world bank document official use only abbreviations and acronyms badc - bangladesh agricultural...
TRANSCRIPT
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No. 4348-BD
STAFF APPRAISAL REPORT
BANGLADESH
RURAL DEVELOPMENT II PROJECT
May 17, 1983
South Asia Projects DepartmentGeneral Agriculture
This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
US$1 = Taka 23.0
Taka 1 = US$0.0435
Taka 1 million = US$43,500
WEIGHTS AND MEASURES
1 acre (ac) = 0.405 hectare (ha)1 maund = 82.27 lb (37.3 kg)1 md/ac = 0.037 tons/acI metric ton (ton) = 26.8 md1 cubic foot per second = 0.0283 cubic meter per
second (cusec)
GLOSSARY
Agricultural Terms
Aman - Paddy planted before or during the monsoon (which begins in June)and harvested in November or December (B. aman is broadcast aman, T.aman is transplanted aman).
Aus - Paddy planted during March and April and harvested during July andAugust (b. aus is broadcast aus, T. aus is transplanted aus).
Boro - Paddy planted in November-December and harvested during April toJune.
Rabi - Dry season.
Paddy - Unhusked rice.
FISCAL YEAR
July 1 to June 30
FOR OFFICIAL USE ONLY
ABBREVIATIONS AND ACRONYMS
BADC - Bangladesh Agricultural Development CorporationBB - Bangladesh BankBHB - Bangladesh Handloom BoardBKB - Bangladesh Krishi BankBRDB - Bangladesh Rural Development BoardBSCIC - Bangladesh Small & Cottage Industries CorporationBSS - Bittyaheen Samabaya SamityCCC - Cooperative College in ComillaCIDA - Canadian International Development AgencyDTIW - Deep TubewellGOB - Government of BangladeshHTW - Hand TubewellIDA - International Development AssociationIMP - Irrigation Management ProgramIRDP - Integrated Rural Development ProgranKSS - Krishi Samabaya SamityLLP - Low Lift PumpMTFPP - Medium Term Food Production PlanNCB - Nationalized Commercial BanksNCIIRD - National Committee for Multi-Sectoral Rural DevelopmentNGO - Non-Governmental OrganizationODA - Overseas Development AdministrationPECU - Project Engineering & Construction UnitPWD - Public Works DepartmentRCS - Registrar of Cooperative SocietiesRDA - Rural Development Academy, BograRDTI - Rural Development Training Institute, SylhetSTW - Shallow TubewellTCCA - Thana Central Cooperative AssociationTPO - Thana Project OfficerTTDC - Thana Training & Development CenterTTU - Thana Training UnitsUNDP - United Nations Development Program
This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Table of Contents
Page No.
I. INTRODUCTION ........................................ 1
II. AGRICULTURAL AND RURAL DEVELOPMENT SECTOR ............... 1
Production and Constraints .............................. lGOB Production Strategy and Role of TCCA/KSS ............ 3
Minor Irrigation Development .......................... 4Irrigation Management Program ....................... 6Rural Institutions ...... .................................. 7
Rural Infrastructure .................... ................ 15Input Supply and Marketing ............... ............. 16Support Services ........... . ........ .............. . ....... . 17
Special Program for the Rural Poor ..... ................. 18IDA Operations in Agriculture and Rural Development ..... 20
III. THE PROJECT *............................................ 23
Project Objectives ......... ... .. .... ............... .... 23Project Area .......................................... . 24Project Components ............................ ....... . 24Detailed Features .. *...*.*.*...*.*.*..*.***.*.*.*.*. .... ... 25Purchase of STW and LLP ...................... * ***.*.... 25Irrigation Management Program ......................... 26Rural Poor Program ....... .. . .................... .. . .. . . . 27Incremental ST Credit for Crop Production ............. 28Marketing ................ 0......... 00...............* ......... 29Thana Civil Works ..* ***. ***** *******........................ ......... . 29Strengthening of BRDB .....,... .......... 29Strengthening of RCS Audit ....... o .. .............. 30Training ........................................ 0............. 30Technical Assistance .................... .............. 32
IV. COST ESTIMATES, FINANCING AND CREDIT ARRANGEMENTS ....... 34
Project Costs and Financing ............ ........... 34Procurement and Disbursement ..... ....................... 36Procurement ...................................... 36Disbursement .. . .. . .............................. ..... . 37
Credit Arrangements ................. . 39
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Page No.
V. ORGANIZATION AND MANAGEMENT ..... ........................ 41
Policy and Management ...... ............................ 41
Policy Guidance ....... ................................ 41Project Management ... ................................... 41
Participating Agencies . ....................... .. 43
Inter-agency Coordination ..... 44Project Implementation ...... ............................ 45Implementation Schedule ............................... 45
Monitoring and Evaluation ..... .......................... 46Accounts and Audit ...... ................................ 47
VI. PRODUCTION, MARKETS AND PRICES ..... ..................... 48
Cropping Patterns ...... ............................... 48
Yields and Production ... ................................ 48Marketing ............................................. 49Prices ................................................ 49
VII. FINANCIAL ANALYSIS AND COST RECOVERY ................... 50
Farm Incomes ...................... ...................... 50Income from Activities under the Rural Poor Components .. 51Financial Performance of Participating TCCA ............. 52
TCCA Grants ..................... ...................... 53Produce and Fertilizer Marketing ......... .. ........... 54
Cost Recovery ........................................... 55
VIII. BENEFITS AND JUSTIFICATION .............................. 56
IX. RECOMMENDATIONS ....... .................................. 61
SCHEDULE A - Lending Terms and Conditions ...................... 64
SCHEDULE B - Eligibility Criteria for Project Inputs .... ....... 69
SCHEDULE C - Lending Procedures for TCCA Credit Operations .... 74
ANNEX 1 - Background Data
Table 1 - TCCA/KSS System - Coverage ., 78Table 2 - Credit Operations of TCCA/K',S .79Table 3 - National Agriculture Credit Program ............... 80Table 4 - Minor Irrigation Experience . .81
Table 5 - Input Marketing Performance .82Table 6 - MTFPP - Requirement and Commitments for
Minor Irrigation Equipment .83
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Page No.
Table 7 - Thana Facilities in Project Area ............... ... 84Table 8 - TCCA/KSS Audit Situation ..... ..................... 85Table 9 - Services Available to TCCA/KSS under
Aided Project ............... ................ ....... 86
Table 10 - BRDB - Irrigation Management Program . .. 87Table 11 - National Rural Poor Program - Lending Activity 88
Table 12 - National Rural Poor Program - Loan RecoveryPerformance ........ 89
Table 13 - Socio-Economic Data on Six Districts underRural Poor Program ........ .. 90
ANNEX 2 - Project Physical Parameters
Table 1A - Growth of TCCA/KSS/BSS .91Table 1B - Growth of TCCA/KSS/BSS - IMP and Marketing .92Table 2 - Training Load - Institutional Training 93Table 3A - Rural Development Training Institute (RDTI),
Sylhet - Projected Utilization by RD-II .94Table 3B - Thana Training Units (TTUs) - Projected
Utilization by RD-II .. 95Table 3C - Rural Development Academy (R)A),
Bogra - Projected Utilization by RD-II .96Table 4 - Rural Poor Program - Training ..... ................ 97Table 5 - Flow of Short Term Credit ..... .................... 98
Table 6 - Projected Phasing of Loans for Rural Poor Program 99
ANNEX 3 - Project Cost
Table 1 - Summary of Project Cost . ............ .. 100Table 2 - Cost Estimates - Minor Irrigation Equipment . 101Table 3 - Cost Estimates - IMP Expansicon . 102Table 4 - Estimated Staff and Training Costs for
IMP Expansion .. . ...... ... . 103Table 5 - Cost Estimates - Private Mechanics Training . 104Table 6 - Cost Estimates - Rural Poor Program . 105
Table 7 - Rural Poor Program - Training Costs ... 106Table 8 - Rural Poor Program - Incremental Staff and
Operating Costs .............. . ..... . ........... 107Table 9 - Cost Estimates - Marketing . 108
Table 10 - Cost Estimates - Training ............ . 109Table 11 - Cost Estimates - Institutional Training .... 110
Table 12 - Cost Estimates - Strengthening Audit Capability ... 111Table 13 - Cost Estimates - Audit Training and
Incremental Staff .... 112Table 14 - Cost Estimates - Thana Physic.al Facilities ... 113
Table 15 - Cost Estimates - Incremental BRDB Staff ... 114Table 16 - Cost Estimates - Technical Assistance ... 115
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Page No.
Appendix I - Rural Poor Program - A Profile ofIncome Generating Activities ............ 116
ANNEX 4 - Project Financing and Disbursement
Table 1 - Project Financing Plan ............................ 121Table 2 - Disbursement Schedule ...... 122
ANNEX 5 - Financial Analysis
Table 1 - Cropping Patterns and Phasing, of Irrigated Area 123Table 2 - Summary of Crop Yields, and Input Requirements .... 124Table 3 - Estimated Operating Cost for Irrigation Equipment . 125Table 4 - Financial Analysis for STW Irrigation Group ....... 126Table 4A - Footnotes for Tables 4 and 5 .... . 127Table 5 - Financial Analysis for LLP Irrigation Group ....... 128Table 6 - Summarized Indicators of Return from
Rural Poor Activities ....... ...................... 129Table 7 - TCCA - Financial Analysis - Income Projection
for New TCCA ...................................... 130Table 8 - Assumptions for TCCA Model (New) .... .............. 131Table 9 - TCCA - Financial Analysis - Income Projection
for Existing TCCA ... .......... ......... ........... 132
Table 10 - Assumptions for TCCA Model (Existing) . 133Table 11 - BRDB - TCCA/KSS System - Key Indicators . 134Table 12 - TCCA - Financial Analysis - Sensitivity Analysis . 135Table 13 - Cash Flow to TCCA from Rice Miarketing ... 136
ANNEX 6 - Economic Analysis
Table 1 - Financial and Economic Prices ..................... 137Table 2 - Derivation of Farmgate Economic Prices ............ 138Table 3 - Economic Analysis . ................................ 139
ANNEX 7 - List of Documents on Project File ................ 140
CHARTS
Chart No. 25027 - Organization of BRDB .................... .... 141
Chart No. 24717 - Coordination of the Rural Development Effort . 142Chart No. I - Implementation Schedule ...... ....... 143
MAPS
IBRD Map No. 17064IBRD Map No. 17066
BANGLADESH
RURAL DEVELOPMENT II PROJECT
I. INTRODUCTION
1.01 The Government of Bangladesh (GOB) has requested the InternationalDevelopment Association (IDA) for assistance in financing a Second RuralDevelopment Project. The project is based on the experience gained under anumber of IDA supported agricultural and rural development projects whichhave involved the GOB's Integrated Rural Development Program (IRDP), inparticular the first Rural Development Project, Cr. 631-BD (RD-I) and theShallow Tubewells Project, Cr. 724-BD. The policy framework of the proposedsecond project has emerged from a Joint Review of IRDP, conducted by GOB andIDA in 1980-81 and similar joint reviews of minor irrigation and agricul-tural credit sectors. 1/
1.02 A team set up by GOB prepared the project with some assistance fromFAO/CP. Further preparation was required and this was merged with appraisalof the project which started in September 1982, and was managed by theResident Mission in Bangladesh (RMB). Appraisal was completed in October1982. The preparation and appraisal team comprised Messrs. A. K. Seth,I. Ahmed, W. Kock, K. Loganathan, H. Sanger and Ms. W. Huq (IDA) and Messrs.R. Lesire, R. Raturi and K. Selvavinayagam (FAO/CP).
II. AGRICULTURAL AND RURAL DEVELOPMENT SECTOR
A. Production and Constraints
2.01 Bangladesh's economy is predominantly agricultural and agricultureaccounts for 57% of GDP, 75% of all direct or indirect employment and over80% of the country's exports. Out of a total land area of 35 million acres,about 22.5 million acres are under cultivation at a cropping intensityaveraging about 150%. Rice is by far the most important crop and accountsfor over 80% of the cultivated area; jute is the principal export andindustrial raw material crop and accounts for 6%; and a variety of othercrops, such as wheat, pulses, tobacco, oilseeds, sugarcane, and vegetablesmake up the balance.
1/ "Bangladesh Integrated Rural Development Program. A Joint Review byGOB and World Bank", October 1981.
"Minor Irrigation Sector Review. A Joint Study by GOB/IDA", draftreport, April 1981.
"Agricultural Credit Sector Review. A Joint Study by GOB/IDA", draftreport, April 1983.
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2.02 Bangladesh still suffers from a chronic shortage of foodgrains,though growth in foodgrain production has accelerated in recent years andwas 2.6% over the period 1970-1981 compared to aL population growth rate of2.7%. However, annual production varies considerably, and in years of badproduction annual imports have reached 1.5 M tons. To achieve self suf-ficiency, which is a major target of GOB's development programs, wouldrequire a growth rate of 7% if it is to be achieved by 1985, the end ofGOB's Second Five Year Plan (SFYP). This would be difficult to achieve eventhough the technology for achieving this growth in production exists and hasbeen in use in Bangladesh since the mid sixties. Full exploitation of thisnew technology depends on the prompt elimination of many constraints.
2.03 Production is held back by physical, socio-economic, institutional,and resource constraints. Practically all of the 22.5 M ac cultivable landis fully utilized and increases in production must therefore come fromintensification. However, nearly two-thirds of the cultivable area isaffected by flood and drainage problems of varying intensities, and only4 M ac are protected by physical works such as embankments and drains. Dryseason irrigation, which avoids the flood problem, is now available for only4 M ac. About 70% of farms are below 2 ac in size and are often fragmentedinto as many as 10 parcels. About 25% of farm families own less than oneacre, and about 40% of all land is sharecropped. The rural power structureis well entrenched. In this situation small and marginal farmers pay dearlyfor tenure and credit, and have poor access to GOB supported services andinputs. Generally, rural areas are physically isolated due to poor roadcommunications, and they lack the basic physical infrastructure needed forthe development of rural industry or for effective administration of GOB'sdevelopment efforts.
2.04 Farmers, who are hard working and responsive to innovation, dependon a number of GOB agencies for essential inputs, credit, technical advice,and price incentives required for the widespread adoption of the HYV basedtechnology. Given the small scale of the average farmer-s needs for water,fertilizer, and credit, and the small size of his marketable surplus, GOBagencies have difficulties in effectively interacting with farmers. Inaddition, poor coordination between GOB agencies providing complementaryservices slows down the spread of the new technology. While actions areunderway to improve the performance of GOB agencies serving the farmer,fiscal constraints prohibit any significant expansion. Consequently GOB isplacing greater reliance on the private sector in providing those serviceswhich are commercial in nature and marketing of fertilizers and pesticides,import and retailing of minor irrigation equipment and their repair andmaintenance, are being increasingly privatized.
2.05 Overshadowing the problem of small and marginal farmers is that ofthe landless. Reliable data is available from the Land Occupancy Survey of1977; a new survey is to be done in 1983. Available evidence shows that the
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problem has become more acute. Even in 1977, about a third of the ruralhouseholds had no land under cultivation and a large proportion ofhouseholds (20%) were seeking employment and incomne opportunities outsidethe farm sector. The rural scene is characterized by widespread poverty.Using a daily calorie intake of 2,100 as indicating the poverty line, thepercentage of rural population below the poverty 'Line has increased from 65%in 1964 to 87% in 1977 and this trend has continued. Such widespread ruralpoverty and real low wages for agricultural labor, are limiting the purchas-ing power of rural people and thus the effective demand for foodgrains.GOB-s intervention to purchase foodgrains at guaranteed prices offers only apartial and so far ineffective solution to the problem of lack of effectivedemand.
B. GOB Production Strategy and Role of TCCA/KSS
2.06 The SFYP and the Medium Term Food Production Plan (MTFPP) developedwith IDA's assistance 1/ give top priority to the achievement of foodgrainself sufficiency by increasing production from 13.5 M tons in 1978 to 20.0 Mtons by 1985. This is to be achieved by a basic strategy to make use of theinitiative of the nation's 7 million private farmers by providing them withthe resources and services that they have shown themselves to be able to useeffectively. Thus, 85% of physical investment under the SFYP/MTFPP isconcentrated on provision of water control and dry season irrigationfacilities, supply of complementary inputs and access to markets. Suppor-tive rural institutions, credit and input supply mechanisms and extensionand research are to be strengthened. Finally, greater reliance is to beplaced on the private sector, on reduction of subsidies, and on increasingefforts for domestic resource mobilization. The MTFPP started off well witha 10% increase in foodgrain production in FY81 but then ran into twounusually dry years. However, expansion of irrigation under MTFPP isproceeding close to plans (para 2.08).
2.07 Bangladesh-s own rural development model - the so called ComillaModel - originated in response to constraints similar to those describedabove (para 2.03). An integral element of the model was the establishmentof Thana Central Cooperative Associations (TCCA) located at the headquartersof the 450 thanas into which Bangladesh is divided administratively; andagricultural cooperative societies - Krishi Shamabay Samities (KSS) -located in the 68,000 villages of Bangladesh. Other components of theComilla Model were: (a) Rural Works Program, planned and implementedthrough local councils for building local infrastructure; (b) Thana Trainingand Development Center to bring together physically the various governmentagencies, local councils and TCCA; and (c) Thana I;rrigation Program to
1/ Bangladesh: Medium Term Foodgrain Production I'lan, February 1981.
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utilize irrigation equipment, and maintain them. After a decade of success-ful experimentation in 20 thanas, the Comilla concept of TCCA/KSS wasexpanded nationwide under the aegis of the Integrated Rural DevelopmentProgram (IRDP), an agency of GOB's Ministry of Rural Development andCooperatives; while other components were expanded nationwide under separateprograms managed by other GOB agencies. The Joint Review by GOB and IDAreviewed the nationwide performance of IRDP. The Review, the report ofwhich was approved by the Cabinet in August 1982, found that the TCCA/KSSsystem had been playing a useful - through far below potential - role infurthering GOB's agricultural and rural development plans and that it was avaluable resource to be used for achieving objectives of GOB's developmentplans. As recommended in the Joint Review, IRDP has recently been estab-lished as an autonomous Bangladesh Rural Development Board (para 2.17).
Minor Irrigation Development
2.08 In the Bangladesh context, with substantial surface water flows butwith a topography that almost excludes any large scale gravity irrigation,farmers have traditionally depended upon small scale lift irrigation fromsurface water bodies using Low Lift Pumps (LLPs) of 1-2 cusec capacity.Since the early seventies, however, Bangladesh's large ground water resour-ces have been increasingly exploited for irrigation in the dry season bydiesel engine operated Shallow Tubewells (STWs) of 0.5-0.75 cusec capacityand Deep Tubewells (DTWs) of 2 cusec capacity as well as by simple manuallyoperated Hand Tubewells (HTWs) capable of irrigating half to one acre ofland. LLPs, DTWs, STWs and HTWs are collectively referred to as minorirrigation equipment. Minor irrigation development is a key component ofthe MTFPP, and its expansion up to end of FY82 was generally encouraging,except for HTW and DTW programs which were constrained by poor supply ofequipment to meet farmer demand.
MTFPP Target Actual % Above/For July 1, 1982 Achievement Below Target
STW in Operation 58,000 63,300 + 9DTW in Operation 13,000 11,490 - 11.5LLP in Operation: 1 cusec 10,500 12,200 + 16
2 cusec 33,500 30,400 - 9HTW Sales 175,000 135,800 - 22
2.09 Groundwater resources, which are expected to provide 45% of theirrigation water used for agricultural production by 1985, are very ade-quate. Bangladesh is part of a geological basin which contains a majoraquifer complex saturated with groundwater. Three major inter-connectedwater bearing zones, the composite aquifer, the main aquifer and the deepaquifer have been identified. The composite aquifer, at a depth varyingfrom a few meters in the north to as much as 60 meters in the south, con-sists of silty to fine sand overlaying the main aquifer. Extraction from
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this aquifer is possible by shallow tubewells for irrigation as well as forrural water supplies. The main aquifer consists of medium and coarse-groundsandy sediments, occasionally inter-bedded with gravel, which extends todepths averaging 140 meters. Extraction is by deep tubewells primarily forirrigation (see Map). The deep aquifer, ranging from 150 meters to 450meters in depth, has been mainly exploited for urban and industrial watersupplies in Dhaka and in the coastal areas. Present groundwater resourcesare utilized as follows:
Million Ac/Ft %
Groundwater resources in main andcomposite aquifer 24.4 100
Present extraction from main andcomposite aquifer 2.8 11
Planned extraction by 1985 forirrigation (MTFPP target) 13.0 53
Source: UNDP - "Groundwater in Bangladesh", draft, April 1982.
2.10 The policy framework for the development of the minor irrigationsector is based on the experience gained under a number of GOB and IDAfinanced projects, and was drawn up in the course of the Joint GOB/IDAReview of the minor irrigation sector. It is now basic GOB policy toencourage private ownership of irrigation equipment rather than their rentalfrom GOB as in the past, and to encourage the private sector in the import,retailing, and subsequent servicing of these equipment, rather than operatea GOB monopoly for these activities. IDA financed Agricultural CreditProject (1147-BD) has assisted GOB in its first major effort to supportprivate sector import and retailing of STWs. STWs have for long been soldto farmers at full cost, but sales of new LLPs and DTWs are presently sub-sidized by 20% and 75Z respectively. LLPs and DTWs previously owned by GOBhave now been put on sale, supported by credit. GOB is gradually reducingsubsidies with the aim of progressively eliminating them. Since 1980,rental rates charged for LLPs and DTWs which still remain with GOB have beentrebled and subsidy on sale of new LLPs has been halved, while the sellingprice of DTWs has been increased by 40%.
2.11 A critical factor in the effective development of irrigated agricul-ture is the relatively large areas (DTW 100 ac, LLP 40 ac, STW 15 ac) whichneed to be irrigated for the economic operation of the existing minorirrigation equipment, which are almost all operated by diesel engines. Asrural electrification expands, small horsepower units would become economi-cally feasible. Given the small size and fragmentation of holdings and thevast number of farmers to be reached, farmers have to work in groups to
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optimize the use of such equipment. The Joint Review has supported theencouragement given by GOB to TCCA/KSS for expanding their role in minorirrigation development.
2.12 TCCA/KSS participation in the national minor :Lrrigation program hasbeen important and has been regularly supported by IDA under its project andprogram credits. For example, in 1980, as part of IDA's Imports X ProgramCredit (Cr. 1194-BD), GOB launched a nationwide program of term credit toTCCA/KSS for purchase of minor irrigation equipment and such purchases havebeen significant in recent years as shown below:
National Sales of Minor Irrigation Equipment
FY81 FY82% Purchased % Purchased
Total Sales by TCCA Total Sales by TCCA
DTW 730 64 1,110 73STW 27,250 54 26,400 44LLP 11,900 20 5,475 21HTW 45,000 N/A 72,000 85
However, less than 45% of existing A- and B class KSS 1/ have irrigationfacilities.
Irrigation Management Program (IMP)
2.13 Minor irrigation equipment is currently irrigating an average of20-25 acres for one cusec installed capacity while the potential would be atleast 50% greater. Primary reasons for the under-utilization of equipmentis the poor organization and management of user groups. To remedy thisproblem, Irrigation Management Program (IMP) was introduced in the RD-IProject in 1979-80. Under IMP, BRDB, BADC and Department of AgriculturalExtension (DAE) officers at the district and thana levels jointly supportthe TCCA to increase the command area per irrigation equipment and thusreduce the cost of irrigation. Essential features of the program are:(a) preparation of action plans; (b) organizing KSS meetings to explainutility of water management; (c) training of managers, and chairmen of KSS,TCCA inspectors, village accountants, block leaders, fieldmen, and tubewelloperators; (d) preparation of land maps and land registers; (e) laying ofirrigation channels; (f) preparation of irrigation budgets; and (g) obtain-ing credit for production costs. The program has been. very successful
1/ Since 1980, IRDP has a system of classifying KSS according to perfor-mance on membership, loan recovery, savings, and related factors(Schedule B); 'A and -B class KSS are judged to be active and viable.
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(Annex 1, Table 10). During 1981-82, IMP covered 43 T(CA and 430 irrigationunits and on average increased command areas by 53%, farmer participation by35% and yields by 15%. Because of such promising results, GOB has decidedto replicate IMP on a nationwide basis and has published a comprehensivemanual in Bengali for implementing IMP. BRDB has been given the respon-sibility for monitoring IMP activities and Rural Development Academy, Bograthe responsibility for training GOB staff with the assistance of an UNDP/FAOproject. IDA is supporting the implementation of IMP in three districtsunder the DTW II Project (Cr. 1287-BD).
Rural Institutions
2.14 The TCCA/KSS system is the basic system of farmer cooperatives andbetween 1978 and 1982, the system has grown as follows:
FY78 FY82
Number of TCCA 250 350Number of KSS 27,500 48,800% of 'A' and 'B' Class KSS N/A 48Paid Membership ('000) 844 1,690Total Savings and Shares (Tk M) 54 163
2.15 This growth has been achieved despite a difficult environment inwhich the system has been unable to guarantee the flow of services most indemand by its members. Thus apart from 74 TCCAs, which are thebeneficiaries of projects financed by IDA and other donors, the services ingreatest demand by members - minor irrigation equipment, medium term credit,fertilizer, and seed - have been rarely available to the TCCA, because ofthe failure of the public sector agencies controlling their supply to meetTCCA demands. These problems have not been totally absent in the case ofTCCA assisted by IDA, though the position has been much better; as has beenthe performance of these TCCA compared to others. This is evident by comi-parison between the 7 TCCAs of RD-I Project and the nationwide TCCA program:
Bangladesh RD-I
Number of TCCA 350 7Number of KSS per TCCA 139 200% of 'A' and 'B' Class KSS /a 48 49Number of Members per KSS 35 54% Farm Families covered in adopted thanas 20 41% Membership of -A- and 'B' Class KSS borrowing 32 77LLP and STW purchased per TCCA per year in FY80-82 47 250
/a RD-I average figure is low because for the 1,070 KSS in theDistrict of Mymensingh, where only DTWs are feasible, no irrigationfacilities have yet been provided.
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2.16 While the TCCA/KSS system has expanded rapidly in recent years, itsqualitative performance is far less impressive. For example, abouttwo-thirds of the membership of A' and B' class KSS does not participatein the system's credit program, partly because of cumbersome procedures andpartly because 55% of these KSS do not yet have irrigation facilities whichtend to drive the demand for credit. At least half of the KSS which havebeen organized are not active, partly because of the problem of providingreal services to their members. Problems of equity and maladministrationare pervasive even among the active KSS; for example, while the membershipof the small and medium size farmers reflects the general situation, themanaging committees tend to be dominated by larger farmers. 1/ In partthese problems arise because of the ineffectiveness of the Department ofCooperatives in ensuring the holding of Annual General Mleetings, conductingof timely audit, weaknesses that in part are due to ambiguities in coopera-tive laws (para 2.22).
2.17 The Bangladesh Rural Development Board (BRDB) which promotes thegrowth of the TCCA/KSS system, was established by GOB in December 1982. Itsestablishment eliminated the uncertainty that in recent years has shroudedthe status of IRDP and its staff; an uncertainty which had led to con-siderable demoralization of the staff responsible for promoting the TCCA/KSSsystem. BRDB is managed by a Governing Council, of which the Minister ofRural Development and Cooperatives is the Chairman, and Secretary RuralDevelopment, the Vice Chairman, and whose other members are:
- Secretaries of Agriculture and Forests, Fisheries and Livestock,Irrigation, Water Development and Flood Control, Local Government,Finance, and Energy divisions (6);
- Chairman of BADC (1);
- Registrar of Cooperatives (1);
- Member (Agricultural and Rural Institutions), Planning Commission (1);
- Director, Rural Development Academy, Comilla (or Bogra, alterna-tively) (1);
- Representative of a major financial institution (1);
- Chairman, Bangladesh Small and Cottage Industries Corporation (1);
1/ In a sample of 25 TCCAs, 44% of the members of the managing committeeswere from among farmers who had more than 5 ac of land, while only 23%of the membership was from this group.
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- five elected Representatives from the National Federation of TCCAs (5);
- one Nominee of the National Cooperative Union (1);
- Director General, BRDB, as Member Secretary (1).
2.18 Under its charter, the role of BRDB is to:
(a) promote village based cooperatives and TCCA so that they become, inthe shortest possible time, autonomous, self- managed and viablevehicles for increasing production, employment and rural develop-ment;
(b) encourage functional cooperatives for sponsoring income generatingactivities for the rural poor;
(c) promote intensive irrigated agriculture as a means of cooperativedevelopment as well as for efficient use of irrigation facilities;
(d) channel and ensure productive utilization of institutional creditthrough village cooperatives and TCCA system and promote membersaccumulation of deposits and savings;
(e) encourage financially viable TCCA to diversify activities, espe-cially in marketing of agricultural inputs and produce;
(f) arrange for effective training of members;
(g) promote the growth of federations of TCCAs at the district andnational levels with a view to progressively hand over to them thepromotional, motivational and educational functions relating torural development;
(h) liaise with concerned agencies for mobilizing supplies, services andsupport for the cooperative system; and
(i) engage competent evaluation teams and research institutions to studyand evaluate the progress made and effectiveness of the projects andprograms of the Board.
2.19 A Director General, a GOB official of the rank of AdditionalSecretary, is the Chief Executive of BRDB. He is presently supported bythree Directors, responsible for Implementation, Monitoring and Evaluation,and, Finance and Administration. At Dhaka, BRDB currently has about 40officers and in the field its strength will increase to 1,500 from 1,000 asTCCA are established in all 450 thanas. The BRDB-s 22 district offices arestaffed by a Project Director (PD), and two Deputy Project Directors (DPDs)with a small accounts cell. PDs monitor the implementation of BRDB's
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projects, assist in promotional activities and most importantly ensure theavailability of inputs to TCCA from GOB and private sector agencies at thedistrict level. To facilitate the development of TCCA, BRDB recruits,trains and seconds to each TCCA, three key staff: a Thana Project Officer(TPO), a Deputy Project Officer, and an Accountant whose salaries BRDB pays.The TPO works as the Secretary to the Managing Committee of the TCCA. Thecommittee is elected for a one year term. All other staff of the TCCA(approximately 25 inspectors and village accountants) are paid out of TCCAs'own earnings.
2.20 BRDB operates a Rural Development Training Institute (RDTI) atSylhet. The RDTI is used for staff training, but because facilities arestill incomplete, in-service and pre-service training of BRDB staff arelagging behind requirements. Facilities of the Rural Development Academy(RDA) at Comilla and the recently completed Bogra RDA 1/ also are used tothe extent available by BRDB for staff training. The two RDAs undertakeaction research in rural development strategies and also organize specialtraining for innovative programs to be executed by TCCA/KSS. The RDA, Bograhas gradually become the focal point for the training for IMP (para 2.13),and is presently engaged in useful action research in the field of specialprograms to create income generating activities for the rural poor (para2.41).
2.21 The Registrar of Cooperative Societies (RCS) is responsible for theregistration, audit and inspection of all cooperatives under the CooperativeSocieties Act, 1940. RCS staff, which number 2,250 have not increased asthe cooperative network has grown. RCS staff also promote and supervise theoperation of the non-Comilla type (or traditional) cooperatives, only 6-10%of which are active. This has overburdened the RCS. As a result, as ofOctober 1982, audits of 12,000 KSS and 83 TCCA were overdue for more thanone year. To train the auditors responsible for KSS audit, RCS operates aCooperative College in Comilla (CCC), whose facilities are underutilized dueto financial constraints. Thus quality of audit has deteriorated steadily.In recognition of this weakness, audit of TCCAs under IDA assisted projectsis currently assigned to locally recruited firms of auditors.
2.22 Following the completion of the Joint IRDP Review, GOB has decidedto merge the two cooperative systems, TCCA/KSS and traditional, startingfrom the village level and also to reallocate the role of the RCS, BRDB,TCCA and the bank which finances the TCCA so as to maintain a system ofchecks and balances. The reallocated functions are:
1/ Completed under IDA assisted Agricultural and Rural Training Project,Cr. 621-BD, for improving the quality of rural training programs andresearch related to rural development.
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Financing
Function RCS BRDB TCCA Bank
Audit / - - -
Inspection (Act and Rules) _ - - -
Registration / - -
Promotion - / _
Credit: Sanction - - - _/
Disbursement - - I -
Collection - - /
Internal Audit - / -
Supervision: Overall Performance - _/
Credit - J - I
Cooperative laws which the Registrar administers, have not been reviewed
since 1940. These laws have been found in practice to be ineffective indealing with credit defaulters and in regulating mis-managed cooperatives.
Current rules, because of their ambiguity, allow chairmen of defaulting KSSto be represented on the managing committee of a TCCA. Other necessaryimprovements relate to the one year term of elected member which is shortfor good management, secret ballotting, reservation of one position on themanaging committee for a BSS member and creation of a bad debt fund. GOB isundertaking an amendment of the Cooperative Act to overcome these deficien-cies.
Rural Credit
2.23 Since 1976, when the Special Agricultural Credit Program (SACP) waslaunched, Bangladesh has operated a multi-agency approach to provideinstitutional credit to farmers. All six Nationalized Commercial Banks(NCBs), Bangladesh Krishi Bank (BKB) and Bangladesh Shamabaya Bank Ltd.(BSBL) which is the apex bank for the traditional cooperatives, have par-ticipated in it. Bangladesh Bank (BB) has supported SACP by liberalrefinance, on average refinancing 40% of total agricultural lending.However, the TCCA/KSS system was excluded from SACP and received its financefrom Sonali Bank, a nationalized commercial bank, without access torefinance from BB. Total lending for agriculture has increased fromTk 470 M in FY76 to Tk 4,395 M in FY 82. The relative lending operations ofcredit agencies are as follows:
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Lending by Credit Agencies(FY82)
Total (Tk M) % % Refinancecl by BB
BKB /a 2,710 62 47NCBs 1,226 28 26BSBL 186 4 94TCCA/KSS 273 6 0
4,395 100 40
/a Including BKB's diversified lending for agro industry andtea which amounts to nearly 45% of its total lending.
2.24 GOB has placed considerable emphasis on rural credit and as aresult, the number of rural branches of NCBs and BKB has now reached 2,850.Compared to only a third in 1972, these branches now comprise nearlytwo-thirds of all NCB/BKB branches. In addition, credit is available at27,000 'A' and 'B' class KSS. This has contributed to the expansion ofrural credit and deposits. Rural deposits account for 16% of total depositswith the above institutions and rural advances now account for 95% of ruraldeposits compared to only 34% in 1975. All TCCA deposits are kept withSonali Bank. In 1982, these amounted to Tk 245 M or 89% of TCCA/KSS annuallending. About two-thirds of these deposits were thrift savings and sharedeposits; the remaining were accumulated profits and surpluses.
