THE WORLD BANK GROUP ARCHIVES PUBLIC DISCLOSURE AUTHORIZED Folder Title: Project Completion Report - June 26, 1981 - Northeast Ghor Irrigation and Rural Development Project - Kingdom of Jordan Folder ID: 1061961 Project ID: P005247 Dates: 6/26/1981 Fonds: Records of the Middle East and North Africa Regional Vice Presidency ISAD Reference Code: WB IBRD/IDA MNA Digitized: 1/18/2019 To cite materials from this archival folder, please follow the following format: [Descriptive name of item], [Folder Title], Folder ID [Folder ID], World Bank Group Archives, Washington, D.C., United States. The records in this folder were created or received by The World Bank in the course of its business. The records that were created by the staff of The World Bank are subject to the Bank's copyright. Please refer to http://www.worldbank.org/terms-of-use-earchives for full copyright terms of use and disclaimers. M THE WORLD BANK Washington, D.C. @ International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org uAr v8 1061961 R1982-029 Other#: Box#79113B 1981 - Northeast Ghor Irrigation and Project Completion Report - June 26, Rural Development Project - Kingdom of Jordan DECLASSIFIED WBG Archives KINGDOM OF JORDAN NORTH EAST GEOR IRRIGATION AND RURAL DEVELOPMENT PROJECT (Credit 498-JO) PROJECT COMPLETION REPORT June 26, 1981 (0564E) ABBREVIATIONS ACC : Agricultural Credit Corporation EGMC : East Ghor Main Canal JVA : Jordan Valley Authority JVC: : Jordan Valley Commission JVFA : Jordan Valley Farmers' Association KfW : Kreditanstalt fUr Wideraufbau LCA : Liaison and Advisory Committee NRA : Natural Resources Authority FISCAL YEAR January 1 - December 31 GOVERNMENT OF THE KINGDOM OF JORDAN TABLE OF CONTENTS BASIC DATA SHEETS I. SUMTMARY ........................................................ . 1 II. BACKGROUND .....................................-- .-- .. . . 3 III. PROJECT FORMULATION ............................................. 4 IV. IMPLEMENTATION ................................................. 6 Targets Achieved and Changes in Project Scope ................ 6 Construction and Procurement ................................. 9 Redistribution of Lands ..................................... 11 Project Costs and Financing ................................... 12 V. AGRICULTURAL DEVELOPMENT ....................................... 14 Production Patterns ........................................... 14 Rate of Adoption of Alternative Irrigation Techniques ........ 16 VI. INSTITUTIONAL PERFORMANCE ...................................... 18 Project Management - Jordan Valley Authority ................. 18 Operation, Maintenance, and Water Management ................. 19 Cost Recovery ......................... ..... 21 Agricultural Support Services ................................ .22 Jordan Valley Farmers' Association .......................... 24 VII. ECONOMIC AND SOCIAL IMPACT ..................................... 24 General ..................................................... 24 The Project .................................................. 26 VIII. BANK AND CONSULTANT PERFORMANCE ................................ 29 IX. RECOMMENDATIONS AND LESSONS LEARNED ............................ 31 ANNEXES Annex I : Implementation Results ............................ 33 Annex II : Comparision of Schedule of Disbursement ............ 34 Annex III : Comparative Production Estimates .................. 35 Annex IV : Suitable Methods of Irrigation for Different Crops.. 36 Annex V : Agricultural Production Projections Used in Economic Analysis ........... o ................. . 38 Annex VI : Assumptions Used in Economic Analysis ............. 39 Annex VII : Farm-Gate Prices Used in Economic Analysis ........ 42 Annex VIII: ACC - Medium Term and Seasonal Credit ............. 43 MAP IBRD 15734 PCR KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPMENT PROJECT (Credit 498-JO) PROJECT COMPLETION REPORT KEY PROJECT DATA Appraisal Actual or Item Estimate Current Estimate Total Project Cost (US$ Million) 17.4 16.2 /a Irrigation Works (US$ million) /b 6.0 13.8 Overrun over 100% Credit Amount (US$ Million) 7.5 7.5 Disbursed 7.5 7.5 Cancelled 0.0 0.0 Repaid to - Outstanding to Date Physical Components March 1977 for civil works March 1979 /c Completed and June 1978 for on-farm development Proportion Completed by Above Date 100% Proportion of Time Overrun- 80% Economic Rate of Return Total Project 29% Total Project. 13% New Lands: 16% Conversion Lands. 5% /a Actual cost of components financed by IDA. 7F Includes civil works and consulting services which are the only comparable items (para 4.19) /c For civil works. On-farm development has not yet started OTHER PROJECT DATA Item Original Actual or Plan Revisions Est. Actual First Mention in Files or Timetables - April 1972 Government's Application - 12/21/1972 Appraisal Sept 1973 Negotiations - - 03/27/1974 Board Approval - - 07/02/1974 Credit Signature Date - - 07/25/1974 Effectiveness Date 10/28/1974 - 01/08/1975 Closing Date (Credit) 06/30/1979 12/31/1979 06/30/1980 Borrower Hashemite Kingdom of Jordan Executing Agency Jordan Valley Commission, changed to Jordan Valley Authority by Law No. 18 of 1977 Fiscal Year of Borrower January 1 - December 31 Follow-on Project A follow-on Project, the Jordan Valley Stage II Irrigation Project was appraised by the Bank on behalf of other Government and Financing Agencies. Implementation of this Project is pending resolution of riparian issues. (0594E) MISSION DATA /1 Returned To Mission Headquarters No. of Date of Item Sent .By Month Year Weeks /1 Persons Man-Weeks Report Identification IDA - 72 1.0 2 2.0 01/02/1973 Preparation /2 FAO 03 73 4.5 5 22.5 06/15/1973 Appraisal Bank 09 73 4.5 4 18.0 05/10/1974 Supervision I 03 75 1.0 2 2.0 04/ /1975 Supervision II 08 75 1.0 3 3.0 09/04/1975 Supervision III 02 76 0.9 3 2.7 04/15/1976 Supervision IV 10 76 1.3 3 3.9 11/19/1976 Supervision V 04 77 1.0 3 3.0 04/15/1977 Supervision VI 11 77 1.5 3 4.5 11/21/1977 Supervision VII 03 78 1.4 1 1.4 04/12/1978 Supervision VIII 11 78 0.7 1 0.7 11/15/1978 Supervision IX 03 79 1.0 1 1.0 03/28/1979 Preparation X for Completion 04 80 0.6 2 1.2 05/28/1980 Completion 03 81 2.0 2 4.0 06/26/1981 /1 In some cases, the number of weeks was estimated /2 Preparation consisted of preliminary design by Government of Jordan and FAO study concentrating on issues requiring special consideration (marketing, agriculture, production, credit). COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) Jordanian Dinar (JD) Appraisal Year Average 1973 Exchange Rate: JD 1 - US$3.11 Intervening Years Average 1974 JD 1 = US$3.12 1975 JD 1 = US$3.13 1976 JD 1 - US$3.01 1977 JD I = US$3.04 1978 JD 1 - US$3.20 Completion Year Average 1979 JD 1 - US$3.33 1980 JD 1 - US$3.35 (0594E) (564E) KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPMENT PROJECT (Credit 498-JO) PROJECT COMPLETION REPORT /1 I. SUMMARY 1.01 The North East Ghor Irrigation and Rural Development Project was appraised in 1973 and a US$7.5 million IDA credit for the project was signed in July 1974. Project-financed construction was completed in 1979 and the credit was closed in June 1980. 1.02 The project area is situated in the northern part of the Jordan Valley, where the topography and temperate climate favor early-season vegetable production. The project was formulated on the basis of a FAO/CP agronomic study and technical feasibility studies prepared by the Jordan Valley Commission. It was conceived as part of the first stage of the Jordan Valley Rehabilitation and Development Plan (1973-75) to which bilateral donors (the US, Kuwait, and West Germany) had also committed funds. It was the first Bank-group financed project in the agricultural sector since the 1967 war in the region. Four credits totalling US$30.3 million for infrastructure (power, energy, water supply) and education sector were approved since mid-1971. 1.03 At appraisal, the project included: (a) construction of a gravity fed sprinkler irrigation system for 2,760 ha, including 1,000 ha then being surface-irrigated under command of the existing East Ghor Main Canal (EGMC) (conversion lands), and 1,760 ha above the canal and largely unirrigated (new lands); (b) improvement of agricultural production on an additional 5,000 ha of surface-irrigated lands under command of the EGMC through land leveling and tile drainage (non-converted lands); (c) two assembly markets; /1 This report is based on the findings of a two-week mission to Jordan in March 1981, and supervision reports and files on the project. It also draws heavily on the data and analysis contained in the Bank's appraisal report for the proposed Jordan Valley Stage II Development Project (June 1980) and on an AID-financed evaluation report on Jordan Valley Development, prepared by Dr. Jarar Dajani, et al. (August 1980). - 2 - (d) procurement of equipment and materials for operation and maintenance and research and extension; (e) provision of agricultural credit; and (e) a multi-sectoral rural development component including construction of schoolrooms, health centers, water supply systems, community centers, and farm roads. Responsiblity for project management rested with the Jordan Valley Commission (JVC) which became in 1977, the Jordan Valley Authority (JVA) with enlarged responsibilities. /1 1.04 The scope of the project was considerably changed during its implementation at the request of JVA. Works on the non-converted lands were abandoned soon after the loan became effective in 1975 since JVA had begun to consider conversion of all irrigated lands in the Valley to a pressure pipe distribution system. Because of cost overruns on the irrigation works, the Borrower also proposed that project financing for the rural development component, assembly markets, and procurement of on-farm sprinkler equipment under the credit component be reallocated to the construction of the irrigation works and consulting services. Other donor financing was arranged for the rural development infrastructure, marketing, and on-farm spinkler equipment. 1.05 Construction of the irrigation system was completed in the spring of 1979, about two years behind appraisal schedule. Completion of detailed design and tender documents was delayed by a year because of delays in finalizing the agreement between JVA and the engineering consultant. Actual project costs turned out to be about twice the appraisal estimates for irrigation civil works and two and a half times for consulting services. 1.06 Two years after completion of irrigation works under the project, its expected agricultural impact remains difficult to determine. Irrigation of lands above the EGMC has not yet started due to delays in land redistribution. On the conversion lands, only 12% of the farms were using the pipe system for sprinkler irrigation at the time of the completion mission, while the others were still irrigating by surface from the open canal system. The farmers' reluctance to adopt sprinkler irrigation apparently stems from fears that it would damage the quality of their major vegetable crops (tomatoes, cucumbers, squash, etc.) accounting for about 30% of the expected cropping pattern in the project area, but covering nearly 100% of the irrigated area in the southern part of the Valley. These fears are supported by the results of preliminary research, which also suggests that sprinkler irrigation may foster plant disease and aggravate weed control problems (para 5.09). 1.07 This unexpected resistance to sprinkler irrigation raises important questions about the decision to install a pressure pipe system on lands irrigable from the EGMC, with implications for the planned conversion of nearly 12,000 ha throughout the Valley under the Government's second stage development plan. In the context of the appraisal of this project, sprinkler irrigation was proposed only for lands with relatively steep /1 Hereafter referred to by its current name, JVA. -3 - slopes and shallow soils in order to save cost of land leveling and to improve water efficiency. However, the same justification was later used by JVA when proposing to convert all lands in the Valley to sprinkler irrigation. Once it had become evident that farmers were reluctant to adopt sprinkler irrigation, JVA adopted a more flexible policy of letting farmers select their preferred irrigation method, whether it be sprinkler, drip, or surface. However, if given the choice, it is not clear that sprinkler irrigation would be widely adopted unless and until research can prove sprinkler an effective and viable irrigation method for Valley crops. 1.08 The substantial cost overruns and delays in realizing production benfits on the new lands have contributed to a significant reduction in the project's expected economic rate of return to roughly 13% compared with 29% /1 estimated at appraisal, assuming that the new lands come fully under irrigation by 1982 as now expected. The lower economic rate of return also reflects the elimination of relatively low-cost high-yielding investments in land-leveling and the drainage on the non-converted lands. Price increases for agricultural production of from 100-200% have partly compensated for cost overruns. 1.09 The rate of collection of water charges from Valley farmers is very high, reported by JVA at close to 100%. However, at the current level of 3 fils per m3, fixed at the time of appraisal, water charges currently cover only about one-third of O&M costs. Section 3.06 of the Credit Agreement calls for the Borrower to collect water charges of at least 6 fils/m3 in the first year of irrigation in the sprinkler-irrigated areas, and to ensure full O&M cost recovery thereafter. Since full operation of the pipe system is expected to begin by the beginning of the fall 1981 cropping system, JVA should increase water charges to 6 fils/m3 by mid-1982. Further upward adjustment will be required for full O&M cost recovery. II. BACKGROUND 2.01 Only 12% (60,000 ha) of cultivable lands (out of a 500,000 ha total) in Jordan are potentially irrigable. About 60% of these lands are in the Jordan Valley. The entire Valley is below sea level from about -200 m at Lake Tiberias to about -400 m at the Dead Sea. Its topography and temperate climate in winter is highly favorable for early season vegetable production. The gradual transformation of the Valley from subsistence farming to commercial agriculture started in the 1950s with the construction of the EGMC which is supplied by the international Yarmouk River. The EGMC runs all along the East Bank of the Jordan Valley. 