acitfic Studies
Canberra A.G.T.
The Registrar,
sRf: AEU - PI :.esearcxi Project
r ockwod advised the jan<" ear.der this year thattne AlU had suDibitted an account for $2,520.U0. The araounthas not arrived and i8 hldng up clearance or Ine advance of *.
4,642.3 requested by the AliUJ. ±il you re-sunit the account,address it t ir. Daiuki Hartan , 17Ls Pennasyvania venueN.W. nanington i.C.
TOurs sincerely,
c.c. Mr. Da~aki Hartanti
Niaeynold8lhw
NEW YORK STAFE COLLEGE OF AGRICULITtUREA SIATUTORY COLLGE OF THE1 STAlE UN;VERSITY
CORNELL UNIVERSITYITHACA, NEW YORK 14850
DFPARTMENT OF
AGiUCULUR1AL Ecor4om cs
WARREN HALL
November 4, 1971
Mr. Norman ReynoldsSouth Asian DepartmentInternational Bank forReconstruction and Development
1818 H Street, N.W .Washington, D. C. 20433
Dear Norman:
I have read the draft report on "The High Yielding Varieties Program inIndia, Part I," by Lockwood, Mukherjee and Shand.' I h.ave also read the proposalfor Part II of the study. I will make my comments in three parts. First, Iwill comment on the report, emphasizing what I think are particularly interest-ing findings and stating some of the policy implications and conclusions whichI think follow from that. Second, I will comment briefly on the proposal forfurther study. Third, I will coamcnt on the Occasional Paper from my program,by Michael Schluter, which attempted. similar analysis with the PEO data, thebasic source of information for the Lockwoood, Maukherjee and Shand report, andsupplemented those data with similar data from studies carried on at the Agro-Economic Research Centres. Throughout, the intent of my comments is positive,emphasizing what is useful in what has already been done and what I think mightbe done to increase the usefulness of future work. Particularly since the smallfarmer part of the analysis has, in my view, a particular relationship to ques-tions of credit, I thought it would be useful to send a copy of these commentsto Mr. Thomas as well. I would be delighted to respond to you or others whoreceive carbons of this ltter if you have further comments or questions.
The Draft Report
As is clearly indicated in the report of Part I of the study and in theproposal for extension of the study, the first effort is largely descriptive anddeals primarily with participation in the high yielding varieties program. Intro-duction of radically higher yielding crop varieties must be the keystone of theeffort to accelerate the rate of growth in agricultural production in India.Hence, understanding who participates and something of the circumstances of suchparticipation is a first and most important step to understanding what policiesneed to be introduced or modified in order to accelerate participation in theprogram and growth in production. While understanding of participation mustcontinue to expand, a relative increase in the emphasis must go to analyzingthe reasons for failure to participate and from that, lead to the policiesnecessary to increase partIgipation.
egan
Mr. Norman Reynolds 2 Novenber )4, 1971
One of the strengths of the PEO data is the continuation of its collectionover a period of years so that one can see the change over time. One of themajor problems in use of the time-series da'ta, however, is change in the blocksfrom which the data were collected. It is clear that there is a good deal ofvariation in participation in the high yielding varieties program and relatedprograms and that this variation is substantial even over small geographic areas.Thus, some of the changes over time within states may be due to changes in thesample.
Adoption of the lew Varieties
The data of course clearly substantiate the almost universal acceptanceof the high yielding wheat varieties in the Punjab. Of substantial interest isthe increase in participation in Bihar from the first year to the second yearand then a drop in participation. In ry view, one of the important potentialsources of growth in foodgrains production in India is the spread of high yield-ing wheat variety production into the Eastern Gangetic Plain, Eastern U. P.,Bihar, and West Bengal. The data on Bihar, showing a drop in participationrate in recent years, is consistent with ry view that there are substantialproblems with wheat in this area. I believe. that the higher temperatures atflowering time for wheat requires a considerably shorter season variety asone moves south fromn the Punjab towards West Bengal. I also believe that awell controlled water supply is necessary and that the lesser institution oftubewell irrigation is a limiting factor to the spread of the wheat varietiesinto the Eastern Gangetic Plain. These two factors of deficiency in the natureof the varieties available and the need for well controlled water suppliestend to reinforce each other. There are some shorter season high yieldingwheat varieties, and it is my understanding that there has been a shortage ofseed of these varieties during this past year. The need in r view then, isfor substantially expanded investment in small scale irrigation projects andresearch to develop high yielding wheat varieties better suited to the EasternGangetic Plain. This requires, in particular, shorter season varieties.There areanumber ofproblems with respect to fulfilling both of these conditions.I have commented on these in other reports icTh IT hve made to the World Bank.
It would be very useful if Part II of the PEO-ANU study could provide moreintensive attention to the hypotheses which I have suggested above or to otherhypotheses which might lead one to the kinds of policies designed to acceleratethe increase in wheat production as a rabi crop in the Eastern Gangetic Plain.
The data show clearly the much greater acceptance of the high yieldingrice varieties in the rabi season than in the kharif season. This again, isindicative of a major problem in increasing foodgrains production in India.The bulk of the rice is produced in the kharif season and that is the one towhich the high yielding varieties of rice have been least applicable. It isrevealing in this respect that high yielding variety paddy in the kharif seasonrepresented a decreasing fraction of the total paddy area over the three yearstudy, declining to only 16 percent in 1969-70. This refers to the percent ofthe paddy acreage on farms adopting high yielding varieties. In contrast,adopters of high yielding variety paddy in the rabi season saw an increase inproportionate total paddy area, gradually rising to 55 percent in 1969-70.
Mr. Torian Reynolds 3 November 4, 1971
Again, study is needed of the precise nature of the problems which are holdingback the spread of hi gh yield ing, varieties in the kharif season. A very inter-esting paper by G. M. Desai, presented at the Rice Policy Conference at theInternational Rice Research Institute, last May, sheds considerable light onthis question. Part II of the PEO study could very usefully give additionalattention to this question. At a superficial level, the -problem relates tolesser sunlight during the kharif season, to greater problems of disease andinsect control during that very humid season, and to poorer control of water.A good deal more detail than this is needed if useful policies with respect toboth research and production infrastructure are to be developed. Very muchrelating to this is the indication in the study of the increasing relativeimportance of IR-8 over time, even in Tamil Nadu, where the local variety, ADT-27,has been very popular. My interpretation of t!his finding is that it indicatesthat at least until very recently, the all India coordinated Rice Research Programhas still not been able to turn out indigenously developed varieties suited tomajor areas in India. This suggests that major continued effort is needed inthis direction, and that even with a substantial effort, it is likely to takeconsiderable time before tangible results are received. Further concentration inPart II of the study could well be given to more detailed analysis of the geo-graphic spread of particular varieties with the view to indicating under whatkinds of conditions the need for high yielding varieties are being met and. underwhat kinds of conditions they are not being met.
The data with respect to Bajara (Millet) was interesting in indicating alower proportion of adopters than I had thought was occurring, especially inGujarat. The relatively slow rate of adoption suggests the serious problemsof diffusion of innovations which are only moderately profitable, which Ibelieved to be the case with the hybrid bajra seed. It is these kinds of situa-tions which require a well developed infrastructure if the innovations are tospread and in which educational programs, such as those of extension education,are particularly important. The need for such programs becomes particularlygreat as the realization grows that the most difficult aspect of the incomedistribution problem is with respect to the lower income people in the regionswhich are not sharing substantially in the new agricultural technologies. The
j dry Bajra Lracts are an important exampie of such a problem.
The Jowar situation (Sorghum) is also revealing, as rate of adoptionincreased from the first to the second year and then gradually declined. Thisis in contrast with Bajara where adoption continued to rise slowly. The differ-ence lies with the technical difference in the two high yielding varieties. Itis my impression that the high yielding Jowar varieties have been very vulner-able to disease and insect problems and hence have in general not been partic-ularly profitable except under irrigated conditions. The hybrid Bajara, it ismy impression, has been quite profitable even under dry land conditions. SinceJowar is the principal crop in major relatively low income, arid tracts, failureto come up with a high yielding variety suited to local conditions is of partic-ular importance with respect to income distribution. Whereas in the case ofBajara, programs of infrastructure, including education, may provide signifi-cant increases in incomes, in the case of Jowar, new improved varieties arerequired before other investment can pay off. Again, testing of these hypothesesin Part II of the study would be very desirable.
Nr. Norman NRynolis Hovember 4, 1971
I should reiterate that the report provides factual information withrespcct to the spread of the high yielding varieties in a number of diversesituations. The hypothesis stated a.bove as to why these differential rates ofspread have occurred and the kinds of policies which might accelerate spreadare mine. Sound policy requires testing of hypotheses of this type.
Fertilizer
The report provides some useful analysis of use of fertilizer. Again, aswith spread of the varieties themselves, it is largely descriptive, providinga background for generating hypotheses for more detailed testing.
Of great interest is the substantial variability in rates of fertilizerapplication even on the same high yielding variety, according to differentregions. Sound policy with respect to fertilizer policy in the future requiresthat we find out why these variations occur and what policy leverage might bebrought to bear on them.
The study suggests a decline in rates of application of fertilizer on wheatin the Punjab. It is my hypothesis that this is because of excessively highrates of application in the early years of introduction of the high yieldingvarieties. In my view, somewhat unrealistic recommendations were made from theexperimcnt stations and it took farmers a year or so to comprehend this and toadjust accordingly. However, one must be careful in interpreting these datain changes from one year to another because of the changes in the villagesstudied. Thus, the study has serious data limitations in a particularly impor-tant aspect of the fertilizer question.
The data on fertilizer application on kharif paddy again has a substantiallimitation because of changes in the villages sampled from one year to another.Thus, the 50 percent increase in the fertilizer anlications per acre in Bihar,75 percent increase in Kerola, the 40 percent decline in West Bengal and the30 percent decline in Mysore may all be due to changes in sampling. Changes infertilizer use over tiLme are imnortant and should be studied with sampling pro-cedures which lend themsclves to this kind analysis. Much of the ferti.Lizerdata are presented in terms of percent of recommended dosage which was applied.As the report points out, districts with high percentage of recommended dosagestended to be those in states where the dosages recommended were relatively low.Thus, it is not clear to what extent variation in performance is a function ofvariation in the degree of realism and economic rationality of the recommenda-tions. In addition, fertilizer data were only available for the first two ofthe three years of the study. It is important that utilization and causes ofchange in utilization be examined on a much more up-to-date basis. It was notclear to me from the proposal for Part II as to what extent new data were tobe collected and to what extent additional questions could be posed at thistime. Certainly Part II analysis of the fertilizer question will be greatlylimited if only the data for 1967-68 and 1968-69 will be available for analysisof fertilizer utilization. There also seems to be some limitation in terms ofthe size of sample in the individual regions. I find it somewhat surprisingthat the level of fertilizer application per acre in 1968-69 in the Punjab islower than that in Haryana and Uttar Pradesh. I suspect, however, this is dueto small samples in a situation of considerable variance.
r Norman Re s 5 hoveTber 4, 1971
The analys is in this study tends to confirm my jud-ement that crefullyselectLd, in dpth analyses are neceSsary of *rtilizer conruption. Thestudies will have to be made with fairly substantial samprles in order Loproperly understand variabilit y and the causes of variability and to providethe basis for int1elligent poicy reconmhdations The PE studies providevery useful background for selecting the areas to be studied and for scttingfor-th hypotheses. It does not appear that they are suited for the in depthanalysis which is necessary for this particular question. This is certainlynot an argurent against attemots at further exploitation of Lhe valuable dataavailable in the PEO surveys, but rather an urging Lhat they be supolementedwith further in depth studies of the type we have discussed in other contexts.
Water
The report contains relatively little information with respect to wateravailability and its interaction with the high yielding varieties. This isunderstandable in terms of the complexity of data collection problems withrespect to water.
Cash Expenditures
The two most important categories of cash expenditure were hired labor andfertilizer. In the case of wheat, hired labor represenLed about 35 percent ofcash expenditure in 1967-68 as compared to 39 percent for fertilizer. In 1968-69,with essentially the same average cash expenditure, hired labor averaged only23 percent and fertilizer 37 percent. In the case of paddy, hired labor comorised42 percent of cash exoenditure in 1967-68 and fertilizer comprised 33 percent.In 1968-69, with total cash expenditure up another .15 percent, the proportiongoing to hired labor increased to 46 percent and the proportion of fertilizerdeclined slightly to 30 percent. Unfortunately, comarative data are notpresented showing the actual expenditure on hired labor for traditional varietiesand the high yielding varieties. This would be very useful information inmeasuring the extent to which the low income, agricultural laboring classes areparticipating in the benefits of increased producLioi from high yielding varieties.
It is noteworthy that the data show little difference in cash costs peracre of high yielding variety by size of farm. This appears to be the casewhether hired labor is included or excluded from total cash costs. This is animportant finding with respect to credit needs of small cultivators, a matteron which the report provides more information later.
High Yielding Varieties and Farm Size
The Part I report done for the World Bank provides a great deal more detailon the relationship between adoption of high yielding varieties and farm sizethan did the earlier PEO reports. This detail allows analysis of the relation-ship between adoption and farm size by states and by crops. This was a veryuseful exercise. The data are clear in showing that while on the one hand,smaller farms lag significantly in adopting the high yielding varieties, thatonce they do adopt, they operate at similar levels of intensity with respect toinputs and with as high or higher a proportion of their acreage planted to the
,r. lan KRnld 6 November 4, 1971
high yielding vaeties. What is needed now is analy Isis of the reasons whysa.l cult ivaors lag in aop ting hig-h ielding varieties. Part 1 of thestudy wiLl appaetyprovide consider-able emhasis in this direction. I willcomment belor on some other efforts alon- these lines.
Part II o -.he Study
There is not enough detail in the statement of Part II to allow judgementof the degree to which the data available will permit an effective analyticaljob along the lines indicated. It does apear that there is substantial datawith the PEO wh:ich, could add significantly to our knowledge of the importantques t ion of spread of the high yielding varieties. I am fully confident thatthe particip un t do a r highly experienced in handling these data andcan be relied upon to do an effective job of research. I would raise two ques-tions in the overall context.
First, I raise a question as to whether the PEO personnel will be sufficientlywell integrated into the operational project to be effective in using the informa-tion which comes out of the study and feeding it into the policy constructively.The operating procedures for pursuing the project suggest some potential diffi-culties in this area which will require considerable sensitivity in approach.
Second, since such a large body of descriptive data have already been digestedand presented, it might be appropriate now to set forth a number of somewhat m.orespecific hypotheses with respect to the nature of the policy problems involvedin further spread of the high yielding varieties. With such hypotheses, theanalysis of the data could be pursued sonewshat more directly to dealing withthese policy questions. I have, earlier in this statement, suggested a number ofhypotheses which might be tested. Surely the participants in the study would bein a better position than I to suggest other hypotheses and to test them ratherspecifically.
It would be useful to have a statement from the projcCt participants as towhat they see as li li-ei ons of the study which chey can do and the conse-quent need for other studies to supplement their efforts. It would be my guessthat the size of the samples in individual areas are sufficiently small as tolimit the analysis of specific policy problems in specific areas. Thus, thisstudy tends to be and will continue to be oriented towards delineating problemareas but will be limited in the extent to which it can suggest solutions tothose problems. In this context, the highly intensive studies of farmer practiceswith respect to fertilizer which are being proposed for the Indian Institute ofManagement at Ahmedabad might make a very useful supplement to the Lockwood,Mukherjee, Shand work. In this context, it would be useful for Dr. G. M. Desaifrom I.I.M. to meet with Dr. Mukherjee at PEO and with Shand when Shand goes toIndia. It might also be useful for Desai to visit Canbarra when the data process-ing has made substantial progress. It seems to me that the World Bank may indeedbe able to play a very useful role in facilitating several key pieces of researchin a manner which is conducive to useful interaction and coordination. I am surethat the level of understanding of each others projects and the approach toresearch of Lockwood, Mukherjee, and Shand on the one hand, and G. M. Desai on
MI Norman Reynold7 7November 4, 1971
the otier hand, would lcad to very usefal interaction of the respective )roj ectsIt would also be useful if these rather micro oriented studies interacted withthe macro studies being carried on by Brown of the World Bank and Donde of theDirectorate of Economics and Statistics.
I have sent to you under separate cover, twenty copies of our OccasionalPaper No. 47 by Michael Schluter entitled "Differential Rates of Adoption of theNew Seed Varieties in India; The Problem of the Small Farm." This study was aneffort to shed as much light as possible on the question of adoption of highyielding varieties by small farmers through use of the published PEO data andpublished data from the Agro-Economic Research Centres. Locliood, Mukher; ee,and Shand were able to provide considerably more detailed analysis of the PE0data through their access to the underlying data. Our publication reachesvery similar conclusions to those of the Lockwood, Mukherjee, Shand publication.We were able to sup-rIement this with a fair amount of quite different data fromthe Agro-Economic Research Centres. The latter studies covered many fewer areasbut covered those areas in somewhat greater dep th.
I think by far the most interesting conclsion from our study is that ofthe important relationship between credit and ado-ption with respect to smallfarms . The poportion of cash expenditures met by the cooperatives is muchhigher for adopters than for nonadop ters of the high yieldi- varieties. However,as size of farm increases, the proportion of cash epoenditure met by the coopera-tives decreases. IoIever, a smaller proportion of cultivators with small farmsbelong to cooperatives than do cultivators of are farms. Thus, taen toeher,these data suggest that a relatively small proportion of those with small farm sare members of the cooperatives but those who are members meet a relativelhigh proportion of their cash expenditures from this source. These are the sm allfarmers who adopt the new varieties. One might assumie that if more small fanrmerscould be brought into membership of the cooperatives, that adoption of high vield-ing varieties by small farmers would increase substantially and that the relativeincomes of the small farmcrs would also increase. What is noL clear :is thereason why they do not belong to the cooperatives. A widely held, and simolisticview is that the cooperatives are controlled by the bigger cultivators an d smallcultivators are either not allowed to join or are not allowed access to creditonce they do join. Substantial evidence in our study, however, shows consider-ably higher risk in the high yielding varieties than with the traditional varie-ties and it may well be that one of the key problems for the small cultivatorin taking up the high yielding varieties is his great vulnerability to risk anduncertainty. In view of this, we are now undertaking a very intensive researchproject in Gujarat State designed to measure the variability in results for awhole series of innovations which might be available to small cultivators andto measure the degree of their aversion to the various risks involved. Fromthis, we hope to be able to indicate what types of innovations are most suitedto small cultivators and what policy measures might be pursued to increase thesuitability of income increasing innovation through decreasing the risk anduncertainty. The findings of this study should be extremely important to thedevelopment of effective credit programs suited to the needs of small cultiva-tors. That study is now underway and we should begin to have preliminary resultswithin a year.
Mr Nora R dNovember 4, 1971
I think you will find a summary of the main findings of our study, on pages
35 Ihrou1;h 40, of considerable intorest. Our detailed compari sons of interre-
gional differences are of some significance. You will note that there is a much
less marked relationship between adoption and farm size in villages studied in
Andhra as compared to those studied in West Bengal. We believe that this is
because of the higher proportion of land irrigated in Andhra. This is very
likely a confirmation of our risk and uncertainty hypothesis. Where a high
proportion of land is irrigated, the risk and uncertainty is much less, and
therefore, the small cultivators are more willing to go into a high yielding
variety. Also, the yield differentials ad profit differentials will be greater
providing a greater incentive to overcome uncertainty problems. It is also
significant that differences in adoption level between farm size groups do not
seem to diminish as overall adoption increases until the limit of 100 percent
adoption is closely approached. Thus, the income differentials between different
size farms arising from differential rates of adoption persist for a considerable
length of time.
You will also note that we did not find a systematic relationship between
the proportion of land owned and adoption. The relationship is direct in some
areas and inverse in others.
I would be pleased to talk with you or others about the results of our
study, and to keep you informed of the work which we are now pursuing. As I
indicated above, we are trying to key our research to development of policies
which will increase adoption by small farmers of farming practices which will
increase their incomes. We include in this not only adoption of high yielding
varieties, but also the shift to more intensive systems of farming, such as milk
production and fruit and vegetable production. We are giving primary emphasis
to problems of uncertainty and the relation of risk and uncertainty to the
availability and use of credit.
I hope these comments will be useful to you. Please do let me know if you
would like further elaboration.
Sincerely yours,
John W. Mellor
JWM:dlacc: Mr. Robert Casson
Mr. J. KraskeMr. David ThomasMr. Gregory Votaw
FORM No. 57 INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
OFFICE MEMORANDUMTO: DATE:
*r J oc i : 9 ovam :r19
FROM:
P. *. NaylorSUBJECT:
nternati aa. eenirner on Nparative Fxporinc CO: 0 ricultura
developnt ir yeloains untries since borld aar Ix".
I attane enubor of sessios fl te avOeoinar covu:
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spite ia broadness of t e t tlo f the seminar, disc six
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learned a n er ouaefal items which zay be of interest.
in ta8 Qiscu sion on agricultdr . cre it, Ja.am & tro 31
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(At present farmers with oldings up to 5 acres account for 22%
of agricultural outstandingo of the scheduled banks). This
group of farmers is to be given priority on any occasion when
credit is in short supply. he also indicated that official
thinking on setting differential interest rates for different
groups of borrowers was still undecided. In the same discussion
3.5. Puri of the Planning Commission revealed that the new agri-cultural lending by the commercial banking system is turningout to have as high a rate of overdues as characterises the
cooperative system, One bank has repayments of only 32'.
