1t'ILE IIICOPY RESTRICTED Report No. TO-586a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION SEC OND AGRICULTURAL CREDIT PROJECT JORDAN April 14, 1967 Projects Department CURRENCY EQUIVALENTS US $1 = Jordan Dinar 0. 3571 (3571 mils Jordan) JD 1 1, 000 mils = US $2. 80 JD 1, 000, 000 US $2. 8 million WEIGHTS AND MEASURES Metric System One dunum = 0. 1 hectare J 0 R D A N SECOND AGRICULTURAL C,1_DTT RtOJ'CT TABLE OF CONTEITS Page No. SUEE ARY9 .... t ., , ...a......6......a...a........................ 1. INTRODUCTION . . . . . . . . ... . . . . .1. 2* BACKGROUND. . . . . . * . . . . . . . . . . . . . . . . . . . 1 As General . . . . . . 4 . . . . . . . . . . * * * * . * . * 1 B. Land and W,1ater Resource Development . . . . . . . . . . . 2 C. Agricultural Services..... . * 6 *... 2 D. ACC's Progress and &cperience Under First IDA Credit. . . 3 E. ACCts Overall Credit Program. . . . . . . . . . . . . . . 4 3. THE PROJECT . . . . ..a . . . 0 . . , . . . . a . 5 A. Detailed Features.. . .. . . , . . . . . . . . . . . 5 B. Cost Estimates. . . . . . . . . , . . . . . . . . . . . . 6 C. Proposed Financing, . ni. .. .. .. . ... . .. .. 6 D. Lending Policies and Procedures . ..* . . . .. . .. . 7 EB Disbursement . . . * . . *. . . . . . . . . . . . . . . 9 F. Operating Results . . . * . .. .a * . . . . . . . . . 10 4. ORGANIZATION AND MANAG&MUT . . . , . . . . . . . . . . . . . 10 A. Project Administration. . . . . e . . a a . . . - 10 B, Procurement . . . . . . . . . . . . . . . . . . . . . . . 11 5. BEN3FITS ANID JUSTIFICATION* . . . . . . . . . . . . . . . . . 11 6. COUCLUSIONS AND RECOIZENDATIONS . . . . . . . . , . . . . , . 12 AlirXES 1. The Agricultural Credit Corporation (Tables 1-5) 2. Details of the Lending Program (Tables 1- ) 3. On-Farm Development Projection for Representative Farms (Tables 1-6) ONE MAP *^ * * This appraisal report is based on the findings of a mission atich visited Jordan from September 16 to October 6, 1966. The mission was composed of lIessrs. P.A. Courbois and H. von Oppenfeld. J 0 R D A N SECOND AGRICULTURAL CREDIT RiOJECT S U 14 M A R Y The Government of Jordan has requested an IDA credit to enable the Agricultural Credit Corporation (ACC) to finance part of the second stage of its 'Lending program. The proposed credit of US$3 million would supplement ACC's own resources to permit lending for the Project of US$5 million over a four-year period. The program is within the framewJork of the Seven-Year Development Plan 1964-1970, and aims at the improvement of Jordan's limited land and water resources and their development for fruit and vegetable production. ii. In December 1963, IDA extended a first Credit of US$3 million ([DA Credit 44-JO) to the Government of Jordan to support the first stage of the lending program. Progress of the Project was satisfactory and there was a ready response frcm farmers to the opportunities afforded in the four main areas of lending, i.e. farm water supply, livestock develop- ment, farm mechanization, and land reclamation. The Credit was fully disbursed by April 1966, and since then ACC has continued the program initiated under the IDA Credit, at a reduced level with a short-term advance from U.S.AID and its own resources, which are inadequate for meeting the demand for credit. iii. As with the first Credit, the Project would include land recla- mation and improvement, farm water supply development, and farm mechani- zation, but there would be greater concentration on tree crop and vineyard establishment and on-farm development within Government irrigation schemes. iv. The total Project cost would be US$6 million. In addition to the IDA Credit of US$3 million, ACC would provide US$2 million and the farmers themselves the remaining US$1 million. The Project is techni- cally sound and economicaIly justified. Estimated benefits both to farmers and the national economy are substantial. The Project is suitable for an IDA credit of US$3 million. J O R D A N SECCbID AGRICUITUIiL CIMEDIT PROJECT 1 . INTRODUCTION 1.01 The Government of Jordan has applied for a second IDA credit to enable the Agricultural Credit Corporation (ACC) to continue its lend- ing program within the framework of its Seven-Year Development Plan 1964- 1970. The Government's request for a credit of US$5.8 million to help finance ACC lending program over a four-year period was scaled donvn to US$3 million. The credit of US$3 million would supplement ACCts resources to permit a lending program of US$5 million over a four-year period. 1.02 In December 1963, IDA extended a first Credit of US$3 million (IDA Credit 44-JO) to the Government of Jordan to support the first phase of its lending program. The progress of the Project was satisfactory; the Credit was fully disbursed in April 1966, slightly before the closing date of June 30, 1966. Since then, ACC has been able to continue the lending operations initiated under the IDA Credit, from its own resources and with a short-term advance from U.S.AID; but its resources, which are now restricted to collections, are inadequate for meeting the demand for credit. 1 03 This report is based on information prepared by the Government of Jordan and on the findings of an appraisal mission which visited Jordan in September-October 1966, composed of Ilessrs. P.A. Courbois and H. von Oppenfeld. 2. BACKGROUND A. General 2.01 Jordan has recently revised its Seven-Year Development Plan 1964- 1970. The Government's major goal is to reduce the deficit in the external balance of trade and the dependence upon external budget support. The agricultural sector is expected to contribute significantly to the attain- ment of this goal, and substantial investments are planned to increase the agricultural output. 2,02 Jordants GDP expanded rapidly by 10 per cent per annum from 1959 to 1964. Aided by two good harvests during this period, the growth rate in agriculture (17 per cent per annum) was even higher. Exports of agri- cultural products also increased by about 17 per cent per annum on the average. They constitute 55 per cent of total exports. In 1964, agricul- ture represented 25 per cent of GDP and accounted for 35 per cent of the 0.5 million labor force. Wages of unskilled laborers have risen in the last few years to a level ranging from JD 0.4 to 0.7 per day (US$1 .15 to US$2.00). Although Jordan has little registered unemployment, there is scope for additional employent of family labor and of -the predominantly rural refugee population through the agricultural development which would be generated by the proposed Project. B. Land and Water Resource Development 2.03 Jordan has a land area of 9.7 million ha and supports a popula- tion of about two million. Eighty-seven per cent of the land area receives less than 200 mm annual rainfall and is unsuitable for cultivation except in small areas where irrigation is feasible, Although not more than 60,000 ha, or less than one per cent, was irrigated in 1963, this area accounted for about 30 per cent of agricultural production. 2.04 Surveys of water resources indicate that an additional area of about 160,000 ha can be irrigated. Uater development is being planned and supervised by the 1iatural Resources Authority (formerly the Central 1Jater Authority), with the assistance of internationally recognized con- sultant firrns 17 2.05 New farm units of not less than 30 dunums (three hectares) have been established in large government irrigation schermes from newly reclaimed lands and from larger farms divided under a land reform program. With intensive fruit and vegetable production these farm units are viable. Formier oimers of larger farms subject to the land reform program have been permitted to retain units up to 200 dunums (20 ha) of irrigated land. 2.06 ilinor irrigation works, involving mainly groundwater development and well construction, have been carried out by progressive farmers vino frequently sell surplus mater to other farmers. Well construction is sub- ject to licensing and supervision by the Hatural Resources Authority. This development has been encouraged by loans under the first IDA Credit. C. Agricultural Services 2.07 The Iinistry of Agriculture has been weak and provided little assistance to farmers borrowing under the first IDA Credit. ACC itself filled the gap, however, by improving and expanding technical services to its borrowers. In recent years the Government of Jordan has significantly improved agricultural research and education, and steps have now been taken to strengthen the agricultural extensiorn services. These measures, allied to the continued provision of technical services by ACC and the industry and skill of commercial farmers, will be adequate for the success- ful operation of the proposed Project, 1/ Ilarza Engineering Company and Sir Ilurdoch HIcDonald and Partners. - 3 - 2,08 Considerable progress has been made in tackling the problems of marketing of agricultural produce. A marketing bureau has been set up to carry out research on markets and related problems of processing, storage and transportation and to promote the development of marketing facilities. In line wiith recommendations of a Government/UNDP market research team, the Government has established two farm marketing centers, with facilities for produce weighing, grading and shipping. The city market of Arman has been relocated and reorganized to improve the efficiency of wholesale distribution, Steps have also been taken to improve packaging, tr&nsport and quality control in order to increase exports of fresh fruit and vege- tables to Kuwait, Saudi Arabia and Iraq. 2.09 Prospects for growth of internal demand are good, and exports of fruit and vegetables have grown at an annual rate of 16 per cent over the past five years. Tomatoes, melons and citrus are the chief export conmodities. D. ACC_s Progress and Experience Under First IDA Credit 2.10 The first IDA Credit became effective in April 1964 and wias disbursed by April 1966 (ACC vas the executing agency). The US$3 million Credit assisted ACC in making development loans to farmers under a USU4.5 million loan program. These development loans have enabled farmers to reclaim land not previously cultivated and to intensify production through water supply development and mechanization. Investment wJas concentrated on four purposes Which accounted for 82 per cent of the lending program: (i) farm vater supply, (ii) livestock development, (iii} farm mechaniza- tion, and (iv) land reclamation. Farmers' response to the program reflects entrepreneurship and wrillingness to modernize their operations, particularly in producing quality fruit and vegetables. 