2.02 Prior to the 1967 war, development of irrigation in the Jordan Valley had resulted in a threefold increase in agriculture's contribution to Jordan's /1 Excluding project costs for social infrastructure investments; the estimated ERR including these costs was 24%. - 4 - GDP over a 10 year period. During the 1967 war considerable damage was sustained in the Valley. This was followed by the civil disturbances of 1970. Normal farming operations were restricted and as a result, a large part of the Valley's population left. In 1971 the population started returning to their holdings but were severely handicapped by the poor state of civil infrastructure and irrigation works, the shortage of housing, and the lack of social services for their families. 2.03 To accelerate the recovery of economic activity in the Valley and to further develop its productive potential, the Jordanian Government in 1971 prepared a three-year Rehabilitation and Development Plan (1973-1975) for the Jordan Valley. It approached various governments and international agencies, including the Bank, to request assistance in financing the Plan /1. 2.04 The Bank reviewed the Plan and sent its first identification mission to Jordan at the end of 1972. At that time other governments and financing agencies had already committed funds or expressed interest in financing parts of the Plan. The Kuwait Fund had agreed to finance construction of the King Talal Dam on the Zarqa River and USAID declared its intention to finance irrigation development downstream of this dam. The German Government also expressed interest in providing financial assistance for development in the south of the Valley. The Bank was asked to consider financing the remaining works to be undertaken in the northern portion of the Valley, north of Wadi Yabis, for which funds had not yet been committed by other donors. III. PROJECT FORMULATION 3.01 The project was identified by the Bank and prepared by the JVA with assistance from FAO/IBRD Cooperative Program. JVA prepared technical feasibility studies for the engineering works. The project area proposed for Bank consideration stretches from Wadi Yabis north to the the Yarmouk river east of the Jordan River (see Map IBRD 15734-PCR). The original project, conceived by JVA and the Bank, included the rehabilitation of surface irrigation facilities on about 5,000 ha under command of the EGMC and the installation of a pipe network for gravity-fed sprinkler irrigation on approximately 1,700 largely unirrigated ha above this canal, where surface irrigation was considered impractical because of the steep slopes and shallow /1 This Development Plan for the Jordan Valley was to be implemented in two stages: Stage I would utilize the unregulated flows of the Yarmouk and of some side Wadis and the regulated flows of the Zarqa River to irrigate 18,000 ha; Stage I projects included the King Talal Dam on the Zarqa River and the four following irrigation projects: (i) North East Ghor financed by IDA; (ii) Zarqa Triangle financed by USAID; (iii) the 18 km extension financed by USAID; and (iv) Kafrein-Hisban financed by KfW. Stage II would develop the Valley's remaining land and water resources by building the Maqarin Dam.on the Yarmouk River and modernizing and extending the irrigation system; implementation of the Stage II project is still pending resolution of riparian issues. - 5- soils. The preliminary design prepared by JVA included three independent irrigation schemes served from the unused Wadi Ziglab storage reservoir and from river run-off from Wadi Arab. 3.02 During preparation, the irrigation component was substantially modified. JVA entered into negotiations with the consulting firm NEDECO-Dar Al Handasah to prepare the detailed design of the irrigation works. The draft agreement provided for the design of the sprinkler system for an additional 1,000 ha lying below the EGMC which were already surface irrigated ("Conversion Lands"), as well as a study to select the most appropriate area to be converted to sprinkler irrigation on the basis of cost and land grading limitations. This study on conversion lands was later considered unnecessary by JVA and excluded from the final agreement between JVA and their consultants with the concurrence of the Bank in April 1973, as JVA had decided to eventually convert all area surface-irrigated by EGMC into sprinkler irrigated. JVA also requested the appraisal mission to consider the inclusion of a dam on Wadi Arab as a part of the project works. 3.03 The appraisal mission agreed to this revised irrigation component, but did not agree to consider the dam on Wadi Arab because its flow had very little annual variations. Its contributions to the final design were. (a) replacing the concept of a pumped system envisaged in the original proposal with a gravity-fed pipe system; and (b) connecting the three individual distribution systems of the original proposal through a main pipe line to optimize water use from river run-off of Wadis Arab and Jurum and .from the reservoir on Wadi Ziglab. This integrated system also allowed flexibility to make use of the supplies developed by the construction of the dam on Wadi Arab. 3.04 The project approved by the Bank on July 25, 1974 (Credit 498-JOR) covered 7,700 ha of which about 86% was already surface-irrigated. A pressure pipe system for gravity-fed spinkler irrigation was to be installed on 1,000 ha of land being irrigated by surface from the EGMC (conversion lands) and on 1,760 ha of land above the canal, of which only 720 ha were under intermittent surface irrigation from side wadis and the rest unirrigated (the entire 1,760 ha are referred to as "new lands"). To improve production on the gravity-irrigated area under command of the EGMC and not to be converted to sprinkler (4,940 ha), the project included land leveling on about 3,000 ha and the drainage of about 520 ha. The project also included rehabilitation of some cross-drainage works on EGMC, and smaller components in agricultural credit, marketing, research and extension, and social infrastructure. The project was to benefit a population of about 25,000. As appraised, the project included the following: (a) Irrigation Works (i) diversion weirs on Wadis Arab and Jurum; (ii) buried carrier pipes and distribution networks to serve by sprinkler irrigation a total of 2,760 ha; - 6- (iii) farm roads (30 kms); (iv) land leveling of about 3,000 ha and tile drainage of about 520 ha; and (v) minor works on the existing East Ghor Canal. (b) Rural Development (i) treated water supply system for about 10 villages; (ii) 3 new health centers and extension of an existing center; (iii) about 150 schoolrooms; (iv) a vocational training center; (v) improvement of about 60 km of roads; and (vi) 10 community development centers; (c) Two assembly markets at Wadi Yabis and North Shuneh; (d) Equipment and materials for maintenance of irrigation works and roads; and for agricultural research and extension; (e) Agricultural credit to help finance loans for agricultural production and on-farm development, including portable sprinkler equipment; (f) Consulting services to assist project staff with the preparation of detailed design and supervision of construction. 3.05 Credit 498-JOR was declared effective on January 8, 1975, about 2 months after the proposed date and after conditions in section 7.01 of the Credit Agreement had been met, i.e. enactment of a law establishing the Jordan Valley Farmer's Association and the election of its Executive Board. The Borrower submitted all documents on time. However, since the Parliament was not in session, the Law establishing the Jordan Valley's Farmers' Association (JVFA) was, under Jordan's Constitution, only temporary; after several exchanges of correspondence between the Borrower and the Bank's Legal Department, the Bank was persuaded to accept the temporary law as fulfilling the Credit Agreement condition. IV. IMPLEMENTATION Targets Achieved and Changes in Project Scope 4.01 Considerable changes in project scope were introduced during project implementation, principally as a result of cost overruns in the irrigation works which necessitated the elimination of most of the non-irrigation related components. As a consequence, the project ultimately consisted of: -7- (i) construction of two diversion weirs, primary and secondary pipe lines and a distribution network serving 2,808 ha (2,760 ha at appraisal); (ii) engineering consultant services; (iii) equipment and materials for operation and maintenance and for agricultural research and extension; and (iv) credit for incremental seasonal agricultural production and medium-term on-farm development loans. The planned improvements on the non-converted lands, minor rehabilitation works, assembly markets and rural development infrastructure components were all dropped from the project, and the credit component was substantially reduced. 4.02 Irrigation Works. The project succeeded in meeting the implementation targets for the installation of the pressure pipe system. The system can serve a net area of approximately 2,808 ha, including 1,030 ha of converted lands below the EGMC and 1,778 ha of new lands above the EGMC. However, at the time of the completion mission, only 12% of the conversion lands was being irrigated from the pipe system, while the remainder was still being surface-irrigated from the EGMC. None of the new lands was irrigated from the system pending completion of land distribution. The limited use of the pipe system in the conversion lands may be attributed to; (i) frequent breakdowns of the pipe system (see para 4.16); and (ii) reluctance of the farmers to adopt sprinkler which they feared would damage the quality of their highest-value vegetable crops (see para. 5.09). 4.03 The only major design change in the irrigation component following agreement on the engineering contract was in the plans for the Wadi Arab diversion weir. The first supervision mission of March 1975 was advised that JVA was considering constructing a dam on the Wadi Arab with Japanese financing, which would require a change in the design of the diversion weir. At issue was whether the diversion weir proposed for the Bank project would be submerged by the new reservoir and, if so, whether the weir should be relocated or a temporary structure should be built. This question dragged on for more than 3 years until completion of the tender documents for construction of the dam. JVA ultimately decided to temporarily pump from the EGMC into the North East Ghor main line and to divert Wadi Arab water into the EGMC until completion of the dam. The temporary pumping station was completed in April 1981, two years after completion of the pipe system. 4.04 Non-Converted Lands. At the time of the first supervision mission in March 1975, two months following loan effectiveness, JVA requested that the proposed improvements in the non-converted lands--land-leveling and tile drainage-be dropped from the project. Since JVA had, by that time, decided to convert to sprinkler irrigation throughout the Valley, the land leveling component was no longer considered necessary. The Bank agreed that it would be difficult to level those project areas which have "relatively steep slopes, shallow soils and perennial orchards and that final decision whether such - 8 - areas should be sprinkler irrigated .... should be delayed." At the same time, JVA requested that the tile drainage works be excluded from the major construction contract in view of its preference to undertake these works under force account with technical assistance from USAID. The Bank also agreed to delay these works provided adequate provisions were made to monitor the situation so that tile drainage could be installed should waterlogging occur. The Bank, however, did not follow up on these aspects, since the non-converted areas were to be included in the Jordan Valley Stage II Project, which was then under preparation. Since then, tile drains have been installed only on about 130 ha through JVA force account. Additional drainage works are needed as evidenced by waterlogging observed in the project area during the completion mission. 4.05 Assembly Markets. Originally the project provided for construction of two assembly markets to be adjoined to two existing grading and packing stations on Wadi Yabis and North Shuneh. The total cost for establishing two modest markets covering 1 ha each with a shed of 800 m2 was estimated at about JD 51,000. These markets were dropped from the project and funds reallocated to the irrigation works. Since then, JVA decided to undertake a more ambitious program to improve the marketing of Valley produce including three new grading, packing and marketing centers which would also serve as wholesale markets. The first one, financed through the Government of the Netherlands, at Al Arda, is now completed (JD 1.8 million). The second, at Wadi Yabis, financed by the UK Overseas Development Authority is now under construction at a total cost of JD 1.5 million. A third one is planned for the southern part of the Valley. 