Document of The World Bank FOR OFFICIAL USE ONLY Report No. 13588 PROJECT COMPLETION REPORT INDIA KERALA SOCIAL FORESTRY PROJECT (CREDIT 1514-IN) OCTOBER 6, 1994 Agriculture Operatins Division India Department South Asia Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. PROJECT COMPLETION REPORT INDIA KERALA SOCIAL FORESTRY PROJECT (Credit 1514-IN) CURRENCY EQUIVALENTS Name of currency (abbreviation) = Indian Rapee (Rs.) Currency Exchange Rate: Appraisal Year Average (1984/85): US$ 1.00 = Rs.11.89 Intervening Year Average (1985/86-1991/92): US$1.00 = Rs.15.94 Completion Year Average (1992/93): US$1.00 = Rs.26.41 FISCAL YEAR GOI and all States: April 1 to March 31 WEIGHTS AND MEASURES Metric System ABBREVIATIONS CPCRI Central Plantation Crops Research Institute ERR Economic Rate of Return FD Forestry Department GOI Government of India GOK Government of Kerala KAU Kerala Agricultural University KFRI Kerala Forest Research Institute KSFP Kerala Social Forestry Project M & E Monitoring and Evaluation MTR Mid-Term Review NGO Non-Government Organization SAR Staff Appraisal Report SFW Social Forestiy Wing WB World Bank FOR OFFICAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Of foe Dof.atotoe-G&~ Opwatonm Evaluaon October 6, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT Subject: Project Completion Report oll India Kerala Social Forestry Project (Credit 1514-IN) Attached is the Project Completion Report on India: Kerala Social Forestry Project (Credit 1514-IN), approved in 1984. Parts I and II were prepared by the South Asia Regional Office and Part II was prepared by the Borrower. The project was the sixth in a series of ten Bank-supported social forestry projects in India. The main objectives of the project were to increase farmers' incomes and self-sufficiency in wood products; establish plantations to increase production of fuelwood, poles, and small timber; and strengthen the Social Forestry Wing of the Forest Department. The project included a component to promote production of medicinal plants and benefit tribal people. The project satisfactorily met its main objectives: incomes have been improved; wood production has been increased; soil erosion has been reduced; and institutional capacity for social forestry in Kerala has been strengthened. Returns to plantation investment are higher than expected at appraisal because of high value wood production. These achievements were made possible because the project was implemented flexibly. The appraised project was not closely tailored to agroecological conditions in Kerala, nor to the priorities of stakeholders. The blanket approach to farm forestry adopted by Bank-supported social forestry projects in India was successfully modified during implementation. The project did not, however, benefit the tribal population significantly, and the modest targets set at appraisal for this component were reduced following the Mid-Term Review. The quality of the PCR is satisfactory, with one exception: the weak performance of the tribal forestry component is not explained. But in this and other regards, the PCR findings of the Bank and the Borrower are consistent. The outcome of the project is rated as satisfactory, with modest institutional development impact. Sustainability is uncertain because the future availability of financial resources to operate and maintain project components appears to be in doubt. The project may be audited. Robert Picciotto by H. Eberhard K6pp Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT INDIA KERALA SOCIAL FORESTRY PROJECT (Credit 1514-IN) TABLE OF CONTENTS PREFACE ...................................................... i EVALUATION SUMMARY ......................................................................... iii PART I. PROJECT REVIEW FROM BORROWER'S PERSPECTIVE ......................... . 1 1. Project Identity ............................... 1 2. Background ............................... 1 3. Project Objectives and Description ............................... 2 4. Project Design and Organization ............................... 2 5. Project Implementation ............................... 3 6. Project Results ............................. 8 7. Project Sustainability ............................... 10 8. Bank Performance ................................................................................. 10 9. Borrower Performance ....................... 10 10. Project Documentation and Data ..................... 10 11. Lessons Learned ....................... 11 PART II. PROJECT REVIEW FROM BORROWER'S PERSPECTIVE ............ ............. 13 PART III. STATISTICAL INFORMATION ....................................................... 40 1. Related Bank Loans and/or Credits ............................... 40 2. Project Timetable ............................... 40 3. Credit Disbursements ............................... 41 This document has a restricted distribution and may be used by recipients only in the performunce of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. 4. Project Implementation ............................. 41 A. Physical Targets and Achievements .............................. 41 B. Staffing, Civil Works and Vehicles ....................... ............................. 42 5. Project Cost and Financing ............................. 43 A. Project Cost .............................. 43 B. Project Financing .............................. 43 6. Project Results .............................. 44 A. Direct Benefits .............................. 44 B. Economic Impact ............................. 45 C. Financial Impact .............................. 45 D. Price of Outputs .............................. 45 7. Status of Covenants ............................. 46 8. Use of Bank Resources .............................. 47 A. Staff Inputs (staff weeks) .............................. 47 B. Mission Data .............................. 48 TABLES 1. Exchange Rate and Inflation Factors .49 2. Cost Overruns. 50 ANNEX 1: FINANCIAL AND ECONOMIC RE-EVALUATION. . 5 1 i PROJECT COMPLETION REPORT INDIA KERALA SOCIAL FORESTRY PROJECT (Cr.1514-IN) PREFACE This is the Project Completion Report (PCR) for the Kerala Social Forestry Project for which Credit 1514-IN for SDR 30.6 million (US$31.8 million equivalent) was approved on July 31, 1984. SDR 4.5 million was cancelled on December 5, 1991 during the funds redeployment exercise. The Credit closed on March 31, 1993, 15 months behind schedule. Final disbursement from the Credit was made on August 19, 1993 and the balance of SDR 1.3 million was cancelled. The Preface, Evaluation Summary, and Parts I and III of this report were prepared by an FAO/World Bank Cooperative Programme mission which visited India in September/October 1993. Part II was prepared by the Government of Kerala (GOK). Preparation of this report is based, inter alia, on the Staff Appraisal Report, the legal documents, supervision reports, correspondence between the Bank and the Borrower, internal Bank memoranda and reports, field visits and discussions with the Kerala Forestry Department and the Bank staff in New Delhi and Washington. iii PROJECT COMPLETION REPORT INDIA KERALA SOCIAL FORESTRY PROJECT (Credit 1514-IN) EVALUATION SUMMARY Objectives 1. The main objectives of the project were to increase farmers' incomes and self- sufficiency in wood products through plantation of trees, making special efforts to involve tribal people; increase fuelwood, small timber and poles by establishing plantations on land belonging to the Government and other institutions; and strengthen the Social Forestry Wing of the Forest Department and related institutions with provision for investment in extension, research and training. Implementation Experience 2. The project was implemented over a period of eight years and four months as against the six years planned at appraisal. Total planted area surpassed the appraisal targets. Implementation of the institutional development component was slow at the start, and the targets for additional staffing and vehicles were still not met at completion. The number of private nurseries which emerged during project operations, exceeding the appraisal estimate, declined dramatically following the discontinuation of the buy-back arrangement towards the end of the project. Seedling quality improvement undertaken by the project included identification of "plus trees" for seed production and collection, and formulation of seedling grading standards. However, limited attention was given to the management of "plus trees," and seed procurement for project plantations continued to be from uncertified sources and with limited quality control. Seedling grading standards were not used in day-to-day project operations, partly because of the large scale seedling production. Plant mortality was high. Technical guidance and supervision provided for private nurseries was not up to the level recommended at appraisal, and the project initiatives did not lead to major technological improvements either in nursery operations or in plantation development and management. 3. Farm forestry has been dominated by high value timber species compared to casuarina, acacia and eucalyptus recommended at appraisal. This change in stand composition has arisen from the farmers' preference for species of commercial value. Establishment of plantations on government lands has prevented further degradation of these sites. Similarly, plantations in coastal areas have become effective shelter-belts against wind and water-induced erosion. Plantations in institutional lands have not been protected well, resulting in illicit felling and damage to growing stock. Given the high literacy rate in Kerala, the project's publicity efforts have worked well. However, the expectation that the existing agricultural extension system would provide follow-up guidance did not materialize. 4. Compared to several social forestry projects in other parts of India, the implementation of the project's research component has been successful. Training activities, however, have come to a stand-still following the termination of the project and the training facilities established under the project remain underutilized due to budgetary constraints. For the same reasons, new plantations have recorded a sharp decline after project closure and the services of almost all the iv staff belonging to the Social Forestry Wing are not fully utilized. The actual cost of implementing the project was Rs.897 million - with about 50 percent increase over the appraisal estimate of Rs.599 million (US$54.5 million). Results 5. The project proved successful in achieving its main objectives: it has improved farmers' income earning opportunities, increased wood production, helped check water and wind erosion, and strengthened institutional capacity. It did not, however, benefit the tribal population significantly. The expected returns from plantation investments are far higher than anticipated at appraisal, mainly due to the high value wood production. A key accomplishment has been the strengthening of FD for implementing a larger statewide social forestry programme capable of generating benefits in the long term. Sustainability 6. Sustainability of several of the activities initiated through the project is in doubt because of the non-availability of budgeted funds. Lessons Learned 7. The key lessons learnt in the implementation of the project are as follows: 8. A blanket approach to farm forestry, similar to that adopted for other social forestry projects in the country, was followed, irrespective of prevailing farmning systems characterized by tree and annual crops in Kerala. Tree species provided under this approach (mainly for fuelwood and fodder) were at variance with farmers' preference for commercial species. In the design and formulation of the projects, macro-level data should be reconciled with locality-specific data/information in order to ascertain the perception and priorities of different stakeholders. For example, surveys to determine species preferences of farmers, market prospects, and site compatibility should have preceded the design of the project and would have led to more accurate predictions of planting material requirements. 9. Contrary to expectations at appraisal, farmers plant trees on their own land primarily to obtain cash incomes, rather than to meet their domestic fuelwood needs. The project's fuelwood production goals, therefore, could have best been achieved by plantations on public land. 10. While free or subsidized seedling distribution contributed positively to the achievement of the project's planting targets, in the short termn, it tended to undermine the fiscal sustainability of the project after the completion of the disbursement period. 11. While designing project implementation units (e.g. Social Forestry Wing) for execution of defined project activities, consideration should be given to the eventual integration of the unit with other wings of the FD structure, thereby meeting sectoral requirements for human resources. This has the advantage of promoting staff morale and ensuring the long-term stability of the organization. 1 PROJECT COMPLETION REPORT INDIA KERALA SOCIAL FORESTRY PROJECT (Credit 1514-IN) PART I. PROJECT REVIEW FROM BORROWER'S PESPECTIVE 1. Project Identity Project Name Kerala Social Forestry Project Credit No. 1514-IN RVP Unit South Asia Region Country India Sector Forestry 2. Background 2.1 Kerala, with about 29 million people and 39,000 km2 of total geographical area, is the most densely populated (700 persons/km2 or three times the national average) state in India. About 29 percent of its land area is under forests, and 60 percent under cultivation. More than 90 percent of the landholdings in the state are less than 1.0 ha in size, and land use involves a mix of several crops including trees (rubber, coconut, arecanut, and cashew - often intercropped - which account for over 60 percent of the cropped area), and foodcrops (paddy and tapioca) and spices (pepper and cardamom). The state contains a large number of enterprises engaged in the production of plywood, veneer, pulp and paper, which use wood as raw material and fuel. In recent decades, forested areas available for exploitation have declined and sources of fuelwood supply have not expanded in pace with the growing demand from the increasing population. To alleviate the situation, the Government of Kerala (GOK) has been implementing since 1982 a series of social forestry schemes which have shown the potential for increasing both wood production and farm incomes. 2.2 The Kerala Social Forestry Project (KSFP), implemented with World Bank assistance, represented the largest of such schemes and covered the entire state of Kerala. It was also the sixth in the series of ten projects in India supported by the Bank with total IDA credits of some US$500 million, mostly for social forestry development in several other states of India including Uttar Pradesh, Gujarat, West Bengal, Jammu and Kashmir, Haryana, Karnataka, Rajasthan, I-limachal Pradesh and Maharashtra. In addition, a Forestry Research, Education and Training project has recently been appraised at an estimated cost of US$56.4 million with institutional and physical infrastructure components. 2 3. Project Objectives and Description 3.1 The objectives of KSFP were to: (a) increase farmers' incomes and self-sufficiency in wood products through their plantation of trees, making special efforts to involve tribal people; (b) increase production of fuelwood, small timber and poles by establishing plantations on available government lands, along railroads, canal banks, roadsides and coastal belts, and grounds of educational and other institutions; (c) reduce the effects of water and wind erosion, and lessen pressure on existing forests; and (d) strengthen the existing Social Forestry Wing (SFW) of the Forest Department (FD) and related institutions, and their capability to conduct a statewide social forestry programme which would yield benefits in the long-term. Project components included: plantation activities (85,300 ha) including farm forestry (69,200 ha), large and small block plantations on government lands (11,000 and 1,000 ha respectively), plantations along coastal, railway, roadside and canal strips (2,000 ha), special (tribal) fuelwood plantations (2,000 ha), and medicinal plants (100 ha) pilot scheme, plantation protection, extension and publicity, training, research and studies, and institutional development. 3.2 As appraised in 1984, this project was to be implemented over a period of six years at a total estimated cost of US$54.5 million (Rs.599 million) including an IDA Credit of US$31.8 million. The Credit became effective in March 1985, providing for retroactive financing from January 1984. 