report no. 4501a:6/13/84 project...

Document of

U.S. AGENCY FOR INTERNATION4L DEVELOPMENT

FOR OFFICIAL TJSE ONLY

Report No. 4501A:6/13/845291-IND

PROJECT PAPER

REPUBLIC OF INDONESIA

UPLAND AGRICULTURE ANSD CONSERVATION PROJECT

July 5, 1984

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank or U.S. Agency for InternationalDevelopment authorization.

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TABLE OF CONTENB

gage

Conditions Precedent and Covenants

Currency Ecuivalents, Weights and Measures andAbbreviations and Special Terminology iii

Ececutive Summary V

Project Paper

I. Background and GOt/IDD/AID Cooperative Strategy 1

II-. Te Project 7

IZI. Project Organization and Management 53

IV. Technical Assistance Requirements 69

V. Cost Estimate and Financial Plan 70

VI. Project Implmentation Plan 82

VIT. Monitoring and Evaluation Plan 87

VI. Summary of Project Analyses 89

Annexes

1. Project AnalysesA. Tacbnical AnalysisB. Economic AnalysisC. Social Soundness AnalysisD. Administrative Analysi6

2. Government of Indonesia Letter of Pequest3. APAC Approval Cable (83 State 252824)4. Logical Pramework5. Budget Annex6. Statutory ::ecklist7. Waivers8. Bibliography9. List of Working Papers and Background Material

#45 O1A: joy: 7/5/84

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0NDITIONS PrECEDENT

Condition Precedent to Initial Disbursement

Evidence that Provincial Coordination Offices and ProjectManagement Units have been established and that sufficient project staffis in place to carzy out first year activities.

Conditions Precedent to Disbursement for Activities other thanPre-Implementation Activities including Studies, Surveys, Commodities andestablishment of MIS

1. Evidence that a Project Executive Secretariat has been establishedand is formulating appropriate guidance for project implementation.

2. Evidence that an agreement between GOI and IBRD has been executed,which provides funding for the project in an amount anticipated inthe AID-GOI Project Agreement.

COVENANITS

1. Government agrees to provide sufficient staff for projectactivities as described in the staffing pattern included in theAID-GOI Project Agreement.

2. Government agrees that the funding mechanism for the project willprovide for local government responsibility and authority under theproject.

3. Government agrees that guidance required to place projectmanagement at the Provincial and District levels, to uinifymanagement, and to unify budgeting will become effective prior toApril 1, 1985.

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CRRNCr 3{IVALENT

US$ 1 - R@. 1,000

WEIGHTS AND MEASURES

1 metric ton - 1,000 kilograms (Kg) - 2205 pounds - 0.98 long ton1 meter (a) - 29.37 inches - 3.28 feet - 1.09 yards1 hectare (ha) - 10,000 mZ - 2.47 acres1 square kilometer (kn2) - 100 ha - 0.39 square miles

ABBRZVIATIONS

AAAT]C - Agency for Agriculture Education, Training and Extension(UPLPP)

AARD- Agency for Agricultural Research and DevelopmentBAPPEDA - Agency for Regional Development Planning (I is at

province level, II is at district level)B XMAS - Program of technical guidance for increasing agriculture

production that provided credit incentivesDIP - Agriculture Intformation CentersBKK - Badan Iredit Recamatan - sub-district credit organizationWLPP - Agriculture In-Service Training

BPLPP - C See AAXTE)BRI - Bank Rakyat IndonesiaBW= - Land Rehabilitation and Soil Conservation Centers, under

the Directorate General of Reforestation and LandRehabilitation

DG - Directorate Ceneral in a ministryDinas - Agriculture technical services at provincial and district

levelsDIP)bUP - GOI regular budget processFID - Financial Institutions Development Project supported by

AIDFXP - Forum for Coordination of Ministry of Agriculture

activities (district level)IFY - Indonesian Fiscal Year (April 1 - March 31)IN3AS - Similar to BIMAS but without credit incentivesINPRES - Presidential Instruction re rural development programsINPRES DATI I - Funding given to provinces for rural development programsINSUS - Similar to BIMAS but without credit incentivesKUD - Koperasi Unit Desa (cooperative at the village level)KUPEDES - General Rural Credit Program of the BRILXMD - Village councilNAEP - National Agriculture Extension Project supported by the

ERD

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NSC - National Seed Corporation05R - On-Site Research plotsPadat Karya - Labor intensive construction metbodPCD - Project Coordination Office at the province levelPIp - Project Innovation YundPLP - Fleld Extension Agent, Ministry of ForestryPMU - Project Management uait at the district levelPPL - Field Extension Agent, Ministry of AgriculturePPM - EKtension supervisorPPS - Subject Matter SpecialistP3RPDAS - Reforestation and Regreening Planning and Supervision for

Watershed Program, now renamed BRLKTPTO - Project Training Officer in JakartaPU - Pabllc WorksREC - Rural Extension CanterREPELITA IV - The Fourth 5 Year PlanSXB - Formal agreement that ministries will cocpae.ate in an

endeavorSUPS- Sustainable Upland Farming Systems - the primary

component of the Upland Agriculture and ConservationProject

WKBPP Area served by an REC

xEaiWTIVZ SUMMARY

I. Borrower : Republic of Indonesia

II. Financing : BRD: $11.3 million (Including capitalized front end fee)AID : $13.9 million loan

$05.0 mLillion grantGOI : $20.0 million

III. Terms: : IBRD: Repayable in 20 years, including a S-year graceperiod, at the standard variable interest rate.

AID : Loan repayable in 40 years, with a grace period of10 years, durirn which time interest will acme atan annual rate of 2%. Thereafter, an annual rateof 3% will apply on any outstanding principal andinterest due.

IV. Estimate Costs*Local Foreign Total- _ r$ million) --

Sustainable Upland Farming Systesa 10.6 0.9 11.5Farming Systems Research 3.3 0.3 3.6Access Roads 4.4 - 4.4Training 1.2 1.0 2.2Institutional Development 5.4 8.4 13.8Project Innovation PFnd 0.4 0.1 0.5

Base Cost 25.3 10.7 36.0

Physical Contingencies 2.5 1.1 3.6Price Contigencies 8.2 2.2 10.4

Total Project Cost 36.0 14.0 50.0

Adjustment for rounding 0.1 0.1Front-end fee on Bank Loan 0.1 0.1

Total Financing Raouired 36.0 14.2 50.2

V. Financing PlamVLocal Foreign Total-- - - ($ million)-- -

Bank 9.0 2.3 11.3USAID 7.0 ll.9** 18.9GOI 20.0 - 20.0

Total 36 0 14.2 50.2

Net of taxes and duties*' Including t5 million grant1/ See Budget Tables in Annex for more detailed illustrative budget.

Varilnces in figures are due to rounding.

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PRO3ECT DESCRIPTION

I. The Problem

The people in upland areas of Indonesia subsist primarily onrainfed rice, cassava, peanuts and maize crops--combined with marginallivestock and forest products. Because these sources of income have notreceived much attention, the standard of living of people in the uplandshas been falling behind that of people in the lowlands. With increasingpopulation in upland areas, over-exploitation of resources and soilerosion, many people in the uplands are experiencing absolute decreasesin their standard of living, from an already poor base.

Upland areas have the basic agro climatic conditions needed forincreased productivity. With improved farm management techniques,research on new technology and increased institutional capacities to dealwith the problem, the productivity of the uplands can be substantiallyincreased.

xi. Project Goal and Purpose

The goal of the Upland Agriculture and Conservation Project is toincrease farm production and incomes, while minimizing soil erosion, indensely populated upland areas in Java by improving farming systems andfarm technologies and management. The Projectts specific purpose is toexpand and improve institutional capacities, primarily at provincial,district and farm levels, to experiment with and apply alternativeapproaches to upland far-ing.

The Project is a joint effort of AID, the IBRD and the Government.IBRD support is being provided througa a separate agreement with theGovernment.

The establishment of a Management Information System (MIS) at thebeginning of the Project is esserzial to evaluation later of whether andto what degree the Project Goal and Purpose are met. The Project willemphasize the continuing use of MIS techniques to maintain adequateplanning and day-to-day management.. The Project includes funds forstudies to provide Project Managers with information relevant to projectperformance. Basic MIS activities may include:

(a) Technical and agro-economic profiles that will be carried outin target areas to describe the pre-project physical, environmental,social, institutional and agro-econcnic situation.

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(b) Regular data generation related to implementation performanceto ascertain Project status, e.g., hectares of expansion completed,distribution of inputs (seed, fertilizer, trees, grass) and researchresults.

In addition, funds will be available to contract for specialstudies through appropriate local institutions or consultants. As ageneral rule these studies will be short-term, not exceeding threemonths, so that their findings can be applied to the planning andimplementation process without delay.

AID funds will be available for technical assistance, operatingcost and equipment for MIS, as needed.

III. Location of Project

Initially the Project vill be implemented in two districts inCentral Java within the Jratunseluna Watershed and two districts in EastJava within the Brantas River Watershed.

The decision to expand project activities to four or moreadditional districts will be made jointly by the Govermment, IBRD and

9ID, based on periodic assessments of field performance, evidence thateffective provincial and district planning and management systems arefunctioning and that capacity exists to expand project activities withoutadversely affecting overall project management.

IV. Prolect Activities

To allow the Project to function as a pilot project, the Governmentwill suspend the activities of other government programs providingsimilar or competing services to the same beneficiaries. Appropriateofficial guidelines will be issued to assure that other governmentprograms work in harmony with the experimental aspects of the Project,especially in the project activities cited below.

To strengthen institutional capacity and to test possibleapproaches to improve farming systems, technologies and management, theProject will include five components: 1) Applied Research; 2) SustainableUpland Farming Systems Pilot Project; 3) Human Resources Development: 4)Access Roads: and 5) a Project Innovation Fund.

A. Applied Research Activities

The puzpose of the research component is to develop the capacityto produce technologies that will increase farm production and incomesand promote soil conservation. A field headquarters with research

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facilities will be established by the Agency for Agricultural Researchand Development (AAD) within one of the target basins in a locationrepresentative of a major ecological zone. The preferred location wouldbe within a radius of 20 km from Ungaran or Salatig'a, In Central Java.This facility also will serve as a research headquarters for the uplandresearch conducted in the Jratunseluna Watershed, and will provideco-munication and logistic support to the field research and supportstaff. Similar facilities will be established in the Brantas Watershed,preferrably in Malang. In addition to the headquarters and researchfacilities, approximately eight on-site research plots will beestablished in areas representative of the conditions found in bothwatersheds. Staff for the combined headquarters and field laboratorywill include five full-time scientists and other field technical staff,while staff at the other headquarters will include two full-timescientists and other technical staff.

In addition to supporting the staff and development of theseresearch sites, funds will be available for research. It is anticipatedthat research will be conducted in the following subject areas:socio-economic evaluation, crop and livestock systems, treecrops andsilvipasture, soil and water management. These studies will beintegrated with the project field demonstration and expansion program(described next) to insure feedback of empirical data on the performanceof different varieties and farming systems and on rates of adoption ofrecosmended technology.

AID funds will be available for training equipment, vehicles andresearch costs, including travel, per diem and operating costs. It isanticipated the IBRD will finance local currency investment costs and aportion of the research budget.

B. Sustainable Upland Farming Systems Pilot Project (SUPS)

This is an effort to improve on-farm trials and diffusion ofimproved technologies and management relevant to upland areas. SUPS willInclude support for nursery development, food-crop seed production anddistribution, demonstration farms and expansion areas and subsidies.Each of these components is described below.

(1) Nurseries. It is anticipated that a network of tennurseries (at least one per district) will be established underGovernment auspices to manage the production and distributJon of largevolumes of grasses/legumes for use in stabilizing terraces ur in theintroduction of silvipasture on steeper slopes.

The nurseries will be established on fertile soil withyear-round access to water and will probably require at least 3 hectaresof irrigated land. To the greatest extent possible, nurseries will be

located on a main road as close to the general target area in eachdistrict as possible. The Government will purchase or lease and developthe land, including irrigation facilities, and fund the operating costs.

It is anticipated that one nursery per district will beestablished during the initial project year in districts Boyolali andSemarang in Central Java and Malang and Blitar in East Java.

aID funds will finance vehicles and equipment for this component.

(2) Upland Pood Crop Seeds. The Project will support theproduction and/or procurement, procAsSing, storago and distrLbution ofthe secondary crop planting material reqyired for both demonstrationfoarms and expansion areas and, in addition, for the expected follow-onseed demand generated by the Project.

It is anticipated that over three thousand tons of certifiedrice, maize, soybean and peanut seed will be required. Budgets forplanting material development will be made availabLe one year ahead ofthe season in which the seeds will be needed, to allow for the purchaseof stock seed, seed multiplication and their timely delivery to expansionareas.

AID funds will be available for vehicles, equipment andoperating costs, including procuring and processing of plant material forthis component.

(3) Tree Crop Seedlinqs. Tree seedlings will be provided freeof charge to farmers willing to put their land under permanant vegetationor follow sound soil and water conservation practices.

It is anticipated that seedlings will be purchased fromexisting, privately owned nurseries in the project area. when improvedtree seeds are available from AARD, AARD will make arrangements to supplynursery contractors the improved seed stock along with the specificmanagement recommendations from appropriate AARD staff.

AID funds will be available for the purchase and distribution ofseedlings.

(4) Demonstration Farms and Expansion Areas. Withln identifiedareas, demonstration farms will be established as the principal activityfor technology demonstration and dissemination under the SUPS pilotproject. In addition to farming systems technologies, it is anticipatedthat two types of conservation technology will be demonstrated initially:bench terraces with grasses planted to stabilize the soil and grassstrips, lamtoro or other appropriate legume tree/shrubs to form a barrierto soil erosion. If acceptable to the owners, marginal lands or lands

with low productivity and high erosion risk will be planted tosilvipasture with cash crop trees and forage grass/legumes for livestockfoed. Farmers with steep and marginal lands will be encouraged andassisted to change from annual food crop production to permanent ormostly permanent vegetative cover.

It is anticipated that 72 demonstration farms will beestablished under the Project; over the life of the Project 23,000hectares will be treated.

AID funds will be available for technical assistance, equipment,commodities, vehicles and operating costs under this component.

(5) Subsidies. Farmer adoption of improved farming systemstechnology will require incremental iqputs, in the form of labor,fertilizer, pesticides, planting material and other items, above thelevels presently applied under traditional farming practices. TheProject will fund direct subsidies in the form of materials or farminputs for participating upland farm communities for an initial period oftheir participation in the program. Specific requirements will vary fromarea to area. Project officials will have the authority to adjust thesubsidy package to insure that it is appropriate to farmor needs in anygiven locality.

In introducing subsidies, adherence to certain criteria will berequired. First, ir. rs in a contiguous area must organize themselvesinto faiming units and formally request government support for theirunit. The farming group will be provided the necessary materials toundertake farming and conservation measures, under the guidance of aqualified technician. After completion of Lnitial activities, such asconstruction of bench terraces, participating farmers will be providedwith necessary materials (such as grasses, seed, fertilizer andpesticide) for the initial year's production. Appropriate inputs will beprovided during the second year according to the needs of the farmingsystem the farmers adopt. It is anticipated that subsidies will beprovided for approximately two years, and that funding for farm inputsafter the initial subsidy period will be in the form of credit from othersources. It is anticipated that the Parties to this Agreement will focustheir credit activities on the project areas.

AID funds may be used for equipment and farm inputs, and otherapproved local currency costs. The IBRD will also finance a portion oflocal costs for this component.

C. Huma., Resources Development

This component includes workshops, intensive technical courses,newsletters, study tours, demonstration visits and handbooks forextension workers, farmers, community leaders and technical and

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managerial staff. In addition, it is anticipated that 40 PPLs willreceive diplomas in Upland Farming Extension and Soil Conservation fromIndonesian schoolsr 20 project personnel will be trained to the H.S.level at Indonesian universities, focusing on upland management andfarming systems; and 16 project personnel will be trained abroad to theM.S. level.

During the first year of the Project an assessment will be madeof skills needed. At the same time, a personnel management system thatmaintains up to date information on individuals' experience and trainingwill be instituted.

Training will emphasize practical applications of technology andwill utilize field exercise as the primary instruction mode. Thetraining effort will be implemented by utilizing existing facilities,experienced staff and trainers, and on-going pxograms when possible. TheProject also includes support for these elements if necessary.

Xt is anticipated that IBRD funds will be used for this activity.

D. Conservation Access Roads

Access roads are required to facilitate the movement ofmaterials into demonstration far=s and expansion areas, and the movementof farm production out of these areas to markets. Approximately 475kilometres of access roads will be constructed or upgraded in the eightproject districts during the life of the Project. The location and rateof construction of access roads in the designated areas will depend onthe rate of development in these areas.

In addition to construction within the project areas, theProject ban included funds to link the expansion area roads to theexisting road networks and to upgrade sections of the existing roadnetworks that init.bit movement from expansion areas to markets.

Construction will utilize labor-intensive methods whenpossible. Roads will have a waterbound macadam surface, constructedaccording to standards acceptable to the Government and AID. The concernfor soil conservation may require a higher standard and higher costs perkilometer than is customary with conventional labor-intensive methods.

AID funds may be used to provide technical assistance andlogistics support for this component, while IBRD support is envisaged forroad construction.

E. Project Innovation Fund

The puzpose of the Project Innovation Pund (PIP) component is toprovide a flexible source of financing for studies, small pilot projects,

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field tests or other initiatives not otherwise funded under the Projectbut which contribute to the Project's purpose. Funds for theseactivities will be made available to non-governmental institutions, suchas local universities, foundations or private sector organizations, aswell as for experimental activities sponsored by government institutions.

Specific criteria for selecting PIF initiatives will be estab-lished by the Government and AID during the first year of the Project.

It is anticipated that by the end of the Project, eachparticipating district will have an active portfolio of such activities.The initial results of these will be evaluated for broader applicationwithin the Project.

AID funds will be available for this activity.

V. Implementation

Government will issue appropriate instructions to effectcollaboration and coordination among the participating ministries asreqhired (1) for effective implementation of the project components; and(2) for the Project to meet its goals and purposes. Because of theinvolvement of many Government agencies and the need for local levelplanning and implementation, the lead agency for the Project will be theMinistry of Home Affairs WKA.); the Ministries of Agriculture and ofForestry will be the primary technical agencies (Chart). MRA willapprove the overall annual plans and budgets, which will be sumnitted toAID for approval.

The Governors of Central and East Java, or their dtIignees, will bethe principal decision-makers responsible for overall project directionand performance, except for the research and training components of theProject. The provincial level administration will also be responsiblefor assisting district level governments to plan, manage and monitorfield programs in upland agriculture development and for establishingstandards for district performance and will help district agenciesstrengthen capacities accordingly.

To facilitate the efficient execution of the Project, the Governorsof Central and East Java will be authorized to create and staff a ProjectCoordination Office (see Chart I). Each governor will appoint afull-time provincial Project Coordinator to provide overall projectleadership. Each Project Coordinator will be supported by a full-timestaff composed of a planning officer, a monitoring and evaluationofficer, a finance officer and supporting administrative staff. Eachparticipating provincial technical agency will appoint a staff member tobe responsible for that agency's technical input into the Project. Theseline agency project representatives will work closely with the Project

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Coordination Office staff to insure that overall project planning andimplementation is fully syncronized and integrated. Technical Assistancefinanced under the Project will work under the direction of theprovincial Project Coordinator.

The district chiefs of each participating district will beresponsible to their provincial governor for overall planning andcoordinated implementation of the Project in their respective districts.Appropriate authorities will be delegated to participating districtchiefs to insure the effective administration of project activities atthe district level.

The governor of each province will appoint, on the advise of thedistrict chief in each participating district, a full-time ProjectManager and supporting staff and authorize the creation of a ProjectManagement Unit (PMU) for each district (see Chart 1). The ProjectManager will be responsible for overall project direction. Each projectcomponent (e.g., the SUFS pilot project and access roads) will be plannedand implemented by the appropriate technical line agency(ies) under theoverall direction of the district chief and the Project Manager. Eachproject component, with the exception of the training component and theProject Innovation Pund, will be under the direct day-to-day managementof a line agency sub-project manager who, for purposes of this Project,will reoort to the respective district Project Manager.

The District Forum for Coordination of Agriculture Extension (E2CPP)will be responsible for the direction and performance of the SustainedUpland Farming System (SUFS) component of the Project. A seniorprofessional from one of the four participating technical services willbe appointed by the district chief to serve as the sub-project managerfor the SUFS component. The FKPP will meet at least quarterly to reviewproject performance, and to agree on plans and budgets for the SUPS pilotproject.

To insure the unified execution of the Project and efficientfinancial management, the project budget, financed through Inpres Dati I,will be dispersed under the direction of each provincial ProjectCoordinator, who will sub-allocate funds to the respective districtProject Managers. District Project Managers will, in turn, authorizedisbursement to the responsible sub-project component managersresponsible for field implementation.

The extension of services to the farmers will be through a unifiedextension system centered at and managed from the GOI's network of ruralextension centers (REC) in the project area. The Ministry of Agriculturewill issue the necessary instructions to its personnel and variouselements to effect this unified extension management at the REC level.

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Primary responsibility for implementation of con.ervation accessroads, and Sustained Upland Farming Systems piVot projects (SUFS) willrest with the concerned technical agencies, namely Public Works,Agriculture and Forestry.

The Agency for Agricultural Research and Development (AARD) will beresponsible for formulating and coordinating agriculture research policyander the Project with the Ministry of Home Affairs and other relevantagencies. AARD will be supported in formulating their researchpriorities by the Directorate General within the Ministry of Agriculture,the Ministry of Forestry's Directorate General for Reforestation and LandRehabilitation and selected agriculture colleges.

VI. Financial Plan

A. Budget Source

The project has been organized around four basic principles:decentralized management, unified management, unified budgeting andcommunity participation. With respect to the concept of unifiedbudgeting, the government is expected to make every effort to provideproject specific funds through the Inpres Dati I channel. To meet thefinancial requirements of the Project without undue disruption of otheronrgoing programs being financed by the provinces through Inpres Dati I,special projct allocations will be provided that are in addition to theregular Dati I allocations.

If necessary, due to restrictions in Inpres Dati X, thegovernment will issue special guidelines, if required, so that theproject Dati I allocation mar be used to finance the expenditurecategories outline in the Pruject Paper.

B. Project Activities

a. Technical Assistance. All technical assistance costs will befinanced by AID and the Government. AID will directly contract withthree organizations to provide technical assistance for the project. Onecontract will be in the form of a PASA with the USDA/Soil ConservationService for technical services at the central level. The second AIDcontract will support two field technical teams located in the projectareas in East and Central Java. This contract will be open forcompetitive bidding to firms from Code 941 countries. Joint venturearrangements or sub-contracts with qualified Indonesian consulting firmswill be encouraged. It is anticipated that AID will contract with one ormore of the international agriculture research centers to support thecollaborative research program with AARD. It is also anticipated thatthere will be other AID direct cor:Lracts, generally under $10 0,000, for

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management informAtion and evaluation studies and for other activitiessupporting project implementation. AID will contract withIndonesian-based financial consultants to assist in the development ofappropriate financial management systems and to carzy out training ofproject staff in the application of these systems.

b. Conmodities. It Is anticipated that all commodities (e.g.office equipment, data processing equipment, agriculture processingeqyipment, vehicles, etc.) will be financed by AID under direct paymentprocedures.

c. Training. It Is anticipated that all training, bothin-country and international, will be financed by the IBRD. TheGovernment will follow the applicable IBRD financial procedures.

a. Construction. All in-country construction for facilitiesassociated with the Farming System Research and SustainAble UplandFarming Systems components will be financed by the 3BRD and theGovernment, and will follow applicable IBRD financial procedures. Inaddition, the Conservation Access Road component will be entirelyfinanced by the IBRD and the Government. Road constructions will bepre-financed by the Government. It is anticipated that up to 60% ofcosts will be reimbursed by the IBRD.

e. Joint IBRD/AID Local Currency Financing. Local cuzrencycosts for two project components, Fasming System Research and theSustainable Upland Farming System pilot projects, will be jointlyfinanced by AID, IBRD and the Government. These costs are for salariesand local support costs. The financial management procedure to beapplied for each component is described below.

(1) Farming Systems Research. AID and IBRD willcollectively finance 581 of the annual operational research budget forthis project component. AARD will 100% pre-finance the annual researchbudget which will subsequently be reimbursed up to 584 of actual cost byboth AID and IBRD.

(2) Sustainable Upland Farming System Pilot Projects(SUPS). AID and IBRD will jointly finance the annual subsidy providedfor demonstration farms and expansion activities under the SUPS componenton a reimbursement basis.

f. Project Innovation Fund (PIF). AID will finance the PIFCost8 on a grant reimbursement basis. Disbursements under the PIF willbe made only upon certification by the AID project officer. Separateaccounts will be maintained by recipient institutions in a manneracceptable in form and content to AID.

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B. Budget

The following is an illustrative flinancial plan. Adjustmentsmay be sade between line items by the representatives of the Parties inthe text of the Agreement without fexmal amendment of this Agreement solong as (a) the Borrower/Grantee's contribution as stated in the text ofthe Agreement is not decreased and C(b) AID's contribution as stated inthe text of the Agreement is not increased.

aCart IUvland Agriculture and Oonservation Proiect Or"animation

LeWad IlMiniatry Iupporting irnsatriee sIminhetryl iNinktrylMNinietryll4inietrylninhetyryiNinhltryl

Hational I of IbAPpnAsI ot I ot I of I Of I of I | Agency for Ali- ILevel Home IfLnance pub nrAqaLoul-Iioreatyt Publlo I | cultural Research I

I Affair. I I I 9nviron. ture I I Works I an| d

…|--| Task orce I----------------------------------------------- ID_Il_t__A_ t

Frovin- I Governor I Idaln Lovel Provincial Guidance Teaa I

- I I Vice I Vice I Go- I I_ _

l IChaimanlChair-IChtair-I re I N a a b e r a | | Agency for AgricaultureI lmantlon III tary I I Research and Develonc |

II | | I I I I- (AARD| Team Leader |I I PUmA I FtIW al P ltOAI UAI Agri- IrorestryIPublial Land I AARM I I I TI 1 ..............1 I I |culturel I Workls. Use | |I |

I-i--- ~~~~~~~~~~~~TAIXIeI| I - planning, alt. eytms, I

| | IPRWJECY OrORDINATZtO OFFICS (POX) A hI1/tvaluAtion syxtm_I I _ __denlopnt/guidance| I Project CoordinatCor I - technical asaLstancI| | Planning Officer T | technical Aelsstanc- e through line offices || | HIS/Evaluation Officer O o Ontractor | - annual budget preparation/ || I Finance Officer I coneolidation

| Dleerlot |Chlot | DLstrict Guidance ean I

I Viae N emabera I _ I------------ Chair- Chair seer-1 food R state I Livn- I nur- I Coope- C I Land I I

IPimpro I I man man tary I PUI Croos Crops I to; I SplKTI rativaes AAIID I Usel II Planning Officer 1

H IlS/Evaluation officer | II Finance Officer I

l~ ~ ~ ~ ~ ~ ~ ~ ~~~~~r Ks _. P. . .

P U I rood Crave Livestoa &tte,r Soil Canrervatlo" I AmsA A A R 0 0 - & a | t lPl~~~~~~~~~~~~~~~~~~~Feld Labor4to!Z

IAccessl

I |IB P r I I On-site II I Rseh I

I . Resear-I Direct to xpansion )rea I W I

e Expansion I I Expansion I I Expansion I| Area I A Area | | Area I

1146Aljoyo6/28/e4

Table 22umayn of mtlaatad Wet. bz Prolect Vaar*

| Pro1ect Year Irv 0 I I 2 3 4 6 I Total | Total || fro1 et CeWDonent 04/65 1 a 5/6 86367 i7i 6 JI19 91 I an.Oa000 I uuo I

i Iartitutional Deveoomenat 230.7 M2636 1 2626. 27:::0 21::: 15696 6 1063.0 13775.7 12775.7 1N iational iAvel uxecutive 0ecroterit M 5 4 I 304 1 30a.4 2. 30.4 I 3.4 I 232.0

| ProVincial Level OrgaIintIon lo Mgt. 1 09.6 9 123.3 9 123.9 1 129.. 126. I 126.6 123. 961.6 911*G| District Level OrganiAtion & Nlgt. 245.2 | 152.4 | 152.4 | 416.4 | 304.6 304.8 | 204.8 1632.6 1 1982.9| Tohnical Asletanes | 426.3 2324.4 | 7324.4 | 2174.4 1 1724.4 1 1105.6 599.0 e 10678s | i67.s

f rming tmyee Puaoh O2pponent 1 771.1 I 45s6 .7 L 456.7 A 451.7 441.7 441.7 3616.3 1!6 II Znveetment | 114.0| 5s.09 | I I I I 229.6 I 2139.0

R eruearh, Traning and Recurrent coets 567.1 | 541.7 1 456.7 4 56.7 | 451.7 1 441.7 4 441.7 1 2377.3 3 7377.3 |

| Justainable Upland Farmineates t | | | | | | | | || Pilot Proleat inaludirgW e ratlve | | I | | | | | I

a Hsed DeelotinntL I 902.S 7 55.3 I 1241.3 I 1662.4 | 2222.7 I 692.6 | 2164.e3 I 11!j3.3 | 11513 I

Investment I 3060 1 16.0eQ 3320. I 62.6 I I I 1 725s.6 725.6 |uRecurrent Cbst 1 456.7 1 320.6 1 532.0 1 717.0 0 730.8 1 730.6 1 730.6 4227.5 1 4227.5 1

| urS Bubsidy | 9.6 I 111.2 |309.0 I 61.u 1491.9 | 1963.0 1 1453.6 1 6299. 3 62".2 1| beed ProcesLing Operation | 130.0 | 130.0 I I | | | I a60.0 1 260.0 |

| aman mourzes Develoent Wmonet | 40.3 I 219.1 | 392.0 | 442.6 | 456.. | 422.6 | 270.4 a2244. 2244.5 |

Cbnaervation Accese Roade ?onent | 66.0 | 75.9 | 362.1 6132.5 | 950.5 | 1103.9 j i.j A 4409.9 | 44 9

j Prolect Innovation tuni (Ir) jr 100.0 j 100. 000 j 100.0 I l0.-O 500I0 500.0

Total Sao* Costs 2713.6 4114.2 5208.6 6066.2 6370. 4330. 1___ I74 36060.7 I 36040.7

j Cont1nencaL (105 of bhae coet) 1 271.4 411. 52091606.6 637.0 633.1 525.7 36061 1total gae Costes Cntin.ence. 2965s.0 4525.6 I S729.5 66723 | 7007.1 I 6943.7 I 5762.1 | fJj6 | *Jj6SI I I I .1 I Inlas10_7- I96- 57 I. 396. 3I6

Price Continoencisos 0% CoNounded) 3 I 16.0 0 630.2 | 1501.4 | 2177.0 I 2603.2 1 2040.5 10469.9 1 10469.9

EIIBRDOln r I I r I I I I 100.0 1 100.0

I TOTAL fRA lI? camT I 2984.0 1 4642.4 1 6559.7 I 8174.2 1 9184.9 I 9766.9 1 3623.6 50235.7 1 50235.7 1I I _ _ I ,-_ I , _ _- I , _ I -I ~~

* Due to rounding line item within eompon nts may not add.

01462A jors6/29/84

PROJ7ECT PAPER

UPLAD AGRZULTURE AND COHSERVAT!ON PROJECT

#420 A

#4200A:07/03/84:Joy

UPLAND AGRIC1LTURE AND CONSERVAT NO PROJECT

I. BACKGROUND AND GOI/1BRD/AID COCPERATIVE STRATEGY

A. The Problem

1.01. Over the past decade Indonesia has transfozmed itself from theworld's largest rice importer into being virtually self-sufficient inrice production. This success rests mainly on the irrigated lowlands ofIndonesia, and it has carried a cost in terms of the relative neglect ofupland areas where most of the poorest rural Indonesians live.

1.02. The people in upland areas subsist pri-arily on rainfed rice,cassava, peanuts and maize crops along with marginal lvestock and forestproducts. Because of the comparative neglect of these areas, thestandard of living in the uplands has been falling behind that of thelowlands. With increasing population, over exploitation of resources andsoil erosion, many people in the uplands are even experiencing absolutedecreases in their standard of living from an already poor base.

1.03. Upland areas are weLl endowed with the basic agro-climaticconditions needed for increased productivity. What is missing in theuplands are: (a) proper dissemination and application of knowntechnology, (b) research for new technology suitable for upland -

conditions and (c) improved organization and management systems, both atthe national and at the local level.

1.04. Table 1 presents the comparative yields of major crops inIndonesia and other countries. The fact that Indonesia is considerablybelow Thailand and Malaysia in yields for upland crops indicates thepotential for improving yields of these crops in Indonesia and shows thatthe technology for increasing yields is available in the region.

1.05. There is little question that a major, and increasingly severe,constraint on the production of upland crops in Indonesia is theincreasing pressure of population in upland areas, with consequent lossof soil and water resources. Although there are formidable problems inmeasurement and even in precise definition of soil erosion, there islittle doubt that the situation in Indonesia, particularly on Java, issevere and deteriorating.

1.06. Historical data from the Cilutung Watershed in West Java showsediment losses steadily increasing during this century, from about 1 mmper hectare in 1911 to 2 am in 1935 to around 6 mm today (van Dijk andVogelang, 1948; ITC, 1976, cited in El-Swaify, 1983). The GOI nowclassifies over one million hectares of land on Java, or about 8 percentof the arable area, as *critical land," i.e., land so degraded that itis, or soon will be, unable to sustain even subsistence agriculture(USAID-GOI, 1983).

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Table 1Yields of Various Cops in Indonesia Compared with.

Those of Other Asian Countries, Japan and the US, 1981(tons/ha)

UnitedComodity Indonesla * Philippines Thailand Malaysia Japan States

Paddy rice 3.67 1.30 2.21 2.08 2.82 5.63 5.46

Corn 1.46 0.67 0.96 2.16 1.14 3.00 5.71

Cassava 9.72 0.57 11.50 17.50 10.29 - -

Peanuts a) 1.15 0.43 0.64 0.65 2.68 1.27 2.08

Soybeans 0.89 0.56 0.89 0.84 1.60 1.46 2.05

Sweet Potatoes 7.53 0.78 4.68 8.99 9.61 20.32 12.94

Sugazcane 99.21 2.12 46.74 38.75 44.74 66.22 88.80

EIndonesia as a percentage of the highest yields among the three otherASEAN nations.

a) Shelled basis, derived from "in shell" yields using a conversion factor of0.7.

Soaxe: World Bank, Indonesia: POLICY OPTIONS AND STRATEGIES FOR MAJORFOOD QOPS (1983, Report No. 3686.IND)

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1.07. Estimates of annual soil loss from sixteen sites, presented inTable 2, range from 0.24 to 10.6 DUD/yr. Losses on most sitessignificantly exceed the annual rate of soil formation, which isesti-mated to be about 2.4 ma/yr (Ramer, 1980/1982). But 4-hesecatchment-wide figures mask the severity of the problem. Most soilerosion comes from small, private land holdings worked by low income,subsistence farmers. These intensively cultivated plots cover onlyone-quarter to one-half of the land area of most watersheds, but may havesoil losses as high as 50 mm/yr. Continued erosion at these levels leadsto complete loss of productivity within only a few years. These areasare the source of Java's rapidly growing critical lands and the majorobject of this project.

1.08. Finding solutions to the problems of upland productivity andloss of soil and water resources is complicated by the wide variation inagro-climatic and demographic conditions in the Indonesian archipelago.Three basic demographic/agro climatic typologies capture conditions foundin Indonesia watersheds:

- densely populated, humid watersheds (Java, Bali and Madura);- sparsely populated, humid watersheds (Sumatra, Kalimantan and

parts of Sulawesi and Irian Jaya);- sparsely populated, drought prone watersheds (East and West Nusa

Tenggara, East Timor and parts of Sulawesi and Irian Jaya).

1.09. Each typology requires a range of technical solutions andinstitutional arrangements that are, at best, only partially in place.No single, standardized program will work; research and extensionprograms need to be tailored to each of the three typologies. TheGI/MBRD/AID strategy outlined in Section I.C focuses attention andresources on the densely populated/humid watersheds of Java.

B. Relationship of Project to GOI, AID and IDRD Priorities

1.10. The Upland Agriculture and Conservation Project adheres to thepriorities of the implementing agencies as outlined below.

1.11. The GOI attaches high priority to area development programs thataddress problems of food production and income of rural farmers inpoverty areas and has initiated a range of agriculture development andconservation programs. The GOI also has made a substantial commitment ofresources to the National Regreening Program, which addresses the rapidlydeteriorating conditions found in the nation's watersheds (particularlyon Java, Bali, Madura and the eastern islands of the archipelago).Budget and staff for the Regreening Program have increased steadily sincethe Program's inception in 1976.

1.12. The GOI is also aware of the decreasing returns to incrementalinvestments in irrigated agriculture on Java and, as stated in therecently completed Fourth Five Year Plan (Repelita IV), will place muchgreater emphasis during the next plan period on exploiting the productionpotential of the country's rainfed, upland areas.

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Table 2BUMMARY o0 RZSUIIS OF BOIL *R0StON BTUDIUSY

| | | Catchment | Sedientation | || Catchnent Area (Province) B 6o0l type Area | Rate per ha ofl source I

(2) I (t2) (3)| Land (mm) (4) | (5) |

I CiIu II Iaa I I 'II Cl-anuk (We Java) I 9blcanlo products, marl, lateritic soil I N/A 0.24 Nollerworger (1964)

| Pengaren near Seoarang (C. Java) | Marl, l3iestona, lateritlo soil N/0 4 H |ollerworger (1964) |

s 8erayu near Clacap -- I Volcanic products, marl, lateritic soil I i/A | 1.6 | Iollerworger (1964) 1| Rambut near Tegal -- | Volcanic 1 45.0 1 0.42 | Van Dijk and Shrenaron (1972) || Cacaban -A Marly | 79.0 | 4.5 I Van Dijk and Zhrenoron (1972) || Research catchment near Carut | Volcanic forest | 0.044 | 0.2 - 1.1 | Caughran (1972) 1

Cimamaja (W. Java) I Volcanic and clay sauly soil " N/A 1 1.0 - 1.4 | De Haan (1952) |Cilulung near Kadipaten -- | Mainly breocias, sandstones, olaystones, I 620.0 | 1.0 (in 1911) | Van Dijk and Vogelzang (1948) |

I --- I Rarly sediments I i 2.0 (in 1934) 1 1| Cloanuk at Parakankondang -- I Malnly volcanic 1 1480 I 3.7 N NZCDSM-8C (1973) I| Cilulung at tUum weir -- I see description for Cilulung above | 600 I 8.0 | NIEco-SmEC (1973) I| 8erayu at Banyu-aa I | 2665 1 3.8 S SYZC (1974) |I Pokacangan at lrengkel | White clays 1 129 5. 6 I SHEC (1974)1 Segaluh at Krasak I I 190 | 0.45 | 8KC (1974) II Jragung at Jragung -- I 1 94 106 IC I W 1976) |i Jratunseluna Upper catchoente (average) (C.Java) | 4786 | 3.4 I PRC/ECI (1980) 1| 8erang at Kedung Ombo (C. Java) I Volcanic and sedimentary | 614 | 3.1' | SKZC (1982) |

1/ Review and updating of the Serang Rlver Projecti SKUC September 1992* In situ density of soil (or specific weight) varies with soil type and generally ranges from 1.0 to 1.5 t/n3. Estimates of average soil

lose rates may vary depending on the value used. Ylgures marked with an asterisk are based on an asameed density of 1.5 t/3. N/A -,NotAvailable. 1 mm/ha - 12-15 T/ha depending on density of the soil.

*4084Aajoya6/28/84

1.13. Three of the central these stated in USAID/Indonesia's CountryDevelopment Strategy Statement (COSS) are: increasing food production andrural productivity, especially the agricultural productivity and incomesof poor upland farmers; strengthening the capacity of local governmentsto plan and manage developmnt programs that reflect the priorities andspecific needs of local communities; and improving measures to protectand enhance Indonesia's natural resources. AID's Provincial DevelopmentProgram already supports three agriculture/conservation efforts followingthese themes in the provinces of Musa Tenggara Barat (NTh), Nusa TenggaraTimur (NTT) and on the island of Madura. The Upland Agriculture andConservation CUAC) Project addresses these same themes as well as broaderAID policy concerns regarding institutional development and technologytranxfer.

1.14. While the World Bank's main support to agriculture continues tofocus on the irrigation and estate crop sectors, it also stressesstrengthening other agricultural activities. The IBRD supports a pilotwatershed effort in the areas of Gunung Kidul ard Xulon Progo as part ofthe Jogyakarta Integrated Rural Development Project. Technical andinvestment support for activities that will significantly contribute toimproving and stabilizing upland farming is now a high priority in Banklending policy. The Bank found it difficult to identify a projectfocused on upland productivity and conservation that complemented theexisting portfolio of Bank assisted projects in the agriculture sector.The UAC Project blends with current Bank projects and may provide thebasis for a broader lending strategy if it proves to be a replicablemodel.

C. GOIS/ID/AID Cooperation Strate=y

1. 1s. The GOI presently in implementing a nationwide conservationprogram in 35 watershods. This program includes all threedemographic/agro climatic typologies previously mentioned. However, 13watersheds of the densely populated/humid tropic typology, locatedprimarily on Java, have been give priority.

1.16. Current IIRD and AID interventions in two denselypopulated/humid regions of Java (the Jogyakarta Integrated RuralDevelopment Project and the Citanduy Project) are focused on addressingconstraints outlined above. The proposed UAC Project will expand thisfocus in Central Java and begin acctivities in East Java. (See Map 1.)

1.17. The proposed project in the Jratunseluna and Brantas Watershedswill be implemented in two phases. Phase I, implemented over a 7 yearperiod, will establish the decentralized institutional base and initialfield program. Phase II, implemented over the following 10 years, willfocus on a Java-wide expansion program in conjunction with the Citanduyand Jogyakarta upland agriculture and conservation programs.

Hop I

ipemis sells 0

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1,18. The Phase I effort will be divided into two stages. Duringstage one, the project wilL work in two districts in Central Java and twodistricts in East Java. Pbcus will be on establishing a decentralizedmanagement and delivery system under district government management thateffectively integrates component project activities. During stage twothe project will expand to two or more districts in each province when ithas been dete-rined that the management, planning and input deliverysystems in the initial target districts are effectively functioning.

1.19. The GOl, IBRD and AID have agreed on a combined effort todevelop appropriate technology and institutional solutions to theproblems outlined above. The two phase program will be carried outthrough combined GOI/IBRD/AID planning and management. Donor financingwill be provided on both a 'parallel" and a 'joint' basis; USAID will bethe lead inpleemnting agency on the donor side for the Phase I effort.Phase II donor leadershtip most likely will be vested with IBRD.

II. THE PROECT

A. Project Goal and Purpose

2.01. The goal of the Upland Agriculture and Conservation Project isto increase farm production and incomes, while minimizing soil erosion,in densely pcpulated upland areas in Java by improving farming systems,farm technologies and management.

2.02. The project's specific purpose is to expand and improvecapacities of provincial, district and farm levels institutions toexperiment and apply alternative approaches to upland farming.

B. Project Strategy and Phasing

1. Project Strategy

2.03. In order to strengthen institutional capacity and testpossible approaches to improve farming systems technologies andmanagement, the project will have five primary components: 1) AppliedFarming Systems Research; 2) Sustainable Tpland Farming Systems PilotProjects; 3) Human Resources Development; 4) Conservation Access Roads;and 5) a Project Innovation Fund. These flve components are designed tostrenghten and reinforce each other. Each component will have a learningdimension, with the exception of the roads component, which applies knowntechnologies and management procedures.

2.04. The project will increase productivity and sustaInability ofupland agriculture within the project area and, in doing so, will createprototypes for an efficient and responsive national program. Authority,resources and staff of cooperating central agencies will be provided tovarious levels of local government to experiment with approaches outsidenormal program prescriptions. The project will also support independentand collaborative activities of selected local public and private groupsin the experimental process.

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2.05. The approaches to be developed and applied under the projetwill seek3 to strengthen the self-reliance of selected communitles byincreasing their ability to manage the adoption and dissemination ofimproved agricultural technologies, to conserve the land and waterresource base and to build the social relationships required forself-reliance. This effort recognizes the potential for cocmunityinitiative, the limitations of government resources and administrativecapacities and, most importantly, the diversity of upland micro-environments. New technologies that are suited to local conditions andthat use the skill and initiative of the individual farm household arerequired.

2.06. The project will require a participatory and integrated modeof agricultural research based on an understanding of existing farmingpractices, their underlying logic and the constraints to adoption ofalternate practices. It also requires an agricultural extension serviceable to assist farming communities in identifying priority needs andopportunities, share expertise among themselves, communicate their needsto researchers and gain information to solve their problems and toexploit new opportunities. In such a system the extension agent acts asa broker of relationships as well as a conduit for technicalinformation. Strong, direct, two-way relationships are required betweenextension agents, fanmers and researchers. There must be ready access toessential agriculture support services.

2.07. Substantial reorientation and development of new capacitieswithin the assisting agencies will be required. Neither can be achieveddirectly, but the project is intended to support the processes wherebyresponsible managers of the relevant agencies may bring them about--byproviding a mandate and by making available flexible sources of technicalassistance and capital.

2.08. The strategy looks to the province as the focal point fordevelop-ent of area specific programs Added to the JogyakartaIntegrated Rural Development Project and the Citanduy Project, the UACPwill coplete the network of province based upland developmentlaboratories on Java.

2.09. The selected districts will serve as field laboratories forlearning how to improve existing programs by applying four basic projectccrcepts: Decentralized Management, Unified Management, UnifiedBudgetary Systems, and Community Participation and Management. Eachparticipating district will establish a Project Management Unit (PMU),responsible to the district chief, for the coordinated management ofupland agriculture development activities within that district. This PMUwill be a prototype for eventual creation of a permanent mechanism fordistrict level coordination of upland development and conservationactivities.