4.06 Rural Development. While the original project design included financing for a variety of social infrastructure works, these funds were ultimately reallocated to help finance cost overruns in the irrigation works component. Nevertheless, the Jordanian Government succeeded in carrying out a major investment program to improve various social services in order to attract families and government employees to the Valley, much of which has been with USAID assistance: -- 208 schoolrooms have been constructed in the project area, compared to the 150 originally planned under the project. Construction began in late 1976 and was completed in 1978, and facilities were promptly equipped and staffed, permitting a rapid increase in enrollment; -- 4 health centers, to have been financed under the Bank project, have also been constructed in the project area. Two of the centers provide comprehensive health care services, each including 20 beds, an X-ray unit, dental clinic, surgical facilities, blood bank, and a maternity/child care unit. The other two are smaller, with less comprehensive facilities. Although there have been no staffing problems with the two smaller centers, the Ministry of Health has reportedly been reluctant to provide full staffing for the larger centers, where some of the services are underutilized. It would appear that these centers have been over-designed for the needs of the Valley population. - 9 - -- Domestic water supply, contemplated in the Bank project for 10 villages, has been provided to 11 villages, fully financed by the Jordanian Government. Service is planned for five more villages. The system is supplied by spring water, instead of the irrigation pipeline as originally planned. Following an outbreak of cholera in 1977-78, the planned use of community taps was abandoned, and house connections were provided, with users paying for meter installation and water fees. -- With Jordanian Government financing, JVA has proceeded to contract for the construction of new farm roads and improvement of existing roads throught the project area. Under the project-financed irrigation construction contract, earthworks were completed for roads in the new lands. 4.07 Credit; The project originally included a US$760,000 credit component to meet needs for both medium-term credit (on-farm sprinkler equipment, on-farm development, farm machinery), and incremental seasonal credit. When USAID agreed to provide funding for on-farm sprinkler equipment under a separate, Valley-wide project, this credit allocation was reduced to US$400,000 to cover remaining medium term requirements and incremental seasonal credit. This allocation was fully disbursed by the Agricultural Credit Corporation (ACC) in three and a half years, from date of loan effectiveness in January 1975 to May 31, 1978. Over 90% was disbursed for medium-term investment, 60% of which was for tree planting and land improvement (see Annex VIII). The balance was disbursed for incremental seasonal credit. This credit component was administered entirely by ACC; the Jordan Valley Farmers Association (JVFA) did not assume any responsibilities for credit distribution or collection, as was envisaged at appraisal, since JVFA's collection function was to have been tied to its marketing operations, which were never implemented. 4.08 In summary, while the scope of the IDA project was substantially reduced in the course of implementation, most of the original targets for improvements in a number of sectors in the project area have been met. (See Annex I). This overall success can be credited to the readiness of other donors to provide additional financing and to the Jordanian Government's evident commitment to Jordan Valley development. The other donors' participation in the development of the Northeast Ghor has had the advantage of simplifying management of the investment program by permitting consolidation of procurement and construction contracts for equipment and works planned on a Valley-wide scale (e.g., schools, health centers, provision of on-farm sprinkler equipment). However, it appears that the ready availability of external financing has encouraged, in a few cases, construction of facilities (e.g., health and marketing centers) which are not being fully utilized at the present time. Construction and Procurement 4.09 The irrigation works were completed during the first quarter of 1979, about 2 years behind appraisal schedule and only 6 months behind the - 10 - contractual completion date. A completion certificate was later issued by JVA establishing the beginning of the maintenance period on June 16, 1979. 4.10 The main cause for the delay on completion date of works stems from the delay in finalizing the detailed design and bidding documents. Appraisal of the project was based on a very preliminary design prepared by JVA staff. The appraisal report dated May 10, 1974, indicated that tender documents would be ready by about September 1974. However, by that time, JVA had only just entered into a final agreement with the engineering consultant. Bidding documents were not ready until July 1975. The process of preparing bids by contractors, awarding and approving the contract took one more year, which is unusually long for these types of works. The order to start construction was issued on August 9, 1976, about 17 months behind schedule. 4.11 Procurement for equipment and civil works financed by the Bank was carried out in accordance with the Bank procedures for ICB. All civil works construction, including the two diversion weirs, the pressure pipe distribution network, rehabiliation of the EGMC and road alignments in the new lands were grouped under a single contract. Of 21 prequalified bidders, five contractors from four different countries submitted tenders. The consultants' evaluation of the bids resulted in a recommendation to accept the lowest responsive bid from the Korean Cho Suk Construction Company. Its JD 4.19 million bid was 56% above the original estimate of JD 3.07 million. Equipment for operation and maintenance and for research and extension was mostly supplied through local agents of foreign manufacturers. 4.12 The overall quality of design and construction was good, with two exceptions. First, the pressure regulators, originally called for in the consultants' design plans could not accommodate zero flow and had to be replaced to avoid overpressurizing the farm mains. This problem was quickly identified and resolved by the contractor. 4.13 A potentially more serious defect may be the choice of reinforced plastic mortar (RPM) pipes proposed by the contractor for part of the distribution network. While the bidding documents called for asbestos cement pipes for the pressure distribution network, the contractor had the option to submit bids for other materials. Cho Suk proposed using RPM for pipes with a diameter over 600 mm, asbestos cement for pipes between 500 and 125 mm and polyvinyl chloride (PVC) for pipes of 100 mm. These two latter types are well known and of proven material. However, plastic pipe was a recent technology, and its field experience was limited. No mention is made in the consultant's bid evaluation report on the performance of these pipes. JVA, with the consulting engineer's assistance, sought outside technical assessment of RPM for similar works financed through USAID at the time of awarding contracts, and was satisfied that RPM, through testing, appeared to be an adequate material. 'It was therefore selected on the basis of its lower cost. However, JVA reports 14 cases of breaks in the RPM pipe in the project area since completion of construction, and in the last year, 60 breaks in the RPM pipes in the USAID financed Zarqa Triangle Project. While these breaks may have - 11 - been caused by water hammer arising from poor operation, they more likely reflect defects in the RPM material. /1 4.14 In addition to these problems, a large share of meters have been seriously vandalized because they were not protected in concrete boxes. Many of these were replaced by the contractor during the contractual one-year period of maintenance. Since the system was handed over to JVA's Operation and Maintenance division, vandalism has not stopped. Cost of additional repair is estimated at JD 200,000. JVA expects that damages will drastically be reduced after distribution of lands since responsibility for maintaining and repairing turnout equipment will be assigned to the farmers themselves. Redistribution of Lands 4.15 Land reform laws passed since 1959 are associated with the development of irrigation in the Jordan Valley. These laws consolidate land ownership and redistribute farm units in order to obtain a pattern of farms compatible with a geometric irrigation system. The objective of the reform was to establish upper and lower limits on the size of land holdings and to redistribute farming units from large to small farmers. These laws were applied to the lands under command of the EGMC during its construction between 1958 and 1966. Application of the laws include the following steps: land surveys of existing fragmented holdings; preparation of the as-built drawings of the irrigation network defining the boundaries of the new farm units; land consolidation and redistribution; transfer of the new holdings to farmers; and a balancing of owners' accounts compensating them for expropriation of land and charging fees for provision of irrigated services. 4.16 The distribution of new lands in the North East Ghor Project was seriously delayed because of JVA's survey procedures and the almost simultaneous completion of the four Stage I irrigation projects (totalling about 9,400 ha). The number of JVA survey teams was limited. Their role was to prepare the as-built drawings of the irrigation network to be superimposed onto the original holding boundary maps. These drawings for the new lands were not received by the JVA Land Reform Office until June 1980. Distribution to farmers started in December 1980. Completion of the program is scheduled for July 1981. 4.17 At the time of the completion mission, only 85 farm units out of 451 (18%) had been distributed in the new lands. Each unit is 3.8 ha which can be held by one or more owners. If owners are assumed to hold equal shares of each unit, the average holding size among the lands already distributed is roughly 2.4 ha. Over 60% of those receiving land own less than 2 ha, and another 30% own between 2 and 4 ha. Almost all of those receiving land previously owned land in the same area. Roughly 18% have increased the size of their holdings, although most of these are still below the desired holding size (1 farm unit, or 3.8 ha); a smaller fraction have smaller holdings than /1 A serious cause of breaks discussed in an ASCE Conference could be the gradual corrosion of glass fiber or interlaminate separation arising from excessive deflection of the pipes during installation. - 12 - previously, even though many of these are still considerably in excess of the desired holding size (i.e., over 10 ha). Thus it appears that the land distribution program as being carried out in the new lands of the project is succeeding in its redistribution objective, but that the upper and lower limits on size of holding are not being uniformly applied. 4.18 As the result of the delay in land distribution, two full production seasons have been lost, which has lowered the economic rate of return on the new lands irrigation investments by 5%. This delay could be eliminated by a change in JVA survey procedures. According to current practice, only the carrier pipes, main and secondary pipe lines, are surveyed at the time of preparation of the detailed design for the pressure network. The alignment of the farm main pipes, which establishes the farm unit boundaries, are determined during construction. Thus, delineation of new farm units for redistribution cannot begin until the pipe system has been built. In order to accelerate the land distribution process, boundaries for the new farm blocks could be finalized during preliminary design of the network. Land redistribution could then proceed independently of construction. This is a procedure which has been succesfully used in all Moroccan irrigation projects since 1960, permitting distribution of land parcels by the time construction is completed. Project Costs and Financing 4.19 At appraisal the total cost of the project was estimated at US$17.4 million. The actual cost of the project components financed by the Association is estimated at US$16.3 million instead of US$12.2 million. In view of the substantial changes in the scope of the project, the only meaningful comparison between estimated and actual project costs to be made is for the pressure system irrigation works and consultant services. The Table below compares original appraisal estimates with the approximate actual project costs. Comparative Costs (us$ ,000) Appraisal Actual Cost Component Estimate (IDA-Financed Project Only) Irrigation Works 5,458 12,382 Tile Drainage 305 Land Levelling 1,046 Main Canal Rehabilitation Works 218 - Equipment and Materials 784 650 Markets 218 Credit 3,483 1,040 Rural Development Infrastructure 3,429 Consultants Services 566 1,424 Administration 1,922 889 Total 17,429 16,385 - 13 - 4.20 The total actual cost of irrigation works under the project (excluding spare parts) amounted to US$11.9 million equivalent, or 125% above the appraisal estimate (which included roughly 45% physical and price contingencies) for the items actually financed. The cost of consulting services (US$1.4 million) is about 150% above the appraisal estimate. When compared to cost overruns on similar projects in the region over the same time period, these cost overruns are not substantial. Cost per ha of the irrigation system, including engineering and administration, is about US$5,150. This is over twice the appraisal estimate and about 60% above the cost of comparable works (including costs of on-farm-sprinkler equipment) in Morocco, for example. The higher cost of the North East Ghor Project is due to the unfavorable shape of the project area requiring a 35 km long mainline, the lack of large diameter pipe factory in Jordan and the higher labor cost. 4.21 The SAR provided for the financing of 82% of the foreign exchange cost through