4. Project Design and Organization 4.1 The project design appropriately focused on the key elements of assistance required for the implementation of a large-scale social forestry programme in the state. It correctly emphasized a low-cost farm forestry component (81 percent of the total planting target area), complementing it with needed infrastructure and support services including orientation/reorientation training for the staff of the Forestry Department and related institutions. The project also sought to address, on a pilot scale, poverty alleviation concerns through support to the tribal population (tribal fuelwood and medicinal plants component). Small and large block plantations on public land aimed at reducing pressures on existing forests, and minimizing water and wind erosion. Seedling pricing has been an area of concern from the early stages of the project cycle. At appraisal, it was expected that a limited number of seedlings - 500 casuarina and 500 of other species - would be distributed free to each participating farmer and seedlings in excess of this free limit should be paid for at the actual financial cost of production. This was intended to meet the requirements of small farmers and gradually build up incentives for the transfer of this operation eventually to the private sector. For reasons explained in para 5.21, this strategy has been neither effective nor practicable. 4.2 In order to give singular attention to social forestry development, special provision was made to strengthen the capacity of the Social Forestry Wing in the Forestry Department to implement the project. In retrospect, however, it would appear that adequate attention was not given at the formulation stage to the possibility of integrating the functions of the Social Forestry Wing and other wings, e.g. Territorial Forestry Wing of the Forestry Department. Similarly, there was inadequate recognition of the need to align the project proposals with those of ongoing projects for the development of tribal communities living in forest areas. Past experience shows that the Forest Department alone could not advance the interest of the tribal population through tree planting without supplementary investments which would generate quick returns (e.g nurseries, medicinal plants processing/marketing and small ruminants production). 3 5. Project Implementation 5.1 The project was implemented over a period of eight years and four months instead of six years as planned at appraisal. The Credit Agreement was amended on three occasions (September 1989, October 1990, and November 1991), to allow a higher proportion of the costs to be met by IDA. The project underwent a Mid-Term Review in 1987, and a revision in December 1990, when the Government of India (GOI) and World Bank (WB) decided to extend the project until 31 March 1993. Following this and the 1991 Credit amendment, planting targets were increased from 85,300 to 127,100 ha. The increased target covered mainly farm forestry (87,000 ha) and large block plantations (37,000 ha) and was financed from Credit savings resulting from the devaluAtion of the rupee. There were no major changes in other components. 5.2 Plantation targets. Total planted area surpassed appraisal target by 32 percent but did not reach (by 12 percent) the expanded target set at project extension. As shown in Part Ll4A of the Report, there were shortfalls vis-a-vis the targets set at project extension in respect of area planted under farm forestry (9 percent), large block plantations (27 percent), and tribal fuelwood plantations (10 percent). On the other hand, there was an increase in the area under small block plantations (170 percent). The tribal medicinal plants scheme met its revised target. As compared to appraisal expectations, strip plantations achieved only 54 percent of the targets, and the farm forestry component registered a decline in its share of the total planted area from 81 percent to 71 percent. This was largely offset by the increased share of the second largest component, i.e. block plantations (from 13 percent to 24 percent). Given that plantation densities were well below appraisal estimates (see para 5.10), the total number of trees planted was below the appraisal target. 5.3 Other targets. The institutional development component for strengthening the Social Forestry Wing of the Forestry Department provided for incremental staffing (360), civil works, mainly residential and office buildings (521), and vehicles (359). Implementation was slow at the start, and the targets for additional staffing and vehicles were still not met at completion. Due to largely local budget constraints, only 73 percent of the planned positions were filled, and 65 percent of the vehicles procured. Some of the divisional posts were filled with junior level officers (e.g. Assistant Conservator of Forests instead of Deputy Conservator of Forests). In earlier years, unduly low schedules of rates for civil works were reported to be main factors contributing to contractor reluctance to take up construction work. These rates were later revised in 1991. Although the total expenditure on civil works was less than the appraisal allocation (in US dollar terms), the number of works completed exceeded the appraisal target by 36 percent. Residential buildings accounted for the larger proportion of this increase and most of them were constructed during the last two years of the project, utilizing a part of the Credit savings. Most of the buildings have been well constructed and utilized for the intended purposes. 5.4 Private and departmental nursery development and production. Seedling production for farm forestry and public plantations was to be achieved through the establishment of a network of (1,055) private and (50) departmental nurseries. Family-operated (landowner and two family members) nurseries of 80,000 to 110,000 seedlings per annum capacity were expected to play an increasingly dominant role in seedling production. However, instead of targetting individual families, project management promoted the involvement of voluntary groups and non- governmental organizations (NGOs) in the establishment and management of these nurseries. This was done to avoid any perceptions of favouritism in the selection of nursery operators, and for equity considerations. Because of quick and high returns, several of the voluntary groups/ NGOs participated. The success of this experience was influenced by timely disbursement of payments due to them. Where project payments were delayed, even the motivated voluntary groups were reluctant to continue with nursery operations. 4 5.5 The number of private nurseries, which exceeded the appraisal target by reaching a maximum number of 3,168 in 1988-89, has since declined to 426 (in 1991-92) mainly in response to the discontinuation of the buy-back arrangement followed under the project, whereby the project purchased all seedlings produced for distribution to applicants. Most seedlings were raised in polypots and their density was infuenced by polypot size. 5.6 Private nurseries produced, on average, 150 seedlings per m2 as against the production rate of 100 seedlings/M2 estimated at appraisal. This is within the expected nursery operational efficiency rates of projects of this kind. However, their unit size and capacity were below th,e appraisal estimate. The Departmental nurseries (consisting of about 26,000 nursery beds), with a seedling production rate of 150 to 160 seedlings/M2, continued to be the dominant source of seedlings for private and public sector planting activities. At project completion, only 34 percent of total seedling producdon was from private nurseries, and the expectation that the private sector would become the primary source of seedling production did not materialize. 5.7 Nursery technology and management. The project contributed to impart and transfer improved nursery development and management technology to the private sector. This was done through providing training and supplying the required inputs, e.g. seeds and polythene bags, to the participating private nursery operators. 5.8 Surveys funded under the project have reported 40 percent plant survival in farm forestry as compared to 55-60 percent in public plantations. This difference is attributable to high rates of pre-planting seedling wastage (in farm forestry) rather than differences in the quality of seedlings produced in private and public nurseries as surmised by some. Given the generally favourable rainfall conditions in Kerala, the reported plant mortality rate is high. Field observations indicate that this could have resulted from high moisture stress (drought) - micro- climatic conditions in the project area. 5.9 Seedling quality improvement initiatives undertaken by the project included identification of "plus trees" for seed production and collection, and formulation of seedling grading standards for important social forestry tree species. However, there was limited management given to these "plus trees" (e.g for crown thinning and exposure for better seed production), and seed procurement for project plantation activities continued to be primarily from uncertified sources and with limited quality control. Seedling grading standards were not used in day-to-day operations of the project, partly because of the scale of seedling production. Similarly, no initiative at the seedling production stage was taken to improve farm forestry plant survival rates by increasing seedling tolerance to moisture stress and drought, which 60 percent of farm forestry survey respondents identified as the main factor in high plant mortality. These operational difficulties could have been addressed by: (a) incorporating grading standards in the seedling production system itself, i.e. by controlling seeding and seedling density; manipulating polypot dimensions, and nursery bed or seedling nutrient management; and (b) favouring production of seedlings with high root-shoot ratios by varying seedbed seedling density, polypot size, fertilizer composition and frequency, and applying techniques like root-pruning. Technical guidance and supervision provided for private nurseries was not up to the level recommended at appraisal (for instance in 1988-89, the ratio of forester to the number of private nurseries was 1:16 as against the recommended 1:5). 5.10 Private and public plantations establishment. Provision was made in the project for the free distribution of seedlings, up to 3,000 casuarina and 500 seedlings of other species, including eucalyptus and Acacia auriculiformis per family for farrn forestry. Over 80 percent of farm forestry planting has been done by farmers with holdings of less than one hectare. Each beneficiary, on average, planted 25 seedlings, 95 percent of which were planted on farm 5 boundaries and homesteads. The established plantation composition, however, does not correspond to Staff Appraisal Report (SAR) expectations. Instead of casuarina, eucalyptus and acacia, farm forestry has been dominated by high value timber species such as ailanthus and teak. These changes in stand composition have arisen from the farmers' preference for species producing higher value products. A key characteristic of these changes is the need for increased plant spacing (i.e. about 4 m2 per plant) which would lead to lower biomass production. 5.11 Casuarina and Acacia auriculiformis have been planted on public lands in line with the appraisal report's proposals. The planting density for both species has been about 4,000 plants/ha as compared to the high density of 4,500 and 10,000 plants per ha for acacia and casuarina respectively, recommended in the SAR. Although the SAR recommended high density could be consistent with the original main objective of the production component, i.e. fuelwood production, it was inappropriate to the home-garden conditions of Kerala. The effective stand density in established stands ranges from 2,000 to 2,223 trees/ha. Stands established under the strip component are similar to block plantations in species mix and stand structure. 5.12 Plantation management technology. Post-planting management in farm forestry has only been carried out in block plantings which constitute only 5 percent of these plantations. For teak block plantations, these include weeding and soil working, fertilization and irrigation, and in some cases, branch pruning to improve stemwood quality. However, in the case of boundary and homestead planting, no post-planting care has been taken of the trees as farmers at this point do not see any value in the activity. Protection by fencing and harvest-scheduling have been the only management activities carried out in respect of plantations on government land. Lack of appropriate arrangements between the project and the participating institutions for protecting the established plantations has led to illicit felling and removal of trees, particularly in strip and institutional plantations. 5.13 The farm forestry plant survival rate estimate (40 percent) is based on the number of seedlings distributed and not on plants actually planted by the beneficiary. Field observations indicate that a significant proportion of the mortality has been a consequence of high seedling wastage (i.e. seedlings distributed but not planted), especially in the early years of project implementation. Some of the wastage could be attributed to the unrealistic emphasis on acacia and casuarina seedling distribution. These species were less compatible with the existing farming system and not preferred by the beneficiaries who were primarily interested in planting high-value species like teak and ailanthus. These problems could have been minimized if appropriate pre- plantation surveys had been carried out to determine farmers' preferences. 5.14 Furthermore, trends in survival rates (35 percent to 40 percent in farm forestry and 50 percent to 55 percent in public plantations) and productivity estimates (10 to 12m3/ha/yr as compared to l5m31ha/yr), indicate that project initiatives did not lead to major technological improvements in either nursery operations or plantation development and management. The project did not address critical problems such as high mortality due to moisture stress and drought. As discussed earlier, apart from actions aimed at increasing drought tolerance of seedlings through improved nursery management, simple moisture conservation techniques including mulching would have gone a long way in mitigating this problem. Similarly, the provision of marketing guidance based on a standing tree girth to volume conversion table would have helped farmers to estimate the volume of their wood production and enhanced their negotiating power at the time of sale of their tree products. 5.15 The establishment of plantations on government land has prevented further degradation of these sites. The coastal strip plantations have become effective shelter-belts against wind and water-induced soil erosion. However, the present harvesting plans, which involve 6 almost total biomass harvesting, do not give adequate attention to soil nutritional aspects of plantation management. Such a high level of biomass harvesting can result in 'export' of large amounts of soil nutrients from these areas. Therefore, it would be essential that FD, while developing silvicultural and harvesting regimes, gives due importance to this aspect of sustainable wood production. 5.16 Protection arrangements. Another area of concern relates to lack of satisfactory arrangements for protection of public plantations established, both in institutional and degraded forest areas. The arrangements for long-terrn protection were not worked out in advance for institutional plantations. Consequently, after the termination of FD's activities in these lands, the benefiting institutions have not taken over protection responsibilities, resulting in illicit felling and damage to growing stock. Plantations established in degraded forest areas face similar problems due to lack of well-defined responsibilities for the local communities. Although, project management organized about 300 village panchayat committees to protect these plantations, only 160 were actually established, and most of them remain non-functional. 5.17 Publicity and extension. The project's provision for publicity was mainly used for dissemination of information through radio, film-shows and news media, and publication and distribution of materials on nursery and tree planting techniques. Given the high rate (over 95 percent) of literacy in the state, this approach worked well. It resulted in creating awareness among the public about the possibility and profitability of growing trees outside the traditional forest lands. It also led to the emergence of a large number of voluntary organizations, including women's associations, interested in operating nurseries and promoting farm forestry. The Social Forestry Wing maintained good liaison with extension staff of the Agriculture Department and made use of the available rural extension facilities, e.g. "Krishi Bhavans" (farmers' meeting points) to propagate farm forestry and distribute seedlings. However, the expectation that the existing agricultural extension system would lend support for providing follow-up guidance did not materialize, as indicated by farm forestry survey results which show that up to 70 percent of the beneficiaries did not receive any planting/post-planting extension advice. 