2.25 TCCA/KSS as a group tend to reach smaller farmers and thus to sup-port a much larger number of farming households than indicated by the sys-tem's share of total lending volume:
Loan Size and Borrowers(FY81)
Average Loan Size No. of Borrowers /a (%)(Tk)
BKB 5,360 390,000 (28)NCBs 1,380 680,000 (48)TCCA/KSS 915 330,000 (24)
National 1,910 1,400,000 /a (100)
/a BSBL data is excluded because of its unreliability.
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2.26 Despite the uncertainty and serious morale problem that hasafflicted BRDB staff since 1976, the relative loan recovery performance ofthe TCCA/KSS system is satisfactory. Loan recovery can be measured in twoways; as a loan recovery profile, or as an annual recovery index. Theprofile shows the percentage of recovery at a point in time against loansgiven in each fiscal year. As loans given in a particular year are col-lected over the following years, the profile shows an increasing trendapproaching 100% performance for good recovery and stopping at much below100% for poor performance. Loan recovery profiles for various institutionsare shown below:
Loan Recovery Profile
% Recovery of Principal and InterestLoans as of June 30, 1982 Total
Disbursed in BKB Sonali BSBL TCCA Average LendingS7 (S) (N) (Tk M)
FY77 94 90 98 81 97 88 986FY78 82 83 94 82 95 82 1,570FY79 66 74 93 80 90 79 1,850FY80 50 57 74 73 75 64 2,906FY81 31 36 42 58 49 43 3,622
N: Bank's own "normal" program not refinanced by BB.
S: 100-Crore Agricultural Credit Program. For BKB, 'N' data isbiased by lending to tea plantations and agro industry whichis nearly 45% of total; but data excluding these is not available.
2.27 Annual recovery index measures the actual recovery in a 12 monthperiod of a fiscal year, against total including previous overdues, due forrecovery during the fiscal year. This index has tended to deteriorate forall credit agencies, and GOB is taking action, which would be supportedunder the project, to arrest this trend.
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Annual Recovery Index for Farm Credit
FY80 FY81 FY82
BKB (S) /a 36 32 30NCBs /b 47 38 38BSBL 27 22 22TCCA 58 47 40
/a BKB normal program, because of its bias dueto tea plantation and agro business credit,is not comparable.
/b Excluding TCCA/KSS lending.
2.28 BSBL, the national apex bank of the traditional cooperatives hasoften been suggested as the logical agency for refinancing the TCCA/KSS.However, the Agricultural Credit Review has indicated that major reform ofBSBL will be required to allow it to become so. This is now under con-sideration of GOB but the nature of the changes is such that their implemen-tation will require a gradual approach starting in a limited geographicalarea, possibly a district or subdivision. Hence, the possibility of BSBLbeing used as a channel for TCCA lending under the proposed project isremote.
2.29 Sonali Bank (SB) is the largest commercial bank in Bangladesh withthe most experience in agricultural lending. Its total agricultural lendingwas Tk 740 M in FY82, about 35% through TCCA. SB's total assets increasedfrom Tk 9,000 M to Tk 24,000 M between FY77 and FY81, while deposits grewfrom Tk 4,500 M to Tk 9,500 M over the same period. In 1980-81 it made anet profit of Tk 232 M. While profitable overall, 55% of its newly estab-lished rural branches showed losses. Its accounting system is satisfactoryand bad debt reserves for agriculture (Tk 70 M) fully cover agriculturaloverdues more than 3 years old. SB operates through 1,026 branches (705rural) and has established a rural credit department with 50 professionalstaff at head office, headed by a deputy general manager. Field staffconsist of about 1,000 special agricultural workers supervised by 37agricultural graduates and farm technologists. SB has excellent trainingfacilities, and training in agricultural lending is being added to itstraining programs.
2.30 SB is participating in all IDA and donor assisted projects providingcredit to TCCA. Current TCCA/KSS lending terms and conditions allow someflexibility for delayed recoveries at the TCCA level, but are essentiallystrict at the KSS and member level where 100% repayment of past loans is acondition for further loans. In Bangladesh, with its complex croppingsystems, the inputs of a crop are often required before a farmer can sell
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off and repay the loans for a preceeding crop. Such requirements and cum-bersome loan sanction procedures have tended to restrict the growth inlending volume. In addition, Sonali Bank has little incentive to lend toTCCA since it has been denied the normal refinance available at 6% fromBangladesh Bank under SACP. Furthermore, given that the Sonali Bank branchmanager receives his funds for lending to a TCCA at an internal transferprice of 11% and lends it to the TCCA at 7.5%, the branch manager has noreal incentive to increase lending to TCCA. These and other factors con-straining the credit program of the TCCA have been studied in the GOB/IDAJoint Reviews of IRDP and of Agricultural Credit. The fact that many suchobvious anomalies have been permitted to exist for so long is one of themost important reasons why progress in agricultural development inBangladesh has been less than what it would have been. The changes neededto reform the TCCA/KSS credit system, which would be implemented under thisproject, are discussed in Chapter IV.
2.31 Apart from financial procedures and interest rates, per acre ceil-ings on loans are prescribed by BB for various crops on the basis of recom-mendation of the Ministry of Agriculture. They have left much to be desiredand were stagnant for almost three years. These have recently been revisedto satisfactory levels based on the recommendation of the AgriculturalCredit Review:
Crop Credit Ceilings (Tk/Ac)
Old New
Wheat 550 1,500Boro 800 2,000T. Aman 700 900Aus 650 1,000Potato 1,000 4,000Tobacco 600 1,250
Rural Infrastructure
2.32 GOB's effort to achieve rural uplift is now reflected in thedecentralization of administration to the thana level and a concurrentemphasis on rural roads, rural electrification, development of physicalfacilities at the thana headquarters, and the establishment of rural inputsupply and marketing facilities. Excluding the national and district high-ways there are 60,000 miles of village to market roads, 13,000 miles ofroads connecting union and thana headquarters, and 5,000 miles of ruralfeeder roads, which connect thana HQ and important market places. Over 85%of these roads are in need of major repair and construction. GCIB is nowstrengthening its Rural Works Program (RWP) to improve these roa,ds. A ruralroads project is being prepared for IDA financing. GOB attaches; highpriority to rural electrification and many donor assisted projects including
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one financed by IDA (Cr. 1262-BD), are now under construction in 100 thanas.The Rural Electrification Board (REB) includes a representative of BRDB.REB presently operates some 120,000 rural connections, more than 85% ofwhich are domestic.
2.33 Thana Training and Development Centers (TTDC) are built by GOB forthe use of its officials posted to the thana. A TTDC complex is owned bythe Thana Council and typically consists of a two-storey building with12,000 sft. office space and a training hall, plus 15-25 ac of land toaccommodate housing, demonstration plots, TCCA buildings, workshops, dieselfuel tanks, fertilizer godowns and other similar facilities. All but 40thanas in the country have a TTDC. About 16 key GOB officials are eligibleto be provided with housing in the TTDC when available. Allowing for 260donor financed units now under construction, about 820 additional housingunits are needed to provide essential housing facilities in all thanas asshown below:
Availability of Staff Housing at TTDC
--- % of Thanas with
4 Units 918 Units 7812 Units 3816 Units 6
About 276 TCCA do no yet have an office building but about 135 are to bebuilt under ongoing projects.
Input Supply and Marketing
2.34 Input Supply: Until 1978, the supply of farm inputs to farmers hadbeen the monopoly of BADC which owns, rents and operates 1,124 godownstotalling 360,000 tons capacity and currently markets 850,000 tons of fer-tilizers annually. Under a New Marketing System (NMS) introduced in 1978,BADC has withdrawn from its Thana Sales Centers (TSC) to about 110 primarydistribution points, except in about 120 'remote thanas where for variousreasons, the response from private sector dealers has been poor. NMS nowcovers the entire country. It has been judged to have been successful 1/ inintroducing the private retailing of fertilizers. Prior to the introductionof NMS, BADC had given wholesale distribution rights in their thanas toabout 65 TCCA which either owned or rented godowns. For these TCCA the NMS
1/ A formal joint evaluation by GOB/USAID is presently underway and areport is expected by March 1983.
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has led to the loss of their market share from 55% to 17%. A greater con-cern to GOB is that in these thanas, along with the reduction in TCCA marketshare, total sales of fertilizers have declined by 35% between 1980, whenNMS was extended nationwide in 1982 (Annex 1, Table 5). GOB has now takenaction to remedy this situation by:
(a) asking BADC to continue to provide fertilizer to TCCAs on credit;
(b) renting BADC godowns to TCCAs at those TSC which have been closeddown;
(c) offering fertilizer wholesalership to TCCAs in -remote- thanas; and
(d) encouraging TCCA to extend fertilizer marketing to the KSS levelusing the experience of an FAO assisted fertilizer marketing pilotprogram, which has demonstrated that fertilizer sales increasesignificantly when supported by credit and made available at theKSS.
2.35 Most farm produce is marketed immediately after harvest. Because ofthe need for cash, problems of on-farm storage and need to repay cropproduction loans, most farmers are unable to hold stocks over an extendedperiod. The private sector handles roughly 75-80% of the marketed grainthrough 8,500 primary markets. Farmers have the option to sell t:heir grainto the Ministry of Food (MOF) which operates a price support program pur-chasing foodgrain at about 850 locations. It is estimated that only 20%of MOF procurement of grains comes directly from farmers because farmersfind the MOF purchase centers inaccessible and purchase and payment proce-dures complicated for the typically small amounts (2-10 mds) they have forsale. Since 1979 GOB has been developing a new TCCA/KSS based paddy andrice marketing system. The so called 'Mukta' marketing project is now intrial operation in four TCCAs, under the IDA financed Second FoocdgrainStorage project (Cr. 787-BD). Under the pilot project farmers retceivepayment for their sales at the KSS at the going market price within 24 hoursand later receive two bonuses, one from KSS and the other from TCCA afterfinal sales. Over the last nine marketing seasons, the final price receivedby farmers from TCCA after covering all operating costs has been 26% higherthan MOF official purchase prices.
Support Services
2.36 GOB provides agricultural extension services through the Departmentof Agriculture. An IDA supported Extension and Research Project (Cr.729-BD) has helped establish in five districts of the country a singletraining and visit (T&V) type extension system that replaced six separateservices that operated on a separate crop basis. A follow-up Second Exten-sion and Research Project (Cr. 1215-BD) is helping to extend the system andunification on a nationwide basis. A farmer to extension worker ratio of
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1,000:1 is expected to be achieved by 1987. Training of the extension staffis at 14 Agricultural Extension and Training Institutes (AETIs), four ofwhich were built under IDA financed Agricultural and Rural Training Project(Cr. 621-BD).
C. Special Programs for the Rural Poor
2.37 It has been estimated that if production targets of MTFPP arereached, agriculture can at best absorb only about 20% 1/ of the expectedaddition to the rural labor force expected by 1987. In an attempt toalleviate the problem a number of programs to reach the rural poor and toincrease their incomes have been initiated by GOB. These include Food forWork (FFW) and Rural Works Programs (RWP); programs of Bangladesh Small andCottage Industries Corporation (BSCIC) and Bangladesh Handloom Board (BHB),the work of many Non-Governmental Organizations (NGOs); and special programsunder BRDB.
2.38 Rural Works and Food for Work programs involve an expenditure ofabout US$100 M annually and generate about 90 M person days of employmentand undertake the construction of productive physical infrastructure such asflood control embankments, rural roads and drainage channels. The qualityof works is generally not good, especially under FFW which is often treatedas a welfare program. RWP operates through the Thana Plan Book, whichcontains a phased 10 year plan for high priority infrastructure developmentand include detailed maps showing location of existing structures, floodinglevels, drainage flows and proposed developments. Virtually all thanas havea Plan Book but many have not been updated since they were first dlrawn up inthe sixties.
2.39 The Bangladesh Small and Cottage Industries Corporation (]3SCIC)helps develop entrepreneurship in rural industries such as carpet weaving,cottage industries and workshops. For this purpose BSCIC has established 20industrial estates, limited thana level extension services, and a trainingcenter in Dhaka. It has completed special rural industry surveys in threedistricts. A BSCIC-s subsidiary, the Bangladesh Handicraft Marketing Cor-poration (BHMC) undertakes domestic as well as export sales of handicrafts.The Bangladesh Handloom Board (BHB) promotes the local handloom industry byproviding training to a member of a loom owning family, and operat:ing a yarndistribution system. At 17 special weavers' centers, it now provides inputand marketing support to about 100,000 weavers.
1/ This compares with the SFYP target to absorb 39% of the incrementallabor force in crop production, 23% in non-crop agriculture, 12% insmall scale rural industries, and the remaining 26% in other sectors.
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2.40 Non-Governmental Organization (NGO) have been assisting the ruralpoor of Bangladesh since independence. Small but successful programs havebeen carried out by Bangladesh Rural Advancement Committee (BRAC),Proshikha, Grameen Bank, and Small Farmers Development Project (SEDP) ofFAO. Their activities are detailed in Annex 1, Tables 12 and 13, andsalient facts are shown below:
Pilot Programs for Rural Poor
BRAC Proshikha SFDP GBP BRDB
Estimated number ofbeneficiaries 16,000 10,000 1,700 25,000 15,000
Credit volume up toJune 1982 (Tk M) 10.5 2.3 16.4 68 20.8
Loan recovery againsttotal due (%) /a 94 80 81 99 /b 84
Village covered N/A 950 46 440 3,500
/a Since inception of each program; thus figure is biased towards older ones/b GBP policy allows loans to remain current provided some repayments,
even if partial, are being made and thus its recovery is overstated.
The NGOs have focussed their credit program on landless laborers, marginalfarmers and disadvantaged women with simple activities such as beef fatten-ing (20%); rickshaw pulling (11%); paddy husking (22%); oil milling (4%);weaving (6%); pond fisheries (2%), irrigation assets (2%); and others (33%).About 37% of the beneficiaries are women. NGO's programs have notencouraged formal grouping of beneficiaries but informal groups of peopleinvolved in similar activities are established and members are encouraged tosave systematically at weekly meetings. NGOs get no financial support fromGOB, except in the case of GBP for which Bangladesh Bank and NCBs bear thecost of promotion, motivation and loan supervision. In FY82 these amountedto roughly Tk 4 M or 20% of loans outstanding.
2.41 BRDB activities to assist the rural poor are also of recent origineven though in the sixties a Special Cooperative Federation (SCF) was set upin Comilla TCCA to cater to the landless and other occupational groups. TheSCF supported 24 agro-based as well as non-farm activities for these groupsand about 100 primary societies with a total membership of about 6,345 arestill operating under the SCF. BRDB started its programs to assist therural poor only in 1977. By 1982, it had established about 2,500 specialcooperatives for the landless with a total membership of 69,000. BRDB alsostarted in 1979 a special program for promoting rural women's cooperativesunder IDA supported Population Planning and Health Project (Cr. 921-BD). So
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far about 100 such cooperatives have been financed and a recent survey hasshown that 15% of their members depend upon wage employment as the primarysource of income. Activities supported under BRDB programs are similar tothose discussed earlier. Major problems faced in the implementation ofthese programs of BRDB have been delays in the registration of newsocieties, delays in the flow of credit, training and extension support anda lack of management focus in BRDB to implement a more extensive program.
2.42 For the design of successful programs for the rural poor some usefullessons have been learnt from the pilot projects undertaken so far. Theseare that:
(a) a group approach which brings together the rural poor with similarsocio-economic background into separately organized productive unitsis necessary for dealing with the established rural power structureand for ensuring adequate supply of inputs and services;
(b) there exist a number of traditional rural occupations which canprovide income earning opportunities for which the necessary skillsare already available with potential beneficiaries;
(c) availability of institutional credit at unsubsidized rates is essen-tial for the rural poor to undertake productive activities and highrepayment rates can be achieved for credit given to landless groups,under adequate technical guidance;
(d) training for the catalysts as well as group leaders is essentialto give them the necessary skills to deal with the rural poor, andbuild up their confidence;
(e) design of such a program needs to be light on planning and strong onevaluation to allow innovation and adjustments based on experienceof implementation; and that the beneficiaries need to have con-siderable say in the choice of activities to be undertaken; and
(f) such a program can make effective contribution to help landlesswomen, who have generally been left out of the development process.
D. IDA Operations in Agriculture and Rural Development
2.43 Since independence in 1971 until March 1983, the Bank has assistedagricultural development in Bangladesh with 20 credits for projects in theagricultural sector and two fertilizer import credits. Total lending foragriculture over this period amounts to about US$450 M, or 20% of total IDAlending to Bangladesh.
2.44 The main thrust of GOB's SFYP, and in particular of the MTFPP, isstrongly endorsed by IDA. This is reflected in the composition of IDA's
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lending program which provides strong support for achieving the objectivesof MTFPP, particularly in the areas of irrigation and drainage and floodcontrol. These projects are:
(a) Low Lift Pump Project (Cr. 990-BD);(b) Hand Tubewells Project (Cr. 1140-BD);(c) Agricultural Credit Project (Cr. 1147-BD);(d) Deep Tubewells II Project (Cr. 1287-BD);(e) Drainage and Flood Control I Project (Cr. 864-BD);(f) Small Scale Drainage and Flood Control Project (Cr.955-BD); and(g) Drainage and Flood Control II Project (Cr. 1194-BD).
Preparation is underway on a Drainage and Flood Control III Project and aWDB Sector Credit.
2.45 As recognized in GOB's overall strategy, rural institutions must bedeveloped to enable Bangladesh's predominantly small farmers and landlesspeasants to be provided with inputs, credit and income generating oppor-tunities and to be organized into groups for the effective utilization ofirrigation equipment. The nearly complete RD-I Project 1/ and this proposedsecond project are designed to support this institutional developmenteffort.
2.46 The First Rural Development Project, Cr. 631-BD (RD-I) was financedin 1976 to test the replicability of the Comilla's TCCA/KSS approach inseven selected thanas in two districts in northern Bangladesh. After anencouraging start'on the training of field staff, and reorganization ofexisting KSS into the Comilla type TCCA/KSS by rescheduling of old debts ofthese KSS and other preparatory work, the supply of inputs like irrigationequipment, fertilizers and technical advice to the project's TCCA ran intoserious problems. For example, procurement of minor irrigation equipmentwas delayed for three years due to BADC's inability to follow the Bank'sprocurement guidelines. Other inputs, which were not financed directlyunder the project, were also in short supply and priority was not given byBADC to the project area. As a result, the only service available tofarmers for the first three years under RD-I was short term (ST) creditwhich was of use basically only to larger farmers who already had irrigationfacilities. Thus, KSS membership did not expand in the project area.Morale of field staff declined rapidly, along with their creditability withthe newly established KSS. Resentment built up further since farmers in theproject area, while getting no services from the project, had to pay inter-est at 17.5% for ST credit, while GOB's SACP, operation of which wasexcluded from the project area, charged interest at only 12%. Thus, exceptfor the project's rural works program, there was little physical evidence of
1/ The project is expected to be complete by June 1983.
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the usefulness of the project and the TCCA/KSS concept came to be ques-tioned. Project implementation began to pick up, however, in 1980 when GOBand IDA took a number of steps:
(a) a core program of minor irrigation, TCCA/KSS management, credit,completion of rural works and fisheries was agreed for concentratedattention;
(b) an Executive Director was appointed after a gap of 18 months andRD-I finances were delinked from other BRDB activities;
(c) monthly thana action plans for the core program were prepared andmonitored during intensive field supervision by the Bank's ResidentMission to Bangladesh (RMB);
(d) a financial incentive system for TCCA staff, based on a quarterlyevaluation of TCCA/KSS, was introduced;
(e) a system for classifying KSS according to performance criteria, andsupplying the limited minor irrigation equipment and other servicesto the best KSS, was introduced; and
(f) procurement of STWs and LLPs, following a farmer choice system, wasintroduced.
2.47 By early 1981, the project's performance had improved noticeably.Disbursements of credit to eligible KSS and farmers increased to Tk 13 Mfrom Tk 2 M in FY79, while the number of borrowers owning less than twoacres increased to 76% from 57% in 1978. Credit recovery of 85% againstdemand was achieved. Two of the seven TCCAs achieved a level of accumulatedsavings that exceeded their annual ST loans; 110 landless fishery coopera-tives were organized and made operational; and a pilot project for improvingutilization of DTWs was successfully undertaken. Sale of 5,000 HTWs, allavailable STWs (730), and DTWs (90) was completed. Training programs forKSS managers and TCCA staff were revitalized and the backlogs of audits andelections for the managing committee for all A and B' class KSS werecleared. By the original closing date (June 1982), the US$16 M project wasbasically complete at a cost saving of US$5 M, a part of which has sincebeen allocated to finance 250 DTWs for the 1,000 KSS located in MymensinghDistrict, where it was found during implementation, that the plan to use STWwas not feasible. The current status of RD-I activities is summarized inTable 1, Annex 1. Problems of audit backlogs and delays in registration oflandless BSS have surfaced. In addition, in Mymensingh, where irrigationdevelopment has been slow due to delays in procurement of DTW, performanceof KSS has not been as good as in Bogra.
2.48 Important lessons have been learnt from RD-I. The first orLe is thatif the principal objective is to create an institution to provide farmers,
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and in particular small farmers, with the means to adopt new technology andundertake efficient irrigation development, it is counter productive topackage investments which are not directly relevant to the basic program, inthis case, establishing viable TCCA/KSS. Attempts to implement a wide rangeof activities divert the attention of project staff from the priority taskof institutional development. The second unsatisfactory aspect of RD-Idesign, which appears common to similar projects financed by other donors isthe concentration on a relatively few thanas. This is unsatisfactory fortwo reasons, because operation of two programs -- project and nonproject --is confusing to district officials because of the administrative problemsinvolved; and further confining an intensive development program to a fewfavored thanas creates local tensions which in turn adversely affectimplementation. Not least, other GOB departments expected to provide serv-ices to projects, in these cases directed by BRDB, seem to have found itdifficult to equate the priority they had been expected to provide suchareas with their responsibilities to provide such services nationwide.Finally, it is evident from the experience of RD-I that institutionaldevelopment cannot take place in the absence of an assured supply of inputsand services to farmers. The strong initial farmer response to RD-I turnedinto antagonism as BADC failed to complete the procurement of STWs underICB. Only when the farmer choice system (para 4.04) was introduced couldthe procurement be completed and the institutional development effortsrevived. Even now, the poor performance of TCCA/KSS in the District ofMymensingh is directly attributable to the failure of BADC to complete theprocurement of DTWs, which alone are feasible for the TCCA located in thesethanas. The proposed Second Rural Development Project appraised in thisreport takes into account these experiences.
III. THE PROJECT
A. Project Objectives
3.01 The primary objective of the Second Rural Development Project(RD-II) would be to strengthen and expand the TCCA/KSS cooperative systemand improve the capability and performance of its promotional agency BRDB.The project would streamline procedures for (a) the purchase by TCCA ofirrigation equipment, and (b) for the distribution of credit by Sornali Bankto the TCCA. Efforts would also be made to diversify the activities of alimited number of selected TCCA into crop and input marketing. Finally, theproject would assist BRDB in providing a special package of inputs throughTCCA for members, including women, of the special cooperatives (BittaheenSamabaya Samity - BSS) of the rural poor. About 90 new TCCA, 8,000 new KSSand 3,000 new BSS 1/ are expected to be formed during the project's four
1/ The term BSS' includes the separate cooperatives for women - or MSS.
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year implementation period. The 210 existing TCCA would focus their atten-tion on the 15,000 A' and B' class KSS, but attempt also to upgrade the7,000 KSS which have yet to reach these standards.
B. Project Area
3.02 With the exceptions set out below, all TCCA would be eligible toparticipate in the project. Due to ongoing and proposed projects which areassisting TCCA in the districts of Kushtia, Pabna and Raishahi (the ADBfinanced Northwest Development Project); Jessore and Faridpur (the IFADfinanced Southwest Rural Development Project); Noakhali (the Danish Govern-ment financed Noakhali Integrated Rural Development Project); and the Chit-tagong Hill Tracts (the ADB financed Chittagong Hill Tracts DevelopmentProject), it is anticipated that TCCA in the seven districts covered bythese projects would not draw on the inputs and services made availableunder RD-II. However, it is expected that the institutional arrangementsemployed in the seven districts would be similar to those used under RD-IIwhich themselves are consistent with the recommendations of the JoiLnt Reviewof IRDP. Because of BRDB-s currently limited implementation capacity theproposed rural poor and marketing components would be initially concentratedin six districts. Eligibility criteria for the participation of individualTCCA in project activities would take account of their needs, managementcapacity and availability of complementary infrastructure and otherfacilities. Assurances have been obtained that these criteria (Schedule B)would be followed. Other BRDB programs should not be affected adversely byRD-II; on the contrary, the strengthening of BRDB and the TCCA under theproject should facilitate the implementation of a number of project:s inwhich BRDB is involved, including some financed by IDA.
C. Project Components
3.03 The principal components of the project would be:
(a) provision of medium term (MT) credit to TCCA/KSS members for thepurchase of about 30,000 STW, 2,000 LLP, 2,300 tool kits, a,nd 2,300bicycles;
(b) expansion of an ongoing Irrigation Management Program (IMP) to coverabout 4,400 DTW and 1,100 LLP/STW clusters; 1/
(c) provision of medium term (MT) credit to about 3,000 TCCA/BSS, undera Rural Poor Program, for productive activities such as beef fatten-ing, weaving, handicrafts, and pond fisheries;
1/ Where STW or LLP are employed in batteries and thus command a substan-tial potentially irrigable area.
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(d) provision of short term (ST) credit to TCCA/KSS members for cropproduction;
(e) implementation of a TCCA Crop and Input Marketing Program in alimited number of TCCA;
(f) construction of basic thana facilities, the Thana Training andDevelopment Center (TTDC), at 20 thanas where these have yet to beprovided by GOB;
(g) construction of essential TCCA office facilities, at 100 thanas andthe residential accommodation required for the staff of GOB agencieswho would be essential for project activities in these thanas;
(h) strengthening BRDB and the audit capacity of the Registrar ofCooperatives by the appointment of additional staff and the provi-sion of vehicles and office equipment;
Mi) training of BRDB staff, Cooperative Department auditors,TCCA/KSS/BSS staff and members, and thana irrigation teams in thewide range of activities essential to the success of the project.This component would include the construction of five new ThanaTraining Units and additional classrooms and staff accommodation atthe Rural Development Training Institute (RDTI) at Sylhet; and
(j) technical assistance required for the Rural Poor Program, marketing,training, audit and accounts, and monitoring and evaluation - atotal of 240 man months.
D. Detailed Features
3.04 Purchase of STW and LLP (Annex 3, Table 2): National demand of theTCCA/KSS system for STW is estimated conservatively at 15,000 per annum andthat for LLPs at 1,500. The project would finance the purchase by eligibleKSS on MT credit provided by TCCA, of 30,000 STW and 3,000 one-cusec LLPS.Installed units which would be mostly diesel engine driven would cost aboutTk 33,000 for a STW and Tk 27,000 for a LLP. The balance of the TCCA demandfor STW would be met from sources such as the IDA financed AgriculturalCredit Project (Cr. 1147-BD) and projects financed by other sources. TheTCCA will also require HTW and DTW, but this demand should be met fully byongoing IDA and other donor financed operations. By 1987, 90% of A and'B class KSS are expected to have some irrigation facilities compared toonly 45% now. Project STW and LLP together with spare parts equivalent toat least 5% of the value of the engines would be imported, retailed,installed and serviced by private dealers. TCCA would however have theoption to purchase STWs in bulk from dealers and install these using privatedrilling contractors. Credit would also be made available to private
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mechanics sponsored by TCCA, for purchase of simple toolboxes and bicycles.Based on irrigation equipment likely to be in operation, it is estimatedthat 2,300 such private mechanics would be required. These mechanics wouldoperate as mobile private repairmen and would be suitably trained (para3.23). Lending terms and conditions are specified in Schedule A. For thisMT credit component to function smoothly, a number of improvements would berequired in the credit mechanism used by BB, Sonali BAnk and TCCA. Theseare discussed in detail in Schedule C.
Irrigation Management Program (IMP) (Annex 3, Tables 3 and 4)
3.05 The project would meet the cost of the expansion of IMP from itspresent coverage of 430 DTW/LLP units (para 2.13) to about 5,500 DTW andSTW/LLP clusters. The expansion would require (a) strengthening of theirrigation faculty at the Rural Development Academy, Bogra; (b) training ofthana level teams; and (c) training of irrigation group leaders.
3.06 About 300 thana irrigation teams, each consisting of a BADC SectionOfficer, TCCA Deputy Project Officer, Thana Extension Officer and ThanaOverseer would be trained under the project at RDA, Bogra. Funds would beprovided under this component to complete the furnishing of RDA traineehostel. The FAO/UNDP's command area development team at Bogra would con-tinue as now to assist RDA's irrigation management faculty in this work.It is expected that all positions already approved for the irrigationfaculty at RDA would be filled by December 1983. Details of the trainingprogram are discussed in para 3.22.
3.07 DTW schemes into which IMP has already been introduced have beenstudies in detail by the Bangladesh Agricultural University. These studieshave shown that further improvements in the efficiency of irrigation can beachieved on all existing IMP units. Generally, improved compaction ofearthen irrigation channels can result in decline of heavy seepage losses,but special canal lining may also be justified on lighter soils or where thecommand area has a topography which allows only poor embankment stability.An allocation of US$0.5 M would be provided (as MT credit) under the projectfor KSS who wish to undertake improved canal construction or lining.
3.08 Although under IMP the specific responsibilities of the thana staffof DEM, BADC and BRDB have now been clearly defined, GOB is yet to act onthe recommendation of the Minor Irrigation Review, to formally establishthese responsibilities for the overall development of DTW/LLP command areas.GOB has constituted a National Committee to consider proposals covering theroles of key agencies and would formally establish their responsibilities byOctober 31, 1983.
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Rural Poor Program (Annex 3, Tables 6, 7, and 8)
3.09 The project would provide MT credit for productive economic.activities to rural poor organized as BSS. Because of BRDB-s experience inrural poor programs is limited, this project component would be small inscale and flexible in design to allow modification as experience dictates.
3.10 The rural poor component would be implemented to start with in thesix districts of Bogra, Mymensingh, Jamalpur, Khulna, Dinajpur and Barisalin which there are no similar activities ongoing or planned. Socio-economicdata of these six districts are in Annex 1, Table 13. Four of the districtshave a landless population above the national average while in the other twothis is equal to the national average. Only about 3% of the 25,000 villagesin these six districts have BSS, mostly in Bogra and Mymensingh where RD-Iis located. Their membership is about 21,000. Of the 2,900 new BittaheenSamabaya Samities (BSSs) to be formed under the project, about 400 would beexclusively for women. Membership of the BSS would be limited as now tothose owning less than 0.5 ac of land and earning their basic livelihoodfrom casual labor. By year 4, BSS membership is expected to reach about120,000 men and 9,000 women.
3.11 The major activities to be supported under the Rural Poor Programare discussed in detail in Annex 3, Appendix 1. Pond fisheries wouldinvolve the formation of BSS around ponds leased from GOB, excavation of thederelict pond using funds in the form of MT credit from the project, pur-chase of fish fries from GOB operated hatcheries or private sources andmarketing of the catch in local markets. Beef fattening would involvepurchase under credit of young calves, grazing and some supplement feeding,and sale of mature cattle. Credit would also be available for purchase ofcows for milk production. A cattle insurance program has been introduced byBRDB with the national insurance company and this would operate for allproject financed animals. Credit for weaving would be for purchase of semiautomatic looms and for working capital. BSS would link up with BHB's yarndistribution centers for input supply and marketing support. Rickshawswould be financed for members of BSS and a self insurance scheme within eachTCCA would cover the financial risk in case the rickshaw gets seriouslydamaged. Cane and bamboo work would be promoted by financing credit forworking capital which is the major constraint. Pottery, a traditionalactivity, would be supported under the project by funds for the purchase ofimproved kilns and for working capital. BSCIC would provide extension andtraining support to the BSS undertaking pottery activity. Other activities
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like carpentry, oil milling or setting up biogas units 1/ would be includedshould there be a demand for these.
3.12 The number of borrowers for various activities is roughly estimatedas follows:
Number of BorrowersActivities Year 1 Year 2 Year 3 Year 4 Total
Pond Fisheries 20 80 100 100 300Beef Fattening 3,000 9,000 12,500 15,000 39,500Livestock for Milk Production 400 600 1,500 1,500 4,000Weaving 300 600 800 1,500 3,200Rickshaw Pulling 350 850 850 1,000 3,050Cane and Bamboo Work 200 400 400 500 1,500Pottery 60 100 200 200 560Others to be identified 250 350 800 1,000 2,400
Total 4,580 11,980 17,150 20,800 54,510
Incremental ST Credit for Crop Production
3.13 Essential to the success of the TCCA/KSS system is an adequate andassured supply of short term credit for crop production. Failure to providesuch a supply (para 2.23) has been a serious constraint to TCCA/KSS develop-ment in the past. With the expanding use of irrigation equipment by KSS andthe increasing efficiency of the use of this equipment under IMP, the demandfor ST credit will increase significantly. This demand will be enhanced bythe expected rise in prices of agricultural inputs and the increase in peracre crop credit ceilings. For a typical 'A' and 'B' class KSS the annualflow of ST credit is expected to increase from a FY82 figure of Tk 11,000 toTk 24,400 in FY83 as a result of higher ceilings; and then grow to Tk 42,000over the following four years. KSS participating in IMP are expected to useTk 80,600 of ST credit annually. It is expected that the number of 'A' and'B' class KSS with irrigation facilities will increase from 45% to 90% by1987; and about 60% of 'A' and 'B' class KSS would be eligible to borrow asnow. The total flow of ST credit through the TCCAs in the 13 districts ofthe project would increase from an estimated Tk 390 M in FY83 to Tk 2,042 Min FY87. The incremental requirement under the project is estimated atTk 1,526 M (Annex 2, Table 5). Sonali Bank would be unable to meet thisdemand from its own internal resources because of demands from other GOBprograms, and BB would provide 90% refinance for this program (para 4.03).
1/ Bangladesh Council for Scientific and Industrial Research (BCSIR) isdeveloping with BRDB a program to popularize biogas unit in rural areasthrough cooperatives.
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Marketing (Annex 3, Table 9)
3.14 The project would provide MT credit to TCCA for the construction ofabout 10 produce marketing godowns and about 15 fertilizer godowns each of200 tons capacity, and of an existing low-cost design. A set of moisturetesting and weighing equipment would be allocated for the 20 TCCAs expectedto participate in the crop marketing program, about half of which now have agodown. The project's marketing activities would be built on the experienceof ongoing pilot projects (para 2.35). The ongoing FAO/UNDP fertilizermarketing project would provide training and logistic support to the TCCAthat would take up fertilizer marketing. The FAO/UNDP project is due toclose on June 30, 1983, and GOB has sought an extension of the project.
Thana Civil Works (Annex 3, Table 14)
3.15 TTDCs have yet to be built or completed at about 20 thanas in the 13districts of the project. These would be built under the project, usingexisting standard designs (para 2.33).