2.11 Signif'icant improvements have been achieved in ACC's technical competence and administrative organization. The technical staff has benefitted from overseas training and from U,S,AID technical assistance. Loan approval, up to s-pecified limits, has been delegated to branch offices. Accounting and statistics have been greatly strengthened. IIech- anization of the accounting system is being undertaken and should further improve the efficiency of loan administration. A substantial recent increase in salary levels is expected to help ACC recruit and retain qualified technicians. However, in-service training is still inadequate, particularly in the techniques of assisting borrowers in the preparation of farm plans and in methods of loan appraisal (para 4.02). 2.12 ACC took important steps to improve its financial position. In 1963, it discontinued its short-term credit operations, leaving this function to the Central Cooperative Union (CCU) and to the cooperatives. In 1964 the rate of interest on medium- and long-term loans to farmers was raised on IDA's request from four to five and a fourth per cent. This rate would be raised to six per cent; it would still be below those of commercial banks which range from seven and a half to nine per cent per - 4 - annum for short-term operations /para 3.08(i)70 Ileasures have been taken to improve loan collections, but the Corporation has not yet applied penalty charges for loans in arrears. The Government refrained from granting moratoria affecting repayment of ACCts loans. As a result of these measures and of government support, ACC's lending operations have been profitable. A net increase of JD 1.3 million has been realized in the loan portfolio from 1963 to 1966. 2.13 ACC's use of funds has not been fully satisfactory in the past. Large cash balances have been deposited in commercial banks where high returns could be obtained, instead of being lent to farmers. These bal- ances have now been drawn down and assurances by ACC were obtained during negotiations that this situation would not recur (para 3,13). 2,14 The CCU provides short-term credit to farmers through coopera- tives from its own resources and ACCG's advances, During 1965 and the first half of 1966, CCU had to reduce its lendings pending reorganization and collection of arrears. E. ACC's Overall Credit Program 2.15 The Corporation's total lending program at the time of appraisal was JD 8 million for the 1967-1970 period. This was considered too ambi- tious by IDA on the grounds of ACCts inadequate staffing for loan appraisal and the danger of excessive farmer indebtedness. During appraisal ACC agreed to reduce this lending program to JD 5.4 million (US$15 million) over the four-year period. The proposed IDA financed Project would be a part of this four-year program as show-n below. UJS" I-lillion JD I1illion Equivalent Total Lending Program 1967/68 5.40 15.O Operations Outside Project a) Investment for subprojects 3.C0 8.4 b) ACC's advances to CCU's revolving fund 0.60 1.6 Lending for Project a) Financed by IDA Credit 1,08 3.0 b) Financed from ACC's own resources 0.72 2.0 2.16 From the total program IDA has selected for the proposed Project those subprojects which have the highest priority and require fairly large amounts (para 3Q02). The rather longer average terms of investment involved for these subprojects would probably have led to some reluctance on ACC's part to give these investments first call on its resources. Other subprojeots, - 5 - while forming a legitimate part of ACC's portfolio, wJere not felt by IDA to have the same priority., or were subject to special factors. Examples of these are: the financing of draft animals, local cattle and sheep; storage and processing facilities which had not reached a stage of prep- aration required for appraisal by the mission; and poultry, where demand is difficult to predict and any lending program would require constant reassessment, and where amounts are likely to be small. ACC will go ahead with the financing of these items from its own resources, but they will remain outside the scope of the Project with the possible exception of storage and processing facilities if adequate justifications for their inclusion are eventually submitted to IDA. The total investment over a four-year period for subprojects outside of the proposed Project wiould aggregate to JD 3 million (US$8.4 million). 2.17 The balance of ACC's lending program outside the Project wOuld take the form of a contribution during the four-year period of about JD 0.6- million (US$1,7 million) to CCU's revolving fund for the extension of short- term credit. This fund wjould provide among others the complementary work- ing capital to farmers obtaining development loans from ACC. 3. THE PflO0IECT A. Detailed Features 3.01 The proposed Project would be part of the second phase of ACC's on-farm investment program. The IDA credit of JD 1.08 million (US$3 mil- lion) would supplement ACC's resources for the extension of about JD 1.8 million (US$5 million) in loans to farmers for priority investment fields in 1967 and 1968. The estimated 3,000 to 4,O00 farmers who would receive loans would contribute the remaining JD 0.36 million (US$1 million) to the financing of the total project cost aggregating JD 2.16 million (US$6 mil- lion) (see paras 3.03 and 3.05). 3.02 Priority investments to be financed would be (i) land reclamation and improvement, (ii) farm water supply, (iii) tree crop and vineyard establishment, (iv) farm machinery, and (v) on-farm development in govern- ment irrigation schemes. The investments would thus improve Jordan's limited land and water resources and develop fruit and vegetable production. iAost of the demand for loans is expected to occur in the northwestern part of Jordan, in the uplands and the Jordan Valley (see map). -6- B. Cost Estimates 3.03 Approximate investment and lending targets for the Project are as follows: On-Farm Investment Targets Estimated Foreign Cost of Exchange Component Proposed Subprojects JDIOOO Per Cent ACC Lending (JD'C00) (TJD1000) land reclamation & improvement 300 76 25 240 Tree crop establishment 400 60 15 340 Farm water supply devel- opment 340 170 50 280 Farm machinery 520 364 70 420 On-farm development with- in irrigation schemes 280 112 40 240 Unallocated 1/! 320 96 30 280 Total: in JDOOO 2,160 878 41 1,800 (in US$'000) (6,000) (2,1460) (5,000) 3.04 Costs have been estimated conservatively on the basis of prices and wages prevailing during the appraisal, with a contingency allowance of about 10 per cent. Except for farm machinery, the farmers' contribution would primarily consist of labor. Because of possible changes in demand and in economic conditions, an amount equivalent to 15 per cent has been left unallocated to permit adjustments and, if necessary, for financing technical services (para 4.02). The estimated foreign exchange component of JD 0.88 million is about 41 per cent of the total project cost or 82 per cent of the proposed IDA credit. C. Proposed Financing 3.05 The estimated project cost of JD 2.16 million (US$6 million) would be met from the following sources: L Technical services have not been specifically included since it is expected that they would be financed from other sources. Should this financing not be available, the foreign exchange cost of these services would be met from the unallocated portion of the IDA Credit. - 7 - JD'OOO US$ lUlion % of Total Farmers' participation O.36 1 17 Total lending 1.80 5 83 Total 2.16 6 100 Sources of Lending ACC's own resources 0.72 2 33 Proposed IDA credit 1 .o8 3 50 Total 1.80 5 83 3.06 Farmers would contribute on the average about 17 per cent to the project cost, primarily in the form of hired or family labor. The contri- bution of settlers within government irrigation projects, whose capital resources are small, could be as low as 10 per cent. A higher contribution would discourage farmers from investing or would force them to borrowr from other sources at excessive cost. 3.07 The balance of project costs (83 per cent) would be provided as loans from ACC., of which 60 per cent would be finarnced from the IDA credit while the remaining 40 per cent would be financed from ACCts omn resources. D. Lending Policies and Procedures 3.08 ACC is an agricultural credit institution making medium- and long-term loans to farmers for development purposes. Operations under the Project wiould be carried out under the general policies and procedures as outlined below and elaborated in Annex 1. The major changes are with respect to interest rates, terms of lending and the basis for loan appraisal. i) Interest , Rates For new loans the Corporation would raise interest rates to individual borrowers from the present annual rates of 5-1/4 per cent to 6 per cent and charge penalty rates of at least one per cent on loans in default, Increase of interest rates rould narrow the gap between ACCrs current interest charges and those of commercial banks (para 2.12). Wlith respect to the IDA credit, the Government would be the borrower and would make the proceeds of the credit available to ACC for 20 years, including 10 years of grace. ACC would pay Government a rate of 3-1/4 per cent as in the first IDA Credit. This would pro- vide a margin of 2-3/4 per cent which wiould be adequate to cover administrative expenses and risks. The interest rate would be reviewed from time to time and necessary changes vould be agreed upon between the Corporation and IDA. The Government would bear the exchange risk for repayment to IDA. ii) Terms f4endml Terms of lending to farmers within the ranges indicated below w,ould be determined on the basis of the projected financial returns in each case. Terms and grace periods for loans for land reclamation, water supply and tree crop establishment would be longer, while terms for loans for light tractors would be shorter than under the fi-rst Credit. Terms and grace periods would be shorter where the land is to be used primarily for vegetable production, intermediate for grape and tree fruit and longest for olive grove development. Terms Including Grace Grace Period Period ....n years),**.'