5.18 Training. Training funds were mainly used for: (a) the construction of a training centre in Arippa, situated at about 60 km away from Trivandrum; (b) Forest Department staff training; and (c) training of farmers and representatives of voluntary organizations. The Arippa Training Centre was constructed at a total cost of Rs. 11 million. All the civil works, including classrooms (with a capacity for 200 trainees), dormitory, staff and guest quarters covering about 5.7 ha of land area, have been completed, and equipment and furniture procured as planned. GOK has endowed the Centre with about 200 ha earmarked for its future expansion which, given the land scarce situation in the state, reflects the state's recognition of the importance of forestry training. Since it became functional in 1990, the facilities available in this Centre are reported to have been used for training some 2,500 persons including representatives of panchayats and NGOs, and agricultural extension workers (30 percent of whom were women), in social forestry operations. Training activities have, however, come to a standstill following the termination of the project. Consequently, the Centre now remains unused, due to lack of budget for training activities. 5.19 Project funds were used both for domestic and overseas training. Three state-level forestry officials benefitted from overseas training in communication technology and social forestry. Some 34 senior forestry officials of the Social Forestry Wing participated in the project- funded study tours to various national centres in forest administration and management, grassland development, and agro-forestry. Orientation courses and seminars/workshops on social forestry techniques were organized within the state in collaboration with the Kerala Agricultural University and other institutions for about 850 FD staff. The project also conducted short-term orientation 7 courses for farmers, women's groups, student "nature" clubs, and representatives of voluntary organizations. The short-term nature of the training courses organized, non-utilization of training consultancies, and the apparent reluctance of the government to use Credit funds, especially for overseas training, have contributed to the less than full use of the appraisal allocation. 5.20 Research and studies. In comparison to several WB-funded social forestry projects in other parts of India, the project has been successful in the implementation of its research component. A commendable aspect is the effective collaboration between the Forest Department and research institutions in carrying out social forestry-related research. From the outset, the advice of a Technical Committee consisting of representatives from the Social Forestry Wing, Central Plantation Crops Research Institute (CPCRI), Kerala Forest Research Institute (KFRI), and Kerala Agricultural University (KAU), was used to identify research priorities and define the scope of project research studies. The project financed a number of investigations relevant to social forestry operations in the state and covering a range of subjects, e.g. wood supply and demand, traditional and improved agro-forestry systems, seed collection procedures, and medicinal plant propagation. Most of these studies were completed on time. The results of some of these studies, e.g. Biomass Yield Tables with information on production allocation to different tree components, and documentation/analysis of social and ecological dimensions of indigenous agro- forestry systems in Kerala, could provide a sound basis for future planning of social forestry development and management in the state. 5.21 Seedling pricing. In the initial years, the Social Forestry Wing was reluctant to sell seedlings lest it might adversely affect implementation of the farm forestry component. Further, during the same period, seedlings were also being distributed free of cost under other ongoing schemes in the state. Moreover, the arrangement to distribute part of the seedlings free of charge and sell the rest not only imposed a cumbersome record keeping but resulted in 'binami' transactions by beneficiaries to evade paying for priced seedlings. At the recommendation of the Mid-Term Review (MTR), cashew and grevillia seedlings distributed under the project were priced in 1988-89 at Rs.0. 10 for basketed plant. This price was subsequently eliminated later due to resistance from growers. A second attempt was made in the following year to price the seedlings at Rs.0.65 for ailanthus, Rs.1.25 for silver oak, and Rs.0.25 for teak stumps. For other species which were distributed in excess of the free distribution limit of 10 naked-root and 3-basketed seedlings, prices were fixed at Rs.0.02 per naked-root and Rs.0.10 for containerized seedlings, respectively. 5.22 Tribal plantations were originally included to benefit the socially backward and poor tribal population living in and around the forest areas. Following the Mid-Term Review, these plantation targets were reduced from 4,200 to 2,100 ha which, in turn, reduced the involvement of tribals and hence their employment opportunities in the project plantations. The area under tribal medicinal plants was also small and of an experimental nature, incorporating numerous species, many of which have no market. There appears to be no indication either that the tribals would be continuing with the schemes introduced under the project or deriving any major benefits therefrom. 5.23 Monitoring and evaluation (M & E). As planned at appraisal, an M & E office was established in 1986. It implemented a monitoring system in accordance with the "Operational Guidelines to the Monitoring and Evaluation of Social Forestry in India" formulated by GOI and WB. The office also monitored the physical and financial progress of the project, and conducted farrn forestry surveys for 1985-86. For other years (1987-1988), these were undertaken by the Economics and Statistics Department of the State Government. Other investigations initiated by the M & E unit include evaluation of plantations by KFRI (1985-1990), study on wastage of seedlings (1987), and an impact study by consultants. Computers provided under the project proved useful 8 in upgrading the monitoring process. Two posts of M & E supervisors and three posts of instructors, however, provided under the project were not filled. As a result, data processing and analysis work was adversely affected. Overall, the establishment of the M & E unit improved information collection and its documentation. However, the linkages between this unit and the planning and field divisions were limited, so that there is little evidence that implementation decisions were affected by the outcome of its studies. 5.24 Project cost. At the time of appraisal, the project was estimated to cost Rs.599.2 million (US$54.5 million) or Rs.7,025/ha over a planting area of 85,300 ha. The actual cost of implemen,ting the project over 112,373 ha of planted area was Rs.896.8 million (US$52.1) or Rs.7,980/ha, representing a cost overrun of about 50 percent in rupee terms or nearly 14 percent in per ha/rupee terms. The depreciation of the rupee against the US dollar has, however, led to an under-run of 5 percent in costs expressed in dollars. As expected, about 60 percent of the costs (compared to 58 percent at appraisal) were incurred directly on plantation activities. Total project costs at appraisal and completion of the project are given in Part III/SA. As shown in Table 2, the cost increase of 50 percent in rupee terms was caused by escalating prices and wages, which accounted for 44 percent of the additional costs; and quantities higher than the appraisal estimates which accounted for 6 percent of the additional costs. The breakdown of cost overruns is presented in Table 2. 5.25 Cost control. The project design has sought to reduce the cost of plantation models by allocating the largest share to the least cost plantation system (i.e. farm forestry). The design however acknowledged the additional benefits (production of poles and fuelwood on otherwise unproductive land, generation of considerable employment and conservation of land) obtainable from block plantations on government wasteland, which were sufficient to justify its high cost. It was considered appropriate to limit the extent of generally high cost strip plantations. Appraisal expectations have, by and large, been met as total cost per ha at project completion is estimated at Rs.5,320 (farm forestry), Rs.15,886 (large block plantation), Rs.8,713 (small block plantation) and Rs.10,750 (strip plantation). The overall project cost increase of 50 percent is partly explained by a reduction in the share of low cost farm forestry plantations, i.e. 71 percent of the total planted area compared to 81 percent foreseen at appraisal. 6. Project Results 6. 1 The project was successful in achieving its main objectives: it has improved farmers' income earning opportunities, increased production (though less than expected) of fuelwood, poles and timber, helped check water and wind erosion, and strengthened the institutional capability of the Social Forestry Wing of the Forest Department and related institutions. It did not, however, benefit the tribal population significantly, limiting their involvement to very small-scale plantation schemes. The project has directly generated 2.30 million person-days of employment from plantations, about 30 percent higher than targeted at appraisal. Despite its overall achievements, the project suffered from some serious shortcomings. These related to distribution of seedlings without ascertaining farmers' preferences, high seedling wastage, lack of attention to moisture stress and drought which adversely affected plant mortality, and lack of satisfactory arrangements for protection of public plantations. 6.2 Production. Current estimates place the eventual size and distribution of production at 5.2 million m3 of fuelwood, 9.9 million m3 of timber, and 1.2 million m3 of poles, giving a total production of 16.3 million m3 over a 32-year production cycle, which equals only about 33 percent of the appraisal estimate. This large shortfall in project production is due to: (a) lower effective plant densities in farm forestry, i.e. 1,000 plants/ ha compared to the SAR estimate of up to 3,000/ha; (b) reduced effective densities in public plantations - one-half to one-fourth of 9 SAR projections because of a combination of low initial planting densities and mortality; and (c) Mean Annual Increments (MAIs) ranging from 8m3 to 12m3 per ha, compared to the SAR estimate of 10 to 15m3/ha for different species. 6.3 At appraisal, 72 percent of total production was expected in fuelwood and poles, and 28% in timber and peelers. However, as a consequence of change in the species mix and effective densities in response to farmer demand, the product mix would be 39 percent and 61 percent in fuelwood/pole and timber respectively. In spite of the reduced volumetric production, in farm forestry, the expected returns from plantation investments are far higher than anticipated, mainly due to production of high value teak and ailanthus. 6.4 Financial analysis. Financial rates of return, not estimated at appraisal, have been calculated based on PCR estimates of biomass yields and prices, detailed in Annex 1. The cash flows for the main plantation models (taken over a 32-year period), have been estimated using average level of costs updated to 1992/93. Costs are calculated per hectare and 1992/93 constant prices are used for both costs and returns. Farmers' labour inputs and products accruing to rural households have been valued at imputed prices equal to market wage rate (Rs.40/person-day) and prices ranging from Rs.20/pole to Rs.1,200/m3 for timber (see Section 6D of Part III). The opportunity cost of land is valued at Rs.1,000/ha/yr for only block planting by farmers which is assumed around 5 percent of the area planted to farm forestry, and Rs.100/ha/yr for grazing areas in public land. The results of the analysis show favourable rates of return ranging from 33 percent to 57 percent depending on the type of planting. 6.5 Economic re-evaluation. An economic re-evaluation has been undertaken for the project as a whole and for three of the five sub-projects. In line with the methodology of the SAR, no benefits have been included for the pilot tribal programme for the cultivation of medicinal plants which only account for 0.1 percent of total planted area. Similarly, production from tribal fuelwood plantations has been excluded due to inadequate and incomplete monitoring data. This accounts for less than 2 percent of total planted area. The analysis has been carried out in 1992/93 prices with past expenditures restated in 1992/93 price terms using the wholesale price index. Phased investment costs in financial terms, as well as in economic terms for the purposes of the analysis are shown in Table 1. The details regarding planted area and expected yields, as compared with the assumptions at appraisal, are in Annex 1. The following conversion factors have been used in converting the financial prices to economic values: Unskilled labour including farm labour 0.70 Standard conversion factor (SCF) 0.80 Output prices, in financial and economic terms at stump, are summarized in Part III/6D. A 32-year period of analysis has been used for the purposes of estimating ERRs. 6.6 Based on the above assumptions, species mix and yields, the current estimate of ERRs for the project as a whole and for the two sub-projects (farm forestry and departmental plantations) are 33 percent, 45 percent, and 29 percent as compared with the appraisal estimate of 26 percent, 33 percent, and 15-26 percent respectively. A combined analysis was undertaken for the departmental plantations (large block, small block and strip plantations) in the absence of adequate segregation of investment costs. The improved output prices (especially for timber) and shift of species mix to high value items have more than offset the reduced survival rate (40 percent in contrast to the appraisal estimate of 60 percent). 6.7 The sensitivity analysis indicates that a reduction in benefits by 20 percent would lower the ERR for the project as a whole to 29 percent; a reduction by 50 percent would lower the 10 ERR to 22 percent; while an increase in cost by 20 percent and by 50 percent would reduce ERRs to 30 percent and 27 percent respectively. A combined reduction in benefits and increase in costs by 50 percent will lower the ERR to only 16 percent. The project is therefore not sensitive to variations in either costs or benefits. 7. Project Sustainability 7.1 A key accomplishment of the project has been the strengthening of the Forest Department, and related institutions, to provide support for implementing a large-scale tree planting programme outside the traditional forest lands over the long term. However, sustainability of the programme is in doubt because of the non-availability of budgeted funds, particularly for plantation development in public lands with the result that the strengthened institutions cannot be effectively utilized. At present, the services of almost all the staff (about 300) belonging to the SFW, are not utilized for want of a budgeted programme for forestry operations. Similarly, the physical facilities established through the project are likely to remain under-utilized in the absence of such support. Sharp declines in the scale of post-project plantation programmes and in the training activities at Arippa centre are indicative of this problem. Project plantations generate adequate resources generally providing surplus revenue to meet continuing development needs. A revolving fund mechanism, as recommended by the Bank missions, appears to be an ideal option to keep aside funds for sustaining project forestry operations. 8. Bank Performance 8.1 The Bank support to the project until its completion was satisfactory. The supervision missions included competent foresters familiar with the local situation, as well as with operational aspects of social forestry projects in other parts of the country. Besides providing continuity in their staffing, the Bank supervision missions made useful contributions towards adoption of bio-engineering soil and moisture conservation techniques. The Bank responded flexibly in dealing with problems of financial management. The decision to increase disbursement percentages helped to relieve local funding shortages and attain higher targets but in so doing could have reduced the pressure on the state government to allocate the funds required to sustain the institutions. Timely extension of the project closing date enabled the government to utilize the Credit savings for expanded operations. 