an IDA credit of US$7.5 million and the balance of the foreign exchange cost and all local costs from Government resources (92%) and farmers (8%). As a result of the cost overrun on irrigation works, the Borrower made arrangements with other donors for the financing of the rural development component, the marketing centers, and the on-farm sprinkler equipment. The OPEC Fund provided US$1.65 million to finance part of the gap in foreign expenditure requirements for the irrigation civil work contract. These OPEC funds were administered by the Bank. 4.22 Reflecting the successive changes in the project scope, there were two substantive amendments to Schedule 1 of the Credit Agreement. Amendment No. 1 of December 1976 reallocated funds on the basis that USAID funds were available for the rural development component and to the portable farm equipment of the project. As a consequence, US$1,690 million were transferred to Category I (civil works) and the allocation for agricultural credit in Category IV was reduced from US$760,000 to US$400,000. The percentage of disbursement was also changed at the request of JVA from 50% of total expenditures to 50% of foreign expenditures to accomodate cost overruns under Category I. Amendment No. 2 of November 1977 increased the funds for civil works to US$5,650,000 and for consultant services to US$1,000,000 and raised the percentage of disbursements under Category I to 75% of foreign expenditures. Final disbursement as compared to appraisal allocations are shown in the following Table. A comparison of the actual disbursement schedule and that projected at appraisal are shown in Annex II. - 14 - Allocation of the Proceeds of the Loan Appraisal Actual Actual Disbursements Allocation Disbursements as % of appraisal Category 07/25/74 Estimates -------- US$ million ------ % I. Civil Works 3,600,000 5,613,645 156 II. Equipment & Materials 760,000 444,056 58 III. Consultants' Servicee 470,000 1,042,298 221 IV. Agriculture Credit 760,000 400,000 52 V. Unallocated 1,910,00 - Total 7,500,000 7,500,000 100 4.23 The original closing date of June 30, 1979 was first extended to December 31, 1979. The Bank then agreed to a further six months to extension to June 30, 1980 to permit full disbursement of the proceeds of the Credit already committed or paid by the Borrower. V. AGRICULTURAL DEVELOPMENT Production Patterns 5.01 Agricultural production in the Jordan Valley has developed rapidly over the last five years. Average yields have increased for virtually all crops, and cropping intensity for the Valley as a whole has increased from 106% to 158% between 1975 and 1979. Increased productivity is a result of various factors: (a) strong demand in regional export markets and favorable prices have led to a marked shift from cereal crops to fruit and vegetable production; (b) rapid adoption of new cultivation techniques, including use of drip irrigation and cultivation of vegetables under plastic; and (c) more extensive use of purchased inputs--fertilizers, herbicides, fungicides and pesticides. These developments are most noticeable in the middle and southern areas of the Valley, where its warmer climate permits earlier harvesting and farmers can capture peak prices for off-season vegetables. Returns on investments in purchased inputs, new irrigation and production technologies are consequently higher in these areas of the Valley. 5.02 In the north, adoption of new techniques has been somewhat slower but much progress has been made nevertheless. Farmers in the project area have shared in the Valley's response to market opportunities for off-season vegetable production. In the conversion lands, over one-fourth of the cultivated land area has shifted from wheat since 1975 to vegetables and citrus in roughly equal proportion, with a slight increase in cropping intensity from 1.36 to 1.44. Despite two drought years, average yields for major crops have shown substantial improvement; average yields for 1974-76 and 1977-79 have increased 58% for tomatoes, 55% for cucumbers, 47% for squash, - 15 - and somewhat less for cabbage, cauliflower, and eggplant. These increases are largely attributable to the farmers' use of improved seed varieties, better fertilizer application, and a sharp decline in labor intensive zig-zag irrigation in preference to straight furrow irrigation which has freed up farm labor for more productive land preparation and cultivation tasks. It also ensures a more even distribution of irrigation water. 5.03 Comparing these developments with those projected at appraisal, the most striking differences are: (i) the notable absence of maize in the cropping pattern, which was anticipated to represent over 10% of the net cropped area; and (ii) the substantially higher share of area under citrus, nearly 2.5 times that estimated. It is also worth noting that yields achieved in 1978 and 1979 for the most important vegetable crops (tomatoes, eggplant, cabbage, and cauliflower) and for bananas equal or exceed yields expected in the SAR at full development in 1983 (see Annex III). These developments have undoubtedly been encouraged by market forces. Prices for all vegetables, except beans and pepper, have at least doubled in current terms since appraisal, and more than tripled for citrus and bananas (see Annex III). This underscores the extent to which farmers in the Valley are able, with limited public sector extension services, to shift to new crops and improved farming practices in response to market opportunities. 5.04 There remains, however, much room for further yield improvement. The most serious constraint to agricultural production is plant disease, not only in the north, but in the whole Valley. Yellow leaf curl virus, which affects early tomato plants (principally in the south) has resulted in a loss of JD 45 million in tomato production this past cropping season. If this disease could be controlled, tomato yields could nearly triple under ideal conditions. White spot disease is beginning to seriously hurt cucumber and squash production, and the problem of nematodes is growing throughout the Valley with the intensification of vegetable production. While improved plant protection through use of disease-resistant varieties and production of disease-free seedlings in private nurseries is practised, considerably more needs to be done in the areas of research, seedling management, improved use of insecticides, and crop rotation. 5.05 A second serious constraint on further agricultural development is the high cost of farm labor. Farm wages currently range from JD 0.5 per hour (roughly US$1.50) for Jordanian laborers to JD 0.4 plus subsistence (housing and food) for foreign workers, mainly Egyptian. This is 2.5 to 3 times the appraisal estimate (JD 1.0 per day for hired labor). The abundant employment opportunities for semi-skilled labor available in the service sector (and in Saudi Arabia and the whole Gulf region) have raised wages throughout the economy and farm labor costs have risen accordingly. Even at these wages, it is difficult to recruit agricultural workers from within Jordan and farmers have increasingly relied on unskilled foreign laborers, now estimated at 3,500, or 10-15% of the Valley's agricultural work force. - 16 - 5.06 Total labor supply in the Valley appears to be considerably below the requirements of intensive agriculture. Based on preliminary figures from the 1978 census (which covers only the fall cropping season), there were an estimated 21,500 agricultural workers employed, including unpaid, mainly family workers. There are thus less than 1.3 workers for each ha of irrigated farm-land, which, assuming 300 days of labor per worker per year, is roughly two-thirds of the labor employed in open field vegetable cultivation under similar conditions in Tunisia, for example The most noticeable effects of the relatively high cost of farm labor in the Valley with its consequent low labor inputs in production are poor weed control, inadequate land preparation, and poor crop husbandry in general. Further improvement in yields will require increased mechanization of certain tasks (land preparation, spraying of herbicides and insecticides, and harvesting). Scarce labor would then be available for such tasks which cannot be performed by mechanical means (weeding and seedling preparation and management), as well as for those associated with the new technologies of drip irrigation and cultivation under plastic. The high cost of farm labor should also favor a progressive shift to labor-saving irrigation techniques such as sprinkler (see para. 5.11). 5.07 Major shifts in cropping patterns in the project area are unlikely, because of a continuing strong demand in regional export markets for off-season fruit and vegetables. The present cropping pattern, including that projected for the new lands, is likely to stabilize at the present distribution of fruit and vegetables crops since further increases in citrus production will be limited by availability of irrigation water. (JVA has suspended granting new licenses for new citrus plantings.) There may be some shift to grape production, judging from the enthusiastic farmer response to a Ministry of Agriculture seedling distribution program in 1980. Grapes, which require considerably less water than citrus, would be a suitable substitute where there are restrictions on new citrus plantings. Rate of Adoption of Alternative Irrigation Techniques 5.08 At the time of the completion mission, only a small fraction of the project area farmers were utilizing the pressure pipe system provided by the project. Operation of the system had not yet begun in the new lands due to delays in land distibution, and only 38 of 297 farm units in the converted lands were irrigated from the pipe system in 1980, all for sprinkler irrigating citrus. On-farm portable sprinkler equipment purchased from JVA with ACC credit under USAID's Sprinkler Equipment Project was being used on 25 of these units. The remainder had been equipped with permanent (buried) sprinkler sets which landholders had imported directly from Cyprus. 5.09 The evident reluctance of the farmers, not only in the project area but throughout the Valley /1 to adopt sprinkler appears to stem from fears /1 None of the farmers in the 18-km extension project financed by USAID to the south of the project area have elected to irrigate by sprinkler from the pipe system; it is estimated that at least half of the farm units have shifted to drip systems after starting with short-furrow irrigation during the first year. - 17 - that sprinkler irrigation would adversely affect the yields and quality of their vegetable crops. While research findings are far from conclusive, there is some evidence that sprinkler can damage tomatoes, cucumber, squash and melons and increase plant disease and weed growth. (See Annex IV). It is not surprising that, with the exception of citrus growers, farmers in the conversion lands of the project area have chosen to continue to irrigate by surface from the canal. 5.10 At the time the completion mission was in Jordan, JVA decided to cut off distribution of water to the conversion lands through the open canal system, obliging the farmers to irrigate from the pipe system starting from mid-March 1981. It is likely that strict enforcement of this precipitous decision cannot be achieved as it will provoke an adverse reaction from farmers who are not prepared to shift suddenly from one method to another. A certain flexibility during the transition will be needed to permit them to obtain portable equipment from JVA or other on-farm equipment such as solid or permanent sprinkler equipment, a hose system for drip or gated pipes, and to make necessary credit arrangements. 5.11 Predicting future rates of adoption of sprinkler irrigation in the project area is difficult. Since the rate of discharge from the pipe system is very lowL, labor requirements for surface irrigation are very high, at least double those for drip and sprinkler. Due to labor shortages, farmers will effectively have to choose between drip and sprinkler. Sprinkler is most likely to be adopted for citrus, which represents over 40% of the conversion lands and a projected 30% of the new lands. Given the high capital cost and relatively high labor requirements of drip, portable sprinkler systems may also be adopted for some vegetable crops, especially on the new lands where steeper slopes would discourage extensive use of costly drip irrigation equipment. Drip systems will, however, be needed for tomatoes, squash, cucumbers, and melons, which do not thrive under sprinkler. 