3.16 TCCA offices with a gross space of 2,750 sq. ft. each would be builtfor about 100 TCCA. They would be built to standard designs used in thepast and include a training room of about 575 sq. ft. To accommodate thekey TCCA staff (para 2.19) 200 twin quarters would also be built under theproject. Both the TCCA office and staff quarters would be built within theTTDC complex where land would be readily available.
Strengthening of BRDB (Annex 3, Table 15)
3.17 All 13 BRDB district offices (para 2.19) would be strengthened withthe addition of a Deputy Project Director (DPD). In addition, for all TCCAstaking up the IMP or rural poor programs, an additional Deputy ProjectOfficer would be appointed for each of the programs. For the 90 new TCCAexpected to be established under the project, BRDB would recruit TPOs, DPOsand accountants. The cost of these incremental staff (13 DPDs, 80 TPOs, 400DPOs, and 90 accountants) would be included in the project (Annex 3,Table 15). TCCA which decide to expand their marketing operations or diver-sify into other activities would need additional staff and would recruitthese on their own account. Vehicles provided under the project for BRDBdistrict offices would include 13 audio visual vans, 16 jeeps, about 790motorcycles and 6,100 bicycles. These estimates of replacement needs arebased on an agewise inventory of BRDB vehicles. Motorcycles and bicycleswould be sold to BRDB and TCCA staff on a hire-purchase basis following thepattern developed under the Extension and Research Project II (Credit1215-BD). Essential furniture and equipment for both new and existing TCCAwould be provided, including about 200 duplicating machines and 400typewriters.
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Strengthening of RCS Audit (Annex 3, Tables 12 and 13)
3.18 The project would finance the setting up, under the RCS, of a wingexclusively responsible for auditing the accounts of TCCA/KSS/BSS. FormalGOB approval for the establishment of this separate section, with staffinglevels satisfactory to IDA would be a condition of effectiveness. Incremen-tal staff totalling 390 (1 Joint Registrar, 15 Deputy Registrars, 44 Assis-tant Registrars and 330 Audit Inspectors) would be provided. In total, itis estimated that by year 4 about 650 audit inspectors would be workingexclusively on the audit of KSS/BSS. Vehicles (15 jeeps, 42 motorcycles and650 bicycles) would be provided for this division as would office equipment.The project would also provide funds for RCS to employ private firms toundertake audit of TCCA. For RCS Comilla Cooperative College where theaudit staff are trained (para 3.28), the project would provide one minibusand other essential equipment.
Training (Annex 2, Tables 2, 3 and 4; Annex 3, Tables 4, 5, 7, 10, li and 13)
3.19 Project training programs would focus on cooperative management,accounts, credit procedures, irrigation management, operations of tlhe ruralpoor program, crop, fertilizer marketing and audit. Details of the topicsto be covered under various training programs are in the project file (Annex7). The volume of the project's total training program (Annex 2, Table 2)is estimated at 3.2 M trainee days, almost 85% of this is at farmer,tKSSlevel.
3.20 Project training would be conducted at the locations shown below:
Institution Type of Trainee Type of Training
RDTI, Sylhet BRDB Staff Pre-service and in-service training incooperative management, accounting,credit procedures and marketing.
RDA, Bogra BRDB Staff; Thana Special innovative programs, like IMPIrrigation Teams and Rural Poor.
TTUs (17) TCCA Staff, KSS In-service training in TCCA activities,Managers credit procedures, loan supervision, BSS
promotion.
TTDC (300) Farmers and KSS Cooperative management, credit procedures,Managers IMP, marketing.
CCC Audit Audit training.
3.21 The project would provide classroom buildings (16,500 sq. ft.), 18staff quarters (of 550 sq. ft. each) and other essential works to complete
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the facilities at RDTI. Two vehicles, training equipment and funds forbooks at the RDTI library would be included. To ensure that financialconstraints do not hold back the execution of essential BRDB staff training,the project would include the incremental operating costs of RDTI. Expectedutilization of RDTI facilities for RD-II purposes would be about 80%.
3.22 For IMP (Annex 3, Table 4), (para 3.06), RDA, Bogra would organizeannually 10 courses of 4-week duration. An IMP training manual has beenprepared; this is based on training materials already produced by RDA andBRDB's training materials production unit. It is expected that a contractsatisfactory to IDA between BRDB and RDA for the latter to undertake the IMPtraining would be executed by December 1983.
3.23 Training of irrigation group leaders would be organized by theconcerned TCCA with costs funded under the project. Participants wouldconsist of one KSS manager, six irrigation block leaders and the group'spump operator. Each group would be given assistance in improved groupmanagement, budgeting, credit procedures, and water sharing. Training ofprivate mechanics (Annex 3, Table 5) would be done by BADC and privatedealers of engines on contract with BRDB. A special 8-month trainingprogram in three phases would be undertaken (see project file for details).GOB would prepare for IDA review a redraft of the agreement, which wasreviewed during negotiations, between BRDB and BADC for the latter's assis-tance for this component by October 31, 1983.
3.24 Rural poor training (Annex 3, Table 7) would consist of training for(a) TCCA promotional staff; (b) BSS chairpersons and managers; and (c) skilltraining where necessary. Training of TCCA staff would focus on how tomotivate the disadvantaged people to form BSS, create an attitude of mutualtrust and build up an absorption capacity for project activities. Aquarterly refresher course would be organized, at which cooperative leaders,participants and BRDB staff would also review program implementation. Train-ing courses for this program would be designed by BRDB's Director for theRural Poor Program. Special training for skill development in cottageindustry and handlooms would be undertaken by institutions like BSCIC, BHBand Bangladesh Sericulture Board as well as by willing NGOs as appropriateunder contract with BRDB. BRDB has identified the assistance needed fromGOB's technical agencies as well as NGOs willing to work with BRDB in thisprogram. BRDB would, based on the draft reviewed during negotiations, enterinto a contract with BSCIC for the latter's assistance for this compDnent.A redraft of the agreement would be submitted for IDA review by October 31,1983. Training needs for traditional activities like beef fattening, live-stock and pond fisheries would be carried out through normal GOB extensionservices.
3.25 In-service training of TCCA staff (Annex 3, Table 11) would be donein the field using the 12 Thana Training Units (TTUs) built under Cr.621-BD. These units have residential and classroom facilities for 30, and
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even though all are not yet complete, they have been useful in organizingthe IMP and Mukta Training in the RD-I thanas. Once completed in June 1983,they would be made fully operational under the project by the appointment ofa training officer and three essential supporting staff at each TTU. Fiveadditional TTUs would be built to the same design to ensure that each dis-trict office has at least one such facility at its command. Training wouldfocus on improving the skills of TCCA staff for undertaking TCCA activities.New training programs with supporting training materials for these TTUswould be designed by BRDB. Incremental operating costs estimated atTk 25,000 per unit annually and allowances for trainees would be included.Utilization of TTU facilities is expected to be at least 75%.
3.26 Training of KSS managers and members (Annex 3, Table 11) would beundertaken at the thana using the training hall of the TTDC or the TlCCAs'own training room. Training would be in group sizes not exceeding 30 andduration would vary from five days for new KSS manager's orientation courseto 3 days for a new Chairman. KSS managers during their weekly visist tothe TCCA to deposit savings, collect loans and settle membership problems,would participate in a 2-hour training sessions. At this session KSSmanagers would be trained in maintaining accounts and preparing creditapplications.
3.27 Training of -model' farmers - a farmer selected for a period of oneyear by the KSS to bring to the village new ideas and techniques - would berestructured. Fortnightly training would be replaced by three days oftraining in four sessions before the start of each crop season. DEM staffwould assist with this training and 'model' farmers from -A- class KSS wouldbe among the 'contact' farmers visited by the extension staff.
3.28 Training of RCS staff (Annex 3, Table 13) who audit the TCCA/KSS/BSSwould be undertaken at CCC which would design and execute special 60-daycourses for this purpose. The cost of this training would be included inthe project. The new audit manual (draft is in the project file) would beused for training purposes.
3.29 Finally, the recently established BRDB's training materials produc-tion unit, which is assisted by a UK grant for equipment and technicalassistance, would be provided with funds under the project for producingtraining material relevant to BRDB's program in the form of posters, book-lets, manuals, slides and short training films (Annex 3, Table 10).
Technical Assistance (Annex 3, Table 16)
3.30 The project is estimated to require 240 man months of technicalassistance which would be funded by the Canadian International DevelopmentAgency (CIDA), Overseas Development Administration (ODA), and UNDP. Outlineterms of reference for the various specialist assistance are in the projectfile (Annex 7). Estimated cost per man month is $12,000 for foreign
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exports. It is expected that Bangladeshi expertise would be available forabout 80 man months of the total, thus bringing the average cost to aboutUS$8,500. Specialists would work with BRDB Directors according to theirarea of activity, except for the specialist on audit who would spend a partof his time with RCS. Technical assistance would be needed for:
(a) Marketing (36 man months): The technical assistance needs of theproject-s fertilizer marketing activities would be provided by anextension of the ongoing FAO/UNDP fertilizer project. However, cropmarketing program would require assistance for developing softwarepackage for the marketing of other crops and for further marketdevelopment for the Mukta program.
(b) Training (48 man months): The project would provide two types ofspecialist assistance, expertise in training methodology and intraining planning. The expert on training methodology would con-centrate on building up the capability of RDTI and TTUs while theone on training planning would focus on BRDB staff training anddevelopment needs.
(c) Rural Poor Program (60 man months): Technical assistance would berequired for the preparation of special surveys for districts inwhich these activities would be implemented. First, in each dis-trict an inventory would be made of potentially gainful employmentopportunities, an assessment of existing capabilities, potentialityand identification of the skill training and special requirementsfor services would be made (30 man months). Secondly, the prepara-tion of detailed syllabus and teaching aids for training BRDB/TCCAstaff, BSS leaders and members (12 man months). Thirdly, periodicfield review of the project activities to identify implementationconstraints and needed modifications in the project approach (18 manmonths).
(d) Evaluation (72 man months): Technical assistance would be requiredfor both ex-post evaluation of the project at completion, and formid term and special studies to monitor and evaluate selectedaspects of project implementation.
(e) Audit (24 man months): Technical assistance would be necessary forupdating the TCCA accounts manual and the RCS audit manual as wellas for designing training program at RDTI for TCCA accountants andat the Cooperative College Comilla for RCS auditors.
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IV. COST ESTIMATES, FINANCING AND CREDIT ARRANGEMENTS
A. Project Costs and Financing
4.01 Total project costs are estimated at US$177 M (Tk 4,070 M) includingduties and taxes estimated at US$8.4 M (Tk 192 M). The foreign exchangecomponent is estimated at US$76.1 M (Tk 1,750 M), representing 43% of totalproject costs. Base cost estimates are expressed in mid-1983 prices.Physical contingencies and contingencies included for expected price escala-tion over the four year project period amount to 25% of total base costs.Physical contingencies have been estimated at 10% of civil works costs, and5% of all other costs, except minor irrigation equipment and incrementalST credit for which no physical contingencies have been provided. Pricecontingencies are based on expected price inflation: for foreign costs 7.5%annually, and for local costs 13% in 1983184, 11% in 1984/85 and 10%annually for 1985/86 through 1986/87. Details of cost estimates are inAnnex 3, and are summarized below:
% ofLocal FEC Total Local FEC Total Total....... (Tk M) ....... ...... (US$ M) ....
Minor Irrigation:Equipment: STW/LLP 425.5 691.8 1117.3 18.50 30.08 48.58 27Private Mechanics 34.5 11.6 46.1 1.50 0.51 2.01 1IMP Expansion 51.1 1.3 52.4 2.22 0.06 2.28 1
Rural Poor Program 227.6 21.5 249.1 9.90 0.93 10.83 6Incremental ST Credit 575.1 489.9 1065.0 25.00 21.30 46.30 26Marketing Program 6.4 1.5 7.9 0.28 0.06 0.34 1Thana Civil Works 157.9 78.8 236.7 6.87 3.42 10.29 6Strengthening of BRDB 80.7 26.4 107.1 3.51 1.15 4.66 3Strengthening of Audit 28.9 5.4 34.3 1.25 0.24 1.49 1Institutional Training 139.0 16.0 155.0 6.04 0.70 6.74 4Technical Assistance 1.6 46.4 48.0 0.07 2.02 2.09 1
Base Cost 1728.3 1390.6 3118.9 75.14 60.47 135.61 77Physical Contingencies 37.6 13.8 51.4 1.64 0.60 2.24 1Price Contingencies 553.0 346.2 899.2 24.04 15.04 39.08 22
Total Project Cost 2318.9 1750.6 4069.5 100.82 76.11 176.93 100
4.02 The project would be financed by several foreign and local sourcesas summarized in the following table:
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Financing Plan(US$ M)
Benef- Sonali BB orIDA iciary Bank GOB CIDA UNDP ODA Total
Minor Irrigation Program 45.24 5.95 5.37 4.74 2.20 - 63.50Rural Poor Program - - - - 14.40 - 14.40Incremental ST Credit 41.81 - 6.66 17.86 - - 66.33Marketing Program 0.35 0.04 0.03 0.03 - - 0.45Thana Civil Works 9.75 - - 3.65 - - 13.40Strengthening of BRDB 2.85 - - 2.80 - - 5.65Strengthening of Audit - - - 0.30 - - 1.55 1.85
Cooperative Training - - - 0.22 - - 8.68 8.90
Technical Assistance - - - - 0.59 1.61 0.25 2.45
Total 100.00 5.99 12.06 29.60 17.19 1.61 10.48 176.93
The proposed IDA credit of US$100 M would cover 59% of total project costnet of duties and taxes (US$168.6 M). IDA financing would contribute to allproject components except rural poor program, strengthening of audit,cooperative training and technical assistance. Canadian grant aid (CIDA) ofabout US$17.2 M is armarked to finance the rural poor program, the privatemechanics program - a part of the minor irrigation program involving therural poor, and the related technical assistance. British grant aid (ODA)of about US$10.5 M would contribute to three of the project com-ponents--strengthening of audit, cooperative training, and the relatedtechnical assistance. UNDP would contribute US$1.6 M to the remainingtechnical assistance program not covered either by CIDA or ODA. Thus for-eign aid would total US$129.3 M and cover about 77% of total project cost,net of duties and taxes. It would finance all foreign expenditure (lJS$76.1M) and about 58% of the local cost (US$92.5 M). The execution of thefinancing agreements with the co-financiers would be a condition of effec-tiveness. The balance of project cost financing would be covered bybeneficiaries: KSS/BSS members and TCCA - US$6.0 M; Sonali Bank - US$12.1 M;and GOB and BB together - US$21.2 M; as well as duties and taxes - US$8.4 Mby GOB.
4.03 KSS members would contribute 10% to the estimated cost of 'STW andLLP in the form of cash downpayment, the remaining 90% would be financed bya medium term loan extended by the Sonali Bank. Sonali Bank contributionestimated at 10% of the MT loan would come from its own resources, theremaining 90% would be refinanced by BB, which in turn would be refiriancedby GOB/IDA (see details in para 4.13). For crop production, KSS members'entire requirements would be financed by a ST loan extended by the SonaliBank. BB would refinance 90% of the loans provided by SB, which in turnwould be refinanced by GOB/IDA. Due to the innovative nature of the ruralpoor program, and Sonali Bank's as well as BRDB's limited experience in
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financing this, BB refinance for BSS activities, which in turn would berefinanced by GOB/CIDA, would be for 100% of SB's lending. BSS members'contribution would range from 5-10% of their total investment. GOB wouldexecute a Subsidiary Loan Agreement with BB under which it would on-lendUS$95 M equivalet to BB on terms and conditions described in Schedule A.Refinancing of SB, on terms and conditions described in Schedule A, would besubject to the completion of a Participation Agrement between BB and SB. Itwould be a condition of effectiveness that both agreements were satisfactoryto IDA and had been properly executed. GOB's contribution for the remnaininglocal costs and duties and taxes would be made available to the implementingagencies in the form of budgetary allocations. It would be a condition ofeffectiveness that a Project Proforma (PP) satisfactory to IDA had beenapproved by GOB.
B. Procurement and Disbursement
Procurement
4.04 Equipment: Procurement by individuals, groups and KSS, wouldinvolve relatively small investments. Typical items would be STW and LLP,pipes and screens, toolboxes, bicycles, and locally made simple equipmaentfor the various activities under the rural poor program. For STW and LLPengines (US$14.6 M) there are a number of approved makes of all importedones, which have been found to be appropriate for operation in Bangladeshand whose dealers are setting up retail and maintenance networks. STW andLLP engines would be procured by private dealers based on farmers' demiandfor their model and at their full cost price including transport and han-dling margins. GOB would issue licenses, valid for two to three months, forthe import of any of the eight approved engines by importers at their ownrisk for sale to project farmers. Under Cr. 1147-BD, GOB has undertaken toallow import of other engines which are appropriate for operation inBangladesh conditions, and for which importers have developed acceptableplans for a repair and service network. This would be confirmed at nego-tiations. To ensure that the implementation of the irrigation program isoff to an early start, it would be a condition of effectiveness that :Lmportlicenses had been issued for the import of at least 5,000 STW/LLP engines byprivate dealers. Locally manufactured centrifugal pumps (US$9.1 M), whichare coupled with the imported engines, are of good quality, there is ade-quate competition in the local market and these would be procured by privateimporters based on farmers' choice. Simple pipes and brass strainers(US$19.0 M) would be procured by private dealers from local suppliers whofabricate these using imported raw materials. Spares (US$2.5 M) would beprocured by the importer with the engines. Transport and drilling services(US$8.1 M) would be provided by local contractors working with the dealers.The remaining costs would be duties and taxes (US$4.6 M).
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4.05 Civil Works: The project-s civil works (US$15.3 M), each item ofwhich would be small in size (maximum US$75,000), would be widely dispersedat 100 or more locations. This would preclude the use of ICB. Conse-quently, these would be executed through local competitive bidding.
4.06 Other Goods and Services: Since project vehicles would be requiredimmediately upon the launching of the project and because of the need forafter sales servicing facilities, project vehicles (US$0.5 M includingduties and taxes which amount to 50% of cost), would be procured by competi-tive bidding advertised locally from all the suppliers of foreign madevehicles and equipment who have a service network in Bangladesh and are frommember countries. Motorcycles and bicycles (US$1.6 M) would be sold toabout 7,500 GOB and TCCA staff on hire purchase. These will be procuredconsistent with the preference of the people to whom such motorcycles andbicycles are to be provided. Price quotations would be invited from alllocal and foreign manufacturers who have a service network in Bangladesh andare from member countries, and supplied to the applicants. Choices givenby them would be collated and orders placed by BRDB. Small items worth lessthan US$15,000 would be purchased following prudent shopping procedures.These would not exceed 1.0 M in aggregate. Incremental operating costs(US$2.5 M) would consist of staff salaries and allowances for BRDB. Train-ing would be totally local and would be arranged by BRDB at institutionsacceptable to IDA. The remaining costs would be for incremental ST credit(US$66.3 M). Procurement of goods and services out of the funds provided byagencies other than IDA would be subject to terms and condition agreed uponbetween GOB and the concerned lending agencies.
4.07 Contract Review: About 350 bidding packages are anticipated forcontracts let under the project, mostly for civil works which would behandled by the Project Engineering and Construction Unit (PECU) of PublicWorks Department (PWD). PECU has satisfactorily handled the procurementof civil work for the IDA financed Foodgrain Storage II Project (Cr.787-BD). For RD-II prior review by IDA would be restricted to civil worksand other contracts costing US$50,000 or more. This will result in priorreview of about 10% of the bidding packages covering nearly 30% of the valueof contracts.
Disbursement (Annex 4, Table 2)
4.08 Disbursements under the credit would extend over five years. Thedisbursement for the project is expected to be faster than the historicaldisbursement profile for projects in Bangladesh because of (a) strong com-mitment of GOB to the project; (b) advance action on the import of STW/LLP;(c) use of existing designs for civil works for which land would be readilyavailable in TTDC; and (d) project emphasis on expansion of ongoingprograms. Disbursements would be made as follows:
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(a) 90% of BB refinance to Sonali Bank for its MT lending to eligibleTCCA (i) for purchase by eligible KSS and farmers of STW and l]LP(US$38.0 M); (ii) for construction of lined irigation canals andcontrol structures (US$0.30 M); and (iii) for construction ofgodowns (US$0.20 M);
(b) 75% of BB refinance for Sonali Bank's incremental ST lending toeligible TCCAs above a base to be established at the end of each FY(US$37.5 M);
(c) 90% of the costs of all civil works contracts (US$9.0 M); 1/
(d) 100% of foreign expenditures, 100% of local expenditures ex-factoryand 60% of local expenditures for project vehicles and equipment(US$1.75 M);
(e) 100% of training costs (US$2.0 M);
(f) 100%-70% 2/ of BRDB incremental staff salaries (US$1.25 M); and
(g) Unallocated (US$10 M).
4.09 Disbursements against Category (c) and (d) would be fully docu-mented. Disbursements against items in para 4.08 (a) and (b) will be madeagainst BB's certified statement of refinance provided by BB to Sonali Bank.Disbursements against Categories (e) and (f) would be based on certifiedstatements of expenditures prepared by the DG of BRDB. Documents in supportof certified statements would be retained by BB and BRDB and made availablefor inspection by staff of IDA supervision missions. All documents insupport of statements of expenditure and refinance would be independentlyaudited and audit reports would be made available to IDA.
4.10 Conditions of Disbursement would be against:
1/ Under PWD procedures, payment to a contractor is reduced by 10% of theapproved bill; this -retention' money is paid only six months after thesuccessful completion of the work and thus delays IDA disbursements forapproved expenditures. GOB has agreed that it would not subsequentlyclaim reimbursement from IDA for the retention money when it is actuallypaid to the contractors. On this basis IDA disbursement rate is calcu-lated as 90% of actual amount paid to contractors, net of retentionmoney.
2/ On a reducing basis with 100% for FY84 and 85, 90% for FY86, 80% forFY87, and 70% for FY88.
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- Category a(ii) and b, that Sonali Bank had designated one DeputtyGeneral manager to handle all aspects of its credit operations withTCCA/KSS/BSS (para 5.07);
- Category a(iii), that the project document for the continuation ofthe UNDP/FAO Fertilizer Marketing Project had been executed (para3.14).
4.11 Experience in Bangladesh has shown that on average there is a gap offour to six months between the time a local expenditure is incurred, and thetime of IDA disbursement. In case of credit components, involving theimport of STW and LLP, scarce foreign exchange is tied up for as long asnine months before the imported engines are sold to farmers and the flow ofcredit is refinanced by IDA. To ensure adequate availability of foreignexchange for imports of STW and LLP engines, a Special Account would beestablished by Bangladesh Bank. To this Special Account, IDA would make anadvance contribution of US$4 M immediately upon effectiveness and thereafterdisbursements would be against statements of expenditure for MT creditrefinanced by BB. The advance would be recovered during year 4 of theproject from BB's claims for reimbursement against MT credit refinanced.Assurance has been obtained that BB would make available the foreignexchange needed by private dealers for the importation of the engines;Bangladesh Bank would provide a quarterly statement of foreign exchagereleased for the importation. It would be a condition of disbursementagainst the advance that the Special Account had been established and proce-dures had been agreed with IDA for its operation.
C. Credit Arrangements
4.12 Overall credit operations of the TCCA would be strengthened andfinancing provided under the project for (a) medium term credit for irriga-tion equipment (US$57.9 M); (b) incremental ST credit flowing through theTCCA in the 13 districts of the project (US$66.3 M); (c) credit for therural poor program supported under the project (US$10.2 M); and (d) creditfor other activities (US$2.1 M).
4.13 All credit for TCCA would be channelled as now through the SonaliBank (para 2.29). Interest rates and financing levels for MT credit and STcredit would be the same as those prevailing under recently approved IDACredits involving lending to TCCA. For the new component to finance incomegenerating activities for the rural poor, the rates would be equal to thehighest prevailing rates in the TCCA/KSS system. These interest rates wouldbe real in relation to the expected inflation and the margins availablewould be satisfactory to ensure that TCCA can achieve financial viability(para 7.07). The lending terms and conditions, which are spelled out inSchedule A, would be embodied in the Subsidiary Loan Agreement between GOBand BB and the Participation Agreement between BB and SB (para 4.03).
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Annual Interest Rates
MT ST Rural Poor Godowns
KSS/BSS to Members 14.0 17.5 17.5 -
TCCA to KSS/BSS 10.5 14.5 14.5 -SB to TCCA 6.5 7.5 7.5 14.0BB to SB 4.0 6.0 4.0 6.0
Contribution and Refinance
MT ST Rural Poor Godowns
Member's Contribution 10% Non Cash - -
InputTCCA/KSS/BSS to Member 90% 100% 100% -SB Finance to TCCA 100% 100% 100% 90%BB Refinance to SB 90% 90% 100% 90%
4.14 Interest rates for all investments financed under the project are1-5% above rates prevailing for similar investments when credit is chan-nelled through institutions other than TCCA. In the past, TCCA/KSS membershave not been overly concerned about the actual interest rates charged undera project provided inputs and services required by them are availablewithout cumbersome procedures. Thus, such interest rate differentialsbetween TCCA and other credit programs are not likely to adversely affectthe growth of credit under the project especially in view of the simplifica-tion of procedures to be done (para 4.15). The overall level of agricul-tural interest rates would be subject to GOB and IDA review as the recommen-dations of the recently completed Joint Review of Agricultural Credit areagreed and implemented. Assurance has been obtained that the interest ratelevel and structure under the project would be reviewed annually to ensurethat: (a) such interest rate level and structure are consistent with recoin-menations of the Joint Review; and (b) until such time as the recommenda-tions of the Joint Review are implemented, interest rates to ultimate bor-rowers remain positive in real terms and ensure the financial viability ofTCCA.
4.15 The procedures used by TCCA and KSS for their lending operaticins andin turn for obtaining refinance from Sonali Bank, would be improved underthe project. The objective of the improvements would be to make the creditoperations more responsive to the needs of eligible farmers while maintain-ing conditions essential for the productive use and good recovery of credit.Three basic features of the changes would be:
(a) streamlined procedures and reduced flow of paper relating to loanapplications, sanctions and payments between TCCA and others;
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(b) refinement of criteria for the eligibility of TCCA/KSS/BSS andmembers; and
(c) establishment of guidelines and criteria for loan approvals in orderto reduce the need for reference to Headquarters by both Sonali Bankbranch manager and the TCCA.
Modifications in credit procedures and salient features of the differentcredit operations of TCCA are detailed in Schedule C. A draft Banking Planincorporating the above improvements and modifications in the present lend-ing operations of Sonali Bank and TCCA, prepared by GOB, was reviewed duringnegotiations; and its approval by the Management Boards of Sonali Bank andBRDB would be a condition of effectiveness.
V. ORGANIZATION AND MANAGEMENT
A. Policy and Management
Policy Guidance
5.01 At the national level, overall policy guidance for a sound growth ofthe TCCA system would be provided by BRDB's 22 member Governing Councilchaired by the Minister of Rural Development and Cooperatives (para 2.17).This body which has high level representation from the relevant GOB Minis-tries and agencies would include five members elected by the NationalFederation of TCCAs. BRDB-s Director General (DG) (para 2.19) would providesecretariat support to the Governing Council bringing to its attentionpolicy issues and recommendations to resolve them. The DG would also beresponsible for the execution of its decisions which directly concern BRDB,and for monitoring the execution of decisions concerning other GOB agencies.
Project Management
5.02 The Director General would be responsible for the execution of theproject. His responsibilities for the project inter alia would be to:
(a) request, receive and disburse funds under the ADP;
(b) coordinate activities of BRDB with other GOB agencies through theliaison officers designated by them;
(c) develop, maintain up to date and provide to all TCCA a Banking Planagreed with BB and Sonali Bank for effective execution of the TCCA'scredit programs;
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(d) execute contracts and agreements with GOB and private agenciesincluding, as appropriate, NGOs for providing essential training andother services to TCCA/KSS/BSS;
(e) enter into agreement with PECU to execute project civil works;
(f) prepare a master plan for, and ensure the execution of, effectivetraining at RDTI, TTU and TCCA;
(g) recommend the issuance of import licenses to private importers ofSTW/LLP engines;
(h) monitor the execution of the project and supply of inputs to, andperformance of, TCCAs;
(i) monitor the progress in the registration and audit of TCCA/KSS/BSS;
(j) maintain consolidated project accounts and have these audited;
(k) prepare position papers for BRDB-s Governing Council on issuesrelating to overall GOB policies as these affect the sound growth ofTCCA/KSS/BSS and seek their resolution; and
(1) claim disbursements from IDA for project expenditures made by BRDB.
5.03 In the execution of his task, the DG is currently supported by threeDirectors and 40 other officers at Dhaka (para 2.19) according to a staffingplan appropriate for BRDB-s normal program of activities, as agreed underthe Joint Review. Subsequent to the Review, the field work for which wasdone in October 1980, BRDB has been entrusted with the responsibility forexecution of or as a major participants in, at least seven large new donorassisted projects 1/ (costing about US$500 M) compared to the situation in1980, when it was implementing only four donor assisted projects costingUS$120 M. In addition, BRDB has been asked by GOB to place much greateremphasis on developing and launching an effective program for developingincome generating activities for the rural poor and to undertake thenational monitoring for IMP. Experience to date has shown that BRDB's HQstaffing requires some modest strengthening and that the position of Direc-tor (Implementation) under whom all these projects, and the normal BRDBprogram for support to the TCCA have been placed, is burdened beyond thecapacity of a single individual. The strengthening is currently underway as
1/ Including IDA financed HTW Project (Cr. 1140-BD), DTW II Project (Cr.1287-BD), Agricultural Credit Project (Cr. 1147-BD); IFAD's SWRDP andADB-s NWRDP.
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PPs for these new projects are approved. It is also necessary that func-tions of Director (Implementation) be carried by two Directors; one dealingwith the routine credit, irrigation, marketing and cooperative programn ofBRDB, and the other dealing with the Rural Poor Program, and revitalizationof staff and member training (Chart No. 25027). The addition of this fourthDirector would be a condition of disbursement by CIDA against expenditure onthe rural poor program.
5.04 Because of the relatively young age of this organization, BRDB3 s ownfull time staff have not yet reached the stage to occupy positions of Direc-tors. Thus all Directors are appointed by GOB from the civil service., Inthe past, frequent transfer of Directors has adversely affected the qulalityof BRDB operations. GOB would ensure careful selection of BRDB Directorsafter considering their demonstrated ability to direct rural developmentactivities and continuing availability for a tenure of at least three years.
B. Participating Agencies
5.05 Other agencies involved in the execution of the project and theirfunctions would be:
(a) The Registrar of Cooperatives: for the (i) registration of newTCCA, KSS and BSS; (ii) timely conduct of their annual statutcoryaudit; (iii) holding of Annual General Meetings at which new manag-ing committees are elected; (iv) training of his audit staff at CCC;and (v) inspection of TCCA/KSS/BSS to see that cooperative laws areenforced.
(b) Public Works Department for construction of the TTDC, TCCA officesand TTU through its Project Engineering and Construction Unit.
(c) Bangladesh Bank for (i) clearance of the Banking Plans; (ii) estab-lishing terms and conditions for TCCA lending; (iii) operating theSpecial Account for release of foreign exchange for import ofSTW/LLP by private importers; and (iv) refinancing loans made bySonali Bank under the project.
(d) Sonali Bank for (i) refinancing credit programs of eligible TCCA;and (ii) establishing detailed banking plans to be used by allbranch managers.
(e) Bangladesh Agricultural Development Corporation for (i) field levelsupport in the expansion of the Irrigation Management Program; and(ii) training of private mechanics.
(f) Directorate of Agricultural Extension to provide extension supportto tarmers and KSS especially for IMP.
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(g) Private dealers for (i) obtaining import licences and foreignexchange releases; (ii) importing, retailing and installing STW/LLPengines and coupling them with pumps accessories; and (iii) provid-ing after sales maintenance service to users.
(h) BSCIC, BHB and selected NGOs for providir.g, under contract withBRDB, training and marketing services for BSS related activitJies.
(i) RDA, Bogra for organizing training of BRDB staff for the irrigationmanagement and rural poor programs.
Inter-agency Coordination
5.06 The three key participating agencies (PWD, Sonali Bank and RCS) eachwould make special arrangements for the execution of their activities underthe project. In case of PWD, the PECU established under Credit 787-BD,which is expected to be physically complete by December 1983, would beresponsible for the construction of project facilities under the project.PECU at Dhaka is headed by an Additional Chief Engineer; and in the field itworks through a well established engineering organization. Assurance hasbeen obtained that PECU would continue in existence until construction underthe project comes to an end.
5.07 Sonali Bank's involvement in externally supported projects prcividingcredit support to TCCA has also grown rapidly since 1980. Within SonaLliBank, ST credit operations of TCCA are managed separately from MT creditoperations by two different Deputy General Managers (DGM). The designationof a single DGM to deal with all TCCA credit affairs would contribute immen-sely to a more smoothly functioning TCCA credit system and such designationwould be a condition of disbursement against expenditures on incremental STcredit and MT credit for canal lining (para 4.10).
5.08 Similarly, the RCS would designate a Joint Registrar to dealexclusively with the registration and audit and inspection of the TCCA, KSSand BSS (para 3.18).
5.09 Each agency would designate a senior staff member to coordinate itsactivities with BRDB. In Bangladesh Bank it would be the Chief CreditOfficer; in Sonali Bank a DGM; in RCS, the Joint Registrar; in RDA it wouldbe the Director; at CCC, the Principal; in BADC, the Director (Irrigation);in BSCIC, the Director (Planning); and in DAE, the Director. It is expectedthat the designation of these officials as agency liaison officers for RD-IIwould be completed by July 30, 1983.
5.10 Operational problems with other participating agencies, which cannotbe resolved by DG, BRDB through bilateral efforts but which are notappropriate to be dealt by the BRDB's Governing Council headed by the Minis-ter, would be dealt by the National Committee for Multi-sectoral Rural
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Development (NCMRD). NCMRD is headed by Secretary, Rural Development withSecretary, Agriculture as Co-Chairman and includes representatives ofrelevant ministries and agencies. Presently, NCMRD has been given a smallsecretariat to monitor the Southwest Rural Development Project. Thissecretariat has not been functioning satisfactorily. In any event, thissecretariat would not be capable of providing the support needed for R.D-IIfor identifying potential problems, seeking solutions and monitoringimplementation. This would be the responsibility of the DG. Should a.meeting of NCMRD is convened to review any interagency problems affectingproject implementation, the necessary secretariat support would be providedby BRDB.