Apparently this new lending is also as unevenly distributed
geographically as the cooperativ lending ever was and is not
filling tao gap in requiremeints. Total institutional short-term
credit is only 1s.600 crores against an estimated requirement of
us.2, 0 0 0 crores by 1973/74. This is a subject perhaps worthfollowing up in next year'ts report.
In a discussion on the green revolution ur. Chandler of
IRRI, after a very optimistic statement about what was being donein rice broeding research at RI, roundly condimned Inaian
researchers for failin to get the new rice varieties out to the
farmer and for failing to toch him now to grow them. .ven in
rice it is no longer the farmer's willingness to use new varietieswhich is in question. In the sme uascussion Dr. .. Srinivasan
of the Indian Statistical Institute gave an elegant paper on the
statistical non-existence of the green revolution though it added
little to what , said in this year's report. This attack, howver,
stung Ram Saran, the Lconomic and Statiatical ,dviser n theinistry of griculture, to a reply on the index of agricultural
production. He regards this as being quite unreliable since it is
still based on 1950 weights e.4. wheot is only 6 iven a weight of
13% against its present importance of 23%. This might be worth
bearing in mind for nax ye r's report.
In a session on employment in agriculture Purl of the
Planning Commission revealed how amall is the impact to date of GCI's
new plans for the poorer sections oi the agricultural community.Out of Rs.l5 crores allocated in the Fourth PIan for small f armers,
marginal farmers etc., at the end of iarch 1971 only Rs.115 lakh had
'been spent. imilarly for the ory farming programs only Rs.20 lakh
out of 3s.45 crores had been spent. On the multiple cropping programnothing has yet been spent and half the lanned projects have not yetbeen sanctioned. Insufficiency of funds is not the obstacle in any
of these c seu but the ability to utilise them. Present difficulties
arise from the failure to integrate the programs into the machineryof administration at the district level. All these new programscame under considerable attack by various speakers particularly byProf. 0)ntwals who felt that t only technology GOI hd for the
mall farmer was to give him a loa.
Sfinal session on reserch priorities snowed that thet
is great itet in knowing more about the extent of yvrtyand unem loyent and the effect of h new t. Inolog in
Ilv itr waese Und in ain itcone distrioution. verpar had a alfferent resaarch subject that needd stu b
no o could offer ar*g s4 lution as to uo was capable of doi6all thi work or wno would benefit from it. obod owed any
ncrn to kcno more about the benefits of investment or 0 t
d rd investe priorities.
ec: Mr. W.apenhanaMr. Kraske
ew rr
f''r C.Gov,
Your errndn e rke on ::una ter studierd1e coer 2, 171, rrivd M tefr u e ableto
rep Oly -,Or d, ry r t A P :, uver, stilnish t v ko h cur re..ets prc in cse e ter is
r isd:i.
In principle, iwe see no objection to 1Mrdon 's propo6 iiprovid credi doument undert k.L
Arc t u ecnt ee l their ercr rter u cAe acuce of Cu py "h rser: -
ien we hve center en psie cogictin icmi tcrete byievricus cras-r tionhp nec som :mi.atelrespacibili mdele Cr milctracua 1rol tionca
Indr rgiir e fr s I itsell is concerned, ±n t secon&rrole: our c tie : rr . e or<lso reareXi xa icn a, incaiina sln
clate r teirsuprviit~, eicyatof exerte onter scales
rgivlehie :i ci r
You Ui cerel ,
1leared wiy in d cc: Mr. M. J. ilden
cc: Mr. Kroske
oebe , 1971
Yor eorandum to Joch~en Kralke on Cr oundwter studies,
dated ctoe 20, 1971, arrived too late for us to be able to repl
uctober 26, asou requested. Yo a, vr to o
hat ou racti a, n case the atr shoul 2 d be raised aain.
In principe no objection to Bdons popsa hich
a muh mrnit and provided th cr.edit doesn v undertakngs are et
oulde content to jud tie consu tants on thei eits and crd
rathe th ot ce osuppl Wt rervatis w ace
on possible complications whc miht be created by the various cros-
relationh involved. Som abiut o repons l a d lop
from the multi-contaual rationhp o the constnts wth FA,
th Asscition adthe Governmnt ofIdi in, in so fras FA
itel i~s cocrnd from ts ecndar rol asaatto ou co-
opeative arnement. The cost fator alor reqire soe eaintion
as in adition toFAO' handling chres for teir supervsion emlyent
of experts on their scalesma invlv ige bsic o ts
I do no uget ttthese considerationsoteig the
urgent nee footside exetise fro haeersorce. The mab orth
rehear ing, hcrever, if alentive are available.
Yours sincre~Ly,
D. . 1. Thoas
'leared ce: Mr., M. J. ~ odn
Mr. W. . October 29, 1971
Dennis J. Parsons
INDIA : Proposal for a Review Mission in General Agriculture
1. I enclose a copy of a draft memo from Mr. Reynolds for clearance
by the Department. Thi arose from di cussions concerning the desirability
of reviewing prospects for investment in General Agriculture projects in
India.
2. As you have been concerned with this in the wider context, Mr. McIvor
suggested I forward the draft to you for comments and/or clearance.
DJParsons/ew
ect Mr. MclvorMr. Reynolds
Encl.
Mr. Arvind Pande October 28, 1971
D. H. 1. Thoman
INDIA - Status ryf Various Prlocts
In your memorandum of October 6, 1971 addrezted to Mr. Kraske,you listed three outstanding nattera. For tie recordt-
(i) Cajarat Agricultura Cradit Project - the procurement of thesecond tranche of tr.actor. uare currently correspondingon this ttr.
(ii) Definition of small fm. , re :anitinf' a resxnwe fromMr. oryandMr.Ikrd~rshn ona dficionwhlich has been
suggested to the n ent they ut
(iii) Tail Jkd Aricuturl . Credit r - dw3Ul investment inthe Cauvory rrea. 'a ha re;che Wret on this ratter.The ncom ry amamcmts to tV le-al documlnts have beandraft-d d we shall cle:ar theI ith you once this credit
DMIThomas: ebe
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL DEVELOPMEINT ASSOCIATION
OFFI CE MEMORANDUM
TO: Mr. Dorris D. Brown DATE: October 26, 1971
FROM: D.W.M. Haynes
SUBJECT: INDIA - Assistance to the Bank/IDATerms of Reference
1. You will proceed to New Delhi, India on or about October 26, 1971for the purpose of working with the Ministry of Food and Agriculture, Economicsand Statistics Department (Dr. W.B. Donde) and arrange for GOI to providethe Bank/IDA with State and up-to-date district agricultural statistical data(1969/70 and 1970/71) to be added to the ten-year series previously provided.You will give detailed attention to the provision of data on net consumptionof fertilizers (N, P'and K) by States for 1970/71.
2. While in India, you will review the farm mechanization study (seeseparate terms of reference).
3. Upon your return to Washington after the Nepal Birganj-Gandakiappraisal mission, you will submit a combined back-to-office and full reporton your findings.
Cleared with and cc: Messrs. Hayes (Economic Program)Mehlem (IFC)Fuchs (Industrial Projects Department)
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL DEVELOPMENT ASSOCIATION
OFFICE MEMORANDUM
TO: Mr. P. C. Goffin DATE: October 26, 1971
FROM: W. H. Spall
SUBJECT: INDIA --Discussions with the Government of Indiaand the Agricultural Refinance CorporationBack-to-Office and Full Report
1. In accordance with my terms of reference dated September 7, 1971, I
had discussions with the Government of India (GOI) on September 28 and
October 1 and with the Agricultural Refinance Corporation (ARC) during
the periods September 14 to 15 and October 6 to 8. Mr. Thomas (Area Depart-
ment) joined in the discussions on September 1V15 and September 28.
DISCUSSIONS WITH GOI
2. In view of the complications which had arisen in respect of tractor
procurement for the Punjab Agricultural Credit Project, most of the mission's
time was spent in discussing this matter. The problems are described in mysupervision reports on the Punjab and Gujarat Agricultural Credit Projectsdated October 20 and 21, 1971 respectively.
Limitation of Tractor Imports
3. A statement in the press, attributed to the Minister of Industry,indicated that as from 1972 tractor imports into India would be banned with
the exception of 34,000 already contracted for under IDA projects. This
figure could not be reconciled with the 19200 already agreed for IDA. Mr. Kaul
(Additional Secretary, Department of Economic Affairs) explained that the
press report was inaccurate, 001 had agreed to the importation of 35,000tractors (excluding IDA commitments) of which 34,000 had been ordered. Never-
theless, the ban would apply to future IDA projects unless specific exemptionwas obtained. I was assured that the tractors contemplated for Mysore were
excluded from the ban. If future agricultural credit project submissions
contain a tractor component, I recommend that GOI be required to give an
assurance on importation before appraisal.
local Currency Financing for Indigenours Tractors
4. Arising out of the importation ban, I was asked if IDA would consider
local currency financing for Indian-produced tractors on the basis that we
already financed part of the local costs of minor irrigation a.d land levelling
Mr. P. C. Goffin - 2 - October 26, 1971
investments. I was not qualified to discuss such a problem and GOI indicated
5. I was informed that for the time being GOI did not intend to submit
to IDA the UP agricultural credit project. Both GOI and ARC would like the
Madya Pradesh (MP) project to be considered as soon as possible. I confirmed
that the banking system in MP would require rehabilitation before appraisal
could be contemplated (see IDA letter of August 25, 1971).
Importation of Hard-steel Componenets for Tractor Implements
6. 00I requested that IDA approve the importation of hard steel instead
of manufactured hard-steel components for tractor implements for the Punjab
Project. As such a proposal had been turned down during the Haryana negotiations,I suggested that GOI should write to us on the matter.
Groundwater Consultants
7. I was informed that, after further discussions, GOI now agreed to
the employment of six internationally recruited groundwater consultants (three
each for Andhra Pradesh and Tamil Nadu) and had asked FAO to assist in recruit-
ment. Since my return IDA has been informed that the Canadian Development
Agency (CDA) has been requested by GOI to assist in providing three experts for
Andhra Pradesh.
Small Farmers Dvelopment Agencies
8. There are now 45 Smail Farmers Development Agencies (SFDAs) in the
field. The budgetary provision up to the end of the current Fourth Plan
1973/74 is Rs 115 million (US$15 million), of which Rs 7 million (US$1 million)had been spent last year (1970/71) and it was anticipated that some Rs 15 million
(US$2 million) would be expended during 1971/72. It was unlikely that the
full amount would be utilized by the end of the Fourth Plan period.
9. Loans to farmers are not given by the SFDAs. Funds are used to pay
administrative expenses; to purchase share capital in Land Development Banks
(LDBs), thereby providing loan funds to such banks; and in providing grants
to farmers of part of investment costs where the farmers have insafficient
security to offer to obtain the requisite loan from an LB,. The amount of
share capital contributed to IDBs is limited to Rs 1 million (US$133,000) perbank which is insufficient for the lending program and LDBs must find addfitional
funds from their own resources. However, up until the end of 1972 ARC has agreed
to refinance the full extent of project costs for schemes sponsored by SFDAs.
10. SFDAs have not been exempted from the similar lending conditions
imposed in the Gujarat, Andhra Pradesh, and Tamil Nadu Projects, as was donie
in the case of Haryana, since the question was not raised at the time. This
means that LDBs in those three States cannot, at present, lend for SFDA
sponsored schemes since the lending terms are substantially dilfferent from IDA
terms. GOI proposed to request IDA to amend the Agreements, exempting loans
Mr. P. C. Goffin - 3 - October 26, 1971
submitted under the aegis of SFDAs in Gujarat, Andhra Pradesh, and Tamil Nadu
from similar lending conditions.
DISCUSSIONS WITH ARC
11. I held discussions with the Chairman, the Managing Director, the
Secretary General, and senior members of ARC staff.
On-going Agricultural Credit Projects
12. We discussed the on-going agricultural credit projects (Gujarat,
Punjab, Andhra Pradesh, Tamil Nadu, and Haryana). Full details are contained
in my supervision reports for each project.
Mysore Agricultural Credit Project
13. The rehabilitation program for the LDB and PLDBs was discussed fully
and agreed with ARC, which is giving substantial expert assistance to Mysore.
The Chairman was anxious that, if possible, negotiations should be held in
mid-November 1971 and that the Credit (if approved by IDA) should be signed
before the elections scheduled for February 1972.
Maharashtra Agricultural Credit Project
l. The proposals for the rehabilitation of the LDB and PLDB were
discussed and agreed in principle. However, they were not as far advanced as
those for Mysore and ARC requires more time for detailed consideration.
Detailed proposals will be sent to IDA by the end of October 1971.
Establishment of Bank Rehabilitation Department
15. IDA's letter of August 30, 1971, had proposed the creation of a
department within ARC which would be responsible for preparing ana implement-
ing rehabilitation programs for LDBs and PLDBs where necessary. The Chairman
preferred that suh a department should be established within the Agricultural
Credit Division zf RBI since the rehabilitation programs affected not only
credit schemes financed by ARC, but the overall operations of the banks which
come under the control of RBI. Additionally, expert staff are available
within RBI whereas ARC does not presently have such staff. Steps have already
been taken to establish such a department and teams were working in Tamil Nadu
and Mysore. It is proposed to send additional teams into Maharashtra and
Madya Pradesh in the near future.
Consultancy Service
16. On August 9, 1971, ARC established a Consultancy Service which will,
in the first instance, be located in Lucknow. It will provide consultancy
assistance to Bihar, West Bengal, Orissa, Assam, Meghalaya, Tripura, Manipur,
Magaland, and NEFA. It will also assist financing agencies in Uttar Pradesh
to the extent possible.
Mr. P. C. Goffin - 4 - October 26, 1971
17. The main functions of the Service are stated to be:
(a) to assist financing agencies in procedures of identifying,investigating, and appraising pro jects and enlisting thesupport of cultivators;
(b) to make a State Government's technical services availableto banks for investigation and appraisal of projects;
(c) to provide technical liaison where State Governments have noarrangements of their own (e.g., groundwater investigations);and
(d) to assist LDBs in streamlining their organization and
procedures and in determining the staff required for controland supervision of lending operations.
Monitoring and Evaluation of Agricultural Credit Projects
18. The Mysore appraisal report proposes that ARC should establish a
system for monitoring and evaluating the financing and economic benefitsresulting from agricultural credit projects. The Chairman pointed out that
a considerable amount of work in this respect was currently being done byRBI. He undertook to examine the position and discuss the proposal furtherat the time of the Mysore negotiations.
General
19. I should like to express my thanks to the Chairman of ARC whoarranged for the Secretary General (Mr. Choksi) to accompany me to all the
States I visited. His assistance was most valuable.
WHSpall/edIBRD
cc: Messrs. Chadenet/Baum/Ripman/King/Rovani/Lee/Engelmann/Lithgow/van der Tak/Lind/Kraske/Thomas/Elliott/Evans/Wapenhans/McIvor/Adler/Darnell/Takahashi/Veraart/Forcum/Cabezas/Walton
Central Files
FoRM No. 57 INTERNATIONAL DEVELOF T INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT I CORPORATION
OFFICE MEMORANDUMTO: DATE: 20 ctoeDr 7
FROM: P
SUBJECT: India: rond water studies.
1, was visited las week o Dr. Burdon, ConsultLngydrogeClogist, from t aFAU Land and Water Division and
jr, from SD -A. They were ere in connection with the
Oi , request to FAO/UmP whion SI offered to finance, to
rideLC staf for theal "Creaisono ad&equate Insitutional
ODr anizatio upportfor proundwater DevelopmentH. T is a
ueEjact lo sely linked the Ba k i swn neavy involvement with
roundwatr and one which we str s uport - at st e s o
n ne ed for 1oreign ass ia nce. I am not sure whete we speci-
icll y :. Out FAO.
2. s soon as Drs. Burdon and ,a s_ arrived the were told
tis re0uest; had be droLI 2peCd.. I .a-d already learned this in Rome
T er reason give me there is 301 s on uncerta nty about their
reqirements 0 Frem a meeting we huad later in the. weekth UNDP ,
learned th, :)D ill iy and restore t i re qes- but in the mean-
time t~ he FA missionJ is looking at ote thins .
3, O.ne of these other th ing s i ste provison ofl on hcard-
rock expert for on0e year to Tai Nadu to wo wit t . tate ao-
wae Directorate. Thi is comin4 trou U D (IND9/lOA eor)
an. the. naime o a canate is crretly under review by '01. This
presumaly overlaps our T. .. redit ProcO
4. Thether thing, to subtiut for the ) tirope request, is
a i oundwater study i Tamil Nadu similar to that wch A is
doin; in Andhra Pradesh. This replaces the pilot projec>.t whc USAID
was to do in Tamoil Nadu iut whiach in now also seen dropped. It is a
"conventional" study spread over four ,ears an. using about 16 man-
years o. "expert" timof various assorted disciplines. Since it
will take about one year to get to th 1aimplmetation staee it is
prposed tiat the "hard rock man" aragraph 3 wi transfer t it
at theu end of his UNDP assignment. It will cover about 3-4000 m'
roughly coeingil the basin of the iver ayil but crossing the Kerala
oorder alsu. It will be a joint SIDA/FAO ject. is does no,,
appear to affect o)ur .N redit Proect.
Dr. Burdon said he 1.i zo me 0 potentil
app"icants for grouwar Wr.. TnIhia. i explained our lack of
,rogr ess in persuading i0l to recruit fo0eUn experts for our pojects,
Jr. Burdon said be thought 2AO would welcome th opp.ortunity to act
as consultats adir btSe p-pE to do ti o n a contract
10,7 l 0
~2CTIOm.
w'»
Ni
bm 'is for GO1o I w somewhat taken aback by this ncverenvisag, ed FA in th lih o consultants owever, on October 14
Sreceiveda note from ~r0 Burdon sayvin that ",t a meting hM JK. Ja n afternoon of 12 October it was Suggee that TAO
migh wi a to provide the consultancy services required in connetionwith, the IDA loan for agricultural development (groundwater aspects)in jamil a 1".
Jrs, Burdon and 'ustafson are cur'rently in Tamil Nadu andi e coming to see me on their return, I) you can give me any
Ban reaction b October 26 so tiiaL I can say It i or IS not aemlcome suggestion to the Bank, I would be grateful.
October 20, 1971
Shri P. N. DamryDeputy GovernorReserve Bank of IndiaP. 0. Box 1036Bombay, India
Dear Parviz:
One of my wore delightful colleagues, "ir. Arun Shourie, an economist.will be traveling to India next month. T have asked him to call on youand to discuss some of the economic studies we are interested in doing(or having done) related to India's agricultural development. Mr.Shourie would also like, through you, to meet Mr. Jakhade and othereconomists at RBI and ARC. Ne expects to be in Bombay November 8-12and will phone you then. I am sure you will enjoy meeting eachother and comparing notes on topics of mutual interest.
Carmen and I are also planning a trip and, with luck, will bein India in December. I will let you know the dates as soon as ourtravel plans are firm.
Very best wishes to you and your family.
Cordially,
Cre . Votaw
cc: Mr. Shourie
GBVotaw: jw
x -
s.
s
- .. - -. s.... - - s s -
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. - . s..
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- . s
October 15, 1971
Sir John CrawfordVice Chancellors Residence24 Balmain CrescentACTON, A. C. T. 2601Canberra, Australia
Dear Sir John,
The copies of Part I of the HYV Programme in India Study havearrived and have been distributed. It is a competent, thorough work ofgreat interest, has aroused favourable comment and should prove most useful.The Bank has now to clear the ground for the new research proposal, Part II,a draft of which you left with me on your last visit.
The logic for financing Part II forthwith is hard to dispute. Thebenefits, in terms of a far more operational study, plus the three additionalstudies, are clear. There is a difficulty, however, which, while unfortunate,is real and has to be dealt with before Part II can be submitted for financ-ing to the Research Committee. (Lockwood's proposal to study mechanizationand the conversion of the PED data to tape fall outside the problem and arenow with the Committee.)
Part I's coverage is much less than was originally expected andagreed on when the Bank financed the study. This may well be a natural out-come of the research process with its unknown elements and numerous bottle-necks. Were only a few thousand dollars and a few months required to com-plete the study as originally conceived it could be left at that. Theproposal for Part II is, however, a much larger request than the former, evenexcluding the three additional studies. How has this disproportionate in-crease come about and, to be able to answer likely questions here, whatassurance is there that Part II will see the completion of the study?