2.10. Each participating province will establish a ProjectCoordination Office (PCD) that will support the development of prototypeprograms, management systems and institutional capacities. They will

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take the lead in developing data collection and diagnostic methodologies,will contract with local Indonesian research and training institutionsfor technic.' support and will manage the Project Innovation Fund.

2.11. The Ministry of home Affairs, supported by a full-timeExecutive Secretariat with staff from the Ministries of Agriculture,Forestry, and Home Affairs, will provide policy guidance and sanction forthe experimental actIvities carried out by the project and will assumeresponsibility for assessing and acting on broad policy issues.

2.12. Key to the project strategy is the distinction between:(a) responsibilities for managing the process of developing new programapproaches and supporting management systems and (b) responsibilities forman iging the actual planning and implementation of program operations.The former will be the primary responsibility of the Project CoordinationOffice. The latter will be the responsib City of appropriate permanentunits of provincial and distri.ct administrations.

2. Phasing

2.13. It is assumed that expanded project operations in theremaining four or more districts will commence beginning the fourth yearof the project (IFY 1987/88), with staff recruitment, training andplanning initiated in the preceeding fiscal year (IFY 1986/87). However,the decision to ccumence project operations in additional districts willdepend entirely on actual field performance. The decision to expandoperations will be made independently for both Central and East Java,reflecting the autonomous operation of project activities in eachprovince.

3. Replicability

2.14. The project is designed to be administratively andtactically replicable if the pilot project methodology is followed.Since the government has made the decision to embark on a nationalprogram to increase the productivity of the uplands and to stabilize theupland environment, this project will serve as the field laboratory fordesign of the major program by presenting cost effective options forfurther expansion.

2.15. The project will seek ways to have an effective operationand yet limit the number of government personnel required. It also willseek to define the minimum levels of inputs required by the subsidyprogram.

2.16. Government personnel, technically trained and experienced,will be mcved to new expansion areas as the project moves to Phase II. Acommnmnity-based organization of key farmers will remain as the primaryinterface for continuing transfer of technology. The continuedimprovement in local agriculture will be supported by: (1) effective,uni :ied management of the remaining thinned-out government cadre,(2) local non-government institutions and (3) an improved system of

- 10 -

agriculture comuunication. For example, the project supportedagriculture/area newsletter might prove to be an effective communicationstool, reducing the need for extension agents. Certainly the improvedroad net will increase the flow of information to the farners.

4. Management Information System

2.17. There is no standardized "blueprint" for the development ofupland agriculture and conservation practices. Rather, the centraloperational concept of the project is learning-by-doing, which depends onthe capacity to monitor the project's output The establishement ofprovincial and district Management Information Systems CMIS) capable ofroutinely generating data on output performance and providing infomnationto project authorities is, therefore, a central component of theproject. Accordingly, an effective management information system will berequired prior to expanding the project into additional districts.

2.18. In addition to the MIS for daily management, project staffand technical assistance personnel at province and district levels willcarry out annual assessments that examine reasons for success or failureof each component activity and recommend modifications.

2.i9. The internal annual assessment and planning processundoubtedly winl uncover many issues that will require additional dataand analysis before action recommendations can be formulated. To addressthese issues, the project will fund short-term (3 months or less) specialstudies through appropriate local instituti.ns or consultants.

2.20. Several external evaluations, independent of projectauthorities, will be carried out during the life of the project. Theseevaluations will re-appraise project concepts, design, allocation offunds, staffing patterns and componert activities in light of theprevious year's performance. The first external evaluation, carried outduring the third year of project activity (IFY 1986/87), will determineif and when the additional districts will be brought into the program.The second mid-term review, during the fifth or sixth year of projectactivity (i,e. IFY 1988/89 or 1989/90), will focus on whether a Phase IIprogram should be initiated. A final project evaluation will be carriedout during the last year of the project and will be a comprehensiveassessment of the Phase I effort.

C. Project Area

1. General Location

2.21. The project will be implemented in Central and East Javawithin the catchment areas of the Jratunseluna Watershed and the BrantasRiver Watershed respectively (Maps 2a and 2b). These two watersheds areamong five designated for priority attention by the GOI during the1980s. The eight project districts in these two watersheds have 251,649hectares of rainfed land, of which 82,318 ha are critical land accordingto the Soil Conservation Service (Sub-BRZrr). Over 1/3 of the totalrainfed area in these districts suffers from serious erosion.

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2.22. The Jratunseluna Watershed, with an area of approximately800,000 hectares, includes six major catchment areas draining five majorrivers, the Jragung, Tuntang, Serang, Lusi and Juwana from which the nameJra-tunr-se-lu-na Is derived. The watershed falls within theadministrative jurisdiction of nine districts, four of which (Semarang,BoyolaLi, Blora and Grobogan) will be included in the project's sevenyear first phase. During initial years of the project, activity wvil befocused in two districts (Semarang and Boyolali) that include catchmentareas with high sedimentation rates. The district of Boyolali includesthe majority of the watershed area upstream of the proposed Kedung Ombodam.

2.23. The Brantas Watershed covers an area of 1.18 millionhectares, and is drained by the Brantas River and seven tributaries. TheBrantas Watershed is composed of seven major catbement areas that fallwithin the administrative jurisdiction of ten district governments. Fourdistricts, Malang, Blitar, Tulungagung and Trenggalek, will be includedin the project. Malang and Blitar contain critical catcbment areasimmediately upstream of the existing Karangkates dam and the Wonokertodam, which is under construction. Initially the project will focus onthese two catchments.

2. Papulation

2.24. The total population of the two watersheds was estimated in1980 to be 18 million (Table 3). Of this total, approximately 3.3million people reside within the eight districts selected for inclusionin the project (Table 4). Pbpulation density varies greatly, however,within and among districts. In the Jratunseluna Watershed withindistrict variation is greatest in Boyolali. It ranges from 513persons/km2 to 1920 persons/kza2 of agricultural land. In the BrantasWatershed the range is from 558/km2 to 1635/km2 (see Table 5).

2.25. The overall rate of population growth is very low in theproject districtsi the Crude Birth Rate was 20/1000 and the Crude DeathRate was 6/1000 from 1978 to 1982. Again there is a great deal ofvariation among districts in the Crude Birth Rate, wbich varies from 18to 29/1000. In all eight districts out-migration is significantly higherthan in-migration. During 1982, the migration figures for the projectsub-districts in East Java were 5,706 in-migrants compared to 9,018out-migrants. For the Central Java districts the same figures were10,107 and 19,572 respectively. A significant part of this variation canbe attributed to differences in the agricultural potential amongdistricts and to the corresponding differences in standards of living.

2.26. The average farm size is essentially the same for projectdistricts in East and Central Java, i.e., 0.67 ha and 0.66 harespectively (Table 5). Although these figures include holdings of bothirrigated and ralnfed land, they appear to be representative based onestimates comonly expressed by those working in both regions.

- 12 -11ap 2ia

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- 13 -

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- 14 -

Table 3Selected Demoqraphic and Land Use Data

| JRRATURN BIA | DRANTAS |I | Watershed | Watershed |I~~~_ I _I| Province | Central Tava I East Java

# Districts | 9 | 10I Population (million) 5.9 1 12I Total # ha | 790,000 1 1,180,000| Population density I I II (persons/ku2) 1 747 1 1,017*Land use (%) | I | Irrigated | 34.8 | 27.3 || Rainfed | 25.2 | 20.9 |I Hame yards/gardens 1 13.8 I 16.0 I

F Forest | 22.8 | 23.4 1I Plantation 1 0.9 t 5.2I Others | 2.5 | 7.2 |I _I I _________________ISource:- Pola Texpadu Pengembangan Wilayah Sungai Jratunseluna oleh BAPPEDA TIkI Jawa

Tengah dan Proyek Pengembangan Wilayah Sungai Jratunseluna, April, 1982.- Direktorat Jendral Kehutanan, Sub-BREKT Daerah Aliran Sungai Brantas.

General Information about Brantas Watershed and same Running Activities,April 1983.

Table 4Project Area Population Data

I Total *I Pop_2 I Pop/km2 I Pop/k_F _ Range_ I Location I Population I Total Land | Agr Land I (by kecamatan) |

1__ 1 (1982) | Area H lEigh low|

| C. Java | 1,656,000 | 551 | 840 I 1,920 513 |I Semarang I 647,000 1 728 1 877 I 1,429 632I Bayolali | 234,000 | 557 | 830 I 1,920 513 || Grobogan | 480,000 | 463 8 876 I 1,517 703 1| Blora | 294,000 | 446 | 731 | 1,095 532 |

E 1. Java 1 1,638,000 1 443 | 753 I 1,635 413 1R lalang 1 627,000 I 366 1 592 I 1,044 487

I Blitar 1 229,000 I 502 1 905 I 710 413 1| Tulunigagung | 310,000 I 491 1 748 1 1,464 429 |I Trenggalek 1 472,000 | 512 I 991 I 1,635 558 |

Source: - Data Sosial Ekonomi Xabupaten, 1982 - Direktorat Jendral Bina Marga* Total population of Selected Sub-districts within the Districts

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Taila SAverage Farm Size in Eight Participating Districts

| I Fam4 lies * I Families * i I Total ** I Ave. Land |I Location IWorking Ownl Working Own I TOTAL ICultivated I Per Family|I I Land ILand & Othersl 1 + 2 ILand (ha)l (ha) II I (1) I (2) I I _ __

B . Java I 487,133 1 65,188 | 552,321 | 372,716 | 0.67I 4alang I 209,113 1 24,913 I 234,026 1 177,716 I 0.76 I| Blitar | 114,795 | 18,333 1 133,128 | 84,817 | 0.64 |I Talungagung I 81,940 1 13,390 95,330 1 37,289 I 0.39I Trenggalek I 81,285 1 8,552 I 89,837 1 72,757 I 0.81

I C. Java I 361,903 I 78,221 I 440,124 I 291,878 I 0.66| Semarang | 85,581 I 18,568 | 104,149 | 59,119 | 0.57 I| Boyolali | 95,979 | 19,637 1 115,616 1 55,570 I 0.48 |I Grobogan X 99,962 | 25,394 | 125,356 1 94,100 f 0.75I flora | 80,381 | 14,622 t 95,003 8 83,089 | 0.87 |- ! I I I I I: _ _ _ I __ _ I. l_ _ I ___ I. I l

- Penduduk Jawa Menurut Propinsi dan Xabupaten/Kotamadya 1980- Zonpilasi Data Hasil Survey Sosial Ekonomi

3. The Agricultural Sector

2.27. Agriculture provides the main livelihood for 681 of thepopulation in the Jratunseluna Watershed and 74% in the BrantasWatershed. Despite intensive utilization of available lands in East andCentral Java, five project districts are net importers of food.

2.28. Upland farming systems found throughout the Brantas andJratunseluna watersheds are diverse and well suited to intercroppilg andplant adaptation. The present low level and poor quality of availableinputs will be improved by the project.

2.29. Three general types of upland farming systems predominateand reflect the varying agroclimatic conditions found in both watersheds.

2.30. The first type is characterized by elevations over 700meters and by precipitation rates greater than 3000 mm/year. The coolertemperatures of this zone and relatively high precipitation rates enablefarmers to devote much of their activity to estate and horticulture cropssuch as carrots, potatoes and cabbages. The livestock preferred is dairycows; grasses and leucaena are abundant for forage. Soils are morestable and the quality of the bench terraces is guite good.

- 16 -

2.31. The second type of upland farming system, found throughoutthe two watersheds, has between 2,500 and 3,000 mm of rain/year.distributed over eight to nine months. Two intercrop plantings per yearare general. In the first planting cycle, which begins with the onset ofthe rainy season, cassava, upland rice and corn are frequentlyintercropped but cassava is not harvested until after the second plantingcycle. The second planting cycle usually includes interplanted corn andpeanuts. Elevations between 250 and 700 meters above sea level arecommon for this zone.

2.32. The third general type of upland farming system receivesless than 2500 mm/year during seven months or less. These areasgenerally have two planting cycles; the first begins with the rainyseason and is characterized by intercropping of cassava-corn-peanuts orcorn monoculture. The planting regime for the second season includesintercropping of corn and soybeans, or corn and peanuts or monoculturesoybean. This farming system is the most prevalent on non-irrigatedlands in both watersheds.

2.33. Several other cropping systems should be mentioned.Nonoculture of cassava is found throughout the two watersheds,particularly on poor soils and seriously eroded, steep slopes. It isalso characteristic of farming operations located near major urban areaswhere farmers derive their main source of income from off-farmemployment. Tree crops are a small but important component of all threegeneral types of farming systems because they provide additional cashincome for the households as well as fuel wood and lumber for homeconsumption. Trees are cultivated throughout the farms but are mostfrequently found in the home gardens.

2.34. Home gardens account for approxriately 30% of total landarea (Table 3). The typical home garden is a mixture of trees for fruit,firewood and building materials, with undezplantings of root crops,tubers, medicinal plants and vegetables. These plants, which torm aclosed canopy similar to natural forests, protect soil from erosion.

2.35. Accurate data on agricultural yields for upland areas aredifficult to obtain due to the intercropping systems. Available data donot differentiate between yields from irrigated versus non-irrigated landor monocropping versus intercropping and multiple cropping patterns.However, Table 6 shows current yields of the dominant intercroppingpattern on a per-hectare basis based on available information andinterviews with farmers and other individuals knowledgeable about thearea. Potential yields can be judged by comparing these figures with theresults of experiments with similar cropping patterns in the Jogyakartaregion (also shown on Table 6).

2.36. An experimental segment of the project will use livestock,which currently can contribute as much as 25-30% of farm income, as anincentive for fazmers to invest their resources in conservation effortssuch as silvipasture. For details see Annex 1.A.

- 17 -

5. Selection Criteria for Target Areas

a. Introduction and Selection Criteria

2.37. District and sub-district selection for inclusion in theproject was based on the screening of potential project areas against apredetermined set of criteria and on Judgment derived from several fieldvisits to both watersheds. The first criterion for site selectionspecifies that project activity be limited to land with slopes above15%. Two other criteria narrow this focus to land that is immediatelyupstream of existing or planned major infrastructure (i.e., multi-purposedams, irrigation facilities, etc.) and/or lands where the erosion of soilis approaching the point beyond which crop yields will be significantlyreduced.

Table 6Estimated Current Yields in UACP Districts andExperimental Results from Upland Trials in theJocyakarta Integrated Rural Development Project

I - _ I Yield/ha II Location ICrop I(g

| I Soybeans | 450I UACP I Corn I 1,000 l| districts I Cassava | 2,000I I Peanuts I 500 I

I ~I l II I Corn I 1,900JIRDP Site | Upland Rice I 4,300

| A | Cassava | 9,000 lI I Peanuts I 700

I | Corn I 1,400I JIRDP Site I Upland Rice I 2,600 || B | Cassava 1 7,500 lI I Peanuts I 600

I _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I _ _ _ _ _ _ _ _ _ _ _ I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~_

2.38. This last criterion gives greater specificity to thepresent GOI definition of critical land, which includes future potentialsources of erosion as well as lands that already are experiencing rapidsoil erosion. The project principally will address treatment of thoseagricultural lands where soil depth is at or approaching 50cm. UnderIndonesian condLtions, this is generally accepted as the minimum soil

- 18 -

depth beyond which crop yields will be significantly reduced. The OOIdefinition of critical lands also includes those lands where soil erosionis so advanced that sedentary agriculture 's no longer possible and thelands have been abandoned. These lands, unless they are majorcontributors to sedimentation of downstream infrastructure in the projectarea, will not be a primary focus of the project, at least during theinitial phase of project operations.

2.39. Thus, project activity vlll fall between these twoextremes and focus on a wcurative" rather than a "preventive" programtargeted on land where agriculture is still viable but which, if leftuntreated, will result in near-term irroversible destruction of theland's agricultural potential.

2.40. Site selection of lands for inclusion under the project(para 2.38) is, due to severe data limitations, tentative and subject tomore precise definition as the project proceeds. An initial priority ofthe project will be the initiation of regular, iterative surveys andmeasurements that will determine: (a) the net rate of soil erosion, (b)the critical depth of soil and (c) the external costs of erosion due tosedimentation and flooding. With this information project managers willbe able to identify priority areas for treatment under the project.

b. Project Area and Indicative Hectarage Covered bx ProJectActivity

2.41. In each province, project management and fieldimplementation will be centered at the district and rural extensioncenter (CECs) levels. Tables 7.a for and b. sucmrize data on existingupland rainfed hectarage and critical land hectarage for Central and EastJava respectively according to these respective management units. Thesetables also present indicative figures for the total hectarage of land tobe treated during the life of the project.

2.42. Each district Project Management Unit (P3(U) andparticipating rural extension center (REC) will identify through fieldsurveys specific expansion areas for subsequent treatment.Implementation of field activities in these expansion areas will radiatefrom 10 hectare demonstration fazms strategically located within eachexpansion area. Wide variation in the pace and quality of fieldimplementation is expected from REC to REC as well as among participatingdistricts. In the annual plans, PMls and PCOs will need to tailor thepace of field implementation to demonstrated performance in the field.

2.43. Compared to recent data from the Citanduy Project area, theaggregate indicative targets for land treatment over the seven year lifeof the tAC Project seem very conservative. The project MIS and annualassessments will provide accurate data upon which to base futureadjustments.

- 19 -Table 7a.

Central Java Project Area DataRainfed Uplands, Critical Lands and Indicative Expansion Hectarage

| REC (Rural I Existing Existing | Indicative| Province | District | Ectension S Sub-District I Rainfed I Critical | Expansion Under |

_____________ ______________I Upland (ha)I Land (ha) IProject (ha) ~~~~~~~~~~~~~~~~~~~~~~~I r I 1 II-- --I Central i'iva I _ I _ 140,141 52,774 I 12,069 I

- 1 Semuarang , L - 27,428 I 14,950 1 4,085 1I I~~~~ Tengaran 1.I 11,839 [ 7,255 [2,399

Tengaran 1 2,550 1 1,456I I . I | Susukan I 1,8491 548| | | |ISuruh | 1,2501 190

Bringin | 1,757 I 1,757Getasan I 4,423 I 3,304

I | Tuntang Xesongo I _ 9,292 | 3,865 1 1,2p3Tuntang I 1,185 I 725Ambarawa I 1,675 I 612Jaubu I 3,8921 1,801

I I I 1 sumowono 1 2,540 1 727I Ungaran I I 6,297 3,830 1 1,203

Ungaran 2,224 I 1,765 1 IRlepu I 2,492 1 1,235 1 I

I I m 8awen 1 1,581 I 830 I IBoyoUli ~~~~~~~ ~ ~~~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~33,,037 I 6,389 2,100

I I T Karanggede I r 26,408 '3,710 1,298TKaranggede 1 2,482 317

I I Wonosgoro 1 7,413 1 1,847I I I Juwangi I 7,6231 244

Keamusu (or Kemorau) | ,890 | 1,302I I Isimo I_____________ I 6,6291 2,679 I 802

I I I I ~~~~~~~~~~~~KlegoI 3,414 2,114 I| Andong I 3,2151 565

Blora _46,404 10,789 1,984I , i c Kunduran I -35,652 7,261 992

I I I |Ngawon 1 14,151 I 1,330 1 |I lora I 6,659 1 1,687

I I I I Banjarejo 1 7,405 1 3,062 ITunjungan 1 7.437 1 1,182 I

I __ _ _ _ _ _ _ _ _ _ _ _ I 1__ _ _ _ _ _ _ _ _ _ _ _ _ , 1 _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ . _ __ _ ___1__ _ I I I

- 20 -

Table 7.a

I I I REC (Rural F Existing I Existing I Indicative || Province I District | Extensive S Sub-District I Rainfed I Critical E Expansion Under |

I____________________ _____,_.__ICenter) Upland (ha)I Land (ha) ! Proiect (ha) |

liJeon I 1 10,752 1 3,528 1 992 1

I I I T Jepon 1 10,752 1 31528Grobogan I I _ | 33,272 | 20,646 | 3,180-- - Gubuq ____________________I 11,331 1 4,765 [ 795

I I I I Karangrayung I 6,036 1 1,476I Kedungjati (7) I 5,295 1 3,289 |

| Kradenan I _ 13,263 | 9,957 I 1,488I Kradenan T 4,442 I 3,289 1

Pulokulon I 4,167 I 3,012I Gabus | 4,654 | 3,656 |

I Toroh ! . I 8,678 I 5,924 1 897 1I I T Toroh (Temong) T 4,116 2,924 | I

| Geyer | 4,552 | 3,000 | |

I I 1 I . . 1 I

I2299AI6/29/84

- 22 -

Table 7.b

I I | RBC (Rural | | Existing E Existing I Indicative I| Province | District 1 Extensive | Sub-District I Rainfed I Critical | Expansion Under |I I_______________ I Center) I _ Upland (ha)l Land (ha) I Projeat (ha) I

I I I Sukoanyar I __ _ _3,150 _ ___1557 ! - 197 IITanggunggunung 1 3,150 1157 1

I- I Trenggalek I I . 1 12,883 1 5,827 I 2,283I I T ~~~~~~~~Durenan 4,861 j 1,462 J693

I I I Durenan I 1,167 I 116I I IiPbgalan I 1,250 I 39

| watulimo I 810 I 810Trenggalsk I 1,199 J 72

I IeBQndungan I 4431 425Don_ko __- - -- _1,079 949 j 299,

Dongko 1,079 1 949 1YXarangan I -_-_ --_-_________ . 5,301 ! 3,149 ! 1,291

| | | IKarangan I 1,965 1 720 1I I I I Pule 1 2,104 1 2,104

| Tugu I 1,2321 325SKKampak a 1 1.642 - 267 0 O

I I I~~~~~~~ ~~Kam~pak I429J 178 I I I | Gandusari I 1,213 8 89 |

02299Aa6/29/84

- 23 -

1I. D. Detailed Project Description

1. Applied Research Activities

a. Introduction

2.44. During the past decade, agricultural production programsin general and agriculture research specifically have focused on ricemonoculture under irrigated conditions. This focus has yieldedimpressive gains: total rice production doubled in the past decade.However, the almost singular attention given to wet rice productionstunted advancement of non-rice crops and crops grown under nono-irrigatedconditions. Thus improved agricultural technologies that are availablefor upland areas are only first approximations.

2.45. Research is needed to improve agricultural and conservationtechnology for upland areas and to tailor them to the reqxirements ofspecific watersheds. The res3arch task is to:

- improve the productivity of existing cropping patterns;- Increase farm Income;- stabilize farm income:- design soil conservation practices appropriate for the different

conditions within the target areas.

2.46. The project will provide the means to carry researchrecomendations to the field and provide feedback to the researchi. s.The research component will draw on the experiences of the Citanduy, Soloand Jogyakarta projects. This strategy (Fig. 1) includes three researchphases and two extension phases after the target areas have been selected.

b. Purpose and End of Project Status

2.47. The Farming System Research coaponent will developtechnologies to increase agricultural production and promote soil andvater conservation in the upland rainfed areas of Java in ways that aresocially and economically acceptable.

2.48. By the end of the project, technology will be in placefor Increasing the production and productivity of upland faming systems!(I- rluding food crops, vegetables, tree crops, forage and livestockproduction). Methods of soil and water conservation under various agroclimatic conditions will have been developed including criteria for theuse of different conservation practices using crops, forage and trees aspart of these practices.

c. Relationship with the National Resear=h Program andInternational Aqriculture Research Centers

2.49. The Agency for Agricultural Research and Development(AARD) has the major responsibility for develcping technology for therainfed upland areas. AAXD is finalizing an ad-ministrative system sothat its various research components will support one another and quicklyprovide answers to common problems.

- 24 -

Fiqure 1Parallel biological and socio-econmxic activities.

required for the five distinct research and implementation phasesof a Farming Systems program

Socio-economic Research Phases Biological & Soil Res.

l l I Site selection and | Data collection |I Agro-economic profile | ; description | | - Soil classification II Site reconnaissance I I Partition area 1 I - Climate l_______________I I (initial) I I - Soil & water losses

| Economic data I I Econ. & biological I I lI collection I I potential studies | I Component technology || Technology Transfer INI I Qaantify problems | | Technology Transfer IN || Farm recording l l lyrs 1-5) M | Monitor soil losses I

rIII_ _ _ _ _ _ _ _ _ _ _ _

| Economic analyses of | | Design and test | I Redesign and test I systems I I farming systems I I system- I

Fam recording I yrs 2-5) I Com22nent studies

! Evaluation I I Test Farms l I |I - technologies I | Expansion Program I j Identification o- |

- institutions yrs 3-5) | | production problems I

V

I _ I t Implementation and | | lJAgricultural statistics| I Technology | | Extension feedback l_ ___ ________I Transfer OUT I

2.50. The AARD Farming Systems Research Group for this projectwill be responsible for providing the appropriate technology for rainfedupland agriculture to all implementing units of the Departments ofAgriculture and Forestry. The explicit objective is to ensure thedevelopment of effective interdisciplinary research in an environmentthat closely resembles the farms systems where the technologies will beused.

2.51. The Farming Systems Research camponent will be supportedby a collaborative research arrangement between AARD and a consortium ofinternational agriculture research centers. IRRI will be the lead agencyand will coordinate the input of other interested international centers.One senior scientist will backstop the Farming System Research full-timefor six years. Commodity and discipline oriented scientists will provideadditional support during Years One through rive, working with AARD

- 25 -

counterparts for about two months each year for each commodity/discipline. Financial support for thi-s effort will be available throughan AID/IRRI Collaborative Agreement funded by the project.

d. Research Scope

2.52. Agricultural and erosion production problems identifiedin upper river watersheds are interrelated and require an integratedapproach, including comprehensive socio-economic analysis. Theseactivitles will follow the phasing and interaction as presented in Fig. 1and include components focused on:

- cropping systems,- livestock,- tree crops and silvipasture,- socio-economic studies,- soil and water conservation and management.

(1) Crop and Livestock Systems

2.53. Research is needed on alternate land uses includingdifferent cropping systems, animal systems and a number of combinationsof both. The cropping systems component will develop cropping patternsadapted for varying agroclimatic conditions and crop maragementpractices. Varietal selection of crops will be made including uplandrice, corn, legumes, cassava, vegetables and forage grasses and legumes.Lastly, this component will estabishing integrated pest management usingsurveys and evaluation of existing management systems.

2.54. The experimental animal systems component will focuson the improvement of feeds using crop residues and year-round forage andfeed supplements; the improvement of animal health, parasite control andvaccination; and reduction of young stock mortality and increase infertil ty.

(2) Tree Crops and Silvipasture

2.55. Rainfed upland areas are often far from villages insteep, inaccessible areas and are planted in crops that require lowinputs. Under these conditions, the productivity of the land is very lowand efforts to control soil erosion are minimal. These steep slopeuplands, as well as those with shallow soils, should be put undersilvipasture.

2.56. Research will focus on: 1) the economic viability andcarrying capacity of grass/legumes forage production for livestockadaptability, 2) management and potential production of cash crop trees,and 3) the process by which a farmer can, within a five year period,gradually change his faming practices from annual crops to mainlypernanent crops.

- 26 -

(3) Soil and Water oanservation and Management

2.57. Initial research will be designed to evaluatedifferent conservation practices and to develop methodologies forquantifying soil and water losses and costs for the different practices.Simultaneously, efforts will be made to monitor and evaluate soilconservation practices implemented in the Citanduy, Solo and Jogyakartaprojects as well as in other areas of activity of Sub-BRLKT. In thesecond phase of the research program, on site research will be the keyactivity and will be closely linked with the U&C Project through theprovincial and district Guidance Teams and the FRPP.

2.58. The goals of the research effort will be todemonstrate and evaluate different methods of conserving soil and water,develop criteria for the use of different soil and water conservationpractices, and evaluate different crop, forage and tree species foreffectiveness in controlling soil and water losses.

(4) Socio-economic Evaluation

2.59. Socio-economic analysis will identify the specificneeds of the target areas and will provide basic social and econo52.c dataand trends. It will include the development of an agro-economic profile,compilction and analysis of production data, farm record keeping andbroad bcsed studies or surveys necessary to develop a betterunderstnding of the social and economic characteristics of the targetar- s. It must estimate the rate of adoption of new/recommendedpractices, which is a central factor in planning che diffusion of uplandtechnology.

e. Research Organization and Staff

2.60. These aspects of the project are covered in detail inProject Organization and Management, Section III.C.

II. D. Detailed Project Description

2. Sustainable Upland Farming Systems (SUPS) Pilot Project

a. PlxPose

2.61. The purpose of the Sustainable Upland Farxming Systemspilot project (SUPS) is to demonstrate and extend to farmers' fields areplicable, cost effective combination of farming and conservationpractices that will be economically stable and will keep erosion withinacceptable 14im4t. More specifically, the SUNS pilot project willachieve broad technology diffusion by gaining farmer participation and byinpro-ring institutional capacities, mLanagement and delivery systems(e.g., grass nurseries. seed production and distribution; and exte-sionmethods and systems).

- 27 -

b. End of Project Status

2.62. By the end of the project three basic programs vill havebeen established.

(1) Planting Material Development and Distribution

- Grass/legume nurseries. A network of ten irrigatednurseries will have been establl shed or upgraded to distributeenough grasses and legumes to meet demand in the eightparticipating districts.

- Seed production and distribution. A program will beestablished to produce sufficient certified seed to meet demand forthe primary upland food crops.

- Tree (cash crop) distribution. A program will be inplace that draws on private sector nurseries zo meet demand forcash crop trees Ce. g., mango, clove and petai).

(2) Livestock (Small Ruminant) Development andDistribution Program

- Several village based small ruminant pilot projectswill be implemented and evaluated by the end of Year 3 (IFY 87/88),which may be replicated throughout all project expansion areas.

(3) Integrated Extension Service

- Annual plans for expansion areas within each of 22 RECWork Regions (WXBPP) wlll be prepared and executed.

- Three or four demonstration farms per REC willdemonstrate improved agriculture and soil and water conservationpractices to upland farm communities.

- Community farm groups, organized in each designatedexpansion area, will be prepared to adopt and use ecologicallysound faming practices.

- Village councils, religious institutions and otherNGOs will support and advance the widescale adoption of sustainablefarming system practices.

- Systematic diffusion of upland agriculture andconservation technology and associated 'in kind' subsidies(planting material, fertilizers, etc.) will be carried-toapproximately 22,900 hectares over the life of the project.

- 28 -

c. SUFS Strategy

2.63. The Sustainable Upland Farming Systems pilot project(SUPS) is an experimental, innovative undertaking, designed to conceiveand test the effectiveness of alternate extension organizations, fielddelivery systems and support services. These alternate systems must bereplicable over time in tho context of larger national programs,particularly the GOI' s National Regreening Program and the NationalAgriculture Extension Program. If the SUFS is to fulfill its mandate asan experimental "field laboratory' for ongoing national programs, it mustbe given flexibility and independence from the rules and regulationspresently governing various upland agriculture and conservation effortsof the government. During project design the GOI, USAID and IBRD haveagreed on this central concept. The GOI will issue appropriateinstructions, acceptable to the Bank and AID, to identify the UplandAgriculture and Conservation Project generally, and the SUFS componentspecifically, as an experimental effort. Within this context, the GOIwill issue the necessary instructions granting project authorities themanagement and budgetary flexibility required to execute an experimentalprogram.

2.64. The SUFS component incorporates several importantmodifications that distinguish it from existing upland agriculture andconservation efforts. These strategic design considerations are--mmarized below.

2.65. First, the SUFS camponent will be planned and implementedin a decentralized and integrated manner. At present the nationalRegreening Program is planned by respective Sub-BELKT and implemented bydistrict governments. As noted in the Administrative Analysis Annex l.D,this separation of responsibility for planning and implementationinevitably leads to disputes and contributes to poor performance. Underthe SUFS, responsibility for planning and implementation will be with therespective district government Project Managers who supervise the fourresponsible technical services, i.e., the Soil Conservation Service, theAgricultural Service, the Livestock Service and the Estate CropsService. The Inpres Dati I budget will be dispersed by the respectiveProject Managers to each of the participating services according to theirjointly developed annual plan.

2.66. Field planning and implementation will be unified andintegrated at the rural extension center (BEC) level. The annual planfor each participating district, as outlined above, will be a compositeof the annual demonstration and expansion program drawn up by the staffof each participating REC with the assistance of subject matterspecialists (PPSs) for food crop agronomy, livestock, estate crops andsoil conservation. All extension personnel assigned to the project willreport directly to the respective supervisors of each REC.

2.67. Extension personnel assigned to each REC will be deployedto serve identified expansion areas (see site selection process described

- 29 -

below). Each expansion area will have one ten hectare demonstration farmto which will be assigned one extension supervisor (PPM) and fiveextension agents (PPL/PLP). This staff will be responsible for extendingappropriate farming and conservation practices throughout the expansionarea served by their respective demonstration farms.

2.68. A second important feature Is the careful selection ofexpansion areas. The potential areas requiring treatment are vast, andthe availability of trained manpower and financial resources ib limited.Therefore, it is imperative that expansion areas be selected carefully toinsure the maximum impact and most efficient allocation of resources. Tothis end, technical and agro-economic surveys will be carried outannually in each participating district to identify potential expansionareas one full year prior to establishing demonstration farms andcommencing extension operations. The site selection process will followa three steps process. First, potential expansion areas will beidentified according to the technical criteria outlined in para 2.37.Following this, an agro-econom.i survey will be carried out to determinepotential agro-economic constraints that may influence the type oftreatment to be introduced. Finally, meetings between project officialsand farmers in the potential expansion areas will be held to guage thedegree of farmers' interest in joining the program. If interest isshown, they will be requested to organize themselves into a group andformally request inclusion in the project. REC and district levelproject staff, based on an analysis of the composite technical,agro-economic and participation data, will then select the areas to beincluded in the following fiscal year's program.

2.69. A third strategic consideration is the development ofhigh quality planting material. A universal constraint limiting allupland agriculture programs at present is the scarcity of good plantingmaterial. Although improved productivity through use of good plant stockhas been demonstrated, inadequate attention has been given to thedevelopment of nursery capacity and seed production and processingfacilities. Consequently, the first priority of the SUPS project will beto establish the capacity to produce the required planting material. Newexpansion areas and supporting demonstration farms will not beestablished until the supply of planting material is assured.

2.70. A fourth concept relates to the subsidy policy to beapplied and tested by the project. The SUFS will: (1) discontinuepayments for terrace construction, reflecting farmers' willingness toadopt recommended practices at a lower level of subsidization thanpresently provided; (2) introduce a uniform subsidy for bothdemonstration faDns and surrounding expansion areas and (3) authorizeProject Managers in each district to vary the level, content and durationof subsidies, based on local conditions, the technology involved andfarmer requirements. The project has been budgeted on the assumptionthat the average period of subsidy will be two years.

- 30 -

2.71. A fifth concept to be tested in the project area,although not directly financed by the project, is a program to replacedirect subsidies after two years with a general household, non-subsidizedline of credit that will be made available by BRI or other appropriatelending institutions, through a system of "village posts" established inall project expansion areas. Financing and technical assistance for thiscredit program will be made available under the AID financed FinancialInstitutions Development Project. The village post concept is presentedin Working Paper 3.a. (see Annex 9).

2.72. A final concept is linkages. District officials andtechnical agencies must link component project activities to the SLPSpilot project extension effort. The establishment of field level workinglinkages between the SUFS and the AARD research effort will beparticularly important. Linking the SUPS and the conservation accessroad component is essential, as are linkages with responsible marketingagents (e.g. cooperatives as well as the private sector), BRI creditofficers, village officials and the extension service.

2.73. These five points should be viewed as an initialstrategic framework for the project rather than a predetermined andurchangeable development policy. As project managers at all levels gainon-the-ground experience, this strategy is expected to be modified andinproved.

d. Coiponent Elements

(1) Planting Material Development and Distribution

2.74. The development of adequate s.applies ofgrasses/legumes, food crop seed stocks and cash tree crop seedlings iscentral to achieving both the conservation and the agricultural-objectives of the project.

(a) Grass/Legume Nurseries

2.75. A network of ten nurseries (at least one perdistrict) will be established under government auspices to manage thecontinuous production and distribution of large volumes of grasses/legumes for use in stabilizing terraces or in the introduction ofsilvipasture on steep slopes.

2.76. The nurseries will be established on at least 3hectares of fertile irrigated land purchased and developed by thegoverment. Irrigation is essential since grasses must be propogateddurlng the dry season for distribution to upland farmers at the on-set ofthe rainy season. Each nursery will be located on a main road as closeto the general target area in each district as possible.

2.77. A permanent work force of laborers for each 3 hectarenursery will be hired to maintain and prepare plant seedlings for

- 31 -

deonstration farms and expansion areas. A PPL will be assigned to eachnursery on a full-time basis and will be responsible for nurserymanagement. The pulling of grass seedlings must be synchronized with thef-rers' planting time. Planting materials must be handled properly toinsure their survival. The PPS for soil conservation in eachparticipating district will be responsible for coordinating nursoeyoperations with the demonstration farm and expansion program activities.

2.78. Basic facilities and equipment for the nursery willinclude a storage shed, equipment such as sprayers, tools, water pumpsand space for an office for the PPL manager. A four-wheel drive pickuptruck will be provided for grass delivery to demonstration farms andexpansion sites.

2.79. One nursery per district will be established duringthe initial project year in districts Boyolali and Seinarang in CentralJava and Malang and Blitar in East Java. The balance of the nurserieswill be established in the remaining four districts when they join theproject at a later date. Table 8 presents an indicative schedule for theestablishment of nurseries under the project.