9. Borrower Performance 9.1 The project was the first major effort in the forestry sector ever undertaken by the state government. Inspite of this , the FD adapted itself well to the project implementation needs. The Social Forestry Wing responded positively to several of the recommendations of the supervision missions. A noticeable shortcoming was lack of progress in the establishment of the "Revolving Fund" to utilize the returns from project investments. The effectiveness of some of the project operations was hampered by a number of factors, including delays in the release of local funds, limited deployment of project staff for supervising private nurseries and monitoring and evaluation of project activities. 10. Project Documentation and Data 10.1 The SAR provided a general framework for project operations. In retrospect, it would appear that it should have been supplemented by an implementation manual specifying technical and management aspects of plantation development (i.e. nursery layout, application of I1 seedling grading standards, stand establishment procedures including pre-plantation surveys, silvicultural practices, and harvesting regime) for enhanced project performance. 11. Lessons Learned 11.1 A blanket approach to farm forestry, similar to that adopted for other social forestry projects in the country, was followed, irrespective of prevailing farming systems characterized by tree and annual crops in Kerala. Tree species provided under this approach (mainly for fuelwood and fodder) were at variance with farmers' preference for commercial species. In the design and formulatiop of the projects, macro-level data should be reconciled with locality-specific data/information in order to ascertain the perception and priorities of different stakeholders. For example, surveys to determine species preferences of farmers, market prospects, and site compatibility should have preceded the design of the project and would have led to more accurate predictions of planting material requirements. 11.2 Contrary to expectations at appraisal, farmers plant trees on their own land primarily to obtain cash incomes, rather than to meet their domestic fuelwood needs. The project's fuelwood production goals, therefore, could have best been achieved by plantations on public land. 11.3 It would have been advantageous to broaden the definition of farm forestry targets by including both the area planted as well as the number of households benefited. 11.4 While free or subsidized seedling distribution contributed positively to the achievement of the project's planting targets, in the short term, it tended to undermine the fiscal sustainability of the project after the completion of the disbursement period. 11.5 While designing project implementation units (e.g. Social Forestry Wing) for execution of defined project activities, consideration should be given to the eventual integration of the unit with other wings of the FD structure, thereby meeting sectoral requirements for human resources. This has the advantage of promoting staff morale and ensuring the long-term stability of the organization. 11.6. When a component (such as the medicinal plants pilot scheme under this project) forms an insignificant proportion of the total project investment and is outside the direct purview of the implementing agency (FD), it receives only slight management attention and seldom attains its goals. 12 PART II. PROJECT REVIEW FROM BORROWER'S PERSPECTIVE 13 KERALA SOCIAL FORESTRY PROJECT CREDIT 1514-IN PROJECT COMPLETION REPORT - PART II SOCIAL FORESTRY WING, KERALA FOREST DEPARTMENT THIRUVANANTHAPURAM. JULY 1993 14 Kerala Social Forestry Project (CREDIT 1514-Iro Part II PCR Introduction: The Social Forestry Progranme in Kerala with the assistance of the World Bank started in the year 1984. The agreement was executed on 12..12..1984+. As per the project doct"ment the period of the project was fixed as six years 1984 to 1990. The original cost of the uroiect in terms of SDR was fixed as 30.6 million and US ` 31.8 million in rupee terms Rs.599.1 million. The important objectives of the project and the compo- nents are narrated below:- - to increase the farmer's incomes and self sufficiency in wood products through their planration of trees; to increase production of fuelwood, small timber and poles by establishing plantations on available Governzment lands, along the sides of railway lines, on canal banks, roadsides and coastal belts and on the gro;nds of edu- cational and other institutions; - to reduce the effects of water, aztd wind erosion and lessen pressure cn existing forests; 15 - to strengthen the eixsting Social Forestry Wing of the Forest Department and related institutions and their capability to conduct a State wide Social Forestry Prograrze which would yield benefits in the long term. The project consists of the following camponents: 1. Distributicn of 340 million seedlings under farm forestry to raise plantations of about 69,000 ha.; 2. Large and small block plantations in Government land totalling 12,000ha.; 3. Strip plantation of 2,000 ha. along canal banks, road sides, railway sides and coastal belts; !-. Special plantation schemes for tribal peoole to th- extent of 2,100 ha.; 5. Establishment/ir-prov,r-nt of small family co3rated nurseries and large nurseries serring departmental plantations; 6. An intensive progra=ze of extension and publicity, strengthening the linkage between Sccial o.-restry and Agricultural Extension; 7. Training for Social Forestry staff, Volantary and other interested organisations and farers, and strengthenirg of selected institutions for Social Forestry Training; 8. Research activities including development of reco-men- dations to be transmitted to the farmers by exten--_on and evaluation of planting prcgramares, carrying cu: of forestr; related research and studies and a wocd supply and demand study; 16 9. Improving the capability of mall farmers and schools to handle nursery work and increasing the role of voluntary organisations, and rural communities in Social Forestry; and 10. Monitoring and evaluation of the project in accordance with the guidelines for 1 onitoring and 3valuation develooed by Government of India and IDA. By the year 1990 the Social Forestry Project achieved the complete physical targets laid down in the original project for farm forestry and bLock plantation. Civil works were also progressing and other activities like extension training, research and studies, monitoring and evaluiation were all pro- grassing. The rate of exchanga of rupee is Dollar and rupee Vs SDR depreciated considerably and as a result of which the physical targets were revised. There was about Ps.4-00 million available in the project account. This necessitated for the extension of the project frcm 1990 for two more years uzto 1993. In the extension proposals submitted in 90 it was proposed to undartake additional planting activities to the extent of 16,1+10 ha. in the degraded forests and civil works 1+10 additional buildings and purchase of few vehicles and equiDments etc. In farm forestry 4.5 crores seedlings were targett,.d for distribution. 17 The combined achievement are furnished below: Achievement s: Large Block Plantations - 27027.01 Small Bkock Plantations - 2696.149 Strip Plantations - 813.74Y + 200.93 Km. Tribal Fuelwood Plan - 1665.10 Tribal Medicinal Garden - 112.60 Civil Works - 507. No. Farm Forestry - Distributed 38.49 crores seedlings equivalent to 79969.50 ha. Research & Studies: The Kerala Social Forestry Project has a Component Research and Studies. We had entrusted thrae Research In- stitutions viz. Kerala Forest Research Institute, Kerala Agricultural University, Central Plantation CroDs Researc:n Institute - a wes research projects and The follc-ing stu- dies have been cc=oleted and fin2l reports received. :Iame of Eesearch Project AgencyJ 1 . Ccccnut based Agro-forestr-y Systems. - C.P.C.R.I., Kasargcde. 2. Oil Palm Based Agro- forestry. - C.P.C.R.I., Kasaragode. 3. Demand and Supply` o" Wood and theirFuture Trends. - K.F.E.I., Peechi. 18 4.~ Litter Dynaflics root nodulation K. .R.I. and microrizhial association Peechi. in Accacia AuricIfiiQf:o)iF ~'.Water use 01 se ecctea indigenous and exctic trees. - K.F.R.I., Peechi. 6. Propagaticri of Xedic-nal Plants Bamboo and Rattan by -P*ehi- tissue culture met!.cds. Peechi. 7. Studies on yield fr ALcacic. - K.F.FR.I., Plantations in Kerala. Peechi. 8. Exploitation of indigenous -K.k.U multi-purpose tree species Vellayani in Agro - Scc-' Forestry Syster's. 9. Seed viability and e.ina- - tion studies in selected Vellayani. forest tree species. The project hiad spent approximately ziz.87 crores till 31.3.1993 sinee it: inception. 19 PART -II (a). Adequacy and accuracy of factual information in Part-III of the P.C.R. WJe have not received the Part-III of the P.C.R. from the Bank. Hence unable to comrent at this stage. (b). Comments on analysis of Part-I of the P.C.R. As the Part-I of the P.C.R. has not been received from the Bank till now, we are unable to offer our Comments. (c). Bank's Derformance during the evolution and imole- mentation of the Droject. The success of the Kerala Social Forestry Project is mainly attributable to the co-ordination and Co-operation extended by the Bank and its staff during the implementatior of the project. The Bank's personnel consisted of professionals in all relevant disciplines. The mission members were experienced in their resoective fields. The over all performance of the Bank during the implementation was extremely good. Lessons learned. 1. The Social Forestry Project of Kerala learned certain lessons which are slurrarised below while implementing tne programme. 20 2. Onc2 the Bank sanctions the loan a 'Pass Boo'k System' should be introduced. The pass book will contain the details of the loan amount and the subsecuent with- drawals o-f the crediz by way of 'reimbursement claims' and the balance at credit in the borrowers' account. In the case of Kerala Social Forestry Project a monthly disbursement summary was received intermittantly thrDugh the Government of India. The monthly disbursement summary did not contain the current exclhange rate at which tLhe loan amount has been debited. As a result Df which the borrov;er could not calculate the amount available in his credit at a particular point of time without consulting Government of India. This information will enab:le the pr3ject authorities to formulate their plans and ta'-e aonrooriate steos for speedy implementation of the -rDject. 3* Flexibility rpeuired: The prinject document contains the sanctirned amount for different cormonents of the project. Hoxever, when the actual imolementation takes place there mar' be a few interlinked activities to be carried out whic` inay not find a place in the approved project document. Such interlinked activities would supnlement and act as complement to the whole activities which have been undertaken. In such cases the project authorities a7e not given the liberty to allocate fund1s for the inter- linked activities. Therefore, a flexible aporoach 21 is required in respect of allocating money to the project components and some flexibility to be made available to the Project Manager. Thlis flexibility may be fixed in terms of the perzentage of financial target of each component. 4. Timely release of funds: As per the usual pattern of funding the State Government have to snend the amount first, and claim reimbursement afterwards. It has been our experience and as per the available recoris in our office,the reimbursement claims 'were combined two or three together and the amounts released. Though during 1992 advance payment of the financial assistance was sanctioned on some occasions; it was not done regularly. There-fore there should ye periodic release of amounts in advance to the State Government within definite intervals. This will enable smooth and timely inplementation of the programmes. The assistance received may have to be utilised by operating a separate treasury account free from any treasury ban. 5.. Monitorinc: Monitoring o- the project by the Bank should xegin with the commencement of the project work, as against its commencement from mid-term appraisal. This would enable to strengthen the monitoring and evaluation activities and take anpropriate decision in time. 22 6 ) 2O.n)obi;ion Iof ta zuperv iion 22j_ion! The sazervisory mission should consist of not only ciualified oersonnels -'iO orofes_ionals from the Xan:c but also bome local -ne7iers from 1ifferent .iweciolines so that the as_es -ient of tho -rojec-. ao well as a->.res_ing the oroobens at the tioe of irole-ient-tion coui be mnde nore effective. 7 ) T.he n_-.l LDr i a in2- re resentative In tle station 7 T-ti( ett1 nc-zr or reo r)r . entative_ J.0n5 . tJl t'o1 9: jj:ct uut.a.-1nt Lin aatoo:rlty _-O to h) 3orrDr o vn oerforiawce oux± jLv n jo .u--jau on OLt-z if th o1 .1Dj-c-,tth t-O C- u.-L enonm~izi on le3ons leLarned tLat oa{ be relevant for^ tne fture. -he oci- 1oDreztr, iin 1 il not h Z- any ia-or nroDLe s .I^i_ inolt-mentatinr- i-ci L ?ore .try rr -ea in er2 a. The tar et_ li 'own in t.-e a 9 rAvJtl Oroject 1ocu.ient %4erc _c ;e-e weli . itnin the tine. 23 The Bank'r .u?ervi-ory mi.jion taave oeen n- j review rcDrt6. The -tnn and recoa 7nlltLonu conc-lnto in tne report were also conniied witn to toLe extunt Do±n±ie. The covenents of t02 project oi2ve been compiied witn in tine. The project ri&,6 created better ozoitive ij2jact aiasn tne PCeoJe oi Kterula. nLle o±Liowin& are t,ie Xunnacy of tnO ?oOWtive indicatorf 1. The ecope of a-ro-fOreetry in Keraa have increasel with the adv,nt of the Social Forestry ProL-ramme. The tree growing habits of the peoole have chan.,el an- stren;gthenel further the gh of a-ro--fore.try ound aultiole tree cronDins oattern. One of the brilliant feature, which can he f'ounl in KeraLa is that every r-o3uehDiA how,ever snail, g-rows both aLricultaral an! fore:tryr >secies. ToiA ha. been reflected in the fLro fore_try Žurveyj conlucted by tne te rt nrnt. It exoiibitd tdoat 7>,) Of tce op?uLltl on on an "verage/ reoi.Ured seedLin6s for growin- in i'utare. 2h'lo bnowo tOe institutiona-iiation of toe O3ciai. z loreLtry 2robraooe in tne .tate aL a wnoie. 24 2. in tnt sbucceedinb years it ha been foLund oat tent tLoe d.Liaand ifor tiobzr o2ecieb e s>eciaiiy teezj, has been very high. The fruit bearing trees were also in great de nanl. Si nilarly 'Ailanthus is anot'er soecies 4 which is in great de-nanl. This wiil show the comnosition of the agro-forestry sy tei prevailinc- in Veraia, Trnich has been ezt-.'lihed hy tlhe Socil1 Forestry Frograme. 15. M-any intitattion- who ha1 a-3telands osoered and co-ooer--te! 'itn the S'oc i..l 'rore-try iing in afforet.in- the entire ar2- t wL)iCn ia g breat ac h ie vG xe zent. Lxt Cnsive wa.-teiandz avaZilitbie witn Univer,itie--, 'i-..D.C n:D,ovrl. fic , KA.C.T CYCHMI- etc. n-ve been Lffore zd ;uct_2-f Ljy. It a fac-Ct tLiat botLi Lideb of tnt: .ation2.' HircIdy. 3ver i3n, diDtaLcu- have bten covered by Xtrio piantstionz by ti:- cOciai Foret:y i.nl -.&i wnicn ev_n no. btan1 ad ta te ztiiony to the baucce-., of the Dro-ramne. 5. As a re&aut of the advent of the Social Forestry Progra-nqe,a joint awarenes3 in greening has oicked uo among the oeoole. The oeoole are aware abhct the environnent an" it_ necessity for ore servatiDn anl the need for creating environmental conservation plans and the ill effects of defore-ttation. Soil Conser- Vi vation methods were adooted. Propa6ation about the 25 Social Forestry activities were carried out through various audio-visual mediums to the people and they are now aware of the programme. The "unanimous will -of the people is to grow more trees. 6. Enhancement of area under the forests:- There has been an increase in the area covered under planting which has added upto the total area of forests of Kerala. More than ten thousand hectares of fallow land comprising those along railway lines, road sides, institutional compounds and other Revenue lands have been afforested with good stocking. They are all outside the reserved forest. 7. As a result of undertaking the Social Forestry Programme the infrastructure for the forest department has considerably -creiated and many assets have been created and which would not have been possible had not the Bank provided the finance. Some of the major buildings -are: i. The Social Forestry Headquarters at Thiruvananthapuram. ii. The Arippa Training Centre iii. Regional Offices at Kollam, Kottayan and Kozhikode. Besides,-. District Level Offices, Quarters, dormitories etc. have been constructed. Thus the total assets in terms of buildings doubled during the 8 year period of the project. 