The Bank had little forewarning that a Part II would be necessaryto complete the study. Lockwood did write to Kirk in March this year in-forming him of delays but was still confident that "a very considerablepart" of the study would be covered in "our first report." He mentioned thequestion of mechanization and labour use and of tenancy as parts of the studythat might have to be omitted. In September ie wrote to Cassen, " ...thefirst report, while limited in scope and sophistication of analysis, is afair start, but no more than that. It attempts little more than to point tosome of the main areas and issues which can be examined in much greater de-tail with the survey data now sitting in Canberra." The letter arrived withthe unbound copy of Part I. It did not in any way explain the reason forthe greatly reduced coverage of Part I, neither the reduction between hisposition of Ilarch this year and the final Part I report.
s
. i
- s:
.. - - - - 1
- as
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Sir John Crawford - 2 - October 15, 1971
It would be fair to state that during your brief visit at the endof September we were not aware that you were discussing a large secord study.We had no intimation of a Part II except for the mechanization and tenancystudies. It was only when I went through the papers which you left that wediscovered the importance of your earlier remarks.
I am sure you will understand the difficulties we face internallyhere; we would be most grateful if you could comment on the above, to assistus in presenting what I am sure is a valuable proposal.
The Computing Activities Department of the Bank have supported therequest to convert the PEO data to tape. The Department has requested thatthe cards be converted to 7 track tape, unlabelled, 800 BPI or 9 6 BPI EvenParity BCD. Records may be blocked, but they would wish to know how manyrecords per block.
Yours sincerely,
Norman Reynolds
P.S. We have not forwarded a copy of this letter to Lockwood, but perhapsyou will wish to do so.
Telephone 201Mr. David Haynes, Esq., Cable Address: ZEISSWERK OberkochenAgricultural Dept.International Bank for Reconstruction Telex: 7-13213
& Development, Bankers: Deutsche Bank AG, Heidenheim1818 H Street North-West Railway Station: Oberkochen (WOrtt.)Tashington, D.C., USAZone No. 20433
Your Ref. Yours of Our Ref. Oberkochen,
VA 1 Jng/Ei October 14, 1971
Dear Sir,
I thank you and Mr. Bold for the interesting telephone conver-
sation we had on October 5, 1971 during my visit to New York.
Meanwhile we have submitted our final quotation to Survey of
India, Center of Survey Training and Map Production, Hyderabad,indicating to them in writing what had already been discussedverbally.
We shall provide the Hyderabad project with Know How to run
the Orthophoto mapping section after it has been installed,
to have it installed by our factory experts, to supply certain
consumption material required in connection with Orthophotomapping, and to guarantee the availability of service facilities
on the spot.
I suppose you agree that this company has gone very far in
providing the means and methods to run such a new mapping section
successfully. We understand this as a one-time-only concession
for the first equipment of this kind in India. The usual training
given by us to our customers is of course provided for as well.
You showed interest in the results of our discussions in Hyde-rabad as far as the mapping is concerned. After considering the
available photographic resources in India as well as therequirements of the civil engineers the following compromisewas found:
Mapping scale: 1:2500 (earlier 1:5000 was required)Contour Intervals; I mMap format; 5Ox50 cmnurier of map sheets, required forthe project: 64time required to produce 64 Orthophoto maps:
32 working days of 8 hours shifts.
-2-
E0
L-
Z
To:
CARL Mr. David Haynes, Washington Sheet: --2-
ZEISSIDate: oct 14, 1971
The system permits further to preserve the terrain profiles inthe storage plates for future map revision. Revised maps thereforecan be produced automatically without further plotting when thearea has been reflown for revision.
The enclosed literature on the possibilities of ortho-projectionmight be of great interest to you in this connection.
Thanking you again for the conversation I could have with youand your colleague, I remain,
Yours sincerely,
- Jo enA• J .ng. -
Form 01041 0165
FORM No. 26(4-69)
INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
INCOMING CABLE
DATE AND TIME R O U T I N GOF CABLE: OCTOBER 14, 1971 1033
LOG NO.: RC 22/14 ACTION CDPY: MR. KRASKE
TO: KRASKE AND CASSEN IRTBAFRAD INFORMATION MR. CASSENCOPY: MR. CARGILL
FROM: CANBERRA DECODED BY:
TEXT:
SHAND LEAVES FOR IRAN OCTOBER 24.
HAVE YOU REACHED DECISION ON INDIAN PROJECT.
WOULD IT BE USEFUL FOR HIM TO CALL NEW DELHI ON ROUTE
FOR DISCUSSION THEIR PARTICIPATION IN PROJECT REGARDS.
CRAWFORD NATUNIV
ee
FOR INFOBMATION REGARDING INCOMING CABLES, PLEASE CALL THE COMMUNICATIONS SECTION, EXT. 2021
ORIGINAL
itti
-I777
NATIONAL DEVEIOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE
ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
OFFICE MEMORANDUM/(7.CES DATE: Octobepr 5, 1971
FROM: Edward B. Cunningham
SUBJECT: INDIA - Note on Meeting with Indian Delegation
September 26, 1971
A meeting was held on September 26 at the Sheraton-Park Plaza
Hotel between the Indian delegation to the Annual Meeting and members
of the South Asia Department. Those present from the Tndian delegation
were Drs. I.G. Patel, S.R. Sen, and Messrs. G.V. Ramakrishna, M. R. Shroff,and A. Pande. The South Asia Department was represented by Messrs. Cargill,Votaw, Melmoth, Blobel, Baneth, Kraske, Dunn, Cassen end Cunningham.
Points for Discussion with Mr. McNamara
Dr. I.G. Patel asked for advice on the subjects which should be
raised with Mr. McNamara. Mr. Cargill commented that the delegation should
certainly raise the problem of the influx of refugees. On the procurement
issue, Mr. Cargill explained that there was very little of substance which
Mr. McNamara could say at this time as the Thalwitz mission had only just
returned. On the need for non-project aid, Mr. Cargill said that the
delegation should consider this issue as largely resolved, now that agree-ment had been reached to proceed with the proposed 7th Industrial Imports
credit. Also, it had been agreed, for planning purposes, that an Industrial
Imports credit could be shown in the lending program as an annual event.
Refugees
Dr. Patel confirmed that he had only proposed some minor amend-
ments to the report prepared by the New Delhi office. It was agreed that
once these amendments had been incorporated and the report had been re-viewed within the Bank, this report could be used as a basis of discussionwith the Consortium members on the financial situation facing GOI. Mr. Cargill
said that any discussion on the refugees should be kept separate from the
proposed Consortium meeting on the Debt Study. He would be suggestingshortly a date for a meeting on refugees.
ICICI
Dr. Patel referred to the request, arising from the negotiations
of the 9th ICICI loan, that ICICI should seek to raise a limited amount of
finance in the world capital market. Dr. Patel said that the cost to India
of foreign exchange would be around 9 percent and he felt that it would be
inconsistent for the Bank to press ICICI to borrow such expensive money at
a time when the Bank study of India debt placed so much emphasis on theneed for India to avoid suppliers credits and other expensive finance.
Files - 2 - October 5, 1971
Mr. Cargill commented that the loan to ICICI had been increased from $50to $60 million in recognition of the fact that the Bank should try to
meet ICICI's requirements to the maximum extent possible. Nevertheless,ICICI should not assume that it had to rely on the Bank as it would be
in the long term interests of ICICI to establish a position for itself
in the world capital markets. So, when appropriate, some borrowing fromthe world capital market, albeit notional, would be desirable.
Proposed Industrial Imports Credit
On the Bank's proposal to consider the financing of replenishment
licenses under this credit, Dr. Patel and Mr. Ramakrishna said that they
would prefer to see this credit follow the pattern of the preceeding one,
especially as they had gone ahead with a considerable amount of licensing.They also explained some of the administrative difficulties which theyIbresaw in the proposal to finance replenishment licenses under this credit
and expressed their reluctance to see the Bank get involved in export pro-
motion policies. Mr. Cargill assurred them that the mission would review
this proposal with GOI in more detail. On the raw material requirements
of small scale industries, Mr. Cunningham explained that this aspect hadbeen included in the terms of reference for the proposed reconnaissancemission.
Shipping Project
With reference to Mr. Cargill's letter dated September 15 on thissubject, Dr. Patel said that GOI were faced with a difficulty over the re-quest of the Bank to permit private shipowners to participate in this project.He explained that this difficulty stemmed from the Bank's proposal that bene-ficiaries under the credit should have secured long-term charter contractswith the Indian Oil Company (IOC). GOI was prepared to allow IOC to enterinto such a contract with the Shipping Corporation of India (SCI) becauseboth organizations were State owned and so windfall profits from fluctuationsin charter rates would remain with government. However, this would not bethe case with a private company and Dr. Patel was concerned about possiblereactions in the future if charter rates changed. It was agreed that fur-ther technical discussions on this problem should take place during thecourse of the week.
Kudremukh Iron Ore Project (Marcona)
Dr. Patel said that GOI's review of the feasibility study had beenlargely completed and that he expected shortly to be in a position to askthe Bank to consider an appraisal of this project.
Urban Projects
After some discussion on the needs of Calcutta, Mr. Cargillcommented that he considered the Bank should concentrate first on Bombayabout which we had acquired a certain amount of knowledge; he hopedthat GOI's comments on the King report would be forwarded soon.
Files - 3 - October 5, 1971
Agricultural Project Preparation
Mr. Cassen drew attention to the possibility of the Bank con-
sidering projects which were concerned with rural unemployment.Mr. Cargill said this was an area which he was anxious the Bank shouldbegin to look at and he had asked Mr. Walinsky to examine the wholequestion of unemployment in more detail during his proposed visit toIndia later this year.
Nepal/Telecommunication Project
Mr. Ramakrishna said that the final loan documents had beenagreed and had been sent to New Delhi at the end of August. Since thenthe Nepalese had asked for some changes to be made in the project content.GOI had agreed to examine these revisions, but in the meantime, had issueda letter of intent to permit the Nepalese to go ahead with calling fortenders from Indian suppliers. He expected the loan agreement to besigned within a matter of weeks.
1. we have received a new research erant request from Air JohnGrawford. AU is now asking for 46hW), initially to analye the factors
associated with the sread of high-yielding varieties and responsible 'or
it. This is presented as the second part oi uhe ANU-GUI study, the so-
called first stage of which we have financed. i have no doubt that the
study as presented is a worthwhile one and should probably be financed bythe Bank. I do however have some qualms, due to the fact that we have
understood that the previous stud; .or which we hav already provided awout
$1 ,00 would in fact provide all te infonnation wnich now IL soughtthrough this second phase.
2. In other term, our understanding with ANu was nat boMh tneseso-called first and second stages were to have been completed by now. It
was only on harch >, 1971 that we receiv .the first hint, decidedlyunapologetic, that th udy may prouce muh les than originally thought.I do not think that this should be grounds for oar refusing to go ahead
with the new ANU tudy. Upon cursory inspection, it is likely to provide
our money' s worth in the second stage when and if we Ainance it; even under
its present form it sees to have been a worthwhile exercise. Aowever, inmy opinion, the failure to provide as much as had been originally areed,
and the very offhand manner in which thi tilure is treated by AJ, warrant
joint reexamination of the question with A. This will at te very leastnecessitate further correspondence.
3. In these conditions I do not think we should submit this furtherstudy to the Research womittee at its next sitting. I do however think weshould go ahead and provide the much smaller amount needed by orian Loecwoodfor a very specific study aiming at discovering the asoociation of the apread
of high-yielding varieties with mechanization, and the impact of mechanizationon the employment of wage-labor. These are subjects which we are very muciinterested in. The amount required for the study woui be j,060. I alsothink that we should take steps to preserve the existing information and putit into a much more useful form; this requires the taping of the roughly
half a million cards now available in India. That would cost j 6,40.
4. I therefore propose that we should submit a request to the KesearchCoumittee ior ),40 for the limited study of high-yielding varieties/mechani-zation/employment, and the taping o the cards oearing tne data collected bythe Program Evaluation Organization. I further propose that we should write
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to vir own arawford an - A , akin .or some explanation as to htwe linal cGoverse o n e y ac it stna now iv auh less toan wasoriina.Lly expected ano aerd, and wh e .urhe amon ol 4,500 isneeded to bring the sia 's coyerge up t he extent wrich acordin, tothe oriiinal ee n.on shold le d ave been reacned now at the totaloa5.. to the skank os,1,;0
ih~ deadline ior sumiassin to the esearch Connittee isOctober 1; therefore, we neew your early approval for the proposed stepa.
ecs Iesars. 3loielKraakeiteyno Lds
Ne OvIelhi uf ice
JBaneth/ylc
Record Removal Notice& Records Management
File Title Barcode No.India - Agriculture and Agricultural Projects - General - Correspondence 1969 / 1971 - Volume 3
1845916
Document Date Document Type
30 September, 1971 Memorandum
Correspondents / ParticipantsTo : FilesFrom: Jean Baneth
Subject I TitleIndia - Lockwood Study
Exception(s)Personal Information
Additional CommentsThe item(s) identified above has/have been removed inaccordance with The World Bank Policy on Access toInformation. This Policy can be found on the World BankAccess to Information website.
Withdrawn by Date
Chandra Kumar 27-Mar- 15
Archives 1 (August 2014)
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6. The extremely high ratios noted in 1966 and 1967 might be explained
by the poor harvests in those years, althouch it is not clear to me why theratio rises in those years, if outputs and inputs are valued in constant prices.
Aside from those two years, the trend in the value added coefficient appears
to be slightly downward, which would be consistent with larger inputs of
fertilizer, irrigation services and the like.
7. In doing the projections, I have made the following assumptions:
a. The growth rates for crop outputs are determined from
Naylor's memo for Rice, Whieat, Other Cereals, Cotton,Jute, Oilseeds and Pulses;
b. Sugar cane and "other" commodities grow at 55 duringthe 1972-85 period;
c. Output from animal husbandry is constant at 16% of totalcommodity production;
d. Value added in agriculture is constant at 74' of output.This is the average ratio for the 1968-70 period usingeither constant or current price data;
e. Value added in non-agricultural sectors is assumed to growat a rate of 64 for the entire 1972-85 period. 1/ Total
GDP at factor cost is defined as the sun of agriculturaland non-agricultural value added;
f. Gross Domestic Product at market prices (all sectors) iscomputed by adding indirect business taxes (less subsidies)to GDP at factor cost, where indirect taxes are equal to
8.5% of total GDP at factor cost (the 1968-70 average);
g. Total GDP at market prices is assumed to be 40,257 (Rs. crores)in FY 1970-71 (based on the debt model data input).
8. The results of a preliminary run with these assumptions is attached.
The most interesting result of the model is the growth rate implied for total
GDP. This works out to be 5.0% for the period 1972-76 and 5.3% for 1977 and
thereafter. Agricultural output grows 3.7% during the first period and 4.3%
during the later period.
1/ Compared with 3.8% over the 1965-70 period and 5.1% 1969-70.
Attachment
NLHicks:lcm
cc: Messrs. Carter, Cassen, Funna
India Mod
Part I. Agriculture
OWHEAT = 7HEAT-i*(1 + C) Gross output, wheat
ORICE =ORICrt i*(1 + f2) Gross output, rice
00THCE = 00THCE ( +f!3) Gross output, other cereals
To : Mr. J.P. Huyser 21 `eptember 1971Director, FAO/IBRD Cooperative Frogramme
From : R.N. HarrisF'AO/BJD Cooperative Progsrmm
Sub ject : IUD1m: Disussions on Small Farm Devel entBack-to-Offic- eeort
1. At the conclusion of the India Higher Level Agricultural Education,nission, July-August 1971, a ae of diOcussions were held with apropriateJUits of the Government of Ind On th e national programmes for sall andmarginal farmer development and the current evaliation beings carried outof these programmes. From 22 to 27 August , eetings were held with theCentral linistry of Agriculture, the Planing Commission, and the FR-serveBank of India (at Bombay). A list of contacts i- attached.
The details of the activities and service of the Small FarmerDevelopment Agency (SFDA) and the Oarginal Fermers and AkriculturalLabourers ( IAL) schemes were revieIed. Thse agencies commaenced in> 1970;46 SFDA' s and 41 'FAL 'aspro ject s h be e t p to ate. Each pro jecis intended to serve on aveErage abou 50,000 ao n ot as at
mary to facilitate credit flows to th m armr ro the regulrcr-edit agencies, either commercial or ocoperative bodies. Corcslionarylending tei-ms andsubsidie are provid e for aand a cenralrisk fund prcovides g 2rant aitace for those 1 - lnding to -allf armers.
3. The intereot of' the Cooperative Prograrm were outli-ed to Gover-ment: narrely the organizational and operat ional lessons to be lear,,,neon-going development projlects or prograrmes in the field of small mand the possibility of cooperation in evaluating the impact of -1mIall arprojects so that wider factors of intere;st to the Prorame could be studid,i.e. employment, secondary benefis , iroemn t- of e alth, etC
4. The various Government officials e s con in terest inthe wider CP approach to small far devlopent particularly sinc it sintended to result in better formulation of small far project for externalfin--anciing. However, it is too early to draw -ay l essn1 from or to carryout any present in-depth evaluation of th SFDA and FAL's which ro clystarted in 1970. Some minor "concurrit valuation" ar. being carried outin 1971 on some 6-( of the 46 SFDA projects o p to date to review progrressand credit requiremen t or SFDA's. St dies ar mostly carrie.d out b ineReserv.e Bank of India n coop ration wit t Planni- Comission and theUinistry of Agriculture. A rapid 3-day assessment of credit requireints
RI/rc oc: All Team embers
BK IBPD, Washirgt o , A)DDCE 3eg. ( ,°
aod pro gros is made by sample surveyo of farmners, extenion taff,cooperative and conmmerciral banks 1 two studies thi have t o e edare: I Diotrict (Bihar), an as e Di-trTict ( ys.or). Two others
are 1 in prepaation: Chindwara (Madhya Pradsh) Darj n ( t Bgaland five others will be completed ti year.
Dis-ussions were also he Tin Bombay with staff of thR Rs- aof India (RBI) who had providerd most of the staff f th oOncurrent7evaluation of the 6 SDA's i1 1'"h C-I do not inten caFrryDin oufurther evaluation of DA' or thr prorcts t hir 1ni1iteiporary assistace to GI will n- b n 1m p in this ourr yaI
6. Joint efforts between t-ec CP a GOI shold e possibl in tilhecoming year. An indp 1 th al ati0n is propo to be caried out for theafirst time about m id-19 (2 for whi chi ti Plann1 in go Coisin will draw u
preliinary survey deign in the be n of 1'7' The Comisi ' onrequsted backgfrocund papes from th Programn: Osugetd val Tu"a'tion
techniqc and wishes to ep in touch wit1h CP in thi fi-ld-'nt itA docision will be n tk0 1 this- ear to whethr aide CP analysisCan be incorporated iito edy.
7. A omplementary exercse will b started by earryin out benchmaerk sure y, of select-d SFTJ' which wold prov ide dtu or cormIparison
i ubse qunt suaves to be carid out at rela intervals. Thismonitoring a pproach whch is prfrr by some t ill prvd useful,
bjectivei informato10 on progr andrslit bt not s oon enog for CPpurposes.
J. Contact shol be m)n.tAained betw cP and the interosted . Govern--en agenc~ies with aiew to establishing futu- lines of ioint aotion, such
S a po-ible first m'pct stdAfy.
1II on 7mall 1arm Developmnt
List of Coni s
Inin iisr fAgri-culture- (Dlhi)
.C. Mathu r Aditional Gor ar
.K. Mukerjha Join~tScrt ySQur hi Additio l Socr a
P.J nodviser
R. onuDepty Secotar
*rc r uh rj lua "t i or,
E~frveBank ofInia(ob )
C.. Da4' Chi .. Officer 1, gicualtualCr ilt De nt
0rd it D 'rt t
Form No. 27(3-70)
INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE
ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
OUTGOING WIRE
TO: AGiEFINANS DATE: SEPTFJI1BER 21, 1971
BOMBAY CLASS OFSERVICE: FULL RATE
COUNTRY: INDIA
TEXT:Cable No.: FOR MR. MA.DHAVA DAS RHERCAB SEPTEMBER 20 STOP WE ARE UNAWARE OF RAMAKRISHNA'S
LETTER TO GOFFIN ON DEFINITION OF SMALL FARMERS STOP DEFINITION AS INCLUDED
IN YOUR CHAIRMAN'S LETTER OF JULY SIX SHOULD BE INCIUDED IN AGREEAFT AS
SCHEDULE ONE REGARDS
KRASKEINDEVAS
NOT TO BE TRANSMITTED
AUTHORIZED BY: J . Kraske CLEARANCES AND COPY DISTRIBUTION:
NAMEcleared with and c.c. essr GofinN' Cabezas
c.c. Mr. Thomas o/rDEPT. South Asia
SIGNATURF< SIGNATU tE OF INDIVIDUAL AUTHORIZED To APPROVE)
REFERENCE: IvlAbfb1L ,tyilIhw For Use By Communications Section
ORIGINAL (File Copy)(IMPORTANT: See Secretaries Guide for preparing form) Checked for Dispatch:
1\ s
a44,vi
mr. J. Funna September 13, 1971
S. Kupaariaonkol
INDIA - The "Iockwood Study": Finniii Assistane in Data Storse
1. Mr. Lockwood has requested $6,400 to convert the data base ofthe study from punch cards to tapes. The data are assembled from threePEO surveys and tubewell studies to assess the progress of the H!V program.It includes detal ed information on sample participating farms, with regards
to operational holdings, irrigation facilities, cropping p-tterns, borrowingsfrom institutions etc. There Is little doubt that the information can beof good use to futue Bank supporting work.