C. Project Implementation
5.11 For effective field implementation, administrative and financialpower would be delegated to the district offices of BRDB. The Headquartersof BRDB would retain responsibility for policy planning, national levelmonitoring and supportive functions. At the district level, a DistrictProject Director, BRDB would have the primary responsibility for projectactivities in his district. Additionally, he would be the Member Secretaryof a District Coordinating Committee headed by the Deputy Commissioner,which would deal specially with inter-agency coordination and problems whichcannot be solved through bi-lateral efforts. The membership of DCC wouldinclude: District Manager (Sonali Bank), Executive Engineer (PWD), DistrictExtension Officer, Executive Engineer (BADC), District Officer (BSCIC),District Fisheries Officer with District Project Director (BRDB) as Execu-tive Secretary (Chart No. 24717). Assurance has been obtained that DCCswould be established by September 30, 1983.
5.12 Quarterly District Action Plans would spell out for each participat-ing agency the tasks to be completed over the following quarter and wouldfollow a pattern successfully developed under RD-I and now being used in thefield activities of SWRDP. The Deputy Commissioner, with the help of Dis-trict Project Director, BRDB, monitors the execution of these plans whichare prepared at district inter-agency meetings attended by Dhaka level staffof all participating agencies and RMB.
Implementation Schedule (Chart I)
5.13 The project would be implemented over a four year period startingJuly 1983. Supply of STW and LLP is expected to start in 1984; fieldimplementation of IMP would be slow initially as the teams are trained andwould build up momentum in 1985. Training of private mechanics would con-tinue throughout the project period. Surveys for launching the rural poorprogram would be prepared towards the end of 1983. Banking Plans would befinalized before end of September 1983 to ensure that there is adequate timefor the training of Sonali Bank and TCCA staff before the flow of creditbuilds up. Training of BRDB staff at RDTI and revitalizaton of TTU level
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training would be given priority attention from the start of the project.The section in the office of RCS responsible for the audit of TCCA/KSS/BSSis expected to be able to clear audit backlogs by July 1984. Because exist-ing designs will be used for all project buildings and land would be readilyavailable in the TTDC complex, the construction program is expected to belaunched in early 1984. Finally, technical assistance, to be provided overthe entire project period, is expected to be operational within six monthsof credit effectiveness. Assurance has been obtained that key projectactions would be implemented in accordance with a schedule agreed with IDA.
5.14 Smooth implementation would require that all BRDB staff and staff ofagencies participating in the various components are familiar with thesystem of supply, sanction and delivery of project inputs. Guidelines foreach component would be prepared by BRDB and the participating agency, andthese would be made available to all project staff. For the credit com-ponent, these would be in the form of a banking plan (para 4.26).Experience with such guidelines has been generally favorable, because eventhough they are sometimes interpreted too rigidly, in their absence parallelaction by two agencies is extremely difficult. Assurance has been obtainedthat implementation guidelines would be provided to IDA for review by Sep-tember 31, 1983 and would be revised regularly as changes are required.
D. Monitoring and Evaluation (M&E)
5.15 BRDB's Director of Planning, Monitoring and Evaluation would beresponsible for M&E functions under the project. Programwide monitoringcapability of BRDB would be strengthened once the consultants for setting upa Management Information System (MIS), financed under SWRDP, have completedtheir task. The consultants for the design and implementation of the MISare expected to be recruited by July 1983.
5.16 Evaluation activities under the project would involve in addition tothe usual mid-term and ex-post evaluation of the project, special studies asneeded to evaluate the performance of individual components. These studieswould be executed through contracts with local and foreign consultants andwould focus on the following aspects of the project:
(a) IMP Expansion: RDA, Bogra would be contracted by BRDB to undertakesample basis bench mark and periodic surveys of IMP schemes toindependently check the participation levels, incremental commandareas and other benefits. Selected IMP schemes would be earmarkedfor repeat surveys each year in order to follow the dynamics ofchange in group management, farmer participation and agriculturalpractices.
(b) Rural Poor Program: Special effort will be made to obtain feedbackof the problems faced in the implementation of the program to ensurethat modifications needed for successful implementation are being
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made continuously. Other studies will deal with the participationof target groups in project activities, incremental benefitsobtained, usefulness of training programs and role of women in theBSS.
(c) Credit Operations: Studies would evaluate the credit proceduresin use, the availability of adequate and timely credit to eligiblemembers and the extent and nature of the bad debt problems; focuswould be on loan recovery performance, defaults by Directors,presence of defaulters on managing committees and access of smallfarmers and sharecroppers to the TCCA credit programs.
(d) Financial Viability and Performance of TCCA/KSS and BSS: Specialstudies will be made of selected TCCA of all age groups to see howfar they are able to achieve financial viability. Financial perfor-mance of new diversified activities undertaken by TCCA would bespecially studied.
E. Accounts and Audit
5.17 TCCA/KSS/BSS are required to maintain accounts according to a systemprescribed by BRDB. The system of accounting is a double entry commercialsystem and is basically sound, though implementation has not always beenfully satisfactory. Under the project, a revised set of accounting manualsfor TCCA/KSS/BSS would be employed and accounts staff of TCCA and KSSretrained.
5.18 The RCS is required to audit annually the accounts of TCCA, KSS andBSS. TCCA and KSS audits are due to be completed within six months of theclose of the fiscal year. For undertaking the audit of KSS and BSS, t'hestrength and capability of the audit staff would be improved under theproject and for the audit of the TCCA, the RCS would recruit qualified firmsof auditors satisfactory to IDA to clear up the backlog and ensure timeli-ness and quality of TCCA audits (para 3.18). A draft revised manual forauditing the accounts of TCCA/KSS/BSS has been prepared. Assurance has beenobtained that, as of December 1983, audits of TCCA/KSS would be carried outin accordance with the provisions of a revised manual satisfactory to IDA.
5.19 BRDB as an autonomous Board would be subject to statutory budgetaryand financial control. BRDB would receive funds from GOB for: (a) itsheadquarters and field establishment costs; (b) grants to be paid toeligible TCCA; and (c) expenditures on approved projects in the AnnualDevelopment Plan (ADP). The ordinance establishing BRDB requires that fundsreceived for the purposes listed above are kept and accounted for separatelyand that BRDB accounts are audited by an independent auditor, in additLon tothe statutory audit of the Accountant General. BRDB has an audit divisionwhich is responsible for the internal audit of all BRDB funds. Bangladesh
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Bank would maintain separate receipt and expenditure accounts for the Spe-cial Account as well as for its refinancing of SB's lending to TCCA.Similar receipt and expenditure accounts as well as accounts of loanrecovery profiles, annual recovery performance and ageing of overdues foreach TCCA would be maintained by SB for its lending activities. Assurancehas been obtained that BRDB, Bangladesh Bank, Sonali Bank and the Registrarof Cooperative Societies would maintain these separate project accounts andthat project accounts audited by independent auditors acceptable to IDAwould be made available to IDA within nine months of the close of eachfi'scal year.
VI. PRODUCTION, MARKETS AND PRICES
Cropping Patterns
6.01 The project would provide tubewell irrigation to presently unir-rigated areas and through IMP result in an increase in the command area ofalready f'ielded minor irrigation equipment. In view of this, the changein cropping patterns assumed to result from project investments is a reflec-tion of aL change from unirrigated to irrigated agriculture.
6.02 Since the project is national in scope, an average cropping patternhas been prepared to reflect the present situation, as well as the chanlgesexpected as a result of the project. Basic cropping systems in Bangladeshare determined primarily by the water regime. Broadly, an unirrigated,rainfed cropping pattern is typified by a local aman crop produced in themonsoon season, followed by crops, such as oilseed and/or a legume cropusing residual moisture in the dry season. Cropping intensities of130-140% are usual under this type of regime. It is assumed that the provi-sion of irrigation would lead to the introduction of a HYV T. Aman crop(supplemented by irrigation if necessary), and the replacing of low-yieldingoilseeds/pulses by irrigated Boro and/or HYV wheat, or other high-value cashcrops. For the purposes of analysis, the dry season crops are representedby irrigated Boro and HYV wheat. While in some cases, cropping intensitiesof over 200% can be expected with the introduction of irrigation, an averagecropping intensity of 180% has been assumed for farmers benefitting fromirrigation investment financed under the project.
Yields and Production
6.03 Yield estimates, both with and without project, reflect averagesituations for unirrigated and irrigated agriculture. The availability ofan assured water supply, under direct control of KSS/farmers, wouldencourage farmers to take greater risks; this combined with strengthening ofthe TCCA/KSS system as a credit disbursing and input supply channel, is,estimated to lead to the increased and more effective use, by farmers, ofhigh yielding varieties, fertilizers and pesticides, and thus to higher
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yields. Yield assumptions under different cropping patterns are summarizedbelow:
Cropping Pattern (ac) Yields (mds/ac)P W P W
Aman (Local) 1.0 - 20 -T. Aman (HYV) - 1.0 - 35 /aBoro 0.5 - 32 7aWheat (HYV) - 0.3 - 25 7Oilseeds 0.2 - 6 -
Pulses 0.2 - 6
Total Cropped Area 1.4 1.8Net Cultivated Area 1.0 1.0Cropping Intensity 140% 180%
/a Areas brought under IMP would obtain 5% higher yields.
6.04 Total incremental production due to the project is based on theconversion of 510,000 ac of recently unirrigated land to irrigated agricul-ture through the sale of 30,000 STW and 3,000 one-cusec LLP. In addition,for the 4,400 DTW and 1,100 two-cusec LLP to be brought under IMP, it isassumed that the command area of a DTW would increase by 20 ac and of atwo-cusec LLP by 10 ac, thus adding 99,000 ac to the already existing com-mand area. The total incremental production expected as a result of theproject at full development in year 4 is expected to be 744,000 tons ofpaddy and 174,000 tons of wheat.
Marketing
6.05 Marketing of the incremental production of foodgrains, arising as aresult of the project, is not expected to pose a problem. Given the chronicsituation of inadequate food production in Bangladesh, it is likely thatmuch of the incremental grain production would be absorbed locally withinthe areas in which it is produced. Surplus would be handled by the tradi-tional marketing system which is well developed and producers would also beable to use the GOB foodgrain procurement system.
Prices (Annex 6, Table 1)
6.06 With a rapidly increasing population, leading to an increased demandfor food, crop prices in Bangladesh are largely determined by the supplysituation. The latter, in turn, is determined to a large extent by weather,and prices vary significantly between locations, seasons and from one yearto another. In an attempt to stabilize prices, GOB provides guaranteedsupport prices, and intervenes in foodgrain marketing through its procure-ment system. However, its impact on effective price stabilization has so
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far been limited and farmers in most cases do not receive the guaranteedprice. In view of this the actual three year average (FY80-FY82) farmgateprices have been used for financial projections in this report. For themain outputs, financial prices used are Tk 119/md for Aman paddy, Tk 116/mdfor Boro paddy and Tk 121/md for wheat. Input prices used, including thosefor labor (Tk 15 per man day) and draft power (Tk 22 per ox-pair day), arebased on prevailing market prices.
VII. FINANCIAL ANALYSIS AND COST RECOVERY
A. Farm Incomes
7.01 The impact of the project on farm incomes has been analyzed boith onan irrigation group basis, as well as on the basis of a one acre farm. Thelatter is as typical as any for the small holders, who are expected to bethe main beneficiaries of the project.
7.02 The ultimate command area of a STW is expected to be 15 acres, andthat of 1 cusec LLP 20 acres, and it is assumed that it would take threeyears for these areas to come under irrigation. Based on these assumpl:ions,and those described in the preceeding chapter incremental net incomes, aswell as financial rates of return have been calculated for STW and LLPirrigation groups. Details of the analysis are shown in Annex 5, Tables 4and 5 with the salient features summarized below:
STW LLPPresent Year 5 /a Present Year 5/a.................. (Tk) ....-.....
Net Farm Income perIrrigation Group /b 31,492 48,085 41,991 70,548
Net Farm Income perAverage Farmer /b 2,100 3,206 2,100 3,527
Subsistence Requirementper Family 3,000 3,000 3,000 3,,000
(Deficit)/Surplus ( 900) 206 ( 900) 527
Internal Rate of Return 38% 56%NPV (at 12% discount rate) 77,545 138,351
/a At full development.7T Incomes shown are after debt servicing.
7.03 Net farm incomes of average one acre farmers are calculated toincrease by 53% or Tk 3,206 in the case of STW groups and by 68% or toTk 3,527 in the case of LLP groups. Based on a norm for subsistence of 15.5ounces of grain per capita per day, and an average family size of six (fouradult equivalent), farm families would move from a position where production
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from a one-acre farm is presently unable to meet this norm and thus whoseincomes have to be supplemented by other activities; into one where therewould be a small surplus from the families direct farming operations.Importantly the cash flow projections show that members of STW and LLPirrigation groups would have no difficulties in servicing their loans.
B. Income from Activities under the Rural Poor Components
7.04 Based on experience from ongoing programs in Bangladesh for whichfinancial and other data are available, an analysis has been undertaken toassess the probable returns from, and the financial viability of theactivities to be supported under the project. The results of this analysisare detailed in Annex 5, Table 6 and summarized below:
Investment Present Net IncrementalMedium Working Net Cash Cash Inflow Net Cash
Activity Term Loan Capital Inflow with Project Inflow....... .... (Tk) . ..
Pond Fisheries 21,115 2,047 1,500 2,080 580Beef Fattening 1,300 - 1,500 2,914 1,414Livestock for Milk 3,200 - 1,500 3,847 2,347Handloom 4,000 15,300 2,400 5,722 3,322Oil Milling 3,000 7,500 1,500 10,887 9,387Rickshaw Pulling 3,800 - 3,900 7,085 3,185Cane and Bamboo - 2,400 1,500 5,150 3,650Carpentry 3,000 8,667 3,000 14,484 11,484Pottery 3,500 1,283 1,500 5,925 4,425
7.05 In estimating present earnings, it is assumed that rickshaw pullersare hiring rickshaw at a fee, while weavers are working as hired labor inlarge handloom units. In all other cases it is assumed that present earn-ings are derived from working as laborers. Based on interviews in thefield, as well as the results of various studies, it is estimated that alaborer finds work for an average of four months in a year at wages betweenTk 10-15 per day. Cost and benefit profiles for each activity have beenderived from interviews in the field, as well as from information obtainedfrom ongoing activities of various NGOs and GOB agencies.
7.06 Cash profiles for all activities show that beneficiaries total netcash inflow with the project would increase significantly. In all cases,except pond fisheries and beef fattening, total net earnings would be ableto meet the minimum subsistence requirements of a typical rural family.Financial rates of return to all resources (except the family labor), usedin the enterprises would be quite high - ranging from 31% in the case ofhandlooms to over 160% in the case of cane and bamboo work. Cash flowprojections indicate that for all proposed activities borrowers would beable to service their loans.
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C. Financial Performance of a Participating TCCA
7.07 Income and expenditure projections have been prepared for both aTCCA typical of the 210 existing TCCA and one typical of the 90 new TCCAexpected to be developed under the project. These projections, based onpresent and projected flow of both short term and medium credit as minorirrigation development spreads to KSS, are in Annex 5, Tables 8 to 13. Theyare based on the following key assumptions:
(a) for an existing TCCA, the percentage of -A and B KSS borrowing STcredit would remain constant at 60%; the current national average is60% and in the seven TCCA of RD-I, it is 98%;
(b) based on the total number of different types of irrigation equipmentprojected to become available over the future, and the past perfor-mance of TCCA, it is estimated that over the next five yearsapproximately 90,000 STW equivalent 1/ units would be sold nation-wide through the TCCA/KSS system; an average of 52 STW equivalentunits by year 5 compared to the current figure per TCCA of 56;
(c) the average ST borrowing per 'A and -B KSS is expected to go up inthe case of a new TCCA, from Tk 12,000 in year 1 to Tk 42,400 inyear 8, while for an existing TCCA it would go up from Tk 24,400 toTk 42,400 in year 5. The volume of ST credit per 'A and B KSS inFY82 was Tk 10,500 and rose to Tk 20,000 when crop limits wereraised recently;
(d) the recovery profile for ST credit based on past performance, wouldshow a 98% recovery of principal and interest over a six yearperiod. This is below the 99% recovery achieved by June 30, 1982for loans more than six years old. For MT credit, for whichexperience is not yet adequate, a recovery profile similar to thatfor ST credit is assumed. For both ST and MT credit, a bad debtexpense equivalent to 2% of the amount disbursed is charged in theyear of loan disbursement;
(e) shares and savings deposited by KSS with a TCCA would be depositedwith Sonali Bank and would earn interest. Fivesixth of interestearned on the deposit of savings would be given to KSS. On STcredit outstanding the TCCA would earn a margin of 7% per annum andon MT credit, 4%;
1/ Various minor irrigation units are converted into STW equivalents interms of MT credit associated with the sale of various types of equip-ment.
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(f) TCCA would meet the salaries/allowances of all its staff includingthose provided by BRDB and its operating expenses. However, expen-ditures on member training have not been included since it isbelieved that this is a legitimate expense of BRDB.
7.08 Based on the above assumptions, the income projections show that anew TCCA should be able to cover all its expenditures, including thesalaries of key staff seconded by BRDB, by year 6 when the annual lendingvolume is expected to reach Tk 2.1 M. An average existing TCCA should beable to achieve a similar status in year 2 when the annual lending volumeis expected to reach Tk 2.7 M. For a new TCCA, about 90% of the incomewould be from margins earned on ST and MT credit operations, while for anexisting TCCA it would be 85%. The remaining 10% and 15% respectively wouldbe from interest earned on deposits. In case of a new TCCA, salaries ofstaff and office operating expenses would constitute 90% of the total expen-ditures in year 1 and decrease to 70% in year 10; for an existing TCCA thesecosts would decrease from 75% in year 1 to 55% in year 10.
7.09 Sensitivity Analysis: The above outcome is dependent on two keyvariables: (i) the growth is ST credit over the years; and (ii) the numberof minor irrigation units financed by the TCCA. To test the possibility ofa slower build up in sales of minor irrigation equipment and thus MT and STcredit, a sensitivity analysis has been done. For existing TCCA, the volumeof ST credit for A and B class KSS is assumed to remain static atTk 24,400 and the number of STW equivalent units sold per TCCA is reduced byhalf. For a new TCCA, ST credit for 'A and B' class KSS is assumed toincrease from Tk 12,000 in year 1 to Tk 24,400 in year 4 and thereafter toremain static and the number of STW equivalent units sold per TCCA is a:Lsoreduced by half.
7.10 Such slower growth in minor irrigation sales and thus in MT and STcredit would delay the equalization of expenditures by income to year 8 fora new TCCA. For an existing TCCA, the income would still exceed expend:Lturein year 2, but would be by a 55% reduced margin. Deficits in income overexpenditure are covered by BRDB in the form of grants to cover salaries andexpenditures of key staff.
TCCA Grants
7.11 BRDB provides TCCA with an annual grant to cover the cost of train-ing and also pays the salaries and travelling allowances for the key staffseconded to TCCA. Training grants would continue to be given but be re:Latedto the actual training conducted by a TCCA rather than be in the form offixed amount of grant in aid. Annual accounts for training expenditureswould be provided by each TCCA, and audited by BRDB-s internal audit diviL-sion.
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7.12 Grants for expenditures on the salaries of key staff of the TCCAwould be required by a new TCCA at least for the first six years after itsestablishment. BRDB would constantly review the need for continued grantsfor a TCCA and would link the extent of the cost of the salaries of key TCCAstaff that it bears, to the growth in a TCCA's credit volume. A suitableformulation would be:
Annual Volume of Credit (Tk M) % of BRDB Grant for Key Staff
Less than 2.0 1002.5 753.0 503.5 254.0 Nil
Assurance has been obtained that BRDB would by June 30, 1984 and annual:Lythereafter, provide IDA with an analysis of the financial performance oiE allTCCA which have been operating for at least six years as of December 31 ofthe previous year; and cause the TCCA which are achieving an adequate levelof credit operations to bear a proportion of the costs of key BRDB staffaccording to a schedule agreed with IDA. Technical assistance would beavailable to BRDB to undertake this analysis which would involve a study ofthe loan recovery situation, classification of overdues and assessment ofincome accrued and realisable over a three year period.
7.13 To provide an incentive to TCCA staff to work towards profitability,the cooperative rules provide that up to 2% of TCCA profits may be used togive bonuses to staff. GOB has already decided to introduce this provisionin those TCCAs which reduce to below 50% their dependence on BRDB for grantsto cover salaries of key staff.
Produce and Fertilizer Marketing
7.14 Some TCCAs are already carrying out marketing of paddy and milledrice on a profitable basis. Based on their experience, an analysis of thefinancial viability of paddy marketing operation has been done (Annex 5,Table 9). The profitability of such a venture is sensitive to the pricereceived from the sale of rice, as well as the price paid for paddy. It isprojected that such a venture would yield a significant net cash inflow,after debt servicing, in the case of better quality rice, but would suffer aloss while handling coarse rice. As at present, TCCA marketing operationsare unlikely to cover coarse paddy.
7.15 Annual costs which a TCCA would have to incur in running a 200 tonfertilizer marketing godown are:
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Tk
Staff Wage Costs /a 16,000Maintenance and Overhead Costs 7,500
Sub Total: 23,500
Debt Servicing (including repaymentof principal) /b 48,000
Total Annual Cost 71,500
/a Storekeeper, Assistant and Night Watchman./b Based on a loan of Tk 250,000 at 14% interest
p.a., and a repayment period of ten years.
Within the present pricing system, TCCA receive a commission from BADC ofTk 105/ton for wholesaling fertilizer. Based on this, a TCCA would have tosell at least 680 tons of fertilizer per annum in order to earn enoughcommission to break even. Past experience, including that of the FAOassisted fertilizer marketing project, shows that this would be feasible formany TCCAs.
D. Cost Recovery
7.16 While STW are sold at full cost, DTW and LLP still carry a subsidyof 75% and 20% respectively. GOB is committed to phase out these subsidiesand thus all STW and LLP (US$57.9 M) would be sold on a full cost basis.For other credit components of the project (US$83.8 M), interest rates wouldbe at 17.5% for ST and rural poor credit and 14% for others. These are thehighest rates prevailing in the agricultural sector in Bangladesh and inrelation to expected inflation, these rates would be real. None of theinputs supplied under the rural poor program are expected to be subsidized.
7.17 GOB would bear the full cost of physical facilities provided foi,training, i.e., TTU and RDTI buildings, TTDC buildings, and project staffquarters (US$11.9 M). Part of the costs for TCCA facilities (US$3.4 M)would be recovered through a rent paid by the TCCA for their facilities.Costs of key staff provided to TCCA by BRDB, currently met by grants fromGOB, would be phased out over a six year period. Cost of project vehicLes(US$1.65 M) would be borne by GOB, but motorcycles and bicycles (US$1.8 M)for GOB field officers and TCCA staff would be supplied to such officers ona hire-purchase basis. Finally, all training costs and operating costs ofGOB staff and agencies (US$14.6 M) would continue to be borne by GOB aswould the cost of technical assistance (US$2.45 M).
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VIII. BENEFITS AND JUSTIFICATION
8.01 The principal benefits from project investments would be increasedagricultural production and employment and income generation for the ruralpoor including women. They would be achieved basically through thestrengthening of the TCCA cooperative system as a channel for rural credit,inputs and sale of irrigation equipment; the strengthening of IMP, and byactivities designed to directly benefit the rural poor. These lateractivities would be on a comparatively limited scale but would have a sub-stantial demonstration effect that should lead to their subsequent expansionoutside the six districts covered under the project. The project wouldimprove the financial viability of the TCCA and enable them to operate asself managed farmer institutions. These stronger institutions are expectedto improve the quality of interaction between farmers and GOB developmentagencies as well as the implementation of agricultural and rural developmentprograms. Importantly, the project would reduce Bangladesh's dependence onimported foodgrains.
8.02 Below, the more specific benefits arising from the project arediscussed. However, a project of this nature, with its emphasis on institu-tion building, has significant secondary benefits which cannot be quan-tified. These would arise out of linkage and multiplier effect caused bythe promotion of a stronger cash economy in rural areas.
8.03 Employment Impact: Increased agricultural activity under theproject, as well as the rural poor component, would lead to increasedemployment in rural areas. The increase in annual on-farm work is estimatedas 45 M person days at full development. This would be due to the increasedemployment of farm-family members andl hired labor as a consequence ofirrigation in the dry season. The rural poor component is expected tocreate an additional 5 M person days of annual employment at full develop-ment. Finally, temporary employment would be created as a result of con-struction works implemented under the project. This is estimated at about6 M person days over the four year project period.
8.04 Income Distribution Impact: Based on the past profile of TCCA/lKSSborrowers by size of landholdings, and the projected profile with moreactive participation of smaller farmers in a strengthened TCCA/KSS systemunder the project, the likely distribution by landholding of beneficiariesunder the project is shown below:
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Average Size Profile of KSS Borrowers Number ofof Holdings As in 1980 /a With Project Direct Beneficiaries /b
(ac) .... ... ).............
1.0 42 50 168,0003.0 42 35 118,2007.0 16 15 50,000
Total 100 100 336,200
/a Source: Joint Review of IRDP./b Excluding beneficiaries of ST credit program.
Based on the farm models prepared for STW and LLP groups (para 7.03) theaverage net farm income per acre would go up from Tk 2,100 to Tk 3,300. Fora family of six, holding 1 ac of land, the latter would amount to Tk 550 percapita annually, and for a similar family owing 3 ac of land to Tk 1,650.This compares with a national per capita income estimated at about Tk 2,650.In addition to the above, an estimated 59,000 families are expected tobenefit from the rural poor program including 2,300 under the privatemechanics program. These beneficiaries have present earnings averagingaround Tk 1,500 annually which is much below the national average. Thus, alarge majority of direct beneficiaries under the project are expected to bepeople who are presently among the lowest income group in the rural economy.
8.05 Balance of Payment Impact: Increased grain production would resultin reduced grain imports. The gross value of annual incremental grainproduction at full development is estimated at US$195 M. Direct foreignexchange expenditure (fertilizer, pesticides, diesel), excluding debt ser-vicing and other secondary foreign exchange expenditure, is estimated atUS$35 M annually, at full development.
8.06 Economic Analysis: The economic analysis of the project as a wholeemploys the following assumptions:
(a) Exchange Rate and Standard Conversion Factor: The official value ofthe Bangladesh Taka has recently been linked to the US dollar and inrecent months this rate has fluctuated between Tk 22.0 and Tk 24.0per US$1. An exchange rate of Tk 23 per US Dollar has been used inthis analysis. All goods and services have been valued at theirborder prices. For traded commodities, border prices at farmgatelevel have been derived from prevailing and projected world marketprices. Non-traded commodities, the prices of which include variouslocally created distortions, have been valued a border prices byapplying a standard conversion factor of 0.83 to their local prices.
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(b) Value of Unskilled Labor: The economic value of labor is estimatedat its opportunity cost, in terms of production foregone in alterna-tive activities, valued at border prices. Given the prevailingconditions of under and unemployment in Bangladesh, the opportunity
cost of unskilled labor (both on-farm and off-farm) is estimated at68% 1/ of the prevailing average market wage rate of Tk 15 per day,i.e., Tk 10.20 per day. Valued at border prices (by applying SICF),the economic price of unskilled labor is estimated at Tk 8.50 perman day.
(c) Investment and Operating Costs: All investment costs (excludingprice contingencies), valued at border prices, have been included incomputing the project ERR; duties, taxes and subsidies have beenexcluded. A specific construction conversion factor of 0.77 wasused to convert financial costs of building construction intoeconomic values. This is based on the assumption that the unit costof building construction includes a 33% foreign exchange componient,32% local non-traded materials and skilled services, 30% unskilledlabor, and 5% taxes. Provision has been made for the replacementcost of engines and pumps for irrigation equipment, as well as thereplacement of vehicles and other equipment, over the period ofanalysis. Finally, all incremental operating costs (training,staff, vehicles operation, building maintenance), related to theinstitutional support component (BRDB, TCCA, KSS, RCS), have beenincluded. It is assumed that the cooperative training costs, aswell as those related to IMP, Rural Poor Program, and audit wou:Ldcontinue beyond the project period, for the full benefits of theproject to be achieved.
(d) Production Costs: All incremental on-farm production costs havebeen included (based on per acre requirements shown on Annex 5,Table 2), as well as the operating and maintenance costs for irriga-tion equipment (Annex 5, Table 3). On-farm benefits and costs aredeferred by one year, and an incremental working capital stream isintroduced. Assuming two cropping seasons, working capital isestimated to amount to 50% of incremental operating costs of thefollowing year. Total working capital is recovered at the end ofthe project period. These adjustments are made to allow for thetime lags occuring between incremental costs and benefits. Totalproduction costs for the rural poor program have been derived fromcost profiles for each activity. Incremental labor provided by the
1/ The opportunity cost of labor is likely to differ between differentareas, depending on the prevailing levels of economic activity in therespective areas. However, as the project is national in scope, an
average has been used for the purpose of the analysis.
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head of the household has been valued on the same basis as for othercomponents. Labor provided by other family members (wife andchildren) has been valued at 10% of the computed economic value oflabor to reflect the value of additional consumption required toundertake these activities.
te) Benefits: Direct incremental benefits from the irrigation equipmentfinanced by the project, and from the area brought under IMP, havebeen included in the economic analysis. These are derived from anincrease in cropping intensity, due to dry season cultivation madepossible by irrigation, increased yields caused by the use of highyielding varieties, fertilizers and pesticides, and a marginalincrease in yields on presently irrigated areas which would bebrought under IMP with the project. Similarly, only direct benefitsfrom the rural poor program have been included. These include theincremental quantities of fish, beef, milk, oil extracted from oilseed, oil cakes, wood, clay and bamboo products, and coarse clothwhich would be produced under the project. 1/ No weights have beenassigned to reflect the favorable income distribution impact of theproject.
(f) Phasing: Based on the phasing of area per unit of irrigation equip-ment (Annex 5, Table 1), the full development STW/LLP irrigated areaof 510,000 ac, and the 99,000 additional area irrigated under IMPwould be reached in year 6. A gradual increase in yields per acrewith the project, has been assumed, leading to full development, interms of incremental production, in year 9.
8.07 ERR and Sensitivity Analysis: Based on the above assumption, theeconomic prices of the main inputs and outputs as shown in Annex 6, Table 1,and a period of analysis of 21 years, the ERR for the project as a whole isestimated to be 79% (Net Present Value, at a 12% discount rate, of Tk 12,505M). The ERR of the rural poor program is estimated at 37% (NPV of Tk 55 M,at a 12% discount rate). Since returns from IMP are expected to be high inrelation to costs, a rate of return has been calculated for the totalproject, excluding the benefits from IMP. This is estimated to be 72%.
1/ With the exception of oil extracted from oil seeds, all other outputsfrom the rural poor program are treated as non-tradeables, as thesewould not have a balance of payments impact.
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8.08 Switching values 1/ were calculated at a discount rate of 12%, totest the sensitivity of the above result to changes in values of key vari-ables. With the exception of paddy yields and prices, the analysis revealsthat the project is not sensitive to changes in the values of the othervariables. As shown in the table below, yields would have to be 31% lowerthan those assumed in this analysis for the total project ERR to fall to12%.
SwitchingVariable Unit Value %
Paddy Yield Mds/ac -36Paddy Price Tk/md -55
Other sensitivity tests show the ERR would decline to 41%, if irrigationdevelopment and consequently on-farm net incremental benefits, were delayedby two years while physical and training investments were carried out onschedule. The very favorable rate of return is essentially the result ofthe highly productive and well proven technical package proposed to farmersunder this project; namely irigation water and modern inputs. Moreover,this combination has the additional advantage of having a short gestationperiod, yielding benefits within one year of the investment. Finally, theRD-II project being primarily a follow-up project, major physical andinstitution-buildng investments took place during past years.
8.09 Project Risks: While the project faces no major overall economicrisk, particularly in view of the estimated high rate of return, elementsof risk are associated with the possibility of delayed irrigation develop-ment as in case of RD-I, with the possibility of slower development of TCCAas effective institutions, and with the expansion of BRDB's rural poorprogram. The success of the project will depend on an effective procurementsystem for the minor irrigation equipment, which under the project has beenput in the hands of the private sector. Private dealers who so far have hadonly one year to develop a mechanism to deal with the TCCA for the timelysupply, installation and payments for STW/LLPs, have faced some initialimplementation difficulties. The project incorporates a number of measuresto expedite licensing procedures as well as to improve the system forprocessing of credit and payment to dealers by TCCA. Equally importantwould be GOB efforts to constantly monitor and remove the administrativeobstacles in the way of the develoment of an effective private sector importand retail system for minor irrigation equipment.
1/ A Switching Value for a variable is defined as that value which, at thegiven discount rate, would make the net present value of the projectequal to zero.
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8.10 The institution building effort of the project critically deperLdson the effectiveness of BRDB. In recent years, BRDB's performance has
deteriorated mainly due to the uncertainty in which it was left by GOB withregard to its future role and status, a situation which seriously affectedstaff morale. However, recent Government measures to finally provide, after10 years of uncertainty, an independent Board status for BRDB and todecentralize BRDB's management, are indications that GOB seriously intendsto revitalize BRDB. The project emphasis on strengthening BRDB's total,program rather than focussing on the integrated development of a limitedgeographical area is also aimed to make BRDB a more effective institution.
8.11 The success of the project will depend also on the establishmentof an effective credit distribution system. Credit distribution to TCCA/KSSand their credit recovery performance have deteriorated in recent years--asit has for the rest of the agricultural sector--due to a number of reasonsfor which BRDB/TCCA are only partly responsible. While the joint GOB/IDAAgricultural Credit Review will address all aspects of the overall agricul-tural credit system and the project Incorporates major changes required inthe TCCA/KSS system to remedy the present situation, it must be recognizedthat agricultural credit is closely entertwined with social and politicalfactors prevailing in the countryside, which may be difficult to overccme.Loan recovery performance poorer than that achieved in the past would notaffect the economic impact as significantly as it would the institution.building and cost recovery objectives of the project.
!X. RECOMMENDATIONS
9.01 The following major assurances were obtained from GOB:
(a) cause BB to make available the foreign exchange needed by privatedealers for the importation of engines (para 4.11);
(b) review annually with IDA the interest rate level and structure forthe TCCA system (para 4.14)
(c) ensure that PECU continues in existence until the construction ofproject facilities comes to an end (para 5.06);
(d) cause all project agencies to implement key project actions accord-ing to a schedule agreed with IDA (para 5.13);
(e) cause RCS to use a revised audit manual satisfactory to IDA for theaudit of TCCA/KSS/BSS (para 5.18); and
(f) cause BB, Sonali Bank and RCS to maintain separate project accounts,have them audited by independent auditors acceptable to IDA, andmake these available to TDA (para 5.19).