Table 8NurseEy Developmnt Schedule

IFY | 84/85 185/861 87/88 1 88/89 189/90190/91191/921 |Project Yearr o I 1| 2 | 3 1 4 15 6 Total I

~~~~~~~I I I 1 I I I . I. IIlnitial 1 I I I I I I I

I SUPS Distr. 1| ha. I J# ha. J* ha. I I I I

Semiarang il (3 ha) I 11 (3 ha)l I I I' orolali |1 (3 ha) I II I I I I IMalag |1 (3 ha) I 11 (3 ha)l I I I IBlitar 1l (3 ha) I I I I I I |

I Sub-total 14 (12 ha)l 12 (6 haW I 16 (18 ha)lI~ ~ 1 I I 1-l -I --1-

|Follow-on I I I II SUFS Distr. ||Blora I I 1l (3 ha)I I I I I IGrobogan I I |1 t3 ha)I I I I IITulungagung I I 1l (3 ha)I I I I I|Trengwalek I I 11 (3 ha)_I I I I I II Sub-total 1 !1 4 (12 hW) 1 1 1 14 (12 ha)I

I TOTAL 14 (12 ha)I 14 (12 ha)J2 (6 ha)l I 1 110(30 ha)lI I I I I I I I 1

- 32 -

Table 9Indicative 3 ha Nursery Budget

(Rp.000)

I Capital Cost: I

| Irrigated land purchase (3 ha Q ap.4,000,000) Rp. 12,000Grass seedlings (40,000 pulls/ha @ Rp.3/pull x 3 ha) Rp. 360 1T Tools Rp. 200 |

I Pickup truck (four wheel drive) Rp. 12,000 II Water Pump Rp. 1,000 |

P Pesticide Sprayer Rp. 170 || Shed Ep. 400III Office furniture Rp. 400 |I I| TOTAL CAPITAL COSTS: Rp. 26,530 I

I I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I Annual Operating Cost (3 ha nursery) I

I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~II Grass/legumes seedlings Rp. 100 IIFertilizers (3 applications/year/ha of 100 kg Urea, |

50 kg TSP and 50 kg XC1 C Rp.90/kg x 3 ha) Rp. 162 |1 Pesticides Rp. 25 |I Tools Rp. 200 |Fuel and maintenance for truck and water pump Rp. 4,500 |Laborers' salaries (2 full-time men/ha 0 Rp.1,000/day and

6 days/week for a total of 312 days/year x 3 ha) Pp. 1,872 I, Driver's salary (full-time Q Rp.35,000/ onth) Rp. 420 || Miscellaneous Rp. 500 I

ANNUAL OPERATING COSTS: Rp. 7,779 1

(b) Upland Pood CroS Seeds

2.80. In 1982, the GOI and IBRD initiated the Seeds IIProject (Loan 2066 IND) to supply sufficient processed seeds from theNational Seed Cooperation (NSC), P.T. Pertani and participatingcooperatives to meet 409 (25,000 tons) of the 1988 BIMAS/INMAS market forwetland rice seed and 20% for upland crops (11,400 tons) and dryland rice(750 tons) in 13 provinces. In every participating provinces, theproject supports inproved and expanded breeder seed storage, seedproduction supervision, upgrading of rice and upland crop seed farms toproduce foundation seed, an expanded program of private contract growersto produce extension seed stock, 18 medium sized seed processing centersfor the National Seed Corporation and P.T. Pertani and six mall seedprocessing centers for cooperatives.

- 33 -

2.81. During ZBRD/GOI negotiations, considerable discussionfocused on the appropriate roles of the National Seed Cozporation,cooperatives and the private sector. The National Seed Corporation (NSC)has a documented history of inefficient operation of mechanized seed farmproduction. Therefore the GOI and IBRD agreed that a long-term objectiveof the government's seed program should be to enhance the role of theprivate sector in seed processing. Nevertheless, both sides concludedthat no private firm (a) would be likely soon to take the risk inherentin pioneering seed processing particularly for upland crops or (b) hadthe size and expertize to organize contract growers to multiply stockseed into extension seed, process the seed and supply the large insularmarkets of Indonesia. As a result, the project has focused on developingNSC's seed processing capability as wvll as establishing, on a pilotbasis, small, cooperative (XUD) seed processing centers, based in sixsub-districts. These centers would then contract with private producersfor extension seed.

2.82. This strategy, with its emphasis on organizingprivate contract growers as opposed to state run seed farms, represents afirst important step toward defining a greater role for the privatesector in the seed industry. The GOI also agreed to gradually increaseseed prices so that by 1988 N9C revenue will cover all costs, including a10% return on investment. The UAC Project seed production anddistribution activities have been formulated in the context of thislarger GOI program and policy environment.

-.83. To meet the 14-4ted demand for extension quality seedstock in the early years of the project (see Table 10), project officialswill work closely with provincial authorities and representatives of theNSC to purchase seed stock directly from provincial seed farms (PSF) inboth East and Central Java. Bowever, given the present limitedproduction of foundation, stock and extension seed for upland crops atthe provincial seed farms, delays in implementation of the GOI/IBRD SeedsII Project and the uncertainty regarding the role of the cooperatives andthe private sector in the seed industry, the project will financetechnical assistance and commission two studies specific to the generalproject area. The first study will focus on seed marketing anddistribution and the second on the potential role of private andcooperative sectors in seed production and processing (see Working Paper4, Seed Study Termas of Reference). These studies will complementnational surveys being undertaken in the context of the Seeds 1IProject. The studies will be initiated during IFY 84/85 (Project Year 0)as a key priority of the project authorities. The results of thesestudies will guide the investment strategy for developing the seedindustry in both provinces.

2.84. Should it be determined that the project cannotpurchase sufficient extension grade seed stock to meet projectrequirements from existing sources, special consideration will be madeduring IFY 84/8S to finance a pilot seed production and processingproject in conjuction with the Ministzy of Cooperatives.

- 34 -

Tablo 10SUPS Zctension Seed Regqirements

(Tons)

I Proj0ct Yr 0 1 1 1 2 1 3 1 4 1 5 1 6 1Type 1 84/85 r 85/86 1 86/87 T 87/88 I 88/89 1 89/90 T 90/91 T $otal

Maize I 4.41 39.81 63.01 104.0 I 122.01 122.0 I I 455.21

Soybeans I 9.9 I 89.6 I 142.0 1 235.0 1 275.0 1 275.0 1 11,026.5 5

Peanut 1 15.4 1 139.0 I 221.0 I 365.0 I 428.0 1 428.0 1 11,596.4 4

TITotal 1 29.7 1 268.4 I 426.0 I 7C4.0 1 825.0 1 825.0 1 13,078.1 11, 1 1 1 1 1 1 1 _ .1 _ _ _

(c) Tree Crop Seedlings

2.85. SUPS will provide free tree seedlings to fazuers whoare willing to put their land under permanent vegetation or follow theproject recomndations for soil and water conservation. Seedlings willbe produced by $eisting, privately owned nurseries in the project areaunder contract to the project. Most of the cash crop trees adapted tothe area are usually available in local private nureries. When improvedtree seeds aze available through AJUW, nursey contractors will besuliLed with the improved seed stock and scific managementrecommendations from appropriate AM staff.

2.86. 1he Estate Crop PPS, in cooperation with the PINs atthe RPCs and PPNs at the demonstration farms, will be responsible foragnagement of this component of the StJFS pilot project.

(2) Demonstration Fazm and Expansion Program

(a) Donstration rarms

2.87. Demonstration fazms will be the prlncipal tool fortechnlogy demonstration and dissmination under the SUIPS pilot project.Twro types of upland technology will be demonstrated initially. On landswith slopes below 50% and soil depth of at least 50 cm, bench terraceswith grasss planted on terrace lips and risers wiLl be established tostabilize the soil. When soil depth is not adequate or slopes are overS0%, grass strips, lamtoro CLeucaena leuBcoeala), gliricidia(Gliricidia *opium or G. maculata) or other appropriate legumes andtreesshrubs will be close planted on the contours to form - barrier tosoll erosion if the land is to be used for food crop production.

- 35 -

Marginal lands or lands with low productivity and high erosion risk maybe planted to silvipasture with cash crop trees and forage grass/legumesfor livestock feed. On steep and marginal lands, efforts will be made tohelp farmers change from annual food crop production to permanent ormostly permanent vegetative cover.

2.88. Demonstration farms will show farmers the benefitsand costs of practises such as:

- the most appropriate way to maintain a stablefarming system for a given site, taking into consideration the soil type,depth, texture, topography, land use and climatic conditions.

- the most appropriate conservation measures (i.e.vegetative stabilization of terrace risers, contour strips orsilvipasture) to insure maximum protection against soil erosion.

- the advantage of using improved seed, optimum plantdensities, opti:um use zf inputs and proper soil management.

- the care of livestock, where applicable; the use offorage produced by the vegetative stabilization program; the use of farmby products and the optimum livestock carrying capacity for specificfarming systems.

- the role and income potential of tree crops such asclove, petai, coffee and fruit as part of the upland farming system,particularly on slop's greater than 50% or on sites where the soils aretoo shallow to allo-w construction of bench terraces. Proven techniquessuch as pruning, fertilizing and pest control will be demonstrated tofarmers who already own productive trees.

(b) Expansion Program

2.89. The expansion rate of the Citanduy Watershed Projectaveraged 85 ha/DF/yr. This realistic standard has been assumed for theSUPS project. Given the aggregate target of approximately 23,000hectares of critical land for treatment, 72 demonstration farms will beneeaed by the end of the project. The aggregate hectarage of landprojected for treatment under the project may be conservative. First, aconstant rate of expansion has been used in estimating the rate oftechnology diffusion. This rate Is probably appropriate for the initialstart-up years of the project but can be expected to accelerate asproject managers and extension agents gain experience and the surroundingcommunities become aware of the project. Second, data from Citanduyindicates a faster rate of expansion should be expected for the UACProject. The Citanduy expansion program subsidies are Rp. 200,000/ha.The Rp. 300,000/ha proposed lor win kind" subsidies to expansion areasunder the SUFS should encourage farmers to participate more readily sincetheir risks are greatly reduced.

- 36 -

2.90. Table 11 presents an indicative annual schedule forthe establishment of these demonstration farms. Table 12 presents anillustrative schedule, for planning and budgetary purposes, of the 22,900ha to be treated by expansion of the SUFS project. These 22,900 harepresents 28 of the 82,318 ha of identified critical land in the eightparticipating districts.

(3) Upland Agriculture and Conservation Subsidies

2.91. Farmer adoption of the improved farming systemstechnology advanced by this project requires incremental inputs of labor,fertilizer, pesticides, planting material and livestock. Financing topurchase these inputs can be drawn from three potential sources: thefarm family's "own" account, subsidies or credit made available througheither public or private channels.

(a) 'Own Account Financing

2.92. It is unlikely, at least in the initial years of theproject, that economically marginal families will be prepared tovoluntarily invest their limited savings in what is to them new anduntested technology. However, as the non-credit technical guidanceprograms (IrMas and INSUS) have demonstrated, farm families will uretheir discretionary income to purchase productivity and income increasinginputs when they are confident that the technology is sound and theprospects of higher yields outweigh the risks. Other sources offinancing must be developed to initiate technology diffusion and to carzythe farm family until it has accumulated sufficient cash surplus tofinance inputs. The initial coordinated program of subsidies will bereplaced by non-subsidized commercial credit to meet recurrent costrequirements. One source of credit will be the USAID supported FinancialInstitutions Development Project, which serves the UAC Project areas.

(b) Subsidies

2.92. The GOI will provide direct subsidies for the initialtwo years of participation in the program. As a condition for joiningthe progran, participating farmers will be required to undertake, attheir own expense and labor, substantial earth moving to establish benchterraces or othler mechanical conservation measures recommended by theproject. In addition, participating farmers will introduce a range ofvegetative conservation measures such as planting appropriate grasses,legumes, tree crops and silvipasture on steep slopes. Since thesemechanical and vegetative conservation measures also reducesedimentation, flooding and dam.ge to estuaries, the upland farmeractually is subsidizing the lowland population that captures off-sitebenefits. This is reasonable justification for the subsidy package.

37 -

Table 11Demonstration Farm Development Schedule

I Indonesian FY 184/85185/86186/87187/88188/89189/90190/911TOtaiI I ha I| Project Year I O 1 | 2 | 3 | 4 | 5 6 1 DF Treated|

IEAT*V I T I I I I I I I I|EAST JAVk

|Malang I1 3 |51 8 | 3,514!1I REC DampIt I |1| 1 | | ||2| 904 |I REC Pagak I 12 131 I 1 51 2,209!

I REC Turen I I 1 I I I 111 4011I3litar | |2 | 4 | | |6 2,6101I REC Binangun I | J | 2 3 1 3 J 1,305| REC Kadekmagan| 11121 I I 1 31 1,305!

ITulungagung | 1 1 15 5| I 1 10| 2,480|| REC Bolorejo |2 | 3 1 | 5 795 |I REC Euntaran 3 I | 13111 | 4 1,488|I REC Sukoanyar I I I I 111 197!I Trenq'galek I I I | 5 | 4 | | I 9 | 2,283|I REC Durenan II2lF3 6931

i REC Dongko | I I |1| I | 1 299!I REC Xarangan 3 I I 1312 I 151 1,2911

I REC Kapak I I I I I I 1 I I II --ub-total I 15 9 I 10 91 I I 33 I 10,887 I

IcNL3v I I I I I I I I I I Semarang I 1 4 I 4 1 2 1 3 I 1 _ 13 I 4,085

I REC Tengaran | F|2 1 2 3 7 1 7 2,399REC Tuntang K. 1 1 1 31 1,203

I REC Ungaran I 111111 1 1 1 31 1,2033Oyoa.alI 1 1 31 12! 1 161 2,100

I REC Karanggede I 12 4 1,298 1I RECSimo I 1 121 i 1 12 1 802I Grobogan I !i 8 4 131121 3,1.80

REC Gubug I I I 12 1 3 795REC Xradenan | | 13 13 6 161 1,488

I REC Toroh | | I |3 | 1 |31 897|Blora I I 14 |4 | 181 1,984| REC Kunduran | I I | 2 | 2 | 1 | 4 | 992

R REC Jepon I 1| |2 |2 |4 992| Sub Total I I 5 7 1 14 113 | I 139 1 12,069

1 T I1~~~~~~~I~~~I1 1-f1~~~~* II TOTAL DP |10 116 |24 122 I 1 |72 | 22,956|

1. 1_ I I I 1 I I I I

*4200k

- 38 -

Table 12Pro2ected Expansion Hectarage Under the SUPS

Pilot Project

IFY 11984/851 85/86 1 86/87 1 87/88 1 88/89 189/90 190/91 | |Project Year 0 O 1 1 2 1 3 1 4 15 | 6 ¶TOTAL

Di | 1100 | 1 I | | 10011E12 |(1O DF)| 850 I I I | 950|

E 13 1 1 1 1 1020 I I I 1970|E 14 1 1 I I I 1020 | | 2990|E 15 1 1 I I 11020| 14010E 16 | . I I I I 110201 5030

I I I I I I I IID.2 I I I 160 1 I 1 I 160|i 23 I I(16 DF)I 1360 | | 1 1 15201E 24 I I I I I 1632 | | 3152|E 25 . | | | | 116321 1 47841E 26 | | | | I 1 j1632 64161

D3 I j i 1240 I j 1 240|1 34 1 1 1 1(24 DF)I 2040 1 1 I 2280I1335 1 I I I I 1 24481 47281E 36 1 1 I I 1 24481 64161

I ~~ I I I I .1* I ID4 I I 1 1 j220 | |220|

1 E45 1 I I I |(22 DF)J 1870 | | 2090 |E 46 1 I I I I I 122441 43341

*1_. I I _ I I I I I_* Total Ha. 1 1 100 I 1010 1 2620 1 4912 1 6970 1 7344 " 22956 I

D 1 - Demonstration farm (DP) established in Project Year 1.E 12 - Expansion area in Year 2 from demonstration farm established during

year 1.

#4200A

- 39 -

2.93. Second, as a result of the introduction of mechanicalconservation measures, farmers will be required to give up valuable cropland to allow for the construction of public waterways and terraces(typically 30% of total land area). Participating farmers may alsoexperience substantial initial production declines after construction ofthe recom-mnded mechanical conservation measures due to top soildisturbance. Thus, some form of subsidy is needed to off-set both thepermanent real loss (i.e., land) as well as short-term loss inproductivity.

2.94. Third, the mechanical and vegetative conservationmeasures and improved farming system technology is beyond the ability oflow income, risk adverse farmers to finance.

2.95. For these reasons the project wlll finance fortwenty-four months a composite subsidy package for each participatingfarm family. This will permit farmers to accummulate sufficient capitalto operate both from their own resources and from those available oncommercial terms through the banking system and private sector.Subsidies will be set at the minimum level required to obtain adoption.Conseqcently, the subsidy package will be under constant review with aneye to reducing the level of subsidy while maintaining acceptable ratesof technology diffusion.

(4) Proposed Project Subsidies

2.96. Experience from the Jogyakarta and Citanduy Projects,although still limited, suggests that the subsidy for construction ofbench terraces can be reduced without jeopardizing the rate of technologydiffusion. Based on field observation by a number of independentobservers, two adjustments in the subsidy package are recomuended:discontinuance of direct payment for terrace construction atdemonstration farns and the Introduction of a uniform subsidy for bothdemonstration farms and the surrounding expansion areas. The recommendedtwo year subsidy package is shown on Table 13.

2.97. Adherence to certain criteria will be required.Farmers in a contiguous watershed area must organize themselves into af A-er group and formally request government support. If accepted, thegroup must, in the case of the bench terrace model, collectivelyundertake construction of the proposed mechanical conservation measuresunder the guidance of a qualified technician. The farmer group will beprovided the necessary construction material and grasses to build therequired terraces and waterways. After completion of the physicalconstruction, the participating farmers will recelve grasses to plant onthe terrace risers to stabilize the soil. Following this initialactivity, farmers will be provided with inputs (seed, fertilizer andpesticide) for the initial year's production. During the second yearfarmers will receive the second subsidy. The specific inputs to befinanced will be jointly determined by the participating farmer groupsand the REC extension teamsr

- 40 -

2.9 . This two year multiple input subsidy is consideredthe minimum necessary to insure adoption of conservation and productivityincreasing practices. The specific inputs shown on Table 13 areindicative only; they will vary widely from area to area and projectofficials will have the authority to "fine tunes the subsidy package toinsure that it is appropriate to farmers t needs. While it is anticipatedthat the subsidy program can be terminated after two years, this decisioncan only be based on the results of implementation. If projectauthorities and AID determine that the subsidy should be extended for alonger period financing provided under the project can be used for thispurpose.

2.99. Based on the projected expansion rate presented inTable 12 and the per hectare cost presented in Table 13, the aggregateSUPS subsidy budget by project year is presented in Table 14.

(S) SUPS Technical and Extension Staff Requirements

2.100 Table 15 presents the existing complement oftechnicalA/anagerial and extension staff of the four technical servicesresponsible for the implementation of the SUPS pilot project. Thisstaff, currently totalling 1,295 personnel, is responsible for thetechnical management of all ongoing programs sponsored by these lineagencies throughout the 176 sub-districts of the eight target districts.

2.101 An estimated 474 managerial, technical and extensionpersonnel from these four participating agencies will be required if theproject target for land treatment is to be achieved. Table 16 presentsthe personnel requirements according to occupational specialization,agency affiliation and year when the respective personnel are expected tojoin the SUPS pilot project.

2.102 During project design the GOI stated its intention toreassign or recruit new personnel to meet the full-time SUFS pilotproject staff requirements, as outlined above and ii Table 16.

2.103 Table 17 presents the allocation of the total SUE'Sstaff according to the requirements of each participating district.


3. Access to Credit

2.104 The availability of credit is central to the large scale,sustained diffusion of productivity and conservation increasingtechnology. It is unreasonable and inappropriate to expect thegovernment to pexpetually subsidize the uplands. Therefore, aprerequisite for sustained diffusion of farming system technology is of afinancially viable credit program to meet the recurrent needs of uplandfarm communities. (Working Paper 3a, Kupedes/Village Post CreditProposal is an analysis of present institutionalized credit lending inthe project areas of East and Central Java and gives the general rationaland design of the village post concept.)

- 41 -

Table 13Subsidy Budget for SUFS Demonstration Farms & Expansion Areas

(Rupiah s)

I I Bench Terrace Silvipasture II ______________________I Slope 50% 1 Slope 50%I | Rp/ha | Rp/ha| Year I I I| Grasses/legumes 1 30,000 | 90,000I Waterway construction I 70,000I Seedlings (trees) 1 1 50,000I I I 1

1st cr input I II Seeds I 59,000| Fertilizers (50 kg urea, 100 kg| TSP & 50 kg KCL) | 18,000

Pesticide I 8,000(85,000)

| 2nd crop input I I I| Seeds I 39,000| Fertilizers (50 kg urea, 100 kg

TSP & 50 kg KCL) 1 18,000Pesticides I 8,000 I I

I I (65,000) I I

| Year II| Variable subsidy for Bench Terrace | 50,000 | 160,000I model and small ruminants (10/ha)I for silvipasture model

Total 2 year subsidy | 300,000 | 300,000

2.105 The project will not have a discrete credit component butwill work with the lead agency--i.e., the Ministry of Home Affairs, andwith various financiaL institutions to divise effective credit programsto support the Sustained Uplands Farming Systems component. TheFinancial Institutions Development Project (FID) supported by AID,already has targetted technical assistance to Bank Rredit Kecamatan ofthe Bank Pembangunan Daerah, a provincial bank in Central Java, thuscovering one watershed area.

- 42 -

Table 14SUrS Demonstration ?arm and Ecpansion Program Subsidy Budget

(Rps millions)

IFYr 1 84/851 85/86 1 86/87 1 87/88 r 88/89 1 89/901 90/91 1IProject Yr. 1 72 3 _ 4 1 5 16 Total

IPlanting I I I 1 Im material 1101 99 257 14811 6831 7201 12250

I. I Ifi ~ F I I.Ilst Yr DF/ I I I 1 II Ecp. area | | 12 1 123 1 320 1 599 I 850 1 896 1 2250| Subsidy I | I I I I I i

I1 I |2nd Yr DF/ |I mp. area I I 81 81 1210 13931 5581 1249ISubsidy |

I Ii *1 iI 1, i *1 I ITOTAL I 10 I 111 I 388 1 882 i1492 11963 11454 I 6299 I

AsumWtions: plant material Rp.98,000/ha budgeted 1 year prior to implement.Construction waterways + fertilizer + pesticides Rp.122,000/habudgeted the same year as inplemented. Rp.80,000/ha budgeted 1year after implementation for inputs to support appropriateindividual farming sysa.lems, e.g., tzee crops, livestock.

2.106 In the early phase of implmentation, FrD will explore thepotential for assisting Bank Rakyat Indonesia's (BRI) planned expansionof the Kupedes program into the project areas using the "village post"concept. FID assistance to BR3 probably will be limited to technicalassistance and sae essential equipAnent. TA will support the developmentof proper phasing, procedures and accounting practices as the Kupedesprogram expands to the uplands. TA will be channeled through theXinistry of bme Affairs, wbich is also the prime implementing agency ofFID, and will pay attention to the unique problems of the upland areas asone of its key elements.

- 43 -

Table 15EZcisting Agricultural and Soil Conservation Staff.

in SUNPS Districts

Food 1/I Live- 2/ 1Estate 3/| Soil 4/I|Crop I stock I Crops I ConservationI Total I

Service I Service I Service I Servicev I L§ ~ ~ ~ ~~I 1 1 1 - '

IEa st JavaM Malang | 105 I 32 1 48 I 48 1 233

1Blitar I 63 1 16 1 20 1 35 I 1341Talungagun; I 59 I 19 I 13 I 19 110!

I Trenggalek | 60 | 11 | 12 | 22 | 105|

Subtotal 1 287 -- 78 I -____ 93 _ 124 I 582 ,

Central Java IISeiarang I 84 I 31 I 26 1 32 I 173

IBoyolali | 75 1 36 | 7 | 39 I 1571|Grobogan | 140 | 23 | 7 | 34 | 204|IBlora 1 126 | 24 a 8 | 21 | 179|

I Subtotal 1 425 I 114 1 48 1 126 1 7131I I 0I btal I 712 I 192 I 141 1 250 11,2951

I/ Includes PPS, PIK and PPL. Data from Directorate of Extension, DG FoodCrops.

2/ Includes PPS, P3( and PH.3/ Includes midlevel supervisor field extension worker from Nor (PNP) and

field extension worker (PLP) daeplots, PW regreening and field extensionworker for checkdams (PLDP).

4/ Administrative and technical staff.* Balal and Sub-Dalai Konservasi Tanah (EX)


4- Human Resources Develooment

a. Purpose and nd of Project Status

(1) PuS2ose

2.107 The Human Resources Development component will orientGovernment of Indonesia personnel in the Ministry of Hoe Affairs, theM4inistry of Agriculture and the Ministry of Forestzy toward dealing withthe serious production and conservation problems in the uplands. Theproject will:

- 44 -

Table 16SuFS Pilot Project Staff Requirements

I IFY 184/85185/686/87187/88188/89189/90190/911IProject Year TO 1 121 3 1 4 1 5 1 6 jTbtalI

|Initial SUPS District | I I I 1 I I I I

PFS Food Crops Agro- | 4| I I I I | 4 1Inomy (NOJA) I I I I I I I I IIPPS Livestock (MOA) | 41 I I I I 1 4 1IPPS Est. Crops (MOA) 4 4 | I | I I 1 4 1

F PPS Soil Conserv. CMOF)i 4 | I I | I | | 4 1- REC Mgt./Ett. Sta.ffl I | I I I I I I

|PE Exten. Mgr. (MO) 101 16| 21 5 | I 1331PPL/PLP Extension I 501 80 101 251 1 I 11651

I Agents(NDR) I I I I I I M A|PPL Nursery Mgt. (MOA) | 4 | | I I I | 4|

I 1 i-X -- ~I 1 |Sub-total Initial SUFS 80 96| 12| 30 | | |2181

1 _ _ _ __ _ _ _ _ __ _ _ _ _ __ I o -X ; X-

|Follow-on SUPS Distr. I | I I I I I I I

|PPS PFod Crops Agro- | | I 4 | 1 I 1 41Incmy (RDA) I I I I I I I|PPS Livestock (MOA) | | | 4 1 | I I 41

PPS Estate Crops (MOA) I I 1 4 | | I | 41iPPS Soil Conserv. (MOA)| I I 4 1 1 1 | I 4 1I -REC Mgt./Met. Staff I I I I I I I I| PPH/PLP Ext. Mgr. (MOA)I I | 221 17 1 I I 39 1

PPL/PLP Extension I I 11101 851 I I 1195I Agents (MOA)|PPL Nursery Mgt. (iOA) I | 1 41 2 I | I 61

I _ _ _ _ _ _ _ _ _ I II I I I I I

ISub-total Follow-on I I 1152 11041 I I I256T_L_UESSt _f__ e I 9 1 1 474

l TOTALSUFS Sta£ffReq. | 801| 961|1641|134 1 |1 1 14741|I I I I I I I I I Il

4 45 "Table 17

SUrS Pilot Project Staff Requireuentper DLetriat and RSC

Indonesian FY 84/85 I 85/86 87/88 1 88/89 1 89/90 r 90/91 |Project Year | _0 _ _1 _ 1 3 4 I TOTAL

I PPP1PL PPHP P PPP PPP PPP PHP P8PS iH p PP pp J PPPPPH PPLI1-~~~~~~~~~~ I I II

|BAST JAVA I I I I I I| DLat M41ang 4 3 16*1 2S |_|___| I 25 54| REC -Dapt . 1 5 1 5 I |

R8C Pagak j 2 101 3 15 || RC Turen I | 1 5 1| Dist. Biltar 4 3 111 4 20 . 41

-REC Dinangun 1 5 2 10 .I REC Kademanan | 151 2 10 | I I I I IIDist.Tulungagungl _ --- 14 5 261 5 21 5 GS | | I _ 651

I RlC Balerejo 1 F 2 101 1 s r I I I; RXC Buntaran | I I 3 1S 3 15

R8C Sukoanyar I i I | 1 S I I IDist. Trengqalek | L 1 4 5 2601 4 20 I _ I | 59|R I Durnan II151 210

I RIC Dongko I I 1 S |

| REC Karangan I 1 2 10R RC Kampak _ I _ I I _ I jSub-total _ 052945j8l052 946 2191

| CUNTRAL JAVA I I I I I I I IDist. Se8arang | 4 4 21*1 4 20 | 2 10 | 3 16*_ 1 1 1 84 1RIRCTengaran 1 1a a101 1I6REC Tuntang | 1 5 1 S I 15 IRiC Ungaran I 1 5S 1 5 t 1 5 |

Dlt. Boyolali | 4 1 601 3 1S I 1 2 101 41 |REC Karanggede 5 1 I 1 51 2 10 1

I REC Sio I 2 101 I I I I I I| DLmt. Grobogan I 1__ I ___ I 4 8 41I1 4 20 1 _ I __ I | 77 1

RBC Gubug I I 1 2 10 T 1 5 -II RC Kradenan I I 1 3 15 3 15 | | I II RC Toroh | I I 3 15 | I I I I

DILt. Blora I_ 1 4 4 21 1 4 201 | | | 531REC Kunduran I 2 10 2 10 1REC Jepon _ _ .._ _._ _ 2 10 2 la 1

| Sub-total 8 5 27 7 35 8 14 72 13 66 | .- S 255 1I- ._ _ I . I I I | TOTAL |16 10 5 16 80 16 24 124 22 112 I I 14741

* Including PPL Nursery

11462Atjoys6/26/84

i'.

- 46 -

- inform farmers and cocmmunity leaders about thegovernment's programs and encourage them to participate in solving theirown problemsi

- provide specific technical skills training to governmentpersonnel and farmers;

- provide decision makers at all levels with opportunitiesto learn how others are dealing with similar problems.

(2) End of Project Status

2.108 The project will provide skills training in agriculturaltechniques, planning, management, motivation and communication to morethan 600 government employees and 2000 farmers. Xey individuals whoinfluence national policy will be provided opportunities to interact withexperts and foreign pes.s who deal with problems similar to those foundin Indonesian watersheds. By Year 6, sixteen outstanding personnelassociated with the project will have been trained abroad to the I.S9level, forty PPLs will have received diplomas in upland farming extensionand soil conservation and twenty leading project personnel will have beentrained to the .S.. level at Indonesian universities, focusing on uplandmanagement and farming systems.

b. Components

(1) Farmer and Community Leader Training and Motivation

2a109 In the final analysis, farmers and their communities willdetermine the success of the project. Training will be focused on keyfarmers who will act as models and give accurate information to otherfarmners and provide feedback for the project. The key farmer, not theextension agent, should be the main interface between the project and thetarget group.

2.110 Training will include worksbops to facilitateunderstanding of the project and its procedures, technical training atdemonstration farms and RZCs and in-country tours to see improvedpractices.

(2) Extension Agent Training

2.111 The extension agent is the first technical level ofgovernment interaction. All extension agents (PPL and PLP) will work outof the rural extension centers and be backstopped by the AgriculturalServices at the district level and by Sub-BNLXT. They will interact withfarmers by providing information on programs and farming techniques andby helping them participate in government programs; and the extensionagents will provide reports and data to the management information system.

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2.112 Training will place strong emphasis on knowledge ofrainfed crops and animals. A ratio of 701 field training to 30%classroom activity is acceptable. Training that provides practical,hands-on experience w$il be devised, such as each trainee assembling hisown training manual and making his own communication aids. Every effortwill be made to have the extension agent maintain his own farm plot.

2.113 One hundred and ninety-five PPLs/PLPs will be phasedinto the project by March 1987; an additional 145 will be phased in byMarch 1989. It will be necessary for the GOl to recruit and train morethan 400 extension agents during the project to allow for long-terztraining, attrition and surplus cadre for expansion during Phase I.

(3) Extension Supervisors (PPM) Trsining

2.114 The extension supervisor, located at the ruralextension center, functions as planner, manager, technician, andtrainer. He is responsible for the personnel, program and facilities inthe REC work area. Usually he is a person with broad knowledge ofagriculture who has come up from the ranks and is an experienced, provenperformer.

2.115 The supervisor's performance will be critical toproject success and expansion. There will be 72 extension supervisors inplace when the project is completed and more will be needed for 'urtherexpansion. The government must train 115 to 130 extension supervisorsvithin this project to provide for personnel attrition and for initialexpansion during Phase II.

(4) Subject Matter Specialists (PPS) Training

2.116 The PPS in located at the district level. Specialistare university trained backstops for the generalists working at the RECsand in the field. As the professional link between the researcher andthe extentionist, they assist farmers directly and train PPLs, PLPs andkey fazmers.

2.117 The PPS's training will be focused on upgradingtechnical skills and keeping abreast of new developments. Great stresswill be placed on how each area of specialization can contribute to thefarming systems approach. Additionally, he will receive training as atrainer.

(5) Planning, Management, Administrative Staff Training

2.118 The Upland Agriculture and Conservation Project willplace a heavy emphasis on management. The process of developingmanagement skills can be greatly accelerated with practical training,provision of simple 'toole , a-nd instruction in techniques. Workshopswill deal vith the actual needs of the project in a learning-by-doingmethod.

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2.119 There are 46 full-time projoct positions in theplanning, management and administrative classification. Provincial andlocal goverrment officials and technical services personnel must beincluded in this training segment, even though not assigned to theprojoct.

c. Methodology

2.120 The project's training effort vill use existingfacilities, experienced staff and trainers and on-going programs (e.g.,NAEP' s training and visitatlon procedure), bolstering these elements asrequired.

2.121 Training for the project staff will begin immediately inthe on-going programs at the BLPPs, at the Soil and Water ConservationCenters, and at the National Agriculture Training Center (Ciawi). Thistraining will run concurrent with planning and assessment activitiesduring the initial project year.

2.122 During Year 0 (IFY 84/85), an assessment will be made ofskills needed for the project. A personnel management system nov beingdeveloped in the Citanduy 1X Project, will be established to maintainup-to-date information on individuals' experience and training.

2.123 Project funds for training will be provided throughInpres Dati I and managed by the training component manager housed withinthe national Executive Secretariat. Additional funds for training willbe included in the Farming Systems Research component of the project.

2.124 In some instances, the GOI will need to double encumber(assign two people to one position) to provide for long-term training.

d. laxposes and Methodoloqies for Training

2.125 Below are a list of the general aims of the trainingprogram and the means to achieve them. Specific training measures arefound in working Paper 5, Training Concepts.

2.126 The training program should broaden farmers' and projectstaff's understanding of upland agriculture and conservation problems andthe methods being used to deal with them. A program of workshops,newsletters, study tours and demonstration visits will be concentrated inproject expansion areas.

2.127 Key farmers and the project staff will be given technicaltraining in agriculturm and soil conservation, especially related torainfed agriculture and conservation, ranging from thoory to practicalfield exercises.

2.128 Key farmers and project staff will be taught how totransfer knowledge to others in an annual intensive (3-4 days) course.

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2.129 Training for mid-level and upper management staff willfocus on planning, implementation and evaluation.

2.130 Project staff will be taught how to manage: a) their owntime, b) other personnel, c) resources and d) budgets and financialflows. Specialized training tailored to the needs of different levels ofproject management will be carried out. Workshops, guided by experts,will define and institutionalize position responsibilities, managementorganization and procedures, and protocols for implementation andcommunication.

2.131 District level PMU managers and upper echelon management,i.e., provincial and national, will be given policy guidance for theproject and training to improve their analytical and planning capabilityin anticipation of an expanded national program. Special trainingcourses, study tours, and workshops in Indonesia and abroad will bearranged.

e. Orcanization and Staffing

2.132 The Project Training Officer, assisted by the TrainingAdvisor and others, will be responsible for planning, managing,coordinating and evaluating all the Hman. Resources Development componentactivities. The Project Training Officer will be one of the permanentstaff of the Exeecutive Secretariat (ExSec) located in Jakarta.

2.133 He wlll work closely with BPLPP and its units, theDirectorate General for Land Rehabilitation and Conservation and theTechnical Services of the Linistry of Agriculture, which have onr-goingprograms and Zacilities suitable for the project. The Project TrainingOfficer will decide how and by whom the training can best be carried out.

2.134 Pr±or to initiating training, the annual training planmust be approved in writing by USAID. The expectation is that Year 0(start-up) primarily will provide refresher training undez pxogramsalready in place. Subsequent years will have additional project specifictraining. Annual plans will be adjusted as required. It will be theEroject Training Officer's responsibility to see that requireddocumentation is processed.

2.1.35 A long-texm Project Training Consultant, assigned to theproject Executive Secretariat, will work in tandem with the ExSecTraining Coordinator. He will assist coordination of the activitiesamong the many government institutions and non-government organizations,advise all le-els of Government and provide regular evaluations regardingthe quality and effectiveness of the training. Short-term consultantswill also be provided.

2.136 The government will be required to provide a ProjectTraining Coordinator and additional full- and part-time staff fortraining and for developmer'-. of manuals, material and publications.Experienced administrators at BPLPP will be needed to set up specializedtraining courses, and une Agriculture Information Centers will be called

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upon to support the project. Also, the government will be requested toprovide high level personnel to assist in evaluating the training. component.

2.137 The need for additional personnel to double enc-umberpositions targeted for both domestic and overseas long-term training willbe agreed to during project negotiations.


5. Conservation Access Roads

a. Puxpose and End of Project Status

2.138 The project will construct all-weather roads to provideaccess to demonstration farms and expansion areas and for generalcommunication. At the end of the project approximately 475 kilometers ofmacadam roads will have been constructed, repaired, or upgraded in eightdistricts.

b. Design Standards and Conservation Measures

2.139 Considerable care will be exercised to assure that designstandards will use construction teciniqies and structures that minimizeenvironmental damage. The roads will have waterbound macadam surfaces, atraditional type of construction found on Java. The standards, however,will be higher than those normally used in Padat Xaxya programs. Theconstruction method to be followed will employ the labor intensiveconstruction techniques developed under the Padat Karya program.

2.140 The design and construction of the roads will take intoconsideration the future requirements for maintenance by people in the areaand by local government. Budgets normally are low for routine maintenanceand only provide for saterials, since the local population supplies thebulk of the manpower under the Padat Karya program. Taking into accountthe high level of design and construction, the emphasis on good drainage tocontrol runr-off and establishment of firm road shoulders, the annual costfor maintenance materials should not exceed Rp. 25,000 per kilometer.

2.141 The project will provide technical assistance to assurehigh engineering standards, to help establish maintenance programs and tocertify that construction meets the standards.

c. Cost Analysis

2.142 Based on the environmental design considerations, the roadgeometric for a waterbound maciam road and assumption of 4 culverts perkilometer and one 6 meter bridge every 6 km, the unit cost for onekilometer will be approximately Rp.9,200,000/km. (See Table 18.) Thisfigure includes cost for constructioa, administration and cost forpurcbasing vehicles and off4ce equipment. Because of additional designconsiderations, this estimate is above the average cost for regular PadatXarya construction under the USAID Rural Roads Project.

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Table 18Average Unit Cost for One Xilometer Road Construction

(Waterbound Macadam) in East Java and Central Java Province(pp. 000)

T Type I Yizd | Unit Cost of I Cst of lunit Cost/KalI Province I of I of I Cost/ I Culverts/1 Bridge/I Road Cons- I

Road I Road X m Road I Xm Road I Km RoadI struction I

East Java I I I I I II I I |Rp- I RPe I Rp. I Rp. |

| 1. Malang | Pi I MCD | 6,000 I 1,600 | 360 | 7,960| 2. Blitar 1 PJ I MCD | 5,700 I 1,350 | 360| 7,44101 3. Tulungagu'g | PJ I MCD M 4,850 I 1,600 | 360 | 6,810| 4. Treuggalek I PJ I MCD | 4,750 I 1,600 I 1,962 | 8,312I I I I I I I IICentral Java I I I I I I II I I I I 1 I I

I 5. Sem-rang | Pi I MCD j 7,200 3.,735 I 1,565 | 10,500| 6. Boyolali | PJ I MCD | 6,650 1 1,700 1 1,600 9,950I 7. Grobogan | PJ I MCD | 6,000 | 4,000 1 1,950 | 11,950

S 8. Blora | PJ IICD | 4,000 | 4,400 1 1,950 | 10,350

3 1 . | | 5,644 1 2,248 I 1,263 I 9,200I I - . I I I I

Note:1. PJ - Penunjangan C a standard for construction higher than the regular

Padat Kaxya standard. Labor intensive construction methods aresuitable.)

2. MCD - Macadam3. Cost of Culverts is calculated for 4 culverts per kilometer road4. Cost of Bridges is calculated for one meter bridge per kilometer road and

it is further assu-ed that evezy six kilometers of road needs an averageof one 6 meter bridge.

2.143 The road component will be financed by the World Bank aadthe GOI. The total construction cost of Phase I is estimated at Rp.4.4bilUionz (See Annex 5, Table 8 for construction schedule and detailedbudget.)

d. Executing Agencies and Procedures

2.144 The road construction is designed to support theactivities of the project and therefore will be determined by thelocation of demonstration farms and expansion areas. The project will

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help local governments improve the general road net if roads outside theexpansion area are inadequate and hamper full utilization of expansionarea roads.

2.145 Public Works (PU) and the Manpower Ministry at thedistrict level will be assigned by the district chief to work together tolay out a right of way and to complete the design. PU will be assignedthe responsibility for these activities.

2.146 Prior to beginning construction that will be reimbursedfrom the IBRD loan, USAID approval in writing of the design and the costestimates will be required.


6. Project Innovation Fund (PIF)

a. Introduction

2.147 The potential for innovation and experimentation withupland agriculture and conservation technology transcends formalgovernment institutions such as AARD and the SUPS pilot project and mustinclude local institutions, universities and upland communitiesthemselves. To the extent that these local institutions and communitiescan be encouraged and supported in their complementary but independentefforts to improve conservation and productivity in the uplands, theprospects of attaining the project's and GOI's goal will be enhanced. Tothis end, a Project Innovation Fund (PIF) will be established to financeinitiatives by the appropriate local institutions, communities, researchorganizations and universities. a

b. Project Purpose and End of Project Status

2.148 The purpose of the Project Innovation Fund will be toprovide project management with a flexible source of funding to finance:

- proposals from local comunities, universities,foundations or other recognized institutes that directly or indirectlyaddress issues of upland productivity and resource conservation;

- small-scale pilot projects designed to field test orperfect production, marketing or processing interventions;

- feasibility studies of private sector investments tobroaden the options for farmers, e.g., post harvest reprocessingfacilities, storage facilities, gasifiers for power generation, abattoirsand feed mills;

- private sector companies, NGOs, or universities todevelop radio programs focused on upland agriculture, pamphlets andmanuals;

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- non-government organizations that will implementsimilar conservation programs.

2.149 By the end of the project's fourth year there will be asystem for soliciting, reviewing and financing proposals submitted bylocal institutions and communIties. At the end of Phase I, eachparticipating district will have an active portfolio of projects financedthrough the PIF, and initial results will have been evaluated for broaderapplication.

c. Financing

2.150 $500,000 in grant funds will be committed to PIF duringPhase I. To insure flexibility these funds will be managed independentlyof the GOI DIP/DUP process. Given the substantial need for these typesof activities the proposed funding level may appear low, but this is adeliberate decision to create competition among the many expectedproposals.- All the funds will not be committed early-on, as good ideasare expected to flourish in the project's later years.

d. Fund Management

2.151 The PIF will be directly under the management of theProject Coordinator in each province. The Project Manager will submitproposals from the district, with recommendations, to the ProjectCoordination Office. The Project Coordinator and the provincial GuidanceTeam will decide which proposals merit financing. Both solicated andunsolicated proposals will be given equal consideration, and proposalsmay be submitted at any time to either the provincial or district projectauthorities.

2.152 All projects will be judged by the criteria that will bedeveloped during the initial year of project ope-ations and =ust beapproved by AID. Once projects are approved by the provincialauthorities, they will be forwarded to USAID for revie-w/approval prior todisbursement of funds.

III. PROJECT ORGANIZATION AND MANAGECENT

A. Introduction and Rationale

3.01. Successful implementation of the project requires the localgovernment to plan and manage development initiatives focused on uplandareas. Accordingly, the project has been designed to strengthen certainplanning and technical offices of the provincial and district govermentsand to channel all operational funds for demonstration and technologydiffusion activities and access roads through a unified management andfinancial structure under the supervision of provincial and districtgovernments*

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B. Management Concepts

3.02. The experience of the Citanduy and Jogyakarta projects has ledto the formulation of management concepts that should create an effectiveinteragency approach to watershed/upland farning systems development.

1. Decentralized Management

3.03. Given the widely varying agro climatic, social andinstitutional environments characterLstic of the Indonesian archipelago,a decentralized management structure that places responsibility andauthority at lower levels of government is the only practical way ofplanning and managing development and conservation interventions.Because multiple interventions are required to assure adoption ofproductive but ecologically stable, upland agriculture technology, it issimply not feasible to manage upland agricultural programs in acentralized manner.

2. Unified Management

3.04. If the responsibility for these programs is appropriatelyplaced at provincial and lower levels of governlent, these officials mustbe vested with sufficient authority, including effective budgetarycontrol, to ensure the unified management of the various human, technicaland financial resources. Presently, these resources are under theresponsibility of several technical line agencies. All must be mobilizedand allocated in a balanced and coordinated manner if the project'sachievements are to be sustained. The magnitude of the problem requiresthat GOI policy makers strengthen the management capacity and authorityof local governments so they can effectively guide and coordinate thespeciallzed inputs and skills of the technical line ministries ofgovernment.

3. Unified Budgetary System

3.05. The ability to develop and allocate the budget determinesthe extent to which local goverments can unify the delivery of servicesby respective line ministries.

3.06. The budgetary system in the Jogyakarta Integrated RuralDevelopment Project will serve as the model for the Upland Agricultureand Conservation Project. In the Jogyakarta Project annual plans andbudgets are prepared by the Jogyakarta Planning Board (BAPPEDA) inconjunction with the participating line ministries. These budgets arereviewed and approved by the Ministry of Home Affairs, and thendisbursements are made through the Inpres Dati I channel to theprovincial government, which, in turn, sub-allocates the budgets to eachparticipating line agency. Not only is one budgetaxy channel utilized,but authority for the development and allocation of the budget iseffectively decentralized and vested with local. government. Without theadoption of this budgetary concept, the correlary concepts ofdecentralized and unified management can be only partially and, at best,ineffectively carried out.