. Land reclamation & improvement) Tree crop establishment ) 7-12 2-5 Farm water supply developm.ent ) On-farm development up to 10 1-3 Heavy tractors (50 hp & above) & combines up to 7 Light tractors (below 50 hp) up to 5 - iii) Basis for Loan Appraisal Under the Corporation's lending rules and procedures, separate appraisals are often made for loans to the same farmer for land reclamation, water supply development and tree crop establish- ment. Assurances have been provided by ACC that all of these would be combined into one farm plan for each farm and would be appraised together. This method of appraisal would permit the formulation of more realistic repayment plan for the farmer than the present system. For pump irrigation schemes involving loans exceeding JD 5,000 ACC would require a satisfactory feasibility report and pumping plant specifications would be prepared in a manner acceptable to the Natural 11ater Aesources Authority. Costs of technical studies would be included in the investment costs and could be financed under the Project. 3.09 As under the first IDA Credit, loan decisions based on the tech- nicians' appraisal reports would be made by committees at the branch, dis- trict, or head office level for loans up to JD 2,500 and by the Board of Directors for loans above that amount. Loans to individual farmers or - for single schemes financed under the Project and exceeding in the aggre- gate JD 20,000 would require IDA approval. The committees would approve or disapprove the application on the basis of creditworthiness of the - 9 - pros'oective borrower, but could lnot change the amount of loan recommended by the techlical staff, since a reduction would not permit the farmer to complete the investments to be carried out under the farm plan. 3.10 ACC would give emphasis to the economic and financial returns to be expected from each farm plan, but would continue to have regard for loan security. Loan security wiould be a first mortgage, with excep- tions authorized in ACCts rules and procedures. With respect to tractors or other heavy equipment, titles wiould be registered and a commitment would be obtained from the farmer not to sell, transfer to assign the equipment until his loan is repaid. 3.11 Loans to farmers would be disbursed in tranches upon documentary evidence of expenditure incurred or on the basis of inspection by ACC of the progress made in carrying out the farm plan. In the case of agricul- tural machinery, ACC would make payments directly to dealers. 3.12 ACC would further strengthen its staff of loan collectors and would pursue a rigorous policy of collections. It would contact borrowers immediately when loans become overdue, enforce a penalty interest rate on defaulting borrowiers and foreclose >hen necessary to recover loans in arrears. The Government would support ACC in this policy, especially by the enforcement of collections through administratiive channels as provided for under ACC's constituting law and would continue to refrain from insti- tuting moratoria affecting the repayment of ACC's loans (para 2.12). During negotiations assurances were obtained concerning these points, 3.13 Due to a pressing demand, ACC is expected to have its resources fully utilized for loans and should, without compromising its standards of loan appraisal, keep only small cash reserves for contingencies which should not exceed about JD 50,000 over and above the amounts currently required for disbursements on loans approved, such amount being projected not to exceed about JD 300,000 at any time. During negotiations, assurances were obtained that ACC would invest the balance of its resources in lending operations (para 2,13). 3.14 Assurances were also obtained that ACC would arrange for regu- lar auditing of the accounts by accountants acceptable to IDA. E. Disbursement 3.15 Disbursements from IDA would be made on the basis of 60 per cent of loans paid out by ACC for farm development purposes (para 3.07). Docu- mentation would consist of a statement of ACC's expenditures for loans, supported whenever possible by the local supplier's invoice. The IDA par- ticipation cannot be related directly to the foreign exchange component of the Project. Imported goods, if any, will be purchased locally by the farmers, and the origin of such goods will not be identifiable except for agricultural machinery and for the major equipment used in wrater supply development. Any disbursements for technical assistance approved by IDA would be on the basis of their foreign exchange cost (para 4.02). - 10 - F. Operating Results 3.16 The projected financial implications of the Project in conjunc- tion with ACC's overall credit operations (see Annex 1, Table 5) are summarized as folloTws: JD'000 Requirements Lending under IDA credit 1 ,800 Lending under ACCts own resources to farmers for development 3,CCO CCU for crop loans 600 Repayment of U,S,AID loan 208 Repayment of Government advance 15 Increase in fixed assets 80 Increase in cash in hand from JD 134 to JD 237 103 5.8o6 Resources Increase in paid-in capital 140 Accumulated retained earnings 429 Loan collections 4,57 IDA proposed credit 1h080 5,8o6 4. ORGAI4TIZATION AS 11ANAG_.3iNT A. Project Administration 4.01 ACC has the responsibility for administering Jordants agricultural credit program wzithin the Seven-Year Development Plan, which is under the control of the Jordan Development Board. It would administer the proposed IDA credit within its overall credit program. Assurances were obtained that IDA wnould be consulted about any changes in the laws and regulations governing ACC and on future appointments to the offices of the Chairman and the Deputy General lVhnager. The present office holders are highly regarded and manage the Corporation on a sound basis. 4.02 Details on ACC's present organization and financial conditions are given in Annex 1 . ACC is benefitirg from U.S.AID assistance given in accounting, statistics and credit procedures. There is clear need for continuation of such assistance and for additional assistance in the field of farm planning and production economics. During negotiations, assurances - 11 - were obtained that ACC would male all efforts necessary to secure, within six months after signing, the services of a farm economics expert with qualifications satisfactory to IDA for a period of one and a half to two years. He would train and supervise ACC's personnel concerned with the preparation of farm development plans and loan appraisals. From its staff ACC would assign on a full-time basis two persons trained in farm economics (one each in the development areas east and west of the Jordan PRiver), who would assist the farm economics expert in training branch technicians and loan officers in the preparation of farm plans and in methods of loan appraisal. In the event that ACC does not succeed in securing a qualified farm economics expert through U.S.AID or other technical assistance programs, ACC would finance the respective foreign exchange cost from the unallocated portion of the IDA credit (para 3.03). (This would constitute less than 10 per cent of the unallocated portion.) 4.03 In addition to further training of its own technical staff, ACC would increasingly work in liaison with the Natural Resources Authority and the Ilinistry of Agriculture, particularly in its extension and veter- inary services and marketing organization. The Agricultural Engineering and Irrigation Section of the IIinistry of Agriculture would continue to be responsible for on-farm development within the ±ast Ghor and other government irrigation schemes, and would encourage increased use of custom services by private contractors to expedite the operations. B, Procuremen-t 4.Q4 Goods required for farm development would be procured locally through normal commercial channels. Competition for imported and local goods is assured, and there are no restrictions on imports of goods under the Project (except of those produced in Israel). IWell drilling and pump installations for private irrigation systems would be performed by local firms lhich are reasonably competent in this field. IJith respect to ser- vice and repair of farm machinery, facilities exist in major centers. Additional repair shops are being established in rural locations. The scale of contracts and services to be procured under the Project would not attract foreign contractors. 5. BENEFITS AND JUSTIFICATION1 5.01 Benefits from the Project would materialize to participating farmers, to the ACC and to Jordan's economy. Quick benefits would accrue from increased production of vegetables; benefits from new vineyards would materialize within three to five years; from stone fruit, citrus and olive groves after a period of five to seven years. 5.02 Through investment in land and water, tree crops and vineyard development, participating farmers would modernize and increase fruit and vegetable production. The financial rate of return on the full investment - 12 - cost would range from 17 per cent in olive grove developiaent to 60 per cent in the development of blue-grape vineyards. The expected financial returns which would commence writhin the time periods indicated in 5.01 above would enaole the borrowers to repay their loans from ACC within five to twelve years. 