2. The original objectives of the study were to determine the p uerns
of trial and adoption of new technology under the f!VF and to assess the
influences of certain factors, such as aailability of fertilizers and
irrigation, on the performance of different blocks. The first volume of
the report, which we have a draft of, has -n impressive collection of
statistical trends mid certainly has covered the first objectives well.,'s to the second objective, which I think is more important to us, r.lockwood indicates that it is forthcoming in future reports.
3. The report also indicates that with the data base, other areasof study are possible, to include H{VP participation and i-
a) extent -ad type of mechnisation and implications forrural employment.
b) f arm iuvestmns, indebtedness and the role of creditinstitut ions.
c) tubewell irrigation and groundwater development.
These are certianly areas of great interest to the Bank and questionswe would like to have answers to. Conerting the data into tape form will
facilitate future work to be die outside Indi , even if not by Mr. Lockwoodhimself.
4. Perhaps we should ask Mr. tockwood what his future pl-ns are for
using the data. He has indicated tha t it may be possible for him to writea paper on mechanisation and labor.
Iiink we should try to finance the proposal. r. Naylor has
spoken to the secretary of the Planning Comission as to whether GIwould be willing to bear a p art of the cost. If they do, it will make
the ac easier to justify on a utual interest basis.
SKupasrimonkol :Ihw
Au u. t 30, 1971
p rofessor Tohn 'P. LeisVoorow 'Ison 'IchoolPrirceton ;Jniversqity
Princeton, "p Jersey
Dear Trofessor Lewis:
r. Votaw is or leave today and tonorrow. Before leaving,however, he as'ed me to send to you the renorts on the Tir11an agri-cultural mission (irepared in 1965 and! 1967) wi.cl you discussedover the telephone last Friday. No indicated thnt these were to befor your personal and for referonce by research students working
under your general supervision. Needless to say, no nortion of
these reports should be nublished nor quoted as representing the
views of the NanI . Perhaps they can best b referred to as confi-dential wor!Ing uprerq nrenaro' olel1 v r us- of the Pank staff.
Vircerelv yours,
cret rV to Mr. Votaw
Reports under separate cover
Tndian Economic Policy and the Pourth Five-Vear Plan, 1967 (2 vols)
Report of Bell 'lission to India, 1964/65 (4 vols)
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August 26, 1971
Mr. A. Ramsay TainshOstermalmsgatan 6111450 StockholmSweden
Dear Mr. Tainsh:
Mr. Cargill has asked me to write and thank you for
your letter of August 16. Your views on the storage of comestibles
and steps to assist Indian peasants are interesting.
You will be pleased to learn that the InternationalDevelopment Association and the Swedish Government have recently
signed an agreement with the Government of India to finance
jointly a Grain Storage Project. Other IDA projects, includingseveral in the field of agricultural credit, are designed to
promote agriculture and to finance, in addition to other inputs,the construction of tubewells in many cases for dIall farmers.
The Government of India is making substantial steps
to promote the agricultural sector. The Bank Group is endeavoringto assist in these efforts.
Very truly yours,
William M. ClevengerSouth Asia Department
cc: Messrs. CargillDunn
WlAe r
WMcleenger: ank
1
August 19, 1971
Letter No. 256
Mr. Wolf LedejinskyInternational Bank for Reconstruction
and DevelopmentP. 0. Box 416New DelhiIndia
Dear Wolf,
The CP raised the vista of projects to help smallfariers and mentioned the need for one or more missions tovisit India to identify such projects. I have begun to lookat odd reports and at the Bank' s previous experience in thisfield. Enclosed is a memio I wrote comenting on David Thomas'contribution to the CPP, a reply to Chacko, and a note on teain India drawn from Elz's study.
Before I go much further with this I would appreciateyour views as to the most suitable approach to such assistance.Peter and you may have stronger feelings than anyone here.Robert will be in Delhi shortly and will be interested indiscussing what the next step should be.
As you will see from the enclosures I, at present,favour the idea of a crop-wise approach with an initial concentra-tion on small holders amongst the tree-crops. We would want,I suggest, also to consider dry land farming and even the selectionof a backward region for an integrated approach, but these twomay require more preparation. Dennis Parsons, who is Divisionhead of the general agriculture division in Agricultural Projectsis quite enthusiastic about a small-holder project and shouldbe helpful in moving the idea.
The possible selection of a crop like tea worries mein that it would be a "convenient" project. The Bank shouldperhaps decide to undertake a project or projects which wouldhelp both the small farmer and some other social end, e.g.cultivated pond fisheries or pulses and thereby nutrition.What real chances are there for Bank projects with such a noble aim?
Mr. W. Ledejinsky - 2 - August 19, 1971
I have the feeling, and the CPP supports it, that weare at something of an impasse in relation to new projects inagriculture. The Bank should clearly move in accord with 30I'ssocial concerns and stated goals. To do so and rwain "bankable"Will require imagination tempered by Iowledge.
I shall be interested to learn of your thoughts.
Yours sincerel ,
A/
Norman ReynoldsSouth Asia Department
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August 19, 1971
Mr. V. I. ChackoThe United Planters' Associationof Southern India"Glenview"P. 0. Box 11Coonoor - 1S. India
Dear Mr. Cha;cko,
We have found your letter to Deter 7l.z on the smallholderposition in India most interesting. The World Bank intends in thenext six months to send one or more missions to India to identifyprojects which would primarily assist small farmers. There appear tobe three courses open to the Bank.
i) The provision of financial aid to credit and/or small farmeragencies as the SMDA.
ii) To work on a regional basis, i.e. integrated projects.iii) To work on a crop basis, as with plantation crops, where there
are likely investment opportunities and in which small farmersmay be easily identified and reached as part of a crop-wiseproject.
Your letter is therefore timely and useful. The Bank haveconsiderable experience in developing smallholder projects, mostlyin East Africa. The Bank has found that smallholders often obtain yieldswhich are equal to or in excess of those of estates if the projects areefficiently organized and have proper administration by Project Manage-ment. Although all smallholder projects do not show yields which areat estate levels, it is usually possible to sharply increase the yieldsobtained by smallholders with a properly organized and run project. Inparticular, we have found that high yields and quality are obtainableon well controlled schemes where smallholder farms are kept to an areathat can be cultivated with family labour. Once farms become so bigthat labour has to be hired, management techniques are so poor that yieldsand quality decline. The optimum site of smallholding for tea in EastAfrica, for instance, is about two acres. Farmers with ten to fiftyacres have neither the advantage c- fady labour and close supervisionthat lies with the true smallholder, not the economies of scale andmanagement capacity of the larger estates.
1'
Mr. V. I. Chacko - 2 - August 19, 1971
I would appreciate additional information, although we dohave numerous reports here which we are using in the preparationof a proposal for a mission as in (iii) above. One decision theBank would have to reach quite early on would be related to theselection of crops, the scale of a project or projects, and theinstitutions suited to become the vechiles for such projects. I amin touch with Wolf Ledejinsky in New Delhi and you could, if you wished,contact him there rather than me in Washington.
Nonetheless, I look forward to further correspondence onwhat appears to be a promising field for assistance to India.
Yours sincerely,
Norman ReynoldsSouth Asia Department
cc: D. ElzD. ParsonsWolf Ledejinsky
NEReynolds/bb
'.. )
Mr. Votaw August 18, 1971
Mr. Reynolds
INDIA -Tea
1. India has a large and growing home market in which demand iseasily influenced by price changes - perhaps more so if sugar alsomoves in line with tea. This fact suggests that India can afford toaim at rapid expansion of production in order to optimise expertearnings while retaining an ability to absorb tea at home as theworld market fluctuates.
2. The report projects a % home consumption between 1969-1980.Recent excise taxes are the reticnale for what is a low projection -again a factor suggesting flexibility. Exports did not grow from1953-1962 and then declined as production increases failed to keepup with home demand. Present predictions on the rate of increasedproduction suggest it will not be sufficient to maintain the levelof experts.
3. Experience with better management, fertiliser and, particularly,new plantings has shown that yfelds can be raised. Nonetheless notenough is being done to even maintain the rate of production increasewhen that rate already threatens India's capacity to maintain exports.The report calculates that 30% of all tea bushes should on seonomicgrounds be replanted inmediately. The Tea Board of India have aplan to replant at a rate of roughly 3% per year, a better than averagerate if the economic life of a plant is 50 years, but inadequatewhen 30% of all bushes are past their economic life. It is nonethelessan expensive operation, Re 157 million p.a.
4. 00I has a number of schemes dating from 1962 to supportimprovements in the industry - special funds, tax rebates, sponsoredmortgage schemes for additional credit above that advanced againstthe crop, small-grower co-peratives. The report states that thevarious measures have not been able to increase the rate of growthand it is unlikely that they will do so in the 1970's. Sine a planttakes 8 years to reach maturity, the gap between the potential interms of export earnings, total home onsumption, excise earnings,farmers' incomes and labourers' wages and the actual position willwiden dramatically between now and 1900 unless markedly moreeffective measures are taken in the next two or three years.
5. Dieter ILs, the author of the report, and Dennis Parsons areexcited about the possibility of transforming the large non-estatesector of the tea industry where better management and ancilleryservices alone should raise yield.dand income substantially. Aproject aimed at this potential may well fit into our and GOI'sconcern to help small-farmers. It would, no doubt, have to be treated
Mr. Votaw - 2 - August 18, 1971
Initally as part of an industry wide survey. I shall be proposingBank work on this later.
6. The report does not help in determining India's realcompetitive position in the world market. To be in a position todo so would require considerable work with each producing countryto compare their costs and benefits. However, given that such astudy cannot be completed before 1972 or 1973, if undertaken, wehave to go on a broad analysis as above and relate that to thestructure of and predictions for the world market. India's largehome market should enable her to pursue changing opportunitiesas they occur more effectively than most of her competitors. Itshould be a question of industry structure, varieties of tea, salesof economy and the right policies. The report is not helpfulhere either. London has a peculiarly central role and is dominatedby four buyers. What implications this has for India' s exportperformance is not clear. Can India alter the oligopoly characterof the London market? We should know. Moreover, other marketsare not treated. Russia comes to mind as a market that may offerIndia a unique opportunity. We should also review the impact ofChina should she gain a freer entry into western markets.
NEReynolds/bb
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August 17, 1971
Letter No. 2,2
Mrs . Sen GuptaInternational Bank for Reconstruction
and DevelopmentP. 0. Box 416New DelhiIndia
Dear Mrs. Sen Gupta,
I recently asked the Bank/Fund library for assistancein obtaining studies on small farmers in India. The referenceswere incomplete and they were therefore not able to assist.Emilosed is a copy of an article from "The Times of India" ofJuily 5, 1971 page 8 on Small Farmers by Ashok Thapar. Wouldyou, without devoting much time to it, try and obtain fullreference to the studies mentioned in the article and, ifpossible, the studies themselves.
Yours sincerely,
Norman ReynoldsSouth Asia Department
{ K
*r. L. . G. avana Agust 16, 197
vid A. w
202 retr omor's Pr os for a Jook on the
1. tte a cci c2 eter Naylor'a emrndum of July 3Qcutlida a roposed stu el the a' expriences in dere; opingits lniing program in aian agriculture. 1 nSe that peter hassent y1u copy unDer cover Co a letter to you on Auut 3, but
deprtment will lid o.ther copy usefa.L in cnsiderints propoaa. 1 also attach a copy o a letter £rm icfiaredd inWhi o indicates his 6enral support fr tie proposal.
2. :oi first reacticn is that this should be un extremelyvalusole ad interestizg tudy which could provide ruaful ingights
into the d s operations, providir Peter I giv one freedom tdraw co nlai a a gested by ac, and also t can feelreasonably assured that whatever coalusiona ne as would not ian-favourably prejudice his position in the an.
3. I ugest that we write to Peter now iving him an initialfavourable reaction and tant we t4an reach a concrete agreementduring hi. visit in jop *aar. 1 presume you will be p&ssing thismemorandu en to omeoe iyour department for closer scnatiry ;if you agree with :y approach, I would we ver7 grateful i- you wouldhave that person contact Mr. Noma aerynolds so that the latter maydraft a lettr to Pter.
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Mr. Dennis Parsons August 10, 1971
Mr . Norman Reynolds
Smallholder Survey: Material PossibleProvided by Mr. Chacko
1. Here is the letter to Xz on smallholder operations inIndia. It appears to be useful in relation to a sector study weshould undertake to identify projects suited to both large andsmall farmers - viz a crop rather than an area or program approach.0Eco is clearly helpful and concerned. I hope to write to himin a week or so after hearing from you.
NEReynolds/bb
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August 9, 1971
Sir John crawfordVice Chancellor's ResidenceAustralian National UniversityCanberra, Australia
Dear Sir John,
Thank you for your cable to Mr, Cassen of August 5, 1971. We
are happy to learn that a draft of Lockwoodts study is now ready, Since
your present plan is for us to receive the study in early September, I
think I should amplify the two points in our cable to you of August 4, 1971.
We personally feel that the data which Lockwood has assembled
will be useful in our future work at the Bank as well as in the work of
others outside interested in India's agricultural problems. But at this
stage it is frankly no more than our personal feeling. Others in the
Bank feel, and quite rightly, that we should withhold a dpcision on ul-Lether
to provide the i'6,00 required for trans ferring the data a tape until their
future use to us is much clearer, lie propose to take up the matter again
with our Research Committee in 'eptember which explains our suggestion in
tae cable that a decision at tha tie -would be possible. But ve shall
aedc at least Lockwood's draft report in tie for us to review it before
middeptember. I hope you find it possible to mail us a copy at your
earliet convenience.
Yours sincerely,
James FunnaS outh A sia repart.ent
JPunna: ank
AUG , 1 1 149
FORM No. 26(4- 69)
INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
INCOMING C A BL E
DATE AND TIME B 0 U T I N GOF CABLE: AUGUST 5, 1971 1440
LOG NO.: RC 10/6 ACION COPY: MR. CASSEN
TO: CASSEN INTBAFRAD INFPATION MR, CARGILLCOPY:
FROM: CANBERRA DECODED 1EY:
TEXT:
THANKS YOURCAB. HAVE JUST RECEIVED DRAFT LCK WOOD STUDY WHICH WITH APPENDICES
WEILL BE READY EARLY SEPTEMBER FOR DISPATCH WASHINGTONO GLAD TALK WITH YOU ABOUT
r.t C. u~geIedish Inte L ; ovelo nt ntorito*0. o31
r .ur .vto iar m st1aernwdIp it-
In reply to your telgap t via un of ugut 3. enclose
please find a reime of te Bank's eot on Imh laigto the agr-
The Bank has 4A prsent no plan to sen a m4Iisio to Calcutta.Your information must have msinterpreted our rnwdhope that auch anevent ecour in the near future. is you ay kno, two recent dvelop-ments have rais ed the likelihood1 of sound oan beltgmd to Calautta,
ti y in sed comitaent to Catta by the G'JI over and abovethat provided by the east Bng ian has been made for the period of thei4th 'Ian, . e development authority, e calutta etropoitaDenvlopnt uthrity (CEA), has been establise, with coniderable powers
to plan, finanne, eo-ordinate and carry out work. The C have told Bankstaff that the timely arrival of construction materials and ofwas the aj4or bottleneok to expedtig roects. The most effectiveto is -prodaing development may be of the proma type. The positionnonthelss re-main aa it was in khay of this year. 01 has u ed that
a massiw effort to save Calcutta should be mad which Aight be backed byan internatioal comrtim Including the stem bloc countries. TheBank h-a incated their iterest in participating. Byond tat we haveto wait for 01 to decide what it wanta don and diat role it isetheBank to play.
S inoerlyi
Nteynolde/yle
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Form No. 27(3-70)
INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE
ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
OUTGOING WIRE
TO: SIR J. CRAWFORD DATE: AUGUST 4, 1971214 BALMAIN CRESCENTACTON, A.C.T. 2601 CLASS OFCANBERRA SERVICE: L/T
COUNTRY: (AUSTRALIA)
TEXT:Cable No.:
REGRET DELAY IN REPLYING URCAB REQUESTING ADDITIONAL FUNDS TO PRESERVE
LOCKWOOD DATA STOP FOLLOWING CAREFUL RE=I OF REQUEST IN APPROPRIATE
DEPARTMENTS COMMA BANK DECIDED TO WITHHOLD DECISION UNTIL VALUE AND FUTURE
USE OF DATA-= CLEAR STOP DECISION POSSIBLE IT SEPTEMBER STOP WOULD HELP
US TO RECEIVE LOCKWOOD STUDY SOONEST
CASSEN
NOT TO BE TRANSMITTED
AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION:
NAME Robert Cassencc: Messrs. Jack Lowther
DEPT. South Asia Department A. C. jgbert
SIGNATURE(SIGNATURE OF INDIVIDUAL AUTHORIZED To APPROVE)
REFERENCE: For Use By Communications SeptionJFunna:RCass en: ank
ORIGINAL (File Copy)(IMPORTANT: See Secretaries Guide for preparing form) Checked for Dispatch:
-- 1 s
-- A.
INTE!RNATIONA\ L BANK FOR RECONSTRUCTION AND DEVELOPMENT
RESIDENT !RE[PRESENTATIVF IN INDIA
53 Lodi Fstate,New Delhi 3TelephoIe 617241-4 Cable Address - INTBAFRAD NEW\X DFLI- Postal Address - P.O. Box 416
August 3, 1971
Letter No. 318
Mr. Da-vid DunnInternational Bank for Reconstruction
& Development1818 11 Street N1W
Washington D.C.
Dear David:
Since I know Greg ad Alex are away I am writing to you inorder to pass on the enclosed memo from Peter Naylor. As you see itrepresents some rather long range career planning on his part. I havebeen over it with him and feel that the study he suggests would be ofconsiderable value and interest to the Bank and to others concernedwith agricultural investment and development, providing of course heis given a reasonable degree of freedom in drawing his own conclusions.
Peter will be visiting Washington for a week or so at the endof his home leave about September 20 and would like to discuss his ideawith SAD and Agricultural Projects at that time. Perhaps you would passa copy of his memo to the latter and anyone else who might be interested.
Incidentally I hear through the grapevine that you may bemoving eastward soon. Congratulations! Needless to say the Delhi officewill miss your cheering visits.
Sincerely,
O.J. McDiarmid- Resident Representative
encs: -1
FORM No. 57 INTERNATIONAL DEVELO :T INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT I CORPORATION
OFFICE MEMORANDUMTO: Mr. O.J. McDiarmid DATE: July 30, 1971
FROM: P.E. Nay
SUBJECT: A book on the Bank and Indian Agriculture
For some time now I have had a growing feeling that it would be
well worth while to write a book about the Bank's experiences indeveloping its lending program for Indian agriculture. I feel that Iam living through a very interesting period in the evolution of an
agricultural development financing program and am fascinated at the
way in which this lending program is continually evolving to meet the
changing realities of the Indian situation and the Bank's adaptation
to it to the extent possible within our general policy framework.While both in India and the Bank there are definite policies,criteria and procedures, yet there is also a continual process ofmutual give and take which shapes each individual project. I feel Iwould like to document this process as it takes place, and then writeit up as a case study of the evolution of an aid program foragricultural development. I realise there may be nothing very new in
many of the individual components of this program but I do not think
anyone has ever tried before to document the forces which shape a
total sector lending program, as opposed to those which influence a
specific project.
I realise that to concentrate just on agricultural lending maynot reveal the full breadth of the process of mutual adjustmentbetween lender and borrower. Yet I think that our agricultural
lending program in India is so large that one can illustrate almosteverything that is worth illustrating about any lending programanywhere through the example of this one sector. I think a case study
of india would be particularly valuable since the Bank's relationshipwith it is so very different both in size and quality from itsrelationship with many other smaller borrowers.
The intention of the book would be to describe and analyse the
influences which have determined the size, shape and content of our
agricultural lending program in India. In the first place the book
would explain what changes occurred to make it possible to restartlending for agricultural projects in 1969 in India after a gap ofseveral years and -whether these changes were desirable and/ornecessary from the point of view of either borrower or lender. Fromthe side of the Bank such changes as a greater willingness to financelocal currency costs and the development of new concepts inagricultural financing would be described. From the Indian side itwould be necessary to analyse why GOI became willing to acceptproject financing in general and agricultural projects in particular.I am uncertain how far one would want to broaden this particular part
- 2 -
of the analysis since this particular subject raises a whole range of
issues related to aid financing (e.g. foreign currency versus local
currency financing, program versus project aid).
Secondly the book would examine the various issues which have
arisen from time to time to affect the scope of our agricultural
lending program. This would include such controversies as the
preference for locally manufactured goods, the Bank's insistence on
international competitive bidding, the Indian insistence on working
only within the present financial allocation of the Fourth Plan (the so-
called additionality problem) and the Indian attempt to direct project
lending into backward areas. To be useful the book would need to
analyse how these issues were resolved and whether the resolution was
fair and in the best interests of development.
A third part of the book would cover the whole area of projectselection, preparation and appraisal. This could be partlydescriptive, explaining how we went about these various activities but
to be useful it would need to analyse how else we could have gone about
selection etc and what the various obstacles to doing a better job were.