5.12 In retrospect, the decision to install a new collective pressure pipe system for sprinkler irrigation in the conversion lands as the least cost alternative for improving water efficiency and production can be questioned. First, the existing canal distribution system is in good shape and reasonably well operated. Overall system efficiency appears to have improved in recent years simply through adjustments in JVA's operational procedures and better irrigation practices by farmers themselves. With the goal of water saving and reducing operating costs in mind, an alternative approach utilizing the existing investment in conveyance facilities would have offered substantial investment cost savings. This approach would have been to continue using the existing surface canal distribution system while building certain features (small reservoirs) and installing more adapted water control equipment to improve /1 4 1/second, which could be increased by some 60-80% when water is delivered directly at the farm hydrants. - 18 - water management flexibility in water distribution. Furthermore, farmers desiring to use sprinkler or drip irrigation for specific crops and when convinced of the values of these methods could install individual pumps. An economic comparison of full collective and individual conversion alternatives indicated that the individual conversion alternative enjoys a saving of initial public works investment of about JD 950 per ha (US$3,180) and an annual operating cost savings of JD 12 (US$40) per ha at a minimum. Another reason for concern is the design of the pressure pipe system for optimal use of sprinkler which therefore limits its adaptability to a surface irrigation method. In view of the relative lack of data on the suitablity of sprinkler for the range of crops to be grown in the project area, the selection of a relatively inflexible design carries a certain risk. 5.13 This issue is a major one facing JVA as it considers the conversion of another 12,000 ha of lands now being surface-irrigated from the canal network. These considerations were addressed during the appraisal of the Jordan Valley Stage II Project and alternative methods of progressive conversion from surface to pressure irrigation were proposed by the appraisal team. In view of the widespread adoption of drip irrigation in the southern portions of the Valley, and the evident problem of sprinkler irrigation for some crops, the team proposed that the concept of a generalized sprinkler system be dropped in favor of a more flexible irrigation system in which the decision whether to use surface, drip, or sprinkler would be left to.the farmers. VI. INSTITUTIONAL PERFORMANCE Project Management - Jordan Valley Authority 6.01 The Jordan Valley Commission (JVC), in charge of the economic and social development of the entire Jordan Valley, was established under a 1973 law when the project was appraised. The appraisal report proposed that JVC would receive project funds and act as the management agency in exercising financing control over project funds, but responsibility for construction and operation of project works would be assigned to the respective technical ministries: (i) the Natural Resources Authority (NRA) for construction and O&M of the irrigation system; (ii) the Ministry of Agriculture for research and extension; (iii) the Agriculture Marketing Organization for the management of marketing centers; and (iv) ACC for the credit component. These provisions with the exception of (iv) were not fulfilled as a result of changes in project scope and institutional jurisdictions. 6.02 Under Law No. 18 of 1977, one year after the start of the project, JVC became officially known as the Jordan Valley Authority (JVA) and entrusted with the total development program for the Valley, including design and construction of all of agricultural and service infrastructure. It also assumed certain responsibilities for research and marketing - 19 - activities. JVA's expanded staff needs were met by incorporating the NRA irrigation staff, recruiting staff for the Social Development Directorate, and seconding Ministry of Agriculture staff to assist in research and planning. JVA, however, is obliged by law to hand over the public services infrastructure to the relevant national organizations two years after completion of construction and is prepared to do so. Because of the increase of JVA responsibilities, the Liaison and Advisory Committee (LCA), contemplated at appraisal to coordinate project activities among executive agencies, was no longer necessary and was never convened. 6.03 JVA's performance in managing the project was mixed. It was efficient and thorough in carrying out its responsibilities in contract supervision and was able to quickly build up a capable engineering staff. It was also highly successful in making financing arrangements with other donors to accommodate the successive changes in the scope of this project. However, it was deficient in its technical preparation of the project, which delayed commencement of works, and did not maintain detailed separate financial records on the different aspects of the project. It was also never fully able to assume much of a role in agricultural research, a responsibility which, in retrospect, it was perhaps unrealistic to have entrusted to JVA. Operation, Maintenance, and Water Management 6.04 The JVA's Directorate of Irrigation is responsible for the O&M of the surface and sprinkler system. The O&M Division is based at Deir Alla in the Jordan Valley and has a staff of about 1,150 people. As shown in the following table comparing JVA's staffing and O&M costs with other irrigation projects, these costs are high. /1 Ha per O&M Farm Turnouts O&M Costs Per Employee Per Ditchrider 1000 m3 Water Delivered (uS$ ) Jordan Valley 18 13 30.18 Tunisia (Lower Medjerda) 66 12 22.40 Algeria (Bas Cheliff) 43 10 24.20 California (4 gravity supply irrigation 660 120 4.10 districts) Morocco (Doukkala) 350 60 n.a. Nevertheless, given the operational requirements of the system and the flexibility it affords farmers, JVA's O&M Division has achieved a reasonable standard of operational efficiency. One of the reasons given by /1 Source. Staff Appraisal Report of the Algeria Bas Cheliff I Irrigation Project. - 20 - JVA for its high staffing needs is the time required to adjust and check several times a day the settings of the Constant Head Orifice (CHO) gates in order to deliver a constant flow into the farms/i. Overall efficiency of the EGMC and lateral canals, as measured, varies between 75 and 80%. 6.05 In addition, JVA provides a flexible water supply service to accommodate farmers' irrigation needs. The basic water scheduling system is a weekly rotation system with fixed frequency and variable flow and period of delivery. The farmers may request up to a maximum of 25 1/s during 6, 12, 18, or 24 hours. During the seedling period, water is delivered twice a week. Time of delivery is also changed every month for reasons of equity between farmers to avoid a situation where any one farmer has always to irrigate during night time or the warmest hours. During water shortage, water demand is readjusted to the prorata share of area planted per farm unit with priority given to licensed permanent tree crops. 6.06 JVA expects a substantial increase in O&M efficiency in the future. It has recently taken measures to improve efficiency by providing transportation to the staff, improving farm access roads along the distribution system, and using wireless communications. More important savings will come from shifting from surface to pipe system. After completion of pipe system serving 9,400 ha (over the last two years), the irrigable surface increased by 63% from about 13,300 ha to 21,700 ha; the O&M staff has, however, only increased by 15%. The number of farm units a ditch tender can supervise with the pipe system is reported to have increased threefold compared to the surface system. Although the present systems are far from being fully used, JVA does not intend to increase O&M staff. For the more distant future, JVA is planning to improve efficiency of the main system by providing automatic operation of the main canal. 6.07 Considerable data are available in the O&M Division for evaluating the efficiency of on-farm water management, but these have not been analyzed in recent years. The last detailed assessment of actual on-farm efficiency was made by the NEDECO consulting firm in 1966 which resulted in an overall figure of 45%, and an estimate of water consumption of 15,830 m3/ha. At'appraisal, the common method of surface irrigation was the zig-zag method which was reported to be very inefficient. It is evident that new cultivation and irrigation practices have dramatically improved water efficiency. The zig-zag method has now been largely abandoned for furrow irrigation. The 3-year drought between 1976 and 1979, and the extension of irrigated areas resulting in lowest flow deliveries for many years have also contributed to improving farmer efficiency and made them aware of need for water savings. The table below gives a rough indication of the increase in water use efficiency. Between 1974 and 1980, water use per hectare increased by only 15% over the period, while overall intensity /1 The Neyrpic type distributors largely used in North African countries are precalibrated and do not require any adjustments if upstream water level remains within certain limits. Operation staff can be substantially reduced by use of these simple devices. - 21 - increased by nearly 50% and the share of cultivated area planted under citrus (which requires 5 to 6 times more water than vegetables crops) increased by 75%. During the same period, the annual value of water sold to farmers has incresed by 33%, while the cropped area has increased by 71%. Area Overall Water Sold Area Water Under Cropping Calendar Year To Farmers Irrigated Use Fruits Intensity (million m3) (ha) (m3/ha) % % 1974 75.7 12,000 6,300 12 /a 1.06 /a 1978 94.0 12,400 7,600 15 1.18 1980 101.0 13,800 7,300 21 /b 1.58 /b /a 1975 data. /b 1979 data. Cost Recovery 6.08 A water charge of 3 fils per m3 is charged to the farmers for water consumed on-farm. For the surface system, JVA's 0&M field staff reports daily on the amount of water distributed based on the flow rate fixed at the farm gate which is verified and adjusted by field checks two to three times per irrigation. These figures are then checked against the cropping pattern for each development unit. For farmers using the pipe system, volumetric meters are used; where these are inoperative, JVA bases its consumption estimates entirely on the cropping pattern, applying a formula which is reported to be 85-90% accurate in calculating actual water consumption. 6.09 Farmers are billed monthly, with payment due in 45 days. Water is shut off if payment is not received. JVA reports that its collection rate is close to 100%. It attributes this success to an efficient collection system, the effective sanction of cutting off water, and to the fact that water charges represent such a small proportion of total production costs (4% as compared to 15% in the Morocco Sebou Project) /1. 6.10 At the current rate of 3 fils per m3, a 100% collection rate covers roughly 35% of estimated O&M costs. In 1980, JVA's 0&M budget was approximately JD 910,000; total water charges billed in the Valley (including penalty fines for stealing water and charges for special /1 There is, however, a consistent pattern of arrears over part of the year, as farmers often delay payment of water charges after October when the rainy season begins, and do not pay outstanding charges until March, when they need to begin irrigation. - 22 - repairs) were JD 327,000. When fixed at 3 fils in 1974, this rate covered nearly all of JVA's O&M budget. But while that budget has increased fourfold since that time, water charges have remained fixed. JVA fully recognizes the need to adjust to current water rate to cover at least 100% of O&M costs and in principle some proportion of investment costs. Its Planning Analysis section is now preparing a study of farmers' capacity to pay higher water charges to serve as a basis for a decision on an upward adjustment. 6.11 Since the Credit Agreement (Section 3.06) calls for JVA to collect water charges of no less than 6 fils/m3 in the first year of irrigation in the sprinkler-irrigated area, JVA will need to double these charges by the end of the 1981/82 cropping season, during which the pipe system will be in full operation in the project area. A further increase is likely to be necessary to comply with the Credit Agreement condition of full O&M cost recovery. In addition, the Credit Agreement provides for the Borrower to fully recover investment costs with 5% interest over 40 years. Given the substantially higher capital costs of the system than were anticipated at appraisal, JVA is actively considering additional recovery methods, including a betterment levy of JD 170/ha to help cover costs of the farm main pipes /1. Agricultural Support Services 6.12 Credit. ACC has shown an impressive capacity to keep pace with the strong growth in credit demand arising from the rapid intensification of agriculture in the Valley. Its total lending level (for both seasonal and investment credit) has jumped from JD 2.25 million in 1978 to JD 4.0 million in 1979 and JD 4.6 million in 1980. While much of this increase reflects recent inflation rates, some is attributable to the increase in on-farm investments. Medium-term credit as a share of total credit extended in the northern Valley increased from 69% in 1974 to over 90% in 1980, and the average size of medium-term loans increased from JD 1,362 to JD 7,368 in that same period. ACC reports that its overall collection rate ranges between 80-85% for the Valley, and somewhat higher for seasonal credit. ACC foresees no difficulty in meeting continuing strong demand for investment credit in the future with continuing capital contributions from the GOJ budget and prospects of a third loan from the KFW. 6.13 ACC's current credit policy requires, in most cases, land as collateral. This effectively excludes sharecroppers and tenant farmers from access to ACC credit. ACC recognizes the need to expand services to these groups and is reportedly looking to JVFA to perform this role. To this end, it has recently undertaken to make a loan to JVFA at 4 1/2-5% to be used to make in-kind seasonal credit available to JVFA clients at rates comparable to ACC terms. This loan would be repayable in 18 months, although it is likely that ACC would continue to provide JVFA with additional resources on a revolving fund basis. /I In addition to the JD 200/ha levy which is charged for "irrigation rights" on new lands being brought under irrigation. - 23 - 6.14 Research and Extension. Performance in research and extension has fallen far short of the needs for the Valley. There are currently 30 extension agents working in the Valley, including 26 from the Ministry of Agriculture and 4 from JVFA. On average, each agent is responsible for 700 irrigated ha, an exceedingly low ratio for intensive vegetable cultivation. (In a region in Tunisia with comparable production patterns, the ratio is 1 agent for 50 ha.) It was reported that in the northern part of the Valley, Ministry of Agriculture agents rarely were able to make field visits more than 2-3 days each week, typically made only at farmers' requests. It is not surprising that the great majority of farmers in the Valley continue to rely almost entirely on technical advice received from commercial input suppliers. 