5.03 The proposed Project would enable ACC to continue the lending program initiated under the first IDA Credit. ACC wjould benefit through upgrading of its technical staff and through further improvements in its institutional strength. The further improvements in loan appraisal, admin- istration and collection will lead to increased recoveries and to a con- sequent strengthening of ACC's financial position. 5.04 Jordan's comparative advantage is greater in the intensive pro- duction of fruits and vegetables where yield, quality and financial returns are higher, than in the production of cereals or other staples w-here Jordan's average yields are below those of neighboring countries. The output of fruits and vegetables, which accounts for over half of Jordan's agricultural production, will further increase through the investment contemplated under this credit. After about 12 years the proposed investment wiould generate incremental annual outputs of fruits and vegetables of approximately 95,000 tons, iath an estimated value at farm prices of JD 2.8 million. About one fourth of this could be exported, which would add JD 680,000 or US$2 million to Jordan's export revenues. Assuming that the resources would be allocated to subprojects as estimated in Annex 2, tables 1 and 2, the return to the econony would be over 30 per cent. 6. CONCLUSTONS AIE@ . CXOIWNDATIONS 6.o0 The Project is a part of the second stage of an agricultural credit program directed principally at the expansion and improvement of Jordan's productive land and w-ater supplies, with concurrent development for fruit and vegetable production. The demand for investment capital in such development is great. Participating farmers would realize satisfactoxy results. 6.02 The Project is sound and suitable for the proposed US$3 million credit. The Government would be the borrower and would make the proceeds of the credit available to ACC whiclh in turn would make medium- and long- term loans to farmers. ACC is capable of administering the credit. 6.03 During negotiations, assurances satisfactonry to IDA were obtained that: a) the Government would: i) refrain from instituting moratoria that would delay repayment of loans made by ACC and would support ACC in a strict policy on loan collections (para 3.12); - 13 - ii) consult IDA about future changes in the laws governing the ACC (para 4.01); iii) consult IDA on future appointments of the General Ianager (Chairman) and the Deputy I7anager of ACC (para 4.01); b) the Agricultural Credit Corporation would: i) contribute from its own resources to the CCU's revolv- ing fund an amount adequate for the extension of the necessary short-term credit required by farmers receiving development loans *i.ho cannot obtain such credit from other sources on reasonable terms (para 2.17); ii) carry out the purposes of the credit through making available for lending to farmers the necessary funds averaging 83 per cent of the cost of approved farm development plans (para 3.07); iii) raise interest rates to borrowers from the present annual rate of five and a fourth per cent to six per cent and charge penalty rates of at least one per cent on loans in default /para 3.08(i)7, increase its staff of collectors and foreclose iSen necessary (para 3.12); iv) appraise loan applications and determine repayment schedules on the basis of projected financial returns, by means of a farm development plan /para 3.08(iii)/; v) require a feasibility report and specifications accept- able to the Natural ilesources Authority for pump irri- gation schemes involving loans in excess of JD 5,000 para 3.08(iii)/; vi) obtain prior IDA approval for loans to any individual farmer or for any single scheme exceeding JD 20,COO in the aggregate (para 3.09); vii) have its financial resources fully utilized for loans and would, without compromising its standards of loan appraisal, keep only small cash reserves for contingen- cies wshich should not exceed about JD 50,000 over and above the amounts currently required for disbursements on loans approved, such amounts being presently estimated to be about JD 300,000 (para 3,13); viii) arrange for an annual audit of the accounts by account- ants acceptable to IDA (para 3.14); - 14 - ix) make all efforts necessary to secure, within six months after signing, the services of a qualified farm produc- tion economics expert satisfactory to IDA who, wzith the assistance of two farm economists from ACC's staff, would train and supervise ACCts field technicians in the preparation of farm plans and in methods of loan appraisal (para 4.02). April 14, 1967 ANNEX I AGRICULTURAL CREDEr PROJECT THE AGRICULTURAL CREDIT CORPORATION 1. The Agricultural Credit Corporation (ACC) was established in 1960 with an authorized capital of JD 7 million (US$19.6 million). The assets of its predecessor credit institutions, mostly balances due on loans made by these institutions, are the major contribution to the paid- in capital which amounted to about JD4.3 million (US$12 million) at September 30, 1966. The objective of the Corporation is to extend loans for productive agricultural purposes. Organization 2. The Corporation is controlled by a Board of Governors, consisting of a Chairman, four Government members representing respectively the Ministry of Finance, the Ministry of Agriculture, the Department of Lands and Surveys and the National Development Board; and four non-Government members. The Chairman is appointed by the Council of Ministers subject to the Kingts approval. He recommends to the Council of Ministers the appointment of the non-GDvernment members. At present these are leading farmers from the major agricultural regions of Jordan. 3. The Board has full authority to administer the Corporation and determine its policies. Coordination with Government policies is assured through representation on the Board from the Ministries of Finance and Agriculture and particularly the National Development Board. The Corpora- tion has its own salary scales and terms of service; the staff does not have civil service status; salaries are slightly higher than in the civil service. 4. The Corporation's head office is in Amman in new premises, built two years ago. It is organized into the following sections: Administrative, Accounting, Credit, Execution and Supervision, Statistics and Research. There are twelve branches and two sub-branches operating in the main centers of the country. 5. The Chairman of the Board is the Chief Executive. He is assisted by a Deputy General Manager who like him is appointed by the Council of Ministers with the approval of the King. The present officeholders are highly regarded and run the Corporation on a sound basis. 6. The Corporation's staff numbers about 209, (about 100 in the head office and 109 in the branches) as against an establishment of 235. The staff is still inadequate both in number and professional experience to administer the existing loan portfolio and to carry out a greatly expanded program of lending operations. ACC has not-been ahle to recruit sufficient qualified personnel or to actively pursue in-service training. A number of staff members are being trained abroad, but this type of training takes a long time and risks of losing trainees are high. The recent increase in salary levels should, however, enable ACC to recruit and retain better qua> ified staff. APNEX 1 Page 2 7. The administrative orgExiization, and especially accounting and statistics, have been considerably improved since the first IDA Credit was made. The mechanization of the accounting system has been undertaken under the guidance of a US. AID expert. Two other U.S. AID experts are assisting ACC with its statistics and lending procedures, respectively. Auditing is carried out by the Government's Audit Department; one employee is permanently assigned to the Corporation for this purpose. Loan Characteristics and Procedures 8. Maximum terms of medium and long-term loans as fixed by regulations are 10 and 20 years, respectively. Terms of loans made actually range from about five years for purchases of tractors, farm machinery and livestock to no more than 15 years for irrigation projects. Periods of grace up to four years are given for investments where returns will not be realized for several years as in tree plantations. The Corporation discontinued short-term credit operations in 1963, leaving them to the Central Co-operatives Union and cooperatives. 9. A real estate mortgage is required as security for a loan. Guarantors are accepted when the borrower is not a landowner or does not have clear title to his land, but in such cases, loans must not exceed JD 500. Loans cannot exceed 60 per cent of the Corporation's valuation of the land offered as security. Because of insufficient resources ACC had in the past established various ceilings according to loan types. These were lifted after ACC received the first IDA Credit. 10. In 1964 the rate of interest on loans for farmers was raised from 4 to 54 per cent per annum at the suggestion of IDA. This rate is still below the rates of commercial banks which range from 71- per cent to the legal maximum of 9 per cent per annum for short-term operations. The Corporation has not yet applied a penalty rave or other charges for loaxLs in arrears. 11. Loan applications are received by the branches or head office directly from farmers. The practice of lending on the basis of farm plans has been developed but still is not general. The appraisal of the collateral offered as security and cost estimates of the Project are still of primary concern to ACC rather than the appraisal of returns. Decisions are made by technical loan committees, including farmers' representatives appointed by the Board. Branch Committees may decide on loans up to JD 50O (USA,400); the Central Loan Committee decides on loans up to JD 5,000 (US$14,000); loans over JD 2,950 are referred to the Board. 