Of particular importance here would be an analysis of the income
distribution versus the output objectives of projects as a criterion
for selection and the changes that occurred in project content as a
resul- of the Indian emphasis on "social justice" (e.g. special terms
for small farmers). An analysis of the difficulties of project
preparation in the Indian context and a description of the ways in
which we endeavoured to overcome these (e.g. the increasing role of the
FAO/IBRD Programme) would be another important part of this section.
Apart from a discussion of general issues it would probably beinstructive to follow two or three projects right through from selection
to completion, to examine the influences which shaped their final form
and how the various safeguards and assurances worked out in practice.
Finally the book would need to analyse the impact of this lendingprogram on India (and also perhaps on the Bank). This analysis would
cover not only the economic impact of the whole program on the Indian
economy in general, and the agricultural sector in particular; it would
also cover the impact on institutions, policies, and procedures. For
instance a study of the Banks influence on the Land Development Banking
system over a number of years would be revealing. Similarly worth study
would be for example our impact on planning procedures, on the
organisation of agricultural development within the commands of
irrigation projects, on the structure of water rates and on the
assessment of groundwater availability. This section could conclude
with a discussion of why in some of these cases changes which we have
thought desirable have occurred, though cause and effect cannot
necessarily be connected, while in other cases we have not been able to
bring about the conditions that we considered desirable in the interestsof efficient project execution.
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In summary I would attempt to use the book to go behind thefacade of aid as a generalised concept of something desirable initself, to examine the practical problems that have to be faced inadapting aid to the realities of the donor/borrower relationship andthe requirements of the selected projects. I would hope to writethis in such a way that it would appeal to a non-specialist readerinterested in the general problems of aid-giving though on the basisof my present thinking the degree of detail needed to describe thesituation may make it rather bulky.
The time is not yet ripe to write such a book since it is lessthan three years since our present agricultural lending program beganto get moving. I think that another 18 months to two years is reallyneeded before one can start to draw conclusions. I am scheduled to behere another 12 months as things now stand. If the Bank was agreeableto my writing this book I would like to be allowed to remain on herefor yet a further 12 months (i.e. till June 1973) gradually phasingout my regular Delhi office work and putting an increasing amount oftime into writing during the course of this second twelve months. Iwould then probably need a further six months to complete the book,most of which would be spent in Washington although it might benecessary to do some more research either in Delhi or elsewhere.Ideally the time span of the book would be the Indian Fourth Five YearPlan that ends on March 30, 1974 but that is so far off still and somany things can happen before then that it would probably not beappropriate at this stage to plan for that date.
Although the time may not yet be ripe to write such a book Iwould, however, like to know what the Bank's reaction would be to mysuggestion that I should undertake it since if the reaction isfavorable I could start planning the outline and be collectingmaterial for it during the course of my normal work. This would nottake up any part of my ordinary working hours but could be a spare-time occupation for the time b eing.
Do you think you could forward this proposal to the Bank forconsideration.
Mr. Hollis Jhenery July 29, 1971
A. ". Ebert
equest for \unds for "Lockwood" Stu of Jigh Yielding Varieties inIndia
1. Essentially, approving of this request would be a simplegrant to Australian 2ational University and PEO of India's Planning,omission, as each would receive one of the two tapes in question.
2. According to Mr. unna the Bank is scheduled to receive acopy of the "Lockwood Stuty" soon. Thus the reason for transferringthe data to tapes at this time is just to preserve it in a moreconvenient, compact and usable form. At this sta e, it is not knownwhether the data is worth preserving and the South Asia Jepartmenthas no specific plans for its use.
3. Until these two items are established I feel that therequest should be denied.
AGEgberttmw
cc: Mr. J. L. Lowther
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Lette fro J:r.xrChacko Concerning~.
7 alhld2Te i Aia yt~~ILx:.~ L
1 hd 0o eleticiedfo - .Chc-
C acko kna the - imtntmidutyr< epe ealti
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July 27, 1971
Mr. 7. I. ChackoThe ~Uited Planters' Associatonof Southern India"Glenview"P. 0. Box No. 11Coonoor - 1S. India
Dear Mr. Chacko:
Oy today received your letter of June 12 in which youstressed te urgency of a smallholder survey for tea, coffee, rubber,cashew and spices. Mr. Ledejins ky has not contacted me so far.
I passed :our letter on to our India country desk and theywill give the matter their attention. Personally, I know only the teasmallholder sector and I would agree with you that thee are ps inknowledge concerning institutional, production an2 rketi spects,including their future developm.nts. You may rememr that I brieflydescribed some of the problems of smallholder production in India inmy "Review of the World Tea Economy".
If I can be of further help, please do not hesitate to ask.I would like to thank you again for the support you have given me intne past during my studies on tea.
With best personal regards.
3incerely yours,
Dieter ElzGene, Ag riculture Division Igriculture Projects Department
s a Tola-up on our telep .hone coversaio an as rr ueted~by ou Ise art beowth salient fotures of our inoVntih
on the iewo wuy2t. InA S3eptebr,; 1x the Pnk agr e t assit in th in nofLL a jon <esac Jorojc between theL' custtia Watia Unvrst
%K AV ,TA icf ,~~l m ; :: ~o .~ c t> at(r) ad thet ronetig Dauion ronistio ,0 or Indi slnnnomiarsnonth adinis tatiL; ond frmI 1ricioatio o In in li
yiedin 7rieie Pro;r± G 0P) Ie 'a e involvedwit the icbo
Ict ase on surveys b the PiO Wich ~over aot 7,0 Lfarm and L.2 A
village and~ spnou ya r ;.By v sytetidl elutingET dat
throw mucho ligh onA Ido "to ograin " prdcin Ou kowede l
of fae sie guit and rontt of rriio oailtis aces to
broadlyk the "tyain objet ive wa to desrib the aen and n
ofdotin te n : fodri.technologr>~ ao~ sss the> Kjr t
"e~ he TMudy so undertaken ~i tw #ssi I/ n 17/1
he -nka conritio was 19,800~ over t o-a eiod uhl a
.s~ The: preen reques for( rute Onk Ositac n th wont;
'r~~A7 Al- 1 r mJ'~r L
71oprilyfnnetecoto rnfri r 0,
pu :esadv omgetctp h aafombt smno
4..
5e No 7 IN TERNAT IONAL DE VELOPM ENT IN TE RNAT O A L B3AN K FRINTERtNATIONAL, FINANCEA&SOCI AT ION RECONSUCTION AND DEVELOPMEN T COFPORAT IN
OFFICE MEMORANDUMTO: Mr. Christian Ladonne DATE: June 25, 1971
FROM: P.E. Naylor-41
SUBJECT: India - Country Program Paper
Your memo on the above subject to Alex Kirk dated June 11 hasjust arrived. It has prompted me to put my thoughts in order on
some aspects of future agriculture lending for India.
I set out below what I regard as the main priority areas for
our future lending. You will note this includes some areas which we
have not so far touched. It also includes most of the areas which
we are currently financing and wnich account for the bulk of our
investment. The list indicates that there is considerable scope for
further diversification although this would require a more preciseproject identification in some cases and a great deal more projectpreparation.
A. projects largely designed to stimulate foodgrain productiongrowth
1. increasing availability of high quality seed.2. developing groundwater resources-in some states (Bengal,
Orissa, Bihar) the main obstable is poor bankingstructures which are blocking the financial channelswhich we have used elsewhere. We need to look at theseto see how to improve them. In other states lack ofinformation about groundwater is or soon will, preventfurther investment in groundwater development. We arestressing need for more information.
3. providing surface water control; lack of surface watercontrol is one of major causes of the slow spread of newrice varieties. it can only be provided through publicinvestment outside individual farmer's control, unlikegroundwater development which can be developed eitherpublicly or privately.
B. projects designed to increase general agricultural productionin a specific area
1. conttruction of new surface irrigation -projects - theseare usually the major irrigation projects where financialresources are a constraint.
2. improvement of existing irrLgation projects - of whichthe so-called "area development" projects are a type,though there should be much more emphasis on improvingwater utilisation and water management (e.g. by land
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levelling) than so far soon in anything yet put up to us,where main stress so far has been on infrastructureinvestment.
3. land development in rainfed areas - the so-called "dryfarming" areas; till recently these have been neglectedin public policy but they constitute a major proportionof Indian farmland.
C. Soil Conservation, Flood Control and Land Reclamation Projects sThese are treated at some length in the Economic Report, paragraphs4.77 to h.83.
D. Projects designed to improve post-harvest technology
1. market development projects on the lines of the Biharproject; particularly needed in the wheat belt where anintegrated project covering improved market handling, bulkstorage and bulk transport. to consuming areas is urgentlyneeded.
.3. fruit and vegetable transport, storage, processing andmarketing projects including export possibilities. Apartfrom our present apple and pineapple projects there areother possibilities in mangoes, citrus and bananas.
E. Agricultural diversification projects. With self-sufficiencyin foodgrains no longer a mirage grain surplus areas are seekingstrategies for crop diversification. Of these strategies the mostpromising is dairy development and for which the most promising area isPunjab. A dairy project should be possible therc. Qahcr such projectsdesigned rather to provide milk supplies to urban areas than todiversify cropping are also needed.
F. Forestry projects. The impending Indian paper famine and therising imports of pulp either for paper, newsprint or rayon allindicate the urgency of increasing pulp production. This implies twotypes of project :
1. plantation of quick growing pulping species.2. exploitation of inaccessible forest areas on a long-term
basis.
Integrated projects combining (1) and/or (2) with paper and pulp millconstruction have been identified and now need developing.
G. Fisheries projects. These are needed not only for localconsumption to raise protein intake but also for exports.
cc i Messrs Evans Votaw, Dunn
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NEW YORK STATE COLLLGE OF AGRICULTUREA STATUTORY COLLEGE OF THE STATE UNIVERSITY
CORNELL UNIVERSITY
ITHACA. NEW YORK 14850
DEPARTMENT OF
AGRICULTURAL ECONOMICS
WARReN HALL June 17, 1971
Gregory VotawInternational Bank for Reconstruction andDevelopment
1818 H Street, N.W.Washington, D. C. 20433
Dear Greg:
I enclose a copy of a letter and a note on modernization of ricemilling both of which come from V. S. Aggarwal who is president ofthe All India Grain Traders Association. I have not made a carefulanalysis myself of the points which Aggarwal makes. Aggarwal is athoughtful, intelligent and highly experienced person in the graintrade. His relations with key government of India personnel are verygood. He does have, I suspect, some vested interest in seeing rapidprogress in modernization of the private rice milling trade. This isin part because he is president of the private association in thisarea and in part because I believe he has some connection through oneof his sons and perhaps even more directly with the selling of equip-ment for modernizing mills. These connections, however, may simplyindicate that he thinks there is a future for such equipment ratherthan introducing a bias to his judgment in this area. If the WorldBank takes an interest in the question of modernization of rice mills,I think that it should think very carefully about the implications ofpursuing this modernization through the gradual and partial moderni-zation of the existing private mills as an alternative to the provisionof new large scale mills in the public and cooperative sectors.Probably the kind of modernization which Aggarwal has in mind will bemost economic both in the long run and the short run. In Aggarwal'squantification of returns from modern rice mills one can tell thathe has had experience with World Bank type project analysis! Forexample, it seems to me highly unlikely that the total paddy crop would
be milled in Rubber Roll Sheller mills in the foreseeable future. Pro-
duction intended for home use will be processed in smaller scale more
old fashioned type shellers. There are other places in which one can
quibble with the macro-economics of what he puts forward. The pro-position still may make sense however. I would be pleased to discuss
this and related matters with you or others at such time as that mightseem appropriate. In case you or others may be looking at this in
the near future I enclose a copy of Occasional Paper No. 37 by Uma J.
Lele which deals with a number of the cciplexities of modernization of
UN 2 2
the rice milling industry. Lele's book on the food grain trade published
by Cornell University Press will be out in July and has a good deal of
further information on these subjects. There is no question but that
Lele is better informed on the economics of this question than anybody
else.
Incidentally, a few weeks ago S. R. Sen was at Cornell, gave an
informal graduate level seminar in my Department and a public lecture
in the International Agricultural Development Program. He did an
excellent job in dealing with some intellectually interesting issues.
Naturally a number of questions arose concerning the influence of the
World Bank with respect to choices of technology and structure of de-
velopment as they might influence growth of employment and distribution
of income. People here were impressed with the thoughtfulness with
which Sen approached these questions. One got the impression of a
person who believed that the World Bank was a basically influential
and effective organization facing exceedingly difficult problems
both with respect to conceptualization of the approaches needed and
in dealing with various vested interest- particularly in the countries
where loans were made. One sensed an agreement that the World Bank
was motivated in essentially the right directions but was facing a
number of very difficult problems in moving in these directions. It
was very refreshing as compared to the more common, "We know the
problems and can do no wrong"kind of approach. In my view as the in-
tellectual community both in this country and abroad begins to question
more and more the operations of the World Bank it will become increasingly
important to have expositions of the type which Sen made.
As you know I have been working quite intensively over the past
year or so with problems of employment and income distribution. I
recently glanced through the report which I did for the World Bank
on these problems with specific reference to India in November of
1969. I think that the points which I made then are beginning to
be somewhat more acceptable than they were at that time. Small scale
highly flexible irrigation systems are of particular importance to
small cultivators and landless laborers in providing the basis for
more intensive agricultural production which uses more labor. The
relationship between rural electrification, the growth of small scale
employment oriented industry, the growth of consumer demand for many
commodities which use a lot of labor in their production and in the
growth of small scale flexible irrigation systems is becoming in-
creasingly apparent. There is already substantial growth in interest
in facilitating rapid expansion of milk production in India and other
types of livestock production such as poultry and pork in some other
low income countries. The combination of rapid growth in consumer
demand rising from higher incomes and the large labor input in these
kinds of production are all encouraging these tendencies. The same is
occurring with respect to intensive fruit and vegetable production and
processing. Finally it is becoming quite clear now that the most
intractable problem with respect to employment and income distribution
is that of regions which are somewhat left behind with respect to thenew agricultural technologies. Not only do they fail to participatein the benefits from those agricultural technologies but a lot of theancillary sources of employment are not available to them either. Inmy report I emphasized the potentials for some strategic investmentin agricultural education and research in a state such as Madhya Pradeshas a means of dealing with this problem. If it becomes appropriate todiscuss some of these issues once again in the current context I wouldbe pleased to do so.
Please do let me know if I can be of any further assistance. Inthe meantime best personal regards.
Sincerely yours,
John W. MellorEnc.
THE UNITED PLANTERS' ASSOCIATION OF SOUTHERN INDIA
TELEGRAMS: 'UPASI' COONOOR 'GLENVIEW'
CODES: A.B.C. 5TH ED. BENTLEY'S SECOND P. 0. BOX NO. iTELEPHONE: COONOOR 2261 & 2302 COONOOR-
Ref. No. S. INDIA
12th June, 1971.
Dear Mr. Elz,
I was talking to Dr. Wolf Ledejinsky ofthe World Bank in New Delhi about the urgent needfor a proper survey of small grower planting undertea, coffee, rubber, cardamom, pepper and cashew,all major exports of India with the exception ofrubber which is a major import saver.
Since India became free, the country hasfollowed a policy which has largely been in favourof the expansion and proliferation of small unitsin plantations the productive efficiency of whichrested on large scale cultivation, sophisticatedfield practices and professional management. Thesmall grower comes to it with a cultural backgroundnot dissimilar to that of peasant cultivators infield crops in the rest of the country.
For fostering the growth of this section,the Government has had to create specially favour-able conditions by subsidies, special bonus inprices, loan schemes and other measures. But thesehave not helped to raise small grower efficiency tolevels already achieved by large plantations underorganised managements in the same planting districts.
In order to form an appreciation of thevarious problems involved and to gain an insightinto the kind of practical solution we shouldstrive for, this Association carried out an ad hocsurvey which has led us to one major conclusion.It is that the small grower problem should be sub-jected to a thorough going examination by an inten-sive and extensive survey.
The survey should have as its objective theestablishment of basic facts, attitudes and the kindof organisation and services which could lead to theachievement of productivity levels common in theestate sector.
The number of large and small units (thedividing line being taken as 40 hectares) in thethree major plantation crops of India, are as follows:
1951-52 1968-69Large Units:
Tea N.India 992(1) 975(2)S.India 289 267
Coffee 589 484
Rubber 257 330
... 2...
<iii
UNITED PLANTERS' ASSOCIATION OF SOUTHERN INDIA CONTINUATION SHEET No.- -
1951-52 1968-69
Small Units:
N.India 1,556(1) 1548Tea S.India 3,643 8,705
Coffee* 33,684 47,398
Rubber 13,750 99,760
(* includes units unregistered with theCoffee Board)
As for the difference in field producti-vity, the average yield of smallholdings in rubberin a Rubber Board Survey is 294 kg. per hectare asagainst 699 kg. on estates. The yield levels ofcoffee are 405 kg. on smallholdings and 670 kg. onestates. The corresponding figures for tea asavailable from the Tea Board Statistics are 390 kg.and 1384 kg. More detailed statistics according tosize of units for coffee and tea are given on theattached sheet.
The smallholdings maintain practically norecord of field operations to provide guidance tothemselves or those who wish to scientifically ana-lyse their problems.
Field operations are modelled on the owner'sexperience and knowledge of annual crops and not onthe accepted practices in plantation crops.
The educational input necessary for smallgrower acceptance of standard estate practices isboth time consuming and expensive and an alternativeof visual impact should be devised to meet the situa-tion.
The development of the small grower sectionis of great economic significance to India as thecost/benefit ratio of a scheme of special conces-sions, subsidies and services has not been examined.This has merely encouraged the proliferation of lowefficiency units without really raising the producti-vity of their fields.
An additional direction for wealth creationis the opportunity presented by the small units formultiple developments based on a proper survey ofresources.
India could greatly augment her commoditysupply in world trade and raise the wealth creatingcapacity of the burgeoning small grower sector. Iwonder whether you could discuss the matter withDr. Ledejinsky during his visit to Washington thismonth and advise me as to the possibility of inte-resting the World Bank in financing such a survey.I am working on an estimate of the cost.
... 3 ...
IINITED PLANTERS' ASSOCIATION OF SOUTHERN INDIA CONTINUATION SHEET NO.- 2
-: 3
Incidentally, there is at present inprogress a survey on the "Export Potential oftea" supported by the US AID in India. This isnot to be confused with the vast problem pre-sented in this letter.
Yoursi sincerely,
(V.I.Chacko) '
Dieter Elz Esq.,Economist,International Bank forReconstruction & Development, 1818 H Street,
N.W.WASHINGTON. DC. 20433, USA
C/to: Dr. Wolf Ledejinsky
YIELD BY SIZE OF ESTATES
1. TEA
Yield- EC2 Per Hectare ...
Size of Units 1956-57 1968-69
N.India S.India N.India S.India
Upto 5 Hectares 401 N.A. 342 N.A.
5 to 50 Hectares 500 235 632 390
50 to 100 Hectares 697 688 730 750
100 to 200 Hectares 831 801 930 988
200 to 400 Hectares Q 1105 13841086 911
Above 400 hectares 1 9 1208 1238
Total 996 847 1107 1062
2. COFFEE
Yield (Kgs. per hectare)Size of Units ----------------------------
1956-57 1965-66
Below 2 hectares N.A. 2522 to 4 Hectares 252 3784 to 10 Hectares 441 422
10 to 20 Hectares 306 58820 to 40 Hectares 370 53940 to 60 Hectares 446 59060 to 80 Hectaree 606 58180 to 100 Hectares 483 722Above 100 Hectares 548 694
FoRM No. 57 INTERNATIONAL DEVELOPM INTERNATIONAL BANK FOR NTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPOIATION
OFFICE MEMORANDUMTO: Mr. A.F. Kirk DATE: April 22, 1971
FROM: . aylo
SUBJECT: Another .us iProject in India
havc, ot ot at soln enstn tae difficulties wnic the seed
industr - nas neri experiencin. over tUe last three wars in tue 1971iconomic acsort on -A,1i. 1or conveni.n1 saa tase ar' also
summarise. uLf taie anne to tais mo. .u analysis taat went into the
prepar:tion of are -u-ort maou a cler lo :- nL ta xu inuustry
badly neeca a considerable injectLon of funa: aa .a tec~ancai expertise
to maxe it capaUie o' failIin, A: -t a 8 irerat aL certifieo
seeus in tne neceisary cuantities an . afliee. i lae aLso forced to
concce t: . e-itner th finance a e ntonai$ i i uitnstanding)or the exLertise woull se ortncw:' in tve ocor L ture witiiout some
outsioue stiulus. ir: discussion- .aene wit- t ational~ricitural oc:mission I tin toe coar o a for.1conur interim
report on the seeds i rs Iuxap act as a
stimulus aitnoa ot present o n t se ariy auiods
aucuxt the situation. -t ec mot :rovte , u v; ti
moment aeemr. ripe taerefore for anote -n/ proct to
proviae Luis outside stiviulus.
vlh if analysis len to thc i entifical a o n need for a
project, ta. way in unicn tnao project iroul'e fornulat io as to
Provide the maxinum stimulus to t- sced indstry . as not 'ra dily
apparent. As a result of fart.ter aorI o cvur, i w1 . no have a
pray ct concept -,icL oest fits th neeor, a e rol t of theprojecL is largely condit ioned uy tE pres nt r cL i t eeds
inoostr ana tais needs some elaborstion b -or c Ic the project
co-icep furtner.
nl seeds incustr, opertes in turac t .i -L i the
research ticr where breecer secd is produce: sna. (uantities.Ile seconci tier is tat wLc ltiplies th : acl' se and produces
jounuation see. in India I ni, fc.rctiin is w t cliivelyerformeu by the inational Seeds corporation N ). The third tier, tue
commercial seed industry proper, is where tWe foundation aea is Iultipliedt roduce certified seed.J/ 1he qality of the seen produced in the
first two tiers aos veen the suoject of much dissatisied comment recentlyin nuia but do not think that this is sometaing waica can be curea bya Jank project. it isade problems of the thir: tier wsere wie prcjoct
can so most good.