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4. Community Participation and Management

3.07. The preceding three concepts have focused on how governmentinstitutions organize and decentralize their operations to enable them toeffectively reach and service the target beneficiaries. A complementaryand directly related question concerns how upland communities need toorganize themselves to address productivity and conservation problems andto access resources/markets available through the goverment and themarket place. The issue is how to broadly engage upland communities inmaking the decisions about upland development and conservation.

3.08. The failure of the initial FAO assisted Solo WatershedProject to gain farmer acceptance of proposed innovations is generaLlyattributed to the absence of a strategy and process for mobilizingcommunity understanding of the problem and active participation inaddressing the problem. On the other hand, the Panawangan PilotWatershed Project and its recent successor, the Cigaru Project, in theCitanduy Basin, succeeded largely due to dynamic local leadership thatmobilized community support for these projects.

3.09. The project organization and management structure outlinedbelow in Section C is an attempt to apply these four managementconcepts. What is proposed is neither a radical reorganization ofgovernment services nor a new organizational structure. Rather, theapproach represents a more effective way of using existing governmentstructures, procedures and programs.

C. Project Organization and Management

3.10. The planning and management systems used by this project are inmany respects new and untested innovations. The GOI, IBRD and USAIDfully expect that, as experience is acquired, modifications in bothorganizational structure and process will be required to improve theeffeciency of project implementation. Accordingly, periodic reviews willbe held to assess performance and recommend changes that subsequentlywill be incorporated into the project.

3.11. The four management concepts discussed above will be put intoeffect as follows:

1. Decentralization

3.12. The project vill be planned and managed at the districtlevel. Provincial government authorities will be responsible for thedesign/application of the relevant planning, management and budgetaryinformation systems needed by participating districts to formulate andexecute the project. The provincial governments of East and Central Javawill also be responsible for evaluation of district governmentperformance and the review and approval of district annual and long-termplans and budgets. Once all grant and loan agreements are in place andbasic national policies established, the provincial governments of East

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and Central Java will appoint a representative to be the responsibleauthority on the GO1 side for the disbursement of IBRD and AID funds forall project activities except agricultural research and training. Theselatter activities will be managed by appropriate national levelauthorities as described below.

2. Unified Management

3.13. The Governors of Central and East Java will each appoint afull-time Project Coordinator and staff who will form the nucleus of aProject Coordination Office (see Chart 1). This office will operateunder the overall policy guidance of an interagency provincial GaidinceTeam that will be authorized by the governor and composed of appropriateprovincial government authorities and the heads of the technical lineagencies directly involved in the project, including the head of theRegional Center for Land Rehabilitation and Soil Conservation. Eachparticipating technical agency will appoint a staff member to beresponsible for that agency's technical input into the project.

3.14. The governor will also appoint, on the advise of thedistrict chief in each participating district, a full-time ProjectManager and supporting staff and authorize the creation of a Projectmanagement Unit (PMU) for each district. The Project Manager in eachdistrict will report directly to the district chief, but will besupported by technical agencies responsible for field implementation ofagriculture extension programs. Each of the line agencies with a majormanagement role will appoint at least one professional member of theirrespective staff to work full-time on the project in close coordinationwith the Project Manager and his staff. *these representatives from theline agencies will be responsible for management of their agencies'contribution to the overall field program.

3.15. Technology diffusion and agriculture support activities(e.g., nurseries) will be managed as a single program through the GOI'snetwork of rural extension centers (tEC) in the project area. Thesupervisor of each rural extension center will be responsible for themanagement of all project activities and extension personnel drawn fromthe four relevant technical services [i.e., the Livestock, Estate Cropsand Soil Conservation Services]. Additional management and extensionstaff will be added to the existing staff resources of these RECs tohandle project related field implementation. The REC management andextension staff will be supported directly by subject matter specialists(P PS) working full-time for the project from the four technicalagriculture and soil conservation services and by the staff of theProject Management Unit.

3.16. Work in the 'ield will be carried out in designatedexpansion areas to be ideitified through detailed technical andsocio-economic surveys. These expansion areas are in the work regions(WXBPP) of ten rural extension centers that presently serve the firstthirty project sub-districts. Similar expansion areas will be identifiedin the second four districts.

57 Chart I

Upland Agriculture and Coneervatlon Project Organization

I Lead I Ih4inlotDryl Bupporting Nitnltries _

Illinletry I lMinis tylInlentrylKinLatrylKinistrylI4nlletryINatLonal of |IBAPPUIASI ot I of I of I of I of I I Agency for Agri- I

Level I Horme I inance |Pop. andlAgrLaul-Iroreetryl PubiLc |I cultural Research |jAffairL | I lnvlron.| ture I I WorkS I and

| g |~~~~~~~~~------------------------------------------------------------------| Developlunt (mm)} | -- | Task orce ows_

Provin- vrnorIclal Level | Provincial Guldance Tea I

I Vc VLel vice I eeo-I I | ICherLmnlChalr-IChaLr-1 re I K a a b a r a I Agency for Agriculture I

loan I oman III tarv I | Research and Developuent |_ I I I I I I I I I (AARD 'rea-Leader

| | PIDA | P4DAI PaIDAI PODIAI Agri- Irorestryl ubliol Land I AARD I I I II|I I I I l| ulturel I Workel Use I I I

TASSIUI I - planning, *gt. syetems | | IAOJUCT a)ORDIMATION OPtICx (Poo) a NZU/Kvaluation ystes II I development/guLdance || | Project OCordinator | - technical aseletance |I | Planning Officer | | Technical Assistance | through line officeL |I | tlIS/evaluation Officer | | Cntractor I - annual budget prepsrAtlon/| | finance Officer | consolidation |

District |Chief | DLitrict Guidance Teame

__ __ _ __ _I I oo IVsatiIce I a a era randsI-_-_-_-_-_-_-_-_-_ - Chair-I Chairl Becre-I I ood Estate Llve- |ub- Coope- | |g pimprI | n man tary I PU I Cropse Crops stock SIAT | rativeg AIRD uje|gPlanning Officer | I

I MIs/tvaluation Ofticer I

I finance Officer I I_ ,--I I

I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I

I I I F.PK. P. P. IFP U | Pwod CroDa I Livestock Leatate I 801l Conservation AIRO | I A A R D

II -I I IField LaboratoryI

I Acca n |I Itad.I

T1_-~~ o p ___ On-asteI I Research |

I irct to xpanelon Area. I L .I gxpanelon I I Expanmlon I I Expansion I

Are I I Area I I Agea I

11462lijoy#6/28/84

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3.17. Conservation access roads and seed procurement will beimplemented at the district level by various technical agencies under thegeneral management of the respective Project Manager and ProjectManagement Units. These support activities will be carried out in theidentified expansion areas. Access roads will be executed by thedistrict Public Works offices, assisted by district Manpower offices.Seed procurement will be managed by the Project Manager assisted by thedistrict representative of the Ministry of Cooperatives and othertechnical agencies involved in seed production and distribution. TheProject Innovation Fund will be managed by the provincial ProjectCoordination Office. Each component activity carried out at the districtlevel will be under the full-time management of a Sub-project Manager.

3.18. Management of the SUPS pilot project presents a particularlydifficult problem, since four technical services from two ministries playimportant roles. To insure unified management of the SUFS pilot project,the FXPP will assume overall responsibility for the coordinatedmanagement of the component. For SUFS pilot project activities, thechairman of the FIPP will report directly to the PMU Project Manager.The FKPP will appoint a senior representative from one of theparticipating services as the full-time Sub-project Manager who willmanage the SUFS project including daily supervision of participatingtechnical personnel from all four services.

3.19. To Insure the timely and coordinated implementation of allthese related activities, the respective PMUs will schedule regularsupervisory meetings with all Sub-project Managers as well as meetregularly with the FXPP and district Guidance Teams. Also, each year aconsolidated plan and unified budget for each district will be preparedunder the leadership of the PYU Project Manager. This will be submittedfor review and approval to the respective provincial Project CoordinationOffices and Guidance Teams.

3.20. The training components of the project will be centered inJakarta and managed by a full-time project officer housed in theExecutive Secretariat. This centralized management is necessary, giventhe large number of possible institutional sources of training, most ofwhich are not located in the project area. Each province andparticipating district will identify Its training requirements annually.The Project Training Officer (PTO) and the Interagency Training ComMitteewithin the Executive Secretariat will assist provincial and districtauthorities in formulating training plans. The P7D will be responsiblefor identifying appropriate institutions to carry out the training.

3.21. The agriculture research component will be managed by theAgency for Agriculture Research and Development (see Chart 2).Headquarters and research facilities will be established in Central Javawith up to eight outreach sites located throughout the Jratunseluna andBrantas Watersheds in representative agro-climatic zones. Research andextension will coordinate through frequent meetings of AARD personnel andproject officials at the provincial and district levels. AARD staff will

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attend provincial and district Guidance Team meetings as well as meetfrequently with the district FICPPs. On sits research by AARD personnelwill be coordinated with the extension teams working out of the ruralextension centers. An annual provincial review of AARD' s researchprogram will be held to insure close linkage between research andimplementation personnel.

3. Unified Budgeting

3.22. The GOI, IBED and AID have agreed in general terms on afinancial system for the project that will minimize budgetaryfragmentation, an issue that has plagued the AID financed Citanduy IIProject. During Project Year 0 (IFY 84/85) this unified financialsystem, which is expected to utilize the Inpres Dati I funding channel,will be fully defined and made operational. The outline of thefinanciaL/budgetazy system presented here is more fully elaborated in theFinancial Plan, Section V.

a. Inpres Dati I (Provincial Inpres Program)

3.23. The Inpres Dati I will be used to finance the SustainedUpland Farming System component, the Access Road component, the Trainingcomponent and the incremental operating expenses associated with theProject Executive Secretariat, the provincial Project CoordinationOffices, the respective district level Project Management Units, FXPPsand participating rural extension centers. The GOI has agreed to modifythe appropriate Inpres Dati I Ministerial Instructions to accommodatethis broader range of expenditure categories.

3.24. The GOI, IBRD and AID have agreed that the overall ratioof financial support for the project should be approximately 40% from theGOI and 60% from the combined 1BRD and AID contributions.

3.25. With the guidance of the provincial Project Coordinatorand the provincial Guidance Team, each district level Project Managerwill be designated as the responsible officer for the management of theInpres Dati I budget. Project Managers may alter any line item of thebudget by 10% on their own authority and an additional 10% subject to theapproval of the provincial Project Coordinator.

3.26. Each Project Coordinator will be the authorized GOIrepresentative responsible for both AID and IBRD grant/loan funds used toreimburse all project activities pre-financed by Inpres Dati I, with theexception of the training component as discussed below.

3.27. (1) Sustained Upland Farming Systems Component: InpresDati I funds will finance the recruitment of additional PLP extensionpersonnel; the establishment and operation of demonstration farms; seedproduction, procuresent and distribution; the development of grass andtree nurseries; the distribution of planting materials; expansion programsubsidies; incremental operating expenses of participating ruralextension centers associated with project execution and unforseen needsof the project.

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3.28. (2) Conservation Access Roads: The Inpres Dati I budgetwill finance the project's conservation access roads. These funds willbe under the management of the Project Manager of each district PMU. Thedistrict Project Manager will transfer implementation authority each yearto the district Public Works Department (PU) for the construction of theaccess roads. PU will be responsible for designs, specifications andcost estimates, assisted by the district Manpower office to insure thatappropriate labor intensive construction methods are employed. Thedistrict Public Works office will be responsible for the force accountconstruction of all access roads.

3.29. (3) Training Program: The Inpres Dati I budget willfinance all training activities. A full-time Project Manager of thiscomponent will be appointed and housed within the Executive Secretariat.Funding for field training directly implemented in the project area willbe subr-allocated to the district Project Managers.

3.30. (4) Operating Expenses: The project's incrementaloperating expenses financed from the Inpres Dati I budget will includecost of data generation and analysis for purposes of project monitoringand planning and counterpaxt rupiah financing for technical assistance.

b. Ministry of ALriculture

3.31. Incremental support and agricultural research staff willbe funded by the MOA. Agricultural research will be directly financed atthe national level through a regular Agency for Agriculture Research andDevelopment (AARD) budget proposal, supplemented, where necessary, bydirect budgetaxy pre-financing from the Ministry of Finance, to cover thedonor reimbursable components of the research activities. Prior tobudget approval, the annual research plan and budget will be submitted tothe provincial Guidance Team in each province for review and coordinationwith other project components.

3.32. The Ministry of Ayriculture will provide, through itsregular budget process (DUP/DIP), the annual budget to finance allprovincial and district agricultural personnel (managerial, i.e., SUPScomponent Sub-project Managers, technical and extension staff) requiredto carry-out the SUPS pilot project.

c. Ministry of Forestry

3.33. The Ministry of Forestry, through the Directorate Generalof Reforestation and Land Rehabilitation will provide the incrementalbudget reguirements for soil conservation personnel (PPL and PPS) andfunds for land suitability and capability studies, including aerialphotography and mapping as needed. Appropriate activities in this lattercategory will be eligible for reimbursement by AID and IBRD loan funds.

- 61 -

4. Community Management

3.34. Communities will be encouraged to propose and organize theirown collective efforts. The Project Innovation Fund will encourage grassroots community initiatives consistent with the general purpose of theproject.

5. Proposed Project Organization Structure (see Chart 1)

a. National Level

3.35. (1) The Ministry of Home Affairs as Lead Agency. Theproject will be organized under the direction of the Ministry of Homeaffairs. The Ministries of Agriculture and Fore.try will be adjutant,supporting agencies responsible for providing technical, administrativeand policy support to the project.

3.36. The principal task at the national level will be to putin place the overall policy framework to govern the execution of theproject. A second task will be to review the annual progress of theproject and, based on that review, approve the consolidated annual planand budget for the project.

3.37. (2) Executive Secretariat and MHA, MOF and MOA BackstopSuppprt: The Executive Secretariat of the project will have full-timestaff to administratively backstop the Upland Agriculture andConservation Project. Por this purpose the Executive Secretariat will bestaffed by two full-time professionals from the Director General forRegional Development, Ministry of Home Affairs, and one professionalstaff each from the Hinistry of Forestry and the Ministry ofAgriculture. Additionally, the designated Project Manager for thetraining component of the project will be assigned to the ExecutiveSecretariat. The tra4-4ig officer will be designa-ted as the authorizedGOI representative for the application and use of AID and ZBRD fundsbudgeted for training under the project.

The tasks of the Executive Secretariat will include:

- drafting for consideration and approval of the involvedministries the required Interministerial Instructions (SX3) or ministryspecific guidelines for project execution.

- the annual review with designated repres-ntatives fromthe Ministry of Population and Environment (XLH), Ministry of Finance andBAPPENAS of eacb provinces' performance in the preceeding fiscal year andproposed plan and annual budget for the coming fiscal year.

- maintaining close liaison with participating provincialand district governments, participating ministries and with USAID andIBRD to resolve administrative or financial problems impeding projectimplementation.

- 62 -

b. Provincial Level

3.38. The Governors of Central and East Java, or theirdesignes, will be the principal decision makera responsible for overallproject direction and performance. Authority for program management,with the exception of the research and training components of theproject, will be delegated by the central government to the twoprovincial governors. To insure effective planning and execution of theprois-. the governor of each province will redelegate authority topr.2wircLAl level institutions and overall field planning and managementresp_ :X;bllty to participating district chiefs and their respectiveadiinistrations.

3.39. (1) Provincial Guidance Team. At the provincial level,each governor will create a provincial Guidance Team responsible for:

- the design, installation and refinement of adecentralized planning/management system to increase the capacity ofdistrict governments to plan, manage and monitor f4ild programs in uplandagriculture and conservation;

- the establislment of standards against which performanceof participating districts will be reviewed and upon which budgetdecisions will be based;

- the development of capacity within each provincialadministration to carry out basic monitoring and evaluation studies,constraints to implementation studies and process evaluations;

- the annual review and recommendations regarding eachdistrict's operational plan and proposed budget;

- providing technical assistance to participat4ng districtadministrations in technical fields and planning and management;

- preparation Cbeginning in Year 3) of a long-tern,comprehensive upland agriculture and conservation plan and program.

3.40. (2) A Prolect Coordination Office will carry out thepolicy instructions of the provincial Guidance Team. The governor willappoint as its head a Pr6ject Coordinator who will be the authorized GOIrepresentative responsible for the application and use of both USAID andIBRD funds used to pre-finance or reimburse all project activities, withthe exception of the research and training coqponents of the project.

3.41. The Project Coordinator in each province will also be theauthorized GOI representative for the application and use of IBRD andUSAID grant and loan funds to finance provincially based technicalassistance contracts Cboth dmestic and international) and the ProjectInnovation Fund.

- 63 -

3.42. The Project Coordinator will be supported by a full-time,three person staff drawn from relevant sections of the provincialgoverment. This staff will be compoted of:

- a planning officer with broad experiance in agricultureand rural development;

- a monitoring/evaluation officer with professionaltraining in economics and statistics;

- a finance officer with professional training inaccounting and finance.

3.43. Each participating prtivincial technical service willdesignate a professional staff member to serve as that agencies'representative to the Project Coordination Office to insure coordinationof each line aSency's activities.

3.44. All requests for IBRD and USAID reimbursement for projectactivities executed under the authority of each provincial governor willbe forwarded to USAID/IBRD, via the appropriate national ministries underthe signature of the respective provincial Project Coordinator.

3.4. Technical Assistance (see Section IV) proviWd tc. emachprovince i-ill be assigned to the provincial Project Coordination Officeand placed under the direction of the respective Project Coordinators.

c. District Level

3.46. (1) District chiefs of each participating district willbe responsible to the provincial governor for the overall planning andcoordinated implementation of the project in their respective districts.

3.47. The district chief wll' be authorized to modify andstrengthen the district Forum for Coordination of Agriculture Extension(FXPPJ, whi-h, in addition to its regular functions, will be the districtlevel steering and coordinating body =esponsible for the overalldirection and perforance of the Sustained Upland Farming System (-SUPS)couponmnt of the project. The FXPP will recomnend app-intment of asenior professional from one of the four participating technical services(i.e. Fool Crops, Livestock, Estate Crops and Soil Conservation) to serveas the Sub-project Manager for the SUPS pilot project. The districtchief will be responsible for the final decision on this appointment.The PKPP will meet at least quarterly to revIew project implementiationperformance and problems and to approve plans and budgets for the ,UFSpilot project prior to su"bission to the Project management Unit.

3.48. (2) A district Guidance Team will be c=eated by eachdistrict chief. Its primary function will be to serve as a steering bodyresponsible for the overall direction and performance of the UACP. Theteam will meet guarterly to review performance and problems and toapprove, prior to submission to higher authorities:

- 64 -

- medium-range program plans;- the annual project budget;- the annual training plans- the annual agricultural research plan;- quarterly progress and financial reporta covering each

component of the project;- the annual prc 'ect report and evaluations.

3.49. (3) The Project management Unit (PXU) will be headed byan experienced Project Manager, recommended by the district chief andapproved by the provincial governor. Be will be responsible to thedistrict chief for directing the interagency planning and programexecuztion. The Project Manager wlll head a small, full-time staffcomposm-l of a plan'nig officer, a monitoring and evaluation officer and afinamca 4fficer, who will have qualifications comparable to theirprovincial level counterparts. These personnel will be drawn from theexisting staff of each participating district government and assigned towork full-time undor the direction of the Project Manager.

3.50. The Project Management Unit will assume directresponsibility for the training component and the Project Innovation Fundat the district level.

3.51. In conjunction with participating technical agencies, thePHU is also responsible for:

- periodic generation and analysis of technical andsocio-economic data for project planning (including land use andcapability surveys);

- formulation and integration of annual and medium-te-plans;

- preparation of a consolidated annual budget andsupervision of disbursement of the budget to participating implementingagencies;

- coordination of all project components with specificemphasis on establishing co-mnication among implementing agenciesresponsible for execution of i"divIdual components and betweenimplementing agencies and project beneficiaries;

- preparation of training requests for district managementpersonnel, technicians, and extension personnel and the coordination ofdistrict training' requirements with the training component ProjectManager;

- preparation of a comaunity management program toencourage fo-xation of comunity farmer groups and their involvement inprogram decision making;

- 65 -

- solicitation, review and recommendation for approval ofprojects to be financed under the Project Innovation Funds;

- periodic monitoring/evaluation of all componentactivities executed under the project.

3.52. (4) The Technical Agencies will be responsible for thetwo remaining components, Conservation Access Roads and SUPS, each ofwhich will appoint a full-time Sub-project Manager. For access roads,the lead agency will be the Public Works Office in each participatingdistrict.

3.53. The SUFS component involves four technical agencies,three district technical offices, Food Crops, Livestock and Estate Crops,and the Soil Conservation Service. As noted in para. 3.48, each FXPPwill appoint a representative from one of the participating agencies toserve as the full-'ime SUPS Sub-project Manager. In addition, eachparticipating agency will appoint a full-time person to be responsiblefor its contribution to the overall field program. Coordination of theactivities of these four technical agencies will be the responsibility ofthe Sub-project Manager and the FKPP. While the three agriculturalagencies are already members of the PKPP, arrangements for the inclusionof the Soil Conservation Service in the FKPP will be required prior todisbursement of funds.

3.54. The responsibilities of the Sub-project Managers andtheir respective line agencies include:

- preparation of annual technical and operational plans;- preparation of the budget to implement the plans;- implementation of component activities in line with the

consolidated implementation schedule develcped by the PMU;- preparation of quarterly progress and fina=Jial reports;- preparation of an annual report detailing implementation

perf o-ance.

d. Field Level

3.55. All component activities of the project will beimplemented in designated expansion areas. All exten ion work, plantingmaterial development, demonstration and expansion program activities willbe executed through participating RECs under the direction of each RECsupervisor, advised and assisted bu subject matter specialist (PPS) fromthe three agriculture technical services and the Sub-Center for LandRehabilitation and Soil Conservation. On-site agriculture researchcarried out by AARD will be conducted in representative expansion areas.Conservation Access Roads, under the supervision of the respectivedistrict Public Works offices will Likewise be constructed in designatedexpansion areas.

- 66 -

*. Aqriculture Research

3.56. The Agency for Agricultural and Development (AARD) willformulate and coordinate agriculture research policy for the project.AMRD will be supported in fozmulating its research priorities by therelevant Directorates General within the Ministry of Agriculture (MOA),the MOP Directorate General of Reforestation and Land Rehabilitation andselected agriculture colleges. Chart 2 presents the general relationshipof the AARD to the overall project management structure.

3.57. A Farming Systems Research Project Management Unit (PMU)with a team of five specialists will be appointed by the head of the AARDto provide technical support and leadership in their areas of expertise.One member of this team will be appointed full-time Project Leader. ThePMU will receive technical support and leadership from the relevantresearch centers of AARD, as well as from elements named in the previousparagraph. In addition, the PHU will coordinate with the respectiveprovincial Guidance Teams and the district level PXPPs, the SoilConservation Service and other project related agencies. This willprovide the necessary liaLison for exchange of information on projectneeds and feedback on implementation of project researchrecommendations. Field coordination between onr-site research andparticipating RECs will be stressed. (See Chart 3.)

3.58. The PMW also will establish close coordination with otherprojects Involved in upland farming and soil and water conservation,particularly with the Solo, Citanduy II and Jogyakarta projects. TheSolo Project is directly associated with the BRLIT soil conservationresearch and as such will be included in the overall research plan to besubmitted to the Provincial Guidance Teams and AARD. The Citanduy I: andJogyakarta research components will be eventually incorporated into thelARD structure for farm4mg systems research.

3.59. a headquarters with research facilities will beestablished within one of the target basins, on a location representativeof a major ecological zone. The preferred location is within a radius of20 km from Ungaran or Salatiga, in Central Java. This will providecomnmnication and logistic support to the field research and supportstaff. A sub-headquarters will be established in the Brantas Basin,preferrably in Malang. Subsequently, the Citanduy 1: and Jogyakartaresearch components will constitute the headquarters for their respectivewatersheds.

3.60. In addition to these facilities, eight onr-ste researchplots (OSR) will be eatabliahed on areas representative of the majoragro-ecologial and socio-economic conditions found in both river basins.Partitioning the target areas by biological and socio-economic categorieswill ensure that OSRs represent the target areas.

- 67 -

Chart 2Farming Systems Research Component Organixation

I Xnter-Ministerial| t .olicy Committee

I I

I I

T_________ _I , Advisory Board: I-Central and East Java I I | Research Centers o| Provincial Guidance Teams I | Ministry of Agriculture |

I I --- ---- I (DGPC, DGIS, DGE) || | I Ministry of Forestry I| | I(Dir.Soil Cons., BRLaKT)

I I I Agricultural Colleges |

.I IX abupaten Forum | | Research Project

I for Coordination I I Management Unit (P1W) II of Agricultural |---I Project Leader IExtension (Modi- | | Technical Team |f ied) FXPP4 I T I I

I I I II~ I I 1

| Brantas Head- I |lCitanduy _I Jogyakarta I I Jratunselunaquarters I I Project | I Project I I Beadquarters &

I I t | I Field Laboratory I

I OSR loSRI |OSRI |oSRI loSRI IO OS 10|SRI COSRImT --r rT m r r -7 -I lI

I|a Cs I RE C

#4200A

- 68 -

chart 3Research Personnel

Degree Number

1. Headquarter/Field Laboratory (Salatiga)Project Leader Ph.D. 1Project Secretary Drs./SH 1Component Research Coordinator Ph.D./MS 5

- Ebod Crop (1)- Tree Crop (1)- Livestock Cl)- Soil (1)- Socio-economic tl)

Statistician Ir./kS 1Training Officer Zr. 1Senior Staff Ir. 2Office Personnel BS/SMA 8*ield Assistant SPMA/SNAXMA 10Driver 3

2. Branch Office (Malang)Coordinator Ir. 1Research Staff Ir. 1Office Personnel SMA/SPPA 3Driver 1

3. Project Sites (8 sites)Coordinator (1/site) Ir. 8Research Staff (3/site) Ir. 24Field Assi--nt (12/site) SPM& 96Office Personnel (2/site) SMA/SPMA 16Driver (1/site) 8

- 69 -

6. Key Project Staff

3.61. Table 19 lays out the key staff required on a full-timebasis to implement the major project components. Additional staff willbe needed in certain categories (e.g. technica' agriculture personnel andextension personnel) either when there is no on-going program or wherethe existing programs are too thinly staffed to spare personnel. In

other cases (e.g. the provincial Project Coordination offices) it isexpected that existing provincial government personnel can be reassignedto fill full-time project positions. It is not certain that districtgovernments can free sufficient qualified personnel to staff the ProjectManagement Units. Discussion with BAPPENAS indicates that the GOI isprepared to consider additional staff in all categories to meet therequirements of the project. This important requirement will bespecifically addressed during negotiations.

IV. TECHNICAL ASSISTANCE REQUIREMENTS

A. Purpose

4.01. Technical Assistance will be provided to support the Ministriesof Agriculture and Forestry and the Executive Secretariat at the nationallevel. TA also will be provided to support development of managerial andtechnical capacity at the provincial and district levels. Finally, acollaborative agreement between AARD and a consortiunm of internationalagriculture research institutes will be financed by AID to strengthentechnical exchange in the field of farming systems research. A profileof planned Technical Assistance is presented in Chart 4. The TechnicalAssistance budget is presented in Annex 5, Table 4.

1. Provincial Level Technical Assistance

4.02. Technical assistance supporting provincial and districtoperations will be provided by a direct USLID contract with a US oreligible 941 country company, a joint venture or a sub-contract. Thelevel of effort will be approxtuately 70 person years of service of whichabout half will be externally recruited consultants and half composed ofIndonesian consultants.

2. Farming Systems Research Collaborative Agreement

4.03. The Farming Systems Research co)mponent will be supported byan AID financed collaborative agreement between AARD and IRRI,representing a consortium of international agriculture research centers.One long-term senior scientist will backstop the farming systemsresearchu commodity and discipline oriented scientists will provideadditional support, working with AARD countexparts for about two monthseach year for each commodity/discipline. The overall level of effortwill be approximately 12 person years.

- 70 -

3. National Level Technical Assistance

4.04. Three long-terz specialists from the United StatesDepartment of Agriculture (USDA) Soil Conservation Service will beassigned to the Executive Secretariat. They will assist: a) projecttraining and materials development; b) the MO? in conservation planning,management and policy formulation; and c) the Ministry of Agriculture inupland agriculture plann;.ng, management and policy formulation.Appropriate short-term asaistance in specialized disciplines will also befinanced. The overall level of effort will be approximately 12 personyears.

V. COST ESTDHATE AND FINANCIAL PLAN

A. Cost Estimate

5.01. Total project costs for Phase I are estimated at US$ 50.1million of which $14.1 million is the foreign exchange component.Because of the tax-exempt status of the implementing agencies, thesecosts do not include local, provincial and national' taxes. Of the totalcost AID Wll contribute $18.9 million, $5.0 millioi. as a grant and $13.9on a loan basis. The IBRD will provide a loan of $11.3 million. The GOlcontribution 'in kind and In rupiah will total $20.0 million, or 40% ofestimated project funding. The 'in kind' contributions from the projectbeneficiaries, e.g., labor and land removed from production, have notbeen included in the project cost estimates.

5.02. Tables 20 and 21 sunmarize the overall project costs by foreignexchange and rupiah requirements and by sources of financing. A 10%contingency factor has been added to the project's base costs. Aninflation factor of 7% compounded has been applied to the base costs andcontingency line item. Total price contingencies for the seven yearperiod will be 21% of baseline and contingency costs. A summary ofproject costs by year is presented in Table 22. Details of estimatedcosts are presented in Annex 5, Tables 1-8.

B. Methods of Financina

1. Introduction

5.03. Special attention was given during project design to theappropriate allocation of MBRD and AID funds among the various componentsto insure the efficient disbursement of funds and the proper accountingof both AID and IBRD resources. To judge which source of f4nancIng foreach project component was appropriate, a number of factors wereconsidered. Among these considerations were:

- GOI preference to use AID funds to finance technicalassistance.

- 71- -

Table 19UPLAND AGRECULTUR AIND COmSERVATiON PROJEC?

FULL-TIME PmOFI5SIOIAIL AttD EXrE'lSION STAFrING RE IRIN iNsINCAEHENTAL/YEAR 1/

lltAR l |IYY 1984/s51 1985/86 1 1986/87 | 1987/8m | 1988/89 I 1989/90 I 1990/91 I |_ OULAYIVE |I- - POSITION | I___ 2 3 _ _4 5 6 7 TOTAL |

A. National Iovel 4 1 _ _ _ _________

L . EKecutLve 50crot rlat | | I | | | I I2. Taimlg 1Nciwnt(rAt A)aL/ n2 ...n. . . - 1 -- ………… … Z --- --------- 2b.In. of oreestry I ------------------I---------I------------------------I--------------a. Min. of Agriculture i, -1 -- ---- ------------------------- --- |

| 2. Traltg Ceopornt Pcoject t4arager Ageney 7)1 | 1 --I1---------1---------1---------1---------1---------1---------1---- -----II

3. Agriculture Research Coqonent (AARD) I | I I| - ProlectP eaderojoxt I dI -- - --a-I-- ---------.--------- I------------------------------------ --- --I -fProject Tm _(PhDMA) 5 I 5 ----- ---- - ------ --------- -- S |

D B. rovinCias Level (Central and Bast Jav| 1. Project Coordinator x 2 | 2 -- |---------|------- ---------- - - --------- -------- I --

2. Project Planning Officer x 2 2 ------------------ I---------I------------------I------------------I 23. ProJectt NIS/1valuation Officer x 2 | 2 I . .-- - ------- --------- ------------------ l--------- -- 2

4. Project Finnce OfIscet x 2 I ---------- --------------------------- -- I----------------I 2 I

IC. District Level I I I I I I I I I I1. PHUNAASENT BTArr||||||||||

| a. Project manager | 4 --------- 4 ---------1---------1-------- -- --I * Ib. Project PlanningOtfficer --1------- 4 -- I----------------I------ -I -1------1--------- --- I

| e. Project MonitorLng Officer I 4 -- …----I--- 4 ---------1-------------------------------------- Id4. Project r:nance Officqr 4 -- ---- I 4 I---------1I-------- ---------1- ------- --_ - --I

2. AgrLiulture + rorestry TECHNICALltAP? j/ I I I I I I I I I Ia. PM ood Crops 4 --------- 1 4 --------------------------- -- ------- I

I b. PPS PUAS I 4 II 4 I-----I---- * ------------- i --ea.PlM LLveatock I 4 --------- 4 ---------|---------|----------------------------

I d. PMP *tate Crops 4 |-.-| 4 1-----…- … I…-…----S-I----- _ - - ---- - -I I I 1 1 I 1 1 1 I 1I 3. IP P ANAaLENT TEXmNSIO STAPtP 10 RfCs) 2/ | I | I I I I I I| a. 3xtension Hanasere PR4 l 10 16 | 24 I 22 …---------I---------… ------------------- 72 || b. PPL/PLP gxtenslon Agents s 5o | SO | 120 110 ……|-----------… ----I 360 1

c. Ilursery Statf KO/KOA 4 I _ 4 j 2 j _ | | I 10 I

I I 115 I 96 110 1341 I I I I 525 I

j Includes staff reqaired in 1986/S7 for anticipated expanaion into four more districts.2/ Inremental staff reqcireeente by the year reqaired.* Exaluding AARD Rosearch Staff (found on chart 3, p. 92)

11462hijoyiG/21/14

Chart 4TICCMICAL ASSISTANCE SCHEOUL6

(Month shove beginning of servLee)

1. Provincial Lcvcl TSchnical Assistance

Origiln Year 0 Year I Year 2 Year 3 year 4 Year 5 Year 6Planner/Team LEader (Sr. 3 xpat Novexber 84Planner/Team Leader Rxpat Feb.85MAnagesent Specialist bxpat. Jan. 65

Management Specialist expat Feb. 95AhmInistrative Assistant Indo Jan. *5Admlnistrative Assistant Indo Feb. 95Roads Engineer Sxpat Apr. 85 CScnds Production Advlior Ixpat Jun. 94Agriculture Econosist Indo tar. 35 _---Agriculture Economist Expet Now. 84txtenslon Agronomist Indo reb. *5Extenelon Agronolnet Uxpat Feb. 85

Treecrops Specialist Scpat Apr. 85 -Livestock Speciallst Expat Nov. 94Special Short term coneu tants an

needed

2) rarming system Ree-amh Collaborative Agreement

Senior Soientist for ara lng Systens Nov. 64Five SpeclaLlate eacht two months per year April *S

3) Executive secretariate Technical Assistance

Specialist for Training and Nov. 4 __4__

Katertal DevelopmentConsultant for conservation planning. April 85

management and policy (*OA)Convultant for Conservation planning. April *5management and policy (Nor)

Short-tezu Technical Assistance Apr1i 95

4l462A%joyv6/28/64

- 73 -

Table 20Upland Agrlculture *rel Conservation Proiect

Deaarlptlon of costs byCguponents foreign laxhanqe and LWcal Cotste

I I Rp Ilillon aII ______ _ U.S. 1000 __ T I of | 0 of Total |

I Project Component | Loal 1 IoreIqn I Total ||Local I orign ooreiqn Ex. Base Costs |

I nstitutional Development k 5386 I 63968 13776 II 5388 I 6388 I 13776 II Sg I a I

| Nktional IAvUl uIxecutive Secretariat (216) | 173 (2333 II (2163 1 (171 1 (2331 II I I| Provincial level OrgJniaatiou & Mgt. (919 I (63 1 19623 II (9193 1 (6331 I (9023 II I II Distriet Level Organization 1 Ilt | (16913 (1923 | (1983) 1I (16913 3 (1923 1 (18833 II

Technlcal Assistance 3 (2563) I (91163 (106793 II (2563) | (9116) I (106793

rraming SySLOtS Research Component 1 3283 1 311 1 3616 11 3283 1 333 1 3616 II 2 I 10 oInvesetant I is5 1 (T17031 I 2 56) I (85)1 (1701 ( (2561 - I 3| Research, Training and Recurrent Coats (31983 (|G1633 1 (33613 II (1993 | (1633 (| 3611 II I I

Sustainablo Upland Farming Symees t e | I I I II I II rllot ProJects (Includiny Cooperative | | | II | | I I |

soud Dovolnpuent) |1 10599 I 914 I 11513 I 6 3 32 I

Inve itsent | (723 (9143 I i93161 II (72) | (914) | (966) II |Rn.wrtent iO*.uat 142283 (422631 1 I (42283 1 1SUvS Subsidy | (62993 (62,193 3 162993 (62993 I I

I~~~ I I 11 I II I I| Ikuan Resources Development Coaponent ; 1213 | 1032 J 2245 I 1213 I 1032 I 2245 7 2 7 | 6

Consurvation ALcuse Roajjds QWa',nant 4344 1 66 I 4410 II 4344 3 66 I 4410 II 0 I 12 I

I Project linovtlon Funfl (PIF) 3 400 100 3 500 3 400 100 500 II I

Total Idea C ts | 25227 I 10633 3 16060 II 25227 | 10933 3 36060 II 76 I 100

I Contingencles (109 ot base cost) I 2521 1083 I 3606 II 2523 1063 I 3606 I 8 I 10 I

1 Price Contingencies 177 compounded) | 8234 | 2236 | 10470 I 9234 3 2236 1 10470 I 16 I 29 |

| URD Loanee r | 100 | 100 I | 100 I 100 I | I

I nTOAL PROJECT awTs 3 25984 | 14252 | 50236 II 35964 | 14252 | 50236 139I I u.. I ..... I ..... I I *" I . _ .I *..... I I I I

* Due to rounding line Items wLthin components may not add.

11462Asjoys 7/2/I4

. 74 -

tabl 211

2I2anil Agriculture and Connervatlion Pro ect!T41yise Flnancing 1evolo by O,u.ntt AID/IUWOOP

9 i -I I II I-Targt I I I I

I|tOJOet CowoInt I A I D I lanD |ol I Total I D r/WZ I A I D | iu I |oo I TotalIGrant I IIU Loani___ !~~tIGet la

I I Or nt~ I In_ I lI | | I IInirLnana n I n I I II~~~~~~~~~~~~~~~~~p 1 illoan -- 1--~ 3--------- us oeo - --

9 . Institutional Developmnt I 4400 I 516 1 1 421 | 15776 1 69/31 I 4400 9 5163 4 I 4211 I 13176I tlalional velk Uesoc. S 1 171 I 216 233 1 1 171 I 7111 .. m I

I provincial Lvel org. 6 Mgt. I 1041 1 070 1 902 1 I 1 1041 1 171 S161| Ollstriot Lvel Or. IMgt. | | 326 s | 1SS | 1683 1 | | 326 | | 1555 | 1283

Technicaol Asiotan I 4400 1 4714 1 1 1565 I 10679 1 1 4400 1 4714 1 156 S 10619

I 11. Fanmng Systow Reeoh Coarc I h 707 1 1000 1109 3616 1 69/31 1 1 707 1 100 11 369 16| Knwsefit.nt | I | I11 i I I |T I I l11 i -as *0| 1

PA em.e trg. a Recurrent Costs | 536 1720 | 1109 | 3365 | | 1 536 1 1720 i 1109 1 3265

11. SUrg PlIat Projects I 4665 1 2526 1 4300 1 11513 6 63/27 1 1 4685 1 2526 i 460o I lst1 slIvestment I 9 5111 1 72 1 ii I 1 1 172 - "II Amurrent ost I I I I 42291 4226 1 1 1 1 42261 422.1

Uts ubdidy 3 9 3771 2520 | 6299 | | 37711 2521 | 6299|

I tV. mian eoasrces Daev .I I 1300 94I 2245 56/42 I I 5 13001 9451 2245I

I V. 0oobeatlon kccess FASAm -. I6 2472 I 1872 1 4410 | 56/42 A 66 At 2.' 1672 1 4416 I

| Vt. roiset Innovation and P Pa I 500I I I I aSOO 100/0 I SOO I SOOI

V. Total ease colts 900 101121 I 100 I 12439 I 36060 I 66/34 4 906 10621 l 6100 I 12439 1 36060

I Vtt. Pwysical Ctotkoncies I 509 1u62 1 906I 1594 I 3606 I 56/44 L O I l I 900 1 1594 I 36S I

I xX. Totat ease co t# Phaleal ost 4950 I *f 16 I 9000 I 14033 I 364%6 $ 6S/35 4950 9 11663 I 9000 1403 3 3646 I. _pric___nt_ _ _ncle_LO_ I 5I 2200 6003I 10470 I 43/57 I 50 I2217I 2200 I6002I 10470!

i Xl I Dlonh I I I 100I |a 1009 | I o 100 i I 1i6i

I Xtl. WMAL. OOtC? Q g1 I SOO I 13300 I 11300 I 20036 I 50236 I 60/40 I 5000 I 13900 I 11300 I 20036 I 50216 I

. ~ ~ ~ ~ . . _ ____ _- _I _ * Due to rounding line item within coqooentn way not add.

*1462Asjoyi6/28/94

Table 22l.mav o Eatastd Itlac aote by Prtaect Year*

IS illionI

I Pr~~Iect Vyer Irvt.....L...1 Ii i Total I TotalI Pro¶ect ~~~~~~~~~~~~ Ws Is1 ~ SG O41 _____4_ 6vs 41 e90 9o0i M.000000 I- U86oso

IInstitutional DevelevM"t tI 2.1 I 266.'1 2636.6 I 211.6 211. 169. 6 IG.S 1062.0I 13775.7 13175.7

INational Level Eamautiye SCcretariat I 50.4 3 0.4 3 0.4 3 0.4 3 0.4 3 0.4 3 0.4 I 222.6 222.6 rcovincial Leovel 0vlavi1utistlo IL *I.t. 2603. 1223.1 126.6 126.6 126.60 126.6I 126.6 901.6 I 961.6

IDistrict Level 0rg4nhsation a Ngt. 245.2 I 152.4 I 152. 4 I 416.4 I 04.6 I 304.1 I 04.6 I 1612.1 1662.6 ITachatcal Assistance 426.23 2324.4 I2224.4 I2114.4 I1724.4 I1105.6 599.0 I 10676.1 10616.1

IcmI -iats hee I g nn 171.1 I jj6 I 46.7 I 45.1I 441.1 I 441.7 3 61G.3 3 616.3

t nvestment I 164.01 55.0 I IIII 239.0 239.6 IIesearob, Tranina arA meourcent Oowt. 567.1 I 41.?1 456.17 456.17 451.7 I 441.7 I 441.1 I 277.2 2371.2

s ustainable Ulplauk Farming lystma IIIII IPilot Projects (including 2=1peraive IIIIIIIa

86U8e Dev.lcjp.nt) M 0.1 I SuSA 1241.6 IG162.4 I 2232.7 I2692.6 I2184.3 11512.3 I 11513.3

iInvestment I 06.0 I 16.0 I 20.6 62.6 7 25.6 I 25.6a mcrn cos 456.7 1 326.6 a 532.0 1 717.81 I 720.8 1 720.6 I 730.8 4221.1 4227.5SBursU lubeldy I 9.6 111.2 I 89.0 I 61.60 1491.9 I1962.0 I1452.6 I 6299.2 629.23

ISued lProcemoLng Operation I 120.0 I 120.0 II I1 260.0 I 60.0

Hutman Rkuoumces 0.valop.int Comporntn 40.2 I 219. 292.0 ga442. a s G5., I la2. 6 a 210.4 I 2244.5 2244.S

Ionservaktion Asceses Made Me@n5fnt I 66.0 I 5.9 I 22.1 I 622.5 I 950.5 I 102.9 I1198.0 I 4409.9 I 4409.9

Protoct. Innovation Fund (in II 1 100.0 I 0100.0 00.0 I 10 0.0 I 100o.0 500.0 L500-.0

Total Base costs 2113.6 14114.2 I5206.6 I 066.2 I 670.1 I6230.6 I5257.4 I 36060.1 I 6060.7

wntingenoies (109 of big* cost) 271.4 I 411.4 I 520.9 I 606.6 I 67. 0 I 622.1 I 525.7 3 606.1 I 3606.1

Total Base Costs _ __nt_____nei__ 29S115S6 529.5 6672.6 I7007.1 I6962.7 S 783.1 a 39646.6 3966G6.6

P r ice O.sttlsjunmies 179 cumP&und*4) 31I ii.. I 620.2 I150L.4 I2117.6 2603.2 2640.5 I 10469.9 I 10469.9

tI 111)141) IaJ r,u aiI aI 100.0 I 100.0

I flrAi. nairL)eL?uri 2984.0 I4842.4 I6559.7 0 174.2 I9164.9 I9766.9 I6623.6 I 50235.7 S 0235.7 I

v ue to rotindinq line Ltomi. withiln components maY not AIqJ.

I146?Aijoyil/29/84

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- ongoing KID and IBID financing of independent projectsthat directly or indirectly relate to project componentactivities (e.g., IBRD finaning under NAEP I a II insupport of the national agricultural extension services).

- the comparative advantage to the GOI of IBRD vs. AILfinancing for specific components (e.g., the IBRD policyon long-term overseas training permits financing of theparticipant's spouse to accompany the partiv.pant duringtraining).

5.04. An additional consideration, related to longer termITRD/AID/GOI strategy, influenced the manner in which project funds fromboth donor sourcoes will be allocated. The IZRD intends to finance aPhase IS upland agriculture and conservation program should the pilotproject executed under Phase I prove successful. Therefore, the IBRDfinancial participation was encouraged in as many of the replicablecomponents of the project as possible. Consequently, the IBRD willfinance all the donor costs of the Buman Resources Development andConservation Access Road components as well as a share of the SustainableUpland Farming Systems pilot project component and the Farming SystemsResearch component. With the exception of the Project Innovation Fund,all component activities will be annually 100% pre-financed by the GOIfrom the national budget based on annual plans and budgets approved bythe GOX and AID.