12. Loan disbursements are made by tranches after checks by inspectors, or on documentary evidence of progress of investments or purchase of goods. Payments for farm machinery purchases are usually made by ACC directly to the dealers. 13. ACC now makes loans to the CCU at a rate of 2 per cent per annum against 1 per cent per annum before the IDA Credit was granted. CCU in ANNEX 1 Page 3 turn lends to member cooperatives at 4 per cent and these relend to their members at 7 and 8 per cent. After a long experience of poor repayment by farmers, CCU has reduced its operations considerably over the last three years, and has been able to redeem a portion of its advances received from ACC. CCU has been reorganized and now has better control over its operations. ACC is also represented on its Board. Lending Operations 14. Table 1 shows the Corporation's lending operations by years from its inception to September 30, 1966 and the amount of the loan portfolio at the end of each period. The overall average of lending per year since the lending program under the IDA Credit started has been about 2,100 loans for a total of about JD 1.1 million per annum (average JD 520 per loan (US$1,460)). Loan collections have averaged about JD 670,000 per year. The net increase of the portfolio during the period has been about JD1.3 million. 15. The record of investments over recent years supported by ACC loans expressed in physical terms is impressive. Some examples are given below: 1963/64 196h/65 1965/66 No. No. No. Irrigation Artesian Wells 6 7 5 Cisterns 726 214 68 Reservoirs 59 42 67 Engines for pumping 49 48 60 Pumps 45 40 49 Pipes (meters) (23,534) (26,665) (47,578) Cement conduits (meters) (45,335) (17,425) (16,596) Soil conduits (meters) ( 2,520) ( 1,580) (13,325) Powerhouses 27 34 41 Farm Machinery Tractors 11 60 77 Combine harvesters 1 0 8 Tractor-drawn equipment 33 145 203 Vines & tree plantings 203,000 365,000 274,000 Subsoiling (dunums) (3,856) (1,394) (2,57h) Fences (meters) (32,000) (42,000) (78,000) Livestock Milking cows 169 220 225 Sheep 17,059 21,136 39,945 Baby chicks 41,000 63,000 44,000 ANNEX 3 Page 4 16. Loans nade uider the fir;t IDA Credit are distributed rs fOllows according to purpose: ---- Loans Made Number Amount Land reclamation & improvement 826 199,000 Establishment of tree crop plantations 681 68,ooo Development & improvement of farm water supplies 775 473O000 Farm machinery 320 200,000 Livestock development 829 450,o000 Farm buildings & storage facilities 209 114,000 On-farm development within East Ghor Irrigation Project 343 103,000 Total 3,983 1,607,000 Total related investments made by farmers are estimated at about JD 2 million. 17. The average rate of loan collections over the last three-year period has been reasonably good for loans made by ACC since inception and excellent for loans under the IDA Credit, although the experience regarding loans under the IDA Credit is short and therefore not conclusive. Repay- ments on loans inherited from other institutions have been poor, but better than expected. Collections were favored in 1963/64 and 1964/65 by good crops; they dropped considerably in 1966 because of an unusually bad crop season. The average collection rate of about 50/60 per cent per annum can be maintained only if ACC pursues a rigorous policy on collection. This low rate is reasonable in Jordan due to the recurrence of bad crop years, the still significant portfolio of old loans and ACC's policy of not granting extension of maturities. The former Government policy of moratoria on loan payments has tended to slow down repayment. Also the uncertain political situation has added to this problem. Loan Portfolio 18. Details of the loan portfolio as at December 31, 1966 are given in Table 2. As at December 31, 1966, ACC's loan portfolio included approxinatelyr 56,0o0 loans for an arnount of JD 6 million (average of about JD 100 per loan). About JD 326,000 are doubtful loans taken over from predecessor institutions. The related collections accrue to the paid- in capital. The great number of loans makes the portfolio difficult to handle. Over the last three years, ACC has been able to reduce the number of loans by about 10,000 through collections and some consolidations. Financial Situation 19. Condensed balance sheets at March 31, 1963-1966 and December 31, 1966 and profit and loss accounts of the Corporation are given in Tables 3 ANNEX 1 Pag-e 5 and 4. Not profits made by ACC over the last five years have been the follo bing: 1961/62 ...... se**&*e 96.,246 1962i"6390*0000*00000 813585 1963/64h*.****#..**.. 38,995 1964/65.... . * .*&**l . 120691 1965/66 .....oeoot 84Y430 1966 (nine months)... 28,119 Only interest payments received are taken into account, and heavy fluctua- tions in net profits relfect changes in collection rates related to the success or failure of aops. Over the period profits have averaged about 2 per cent of the average capital employed; gross income has been about 4.2 per cent and administrative expenses 2.2 per cent. lJith the strength- ening and better payment of its staff, ACC1s administrative expenses have increased. They are still, however, extremely modest; and their rate of increase has been less than the increase in income. ACC's profitability wiould be better if collection of interest wiere improved. 20. ACC's overall financial situation has improved markedly since the lending program under the IDA Credit was started. Major improvements include: a significant increase of the paid-in capital and surplus account which was credited iath all the profit, increase in loanable resources by the amount of the IDA Credit., reduction by about 50 per cent of doubtful loans and significant reduction of loans inherited from predecessor institutions. From September 30, 1963 which is the beginning of the first IDA Project, the proportion of old loans has dropped from 47 per cent of the loan portfolio to about 24 per cent at December 31, 1966. Wthile ACCIs financial situation is satisfactory at present, the possibility of a dete- rioration at a later stage is always present because of the impact which Jordan's unstable political situation appears to have on repayinents of loans. ANNEX 1 Table 1 JORDAN AGRICULTURAL CREDIT CORPORATION Detail of Lending Operations Since Inception laED(i JD) -New Loans Made-- --- Repayments--- ---Loan Portfolio-- Periods No. Amount No. Amount Date Amount 10/60-3/31/61 n.a. 457,681 -- 80,500 4/1/61 3,747,159 1961-1962 2,619 485,582 8,433 427,135 3/31/62 3,988,960 1962-1963 3,433 1,023,783 8,219 633,665 3/31/63 4,380,449 4/1/63- l0/1/63¸Z- n.a. 482,550 n.a. n.a. 10/1/63 4,553,508 10/1/63- 3/31/64 n.a. 420,257 n.a. n.a. Subtotal 1963/64 2,938 902,807 3,103 473,896 3/31/64 4,777,494 1964-1965 1,764 833,o55 3,821 707,644 3/31/65 4,797,184 1965-1966 2,042 1,193,716 4,315 691,666 3/31/66 5,253,406 4/1/66- 9/30/66i1 1,430 908,490 1,449 356,820 9/30/66 5,810,014K2 9/30/66- 12/31/66 813 335,215 1,164 158,898L13 12/31/66 5,983,012 1/ Expenditures made between October 1, 1963 and June 30, 1966 were eligible for reimbursement under the first IDA project. 2/ Net increase of portfolio during the first IDA project is: JD 1,256,506. 3/ Including renewals: JD 48,419. ANNEX 1 Table 2 JORDAN AGRICULTUiiAL CREDIT CORPORATION Detail1 of Loan Portfolio (in JD) 1/ 9/30/63 -- 12/31/66- Amount Loans Amount A) ACC's New Loans Short term 124,852 1,086 48,861 Medium term 1,186,562 7,041 2,389,959 Long term 32,934 13 26,734 To East Ghor farmers 22.191 125 17,441 To East Ghor Canal Authority 29,048 1 14,290 Under IDA Credit -- 3,851 1,400,889 1,395,587 12,117 3,898,174 B) Loans from funds provided by U.S.AID 360,291 2,441 264,398 C) Loans to Central Coop. Union 625,219 1 464,012 D) Loans taken over from various credit institutions 1,711,482 26,373 1,021,715 E) East Ghor Rural Dev. loans -- 21 8,500 F) Doubtfuhl loans transferred to ACC 460,930 15,077 326,212 4,553,509 56,030 5,983,011 Housing scheme for staff -- 3 65.529 4,553,509 56,062 6,o48,54o I/ Beginning of first IDA Project. JORDAN AGRICULTURAL CREDIT CORPORATION Comparative Balance Sheets (in JD) 3/31/63 3/31/64 _ /31/65 3/31/66 12/31/66 A S S E T S Cash in hand 323,567 326,678 708,545 741,298 265,880 Loan portfolio 4,380,449 4,774,494 4,797,184 5,253,406 6,048,S541 Village development loans 298,647 279,362 252,989 -- -- Various assets 3,865 10i,644 73,963 95,665 4,989 Fixed assets (net) 17,667 43,816 21,186 84,445 102,362 Total Assets 5,024,195 5,434,994 5,853,867 6,174,814 6,421,772 L I A B I L I T I E S Capital 4,oo8,996 4,1i4,185 4,191,289 4s288,236 4,333,905 Surplus 99,596 138,551 259,188 343,618 368,427 IDA Credit __ 237,537 582,763 977,505 1,071,343 U.S.AID loan -- -- -- -- 208,000 Inherited doubtful XQans (contra account) / 480,015 454,556 395,557 342,412 326s212 Village development )oans (contra account) 1 298,647 279,889 253,321 -- -- Borrowers' current accounts -- 206,161 148,767 154,711 32,653 Sundry liabilities 136,941 4,15 22,982 68,332 81,232 L2. Total Liabilities 5,024,195 5,434,994 5,853,867 6,174,814 6s421,872 1/ Inherited doubtful loans and village development loans are not considered as part of ACC's capital. (DR 2/ Including Treasury advance of JD 20,000 against frozen deposit with Intrabank. ANNEX 1 Table 4 JORDAN AGRICULTURAL CREDIT CORI?ORATION Profit and Loss Accounts (in JD) 1/ 1962/63 1963/64 1964/65 1965/66 19669 I N C O M E Interest on individual loans received 121,398 105,842 209,763 171,354 109,916 Interest on coop loans 5,839 6,399 6,475 6,916 5,384 Interest on deposits in banks 21,769 10,051 10,465 34,024 27,068 Other income 1,586 2,076 1,970 923 Total Income 150,029 123,878 228,779 214,264 143,291 E X P E N D I T U R E S Interest on IDA Credit -- -- 8,684 23,346 26,116 Administrative expenses 66,448 83,487 96,090 101,387 86,632 Others 1,996 1,436 3,314 5,101 2,424 Total Expenditures 68,444 84,923 108,088 129,834 115,172 Profits -81,585 38,955 120,691 84,430 28,119 Total Expenditures & Profits 150,029 123,878 228,779 214,264 143,291 Detail of Administrative Expenses Salaries 54,169 64,571 75,280 78,751 68,920 Board of Directors & Loan Committees 1,442 1,723 4,,445 4,648 3,794 Travel & transportation 705 4,004 4,402 4,531 5,258 Utilities 1,499 1,732 2,162 2,189 1,689 Books; stationery 1,329 1,544 1,593 1,055 1,105 Rents 3,587 4,194 2,159 2,158 1,947 Miscellaneous 4,927 5,719 6,049 8,055 3,919 Total Administrative Expenses 67,658 83,487 96,090 101,387 86,632 1/ Nine months. JORDAN AGRICULTURAL CREDIT CORPORATION C a s hf l ow (in JD1000) A CT U AL FO0R E C A S T 17 --------Project Period------- 1964/65 1965/66 1966/67 1967/68 1968/69 _1969,/7o 1970/71 Cash in hand beginning of period 327 709 741. 