/ Atrictly speaking only seed which has gone througn a specified series
o' inspections and tests can be called certified. While it is the
intention eventually to certify all commercially produced seed of this kind,the certification systere ns only recently been enforced in id and is
as yet by no means univeral. Gertified seed, hwwever, is a convenientway to refer to seed produced in the first generation from foundation seed.
The production of certified seed in this third tier is divided
between four main groups :
1. : It was never the intention that N60 should undertake
cor. ercia2 seed production in the vay it nas recently done. It has been
forced into doing so partially by tue lack of alternative seed growers
and partially in the attempt to offset its losses on other operations.
Virtually all its certified seed production is done on a contract basis
with individaal farmers; ',- only has 1,700 acres under its own control.
These commercial activities have tended to conflict with BSC's other
functions : the encouragement of the private seed industry and the
production of foundation seed. while there may be a continuing role
for Nod in certified seed production it is not one which needs any
outside encouragement. B> themselves hope to be out of commercial seed
production by 1975.
2. State cpartmens fAiculture - Those state departments no
lon er contract with private grower on any scale for certified seed
production. t tady produce comes frun thir own sc-d farms set up
mostly since 1-1 ). By a accounts tnese are usually 3nell, ill-equipped,
badly managed anU anrolitable. host sates ,Nould proabl; be glad to
phase tnem out if seed were available in adequate guantities from other
sources. ven the alternative of developin6 these farms or encouraging
a private industry I would choose tae private industry and encourage the
phasing out of 'ue state farms.
3. The Terai Jevelopment Gorporation : --hile thic is exoanding as
fast as it can it can never be large enough to satisfy more than a
modest proportion of national seed req;ire ients and l wat only for a
limited range of crops.
L. Private seed producers : e fall into two main groups, first
a &mall handful of limited campanie-s poducing seed on several nundred
hectares, contracting out for several hundro more and marketing under
their own brand names, second acout 230 small rmer growers, ranging
between 10 and 5) ctares in size, multiply:Uin foundation seed but
marketing either on their own account or throughf C
It is this fourth group whicn te project aims to help since it
is on this group, in the long run, that Kndia must rely for her
production of certified seed. Because the project will therefore not
be financing a public ag ic' the financing channel becomes an
important consideration. There seem to be three altErnatives; to use
or !IIi, to set up a company/corporation/age'ncy to wnica IDA funds
could be channelled directly by -0 or to use 1.
The sugestion to use iCI5 I originated last year wnen, after the
largest private seen grower in Lnuia (innapurna -eed Farm industries)
had approached IFC for a loan, he was referred back to this office. In
discussions with him it became clear that his requirements were too
small to be of interest to IFU and that the only source from which he
-3-
could obtain long-term capital with an element of foreign exchange was
1dIII. This was not really within 1(C's normal range of operations
and he has not approached them. While it would have been possible in
this particular instance to use ICICI, this would not be a suitable
channel for helping the Ieed industry as a whole since the typical
burrower is likely to be small to interest IdICI.
The second alternative is to set up a corporation modelled on
much the same lines es the Terai Development Corporation. This has
much to commend it from our point of view; Toi has so far been a
comm ercial success, its large size makes it comparatively simple to
control, and its impact on the supply of seeds is large. On the other
hand it nas a number of drawbacks. In the first place there are
certain unique features about TDC which would be difficult to
duplicate (the personalities uivolved, the size of tie uni'ersity farmand the character of the farmers in particular); secondly it is a
semi-public agency and still leans heavily on the University of
griculture for mny things (to nextent that the M1inistry would not
like another such corporation); tirdly the formation of a corporation
would do nothing to put the seea industry on its feet.
The tiird alternative-, the use of [A.C, is therefore the one i
prefer since iz would be capable of having the largust and most
widesoread im act on the private seed industry as a whole. The model
I wouid suggest would bt the Agro-Aviation project. d would be
given a line of credit to use for financing approved private seed,
development schemes. , tecanical group would ou set up, probably
within V , to held thoSe w" vnt to a i for a ioan by preparinga project and providing all tne necessary tecnnical advice. Tiis
groip would also advige w h would approve a scneme so long as the
farmer ag7reed to follow a specifio plan. in tnis fashion we could
help not only the few large seed growers but also re c, oit to any of
the smller seed erowers :ho :ant, to e.pand and invest in fixed
equipment.
This .dea is also vry uchi n line withi thinking in the NSC.
ihe USAID adviscrs to iC have been preparing a scheme to try and use
surplus PL 10 rupees for firancing see industry development. If
this scheme comes off (and it i still uncertain wnether 'L 60 rupees
can be used) it would complement our finances by providing the matching
rupees for that part of the project cost not covered by IDA.
It is impossible at this stage to say how large a project this
would be but a very rough guess would give a total project cost as
follows :
-4-
(million rupees)
humber of Sub-loans Size of Sub-loan Total
5 10 5010 5 5030 3040 0.5 20
150
(equivalent US , 20 million)
This project might also cover part of the costs of setting up
a central seed certificat ion agency. It is hoped t-aa ?L 46J rupeesmay be ava-iiabl fur this but ther ar certai forein exchangecosts for equipment that iould no be covere whch we might pick upin this project.
Formal approval by 3Cl is still needed before we can startpreparation. I have only discussed it u; to the Joini eratr
level in the [inistry of Agriculture but I do not think I will haveany difficulty clearing it ,i her up. I think we could usefullyuse 2-3 months in preliminary preparation this summcr before .ettinga C.t . mission out in say Octooer to take it a stage furth er.Appraisal should be possible in iiarch 1972 and Eoard approvl by
September 1972. ut before doin, anyuLiing more I would like your
approval in principle that Ili would be interested in such a project.
cc : r. a vansAr. Votaw/&r . Junn
Mr. Persons
Annex
A note on rccent events in the Indian Seed Industry
The main period of rapid growth of both public and privateseed production was between 1963-64 to 1968-69, during whien timethe area under certified seeds grew from just over 600 hectares to35,000 hectares. Two features marked this first period of growth.In the first place all responsibility for seeds marketing wasassumed by state governments who offered attractive prices togrowers at the same time as bearing all the commercial risks andcosts of storage. In the second place the demand for certified seeds,particularly of hybrids, bolstered up by high acreage targetsestablished by GOI in the early years of the high yielding varietiesprogram, was expanding fast.
Because the area under high yielding varieties failed to riseas fast as had been earlier expected (except for wheat) there was arapid accumulation of stocks in the hands of state governments whichreached a peak about the end of 1968-69. This accumulation of stockswas particularly serious for hybrid seed varieties whose acreage hasbarely reached 40% (257 in the case of maize) of the original targeton which the expansion of the seeds industry was based. is a resultof this accumulation of stocks and the heavy losses state governmentswere making in seed distribution, the end of the 1968 kharif seasonsaw most state governments largely withdrawing from directlycontracting for the seed requirements with private producers and NSCand also greatly curtailing their own seed production programs.
This policy change created a critical situation for the seedindustry both because private producers were being undercut by stategovernments intent on liquidating their stocks and because, withstates no longer organizing, and bearing the risks of marketing, theindustry was forced to develop its own marketing channels. This puta heavy strain on the organizational competence and financialresources of N'C, TJC and the private seed growers, with the resultthat many of the small farmer seed-producers have gone out of seeidproduction and at least three of the private seed companies havegone into liquidation. Those that remain are facing acutedifficulties. NSC has been almost as badly affected as the privateproducers and suffered a loss in 1968-69 of Rs. 2.5 million comparedwith a profit of Rs. 2.2 million in 1967-68. In 1969-70 it showed amarginal profit but this was overshadowed by Rs. 5 million worth ofsurplus seed stocks. The only seed producer that emerged in astronger position in this period was the World Bank financed TeraiDevelopment Corporation, which achieved this by concentrating onwheat and soyabean production, virtually abandoning the production ofhybrid seeds.
- 2 -
The impact of this changing situation on the total area undercertified seed production was little short of disastrous. After asteady growti for six years the area of certified hybrid seeds in1968-69 had reached a total of 30,000 hectares; the area under othertypes of seed crops was another 5,000 hectares. In 1969-70 the areaunder hybrid seed production fell by two-thirds and although thearea under other kinds of seeds expanded to 15,000 hectares, therewas a drop in the total certified seed area of 45%.
The worst now seems to be over. Accumulated stocks havelargely been liquidated. More realistic targets for the various highyielding varieties have been fixed. Less attention is now paid bythe seeds industry to 6overnment target fixing and more to likelymarket demand. Above all, TiJC and the private seed companies, andalso NSG, have begun to develop their own marketing system and retailoutlets to replace the vacuum left by the sudden withdrawal of stategovernments from seed marketing. State governments still market someseed but this is usually not more than about 25% of the totalrequirements of any one crop.
Although the worst may be over for the seeds industry, from anational point of view the present position is anything but healthy.Unless policy changes occur in the next y'ear or two, encouraging thegrowth of an organized private seed industry, agricultural growthcould well be hampered by a shortage of high quality seeds. Indeedthe expansion of the area under hybrids and some of the newly releasedwheat and rice varieties is likely to be limited by seed shortageseven in 1971. To meet the 1973-74 targets for hybrids would need a1972-73 area under hybrid seed production of 60,000 hectares or sixtimes the 1969-70 area. The targets for rice and wheat imply a seedarea of 65,000 hectares (if farmers change their seed every fiveyears) against a 1969-70 area of 7,200 hectares.
FORM No. 75 INTERNATIONAL BANK FOR
(2.605 RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL FINANCE INTERNATIONAL DEVELOPMENTCORPORATION ASSOCIATION
DatePOUTING SLIP >
NAME ROOM NO.
To handle Note and File
Appropriate Disposition Note and Return
Approval Prepare RepilComment Per Our Conversation
Ful Report Recommendation
information SLqnature
ni tial Send OnREMARKS
Fr.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
RESIDENT MISSION IN INDIA
53 Lodi Estate, New Delhi-3
Telephone 617241 Cable Address - INTBAFRAD NEW DELHI - Postal Address - P.O. Box 416
Letter No. 158 April 21, 1971
Mr. Alexander F. KirkSouth Asia DepartmentInternational Bank for Reconstruction &
Development1818 H Street, N.W.Washington D.C. 20433U.S.A.
Dear Alex,
This note is to call your attention and that of the appropriatemembers of the Agricultural Division to the attached excerpt. It istaken from the first of three Tagore lectures to be delivered atGujarat University by Mr. Asok Mitra, Secretary, Planning Commission.What he has to say is not novel but worth reiterating, particularlyas the lowly position of small farmers in credit allocation showshardly any signs of improvement and yet everybody and his uncle professeshis concern about them. I should add, too, that his last three pagesare magnificent, and if I had written them they would have crucified me.
There is, to confess, a personal reason why I greeted his ventureinto the subject. You probably know that the representatives of thevarious governmient agencies, including those of the Planning Commission,have not taken kindly to much of my chapter 3, including the section onrural cooperatives. I am not citing Hr. Asok Litra's lecture inself-defence but merely to set the record straight for all those in anyway interested in the condition of the small farmers, their access orrather lack of access to institutional credit as a means of improving thatcondition, and the poor Derformance of the credit cooperatives in general.True too, as one reads Mr. Mitra and recalls the review antics, it isclear that in the same institution the right hand often doesn't know whatthe left hand is doing.
My usual good wishes to you and is it not time for you to put inyour appearance?
Cordially,
Wolf Lade insky
Enc: As above
This excerpt is from the first of the three Tagore lectures
delivered at Gujarat University (1971) by Mr. Ashok Mitra,Secretary, Planning Commission.
It also shows how the landlord-tenant relationship still operates in
protean forms even where the system has legally disappeared. In fact, the
Tables read together leave no room for doubt that the landlord-tenant
relationship still continues to be the crux of the matter and that the
unfinished course of land reforms still heavily dominates rural credit. In
fact, credit has become a more formidable instrument of regaining whatever
has been lost through land reforms. Cooperative credit mostly forms a
small part as bounty of a much larger amount of credit at prohibitively
usurious rates lent by the bigger cultivators to the smaller cultivator to
keep the latter under a right sense of obligation. The resources of the
larger cultivators have now grown so substantially that a large portion of
the money they borrow from the cooperative by virtue of their standing, is
immediately invested in commercial and industrial ventures at double or
even higher rates of return than the rate charged by the cooperative, thus
denying a large portion of cooperative credit to the small and marginal
farmer. There is widespread reason to suspect that even where the small
farmer has been issued a certain amount of cooperative credit on paper,
a substantial part of it is immediately recovered by the large cultivatcr.
creditor and re-issued to him at much higher rates of interest for subsistence
purposes. In such a situation, the suggestion of a differentially lower
rate of interest to the small and marginal cultivator may look very
appropriate but the effect can operate quite contrarily because it is
certain that in many areas the bigger landholder will immediately pounce upon
this amount issued at a lower rate of interest and replace it, if at all or
-2.
partially, with a much higher usurious rate of interest, thus appropriatirg
to himself the entire gain cf the differential rate. In such a situation
again, ironically enough, it would perhaps be a greater act of kindness
to stipulate a rate of interest for the small cultivator, somewhere inter-
mediate between the ordinary rate of agricultural credit and the usurious
rate of interest ordinarily extracted by the agriculturist moneylender so
that this intermediate rate will act as a deterrent to the big landowner
from getting at it from the small cultivator for re-investment elsewhere.
While such an apparatus would be more suited to the conditions as they
obtain on the ground, this can hardly be adumbrated by champions of social
justice. The facts are so patent that it is impossible to fool anybody
and yet it is so convenient to continue toignore them. In the former
zamindari states, the new class of agriculturist moneylenders does not
have to operate through the subterfuge of cooperative credit, thanks to the
weakness of the cooperative movement, and the continuing concentration of
large holdings in the hands of the few. But in the former mirashdari and
rayotwari states, this subterfuge has to operate to a greater or lesser
extent, depending more or less upon the concentration ratio of ownership
of land. Thus, in Andhra Pradesh and Madras where this ratio is still very
high, the big cultivator has also other means of domination.
The following' is an eloauent comment on the way cooperative credit is
wielded in the Arcot region. "Interview with the Cooperative Society
President on his perception of the objectives of the Society and his functions
as a President revealed that he considered tprotecting t the Society from
getting a bad name as having overdues was the primary concern of the President.
t Thus, unless a member is a close relative of mine, I will never entertain
a loan application. I will thus be certain that none will swallow the
18/cooperativets money. My relatives also know this.t" - The Parthasarathy
Study on Andhra Pradesh generally suggests that the position is no better
throughout Andhra Pradesho
Numerous factors are responsible for the neglect of the small farmer
in the cooperative movement. In most places, cooperatives operate as a
closed shop for the benefit of one particular economic group, caste or
faction, against which the principle of open membership fails to make a
dent. Secondly, the repaying capacity of the small cultivator is frequently
and conveniently called into question and the loan often ruled out on this
ground. Thirdly, the funds being limited, the small farmer is left out.
Thiagain, in the caseof the small farmer, there is much insistence on
relating the individual maximum borrowing power strictly to the small
farmer's crop base. Tenants are discriminated against and irrespective
of the crops raised by them and their acreage, their entitlement to credit
is restricted to only Rs. 250 or thereabout. Insistence on the security
of mortgage of land, again, operates against the provision of adequate
short term credit to the tenants. Lastly, in spite of the provision for
appeal to the Registrar of Cooperative Societies, even membership, let alone
credit, is denied to cultivators belonging to certain classes, factions
or casts. All these have had the effect of effectively reducing the
access of the small cultivator to cooperative credit. Substantial expansion
in cooperative credit in certain areas, in recent years, represents in
effect more increase in the amounts borrowed by limited number of members
rather than the widening of the areas over which the benefit of cooperative
credit is spreada
-4
Whichever way one looks, it ultimately boils down to the degree of
commitment that the Government, Co-operatives and Institutional Credit
Structure, the local political and administrative structure and the primary
administrative machinery can bring to bear on the task on hand. (The
success of the Small Farmers Development Agency. S.F.D.A). It is too early
to say how this commitment will take shape, but it is quite clear that
the success of the programme will depend upon the speed and thoroughness
with which three aims are realized: the completing of the unfinished course
of land reforms and the effective prevention of the landlord from burgeoning
into agricultural moneylender, trade and commission agent and a virtual
controller of the marketing of the small farmer's produce; firm enforcement
of ceilings on landholdings with the object of substantially reducing
concentration of land to subdue the power structure and enable cooperative
and institutional credit to percolate to small farmers; the building up of
cadres of government, institutional and cooperative officials effectively to
carry out the new policies with zeal and dedication. Where the landlord is
dominant or operational holdings are markedly concentrated with a pronounced
skewness of distribution the task of cooperative and institutional credit
will not be easy because it is in precisely these areas that the cooperative
tool has acquired a class structure serving the privileged and wealthy groups.
The subsidies and guarantees in the SFDA programmes are so attractive that
resourceful minds will feel invited to devise ways of rigging and obfuscating
the stipulations in their favour by packing the credit institutions and
influencing the administrative machinery. It is not difficult at all for the
power structure in village to fudge claims and set up bogus claimants well
within the identification pro forma, provided the institutions and the
-5-
administrative machinery are skilfully handled, or for the wrong group to
siphon off the benefits without the guardians of the special programmes
having much of a clue as to what really is happening. The need to fulfill
financial and physical targets can be such hard drivers in a government
programme as to induce a natural reluctance to look too closely at first
where it is all going, provided someone is going somewhere, no matter where.
Besides the features of the programme are so conducive to productivity that
even if the benefits all went to the wrong targets and recipients there
would still be the added national product to console and comfort. In such
a situation it will perhaps be necessary to work out a multi-agency formula
with appropriate earmarking of funds which will reduce the monopoly role of
a dominant group. Laissez faire arrangements will not certainly be relevant
in any case and there must be uniform and positive operative elements within
the social framework. Persuasion does not seem to have worked in nominated
boards and one solution may lie in the putting up of panels for elected
boards where the Administration persuades the cooperative structure to
accept certain ground laws of the sanctity of such panels. Earmarking of
funds will be beneficial but is ultimately a question of administration
and will depend on personnel management for which a certain proportion of
managerial subsidy will be essential. One of the biggest impediments likely
to raise its head in the working out of the SFDA and similar programmes
for the weaker sections is the sluggishness of the politician or the official
to operate them other than for the sections of the population they represent
and one knows only too well how the bulk of the extension and revenue staff
feel called upon to address themselves primarily to-the needs of the middle
and rich peasants if for no other consideration than sheer self-preservation.
For, as many know to their cost, except for small pockets in the entire
country, the penalties for any genuine commitment to the small and marginal
farmer can still be exceptionally severe*
April 21, 1971
Dear Dr. Hayami:
At the request of Mr. Wolf Ladejinsky, I am sending
herewith a copy of reports he prepared in 1965 for the World
Bank on some aspects of the agricultrual situation in India.
Sincerely yours,
William M. GilmartinChief Economist
East Asia and Pacific Department
Enclosure
Dr. Y. HayamiTokyo Metropolitan UniversityTokyo, Japan
cc: Mr. Ladejinsky
WMGilmartin:go
April 21, 1971
Dr. .I Kanedaepa-t ent of conomics
University of aliforniaDavI, California95616
Dear Dr. Kaneda:
At the request of Mr. Wolf ladejinsky, I am sending
hereth a copy of reports he prepared in 1965 for the World
Bank on soe aspects of the agricultural situation in India.
Sincerely yours,
illiamn M. GilmartinChif £ xconomist
East sia ad Pacific Department
Enclosure
ec: Mr. Ladejinsky
WMilmartin:go
INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION I RECONSTRUCTION AND DEVELOPMENT CORPORATION
OFFICE MEMORANDUMTO: Mission Members DATE: April 12, 1971
FROM: M'ilton Fireman
SUBJECT: Pertinent AricuLtunal Notes on Paharsi PrW ect Area
1. No data is avalable on the soils of the project area but a soilsurvey is in progress and .ll be comipleted in about a year. It appearsthat most of the project soils are lateritic in nature, but soils composedof mixed alluvium are found in the lower coastal areas and in the widervalleys of the ighe6r areas.