6.15 In the area of research, the Ministry of Agriculture maintains its main station at Deir Alla, with a substation at Wadi Yabis serving the Project area. The Ministry's existing programs focus on variety testings, plant protection, and seedling distribution. The only research being done in water management is under the direction of JVA, which maintains a small research plot at the Ministry's Deir Alla station, and a separate station at Wadi Yabis. Under an AID-financed technical assistance project, JVA conducted a research program in water management technology which covered a wide range of technical practices. Of particular interest for the project were comparative tests of furrow, sprinkler, and drip irrigation with regard to water-use efficiency and yields and quality of major vegetable crops. Considerable emphasis was given to on-farm demonstration of alternative practices. Unfortunately, this program was terminated in early 1981, one year earlier than planned, amid much controversy over the validity of the trials on comparative on-farm irrigation systems, which showed yields for vegetables under sprinkler were consistently lower than under drip or furrow irrigation. Since there was no effective control of the amount of water applied to the plants in these tests, these findings are not considered meaningful. While other tests produced interesting and more valid results, little has been done to follow up this work in any systematic fashion. Agents in the Valley note that few of the participating farmers have in fact adopted any of the new practices which were successfully tested on their own farms. 6.16 A major issue which appears to have hampered the progress in research and extension in the Valley has been the ambiguity surrounding the institutional arrangements for research and extension activities. Since 1977, when the law expanding JVA's authority was issued, responsibilities for these activities were shared between JVA and the Ministry of Agriculture. While JVA's research function were limited to on-farm water management problems, this arrangement has not proved practical, in part because of JVA's own staffing limitations, and in part because of a failure to develop effective means to coordinate the research being done by the respective agencies. A proposal for reorganizing national agricultural research is being discussed with the Government within the framework of the Bank's agriculture sector work /1 . 11 Rainfed Agricultural Subsector Memorandum, IBRD, April 1981 - 24 - Jordan Valley Farmers' Association 6.17 The Jordan Valley Farmers' Association (JVFA), established in 1974 as contemplated in the SAR to provide selected services to Valley farmers, now operates out of six offices, including its headquarters office in Deir Alla, and plans to open three more branches in 1981. While its staff was increased from 30 to 60 last year, it is still far below the levels needed to provide the range and coverage of services originally planned. Its current membership stands at 4,000 farmers, or two-thirds of its target clientele of 6,000. 6.18 JVFA's principal service to farmers has been in input supply, where bulk purchases, in some cases directly from overseas (US) suppliers, has permitted JVFA to sell well under prices offered by local commercial suppliers. In fertilizers, for example, which account for roughly 50% of JVFA sales, JVFA prices typically range from 10-18% below commercial prices. JVFA input sales in 1980 totalled over JD 450,000, more than doubling 1979 sales of JD 200,000. (Since sales in both years were from existing stock, this increase reflects sales volume and not price increases.) 6.19 JVFA also provides seasonal credit to members under an AID project designed to broaden credit access to smaller farmers. The number of seasonal loans extended to members increased from 350 in 1978, to 432 in 1979, and to 650 in 1980. Even with this growth, JVFA's credit services are reaching only 16% of its total membership. While the opening of new branch offices and the injection of new lending capital from ACC (see para. 6.13) should encourage greater coverage, JVFA's credit program may be constrained by staffing limitations in capacity to process loans and supervise collection. The current collection rate is estimated at 77%. 6.20 JVFA has yet to assume any of the production marketing functions which were originally conceived as central to JVFA's role in the Valley due to delays in the planning and financing of the three new marketing centers in El Aarda, Wadi Yabis, and South Shuneh. The cause of much of this delay has been the extended planning period required for the design of these relatively sophisticated facilities. Once completed, these facilities will be operated by JVA for two years. It is not clear at this time whether the centers will then be turned over to JVFA, as originally planned, or to a joint public-private sector marketing board. JVA reports that the decision will depend to a large extent on an assessment of JVFA's capacity to take on the complex administrative tasks of operating the facilities. VII. ECONOMIC AND SOCIAL IMPACT General 7.01 Looking at the impact of the Stage I development program in the Valley, of which this project was a part, it is evident that the general level of development activity and standards of living have risen significantly. Non-agricultural employment increased by 90% between 1973 and 1979, mostly as - 25 - a direct result of public sector infrastructure investment. The percentage of paid labor in agriculture grew from 46% of total agricultural labor force in 1975 to 57% in 1978; the declining reliance on family labor has permitted family members to seek more remunerative employment elsewhere or to pursue higher levels of education. The rate of on-farm investment has grown markedly with the rapid diffusion of new irrigation and cultivation technologies, particularly drip irrigation and plastic houses and tunnels. Increased traffic and transport services point to growth in general commercial activity. 7.02 These measures of economic progress are paralleled by indicators of improved levels of social welfare. School enrollment increased by 61% between 1973 and 1979, and it is estimated to have increased by another 20-25% during the 1979/80 academic year. These increases are almost twice the rate of population growth over the period. Particularly striking are the 119% increase in secondary school enrollment and the relatively higher growth in enrollment of female students, evidence of upward mobility among second-generation residents. Literacy rates also showed significant gains, and the availability and quality of health services have improved considerably, including the provision of domestic water supply throughout much of the Valley. 7.03 These achievements in the provi'sion of social services are all the more impressive considering the rate of population growth in the Valley. Between 1973 and 1979, the Valley's population grew from 64,000 to 87,000, an increase of 35%, well above the natural growth rates for the country. This fast population growth has been both the consequence of and necessary to the rapid growth in the Valley; agricultural production following the expansion of irrigated area under Stage I, and the substantial improvements in educational, health, and water supply facilities have undoubtedly helped to attract newcomers, not only in agricultural activities but also in related support services, both public and private. 7.04 Because the northern part of the Valley has benefitted from a longer history of irrigated agriculture, it enjoys somewhat higher living standards than the middle and southern parts of the Valley. Enrollment levels are higher, especially among females, illiteracy rates are lower, and there is less reliance on family labor. The relatively advantaged position of the north may, however, be eroding as the adoption of new technologies in the middle and southern areas has permitted higher cropping intensities and outstripped productivity gains in the north. This pattern can be expected to continue unless the north can begin to share in the productivity increases associated with improved technologies. Given the north's climatic disadvantage in competing with early-season production, the more expensive technologies (i.e., greenhouses and irrigation) are not likely to be as widely adopted in the north. The smaller farm size in the north may also inhibit investment in labor-saving equipment. Future research may need to consider the special needs of the northern farmers for lower-cost improvements in technical practices, and extension will need to be considerably strengthened to accelerate the rate of adoption of improved practices. - 26 - 7.05 An especially interesting aspect of development in the Valley is its impact on the structure of farm management and the agricultural labor market. With the upward mobility of the second generation of landowners and increasing labor requirements of intensified vegetable production, there has been a sharp increase in paid agricultural labor in the Valley, much of which is foreign labor. Together with the increased role of high technology in agriculture, management has become a more complex and critical feature of Valley farming. There has been, thus, a fast-evolving role for "professional" farm managers which is being filled by service sector employees from Amman and by recent immigrants typically from the West Bank who have brought with them extensive experience in irrigated agriculture. It is this trend that partly accounts for the increase in paid labor hired on a relatively longer-term basis in the Valley, and may be associated with the evolution of a more modern and efficient agricultural production system. 7.06 Parallel to this development is a change in the nature of sharecropping and tenant/landlord relationships in the Valley. Sharecropping, traditionally an important feature of Valley agriculture, has assumed new significance with the introduction of the new high-cost technologies since it permits sharing of risks and costs. Over 90% of the land where drip irrigation and plastic covers are being used in the Valley is being farmed under sharecropping arrangements. Given the shortage of skilled agricultural labor and the premium on experienced farm managers, sharecroppers may enjoy a higher degree of bargaining power than is typically assumed and participate actively in most production decisions. Sharecropping thus appears to be an efficient adaptation to the transition to modernized agriculture. This development may imply the need for more flexibility in institutional credit policy, which at present restricts availability of credit primarily to landowners who can pledge land as collateral. The Project 7.07 The economic impact of the project has been evaluated by re-calculating the rate of return to reflect changes in both project scope and assumptions concerning future production. Since the project as implemented did not include si-gnificant components for research and e-xtension, credit, or supporting social and economic infrastructure, which were ultimately financed by other donors and the Borrower, only those benefits derived from the irrigation network itself were considered. The projection of benefits reflects a considerable degree of speculation since, at the time of the mission, only a small fraction of the farmers in the Project area were irrigating from the pipe system. 7.08 In projecting benefits, it was assumed that there would be no marked change in the market demand for Valley produce; therefore, the cropping pattern in both the conversion lands and the new lands would reflect the existing distribution of fruit and vegetable production. In the new lands, however, the cropping patterns assumes a somewhat lower cropping intensity, owing to rougher terrain, and a lower percentage of the area in citrus, reflecting limitations on irrigation water supply. (See Annex V for cropping patterns.) Subst'antial increases in yields were assumed in both the with and - 27 - without project cases reflecting relatively low base yields and the high production potential of the area. (See Annex V.) The projected yields at full development are substantially higher than those estimated at appraisal, reflecting the fact that current yields in the Valley are better than expected in the without project situation. The phasing of projected benefits assumed maximum yields are reached over 12 years, maximum cropping intensity on the new lands is reached over 5 years, and the shift to alternative on-farm irrigation systems (sprinkler and drip) is made over a 4-year period, depending on the crop and system selected (See Annex VI). The assumed shift to drip and sprinkler by all farmers is predicated on JVA's recent decision to cut off water from the canal system and the low discharge rate from the pipe system which will effectively preclude irrigating by surface methods (see para. 5.11). Actual investment costs of the irrigation system network were used in the analysis, including costs of the construction contract, consultancy services, and project administration. Replacement costs were included at 5% of initial investment for the first two years following construction, and 2% thereafter. Operation and maintenance costs were projected at JD 60 per ha. All costs and benefits were valued at 1979 prices. (See Annex VII for farmgate prices of agricultural production). 7.09 On the basis of these assumptions, the overall ERR is estimated to be 13%. 