134 266 306 274 Cash Inflow Paid-in capital increases 77 97 56 35 35 35 35 Retained earnings 121 84 25 101 106 109 113 Loan collIections 709 690 653 1,050 1,068 1.,034 1.,005 IDA Credit 345 395 94 270 270 270 270 M4iscellaneouas 46 228 L2 --- - 1,9598 2.,021 1.,797 1.,590 1,,745 1.,754 1.,697 Cash Outflow Lendings 1 174 1 140 00 130 1 4001,0 Under IEDA Credit 450V T16 $7 5 Under ACC's own funds -for development 206 468 1,114. 640 740 790 790 -for short term through CCU 110 96 89 100 150 150 200 -for other purposes --17 50 10 10 10 10 Repaymuent U,S.AID loan & Treasury advance - 5 84 69 70 - Miscellaneous 56 106 218 J3 40 20 10 10 Cash in hand end of period 709 741. 134 266 306 274 237 1.,598 2.,021 1~,797 1,9590 1.,745 1,754 1.,697 1/ Thirteen mionths. ~/U.S.AID advance to ACC: JD 208,000 and Treasury advance: JD 20.,000. TIMiscellaneous fixed assets and advances to branchies. ANNEX 2 JORDAN - AGRICULTURAL CREDIT DETAILS OF THE LENDING PROGRAM Basis for Loan Appraisal 1. The first three investment categories, land reclamation and improvement, development and improvement of farm 'water supplies and estab- lishment of tree crop plantations do not constitute separate investment purposes. They are in fact complementary and dependent upon each other. In most areas, for example, land reclamation precedes stone fruit, citrus, olive grove and vineyard development. In others, the farmer will not proceed with land reclamation and tree crop planting unless he has succeeded in developing an assured -water supply. Under the proposed Credit, all these development costs would, whenever possible, be incorporated in one farm plan and -would be projected in conjunction with the financial returns by means of a cash flow statement. 2. In like manner, on-farm development in Government irrigation schemes would be projected in conjunction with the financial returns from citrus and/or vegetable production. On the basis of a farm plan, minor investments in draft animals, equipment and farm buildings would be included as components of such loans. The farm plan would also show the extent of financial assistance which the borrower is receiving from other sources such as the land reclamation scheme financed under the World Food Program or the USAID grant for land levelling. The entire investment would be appraised in terms of the projected financial returns. 3. Farm machinery would remain a separate investment category. Loan appraisal would rest on adequate utilization on the borrower's own farm and on the need for custom services which he would render. ACC's Operations outside the IDA Credit 4. Two investment categories of the first Credit, livestock produc- tion and farm building and storage facilities, would not be included under the proposed second IDA Credit. Loans for livestock, mainly for dairy farms under the first Credit were discontinued because sufficient develop- ment has already taken place considering present feed supply and milk marketing conditions. Financing of poultry, particularly for hatcheries and egg production, will be required, but not on a large scale. Prepara- tion for storage and processing facilities had not yet reached the stage considered adequate by the appraisal mission. The mission considers these investments essential for Jordan's economy, but ranks them second in priority. They may ever.tually be considered for financing under the credit if adequate justifications are provided. Land Reclamation and Improvement -- JD 300,COO 5. Land clearing as practiced in Jordan. involves high cost per unit area and would hardly be economical in many countries. It is conditioned ANNEX 2 Page 2 by the extreme shortage of arable land, and is made possible particularly in areas where rainfall or irrigation permits production of high va3ue crops. 6. The physical process, mainly in West Bank locations (west of the Jordan River), may involve blasting and piling of rocks in stone walls, terracing and subsoiling. The work is either done by hand labor, particularly in areas where labor costs are not excessive or where women perform part of the task at daily wages not exceeding JD .250, or with mechanical drilling, blasting and bulldozing. Land development has averaged approximately JD 15 per dunum, but has been substantially higher in some cases. 7. Concerned about the high cost of land reclamation and terracing, particularly in Wlest Bank areas near Hebron, the mission obtained detailed input-output data and found that farmers were using advanced horticultuxral and marketing techniques. Yields and financial returns from vegetables, stone fruit and grapes enable farmers to repay development loans within a period of about 10 years (see Annex 3, Tables 1-6). Since the first IDA Credit became effective, the area reclaimed with ACC financing has ranged from an annual rate of about 1,400 to 4L,CoO dunrum. The four-y-ear investment target under the Project aims at the reclamation of 16,000 to 20,000 dunums in total at an average cost of JD 15 to JD 20 per dunum. 8. To give further encouragement to this program, the Government has appointed a committee consisting of the Undersecretary of Agriculture, the Director of Extension and the Chairman of ACC which organizes and judges contests and awards prizes for land reclamation. Development of Farm Water Resources -- JD 340,000 9. Eighty per cent of Jordan's land area receives less than 220 mm of annual rainfall. Farm water resource development has high priority. Loans for this purpose have comprised nearly 20 per cent of ACCts loan volume since 1960. Investment in major irrigation works has been financed from other sources. 10. Specifically, ACC has been financing small dams and reservoirs, wells with pumps, pipes, engines and power house, and concrete lining of water channels. ACC loans for these purposes were JD 128,000 for the year ending September 1966 and even higher in the two preceding years. Before farmers are eligible for ACC financing of pump irrigation systems, they must assume the risk of finding water. They receive no credit until they have found good and sufficient water. 11. The Credit program has been most effective in West Bank areas, in the Ghor Nimrin on the East Bank and in the desert area near Wadi Dhuleil. When water is struck, land reclamation, as described above, starts simultaneously with the construction of the water supply system. In the same year vegetables, or fruit trees intercropped with vegetables, are planted. Development cost per dunum is high but high returns warrant loan repayment within 10 to 12 years. Entrepreneurs installing larger pump units sell water to neighboring farmers. In other cases, sevreral farmers pool their resources and share the investment cost of the pump scheme. The investors form a group which sells water to its members and also to outsiders. ANNXC 2 Page 3 12. Remarkable as the accomplishments of enterprising farmers, with the assiswance of ACC loans, may be, there are at least two serious con- straints. One is the limitation of usable groundwater resources. In certain 1-1est Bank areas, there has been some evidence of overpumping. This rill remain a problem until the groundwater will eventually be recharged iw.ith wzater from the reservoirs built on the tributaries of the Jordan River. Avare of the danger of overpumping, the Government has subjected pump sclemes to license and inspection by the Natural ilesources Authority, which agency is responsible for all water development projects. 13. The other constraint lies in the lack of experience in designing and operating major pump schemes. Jordan has capable and experienced engineers but in the opinion of the mission, ACC has failed to utilize them for these works. Farmers have often used crude designs even for costly pump schemes. The mission recormends that for purmp schemes costing more than JD 3,000 ACC should require a satisfactory feasibility study before granting the appropriate loan. ilith this provision the lack of engineer- ing knowzledge should no longer be a constraint. l4. Taking into account ground water limitations as well as past achievements, the mission's conservative forecast of lending would facilitate water supply development for approximately 9,000 dunum, at an average cost of JD 36 per dunun. ACC is capable of executing a program of this size. Tree Crop Development -- JD 400,000 15. There is a great potential for a variety of stone fruit and vineyards, particularly in locations west of the Jordan River where rainfall is adequate without irrigation. In these areas, orchards and vineyards are generally developed as a corrollary to land reclamation. 16. Citrus development in most locations requires prior land and water development. Diversification through the establishment of blocks with different orange varieties, "monthly" and "annual" lemons, grapefruit, and tangarines help farmers to minimize the effect of 3easonal price and income fluctuations. Intercropping with vegetables and with grapes provides early returns from orchards and olive groves which require a long gestation period. The range of practices and combinations is so great that the examples (Annex 3, Table 1-6) may not be representative of a large number of existing farms. 