5.0 S. Reimbursement generally will be about 65% of the totalcost. Raimbursement for the AID contribution to component activitieswill be made after certification by appropriate AID authorities that eachcomponent activity has been properly executed. The IBRD will reimbursefollowing the system it currently uses in Indonesia. The projectNanagement Information System asses-ment reports and USAID projectreports will alert the IBED to any problems that may arise.

5.06. Tecbnical assistance will be via AID direct contracts withdirect payment made by the USAID. A Mission issued Direct Letter ofCommitment may be issued if req2ired. Annual Commitment PILs will beissued for the various activities. Payment documentation forre4ibursement will indicate expenses incurred for all parties to theagreement, i.e., AID/0I/IBRD. The administrative/financial systems tobe developed for the project's lc-al currency costs will be reviewed andapproved by the USAID Controller prior to commitment of AID funds. It isthereafter anticipated that an AID direct contract will be entered intowith an Indonesian based accounting firm's management consulting divisionto conduct annual financial reviews. AID funded commodities will beprocured by AID following direct payment procedures.

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2. Sources of GOI Financing

a. inpres Dati I

5.07. Except for salaries of civil servants, Inpres Dati I willfinance recurrent overhead costs, including contract extensionpersonnel. These recurrent overhead costs are presented in Annex 5,Tables 1-8.

S.08. In addition to recurrent overhead costs, the Inpres DatiI budget will:

- 100% pre-finance the subsidies p;ovided under theSustainable Upland Farming System pilot project (Annex 5, Table 6).Subsequent reimbursement will be made by TBRD/AIT.

- finance the recurrent cost and training budget of theHuman Resources Development component (Annex 5, Table 7). The GOI willappoint a Training Coordinator to manage this component. The ministrythat assumes this responsibility will finance the salary of the TrainingCoordinator.

- finance the incremental project associated recurrentcosts and investment req.irements for the CoDnservation Access Roadcomponent (Annex 5, Table 8).

- finance the GOI ruoiah counterpart budget for thetechnical assistance financed by AID and located in the two participatingprovinces and in Jakarta. (The rupiah counterpart for the CollaborativeResearch Agreement between AARD and the consortium of internationalagriculture research institutions will be financed separately asdescribed in paragraph 5.11.)

5.09. The GOI has agreed to modify the appropriate Inpres DatiI Ministerial Instructions to accomodate this range of expenditurecategories and to add funding to the normal Dati I level for eachparticipating province at levels required by project activities. Allproject activities financed under this Inpres budget will be 100%pre-financed by the GOI. To the extent required, the GOI will supplementthe Inpres Dati I budget with funds from the National Budget (AnggaranNegara) up to the amount to be reimbursed by IBRD/AID as specified inMinisterial Decree No. 387, 1978, Ministry of Finance.

b. Xinistry of Agriculture (MOA)

(1) Technical and Extension Staff

5.10. The Mimistry of Agriculture's regular budget process(DUP/bIP) will finance all prolrincial and district agricultural personnelreqaired to carry out the Sustainable Upland Farming Systems (SUFS) pilotproject. (See Annex 5, Table 6.) Also the MOA will annually allocatethe funds necessary to finance the salary of the MOA's full-timerepresentative to the Executive Secretariat (Annex 5, Table 1).

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(2) Farming Sxstems Research

5.11. The Farming System Research component (Annex 5, Table 5)will be 100% pre-financed annually through the normal MOA budget process(DUP/DIP) prepared and subkitted to AARD by the project leader of theResearch Project ManAgement Unit.

c. Ministry of Forestry (MOF).

5.12. Through the Director General of Reforestation and LandRehabilitation, the Ministry of Forestry wlll use its regular budget(DUP/DIP) to finance the annual budget for all technical staff assignedto the Upland Agriculture and Conservation Project as specified under theSustainable Upland Farming System pilot project budget (Annex 5, Table6) - The MOP will also provide the annual budget for the salazy of thefull-time MOP representative on the Executive Secretariat. Incrementalbudgets required for land suitability, aerial photography/mapping, etc.,will be financed through the regular MOP DUP/DIP process. AID and IBRDfunds can be used to reimburse the GOI for mutually agreed upon eqaipmentor activities associated with this latter exper.diture category.

d. Ministry of Hone Affairs and Provincial and DistrictGovernment

5.13. The Ministry of home Affairs (MEA) and participatingprovinces and districts will provide the necessary budget through thenormal budget process to finance the incre-mntal, full-time staffassociated with the project. This includes the salary for two full-time11A representatives to the Executive Secretariat (Annex 5, Table 1), theProject Coordinators and staff of the two provincial Project CoordinationOffices (Annex 5, Table 2) and the Project Managers and staff associatedwith each district Project Management Unit (Annex 5, Table 3).

e. Ministry of Nanpower/Public Works

5.14. The Ministry of Public Works will provide the necessaryannual budget for Conservation Access Road Sub-project Managers andassociated technical staff and associated Ministry of Manpower staff(Annex 5, Table 8).

3. IBPD/AID Financing and Reimbursement

5.15. The method of AID/1BRD financing varies with the projectcomponent. Each of the different methods is described below.

a. Technical Assistance

5.16. All technical assistance costs will be financed by AIDand the GOI as shown in Annex 5, Table 4. AID will directly contractwith three institutions/contractors to provide the full range oftechnical assistance programmed under the project. Short-term contractsunder $100,000, particularly for management information and evaluationstudies, will also be directly financed by AID.

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b. Commodities

5.17. All commodities (e.g. office equipment, data processingequipment, agriculture processing equipment, vehicles, etc.) wili befinanced bin; AID under direct payment/reimbursement procedures.

c. Training

5.18. All training, both in-country and international, will befinanced by the IBRD, and the GOI will follow the applicable IBRDfinancial procedures.

d. Construction

5.19. All in-country construction for facilities associatedwith the Parming System Research and Sustainable Upland Farming Systemscomponents will be financed by the IBRD and the GOI and will followapplicable IBRD financial procedures. The Conservation Access Roadcomponent will be entirely financed by the IBRD and GOI. Roadconstruction will be 100% pre-financed by the GOI and subsequentlyreimbursed up to 60% of actual cost by the IBRD. Reimbursementprocedures are discussed under para 5.27.

e. Joint IBRD/AID Local Currency Financing

5.20. Local currency costs for two project components, FarmingSystems Research and the Sustainable Upland Famning System, will bejointly financed my AID, IBRD and the Gol. The financial managementprocedure to be applied for each component is described below.

(l) Farming Systems Research

5.21. AARD will 100% pre-finance the annual research budgetthrough its regular DUP/DIP process supplemented by National Budget fundsas required, which subsequently will be reimbursed up to 67% of actualcost by both AID and! IBID. the reimbursement procedure to be followed isoutlined in para 5.27.

(2) Sustainable Upland Faxming System Pilot Projects(SUPS)

5.22. AID and IBRD will jointly finance the annual subsidyprovided for demonstraion farms and expansion activities under the SUPScomponent (Annex 5, Table 5) . The GOI will 100% pre-finance the annualSUFS subsidy budget. Upon satisfactory completion of the annual SUFSprogram, the GOI will be 100% reimbursed by IBERD/AID following thereimbursement procedure presented in para 5.27.

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f. Project Innovation Phnd (PIP)

5.23. AID will finance 100% of the P1F costs on a grant basis.The Project Coordinator in each province will be the accountable officerfor the management of the PIP. Disbursements under the PIP will be madeonly upon certification by the AID project officer. Separate accountswill be maintained by recipient institutions In a manner acceptable inform and content to AID.

C. Funds Control and Management

5.24. The Project Coordinator in each province will be designated asthe authorized GOI representative responsible for the management ofproject activities financed by AID and IBRD, with the exception of theFarming System Research component and the Human Resources Developmentcomponent- It will be the Project Coordinator's responsibility to insurethat all planning and review procedures regqired by AID and IBRD toestablish eligibility for reimbursement are followed by all districtProject Managers and Sub-project Managers. It will also be the ProjectCoordinator's responsibility to insure that proper accountingprocedures/systems are established and followed by all district ProjectManagers and sub-comnponent Project Managers. To this end, each ProjectCoordination Office and each district Project Management Unit will have afull-time finance officer to insure proper disbursement and accounting ofproject funds. It will also be the responsibility of the provincialProject Coordinator to initiate requests for reimbursement to AID/IBRD.

5.25. The AARD Team Leader of the Farming System Research componentwill be the responsible officer accountable for the proper disbursementand accounting of project funds. It will be the Team Leader' sresponsibility to insure that all planning and review requirements ofAID/IBMD required to establish eligibility for reimbursement arefollowed. It will also be the responsibility of the Team Leader toinsure that proper books are maintained to account for project funds.Finally, the Team Leader will be responsible of initiating requests forAID/IBIRD reimbursement.

5.26. Likewise, the Training Coordinator appointed by the GOI will beresponsible for insuring that all planning and review reouirementsnecessaxy to establish eligibility for reimbursement of the HumanResources Development component by IBRD are met. It will be theresponsibility of the Training Coordinator to insure that proper booksare maintained to account for project funds.

D. Reimbursement Procedures

5.27. The first step in the reimbursement process is the preparationof annual plans and budgets for each component activity. These plans andbudgets will be prepared by each participating Project Management Unit(PMU) for each component activity for which it Is directly responsible.This plan and budget will be reviewed and approved by the provincial

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Project Coordinator and Guidance Team and forwarded to the SKA and USAIDfor review and approval. AID will subsequently issue a ProjectImplementation Letter (PIL) stating its approval of the plan and budgeton behalf of AID and IBRD. The approval PTL will identify any items thatwill not be eligible for reimbursement by AID or the IDBRD. Uponcompletion of each year's annual program, each PMU, in conjunction withthe provincial Project Coordination Office and the project consultant,will carry out an assessment of each component activity and prepare anevaluation report of the effectiveness of the previous year'simplementation, indicating areas for improvement that should be builtinto the subsequent year' s annual plan and budget. Based on thisassessment and field inspection by AID and provincial government staff,AID will approve those activities eligible for AID reimbursement.Subsequently, the provincial Project Coordination Office will formallysubmit an official reimbursement request to the MHA and the Ministry ofFinance, who will officially forward the request to AID for reimbursement.

5.28. Upon approval and payment by AID of its portion of thereimbursement, the official request will be forwarded to IBRD, who inturnwill make payment to the GOI for its portion. A single consolidatedreimbursement request will be sent to AID and to the IBRD.

5.29. The same process will be followed for the Famming SystemResearch component and the Human Resources Development component.

E. Audit

5.30. Assurances have been obtained from the government during projectdesign that the GOI will furnish AID and the IBRD with any projectrelated information and reports requested. The GOI will also, maintain,in accordance with generally accepted accounting principles andpractices, adequate books and records relating to the project to showwithout limitation the receipt and use of goods and services acquiredunder the respective IBRD loan and AID loan and grant. Such books andrecords will be audited regularly, in accordance with generally acceptedauditing standards, and maintained for three years after the date of thelast disbursement by AID and I9RD. Such books and records will also beadequate to show the nature and extent of solicitations of prospectivesuppliers of goods and services acquired, the basis of award of contractsand orders and the overall progress of the project toward completion.Finally, the GOI will allow authorized representatives of AID and theIBRD at all reasonable times to inspect the project, the utilization ofgoods and services financed by AID and IBRD, and books, records and otherdocuments relating to the project.

F. Disbursement Schedule

5.31. Table 9 in Annex 5 summarizes the projected disbursementschedule for AID/IBRD grant and loan funds.

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VI. PROJECT IMPLEKNTATZON PL&IN

A. Schedule of aLrly and Key Events

6.01. Table 23 sarzzes the schedule of early and key eventsrequired to initiate project operations. The more important of theseevents are discussed below.

1. Polir-y rorulation

6.02. The GOI must implement several important policy changesbefore the Upland Agriculture and Cbnservation Project can begin. Thesenecessary changes are delineated in para 3.37.

2. Management/Planning and Management Information Systems

6.03. Early start up and implementation of the project willreqaire:

- identification and recruitment of management staff forP00s and PMUs and line agency component Sub-project Managers.Technically, this recruitment cannot be initiated prior to issuance ofthe necessary policy determinations. Znterim GOI guidance will be soughtto allow recruitment to begin in July 1984.

- the design of project planning, management, budgetary/accounting systems and management information systems to guide andcontrol project management at the provincial level by July 1984.Concurrent with recruitment of key project personnel AID will financeshort-term consultants to assist in completion of this activity.

- work-shops on new planning/management systems. Output:the IFY p985/86 annual plan and budget. lnitiation/completion:Septembe:r-October 1984.

- recruiting technical line agency personnel and arrangingfor technical training available through existing institutions andon-site visits to Jogyakarta and Citanduy. Initiation/completion:October/December 1984.

- a contract with local institutions for base linesocio-economic and technical surveys to identify target expansion areasfor inclusion in IFY 85/86 program in four districts. Intiation/completion: June/October 1984.

- AARD appointment of the Project Leader for FarmingSystems Research and design of the Year 0 (IFY 1984/85) program,Including identification of headquarters and field research sites andgeneral agriculture and economic surveys of project area.

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- irrigated nursery development at 10 sites. Initiation:September 1984.

- seed production operations at selected sites.Initiation: September 1984.

3. Technical Assistance

6.04. The major actions required to initiate the project relatedtechnical assistance are outline below:

- draft Terms of Reference/Requests for Proposals for twoTA contracts (i.e. provincial level tech-ical assistance and nationallevel PASA with USDA/SCS). Initiation/Completion: prior to September1984.

- recruit a consultant associated with internationalagriculture research network to develop with AARD policy framework andinstitutional arrangements/protocol to govern AARD collaborative researcharrangement with consortium of international research institutes.Initiation/completion: July/August 1984.

- advertise, select and negotiate TA contract forprovincial level TA contract. Initiation/comletion: June/December 1984.

- negotiate USDA PASA. Initiation/completion: August 1984.

- recrvit short-term consultants to assist in draftingproject policy guidance and designing project planning, management,budgetaxy and monitoring system. Initiation/completion: June-October1984.

4. Procurement

6.05. All international procurement and equipment procurement willbe fiii3pced and handled by AID. Initial procurement actions include:

- a waiver (to be included in the Project Authorization)for non-competitive contracting with USDA/SCS and with the InternationalAgriculture Research Consortium;

- a waiver to procure locally assembled vehicles andmotorcycles (to be included in Project Authorization).

3. Planning, Management, Monitoring and Reimbursement Process

6.06. Effective management of the project will require a clearlyarticulated planning, management and monitoring cycle/process that isfully understood and followed by all project authorities from the centerdown to the participating rural extension centers.

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Table 23Schedule of Early and Xey Events

Item Primary TaxgetResponsibility Date

1. USAID approval of Project Paper Director Jun. 84

2. GOI and USAID sign Project Agreements Jun. 84

3. Task Force formed to organize project Ex. Sec. Jun. 84

4. IBRD approval of Appraisal Report President Aug. 84

5. Start up consultants arrive USAID Jul. 84

6. Management orientative workshop Task Porce Aug. 84

7. Preliminary work begins for POD Aug. 84Sustained Uplands Famning Systemcomponent, e.g., choosing nurserysites, locating seeds and seedlings

S. Planning/scheduling workshop PC0 Sep. 84

9. MIS workshop POD Sep. 84

10. Conditions Precedent for initial PCD Sep. 84disbursement met

13. RFTP for consulting contract issued USAID Oct. 84

12. GOIa/BRD loan agreement signed GOI/laRD Oct. 84

13. Plans and budgets for Year 1 PCD Dec. 84(IFY 85/85)

14. Consultants for Ex Sec arrive USLID Oct. 84

15. Senior scientist from IARC arrives AARD Nov. 84

16. Consultant Chief of Party and USAID Feb. 85core group arrive

17. Demonstration f am begin physical PMU Jun. 85improvement

18. Expansion areas begin physical PMU Jun. 86improvement

19. Decision re expansion of project USAID Nov. 86to additional district

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6.07. The basic outline of this planningAnanagement cycle and processis presented in Table 24. Each cycle, while geared to the GOI fiscalyear and agriculture planting schedule, will require approximately 13months to implement. Thus, each cycle overlaps to a certain extent withthe preceding planning and management cycle.

6.08. Three important aspects of this cycle require specific mention,because they are not normally found in existing agriculture andconservation planning and management systems. First, the planning/management process will incorporate specific activities to identifyexpansion areas for treatment under the project, based both on technicaldata and on the willingness/enthusiasm of upland communities toparticipate in the project. Each year agro-economic profiles ofpotential expansion areas will be carried out followed by a series ofmeetings between project authorities and the communities farming thelands identified for potential inclusion in the project. Based on boththe technical data and the response of the target communities, projectauthorities will select a sub-set of the identified levels for inclusionin the project.

6.09. Second, a mandatory annual field assessment will be carried oatin March for each component activity under the project. The results ofthis assessment will be published and subsequently used to improveplanning and execution of each component activity in subsequent cycles.The assessment will be muanaged by each Project Coordination Office andwill include the staff from each participating PMU and technical lineagencies and the project consultants. This annual assessment will serveas one of the principal tools to implement the learning-by-doingphilosophy of the project. The completion and publication of this annualassessment will be an essentia' pre-condition to estabish eligibility forreimbursement by AID and IBRD.

6.10. Third, following the completion of the annual assessment report,representatives from the national Executive Secretariat, the ProjectCoordinator Office and AID/IBID will conduct a field inspection todete-ine which activities are eligible for reimbursement in April ofeach year. Each PCD will submit its formal reimbursement request throughofficial channels in May of each year. Given this annual in-houseevaluation and subsequent monitoring process by GOI/AID/IBRD, thedisbursement of loan funds from AID and IBRD will proceed in a systematicand regular fashion.

6.11. Finally, a schedule will be established for the subaission ofplans and for approval by the GOI and AID for purposes of establishingeligibility for reimbursement. These dates will be strictly followed toinsure that resources are available to P!Us well in advance of thebeginning of the rainy season.

I lii At~~~~14 nI"Ma IMsW soil ilas'O

I i ~~~~I-ss"evsmoe eev! sm.I st a"j I I I I '~~~~~~~~~~~a Il*mMo IIl sl

=~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~"r J see 1 f

.11 ~ SS~ *t.U o* b * *""Me in ma

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I, ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t, II 'm..,ia Ise -a1~~~~ J F~~~~ L I E~~~~~ ; ; . I U~~~~~~~~ r a~~~~ i : : o , a ,~~~~~~~~~~ S'~~~s -5 w e " o t I " w U q )a lig m g am3 I n

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01.1e .!: Cy__

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6.12. The planning and management cycle/process presented on Table 25is only a first approximation and will be refined in conjunction withparticipating local goversment and line agencies early in Year 0 (IFY1984/85) of project implementation. All project personnel will be giventraining to insure their full understanding of and ability to executeeach activity comprising the annual planning and management cycle.

VII. MONITORING AND EVALWATION PLAN

A. Introduction

7.01. The tUAC Project is based on a methodology of learning-by-doing. Central to this methodology is the ability to monitor theon-going inplementation of the project to determine If project activitieswere implemented as planned and if the outputs specified in the plan wereactually realized. The establishment of a Management Information System(MIS) the province and district levels capable of routinely generatingdata on output performance is, therefore, a central concern of theproject. This information will serve as an important data source forannual planning of component activities. In addition to the on-goingassessment and annual planning activities, the project will also carryout several external evaluations during the project.

B. Management Information System (MIS)

7.02. The primaxy purpose of the MIS is to provide project managementwith information relevant to project performance. Basic MIS activitiescan be divided into two basic types:

(a) Technical and Aqro-economic profiles that will be carriedout in target expansion areas to describe the pre-project physical,environmental, social, institutional and agro-economic situation.

(b) Periodic implementation performance data to ascertainproject status with respect to component project performance such ashectares of expansion completed, distribution of inputs (seed,fertilizer, trees, grass) and credit extended, etc. Working Paper 2provides an illustrative outline of the content of these inventories.

7.03. This information will provide project managers with informationon 'what is happening'. Project managers must then address theqaestions, "Why is it happening?" and 'how can it be improved?' Toanswer these questions, the project staff at both the provincial anddistrict levels and the technical assistance contractor will carry out anannual project assessment that examines the reasons for success orfailure of each project component and recommends modifications to beintroduced in the subsequent year's component plans. The completion ofthis annual assessmnt will be a requirement to establish eligibility forAID/mBRD reimbursement of the succeeding year's program.

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7.04. 1he internal annual asseasment and planning process willundoubtedly uncover many issues directly related to component design andperformance that require additional data and analysis before actionrecomendations can be formulated. Funds will be available to theproject tc ccntract for special studies through appropriate localinstitutions or consultants. As a general rule, these studies will beshort-term, not exceeding three months, so their findings can be fed backinto the planning and implementation process without undue delay.

C. Ecternal Evaluations

7.05. Several external evaluations, independent of projectauthorities, will be carried out during the life of the project. Theseevaluations will be re-appraisals of project concepts, design, allocationof funds, staffing patterns and component activities in light ofperfozmance. The first external evaluation will be carried out duringthe third year of project activity (IFY 1986/87). Following thisevaluation, a determination will be made about if and when the additionalfour or more districts will be brought into the program. The secondmid-term review will be during the fifth or sixth year of projectactivity (i.e. IFY 1988/89 or 1989/90) and will focus on whether a PhaseII program should be initiated. A final project evaluation will becarried out during the last year of the project and will constitute acomprehensive assessment of the Phase I effort.

D. Organization

7.06. Primary responsibility for the design and implementation of thebasic MIS and the special studies will reside with the provincial levelProject Coordination Offices. The project will provide the PCDs with thenecessary technical assistance, training and, as appropriate, funds ande qipment.

7.07. The provincial PCD will work closely with the district ProjectManagement Units in the design and implementation of the MIS systems. Itis expected that both the provincial and district PMUs will be staffed byone individual with the appropriate background. Additional training ofthese individuals will also be available as part of the project. Neitherthe provincial P(.U nor the district PMU will have the manpower or thecapacity to undertake all of the activities associated with thedevelopment and management of the MIS systems. Thus, an importantcomponent of strengthening the capacity of these groups will be in thearea of simple research management. Close ties with the regionaluniversities in these activities will be encouraged as will use ofindigenous consulting firms.

7.08. EIcternal evaluations will be primarily the responsibility ofsenior project management, the USAID project officer and hiscounterparts. In-country institutions will also be involved in theassessments wherever possible.

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VIII. SUMMARY OF THE PROJECT ANALYSES

A. Tebcnlcal Analysis

8.01. The full toxt of the technical analysis is prosented in AnnexI.A. This section concludes that the principle shor'-run constraint onutilization of upland resources is the lack of an effectlvo deliverysystem for improved germ-plasm for crops, grasses and trees. Hence,establishing an effective delivery system for gez-plauu anddiseminating effective soil and water conservation techniques to uplandareas are two major objectives of the project.

8.02. In accord with these objectives, a considerable amount ofresearch and learning-by-doing is necessary to develop improvedgerm-plasm, to test alternative delivery systems and to devise theappropriate soil and water conservation measures for specific conditionsof soils, slopes and farm management systems.

8.03. Development of the livestock sector in uplands areas alsorequires research and testing. While there is a large potential forlivestock, better means of growlng and storing fodder supplies for thedry season must be developed and demonstrated before this potential canbe realized.

8.04. Lastly, upland areas have substantial potential for cash cropssuch as vogetables, fruit and spices, but processing/marketing andtechnological constraints must be overcome. In the case of trooproducts, means have to be devised to assure a reasonable income tofarners while the trees are maturing.

8.05. In sun, while there is a sufficient technical basis to proceedwith the project, a major intent of the project is to learn as theproject proceeds.

D. Economic Analysis

8.06. The details of the economic analysis are provided in Annex 1.B.The analysis concludes that because of the large gap between presentyields of major crops in upland areas and technically and economicallyfeasLble yields the economic returns to the project are hLghly favorable.

B.07. The direct net benefits from the 23,000 ha of land to beincluded in the project are sufficient to create an internal rate ofreturn (IRR) for the project as a whole of 12%. However, considerLng thefollowlng indirect benefits, the economic feasibility of the project'isconsLderably hlgher.

8.0 . Flrst, the benefits of infrastructure Lnvestments in research,human capLtal development and roads will splll over to a much greaterarea than the 23,000 ha directly affected by the project and used as abasis for the econouic evaluation.

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8.09. Second, the analysis dooe not include the value of externalbene lts to downstream users through reduced sedimentation and flooding.Based on the analysis of a similar watershed, these external benefitscould amount to more than onerthird of the total costs of the project.

8.10. GLven the conservative nature of the assumptions regardingdirect project benefits and costs, the high potential value of theindirect benefits and asmmuing reasonable management, the true MRR of theproject is likely to be above 15%, as shown in Annex 1.B.

C. Social Soundness Analysis

8.11. The complete text of the social soundness analysis can be foundin Annex 1.C. The analysis concludes that the proposed UplandAgriculture and Conservation Project is compatible with thesocio-cultural environment of the two areas and that the activity willboeneft a wide array of groups but will assist most directly the ruralhouseholds who own and operate farms inciuded within the approximately23,000 hectares of the tazget area.

8.12. The populations of the upland areas of the two watershedsshare many of the same socio-econcmic characteristics. Although ahierarcky exists within the village conmuLities, the degree of differencein the living standards of the groups is not very great. Land-ownershipis the most important factor in detertining wealth and status in theuplands. Absolute lAndleasness is relatively low in upland areas but asignificant though undetezrmned portion of the population do not ownenough land to provide for their livelihood throughout the year.

8.13. Dospite a high degree of similarity among uplandcomanltie , perhaps the most remarkable feature of socio_-conaomicconditions in theme areas is the diversity. Several factors contributeto this diversity, the most obvious being variation in the agro climaticzones. Other factors contributing to this diversity include: theavailability of of f-fazz eployment opportunities, migration patterns,access to markets, proximity to urban centers and the presence ofgovernmant programs promoting rural developent. 7his degree ofdiversity mandates a project implementation strategy that takes intoaccount local conditions and involves communities in the identificationand testing of improved farming systms technologies. The project hasbeen designed to encourage the dLrect participation of local coamunitiesin the projectls planning and decision-making processes.

4. Administrative Analysis

8.14. The complete text of the administrative analysiL can befound ln Annex l.D. he analysis concludes that the organLzationalstrategy proposed as part of the Upland Agriculture and ConservationProject reflects past experience of UsXD, the IBRD and the GOI, withsimilar interventions and appropriately focuses on sub-national levels ofgovernment as the key plannlng and executing agencies.

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8.15. he existing stzucture of governnt, as it relates toupland agriculture and conservation# is characterized by a high degree ofctrazation and corresponding standardization. In addition,government services provided to upland communities are highly fragmented,with responsibilities unclearly divided among the Ministry of Fbrestryand the Ministry of Agriculture and local government. The rigidityimposed by the existing centralized structure and the confusion resultingfrom the fragmentation of government services make it extremely difficultto design and implement programs that are tailored 'o the diversity ofagro climatic and socio-economic conditions comon to upland areas notonly in these two watersheds but also throughout Java and Indonesia.

8.16. The gmagement structure and planning and management systems tobe utilized under this project are in many respects new and untestedinnovations. Project gamaaement fully expects that as additional=perience is acquired, aodifications in both orgaizational structure

andprocess will be required to improve the efficiency and effectivenessof project implementation. The development of this organtionalstructure is an explicit purpose of the project. At the same time, theproposed operational framework represents lessons learned from pastexperiences f ocusing on upland agriculture and conservation activitiesand attempts to bluid upon the strengths of these efforts whileaddressing well-docmented weaknesses.

S. Environmental Analysis

8.17 The initial environental examination, suixitted as part of theProject Identification Document, concludes that although the projectshould have major positive environmental impact, an environmentalassessment is needed for the rural roads componeSt. Any procurement anduse of pesticides under the project will also be subject to a formalenvironmental assesemnt, in acccordance with CFR Section 216Environmental Impact Assessment Procedures. Plans for theimplementation of each of these are saarized below.

1. Conservation Roads

8.18. Most of the land in the project area is densely settled andhas had intense human usage for at least severl decades. None of theroads to be constructed under the project are expected to pass throughareas of concern for nat-re conservation puxposes.

8.19. Therefore, the main anticipated negative environmentalimpact is increased soil erosion, caused either directly by constructionof the roadways or indirecty from changes in land use adjacent toroadwys. oTe potential impacts of rural roads development in theproject region have been considered seriously during final design of theproject. Erosion control efforts are believed to be identical with soundengineering practices. Project design criteria for planning,construction and Maintainance of the roads to be constructed are asrigorous or more rigorous than for any rural roads previously constructedon Java (see Annex 1-1).

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8.20. The project component itself has been redesignated as theCbnservation Access Roads component. This reflects both the ero6ioncontrol emphasis assigned to cqnstruction and maintainance of theroadways, as weill as the expectation that the roads will have indirectpositive environmental effects. These indirect effects will arise fromizproved access to markets, which in believed likely to stimulatesoil-conserving agricultural investments, and from the improved flow ofconservation info-mation and training into presently isolated uplandvillages. Easier transportation and communication access may, of course,also have countervailing negative soil erosion or other environmentalimpacts.

8.21. Since the overall puxpose of the project is to developIndonesia' 8 capacity to learn from experience and to institutionalizeimproved pilot efforts in upland development and coservation, we intendthat the Environmental Assessment will be conducted as an extended,iterative process through Phase One of the project. A joint GOI-UsAIDUpland Conservation Roads Environmental Review Committee will beestablished, comprised of representatives of the State Ministry ofPopulation and Environsent, Public Work- (from Padat Kazya), Interior(from the Population and Environmental Bureau from the provincial BappedaOffices) and US&ID (the Project Officer and the Mission EnvironmentalOfficer) . This committee will meet at least once during Year 0 of theproject. They will be responsible for producing: (1) the EnvironmentalAssessment of the Conservation Roads component of the UAC Project, and(2) a Manual on Erosion Cbntrol for Rural Roads in the UAC Project Area.The Committee could authorize field studies, monitoring work, specialtraining courses, or other activities as they feel appropriate. TheirXrports, the Environmental Assessment and the manual on erosion controlfor rural roads, should be completed prior to the mid-project review InYear 2. This report should address the question of general environmentalimpact associated with future rural roads development in the uplands ofEast and Central Java.

2. Pesticides

8.22. The GOX is committed to integrated pest management (IPt),which vill be the basis of crop protection work under this project. Allpesticides used or procured under the project, even on expeximental testplots, will be subject to the regulatory procedures both of the GOI andof the U9G. During Year 0 of the project, AARD will work with the USAIDproject officer to develop a preliminary upland crop protection researchand management plan. The Mission anticipates drawing upon the AIDJw CropProtection Project to provide technical support to review thispreliminary plan, and to work out any additional technical support thatmay be needed. Ths review will constitute the foral EnvironmentalAssessment for pesticides use under the project. It must be completedprior to any procurement or usage.

A N N E X I

EROJECT ANALYSES

# 4066A:joy: 7/5/84

1. PROJECT ANALYSES

A. Technical Analysis

- 1. Introduction

The major technical issues in the UACP are soil and waterconservation, seed and plant material availability, and livestock andfodder supplies. The following discussion outlines: 1) the majortechnical features and issues in each of these subject areas in terms ofcriteria for project design and 2) important areas for research andmonitoring in the project.

a. Soil and Water Conservation (SIC)

SWC programs create essentially three kinds of benefits:

- Increased production of agricultural, forest and grass products.- Reduced external costs of downstream sedimentation and flooding.- Preservation of options for an uncertain future.

The second and third types of benefits are discussed in theeconomics section. The focus here will be on the physical basis of theseeffects, especially as they relate to agriculture and silvipasturesystems.

Unfortunately, there is almost no scientifically reliableinformation concerning SIC in Indonesia (or in other tropical areas)(Hudson, 1983; Hamer, 1980). Therefore this analysis will have to bebased on various estimation techniques, fitted where possible, to whatlittle information is available.

The benefits of SIC programs to agricultural production (includingforestry, grass, etc.) are of three kinds:

- Preventing loss of nutrients and other valuablecharacteristics of the soil.

- Preventing loss of soil-moisture holding capacity.- EnAhlIng better management practices through the above

two factors and through such items as cultivating flatareas on bench terraces rather than steep slopes.

All of these benefits depend, directly or indirectly, on therelationship between three basic parameters: 11) the net rate of erosionbefore and after the SWC project, (2) the quality and depth of the soil,and (3) agro-dlimatic conditions, which in turn affect (1) and (2).

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The net rate of erosion is the rate of loss of soil minus thenatural rate of soil formation. In temperate climates, onnon-agricultural land, the natural rate of soil formation is about 0.8mWyr, or 9.6 t/ha/yr (1 mm - 12 t/ha). However, in the tropics the rateof soil formation is about three times more: 2.4 mm/yr or 28.8 t/ha/yr(Hamer, 1982, p.5). It may also be higher in agricultural land because

of greater mechanical and chemical activity, but this is not proven.

The critical depth of soil is the minimum depth at which cropyields are significantly reduced. This is mainly a function of thesoil-moisture holding capacity of the soil in relation to agro-climaticconditions--precipitation, evapotranspiration of plants and the rootdepth of plants. Adventitious roots, which provide most of the nutrientuptake, occupy only the upper 15 cm or so of the soil. Tap roots, whichprovide most of the water uptake, vary by crops but can extend as fardown as 2 meters under moisture stress conditions. Thus moisture storedin the C horizon can also be used by crops. It is not known what thecritical soil depth is under the climatic conditions of Java, or what thequantitative effect on yield is as the critical level is surpassed.

Assu=ing some (presently unknown) amount of fertilizer applicationto partly compensate for loss of soil nutrients and favorable agro-climatic conditions, approximately 50-75 mm soil depth may be taken asthe point where yields begin to be significantly reduced due to erosion.

2. Estimating the Rate of Erosion

This analysis follows Hamer's excellent discussion of theUniversal Soil Loss Equation (USLE) under Indonesian conditions. As henotes, the USLE has only been verified for temperate climates andcropping systems, medium textured soils and slope gradients of 3% to 18%(pp. 3-4).

The USLE may be written: (1) E - f (C, S; T, L)* whereE - Average Annual Erosion (tlha/yr)C = Climatic Factor: see the estimation from precipitation data in

Hamer (p.8)S - Soil factor: a classification based on soil texture, organic

matter, structure and, especially, permeabilityT - Topography factor: slope gradient, in percent, slope length,

and land formL - Land ulitization factor: plant cover in relation to bare soil

* It should be noted that the USLE usually contains a management factor(M) for conservation practises - like terracing, or grass striping.However, because X - f CT, L), this term is redundant in the USLE.In a regression analysis this would cause fornidable problems ofmulti-coliniarity since M and CT, L) are highly correlated. Forregression analysis of E in relation to particular states of M, thefunction could be written E - f tC, S, M), however, E - f (C,S, T, L)is more precise for analytical pu2poses.

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The first two factors, C and S, are parameters that are notchangeable. The last two factors, T and L, are the instrument variablesthat can be changed to control erosion. T involves mechanical controlthrough changes in the slope and form of the soil surface. L involvesbiological control through changes in plant cover.

Addressing biological control first, various values for L areshown in Table 1 (Namer, 1980, p.20). Note that a value of 1 for bareland is the worst condition for L. These L values must be interpetedunder the condition that all other factors in the USLE are constant.However the values may change, even in ranking, for different absolutevalues of the other factors, especially T.

Second, the primary function of mechanical control (T) is todecrease the slope of the land surface to lower the quantity and velocityof water run-off and, hence, soil erosion. Estimates for T are providedin Table 2 (Hamer 1982, pp. 1-3). As shown in the right column of Table2, the rate of erosion is roughly proportional to the slope, over sloperanges greater than 15%. Over undulating terrain, slope degree andlength should be estimated as a weighted average of various segments ofthe land surface.

Table 3 (Hamer, 1980, p. 2 1) shows values of different combinationsof L and T or management (M) factors by different quality standards (M1 represents the worst value). It is interesting to note that thehighest quality bench terraces have the same M value (0.4J as the bestgrass strips. Both are 2.5 times more effective than permanent groundcover with estate crops.

Neither the USLE nor empirical research in Indonesia has givensufficiently reliable estimates of the actual magnitudes of erosion to beused in planning. An example of this problem is cited in Hamer (1980,p.39) where the rate of erosion in the upper Solo Basin was estimated as1800-4800 t/ha by one group, and 50 t/ha by another group.

3. SWC Treatments

There are many alternative means of controling soil erosionranging from tree and grass plantations, tbrough grass striping andcontour bunding, to bench terraces. The appropriate treatment depends onboth physical and economic factors.

Variation in soil types is a major physical constraint in thesetwo river basin. Soil types found in the project districts include:Regosols/Lithosols, Grumusols, Latosols, Podsols and Mediterranean soilsderived from limestone parent materials. Other types of soils such asAndosols are mainly found in higher elevations and are associated withrecent volcanic activities in locations such as Malang, northern Blitarand parts of Boyolali.

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Table 27bpoqraphic factors (T)

| Slope | Assumed | Mean | Range T/ II gradient I slope T | in T | Measure |I class (%) m length (m) rating I rating I slope I

0 - 5 0,5 I 45 I 0.35 I 0.00 - 0.75 I 0.146 - 15 9,5 s 35 I 1.60 1 0.76 - 2.40 I 0.17

16 - 35 25,5 1 25 I 4.60 I 2.41 - 6.80 I 0.1836 - 50 43 I 20 1 7.90 1 6.81 - 8.99 0.18

o50 20 I 9.00 1 8.99 I 0.18

Table 3

Code I Conservation Practices (M) | Rating M - I

I I Bench terraces I ITh | - high standard design/construction | 0.04 * ITsm -- medium standard desigr/construction | 0.15

I Ti | - low standard design/construction | 0.35 1

Tg I Traditional terraces I 0.40 *

T Tc I Colluvial terraces on grass strips or bamboo 0.50Permanent grass strips e.g. Bahlia grass:

.I - high standard design and establishment I 0.04 *

I I - low standard design and establishment | 0.40Et i Hi 3side trenches (silt pits) 1 0.3L | Croatalaria sp. (legume) in rotation 1 0.60 * |

Cl I Contour cropping, slope gradient 0 - 8% 0.52 9 - 20% 0.75

3 I 20 O 0.9I M6 | Surface Mulch retention (litter or straw 6t/ha/yr) | 0.3 *

13 1 (litter ox straw 3t/ha/yr) I 0.51 1 (litter or straw lt/ha/yr) I 0.8| GC | Permanent ground cover with estate crops I II h I - high density I 0.1 1

I i | - medium density I 0.5I R I Early reafforestation with cover crop I 0.3| n.s. I Not specified I 1.0 II n.a. I Not applicable 1 1.0 |

* based on Soil Research Institute (Bogor) data

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Terracing in sandy-loam or loam textured soils is more difficultthan on more stable clay textured soils. For soils other than clay,close planting of legume shrub hedges such as leucaena or gliricidiaalong the edge of the terraces with grasses to strengthen the terracerisers is highly recommended. The experiences of district Sikka onFlores Island or the SALT Project in Davao, Mindanao, are primeexamples. Planting legumes on the risers both strengthens the riser andprovides green manure. In both these areas, the leucaena was planted intwo rows at 50 cm apart and 5 to 6 cm along the rows. The foliage fromthe leucaena will protrude about 30 to 50 cm on each side of the rows,thus occupying 1.10 to 1.50 m of land per terrace. In the PanawanganPilot Watershed, where the average terrace width is less than 1.50 i, theabove system is clearly impractical.