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9.02 The following major assurances were obtained from BRDB:
(a) follow criteria agreed with IDA (Schedule B) in selectingTCCA/KSS/BSS for services and inputs financed under the project:(para 3.02);
(b) provide to IDA by September 30, 1983 for review the guidelines to beissued for implementation of the various components of the project;and revise these guidelines as required (para 5.14);
(c) maintain separate project accounts, have these audited by independ-ent auditors acceptable to IDA and make these available to IDA (para5.19);
(d) provide IDA by June 30, 1984 and annually thereafter an analysis ofthe financial performance of all TCCA which have been operating; forat least six years; and cause those TCCA which achieve an adequ.atelevel of credit volume to progressively share the cost of BRDB staffaccording to a schedule agreed with IDA (para 7.12).
9.03 Conditions for credit effectiveness would be that:
(a) GOB had formally approved the establishment of a separate wing inthe office of the RCS, with staffing levels satisfactory to IDA,exclusively responsible for the audit of TCCA/KSS/BSS (para 3.18);
(b) the financing agreements with the co-financiers had been executed(para 4.02);
(c) Executive Committee of the National Economic Council had approvedthe Project Proformas (para 4.03);
(d) subsidiary loan agreements between GOB and BB, and participatingagreement between BB and Sonali Bank had been executed (para 4.03);
(e) import licences had been issued for import by private dealers of5,000 STW/LLP engines (para 4.04); and
(f) the Banking Plan had been approved by the Management Boards ofSonali Bank and BRDB (para 4.15).
9.04 Conditions of disbursement would be against:
(a) ST credit, that Sonali Bank had designated one Deputy GeneralManager to handle all aspects of its credit operations withTCCA/KSS/BSS (para 4.10).
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(b) MT credit for marketing downs, that the project document for thecontinuation of the UNDP/FAO Fertilizer Marketing Project had beenexecuted (para 4.10).
(c) Advance against MT credit for irrigation equipment, that a SpecialAccount had been established and procedures had been agreed wilth IDAfor its operations (para 4.11).
9.05 Subject to the above conditions and assurances, the project co01-stitutes a suitable basis for an IDA Credit of US$100 M to the People'sRepublic of Bangladesh.
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BANGLADESH
RURAL DEVELOPMNT II PROJECT
Lending Terms and Conditions 1/
A. AGRICULTURAL MT CREDIT
1. GOB to BB
(a) annua'l interest rate of 3% per annum;
(b) repayment period up to 12 years inclusive up to 2 yearsgrace period;
(c) foreign exchange risk to be borne by the borrower; and
(d) refinancing up to 90% of BB refinance to SB.
2. BB to SB
(a) interest rate to be not less than 4% per annum for onlendingthrough TCCA/KSS;
(b) repayment to coincide approximately with agreedcollections from ultimate borrowers;
(c) refinancing up to 90% of loans made to eligible TCCA; and
(d) SB to pass funds to its branches at not more than 1% aboveinterest rate charged on BB refinance.
3. SB to TCCA
(a) interest rate to be not less than 6-1/2% per annum;
(b) repayment to coincide approx'mately withagreed collections from ultimate borrowers; and
(c) financing up to 100% of loans made to eligible KSS withinthe overall limit established for the TCCA.
1/ All interest rates at all levels are to be increased by at least 3% foroverdue amounts.
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4. TCCA to KSS
(a) interest rate to be not less than 10-1/2% per annum;
(b) finance up to 100% of the loans made to eligible members.
5. KSS to Borrowers
(a) interest rate to be not less than 14% per annum;
(b) finance up to 90% of the cost of eligible items; and
(c) repayment over 10 years inclusive of up to one year gracerepayable in semi-annual installments.
B. AGRICULTURAL ST CREDIT
1. GOB to BB
(a) IDA disbursements to be kept in a special fund to be usedto refinance the Sonali Bank for its ST lending to TCCA/KSS;
(b) interest rate to be not less than 5%;
(c) repayment period over 25 years inclusive of up to 5 yearsgrace period;
(d) refinancing up to 75% of BB refinance to Sonali Bank; and
(e) foreign exchange risk to be borne by the borrower.
2. BB to SB
(a) interest rate to be not less than 6% per annum for onlendingthrough TCCA/KSS;
(b) repayment to coincide approximately with agreedcollections from TCCA, but to be at intervals not lessthan one year;
(c) refinancing up to 90% of loans to eligible TCCA; and
(d) SB to pass loans to its branches, at not more than 3/4%above interest rate charged by BB on refinance.
3. SB to TCCA
(a) interest rate to be not less than 7-1/2% per annum;
-66-Schedule APage 3
(b) repayment to coincide approximately withagreed collections from ultimate borrowers; and
(c) financing up to 100% of loans to eligible KSS, withinthe overall limit established for a TCCA.
4. TCCA to KSS
(a) interest rate to be not less than 14-1/2% per annum; and
(b) financing up to 100% of loans to eligible members withinthe overall limit established for a KSS.
5. KSS to Members
(a) interest rate to be not less than 17-1/2% per annum; and
(b) repayment on a schedule established by TCCA.
C. RURAL POOR PROGRAM
1. GOB to BB
(a) annual interest rate of 3% per annum;
(b) repayment period up to 10 years inclusive up to 2 yearsgrace period;
(c) refinancing up to 100% of BB refinance; and
(d) foreign exchange risk to be borne by the borrower.
2. BB to SB
(a) interest rate to be not less than 4% per annum foronlending through TCCA/BSS;
(b) repayment to coincide approximately with theagreed collection from TCCA, but to be at intervals notless than one year;
(c) refinancing up to 100% loans to eligible TCCA; and
(d) SB to pass loans to branches at not more than 1% aboveBB interest rate charged by BB on refinance.
3. SB to TCCA
(a) interest rate to be not less than 7-1/2% per annum;
-67-Schedule APage 4
(b) repayment to coincide approximately with agreedcollections from borrowers; and
(c) financing up to 100% of loans to eligible BSS.
4. TCCA to BSS
(a) interest rate to be not less than 14-1/2% per annumfor ST and working capital loans;
(b) repayment to coincide approximately with agreed collectionfrom ultimate borrowers; and
(c) financing up to 100% of loans to eligible members.
5. BSS to Members
(a) interest rate to be not less than 17-1/2% per annum;
(b) repayment on a schedule established by TCCA for eachactivity; and
(c) financing up to 100% of loan for eligible activities.
D. MARKETING GODOWNS BY TCCA
1. GOB to BB
(a) annual interest rate to be not less than 5%;
(b) repayment period up to 10 years inclusive of up to two years grace;
(c) foreign exchange risk to be borne by the borrower; and
(d) refinancing up to 90% of BB refinance.
2. BB to SB
(a) annual interest rate to be not less than 6%;
(b) repayment to coincide with approximately with agreedcollection from ultimate borrowers;
(c) refinancing up to 90% of the loans to TCCA; and
(d) SB to pass loans to branches at not more than 2%above interest rate charged by BB on refinance.
-68-Schedule APage 5
3. SB to TCCA
(a) annual interest rate to be not less than 14%;
(b) repayment period of 10 years inclusive of up to two yearsgrace; and
(c) financing up to 90% of the cost of the godown.
-69- Schedule B
Page 1
BANGLADESR
RURAL DEVELOPMENT II PROJECT
Criteria for Eligibility for Project Inputs
1. Inputs under the project would be available to all TCCA/KSS/BSSwhich meet the following criteria:
(a) Minor Irrigation Equipment: All TCCA regardless of classification 1/would be eligible for purchase of equipment provided they areeligible for MT credit. Access would be limited to KSS of 'A' and'B' class and KSS of other classes would have to upgrade theirperformance before being provided with equipment financed under theproject.
(b) IMP: All TCCA would be eligible, provided they are eligible forST credit (see item d below); only about 75 TCCA would be selectedin year 1. KSS must be of 'A' or 'B' class to participate in I]MP.About 5 KSS would be selected in each TCCA every year. Initialconcentration would be on KSS with DTW or 2-cusec LLP, but 'A' or'B' class KSS with more than one STW or LLP would also be eligible.
(c) Private Mechanics Training: Only 'A' and 'B' class TCCA would beeligible for this activity. Potential trainees would be selectedfrom 'A' and 'B' class BSS. Maximum trainees per TCCA would belimited to about 10.
(d) Medium-term and Short-term Credit would be available to TCCA/KSS/BSSwhich meet the eligibility criteria of Schedule C.
(e) Fertilizer Marketing
(i) Only 'A' class TCCA would be eligible;
(ii) TCCA must be located in districts where the UNDP/FAO fertilizermarketing project is operating;
1/ All TCCA/KSS/BSS would be classified according to a seven part indexbuilt up as in Attachment 1, 2 and 3. For 'A' class, the minimumachievement would be 60% for 'B', 50% of the maximum attainable totalscore. The classification of TCCA/KSS would be made as part of theannual audit of these societies. Newly established KSS/BSS would betreated as 'A' class during the first year of their operation.
-70-Schedule BPage 2
(iii) TCCA must have a godown, or must agree to build or rent one;
(iv) At least 20 KSS of A class with irrigation facilities shouldbe in approachable distance to a BADC primary distribution pointin that area; and
(v) TCCA must be willing to appoint, at its own expense one inspec-tor and one godown watchman for this purpose.
(f) Crop Marketing
(i) Only 'A and B class TCCA would be eligible;
(ii) The TCCA must have a godown or be willing to rent, or build one;and
(iii) The TCCA must be willing to appoint at its own expense oneinspector and one godown watchman for this purpose.
(g) TCCA Office and Housing: TCCA without office or housing facilitieswould be shortlisted each year and those with the best performanceratings would be selected for that year's construction program.
(h) Rural Poor Program:
(i) TCCA would be of A or B class; and
(ii) TCCA would pass a resolution to reserve at least one positioneach in its managing committee for a representative of the BSS.
-71- Schedule B
Attachment 1
BANGLADESH
RURAL DEVELOPMENT II PROJECT
TCCA Classification Criteria
No. Subject Condition Scale Marks 1/
1. Loan Repayment Percent repayment of amount 65 35due during the year 20 0
2. Financial Income excluding grants as 60 15a percent of expenditure 20 0excluding training
3. Capital Percent of shares and savings 80 10Formation target reached 2/ 15 0
4. Share of Good Percent KSS/BSS in -A- and 45 10KSS/BSS 'B' class 15 0
5. Accounting All annual accounts completed yes 10and in order no 0
6. AGM Meetings held as per cooperative yes 10rules no 0
7. Training Percent of programmed classes 65 10held 20 0
Maximum Total Mark 3/ 100
1/ Marks for achievement in between the limits indicated in the tableshould be proportionally reduced.
2/ Each KSS/BSS member is targetted to save Tk 25 per year.
3/ For 'A' classification, the minimum requirement would be 60;for 'B', 50.
-72-
Schedule BAttachment 2
BANGLADESH
RURAL DEVELOPMENT II PROJECT
KSS Classification Criteria
ScaleNo. Subject Condition (%) Marks 1/
1. Loan Repayment Percent repayment of amount 100 40due during the year 30 0
2. Capital Percent of shares and savings 75 10Formation target reached 2/ < 25 0
3. Accounting All annual accounts completed yes 10and in order no 0
4. Weekly Meetings All due meetings held > 50 10of KSS/BSS < 20 0
5. Training at Percent of programmed classes > 50 10TCCA attended by manager 15 0
6. AGM Meetings held as per cooperative yes 1.0rules no 0
7. Coverage Percent of eligible village 50 1.0households covered 20 0
Maximum Total Mark 3/ 1(0
1/ Marks for achievement in between the limits indicated in the tableshould be proportionally reduced.
2/ Each KSS member is targetted to save Tk 25 per year.
3/ For 'A' classification, the minimum requirement would be 60;for B', 50.
-73-Schedule BAttachment 3
BANGLADESH
RURAL DEVELOPMENT II PROJECT
BSS Classification Criteria
ScaleNo. Subject Condition (%) Marks 1/
1. Loan Repayment Percent repayment of amount 90 40due during the year 30 0
2. Capital Percent of shares and savings 75 10Formation target reached 2/ 25 0
3. Accounting All annual accounts completed yes 10and in order no 0
4. Weekly Meetings All due meetings held 50 10of BSS 20 0
5. Training at Percent of programmed classes 50 10TCCA attended by manager 15 0
6. Annual General Meetings held as per cooperative yes 10Meeting rules no 0
7. Membership Percent of eligible village 50 10Coverage households covered 20 0
Maximum Total Mark 31 100
1/ Marks for achievement in between the limits indicated in the tableshould be proportionally reduced.
2/ Each BSS member is targetted to save Tk 20 per year.
3/ For 'A' classification, the minimum requirement would be 60;for 'B', 50.
Schedule C
Page 1
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Lending Procedures for TCCA Credit Operations
A. Medium Term Credit
1. Steps involved in processing a MT credit application would be asfollows:
(a) an irrigation sub-group under a KSS would make an application forthe purchase of a STW or for construction of lined channels.Application would be on TCCA's standard form showing each member sland holding, and would be supported by legal papers for joint andseveral responsibility for loan repayment. A minimum potentialirrigated area of 12 acres would be required for an application tobe considered;
(b) using thana irrigation maps available in many thanas, and afterconducting a field inspection, the TPO would recommend the appLica-tion of eligible KSS to the TCCA managing committee;
(c) a consolidated list of applications approved by the managing commit-tee, would be sent to the Sonali Bank branch manager for forma:Lsanction of the loans; this list would be accompanied by allrelevant data requested by the Sonali Bank, but all supportingpapers would be retained by the TCCA;
(d) TCCA would make an application for the insurance of the minorirrigation equipment with the Shadharan Bima Corporation and forwardthe insurance policy to the Sonali Bank branch manager;
(e) upon installation of the minor irrigation equipment, the purchasingKSS would approve the supplier's bill requesting payment, TCCA wouldmake the payment to the supplier by check using a line of creditestablished by Sonali Bank, and would charge a loan to the KSS; and
(f) Sonali Bank would charge a loan to the TCCA when the check issued tothe supplier is presented for payment.
2. Eligibility criteria for TCCA/KSS and members would be revised asfollows:
(a) for a TCCA to be eligible for finance from Sonali Bank for MT creditgiven to eligible KSS, it would have to (i) achieve a minimumrecovery during the previous 12 months of 65% of the total demand
-75-ScheduLe CPage 2
for all MT credit; (ii) allocate at least 2% of the interest marginit had received on previous loans to bad debt reserve; and (iii)submit a statement showing overdues by age;
(b) for a KSS to be eligible for financing from TCCA for MT credit, itwould have to (i) achieve a minimum recovery during the previout, 12months of 100% of the total demand for all MT credit; and
(c) for a member of a KSS to obtain finance for MT, he would have torepay 100% of all amounts due.
3. Guidelines for branch managers and regional managers would be estab-lished by Sonali Bank to help them determine without reference to HQ theannual credit limits for eligible TCCA for MT credit. These limits would berelated to the classification of TCCA (Schedule B) and would be higher for'A class TCCA than for B class TCCA. Sonali Bank would also introducemonthly and quarterly reports from branch managers to report exclusively onthe activities of the SB branch relating to its MT credit operations withthe TCCA.
B. Short Term Credit
4. Steps involved in obtaining ST credit would be as follows:
(a) a KSS manager would prepare a KSS production plan -- a documentwhich records the land holding, cropping plan, input and creditneeds of the members of a KSS; these plans in the past have beenprepared on a seasonal basis but, under the project, this wouldshift to an annual basis; the production plan when submitted to theTCCA with a supportive resolution of the KSS managing committeewould constitute a loan application;
(b) TPO would consolidate the loan applications of all eligible KSS; asthe number of KSS has grown the preparation of one consolidatedapplication for all KSS has led to delays in loan approvals; thus,under the project, consolidated applications would be prepared forabout 20 KSS;
(c) TCCA management committee would approve the loan application andforward the consolidated applications with all essential supportinginformation to the Sonali Bank branch for sanction. All supportingpapers would be retained at the TCCA to be available for inspectionby authorized staff of the Sonali Bank; the past practice ofapplications being forwarded by TCCA to District Project Directorsand BRDB HQ would be discontinued; and
(d) by writing checks to suppliers and KSS, TCCA would draw against thesanctioned credit limit approved by Sonali Bank.
5. Eligibility criteria for TCCA/KSS members would be revised as follows:
-76- Schedule CPage 3
(a) for a TCCA to be eligible for finance from Sonali Bank for STcredit, it would have to (i) achieve a minimum recovery during theprevious 12 months of 65% of the total demand for all ST credit;(ii) allocate at least 2% of the interest margin it had received onprevious loans to bad debt reserve; and (iii) submit a statementshowing overdues by age;
(b) for a KSS to be eligible for financing by TCCA for ST credit, itwould have to (i) achieve a minimum recovery during the previous 12months of 100% of the total demand for all ST credit;
(c) for a member of a KSS to be eligible for ST credit, he would have torepay 100% of all amounts due; a member would be eligible to borrowfor a following crop even when previous loans are outstanding butnot overdue.
6. Guidelines for Sonali Bank branch and regional managers would beestablished to enable them to determine the credit limits for a eligibleTGCA without reference to SB Headquarters. Calculation of the annual creditlimit of the TCCA would be linked to its classification (Schedule B).
C. Rural Poor Credit
7. Under the project, a credit program would be established by SonaliBank through the TCCA for lending to eligible BSS. Steps involved inobtaining such a loan would be as follows:
(a) a BSS manager would prepare a BSS activity plan grouping membersaccording to specific activities for which they have been trained oralready have the skills; the activity plan would record the inputand credit needs of the members, and when forwarded to the TCCA witha supportive resolution of the managing committee, would constitutea loan application;
(b) TPO would arrange for the activity plans to be reviewed byappropriate GOB technical agencies and recommend the application ofeligible BSS to the management committee for approval;
(c) TCCA will forward the consolidated plan, with supporting informationand the report of the technical review, to the branch of Sonali Bankfor sanction of loan; and
(d) once the total TCCA loan is sanctioned by Sonali Bank, payment tosuppliers or BSS would be made by TCCA upon presentation of a billapproved by the beneficiaries; TCCA would charge a loan to the BSSat the time of payment to supplier; and
(e) Sonali Bank would charge a loan to the TCCA at the time the checkissued by the TCCA is presented for encashment.
-7 7-Schedule CPage 4 -
8. Eligibility of the TCCA/BSS members for loans would be establishedas follows:
(a) a TCCA to be eligible for finance from Sonali Bank for loans underthe rural poor program would have to be 'A' or 'B' class, and wouldhave to (i) achieve a minimum recovery during the previous 12 monthsof 65% of total demand of loans given to BSS; (ii) allocate 2% outof interest margin it had received on previous loans to bad debtreserve; and (iii) submit a statement showing overdues by age;
(b) for a BSS to be eligible for finance from TCCA, it would have toachieve a minimum loan recovery during the previous 12 months of 75%of the total demand for all loans to members;
(c) for a member to be eligible for loans from a BSS, he or she wouldhave to repay 90% of all amounts due; the normal KSS requirement ofdepositing 10% of the loan amount as shares/deposits would berelaxed to 5% in case of BSS members.
9. Guidelines for Sonali Bank and TCCA would be established to enablethem to determine loan limits without reference to their respective HQ.These guidelines would allow a branch manager to approve loans, once thesehave been appraised by the appropriate GOB agency, without reference to HQprovided the TCCA and BSS both meet eligibility criteria.
D. Diversified Lending
10. This lending will be for selected TCCAs to invest in marketing andfertilizer godowns. Loan applications would be appraised by Sonali Bank.In case of fertilizer godowns, Sonali Bank's appraisal would focus on thelikely TCCA turnover of fertilizer in its thana of operation (para 7.15); incase of crop marketing loans for crops other than paddy, careful scrutinywould be required to assess the seasonal variations, processing and handlingcosts and prices obtainable in retail markets. Sonali Bank branch managerswould refer these application their Headquarters, using proforma prescribedby Sonali Bank.
BANGLADESHRURAL DEVELOPMENT II PRUJECT
TCCA/KSS System: Coverage
BRDB , RD I PRGJSCT
FY 78 FY 79 FY 80 FY 81 FY 82 FY 78 FY 79 FY 80 FY 81 FY 82
Number of TCCA 250 250 267 297 350 7 7 7 7 7
Number of A & B Class N/A s N/A N/A N/A 200 N/A N/A N/A N/A N/A
Number of KSS 27,500 33,500 39,600 44,800 48,800 810 1,000 1,140 1,400 1,400
Number of BSS - - 640 1,955 2,525 - - 110 330 390
A & B Class KSS (%) N/A / N/A N/A 47 48 N/A N/A N/A 45 49
Per TCCA : KSS 110 134 148 150 139 115 142 163 200 200BS - - - 10 10 - - 16 47 56
Membership ('000) : KSS 844 1,042 1,300 1,508 1,690 32 42 55 59 75BSS - - 19 43 69 - - 2e7 7,5 10
Membership : Per OSS 30 31 33 34 35 39 42 49 42 54PerBSS - - 30 22 27 - - 25 24 25
Total Savings+ Shares : KSS (Tkl M) 54 71 92 129 163 1.0 1.3 2.2 2.7 15.4BSS - - 0o.6 1.9 3 - - - 0.2 0.35
Per Member Savings & Shares : ESS 64 68 71 85 96 30 30 39 46 71BSS - - 32 44 43 - - - 23 35
Farm Families., Covered in 30 34 22 20 20 21 27 29 38 41Adopted Thanas (-A)
% of _ & B Class Members Borrowin g : - - - 37 32 -_ _ 24 77
Source : BRDB
iI Classificatian system started in 1981. S/ Assuming that average membership of 'A' and 'B' Class KSS is 50% p >
higher than others.a 21 Farm families are defined as total rural families. h t o4/ All TCCA do not have a rural poor program.
-79- ANNEX ITable 2
BANGLADESHRURAL DEVELOEMENT II PROJECT
Credit Operations of TCCA/KSS
FY 78 FY 79 FY 80 FY 81 FY 82
Thana Covered 250 250 267 295 350
Paddy :
- T. AmanTCCA financed N/A N/A N/A 184 127KSS financed 3,408 3,666 4,638 5,178 2,719Members financed 102,045 110,165 81,402 103,456 77,679Amount disbursed (Tk M) 33.1 34.2 50.7 713.00 730.77
-Boro
TCCA financed N/A N/A N/A 193 181KSS financed 7,610 6,717 6,710 7,114 6,537Members financed 190,335 169,200 131,199 136,919 139,279Amount disbursed (Tk M) 48,1 45.4 85.0 115.4 132.4
Aus/B. AmanTCCA financed N/A N/A N/A 115 120XSS financed 4,015 4,111 4,351 2,925 3,850Members financed 103,122 102,185 80,229 63,874 96,660Amount disbursed (Tk M) 21.0 33.1 54.8 50.9 40.0
WheatTCCA financed N/A N/A N/A 59 22ESS financed 312 395 742 833 485Members financed 7,818 10,112 14,312 19,023 7,532Amount disbursed (Tk M) 2.4 3.9 8.2 11.2 8.9
PotatoTCCA financed N/A N/A N/A 30 24KSS financed 355 403 297 397 242Members financed 8,019 8,541 5,173 8,471 4,906Amount disbursed (Tk M) 4.1 5.7 5.8 7.7 3.9
TobaccoTCCA financed N/A N/A N/A 3 3XSS financed N/A N/A N/A 28 185Members financed N/A N/A N/A 485 4,100Amount disbursed (Tk M) N/A N/A N/A 4.17 5.37
STW/DTW/LLPTCCA financed - - N/A N/A 102KSS financed - - N/A N/A N/AMembers financed - - N/A N/A N/AAmount disbuirsed (Tk M) - - N/A N/A 15.4
Source : BRDB
(Loan Operations in Taka/Million)
-80-ANNEX 1Table 3
BANGLADESHRURAL DEVELOPMENT II PROJECT
National Agriculture Credit Program
(i) Volume and % Refinance from Bangladesh Bank(Taka/Millions and %)
FY 79 FY 80 FY 81 Y 82
BKB 746 (89) 1,415 (75) 2,097 ( 6 9 )il 2,710 (47)NCBs 784 (16) 972 (17) 945 (7) 1,226 (26)BSBL 201 (99) 270 (94) 276 (93) 186 (94)TCCA/XSS 185 (0) 290 (O) 302 (0) 273 (0)
1916 (52) 2.947 (50 6-2095 (40)
(ii) Recovery Performanc '
Loans Disbursed in % Recoverv uDto June 30. 1982 National Average
BKB Sonali_1 BSBL TCA/ISSSACP SACP N.P, N.P. N,P,
FY 77 94 90 98 81 99 E8FY 78 82 83 94 82 95 E12FY 79 66 74 93 80 90 7'9FY 80 50 57 74 73 75 64FY 81 316_ 42 58 4
(iii) Number of Borrowers/Loan Size
FY 80 FY 81 FY 82
Borrowers Loan Size Borrowers Loan Size Borrowers Loan Size
BKB 388 3,650 391 5,360 N/A N A(ooo) (Tk) (ooo) (Tk) (000) (Tk)
NCBs 649 1,500 683 1,380 N/A N/A
TCCAZXSS 312 930 30 915 331 8251.349 1.283 1.404 1.210 - -
Source : Respective Banks. BSBL Data not available; BKB normal program recovery datanot available.
SACP : Special agricultural credit program - 100 Crore Program.NP : Normal Program.
/ About 38% of BKB lending is now "Non-agricultural" or commercial; and this isincreasingly financed from deposits.
/ On principal and interest.
/ Excluding TCCA/KSS.
-81-
BANGLADESH ANNEX IRURAL DEVELOPMENT II PROJECT Table
Minor Irrigation ExDerience
(i) Sales Prozram
1980-81 1981-82 Projected 1982-87
Total I Total Total TotalSales ' TCCA Sales ' TOCA Number ' TCCA TCCA
DTW 730 64 1,130 73 6,000 95 5,7501/
STW 27,250 54 26,400 44 120,000 45 54,000/
LLP 11,900 20 5,475 21 16,000 37.5 6,000 "
HTW 45,030 N/A 72,070 85 350,000 85 300,000
Rented DTW/LLP/ - - 2,000 N/A 15,000 65 10,000
(ii) % of KSS withoutz' Irritation
'A' Class 'B' Class
1979-80 57 56
1981-82 53 59
Source : BRVB/BADC/BKB
1/ Sale of old equipment on MT credit is expected to start in 1982-83 season.
2/ "Without" means that there is no STW, or DTW, or LLP under KSS management.
/ About 4000 from IDA's DTW II project (Credit 1287-BD); 600 from ShRDP and RD-I.
_! About 30,000 from RD-II, and another 10,000 from Agricultural Credit I (Cr. 1147-BD);and normal program of BADC.
/ 3000 from RD-II; 2000 from LLP Project (Cr. 990-BD); and other from normal program.
6/ 190,000 from IDA's HTW Project (Credit 1140-BD).
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Input Marketing Performance
Total Sales Market Share of TCCAsNo. of TCCAs Involved Total Sales by TCCAs (Tons) . (in %)
Year in Fertilizer Sales (in Tons) National TCCA Thanas National TCCA Thanas
1972 29 72,582 243,842 - 30 -
1973 52 113,964 384,023 - 30 -
1974 64 150,945 379,884 - 40 -
1975 69 136,254 279,569 - 49 -
1976 61 160,727 457,586 - 35
1977 61 166,327 576,057 - 32 _
1978' 64 107,709 715,347 - 15 -
1979 63 101,164 741,608 182,065 14 55
1980 75 72,345 838,110 198,558 9 36
1981 62 36,614 874,639 221,167 4 16
1982 66 22,736 829,323 130,325 3 17
(D
BANGLADESHRURAL DEVELOPMENT II PROJECT
Medium Term Foodgrain Production Plan
ReauLrement and Commitments for Minor Irrization Equipment(As of November 7, 1982)
DTW STW LLP IT _HW
Increase in Units in Operation under MTFPP?/ 14,500 140,000 12,400 390,000
Units to be Procured 16,500 151,400 28,200 490,000
Financing Commitments
IDA 4,250 27,000 9,900 190,000
ADB 960 24,450 2,000 _
IFAD 350* 3,250 500 _USAID - - - 160,000
Kuwait 2,500* 1,000 1,750a/ -
Yen Credit and K. R. Grant 500 51,250 6,600U.K. - - 3,000
GOB Local - 15,350 -
Saudi Arabia 3,500 - 10,000/-
FJW 240 __- _ -
12,300 122,300 33,750 350,000
Of which already Procured/Supplied 3,385 69,000 20,650 160,000
Financing Gap (No. of Units) 4,200 29,100 - 140,000
1/ MTFPP Target raised in July 1982 to 165,000 STW units in operation.2/ Electric motors only.3/ Negotiation initiated. x 4/ Due to a all round substitution of 2 cusec LLPs by 1 cusec LLPs, the numbers of equipment being supplied H
exceed the MTFPP requirement; however the total cusec capacity is still not exceeded; it is estimated _that a gap of about 13,000 1 cusec units still exists.
-84- ANNEX 1Table 7
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Thana Facilities in Project Area
District Number of Thanas
Total Without Without Without Without NumberTTDCi/ TCCA Office Two Twin TCCA of
Quarters2/ Godowns_/ TTUs
1. Dinajpur 23 - 8 2 19 -
2. Rangpur 34 3 22 11 29 1
3. Bogra 15 1 7 7 7 4
4. Khulna 22 - 19 5 20 -
5. Patuakhali 11 4 3 3 6 -
6. Barisal 28 3 14 4 21 1
7. Dacca_' 33 6 15 13 27 1
8. Tangail 11 3 5 6 6 -
9. Mymensingh3' 33 3 ( 11 ( (10. Jamalpur 11 1 3 (34 (3
1i. Sylhet 34 3 27 12 29 1
12. Comilla 25 4 4 6 3 -
13. Chittagong 21 8 - 4 19 1
TOTAL 301 39 132 87 220 12
L/ Incomplete TTDC is treated as without.
2/ Normal pattern is to have 4 twin quarter buildings per TTDC.
/ Excluding facilities being built under DTW II Project (Cr. 1287-BD), inMymensingh and Dacca districts.
/ About 31 TCCAs have 200-300T godowns; and 49 TCCAs have 50-75T godowns.
-85- ANNEX 1Table 8
BANGLADESHRURAL DEVELOPMENT II PROJECT
TCCA/KSS Audit Situation
Year No. to be Audited No. of Actual Audits Backl '
KSS TCGA KSS TCCA KSS TCCA
1979-80 33,500 250 21,150 177 12,350 83
1980-81 39,600 275 23,250 188 27,700 170
1981-82 44,800 297 4,500 25 - -
Source : Registrar of Cooperatives
il Assuming no backlog from 1978-79; as of October 1982.
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Services Available to TCCA/KSS/BSS under Aided Projects
Mnor Irrigation Development Rural Crop Fertilizer Thana---------------------------------------------------------------- Poor Marketing Mrketing Civil
District DTW STW LLP HTW IMP Program Program 2/ Program Works
Dinajpur Kuwait F.* RD-II/Ag.Cr. RD-II (HTW) RD-II RD-II RD-II RD-II RD-IIRangpur Kuwait F.* RD-II/Ag.Cr. RD-II (HTWI) RD-II - - RD-IIBogra KFW* RD-II/Ag.Cr. RD-II (HTW) RD-II RD-II RD-II RD-II RD-IIKhulna 1/ 1/ RD-II (HTW) RD-II RD-II RD-II RD-II RD-IIPatuakhali 1/ T/ RD-II/(LLP) (HTW) RD-II - - RD-IIBarisal 1/ T/ RD-II/(LLP) (HTW) RD-II RD-II - RD-IIDhaka TDTW-II) RD-II RD-II (HTW) RD-II/(DTW-II) - RD-II FAO* RD-II/(DTW-II)Tangail (DTW-II) RD-II RD-II (HTW) RD-II/(DTW-II) - FG-II - RD-II/(DTW-II)Mymensingh (DTW-II) RD-II RD-II (HTW) RD-Il/(DTW-II) RD-II RD-II RD-II RD-II/(DTW-II)Jamalpur (DTW-II) RD-II RD-II (HTW) RD-II/(DTW-II) RD-II RD-II RD-II RD-II/(DTW-II)Sylhet 1/ 1/ RD-II (HTW) RD-II - - RD-IIComilla - RD-II RD-II/(LLP) (HTW) RD-II FAO* - FAO* RD-IIChittagong RD-II RD-II/(LLP) (HTW) RD-II - - - RD-II
Chittagong Hill Tracts 1/ 1/ 1/ 1/ 1/ ADB* - - ADB*Ra jshahi ADB* (Ag. Cr.) ADB* ZHTW) ADB* ADB* - - ADB*
ADB*Pabna ADB* (Ag.Cr.) ADB* (HTW) ADB* ADB* - - ADB*
ADB*Kushtia ADB* ADB* ADB* (HTW) ADB* ADB* - - ADB*Jessore IFAD* IFAD* IFAD* (H1TW) IFAD* IFAD* IFAD* IFAD* IFADFaridpur IFAD* IFAD* IFAD* (HTW) IFAD* IFAD* IFAD* IFAD* IFADNoakhali 1/ 1/ (LLP) (HTW) - DANIDA* DANIDA* - ADB*
1/ Not feasible in most parts of the district. (HTW) Hand Tubewells Project, Cr. 1140-BD2/ Total program includes 20 thanas for crop marketing, 30 for (LLP) Low Lift Pump Project, Cr. 990-BD
fertilizer marketing, and 100 for rural poor in six districts. (Ag.Cr.): Agricultural Credit Project, Cr. 1147-BD sH* Non-IDA projects. (DTW-II): Deep Tubewells Project, Cr. 1287-BD
(FG-II): Foodgrain Storage II Project. Cr. 787-BD >c
BANGLADESHRURAL DEVELOPMENT II PROJECT
BRDB: Irrigation Manarement Program
1979-80 _980-81 1981-8_
A. Coverage of IMPTCCA 7 (RD-I) 20 43DTW 20 84 311LLP (2 Cusec) - 20 128
Before J After fIncrease Beforeiff After Increas2 B-efr.1 After 96 Tnoreage
B. Irrizated Area per UnitDTW 52 94 80 63 87 38 48 73 52
LLP (2 Cusec) - - - 43 56 30 33 51 54
C. Farmer Participation per Unitl DTW 83 134 61 43 66 53 60 76 27LLP (2 Cusec) - - - 31 41 32 44 62 41
D. Yield per AcreDTW 37 58 56 39 46 18 44 55 25
LLP (2 Cusec) - - - 38 45 18 45 45 -
E. Irrigation Cost per Acre (Tk) 28 2DTW 404 283 -30 32 378 +16J N/A N/A _
LLP (2 Cusec) - - - 3312 3812 +15 N/A N/A -
F. Credit Flow per Unit (Tk)DTW 11,300 30,200 - 11,580 33,080 180 N/A N/A -LLP - - - 7,450 11,750 58 N/A N/A -
I/ i.e., the season before the DTW/LLP were adopted under IMP.
2/ Fuel prices increased by 50 between 1979-80 and 1980-81.