17. Farmers have ample choice and adequate supplies of planting materials from private and Government nurseries. They apply modern horticultural and marketing techniques. Some fruit growers' cooperatives compete with private marketing firms in providing essential marketing services. The produce market in Amman has been re-located and reorganized. Government and UN experts carry out experimental work to improve marketing efficiency and to develop domestic and export markets. ANNEX 2 Page. S 18. Olive grove development is carried out in many locations. Annual returns from olives tend to be lower and less reliable than returns from other tree crops. The cash flow statement (Anmex 3, Table 6) brings out the danger of excessive cost for land development which would not be compensated by commensurate returns from olives. ACC should not approve loans to olive growers whose land reclamation cost exceeds about JD 15 per dunum. Returns from olives have been conservatively estimated at 15 Kg/tree, they could be increased substantially by use of high yielding plant material and improved management. On-Farm Development -- JD 280 000 19. On-farm development involves the re-design of farm lay-out, con- struction of farm head ditches, stone removal and land levelling. At the farmer's request these services are being performed, with ACC financing, by the Agricultural and Irrigation Engineering Services Division of the Ministry of Agriculture. The Division has experienced technicians, levell- ing equipment and does good work. The rate of development could be increased if more private contractors were encouraged to execute the operations under guidance and supervision of the Division. 2o. The need for on-farm development exists in one major and in three minor irrigation schemes. The National Water Resources Authority is responsible for the construction of the water shortage and distribution system and for operation and maintenance. 21. The major scheme is the East Ghor Irrigation Project, the first stage of a phased program for development in the Jordan Valley. For the cropping season 1967, water will be supplied for irrigating 117,000 dunum on some 3400 farm units. Most units will have 30 or 50 dunum of irrigated land. Farmers who owned larger areas prior to construction of the irrigation scheme, are permitted to operate larger farms up to 200 dunum. 22. Farmers receive technical services from Government research and extension centers located in the Project area. USAID has financed the design and construction phase for on-farm development and provides backstopp- ing for the essential Government services. The Project area has some of Jordan's most fertile soils. Through land reclamation they become highly productive for growing vegetables and bananas. It is served by a network of feeder roads and by a major road to Amman. 23. Design and construction of three minor irrigation schemes is being financed by the UK Govermment. Construction of two minor schemes with earth dams and main canals on Wadi Shu'aib and Wadi Kafrein began in September 1966 and is to be completed within two years. The reservoirs will have a total storage capacity of 11.7 mcm. They will provide water for 23000 dunum of newly irrigated land and supplementary water to areas now receiving inadequate water supplies from other sources. ANNEX 2 Page'e 24. Wadi DhuLleil, the third minor scheme, likewise receiving financial and technical assistance from the UK Government, involves the development of ground water in a desert area about 40 km northeast of Amman. The scheme is programmed in three stages, each of which is to irrigate 10,000 dunum. Private growers have pioneered in this development and have established technical feasibility and profitable vegetable production on irrigated desert soils in large scale operations. The Government aims to establish the feasibility and the economics of operating small farm units. Construction under this scheme is not yet sufficiently advanced to permit financing of on-farm development under the proposed second IDA Credit. 25. On-farm development within the first two minor schemes could be financed by ACC under the proposed second IDA Credit in a similar manner as in the East Ghor Scheme, provided that construction will proceed on schedule. Farm Mechanization -- JD 520,0OO 26. Except for normal port handling charges, there are at present no significant levies on importation of farm machinery in Jordan. Major tractor and implement companies have sales and service agencies in Jordan and competition among them is keen. Mechanization has progressed rapidly, as indicated below, and the demand for tractors is strong. Tractors on hand at Tractors sold Tractors sold ACC loans for end of calendar year to farmers with ACC loans farm machinery number number number in JD 1963/64 1169 188 11 25,000 1964/65 1462 293 60 162,000 1965/66 1773 310 77 171,000 27. In the year ending September 30, 1966, ACC's loan volume for mechanization increased further to about JD 236,000 and more than 100 tractor purchases were financed. In view of Jordan's small land base, at the national and at the farm unit level, and in view of the rapid pace of mechanization in recent years, mechanization assumes a lower priority during the proposed second Credit than it had during the first IDA Credit. The investment target of JD 520,000 would permit financing tractor purchases at annual rates of about 70 tractor units and other additional equipment. 28. Farmers spend approximately JD 1 on trailers, combines and stationary threshers for every JD 2 they spend on tractor purchases. Tractors in greatest demand are in the light to medium weight class, ranging from 30 to 65 hp. Tractor owners whose farms are too small for the capacity of their equipment perform custom services for other farmers. ACC organizes tractor field days and training courses in close cooperation with the equipment comr,panies. ANNEX 2 Table 1 JORDAN AGRICULTURAL CREDIT PROJECT Estimated Cost of Subprojects and Utilization Four-Year Investment Average Cost Total Units Tarzet Per Dunumr Financed (JDIOOo) (JD) (dunums) Land reclamation 300 15 20,000 Tree crop establishment 400 50 8,ooo Farm water supply development 340 36 9,400 On-farm development 280 16 18,000 Farm mechanization 1/ (tractor units) 520 (1,250) (420) 2/ 2/ Unallocated 320 30 10,600 1/ Tractor units with complementary attachments. Farmers have been spend- ing approximately JD 1 on trailers, combines and stationary threshers for every JD 2 they spend for tractors and complementary attachments. If this investment pattern continues, JD 520,000 would finance only about 280 tractors during the four-year program. 2/ If used for land reclamation and olive tree development, approximately 10,600 d.unums could be developed. ANNEX 2 Table 2 JORDAN AGRICULTURAL CREDIT PROJECT Expected Utilization and Results Crop Area Annual Output Total to be at Full Total Value at Crop Developed Development Volume Farm Price Farm Prices (dunums) (tons/dunum) (tons) (JD/ton) (JD'COO) Citrus 12,000 4.00 48,ooo 30 1,440 Stone fruit 2,000 4.0o 8,ooo 40 320 Grapes -Green 2,000 2.00 4,000 30 120 -Blue, with trellis 2,000 3.50 7,000 45 320 Olives 10,600 0.15 1,600 80 128 Vegetables 22,000 1.50 33,000 20 660 Total 50,600 101,600 2,988 1/ Of the 50,600 dunums, 10,000 are utilized at present. Production of vegetables on this land, averages 0.5 tons per dunum yielding an estimated JD 180,000. The total incremental return from the full development of the 50,600 dunums will therefore be JD 208 million. JORDAN - AGRICULTURAL CREDIT PROJECT TANE 1 ON-FARM DEVELOPMENT, CITRUS AM) VEGETABLE PRDDUCTION REPRESENTATIVE EAST GHOR FARM, WADI YABES 10 DUNUM CITRUS, 20 DUNUM VEGETABLES Year Before Y EA R Development 1 2 3 4 6 E A9 10 PfRE-DEVELDPMENT COST FOR 30 DUINUM --- JD --- Land leveling, head ditch construction 250 Lining of head ditch 50 House and farm buildings 100 Mole 70 Sub-Total 470 Less CCU/NS AID Grant W 150 Sub-Total - Pre-developewnt cost 320 * VELOFMENT AND OPERATING COST FOR 13 DUNUM CITRUIS ORCHARD Flowing 1 x deep & 1 x shallow 28 Digging LO holes 0 JD .07 28 LOO seedlings JD .07 and laor for p3anting 36 2 Manure 35 38 38 38 38 38 38 38 38 38 Fertilizer 20 - 40 kg/duoun of 0-20-40 0 JD 1.4/g 28 44 56 56 56 56 56 56 56 56 Labor for spreading fertilizer 8 8 8 8 8 8 8 8 8 B Labor to prepare land for irrigation anc. fertilising 61 32 33 33 33 33 33 33 33 33 Water for irrigation 4 JD .001/cu.m. 10 12 17 17 17 18 18 18 18 Sd Cultivating, weeding, pruning 30 30 30 30 30 30 30 30 30 30 Support sticks and labor 36 Spraying _5 _10 10 17 17 17 17 17 Sub-Total 264 202 187 -92 192 200 200 20D 200 200 dl'DUJCTI5N C^ST FOR 20 DUN'JM OF VEGETA3LES Plowing R JD 1.5/dunum 30 Furrowing w JD .25/dunum 5 Labor A JD l/dunum 20 Manure @ JD 4/dunum 80 1000 Seedlings $ 500 fOr replanting O JD .001/seedling 30 Fertilizer 35 kg/dunse of 0-20-20 and an. sulfate 50 Sulfur dust 0 JD .5/dunuo insecticidev JD 1/dunum 30 Iabor-fOr cultivating, irrigating 40 Irrigation 800 ou.m./dunum 15 Harvesting C JO 1/ton 30 __ Sub-Total 100 330 330 330 330 330 330 330 330 330 330 -7'I!lRNS ''t from intercroping, 10 dunums citrus 50 50 citrus, 4-S orange varieties, lemon and grapefruit, tons, ( ) (5) (10) (15) (20) (30) (40) alu.e A JO 30/toe, harvest oust at ber expense. 150 300 450 600 900 1200 From tomatoes, cauliflower or other vegetables 1.5 ton/dunun 6 JD 20/ton 150 600 600 600 600 600 600 600 600 600 600 TOTAL 150 650 650 600 600 750 S00 1050 1200 1500 1800 Less Total Cost (I, II and III) 100 914 532 517 522 522 530 530 530 530 530 NET REVENUE OR (LOSS) 50 (264) 118 83 78 228 370 520 670 970 7170 F_NANCINO ACC loan release 250 Principal Outstanding 250 250 250 250 250 250 190 130 70 - Repaynent of principal 60 60 60 70 - Interest 15 15 15 15 1S 15 11 8 4 - Annual casn position after debt servioc payment (29) 103 68 63 213 295 449 602 896 1270 Finanoial rate of return on basis of incormeneal costs and r-turns - 50 percent. a/ The financial rate of return is 45 perceant uhen the Zoolr;O 'oo-erative Onion (C017) PJS AID grant for land levelling is taken into consideration. JORDAN - AGRICOULTURAL CREDIT PROJECT WATER DEVELOPIEtT, RECLAIMING ROCKY LAND, ORCHARD DEVELOPMElNT Tror 2 REPRESENTATIVE FARI, NABLUS BRANCO, TULEARM AREA 80 DENUM CITRUS ORCEADO1 KERATION NEILLING WELL - IOSTALLING PEMP. ININEARC =PIPES PER DO 00N0M FARM II RECLAIMING ao DUNUM OF ROCKY IAND _____ ____ JD/90 donr Drilling 2,000 N1esting powder, i tons g JD 60 Allo2wnoe for dry hAlno 400 Stone -Coher on-tA for oruehing Purp, 61 yielding 80-90 -u.hfacr 3,ODO 3°° i stone 150 _ Cemnnit for tend dltoh, 000 enoko EnCgie (onst range J. 2000-3000) 2,503 JO fo .6oo 240 CenIng (cost ra-oe Jr 0-800) 500 LCbor, daily vAges JO .250 for Bo-er, JD .750 for na- 5,000 Purp hOus. 8 x 12 r l,O0O Manl pipe lien 200r, Installed 260 III G2XERAL OVERHEAD EXPENSES FOR 9C D0NOM Distribut.ion pipes, 60De, intealle. 