Vertical risers in clay soils with grass protection on the lipsand upper 1/3 of the terrace riser have proven to be quite stable in manydemonstration farms at Citanduy Watershed. However, to obtain a fullgrass/legume cover of the terrace risers it is recommended that risers bebuilt on a 1/2 slope (1 horizontal to 2 vertical). There is clearly atrade-off between crop production and increased livestock carryingcapacity, in the form of greater grass/legume production, between thesetwo styles of terracing. The 1/2 slope risers are recomended on slopesat 40%.

For general purposes the privately owned lands can be classifiedin four broad categories:

1. Land under permanent vegetation, including those underalang-alang (Imperata cylindrica).

2. Land where soil degradation has reached such a level thatagriculture production is no longer practical under localconditions.

3. Land where productive soil depth is getting so thin that, ifsoil erosion is not reduced to a minimum, it will fall intocategory 2 within a few years.

4. Land where the soil depth is such that it will take manyyears under the present soil management before soilproduction is reduced significantly.

The priority target for land stabilization should be land category3 with attempts to establish permanent vegetation on land category 2 byusing legumes and trees such as cashew capable of producing under poorsoil conditions. Land category 4, although not in danger itself, is alsoa source of sedimentation.

Silvipasture should be encouraged on shallow soils where terracingis not practical or, because of steepness of the land, terraces are notstable or are too costly for what can be produced on them. Owners ofland that is presently under IMperate cylindrica or other type of weedsand trees, who want to take advantage of the project to obtain bettergrass/legumes and trees, should be allowed to do so providing that theyparticipate and work with the other farmers in the group.

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The project may give the farmers fertilizers for grass but themajority of the farmers will not use it for that purpose and almost nofarmers will buy fertilizer for grass except on special occasions orwhere dairy is important and a market exists for grasses. This impliesthat outside such areas, large grass plantations are not feasible, sincefertilizer is required. Thus grass production will occur only on terracerisers, utilizing some of the fertilizer provided for crops. Sincefarmers build very steep risers on their terraces to avoid reduction ofagricultural land, the area producing grass will be low (say less than10% of the agricultural area). Since 1977 Project Citanduy has beenrecommending that farmers replace top soil on the surface of their newlybuilt terraces. Two techniques were recommended: 1) stockpiling top soiland 2) building the bottom terrace first, then throwing the top soil fromabove onto the already built terrace.

Farmers as a rule have not followed these recommendations nor isthere data to prove that the practice of replacing the top soil on thenewly built terraces actually increases production sufficiently to makeit worthwhile. This issue should be closely studied in the researchcomponent to dete-rmine under which conditions it should or should not berecomzended. Largely to counteract this yield-reducing effect, and toencourage establishment of grasses, the project will supply subsidizedfertilizers for the first two years after terraces have been installed.

4. Estimating the Labor Requirements of Bench Terracing

The design of bench (and other) terraces has been specified bySheng (FAO 1981). Sheng has calculated the volume of earth required tobe cut, transported and compacted in bench terracing, in relation to theslope of the land and width of the terrace bench, as shown in Figures 1and 2.

Figure 1

REVERSE SLOPES TERRACE

\ _ .ORIG1NAL LAND 2URFACE

_ TOE CRPAIN

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Row 1 at the bottom of Figure. 2 shows the i 3 of earth per ha ofland area under bench terracing. The 2.5 m minimum bench width figureswill be used here.

Row 2 shows the amount of earth per ha of bench surface oragricultural land, not of land used in the risers. The percentagefigures under the curves of Figure 1 show the percentage of total landarea in benches. Row 2 is obtainsd by dividing these figures into Row 1.

Lastly, Row 3 shows the mandays requlired per ha of bench surfacecreated. Those figures are based on the assumption that one man cancompletely process 1 m3 of earth per day (about 3.6 tons). Shengestimates 3.8-4.0 m3 per day. Sheng's assumption may be valid in veryfavorable conditions where the soil is loose and moist. However, most ofthe terracing in the uplands project will be done in the dry season, whonthe hard, dry condition of the soil will adversely affect production andincrease compaction costs. Data from the Citanduy Project indicates thatonly 0.9 to 1.4 =3 of earth is moved per day in construction of benchterraces. hus Row 3 may under-estimate labor requirements by a factorof 2-3.

It is assumed that farmers will contribute their labor free ofcost in exchange for the Rp.300,000Aha subsidy. The shadow price oflabor is assumed to be Rp-500/day, while the market prices is aboutRp.l,0001,500 per day. If farmers have no alternative opportunities fortheir labor, the shadow prices should be used. If they haveself-euployment opportunities, with a value greater than the shadowprice, that figure should be used. If they must be employed for thework, ]Rp.l,000-l,S00 per day should be used. Thus at the minimum slopeof 17.6%, the labor cost in shadow prices is Rp.80,000 per ha of benchsurface. These figures do not include the cost of grassed waterways. Interms of market wages, the costs would be 2-3 times these amounts.(These cost figures should be adjusted down in terms of land areatreated, accozding to the percentage of total area in bench shown inFigure 2).

If farers are to be paid Rp.300, 000 per ha of bench area, thenthose with the lowest slope will rxeceive about the market wage for theirlabor, while those with the highest slope will receive only half thisamount, or the shadow price of their labor. This inequity could beevened out by the group for= of bench terracing-where all farmers workon all the slopes in their area and share the subsidy according to theirwork.

The amount of subsidy should be adjusted to the weighted averageslope of the area to be worked by each group. A problem with thispolicy, however, is that since the subsidy is paid in seeds andfertilizer those working lower slopes would receive less imput per unitof bench land. Clearly, policy decisions on the management of thesubsidy are required here.

-9-

Figure 2

Volumes of Soil to be Cut and Filled per Hectarefor Bench Terraces

Machine Built (Riser slope 1:1) / 8.28.0- Hand Made (Riser slope 8.75:1)

FPb 7 a of Area in Benches I

7.5-

7.0 - .7.0

b.0~'0~~~~~~~~

0

m 5.5- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -~5*2 >

0 --

4 .0- / 3 9

/ 0. 1~~~~~~-3.64.5 // .

ze 3 .4I

4.0 /-

'/ 7 /, ,4 74

/ / /4 - , ,27

I. ~/ha area 500 60O 7Oio q0O qao00 1100 /toaoo d13J00 14-00 J iO a )&oo /t0 Ioo iAO0 GOQO

3/ha bench 51o 70 Too l jIG /W I, q4 v.qo9 va

ma niidaysIha bench It?0 o R& 34a. 317 4'19 11 749

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5. Existing Crop Situation and Pbtential

Crop production is generally poor in the uplands. The key toimproving yields in better seed stock. The following section outlinesthe seed situation for the four principal crops.

a. Maize is one of the most popular and by far the most widelycultivated of the several traditional home-grown food crops produced bythe upland smallholder. The production of local, low producing, shortmaturity white varieties are currently preforred. Yields from non-intercropped plots are estimated to range from 600-1000 kg per hectare.

Test results of currently available improved (Arjuna, Geja Kertas,Barapan, etc.) and hybrid (Cl) yellow kernal varieties In the projectarea have convinced the Department of Agriculture to intensify theproduction of hybrid seeds and to promote the cultivation of these higheryielding improved maize varieties. Results from numerous test plottrials with hybrid seeds and relatively low fertilizer application haveproduced yields as high as 10.5 t/ha, averaging 5.7 t/ha. In Blitar,East Java, demonstration yields of dry grain were 10.2 t/ha. Compared tothe improved Arjuna variety, the hybrid seed required an additionalRp.15,000/ha but it increased returns by an average of Rp.332,000/ha.

Promotion efforts have met with success in most lowland suzplusproduction areas and will have to be intensified in the upland areas incorrespondence with the maize seed supply activity envisioned by theproject.

(b) Peanuts are widely grown and traditionally intercropped inseveral of the upland areas. They are a good source of cash income whengrown with improved practices and offer higher returns than otherpalawija crops.

High yielding quality peanut seed, although unavailable in mostareas of Indonesia, offers the potential to dramatically increase yields,which currently are approximately 700 kg/ha in Central Java. TheDepartment of Agriculture has recently demonstrated that two currentlypromoted varieties (Anoa and Rusa) can more than double average yields(to 1300-1500 kg/ha).

Farmers generally purchase low quality seed that has a low rate ofgermination and produces low yields. The seed, due to its 1imitedseasonal compatibility, is purchased during periods of high prices andscarcity. Normally, the farmer will contract his harvest and salethrough the "tebasan" system. Prior to threshing, the unshelled nuts aresold to a private trader and the plant is sold as an inexpensivelivestock forage. The traders then dxy, shell, manually grade andpackage the nuts for wholesale marketing. Usually this manual gradingwill separate a portion of the larger, untarnished nuts for eventual seedresale to farmers. A significant factor in the unavailability ofimproved groundnut seed is the tedious and costly manual sorting system.

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(c) Upland Rice is commonly grown once the timing of the rainyseason has become well established. Varieties generally planted areshort maturing (mainly IR 35 and Sintani) because rains are unpredictableand irrigation is unreliable. Certified stock and extension seeds arerarely available and utilized in the upland areas. The seed productioncompanies' emphasis on the Cisadane variety used in lowland irrigatedareas has contributed to this situation.

Due to the rainfall sensitivity of rice and current lowlandpreferences toward late maturiting, high yielding varieties, it is mostlikely that project associated research, extension and seed productionefforts will concentrate on short maturing, drought resistent uplandvarieties. The adoption of these varieties by project participants willdepend almost solely upon their availability and thus on local uplandproduction.

{d) Several varieties of soybeans are grown (oftentimesimultaneously) for resale in the project areas. Its relatively highresistence to drought and yearlong marketability makes it a necessarycrop in several areas. The early maturing Lokon variety appears to offerthe best potential for higher yields with good husbandzy practices,fertilization and pest control. Qality certified soybean seed is rarelyavailable and, when available, is often used by government related creditprograms. Because sorting/grading of soybeans is time consuming, it isoften done at the farmer producer's home and is subject to mixing withother varieties. Low germination and varietal mixing complicate plantingand harvesting operations producing lowing yields.

6. Experimental Livestock Sector

An experimental sector of the project will deal with livestock.At present, livestock production often contributes l5.to 25% of farnincome in these two wate:sheds. Brama cows are prefered by many farmers,but mall ruminants, such as goats and sheep, play a more important rolein the household economy. The latter are a form of savings and a readilyavailable source of capital.

Despite the decreasing amount of land available for agriculturalpurposes, small ruminants continue to be widely raised. They are moreadaptable to varying environments, their reproductive cycle is muchfaster than that of cattle or water buffalo and there is a ready marketfor them. Typical goat or sheep herd size for uplands families is 3 to 5head. The average number of small ruminants/family is shown on Table 4.

Present stocking rates vary from .24 to .95 AU/ha (1 AU isequivalent to 500 kgs live weight). With project inputs, the carryingcapacity could increase to 5 animal units (AU) per ha of land under grassvegetation or sIlvipasture with low tree density and shade tolerantgrass/Legumes. Table 4 demonstrates the potential for increasedlivestock and farm income.

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Table 4Average Number of Small Ruminants*

Area Total Total Total Nuaber SRLocation (ha)' * SR Cattle AU/ha** Families Mly

Central Java

Semarng 88,870 83,881 4,538 0.11 130,477 0.64Bcoyolall 42,024 98,439 17,125 0.55 46,862 2.10Grobogan 103,686 69,513 37,588 0.40 96,050 0.72Blora 65,911 31,665 55,182 0.91 58,758 0.54

East Java

Malang 171,570 55,828 31,751 0.32 125,421 0.44B2ltar 38,776 34,555 29,282 0.81 4S,773 0.75TLlungagung 63,069 32,188 28,290 0.48 61,947 0.52frenggalek 98,737 83,335 27,181 0.33 97,643 0.85

FOr the analysis in this livestock table it is assumed thatlivestock numbers rePOrted bY the districts are totals for adult andyoung animal. It Ls assumed that the livestock is supported nowfrom all land rather than just the cultivated land. Also the 'Area(Ha)" category may not include roadsides, stream banks, drainages,vllages and huae gardens. Tis land is an important source offorage in the present cut and carry system of the project area. Ifthis in the case, the calculated stocking rate may actually be lowerdue to the same number of amimals being supported by greater landarea.

T - otal land area vith no distinction between agriculture andnon-agriculture land.

* 1 AAU - 1000 lbs or 500 Xgs of liveweight of livestock. One head ofcattle - 500 Kg - 1 AUOne goat/sheep - 30 Xgs - .06 AU

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On an exper-imental basiLs, the project will supply 4 adult smallru-mnants/ha as an incentive for farmers to Invest their resource-% insoil conservation efforts such as silzipasture. Before receiving theanimals, farmer recipients will be required to plant grasses, legumesand/or trees * Te farmer would normally have to wait several years (upto 5 years) to realize cash benefits from tree crops, but if pastures are

planted the farmer can more quickly realize a modest but steady income.Even under less than favorable soil conditions, silvipasture may support1-2 AU/ha (10 to 20 goats or sheep).

One of the first considerations to increase stocking rates shouldbe the year-round availability of sufficient feed. In the project areasthat have rainfall of 2500 mm/yr and above, distributed over 8 months ormore, there is no problem of year-round supply of forage. Where it isless than 2500 mm/yr, the availability of dry season fodder must beassessed before increasing the livestock population. Lamtorco would be anappropriate choice for this area as it is draught resistant and maintainsgreen leaves during the dry season. On a wet basis of 85% moisture ityields 11 t/ha/yr. Other possible forages are Setaria spp (54 t/ha/yr)and Brachiaria (32 t/ha/yr), which are improved grasses, that have highernutritive value and are higher yielding than common native grasses. Inaddition to these introduced forages, farmers can (and presently do) usecrop by-products such as leaves frovi cassava, corn, peanuts and soybeansto supplement livestock feed during the dry season. There are alsopossibilities for cutting the excess pasture production during the rainyseason and preserving it as hay for use in the dry season. Thus a higherstocking rate can be maintained throughout the year.

Small ruminants play an important role in the family fazmingsytem. They utilize crop by-products that would otherwise go unused: thefamily can generate cash for specific needs through sale of goats orsheep; and manure produced can be sold or used to help maintain soilfertility.

To date, few data have been taken on possible forages, but some ofthe promising ones include Brachiaria briantha (32 t/ha/yr) Leucaenaleucaecephala (11 t/ha/yr) Septana splendida (54 t/ha/yr).* Thesespecies have relatively higher nutritional quality and higher yields thannative grasses, and are appropriate for the various climatic and rainfallconditions of the project area. Specific monthly yield data is notavailable, so It is difficult to predict yield of each species and hencethe carrying capacity, during the dry season. Only part of the projectarea has an extended dry season and low annual rainfall that makesyear-round availability of forage a critical factor in increasingstocking rates. Bowever, there are several indications that, althoughyields do decrease during the dry period, farmers presently have accessto and use other feeds.

* These figures are on a wet basis of 85% moisture content.

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B. Economic Analysis

1. Conceptual Background

Soil and water conservation (SWC) programs involve the use oflimited public and private resources that have alternate uses. Thereforethese programs are subject to the same kind of economic evaluation as anyother program. It is necessary to stress this point because there is akind of SIC "Pandamentalism" (where objectivity is replaced by a moralimperative) that holds these programs to somehow be beyondeconomics--that they are, so to speak, worth whatever they cost. Whileit is true that SWC programs are somewhat different from many otherprograms because they involve long-run, irreversible, and uncertaineffects, conventional economic analysis provides a framework for rationaldecision-making--although, as in all other fields, it is never sufficientfor the final decision.

SCW programs create essentially three kinds of benefits:

- Increased production of agriculture, forest, and grass products,- Reduced external costs of downstream sedimentation and

flooding, and- Preserzvation of option values for an uncertain future.

The on site, external and inter-temporal dimensions of SWCprograms must all be evaluated as quantitatively as possible if rationalchoices are to be made in this important field.

In principle, the on site and external benefits of SWC programscan be estimated with a reasonable degree of accuracy--although the datais rarely available to actually do so. The situation with respect tooption values is quite another matter. For example, in attempting toestimate the need for soil on site a centuzy from now, one must be ableto forecast both consumption demand and agricultural technology at thattime. Future technology, which is based on new knowledge, is impossibleto predict even in principle. It simply is not known what the value ofland will be beyond the horizon of present technology--it may be morethan today's value, or less. In cases of uncertainty and risk it isrational to pay a certain amount in the present to preserve an option forthe future. In the case of risk, where probabilities can be assigned,the value of the option can be estimated, as in insurance premiums. Incases of pure uncertainty, where no probability can be assigned, thevalue of the option is strictly a matter of the subjective judgement ofdecision-makers.

However, while economic analysis cannot tell decision-makers thevalue of the option, it can define the cost of the option. For example,if a project carries a favorable rate of return on the basis of thecountable benefits.alone, then the cost of the option is zero. Nothingis given up by having the option if the project that carries the optionis desirable on other grounds. On the other hand, if the project does

- 15 -

not carry a favorable rate of return on the basis of the countables, thenthe cost of the option is the amount of additonal benefit necessary tomake it favorable. For example, in benefit-cost terms, if a 3/C ratio of1.2 is considered favorable, and the B/C ratio on the basis of thecountables alone is only 0.9, then the cost of the option is equal to 0.3of the total countable benefits. After this computation is finisheddecision-makers can decide if the project is worth doing. This is thebasic methodology used here for the economic evaluation of SWC program.

2. Overview

The Upland Agriculture and Conservation Project is targeted tohave direct impact on the agricultural system in the upper watershedregions of the Jratunseluna and Brantas Basins of Central and East Java,respectively. Through the Sustainable Upland Warming Systems (SUFS)component, dem plots (10 ha each) will be established on critical landswith greater than 15% slope to demonstrate improved technologyappropriate for increasing agricultural productivity in upland areas.These dem plots will be developed under the supervision of the extensionservice, with all dem plot participants responsible for constructingbench terraces on their own land to prevent future declines inproductivity and for assisting to build waterways for the contiguousterraced area. As an incentive to participate, in the first and secondyears, cooperators will be given improved seed varieties and inputs toIncrease yields and a subsidy to cover the cost for construction ofwaterways for establishing grass to stabilize the terraces and forimproved seed varities and inputs to increase yields. In subsequentyears, credit will be available to finance input purchases.

In year 2, the technology demonstrated on the dem plot will beextended to nearby farms with participants given the same incentivesprovided to the initial dem plot cooperators. As appropriate technologyis identified, project activities will expand to cover the steep slopedareas--say, 40% and above--through such technologies as grass and treestrip terracing, orchards, grasses and fodder trees, fuel wood and othercash crops.

To support the SUFS dem plot/expansion program, the UplandAgriculture and Conservation Project includes components in appliedresearch, human resource development and upland village access roads.

In addition to directly increasing upland agriculturalproductivity, the project has secondary impact beyond the immediateproject area. Stabilizing the uplands will reduce the siltation rate indownrstream dams, extending their useful life for producing hydroelectricpower and irrigating the lowlands, and in the coastal estuaries, therebyincreasing fisheries productivity. Technology developed through theapplied agricultural research component will increase agriculturalproductivity in upper watershed areas throughout Indonesia. Organizationand management strategies incorporated into the project will havewidespread applicability for increasing project effectiveness throughoutthe agricultural sector.

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3. Crop Systems

The primaxy annual crops grown in the Jratunseluna and BrantasRiver Basins include cassava, corn, peanuts, soybeans with some uplandrice, sweet potatoes and mung beans. Econonic crops include sugar cane,clove, coffee, firewood trees and fodder trees.

In each of the two target provinces, the project will focus onfour districts. In each district, activities are concentrated in thesub-districts most affected by soil erosion due to annual croppingactivities. Table 1 (a-d) shows estimated yields and area for eachsub-district in the project area. These average yields tend to overestimate actual yields found in the project areas since 1) the datarepresents an average of yields in lowland and upland environments, 2)yields are generally higher in the lowlands, 3) only a portion of eachsub-district is in the upper watershed, and 4) the values generallyreflect pure stand yields whereas producers in the upper watershedinter-crop.

Based on Bina Marga District data, the major annual food cropcropping patterns are estimated in Table 2. While upland rice is alsogrown In the upper watersheds, data is not available to estimate theupland rice area. Consequently, upland rice is an additional crop insome unknown proportion in the listed cropping patterns.

4. Prices

Financial prices for material inputs are based on currentgovernment farm level supply prices. Seed prices are adjusted to reflectthe cost of improved varieties. Labor costs are based on the prevailingwage rate in the area. Output prices are based on seasonal low ruralmarket prices (1983) in Central and East Java, estimated by the CentralBureau of Statisties. Working Paper I discusses the marketing situatlionwith respect to secondary crops in Indonesia.

Economic prices are derived from world market prices (mid-1983)backed down to farm gate prices. The minimum shadow price of underemployed labor is assumed to be Rp 500/md, equal to the estimated dailyminimum wage necessary for a head of household to support a family offive persons.

5. Without Project Situation

For estimating crop production in the without project situation,results in Tables 1 (a-d) and 2 were reviewed as well as studiesconducted in similar upper watershed areas. The cropping pattern,cassava and corn with peanuts, was chosen for representative analysisbecause it is an important pattern in the area and is a more intensiveexisting pattern than a monoculture or two-crop pattern. Improvementsachieved in this pattern would have an even greater impact on lessintensive existing cropping patterns.

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input levels and yields associated with this existing croppingpattern are shown in Table 3, assuming that 20% of the first and secondcrops are planted to cassava and 80% to corn and peanuts, respectively.Total labor is estimated at 200 md/ha, 30% of which is hired. Inputlevels and yields are based on a synthesis of data shown in Table I(a-d), research conducted in similar areas, and the judgment of thetechnical personnel (Working Paper L, Secondary Crop Marketing).

Financial and economic prices for inputs and outputs are shown inTable 4.

Under the assumed cropping pattern and input levels (Table 3) andprices (Table 4), net returns/ha are shown in Table S. In the absence ofa better yield/soil loss functon for critical areas, it is assumed thatnet returns decline at a rate of 2% p.a. as a consequence of soil erosionin critical areas.

6. With Project Situation

Analysis of the with project situation is based on estimates ofproductivity increases that can be achieved in the existing croppingpattern through the introduction of new seed varieties, fertilizer andpesticide--once the soil-moisture regime is established by terracing.Input levels applied in the introduced cropping pattern are shown inTable 6. In years 1 and 2, inputs are subsidized, but in subsequentyears producers are assumed to borrow or use their own capital atdiscount rate of 2%/month.

As a consequence of the adoption of new seed varieties, fertilizerand pesticide, cassava yields are expected to increase by 50% and cornand peanut yields by 100 compared to the without project situation. Itis assumed to take five years for the existing technologies to achievetheir full potential as producers will require some time to fine-tune therecommended practices. From years 6 to 15 it is estimated that cassava,corn and peanut yields will increase at an anual rate of 2%, 3% and 3%,respectively as a consequence of research activities conducted by theapplied research component of the project. From years 16 to 30 it isassumed yields will remain constant without further research. The yieldsfor years 1 to 30 projected under these assumptions are shown in Table 7.

Under the assumed cropping pattern and input levels (Table 6) andresulting yields (Table 7), net returns are shown in Table 8a (financial)and Bb (economic) for the food crop enterprise. Financial returns tofarmers are shown net of subsidies under the SUFS component. Economicreturns include the economic costs of the subsidies for farm imputs.

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Table l(a)Secondary Crop area (ha) and Yields (kg/ha)

in Project Sub-Districts of the upper watershed regionsof the Jratunseluna and Brantas River Basins (1982)

| Corn Cassava Soybeans Peanuts| Districts/ Area Yield Area Yield Area Yield Area Yield I| Sub-Districts (ha) (kg) (ha) (kg) (ha) (kg) (ha) (kg) I

M ?alang| Pagak NA NA 1,410 15,820 721 698 203 729 || Dampet NA NA 1,494 17,880 0 0 10 700 |

| Xalipare NA NA 1,935 16,320 921 705 539 701 || Gudangan NA NA NA NA NA NA NA NA |I Suber manjung NA NA 1,885 17,030 164 707 37 649 || Bantur NA NA 4,883 15,430 196 674 21 667 || Ampel gading NA NA 2,347 18,610 0 0 15 667 I| Donomulyo NA NA 4,234 16,790 469 693 165 752 || Wajali NA NA 181 16,630 0 0 5 800 || NA NA 18,369 16,650 2,462 698 995 713 |I II C:ropping PatternI NA

| Blitar Ij Kademangan 1,448 698 2,178 7,697 170 597 204 479 |

B sakung 754 752 1,833 7,929 202 340 114 428 |I Sutojayan 200 1,242 1,125 9,393 114 523 258 553 1| Panggungrejo 1,460 803 1,515 4,779 1,250 388 0 0 J| Binangun 1,452 771 2,215 6,084 2,196 615 0 0 1I Wates 1,249 1,139 1,077 5,680 1,217 737 881 4373 6,563 844 9,943 6,929 5,149 533 1,457 462 II I Cropping Pattern Area (%) I

Cassava monoculture 33Cassava + corn + peanuts 17 ICassava + corn I soybeans 50 |

I II I

NA - Data not availableSource: Bina Marga

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Table 1( b)Secondarv Crop area (ha) and Yields (kg/ha)

in Project Sub-Districts o3 the upper watershed regionsof the Jratunseluna and Brantas River Basins (1982)

Corn Cassava Soybeans Peanuts| Districts/ Area Yield Area Yield Area Yield Area Yield II Sub-Districts (ha) (kg) (ha) (kg) (ha) (kg, (ha) (kg)

I Tulung AgungI Rejotangan 937 2,026 564 8,700 319 725 340 760 3| Tanggung gunung 624 2,626 36 8,400 0 0 266 500 1I Pucang laban 779 1,337 1,975 4,733 236 455 538 400 || Seadang 791 1,100 1,730 10,393 14 514 1,710 960 || Pagerwajo 1,182 1,270 1,295 7,811 0 0 93 900 I| Kamman 78 800 37 8,500 43 553 12 650 |

Kali Dawir 1,047 1,726 1,508 5,147 261 655 96 700 |x Xarang rejo 827 2,870 656 7,713 175 805 240 980 1

I6,331 1,780 a 7,791 7,200 1,054 650 3,364 800I II Croping Pattern Area (%)i Cassava monoculture 19

CCassava + corn 25 II Cassava + corn + peanuts 43! Cassava + corn + soybeans 13i I

T Trenqqalek Ii Pale 118 1,560 2,54d 9,755 14 321 0 0 |

x Zarangan 1,266 1,891 2,374 9,787 1,588 465 71 572P Panggul. 69 1,056 849 9,726 893 429 151 498Dongko 224 1,653 996 8,496 94 450 46 576 |

I Darenan 538 2,495 495 10,553 783 583 21 633Tugu 1,112 1,781 1,672 9,568 803 589 37 549 I

I Xampak s0 900 720 9,057 280 441 109 542 |I Watulimo 44 1,770 2,988 9,585 73 485 56 627 I

B Dendungan 2,407 1,801 1,805 9,805 13 400 0 0 || Gandusari 822 1,859 1,307 9,754 1,022 569 275 614 || Trenggalek 381 1,677 723 9,591 789 579 23 600 |I Pagolan 372 1,561 463 9,554 739 478 95 583

7,433 1,827 16,940 9,607 7,091 515 884 575

I Cropping Pattern Area (%) II Cassava monoculture 56I Cassava + corn + peanuts 391 Cassava + corn + soybeans 5I I1, I

Source: BirLa Marga

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Table I(c)Secondaxy Crop area (ha) and Yields (kg/ha)

in ProJect Sub-Districts in the upper watershed regionsof the Jratunseluna and Brantas River Basins (1982)

I Corn Cassava Soybeans Peanuts | Districts/ Area Yield Area Yield Area Yield Area Yield ISub-Districts (ha) (kg) (ha) (kg) (ha) (kg) (ha) (kg)

I Getasan 1,421 2,625 147 10,565 1 100 1 600 1I Jambu 2,894 2,837 935 13,294 0 0 5 800I Ungaran 208 1,909 287 13,408 0 0 153 856 1

I Klepu 357 1,675 950 13,334 7 857 217 848I Tegarun 984 2,019 232 11,237 0 0 7 343I Sumowono 1,847 2,485 347 13,225 0 0 0 0 I

B Dawen 88 2,114 286 13,272 0 0 59 1,712 |I Susukan 431 2,814 221 12,534 129 798 863 650I Tumtang 109 2,119 459 11,634 0 0 0 0 1I Ambrawa 882 2,387 628 13,311 0 0 2 5003 Bagin 437 2,261 367 10,515 2 500 363 967ISuxzuh 304 2,084 495 10,721 0 0 423 650 II 10,117 2,496 5,354 12,538 139 799 2,093 783 1

cropping Pattern Area %)|Corn monoculture 47 ICassava monoculture 31Cassava + corn + peanuts 1 1

I Cassava + corn + soybeans 21 1

I Noyolali.wonosegoro 2,496 1,698 1,367 9,096 605 562 249 1,072I Kuuu 2,528 1,808 1,128 8,618 266 564 380 692

I Klego 1,047 1,566 1,525 9,800 488 1.002 223 659J uangi 520 1,040 509 5,760 147 544 25 640Xaranggede 996 1,519 1,107 9,858 175 863 131 687 1

| Andong 1,041 1,560 1,464 9,034 18 556 542 659 |9,628 1,637 7,100 9,036 1, 699 718 1,550 736 I

Cropping Pattern Area (9 II O:brn monoculture 18 1I C1assava monoculture 44 1

Cassava + corn + peanuts 1.8 I Caxsava + corn + soybeans 20 I

Source: Bina arga

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Table l(d)Secondary Crop area (ha) and Yields (kg/ha)

in Proiect Sub-Districts in the upper watershed regionsof the Jratiuseluna and Brantas River Basins (1982)

Corn Cassava Soybeans Peanuts |

I Districts/ Area Yield Area Yield Area Yield Area Yield |I Sub-Districts (ha) (kg) (ha) (kg) (ha) (kg) (ha) (kg) I

| GroboganI Kradenan 3,699 1,698 325 9,791 387 814 74 554 |

Gasbus 4,100 1,557 340 9,956 2,056 701 0 0II Geyer 1,850 1,589 1,940 13,174 78 820 84 833 |I Kedung jati 123 1,667 357 9,434 90 711 66 758I Torah 6,012 1,572 62 10,290 1,273 766 18 500 S

x Karang agung 1,258 1,572 1,308 9,038 189 757 14 571 |

I Pulokulon 3,324 1,614 320 8,525 91 654 0 021,041 1,549 4,652 10,892 4,164 736 256 695

I .II CCOpping Pattern Area (L) II Corn monoculture 77

Cassava monoculture 12I Cassava + corn + peanuts 10| Cassava + corn + soybeans 1I I

B Elora II Jepon 12,921 625 854 7,645 1,617 413 1,749 389 1

| Ngamen 8,382 908 882 7,496 4,736 264 923 333 1| Banjarejo 7,970 913 532 7,684 1,717 767 843 439 |I Tanjungan 5,762 803 551 7,668 3,613 450 1,712 430 1| Blora 1,816 811 105 7,638 598 455 244 414 I

36,851 789 2,924 7,611 12,281 *'18 5,471 401 I

I Cropping Pattern Area (M)I Corn monoculture 44I Corn + cassava 8

Corn + peanuts 15 iCorn + scybeans 33 1

4 I

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Table 2Relative Occurance of Major Cropping Patterns

found in the Upper Watershed Regionsof the Jratunseluna and Brantas River Basins (1982)

I t Cropping PatternI I I I I I Cassava | Cassava | Cassava |

I I I I I I + + Corn | +I I Corn I Cassava t Cassava | Cassava I Soybeans] Corn I CornI IKNono |Mono- + I + I I + I +

t________ I culture | culture I Corn I Peanuts I Soybeansl Peanuts I Soybeansi

IPercentIof area 34 I 19 1 7 I 5 | 11 1 16 1 8I_____ I . I _ .I 1 I I

Source: Estimated from Bina Marga data for respective sub-districts.

Table 3Characteristics of the Dominant Intercropped Farmers' Cropping Patterns

in Moderately Sloped Areas in the Upper Watershed Regionsof the Jratunseluna and Brantas River Basins

(per ha)

I _ lOUTPUT INPUTSC Cropping I I I ILabor I Hired I|ertili-I Seed (kg1)

I Pattern I ICassaval Corn IPeanutsl (MD) I % lzer (kg)I Corn I PeanutsI I I I I II Cassava + I I I II corn + 1 2,000 1 1,0001 500 1 200 1 30 1 75 1 40 1 60 1I peanuts I I I I I II I I I [ I I I I

Note: Derived from Bina Marga data and synthesis of research reports.

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Table 4Prices of Inputs and Outputs in the upper watershed regions

of.the Jratunseluna and Brantas River Basins (1983)

I' I 1 Price/Value I Price/Value I

| F a c t o r I Unit I FinanciallEconomic I FinanciallEconomic |I I I I

INPTS

r Fertilizer: I I I I- Urea | kg | 90 I 200| .09 I .20 |

I -TSP I kg | 90 I 2381 .09 1 .24|I - Cx | kg | 90 | 177 | .09 | .18 |

I Insecticide: I I I I I| - Diazinin I lt I 1500 1 6000 | 1.50 1 6.00 |

- Furidan I kg | 400 1 1600 I .40 I 1.60 I

| Labor: I I I I- -F rm Imanday 1000 1 500 S 1.00 o .50i - Public Works | manday | 1000 | 500 | 1.00 | .50 |

j Materials: | I I I I Iw-Waterways | ha | 60000 | 60000 | .60 1 .60 |

i I I I. I I IISeed: I I I I I

Local - Corn |kg | 150 | 150 .15 I .15- Peanut |kg | 850 I 850a .85 I .85

| Improved |

- Corn | kg | 300 | 300 | .30 1 .30I - Peanut Ikg I 900 I 9001 .90 I .90

JOUTPIJ,SIIIIIII O SI I I I I I| Cassava 1kg I 30 0 3 .03 | .031| Cbrn 1kg I 110 I 169 .11 I .17I Peanut I kg I 750 I 4071 .75 I .411

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Table 5Crrent Returns from FaPaer's Cropping PatternWithout ProJect Moderately Sloped Areas in the

Jratunseluna and Drantas River Basin.

I I_________ Ibpenses' I Returns| I I FeiIrtl l l I

__________I Seed lizer**l Labor I Total I Gross I Net |I 1 I - --I I I l=I

I FinanJiai 1 57,000 I 6,750 t 60,000 | 123,750 | 545,000 | 421,250 |z coonamic 1 57,000 I 15,950 I 100,000 I 172,950 I 431,500 1 258,550 t

1___ Ij_ _ 1 I I 1I,

* See Tables 3 and 4 for yields, izwut levels and prices used inestimating returns.

' Analysis assmes labor use declines by 3 percent/year, compared toprevious year's total.

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7. Livestock Ekperiment

In addition, during the first three year. of the project,experiments wlll be conducted to test the technical and economicviability of small ruminants in the project areas. In steep slope areasgrass and tree plantations will be established, inter-,copped withagricultural crops for the first 2-3 years, to provide fodder forlivestock. Also grass production from the risers of bench-terraces naysupply sufficient fodder to support livestock. The major constraint willbe fodder supplies through the dry season. This constraint can only besolved through dry season production of fodder, or by storage. If theexperiments are successful a livestock subsidy progras will be madeavailable in the program beginning in the fourth year. Bowever, thelivestock sector has not been included in this analysis.

8. Economic Analysis: Project Level

a. Total Net incremental Benefit from the SUPS Component

Direct project benefits are generated as a consequence of theSustainable Upland Farming Systems component on farm level productivity,as shown in Table 9a. Cols. 1 and 2 show the net annual return per hawith and without the project respectively. Incremental net projectreturns per ha are shown in col. 3. The total additional area to beimproved by the project p.a. is shown in col. 4. Tbtal net economicbenefits, excluding project level costs, are shown in col. S. The totalnet benefit shown in col. 5 is derived by first multiplying the netLncremental benefits on one hectare for each of the project years 1-30times the number of hectares covered by the project in years 0-6, asshown in Table 9b. 5he benefit streams are crnmmed across each year toobtain col. 5 of Table 9a. To generate a 30-7ear flow of benefits fromall dam plot/expansion hectares, six extra years are added to Table 9aand b as the 30th year of benefits from development initiated in year 6do not occur until year 36.

b. Economic Evaluation: Direct Project Level Co--I.s and Benefits

Total project costs (including 10% contingency), as explainedin Section V of the Project Paper, are shown in Table 9a. Col. 6. TheSUPS costs have been reduced by the economic value of waterways,materials, seeds, fertilizer and pesticides that have a: ready beenincluded in the first two years, as shown in Table 8. Col. 7 presentsthe net stream of project benefits after all project levtl costs (withthe SUPS component adjusted) are deducted. As shown in col. 8 of Table9a, the IRR of the project on this basis is slightly less than 12%.

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Table 6IPuts LeveLs

of the Jratunseluma and Brantas River Basin8 (1983)

1 jc| Croppinpg PatteternI a c t o r ' Unit I Existim Introduced 7I

INPUTS I I I

I Fertilizer: I I I- Urea | kg 1 50 | 200

| -TSP . kg | 25 | 200| - CL | kg | 0 | 100 |

I Insecticide: I | II - Diazinin | lt | 0 | 9 |

- Fuidan k Xg | 0 | 6

I Labor:| - Fazm (total, yr. 1) manday | 200 | 206I -EHired | percent 1 30 I 30

I Materials: I |I - Waterways | man-days I 0 1 30 1| - Terraces building mandays |0 So 500 |

- Terraces maintenance mandays 0 10 |i I I I IISeed: 1 -I ocal 1 I I

_ -Corn I kg 1 40 I 0- Peanut | kg | 60 | 0

i Improved I I I| -Corn I kg 1 0 | 40I - Peanuts | kg | 0 | 60 |

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Table 7Yields in Introduced Cropping Pattern with project

in the Jratunseluna and Brantas River Basin*(kg/ha)

I Cassava* Corn PeanutsI Year with with after I| Corn Cassava Cssava I

1 2,000 1,000 5o0 o2 2,200 1,200 600 l3 2,400 1,400 700 I4 2,800 1,800 850 l5 3,000 2,000 1,0006 3,060 2,060 1,030 l7 3,121 2,122 1,0618 3,184 2,185 1,093I 9 3,247 2,251 1,126 l.10 3,312 2,319 1,159 l

I 11 3,378 3,388 1,19412 3,446 2,460 1,230

* 13 3,515 2,534 1,267 IA14 3,585 2,610 1,305 l

I 15 3,657 2,688 1,344* - -16 3,657 2,688 1,344- 17 3,657 2,688 1,344

18 3,657 2,688 1,344 1g19 3,657 2,688 1,344

20 3,657 2,688 1,344 121 3,657 2,688 1,34422 3,657 2,688 1,344

- *23 3,657 2,688 1,34424 3,657 2,688 1,34425 3,657 2,688 1,34426 3,657 2,688 1,34427 3,657 2,688 1,344 I28 3,657 2,688 1,344 l

I 29 3,657 2,688 1,34430 3,657 2,688 1,344

* Yields from years 1-5 are based on an estimate of the potentialof existing technology. Yields from years 6-15 are based on theassumption that project research activities will developimproved technology that will increase cassava, corn and peanutyields by 2, 3 and 3% year, respectively. From year 16-30,yields will remain constant without further research.

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Table 8aPinancial Returns from Introduced &CrPping Patterns with projeCt

Moderately Sloped Areas in the Upper Watershed Areasof the Jratunseluna and Brantas River Basin

(Hp/ha)

| Expenses* Returns ( Financial) |1 Year Fertl- Pesti- Hired Inte- I

Seed lizer cide Labor" rest Total Gross NotI 0 0 0 61,800 0 61,800 545,000 483,2002 28,000 20,000 6,000 63,654 4,660 126,914 648,000 521,0863 66,000 45,000 15,900 65,564 10,962 203,426 751,000 545,5744 66,000 45,000 15,900 67,531 10,962 205,393 919,500 714,1075 66,000 45,500 15,900 69,556 10,962 207,418 1,060,000 852,5826 66,000 45,000 15,900 71,643 10,962 209,505 1,090,900 881,3957 66.000 45,000 15,900 73,792 10,962 211,654 1,122,709 911,0558 66,000 45,000 lb,900 76,006 10,962 213,868 1,155,454 941,586 1

I 9 66,000 45,000 15,900 78,286 10,962 216,148 1,189,162 973,014 11 10 66,000 45,000 15,900 80,635 10,962 218,497 1,189,162 1,005,366I 11 66,000 45,000 15,900 83,054 10,962 220,916 1,223,863 1,038,669

12 66,000 45,000 15,900 85,546 10,962 223,408 1,259,585 1,072,952I 13 66,000 45,000 15,900 88,112 10,962 225,974 1,296,359 1,108,242i 14 66,000 45,000 15,900 90,755 10,962 228,617 1,334,216 1,144,571

15 66,000 45,000 15,900 93,478 10,962 231,340 1,373,168 1,181,968. 16 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,382,050

17 Lo,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,05018 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,050

2 19 66,000 45,000 15,900 93,478 10,962 231,340 1 , 4 1 3 , 3 0 8 1,182,05020 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,050

1 21 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,05022 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,05023 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,05024 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,05025 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,05026 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,05027 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,050

1 28 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,05029 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,050

1 30 66,000 45,000 15,900 93,478 10,962 231,340 1,413,308 1,182,050 II .I

* See Table 4 for input levels and prices used in estimating returns. Seed,fertilizer and pesticide are subsidized to project participants in years 1and 2 as shown in Table 14 p.53.

* Analysis assumes a labor demand of 206 md/ha in year 1 and that labor demandwill increase by 3 percent per year compared to the previous year' s level.

' Interest costs estimated as 24% of first crop's material inputs and 12% ofsecond crop's material imputs.

44066h:joy: 7/5/84

- 29 -Table Eb

EconoiLc Cost and Returns from Introduced Cropping Pattern with projectModerately Sloped Areas in the Upnper Watershed Areas

of the Jratunseluna and Brantas River Basin.(Hp/ha)

I ~Rt ense8 1, IWaterways Terrace Labor Annual Crops bconoioa 1 -I

| Year Materials Cbn- Main- FertL- PeetL- | Labor' struct*" tain"** Seed luser cide Labor'*** Total Gross Net I

1 60,000 15,000 250,000 0 66,000 105,300 63.600 103,000 662,900 431,500 231,4002 0 0 0 5,000 66,000 105,300 63,600 106,090 345,990 511,900 165,8103 0 0 0 5,000 66,000 105,300 63,600 109,273 349,173 592,100 242,9274 0 0 0 5,000 66,000 105,300 63,600 112,551 352,451 732,350 377,8995 0 0 a 5,000 66,000 105,300 63,600 115,927 355,827 833,000 477,1736 0 0 0 5,000 66,000 105,300 63,600 119,405 359,305 857,090 497,7957 0 0 0 5,000 66,000 105,300 63,600 122,987 362,887 861,685 S18,9978 0 0 0 5,000 66,000 105,300 63,600 126,677 366,577 907,405 540,628

l 9 0 0 0 5,000 66,000 105,300 63,600 130,477 370,377 933,672 563,295I 10 0 0 0 5,000 66,000 105,300 63,600 134,392 374,292 960,708 594,41611 0 0 0 5,000 66,000 105,300 63,600 138,323 378,323 988,535 610,21212 0 0 0 5,000 66,000 105,300 63,600 142,576 382,476 1,017,178 634,70213 0 0 0 5,000 66,000 l05,300 63,600 146,853 396,753 1,046,660 659,90614 0 0 0 5,000 66,000 105,300 63,600 151,259 391,159 1,077,005 685,846i15 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,239 712,54316 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,60517 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,605i1 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,605

I 19 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,6051 20 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,60521 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,60522 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,60523 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,60524 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,60525 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,109,302 712,605

I 26 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,605 I27 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,109,302 712,605 |29 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,60529 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 1,108,302 712,60530 0 0 0 5,000 66,000 105,300 63,600 155,797 395,697 L,108,302 712,605

I/ See table 4 for lnput levels and prices used In estimating returns& 30 md/ha'* 500 md/ha*O* 10 md/ha"*' Analysis assumes a labor demand of 206 md/ha in year 1 and that labor demand will increage by 3 percent per year

compared to the previous year's level.

*1462ljoys

- 30 -

TABLE 9A EPONOMIC ANALYSIS UACP

1 2 3 4 5 6 7 9

YEAR NET RETURN NET RETURN INCREMENTAL HA SUFS TOTAL NET TOTAL PRO- NET PROJECT NPV e 12% NPV OllX/HA WITH /HA WITH- RETURNS/HA RETURNS JECT COSTS BENIFITSPROJECT OUT PROJECT SUFS ADJ SPILL

0 o 0 0 0 0 2841961 -2841961 -2537465 -25603251 -231 259 -490 100 -49000 4369266 -4418266 -3522215 -35859642 166 254 -66 1010 -503682 5475080 -5976762 -4255Y6S -43716193 243 249 -6 2620 -1373073 6122414 -7495487 -4763517 -49373094 :30 244 136 4912 -2629146 6007304 -9636450 -4900s54 -51253135 477 239 230 6970 -3700316 5465966 -9186304 -4654067 -49113736 499 234 264 7344 -3615076 4074208 -7669284 -3479242 -37036087 519 229 290 903504 903504 364910 3920558 541 225 316 3092386 3092386 1115143 12088909 563 220 343 5068534 5068534 1631932 178505V10 586 216 370 6221695 .6221695 1766589 1974040It 610 212 398 6820551 6820551 1750666 194959212 635 207 428 7427969 7427969 1702299 191280813 h60 203 457 8049178 8049178 1647021 186736814 686 199 467 6682934 9602934 1566340 191477115 713 195 518 9335014 9335014 1522743 175771016 713 191 522 iOO00365 10000365 1456497 169639917 713 197 V26 10651399 10651368 1395102 162776818 713 184 529 11241660) 11241660 1305233 154772519 713 180 533 11711765 11711765 1214121 145265620 713 176 537 11999204 11999204 1110642 134081921 713 173 540 12086573 12086573 999865 121674022 713 169 544 12172194 12172194 891816 110392723 713 166 547 12256103 12256103 807458 100139524 713 163 550 12338333 12338333 725782 '90820125 713 159 554 12418919 12418919 652252 92354326 713 156 557 12497893 12497993 586073 74664927 713 153 560 12575208 12575288 526518 67682226 713 150 563 12651135 12651135 472941 61342729 713 147 566 12725465 12725465 424750 55588430 713 144 569 12798308 12798308 381412 50366331 713 141 572 12869694 12869694 342446 45628232 12882199 12882198 306052 41146433 12370190 12370190 262400 35595534 10929002 10929002 206990 28331935 a162419 8162419 138029 19063036 4198708 4198708 63394 8934237