'This is a substantial reduction from the 29% return estimated at appraisal, reflecting the large cost overruns on the irrigation works, the delay in production benefits on the new lands, and the change in project scope by which the relatively low-cost high-yielding investments in land leveling and tile drainage on the non-converted lands were dropped from the project. Another important factor accounting for the lower ERR is the revised assumption concerning yields on the conversion lands in the without project case. While the SAR assumed annual yield increases of only 2% without the project, actual experience has shown substantially higher yield increases on the conversion lands due to factors which cannot be attributed to the project. Therefore, the revised ERR calculation has assumed that future yield increases on currently irrigated land would have occurred even if the investment in the pipe system had not been made, substantially reducing the incremental benefits of the project. Given this assumption, the nature of the project benefits on the conversion lands differ significantly from those on the new lands; a separate analysis was done for each. 7.10 New Lands. The economic IRR for the new lands (1,760 ha) was estimated at 16% showing the benefits of a shift from wheat to off-season vegetables and fruit on 730 ha, more intensive cultivation of vegetables on 530 ha now irrigated from the side wadis, and new cultivation of 500 ha. Bringing these lands under permanent irrigation permits an increase in overall cropping intensity from 68% /1 at present to 125%, and a tripling of the area in fruit production (largely citrus and grapes). /1 This figure is based on 1980 production data; it is unusually high given abundant rainfall in the past low cropping seasons which has permitted additional cultivation of rainfed wheat and a larger area irrigable from the side Wadis. - 28 - 7.11 Conversion Lands. As explained above (para. 7.09), the rate of return for the conversion lands (1,000 ha) assumed no change in cropping pattern or in yields as a result of converting from the surface system to the pipe system. Incremental benefits attributed to the project and considered in the analysis were: a savings in operation and maintenance costs from JD 90 to JD 60 per ha, a savings in irrigation labor requirements for sprinkler and drip systems compared to the existing surface system, and a 10% reduction in irrigation water consumption (combined off- and on-farm savings), valued as the net value of production on an incremental 10% of irrigable land. Based on these assumptions, the estimated economic rate of return for the conversion lands is 5%. Sensitivity tests showed the IRR was not sensitive to increased labor costs or to lower operation and maintenance costs, but was moderately sensitive to benefits from water savings. However, these benefits would have to nearly double to 20% water savings to obtain a 10% return. This would imply a combined irrigation system efficiency of 85%, which, while theoretically possible, is highly improbable. FAO reports that sprinkler systems in use in the US exhibit 60% overall water efficiency under hot and dry climate conditions. Researchers in the Jordan Valley have reported on-farm water losses alone of 10-15% due to wind and an additional 10% due to evaporation. 7.12 Impact on Farm Incomes. Since only a small fraction of the farmers were irrigating from the pipe system at the time of the completion mission, it is too early to make any meaningful projections of the impact of the project on farm family incomes. Much will depend on the selection of on-farm irrigation methods, the level of water fees to be charged, and the on-farm efficiency of water use, for which no information is yet available. Based on the assumptions made in the economic analysis, however, the net value of production on the new lands could be expected to increase five times for an average farm, and considerably more for farmers cultivating only rainfed wheat, showing the production benefits of increased cropping intensity and a shift to fruit and vegetable production permitted by year-round water availability. 7.13 The impact of the project on family incomes on the conversion lands will be limited to savings from reduced irrigation labor and water requirements, which will be insignificant in most cases. Fruit growers will benefit disproportionately; given the high water consumption requirements of fruits, the value of water and labor savings is correspondingly higher. Citrus farmers could realize total savings of up to JD 138/ha assuming a shift to permanent sprinkler and water charges at 6 fils/m3. This saving represents approximately 15% of total production costs. The savings for vegetable farmers would be considerably less, ranging from JD 4/ha for squash under drip (or less than 1% of total production costs) to JD 34/ha for eggplant under portable sprinkler. These savings on conversion lands are not adequate to cover the amortization costs of acquiring necessary on-farm irrigation - 29 - equipment /1. If water charges are increased to 12 fils/m3, the value of these savings would just cover amortization costs of sprinkler equipment. VIII. BANK AND CONSULTANT PERFORMANCE 8.01 The Bank's performance in this project must be viewed in the context of the favorable atmosphere which prevailed in Jordan after 1971 for economic development after years of uncertainty. This atmosphere encouraged the Bank to respond to the expectations of the Jordanian Government, as well as those of other donors, to take an active role in the Rehabilitation and Development Plan for the Valley. At a donor conference held in November 1972, the Crown Prince expressed the hope that the Bank would find the Jordan Valley Project (Stage I) ready for appraisal and would take the lead for the appraisal. Because other donors had already made commitmemts to other projects in the Plan, IDA financing was limited to the northern sector of the Valley. 8.02 The eagerness of the donors and the Government to act swiftly in an area of high potential and priority for Jordan led to a hurried appraisal of the North East Ghor, which was one of the least prepared in the Plan proposed by Government. According to an FAO/CP Cooperative Programme mission which visited Jordan in December 1972, the designs prepared by the Jordanian Government were not at feasibility standard. But the Bank staff did not consider this a major problem because the study prepared by the same consultant for the two USAID projects in the Valley was well advanced and could provide reliable estimates for the IDA-financed project. The project was promptly appraised in September 1973 without further preparation and without an updated comprehensive preparation report by FAO/CP reflecting design changes requested by JVA at time of appraisal. 8.03 Problems during project implementation reflected its lack of sufficient preparation resulting in. (i) the Borrower's request for substantive changes in project scope only two months after the loan was effective; (ii) an 18-month delay in starting physical implementation to prepare tender documents; and (iii) unneccessary postponment of land distribution procedures after completion of irrigation works. Had more time been allowed for a thorough project appraisal, cost overruns might have been reduced and the lag in project benefits on new lands could have been minimized. 8.04 The most serious question is why the Bank and JVA, together with all other parties involved in the project, did not question the agronomic suitability of sprinkler irrigation for the Valley and, consequently, supported the adoption of sprinkler for the conversion lands at appraisal. Only the water management and economic advantages of sprinkler were considered during preparation and design stages. While the steep slopes and shallow /1 Assuming 80% credit financing at 6% over 10 years, which are the terms for portable sprinkler equipment procurement under the USAID project. - 30 - soils of the project lands above the EGMC may have justified adoption of sprinkler on the new lands, regardless of its agronomic disadvantages, a more careful assessment of sprinkler may have discouraged its adoption on lands already being surface-irrigated from the EGMC. It is striking that even the irrigation experts recruited by JVA to review the design criteria and preliminary layout prepared by their consultants for all on-going Stage I projects did not raise any questions, on the use of sprinkler irrigation on the crops proposed, particularly since many technical publications available at the time had discussed the disease and weed control problems associated with sprinkler. 8.05 Several factors may help to explain the failure to consider these aspects for the North East Ghor as well as for the three other Stage I projects. One is the lack of coordination among the responsible agencies for preparation of the project. The FAO/IBRD Cooperative Programme was in charge to assess the project's overall economic and financial justification as well as its agricultural and organizational aspects while JVA and their consultants were in charge of preparing the technical aspects of the irrigation and non-agricultural components. Second, the special advisor hired by JVA to review the detailed design was asked to examine only the effect of sprinkler irrigation on bananas, citrus and tall-stemmed crops and the wind effect. Third, the development of cultivation under plasticulture (greenhouses and small tunnels) which exluded the use of conventional sprinkler systems was not foreseen at appraisal. Fourth, the cropping pattern projected in the SAR included a significant share (nearly 15%) of cereal crops for which sprinkler is ideally suited. With the development of new export markets for off-season fruit and vegetables, cereal crops have virtually disappeared in the current cropping patterns. Some areas in the south are now nearly 100% planted with crops not well adapted to sprinkler. Part of the explanation may also lie in the strong engineering and construction-oriented organization of JVA during implementation stage and the weakness of the Agriculture Ministry of Jordan. 8.06 In the later stages of the supervision of the North East Ghor Project and the preparation of the Jordan Valley Stage II Project, the Bank, however, has been instrumental in focusing attention of the Borrower on the potential problems of sprinkler and, more broadly, on the need to address the non-engineering aspects of irrigated agriculture through a more comprehensive research and extension program. The dialogue between the Bank and the Borrower was effectively continued in the context of the preparation of the Jordan Valley Stage II Project. 8.07 The consultant was diligent in performing engineering services along the design criteria set up by the Borrower. The responsibility of the consultant in the selection of the RPM pipes is unclear. The lack of technical data in the bid evaluation report does not indicate whether it had adequately investigated this relatively new technology. Nor is it clear whether either JVA or the consultant were aware of the special requirements for installing RPM pipes and took appropriate precautions during supervision of construction. The Bank, too, perhaps carries some responsibility in this matter, since, in its review of the proposed contract award, despite the new technology proposed, it did not ascertain of its feasibility and reliability. - 31 - In restrospect, the Bank should have requested a substantiated technical evaluation of the RPM pipes which JVA selected only on price comparison. This is crucial when a relatively unproven technology is proposed. IX. RECOMMENDATIONS AND LESSONS LEARNED 9.01 Since the project-financed irrigation works were not yet in service at the time of completion mission, it is premature to draw final conclusions about the project. Projections regarding agriculture production and rate of adoption of alternative irrigation methods are highly- speculative. An impact evaluation of the project should be scheduled in about two or three years and certainly before the Bank considers financing of any follow-up project for the installation of pressurized pipe irrigation system on currently surface-irrigated lands. 9.02 The Borrower will need to increase water charges to 6 fils/m3 by the end of the 1981/82 cropping season (para 6.11). The Bank should, as soon as possible, review with JVA its proposals for adjustments in water charges and betterment levies now being studied. It should aim to seek JVA's compliance with the principle of full operation and maintenance cost recovery as stipulated in the Credit Agreement, while recognizing that a restructuring of water charges may require some time to implement. 9.03 Inadequate agricultural research and extension is presently the major constraint to the agricultural production in the Valley. The Bank, together with other donors should now aim to support an applied research program project in the Valley and to establish a dynamic and competent extension service. 9.04 This project illustrates several consequences of premature and incomplete appraisal. In particular, it demonstrates the drawbacks of appraising a major civil works project when preparation is carried out only to the feasibility stage. It is likely that present Bank requirements (OMS 2.28) for preparation of final engineering designs prior to project approval, would have resulted in a more rapid implementation of the project and a less substantial cost overrun. It also demonstrates the importance of giving careful attention to institutional and procedural aspects of key implementation actions. Because the procedures and practices for land distribution were not examined in detail, an opportunity was lost to make simple reforms which could have avoided the two-year gap between construction and production on the new lands. 