8. Augmentation of many failed plantations and degraded forests within the reserve forests increased the biomass to a considerable extent. '; 26 Experi nces The project document laid-down farm forestry, block plantations, extension and training and Civil works as the major components of the project. The main t:hrust the project document Was given to the farm forestry programme in which seedlings were distributed to the public for planting in their homesteads. In the initial stages seedlings were distributed free of cost but later on pricing of seedlings was introduced gradually. (i). Farm Forestry Programme. As already stated this component constituted about 81% of the total planting programme. The farmers in most parts of Kerala are sophisticated tree growers and they have wide range of horticultural tree species such as account, cashew nut, arcanut etc. The objective as envisaged in the project was to increase the income and self sufficiency of the small farmers by adopting the Social Forestry programme as they will grow small timber, poles and fuelwooc and fodder species. The unique feature of the farming community is that majority of the land holdin,gs are small ie. less than 2 hectares. But at the same time the farmers grow multiple tree species in the available lands, which formed -a unicue land use patterm- During the Mld%-tm appraisal of the project it was suggested that there has been a large demand for seedlings but the supply has to be channelised in. a careful manner so as to avoid wastage of seedlings. A distribution register 27 was maintained from each distribution centre which contains the relevant details about the seedling distribution programme.. The NGOs were involved in the distribution of seedlings. Further, the mission appraisal; suggested that regular inspections should be carried out to avoid wastage and the Forest Department should provide better training to the farmers as well as NGOs. It was also further pointed out that the farmers should be given the freedom to select the species. While pointing out the need for better extension activities, it was brought to the notice that in many cases the extension snould focus on the following: (a). Right spacing. (b). appropriate species. (c). Planting of seedlings in a shady area. (d). Tackling weed menace -l - ^ (e). tight Pit sizes. (f). Application of I44Ptes and fertilizers and insecticiLdes. In the subsequent years the above points were considered in great detail. Consequently to avoid wastage, pricing of seedlings was introduced initially in four districts in 1988-'89. There was desistance from the farmers and the off-take of seedlings was considerably low. After the bitter experience in the district of Kollam, were cashew seedlings/distributed f;ee of cost as demanded - by the local people. ,, 28 Afterwards the department started limiting the supply of free seedlings to a particular no. and thereafter charging a nominal price. After great resistance this was accepted by the people. The department resorted to charging of production cost and the current practice of charging the production cost is being continued. The Govern=ent also co-operated with the department in issuing the order in accordance with the species. IMPROV.LD Z=:-,SION AND TRAINING FACILITMS. Originally jit was conceived that extension should be carried out through the Agricultural 3xtension T&V system prevalent in Kerala. But as the system did not work well we had to resort-to our own way of imparting training and extension work. The Kerala Agricultural University was involved in giving training, to the people. Similarly in the latter years the "Krishi Bhavans" of the Agricultural Department were also involved in imparting information on Farm Forestry to farmer groups. As per the monitoring and evaluation survey report on farm forestry it was recommended triat the extension support should be strengthened further in the farm forestry sector for better results. The wing yielding to this recommendation charted out training prograxmes for farmers, voluntary organisations, iNGOs. These training programmes are conducted from the institute at Arippa and also from 29 the Regional Eitension Centres established for the purpose. Apart from this training, monthly work shops, seminars , exhibitions and audio-visuals programmes,group discussions are arranged and large numbers of farmers participate in the programme. Role of Voluntary Crganisations:- The Social Forestry Wing in the initial stages entrusted the work of distribution of seedlings to the NGOs/Voluntary Organisations. The Voluntary Organisation arranged distribution centres, at the time of seedling distribution and maintained the distribution registers. It was experienced at that time many of the NGOs were not doing their work properly and there were wastage of seedlings. This has been pointed out in the farm forestry survey report as well as in the evaluation report. To avoid this the wing resorted to giving some incentives to the voluntary organisations for the good work done by them. For eg., a small unit of the NGO like Sports & arts club will be given a sports kit as incentive. This enabled better distribution of seedlings avcided wastages of 5eedlings considerably. 30 During last year we have established th- Panchayat Comm.ittees for the distribution of the seedlings, The committees were formed with the officials and representa- tives from the Department, Panchayats, Voluntary Organi- sations and local Villagers. They were given the choice to select the type of species to be distributed and they were given money fcr taking up the nmrseries in accordance with the demand for local spocies. it functioned extremely well and ncw the committees are continued. With the involvement of the Panchayats the decentralised Micro-Plannin4 system was introdiced in the Kerala Social Forestry activities. The committees will also make an assessment of the available resources in the village and tailor the Social Forestry Programme accordingly. This was i.a contrast to the earlier centralised system of decisicn making by the Forest Department. Nurseries: in the initial stages of the project, nuirseries were established by the Forest Department itself to produce the required-seedlings. Usually, the nulrseries are established very near to a water scurce. Subsequently it was found tnat training in nursery management are required and this was also imparted frcm the Training Institute at Arippa. Grading of seedlings: The quality of the seedlings prodaced from the nuirseries were checked regularly and it was found that the quality required to the improved. Therefore, "grading of seedlings" were introduced and the grades were presc-ribed and seedlings produced for distributicn. 31 juidelines were issued with regard to the 'package of practices' to be adooted for better niarsery management. This is being continued. Decentralised nuirseries and Private nurseries To encourage the local people to take up nurseries to to a decentralised nursery sche,me was adopted. Under the scheme public were given a sapling and the poly bag, and they have to fill the bag with soil and grow the seedlings. After tne seedlings reach a particular height they are free to sell these seedlings in the open market and if they are unable to sell the department will come to rescue by offering a 'buy back' price 4 30 paise per seecilings which has been subsequently enhanced to 45 paise per seedlings. Many missi_ns visited and after tneir recommendations it was decided that the ccmpositicn o.f private nurseries in the total nurseries will have to be enhanced to that of 661; and the remaining 33% will have to be establishea by the department. The directions issued by the aorld Bank that for departmental Dlantations seedlings will have to be purchased from the private nurseries was also adhered to the extent possible. But this was not possible in all cas-s since some of the platations were far, in the interior wn-re decentralised nuirseries did not exist. Regular Assessment:- The Farm Forestry survey has been regularly conducted tc assess the survival percentage of the seedling distribilted under the programme. s per the survey the survival percentage hovers round 40%,interalia, the survey also made an indepth ,ontne reason for mortalitv of the seedling d.stributed anc the future trends and extension activittes 32 etc. The recommendations of the survey were timely acted upon in the subsequent years. Plantations: Block plantaticns represents the second largest component of the Social Forestry Programmes. Different categories of block plantations were envisaged in the project report. As per the project report the different categories and large block, small block, strip, tribal fuelwood and tribal medicinal gardens. Block plantations, barring a few, maintain good standard. Tribal fuel wood plantations are the same as other fuel w_od plantaticns except in-their locaticn. Medicinal gardens .:ave not succeeded in most of the cases as they are qiai new and mare,etting has not been properly estanlished. Supervisory aissions visited and reccmmended that the strip plantations should be raised in two or three rows and in the first rcw flowering plants should be planted. The fuelw:-od and small timber plants should be planted in the second and third row. Fencing shoulld be of live fence (Glyricidia, Jedropha) accordingly we have establi- shed the strip plantations throughout the State. HarvestinQ nlan - Manacement of Dlantations:- As per the direc-ions of the World Bank we have prepared a harvesting plan I A Management Plan fixing t-e rotaticns' ana submitted to the Wcrld Bank also. The detailed harvestirg plan contains tne district-wise plantations and area in hectares ready for harvesting in future. Benefit sharing:- The Steering Ccmmittee of the Government of Kerala 33 which monitors the project activities decided that the beneFit sharinc with the people should be in the following manner. In accord,ance with this decisions the Government of Kerala also issued a 0.O. on benefit sharing. 1. The poles will be disoosed of in open auction. 2. 75,' of the prcduce will be d4isnos-e of in onen auctiornter auction rates. 3. 25%0 of the quantity of the fuelwood, will oe sol1 at 75' of the Drice fetched from the auction. The order was not a workable proposition and therefore we submitted a croposal to liberalise the order an-d give more benefits to the reonle. As cer the proposal submit-ed to the Sovernment, 50O, of- The producz will be sold! at a concessional rate to be ceomle residing nearbv the olanoa-ions. Apart from the a'bJove twigs, branches, lops and tops dried materials etc. are supplied to the local people free o, cos7 staying nearby the plantations. In 1988 in the district of Palakka2 we have distributad the above thin-ed' materials to b_e local ze:ole throucn committees. The criteria for selectior. o- -'re beneficiarleo is that the income as suggested in the ration card reckoned as rs.500/- per montn. This 1has been successfully done. Technoloav Manuel: A techlno' oc manual for the plantatinrs translazed into the local language was prepared. The technology 34 manual covers various models of plantations, treatments, package of practice, micro-planning etc. The multi-tier 'VI ditch olantina: The World Bank Mission recor-iended to adopt a vegetative, conservative multi-tier technology, intergra ting planting _nd soil conservation works. As per the directions 30'0 of the tDtal area under olanting in an year should be brought under this scheme. in W,-e have attemoted on this and .almost every district 'demonstration olots' have been established to show to the public to adopt this tech-nology. zvaluation. of olant ations: Evaluation of th-2 plantations was conluci:ed bv t.e r-' For-st Research Insti;t:,e assessing the surviv-31 nercentaoe in o:1e 7larnta-`ons. Accorlio to their re-ort 65,'t to 80;' is the survival in these polantations. Tribal Schemes: As a part of the Soc-l 'or-st. roornres tr:_al fuelwood olantaticns were established ir. almost all the districts o .Kerala. In these plantations tribal -ere engaged by the Department giving ermloyment to them and the berefits ,,e-e shared *,;ith them. The activities ,ere planting Pepper, Rubcer an. OoGonut. Further maintenance have also been done by decartment in cert_in ar2as 35 where the tribals are not conversant with that. Digging wells, constructing approach roads, constructing tribal houses and farm a7znroach roads also 1have been done in some cases as -=,roved by the District Level Committee. A tribal medicinal garden was also establisshed. The produce from these plantations are shared as per a G.C. which stioulate for 75' of tle sale -Droduce w.ill be distributed in cash among the tribal families and 25' of the amount will be deposited in a fund which .J/il1 be used for common welfare activities of the tribl to ensure craduation of tribal families to self sufficiencv. MCN:7O3R7XG & EVALUA.CTI Th.e Monitoring & Evaluation is an inbuilt mechanism in the project to monit:or effectiv,ely the imDlementation of tle Social Forestrv schemes and4 to recommrenan suggestions for im-roved executi-n an-I assess the nerforman.ce of tie 'croiect. v:onitoring coil_ds be done more effeccively iuring the extension oeriod of the project. A team of Officers from the hec-Iqiarters ,;ere utilised -or tTis ou-?oee. heVv±sitz almost all divisions and send status reoorts- Based on their observation in res-ect cf (i) Formation of nursery (ii) _uantitv end cuality o- seedlings nrc-.uce.. (i-i) Planting activities. the defects ,.,,ere rectified. 36 Two stages of evaluatior. were done (1) the Farm Forestry survey which were conductecd by the Deo,rtent : conomics and Statistics and (2) Evaluation of plantations by the Kerala Forest Research Institute. Conslant monitcring were done by tle Department and progress reports anl inspection of nurseries distributions were done by tlhe Senior Officers of the Department periodically. TeWhenever aberrations have taken pDace corrective measures were adooted. The Farm Forest;r surve,Ys mainly assessed the survival of th-e seedlings distributed under the farm forestrv programme. The methlod used was stratified systematic random sarrDling teclhnique in sel-ction of households. * det-ailed questionnaire was orceared and got filled up. WIhile collecting t;.e data de'ails .e also collected r_a.arding extensicr. advice, recarding future needs of the -e,-le wlillincness to olantmore trees reason for mortality etc. T-ese have been tabulated end presented in the reoort. 3ased orn the indings of the reoor- 7eriodic changes have _een introduced in the inmlermentation of the sch-eme. For instance thle survey report indi-cated that many peo7le are incliridto take fruit bearing trees and horticulture species. In the subsequent years of seedling distribution, the quantum of f-uit bearing and horticulture species were increased. 37 Similarly extension activities were 2ccentuated based on the report. The number of training procrammes and the number of workshons the number of meetings, seminars were considerably enhanced in the subsequent years. Research The project Drovided for undertaking a few research studies to imorove the current oractices and to desicn the future course of action to be adopted for better imolementation of the prograsur. The Kerala Agriculture University, the Central Plantation Crops Research institute, Kerala Forest Research Institute were engagc1d in the research studies. The renorts have been received and are readily available in the office. Based on these reports also we have introduced some changes in the imrolementation o- the rro:gramrme. For instance the Central plantation Crops Research Institute reoort found out that .Ailanthus is the best inter cron to be grown in the midst of coconuts. This was introduced in the farm forestry and there are many honesteadsch-e Ailanthus and Coconut are grown together for better results. Kerala -orest Research Institute have conducted a few studies on yield from Acacia plantations which is used for collecting the total biomass availability. Similarly the Kerala Forest Research Institute have conducted a eiemand supply of wood studies which is also very useful. 38 (e) The relationship between the Bank in borrower durina the evolution and imolementation of the oroject. There was a co-ordial relationshin and the Bar.k co-operated and supported the Social Forestry Programme in a very effective way. There has been no difference of opinion nor any conflict nor any major problems. (f) Evolution of the verformance of the co-financiars and assess their relationshin with the borrower during the evolution and imnlementation of the oroject. There has been no co-financiars and the Social Forestry Wing had implemented only one project with the assistance of the World Bank and hence there are no comments on this point. 39 SummarV To sum up the World Bank's assistance to the forestry sector in Kerala has helned to a very great extant in developing the infrastructure for the department to institutionalise the social forestry activities in the long run. Traditionally, the 'orest Deoartment had to play a regulatory role in the protection of environment & forests. People were not involved in the forestry activities. The social forestry paved a great way in opening uo the forest to the people. They were made to realise the need for protecting their environment and the need for oreserving the forests, and the way for sustain-d economic develon- ment. If one scans through th-e records it would reveal that forestrv was regarded as a 'revenue earning department' and little was done towar-]s affor-station programme. Consequent upon taking social focestry, better management of forests ushered in. People were also allowed to partake in the nature buildinc activities. The contractual obligation of the ,eoole to offer services for protecting the forests and thereby take away their legitimate share of forest produce streewn the way for better economic development. This enabled the forestryz sector to be managed in a democratic way. The peo?le were also provided with ample employment generation procramme and in effect made them more self-r-eliant. Prl. Chief Conservator of Forests (SF&-V). 