TOTAL 12427 22956 295268278 34376221 250892057 -736867 3068169

- 31 -TABLE 98 PROJECTIONS OF NET RETURNS

YEAR 1 2 3 4 Y 601 -490002 -9792 -4949003 -574 -88698 -12838004 13623 -5901 -230088 -24068BO5 23811 137594 -15048 -431372 -34153006 26389 240489 356926 -28213 -612105 -35985607 28957 266523 623839 669169 -40033 -6449508 31616 292462 691377 1169580 949532 -421519 34265 319317 758665 1296201 1659603 100049210 37006 346079 928327 1422352 1939275 174865511 39838 373760 897749 152956 2018291 193796812 42761 402362 969555 1693108 2203604 212657913 45676 431887 1043751 1917731 2380287 232184614 49692 461326 1120340 1956933 2579314 251643915 51781 491691 1196707 2100423 2776696 271771616 52171 522995 1275477 2243597 2990446 292568917 52554 526928 1356654 2391276 3193606 314037218 52929 530792 1366582 2543467 3393158 335443319 53296 534579 1376905 2562642 3609113 357523020 53656 539290 1386728 2581435 3636323 380277321 54009 541926 1396355 2599851 3662999 393144322 54355 545490 1405789 2617899 3689121 385953923 54694 548953 1415035 2635586 3714731 388707424 55026 552406 1424095 2652920 3739929 391405925 55351 555761 1432974 2669907 3764424 394050226 55670 559049 1441676 2696554 3799528 396641927 55983 562270 1450204 2702968 3912149 399191528 56289 565427 1459561 2718855 3935299 401670429 56599 568521 1466751 2734523 3957985 404109530 56994 571553 1474777 2749879 3880217 406499931 57172 574525 1492643 2764926 3902005 409842432 577437 1490351 2779672 3923357 411138133 1497905 2794124 3944292 413397934 2909286 3964799 415592735 3994995 417753436 4199709

- 32 -

c- EZonomic Anelysis: Indirect Benefits

In-so-fazr-as the project is successful in reducing flooding andsedimentation, indirect benefits will be created for downstreambeneficiaries. A major goal of the research component of the projectvL1l be to measure the quantity of these indirect benefits. Pending datafrom that research, only an indicative estimate is possible here.Fortunately, there exists some information from a feasible study of asimilar project proposal in the watershed of the Xedung Ombo reservoir inCentral Java, by the Snowy Mountains Engineering Coxporation, whichprovides the basis for an indicative analysis.

The reservoir has a dead storage capacity of 91 MC0 (millionm3) and a total storage capacity of 728 1C0. It is estimated that 2.4NM of sediment is trapped in the reservoir p.a. At this rate ofsedimentation, total storage of the reservoir will be exhausted in 250years. Thus the dead storage would be filled in 38 years. However,sediment tends to pile up at the tail of a reservoir, displacing livestoraae. The estimate is 1.4 M1M loss of live storage p.a. The economicanalysis of the project indicates that the value of live storage is$0.065/M3 resulting in an annual loss of live storage of $90,000 p.a.The present value of this loss, at 12% discounted over 38 years, is$740, 000.

A more significant loss, according to the report, is due todamage to canals and irrigation facilities below the dam-fron otherareas in the catchment. A sediment trap on the canal might trap 1.251101p.a. The cost of mechanically removing sediment is $1.40 m3 or $2.1million p.a. The present value of this cost over 38 years is $17.6=illion.

The SMEC study assumes that the rate of sedimentation could bereduced by one-half by the bench-terraces and silvipasture introduced bythe UACP. Thus the total present value of reduced external costs wouldbe about $9 million--or, $10 million with other benefits to fisheries,turbines, etc., included. The SWC part of the project costs $30million. The present value of reduced external costs is about one-third.of the project cost on the assumption that present rates of erosion willnot increase. If, without the project, erosion increased at a rate of 2%p.a., then this value would double to $20 million or two-thirds ofproject costs over the 38 year horizon. Longer horizons make nosubstantial difference in the present value.

9. Conclusion: Economic Viability of the UACP

There are essentially three factors to consider in appraising theeconomic viability of the UACP.

a. The bench-terrace/agricultural couponent, SUFS.b. Downstream benefits of reduced flooding and sedimentation.c. The spillover of benefits from agricultural research and roads,

to beneficiaries not formally included In the project.

- 33 -TABLE 1o. ECONOMIC ANALYSIS UACP ADJUSTED FOR SPILLOVER EFFECTS

1 2 3 4 5 6 7 9

YEAR NET RETURN NET RETURN INCREMENTAL HA SUFS TOTAL NET TOTAL PRO- NET PROJECT NPV 8 13X. NPV *14X/HA WITH /HA WITH- RETURNS/HA RETURNS JECT COSTS BENIFITS

*PROJECT OUT PROJECT SUFS ADJ SPILL

O 0 0 0 0 0 2841961 -2841961 -2515010 -24929481 -231 259 -490 100 -49000 4369266 -4418266 -3460150 -33997122 166 254 -8B Q101 -503682 5475060 -5978762 -4143582 -40354943 243 249 -6 2620 -1373073 6122414 -7495487 -4597122 -44379304 380 244 136 4912 -2629146. 3003652 -5632798 -3057257 -29254995 477 239 23B 6970 -3700316 3675612 -7375928 -3542795 -33603736 498 234 264 7344 -3615076 2037104 -5652180 -2402519 -22588227 519 229 290 903504 903504 339862 316732a 541 225 316 3092386 3092386 1029408 9509339 563 220 343 5069534 5069534 1493131 136720610 506 216 370 6221695 6221695 1621981 147216111 610 212 398 6820551 6820551 1573541 141566912 635 207 428 7427969 7427969 1516528 135240613 660 203 457 9049179 9049178 1454299 129553414 686 199 487 8682934 6682934 1368321 121644915 713 195 519 9335014 9335014 1320869 114719516 713 191 522 10000365 10000365 1252225 107803617 713 167 526 10651389 10651399 1180305 100720718 713 164 529 11241660 11241660 1102402 93247719 713 160 533 11711765 11711765 1016374 83216820 713 176 537 11999204 11999204 921521 76586221 713 173 540 12086573 12086573 921443 67670022 713 169 544 12172194 12172194 732090 59790223 713 166 547 12256103 12256103 6S2334 52800224 713 163 550 12338333 12338333 Se1160 46626925 713 159 554 12419919 12419919 517660 41167826 713 156 . 557 12497893 12497893 461019 36341727 713 153 560 12575286 12575288 410508 32076128 713 150 563 . 12651135 12651135 365472 28306729 713 147 566 12725465 12725465 325327 24976330 713 144 569 12799309 12798308 289548 22034431 713 141 572 12869694 12869694 257667 19436332 12892198 12882199 228245 17065933 12370190 12370190 193959 14375134 10929002 10929002 151647 11140735 8162419 8162419 100229 7299736 4198708 4198708 45626 3293337

TOTAL 12427 22956 295268278 27525089 257743189 -373736 -2906841

-3A-

On the basis of (a) above, the IRR is 12%, the same as the socialrate of discount and therefore, a marginal return on investment.However, the downstream benefits (b) have potential for adding benefitsequal to at least one-third of project costs, as shown in the preceedingsection. Finally, much of the benefits of some of the components willspillover to other beneficiaries tc) not counted here. It couldplausibly be assumed that the value of these spillover benefits will beequal to at least 50% of the costs of the research and roads components.Table 10 shows the effect of reducing these costs by 50% and the costs ofthe SUPS component by 33% to capture the potential value of downstreamflooding and sedimentation. The resulting IRR is slightly less than13%. This is perhaps the most realistic estimate possible of the realeconomic return to the project in the absence of better information.

C. Social Soundness Analysis

1. Introduction

The purpose of this analysis is to assess the compatability of theUpland Agriculture and Conservation Project with the socio-culturalenvironment of the target areas.

Throughout most of the 19th century, produce of the estate cropswas very good in upland areas of East and Central Java and the yields ofupland rice were equal to those of the wet rice areas. By the beginningof the 20th century, however, economic conditions in upland areas of Javabegan to deteriorate. Increased population pressure forced farnersfarther and farther up the slopes of the hilly regions. At the same timethe average size of landholdings steadily decreased, from an average ofthree hectares per farm in the 1930s to a little more than one hectare inthe 1960s. The carrying capacity of these regions was severely taxed sothat throughout the 1960s famine-like conditions were common place inmany regions. Government programs to build up food stocks havesignificantly reduced the risk of famine and on-going family planning andtransmigration programs provide a partial solution to these problems.However, the prevalence of malnutrition in these areas is still high andenvironmental problems have steadily worsened. The development ofsustainable, ecologically sound, upland farming systems is also criticalto addressing the problems confronting upland communities.

2. Socio-Economic Environment

The populations of the upland areas of the Brantas andJratunseluna Watersheds share many of the same socio-economiccharacteristics. Although there is a social and economic hierarchy inthe local commuities, the degree of difference that exist betweenindividuals is not very great. Living standards for the majority of thepopulation are quite low and material possessions are modest even at thehighest levels. The way of life is simple and largely based onagriculture.

- 35 -

Landownership is the most important factor in determining wealthand status in the uplands. In theory there are records of landholdings,but due to changes in cultivation rights, loans, inheritance, etc., theyare inaccurate. Ihe average size of landholdings in the project area isestimated at .70 hectare divided into several small parcels. In atypical setting, a large landholder is someone who owns more than 2hectares. Landownership of 5 hectares or moLe is very uncommon. Asignificant percentage of the population owns less than .50 hectare. Thesocial and economic stratification of these communities is reflected notonly by the size of the landholding, but also its quality and location.The villages are frequently located in the valleys and the poorestfamilies own the most distant and least fertile plots on the mountainslopes.

Absolute landlessness is uncocmon in the project area, but asignificant though uncertain proportion of the population does not ownenough land to provide for their livelihood throughout the year. Thescope for agricultural labor is limited for these small landholdersbecause few people own plots that cannot be worked by the family.Families whose land cannot provide year round sustenance are thereforedependent upon nonr-agricultural sources of income. For the older membersof these families and for the young females as well, cottage industriesprovide one source of additional income. Many families depend upon avariety of occupations in cities and nearby towns for this income.Because of the demands of planting and harvesting their own land,off-farm employment is frequently transitory. Males, ranging in age from15 to 40 are the primary migrants.

Animal ownership is widespread though not universal in theseupland communities. They provide an additional source of income for manyfamilies, either through direct ownership or caring for otherindividuals' livestock. Cattle, goats and sheep are the main runinantstended in these areas.

Despite similarities among upland communities in these twowatersheds, there is a degree of diversity. Several factors contributeto this diversity, the most obvious being those derived from variation inthe agro-c14iAtic zones. Other contributing factors are the availabilityof off-farm employment opportunities, migration patterns, access tomarkets, proximity to large urban centers and the presence of governmentprograms promoting rural development. On the basis of field trips to thetwo watersheds, four general types of socio-economic categories weredeveloped.

In the first category, environmental degradation and decliningagricultural productivity are in a very advanced stage. Per-Anent outmigration is high. The population structure is heavily weighted towardsyoung children and adults over 45. Landholdings are very large,averaging 2 hectares with some private holdings as high as 10 hectares.Agricultural labor is in short supply and off-farm employmentopportunities are rare.

- 36 -

The second type is similar to the first with the exception thaterosion and declining agricultural productivity are not as advanced.Subsistence farming, seasonal migration and limited access to markets arecharacteristic of this type. A variety of government assisted programsare the malnstay of new economic activity in these regions although thereturns from these programs appear to be minimal and there is little hopeof their becoming self-sustaining.

Zn the third category, households have significantly moreoptions. Substantial numbers of farmers in these areas own vet ricefields as well as upland fields. Greater access to a-rkets, morenumerous off-farm employment opportunities (including agricultural labor)and the emergence of a comercial orientation toward the farm entexpriseare everywhere in evidence. These communities are not as hoaogenous asthose described in categories 1 and 2 and the number of landless issignificantly higher.

Zn tho last category, sociO-economic conditions are quite similarto those described in the third category. One major diatinction is thatthe majority of upland households do not own wet rice lands. However,opportunities for earning additional income through agricultural labor inthe nearby vet rice areas are plentiful. Other off-famr employmentopportunities in rural industries are also frequently available. As Isthe case in categories 1 and 2, these communities are relativelyh'mogenous.

3. Social Organization

For many Indonesian famers, the most important geographical unitis the hamlet in vhich they live. The hamlet is a cluster of 50 to 100dwellings, housing between 250 and 1,000 people. Many of the familiesare closely related.

The hamlet is headed by an elected headman who represents thelowest level of authority in the rural government structure. In manycases the headman comes from the most prominent family within thecommunity whose members have served as hamlet headmen for many years.This family invariably has a long and intimate association with thehamlet and fulfills the role of community leaders. The dynam4sm andcommunity participation within the hamlet is often reflected in anddependent upon the personality and attitudes of its leader.

The hamlet is a subdivision of the village or townshipadministrative structure. A typical townshLp is divided into 10 to 12hamlets and Includes a population of 2,500 to 10,000 individuals. Thehead of the village administrative structure has a staff of 4 to 7individuals and a number of semi-public organizations at the villagelevel provide additional guidance * br development activities, the mostimportant of tbese organization is the LXZD. The LDID is a relativelyrecent addltion to the village aA-inistrative structure with no clearlines of authority with regazd to the development process. In themajority of cases, these organizations are dominated by the villageheadman.

- 37 -

The role of the village headman in village affairs has changedsubstantially in the past two decades. Traditionally, he served as acomunity leader with primary responsibility as intermediate between thevillage and the outside world. In more recent times, with the dramaticincrease of government programs targetted at the village level, theheadman' s role as community spokesman has given way to his position asgovernment representative at this level. In some respects, the villageheadmen and their staffs have become the rural elite with far less incommn with the rural peoples as was the case in the past. They remaindominant figures in the political life of rural communi#ies but often donot function as true community leaders.

4. The Project

The implementation strategy of the UAC Project focuses oncommunity participation and flexibility in the identification ofappropriate technical innovations. It also emphasizes testing famingsystems for improving the profitability of the farm enterprise, asopposed to overall production levels, to ensure that the maxmum benefitswill be derived from the program. Further refinement and explication ofthese strategies will necessarily have to occur within the first year ofthe project's implementation. More importantly, however, the project isdesigned to promote continous refinements of these strategies.

The importance of flexibility in the identification of appropriatetechnological innovations stems from the significant degree of diversityin the socio-econonic conditions within the project areas. For example,labor intensive innovations will not be as suitable in areas in whichsignificant outmigration is occuring. LRsS capital intensive packagesmight be more appropriate in subsistence areas than in communitiescharacterized by a commercial orientation to the farm enterprise. Thefocus on siter-specific planning, which is central to the projectimplementation strategy, is essential for identifying the criticalvariables which will influence the acceptability of the innovation.

Qoounnity participation is an expliclt element of the proposedproject implementation strategy. Efforts to operationalize the conceptof participation are still in the formative stage and will have to beclarified as project personnel gain additional experience in this area.Initially, emphasis should be given to building a collaborativerelationship between the extension service and the farmer groups withwhom they work. Such a strategy necessarily focuses on strengthening thecapacity of the extension service to enlist the cooperation of thefarmers in the development of the demonstration plots and the subsequentexpansion of these activities iin surrounding areas. It is difficult togeneralize about the existing capability of the extension service tooperate along these lines. A stereotype of the extension service asunresponsive to the needs of the farmers does exist. On the other hand,field trips to the two watersheds indicated that receptivity to assigningfarmers a larger role in the extension system is in evidence and thatinitial attempts to build a collaborative relationship between the twogroups are already underway.

% - 38-

A series of steps can be initiated at the oultset of the project toeffect community participation. The first is the unification of thedelivery of extension services. The fragmented state of the existingextension system and the dominance of food crop extension agents makes itextremely difficult for farmers to get the information they need toimprove the productivity of their farming systems. A second step is toconcentrate on farm-centered data in the development of site-specificplans for extension activities. A third step is to promote theestablishment of a monitoring system that will enable both extensionagents and farmers to assess the results of on-going efforts to improveproductivity and to adapt their activities accordingly. A fourth andfinal step is to focus on the hamlet as opposed to the township as thecritical social unit in these activities.

5. Beneficiaries

The activities associated with the Upland Agriculture andConservation Project will benefit a wide array of groups but principallywill assist the rural families who own and operate farms in the 22,920hectares of the target area. An estimate of the beneficiary populationof the tazget area, based upon average landholdings of .7 hectare and anaverage family size of 5, is 160,000.

The immediate benefits to the principal beneficiaries will derivefrom the increased yields and improved productivity expected from theproject activities. In the mediumr to long-term, more ecologically soundfarming practices will allow farmers to sustain the gains achieved fromthe availability of improved farming systems technologies.

The extent and nature of these gains can be expected to varysignificantly from location to location, depending upon agro-climatic,environmental and soccio-economic conditions. An important factor indetermining the impact of the project will be the extent to which theactivities have provided the beneficiaries with a greater range ofoptions for improving household social and economic well-being.

Other direct beneficiaries of the project include the lowlandhouseholds located in the two river basins. Restoring and preserving theupland regions of the Brantas and Jra%,unseluna Watersheds will benefitlowland populations whose farm enterprises are directly affected by soilconservation measures in these areas. Project activities that stabilizethe soils in the upland areas will reduce the siltation rate indownstreams dams, extending their useful life for producing hydroelectricpower and irrigating the lowlands. Similarly, reduced siltation in thecoastal estuaries will increase fisheries production. It is difficult toestimate the size of this second group of direct beneficiaries. Morethan half of the 3.2 mlillion of people living in the targetted areais ofthe 8 districts will, over time, be directly benefitted by the project.A sizeable percentage of the surrounding watershed pcpulations will alsobe directly affected.

- 39 -

Tnd4rect beneficiaries include the populations of the numerouswatersheds found throughout Java. Their benefits will principally derivefrom the applied agriculture research activities carried out under theproject which will have general application in other regions.

The above analysis states there may be landless population in thewatersheds in which the project will work. However, the available datais inadequate to pirpoint locations and/or to estimate numbers ofpeople. The project activities are aimed at landowners and are notintended to directly Involve the landless. Of course, if data generatedby the project surveys and other activities indicate opportunities toprovide assistance to landless persons under the rubrique of uplandagriculture and conservation, there is adequate flexibility to do so.

Project road construction will provide employment opportunities tothe general population in the areas, and the increased economic activitybrought about by the project also will benefit tl-e general pcpulation.

(Other USRID projects in the same geographic areas directlybenefit the landless).

Institutional development is an explicit focus of the project.The effectiveness and efficiency of the extension service in the projectareas wlll be increased and the role of local authorities will bestrengthened in the design and implementation activities of development.The improved organizational and management activities that will resultfrom this focus are expected to provide an institutional prototype thatsbould be replicable on a very large scale and thus indirectly benefitthese institution and the populations which they serve.

D Administrative Analysis

1. Tntroduction

The puzpose of the administrative analysis is to assess theadministrative capabilities of the implementing agencies and to determinewhether specific implementation plans will be workable. The analysisfocuses on three elements of tho implementing agencies' opreations:organization, management and staff. Assessment of the administrativecapabilities of the participating agencies is subdivided along the linesof the project's four major components: sustained upland farmingsystems, roads, agricultural research and training.

2. Sustaind Upland Farming Sstems

As a general obrervation both agriculture and conservationprograms of the government that focus on upland areas are highlycentralized and standardized. 5he rigidity imposed by the existingcentrallzed structure makes it extremely difficult &.or the relevantgovernment services to design and implement programs that can be tailored

- 40

to the many of agro-climatic and socio-economic conditions of uplandareaz throughout Indonesia. A second general observation is thatgovernment services for upland communities are highly fragmented,complicating the effective delivery of farming systems technology.

The following discussion outlines the present governmentalstructure and delivery system of conservation and agriculturetechnologies through the Ministry of ibrestry and the Ministry ofAgriculture and discusses the relationship of both to local govercment.

a. The RegreeningProgram

The national Regreening Program (Penghijauan) constitutes theGOI's principal delivery system focused on the conservation of thenattion's privately owned lands. Responsibility for this program isshared by seven Ministries, with the Ministries of Pbrestry and H:meAffairs playing key roles. Until recently (1983) technical management ofthe Regreening Program was located within the Ministry of Agricultureunder the overall policy guidance of the Minister of Agricultures. Since1983, however, responsibility for the Re greening Program has beentransfered to the newly created Ministry of Forestry (MOP). Within theMOP the program is under the policy direction of the Director General forReforestation and Land Rehabilitation (Chart I). Within this DirectorateGeneral a Directorate of Soil Conservation has been given the overallresponsibility for soil and water conservation on private lands (Chart

Through a Ministerial Decree issued in December 1983 the MOPhas authorized creation of eleven Regional Centers for LandRehauilitation and Conservation. On Java three centers are to be locatedIn the provincial capitals of West, Central and East Java. Thegeographical jurisdictions of these centers are, however, not identicalto provincial administrat*ve boundaries. For exazple, the regionalcenter located in Semarang, Central Java, is responsible for most ofCentral Java and all of the Special District of Jogyakarta whereas theregional center located in Bandung, the provincial capital of theprovince of West Java, is responsible for all of the territory in WestJava plus one district, Cilacap, which is administratively under thejurisdiction of the provincial government of Central Java. Ihe ral'on;.lfor this territorial division advanced by the Ministry of Forestry isthat their responsibilities are properly defined by watershed rather thanadministrative divisions of local government.

Subordinate to the eleven regional centers are fortySub-Centers for Land Rehabilitation and Soil Conservation which again areorganized around watershed rather than district government administrativeboundaries. Typically, the service area of one sub-center will cover theterritory of four .o nine district governments. These sub-centers(sub-BM2T), are responsible for the technical planning and guidance ofthe Regreening Program.

- 41 -

CHART IOraANIZATION CHART OF MINISTRY OF FORESTRY

| FORESTRY MINISTER I

- .. _I _-

| INSPECTORATE GENERAL I I I SECRETARY GENERAL I

I DIRECTORATE GENERAL I I DIRECTORATE GENERAL I I I DIRECTORATE GENERAL OF I| OF FOREST UTILI8A- I I OF REPORESTATION AND | | | FOREST PROTECTIOti ANDI TION | | LAND REHABILITATION I I I NATURE CONSERVATION I

I I SECRETARY OF | II I DIRECTORATE GBNERAL I

| I 1. - 1- 'I I I

IDIRECTORAT|I I|DIRECTORATEI1 IDIRECTORATEI I DIRECTORATE| II OP I |OF REFORES-1 I OF SOIL I IOF GREENINGI IIPROGRAMM¢NGI I TATION | I CONSERVA- I 1i SHIFTING I I

I TION I ICULTIVATIONI I| CONTROL I I

I ~~~~~~~~~~~~~~~~~~~~~~I

IAGENCY FOR FOREST INVENTORY I I I AGENCY FOR FORBST RESEARCHII AND FOREST LAND USE I I I AND DEVELOPMENT I

IPROVINCIAL HEADQUIARTER OFII MINISTRY OF FORESTRY I

#1462 tjoyi6/19/84

- 42 -

CHART II

ORGANIZATION CHART OF DIRECTORATE OF SOIL C4NSERVATION

MINISTRY OF FORESTRY

DIRECTOR OF II SOIL CONSERVATION |

---------------- |ADMINISTRATIVE DIVISION |

I I

I ISUB DIVISIONI ISUB DIVISION OF| ISUB DIVISION OF|I |OF PERSONNELI I HOUSE KEEPING I ICORRESP)NDENCE |

I _ _ _ _ I ._ __ -

ISUB DIRECTORATE FOR | SUB DIRECTORATE FOR I I SUB DIRECTORATE FORIWANrERSIED MANAGEMENTI ISOIL CONSERVATION TECHNIQUESI ILAND UTILIZATION PLANNINGI

I . .I

I _I I,,_

| |Watershed Managementi | _ Vegetative Techniques| I j Annual Crops I|I I Study Section S section I - I Section |

| _______watershed Manageinentj I _ Civil Technics I I _ Perennial Crops |

I I Planning section I I , Section I I Section

lwatershed Managementi I Check Dam I I | Grazing Crops eGuidance Section I I I Section , I I Section I

!Watershed Hydrology I 1 * Agro Economy I I IMonitoring of Soil II Section I I Section I '------lconservation rmple-I

Imentation Section I

#1462Atjoy t 6/19/84

- 43 -

Unlike the Ministry of Agriculture, the line of authority fromthe Ministry of Forestry in Jakarta to the regional and sub-regionallevel is direct. Local governments have no authority over the regionalor sub-regional centers, their budget or their personnel. This is indirect contrast to the relationship of local governments with the serviceagencies of the Ministry of Agriculture, which secund technicalagriculture personnel to work directly for provincial and districtgovernments. The establishment of these regional and sub-regionalcenters for land rehabilitation and conservation representsdeconcentration of Ministry of Pbrestry central authority, whereas theMaA field organization has elements of both central governmentdeconcentration as well as decentralization of authority to localgovernments.

While the MOF and its regional and sub-regional centers aredelegated responsibility for planning and guiding the technical aspectsof the Regreening Program, the management and financing of the program isvested with local (district) governments. They in turn direct one oftheir respective agriculture technical services to be the leadinplementing institution. The principal effect of these organizationalarrangements has been the separation of responsibility for planning fromimpleenntation. Predictably, when the program runs into problems in thefield the implementors (local governments and their agriculturalservices) fault the planning of Ministry of Fbrestry personnel and theforestry planners, in turn, argue that the implementing agencies haveimproperly carried out their technical plans.

At present four sets of instructions are issued annually by theGOI to effect implementation of the Regreening Program. The firstinstruction is in the form of a Presidential Decree that lays out overallpolicy objectives, the aggregate budget and calls on involved ministriesto collectively Issue further policy and implementation guidance of botha technical and administrative nature.

Subsequently, a second decree (SXB) is jointly Issued by sevenministrles that has specific roles in implementing the RegreeningProgram. The seven ministries involved in the formulation and issuanceof the SKB are ubme Affairs, Finance, Forestry, Agriculture, Environment,Public Works, and BAPPENAS.

This SKB lays out the functional responsibilities of eachparticipating ministry; designates district level goverznent as theresponsible management entity for field implementation of regreening(conservation) efforts on private lands; specifies the level and specificuses to which the Regreening Program budget can be applied and identifiesresponsibilities for planning sub-BRILT, plan approval (Governorl andfield implementation (local gove-nment along with extension staffdirectly supervised by the local government and the lead agricultureagency).

- 44 -

The t-.:- '-truction, which is a joint Nme Affairs andForestry decree (SSB) further details the organization and managementstructure (chart IIl a & b), planning and managekent system, andres5ponsibilities of each official down to the field level.

The final instruction is a provincial decree issued by theGovernor of each province participating in the Regreening Program. Thisdocument further elaborates on the various Ministerial instructions andgives greater clarity to the specific responsibilities of eachresponsible officer involed in the Ragreening Program.

In suary, the present guidance issued under the variousministerial instructions is very detailed and limiting in terms of thespecific conservation measures that can be carried out using INPRESPenghijauan funds. Preparation of technical conservation plans is vestedwith the Ministry of Forestry and are drawn up by the RegionalSub-centers for Land Rehabilitation and Cbnaervation. Responsibility forpreparation of the annual operating plan, whLch is derived from theRegional Sub-center's technical plan, is the responsibility of localgovernment, in conjunction with the lead implementing agency, which iseither the district Agricultural Service or the Estate Crops Service.Implementation is the responsibility of the district government throughone of the technical services mentioned above. An inherent weakness ofthis arrangement, beside the separation of technical planningresponsibility from implementation responsibility, is that the technicalagricultural agency charged with executing the program, has as itsprimary responsibility, in the case of the Pbod Crop Service, planningand execution of the national agriculture extension program or, in thecase of the Estate Crops service, the execution of estate crop programsmandated by the Director General of Estate Crops. Thus, there is atendency for the technical agriculture service to give priority to theprograms directly under their control, subordinating the RegreeningProgram, overwhich they have Limited technical responsibility, to asecondazy position.

b* Agricultural Extension Services

Responsibilities for agricultural extension within the Ministryof Agriculture are divided among the Agency for Agricultural Education,Training and Extension (AAETE) and four Directorate Generals (DGs)including Food Crops, Estate Crops, Livestock and Fisheries. In 1974AAETZ was given the mandate as the lead agency in the field ofagricultural extension. Bowever, it has not had operational control ofthe various bodies of field extension workers and has concentrated itsefforts on extension methodology, production of extension material andparticularly in managing agricultural education in high schools andtraining of agricultural staff of the other DGs.

- 46

CHART III.b.ORiANIZATIONAL STRUCTURE

*-m-m---i-----------------mi-n--0-um Distriot Chief I @- . . . . . .-. .- @ I P3RP DAS

--------------|I Regreening Officer |

N I I

N _ I _ _

| Project Manager - - - - - -

N I I I

I Treasurer ------------------

N _ _ _ I I S

CeSub-Disrit | | Implementation I_______________ I Officer Chie ' _-_-_-_-_-_- - -

N I , s uN T *

* I ' | Pegreening |N _, . E xt:enuion Agent |

Asst. Treasurer …-------------1 n *

N I I ,

Village Chief | I Implementation |

I ekad, LKMD I==,==inininI=a"=sW---1 Farmer's Groups |…I(Village council)| | -

.. .. ... .. . .. .. .nI I S

Hinm=minininm*-----wininininu.inu 3= =In Farmers I . . . . . . . . . . . . . .

InformationsP3RPDAS - Project Planning and Guidance for neforestation Project Managers are:and Regreening of Watersheds. P3RPDAS new name: 1 Chief, Agriculture Level IISubrCenter for Land Rehabilitation and Conservation 2. Chief, Estate Crops Level 1I

3. KPHif Lines Information:

1. Command line 4 -*-*-*-*-. Consultation2. - ; - - -- - coordination/Evaluation lne 5.- -Guidanoc and Technical Assistance

3. -'---->---w"- Inspectlon/Audit 6 ------------- Operational Coordination7. . . . . . . E Extension

*l462Atjoy:6/19/84

- 47 -

Operational control of the extension services remains withinthe four DGs. This control has recently been reconfirmed underPresidential Decree No.24fl983 in which Directorates of Extension werecreated in all four DGs of the Ministry of Agriculture. The overwhelmingmajority of the extension foz=e is under the DG of Food Crops whichcurrently employs about 23,000 extension staff, 15,000 of whom are PPLswho are stationed in the field. Other DGs such as Estate Crops,Livestock and Fisheries have a very small number of extension agents,numbering 8,000-12,000; 1,000-2,000; and 1,000 respectively. Also theextension personnel from these offices are highly specialized in fieldssuch as coconut production, artificial insemination, poultry orproduction of fingerlings. For the most part, they are stationed andwork out of the district capital. At the same time, their geographicareas of responsibility are frequently not the same as the administrativeboundaries of the district governments. Unlike the Food Crops extensionservice, the others operate more directly under the management of theparticular programs and projects for which they are employed.

DG Food Crops' major role in agricultural extension dates backto 1965 and the inauguration of the BIMAS program (see Chart IV). TheBIMAS program was established to take advantage of the newseeds/technologies available for wet rice production and activelysupported the expansion of Food Crops' extension service to transferthese improved technologies. This history has significantly shaped thedevelopment of this extension service. The majority of their activitieshave necessarily focured on wet rice production areas and administrationof the extension service has been the responsibility of the BIMAS program.

The present system of extension under the DG of Food Cropsoperates through rural extension centers (RECs) that cover workingareas. Each service from one to several subdistricts. The REC is-anaged by two mid-level extension workers (PPMs), one in charge ofprogram planning and the other the chief administrative officer. A teamof 10 to 12 field extension Jeorkers (PPLs) operates from each REC. Inthe lowland areas one PPL typically services 800 hectares of irrigatedland, or roughly 3000 farmers. In the non-irrigated areas, the ratio ofPP$ to farmers is to be significantly higher.

In summary, the extension service developed by the DG of FoodCrops has developed a well defined system of extension and has set up anationwide network of rural extension centers that reachs about 50% ofthe faxmers, most of whom own and operate irrigated rice lands. The weaklink in this system, particularly with reference to this project, is thatthe Food Crops extension agents have not established close ties withother extensions services including those working with the nationalRegreening Program.

Over the past few years, considerable discussion has takenplace regarding appropriate measures which should be taken to addressthis weakness and achieve the unification of the extension services.Recent legislation provides for close coordination of extension

dcart IV -AS-Oruanisation oT mtaneion sarvice

(lrood Crops$

_ _ _ _ _ _ _ _ _ _ _ _ _ _ I 3 1 A | DIR CSOR 043ML |

| MFOD CROPS |r|| aXd of the I__ _ _ _ _ _ I I h a d o tli I,~~~~~ ~~~ ~ ~ ~ ~~~~~~~ _ -- Er.

| | | | | Dlractori II Dlretor I|| Dir etor | |Director | I Dlrector | | ra m | Plrnt I I Land I I | Director | | Director I I Dlrector

____o_r_nI I Production I I Buslness I I Protection I I Oevelo nt I I I Agr. Training I I Agriculture | I Staft rWaning.I I X Rduc4tion | | Iztenuion I I and Educatla I

AgrLiultural I I RI. Agr. R | ag. Agr.L I I Secondary | | Infoaation i n-serviceProv. Inspector - ------ - - - - | - -chools Contor ininr Cnterol

1 DOWCA 1 | | (Sp") 1

l~~~~~~~~~~~~~~~~~~~~~~ - - - - - - - -- -- - - - -

|Cl ||Cct || a f | Chlot Subdinl| I Ijj il || Subdin |l ubdin s | ubdin I Plant I I Land | | bdin ||Progrr I |Produetloni Ir, 8;elnerul I Lrotoctton I l>"o nt I I Extenclon |

I abuptn Cht-1 - - - - - - - ---------------------------------Aaric. Service1

Chief Se | I Chief 80co|. Chief Lee. | | Chief ieco ||_Production I I ra m ueolnen |I IPlant Protectionil I ateneio I

-F4ca-t-nI Hantri Partanian I | PR I FP I I PPM I

| IPlC) | iI (|PRC) |

Co_san4 Line- - - - - - Coordination Line

11462A,joya6/19/04

- 49 -

activities among the DGs. Under the decree of the Minister ofAgriculture 664/1979, an advisory working group hasl been set up at thecentral level and forums of extension coordination (FPPP) established atthe provincial and district levels. Following the uEvergreenu workshopon the subject in October 1982 at which all DGs and AAETE participated,two important decision were taken as steps in the direction ofunification. First, RECs were identified as the focal point forextension activities of all the DGs. Second, all DGs were requested toutilize to the maximum extent possible the nationwide network of farmersgroups organized by local governments as part of the DG Food Cropsextension system.

In a separate effort, the responsibilities of BIMAS, underPresidential Decree No.62/1983, have been expanded to embrace all DGs inthe MOA. As a consequence, the head of BINAS, in addition toadainistering the DG nbod Crops extension staff, will take over theadministration of the extension staff of the other three DGs over thenext twelve months.

c. SUFS Assessment

The existing management system responsible for the SustainedUpland Farming System component has two critical weaknesses: The currentstructure has a high degree of centralization and correspondingstandardization and a high degree of fragmentation in the deliverysystems responsible for supporting improved upland farming systems.

A major objective of the Upland Agriculture and ConservationProject is to assist the Government of Indonesia achieve its ains todecentralize and unify management of its ongoing upland agriculture andconservation programs. The proposed management and organizationstructure of the UAC Project seeks to accomplish this on the one hand bydelegating responsibility for the management of the SUFS activities tothe district level. On the other hand a unified extension system isproposed, using the RECs as the operational level focal point and FX2PsII as the forum for coordinated planning.

The above refinements in the existing management system forSUFS activities are new and untested. What is proposed, however, doesnot constitute a radical reorganization of existing governmentalstructures Rather, it represents a new and potentially more effectivestrategy for using existing systems. The GOI, IERD and USAID all expectthat, as experience with the management system is gained, modification inboth organizational structure and process may be required.

4. Agricultural Research

The sajor responsibility for the development of technology for therainfed upland areas.of the upper river watersheds lies with the Agencyfor Agricultural Research and Development (AARD). This agency alreadyhas a program for research and development on watersheds and, under its

- 50 -

umbrella, there are nine other proposed or active faxning systemsprojects. AARD has collaborated with watershed projects in the Citanduyand Solo river systems and in Yogyakarta. These faming systems studieshave been directly useful within the project areas but have also providedmethodology and experiences for more comprehensive research. Inparticular, research with cropping systems, bench terraces and foragemanagement have provided the technological base for expansion programsfor soil and water conservation. These initial and limited efforts alsoprovide the background needed for further research.

AARD is at present finalizing an overall administrative system forall these research activities and the system will be applicable to theresearch component under the UAC Project. With specific regard to theUACP, a Project Management Unit will be established with a team of fivespecialists appolnted by the head of the agency to provide technicalsupport and leadership in their areas of expertise. The PMU will receivesupport from the relevant research centers in its implementation ofproject activities.

Further details on the administrative analysis will have to waitfor the finalization of the re-organization of AARD.

5. Traininq

The training components of the project will be centered in Jakartaand managed by a full-time project officer. This centralized managementis necessary given the large number of possible institutional sources oftraining which are, in most cases, not located in the project area. Eachprovince and participating district will be expected to identify itstraining requirements annually. The Project Training Officer and anInteragency Training Committee will assist both provincial and districtauthorities in formulating their respective training needs and plans andwill subsequently be responsible for identifying appropriate institutionsto carry out the training. As much as possible the training will befield oriented and carried out within the project area whenever possible.

6. Roads

Two government agencies will be involved in the implementation ofthe roads component, the Ministry of Manpower and the district PublicWorks Office (PU). The PU will have primary responsibility for thedesign of the roads and for working with the district Project ManagementUnit on plans for the location of the roads. The Ministry of Manpoweroffices at the district level will be responsible for the management ofthe road construction. This strategy builds upon the existing strengthsof the two agencies and will be an effective means for implementing thiscomponent.

A N N E X III

APAC APPROVAL CABLE (83 STATE 252824)

3. 2 ~~UNCLASSIIZ(:E2fl ?X

ACTIC ACTION CoC:IC: DIS! 2e 65I - CZ A0137 0! SEP E3 gIe

pp juFEjA CN: 3ess/JE 2UPEBC &2S24/01 24E1507 CERG: j 7

jNR UDUU ZZE e DIST: A/P 2214522 SEP E3yi SICSTAI! WASEDC

J)TC AMIEMEASSY jAKARTA PRIORITY 7233

UNCIAS STATE 252824 To Ac: infoI

AIZAC /-OFFICIAL FILE DIDFILEL

0 O. 12 NEe: ./A TAGS: MCT

' SUIJECI FPLAND ACRICULTURE AND CONSERIATION- -I I FRCJICT (4 c7-eq12) PID APAC REVIEW IFI - _

I~~~~~~~~~~~~~~~~~~~~~~LII,REFS: (A) STAIE 234173 (1 STATS 20SE34 iFIRFA

RD-POP

1. 5UwMAR!: SUEJECT PIZ WAS REVIEWID PT APAC ON AJGUST , - -

,11. ISS3. USAIr '.AS EPREMSENTED El DOUGLAS TINSIER. iEH- PIB WAS AP?R0VED AND rISSION WAS AUTHORIZED TO ApvOVE 'ENRiTPP. SU!;'tCT TO FCLIOUINtG. POINTS C^1 ISSUES PEING sTE-| _} EP.$ISskC;- I N. ISOLVED DURING THE COURFE OF PROJECT - -t

S DES<IGN. :N

J 2. DEIAITED rISCUSSION: JAUR! ~~~~~~~~~~~~~~~~~~~IF-W I_ _

A.APAC _ISCUSSID UBET8ER PROPOSID PROJECT VAS PALLIA1I1°-) .ATRER T:A: WEALING VITE TEE BOOT CAUSE OF TEE PROILEM -

I.E. PCPUIATIO.N PX?TSSURF AtED TEE Riv!SUITART CULTIVATION -UP-?PE VATF?S'¢- -AvLAS X!APF_RC?RIAT-4 T_ FR AG3ICULTUBI.MISSION RT P ACKHOLEDGED TEAT THE PRCPOSED FROJECT VILLIjNC SOIVE T!AT BASIC PROBLEM BUT RATBER WILL R!3DCCE SOII _

-IEOSION P.ND INCPEASSE ?ROlUC?IVITT OF uPiAND FARMs, A,NECE:SSARY bART OF DONG RANGE STP.ATIGY WRICOX MUST INCLUDTi&PAtSO0 ONSF-F A.} AM 3EPLOYMENT. FIRTIIITLRDIUCTION AN4D

iOUT-MIWRIA 1 ION. [M 6

. APAC AG.REED PP MESI PR.ESENT 'EOEOUGE MiACP.O- ART,*M ICRC- ECONOMIC ANALYSES TO DEMONSTEAT! F3ASIZILITy IN

.E?.rs 0 1ENETI'IS AKE COSTS AT TEE 7AP LEVEL AS WElL AS ACIO CPY1CNG-TEUM CONSS!RVATION PENIFITS TO rPLAND AND LOWLA,ID ACTION

I ,ASIN AREAS AS' A iWEO'E. IT VAS R-CCGN12ZlD ET TIHE AP1AC t; -TEAT LPIIAND EYAPM!P.S WILL NOT ADOPT APPECP.IATE rETEODS

, UNLESS T--! AR!v YINANCIALLY ATTRACTIVE AND HAVE AlREPDYI.I| )7j EN: PFCUt .S TIA21,1 TOG A REAlSONAELi nTE1N. T-EE CON- -. , ,;l #

t SERVATION ANJD PROrUC1ION .ACAGES DEVELOPED UNDIER TRIS!PCJFCT TSA&LD TA. TEIS INTO ACCOUNT AND RTE EX?PCTEr ay: e*'I ItACTS OF CO;SEiV.'311ICN PRACTICES ON PRODUCTIVI?T AND P= r:Jbir Ti C ;.'cC I-;cZC. suouLr sE AnimiSSmt IN TR PS .

C. LAND T-E:VRT- S7CuI:! IS IMPORTANT IN ^OI1AINING

! 2 V NCIA --SS!!IID STA.TE 252E24jl1

2 DNCLA.SSI IID STATE 252-24/01

Ax AECW.&E IC-PT PARTICIPATION IN CO?.PIE-ING CON'SERTA-7ICXAi r F; ItzP.lIN ACTIVITIES ASSOCIATIE V!ITF TEE PROJECT.THIS ASPrCT O T'El TPRJZCT SEOULE HE FULLY EXPLAINED INTEE PP. APAC NO6TD A NDMIER OF DIRECT AND INDIRECTIMNITICIARIES OF TRY PROPOSED PROJECI cET QUE5TIONED ITSIMPACT ON TRE IANZ LESS. MISSION REP Et.7LAINED THAT I?¶THE CONSRVTATION 1EYORTS ARE SUCCESSFUL, GREATER AMOUNTSCF FUHIIC LAWMES III !E AVAILAHIE TO TlI LANDLESS F2P.cZ.3.SSTS CR I:ANIMAL GRAZING. TEE PROJT!C% WIIL ALSO ?PO IDiC?EEIT TO THH LA3DLESS. APAC REOUESTED Tal TEE ?ROJzXIDEAL WITE THE ILNDLESS WITH INTERVENTIONS TAILORED TOTHEIR SP'ECIYIC NEEDS A!1I FELT THAT TEE FP SSOULD DEFINETIE EST!IATED NUMPEP. OF 2!NFICIARIIS IN T;R.S OF BOWTXEE ARE IMPACTSED, E.G., DIRECT, INTIRMEDIATE ANDINDIRECT.

D. APAC AGFRE!E THAT TlHE IBP.D'S ?PARTICIP?IION IN THEtPPOPOSED PROJECT SEOUID BE CON!-11M3D IN TEE PP &ND TE.A^T s I NATURE ANID EXTENT CF AID/I}RD CCO--DINATION CLARIFIED.TEE rIISSICN IS ENCOURAGED TO EXPLORE A SOME:EAT GRE}ATERITED FINANCING R1OLS IN THE CREDIT COrPONEhT OF THIS

i PROJECT.

F. APAC REeU'SIX1D TEPT THE PP EXIPIN PO' ANT T5 WHA'T*XTENT TEIS ?PFOJECT COUID BE REPLI.ATED TO OTHER APEAS OFIt%DCxESIA. MISSION REP nESPONDiD TRAT TEE PROPOSEDPROJECT OULL HAVE IElMENTS WIICH COULD 'S EEPLICATED, IF

TCU>;r SUCCESSTDL, SUCH AS TEE: DECEiNTPALIZDt APPROACE TO: FPCJECT IM'PLEMiENTATION AND TEE COOR.INATION MECEANISM

t EVETOFED 1-IVWEEN GCI, I2RD AND AID.

T. A,AC RE-QUESTEI; T?AT TEE PP EXPLAIN uOW TEE PROJECT;I1' SERVE TEE tIATOGUE ON T_- r7VELCIOPMENT O NATIONAL'REGICNAL POLICIES FOR UPIAND AGRICULTU3RE/'ATERSHEIDrEVEICPM1NT ANT CONSERVATION.