550 Ppomator-o resideenc - 700 Water reremrTors, two 500 B-rbtrl wire fence, ESNE s o 6 ntr-ede, inSal,.led 4 00 701TAL 10,710 Fare . ood, 100 m - 210 TOTAL 5,690 1,210 Ye. 1 2 3 4 S 6 7 8 9 10 JO for 80 dunnes --- I WATER EEVELOPM3NT 10,710 II LAND RECLA2RTION 5,690 III SENESAL 0V0R3HAD 1,210 IV CLTRCS CSTAfLIS8ENNT AND OPE8ATIRG COST FOR SO D7NDM OPERATON D f Plovirg 28 22 22 28 20 20 28 28 28 28 DlggOlg 3,600 holes A JO .094 144 - - - - - - - - - SeedIieg 3,6D0 a JD .1 360 2D Pletleg lor 36 - Water 144,000 no.r. . JD .005 per O0.C. 720 720 720 720 720 720 720 720 720 720 Iroor for irrigati-n 76 76 76 76 76 76 76 '6 76 76 Labor for omlti-ting, weeding, prontng 160 160 160 160 160 160 160 D60 l6D 160 Budding @ JD 36 and sopport otin:ko J.D 216 - 252 - - - - - - - - Manore and fertilieer _ 216 2716 216 216 216 216 26 216 216 Sob-Totl 1,524 1,472 1,200 1,200 1,200 1,200 1,200 1,2G0 1,200 1,200 TOTAL CiST 19,13h 1,472 1,200 1,220 1,200 1,200 1,200 1,200 1,200 0,200 RIETTURNS Net fror intgert oppieg tntaEoen, -oo-b-eon, pototeS 1,200 1,200 - - - - - - Citros, aver-ge of 5 nrange nanletee, leen, grapefroit, (tons). - - - (56) (136) (320) (LED) (640) (64o) VOlue of oitr-. at fare prices, havest Rost and cortainer at buyeo s eSpoe-e. - - - - 1,600 4,0Bo 9,600 0L,400 19,200 19,200 NET REVEc3UE NE (LOSS0J Annual (lors) re-en-e (17,734) (272) (1,200) (1,200) 480 2,000 6,400 13,200 18,000 00,002 Cuelatite (lose) r'eooe. (17,934) (15,206) (19,506) (20,606) (20,126) (17,246) (8,806) 4,354 22,354 50,354 T'INANC7ING ACG3s.A release 15,000 500 1,000 1,000 - - - - - - Prinoipal oatstandmg 15,000 10,500 16,500 17,500 17,500 17,500 16,500 34,000 10,500 5,500 R.raen,et of Principal - - - - - 1,000 2,500 3,500 5,000 5,500 CAtarent 900 930 990 1,050 1,050 1,050 990 840 630 330 Annual net oneh positiro fter debt serTice psy-entS 5/ (3,834) (702) (1,190) (1,250) (570) 530 4,910 8,060 13,570 13,370 FinoRial rate of retarn on in-Seetent in (1) LTed reelareetin) (2) Water nopply develnpeent 3 270 assaring 30-yea- life uf projeot (3) CitreS nrtablinh-nt ) V Of the 90 donor Land area, 10 dono, are loSt in the reolsonatbot pro-e, throngh tornacing ond tnrn-gh space taken op by Stone unTie. b/ Parnere ovdertaking srohrrd de.e.op-ant oN thie type would be nopeoted to ba in a position te provide a considerable p-rtiono f the fi=ds thtaeelue-, sio.s the total iovestmont is a large ose. JORDAN - AGRICULTURAL CREDIT PROJECT DEVELOPMENT OF GREEN GRAPE VINEYARD WITHOUT TRELLIS 50 DUNUM VINEYARD OPERATION Cost For Before YE AR One Dunum Development 1 2 3 4 5 6 7 8 9 JD RECLAIMING OLD VINEYARD Cutting vines, roots and buldozing 15 750 Deep plowing 10 500 Incentive payments to laborers 3 150 VINEYARD ESTA3LISHMENT AND OPERATING COST Plowing, cultivating, weeding 1-3 50 50 150 150 150 150 150 150 150 Making holes, planting, incl. cuttings 2.5 125 - - - - - - - Manure 2 - - 100 100 100 100 100 100 100 Spraying 5 - 2 25 50 75 100 100 100 1o0 100 Pruning and other labor 2 - 5 - 100 100 150 200 250 250 250 250 TOTAL COST 200 1575 175 400 475 550 600 600 600 600 GROSS RETURN Net from intercropping tomatoes, squash, melon, etc . 20 1000 1000 Grapes, in tons ( ) (.6)-(2) (-4) (30) (4o) (50) (75) (100) (100) Value of grapes @ JD 30/ton 600 900 1200 1500 2250 3000 3000 NET RETURN Anniual (loss) Revenue 400 (575) 325 (400) 425 650 goo 1650 2400 21400 FINANCING ACC loan release to farmer 800 Principal outstanding 800 800 800 800 800 600 4oo 200 Repayment of: Principal 200 200 200 200 Interest 48 48 48 48 48 36 24 la Year-end cash position after debt service payments 177 777 (448) 377 402 664 1426 2188 2400 Financial rate of return 38 percent. JORDAN - AGRICULTURAL CREDIT PROJECT DEVELOPMENT OF BLUE GRAPE VINEYARD WITH TRELLIS 20 DUNUM OPERATION, HEBRON AREA Cost for YEAR 1 Dunum JD/Dunum 1 2 3 4 5 6 7 8 9 --D JD RECLAIMING ROCKY LAND Gunpowder and blasting 3 60 Rental of comrressorGJD 10/dunum 10 200 Labor, 30 dayst JD 70/dunum 21 420 Incentive payments to laborers 3 60 Setting retaining walls 6 120 VINEYARD ESTABLISHMENT AND OPERATING COST Plowing, cultivating, weeding 1-4 20 40 60 60 60 80 80 80 80 Making holes, planting incl. cost of cuttings 2.5 50 - - - - - - - - Manure 3 - - 60 60 60 60 60 60 Spraying *5-3 - 10 20 30 40 60 60 60 60 Pruninc, and other labor 2-8 - 40 60 80 110 140 160 160 160 Posts for trellis, installation and wiring 60 - 1200 - - - - - - - TOTAL COST 930 1290 140 230 270 340 360 360 360 GROSS RETURN Net from intercropping tomatoes, squash, melons etc. 20 400 400 Grapes in tons ( ) (1 - 3-5) (20) (40) (60) (70) (70) (70) Value of blue grapes sJD 45/ton 45 - 157 900 1800 2700 3150 3150 3150 NET RETURN Annual (loss) Revenue (530) (890) (140) 670 1530 2360 2790 2790 2790 FINANCING ACC loan release to farmer 650 1000 Principal outstanding 650 1650 165o 1650 1650 13 00 900 450 Repayment of: Principal 350 400 450 450 Interest 39 99 99 99 99 78 54 27 Year end cash position after debt service payments 81 11 (239) 571 1081 1882 2286 2313 3150 Financial rate of return 60 percent. JORDAN - AGRICULTURAL CREDIT PROJECT STONE FRUIT ORCHARD DEVELOPMENT COST AND REVENUE FOR 50 DUNUM OPERATION REPRESENTATIVE FARM, HEBBON BRANCH AREA Y E A R 1 2 3 4 5 6 7 8 9 10 11 12 -- JD --- RECLAINITR ROCKY LAND Gun powder * Blasting 150 Rental of Comprssror (10-15/donum) 750 Lahor. 29 days 3 JD. 750/donom 1,100 Inocentioe paymeni (added JD 10-15 farmer's estimate) 750 S IR3SHIWNT AND OPEPATING COST Plowing, clitivating, weeding 50 50 50 50 5O 0O 50 SO SO 50 SO 5° Nakirr holn slanting (Inca. seeds) 50 - - - - - - _ _ _ -upport 0t1cks - ChAnging supports - 100 _ 150 - - - -- - - _ _ Spraying - 25 30 40 50 50 50 50 50 50 50 50 Labor for grafting a pruning - - 20 35 50 50 5o 50 5° 50 50 50 Manure every 4th year - - - - - 300 100 100 100 100 100 100 Gere ral labor ard overhead 150 200 250 250 250 250 250 250 250 250 250 250 Total C,st 3,000 375 350 525 400 700 500 500 500 500 500 500 ,ROSS RETURNS Net from intercropping tomntoes and other vegetables 1,250 1,250 - - - - - - Yield in tons ( ) - - - - - (50) (75) (100) (125) (125) (150) (20C) Value at farm prices 0 JD 40/ton (range JD 40 to JD 50/ton) - - - - 2,000 3,000 4,000 5,000 5,000 6,oo0 8,0o0 NiT RETURNS Anrual (Loes) or Revenue (1,750) 875 (350) (525) (400) 1,300 2,500 3,500 4,500 4,500 5,500 7,500 Cousulative (Locs) or Revenue (1,750) (875) (1,225) (1,750) (2,150) (850) 1,650 5,150 9,650 14,150 19,650 27,150 FINANC INO ACCGs Loan Release to Farrer 2,400 - - Amount De ACC 2,400 2,400 2,000 2,000 2,000 2,000 1,600 1,200 800 Repaysmnt f Principal - 400 - - - 400 400 400 900 Interest 144 144 12C 120 120 120 96 72 48 - - Annual net cash position after debt service paymrnts 5°6 331 (47C) (645) (520) 780 2,004l 7,C28 3,652 4,5cC 5,500 7,500 The Finan-ial rt- of r-t-ro would te a'.ot 45 per rent. °l!t JORDAN - AGRICULTURAL CREDIT PROJECT OLIVE MROVE DEVELOPNENT COST AND RETURNS FOR 80 DUNUM OPERATION Y E A R 1 2 3 4 5 6 7 B 9 10 11 12 --- JD --- LAND 11ECLA!lTiON, OLI1Ti GRnrVE DEVFLOPPENT AMD OPERATING COST a/ Blasting, clearing, sub-soiling, terracing- 1,200 - 800 grafted 8 year-old trees 800 - 80 Digging holds and planting- 160 Plowing and weeding- 80 80 80 80 80 80 80 80 80 80 80 80 Watering (4 times annually)-/ 200 200 Pruning and general care 24 24 24 2)4 2) 24 24 24 24 214 24 24 Total 2,!46l 304 184 1014 104 104 104 104 104 104 104 104 ANNUAL RETURNS Yields alternating (5-10-15-20-25) 15 kg./tree-' - - - - (600) (1,000) (1,200) (1,200) (1,200) (1,200) (1,200) (1,200) Value G JD .08/kg d/ - - - 480 960 960 960 960 960 960 960 NET REVENUE OR (LOSS) (jj4) (3) (T1) (17) 376 6 6 856 __ _ __ FINANCING ACC's loan release 2,000 240 - - - - - - - - - Amount due ACC 2,000 2,240 2,240 2,240 2,240 2,240 1,843 1,422 975 501 - - Repayment of Principal _ - _ _ _ 397 421 447 474 5ol - - Interest 120 131 134 13h 134 13)4 110 85 58 31 - - Annual net position after debt service payment (584) (198) (318) (238) 242 325 325 324 324 324 856 856 Financial rate of return is 17 percent. a/ When land reclamation costs exceed a level of JD 15 per dunum, the returns from olive trees ere not commensurPte with the investrent costs. b/ Wages at JD .5 per man day. c/ Tield though alternating as indic&ted wou;ld average 15 kg/tree with 10 trees per dunum. a/ Cost of harvesting at contractor's expense. LAKE TIBERIAS ) . /j5g S Y R I A A;,~~~~~~~~~~~" |' RAMT-iA * IRBID JENINE W.YABIS 7 \ - j <;0f - N*MAFRAQ , 0 TULKARMEAST GHOR "'AAS - (oTULKARM CANAL PROJECT JARASH *NABLUS Zarqa B - | .°QUAL.Q[LIYA \ -'tr rON ~ 000Q0 DHULAIL PROJECT ( ' t / \ S A LT / Do AZ ZARQA SALT E 2 ~~~~~KAN~REIN 5H EIB~~~~~ .HE C AT R- * AMMAN {) ~~~~~P^OJECT ' JERIC1OO ) JERUSALEM / / e /; < ,- J W.WA/ala ' UHEBRON /~~~~~ ~ '~ TL'E - i W. E . zY ' Kvitb R E - _- *-< 0 . , ' W t - '_o T U R K R ,,~~ ~ ~ ~~~~ l a C: ,'KARAK , ._ r A~~~~~~~~~~~~SRAEI.-y l SUD -f ........................................ E G Y PT 0I TAFIL~~ NK. f / %< TAFILA §,,>s,,> JORDAN '' LOCATION OF AGRICULTURAL / " . , ' -- CREDIT CORPORATION OFFICES j/ -- _ xisB ,' ' AND IRRIGATION PROJECT j , / ' AREAS j . ( DAM SITES J L ! . X 0 j t; IRRIGATION PROJECT AREAS EAST GHOR CANAL j '. 1 * A. C. C. BRANCH OFFICES ||-/ '! - 200MM ISOHYET PATTERN *MA'AN 10 5 10 20 30 'OKM FEBRUARY 1967 IBRD-1907R1