40 PART III 1. Related Bank Loans and/or Credits Credit Titk Purposc Year of Status Approval Uttar Pradesh Social Forestry To incrcasc the supply of fuelwood in rural areas, to 1978 Completed Project (Cr.925-IN) provide poles, bamboo, small timber, foddcr grass and minor forcstry products and strcngthen the social forestry organization to carry out project works. Gujarat Social Forestry Project (as above) 1979 Completed (Cr.961-IN) West Bengal Social Forestry (as above) 1982 Completed Project (Cr.1178-IN) Jammu and Kashmir and Haryana (as above) 1982 Completed Social Forestry Project (Cr.1286- IN) Karnataka Social Forestry Project To augment fuelwood supplies in priority rural areas 1983 Completed (Cr.1432-IN) and semi-urban areas. and to provide small timber fodder and other related forest products. National Social Forestry Project To assist the States of Gujarat. Uttar Pradesh. 1985 Completed (Cr.161 1-IN) Ihimachal Pradesh, & Rajasthan to expand and improve their social forestry activities. Maharashtra Forestry Project To support restructuring and rationalization of the 1992 Ongoing (Cr.2328-IN) State's Forestry Department and its investment programmes, and to foster a greater role in forestry and development for village communities, non- governnment institutions, cooperatives and the private sector. West Bengal Forestry Project To support Government of West Bengal Forestry 1992 Ongoing (Cr.2341-IN) Department programme through installation of a sustainable protection system in all regions in the State, enhancement of rorest productivity and conservation of biodiversity. 2. Project Timetable Item Date Planned Date Revised Date Actual Prcparation - 1983 Appraisal - Jan/Feb. 1984 Negotiations - June 1984 Board Approval - July 31, 1984 Credit Signature - Dec. 12, 1984 Credit Effectiveness - - March 5, 1985 Closing Date Dec. 31, 1990 Dec. 31, 1991 March 31, 1993 41 3. Credit Disbursements Cumulative Estimated and Actual Disbursements (SDR Million) FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 Appraisal Estimate 2.50 6.30 11.40 17.00 22.80 28.90 30.6 30.6 30.6 30.6 Actual 0.3 2.5 6.2 10 12.6 15.4 18.5 22.8 24.7 24.8 Actual as % of Estimate 12% 40% 54% 59% 55% 53% 60% 75% 81% 8190 Comments: SDR4.5 million was cancelled on December 5,1991. Final disbursement from the Credit was made on August 19, 1993 and the undisbursed balance of SDRI.3 million was cancelled. The final Credit amount was SDR24.8 million. 4. Project Implementation A. Physical Targets and Achievements Itcm Appraisal Target Extcnsion Targct / Actual AchievcmcnL2' (ha) (%) (ha) (%) (ha) (%) 1. Iarm Forestry 69,200 81.1 87,000 68.5 79,962 71.2 2. I'lantations on GoNcrnnicnt land - large hlocks 11,000 12.9 37.000 29.1 26,875 23.9 - small blocks 1,000 1.2 1,000 0.8 2,711 2.4 - strip plantation 2.000 2.4 - - 911 0.8 - tribal fuclwood 2.000 2.3 2.000 1.5 1,801 1.6 - tribal medicinal 100 0.1 113 0.1 113 0.1 botal Arca Plantcd 85,300 100 127,100 100 112,373 100 1/ lhc project was extended by 27 months in December 1990. 2/ Actually achieved as on closing date, i.e. March 31, 1993. 42 B. Staffing, Civil Works and Vehicles Appraisal In Position Actual/Appraised 1. STAFFING (No.) (No.) (%) Prl. Chicf Conservator of Forests (Social Forestry & I 1 100 Vigilance) Chief Conscrvator of Forests I I 100 Conservator of Forests 4 4 100 Deputy Conservator of Forests 17 3 18 Assistant Conservator of Forests 18 18 100 Financial Manager I 1 100 Economist I I 100 Statistician I I 100 Forest Ranger 47 39 83 Foresters 230 189 82 Forest Guard 34 4 12 M & E Supervisor 2 - - Instructor 3 - Others I 1 100 Total 360 263 73 Appraisal Actual Actual/Appraised 2. CIVIL WORKS (No.) (No.) (%) A. Non-Rcsidential Social Forestry IIQ I 1 100 Circle IIQ (CF) 2 3 150 = District 0IQ (DFO) 14 13 93 = Range Offices 47 30 64 T Training, various types 43 36 84 - Others (garages, water supply, sheds etc., community 54 88 163 halls under T'SP) 13. Rcsidential - CCI: Quarters I 1 100 - Cl Quarters) 4 (6 ( 26 - DCF Quartcrs) 19 ( - ACE Quarters Is 19 127 - Range Officers 49 74 151 - Forestcrs 238 1/ 292 123 - lorest (,uards 34 144 424 Total 521 707 136 Appraisal Actual Actual/Appraised 3. VI llHlCJ.S (No.) (No.) (%) Car S 5 100 NMinibus & Bus 4 4 100 Traicrflcrrck ker 36 12 33 2-W Icep 36 25 69 Publicity Vans 3 2 67 Motorcycles 93 87 94 Mopeds 182 92 51 13Ioats Truck 7 6 86 Total 359 233 65 Forestcrs' storc-cuni-rcsidcnce. 43 5. Project Cost and Financing A. Project Cost (Rs million) ItLm I Appraisal1' Actual 2/ Actual as % of Appraial A. Organization and Managemcat 212.9 337.9 159 B. Planiation Activitics - Seedling Production 213.4 216.9 102 - Large Block Plantation 94.6 253.2 268 - Small Block Plantation 6.8 36.0 529 - Strip Plantation 125 8.3 66 - Tribal Fuelwood Plantation 12.4 4.1 33 - Tribal Medicinal Pilot Scheme 0.9 6.2 689 - Plantation Protection 5.1 17.1 335 Sub-Total Plantation Activitics 345.7 541.8 157 C E-xtcnsion and Publicity 4.9 0.7 14 D. Training 33.6 11.7 35 EL Rescarch and Studics 2.1 4.7 224 Total Project Cost 599.2 896B 150 1/ Includes physical and price contingencies. 2/ Actually incurred as at closing date, i.e. March 31, 1993. B. Project Financing B1.1 Planned Actual (SDR million) (%) (SDR million) (%) IDA 30.6 58 24.8 GOK 21.8 42 N.A. Total 52.4 10( / Figures not available at the time of PCR preparation. 44 B. Expcnditure/Catcgorica Planncd Crdit Agreement Reviacd Allocation Final Am nt Fnl May 1991 Dec. 1991 )DA Credit . (in SDR'OOOs) . Civil works 5.190 4,050 3,200 3.363 11 Vehicles, equipment, fumiture t 870 1,081 1.300 996 3 materials Plantation activities 17,670 20,086 17,400 17,1021Y 56 Consultant services and training 1.640 2,383 1,000 489 2 Incremental staff salaries 3,270 3,000 3,200 2,848 9 Unallocated 1,960 - - - Total disbursements - - 24,798 81 Cancellation - 4,5Ot/ 4-S00X/ 15 1.3023/ 4 Total 30,600 30,600 30,600 30,600 100 1" Includes SDR 64.000 disbursenient out of SpCcial Fund. 21 Cancciled as of December 5. 1991. / Still uncommitted as of August 31, 1993, and would be caniccllcd. 6. Project Results A. Direct Benefits Item Unit Appraisal listimatc PCR Estimatc I'arm Public Parm Public Forcstry Lands 'I'otal Porcstry Lands TOtaW Fuclwood million m3 7.7 4.2 11.9 2.0 3.2 5.2 Timber and Pcciers million m3 13.9 - 13.9 9.9 - 9.9 Poles million m3 19.5 4.5 24.0 0.4 0.8 1.2 Total Production million m3 41.1 8.7 49.8 12.4 4.0 16.4 No. of Bencficiarics million Employmcni Gencrated - from plantations man-days 1.75 million 2.30 million - from Forest Dcpartment jobs 550 263 1/ Excludes production from tribal fuclwood and pilot medicinal components. 45 B. Economic Impact Appraisal P-stimate PCR Estimate Eanomic Ratc of Rcturn (%) Farm Forestry 33 45 Departmental Plantations: - Large Block Plantations 26 - Small Block Plantations 17 - Strip Plantations 15 29 - Tribal Plantations 25 Total Project 26 33 Assumptions: - Project Life (years) 30 4.0 - Standard Conversion Factor 0.8 0.8 - Conversion Factor for Unskilled Labour 0.6 0.7 1/ A combined analysis was undertaken in the absence of adequate segregation of investment costs. C. Financial Impact Appraisal Estimatc PCR Estimate Vinancial Rate of Return (%) Not Estimatcd Farm Forestry 43 Large Block Plantations 33 Small Block Plantations 57 Strip Plantations 50 D. Price of Outputs Appraisal Estimate PCR Fstimatc Firewood Small Poles Large Poles Small I imbcr Frirewood Small Poles Large Poles Small Timbcr (Rs/_3) (Rs/pole) (Rs/polc) (Rs/.3) (Rs/_3) (Rs/pole) (Rs/pole) Rs/ul Market Price 210 40 80 700 250 30 345 1,500 Les Felling 18 0.35 0.80 30 20 5 33 30 Less Il-andling and 42 0.80 1.90 70 50 5 62 270 Transport Financial Stumpage 150 38.85 77230 600 180 20 250 1,200 or39 or77 Conversion Factor 08 0.8 0.8 0.8 0.8 0.8 0 8 0.8 Economic l'rice 120 31 62 480 144 16 200 960 46 7. Status of Covenants Sectioat Summary Dcscription ½pc of Lcvel of Revised Original Remarks Covenant Compliance Compliance Compliane 1/ 2/ Date Date 2.02 As and when required. GOK shall employ MAN 1 // // consultants on the basis of World Bank Guidelines for the use of Consultants, published in August 1981. 2.05a GOK shall furnish to the Association their ORG 1 / // plans, reports, contract documents, work & procurement schedules for the project, etc., in such detail as the Association shall request. 2.05d GOK to furnish a report on execution and RPT 4 // // initial operation of the project promptly after project compietion, but not later than 6 months after the Closing Date. 3.01.ai GOK to maintain separate records and FIN I // // accounts adequate to renlect their resources, expenditures and operations related to the project. 3.0l.aii GOK to furnish copies of their accounts and FIN I // // financial statements for each FY as soon as available but not later tian 9 months after the end of such year. 3.01.bi GOK to have their accounts and financial ADT 1 // / statements for each FY audited by independent auditors acceptable to the Association. 3.01.bii GOK to furnish the Audit Report ADT 1 // // immediately following its finalization. 3.02 GOK to undertake a joint mid-term review STD I // 03/31/87 of the project with the 13orrower and the Association after third year's planting and not later than 3.31.87. 8.01(c) GOK would complete anid submit for IDA STI) 1 06/30/90 12/31/85 SAR review the wood supply and dcmand study by 12.31.85. SCII 2.1 Positions of regional conseivators of forests ORG 1 12/31/85 12/31/84 shall be fillcd by 12.31.84. SCI1.2.1 F:icld Dl(is & quartcr of l)Ci's to be ORG I // 12/31/84 Assistant Conservators instead of DCfls posted. sanctioned. SCI1.2.2 Principics covering arrangements for sale of ORG 1 09/30/89 06/30/86 fuelwoxod front Forcst Departnient's lands shall bc finalized by 6.30.86. SCI 1.2.3 Bcginning with the 1985-86 planting season, ORG I // // Four species arc priced at full cost. For up to 3,500 casuarina secdlings & up to 500 othcr species GOK has dceided to continue secdlings per family for all other species free distribution up to 10 naked and 3 shall bc distributed frec of charge. containcrized secdlings and charge in excess of thcse at 02p and 10 p, respectively. 47 Section Summary Dcscriptio Type of Lcvel of Rcviscd Original Rcmarks Covenant Compliancc Compliancc Compliance I/ 2/ Date Daic SC}1.2.3 Beginning with 1985-86 planting season, ORG 2 // 1/ GOK has agreed to charge full price for excess seedlings will be charged at cost of some seedlings from 1992 planting season. production. SCH.2.3 Beginning with 1985-86 planting season, ORG I // 1/ Rcgisters are maintained. Forest Dcpt. nurseries shall maintain registers of the numbers of seedlings distributed to each family. SCH.2.3 Beginning with 1985-86 planting season, STD 2 // // Review up to FY87 done, because of low social forestry wing shall conduct field survival and want of space, the number of reviews during each planting season to seedlings to be distributed reduced ascertain wastage of seedlings if being substantially from 1989 & to be continued in minimized. future. 1/ ADT - Audit; FIN = Financial: MAN = Management: ORG = Organizational: RPT = Reporting: STD = Studies. 2/ 1 - Fully complied; 2 = Partially complied - not affecing implementation: 3 = Non complianec; 4 = Not yet due. 8. Use of Bank Resources A. Staff Inputs (staff weeks) Stagc of Projct Cydc FY84 FY85 17Y86 FY87 FY88 FY8'9 FY90 FY91 FY92 FY93 FY94 Total Identification/Prcparation 12.6 12.6 Appraisal 44.2 44.2 Negotiations 1 6 4.3 Lending Operations Supervision 9.6 12.8 7.0 2.8 3.5 0.8 3.8 2.2 0.9 0.1 43.4 Project Compietion 15.2 15.2 Total 119.6 48 B. Mission Data Xpc of Mission Month/Yca NM of D, in Speianlztioo Performacc Typc do Commerts Pcrom Fid Rcpr Ited11 Rlting Stats2/ ProbknC3/ Appraisal 6/84 4 E + F Supervision 1 9/84 1 7 E F Delays in release of local funds. Supervision 2 3/85 2 8 E + F M + T Slow progress in appointment of key staff & inadequate provision of technical advice on seedling production. Supervision 3 9/85 3 10 E + S + F M + T Inadequate extension support and wastage of seedlings distributed. Supervision 4 6/86 1 10 E I Lack of social participation in departmental plantations. Supervision 5 6/87 1 10 E M + I Inadequate extension advice and limited social participation. Supervision 6 1/88 1 7 F T Lack of extension technology. Supervision 7 7/88 1 7 F T + M Lack of extension technology. Supervision 8 1/89 2 6 F + S 3 M Implementation problcms in farm forestry. Supervision 9 7/89 1 4 F 2 M Limited extension support. Supervision 10 3/90 1 4 F 2 M Weak extension and M & E. Supervision It 8/90 2 7 F 2 1 + M Bencfit distribution problematic; extension and M & E inefficient. Supervision 12 3/91 3 S A + F 2 F Local fund availability. Supervision 13 8/91 3 5 F + S 2 M Inadequate extension. Supervision 14 3/92 2 7 F 2 M Lack of coordination. Supervision 15 10/92 2 6 F I M Lack of coordination with Territorial Forestry Division. insufficient M & E, & poor quality of nursery stock. 1/ Specialization representcd: A - Agriculture; E - Economics; F - Forestry, S - Sociology. 2/ Performance rating status: I - No significant problems: 2 = Moderatc problems: 3 - Major problems being addressed adequately. 31 Type of problem: I - Institutional: F - Financial; M - Management: T * Technical. 49 INDIA Kerala Social Foretry Project (Cr.1514-IN) Pmoject Completion Raport Table 1. Exchange Rate and Inflation Factors Exchange Rate 1, Wholesale Price Index Fiscal Year (at Rs to US$1.00) (Base Year 1993-100) (Period Average) 1984/85 11.89 190.0 1985/86 12.24 182.0 1986/87 12.79 172.0 1987/88 12.97 159.0 1988/89 14.48 148.0 1989/90 16.66 138.0 1990/91 17.95 125.0 1991/92 24.52 109.9 1992/93 26.41 100.0 / IMF - Intcrnational Financial Statistics. INDIA: Kerala Social Forestry Project (Cr.1514-IN) Project Completion Report Table 2. Cost Overrurts Appraisal Estimate Actual Expenditure Cost Overrun Item in FY84 Prices Actual Expenditure in FY84 Prices Total | Price uantity . ............................ . (Rs million) . Plantation activities 345.7 541.8 393.8 57 43 14 Other costs 253.5 355.0 239.8 40 45 (5) T8I Total Cost 599.2 896.8 633.6 50 4.6 0 51 ANNEX 1 FINANCIAL AND ECONOMIC RE-EVALUATION A. INTRODUCTION 1. This annex presents a discussion of the financial and economic assumptions and results of investments made by farmers and the Forest Department under the Kerala Social Forestry Project. Returns to these investments have been computed on the basis of estimated yields and they must therefore be considered interim. 2. Three types of analysis have been carried out. First, a financial cash flow analysis was prepared from the investor's point of view to determine the financial viability of the plantation models. This analysis was not carried out at appraisal. Secondly, economic analysis of plantations raised by farmers and the Forest Department was carried out using only direct costs of plantations covering farm forestry, large block plantation, small block plantation, and strip plantation. Finally, an economic analysis was carried out for the project as a whole using both the direct costs of plantation establishment and maintenance, and indirect costs of management. In doing so, no benefits have been included for the tribal medicinal pilot programme (in line with the appraisal methodology), or for tribal fuelwood plantations (due to insufficient data). 3. Kerala is dominated by small-scale farmers who have, on average, land holdings of less than one hectare. Most of their plantings under the project have been on bunds or peripheries of homesteads as they cannot plant their small land holdings with forest species and wait for 5-15 years to receive a return. Available evidence suggests that some of the larger farmers have gone in for tree planting (particularly teak) in their agricultural fields but the area involved would not exceed 5% of the total area planted under farm forestry. Departmental plantations have generally been on 'wastelands' some of which had previously been subject to grazing. Opportunity cost of land in both cases (field crops and grass) has been considered in deriving the financial and economic rate of return, although, at appraisal no land value had been imputed for grass on departmental plantations on wasteland. 4. The annex is divided into two main sections. The first provides the results of the financial analysis while the second gives the economic rates of return for plantations established under the project. B. FINANCIAL ANALYSIS General 5. The financial cash flow analysis indicates that all four plantation models on a per ha basis are quite profitable, generating financial rates of return ranging from 33% 52 INDIA: Kerala Social Forest-y Project (Cr.1514-IN) Annex 1: Financial and Eronomic Re-cvaluation Project Comple6ion Report (large block plantation), 43% (farm forestry), 50% (strip plantation) and 57% (small block plantations) (see Tables 1-4). 