/ About 40% of participants are non members of KSS. CD
-88- ANNEX 1
Table 11BANGLADESH
RURAL DEVELOPMENT II PROJECT
National Rural Poor Programs
Lending Activity (1981-82)(Tk 'ooO)
Activity --- - Agenc/Pr_oam_
BRAC GBP Proshika SFDP BRDB_Main Prog. RD-I Women's Prog.
Beef Fattening 1,840 2,250 45 1,903 210 1,240 705
Pond Fisheries 540 - 60 57 78 33 -
Rickshaw 600 3,770 - - 50 73 -
Weaving 980 1,240 - - - - -
Irrigation Assets 400 25 100 281 - 23 -
Paddy Husking 860 5,040 45 1 385 - 2,350
Cottage Industry 50 470 - 17 - 8 470
Oil Milling - 1,610 _ - _ 43 -
Carpentry 150 - - - - -
Others 10 8,650 - 1,186 815 280 1,175
TOTAL: 5,430 23,050 250 3,445 1,538 1,700 4,700
BRAC: Bangladesh Rural Advancement Committee
GBP : Grameen Bank Project
SFDP: Small Farmers Development Program
-89- ANNEX 1
Table 12
BANGLADESHRURAL DEVELOPMIENT II PROJECT
National Rural Poor Program
Loan Recovery Performance 8(since inception to June 1982)
(in M Tk)
Loans Loans Due Loans Loans Recovered as % 8Disbursed for Recovery Recovered of Loans Due for Recoverv
BRAC - 10.6 2.88 2.71 94
Proshik87 2.28 0.75 0.60 80
GBP2/ 68,28 48.79 48.31 99 2
ASSARRDA' 16.38 14.31 11.67 81
BRDB - Main Program ' 9.47 6.31 5.42 86
- RD-I' 2.41 0.48 0.25 52
-Women ,, 8.92 7.0 5.85 83Progr
JJ Since July 1980.
/ Since 1980.
2/ Since November 1979; data only for Tangail; GBP accumulates a loan guaranteefund by allocating to it 5% of the initial loan, and this fund is used tomaintain program recovery levels against repayment difficulties of individualborrowers.
/ Since July 1976.
/ Since July 1979.
/ Since July 1980.
/ Since January 1975.
8/ Because of differing inception dates for various programs, the recovery % isnot strictly comparable being biased towards older programs. However, data.on annual recovery against demand is not available.
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Socio-Economic Data on Six Districts
Agricultural Total - - 0.5Farm Holdi 0-2( Acr 7 25 Acre Average Size Percentage of
Holding …………---------- -- -- -- of Farm Hold- Households not
Districts (No. in '000) Number Acres Number _Acles Number Acres Number __AcLes ings in Acres Operating any Land
Bogra 247.0 225.6 704.0 11.3 3.6 110.1 161.7 104.2 538.7 3.12 32
Dinajpur 278.6 253.4 1,205.7 2.5 0.7 69.2 112.9 181.7 1,092.1 4.75 33
Khulna 297.9 264.9 1,142.4 12.9 3.3 89.5 134.8 162.5 1,004.3 4.31 31
Barisal 372.0 325.0 1,229.9 13.1 4.3 130.0 194.5 181.9 1,031.1 3.78 28 oD
Mymensingh 590.5 565.4 1,860.8 30.3 9.4 261.6 376.6 273.5 1,474.8 3.29 28
Jamalpur 198.3 188.4 686.6 7.3 2.4 77.9 116.7 103.2 567.5 3.64 34
Bangladesh 6,853.0 6,257.0 21,959.0 324.0 109.0 2,787.0 4,007.0 3,146.0 17,843.0 3.5 29
Source: Agricultural Census 1977.
Socio-Economic Indicators 1980.Land Occupancy Survey Report 1977.
I-es
-91- ANNEX 2
Table I A
BANGLADESHRURAL DEVELOPMENT II PROJECT
Growth of TCCA/IKS/BSS
A. KSS
Base Year 1 Year 2 Year 3 Yer 4
1. TCCA 212 301 301 301 301
2. KSS Existing & Upgrading 15,250 16,685 18,120 19,560 21,000
New - 1,780 3,560 5,340 7,120
3. Membership/ ('000) 535 700 900 1,150 1,490
B. BSS/MBSS
1. TCCA Covered 72/ 12 41 73 100
2. BSS 300 400 1,025 1,830 2,500
3. MBSS _ 30 60 150 400
4. Membershi 7,000 9,450 27,400 55,000 128,000
j/ Rough estimates based on global averages rather than growth of each KSS/BSS.
/Oly RD-I thanas are considered in the 'base' figure.
-92- ANNEX 2Table 1B
BANGLADESHRURAL DEVELOPMENT II PROJECT
Growth of TCCA/KSS/BSS
C. IMFI/
Base Year 1 Year 2 Year 3 Year 4
1. TCCA Covered 75 150 225 301
2. DTW Covered 440 1,320 2,640 4,400
3. LLP Covered 110 330 660 1,100
D. MARKETING
Village Level Fertilizer
1. TCCA Covered 4 10 15 22 30
2. KSS Covered 110 170 268 420 620
3. Farmers Participating 1,650 2,800 4,020 6,110 9,200
Crov)
1. TCdA Covered 4 6 10 15 20
2. KSS Covered 200 220 280 400 555
3. Farmers Participating 2,400 3,160 3,680 4,800 6,460
I/ Staff will be trained in Year 1,
BANGLADESHRURAL DEVELOPMENT II PROJECT
Trairinru Load: Institutional Trainine
Category No. of Total Teaching Total Total Trainee Day__ mento_Enees (Takof Type of Days per No. of Group No. of Course ------------------ Traine Allce. Travel Alnce.
Trainees Field of Training Training Location Course Trainees Size Groups Days Total Year 1 Year 2 Year Year 4_ Daily Rate Per Trainee
Diatrict HRQ: BRDB orPD and DPD Rural Development Refresher BARD: Couilla 5 156 39 4 20 780 195 195 195 195 40 300TCCATPO Rural Development Pre-Service RDTI 112 89 30 3 336 9,968 9,968 - - - 40 300
In-Service RDTI 5 1,115 30 37 185 5,575 1,060 1,505 1,505 1,505 40 300
DPO/ Rural Development Pre-Service RDTI 90 389 25-33 14 1,260 35,010 14,760 6,750 6,750 6,750 306 300In-ervice RDTI 5 1,565 30-31 51 255 7,825 1,060 1,880 2,255 2,630 25 300
Accountant 'ccounting Pre-Service RDTI: Bogra 68 S9 30 3 204 6,052 6,052 - - - 25 300Refresher RDTI: Bogra 5 1,115 30 37 185 5,575 1,060 1,505 1,505 1,505 25 300
Inspector COOD. Mgt./dcntp. Pre-Service TTUs 45 1,663 30 56 2,520 74,835 18,720 18,720 18,720 18,675 20 150In-Service TITUs 45 288 24 12 540 12,960 3,240 3,240 3,240 3,240 20 150 'Refresher TTUs 5 4,986 30 167 835 24,930 4,310 4,670 7,170 8,780 20 150
Chairman CoOD. Manaaement (,rientation TTUs 5 1,204 30 40 200 6,020 1,505 1,505 1,505 1,505 20 150KSSllanager Coop.Mgt./Accntg. Grientation TTUs 5 34 025 30 1,135 5,675 170,125 36,710 39,105 41,505 52,805 20 150
Coop.Mgt./Arcntg. Weekly Trg. TTDC Hall/ 1 _/ 34,025 30 1,135 52,210 1,565,150 337,732 359,766 381,846 485,806 20+ Agriculture -
Hodel Farser Coop.Mgt./Agric. Seasonal TTDC Hall/ 3 -/ 93,165 30 3,106 37,272 1,117,980 221,580 260,160 298,800 337,440 20
Chairman Coop. Management Crientation TTDC Hall-"/ 3 5/ q3,165 30 3,106 9,318 279,495 55,395 65,040 74,700 04,360 20
I/ The training of the DPUs (Rural Program) is not included here but in the Annex 2, Table 4, "Rural Poor Program".
i/ Or in TTU if existing in the Thana and if a classroom is available.
V/ One day/week during 46 weeks.
B/ Before each of the 4 seasons, one day during three successive weeks or another appropriate time schedule.
5/ Three days each year.
i/ Only for the working days (weekends not included).
-94-ANNEX 2Table 3A
BANGLADESHRURAL DEVELOPMENT II PROJECT
Rural Development Trainina Institute. Sylhet(Capacity 100)
Pro.jected UtilizatiorA' bv RD II
Year 1 Year 2 Year 3 Year 4
( . . Weeks % of capacity used)8 a. . T.....)I. TEACHING WEEKS
1. TPOs
Pre-Service 12 (100) - - -
In-Service 2 (100) 3 (100) 3 (100) 3 (100)1 (30) 1 (30) 1 (30) 1 (30)
2. DPOs
Pre-Service 12 (100) 12 (75) 12 (75) 12 ('75)12 (64) - -
In-Service 2 (100) 4 (100) 5 (100) 5 (100)1 (30) 1 (60)
3. TCCA Accountants
Pre-Service-/ e
In-Service 7 (30) 10 (30) 10 (30) 10 (30)
II. CAPACITY UTILIZATIGN (%) 81 65 65 65
Figure in (%) is rate of utilization of maximum capacity.
11 The maximum availability of RDTI, taking into account the personnel leaveperiod is about 47 weeks or 10.5 months.
L1 Due to lack of space at RDTI in Year 1, the pre-service traininX for TCCAaccountants,especially for 89 new TCCAs, would be in RDA (Bogra) (Table 3C).
-95- ANNEX 2
Table 3B
BANGLADESHRURAL DEVELOPMENT II PROJECT
Thana Training Uni.ts (TVUs)(Capacity of each TTU = 30)
Projected Utilization bv RD-II
Year 1 Year 2 Year 3 Year 4
I. TOTAL NUMBER OF TEACHING WEEKS
1. TCCA Inspectors (groups of 30):Pre-Service 98 98 98 98In-Service 21 21 21 21Refresher 29 31 48 59
2. BSS/MBSS Group Organizers:Pre-Service 14 21 28 28
3. TCCA Chairmen 10 10 10 10
4. YSS Managers 245 261 277 352
5. BSS Managers 14 35 61 84
6. MBSS Managers 1 2 3 14
7. BSS Chairmen 17 35 61
8. MBSS Chairwomen 1 2 3
Total : 450 516 610 666
II. NUMBER OF TEACHING WEEKS PER TTUI' 38 43 36 40
III. CAPACITY UTILIZATIONL' 80 90 76 84
j/ The maximum availability of a TTU, taking into account the personnel leaveperiod, is about 47 weeks or 10.5 months each year.
2/ After the Year 3, the BSS and MBSS Chairmen/Chairwomen -'ill be trained in. theTTDC's.
./ Number of TTUs in the project area: 12 during the Years I and 2;17 during the Years 3 and 4.
-96-
ANNEX 2Table 3C
BANGLADESHRURAL DEVELOPMENT II PROJECT
Rural Development Academy (RDA). Boira(Capacity 175)
Projected Utilization by RD-II
Yarc I Year 2 Year 3 Year 4
I. TEACHING DAYS
1. Irrigation tIanagement Program
Thana Teams 140 140 140 140
2. Rural Poor Program
Orientatio A 14 28 28 28
3. TCCA Accountants
Pre-Service Training 135
II. CAPACITY UTILIZATION 26 29 29 29
Figure in (%) is rate of utilization of maximum capacity.
J/ The maximum availability of RDA, taking into account personnel leaveperiod, is about 200 days each year.
2/ Orientation course for Joint Director (HQ), Deputy Directors (HQ), ProjectDirectors, Deputy Project Directors, Thana Project Officer and TCCA Directors.
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Rural Poor Proraam
Training
Categories of Trainees Location Duration Number of Trainees Type of Training_________________________________ _____(Days) 1 2 j 4 _
a) Staff Training
Pre-Service TrainingDPO RDTI 120 12 29 32 27 Rural Development
Accountant RDTI 90 12 29 32 27 Accounting
Group Organisers TTU 60 43 65 90 92 Cooperative Management & Accounting
OrientationJoint Director/DD RDA 14 3 ) Familiarisation with the rural poor '
PD/DPDn 14 12 ) program; monitoring; and creditTPO 14 12 29 32 27 ) procedures.TCCA Director n 14 12 29 32 27
Refresher SessionsJD'/DD TTDC 9 3 3 3 3 ? Review of the progTess of the program.PD/DPD " 9 12 12 12 12 )TPO/DPO 9 24 82 146 200Accountant/GD 9 55 149 271 390TCCA Director 9 12 41 73 100
b) Cooperative Traini 1BSS Chairman Managers/Rep. TTDC 5 1,200 1,875 3,615 3,885 Leadership training and cooperative
MBSS Chairperson/Manager/Rep. 5 90 90 360 840 J management and accounting.
c) Refresher SessionsBSS Chairman/Managers/Rep. TTDC 9 1,200 3,075 5,490 7,500 ) General review of the program.
MBSS Chairperson/Managers/Rep. " 9 90 180 450 1,200
j/ For each society, it is assumed that a new set of leaders would be elected every two years.
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Flow of Short Term Credit
FY 83 FY 84 FY 85 FY 86 FY 87(Base Year)
1. Average loan limit Tk/ac 1/ 2/ 1,545 1,615 1,685 1,755 1,8252. % of 'A' and 'B' KSS 50 54 58 64 703. % of 'A' and 'B' KSS with irrigation 3/ 48 55 65 75 904. % of 'A' and 'B' Membership borrowing 4/ 34 37 40 45 505. ST credit per 'A' and 'B' KSS 5/ 24,400 27,750 31,300 36,700 42,4006. ST credit per KSS under IMP 6/ 80,600 80,600 80,600 80,600 80,6007. Total number of 'A' and 'B' KSS 15,250 18,465 21,680 25,000 28,1208. Total number of IMP KSS 7/ 300 300 795 1,785 3,2709. ST Credit Flow (Tk Million) 390 536 743 1,061 1,45510. Incremental ST Credit - 146 353 671 1,065 1
Price Escalation 8/ 14 73 211 461 D
Total (Tk Million) 9/ 160 426 882 1,526
J/ Loan limits will be increased from Tk 700 to Tk 900 per acre for T. Aman; Tk 800 to Tk 2,000 for HYV Boro; Tk 650 to Tk 1,000 forAus/LIV Boro; Tk 550 to Tk ',500 for Wheat; Tk 1,000 to Tk 4,000 for Potato; and Tk 600 to Tk 1,250 for Tobacco.
j/ Assuming total loan mix will change from 28 Aman; 51% HYV Boro; 16% Local Aus and Boro; 3,5% Wheat; 1.5% Potato and Tobacco .Q
20%, 65%, 5%, 5%, 5% respectively by 1987. The average limit will increase to Tk 1,545 and shift to Tk 1,825 as loan mix changes.
2/ It is expected that each EiS will have equivalent of 4 STWs, about 40,000 KSS can be covered .on this basis by the total minor irrigationequipment likely to.be available to TCCA (Annex 1, Table 4); of these 25,000 are expected to be under RD-II.
i/ A conservative projection for increase in demand for ST credit an irrigation expands to cover 9(% of 'A' and 'B' claase M5S.5/ From a FY 82 average of Tk 10,500 per 'A' and 'B' KSS, the average will increase to Tk 24,400 due to higher crcp limitz.
i/ Loan mix is assumed static at 2C0 Aman; 65% Boro; 15% others as in 1982.
I/ Ur.der the project, IM1P will expand starting from a base of 300 in FY 83 to additional 495 KSS in Year 2; 1,485 in Year 3; 2,970 in Year 4;and 4,950 by FY 88; credit per IMP KSS will increase from EY 81 average of about Tik 33,000 to Tk 80,600 due to higher loan limits. X
8/ Loan iimits will be regularly revised to reflect agricultural input price increases, which have been assumed to be in line withcontingiPncy factors shown on Annrc 3,Table 1.k/ 'oreign exchange cost of the items (cash inputs) financed by LT credit is estimated at 4t.
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Projected Phasinw of Loans for Rural Poor Progra y
Loan Size
Medium WorkingActivities ?erm CaDitai Year 1 Year 2 Year 3 Year l otal
Takal -..... T..-................ (lo. of Loans) 4.................
Pond Fisheries 21,115 2,047 20 80 100 100 300
Beef Fattening 1,300 - 3,000 9,000 12,500 15,000 39,500
Livestock for Milk Production 3,200 ° 400 600 1,500 1,500 4,000
Handloom 4,000 15,300 300 600 800 1,500 3,200
Oil Milling 3,000 7,500 200 300 400 500 1,400
Rickshaw Pulling 3,800 - 350 850 850 1,000 3,050
Cane & Bamboo Work - 24400 200 400 400 500 1,500
Carpentry 3,000 8,667 50 50 400 500 1,000
Pottery 3,500 1,283 60 100 200 200 560
Total 4,580: 11,980 17,150 20,800 54,510
S/ The total number of loans per activity is based on experience gained from other similar programs.However, -it is likely that some of these would change during implementation, with the introductionof other activities found to be viable.
ON )
BANGIADESH
RURAL DEVELOPMENT II PROJECT
Summary of Project Cost
Local Forei T Total Local Foreig Total % of Total.. Tk M).......... ......... (US M) ..........
Minor Irrigation Equipment 531.9 800.6 1332.5 23.12 34.81 57.93 33
Private Mechanics Program 42.8 12.9 55.7 1.86 0.56 2.42 1
IMP Expansion 70.2 1.5 71.7 3.05 0.07 3.12 2
Rural Poor Program 305.6 25.9 331.5 13.29 1.12 14.41 8
Incremental Short Term Credit 824.1 701.9 1526.0 37.20 29.13 66.33 37
Marketing Program 8.7 1.8 10.5 0.38 0.08 0.46 1
Thana Civil Works 210.1 97.8 307.9 9.13 4.25 13.38 8
Strengthening BRDB 102.0 28.9 130.9 4.44 1.26 5.70 3
Strengthening of Audit 36.8 6.0 42.8 1.60 0.26 1.86 1
Cooperative Training 184.7 19.2 203.9 8.03 0.84 8.87 5 lo
Technical Assistance 2.1 54.0 56.1 0.09 2.35 2.44 1
Total: 2319.0 1750.5 4069.5 102.19 74.73 176.92 100
Note: Physical Contingencies - In estimating total project cost, no physical contingencies have been providedon minor irrigation equipment, 10% on civil works, and 5% on all other costs.
Price Contingencies - These have been calculated on the basis of the following:
i) Base costs are expressed in mid 1983 prices, by applying, to mid 1982prices, a 13% inflation factor on local oDsts and 8% on foreign costs.
ii) Anticipated inflation during the project period is assumed as follows!Foreign Costs : Year 1 to 4 - 7.5% p.a.Local Costs : Year 1 - 13%; Year 2 - 11%; Years 3 & 4 - 10% p.a.
BANGIADESH
RURAL DEVELOPMhENT II PROJECT
Cost Estimates - Minor Irrigation Equipment
Total Coat (Taka million)
Unit Cost (Taka) Number of Units Year 1 Year 2 Year 3 Year 4 Totl
Local __P Total J 2 j 4 Total Total FEC Total C Total FEC Total FEC Cost FEC
Shallow TubevellsDiesel Engine (5-6 hp) 8,100 8,100Pump 4,230 1,020 5,250G.I. Pipe - 4" 50' 350 3,295 3,645Strainer - 40' 600 5,450 6,050Accessories 1,400 300 1,700Drilling 960 640 1,600Transport & Handling 2,200 1,500 3,700Duties & Taxes 2,800 - 2,800
Total 12,540 20,305 32,845 7,500 7,500 7,500 7,500 30,000 246.3 152.3 246.3 152.3 246.3 152.3 246.3 152.3 985.2 609.2
Low Lift Pumps (1 Cusec)Diesel Engine 8,100 8,100 C
Pump with Coupling 5,000 1,200 6,200Pipework & Access. 5,000 2,700 7,700Transport & Handling 2,000 1,300 3,300Duties & Taxes 1,800 1,800
Total 13,800 13,300 27,100 1,000 1,000 1,000 - 3,000 27.1 13.3 27.1 13.3 27.1 13.3 - - 81.3 39.9
Spare Parts.'For STWs 200 1,335 1,535 7,500 .7,500 7,500 7,500 30,000 11.5 10.0 11.5 10.0 11.5 10.0 11.5 10.0 46.0 40.0
For LLPs 715 930 1,645 1,000 1,000 1,000 - 3,000 1.6 0.9 1.6 0.9 1.6 0.9 4.8 2.7
Total Base Cost 286.5 176.5 286.5 176.5 286.5 176.5 257.8 162.3 1117.3 691.8
Price Contingencies5' 13.8 6.6 41.5 20.3 70.1 35.0 89.8 46.9 215.2 108.8
Total Cost 300.3 181.1 328.0 196.8 356 6 211.5 347.6 209.2 1332.5 800.6
j/ 10% of Engine & Pump costs, including duties and taxes. 13
2/ See note on Table 1. @ U
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Cost Estimates - IMP Expansion (Tk '000)
Total CostUnit Cost _-Number of Units Year 1 Year 2 Year3 Year 4 Total
Total FEC 1 2 3 4 Total Total FEC Total FEC Total FEC Total FEC Cost FEC
Civil WorksCanal Lining 4,000 4,000 4,000 12,000
Vehicles & EguipmentlJeeps 400 240 2 2 800 480 800 480Minibus 2 420 252 1 1 420 252 420 252Classroom Furniture'3 300 30 1 set 1 set 300 30 300 30Hostel Furniturel/ 400 40 1 set 1 set 400 40 400 40Training NaterialsA/ 500 300 100 100 100 800 300
Sub Total 2,420 1,102 100 100 100 2,720 1,102
Staff & Training Cogtsti"Training Thana Teams 694 879 879 879 3,331 o
Strengthening Bogra Academy 2,385 54 2,385 54 2,385 54 2,385 54 9,540 216
Survey Training of TIP Overseers 319 383 333 333 1,368
Training of Implementors 1,098 1,198 1,368 2,258 5,922
Topo Survey Implementation 3,320 2,120 2,480 9,600 17,520
Total Base Cost 10,236 1,156 11,065 54 11,545 54 19,555 54 52,401 1,318
Physical Contingenciesl 512 58 753 3 777 3 1,178 3 3,220 67
Sub Total 10,748 1,214 11,818 57 12,322 57 20,733 57 55,621 1,385
Price Contingenciea§" 666 46 2,266 7 3,899 11 9,294 16 16,125 80
Total Cost 11,414 1,260 14,084 64 16,221 68 30,027 73 71,746 1,465
j/ For the Irrigation Faculty of Bogra Academy. A/ 1 Overhead Projector, 1 Epidiascope, 1 Photocopier, & other training materials.
/ 200 Chairs, 15 Tables, 6 Blackboards, Window Screens. / From Table 4. -
f 100 each of Beds, Tables, Chairs. 6/ See rote on Table 1.
BANGLADESHRURAL DEVELOPMENT II PROJECT
Estimated Staff & Training Costs for IMP Expansion
Unit 'lumber of Units Total Cost (Taka '000)Cost…-
Unit (Taka) 1 2 3 4 _ Total 1 2 4 Totala) Training Thana Teams(Bozra)
Trainers'Salaries j]1 Year 43,680 4 4 4 4 16 175 175 175 175 700Training Allowances Days 40 4,620 9,240 9,240 9,240 32,340 185 370 370 370 1,295Travel Allowances Return Trip 300 280 280 280 280 1,120 84 84 84 84 336Support Staff Costs 100 100 100 100 400Stationery 150 150 150 150 600
Total 694 879 879 879 3.331
b) Strengthening Bogra Academ ZPeriodic Evaluation 500 500 500 500 2,000Demonstrations 250 250 250 250 1,000Support Staff 1,500 1,500 1,500 1,500 6,000Jeep & Bus Operating Costs 135 135 135 135 540
Total 2.385 2.385 2.385 2.385 9.540
c) Survey Training of TIP OverseersInstructors' Salaries Year 36,000 2 2 2 2 8 72 72 72 72 288Assistants' Salaries Year 24,000 4 4 4 4 16 96 96 96 96 384Training Allowances Days 40 1,600 3,200 3,200 3,200 11,200 64 128 128 128 448Travel Allowances Return Trip 300 100 100 100 100 400 30 30 30 30 120 p
Support Staff 5 5 5 5 20 °Training Equipment 50 50 - - 100Miscellaneous 2 2 2 2 8
Total 319 383 333 333 1,368
d) Traininz of ImplementorsInstructors' Allowances . Days 30 7,050 7,050 7,050 7,050 28,200 212 212 212 212 848Training Allowances for Scheme Managers3 Days 20 28,200 28,200 28,200 28,200 112,800 564 564 564 564 2,256Training Allowances for IMP Uperators Days 20 14,100 14,100 14,100 14,100 / 56,400 282 282 282 282 1,128Training Materials Scheme 200 200 700 1,550 6,0 / 8,450 40 140 310 1.200 1.690
Total 1.098 1.198 1.368 2.258 5,922
e) Togo Surveby Inlementatio-Helpers' Wages V Days 25 8,000 28,000 62,000 240,000 338,000 200 700 1,550 6,000 8,450Surveyors' Allowances Maps 500 200 700 1,550 6,000 8,450 100 350 775 3,000 4,225Travel Allowances Scheme 100 200 700 1,550 6,000 8,450 20 70 155 600 845Training Materials Sets 10,000 300 100 - - 400 3.000 1000 - - 4,000
Total 3.320 2.120 2.480 92600 17.520
4 4 trainers over 4 years - 2 irrigation engineers, I rural institutions -/ RSS Managers, Scheme Managers, Block Loaders.specialist, 1 irrigation agronomist. gA Of this, 3,750 to be implemented the following year.
3/ Irrigation Faculty only. S/ 40 Helper days per scheme. (D
BANGLADESHRURAL DEVLOPRlT II PROJECT
Cost Estimates - Private Mechanics Traininr
Total Cost (Taka '000)Unit Cost (Taka) Number of Units _ Year 1 Year 2 _ Year 3 Year -4_ Total
Ullit Total FEC 1 2 3 4 Total Total FEC Total FEC Total FEC Total FEC Cost FECVehicles & Euipoment
Jeeps Number 400,000 240,000 2 - - - 2 800 480 80O 480Minibus 420,000 252,000 1 - 1 420 252 420 252Old Enginesi! 1 1000 - 200 200 200 - 600 200 200 200 600 -Spare Parts3' 200 20 200 20 200 20 600 60Tool Boxes 9i/ 9,000 3,600 1,700 700 - - 2,400 15,300 6,120 6,300 2,520 21,600 8,640Furniture 115 12 115 12 230 24Office Equipment5/ 140 56 140 56Bicycles Number 2,000 800 1,150 1,150 2,300 2.300 920 2,300 920 4.600 1.840
Sub Total 19.475 7.860 9.115 3.472 400 20 28.990 11.352
Incremental Staff CostqProject Coordinator Year 36,000 1 1 1 1 4 36 36 36 36 144Deputy Project Coordinator 24,000 1 1 1 1 4 24 24 24 24 96Office Superintendent 9,600 1 1 1 1 4 10 10 10 10 40Typists 6,000 3 3 3 3 12 18 18 18 18 72Drivers 6,000 3 3 3 3 12 18 18 18 18 72Storekeepor 6,000 1 1 1 1 4 6 6 6 6 24Support Staff 3,600 5 5 5 5 20 18 18 18 18 72
Sub Total 130 130 130 130 520
Training * Operating CcutsTraining Allowances Day 35 108,400 108,400 108,400 108,400 433,600 3,794 3,794 3.794 3,794 15,176Travel Allowances Return Trip 150 400 400 400 400 1,600 60 60 60 60 240Instructors' Allowances Month 200 60 60 60 60 240 12 12 12 12 48Support Staff Apprentice Course Day 25 1,800 1,800 1,800 1,800 7,200 45 45 45 45 180Additional Teacher Salaries Month 500 60 60 60 60 240 30 30 30 30 120Support Staff Workshop Course Day 25 1,732 1,732 1,732 1,732 6,928 43 43 43 43 172Office Running Costs Year 24,000 1 1 1 1 4 24 24 24 24 96Vehicle Operating Costs" Year 45,000 3 3 3 3 12 135 54 135 54 135 54 135 54 540 216
Sub Total 4.143 54 4.143 54 4.143 54 4.143 54 16.572 216
Total Base Cost 23.748 7,914 13,388 3.526 4,673 74 4,273 54 46,082 11,568Physical Contingencies2/ 1,187 396 669 176 234 4 214 3 2,304 579Sub Total 24 935 8,310 14,057 3,702 4,907 78 4,487 57 48,386 12,147Price Contingenciesl/ 1,393 312 2,416 427 1,547 16 2,004 16 7,360 771Total Cost 26,328 8,622 16,473 4,129 6,454 94 6,491 73 55,746 12,918
3/ Supplied from BADC. i/ Includes 3 typewriters and other office equipment and furniture.
2/ Tk 1,000 per old engine. i/ Estimated on the basis of 15,000 miles per year per vehicle; diesel costs at
J/ Supplied to each student at the beginning of each course. va repair ala. eaconcuance coats .T .. a.
_/ For furnishing rented accommodation. :7/ See note on Annex 3, Table 1. a
BAQGLADESHRURAL DEVELOHIENT II PROJECT
Cost Satimates - R,lral Poor Procram (Taka '000)
Total CostUnit Coat Number Year 1 -- Year 2 Year 3 Year 4 Ttal
J .. Ir.. t 2 fl 4 Total Total FEC Total FEC TotaQl LEC Total F4£ goat _lC__20,700 2,070 34,500 3,450 52,900 5,290 69,000 6,900 177,100 17,710
Vehicles & Euilment
a) BRDB HQJeep 400 240 1 1 400 240 400 240office Farniture d EquiPment 65 20 1 set 1 et 65 20 65 20
b) Projeot Director's OfficeKotorcyclas 20 8 6 6 120 48 120 UTypewriters 20 8 6 6 120 48 120 48Calculators 1 0.6 6 6 6 4 6 4Office Furniture 1 0.1 6 sets 6 ets 6 1 6 1
)Thana OfficeNotorcycles 20 8 12 29 32 27 100 240 96 580 232 640 256 540 216 2,000 800Bicycles 2 0.8 40 62 91 67 250 80 32 124 50 162 65 134 53 500 200Typewriters 20 8 12 29 32 27 100 240 96 580 232 640 256 540 216 2,000 800Calculators 1 0.6 12 29 32 27 100 12 7 29 18 32 19 27 16 100 60Office Furniture 0 0.1 12 29 32 27 100 6 1 15 3 16 3 13 3 50 10
Sub Total 1.295 593 1.328 535 1.490 599 1.254 504 5.367 2.231
Training Costl/ 546 5,744 15,731 18,607 40,628Survey & Evaluation 2 92 115 115 138 460Staff & Operatine Cost?i 2,047 126 4,756 300 7,913 492 10.811 654 25,527 1,572
Total Base Coost 24,680 2.789 46,443 4,285 78,149 6,381 99,810 8,058 249,082 21,513Physical ContingenciesL/ 199 36 597 42 1,262 55 1,541 58 3,599 191Sub Total 24,879 2,825 47,040 4,327 79,411 6,436 101,351 8,116 252,681 21,704Price Contingenciesrp/ 1,540 106 8,704 499 24,413 1,280 44,179 2,344 78,836 4,229Total Cost 26,419 2,931 55,744 4,826 103,824 7,716 145,530 10,460 331,517 25,933
FJ From Table 7.
jI From Table 8.
S Cee note oi, Tabic ; Irno physical cuntii.geicieb on Ocreait ab hiready UulIt intu per unit credit requirement tor eacn activity).
BANGLADESHRUCR.AL DEVELOPMENT II PRO.(ECT
RuralPoorroirai rann Costs
TravelAllowance
per Allowance Days Number of Trainees Total Cost (Tk '000)Trainee pei Day per …--…-…
__akaj L Course a _ _ 1 2 _ 3 _a) Staff Trainira
Pre-S ervice TrainingDPO 300 30 120 12 29 32 27 47 113 125 105 390Assistant Accountant 300 20 90 12 29 32 27 26 61 68 57 212Group Organizers 150 20 60 43 65 90 92 58 88 122 124 392
OriertationJoint Director/Deputy Director 300 40 14 3 3 3PD/DPD 300 40 14 12 i1 11TPO 300 3C 14 12 29 32 27 9 21 23 19 72TCCA Director 300 20 14 12 29 32 27 7 17 19 16 59
Refresher Course °Joint Director/Deputy Director 40 9 3 3 3 3 1 1 1 4PD/DPD 40 9 12 12 12 12 4 4 4 4 16TPO/DPO 30 9 24 82 146 200 7 22 40 54 123Asstt. Accountant/Gp. Organizer 20 9 55 149 271 390 10 27 49 70 156TCCA Director 20 9 12 41 73 100 2 7 13 18 40
Cooperative Trainin >BSS Chairman/Managers/Rep. 20 5 1,200 1,875 3,615 3,885 120 188 362 389 1,059MBSS Chairperson/Managers/Rep. 20 5 90 90 360 840 9 9 36 84 138
Refresher Cooperative TrainingBSS Chairman/Managers/Rep. 20 9 1,200 3,075 5,490 7,500 216 554 988 1,350 3,108MBSS Chairperson/Managers/Rep. 20 9 90 180 450 1,200 16 32 81 216 345
Sub Total 546 1.144 1.931 2.507 6.1282/
b) Skill TrainiK_ 4,600 13,800 16,100 34,500
Total Base Cost 546 5.744 15.731 18.607 40.628
j For each eociety, it is assumed that a new set of officers will be elected every two years.
2/ Cost of providing training to group members in the different activities.