The typical lateritic soils of the paddy areas are nixt res ofalluvial (water borne), colluvial (deposited from nearby slopes) and resi-dual (omdn place) natcrils, mostLy orignlatin from various kinds ofrocks und-ergo'ing lateritic decmposi tLin. Soil coors rany rom yellow-ish red to dark brown on the surface and are brighter with depth, frequentlywith a mixture of red, pink, purple and yellow mottling. Surface texturesrange from sandy loams to clays, with the percentage of sand generallyincreasing with depth. The soils are acid in reaction, moderate to low inorganic matter content, relatively low in cation exchange capacity but thesehave a high capacity for "fixing" phosphate and potash (ie. making it un-available to plants), and are moderately well drained provided suitable out-lets are available. The soils are generally sticky and plastic when wetbut when dry structures range from firm sub-angular blocky to friable crunbin the surface and grade into structureless massive plastic material withdepth.
The alluvial soils are largely comprised of typical recent riverdeposits and older marine clays with slight to moderate admixture cf materialwith lateritic characteristics. The soils are light grcyish brown- to verydark brown in color, clay loar- to clay in surface texture generally becoming,finer with depth, and moderately acid in reaction. They are very sticky andhighly plastic when wet and form very hard clods when dry; as a resulttillage operations are relatively difficult, and internal drainage is onlyfair to poor. Fertilizer 'fixation' generally is low.
2. The principal soil problem is said to be associated with properfertilization. This appears likely.
3. ir:or drainage problems were noted in some cf the broader sub-areas andTalleys . Al though drainage proble is wil increase in numrer,extent and severity with increases in rigation ater applicaticn, theywill not be ry imortant nih pad the onl; Crofp. However, if thereshould be a chang in cropping pattern, the detriment-al effect of the drainagesi.tu atio n "ol L d b apopreie but te imac t on project economics cannotbe anticipated it the available Uiforation.
-2-
4. Extent, yields and production of rice, according to thedetailed project write-up:
Doublo Crop 15,800 39,000 0.7 56,600 -Riand 0. D 0
16,t 200 L0, 000 56, 000 10, 910
5. Projected konetary Gain:
40,910 tons X Rs583/ton = Rs 23,850,530(It should be noted that these figures do not take into accountthe increased cost of production with project resulting fromincreased inputs, etc.)
6. Average yields for the period 1963/64 to 1968/69 according toPublic Works (Irrigation) Department:
7. Avera yiniIds for Korala in 1967/68 and 1968/69 according to thefigures o L the Siate Plnning Board:
Year Rce k '/ia1 / A 32
Ok>~ (J>1,3
-3-
8. Note that in the "statement of benefit cost raticsf of therevised project estimate (1970)0.3 and 0.7 tons per acre of rice(see item 4, above) were used for the without and with project casesrespectively, whereas present rice yields actually are about 0.5 t/acrefor the "unirrigated" and almost 0.7 t/acre for irrigated crops. Thebasis for 0.3 T/A is not knoun, but use of 0.7 T/A for the with projectcase would indicate that no changes are antici pated in seed varieties,beneficial inputs such as fertilizers and pesticides, or in crop manage-ment. This is a very unlikely projection.
9. The "mean annual run-off at the barrage site (estimated)" isgiven as 3,000 million m 3 , or 80% cf the indicated mean annual rainfallin the watershed. This appears to be unrealistically high, and theimplications as regards feasibility of the project is not indicated.
FORM No. 57 INTERNATIONAL DE NT INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATIO, RECONSTRUCTION AND DEVELOPMENl CORPORATION
OFFICE MEMORANDUMTO: DATE: ggi Y(i
FROM:
SUBJECT: e me a io Of Ida O
th 4a1e farma sorortion of india .a esablia uyin May 19&i o taxe over on a arca baals the ru ng af &ixalreacy msalae enrlaaeFrmiesGnral aaonm
arm largj k meenanm e" ni4as estah'1 ndr sauspices, ' Iu firs of tese at iurahara iz ~ajathan, wita
3JuJ acres, was establiane* i y56 wit a gift of machinery raM. Tis was subdivic4d ar easier nement la k)#J. Ine oter
our wee set up undr an t mutn i$A in a vete1,^b, Auder wnith J would previce te wacMaery for five newfarnm to be set 4p by arc1 and Inia wouid prurcha e cnrfor a farmero ten farm to os set up by 11, ik'en vary in .i4
mn bout , to 9, acre. estaianewd in 1)0, two1in Akugust lyuand Lne taer la 4armh m,9 ksse o the twoz
estabu nd in at l$*a ~a not yet started fucioi as 3ost0
ut land is "nder uatorie4 ocupto of quatra. The -t- er,at Mis.ar in yaryano (aa.h .visted &st wek to aet 8Oe idea of
w1t was uL o ha 25 of its ares alread4 cultivated bytesnta and ia atuig until the tnnits are evited before IL taxes
this part over. An e r is oeirw nstabiiaed in rerala andthree moro (i,0(J-2,OO acres eachs are i set upin th- e iso ill
L t is the reor 3O*r tat is well behiudA in it,agre nwi J to establi i nnw 8ras 3 ie rsent
date sine onig .4gat ara ean or plane .i v thieh only four areooperating. Jesp t Mi Me stat.e arm torporation appears to bewell satisfied witn its operations, aing xada gross pofit
almost 'a. 5 Miflion i.n 1y/70 (of v n % tame fra te oldaurasarn farn) and a pro it ne f unpreciation of us. X million.
tine r establiihmentL of aknyno Aad farmssestotrt sores. norml si policy or aaxiusing toe eploymetpotental of ajriu lture, i visited the fr at uaar to see wea
one of these farme loiked liga. bda tar. usa on untiLonin onesin~os aM u*a 16 ad Mhe aumlnery did not start becan~savailable till sary 1966 s it is diftficult to fo any asesm.nt
afit, reoa± offioiey. Ihe land on inih e farm As aitaated asonyrecently received canal suppies wadn arc entirely into f ant
in quantity for intensive arpping nd most unrls. ±her. is noale roundw r. l the land pt acre was r; ,rfantl 1 r eeers ago; the idgher parta of it aseily reclaia*oie, it
lover ptars thies c aa and c unala. i 12%/71 kvrir Jropnoomupiad J34 and rei oeps %6% o t e available land (nuch this
double cropped . silds seemaeat verae, for the area. itusprobblysomting ovr a' alf 'te land anos een brou&ght into a state
-.--- x .7- -
- - -. x x
x- : -4 , : -- 4. -
* x -
- - , 4 -- ,
- - a x4 - . -- -. . ..------- 4
-4 - - - -
T- - .~* , .- x . - x -7--4 s - -'
Aulais mi s does `-V 'Ifa e o
A 1t .v acArata. M 20 Vmr
namL, ce WC e iiA u"t - L
ra in 97/1 1t f t oo K t 1 s l q
cua Lde rul ai nc Mic 11 t c0 zt to iA 0
±%pvibali & aietiCi
e aocraet antocapau at Lra, on - L
A R ye 4 drta:g va m a sa r o
KMa ltrel, nWz la to na r wic , or vyLiin or
impsbla Wit4 MOhu ai 4r" ' e
ewauLu Aul e am carried outnm ue np*arIatatianozk ne t 1segmia adcpt 4ioaat a.
Ssiek
rA r-p
leas agal me mepreent e, evn moe n .7
aspct i a a raneante l ea a
teans radieay riiv:,d a watos~ w lmaitpo3 erwise of . estm cea arr an na e
I Headquarters:
Washington, D. U.S.A.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
RESIDENT REPRESENTATIVE IN INDIA
53 Lodi Fstate, New Delhi 3Telephone 617241 Cable Address - INTBAFRAD NEW DELHI - Postal Address - P.O. Box 416
April 6, 1971
Letter No. t3l
Mr. P.C. GoffinInternational Bank for Reconstruction
and Development1818 H Street NWWashington DC
Dear Paul,
Further to my letter No. 62 of February 5 I amenclosing some more information on the levels of taxation onagricultural inputs which the Ministry of Agriculture havejust sent. This may or may not complete what you want, forinstance the customs duties on diesel are not given. You mayalready have these but if you do not or want anything furtherplease let me know.
Yours sincerely,
P.2. Naylor
Encl:
T~ "T
"3 L U, 9
-- x
4 -
-'V
(1) MC Aciner-' including trcosinlmtstc
General Iachinry $tems~ are rsessnble to Avuty atthe rate of 774 -loran1 T trs and not thereof
exemint fro the nayient of CU stoms duty vide noticationo2u s ated the 5th Januar, 1963, as amended
ite¶ No.72( ) I. and under the foow note to this itmare et from s muc> of the customs~ duty as s i
of 1- nrt A-valore> Under notificatio No.9(-Customs,~- date the1 21st November,- 1970, iCobinesi! of-certai a itural i ements an r
frm ouc rnof~ the custom 7uty s is in ex~cs of 15 ypercent ad volee poe tillersor~n er c ilturl puoe amre
totallyr e-ye '-'t from the nay-~mnt of customs~ <iuty,
he arcles enume~r te in item 35 md3()o thec. 0, T. ore euty fre. Urea and mo mnshte usedsolr~el s manure aren'~h7 t ot'lly exe-vpnt from the custo'ms du tyr
Add itiona~l du ty in trms of sectio m2 {f th' TIndin -rari ffAct, 1934, sub et to crtin exentioxns, is oarable at therate of 101 nO valoreuf
(3)7r 7re e
The enrlrate of cu stomsr' duty on pesticnide und~rer
i tem io02C T.C-. is 60 per cent d valorem (t -. ) and T0rad valorem (Precf.) Tocever, t he pestcides seified in
no tificat~in N9O7-ustoms, dted the 10th Tovembenr, 1t7t
(cony enclqose) when iC orted into Indiam in a ommerciallyhToure for are~ eemt from so much1 of the cusotomso duty as
is in er-cess of 17 ail vol orm ( td.) and 7il (Trof.) Theesticide mentioned in n1otification To.136-customs, daterI
~the 30th 'jecember, 1967, ais amended (copy enclosed) areexempt frm so uch of the customs duty as i in excess
of' 2Of ad val. (std.) and 10% ad val. (Prof.)
/ A> r-a •
' C;
i t T..M. s G -o r c-li -,evrqy0
Vfi F - tr~ 0( v ifhi 0' y- ~
071-b 7ee Mi se 7,1' - - t n e
ie *O7(5') (a) I.T ''nd refinen diesel 1oi undenr ITemp*o.27( 7) (b) lT .T B Zot~h these oils ar erant' from the
levyr o-f hasic~y cutoms~ ruty. Th~eyre le viabl e to addiional
uty~ i~n terms ofC ectiorn 2A ofc the Indiafl n ri ff aet 1954.
duty libity of t 11' ac va1orem fitter to tr!ctr ofr-!c wahr Thrse Tower exceed9ing 5n fovr the first time beforeclearance from~ the factory of manufactu're of sucr~h trctrare eet from rlit-r i f the Collc-tor of Cerntrl xcise issified that the tractors so fitted are used solelr foraicltursl nurnoss. I.E. Engines itd to tractors of
ea °rar T.P 530) nd below for the first time before clear-anc from the factory if manufacture of such tractors arealso fully eyemnt from -eycise duty.
(2) Power driven numns (including motor-oumos turbopumps and' monoblock numo sets) for liouids whether or notfitted with measuring devices liable to duy at 20% advalorem are exempt from the whole of duty leviable.
(3) Tractors have an aggregate duty liability of12% ad vaorem. But tractor of draw bar horse power 50 andbelow are exempt from duty. Tractors of drag bar horse nowerexceeding 50 are also exempt from duty if an officer notbelow the rack of an Assistant Collector of Central Exciseis satisfied that such tractors are used solely for agricul-tural purposes.
FERTILISERIS : are leviable to excise duty of 10% ad-val.losoecial excise duty. Fertiliser mixtures made from dutynaid base fertilisers are exempt from duty fertilisers inthe manufacture of which no process is carried or with theaid of power are also exempt from duty.
Dielel fuels may be either R.D.O. (H.S.D.) coveringunder item 8 or D.O. Nos. (L.D.0.) under item 9 of C0.E.Tariff.
Basic excise duty or R.D.O. is rs.461.05 p. per K.1.at 15 0C. and or D.O. Nos. (L.D.o.) is Rs.95v55 p. per K.D.at 15 0 C. Addl. Excise duty is there, but this cannot bepassed on to the purchaser by refiners or marketingcompanies.
TO BE PUBIJSTBEhD IN PAR II, SECTION 3, SUB-SECT ION (i)
OF "ITH GAZETT OF ITIA, DATED THE 21ST NOVEMBER, 1970.
GOVErTMTNT OF IIMTAMINISTRY OF FINANCE
(DEPAR7T.MTT OF REVTE I AD) INSURANCE)IT1 DEII, TFE 21ST NOVEMWR, 1970.
YNOT_ I FI CA; TION"-TO7 7
2. *T.i.. -In exercise of the powers conferred by sub-section(1)
of Section 25, of the Customs Act 1962 (52 of 1962), the Central
Government, being satisfied that it is necessary in the public
interest so to do, hereby exempts the agricultural implements
goods of the description snecified in column (2) of the Table
hereto annexed, when impnorted into Tndia, from so much of that
portion of the duty of customs leviable thereon which is
specified in the -irst Schedule to the Indian Tariff Act, 1934
(32 of 1934) as is in excess of the duty leviable on goods
falling under Item To.7?(8) of the said lirst Schedule.
menfts etc. S 'on ments, lraiers0ertilizer moved 27? on ertilizerbyRod (S~ingle polnrt)
on seedsL.
2i Cetroi on1ohrms Ti, ectors,
yCi a0 20O.2cise on 'Irai2e rs
Ici'
1cncs on partiliser,
- ratris 1
1cnts TNoQ trc.
Spurchiase of inr linvuts17 r ietatripeent,
vi) 7.W * punmps and3 diesel fuel etc
Wotc 7he ma ceial to the reAi-tereddele1rs is issued ag "inst '' form.
i) Irctrs FreeC of dUtyji) mTo shaftis 25
amd 7 Pulley-fwith~ New?~ trctors0
iii) Air com1resor 5~
SArclua 5
off7 by the ieofinnce )
175<
T ~ L. -.
3.~ TisT
I -
4,~ ~~~C rye 0 ls1
t u
7for ~-vr -t Q e <Lther ;chier i ern~rvariable~ rae as -e mot oto
*16
Note. On of the'op reunns to get-
KINv to 0r e one'2
iyne Ti <e orm s he
1 r imp orte~ d yth
u' p
- Y C-,
C - r, 1,
- >C- Tt- - -ip~ *' *
c c c ;
7r C n s
c' 2
-a nroduced
April 6, 1971
Mr. A. K. ChakravartiAsseiate Profess-orUnivr ity r? aktchewnnaskat, in, 'rnada
TIear Prcnf. fhakravarti:
Thank yv for your letter of March 1 which has been passedto me. 1 quite understand your frustration at not being able ,7et hd f the -rg data. I may say that the Bank uld have n,bjetinn t- your usin the ata: however, the positin is that theqvernment of India has made the data available to us f -r our -n
use, and their authority is required if the data is to be used byothers. (I mi7ht add that a printout made by us would cost in theregion of y0 y should find it less expensive in New elhi.)
I can only suggest ,t.heref.re, that you renew your effort"with the Directorate of tatiAtics in the Ministry of 'l
Agrtcunture, quting f a he above paragraph if you wish. Thi
might als note that much the information on the cards isavailable in the lvernment ,f India publication "Ariultural.Situation" (annual). which should be available through the 'RnadianDepartment 4f Avrhiulture.
I am sorry not to have been able to be more helpful.
Yurr sinerely,
.. Hasen
India iitan
R. H. assen:rse
cc: Messrs. Votawli. Brown (-gricultural Projents)
FORM 75 INTERNATIONAL BANK FORFORM6o0) RECONSTRUCTION AND OEVELOPML
INTERNAT:ONAL FINANCE INTERNATIONAL DEVELOPMENTCORPORATI ON ASSOCIATION
DateROUTING SLIP
April 5 1971NAME ROOM NO.
Mr. I. P. M. Cargill
To Handle Note and File
Appropriate Disposition Note and ReturnApproval Prepare Reply
Comment Per Our Conversation
Full Report Recommendation
Information SignatureInitial _ Send On
REMARKS
Re. my routing slip to you ofApril 2, 1971 -- Sir John Crawfordhas now sent us the attached reportby Dr. Swaminathan referred to inparagraph 2 of his report on hisvisit to New Delhi and Bangkok.
From W. A. Wapenhans
oprUrsne ait the ont. gvcation~
197\ ha s beena year 'both of >reat progres n difficult problc.
I simi~1l refer irst te the pro rCs Xde an ton o th problems.
Aignificant achievoi.nt wr de in the . imrve of wheaL..t, rice,
r j dar va ri poularl re~ e~rred to aso "triple dwarf" because
___ti__onr_, weofceecd n .i ton, a dwr stin
of r1i . . I. V 2 o wi the iedcU
area ~~~ ~ ~ ~ C of rd en w e srioE..2n "l30hv
iven 2! 'oefedtmtuoclitanw osat vigIl has
been. t itan vr;. theK. 2Pre, 0f black, brwn 'd -eIowJ rusts. In
faco, our rus1, t ,urve il c s ed 'upport frol the
)ckefe .ller d ora ma' tion is e.sil one. of th besJ0t in. thei
worldi and[ there is iJ. terest..9 in: onI ~n .it into .nitrntoa
eforict te.ndin> ro unsi to ,il adu. e ha've nlo. eten~id
the sccope of te rust s urvy so .s to cover .ll the diseaseso what,
rusts of bule and~ 1.lso of insect pects. auch .uve o help the
brceder in cloos vari 01ie ir iernt areas n in unertahin
anticipAtor ir in .< e umLicanon wor>. me.o omi:nnt ni;1
yielding, wheat variet of our country ala onas become
susoceptible to .olo rus as ell . to race 122 of b.lack rut. .n
a coequence ra ce 122 s bportant in tI enire wet area.
Fotntely, e v in"- the!- -r2dr; eml liesvea highvieldng~ AtrainsL .i reistance to b ro . ad~ su.ctru. of rces of rust
ouVamr edi te o firs wite ri about
rircultre wouAld or nise~ oerial app.licaion of Urca to unirrigatedi
wheat, we c . epct a uc .b e> 0rop in: .pri5 l, 19,1, tan in
earl?1I i ye.ars.
Inrie, fAt avO. bu tg9 4.
breedim. ~ (2te wae aaeet an ;frtilisa r lc'i
techniques v been developed for both puddied and upland conditions.
f p il interest il te . -obrv onm that y lending Urea with
nee: seed powder or col ta r, wicd serve as nitrification retardants,
te effcinc oC I, ca-Us sa c. ii e tnemcrusL e -, - . 1 ... - a ao :ao &Wi
as would be Aindith 1)2 . of Urea alone. To new hi-
yielding rice varieties wit, fi r velope at tis Institute
were released durin the ya une the name ub
rice cultures < it 7oo reomi an diss ra 'ace proporties.
4. uz;- i.e 2 .I u rice
varieties t-- e1e7' nc1 d(rir en which appears to be
ssocite it c ibit o c il li n uro virus.
oc se c7 <tr ar w1c> a r -) 0e super to
ii- iv . pIr octare it U n oil content of
43 . ( e viet rQini &u £ieaatation1.
U e chaces for.4' thiser 4c i i 4pothnt in our econom2y thusP
,3 Urid Jonar. -. I. . 1chCentre, 209intore, by croooin o locVlly deeoe mtle ster'ile
S2219 w3i I. ;91 was .officiIll releasedi tis year. Thiis hybrid
has :'ie in All ai: testsI 2K more. yild~ thn C. .. 1, has better
-,:r~12 rtttoefrl.flgrai qualit an as als rate toleran~2Xce to. shootflatck
Coot fly cotiues to be a na jor cause of low yield in Jowar but
aystemic pestide, carbourhan'K, has en found to be very efctive
i contrlli ipt i e treated wit chc aal are used
for sowing.
aterlr dui aKai oni 3 lr~ous
limtin1 fato t 7iz j nc, sy stemat.'ic
sceein of yri and~' ' coos ites under ctodiion ot wa trloggoing
simulated in l£ imeter is U ei.d.e n the . reulto gathered
sofa show it the 'iz c7oposit 7s1n and~ -hybridU bajra. o.3
Aiereaiv ete y1id in 'waterlo4 ed soilo. Reearch 0on
resarc wichr i exloited, would help to increase pulse production
oer ilsin th f ' ya, ce include new
q n ih yielin 'varieties of 012cn, U. d, orhar and lentil;
iC proved fertilier d ps conAro p emcnbcteri2
cultures for ic in the i of tmospheric nitrogen,
tecliquec o pw the ctra cultures2 c2tablish
under unavurbl silC~ condiins such as alkalin ity Cmdacdt
an the identLiicaion of srain o gram wih resistLan ct wilt
in the ficid~ an to bryuc id. pet duiC tra * 3fIicent sthrns
pro d it tt hl o
vitcliciI Jr2 ui 2 -2 ~.
o t craizend ric. afer fro serious
pest pr bl1 nLt LL iol an
emod of conro is Iegd ee o eca (crop. -2,t
en2rous rn frot 2ckee oundation~, it has been posibleto;S2 srnt.e th12tcieaiu -nlyi a2oratory. Hereafter,
n chemic ps conLrol ceu :i be reco; mene without first
acerator A, _,so +11( vamoeo te ni -ordinatoen
rjects n rclturl n i
197t La bn o year o cotto resrch, l
proxbly not. for cotton~ production. * he extra1 lon: staple variety
og ae a a bstiuteIorthe mpotedteno .iandiza Q6
cttons. The rt-durion vriey 7 -72 is. bcoinJ popula3r
fovenggo i ie . li 12 in dryc faming areas, while 2n
introduct fron n ic., ce.* -S., Iluv h i ;h yields
in unirite t Al ir, I.ysore 0nd L adya ra-deshL.