6. Costs are calculated per hectare and 1992/93 prices are used for both costs and returns. Farmers' labour inputs and products accruing to rural households have been valued at imputed prices equal to market wage rate (Rs4O/man-day) and output prices ranging from Rs2O/pole to Rsl,200/m3 for timber (see Part III/6D). Establishment Cost 7. Plantation costs have obviously varied from place to place, depending on different site conditions, methods of work and type of production units. However, on average costs have been estimated from these figures based on data provided by the Forest Department and updated to 1992/93 prices. The updated figures are provided in Table 1 (farm forestry), in Table 2 (large block plantation), in Table 3 (small block plantation) and in Table 4 (strip plantation). In summary, the total cost is reckoned at Rs5,320/ha (farm forestry), Rsl5,886/ha (large block), Rs8,713/ha (small block) and RslO,750/ha (strip plantation). As expected, farm forestry represents the lowest cost model. Plantation Mlaintenance 8. Plantation maintenance is estimated to cost Rs9O/ha (departmental plantations) annually. No maintenance, except for casualty replacement, is assumed for smallholder farm forestry. Production Volume 9. Projected production at SAR and PCR estimated production are given below: 53 INDLA: Kcrala Social Forestry Projcct (Cr.1514-IN) Annex 1: Financial and Economic Rc-evaluation Project Complction Report SAR PCR Production Farm Forestry I Public Lands Farm Forestry | Public Lands ................. . . . . . . . (million m3). Fuelwood 7.7 4.2 2.0 3.22 Poles 19.5 4.5 0.43 0.75 Timber 13.9 - 9.91 - Sub-Total 41.1 8.7 12.34 3.97 Total 49.8 16.31 10. The differences in product mix and quantities between the SAR and PCR arise from changes in: (i) Species mix. The agro-forestry component in the SAR recommended that casuarina be planted at a density of 3,000 seedlings/ha on a hectare equivalent basis. Similarly, high yielding eucalyptus species were expected to form a substantial proportion of the species mix. However, based on seedling distribution records and reports, and mission estimates, casuarina's contribution to the species mix at the time of planting was only 16% of the total planted stock, while ailanthus and teak accounted for 41% and 10% of the species composition at distribution. In addition, the relative survival rates of these species1l have further skewed the stand composition towards teak and ailanthus. Eucalyptus is practically non-existent. Therefore, in the established phase, teak and ailanthus will represent up to 80% of the growing stock. (ii) Densities. As a consequence of these species changes, the densities expected at SAR (for example 3,000 seedlings/ha) were not achievable. Furthermore, the farming systems in which those species had to be integrated into did not lend themselves to such high density planting. Moreover, farm land being at such a premium in Kerala, the farmer very rationally puts it to production of a product of the highest possible value. His perceived returns should justify his land, labour and capital investments. Energy for fuel production, though an important commodity and reportedly scarce, does not match well with high-value products like teak and ailanthus timber; 1, 56% for icak, 45% for aiinlnhus ;ind only 9% for casuarinat. 54 IN'DIA: Kerala Social Forestry Projcct (Cr.1514-IN) Annex 1: Financial and Economic Rc-cvaluation Project Compiction Report more so when substantial domestic energy needs are met from coconut husks and other tree crops. These changes in management goals have led to changes in densities at which these tree species have been raised. (iii) Survival rates. Moreover, the survival rates of the farm forestry component have been about 40% as against 60% expected at appraisal. This means that even on an increased national area of 79,962 ha, only 31,984 ha are under actual production as against 41,520 productive hectares expected at SAR. Similarly, in public land plantations the established stand densities were estimated at 6,000 stems for casuarina with an initial spacing of up to 10,000 seedlings/ha. However, the PCR estimates are in the 2,200 to 2,400 range for Casuarina equisetfolia and Acacia auriculiformis on government lands. One of the consequences of this deviation in densities is the reduced pole production. Finally, it seems that total project production estimates of 49.8 million m3 are not in agreement with the MAI estimates given for different species in the SAR. The total production level would require an MAI of about 20 m3/ha/yr, which is even higher than the highest yielding species, i.e. Eucalyptus tereticornis in this case at 15 m3/ha/yr. 11. Estimates of total production are summarized below. Unit Farm U rge Small Strip Total (million) Forestry Block Block Fuelwood m3 2.00 2.95 0.20 0.068 5.22 Poles No. - small (7.5 cm, dia.) 2.88 - - - 2.88 - large (10 cm, dia.) 8.48 15.05 1.49 0.50 25.52 Timber m3 9.91 - - - 9.91 The planted area by plantations models and by year is given in Table 8. 12. Per hectare yield estimates of major species planted under the project are given below. 55 INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Species MAI per ha per year of Woody Biomass Rotation (years) Acacia auriculiformis 9.5 m3 or 6 mt. 8 to 10 Ailanthus triphysa 10 m3 or 6.3 mt. 10 Casuarina equisetfolia 9.5 m3 or 6 mt. 8 to 10 Grevillia 8 m3 or 5 mt. 15 Teak (Tectona grandis) 12 m3 or 8 mt. 40 - 60 Note: 1. These are silviculturally available production estimates, actual yields may be lower due to fire damage, or loss due to illicit felling, etc. 2. Pole dimensions are: Small = 6 m long, 7.5 cm dia., = 0.0185 m3/pole; 0Large = 8 m long, 10 cm dia., = 0.044 m3/pole. 3. mJ = 0.63 mt. Output Prices 13. Prices used in calculating financial revenues are unit values which the producing unit expects to obtain at stump. Average 1992/93 prices prevailing in the project areas have been used, net of felling, handling and transportation costs. The financial prices and standing values are given in Part III/6D and summarized below. Financial Prices at Stump Fuelwood Small Poles Large Poles Timber (Rs/m3) (Rs/polc) (Rs/Polc) (Rs/m3) At Appraisal 150 39 77 600 At PCR 180 20 250 1,200 The opportunity cost of land has been estimated at Rsl,000/ha/yr for agricultural fields and at RslOO/ha/yr for grass in wastelands. Financial Rates of Return 14. On the basis of the foregoing discussion, cost and revenue projections have been prepared with an assumed project life of 32 years. These are presented in Tables 1-4 and the results of the analysis are summarized below. 56 INDIA: Kerala Social Forcstry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evalualion Project Compiction Rcport FRR (%) Farm forestry 42.5 Large block plantation 33.0 Small block plantation 56.9 Strip plantation 50.3 C. ECONONIIC RE-EVALUATION General 15. An economic re-evaluation has been undertaken for the project as a whole and for farm forestry and departmental plantations comprising large block, small block and strip plantations. Following the SAR, only direct costs of plantations have been included in estimating the ERR for component plantations. Other main assumptions and estimates made in the SAR and PCR are set out below. Appraisal Estimates 16. At appraisal, the project's economic rate of return (ERR) was estimated to be 26%, and the rates of return of the component plantations to be 33% for farm forestry and 15-26% for departmental plantations based on the following assumptions: - project life of 30 years, including an implementation period of 6 years; - initial mortality/wastage rate of 40%; - all farm labour valued at 60% of market wage rates; - a standard conversion factor of 0.8 applied to all prices; - opportunity cost of land valued at Rs200/ha/yr for planting by farmers, and no land value imputed for departmental plantations on wasteland; - no benefits included for the pilot tribal programme for cultivation of medicinal plants. 57 INDIA: Kerala Social Forestry Projcct (Cr.1514-IN) Annex 1: Financial and Economic Rc-evaluation Project Completion Rcport PCR Estimates 17. The recalculation of the ERR's follows the SAR methodology. The main differences are: - actual costs are used for project years FY1984-85 to 1992-93 with past expenditures restated in FY1992/93 prices using wholesale price index; - all values are expressed in constant 1992/93 price terms, the project's completion year; - all farm labour valued at 70% of market wage rates to be consistent with calculations in National Social Forestry PCR; - opportunity cost of land valued at Rsl,000/ha/yr for block planting by farmers (about 5% of the area) and RslOO/ha/yr for grazing lands in government wastelands; - no benefits quantified for tribal fuelwood plantations because of insufficient data and insignificant area involved (1.6%); - costs after project completion include 1% of the total expenditure for civil works as maintenance, 10% of staff salaries and 10% of vehicle and office operating costs of the year 1992/93 to continue, and Rs9O/ha/yr as plantation maintenance for departmental plantations; and a combined economic rate of return calculated for the three plantation models (large block, small block and strip plantations) because of inadequate and incomplete monitoring data segregated by individual models. 18. Phased investment costs in financial terms and economic values for the purpose of the analysis are shown in Tables 5, 6 & 7. The details regarding planted area (see Table 8) and expected production are discussed above. 19. Based on the above assumptions, species mix and expected yields, the current estimates of ERRs for the project as a whole, for farm forestry and for the combined plantation model are 33%, 45%, and 29% respectively (see Tables 9-1 1). The principal factors which have contributed to the higher ERRs as compared with the appraisal estimates are the following: 58 INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report (i) improved output prices, particularly for timber; (ii) shift of species mix to high value species (teak and ailanthus) as opposed to appraisal expectations of casuarina, eucalyptus and acacia; (iii) increase in planted area by 32% (from 85,300 ha at appraisal to 112,373 ha at project completion). The lower expected production due to reduced survival rate (40% in contrast to the appraisal estimate of 60%) was more than offset by the above factors. 20. Sensitivity analysis indicates that a reduction in benefits by 20% will lower the ERR for the project as a whole to 29%; a reduction by 50% will lower the ERR to 22%; while an increase in cost by 20% will lower the ERR to 30%; and an increase in cost by 50% will lower the ERR to 27%. A combined reduction in benefits and increase in costs by 50% will lower the ERR to 16%. The project is therefore not sensitive to variations in either costs or revenue. The results are presented in Table 12. 21. It can be concluded that, on the basis of the above analysis, social forestry in Kerala is both financially and economically profitable. Indirect benefits resulting from water and soil conservation (presently excluded) would have pushed up the ERRs. It is also clear that the farmers have utilized the land for maximizing possible benefit by planting high value trees, in contrast to appraisal expectations. INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Tabte 1. Farm Forestry: Finnmcial Costs and Returns per ha (Rs'000) (Page 1) 1 2-03 4 5-07 8 9 10 11-14 15 16 17-23 24 25-31 32 Costs 1/ 2/ Establish. & maint. costs 5.084 0.118 - - - - - - - - - - - Opportunity cost of land 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 Total costs 5.134 0.168 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 Benefits Fuelwood - - 0.022 - 0.416 - 1.562 - 0.450 0.900 - 1.170 - - Smalt poles - - 0.720 - - - - - - - - - Large poles - - - 26.500 - , -- Small timber - - - - - - 63.360 - - - - - Large timber - - - - - - - - 11.040 20.232 30.192 - 23.832 Total benefits - - 0.742 - 26.916 - 64.922 - 11.490 21.132 - 31.362 - 23.832 Net benefits -5.134 -0.168 0.692 -0.050 26.866 -0.050 64.872 -0.050 11.440 21.082 -0.050 31.312 -0.050 23.782 FRR = 42.5% 1/ Seedling price Rsl,122.00 (mix of species - ailanthus, casuarina, grevillia, teak, mahogany and others), transportation cost Rs250/= (=/10 per seedling), crow bar planting cost of RslO0 for teak at =/40 per stump for 250 plants, pit digging for 2,250 plants at =/70 per pit Rsl,575/=, planting cost of Rs785 for 2,250 plants at =/35 per plant, fertilizer 10 gram/plant at =/50 per plant for Rs1,250 - all totalling 5,084 in Year 1, and casualty replacement at Rs118 in Years 2 & 3. 2/ Costs in 1992/93 prices. INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Table 1. Farm Forestry: Calculation of Benefits (Rs'000) (Page 2) …..--- -- . . . . - -- -- -- -- . - . - . . . -- -- . . . - -- -- . . . . . . . . . . -- -- -- -- -- -- -- -- -- --........... 1-03 4 5-07 8 9 10 11-14 15 16 17-23 24 25-31 32 …...- --------.-- Fuelwood price (m3) 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 Large poles 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Small potes 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 Small timber 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 Fuelwood (m3) - 0.12 - 2.31 - 8.68 - 2.50 5.00 - 6.50 - - Small poles (no.) - 36.00 - - - - - Large Poles (no.) - - - 106.00 - - - - - - - - - Small timber - - - - - 52.80 - - - - - - Large timber - - - - - - - 9.20 16.86 - 25.16 - 19.86 fuetwood benefits - 0.02 - 0.42 - 1.56 - 0.45 0.90 - 1.17 - - Small poles benefits - 0.72 - - - - - - - - - - Large poles benefits - - - 26.50 - - - - - - SmaIl timber benefits - - - - - 63.36 - - - - - - - Large timber benefits - - - - - - - 11.04 20.23 - 30.19 - 23.83 ….----.. .---- INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Table 2. Large atock Plantations: Financiat Costs and Returns per ha (Rs'O00) 1 2 3 4 5 6 7 8-09 10 11-32 Costs Establish. & maint. costsi/ 7.553 4.588 2.070 0.625 0.550 0.500 - - - - Opportunity cost of land 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.100 Total costs 7.653 4.688 2.170 0.725 0.650 0.600 0.100 0.100 0.100 0.100 Benefits Fuelwood - - 0.432 0.432 1.800 - 0.216 0.432 16.020 - Large poles - - - - - 140.000 Total benefits - - 0.432 0.432 1.800 - 0.216 0.432 156.020 - Net benefits -7.653 -4.688 -1.738 -0.293 1.150 -0.600 0.116 0.332 155.920 -0.100 -- --- ___ -- - - - - -- - - --- - - --. -- -------- ----- - - - -- - --- - -- - - -- - --- -- -- - -- -- - - - ---- - -- - -- - --- - - - - - - ------ - - - - - - - --------- FRR = 32.98% Calculation of Benefits 1-02 3-04 5 6 7 8-09 10 11-32 Fuetwood price (m3) 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 Large poles 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Fuelwood (m3) - 2.40 10.00 - 1.20 2.40 89.00 - Large Poles (no.) - - - - - 560.00 - Fuelwood benefits - 0.43 1.80 - 0.22 0.43 16.02 - Large poles benefits - - - - 140.00 1/ Costs as provided by the Forest Department starting from 1987/88 for a typical hectare, which was updated to 1992/93 using UPl. INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Table 3. Smalt Block Plantatiorns: Financiat Costs and Returns per ha (Rs'000) 1 2 3 4-07 8 9-32 Costs Establish. & maint. costs 4.3T3 2.960 1.380 - - - Opportunity cost of land 0.100 0.100 0.100 0.100 0.100 0.100 Total costs 4.473 3.060 1.480 0.100 0.100 0.100 Benefits Fuelwood - - 1.800 - 11.700 - Large poles - - - 137.500 Total benefits - - 1.800 - 149.200 - Net benefits -4.473 -3.060 0.320 -0.100 149.100 -0.100 FRR = 56.9% Calculation of Benefits 1-02 3 4-07 8 9-32 Fuetwood price (m3) 0.18 0.18 0.18 0.18 0.18 Large poles 0.25 0.25 0.25 0.25 0.25 Fuelwood (m3) - 10.00 - 65.00 - Large Poles (no.) - - - 550.00 Fuelwood benefits - 1.80 - 11.70 - Large poles benefits - - - 137.50 - 1/ Costs as provided by the Forest Department starting from 1987/88 for a typical hectare, which was updated to 1992/93 using WPI. INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Comptetion Report Tabtc 4. Strip Plantations: Fin.anciat Costs and Returns per ha (Rs'000) 1 2 3 4-07 a 9-32 Costs Estabtish. L maint. costs 1/ 6.360 3.700 0.690 - - - Opportunity cost of land 0.100 0.100 0.100 0.100 0.100 0.100 Total costs 6.460 3.800 0.790 0.100 0.100 0.100 Benefits Fuetwood - - 1.800 - 11.700 - Large poles - - - - 137.500 - Total benefits - - 1.800 - 149.200 - Net benefits -6.460 -3.800 1.010 -0.100 149.100 -0.100 FRR = 50.3X Calculation of Benefits 1-02 3 4-07 8 9-32 Fuelwood price (m3) 0.18 0.18 0.18 0.18 0.18 Large poles 0.25 0.25 0.25 0.25 0.25 Fuelwood (m3) - 10.00 - 65.00 - Large Poles (no.) - - 550.00 - Fuelwood benefits - 1.80 - 11.70 - Large poles benefits - - 137.50 - 1/ Costs as provided by the Forest Department starting from 1987/88 for a typical hectare, which was updated to 1992/93 using WP1. INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Conaletion Report Tabte