I

C. APAC WIS INTERESTED IN ECf TFE OJ"CT WOUL1) PROVID3FCR MAXIMUM INVOIVELiMNT OF TEr PRIVATE SECTOR FOR SUPPORTCY TFE IM?I:EMENTATION OF THIS PROJECI. MISSION REPSlA-TA TEAT IT WAS TEE ITENT7IOY OF ITE MISSION TOINVESTIGAT7 PRIVATE SECTOR INVOLVEMENT IN AREAS OF SEEDC7RTIFICATION, NURSERISS, INPUT SU?PIIES AND ESXT-t!SIONACTIVITIES IN SUPPORT OF THE PROJECT. REP INTICATEDTEl ZITENT CT TR17ATE SECTOR IN1OLV'EM-'T CN THIS PROJECTWAS A MATTFR O DISCUSSION 'WITE THE GOI, BUT TSE MISSION-4'0DIE !E PARTICULA31T INTERESTED IN ERA.AINS PRIV-TE *SICTC2 XURSERIES INTO THE PROJECT. APAC SVIG-ST!D TEATTHERE MIV-T El A ROLE FOR PRIVATE INEORMAL CREDIT!NSI1TUT-TONS Y ITEIN THE CREDIT CCMPON7NT OIF THE PROJECT.PCCCP-INrG Y, MISSION SHOULD En?lO?E PR50?ECTS FOR S!CE:PRIVATS CREDIT INSTITUTIONS TO ?AP.RICI?ATz rN TEEPFOJECT, AND INCC2FORATE CONCIUSIOilS IN TPE PP.

92E-24

!;'AN Ii

-- liN'~Ci;.SSTITI! S TATE :coP

UNCLASSIYIEr STATE 5529e 2

B. APAC WAS INTERESTED IN TEE ROLE CRrDIT PLAYS IN TEEPIOJECI, PhITICULARL! HOW TEE PROJECT ALDRESSES T3E ISSUEOF !STABLISEING A S!IF-SUSTAI'4ING CREDII YACItITY AND POWSUISIBIZEL AGRICULMTUE CREDIT FROM OTEER SOURCES MIGHTCOIG"ITE ITE DEMANDS FOR TEE CREDIT PROVIDED UNDER TRE

)PRCJECT. MISSION REP STATED TEAT T3E CREDIT SNVISIONEDUNDER TEE PROJECT IS NOT TEE TrADITIOKA1. SHORT-TERMAG!ICUITURAL CREDIT PRESENTLY AVkILAPIE PUT A MORE

) FLZIMLI, IMPLICITLY LONGER-TERM CR:E1T ESTABlISEED UM1DfTEE IX/2/CD NETWORK. IN TEIS REGARE, IT IS EXPERIMENTALI NATUIRE. APAC NOTED THAT PID DID NOT SPECIT! THEIMFPIE!NTING AGENCY, ALTEOUGE TEE RKX AJAONG OTHERS, WASMENTIONED AS UNDER REVIEW. -APAC CONCLUIED THAT AS TEECREIZT PROGRAM IS PITOTAL TO TEE SUCCESS OF TEE PROJICT,A CAPEIUI ANAITSIS O TEE ROIE AND POTENTIAL OF THISPROGP.AM BE INCIUDED IN THE PP AS WEIL AS TEXJUSIIFICATION OF TEE IMPI.Et:TING AGEWCY.

I. APAC NOTID TPAT IrRD/GOI lWOULD PE FINANCING THECCNSTRUCTION 0 PCCESS ROADS. E'-VEN THIE DESIGN',MATERIALS USID AND TEE PROCEDU3R7 EMPLOYED. TEESE ROADSICOULD EXACIRTATE TEE DEGRADATIOT; C-F T ::I' JVIRONMET.

* P.P. SEOULD ANALYZE TEBESE IMPACTS Cl'SEIT. FURTEER.AS TEE ROADS ARE BUILT TO ?ROVIDE EtN ACCESS T3AVAILABLE MrAlKTS FOR REGIONAL GOCDS, AHE! ALSO PRorIDF*PN EASIER METEOD TO MARKET GOODS AND SvRVICES COMING

.INTO TBE REGION. THE COMPARATIVE AEVANiTAGE ENJOYEDIT TEE UPLAND FARMERS FOP SEIECTED CROPS MA! DISAPPEA?-DUE TO AVAILAIILITY OE CROPS PRODUCED B? LOWLAND FARMEF.SMAit!TID B! WA! OF TEES- NU ACC_SS ROADS. APAC FELTITEAT TEE PP ECONCMIC ANAIYSIS SEOULD TAXE TEIS INTOA CCG'U!CI

J. APAC WAS CONCNEI: TEAT T7_ P'D DI% NOT INCLUDEPRCVVIION TOR OPIRATION AND MAINTENANCE O! TEECONSERIATION/FARMING FLOTS, ACCESS ROADS. ETC. APACIEMIETES TEAT 0 AND M SEOULD BE ADDRIESSa D I ;L

I INCLUDING POW THIS WCUL-D r}E FINANCED, AND WHEO WOULD sE

RESPONSIBL-.

.K. CLCSEI! LINEiD TC J. ABOVE. APAC NO¶!D THAT MANTI?IPIUMENTATION DELAYS RESULT TROM LACK OF GOI !LDGETARTAVAILIAILITIES. APAC STRESSED TEAT F? SHOULD ANAlTZETB! POTENTIAL CONSQOUENCES OF ?._DUCED GOI CONTRIDBTIONSTO TBE PlOZECT AND OUTLINE POSSIBLE SOLUTIONS.

IT. APAC CONCLUDE; THAT. ALTLOVGE TEE PID DESCRIMED TE-PPCCSED FROJECT ALS PEAS! I CY SOMF IARIER E1FORT, TEZR0OJECT SHOULD BE DSIG.N13D AND CONSITERED AS A DISCRETE

;SET7-CCNTAINED PROJECT. T"E= O-Ji-CTIMES, AS STATED IN TEEPIE. SECUIZ SE OTIAINAPLE WITEIN TEE PROZECT PACD ANDAIr SEOULD NOT !I COMMITTED ZVTN' I!,PLIC-L-r TC CONTINUE

-IN THIS PROJECT MZEONM THAT PGINT.

M. APAC AGREED T21T TEE PROJECT S73OULrj AUTFCR1ZED IY$TE MISSION OK T'BE UND-ESTANDING TEAI THE P7"jECT, S

: llUNCLASSIFIED STATE 2!2S24';O2

*-XCIASSITIDS STAT! 25zs24ie2

DLESIGNiD. WILL 3! CONSISTENT WIT! ASIA 3UwEAU GUIDMLIIZSCH RAIITIZ AGRICULTURE AND WILL RESOIVE T.VE ISSU!SAN1/O0l INC0POIATF. TE'POINTS RAISED AROYE. IN*ACCOZANCf-CiIIT T?nSI GUIDELIE4!5 PTR RIFTEL 3T PP NEE'DTC I:3ctDE TBOROUGH SCCIAL SOUINIDT!SS, ANALYSIS. IMARKET£'lETSIS AND EIZIEC! OFT HIOST COUNTRY Comm9ITmENT.

3. APAC APRMECIATES INPUTS OF DOUGIIAS TINLF. AT REVIEW.HIS UND)ERSTANDING IND -TOUGL1FIL INSIGIFTS ASSIST"D ALL IPAPEi3CIATING PROELEMS OF ARND OPPO3TUNITIES FOR UPLANlDAG2ICUIlTrz PKL CONSzRvAIiom IIx INDONESIA. MISSION ISAUTECRIZIE TO PROCEIT WITH E1EVLOPM7N. CT TEE PROJECTEPA r. SBTUITZIT#2E024

NNUN

UXt: CLASSIXIED STFATE 25i2.-4!lZ

AN N E X IV

LOGICAL FRAMEWORX

#34OlAijoyi 6/1/84

VRQJGCT DESIGN SU$NAItCUCO ICAC FRlWiJK~

Project litlel Upland Aariculture and OInservatton Prolect I llags I

I ~~~~~~~~I I ..INARRATIVE SUHIAtR O|IJCTIVILI IRIflALE INDICATORS M EANS Of VERIFlCAtION I HPORTANT ASSUKTIOS II _(-I I

I _ Ur Hcctot Wall te measures of Coal A__ *_evea_* nt2 (A-I) I (-3) A sumptions for Achieving goal |I occtiee_to which ehl I I I ternet.; (A-4)I c eontrbteI$ (A L

| To sustain aiid emilance tho | Percent of uplands in sustainable productive use L Land eepebility I that other development pollees II producttve capacity of | (forest, elvipasture, estate crops or privately a xnd use statLatLea. a end activities of the COI relevant I

J Java's uplaeds through | profitable, but ecologically stable, annual cropping I Haisuramenta of | to this area (e.g., populatlon IImproved menagesent of Systems). I sedimaentation rates. | control, transulgretlon, aff-farm Iomil nitd wator resoures. e ploynnt seneration) will be

I I I I ~~~~~~~~~~~~~~~~~~~~~~~~~~effectively carried out. I _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ . __ _ _ _ _ I _ _ _ _ _ _ __ I

Project Purposel (S-1) | GonditLone that vill indicate puroose has been L-31 Assumptions for achievins purpoas s chieved, C .

1. To expnid and Ilpi ova I Dy end oft hase I.e. By end of Phase l.b.inatlttitional capaities, (36 months from mati.- (year 6) I

I primarily at provincial, I faction oft sjo CFO)|

district and fare levels I - Ito expert.eilt wIth I.e. decentralimed, Inter l.x. decentrslid ioter I - Annual assesseente. I - That Covxrneent VIII utilise the |

I alterintivo approachers ageny plaening system asency planning system I - Project evaluation. I uonaeent system described Is the Ito upland frming and I in place and functioning fulLy functloning and I I Project Paper. Ito apply thtee approaches; with annual plans produ- elther expanded or |

fcd for project years I- ready to erpand into I | - That Government will provido theI I 111 and compreheneive broader pheoe It prog- I I neceasamy manpover.

I plan produced for yearc ram in both test and | I II IV - VII Central Java provinces; I I I

| I.b. unified budget systen l.b. GOI prepared to1I In plAce and routinely iaitiate broad phase I t I I

I functioning utilixriw program utiLising Uni- IIIOMIT as e insle tIWtlS fied, decentralized I

I ystool budettaiina preetleed||funcIioning itili.i,~ progra th is projectl

I l.e. lRteresene1 district I.e. CUI prepared to| | ~~~~~~~~gulddc. tee-e and lnttlate broadly based |

Project Hanagament Unite thase 11 prosgra utili- |u t (FMW) routinely planning sing, decenttelilcd

Iaend uen. gir projeetl and interpgency project, | *^~~~~~~~~~~~~mnagement concepts as

I ~~~~~~~precticod In thisI ~~~~~~~~~~~~~~~~project;

_ ____ _.____ ___

I NARATItW SUIART i OUJCTIZLY WRIFUtALI INDZICATRS I aIANS OF VUIIVLCATtON i IHORIANT ASIWTIOUS 1| i.d. Upi and intewgecy I.t. Up and p.lyv.le.t I i

exteaslon teore ffe -aten propse. has 1 |tively elanaotw and proewa tefective la I||*oeuutir< Coeprehen- diesrnntatill Improvedmnle fteld program la technology through pro-tagleted oubwatersbodec duttiwe lateraetion

| with tearmer eonserva-

I ttea rewves l~~~~~~~ Il m.e. recr groups 10.: Nethotdoleate gte at-

IdI c ynzle- tively ctn& or tam -oa-ally funotio.loa1 unitie Is lotorSaettn

process ol divelipoe tI t~~~~~~~n eenJunctloa with II local goversuent lave

proveoffective andlectituttesi frameworkLan process n te to a n

l t~~~~~~~~~~~~~~oth fam*eoffiuityI s and local gvferl nmaa I

msat to move lato rxpsn- dad pkaee 1I praires I

ilvolvig wtoject reeod of private con-Managemnt biuri trecterse univereitic. prlrvte contractor, and loundatioam In eel-umolversities and laborateia with local

I foudatioas to provide comunitieoer of U. InI supporting servleso providing tevices to C

resea etb Ote. Oan varrant judgwent thatI routi: basis to suck collborative I I

I project end portite- *cetlon cam be suboton- ||;patios coenittes3 tinly expanded durtag | I

nameIII I 1.g. Evid4oce that prepgga 1 g. ublic information

I bce crested public progresaeae/poign|c moaectoucnees conceriat rotinely Informing I

| uplnaA productivity end pubiic an uplaod osri- |eeaoeervation issues and culture and soil and

I cerrective etieon wter cncerv,ation

".as.te l I

.3

| NMKATIVI *UWA OE.JC IILT VIPIFIARLI 114ICATORS "RAW of YEICATWON IN AT UI

j I . -- - .I _ - -I_.I|I.b. Project 11nageaumt I.b. A atrong capacity tor |

I I.E oef atios systeme for execution and I II ti plce an4 functiu nitoo gart of evaluatiao

asu pleer"4. coeacwh exists atproj et and provincele"l tA1 evidence sew-

otektl tbrou-h thiseffort hoe eutabliuhed

tbari la part for pro-* | t ee~~~~~~~~~~~~~~toirg phase It.

| 2Incrosse COI tachwieal 12. FI system field 2. Ienear e ha has Iaapacity and arebireh laboratory *ad out- eetablelhed a dLveril- | | I

proesse n oateh *yetei- I e . etc teis plee tied rane. o@ profit-ticlly, an am a cati- en4 tunettoniw and eble, but aeologlcallynucus basil, lprove the Ilitill results stable technologies foriolo ocl ead soeLo- comas on stream. upland comunitIeI

| ecooesl teuneattoo t Ielu41wg iuLttelI related to upland tainag I results on tree crops/l contittone on Java. I alvipasture technology.

Project Outpute L nC-l e I anitude of Otputs (C-2) I Aaiue"tliae for achievina outmutelmy eI el A le my ande4 e f Ie I b

1 zAwn S1t | t6 soothe fromye ag4eentri11eg a" UU91r _"asttw *o10r CFO)

nagament and budgetarysystems in place and tuac- la. Policy guidence and la. (anageusnt System Annual saueruaente. - tequate delegations of authoritytioning which provides the regslatlona In place lnternaitsed into Project evaluatleo. to the provincial and distitettintitutlonal framework wbich authodse nad define eprovicial manaOGemet I goeermeats.mad uengoae.nt proceeree I the etructure end proes qettee and routinely | - uppart from relevast Hitlatrtes. |for effactlvely eutending of deeeatrallted and uul- applied to all districte | - Acceptence of reuponubilltty andto upland communitiee lnfor- ifled aanageaent at the province widul autbhrity by the proviaen andI t:o: , technology a Loputs preoiciul, district end districts.required for the diffusion field lenlea I I I

I A austained application of I| acolgesally eteble upland I I

farmina systete technoloy. |

lb. A uitfied budgetaay lb. Budgetary eysea|§ I qetes le place and Internalized Into overall

|w| tioalng under the budgectig processe an|entrol and management routinely applied to allof district gsvermamtete dittrlete, province widel

| hUMlVS SWIIttHMt OBJCtLWLT VSRIVIAUIS INDICATORS I4ANS OF V1URIFICATIUN | INIORTANIT AISUHIfNS

Il. Interarency District la. Ianageaent systemII Ildaerg Teoae (WOT) and intaernaeled toete

r aCet Hanag"ect Unilts peovincial xaaagentI ) eatablished and syatems snd routinelyIt teming in gour applied In all distritesdptroctot pvldenead byt province wLde

preperatton of annualprjc lans and btldates

tuaeationeent plaafeer prrJet years IV-VIg

- ateSct^lec of 13Rf1UA |presrez and *2P PreO&u ANIntoeoverall proJect uenee I*lnt ztrueeUre & synt4sl

id. staff of 22 participatingt3EVIUC have receIved

I appropriate traintin dadplanning and sataite ofthe Surs Plot Projectel

2. ieerot S tema I 2e. Oac fieldlaboratory & 2. n effective farming Annual asene.unt. I - sufficient and able staff ad IPoerclel |*outech ttoe developing yste rese h eepeelty I ProjOct Sveluetn |tlanctoe carrq out tbf proltee.|

a comprel,ensivo program and field testing farming existing and to routinely | |- Nothodoloy that moves results too fupland teruing :ytea uyste:e technology innlu de.loepinr Improved and efarmers fields ivthla PACO.applied cosetca h designed dtng eouponenta focused onl lisproned technolostlte InvtlCutioLtenaltetieeO et taMLa Ito Improve asisting and eOlilfwater eenrersutton and for field application. systems reaeeeth by AARD.develop new technolosies. I anagaexti ecropping o ic-

toena livestock, tree cropaand eililpaeture and eoclo-sconoc *wevaluation.

2b. Tho acceptance of reco- I II mendatlons developed by the I II researcb. | I |I I II _ _ _ _ _ _ . - - -__ _ _ _ _ __ . _ _ ______

!A|RPATIVi UHl^tR | OUECTtWLY SW4MIRL IVICAVU HHVS or IPtCAT I TS t niu I~~~~~~~~~~~~~~~~~~~~~~~~~ _.AN ___ ___VCAW . NOTN AINFI

3. Suitslnbhle Uplond 3. Suitolnable Upland 3. tustaineble UplandFI r l $Ytm5 lOt Iymints " Pilot i toecrt fttes ilot t

I Nang..Aent/dmlivtry a. Up to three (3) OPP a. An estoblished prog- | Annual assI*eoeuts. I - Ttat better technology Is avell-I systems esteblished for I baded mini vatereltad can and proess. in place Project evaLuatiosn. I *ble of can be developed accordingI the ditfualon of farming I utainable farntrg whlich has introduced | I to the project plan .I ystato technology to I system pilo t projects project supported cor I I - That loatmer ill acePt the II upland communities. to place In each of the servotioe and produe- | |better technology.

(4) four participating tiwity incroeasng tech- I I - That the required inputs will be |districts which includo: nology an approxiumtely avallable as planaed |

23 000 htec. equally - Sutfictent and able staff ad Ia *woteorzhd developeait divided 0between tho pro- ftuincing to carry out the progt. Ipla and preogruam vinces of Central ad | | - Timely pre-financing by 001. I

I last Jav& $ I - Farmers adopting the Improved I| I I I practiese will be is ecatigteus

* I irrigated nurseries | | gtoups. II I ootobltohad I I I

I I *~~~~~~~nd properly dlotrlbutod| amon 8 participetingdistrict which producesufficient grase/lesume

| production to soot deool |I | *stel.ted at 700 lb.pr Ip

| district at 2,eoo hletarsr

proWcan in place and|functitoning which produece I IIgood seed for distrtib- |

I tion uodsr the program| sufficlent to meot demand || *etimated at 700 Ha. per II district or 2,e00 hectares r |

overall 1

I C up to five strategically iI | | located Demon"tration |

I ams of + 1O hfe.eh | | i each woterohedl I |I ___ 1 _ __ ___ __ __ I _ _ __ _

I~~~~~~~~~~~~~~~~~~~ I6~~~

I NesARPAIZW IuNa I OIzcnECrLu WUIMAILS INDICAUS KRA 0S U VIRIIICAtION DiIORIAJT AIPUUUCUU

* pilet appfoachae te * lstltutlieelie.d |eo_u«lty mS"s ol fese@ Is plae of

upland reacurue eOecutod rtoc.t ve: pecte io-Is selected dietiette making betueen upland Iwhlh utiltee a rewre of eo_unitiet and local I IInetitutleao (e.g. con- goveroceat wich reultI earvatiaa group., villge nt eofficetnt *pplice-caumile, ruligiew tie. of roeeurce ead

| ~~~~~~~~~I ttitvtlenes) and Wbteb oustaituble upland | I tiliee local lntetwt- *e"lepmet and eeerar-|

tlfea {{{g.8 livA: t vatloeg! unIlweritieo) to provide It ehnical lbceketopprto upland easmuitloea

I *Ie Reusto op. b. lItas lesouro.e Dveloe. I Iex eiIiioef et Ic.l. am lecol gover I- - roject treislq id - AdquAte imetitutioeljertewleela Itraisiug p:og- isn aup%aued "at deciolealworat, Itfinial "useeo. I Iouger/ate4ade.d giculturo. eooaervatlea techniceans testlee - AnsAel easees ta. t - Adequato Bellish leangse eapebi-precticee and comunitty vorksre, ead gareer ad | toJtct ol atle lity on pact of *p rlot $telf.| nagemeat for exteaeion caeunity leaders Pare-ltl e t.tept t that stetl-workers, famets nd ceu- t9eine4 1n uplead dat- I ti* uttebl, traees adA prvlidec I ity leadert and lecal e.2. N.A. level traimiag time for treile. |

I I govermnmet deailsoe makere. lor 36 prafecsionl Itbreuab U.S. land Creat

iUvnrlsityjVIDA/Seil,I I Caaeerwetioa service

I work/study program. I II c.3. An i.foruatiaa prog- I I

ram of newsletters slide "shown & moviei will bI I brought to the villes. .

I . Access Peodet kceess . Acesas bidet 475 kse Ilysoeal verifeaties. - Adequate local eapacity/p.rea-I roeda estebllsead as OfrWi grade village Project budget end power exists to carry cut the I required to sustelnable access road constructed I records. I coaractioa activitles. I I upland pilot project And/or wpgratded to I-UEctive warklg reletiaeblp I

areas. + 90 km by enr us:tainable uplatd | btwe Toenag& IKerjo end v.U. |I__et_year threo__ I r ar ratte pilot |

project *r ^^ ll

NARIAUTI lIEAR! I OLJCTIVLR VRJ UFIAIL IKDICATOKS M EANS Or VRitlZCAITIO I IHW ITAiT AUUUHWZOMS

, ~~~~~~~~I *7. mic iII II Frole Itniovatloa Fund d. 1oeet Inetn t un| eytee esteWllaoh a nd system eoteWllgthd *ndar

I eah partlelpatl qotetet each ParticipatinI*teatodimg rloto li rompomme distritI I eIttWto prepomal ftee local rcnto in response tolostituttos anA eg_namitlmou proposele from local

Institutlio & comme_nltles.m

4. *yalatloa Elannil 4. Uvolueat(oe conductedand Erol et isorlmal amoumlly3 with major

for phase III Vfeil ec evaluation at an o e"< ee *Iuatloll third aid fifth yalrl

of eeenot activtiteoql HIS la pl ee end endulel|||*^"|_en4t 644961 esults. I __ ____ __ __

ANNE X V

BUDGT ANNEX

I

> s ] § tn^2 twAa i 2 U .2 a~~~~~~~~~~~~~~~~~~~~~~~a

a- -2- ml~~~~~~~~~~-~~~- ~ a - __ SOa-~~~~~ap

U . ____ H. _~- a __ 0 _ ______

-~~ 0 ________________ _OO gf _Ma _ ___________ __--_-_- -- - - - -

- - - - - - - - - - - - - - -.4f oooo oooo ------- 8--

a-a- P a 7m - -- - -- - - -- - -

a a-

.- 0~~~~~~~~~~~

1° ° O o o _aO o

t~~~~~1 0 cm 10 a ° 0 20 " oe o ea o0 _8

Oa~~~~a

a a AM CD ae oaaa 00a o °o

lo t-o ao o- 8e aa- ao o o

a i a DaB

e~~~~~4 1w 0 "" _ "e

.4 5

o z e e e o o o e o o o e e ° CD|CD

lo __ _____________ __._ _. _____ _ _

* a-a-a-a- ia-i-a- a-i-a M

0~~~~~~~~~

lud,e Ane

ProvinoLal toevel project Mana&ement a staft costs toentral and Saint Java)I(u' In 00031

I 1 _____ an~~~~~~~~tip PtQ lict year s ame Sote h 1 ip.ieot Tear ______

_________________ init i-r-r 1 F2 14T 1T Total lunit Coseti i . .. F . 1 Y 3 4 I I . . I Ttal

IA. invqutment Catel I I I II100000l I I I I I I I~ I Pb,inoial evel' I"* I I I I IIIb.kt.acentralJ5za,a

ITnil IIG I I I I 10000 I 600001 I I I I I I '0000 IOItt.quiAWPurn(POU)I set I2 I 1I 10000 1 200001 I 1 I 1 I 1 208000

Is. Reourrent costs I 1601260160I260L30I260160I 901600

11. Personnel (10.31I I I I I I I II I 310001 3100,01 L10001 310001 310001 310001 310001 217000 II roj. Coordinator P o I2I I I I I I 2 1 3600 I 72001 72001 72001 72001 -720-01 -720-01 72001 50400 Iproject Plan. Oct. INo I2 1 I I 2 I 2500 I s0001 s000l s0o01 50001 50001 500l sool 35000

I Nis/oval* officer IPNo I 2 1 I I I 2 1 2500 I s0001 50001 s0001 s001, s0001 s0001 5000 35000 II Proj. PIFn. Off. "a ao 2 1 2 I 2500 I 50001 50001 50001 50001 s0001 500l s000l 35000 II Ieoretarium No I4 I I I I 1 I 4 1 1000 1 40001 40001 40001 40001 40001 40001 40001 260000 I

3rivera I No I 6 I I I I I I I S~ ~~~~~~~ I 00 I 43001 diSo1 46001 48001 41001 4.001 46001 33600

12. other I 971001 971001 976001 971001 97.001 97.001 971001 664600 1 Fra&vel lcw.dPCU) IAnn. I I I I I I I issoof/y/ I T5I-oI Ti-oiil i3-56 ifo 17000 WroliI -1TWi 170001 Tti-T II Office hnx'. (IP0.3 I Ann. I I I I I IIuO,/P/y 1 3,0001 360001 360001 3,0001 360001 360001 360001 252000 II Vehiclebimnning IM0/I I I I I I I I I I I I I I I I I

Expuenses (10.3) 1km/li' I 20 I 20 I 20 I 26 1 20 I 20 I 20 I 140jgpAmu 1 41001 41001 41001 46001 41001 46001 410001 33600 IIrcoj. Monitoring I I I I I I I I I I I I I I I I I I II vaI/Spes.Iteds AnMn. I I I I I 120000/P I 400001 400001 4100001 400001 410001 400001 400001 2600000 I

IC. Total ProvincialI I OI(bt I I I III010I2012001100110I2101210 931600 I

13332Am joy:6/27/34

Upland Aqrlculture and Onssr,ation lprolectDistrict Level Managemwnt £Utaff Ceets (Central and East Javad

(RV. La coos)

1.. Inyesatmnt Cocti 1001 I lzoo 2400001isLtrLat Leirel I I I I I I I I III II 1

Jetiep DLt~raJVa,1A U I I I I I 16 I 1I00 I Iooo I I Ioo I 1I 0 0OI I III . fI I I I I I I I I I I I I

f,gn(ltutr./H I ILI1R)uI4I I I 41 I 110000 1 4001 1 14I 01 1 0u00

11. inecurrent CSlte I I I I I 124001152400l1U24001304s00130480012048001304uoI 1674400

IA. permannl (MU) I I I I I I I I I II 594601 596001 596301119200I1119200I111g20011192001 655600 I Proj. Manager I NO I 4 I I I U I I I I U 1 3000 I 120001 120001 T10C0l 240001 240001 2490011 240001 I1fioI Planning Officeer I NSo I 4 I I I I I I I I 2000 I 10001 10001 60001 160001 160001 160001 140001 61000 I MIS/hval. Officer I No I 4 I I I U I I a I 2000 I 00001 10001 00001 160001 160001 160001 160001 11000OIPLnasm OffLcer. I No I 4 I I I II I 2000 I Mol0 10001 10001 160001 160001 160001 160001 35000

Date A"lyst I ft 1 4 1 1 1 9 I a I ~~~1500 I 40001 .0001 60001 120001 120001 120001 1L20001 66000 II secretaries I No I a I I I 16 I I I I 16 I 1000 I sogol 10001 600001 160001 l.00o1 1so001 160001 Sa000oIClerks I No I 4 I I I U I I a I 800 I 32001 32001 32001 64001 .4001 64001 64001 35200 Io Divers Ino a I 16 I I I 16 I 600 I 64001 64001 64001 121001 126001 121001 12l001 70400 I

I3. Other I 652001 321001 92800I1165G0011U5600113560011856001 1020800 II TravelI Allow. lann. I I I I I I I I 13600/ann i T4 1511 i-14 115i iT44- oi -re 001I -2 FG0, I2830100101o-o IATSUII Off Ice gxp. (19W) Iea rn. I I I I I I I I 11000/.th I 320001 410001 410001 960001 960001 160001 960001 512000 I Vehicle ftanning IDOOokaI 20 I 20 1 20 I 20 I 20 I 20 I 20 1 14ORp/k. 1 32001 64011 44001 126001 120001 123001 121001 400 I hpeneeuI(Po)lijep I I I I I I I1.1 I I I I I I I I III ofI.Mentral (NW) lann. I I I I I I I I 1500oMth I 160001 240001 249010 410001 430001 430001 4,0001 254000 Ililt. Total isitrictl I

IN.tltu/Wmte(1.ZIP I I I I I I I I I I 1245200115240011524001424800130410013041002400139eO 18621000

23332Aijoy sG/27/I4

I. 4~~~~~~~Tbl

TeahaLcal Assistance I

_____ Teatg titgI ass Cost. JNiet year ______

I________________ __6_U__ i UnA.Cout 0 I ..... 1 ..... LJTI Total I 111111111 I 11 T I I~~~3 I

It. lmveatuent Costs I I I I I I odooo

office ru Ieq IpiIse I I itoo I I00 I I II *-. SA. ;m Iecr.svd Ofi I I I I I I I I I I

I h1c1IW I INO IS 1 7500 1450001 I I 45000I office Pwrn/euipl6got I 1 I I I I I I 2 110000 I 300001 I I I I 20000 Io.var. uv,. R::,I I I I I I I I I I I I I I I I I II whioal. I"a I II I I I I I I 1 I7500 175001 I I I I 7500 I OCffrurn./Eqt.Lp. Not Ii I I I I I I I 110000 I100001 I I I I 10000

Ill ReaUCirtl.Cm.j I I III I I II II 110512545 I I I 1 1 III I I IIII I- -IConsult. Cant "act 1,/al I I I I I 112500 2/I I I I I

he x "as. I Upat.) 110 I 36 I 36 I 36 113 112 I I 1 11250001 4500001 4500001 4500001 1500001 1500001 I 1775000 asFov. Coon!. Off.l I 7.5I$0s4110.t41g6.41S4*4136*4I12+121 I I 93750114000001140000011230000I111000001 50000013000001 6043750

Ic. re Remeatcb I 1 4.51 24 I 24 1 24 I 24 I 24 I 121 I I 562501 3000001 2000001 2000001 3000001 30000011500001 1706250IO. Oen.ltakttw UP 13 II I I 1 375001 I I I I I I 375001IzndonegianeI I I l II I I I I I I I I I

In 1s5 112 13l 2 2 2 1 450 1 22501 54001 54001 54001 54001 54001 1 29250 1I clerical I I I I I I I II I I I I I I I I II unskilled I I5 I12 12 I 12 I12 I 12 9 1 I 100 I SOOt 12001 12001 12001 12001 12001 I 6500 I

as Prove QW066 OffI I I I I I I I I I I I I I I I I II hofeseLonal I I 3 I48 43 I 41 43 I 43 9 46 1 I 2500 3/I 75001 1,200001 1200001 1200001 1200001 12000011200001 727500 II Clerical I 1I 46 I41 45 46 I 24 1 24 1 I 450 I 4501 214001 216001 216001 216001 103001I 101001 106450 II Unshilled I I1 72 I72 I72 72 24 1 24 1 1 100 I 1001 72001 72001 73001 72001 24001 24001 23700 I

Ic.Vlre ereah I I I1 I I I I I I I I I I II Clercacl I I3 I12 112 I12 I12 I 12 1 12 1 I 450 1 13501 54001 54001 54001 54001 54001 54001 33750 I Unskilled I I3 I12 I12 I12 I12 I 12 1 12 1 I 100 I 3001 12001 1.2001 12001 12001 12001 12001 7500

Iveholae run. .aiPORS6 lslet Rpi 40 u 20,000 kuu ntuber of vehilel. annuallyll I I I I I I I I 63195 A. I. goo. I /Y 10.51 I II SIII I I I I1 I I 7.5 I1.00 I 4001 6001 8001 6001 Dool 3J001 wool .3111

I v. prow.coord. OffI. I v/y I0.1 6 1 6 1 6 1 6 1 2 1 2 1 29.1 1 I 301 4a001 46001 49001 46001 16001 16001 22480 1 C. re fecseach I Viy 10.2 1 I I 1L I 1LI ILI 1, II I I 7.3 I 1 2401 .001 1001 60o1 6001 fool Srl0 5040 IIVehicle maintenance I I II I I I I I I I I I I I I IIA.-W. 8.. I 1I1IL1 I I 11 7.5 1750 1 2751 7501 7501 7501 7501 7501 7501 4875

B . lrov.Coor.3. Off. I 0.I6 16 6 S 6 6 29.1 1 751 45001 45001 45001 45001 45001 45001 27075 IC V esearch W/f 02I1 1 1 I I I 1 1.3 1 2251 7501 7501 7501 7501 7501 7501 4725 II I ~~~~~~~101I 1I It I "I 1 I I I II I IALW I 14163451232440012324400121744001172440011105500153,0001 1067554S

of licem are aolocate4 wLth counterpartsyOffice zirupieng, intal assumed under monthly costs

43332gjoym /27/64

rari t rtesPeh ac cmoent s

4Unit r 4 5II.. atal Unit cost I 0 1 2 3 4

A. _Ivesmen costs i i 11840001 550001 1 239000 .

N o 1 1 3' 110000 I.0000130a0001 I 1 1 1 PI Vik-up truck N1o I Ii~ 112000 1 120001 1 I I 1 I I motorcycles Nol 1151101 20 1 OO I 100001 1000011N1nibus I I I I 1.1100 1 120001 I I

Mazteactore No ~~~160 41 I 4 1 4000 1 160001 1 1 1 1IGenmrat.r (7000 W) No.1 II I I I 1 1000 I I 50001 I I I I I II Office 3tquipuent I get 1 21 I 1 2 1 7000 1 140001 I I I I I IIftroonal couut.rI No I I ILI I I II I 10000 I IioLOoI I I I I II Field toab.taility I Va r. I I I I 9000 I 90000 I I I I I I

I I II I I I II 37I2I*. lacurrenk Coete I * a I I~~~~~~~ omeeIfttww~01 W.WI ameI w w ~aI -m

II. Pureonnel (EKUI 1 I j I I11574601159660I1S981E0I159060115286011591601159"601 1116620ftoject Wader I~~~~~~~~~~~~~~~~~~~~~~ No II *7 * 0/y I 00 uu.uI .w.w1 uw0.;:Iuu0;;1 .0m01 u.u1u.a 0o-Seior mrh I No I7 I 7 I 7 I 7I 9 14o/ 301360 336001 336001 336001 336021 336001 23S200 Juior I0ko Me 1I 1 1I 1 1 I 1I11 I4 4I0/ 540001 540001 540001 540001 540001 540001 54000) 378000 ITeahnLaanu No I24 I24 I24 I24 I24 I 24 I24 I 169 I 14404y I 34560 1 345601 345601 345601 345601 345601 345601 141920 IField Am steants No I25 I25 I25 I25 I25 25 I23 1 175 I 780/' 1 195001 195001 1uS001 195001 195001 195001 195001 136500 secretaries INO 5 I5 I 5 I 5 I 5 I S 35 I 10004y I 50001 50001 50001 s0001 sOcal 50001 50001 33000 I

I GrAven I I S I~~ 91 9 I 91 91 9 9 I 9 60 I 60004' I 48001 72001 72001 72001 72001 72001 72001 48000

2. other I 7962091 8701 94,701 9,8O701 9119701 611701 811701 610140 IVeb. Run. btpne. I 000 1 40140 140 1 40 I 40 40 1 40 I 280 IRRp5O/km 1 17712 201 1 71201 1 71201 171201 121 7=1201 1112301 119940 IVe~hicle OMK Is.rep I 6 I 9 I 9 I 9 I 9I 9 I 9 I 60 1 V750000/y I 450 01 7501 67501 67501 67501 67501 67501 45000

I Travel allowance I Ann. I I I I I I I I I 71P I 200001 200001 2600001 200001 200001 200001 200001 1460000 IIOfios and staff I I I I I I I I I I I I I I I I I I I

houseo rental I Ann. I I I I I I I I I I 160001 150001 1600o1 110001 110001 160001 1.000l 126000 II Tr/aDnE./Publia. I Ann. I I I I I I I I I I 200001 200001 350001 350001 300001 200001 200001 110000 II I I I I I I I I I I I I I I I I I 13. Field Res.Budget I Ann . I I I I I I I I 1 3500001300000120000012040001I200000120000012000*00I1 .A0000~ IC. Total Faruing I I I I I I I I I

I avut Hoe. ost. I I I I I II I I 17?1010IS96730145673014567301451730144173014417301 3616460

Is332A1jcya 6/27/U4

_Upland AgticuLtute and Conservation PC*laatsuistainable Uplanda Faming Ustons Pilot Proleata

(Rpm In 00 a

pnt1 Pr a er ______ ame Wisti byroeo t IYear ~a

II. Investment Coslt.II II 1 3060001 160001 3208001 929001 I I I 725600

I. I I I I I I I I I ~ ~~~~~~~~~~~~~~~~~~~~ .0aa.l 0.suu.-u-I -"-I I I a Kotorcyole I 1 221 121 261 121 I I I 72 1 1000/motor I 100001 160001 240001 220001 1 1 I 72000Jep(gub-project No I 201 I 201 21 I I I 42 1 10000/veh. 2000001 1 P-00001 200001 I I I 420000

Ofce 3qudp. I st1401 I 421 21 I I I 94 I 400/mat I 160001 I 1610001 01 Il I 33600 IOffice Hurs.Deapt. I a14 1 2 0 I300nus col I900 001 1200

We___u___n costs I ha47001I 120 100420000/nuts. !420 744O 7440 424ii740

Hin.Af A!r..1 II I I I I I I I I ( iiiiY-)I(75-601 I(73560 1 (90-7201 1 (,072011 (,072-01 1 ,0_720) I (-49390108 road c~ir.Aq*PM)1s I No I 41 I 41 I I I I 8 I 1440/yr I s7601 S7601 115201 11S201 115201 115201 115201 69120 Liestock (PMS) I No I 41 1 41 I I 4 I I 9 5 1440/yr I S7601 57601 11521 1L15201 115201 115201 115201 69120 noaeCrop (PuO) I No I 41 I 41 I I I I S I L440/yt I 57601 57601 11S201 11S201 115201 111201 115201 69120 I

I xt.Monager (PIN) I No I li1 121 241 121 41 1 72 1 760/yt I 71001 202101 390001 561601 561601 561601 561601 291720

M in.of FrorestryINor) I (9160)l (9160) 1(16320) 1(17520) 1(17520) 1(17520) 1(17520)1 (102720) 1 Soil 0onmerv (P'M)l N o I 41 I 41 I 1 I I a 1 1440/I I 51601 57601 115201 115201 115201 115201 115201 69120 I5 ursegy Itaff(IPLP)l No H@ 41 1 41 21 I I I 10 I 600/yr I 21001 24001 41001 60001 60001 60001 60001 33600

Rlural Extocenturl I I xt.staff(PPEMPl3) Ho 11101 601 1301 a01 I I I 360 1 600/yr 1 330001 510001 1410001 1980001 2160001 2160001 2160001 1152000 I

In. Other Cost I I l I I I I I I I 4006S05 1636001 3075501 4104001 4242001 4242005 4242001 2575000 1 Vehicle run. expn. 1000 km540 I I I I I I I IIpOAcm I -io-oo-oI 400001'T o 6001820001l OUR00 820001 9120-001 439 00-0 I1 Viehiole maint. l8t.ropi I I I I I I I IRp730/yr I 222001 234001 460001 492001 492001 492001 492001 166000 I Notoraycle 0414 115000kg I I I I I I I 53p100/yr I 16501 42001 70301 99001 10.001 101001 101001 56100 I cave1 allowance I Anne I I I I I I I I It* I 3170001 760001 1245001 1733001 1162001 1862001 1162001 1249400 II P13 housing allow. I Ann. I I I I I I I I IItp500/yr I 10001 10001 160001 160005 160001 160001 160001 96000 I Hrorsry Opr. cost I 3haw I 41 1 61 I I I I IRPlQOOGyr I 320001 320001 640001 moCoul 600005 100001 100005 4410000 I

1i11. WUS Submid, Iha/yr 1 122011990131501522016120161201 22620 1R9300000 ovenl 1398001 24116005 3089601 9010161149192411061012114S35681 6560260 1 I I I I I I I I I 2 yearcs I *.a.sa-al uuum wersa5.fuulu5saulau5au4.5 eU..m IIPlantini Matterial' I I I I I I I I I I I 960001 9,9601 2577401 4813761 6810601 7197121 I 2250666 Ilotyr. DoermV If I II I I I I I I I I I I I I I I

+ * hpansian Spar/hal I I I I I I I 122920 ha I I 122001 1232201 3196401 5992641 1503401 8959611 2600632 I2nd yr. DenFm ** uI I II I I I I I I I I I I I I I III 4 UpaniaL I ISn I I I I 2 years I I I .0001 101001 2096001 3,29601 5576001 1246960 nlestoperation I I i I I I I I 1 1300011 1300001 I I 1 260000

1 1 1 1I1*1PwuiV.L000/yrI I I I I I I I I II1TcYAL1+1*U1 I IPPH I 60OfyrI I I I 9024611 58590011241780116924361222266412693752121843081 11513200 5* 1 I I I~~~~~~~~~~~~~ I lPpi I 300/yrl I I I *'I I

s ee following table for leeds budget detailto 001 will. fund the second year subsidy for the last axpanmion segmeant, which wLil be In Tear 7. therefore afttr PACW.

0 3332AtjoysG/27/84

ulpland Agricul1ture and o3nhervation Project

Hu R Asoureem Development

Quantit b Prolet Tear Bas____ ie eu roeter_______

(iionewlIIutLlI.eI I 2 ~~2 I I I II I Toa

It. investment costs IexL.t. laailLtiesI 2 I 2 2 I 2 2 II Geproje providedl

Ilogistics supportl ltrg. wiLXb. donel Iunderocntract r)2

jIl. Recuarrent cots. 1365661IA. Trrainingi Olreotorl No I I I I I I 2 I 7 I 3000 I 30001 20001 30001 30001 30001 30001 30001 2100010. Travel Allowance lannuall I I I I I I I 7 1 2040 1 13261 20401 20401 20401 20401 20401 20402 13566 IIC. Newsletter limit. I 19 21 31 3 1 dl d1 42 1 2L 5000o I 50001 100002 150001 150001 200001 200001 200002 105000 II I I I I I I I I I I I I2 I I I I I I IIliz. intensive I I I I 2 I I I II I II IIIIIIiehorc~z~OUCSe I 2 I III I I 735200 II A. Vaguer. tpre/wkl I 37402 57101102001122401122401122401 56440 1 1eI 374001 57aQol102000Il22400112240011224001 5644-00 IN. OttensAon workor.lpreAvkl 2201 2301 4301 4201 601 I I 1360 I 100 I 220001 230001 430001 420002 60001 126000 2C.ZXxtensionNMana- I I I I I I I I I I I I I I I I II gers a uuperv. Ipru/wkl 441 241 561 242 I I 2 220 1 100 2 44002 24001 560"I 24002 72001 I I 22000 IID. Subject Matterl I I I I I I I I I I I I I I I I II Specialists Ijpre/whl 161 I 161 3221 321 3222 128 1 100 I 16001 I 16002 32001 22002 32001 1 25000 I I I I I I I I I I I I I I I I I I I IlIv. In-OountryTh ralI I I I I I I I I I I I I I I I I 190002IA. KeyCtF ers I pr gYkl I I 1001 1002 1001 1001 I 400 1 100 I I I 100002 100002 100002 100009 I iii0i Itis. state Iprsdwkl I 401 201 201 201 I I 60 I 100 I I 20001 20001 20001 20002 I I 6000

IV. ftmal raLnineI 2 1240000 IIA. Diploma (ind.40) Ipr./yrl I I of el 102 101 41 40 1 2000 2 I 160001 160001 200002 200001 $100o1 60000 In. MAoterm (Ind.20) Ipr./vrI2/ I 52 Si 102 iol 102 I 40 1 5000 I I 250001 250002 500002 500001 500001 I 200000 IIC. Neuters (abrd.20)Ipra/yrlT/ I SI SI 102 102 101 52 s0 1 19200 I 600011920001212000I11200011920001 960001 960000 I

iNatoc-a-e- IpAvk I 3 22 II 31 I 2I 1 100 301 00 10001 30001 10001 I10001 ______

2V11. Study Taure I I I I I I I I II I 2 I I I I III Abroad Ipr./vkl I lei lei I 1.2 I iII 72 I 1000 I I 160001 1600021 I 1.0001 I 160002 72000I 2~~~~~~ I 2 I I I I I 2 I I I I I I I I I I

TOPAZ. ~ ~I I 2 I I I I I I I I 403261219I40139204014426401456S40142264012704401 2244766 I

l/ 24 month program

le 30 month program

13332hijoyo6/27/04

k4qse RrnneuTable 6

O0ngervation P4Oee pb4d(Rp" In 000uJ

I alUf by tU our same Cost F r _

oI.txlqtlev un I I l3 4 i 5 a I 2 4 I I I tI

A lti 1nSun ots L-o

I hiae1 lIo/Ditl 4 1 I 1 4 1 I I I a I 10000 1 400001 1 14 0001 1 1 60l0og*tle furneqwilpIlDlati * I I I 4 4 I I I * I 1000 1 40001 1 1 40001 1 *0oo0____ I I I I I I I I I I I I I I I I I I I260| . Recurrnet costs 2X

1. core staff 11 taI 4 1 4 I *4 4 4 4 I e 1 900 1 3600 36001 36001 36001 36001 36001 36001 -5300

0 - planner lp¢r.yr 4 | 4 1 4 1 4 1 4 1 * | 4 1 20 1 360 1 1I401 14401 14401 14401 14401 14401 14401 10060I - urvoyar Ip C.r 1 12 12 I 12 I 12 1 12 12 I 12 I 64 1 300 1 36001 36001 36001 36001 36001 36001 34001 25200 1

I - designer Iper.yrl 6 I 1 I I U I a I a I So I 1so I 12001 1001 12001 12001 12001 12001 12005 640*I glseimator SperrYd * a * I 6 I a I a I a I a I 56 I 100o1 8001 *oo 6oelol gof ool 6o0l goal 1600I - clocrks per.yrl 1 I I * I e I I I 0 1 64 1 15D I 12001 12001 1200 12001 L12001 1001 12001 64004I - ttechniclans Ipr.yrl I * I 10 I1 I1a 1 I 24 1 24 1 126 1 300 1 1 24001 30001 54001 54001 72001 73001 34400

const. aup.r,. Iper.Yrl I 4 1 5 I 9 I 9 1 12 1 12 1 63 1 200 I I 6001 10005 18005 16001 24001 24001 10200| -dratn lper.yrl 0 1 a I a I I I a I I I e 56 s 100 I s001 6005100t 6001 005ol sooo 60 5600

2. sraTel allowanc per.rtIl ! 2! 27 534 1 1 54 1 2 600 ! 72001 144001 162001 204001 324001 324001 32400t 15540 1.3 Vohic. aperakion I 20001 20001 25.01 41001 45001 600eoe 6o00 71500 I

| 4. Construction KM I | I 5 | 42 1 66 1109 1127 1 126 47 1 100 I 1 40,001 3402001 5346001 001 3047500 15. Maintenance I | A | } 2 l l l l l l | | 125| 11751 26251 555sl 37251 140O I

| .Kainlten 4 e. fr5K 1 1 1 I I I I I ko so Ze eo ol eol *ol 4zS. tpaIr e 1 1 1 1 I i 1 2201 2001 64001 Bo001 l o001 l 60001 4360

C Tan a I I I I I I I I I' 7140 1 _0;T- -T- - -o) I . . I I1. _ I I , 4 I I SI 3 I , I- I I I ll

e Labor, materials plant hire! only material

1 3332Ajoyt7/2/84

I~~~~~~~~~~~~~~~~~~~~

Nm

I

AREX 6: STATUTORY CHECKLIST

Listed below are statutorycriteria applicable generally toprojects under the FAA and projectcriteria applicable to individualfunding sources: DevelopmentAssistance (with a subcategory forcriteria applicable only toloans); and Economic Support Funds.

A. GENERAL CRITERIA FOR PROJECT

1. FY 1982 AppropriationAct; Sec. 523; FAA Sec.634A: Sec. 653 (b).

(a) Describe how The Committees in appropriationauthorizing and of Senate and House wereappropriations Committees notified of the project throughof Senate and House have the FY84 Congressional Presenta-been or will be notified tion and through a Congressionalconcerning the project; Notification.(b) is assistance within(Operational Year Budget)country or internationalorganization allocationreported to Congress (ornot more than $1 millionover that amount)?

2. FAA Sec. 611(a)(1).Prior to obligation in Yesexcess of $100,000, willthere be (a) engineering,financial other plansnecessary to carry outthe assistance and (b) areasonably firm estimateof the cost to t:e U.S.of the assistance?

3. FAA Sec. 611(a)(2). If No further legislative actionfurther legislative is required.action is reqaired withinrecipient country, whatis basis for reasonableexpectation that suchaction will be completedin time to permit orderlyaccomplishment of purposeof the assistance?

-2-

4. FAA Sec. 611(b); FY 1982Continuinq ResolutionSec. 501. If for wateror water-related landresource construction,hasproject met the standardsand criteria as set forthin the Principles andStandards for PlanningWater and Related LandResources, dated October25, 1973?

5. FAA Sec. 611(e. If NAproject i.s capitalassitance (e.g..construction), and allU.S. assistance for itwill exceed $1 million,has Mission Directorcertified and RegionalAssistant Administratortaken into considerationthe country's capabilityeffectively to maintainand utilize the project?

6. FAA Sec. 209. Is project It is being iplemented assusceptible of execution a mltilateral project.as part of regional ormultilateral project? Ifso why is project not soexecuted? Informationand conclusion whetherassistance will encourageregional developmentprograms.

7. FAA Sec. 601(a). This project should directlyInformation and encorage (b). (c) and (e).conclusions whetherproject will encourageefforts of the countryto: (a) increase the flowof international trade;(b) foster p_ivateinitiative andcompetition: and (c)encourage development anduse of cooperatives, and

-3-

credit unions, andsavings and loanassociations; (d)discourage monopolisticpractices; (e) improvetechnical efficiency ofindustry, agriculture andcommerce: and (f)strengthen free laborunions.

8. FAA Sec. 601(b). NAInformation ad-conclusions on howproject will encourageU.S. private trade andinvestment abroad andencourage private U.S.participation in foreignassistance programs(including use of privatetrade channels and theservices of U.S. privateenterprise.)

9. FAA Sec. 612(b), 636(h); Normal project disbursementFY 1982 Appro riation procedures assure this.Act Sec 507. Describesteps taken to assurethat, to the maximumextent possible, thecountry is contributinglocal currencies to meetthe cost of contractualand other services, andforeign currencies ownedby the U.S. are utilizedin lieu of dollars.

10. FAA Sec. 612(d). Does Nothe U.S. own excessforeign currency of thecountry and, if so, whatarrangements have beenmade for its release?

11. FAA Sec. 60i(e. Will Yes* thEe project uztilize

competitive selectionprocedures for theawarding of contracts,except where applicableprocurement rules allowotherwise?

-4-

12. FY 1982 Appropriation Act NASec 521. If assistanceis for'the production ofany commodity for export,is the commodity likelyto be in surplus on worldmarkets at the time theresulting productivecapacity becomesoperative, and is suchassistance likely tocause substantial injuryto U.S. producers of thesame, similar orcompeting commodity?

13. FAA 118(c) and (d). Does One purpose of the project isthe project take into to reverse the negativeaccount the impact on the environmental impact of theenvironment and natural farmers by demonstrating moreresources? If the sound and productive so5lproject or program will conservation practices. Asignificantly affect the formal environmental assessmentglobal commons or the ill be completed prior to anyU.S. environment, has an procurement or use of pesticides.environmental impact With regard to roads, an envison-statement been prepared? mental assessment will be done asIf the project or program roads are designed.will significantly affectthe environment of aforeign country, has anenvironmental assessmentbeen prepared? Does theproject or program takeinto consideration theproblem of thedestruction of tropicalforests?

14. FAA 121(d). If a Sahel NAproject, has adetermination been madethat the host governmenthas an adequate syrtemfor accounting for andcontrolling receipt andexpenditure of projectfunds (dollars or localcurrency generatedtherefrom)?

-5-

B. FUNDING CRITERIA FOR PROJECT

1. Development Assistance this project wll provideProject Criteria forwrd steps for items (a),

(b). (c) and (d). Also.a, FAA Sec. 102(b), 111, the project will be a partial113, 281 (a). Extent to testing of (d) by the Missionwhich activity will (a) in collaboration with USAID/effectively involve the Philippines and USAID/Thailand.poor in development, byextending access to economyat local level, increasinglabor-intensive productionand the use of appropriatetechnology, spreadinginvestment out from citiesto small towns and ruralareas, and insuring wideparticipation of the poorin the benefits ofdevelopment on a sustainedbasis, using theappropriate U.S.institution.; (b) helpdevelop cooperatives,especially by technicalassistance, to assist ruraland urban poor to helpthemselves toward betterlife, and otherwiseencourage democraticprivate and localgovernmental institutions;(c) support the self-helpefforts of developingcountries: (d) promote theparticipation of women inthe national economies ofdeveloping countries andthe improvement of women'sstatus; and (e) utilize andencourage regionalcooperation by developingcountries?

*-6-

b. FAA Sec. 103, Yes103A,104, 105 106. Doestej project fit thecriteria for the type offunds (functionalaccount) being used?

c. FAA Sec. 107. Is Yesemphasis on use ofappropriate technology(relatively smaller,cost-saving, labor-usingtechnologies that aregenerally mostappropriate for the smallfarms, small businesses,and small incomes of thepoor)?

d. FAA Sec. 110(a). yesWill the recipientcountry provide at least25% of the costs of theprogran, pr3oject, oractivity with respect towhich the assistance isto be furnished (or isthe latter cost-sharingrequirement being waivedfor a "relatively leastdeveloped country)?

e. FAA Sec. llO(b). Will NAgrant capital assistancebe disbursed for projectover more than 3 years?If so, has justificationsatisfactory to Congressbeen made, and effortsfor other financing, oris the recipient countryWrelatively leastdevelopedo?

f. FAA Sec. 122(b). YesDoes the activity givereasonable promise ofcontributing to thedevelopment of economicresources, or to the

-7-

increase of productivecapacities andself-sustaining economicgrowth?

g. PAA Sec. 281 (b). This project supports developmentDescribe extent to which of local government institutionsprogram recognizes the and increasing the productiveparticular needs, capacity and income of the ruraldesires, and capacities poor. It provides for trainingof the people of the In self-government and incountry; utilizes the technical skills. It looks tocountry's intellectual local admistItions toresources to encourage loal acadelic gvstitutions toinstitutional assist the local govermnts indevelopment: and supports iplemntation.civil education andtraining in skillsrequired for effectiveparticipation ingovernmental processesessential toself-government.

2. Development AssistanceProject Criteria (Loansonly)

a. FAA Sec. 122(b). GOI is able to repay the loan.information and capacityof the country to repaythe loan, at a reasonablerate of interest.

b. FAA Sec. 620(d). If NAassistance is for anyproductive enterprisewhich will compete withU.S. enterprises, isthere an agreement by therecipient courtry toprevent export to theU.S. of more than 20% ofthe enterprise's annualproduction during thelife of the loan?

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c. ISDCA of 1981, Sec. NA724(c) and (dO If forNicaragua, does the loanagreement require thatthe funds be used to themaximum extent possiblefor the private sector?Does the project providefor monitoring under FAASec. 624(g)?

3. Project Criteria Solelyfor Economic Support Fund

a. FAA Sec. 531(a).Will this assistancepromote economic orpolitical stability? Tothe extent possible. doesit reflect the policydirections of FAA Section102?

b. FAA Sec. 531(c).Will assistance underthis chapter be used formilitary, or paramilitaryactivities?

c. FAA Sec. 534. WillESF funds be used tofinance the constructionof the operation ormaintenance of, or thesupplying of fuel for anuclear facility? If so,has the Presidentcertified that such useof funds is indispensableto nonproliferationobjectives?

d. FAA Sec. 609. Ifcommodities are to begranted so that saleproceeds will accrue tothe recipient country,have Special Account(counterpart)arrangements been nade?

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e. Section 133.Notwithstanding any otherprovision of this jointresolution, none of thefunds appropriated undersection 101(b) of thisjoint resolution may beavailable for any countryduring any 3-month periodbeginnning on or ,fterOctober 1, 1982,immediately following thecertification of thePresident to the Congressthat such country is nottaking adequate steps tocooperate with the UnitedStates to prevent narcoticdrugs and othsr controlledsubstances (as listed inthe schedules in Section202 of the ComprehensiveDrug Abuse and-PreventionControl Act of 1971 (21U.S.C. 812)) which areproduced, processed, ortransported in such countryfrom entering the UnitedStates unlawfully.'

A N N E VIII

BIBL IOMQEPHY

0~~~~~~~~~

ANNEX 8

BXELOGRAPHY

Direktorate Jenderal Xehutanan, P3RPDAS Daerah Aliran Sungai Bran:tas,'General Information about Brantas Watershed and Some RunningActivities", April 1983.

E1 Swaify, S.A., Arsayad, S., and Krishnarajah, P., "Soil Erosion byWater", in Natural Systems for Development, Richard Carpenter,editor, MacKillan Publishing Co., 1983, pp. 99-161.

Hamer, W.I., 'Soil Conservation Consultant Report", for the Soil ResearchInstitute of Indonesia, 1980, 1981, 1982.

HBdson, Norman W., NSoil and Conservation Strategies in the Third World",Journal of Soil and Water Conservation, November - December 1983,p. 450.

'Pola Terpadu Pengembangan Wilayah Sungai Jratunseluia", oleh BAPPEDATk. I Jawa Tengah dan Proyek Pengembangan Wilayah SungaiJratunseiuna, April 1982.

Sheng, T.C., "Protection of Cultivated Slopes -- Terracing Steep Slopesin Humid Regions", FOA, 1981.

Snowy Mountains Engineering Corp. (SMEC), "Report on the Serang RiverProject", 1982.

USAID/GOI, "Composite Report of the Watershed Assessment Team", 3volumes, 1983.

World Bank/Indonesia, "Policy Options and Strategies for Major PoodCrops", Report No. 3686 IND, 1983.

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AlNNEX iX

LIST OP WOPKIG PAPERS AND- BACKGRUND WERZL

Ala=X 9working Papers and Background Materials for the

Upland Agriculture and Conservation Project

The Papers and reports listed below by and large stand on their own, butall of then define same constraints faced in the design of the UACP. Paperssteummng from the C:itanduy II Project are included to show why specificobjectives and organizational elements, different froa those of previouswatershed projects, have been incozporated in this project. Other papers areproposals or think pieces that may provide useful ideas for the project asspecific needs develop. All are on file with the UAlC Project Papers.

1. 'Secondazy Crop Mark.eting, USAID/Tndonesia, Ric Bernsten, 1983.

2. aagement Information System Terms of Reference.

3. a. Subsidies and Creditb. IUpland Agriculture and Conservation Project Paper Annex;

Pinancial Support for Project Participants", Jay Rosengard, 1983.

4. 'Cooperative Seed Production and Distribution, for USAID/Indonesia', SamPiliaci, 1984.

5. Specific Proposals for the UAC Project Training Component.

6. 'Proposal for Upland Agriculture and Conservation Pro3ect", AppliedAgricultural Research, $inistry of Agriculture, 1984.

7. "The Citanduy River Basin Development Project-Citanduy Upper WatershedManagement Project--Feasibility Report", for the Directorate General ofWater Resources Development, Ministry of Public Works, PRC EngineeridgConsultants, Inc., Denver, Colo., USA, 1980.

8. "The Citanduy River Basin Development Project-Panawangan Pilot WatershedImplementation and Evaluation Report", for the Directorate General ofWater Resources Development, Ministry of Public Works, PRC EngineeringConsultants Inc., Denver, Colo., USa, 1980.

9. -Citanduy II-Orgaxnzational Arrangements for Iutegrated MultisectoralRiver Basin Developmente, for USAID, Paul Bisek, 1981.

10. 'Citanduy River Basin Integrated Development Project (Citanduy II) Ciamis,West Java, Monthly Reports", for USAm, Resources Management International,Inc. in association with PRC Engineering Consultants, Inc., 1982-1984.

13. Citanduy 1I Detailed Component Description", Annex 3 of the Project Loan

Agreement between the Republic of lndonesia and the United States ofAmerica, 1980.

12. "Analysis Social Soundness Terbadap Project Proposal Upland Agricultureand Conservation Project", di Dati I Java Tengah dan Jawa Timur, JohnJ. 0.1. Ihalauw, 1983.

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report no. 4501a:6/13/84 project...

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