BANGLADESHRURAL DEVELOPMENT II PROJECT
Rural Poor Program - Incremental Staff & O_erating Coats (Tk '000)
Unit Number of Units _- Total Cost _ Total
Cost 1 2 _AL _ Total 1 2 1 L Cost
a) EaD HQ (Landless Cell)Joint Director 56 1 1 1 1 4 56 56 56 56 224Deputy Director 50 2 2 2 2 8 100 100 100 100 400Stenographer/Office Assistant 19 2 2 2 2 8 38 38 38 38 152Typist 16 2 2 2 2 8 32 32 32 32 128Driver 12 1 1 1 1 4 12 12 12 12 48Vehicle Operating Costs 45 1 1 1 1 4 45 45 45 45 180Office Running Costs 20 1 1 1 1 4 20 20 20 20 80
Sub Total 303__ 303__ 303 303 1,212
b) Project Director's OfficeDeputy Project Director 37 6 6 6 6 24 222 222 222 222 888Typist 16 6 6 6 6 24 96 96 96 96 384Motorcycle Operating Costs 15 6 6 6 6 24 90 9C 90 90 360 C
Office Running Costs 15 6 6 6 6 24 9g 90 90 90 __360Sub Total 498 498 498 498 1,992
a) TCCA OfficeDeputy Project Officer 23 12 41 73 100 226 276 943 1,679 2,300 5,198
Accountant 17 12 41 73 100 226 204 697 1,241 1,700 3,842Typist 10 12 41 73 100 226 120 410 730 1,000 2,260Travel Allowance for MBSS Organizers 7 3 6 15 40 64 21 42 105 280 448Motorcycle Operating Costs 15 12 41 73 100 226 180 615 1,095 1,500 3,390Office Running Costs 12 12 41 73 100 226 144 492 876 1.200 2.712
Sub Total 945 3.I99 5.726 7.980 17.850
d) 3jj _aXjt1lGroup OrganizersBSS 7 40 102 183 250 575 280 714 1,281 1,750 4,025MBSS 7 6 15 4d 64 2 42 1 280 _ 4
Sub Total 301 756 1.386 2.030 4.473
Total Base Cost 2,047 4,756 7,913 10,811 25,527
CDa
BANGLADESHRURAL DEVELOPM5ENT II PROJECT
Cost Estimates - Marketing (Tk '000)
Total CostUnit Cost Number of Units Year 1 Year 2 Year 3 Year 4 Total
Total FEC 1 2 3 i Total Total FEC Total FEC Total FEC Total FEC Cost FEC
Civil Works 1Produce Marketing Godowna' 250 50 2 4 4 - 10 500 100 1,000 200 1,000 200 2,500 500Fertilizer GodownsjJ 250 50 2 5 8 - 15 500 100 1.250 230 2.000 400 3.750 750
Sub Total 1.000 200 2.250 450 3.000 600 6,250 1.250
Egujpment ' 20 12 2 4 5 5 16 40 24 80 48 100 60 100 60 320 192
Trainin~ >150 300 300 150 900 -
Market Promotion 120 80 100 100 400 - 00
Total Base Cost 1,310 224 2,710 498 3,500 660 350 60 7,870 1,442
Physical Contingencies1 116 21 248 47 325 63 18 3 707 134
Sub Total 1,426 245 2,958 545 3,825 723 368 63 8,577 1,576
Price Contingencies 86 9 526 63 1,127 144 155 18 1,894 234
Total Cost 1,512 254 3,484 608 4,952 867 523 81 10,471 1,810
jJ Unit size of 200 tons capacity each.
2/ Set of moisture meter and weighing scale for new TCCAs involved in produce marketing.
./ 3 years training for each TCCA at Tk 15,000/TCCA/year; assuming that 10 TCCAs will start in Year 1, and 10 in Year 2. 63
4/ See Table 1. CD
BANGLA.DHRURAL DEVELOPMENT II PROJECT
Cost Eatimates - Trajninx (Institutional)
Unit Cost Total Cost (Tk '000) -
(Tk '000) Number of Units -- Year 1 Year 2 Year 3 Year 4 Totl
Total FEC 1 2 3 4 Total Total FEC Total FEC Total FEC_ total FEC COSt FECCivil WorksTTU Buildings 1 1 1,311 437 2 3 5 2,622 874 3,933 1,311 6,555 2,185RDTI Building-' 3,630 1,210 1 1 3,630 1,210 3,630 1,210Quarters for RDTI Staff- 117 39 18 18 2,106 702 2,106 702Water Supply for RDTI L 2,200 1,100 1 1 2.200 1.100 2.200 1.100
Sub Total 10.558 3.886 3.933 1.311 14.491 5.197
Vehicles & EquiEmeatl'Jeep 400 240 1 1 400 240 400 240Bus (30 seater) 900 540 1 1 900 540 900 540Overhead Projector 33 15 2 2 66 30 66 3016 mm Projector with Screen 37 17 1 1 37 17 37 17Photocopier 265 110 1 1 265 110 265 110Steel Framed Flip Chart Boards 5 2 6 6 30 12 30 12Electric Stencil Cutter 140 63 1 1 140 63 140 63Camera with 3 Lens 50 30 1 1 50 30 50 30 Typewriters 20 8 2 2 16
Sub Total 1.928 1.058 1.928 1.058
Books & MaterialsBooks for RDTI Library 30 20 30 20 30 20 30 20 120 80Training Materials v 9.570 1.914 11.240 2.248 12.910 2.582 14.580 2.916 48.300 9.660
Sub Total 9.600 1.934 11.270 2.268 12.940 2.602 14.610 2.936 48.420 9.740
Staff & Operating CostsSl' 19,826 20,504 22,847 27,033 90,210
Total Base Cost / 41,912 6,878 35,707 3,579 35,787 2,602 41,643 2,936 155,049 15,995Physical Contingencies 2,624 538 1,982 245 1,789 130 2,082 147 8,477 1,060Sub Total /44,536 7,416 37,689 3,824 37,576 2,732 43,725 3,083 163,526 17,055Price Contingencies~/ 2,691 278 6,946 441 11,589 543 19,126 890 40,352 2,152Total Cost 47,227 7,694 44,635 4,265 49,165 3,275 62,851 3,973 203,878 19,207
j/ Estimated area RDTI - 16,500 sq ft; Q4uarters - 550 sq ft each. 9/ Production costs of TMP section for posters, Charts, handouts,Cost for RDTI building includes provision for imorovement rC dinirn hS11, Booklets, Nanuals, Display Boards, Photographs, etc., for
2 DTW installation, overhead tank & distribution pipes. project training program. cri
S For RDTI. / From Table 11./ See Table 1.
BANGLADESHRURAL DEVELOPMENT II PROJECT
Cost Estimates: Institutional Traininr
Unit ----------- Number of Units Total Cost (Tk '000)Unit ------- -- I------~~~~-~---------------- ---------------
Unit Cost 1 2 _ 4 Total 1 2 4 4 Total
TTUTraining Officers Year 27,025 12 12 17 17 58 324 324 460 460 1,568
Cooks " 10,123 12 12 17 17 58 121 121 172 172 586
Helpers 8,159 12 12 17 17 58 98 98 139 139 474
Darwan " 5,752 24 24 34 34 116 138 138 98 98 472
Guest SDeakers Hour 25 6,840 7,740 9,180 10,200 33,960 171 194 230 255 850
Operating Costs Year 25,000 12 12 17 17 58 300 300 425 425 1.450
Sub Total 1.152 1.175 1.524 1.549 5.400
TTDCTrainer's Allowances:- KSS Manager Training Hour 15 33,810 36,018 38,226 48,576 156,630 507 540 574 729 2,350
- Model Farmer Training ' 15 36,960 43,380 49,800 56,220 186,360 554 651 747 843 2.795
- KSS Chairman Training ' 15 9,240 10,845 12,450 14,055 46,590 139 163 187 211 70
Sub Total 1.200 1.354 1.508 1.783 5.845
BRDB Training A
Trainees'Subsistence Allowances 14,680 15,399 16,914 20,226 67,219
Trainees' Travel Allowances jJ 1.654 1.759 1.929 2.338 7.680
Sub Total 16.334 17.158 18.843 22.564 74.899
Other TrainingHQ - Allowance for Trainers 2 2 2 2 8
Training in Use of Training Materials 348 348
Sub Total 350 2 2 2 356
RDTI Operatin- CostsTraining of Instructors 60 60 80 110 310
Research and Evaluation 330 330 440 550 1,650
Stationery 100 125 150 175 550
Miscellaneous Expenditure 300 300 300 300 .20
Sub Total 790 a15 970 1.135 3.710
Total Staff & Operating Cost 19,826 20,504 22,847 27,033 90,210
I/ See Annex 2, Table 2.
BANGLADESH1RElAL DLVEhOPIEDT II PEOJBT
Cost Ebtimate8 - Stren,thenin, Audit CaRability
Unit Cost Total Cost (Tk '000)(TsYa) _-_ -Number of Units Year 1 Year 2 _ -Year 3 Year 4 Total
Total FEC 1 92 3 4 Total Total FEC Total FEC Total FEC Total .ZV .c ost In.
Vehicles t Equinment
a) Registrar of Cooperative SocietiesJeep j/ 400,000 240,000 15 15 6,000 3,600 6,000 3,600Motorcycles i/ 20,000 8,000 27 5 5 5 42 540 216 100 40 100 40 100 40 840 336Bicycles I/ 2,000 800 400 75 75 100 650 800 320 150 60 150 60 200 80 1,300 520Duplicating Machine 2/ 43,000 19,000 15 15 645 285 645 285Typewr:iters 20,000 8,000 30 30 600 240 600 240Office Furniture (Head Office) 4,500 450 2 sets 2 sets 9 1 9 1Office Furniture (District Office)
- Stamf Offices 3,000 300 42 5 5 5 57 126 12 15 2 15 2 15 2 171 18- Clerical Offices 1,500 150 105 105 158 16 158 16- Steel Cabinets 1,500 750 15 15 23 11 23 11
Stationery / 85 165 250 310 _ 80Sub Total 8,.86 4.701 430 102 515 102 645 122 10.576 5.027
b) Bangladesh Cooperative Collegellinibus 420,000 252,000 1 1 420 252 420 252Overhead Projector & Screen 37,000 17,000 1 1 37 17 37 17Photocopier 265,000 110,000 1 1 265 110 265 110Duplicating Me.hine 43,000 19,000 1 1 43 19 43 19Bedding and Linen 750 30 sets 30 sets 23 23Stationery 11 11 11 11 44
Sub Total 799 398 11 11 11 832 398
157 157 157 157 628
Incremental StaffA/ 8,133 3,787 4,738 5,642 22,300
Total Base Cost 18,075 5,099 4,385 102 5,421 102 6,455 122 34,336 5,425Physical Contingencies/5 904 255 219 5 271 5 323 6 1,717 271
SAb Total 18,979 5,354 4,604 107 5,692 107 6,778 128 36,053 5,696Price Contingencieas 1,086 201 876 12 1,791 21 3,021 37 6,774 271
Total Cost 20,065 5,555 5,480 119 7,483 128 9,799 165 42,827 5,967
,/ Jeeps 1 per Deputy Registrar; Motorcycles 1 per District ARCS; Bicycles 1 per Field Inspector. A/ From Annex 3, Table 13.
2/ 1 per District. 5/ See Annex 3, Table 1.
2/ Tk 1,000 per F4eld Inspect^,r.
BANGLADESHRURAL DEVELOPMENT II PROJECT
Coat Estimates: Audit Training and Incremental Staff
Unit ______ Number of Units ------ Total Cost (Tk '000)Unit Cost 1 2 3 4 Total 1 2 3 4 Total
TrainingBangladesh Cooperative College
Visiting Lecturers Hour 501 75 75 75 75 300 4 4 4 4 16Trairee's Allowance Trainee 1,800' 85 80 85 80 330 153 153 153 153 612
Total Training Cost 157 157 157 157 628
Incremental StaffRegistrar of Cooueratives
a) Read OfficeJoint Registrar Number 29,400 1 1 1 1 4 29 29 29 29 116ARCS 22,200 1 1 1 1 4 22 22 22 22 88Inspectors " 9,900 2 2 2 2 8 20 20 20 20 e0
b) District OfficeDeputy Registrar 25,200 15 15 15 15 60 378 378 378 378 1,512ARCS 22,200 27 32 37 42 138 599 711 821 933 3,064Inspectors 2/ 9,900 30 30 30 30 120 297 297 297 297 t,188Clerical StafH 44,400 15 15 15 15 60 666 666 666 666 2,664
c) Field Inspectors_" " 9,900 85 165 250 330 830 842 1,634 2,475 3,267 8,218
d) Audit CostTCCA Audits 2,000 15 15 15 15 60 30 30 30 30 120XSS Audits (arrears) 350 15,000 15,000 5,250 5,250
Total Cost 8,133 3,787 4,738 5,642 22,300
jJ At Tk 30 for 60 days.
21 2 Typists, 1 Upper Division Asstt., 1 Receipt & Despatch Asstt., 1 Messenger, and 1 Night Guard.
S/ Total required, 410 in Year 1, 490 in Year 2, 575 in Year 3, and 655 in Year 4.
BANGLADESHRURAL DVELOPMEET II PRWECT
Cost Estimates - Thana Physical Facilities (Tk '000)
Total CostUnit Cost Number of Units Year 1 Year-2 Year 3 Year 4
---- 2_ ------ - ---- - ------ -------…--------- -------- - ---------------- -_ -- - -- TotalTotal FEC 1 2 3 4 Total Total FEC Total FEC Total FEC Total FBC Cost FEC
Civil Works
TCCA Offices 607 202 30 35 35 100 18,210 6,060 21,245 7,070 21,245 7,070 60,700 20,200
Twin Quarters 748 249 50 70 80 200 37,400 12,450 52,360 17,430 59,940 19,920 149,600 49,800
TTDC Buildings 1,320 440 5 5 5 5 20 6,600 2,200 6,600 2,200 6,600 2,200 6,600 2,200 26,400 8,800
Total Base Cost 62,210 20,710 80,205 26,700 8i,685 29,190 6,600 2,200 236,700 78,800
Physical Contingencies-'J 6,221 2,071 8,021 2,670 8,768 2,919 660 220 23,670 7,800
Sub Total 68,431 22,781 88,226 29,370 96,453 32,109 7,260 2,420 260,370 86,680
Price Contingenciesi/ 3,821 854 14,686 3,386 26,780 6,263 2,234 568 47,521 11,071
Total Cost 72,252 23,635 102,912 32,756 123,233 38,372 9,494 2,988 307,891 97,751
j/ See Annex 3, Table 1.
0F3
BMNGLADESHRURAL DEVELOPMENT II PROJECT
Cost Ratimates -Engthening BRDB (Tk '000.
Total CostUnit Cost_ ------ u----Number_-------_--_ - Year 1 - -Year 2 ---- Year 3 - Year 4 T Sotal
Total FEC 1 2 _3 4 Total Total FEC Total FEC Total FEC _otal FSC Cost FECVehiclesEquipped AudiL Visaal Van I/ 930 330 13 13 12,090 4,290 12,090 4,290Jeeps p/ 400 240 16 16 6,400 3,840 6,400 3,840Motorcyclesa2/ 20 8 568 75 75 75 793 11,360 4,544 1,500 600 1,500 600 1,500 600 15,860 6,344Bicycles A/ 2 0.8 2,085 2,000 2,000 6,085 4,170 1.668 4.000 1.600 4.000 1.600 12.170 4.868Sub Total 34,020 14.342 5.500 2.200 5.500 2.200 1,,00 600 46.520 193,142
EsulpmentTypewriter 20 8 390 390 7,800 3,120 7,800 3,120Duplicating Machine 43 19 195 195 8,385 3,705 8,385 3,705Furniture - District Office 10 1 13 13 130 13 130 13- TCCA Office 7.5 0.75 231 35 35 301 1.733 173 262 26 262 26 2,257 225Sub Total 18.048 7.011 262__ 26 262 26 18,572 7,063
Incremental Staff2
/District - DPD 37 - 11 11 11 11 44 407 407 407 407 1,628 ,TCCA - TPO 25 - 89 89 89 89 356 2,225 2,225 2,225 2,225 8,900- DPO 23 - 89 89 89 89 356 2,047 2,047 2,047 2,047 8,188- Dpo (IMP) 23 - 75 150 225 301 751 1,725 3,450 5,175 6,923 17,273- Accountant 17 - 89 89 89 89 356 1.513 1.513 1.513 1.513 6.052Sub Total 7,917 9,642 11.367 13.115 42.041
Total Base Cost 59,985 21,353 15,404 2,226 17,129 2,226 14,615 600 107,133 26,405Physical Contingencie5§/ 2,999 1,068 770 Ill 857 111 731 30 5,357 1,320Sub Total 62;984 22,421 16,174 2,337 17,986 2,337 15,346 630 112,490 27,725Price Contingencies5/ 3,478 520 2,935 210 5,429 36C 6,613 105 18,455 1,203Total Cost 66,462 22,941 19,109 2,547 23,415 2,705 21,959 735 130,945 28,928
j/ 1 per district. _/ 65 for di.strict staff and the remaining for TCCA staff.21 6 for BRDB HQ and 10 for districts. 21 Excluding Rural Poor Program./ 13 for DPOs and the balance for TCCA staff. 6/ See Annex 3. Table 1.
BANGLADESHRURAL DEVELOPMENT II PROJECT
Cost Estimates - Technical Assistance (Tk 'ooo)
Total Costs'
Number of Units (Man Months) Year 1 Year 2 Year 3 Year 4
1 2 . * j3 4 Total Total FEC Total FEC Total FEC XQIBJ_ FEC .QE.Lt FEC
i) Rural Poor Program 18 18 12 12 60 3,602 3,478 3,602 3,478 2,401 2,318 2,401 2,318 12,006 11,592
ii) Marketing 12 12 12 36 2,401 2,318 2,401 2,318 2,401 2,318 7,203 6,954
iii) Training 30 18 48 6,002 5,795 3,602 3,478 9,604 9,273
iv) Accounts and Audit 24 24 4,802 4,636 4,802 4,636
v) Monitoring & Evaluiation 24 24 12 12 72 4,802 4,636 4,802 4,636 2,401 2,318 2,401 2,318 14,406 13,908
Total Base Cost 21,609 20,863 14,407 13,910 7,203 6,954 4,802 4,636 48,021 46,363
Physical Contingencies. 1,080 1,043 720 696 360 348 240 232 2,400 2,319
Sub Total 22,689 21,906 15,127 14,606 7,563 7,302 5,042 4,868 50,421 48,682
Price Contingenciesv 873 822 1,784 1,684 1,534 1,452 1,484 1,406 5,675 5,364
Total Cost 23,562 22,728 16,911 16,290 9 097 8,754 6,526 6,274 56,096 54,046
Jj/ For the purposes of costing, it is assumed that 30 of the TA would be local experts (unit cost US$1000/mm),
and 70% foreign (unit cost USS12,000/mm).
2/ See Annex 3, Table 1.
CDA
ANNEX 3-116- Appendix 1
Page 1
BANGLADESH
RURAL DEVELOPMENT II PROJECT
RURAL POOR PROGRAM
A Profile of Income Generating Activities for the Rural Poor
1. While BSS members would have the opportunity to decide the activitiesthey would like to pursue, from the experience of ongoing programs, somepromising activities have been identified which would be initially supportedby the project. These are discussed below. Other suitable activities iden-tified in the special surveys to be done in each district would be includedduring implementation.
Pond Fisheries
2. Pond or tanks suitable for fish culture are a major national resource
in Bangladesh. There are about 1.1 M tanks covering 360,000 ac of whichnearly 40% are classified as derelict.
3. GOB owned ponds, as distinct from joint family owned fish ponds,offer an excellent potential for cooperative fish farming. Some of thelandless fish cooperatives established so far have demonstrated that withcredit, training and extension, they can produce good yields of fish.However, several constraints impede proper exploitation of the full poten-tial. These are: delays in issuance of a long term lease to these coopera-
tives; improper excavation of derelict ponds under Rural Works Program (RWP)and poor extensicn support. Only recently has GOB finally taken a policydecision to give priority to landless cooperative societies for issuingleases to GOB owned fish ponds. The lease period has also been fixed at 10years.
4. Fish fries and fingerling of the popular species -- 'Katla,' 'Rohui,''Mrigal,' 'Calbaus,' Catfish and Chinese Carp -- would improve as thehatcheries in Jessore (under IDA financed Oxbow- Lake Fisheries Project),Raipur (under IDA financed Yarnafuli Irrigation Project) and an ongoingUNICEF assisted project are completed. Training facilities are also avail-able at these centers where selected members of these cooperatives can betrained. To overcome problems faced in the past when pond excavation wasdone before cooperative groups were established, BRDB now establishescooperatives and ensures their registration before ponds are excavated. Inthe past, ponds have been excavated under RWP and the experience with thecost and quality of excavation has rnot been fully satisfactory. Potential
-117- ANNEX 3Appendix 1Page 2
returns from pond fisheries are judged to be sufficiently high that the pastpractice of providing 50% of the cost as a grant is not considered necessary.Thus, the project would introduce a MT credit program for BSS to developabout 300 ac of GOB owned derelict fishponds for which the BSS would be givenleases which extend for a minimum of 10 years. Extension support would beprovided by Thana Fishery Officer, one of whom is being posted in each thanaand GOB has launched special training programs for these officers.
Beef Fattening and Livestock
5. This activity has been a popular one in all ongoing rural poorprograms. Cattle are generally looked after by women and children. Mostlivestock graze on roadside grasses, marginally supplemented by concentratefeed, the cost of which does not exceed the value of the cowdung. Marketingthe cattle or milk is no problem. So far, TCCA was trying to operate a selfinsurance scheme to protect the borrowers from the financial risk arisingfrom the death of the animal. More recently, a general cattle insurancescheme has been agreed between BRDB and the Sadharan Bima Corporation, tooperate in special projects. The premium for this insurance is set at 5% ofthe purchase value of the cattle and is to be paid out of the loan amount.
6. The project would provide credit for a member to purchase either amature cow for milking or a young calf if he or she wishes to fatten it. Thefield staff of the Directorate of Livestock will, as now, inspect the cattlebeing financed, and vaccinate them and also supply to BSS members, seeds andplanting material of lencaena bucocephala (Ipil Ipil) for planting either onhomesteads or other common areas. Efforts to introduce chemically treatedstraw as cattle feed have been successful under BRDB's Noakhali RuralDevelopment Project, assisted by DANIDA. This concept is now beingpropagated through demonstration units located in the TTDC.
Weaving
7. This activity has been pursued by landless weavers in a number ofongoing programs. Some socioeconomic 1/ indicators of handloom weaving aregiven below:
No. of Average Rural Female Capital: LaborNumber loomless working industrial partici- worker producti-of units Employment weavers days employment pation ratio vity per('000) ('000) ('000) (%) (%) (in Tk) hour (Tk)
475 1,000 300 250 30 39 1,000 1.6
1/ All socioeconomic data in this appendix is from the Rural Industry Surveydone by Bangladesh Institute of Development Studies -- April 1982.
-118-ANNEX 3Appendix 1Page 3
8. Handloom weaving is carried out intensively in Dhaka, Pabna, Comilla,Tangail and Chittagong Hill Tracts but a large number of weavers also existin other parts of the country. Unlike other cottage industries, incidence ofwage employment is quite high in handloom weaving. BHB in its surveys hasfound that the economic conditions of weavers have deteriorated in recentyears as prices of raw materials have increased while flow of institutionalcredit has not been established. The major products, sarces, and 'lungee,'are readily marketed locally in the rural areas.
9. According to BHB, there exists a distinct potential to promote thisactivity in some selected pockets, mainly in Barisal and Khulna. The project
would provide loomless weavers with term credit to procure semi-automaticlooms and for working capital. BRDB would enter into a contract with BHB for(a) identifying areas of concentration of loomless weavers, (b) providinginput supply support, extension services and training facilities. BHB hasalready set up yarn distribution centers in two thanas of Khulna and Barisaldistricts and these would be used under the project. BHB would also appraisethe investment plans of BSS for this activity.
Oil Milling
10. This activity is widely carried out in areas where mustard andcoconut is grown. In 1980/81, area under mustard was 500,000 ac and coconutover 70,000 ac. The present production of edible oil seeds meets less thanone-fourth of domestic requirement. In FY80, about Tk 11.53 M was spent onimport edible oils and seeds.
11. Some socioeconomic indicators of oil milling are presented below:
Family ContributionRural Labor in Female Capital/ to value added Labor
Industrial Total Labor Partici- :Worker by Rural Productivity/Employment Employed pation Ratio Industries Hour
(%) (%) (%) (Tk) (%) (Tk)
2 89 43 100-250 1 1.26-2.00
Most oil milling is done by the traditional ghani (oil pressing machine).Most rural oil millers do not possess bullocks to pull the ghani but usefamily labor. About 75% of the millers procure raw materiaTlsdirectly fromcultivators and 90% sell the oil directly to consumers. Major constraintidentified by rural oil millers has been the lack of credit for investmentand working capital.
12. The project will provide MT credit to about 1,500 oil millersorganized as BSS to acquire oil presses and bullocks and for working capital.The potential to promote oil milling is good in districts of Barisal andMymensingh
-119-ANNEX 3Appendix 1Page 4
Mustard and Rape Seed CoconutDistrict Area (ac) Production Area (ac) Production
Bogra 9,900 2,580 215 190Dinajpur 58,270 10,810 290 215Khulna 7,640 1,560 12,655 16,620Barisal 4,190 945 21,005 18,455Mymensingh 10,400 2,160 230 190Jamalpur 10,540 2,170 130 115
All Bangladesh 525,835 135,125 67,595 65,815
Supplies of mustard and oil seeds should improve as new varieties are intro-duced by BARI, based on successful introduction trials completed under theIDA financed Agricultural Research Project, Credit 828-BD.
Rickshaw Pulling
13. Rickshaw -- manually operated tricycle -- is a convenient means oftransport in the rural areas. Rickshaws are generally owned by relativelywealthier persons and rented out to rickshaw pullers at rates (Tk 35 per day)which are considered high by the rickshaw pullers. Many ongoing rural poorprograms have successfully extended credit to landless people to purchase andoperate their own rickshaws. As rural economic activities increase, demandfor rickshaws will also increase.
14. The project would provide MT credit to about 3,050 members of BSS topurchase rickshaws. An insurance scheme would be established by each TCCA toprotect the borrowers from the risk of credit default in case of seriousdamage to the rickshaw.
Cane and Bamboo Work
15. This activity is carried out all over the country. The items mainlyproduced are mats and baskets for which there is great demand in the ruralareas. Some socioecnomic indicators for this activity are given below:
% of Rural % of Family Capital: LaborIndustrial Labor % of Female Worker Productivity
Employment Employed Participation Ratio (Tk) Hour (Tk)
2 83 80 100 1.0
16. Major constraints identified in the Rural Industry Survey on theexpansion of this activity were the lack of working capital and also the needfor skill training in product diversification. The project would provideskill training and credit for working capital to about 1,500 artisans asmembers of BSS. BSCIC, under a contract with BRDB, would supply qualitytools and equipment, train members in improved techniques, provide market
-120- ANNEX 3
Appendix 1Page 5
information to encourage the development of new products and appraise theinvestment plan of BSS for this activity.
Carpentry
17. Rural carpenters produce simple wooden furnitures, bullock carts,
agricultural and non-agricultural implements and country boats. Laborproductivity in this activity is one of the highest among rural occupations
and rural demand for these is highly elastic and likely to build up asincomes increase. The project would provide to about 1,000 members of BSS
credit for investment and working capital. BSCIC under a contract with BRDBwould supply standard tools and equipment, training facilities, as needed,
and appraise the investment plans of BSS for this activity.
Pottery
18. This is a traditional family based occupation. There are at present
about 100,000 pottery workers in Bangladesh, about 50% of whom are women.This activity provides for about 61% of rural industrial employment. There
are infinite variety of pottery products ranging from utilitarian ones todecorative items. Pottery products have both domestic and foreign markets.BSCIC is assisting village potteries by giving technical advice aboutsoft-glazed pottery, providing designs for new products for glazing and
testing clays from different regions for identifying their best use.
19. This activity is carried out extensively in the project area, espe-
cially in Khulna and Barisal districts. The project would provide creditfor improved kilns and working capital. BSCIC under a contract with BRDB
would assist in selection of villages suitable for this activity, provideskill training and technical expertise to upgrade pottery products andappraise the investment plans of BSS for this activity.
Irrigation Assets for the Rural Poor
20. Irrigation assets are generally owned by those who own land. As aconsequence, the benefits of increased production due to irrigation tend toaccrue to landowners. Several NGO's like BRAC and Proshika and morerecently, BRDB, have launched programs to provide irrigation assets to land-less and marginal farmers who sell water and in this manner supplement theirincomes. Several women have also acquired HTW for irrigation purposes.
21. The project would provide STW and LLPs on MT credit to rural poorgroups who are interested in operating these assets for providing irrigationwater to others.
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Project Financing Plan
- (US$ M) -
Cost IDA Sonali Benefi-
Component/Item Total Agency Disbursement Basis Amount CIDA ODA UNDP Bank ciaries GOB/BB
1. Minor Irrigation EquipmentMT Credit 57.95 Scnali Bank 90% BB refinance 42.24 5.22 5.80 4.69
2. IMP ExpansionMT Credit ) Sonali Bank 90% BB refinance 0.40 0.05 0.05Vehicles and Equipment ) 3.15 BRDB 100%-60% 0.12 ) 0.05
Training arnd Others ) BRDB 100% 2.48
3. Private Mechanics ProgramMT Credit ) 2.40 Sonali Bank ) 2.20 0.10 0.10
Training and Others ) BRDB
4. Rural Poor Program
Credit ) Sonali Bank )Training ) 14.40 BRDB ) 14.40Overheads ) BRDB
5. Marketing ProgramMT Credit ) Sonali Bank 90% BB refinance 0.25 0.03 0.04Training ) 0.45 BRDB 100% 0.08 ) 0.03 I
Vehicles and Equipment ) BRDB 100%-60% 0.02 to
6. Thana Civil Works 13.40 BRDB 90% 9.75 3.65
7. Strengthening BRDB
Incremental Staff ) 5.65 BRDB 100%-70% 1.25 ) 2.80
Vehicles and Equipment ) BRDB 100%-60% 1.60
8. Strengthening AuditEquipment and Vehicles ) RCSTraining j 1.85 RCS ) 1.55 ) 0.30
Incremental Staff ) RCS ) )
9. Cooperative TrainingCivil Works ) BRDB )Training ) 8.90 BRDB ) 8.68 ) 0.22Vehicles and Equipment ) BRDB
10. Technical Assistance 2.45 BRDB 0.59 0.25 1.61
11. Short Term Credit 66.33 Sonali Bank 75% BB refinance 41.81 6.66 17.86 E
Total 176.93 100.00 17.19 10.48 1.61 12.06 5.99 29.60 X
= = = 4
-122-
ANNEX 4Table 2
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Estimated Schedule of Disbursements 1/
- (US$ M) -
DisbursementIDA Fiscal Year and Quarter Quarter Cumulative
1984/1 - -2 4.0 2/ 4.03 _ 4.04 5.0 9.0
1985/1 10.0 19.02 10.0 29.03 10.0 39.04 6.0 45.0
1986/1 5.0 50.02 6.0 56.03 6.0 62.04 6.0 68.0
1987/1 5.0 73.02 5.0 78.03 5.0 83.04 5.0 88.0
1988/1 5.0 93.02 3.0 96.03 2.0 98.04 2.0 100.0
1/ Assumes project completion by September 30, 1987 and creditclosing by June 30, 1988.
2/ IDA contribution to the Special Account.
BANGLADESHRURAL DEVELOPK(ENT II PROJECT
Crop2ping Patterns and Phasing of Irrigated Area
ii i5t E'WO/ EW1/ Irrigated Area (Acres per Unit'P & FWC-' EVIL-Unirriated) Ii t, resent Year 1 Year 2 , Yer
*., *Cropping Intensity .
CroDping PatternLocal Aman 100HYI Aman - 10
HYV Boro 50
IYV Wheat 30
Oilseeds 20Pulses 20
Total Cropping Intensity 140 180
Phasing of Irrigated Area with Proj2ct
a) Minor Irrigation EquipmentSTW - - 12 15 15
LLP (1 cusee) - - 16 20 20
b) IMP 2D TW-2 50 50 50 70 70
LLP (2 cusec)z/ 40 40 40 50 50
I/ P = Present; FWO = Future without project; FW = Future with project.
2/ Under IMP, with the project, it is assumed that command area of a DTW would increase from 50 acres to
70 acres, while that of an LLP from 40 acres to 50 acres.
I1'
BANGLADESHRURAL DEVELOPMENT II PROJECT
Summary of Crop. Tields. & Input Requirements per Acre
Unit T, Aman Oilseeds Pulses HYV Aman HYV Boro HYV Wheat
Yields2/Area presently not under IMP Maund 20 6 6 35 32 25Area under IMP S/ - - 37 34 26
InputsSeed Seer 20 8 8 16 16 40Fertilizer - Urea " 32 - - 72 72 35
- TSP 6 _ _ 25 25 20- MP - - - 10 10 10
Pesticides Al Taka 50 - - 300 300 150Draught Power!U Pair days 15 15 12 20 20 20Labour - Family Man-days 40 25 30 65 65 30
- Hired 20 10 - 35 30 20
.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~5
jJ P & FWO = Present and Future without Project; FW = Future with Project.
21 Full development yields under the project are expected to be reached in three years time, once irrigationbecomes available.
/ Yields in areas under IMP are higher. It is expected that due to the project, yields in these areas wouldbe between 5-10% higher than in non-IMP irrigated areas. For the purposes of the analyses, it is assumedthat yields would be between 5-6% higher in the IMP project areas, due to activities undertaken throughthe project.
j/ It is assumed that 50% of draught power requirements are hired.
BANGLADESHRURAL DEVELOPMENT II PROJECT
Estimated OpDerating Cost for Irrigation EquipMent (Taka) 4
DTW STW LLP (1 cusec) LLP (2 cusee)
Financial Economic Financial Economic Financial Economic Financial Economic
Hourly Runnin CostFuel 2/ 41.98 38.48 11.45 10,50 11.45 10.50 22.90 20.99
Lubricant S 210 1.93 0.57 0.52 0,57 0.52 1e15 1.05Re-pairs & Maintenance' 4.62 4.02 0.8d 0.71 0581 0.71 1.22 1%05
Miscellaneous 7,31 6.07 1.93 l1.60 1.93 1,60 3.80 3,15
'fotal Hourly Cost 56.01 50550 14.76 13.$33 14,76 13.33 29.07 26.24
Nuxmber of hours per year 1 000 600 600 800
Total Cost 56,010 50,500 8,856 7,998 8,856 7,998 23,256 20,992
Acres irrigated 70 15 20 50
Cost per acre 800 721 590 533 443 400 465 420
j/ Based on assuimed cropping pattern.
2/ Estimated at 0.053 gallon/hp/hour.
.2/ 5% of diesel cost.
A/ Based on 4% of engine cost and 1% pump cost (including handling and duties & taxes).
S/ 15% of other costs, to include operators' pay, channel maintenance costs, etc.
"A1.z
BALGIADESHRMURL DEVELOPKENT II PROJECT
Financial Analvais for STW Irrigation GrouA' (15 acres)(Taka)
WithoutProject _ I2 Year 2 _1 -j L RM-A. E i. U Y-i I Q -sr 8.J.11.