9.05 More importantly, the experience of this project proves the difficulties of selecting an appropriate on-farm irrigation technology and the need to examine non-engineering aspects of such a selection. While it is premature to conclude that sprinkler irrigation was an inappropriate selection in the Northeast Ghor, two years of experience with the pressure distribution system in the south of the Valley and limited results of research on water - 32 - management point to the need for flexibility in selection of on-farm irrigation methods and system design, especially in the Jordan Valley where the farmers are quick to adopt innovative techniques and new crops in response to market opportunies. When it became evident by mid-1977 that Valley farmers were electing to irrigate by drip systems, the Bank suggested that JVA study the possibility of adapting the design for the irrigation outlets to permit low pressure irrigation as an alternative to sprinkler. In retrospect, it is unfortunate that implementation of four sprinkler projects covering about 9,500 ha started simultaneously without the benefits of a small scale pilot project demonstrating the value and the problems associated with this irrigation method A priority project to be developed in the Jordan Valley should consist of a research and extension project, encompassing water management, irrigation methods, weed control, and plant protection. - 33 - ANNEX I KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPMENT PROJECT PROJECT COMPLETION REPORT Implementation Results SAR Actual or Expected (including those not financed under the IDA Project) I. IRRIGATION WORKS Area Served by Pipe System (net) - New Lands (ha) 1,760 1,778 - Conversion Lands (ha) 1,000 1,030 Farm Units Using Sprinkler (%) 100 12 Improvements in Surface-Irrigated Area - Land Levelling (ha) 3,000 - Tile drainage (ha) 520 130 /a II. FARM ROADS - New (km) 30 (gravel) 79 Ia (seal-coat) - Improved (km) 60 (gravel) 90 /a (seal-coat) III. RURAL DEVELOPMENT INFRASTRUCTURE - Marketing Facilities 2 assembly markets 1 wholesale market /a - Water Supply Systems 10 11 /a - Health Centers 3 new, 1 improved 4 new /a - Schoolrooms 150 208 /a - Vocational Training Center 1 1 /a (in planning stage) - Community Centers 10 8 /a (in planning stage) IV. PROJECT BENEFICIARIES Project Area Population 25,000 32,300 Farms Served 1,800 holdings 748 farm units /b /a Components not actually financed under IDA Project lb Actual number of farm householders being served is not yet available pending completion of land distribution on new lands. (0593E) - 34 - ANNEX II KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVLOPMENT PROJECT (Credit 498-JO) PROJECT COMPLETION REPORT Comparison of Schedule of Disbursement IDA Fiscal Year At Appraisal Actual and Quarter (US$ '000) 1974/1975 Sept. 30, 1974 40 Dec. 31, 1974 200 March 1975 480 June 1975 1420 1975/1976 Sept. 30, 1975 2220 Dec. 31, 1975 3440 March 1976 3970 100 June 1976 4550 100 1976/1977 Sept. 30, 1976 5390 300 Dec. 31, 1976 5800 400 March 1977 6390 800 June 1977 6850 1000 1977/1978 Sept. 30, 1977 7050 2600 Dec. 31, 1977 7350 3600 March 1978 7420 3900 June 1978 7470 4100 1978/1979 Sept. 31, 1978 7500 4310 Dec. 1978 7500 4960 March 1979 7500 5540 June 1979 7500 5540 1979/1980 Sept. 31, 1979 7500 5770 Dec. 1979 7500 5890 March 1980 7500 6550 June 1980 7500 6590 1980/1981 Sept. 30, 1980 7550 - 35 - ANNEX III KINGDOM OF JORDAN NORTHEAST GHOR IRRIGATION AND RURAL DEVELOPEMENT PROJECT PROJECT COMPLETION REPORT Comparative Production Estimates Cropped Area Yields (% of Total) (t/ha) SAR /a Actual (1980) /b At Appraisal Actual (1 9 7 7 F7 9J Current Projected Average Highest Field Crops Wheat 4.3 4.1 2.5 3.5 1.2 2.1 Maize 10.4 - 4.0 8.0 - - Subtotal 14.7 4.1 Vegetables Tomatoes 19.8 5.4 17 25 19.4 24.6 Eggplant 15 23 19.1 26.0 Pepper 20.7 22.2 15 23 19.1 26.0 Cucumbers 10 20 14.3 18.0 Squash 9.3 6.6 10 20 14.4 15.6 Cauliflower/Cabbage 5.7 8.3 12 23 17.3 23.8 Onion 2.2 12 23 13.1 15.4 Potatoes 5.3 2.0 12 17 6.7 7.1 Beans 4.1 1.6 12 15 6.0 6.2 Other - 8.1 Subtotal 69.0 56.4 Fruits Citrus 12.5 35.6 17 28 14.5 17.6 Bananas 3.8 3.6 15 22 14.1 30.0 Other 0.3 Subtotal 16.3 39.5 /a At full production in 1983 / In conversion lands only. (0596E) - 36 - ANNEX IV KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPMENT PROJECT (Credit 498-JO) PROJECT COMPLETION REPORT Suitable Methods of Irrigation for Different Crops Tomato Drip system or surface. Tomatoes respond well to a constant water supply, drip reduces water stress, gives a higher yield, improves quality of fruit. Sprinkle irrigation is not a suit- able method because it increases foliar diseases, (early and late blight), reduces fruit setting, washes off insecticides and fungicides, will produce cracked fruit. Eggplant Surface is the preferred method. Drip is used if an early pro- duction using mulch is required. Sprinkle will cause disease problems, will dirty the fruit, will create difficult conditions at harvesting time when the soil is wet. Pepper When plastic mulching is applied, it is better to irrigate with drip. Drip will give the same advantages as for tomatoes. Sur- face can be a suitable method. Sprinkle will increase foliar diseases and dirty the fruit. Cucumber under tunnel and in greenhouses Drip will be the preferred method. Sprinkle will increase foliar diseases especially downy mildew and make the fruit dirty. Potato Drip is too expensive. Surface is the preferred method because it is inexpensive as the plants have to be hilled up making the furrows, so the same furrows can be used for irrigation. Sprinkle can also be used. Squash Surface is the most common system because less expensive. Drip will be used in existing system already installed for another crop. Sprinkle will increase foliar disease and require more pest control. - 37 - ANNEX IV Page 2 Watermelon Surface will be the preferred method because less expensive. Drip can be specifically used for early production. Sprinkle will increase diseases, wet the fruit and decrease the quality. Cabbage/Cauliflower They are indifferent to the different methods. Surface is the cheapest method. -Where drip or sprinkle are installed for other crops, they can be used. Sprinkle has the disadvantage of making the heads rot. Broadbean It is a low return crop. It is advisable to irrigate them with the cheapest method. They can be grown under sprinkle and drip. Greenbean Surface is the preferred method. Sprinkle will increase diseases and. dirty tie pods. Drip will not give the same advantages as for tomatoes. Onion Surface will be the preferred method. Sprinkle will also be a suitable method. Citrus Sprinkle is the preferred method because it is water and labor saving. Surface and drip can also be used. Banana Drip is the preferred method because it avoids water stress, gives fruit of better quality. Grape Drip and sprinkle are the preferred methods because this crop is generally grown on slopes. - 38 - ANNEX V EINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPMENT PROJECT (Credit 498-JO) PROJECT COMPLETION REPORT Agricultural Production Projections Used in Economic Analysis Cropping Patterns Yields(t/ha) Conversion Lands New Lands (,.760 ha) Current Projected Ic Crop (1,000 he) Current Projectfd /b Area (ha) 2/a Area(ha) % /a Area(ha) Z /a Citrus 435 43.5 190 10.8 530 30.1 15 35 Bananas 45 4.5 - - 10 0.6 22 30 Grapes - - - - 90 5.1 15 Other 5 0.5 30 1.7 Sub-total - Fruits 485 48.5 220 12.5 630 35.8 265 26.5 120 6.8 490 27.8 19 35 Eggplant 105 10.5 60 3.4 200 11.4 16 29 Cabb*g./CauLifLower 6.5 50 2.8 230 13.1 10 24 Squash 65 Tomatoes 65 6.5 35 2.0 215 12.2 17 43 25 2.5 15 0.9 70 4.0 12 29 Potatoes Beans 20 2.0 10 0.6 45 2.6 6 12 15 1.5 10 0.6 45 2.6 14 28 Cucumbers 5 0.5 - - 70 4.0 17 25 Melons 125 12.5 10 0.6 45 2.6 10 20 Other Sub-total - Veg 690 69.0 310 17.7 1,410 80.3 Wheat (I) 500 50.0 285 16.2 - - 1.2 3.6 (R) - - 445 25.3 - - 0.8 1.5 /d /d _ Uncultivated - / Total Cropped Area 1,675 1,260 71.7 2,040 116.1 Cropping Intensity 1.44 .67 1.25 (excl. peremnials) /a %of total cultivable area L To be reached over 5 years /c Full development over 12 years. /d 500 ha of new lands are presently uncultivated - 39 - ANNEX VI KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPMENT PROJECT (Credit 498-JO) PROJECT COMPLETION REPORT Assumptions Used in Economic Analysis Note on Shift to Alternative on-farm Irrigation Methods 1. Since only a fraction of the farmers in the project area were irrigating from the pressured pipe system at the time of the completion mission, the projections in the economic analysis had to incorporate assumptions concerning the selection of alternative on-farm irrigation methods after the pipe system is under full operation and farmers in the conversion lands are no longer able to irrigate from the canal network. The assumptions made were based largely on agronomic and engineering data collected by the Bank's 1979 appraisal mission for the Stage II Jordan Valley Development project. On-farm irrigation investment costs and estimated labor savings considered in the IRR reflect a simplification of the expected trends, which are summarized below: (a) All citrus orchards will be irrigated by sprinkler, which is known to be well suited to citrus. Farmers will select the permanent (buried) system for mature orchards, where it is difficult to move the pipes under a portable set-up. Portable sets will be used for new plantings given their considerably lower costs. (b) Drip systems will be used on those vegetables which are susceptible to damage under sprinkler irrigation, namely tomatoes, squash, cucumbers, and melons. While drip systems are expensive (see para. 2 below), they are well adapted to additional relatively low-cost farming improvements--such as mulching, raised-bedding, and application of soluble fertilizer and other chemical treatments--which can substantially increase yields and reduce labor required for weeding and chemical spraying. The assumed rate of adoption of drip irrigation for these crops in the analysis is considerably more rapid than might otherwise be expected simply because, with the exceedingly low water discharge available from the pipe system in the project area, surface irrigation will not be practical and the farmers will effectively have no choice but to shift to drip system. This system is now widely adopted in the southern part of the valley. (c) All other vegetables--principally eggplant, cabbage, cauliflower, beans, and potatoes--are assumed to be irrigated under portable sprinkler systems, which is the least costly alternative to surface. - 40 - ANNEX VI Page 2 2. Capital costs of these alternative on-farm irrigation investments are based on estimates provided by JVA's Engineering Division and expressed in 1979 prices. The permanent (buried) sprinkler system is costed at 1,580 JD/ha, with an assumed life of 20-25 years. The portable sprinkler system (2 lines for a farm unit of 3.8 ha) is costed at 340 JD/ha, with a life of 8 years. The drip system, including a filter, is costed at 1,230 JD/ha; the filter is assumed to last 10 years, while the pipes and nozzles are assumed to be replaced every fourth year. Savings in irrigation labor requirements when shifting from unimproved surface with a 20 liter/second discharge to these alternative systems generally fall within the range of 50-80%. The greatest savings--with a nearly 100% reduction in irrigation labor requirements is for citrus under permanent sprinkler. For squash and cucumber, however, assumed to be under drip labor requirements, increase somewhat (see attached table). (0588E) KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPHENT PROJECT PROJECT COMPLETION REPORT Reduction in Irrigation Labor Requirements /I Crop Labor Requirements (hrs/ha) Labor Savings Unimproved Surface at 20 1/s Portable Sprinkler Permanent Sprinkler Drip Hrs/ha Reduction Citrus 272 55 5 217/267 80/99 Bananas 400 96 304 76 Grapes 208 69 139 67 Tomatoes 96 53 43 44 Squash 40 46 (6) Cucumbers 40 46 (6) Melons 144 60 84 58 Other 128 58 70 54 Eggplant 80 19 61 76 Cabbage/Cauliflower 40 12 28 70 Beans 32 10 22 70 Potatoes 80 19 61 76 Other 80 18 62 78 / Based on data cole d by Bank appraisal team for proposed Stage II Jordan Valley Development project. (0589E) - 42 - ANNEX VII KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPMENT PROJECT PROJECT COMPLETION REPORT Farm-Gate Prices used in Economic Analysis /1 (JD/ton) SAR PCR Wheat 30 60 Tomatoes 30 73 Greenbeans 82 179 Eggplant 24 51 Potatoes 34 75 Pepper 40 64 Cauliflower 25 64 Squash 28 68 Cucumbers 49 156 Beans 48 62 Onions 26 52 Oranges 30 91 Bananas 62 192 Grapes - 109 Melons 71 /1 Weighted average of prices for summer and winter production seasons, based on average wholesale market prices over 1971-73 for the SAR and 1978-79 for the PCR. (0596E) KINGDOM OF JORDAN NORTH EAST GHOR IRRIGATION AND RURAL DEVELOPMENT PROJECT (Credit 498-JO) PROJECT COMPLETION REPORT ACC - Medium-Term and Seasonal Credit (in JD) 1975 1976 Jan-June '77 July 77-May 78 Total Medium-Term Loans Amount % Amount % Amount % Amount % Amount % 27,273 33.5 28,880 26.2 3,760 13.0 16,140 19.4 76,053 25.1 Tree Planting 30,665 37.7 46,345 42.1 9,400 32.6 19,925 23.9 106,335 35.0 Land Improvement 15,100 18.6 18,600 16.9 14,500 50.2 14,875 17.9 63,075 20.8 Farm Machinery 2,300 2.8 3,500 3.2 - - 24,800 29.8 30,600 10.1 Plastic Tunnels Farm Buildings 6,020 7.4 6,700 6.1 1,200 4.2 2,620 3.1 16,540 5.5 - - - - - - 4,875 5.9 4,875 1.6 Pipes & Canal-Lining Poultry Farms - - 6,000 5.5 - - - - 6,000 2.0 Total 81,358 100.0 110,025 100.0 28,860 100.0 83,235 100.0 303,478 100.1 Average Loan Sise /1 1,432 2,124 2,575 a 2,412 Lb 1975 1976 1977 1978 1979 1980 Seasonal # Average # Average # Average # Average # Average # Average Loana A Amount Loans Loan Amount Loans Loan Amount Loans Loan Amount Loans .Loan Amount Loans Loan Amount Loans Loan 36,510 88 415 32,865 112 293 56,530 113 500 54,225 92 589 45,780 60 763 50,554 103 491 outside the projeer area. L For all loans extended from Wadi Yahis branch office, which includes Kriawch, L# For 1977 /b For 1978 BkZ D174 (PCR) JORD AN NORTH EAST GHOR IRRIGATION & RURAL DEVELOPMENT PROJECT -V ( -K NW LANAN1 0 NOT ONVEWD LNDS 4940 h OAAA SAp\-i ARI A L!r