Une a prcipitation 2f (7 o i .ye 15% 1. -e 21. per ectare
witL _A- -pJn v . .. e . vr short22 auration
a under' asesen orlsqulitie. There is now suffiien~it
research inforst. ~ion for 22a2 dobin cotton prod12uctio thruhn speci2l
area ~ 2~ deelJmn i mae in selctedu districts like 2Corozepur9
mong the now veeale varietie released~ dur'in. the year are
us 11rant in L ri.. j al, us 2 ci n use 7Chand rn in turnip,
usa i2an in 2 radi>a. , 1usa -o luus>nui in ittercourd, Pusa Jurbati
in muskmlon, Pus dn (seedles in waternelon, usa Jyoti
inalk, uu arai in Frenc ben, rkel n tor Ii arde
peza, and tnre dyra uaniineigl s nut inl
lon bottle"urd 12u ri i roud bot ler ound, in ross,
three vreis agdn u mui yrasae rnitbloribun c'ere rlesed Mauern22± in nyrid .ea, a r n
AkVat and or102in loibund bre of . 2l wi bereeae
-1 to. = x u eccc r t
it2 is vigoro, iu.t jigt oco e us. or rela ard stc
no ccomonly usd n os :du .nini, to rose varet with
i1tratoa neet eIo en veeaae ndfowr ill be
rut lovers ve ais 'ood new. ..ne ani L ybri b eI atween
elou xm wei is . utot u in 1.ield an uit. Tw sadn
of~ renes from t.e cross urx usa eedleus are botir hi ~ 1 yieldAingand ery'1 -tuire. lorda uu ec 0andi L 1uared ect2Lrin imported
fromf the United ta.e fruited .i in2eh .ndripne 15 days<
wa i nniiLea AL e y; >vi os ow 0 as 02u ue. a etie
oil-iA af cVo cro caf1teria wa
iI lik o , ru T' LUeer, -le crp ie. ajr
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April 2, 1971
Sir John G. CrawfordVice-Chancellor's desidence24 2al~Uain CrescentActon A.C.C. 2601
Dear Sir John,
Thank you for your letter of Aarch and for the copy ofthe Hukherjee/Lockwood paper prepared for the Conorss of Crientalists.
The paper is indeed very valuable and holds forth greatpromise for the final results of Lockwood's study.
As Robert Cassen has indicated to you, we are quite concernedat the zcaent with the question of uechanization and emploguient. .hope that we can Lake .utually satisfactory arrangaments to avaLilourselves of the benefits of the data collected on this subject, aswell as on the related topic of land oladings and income distribution.
i look forward to seeing the report in June.
Greg Votaw joins me in sending you best regards.
Zours sincerely,
A. . Kirkiouti sia Departent
Copy for: Dr. B, Lockwood also to: C.1 Nizamuddin Eastc/o Australian National University New Delhi13,IndiaDepartment of EconomicsCanberra
Mr. CassenAMirk/gs
Mr. S. J. G. Burt March 31, 1971
W. A. Wapenhans
INDIA : Draft FAO/CP Report on Nigher Agricultural EducationMission to India
I refer to your request of February 19. Mr. D. D. Brown has
now had an opportunity to review the report and his comments are attached.
In particular I think you ought to take note of the point made in para. 5
regarding the relationship of university level teaching and research.
Should you require any further elaboration of the points made, please con-
tact Messrs. Takahashi and Brown directly.
cc: Mr. TakahashiMr. Brown
Attachment
WAWape h ns:rs
Dear JV-,
I enclose three copies of a briefon my visit to New Delhi and Bangkok. I amassuming that the paper mentioned in paragrapn 12has already reached you.
Would you be good enough to make aof the report available also to Peter Cargillwith an indication that i would be happy to tryto answer any questions he might wish to raIse outof the report.
I would be grateful to receive a copyof anything yet received from the New Delhi officeparticularly their final version of the currentagricultural situation.
Best of good wishes,
Yours sincerely,
(J. G. Crawford)
Mr. L.J.C. Evans,Director,Agriculture Projects Department,1818 H Street, N.W.WASHINGTON, D.C. 20433, U.S.A.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATITONAL DEVELOPMENT ASSOCIATION
OFFICE MEMORANDUM
TO: Mr. L. J. C. Evans DATE: March 2, 1971
FROM: L. Helmers, R. Golkowsky (IBRD/IDA)and L. Wooton (Consultant)
SUBJECT: INDIA - Agro-Industries Reconnaissance MissionBack-to-Office Report
1. In accordance with terms of reference dated February 3, the missionvisited India from February 7 to February 2h, and reunited in Washingtonon March 1. Places visited included the States of Himachal Pradesh, Bihar,Orissa, Assam and the city of Bombay. Discussions were held with Centraland State Government officials and representatives of the AgriculturalRefinance Corporation, the Agricultural Finance Corporation and theIndustrial Development Bank of India concerning possible futuva lendingin the agro-industrial sector in India. On his way back, Mr. Wooton discussedthe design of apple packing plants with officials of FAO, Rome. The missiondiscussed the following projects:
Bihar - Agricultural Wholesale Markets
2. Wholesale markets for food grains are not well developed in theState of Bihar and substantial food grain handling losses are being incurred.The project would consist of the construction of about 50 wholesale marketsand would include the provision of access roads, grading and cleaningfacilities, wholesale shops, warehouses and in a few cases cold storagefacilities. Each market would be run by a market committee and would be
financially self-supporting. Revenues would consist of market fees andincome from the leasing of wholesale shops and storage facilities. The total
cost of the poject would be about US$13 million. The economic benefitssvuld mainly consist of an increase in the value of food grain productionbecause of the better quality of the produce and reduction of storage andhandling losses. The economic rate of return of the project has beententatively calculated to be at least 30%. A full preparation report hasbeen received and the project is ready for appraisal.
Himachal Pradesh - Apple Processing and Marketing Project
3, Apple production in Himachal Pradesh increased substantially overthe last decade to a present production of about 80,000 tons. About 75% ofthe total is marketed by individual fanners through commission agents in NewDelhi. There are no storage, grading and marketing facilities in the pro-duction area, resulting in high apple losses. Production will more thandouble over the next five years exacerbating the strain on the present
1r. L. J. C. Evans - 2 - March 2, 1971
marketing arrangements. The proposed project would include (a) access roads,(b) about 40 to 50 small apple packing plants, (c) cold storage facilities
in the producing area to reduce the trucking bottleneck during the harvest
season, and (d) credit to farmers and private entrepreneurs for orchard
development and related facilities. The total project cost would be about
US$20 million. The benefits would be substantial and would consist ofincreased farm prices and reduction of storage and handling losses. The
economic rate of return has been calculated to be at least 20%. Substantial
additional preparation is required, however, before the project can be
appraised, A project preparation outline is being prepared.
Orissa - Chilka Lake Fisheries Development Project
4. Because the opening between the Lake and the sea has been silted
up, destroying the fish breeding grounds in the Lake, fish production hasdecreased in the last decade from about 6,000 tons to about 3,000 tons.Indian biologists, after extensive studies, are convinced that the openingup of a canal towards the sea would restore original conditions. The projectwould consist of (a) the dredging of several openings towards the sea,(b) the construction of about 10,000 acres of ponds for brackish water fishfarming, (c) the construction of a small fishing port at one of the canals,and (d) the provision of credit to private fishermen for the acquisition ofabout 120 35' to 451 fishing vessels. Total project cost would be aboutUS$20 million. Benefits would consist of substantial additional fish pro-duction. The rate of return has been tentatively calculated to be atleast 20%. Model tests are presently being undertaken to determine the
best locations of the sea openings. The mission recommends that a pre-appraisal mission should be mounted to evaluate the results of the modeltests, which should be known in about three monthst time. The pre-appraisalmission should include a fisheries biologist, a brackish water fish farmingspecialist, a fish pond engineer and a fishing port engineer.
Assam - Pineapple Processing Project
5. Assam provides at present about 50% of India's total productionof pineapples. The quality of its pineapples is equal to or better thanthose grown in other pineapple production areas in the world. Because
production is spread over many isolated little pockets, no processing plantsof any size could be established. The proposed project would consist of(a) the construction of two processing plants, each with a nucleus estate o-fabout 1,000 acres, (b) credit to farmers/outgrowers for plantation develop-ment, and (c) the construction of about 80 km of access roads. The totalcost including working capital requirements of about US$1.7 million would be
about US$6 million, The major part of the processed produce would bemarketed in India. The tentative rate of return is estimated to be about
15%. Additional preparation is necessary before the project can be appraised,A preparation outline, to be sent to the State Government, is being prepared.
Mr. L. J. C. Evans - 3 - March 2, 1971
Fisheries
6. Except with respect to the Chilka Lake Project, GOI had preparedno comprehensive project concerning the development of the traditional -fisheries sector, but has concentrated on a project concerning the con-struction of major fishing ports. Detailed project reports for the con-struction of fishing ports at Madras, Cochin and Roychowk have beenprepared and a preparation report for a fishing port at Visakhapatnam isbeing finalized. The mission received a short outline concerning these portswhich will be passed on to the Ports Division.
Other Projects
7. Finally, the mission discussed with officials of the Ministry ofFood, Agriculture, Community Development and Cooperatives of the CentralGovernment the possibility of organizing projects in the fields of ricemilling, jute milling, tea processing, silviculture, slaughterhouses,tractor services and fish trawling. The mission indicated that it waswilling to look into the feasibility of any of those projects. A majorconstraint to GOI in requesting IDA finance is IDAfs condition of inter-national bidding. The Government intends to submit to IDA only those projectsfor which international bidding would not be required or for which inter-national bidding would be acceptable to GOI because the project's physicalcapital inputs are not produced in India.
FORM No. 57 INTERNATIONAL DEVELO 4T INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
OFfCE MEMORANDUMTO: Mr. Willi A. Wapenhans DATE: March 19, 1970
FROM: A. R. MacMilla,
SUBJECT:
Earlier this month, Mr. Hughes and Mr. Howe, of Howe Inter-national Limited, called on you to discuss a number of developmentmatters in India. Subsequently, Mr. Hughes wrote to us, enclosing a
copy of the Howe International Limited feasibility study (two volumes)of fertilizer bulk unloading facilities in India. In his letter,Mr. Hughes indicated that, since this study had been done for theCanadian International Development Agency (CIDA), it could only bereleased to you with CIDA authority.
As the CIDA officials concerned have authorized us torelease it, I enclose a copy.
Enclosures.
NTERN A TION AL DEVL'PME NT IN'TERNATiNAL RAN. FOR INTLr!R IASSOCIATION RECONISTLUCTION A'D DEVELOPMENT | CORORATIO
OFFICE MEO\RA k\NDUMTO: FIES- DATF: March 9, 197
FROM: Edward D. Cunningham
SU BJECT: IDIA. - Note on Mornthlty MeetLng on India Project PreparationMar ch 8,197
1. The folloing- vere present at tihe meting, M, M "c"aa, Mr. Cop
2. Th e m PeetingJ renviel:edI the m ontl Uat rep)r setyr. Votaw
to Dr. S'en on Marbc 3rd.
3. Mr. Con courirmed n r to r. in . aw'l that Ies to 9 wcefirm prospect iopesnainoth oddu IJiS ficcalF yeaor.
Mr. Ea 'si that the Arica> '" Credit Pr''i"t for )il Ha. u
St Iefit neii U ations,' ath end of Apr1i. D ''Poe'T if a' *'e)iA' ,
he said that the~ yeiJcvrrpr sn ceo o hcshoul ein'i abolS presentation toIC~ the Board in2 June'.2.' oun' ofC P. crei
Koul probably'J)i~7C beinrese to 'bu 60 pilion 'n V Cgng a
Depar12 u sho1½uld'c preoo a no byo te ado a i u{'U' Dr. 'L n on .. mi
Proraa'or FT 1972
5 Mro..vas sad it wa s 'a i k'ly Ia < e Jh 1, A'ndi a Ir"'a'i and,.1r'
be requirex'd on½ the orojecrt r''u"' ree:n 'if" 00' ',n Febuar 12f H doute
tha;t a orcdit 'or Irr in (Undtf ) ' ' " unoete 1
he 'uld prefer o: wai~t the rotP's of'"~'' .2' '' r'or 'ne " io noC in *Lnaua
beore~ poposing a'y chanes. .i Denif~i s ""g'stod ,n he GI Lha pr'ifoposed
a numbe ,~r of sm'all.' irrigatini ( 2 prjets "e should) be appr'i½''d1 togdher. '
Mr. Baum~ pointed od, howevorf'Ll, thatL this3 ":o ld evr diiffLicult -' ia the
projects have 1 bee iden ified ' april In' paicular, 'Le. ihIar' ' marke-
ing pr'o~jefict look au stron'g caadt and appaif a in Api/aagtb
possib.
FIfL'S - 2 - March 9, 1971
6. MrV t sad th at o irtend-d to a rae both the IucT. s oU7a Iuvt staffing ontrain Pigt limit a>11ais 4 or1P
fo f 1972 to c'y one0 of thee proposain.
7. On W R 'tili P4oject>, Mr. Kirk sdid that dicusAionsc hadtaken place bc 0 nv juh C. Tnth. Cn I i II T+i'r. .udicerela~ sa Ca ia: & ah were to or three issu Iic hol b-resolved before W uion leaves in July/Augut. n *repl oMr. Mcoaara, Mr. A rel a eed to sui aired on hs ssuesto Dr. F by h cnd of this neek. On 77 i in : Dr. SeriCon rfY: t at e coul oxpec G co s on h A's reafter h electim (i.e. by tie ond of c o nIbh 2.ld:re'ia sai. cA t prel-U -ry idcaios vroea a oe eposaln c d be prce ed very k a a he od u foprsenot)to to th Boar'd em. :7in Fiscal~ 4a 172.) _ the.a arnt shown
as Anted for a zis.llery of pojK ect, it a 2 at 1)h variousprop l were at such an early -t of considaion, K as A u nikelythat I., of them iuld be ready for, apprisal in time ior presentation inFY 72.
8. In conclnon, Mr. Mnaara poInYd out t hit ore were a numberof projets shown ner F 1972 uich it wno apr at were unlibly tomatorializ (e g. Iriti n Uni detified, Highay 1, Tata Fert'Lar,arcna iron Orand alc ) anId a- a c qe te opor-io:
prograa for IL 1972 might only mount to O million or so. He stressethat aLl or should be mado no-w to ensurethat -e could meet a l)ndinrProgram of $>0 mi$on.
cc: Mr. Christofferer Mr.A rMr. B a, Mr. E0 vis, Mr. Votcn , Mr. Ki rkMr. Shroff, Mr. GilletteMr. Mosconi (2 copics)Mr. Urquhart (10 copies)
EBCunningham/AFirkici
ORGANISATION DES NATIONS UNIES POUR ORGANIZACION DE LAS NACIONES UNIDASL'ALIMENTATION ET L'AGRICULTURE - - PARA LA AGRICULTURA Y LA ALIMENTACION
FOOD AND AGRICULTURE ORGANIZATIONOF THE UNITED NATIONS
Via delle Terme di Caracalla, 00100-ROME Cables: FOODAGRI ROME Telex: 61181 FOODAGRI Telephone: 5797
Ref. C) C 0 i) S
NOy
I -:m2sP.di::. ~~ou under separ te cover co of0D(p to echn0i reports(o ona, ucooic 7;v ion" and "Honovar, En nee r'2n Sucrve,
oil nve s-45 i tios e "1 on t e U"DP/U ioject India 55 "Pre-Investmen;S3urvey of 'i 'rvest", th's he rect in which I.. exresse)d cpci al
inerest. '
e L ee o 1hese rports fI ( dis titi i s t ill re (tricted so we
0ould appreciate your handlin ,Po thm onidniilyi oe udd tae n57 rt r7 er.s c toe0ITOL
4-1e 1,,' t )5 r ,7-In the leter sentft t'he G~over:nmentFOhsdanteGvrmn'
rattin i no th cocLusosn oel Rho 3 ta the beit cost
iratio and irnalSat of rernof te on avar :Ed htbo ricee~ would 'eincrease ithpeiod ofi anlyi weeDon- t the te n year 1 s e d i n
the report nd th "1idiret ef cs " suh rovsi2onj of empioymnt orreater se of roads, which fve not ben incorporated in e analsis iP,would sho(I :ow a rkenet benit. The at tention of the Gove rnment has also beon
dr wn to the 7sumtons ue inl the de aiLed eva iltion of the scheme. * eea re iven as Appendix 13 to tie reorot.
oeurs sincerely,
John SpearsChief, pertions anning and Coordination Unit
FAO/IBRD Cooperative Progrmme
r. . Vera:art,Internationa -ank for heconstruction and
Develou menE,
W ashinn, D.. 20433
sC
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MOT'J '>EL CJO'"'"gAL >' AG P. O. P8 ID A. " X , 2Pt . 9
INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE
ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
OUTGOING WIRE
TO: INTBAFRAD DATE: FRIMM
NEW DELHI CLASS OF FEBRUARY 18, 1971
SERVICE: LT
COUNTRY: IND
TEXT:Cable No.: 40
FOR NAYLOR
RESERVATIONS MADE FOR WOOTON AT ROGER SMITH HOTEL
BEGINNING FEBRUARY 28.
REGARDS
ECCLES
NOT TO BE TRANSMITTED
AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION:
NAME S. D. Eccles
DEPT. Deputy Chief, Agricultural Industries DivAgriculture Projects Department
SIGNATURE(SIGNATURE OF INDIVIDUAL AUTHORIZED TO APPROVE)
REFERENCE India - Agro-Business For Use By Communications Section
SDEccleORIAiNAL (File Copy)
(IMPORTANT: See Secretaries Guide for preparing form) Checked for Dispatch:
s
sea ---
1
4
s
FORM No. 26(4-69)
INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCEASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION
IN COM IN G C A BL E
DATE AND TIME R 0 U T I N GOF CABLE: F 5,171
LOG NO.: WUI ACTION CDPY: AGRICULTURAL PRIOJECT
TO: vii INFOFATIONCOPY:
FROM: AOME DECODED BY:
TEXT:
NO 886 PAO V,--iud
oNE INDIA oEs JPERVII PLE E AVIdE PR EGI- FIELD Ea TEi.EG
TWO PRiO HUY6EA IC~AU FIHR ADATI eAVAIL1BLE UulDE
JN FLH BIOLOGIT WILL .imVIS 800N i;
BROCUHU
OFFIER IN, CHAtG
FAO/I3KD COOPERATIVE PctOGA1 cAE
FOR INFURMATION REGARDING INCMIING CABLES, PLEASE CALL THE COMMUNICATIONS SECTION, EXT. 2021
ORIGINAL
TYPED
FES 5 1 42 PH1971COMMUNICATIONS
SECTION
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL DEVELOPMENT ASSOCIATION
OFFICE MEMORANDUM
TO Messrs. L. Helmers, R. Golkowsky (IBRD/IDA) DATE : February 3, 1971and L. Wooten (C)
FROM : Mr. S. N. McIvor
SUBJECT: INDIA - Agro-Industries Reconnaissance MissionTerms of Reference
1. On or about February 7, 1971, you will arrive in New Delhi forabout three weeks to review the program of future Bank group lending tothe agricultural industries sector. You will keep in close contact withthe Bank's Delhi office.
2. You will pay particular attention to the present status of theinvestment plans for pineapple development in Assam and apple productionand marketing in Hamachal Pradesh andfor the fisheries sector. You willinvestigate whether these projects seem economically viable and suitablefor IDA financing and discuss with GOI and the agencies responsible forthe projects, what steps need to be taken to complete project preparation.
3. Areas of major responsibility will be as follows :
(a) Mr. Helmers will be responsible for planning andcoordinating the work of the mission, including its-field visits. He will be responsible for ascertain-ing Government's plans and for working out thenature of possible Bank participation, includingassistance in preparation and financing of projects.
(b) Mr. Golkowsky will be responsible for collectingbackground information and cost and benefit dataof the proposed projects. With Mr. Helmers he willassess whether the proposed projects seem economic-ally viable and determine what steps should betaken to complete project preparation.
(c) Mr. Wooten (consultant) will evaluate the appleproject in Himachal Pradesh. He will review theadequacy of existing and proposed market channels,handling procedures and marketing and cold storagefacilities in the proposed project areas, recommendwhat improvement s should be made and evaluate theviability of the proposed project.
Page 2. February 3, 1971.
4-. Upon return to Washington, you will submit a back-to-office