InflowGross Value of Production 43.854 !.54 81.679 96.249 J02.648 103.928 103.928 103.928 103.928 103.928
Outflows 2'Invewtment Cost/ 32,845 - - - - 9,315 (3,285)Cash Production Costs 12,362 12,362 32,581 37,635 37,635 37,635 37,635 37,635 37,635 37,635Irrigation O&M Costs - - 7,080 8,850 8,850 B,850 8,850 8,850 8,850 8,850Incremental Working Capital - 13,650 3,412 - - - - - (17,062)
Total Outflows _12362 58.857 43.073 46.485 46.485 46.485 55.800 46.485 46.485 26.1_
Net Benefit bef ore !inancingTotal 31,492 (15,003) 38,602 49,764 56,163 57,443 48,128 57,443 57,443 77,790Incremental i46.495) 7.110 18.272 7 25.951 1_ 6 * 25.91 9s1 90R
IR:R =38 N (12% discout rate) =77.54
Loan Receipts 16MT Credit 29,560j - 8,384- - -
ST Credi- 13,650 17,062 17,062 17,062 17,062 17,062 17,062 17,062 -Debt Service
MT Credit - 4,138 6,372 6,372 6,372 6,372 8,814 8,814 2,442ST Credit - 16,039 20,048 20,048 20,048 20,048 20,048 20,048 20,048
Net Financing _ _ -43,210 1ii) (I38jj9.358) (9,358) (974) (Ii1.800) ( 2 I.920)
Net Benefit Pfter- Faci-Total 31,492 28,207 8 35,487 40,406 46,805 48,085 47,154 45,643 45,643 55,300Incremental 2,914.151 14_151 _ 2__2808
Net Benefit per AvTerage Fr.9r/Total 2,100 1,881 2,366 2,694 3,120 3,206 3,144 3,043 3,043 3,687Incremental (219)-' 266 9400160434
Ipact on Cons tDl r FarmerMinimum Subsistence Requirement 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000(Deficit)/Net Caoh
Inflow 1, (900) (1,119) (634) (306) 120 206 144 43 43 687
Note: For footnotes please see Annex 5, Table 4A.
-12 7-ANNEX 5-Table 4A
BANGLADESH
RURAL DE'VELOPMENT II PROJECT
Footnotes for Both Tables 4 and. 5 of Annex 5
I/ For the purposes of IRR calculations all benefits and costs, exceptinvestment, are deferred by one year, and the incremental workingcapital stream is introduced. This is to allow for time lagsoccurring between incremental costs and benefits.
g/ Life of engine 5 years, and pump 10 years; salvage value of 10%assumed.
S/ See Annex 5, Table 3.
A/ Assuming two cropping seasons, working capital is estimated at 50%of the incremental operating cost of the following year. Workingcapital is recovered at the end of the project period.
S/ Medium Term Credit at 14 p.a. interest, to cover 90% of investmentcost, with one year grace period and maturity period of 9 years.
*S/ Medium Term Credit to finance replacement engine, assumed to berecovered in 5 years for the purposes of this analysis.
il Short Term Credit at 17.5% p.a. interest, to finance cumulativeincremental working capital.
8/ Farmer's contribution of 10% to investment cost.
9/ Average farmer assumed to have a holding of one acre.
10/ Based on minimum consumpt:ion requirements of 15.5 ounces per dayand a family size of 6 (4 adult equivalent).
11/ Deficits reflect families holding an average of 1 acre, either livingbelow the minimum subsistence levels, or having to supplement incomefrom other sources.
BANGLADESHRURAL DEVELOPMENT II PROJECT
Financial Analysis for LLP Irrigation Group ' (20 acres)(Taka)
Without Project Year 1 Year 2 Year 3 Yeax 4 Year 5 Year 6 Year -E 0 Year 11
InflowGross Value of Production _f§j7 58.472 108.900 128.332 136.864 138.570 138.570 138.570 158.570
Outflows 2Investment Cost. 27,100 - - - - 9,315 - (2,710)Cash Production Costs 16,481 16,481 43,440 50,180 50,180 50,180 50,180 50,180 50,180Irrigation O&M Costs j - - 7,088 8,860 8,860 8,860 8,860 8,860 8,860Incremental Working Capital- 17,024 4,256 - - - - -(21,280)
Total Outflows 16.481 60,605 54.784 59.040 59.040 59,040 68.355 59.040 35.050
Net Benefit before FinancingTotal 41,991 (2,133) 54,116 69,292 77,824 79,530 70,215 79,530 103,520Incremental - (44.124) 12_125 27.301 35,833 37,539 28,224 37,539 2
IRR = 56% NPV (12_ discount rate) =_138.35
Loan Receipts /MT Credit , 24,3902/ - - - - 8,384-' - -
ST CreditU - 17,024 21,280 21,280 21,280 21,280 21,280 21,280 - N
Debt ServiceMT Credit - - 3,415 5,258 5,258 5,258 5,258 7,700 2,442ST Credit - 20,003 25,004 25,004 25,004 25,004 25,004 25,004
Net Financing --4 .4-- _,_L82)L 28 ii 4
Net Bene it after FinancinygTotal 41,991 39,281 8 51,978 60,310 68,842 70,548 69,763 68,106 76,074Incremental _ j2 '10j 9,987 1MJ3i___ 26_ 2?W5 _ 22 261158j4,83
Net Benefit per Average Farmers/Total 2,100 1,964 8/ 2,599 3,016 3,442 3,527 3,488 3,405 3,804Incremental -___9 , 916 42 _,2 1,S 1,704
InDact on Consumption/Cash Flow Per FarmerMinimum Subsistence Requirement 57Q 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3.000(Deficit)/Net CasL
Inflow "i (900) (1,036) (401) 16 442 527 488 405 804
Note: For footnotes please see Annex 5, Table 4A.
BANGLADESHRURAL DEVELOPhENT II PROJECT
Summarized Indicators of Return from Rural Poor Activities1S
FinancingRe 3 uired-/ At Pull De elopment (p.a.)
Life of M.T. Working Cash Cash Debt Net Cash Present Net Total with % increase Payback
ment Loan CaLtal Loan Ifln f S Inflow /4/ in Casrh InPlow IRR5 Fe iod
(Years) (y......Taka..........) (..) (Years)
Proposed Activity
Pond Fisheriesv 10 21,115 2,047 900 63 257 580 1,5007,/ 2,080 39 53 2.5
(513)
Beef Fattening 1.5 1,300 - 3,250 1,550 286 1,414 1,5007/ 2,914 94 90 1.5
(1,414)
Livestock for Milk 6 3,200 - 3,150 200 - 8 2,950 1,500 3,847 156 64 1.0
Production (2,347)
Handloom iO 4,000 15,300 39,000 30,600 2,678 5,722 2,400 5,722 138 31 2.5
(5,205)
Oil Milling 10 3,000 7,500 42,200 30,000 1,313 10,887 1,500 10,887 626 102 1.0
(10,500)
Rickshaw Pklling 5 3,800 - 7,500 415 - - 7,085 3,900 7,085 82 77 1.25
(6,142)
Cane & Bamboo Work 5 - 2,400 8,000 4,000 350 3,650 1,5007' 5,150 243 167 1.0
(3,572)
Carpentry 5 3,000 8,667 42,000 26,000 1,516 14,484 3,000 14,484 383 111 1.0
(13,709)
Pottery 5 3,500 1,283 10,000 3,850 225 5,925 1,500 5,925 295 97 1.0
(5,020)
j Details are available in project file. Profiles given here are for a selection of the activities likely to be taken up under the project.
21 In all cases financing is required in Year 1 of the activity. Medium Term loans are at 14% interest p,a., and working capital Short Term
loans at 17.5% p.a.
/ As varying periods are required to reach full development for the different activities, figures in parenthesis show average net cash inflow p.a.
over the total period of investment.
A/ Present income in most cases is assumed to be obtained from working as hired labour. Based on various data, it is assumed that on average a
landless person is working about 125 days in a year at an average wage rate of Taka 12 per day (wage rates vary between Taka 10-1S per dav).
/ In computing Internal rates of return, all benefits and costs, with the axception of Investment and Working capital costs, were deferred by one
year to allow for time lags between incremental costs and benefits.
/ Investment required is per acre of pond; cash flow figures are expressed as per member, assuming a group of 20.
/ The activities would not involve foregoing present income.
8/ All loans fully repaid before reaching full development.
BANGLADESHRURAL DEVELOPMENT II PROJECT
TCCA - Financial AnalvsisIncome Projection for TCCA (New)
Unit Year 1 Year 2 Year 3 Yer Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
KSS covered - cumulative No. 20 40 60 80 100 120 140 160 180 200Parm families per KSS - cumulative " 20 25 30 35 40 50 60 60 60 60Farm families covered - cumulative " 400 900 1,500 2,200 3,000 4,000 5,200 6,400 7,600 8,800Shares - cumulative Tk 6,000 15,000 27,380 43,500 63,750 90,000 123,000 160,500 202,500 231,000Savings - cumulative I10,000 25,000 45,620 72,500 106,250 150,000 205,000 267,500 337,500 385,000Credit disbursed: Short Term 48,000 120,000 201,000 3 >,10G 464,000 671,800 930,100 1,236,650 1,557,700 1,949,800
Medium Term 325,200 502,500 709,400 1,005,000 1,330,200 1,537,000 1,537,000 1,537,000 1,537,000 1,537,000
Income/ iInterest on fixed depositS Tk 210 1,160 2,530 4,400 6,800 9,840 13,750 18,530 23,940 29,350Interest on savings ? 1. 210 1,170 2,560 4,450 6,880 9,960 13,920 18,750 24,220 29,670Commission on credit: Short Terra" " 3,360 11,260 22,890 40,740 62,130 91,030 129,080 176,600 231,360 295,050
Medium Ter.A0 61,200 100.240 150.380 205.900 257.300 303.260 342.700 375 060Sub Total, 16,780 46,690 89,180 149,830 226,190 316,730 414,050 517,140 622,220 729,130
Expendi ture 'Interest to members on saving ' Tk 175 970 2,130 3,710 5,730 8,300 11,600 15,625 20,180 24,730Bad debt expense §
Principal write off: Short Term " 960 2,400 4,020 6,780 9,300 13,430 18,600 24,730 31,140 39,000Medium Term " 6,500 10,050 14,190 20.100 26,600 30,740 30,740 30,740 30,740 30,740
Interest write off : Short Term 70 240 520 990 1,640 2,580 3,880 5,610 7,790 10,520Medium Term " 260 660 1,230 2,030 3,090 4,320 5,550 6,780 8,000 9,230
Pay & allowance (management) V 8/ 58,000 58,000 58,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000Pay & allowance (others) 2 25,000 35,000 55,000 65,000 85,000 105,000 115,000 125,000 145,000 155,000Office operating expenses 2_ 5.000 10.000 15.000 20,000 25.000 25.000 25.000 50.000 30.000 30 000
Sub Total * 95.965 117,320 150,090 194,610 232,360 265,370 286,370 314,485 348,850 375,220
Surplus (Deficit) (79,185) (70,630) (60,910) (44,780) (6,170) 51,360 127,680 202,655 273,370 353,910
I/ Share money on deposit on an average for 3 months in the first year and thereafter for 12 months 8 14% p.a.
2 Savings on deposit for 3 months in the firat year and thereafter for a full 12 montho ' 8.5; p.a., 7/17.5 of the total interest earned over the years on ST credit disbursed, net of recovery.
l 4/14 of the total interest earned over the years on MT credit disbursed, net of recovery.
5/ 5/6 of interest earned.
6/ Bad debt is charged at 2% in the year of loan disbursement for both ST and MT credit.
2/ Based on sample of 5 TCCAs over 3-year period.
8 1 TPO, 1 DPC, and 1 Accountant, Additional DPx in Year 4.
/ Excluding cost of training and any grants from GOB.
-3>
BANGLADFSHRURAL DEVELOPMENT II PROJECT
Aasuzntioris for.TCIA_ Model (NewK)
New TCCA _n Year 1 Year 2 r e Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 IELi1
a) KSS covered per TCCA No. 20 40 60 80 100 120 140 160 180 200
b) Farm families per KSS " 20 25 30 35 40 50 60 60 60 60
c) Total farm families " 400 900 1,500 2,200 3,000 4,000 5,200 6,400 7,600 8,800
d) Shares & savings per family Tk 40 50 60 70 80 90 100 110 120 130
e) STW equivalent sold per TCCA-' No. 11 17 24 34 45 52 52 52 52 52
f) 'A' and 'B' KSS % 20 25 30 35 40 45 50 55 60 65
g) 'A' and 'B' KSa No. 4 10 18 28 40 54 70 88 108 130
h) 'A' and 'B' KSS borrowing ST creditl/% 100 90 70 70 60 60 60 60 60 60
i) 'A' and 'B' KSS borrowing ST credit No. 4 9 13 20 24 32 42 53 65 78
.1) ST credit per 'A' and 'B' KSS Tk 12,000 15,000 19,500 24,400 27,750 31,300 36,700 42,400 42,400 42,400
k) Recovery profile:A" ST credit % 15 50 75 90 95 98
MT credit % - 2 8 18 29 41 53 65 77 88 94 97 98
iJ In ratio of 3-5 between shares and savings.
2/ Unit Cost Tk 32,845; estimated 90,000 STWs equivalent will be available to TCCAs over 5 years.
/ It is assumed that all 'A' and 'B' KSS will borrow in Year 1 since they would have no loans outstanding and would only be in default in the
membership requirement. Over five years, the % of 'A' and 'B' KSS borrowing ST credit is reduced to 60% or to the present BRDB average.
v/ Bad debt is charged at 2% in the year of loan disbursement for both ST credit and MT credit.
/ Based on proposed recovery in 8 equal instalments - recovery profile for each instalment samne as for ST credit recovery.
BANGLADESHRURAL DEVEOPMENT II PROJECT
TCCA - Financial Analysis
Income Proiection for TCCA (Existing)
TJnit Year 1 Year 2 Year 3 Year 4 Year 6 Year 7 Year 8 Year 9 Year 10
ESS covered - cumulative No. 140 150 160 180 200 200 200 200 200 200Farm families per KSS - cumulative " 35 40 45 50 60 60 60 60 60 60Farm families covered - cumulative " 4,900 5,950 7,050 8,550 10,850 11,200 11,500 11,800 12,000 12,000Shares - cumulative Tk 183,800 241,500 304,900 396,900 526,400 565,900 601,700 636,800 661,400 666,900Savings - cumulative " 306,300 402,500 508,100 661,600 877,300 943,100 1,002,900 1,061,300 1,102,300 1,111,600Credit disbursed: Short Term " 1,024,800 1,311,900 1,676,300 2,268,400 2,978,150 3,151,950 3,321,000 3,476,100 3,561,600 3,561,600
Medium Term " 1,241,500 1,359,800 1,448,500 1,507,600 1,537,100 1,537,100 1,537,100 1,537,100 1,537,100 1,537,100
Income2/ 1/Interest on fixed deposit' Tk 6,400 27,700 36,000 45,900 60,100 75,100 80,500 85,500 90,000 92,800Interest on savings 21 6,500 28,000 36,500 46,500 60,800 76,000 81,400 86,400 91,100 94,000Commission on credit: Short Termr2/ " 165,100 185,800 244,000 322,400 432,200 519,300 580,300 625,100 656,300 673,500
Medium Termr' " 49.700 104,000 161.000 217,200 268,900 313,700 351,500 382,000 405.000 421.300Sub Total 227.700 345.500 477.500 632.000 822.000 984.100 1,093,700 1.179.000 1.242.400 1.281.600
Expenditurea/Interest to members on savings
4' Tk 5,400 23,400 30,400 38,700 50,700 63,300 67,900 72,100 76,000 78,000
Bad debt expense SPrincipal write off: Short Term 24,900 30,600 37,900 45,400 59,600 63,000 66,400 69,500 71,200 71,200
Medium Term 24,900 38,100 40,6D0 42,300 43,100 43,100 43,100 43,100 43,100 43,100Interest write off: Short Term " 1,740 3,890 6,540 9,720 13,890 10,300 22,950 27,810 32,800 37,780 _
Mediutm Term 1,000 2,520 4,150 5,840 7,560 9,290 11,010 12,740 14,460 16,190 goPay and allowance (management) 7] 8/ 76,000 76,000 76,000 76,000 76,000 76,000 76,000 0 76,000Pay and allowance (others) EI "75,000 85,000 100,000 115,000 125,000 135,000 150,000 160,000 165,000 170,000Office operating expenses 25.000 25Q000 30.000 30.000 35.000 35.000 40.000 40.000 45.000 45.000
Sub Total " 233.940 284.510 325.590 362.960 410,850 442.990 477,360 501.250 523.560 537.270
Surplus (Deficit) " (6,240) 60,990 151,910 269,040 411,150 541,110 616,340 677,750 718,840 744,330
I/ Share money on deposit on an average for 3 months in the first year anid thereafter for 12 months @ 14% p.a.
Z/ Savings on deposit for 3 months in the first year and thereafter for a full 12 months @ 8.5% p.a.
2/ 7/17.5 of the total interest earned over the years on ST credit disbursed, net of recovery.
A/ 4/14 of the total interest earned over the years on MT credit disbursed, net of recovery.
S/ 5/6 of interest earned.
j/ Bad debt is charged at 2% in the year of loan disbursement for both ST and MT credit.
I/ Based on sample of 5 TCCAs over 3 year period.
/ One TPO, two DPOs and one Accountant.
/ Excluding cost of training and any grants from GOB.
BANGLADESHRURAL DEVELOPMENT II PROJECT
Assumptions for TCCA Model (1xisting)
Old TCCA Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13
a) KSS covered per TCCA No, 140 150 160 180 200 200 200 200 200 200
b) Farm families per KSS t 35 40 45 50 60 60 60 60 60 60
c) Total farm families " 4,900 5,950 7,050 8,550 10,850 11,200 11,500 11,800 12,000 12,000
d) Shares & savings per familyi/ Tk 100 110 120 135 150 150 150 150 150 150
e) STW equivalent sold per TCCA.d No. 42 46 49 51 52 52 52 52 52 52
f) 'A' and 'B' KSS % 50 54 58 64 70 70 70 70 70 70
g) 'A' and 'B' KSS No. 70 80 93 115 140 140 140 140 140 140
h) 'A' and 'B' KSS borrowing ST credit % 60 60 60 60 60 60 60 60 60 60
i) 'A' and 'B' KSS borrowing ST credit No. 42 48 56 69 84 84 84 84 84 84
j) ST credit per 'A' and 'B' KSS Tk 24,400 27,750 31,300 36,700 42,400 42,400 42,400 42,400 42,400 42,400
k) Recovery profile _/: ST creditA/ % 15 50 75 90 95 98
MT creditV % - 2 8 18 29 41 53 65 77 88 94 97 98
I/ In ratio of 3:5 between shares and savings.
/ Unit cost Tk 32,845; estimated 90,000 STis equivalent will be available to TCCAs over 5 years.
/ Bad debt is charged at 2% in the year of loan disbursement for both ST and MT credit.
g Existing balance in Year 1 assumed to be recovered over 3 years.
/ Same as for new.
BANGIADESH
RURAL DEVELOPMENT II PROJECT
BRDB-TCCA/KSS System
Key Indicators(Average)
Units Current RD-I Current BRDB TCCA ModelsILNew Existing
1. KSS covered per TCCA No. 200 139 20 140
2. Farm families per KSS No. 54 35 20 35
3. Total farm families per TCCA No. 10,800 4,865 400 4,900 w
4. Shares and savings per member Tk 71 96 40 100
5. STW equivalent sold per TCCA per year No. 180 56 11 42
6. A and B KSS % 49 48 20 50
7, A and B KSS borrowing ST credit % 98 60 100 60
/ For the first year of the project.
0-4
BANGLADESHRURAL DEVELOPMENT II PROJECT
TCCA - Financial Analysis
Sensitivity Analysis
New TCCA Unit Year I Year 2 year Year 4 Year 5 Year 6 Year Year Year 9 Year 10
Total Income Tk 10,870 30,140 57,400 98,490 148,250 202,160 261,500 325,280 393,830 465,720
Total Expenditure 92,895 111,670 141,760 183,520 216,870 243,990 262,860 288,185 320,290 343,360
Surplus (Deficit) " (82,025) (81,530) (84,360) (85,030) (68,620) (41,830) (1,360) 37,095 73,540 122,360
Existing TCCA <n
Total Income Tk 202,800 283,600 366,400 457,900 573,500 667,600 718,200 753,500 778,700 794,200
Total Expenditure " 220,940 255,530 289,820 318,670 357,060 383,140 411,240 428,930 446,320 456,810
Surplus (Deficit) " (18,140) 28,070 76,580 139,230 216,440 284,460 306,960 324,570 332,380 337,390
c i
BANGLADESHRURAL DEVELOPMENT II PROJECT
Cash Flow to TCCA from Rice Mark
Rice
Unit Price Annual Outflow Fine Qualit Medium Quality... 0... ,(Taka '000) .
Cash InflowProceeds from Rice Sale 21 4.005 3,650
Cash OutflowPurchase of Paddy Tk 110/md 2/ 2,948Transport to Godown Tk 1/md 27Milling Cost Tk 4/md 107Gunny Bags (1,250 of 2 md capacity) Tk 7/bag 9Transport of Rice to the Market Tk 4/md 64Gunny Bags for Rice (8,040 of 2 md each) Tk 7/bag 56Labour Cost A/ 32Fixed Supervisory Wage Cost . 16
Sub Total: 3,259Interest on Working Capital Y 94Annual Operating Costs 3,353Annual Debt Servicing (for 10 years) / 48
Total Annual Cash Outflow: 3.401 3.401 3.401
Net Cash Inflow/(Outflow) 604 249 O
Net Cash Inflow per Maund of Paddv2' 22.50 9.30
I Based on a godown capacity of 200 tons, annual paddy procurement of 1000 tons, and rice production of600 tons.
2/ Based on data for 7 districts from BBS, a three-year average wholesale price for fine quality rice ofTk 249/md, and medium quality of Tk 227/md.
2 Three-year average grower's price.
v For filling gunny bags, and handling of paddy and rice.
/ Salaries for Storekeeper and Night Guard.
6/ Based on average working capital of 20% of paddy purchasing costs, at an interest of 16% p.a.
2 MT loan for godown of Tk 250,000 at 14% interest p.a., and a repayment period of 10 years. ENQ/ The surplus would be available for distribution to members who sold paddy to the KSS/TCCA.
-137-
ANNEX 6Table 1
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Financial and Economic Prices
Unit Financial Price Economic Price 1/.............. (Tk) .
Output
Paddy: Aman Maund 119 210Boro Maund 116 197
Wheat Maund 121 240Mustard Maund 240 199Pulses Maund 213 177
input
Seed: Paddy (Local) Maund 119 210Paddy (HYV) Maund 180 230Wheat Maund 190 280Mustard Maund 400 295Pulses Maund 213 177
Fertilizer: Urea Maund 148 292TSP Maund 115 312MP Maund 110 228
Draught Power Pair day 22 18.25 2/Labour Man day 15 8.50 3/Diesel Gallon 36 33.00
1/ See Table 2 for derivation of economic prices of main inputs and outputs.2/ Adjusted by SCF of 0.83.3/ The opportunity cost of labour is assumed to be 68% of the prevailing
financial price, to reflect prevailing under- and unemployment. The SCFof 0.83 has been used to reflect the opportunity cost of labour in borderprices.
BANGLADESH
RURAL DEVELOPMENT 11 PROJECT
Derivation of Fa-mgate Economic Prices (1983 Constant Prices)
PaddyUnit Aman Boro Wheat Urea TSP MP
Projected 1990 World Market Price kii 1981Constaimt Dollars 1/ US$/ton 425 425 190 265 195 1.10
Adjustmnent for 1983 Constant Dollars 2/ 1.07 1.07 1.07 1.07 1.07 1.07Projected Price in 1983 Constant Dollars US$/ton 450 450 200 285 210 120Adjustment for Quality 3/ % 70 65 90 -
Projected Price Adjusted for Quality US$/ton 315 293 180 285 210 120Freight, etc. to Bangladesh US$/ton 35 35 70 20 65 65CIF/FOB Chittagong US$/ton 350 328 250 305 275 185CIF/FOB Chittagong Tk/md 326 306 233 285 257 173Internal Handling and Transport betweenPort and Market Tk/md +43 +43 +43 -24 +24 +24
Market Price Tk/md 369 349 276 261 281 197Local Costs between Market and Farmgate 4/ Tk/md 46 46 36 31 31 31
Sub-total 323 303 240 292 312 228Processing Ratio % 65 65 - - - -
Farmgate Price Tk/md 210 197 240 292 312 228
1/ Source: IBRD Price Forecasts dated December, 1982. It is assumed that Bangladesh would be anet exporter of Urea.
2/ Using IBRD Manufacturing Unit Value (MUV) Index, December 1982.3/ Boro paddy is of inferior quality as compared with Aman.4/ Costs of non-traded components included have been adjusted by SCF of 0.83.
~1-M D4
BANGLADESH
RURAL DEVELOPMENT II PROJECT
Economic Analysis
Costs for Rural Operating Incremental on Farm Working Incremental Benefits Net
Year Investment 1/ Poor Activities Costs 3/ Production Costs 4/ Capital 5/ On Farm Rural Poor Balance
........ ...... , ... (Tk Million) .
1 399 7 44 - 165 - - ( 615)
2 357 35 59 330 226 675 28 ( 304)
3 347 85 82 781 240 1,659 88 212
4 251 152 101 1,261 232 2,832 175 1,010
5 - 204 105 1,725 100 3,988 282 2,136
6 87 180 108 1,923 - 4,691 247 2,640
7 71 150 112 1,923 - 4,864 200 2,808
8 71 146 115 1,923 - 4,933 192 2,870
9 62 134 118 1,923 - 4,959 170 2,890
10 - 119 120 1,923 - 4,959 146 2,943
11 148 107 120 1,923 - 4,959 131 2,792
12 113 77 120 1,923 - 4,959 100 2,826
13 114 53 120 1,923 - 4,959 68 2,817
14 100 1 120 1,923 - 4,959 5 2,820
15 - 1 120 1,923 - 4,959 5 2,920
16 87 - 120 1,923 - 4,959 - 2,829
17 71 - 120 1,923 - 4,959 - 2,845
18 71 - 120 1,923 - 4,959 - 2,845
19 62 - 120 1,923 - 4,959 - 2,854
20 - - 120 1,923 - 4,959 - 2,916
21 (122) 2/ - 120 1,923 (963) 4,959 - 4,001
ERR = 79% (NPV of Tk 12,505 million at 12% discount rate)
1/ Excludes rural poor activity costs; for replacement costs life of STW/LLP engine = 5 years;pumpsets = 10 years; motor vehicles = 5 years.
2/ Salvage value of engine and pumpsets. mX3/ Training, staff and office operating costs (including building maintenance). W0%
4/ Including irrigation costs.
5/ Incremental working capital stream introduced for discounting purposes to allow for time lags occuring
between incremental costs and benefits. Assuming two cropping seasons, it is estimated at 50% of the
incremental farm production costs for the following year.
-140- ANNEX 7
BANGIADESE.
RURAL DEVELOPMENT II PROJECT
LIST OF DOCUMENTS ON PROJECT FILE
ITEM TITLE
4. Training Module
2. Terms of Reference for Technical Assistance
3. Audit Manual
4. RDTI Training & Construction Plan
5. TTDC/TCCA/TTUJ Cost Estimates
6. Draft Banking Plan
BANGLADESHRURAL DEVELOPMENT 11 PROJECT
Organization of Bangladesh Rural Development Board
Board of Directors
Chairman
Director General LEVEL I rt
Rural Poor/ Planning Monitoring
DIR SIRDP NIRDP )i 'mperentation Rral oinance Evaluation
f T $ A t h f 9 < f t1 TrininJD ~~~~~~Coop/Credift IMP irngaion Mairketing SWRD FMRD Womyen Rural Poor Training RDTI Plannin MVonOl
Equipmnt I-.
DD ~ ~ ~ ~ ~ op CrdtToning MPF&A udtMonitoring Eauto
AD F5 B 171 F2 2 ~2 In 1 2 12 [1 Lrain
Legend: DIR - Director RDI - Rural Development IJD - Jont Director SWRDP - Southwest Rural Development ProjectDO - Deputy Director NWRD - Northwest Rural Development ProiectAD - Assistant Director HTiW - Hand Tube WellSIRDP - Sirjgaon integrated Rural Developrient Project RDTi - Rural Development Training Institute. SyihetNIRDP - Noakhali Integrated Rural Development Project Word Bank-25027
BANG LADESHLEVEL RURAL DEVELOPMENT PROJECT 11
Coordination of the Rural Development Effort
Cooperatives
MINISTERIAL Bangladesh Rural Development Board | Nat'l. Federation
Governing Committee of TCCAChairman, Minister RDLG
hlCMRID:
mCo Chairan, Sec, LGRDCo Chairman, Sec Agcul.
Director General
| Dirrector Rural Poor Director Planning lDirector Field Director Finance lProgramme & Training Monitoring & Evaluation F Services F Audit/Accounts
DISTRICT | District Commissioner D-…s…i _ Cooination DistrictCommittee ~~~~~~~~~~~~Federation
l l l 1 ~ ~~~~~~~~~~~~~~~ 1_- -- l
District Executive District Executive District Extension Project t Fisheries District Officer Regional ManagerEngineer, RWP Engineer, BADC Officer Director f ficer BSIC (Sonali Bank)
Deput Project I rDirector
THANA | Thana Chairman Thana Councl
Nirbahi Officer
i I . I . } TCCA ChairmnSection Agriculture Cooperative Thana Rural Live Stock Thana Fisheries Branch Manager Management
Officer, BADC Officer, DAE Officer Develop. Officer Office Engi neer Officer (Soneli Bank) Committee
|DevelopS OfficerS5MSS/BSS
The Thana Rural Development Officer acts asSecretary to the Managing Committee of the T.C.C.A. World Bank-24717
BANGLADESHRURAL DEVELOPMENT II PROJECT
IMPLEMENTATION SCHEDULE
Agency Activity FY83 FY84 FY 85 FY 86 FY87
GOB Review of the Credit Program of TCC ABROS Droft PPGOB PP Approvol60i Droaf Command Areo Development PlanIDA/GOB Credit EffectivenessGOB Reorgonization ond Decentralisotlon of RDBRS8/SB/BROB Droft Bonking Plon for TCCA/SB OperotionsI83/SS/BROS Finol Banking Plon for TCCA/S83 Operotions
BRDB Draft. Implementation ManuolGOB Revision of Cooperotive RulesBRDB/RDA Contract for IMP and Rurol Poor TroiningBRDS/BADC Agreed Troining Program for Private MechanicsBROB/RDA Private Me;honics Training - -GOB/FAO Agreement to Continue Fertillier Marketing ProjectGOB/UNDP Ageement on Technical Assistonce-UNDPBRDB/Consul- Prepration of District Survey Plan for Rural Poorting FirmsBROS lssuonce of -Import LicenceBRDS/Private Sole of STW/LLP -Dealers
BRDB Conal Lining Credit Program ' - -
BRDB Procurement of VehiclesBRDi3 Rurol Poor Stoff Training - _B3ROB/Consul- Stilt Training for Rurol Poor Progromling FirmsPWD/BRDB Civil Works-Marketing, Thona Facilities - _PWD/BRDB Civil Works for RDTI, TTU _ -
BRDB/RCS Agreement on Audit MonualBRDB/RCS Audit Troining _
CHART T
I
IBRD 17064- 89 BAN LA 9D0ES 932t MARCH 1983
,/ >; \ s: ''a<s BANGLADESH
RURAL DEVELOPMENT II PROJECTPROJECT AREAS AND TRAINING FACILITIES
N /S E\ < X ' :S \ n nr Gothoti
8 g ( ) <, \ Ro .st .5 Y RURAL DEVELOPMENT I AREAS TRAINING FACILITIES ROADS
26 a /' ) TfhakUrUOrt \ X < - ' ' ur FLOOOGRAIN TI MARKETING AREAS B.A R D O-, RAILWAYS 26-
-FAO FERTILIZER MARKETING AREAS R.O,A. = sc: RIVERS
: So tof/^or - t s , 8 ~~~~~~~~~~~~~~~~~CHTP AREA iADS) T.T.L . OISTRICT BOUh'DARIES
, DINAJPUg 0 USRC UUU ,;sUAj,. \ S 1*l;J- S t t \ . -NH'RDP AREA IADBI A R.U,T. BNTERNATINAL
BOUNDARIES
Fag~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4
0 ( / q 9>i \ A . 2 ~~~~~~~~~~~~~~SVWRDP AREA DIFADI
-25'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~3
BAR/ / > , r 9 NIRDP VREA IDANIDAI
C24°BN dee du 24°o
*/; j~~~~~~ I N D I A
cent _ _II DPeR - - =..D Bank andee IFAD
_ Ct) < . ^ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~n .23 '- GA.
Tlenoa,-n Fb-c p,end maen
acett e' ntt en tIcujet ,o te ga'k re t Ist
ee'enee-e nen o acceptance oCt/X ( ~~.\
sccneeM,Deeea ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ PALY HA,
-h /-
0 ~ > 7r N-l -- -d th.> t2</J2 S
i N D I A >
f Az7.c ni zienm~ tO.' 1 0 25 50 75 MILES .3URM A- t. _21't t I 21°
) g ,,.3 0 50 .00 KIEOMETERS .
| SRI LANKA0 ) '> 90° 910 92t
IBi3 17066J\& Si 9890 900 90 BANGLADESH MAhCH 1003
.tAt 2VX'2 <1 N D A RURAL DEVELOPMENT 11 PROJECTGROUNDWATER DEVELOPMENT AREA
Areas not suttab e for snallow ntubevell development,f i 1T.fiO G-Jho,f but deep tubewell can be developen
Areas under the coasta zone wheoe cnmplex ground.water condti,os exist-26' W g 0 <In general, considered as nsuiable 'or sha low tubeve I deve opment 260-
Groundwater notental may oe confined to tie deeo 8qu for.Suitabi.ty for shallow tuneweH development is not known due toinsuficant data
,RA.GP R , Areas where the ndeseopment ponert1al for dee0 and snaHoOw tubeveHis not known due no absence or iack o' data.
L DINAJPURJ s \ 5 0 \ < t - Z ~~~~ROADS\ $\r/ t i' ' { + '''.1 -00 > e RAI LWAYS
> t ? ~77 o .- i C , \ X ' /.'-,:- >t - -:RIVERS) \ >1 { DISTRICT BOUNDARIES
)" - - INTERNATIONAL BOUNDARIES
-25\ )< <t 1/( i'0fL t ~ ' ~ ~ /' ~~-r<'//Y8 i 25'2
> < < 6)~~~~~~~~~~~~~~~SHRAN 'X 'J,t
-24' *N 24. )" . i t,. 2
NH~KAI N D A
COMILA
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,,on Whin mao do nret imn/n on Whe 4is>7> S -R9 i-- - t t\ 022 east of Thn World Bank and tOnX .l1>j 1,4 .:--fl/.
Intnnoanonal Foanne Cortoratio IxJT Eef'.;0v -L.~\ J any iudqmenn onl fhe (eOaiS/sahsR>l ,-1 .-- of ony ferritory orny sop i '. -t 1 eendrsement nr accepbnceO of Vt- a\ ( > : _ . \
;su;h ;ounaoes NA t -":t '~ f N <
I N D I ABARISj . X }it
th r,ny ofI&rig' o- 0 2;S 50 t'I
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of ., tertr or an