S. Irivestment Costs in financiat and Econamic Terms (Rs million) 1. INVESTMENiT COSTS 1984-851 1985-861 1986-871 1987-88| 1988-89| 1989-90| 1990-91| 1991-92| 1992-93 Civil works 0.943 8.983 14.701 13.349 13.467 12.965 10.717 19.530 95.429 Ecoinmc Cost at CF.66 0.622 5.929 9.703 8.810 8.888 8.557 7.073 12.890 62.983 Vehicles, Equipment & 4.700 5.733 2.104 1.309 2.601 1.983 1.909 1.354 11.333 Furniture Economic Cost at CF.66 3.102 3.784 1.387 0.864 1.717 1.309 1.260 0.894 7.U0 Seedling Production Farm 5.419 20.259 29.519 27.302 26.671 5.778 8.112 10.412 14.290 Forestry Economic Cost at CF.70 3.793 14.181 20.663 19.111 18.670 4.045 5.678 7.288 10.003 Seedting Production 1.160 4.133 6.903 8.754 9.342 6.486 5.972 15.635 10.758 Goverrwnental Econic Cost at CF.70 0.812 2.893 4.832 6.128 6.539 4.540 4.180 10.944 7.531 Plantation Establishment 2.332 14.585 26.351 29.253 27.087 24.424 25.070 34.704 45.932 Ecornic Cost at CF.70 1.632 10.209 18.446 20.477 18.961 17.097 17.549 24.293 32.152 Plantation Management 0.415 0.789 4.751 6.178 7.114 12.177 15.731 20.277 27.713 Ecornmic Cost at CF.70 0.290 0.552 3.326 4.325 4.980 8.524 11.012 14.194 19.399 Training 0.069 0.153 0.250 0.555 0.144 0.035 0.353 0.051 0.230 Econric Cost at CF.97 0.067 0.148 0.242 0.538 0.140 0.034 0.342 0.049 0.223 X Research 4 Studies 0.021 0.068 0.053 0.151 0.114 1.195 0.558 2.378 0.127 Econic Cost at CF.78 0.016 0.053 0.041 0.118 0.089 0.932 0.435 1.855 0.099 Total Investment Costs in 15.059 54.703 84.632 86.851 86.540 65.043 68.422 104.341 205J812 Finrnciat Term Totat Irvest.ent Costs in 10.334 37.749 58.640 60.371 59.984 45.038 47.529 72.407 139.570 Ecoroic Term 11. OPERATING COSTS Staff Salaries 3.552 6.561 8.468 9.997 11.162 12.799 16.697 18.213 19.529 Economic Cost at CF1.0 3.552 6.561 8.468 9.997 11.162 12.799 16.697 18.213 19.529 Vehicle Operating Costs 0.403 0.906 1.003 1.008 1.100 1.109 1.160 1.309 1.825 Economic Cost at CFO.80 0.322 0.725 0.802 0.806 0.880 0.887 0.928 1.047 1.460 Office Operating Costs 0.485 0.771 0.955 1.033 0.850 0.835 0.964 1.255 1.414 Ecanic Cost at CF.K4 0.407 0.648 0.802 0.868 0.714 0.701 0.810 1.054 1.187 Totat Operating Costs in 4.440 8.238 10.426 12.038 13.112 14.743 18.821 20.777 22.768 Financiat Terms Total Project Costs in 19.499 62.941 95.058 98.889 99.652 79.786 87.243 125.118 228.580 Financiat Term Totat Project Costs in 14.615 45.683 68.712 72.042 72.740 59.417 65.964 92.721 162.046 Ecornic Term UPI 1.90 1.82 1.72 1.59 1.48 1.38 1.25 1.10 1.000 Totat Project Economic Cost 27.768 83.143 118.185 114.547 107.655 81.955 82.455 101.993 162.046 in 1992/93 Terms INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Com4petion Report Table 6. Financial and Economic Costs FY84-85 FY85-86 FY86-87 I FY87-88 I FY88-89 FY89-90 I FY90-91 I FY91-92 FY91-92 Farm Forestry . . . . . . . . . . . . . . . . . . . . . . . . . (Rs million) . . . . . . . . . . . . . . . . . . . . . . . . . Seedling Proruction - Financial Cost 5.419 20.259 29.519 27.302 26.671 5.778 8.112 10.412 14.290 - Economic Cost (CF.70) 3.793 14.181 20.663 19.111 18.670 4.045 5.678 7.288 10.003 - UPi 190 182 172 159 148 138 125 110 100 - Economic Cost in 92/93 price 7.207 25.809 35.540 30.386 27.632 5.582 7.097 8.017 10.003 Depart ental Plantations Seedling Production ON - Financial cost 1.160 4.133 6.903 8.754 9.342 6.486 5.972 15.635 10.758 Plantation Estabtishment - Financial cost 2.332 14.585 26.351 29.253 27.087 24.424 25.070 34.704 45.932 Plantation Management - Financial cost 0.415 0.789 4.751 6.178 7.114 12.177 15.731 20.277 27.713 Totat Financial Cost 3.907 19.507 38.005 44.185 43.543 43.087 46.T73 70.616 84.403 Total Econrmic Cost 2.735 13.655 26.604 30.929 30.480 30.161 32.741 49.431 59.082 Economic cost in 92/93 price 5.196 24.852 45.759 49.177 45.110 41.622 40.926 54.374 59.082 INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evatuation Tabte 7. Ecorincic Cost of Farm Forestry and Department Plantations (Rs miltion) 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 Farm Forestry Seedting Production 7.207 25.809 35.540 30.386 27.632 5.582 7.097 8.017 10.003 - - Establishment l Maintenance 17.064 36.098 84.929 71.762 66.556 9.002 11.017 6.982 8.739 0.348 0.194 SL4b-totat 24.271 61.907 120.469 102.148 94.188 14.584 18.114 14.999 18.742 0.348 0.194 Depart etat Ptantations I/ Seedling production, esta- 5.196 24.852 45.759 49.177 45.110 41.622 40.926 54.374 59.082 2.95 2.95 blishment & maintenance Civit Works & Vehicles 7.076 17.678 19.075 15.382 15.695 13.615 10.416 15.162 70.463 1.846 1.846 c Training, Research & Studies 0.158 0.366 0.487 1.043 0.339 1.333 0.971 2.094 0.322 - - Staff Sataries 6.749 11.941 14.565 15.895 16.520 17.662 20.871 20.034 19.529 1.953 1.953 Vehicte & Office Operating 1.385 2.499 2.759 2.661 2.359 2.191 2.172 2.311 2.647 0.265 0.265 Costs Sub-totat 20.564 57.336 82.645 84.158 80.023 76.423 75.356 93.975 152.043 7.014 7.014 TOTAL COSTS 44.835 119.243 203.114 186.306 174.211 91.007 93.470 108.974 170.785 7.362 7.208 Costs after FY 1993 are estimated at Rs9O/ha/yr for departmental ptantations, 1% of totat expenditure for civil works, 10% of 1992/93 staff salaries and 10% of FY 1993 expenditure for vehicle and operating costs. INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Comptetion Report Table 8. PhysicaL Phasing 1984-85 1985-86 | 1986-87 | 1987-88 | 1988-89 | 1989-90 1990-91 1991-92 1992-93 1. Farm Forestry (ha) 4,795 10,032 21,425 17,339 17,802 1,714 2,643 1,861 2,351 2. Departmental Plantation (ha) - large btock 322 1,434 2,338 2,447 2,870 2,139 4,366 4,626 6,333 - small block 23 123 172 419 580 388 383 198 425 co - strip 50 65 66 169 125 344 54 3 35 INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Table 9. Economic Antalysis: Total Project (Rs million) (Page 1) 1 2 3 4 5 6 7 8 9 10 11 12 13 Costs Farm For. maint.9 land 15.704 43.824 74.244 62.923 61.857 12.183 15.438 15.101 18.051 4.000 4.000 4.000 4.000 Dep. Pl. maint. and land 5.235 25.054 46.218 49.940 46.230 43.029 42.814 56.744 62.132 6.000 6.000 6.000 6.000 Other Expenditures Civil works and vehicles 7.076 17.678 19.075 15.382 15.695 13.615 10.416 15.162 70.463 1.846 1.846 1.846 1.846 Training, res. & studies 0.158 0.366 0.487 1.043 0.339 1.333 0.971 2.094 0.322 - - - Staff salaries 6.749 11.941 14.565 15.895 16.520 17.662 20.871 20.034 19.529 1.953 1.953 1.953 1.953 Vehicle L office operat. 1.385 2.499 2.759 2.661 2.359 2.191 2.172 2.311 2.647 0.265 0.265 0.265 0.265 Total costs 36.307 101.362 157.348 147.844 143.000 90.013 92.682 111.446 173.144 14.064 14.064 14.064 14.064 Co Benefits Farm Forestry - - - 2.845 5.952 12.711 10.287 113.811 217.032 711.947 895.500 1497.489 937.459 DepartmentaL Plantation - - 0.183 0.734 2.039 4.210 6.043 15.442 29.532 76.610 259.418 386.131 406.198 Total benefits - - 0.183 3.578 7.991 16.921 16.330 129.253 246.564 788.557 1154.917 1883.620 1343.657 Net benefits -36.307 -101.362 -157.165 -144.265 -135.009 -73.093 -76.352 17.807 73.421 774.493 1140.854 1869.556 1329.593 ERR = 33.2% INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financiat and Economic Re-evatuation Project CoWmletion Report Table 9. Economic Analysis: Total Project (Rs million) (Page 2) 14 15 16 17 18 19 20 21 22 23 24 25 26 Costs farm For. maint.& land 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 Dep. Pi. maint. and Lanrd 6.000 6.000 6.000 6.000 6.000 6.000 6.000 6.000 6.000 6.000 6.000 6.000 6.000 Other Expenditures Civil works and vehicles 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 Training, res. & studies - - - - - - - - - - - - - Staff salaries 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 Vehicle & office operat. 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 Total costs 14.064 14.064 14.064 14.064 14.064 14.064 14.064 14.064 14.064 14.064 14.064 14.064 14.064 Benefits Farm Forestry 981.510 173.169 361.172 463.192 643.689 456.762 316.709 53.271 61.788 53.072 160.050 251.699 537.545 Departmental Ptantation 413.477 296.906 601.515 583.566 790.460 - - - - - - - Total benefits 1394.986 470.076 962.687 1046.758 1434.148 456.762 316.709 53.271 61.788 53.072 160.050 251.699 537.545 Net benefits 1380.922 456.012 948.623 1032.694 1420.085 442.698 302.645 39.207 47.724 39.008 145.986 237.635 523.481 -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - . - . - - - - - . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - INDIA: Kerata Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Tabte 9. Economic Anatysis: TotaL Project (Rs mittion) (Page 3) 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Costs Farm For. maint.A land 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 Dep. Pt. maint. and tand 6.000 6.000 6.000 6.000 6.000 6.000 5.960 5.798 5.540 5.237 4.879 4.592 4.112 3.629 Other Expenditures Civit works and vehicles 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 1.846 Training, res. L studies - - - - - - - - - . - - Staff salaries 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 1.953 Vehicle & office operat. 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 0.265 Total costs 14.064 14.064 14.064 14.064 14.064 14.064 14.024 13.862 13.604 13.301 12.943 12.656 12.176 11.693 o Benefits Farm Forestry 435.029 446.645 43.004 66.312 46.692 150.405 191.266 408.480 330.578 339.406 32.678 50.390 35.481 44.823 Departmental Plantation - - - - - - - - - Total benefits 435.029 446.645 43.004 66.312 46.692 150.405 191.266 408.480 330.578 339.406 32.678 50.390 35.481 44.823 Net benefits 420.965 432.581 28.940 52.248 32.628 136.342 177.242 394.618 316.974 326.105 19.735 37.734 23.305 33.130 - - - - - - - - -- - - - - - -- -- - - - - - - - - - - - - - - ----- -- - . .- -- -.-- - - - - - - - - - - - - - - - - --.- - - - - - - - - - - - - - - - - - - - - INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Com,pletion Report Table 10. Farm Forestry: Economic Costs and Returns (Rs million) (Page 1) 1 2 3 4 5 6 7 8 9 10 11 12 13 Costs Seedt. , est. & mainten. 15.464 43.084 72.434 60.243 58.287 8.533 11.648 11.221 14.051 - - - - opportunity cost of land 0.240 0.740 1.810 2.680 3.570 3.650 3.790 3.880 4.000 4.000 4.000 4.000 4.000 Total costs 15.704 43.824 74.244 62.923 61.857 12.183 15.438 15.101 18.051 4.000 4.000 4.000 4.000 Benefits Fueltwood - - - 0.083 0.173 0.370 0.300 1.903 3.367 13.166 18.339 32.742 22.243 Small poles - - - 2.762 5.778 12.341 9.987 10.254 0.987 1.522 1.072 1.354 - Large poles - - - - - - - 101 .654 212.678 454.210 367.587 377.402 36.337 Small timber - - - - - - - - - 243.049 508.502 1085.990 878.879 Large timtber - - - - - - - - - - - - Total benefits - - 2.845 5.952 12.711 10.287 113.811 217.032 711.947 895.500 1497.489 937.459 Met benefits -15.704 -43.824 -74.244 -60.078 -55.905 0.528 -5.151 98.710 198.981 707.947 891.500 1493.489 933.459 ERR = 44.9% INDIA: Kerata Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Table 10. farm Forestry: Economic Costs and Returns (Rs mitlion) (Page 2) …---- 14 15 16 17 18 19 20 21 22 23 24 25 26 Costs Seedl. , est. & mainten. - - - - - - - - - - - - - Opportunity cost of land 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 Totat costs 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 Benefits Fuetwood 23.130 4.488 11.149 17.262 24.607 18.893 13.434 2.186 2.573 2.186 6.181 9.390 20.054 Smalt poles - - - - - - -- - - - Large potes 56.032 39.453 49.841 - - - - - - - - - ro Smatt tiffber 902.348 86.879 133.968 94.330 119.167 - - - - - - - - Large timber - 42.349 166.213 351.600 499.915 437.869 303.274 51.085 59.215 50.885 153.869 242.309 517.491 Total benefits 981.510 173.169 361.172 463.192 643.689 456.762 316.709 53.271 61.788 53.072 160.050 251.699 537.545 Net benefits 977.510 169.169 357.172 459.192 639.689 452.762 312.709 49.271 57.788 49.072 156.050 247.699 533.545 .---------- INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Table 10. Far. Forestry: Economic Costs and Returns (Rs mitlion) (Page 3) 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Costs Seedt. , est. & mainten. - - - - - - - . - - - - Opportunity cost of land 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 Total costs 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 4.000 Benefits Fuelwood 16.229 16.663 1.604 2.474 1.742 2.201 - - - - - - - - SmarL poles - - - - - - - - - - - Large poles -- ....- Small tirber - - - - - - - Large timber 418.799 429.982 41.399 63.838 44.950 148.205 191.266 408.480 330.578 339.406 32.678 50.390 35.481 44.823 Total benefits 435.029 446.645 43.004 66.312 46.692 150.405 191.266 408.480 330.578 339.406 32.678 50.390 35.481 44.823 Net benefits 431.029 442.645 39.004 62.312 42.692 146.405 187.266 404.480 326.578 335.406 28.678 46.390 31.481 40.823 ............. -..-- -- - - -- - -- ---- -------.......................- --- -- - --------------.............----- -------.. .......-- --- -----------.-.......---- -- - -- -------.......--...---- ----... ....--- ----...- ---- .. -. ..--.....................-.........-__-_ INDIA: Kerata Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Table 11. Departmental Plantations: Economic Costs and Returns (Rs million) (Page 1) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Costs Seedt. estab. L mainten. 5.196 24.852 45.759 49.177 45.110 41.622 40.926 54.374 59.082 2.950 2.950 2.950 2.950 2.950 Opp. cost land smatl blo. 0.002 0.015 0.032 0.074 0.132 0.170 0.209 0.229 0.271 0.271 0.271 0.271 0.271 0.271 Opp. cost 1. Large blocks 0.032 0.176 0.409 0.654 0.941 1.155 1.592 2.054 2.687 2.687 2.687 2.687 2.687 2.687 Opp. cost l. strip plant. 0.005 0.011 0.018 0.035 0.047 0.082 0.087 0.088 0.091 0.091 0.091 0.091 0.091 0.091 Total costs 5.235 25.054 46.218 49.940 46.230 43.029 42.814 56.744 62.132 6.000 6.000 6.000 6.000 6.000 Benefits -4 strip pi. totat benefits - - 0.072 0.094 0.095 0.243 0.180 6.463 7.836 7.882 20.222 14.920 41.060 6.445 SmaLl block tot. benefits - - - 0.033 0.177 0.248 0.603 3.365 14.304 20.623 47.985 68.334 48.109 45.762 Large block benefits - - 0.111 0.607 1.767 3.719 5.260 5.614 7.392 48.105 191.210 302.877 317.030 361.269 TotaL benefits - - 0.183 0.34 2.039 4.210 6.043 15.442 29.532 76.610 259.418 386.131 406.198 413.4A7 Net benefits -5.235 -25.054 -46.035 -49.206 -44.191 -38.820 -36.770 -41.302 -32.600 70.610 253.418 380.131 400.199 407.477 ERR = 29.4X INDIA: Kerala Social forestry Project (Cr.1514-IN) Amex 1: Financial and Economic Re-evaluation Project Coqpletion Report Table 11. Departental Plantations: Economic Costs and Returns (Rs miltion) (Page 2) -- -- -- -- - -- -- -- - -- -- -- - -- -- -- -- - -- -- -- - -- -- -- - -- -- -- -- - -- -- -- - -- -- -- - -- -- -- -- - -- -- -- - -- -- -- - 15 16 17 18 19-32 33 34 35 36 37 38 39 40 Costs Seedl. estab. £ minten. 2.950 2.950 2.950 2.950 2.950 2.950 2.950 2.950 2.950 2.950 2.950 2.950 2.950 Opp. cost Land smtal blo. 0.271 0.271 0.271 0.271 0.271 0.269 0.256 0.239 0.197 0.139 0.101 0.062 0.042 Opp. cost l. large blocks 2.687 2.687 2.687 2.687 2.687 2.655 2.512 2.278 2.033 1.746 1.532 1.096 0.633 Opp. cost l. strip plant. 0.091 0.091 0.091 0.091 0.091 0.086 0.080 0.073 0.056 0.044 0.009 0.004 0.003 Total costs 6.000 6.000 6.000 6.000 6.000 5.960 5.798 5.540 5.237 4.879 4.592 4.112 3.629 Benefits Strip pi. total benefits 0.358 4.178 - - - - - - - - - - - Small block tot, benefits 25.365 48.603 3.978 - Large block benefits 271.183 548.734 579.588 790.460 Total benefits 296.906 601.515 583.566 790.460 - - - - - - - - - met benefits 290.907 595.515 577.566 78.460 -6.000 -5.960 -5.798 -5.540 -5.237 -4.879 -4.592 -4.112 -3.629 .. __---- ---- ---- ---- ---- ---- ----- ---- ---- -- - ---- -. - ---- ----- --- ---- ---- ---- ---- ---- ----- - . . . . . ...-- . . . . . -- . -- _ INDIA: Kerala Social Forestry Project (Cr.1514-IN) Annex 1: Financial and Economic Re-evaluation Project Completion Report Table 11. Dcpartmental Plantatiotns: Econaoic Costs and Returns (Rs mitlion) (Page 3) Internal Rates of Returns of Net Streams Present values of Net Streams at a Discount Rate of 12.0% BToT2O UP 10% UP 20% UP 50% DOWJN 10% DOWN 20% DOWN 50% 8TOT20 UP 10% UP 20% UP 50% DOWN 10% DOWN 20% DOWN 50% CTOT 33.248 34.853 36.341 40.254 31.501 29.584 22.284 CTOT 2001.5 2265.2 2529.0 3320.3 1737.7 1473.9 682.6 UP 10% 31.667 33.248 34.713 38.565 29.947 28.059 20.870 UP 10% 1937.8 2201.6 2465.4 3256.7 1674.1 1410.3 619.0 UP 20% 30.244 31.803 33.248 37.046 28.549 26.687 19.598 UP 20% 1874.2 2138.0 2401.7 3193.0 1610.5 1346.7 555.4 UP 50% 26.687 28.191 29.584 33.248 25.050 23.254 16.417 UP 50% 1683.4 1947.1 2210.9 3002.2 1419.6 1155.8 364.5 DOWN 10% 35.024 36.657 38.171 42.152 33.248 31.298 23.873 DOWN 10% 2065.1 2328.8 2592.6 3383.9 1801.3 1537.5 746.3 DOWN 20% 37.046 38.711 40.254 44.314 35.236 33.248 25.681 DOWN 20% 2128.7 2392.5 2656.2 3447.5 1864.9 1601.2 809.9 DOWN 50% 45.517 47.317 48.987 53.385 43.560 41.413 33.248 a' DOWN 50% 2319.6 2583.3 2847.1 3638.4 2055.8 1792.0 1000.7 BTOT20 LAG 1 LAG 2 LAG 3 BTOT20 LAG I LAG 2 LAG 3 CTOT 33.248 29.069 25.841 23.269 CTOT 2001.5 1718.9 1466.5 1241.2 UP 10% 31.667 27.718 24.661 22.222 UP 10% 1937.8 1655.2 1402.9 1177.6 UP 20X 30.244 26.500 23.596 21.275 UP 20% 1874.2 1591.6 1339.3 1114.0 UP 50% 26.687 23.444 20.916 18.889 UP 50% 1683.4 1400.8 1148.4 923.1 DOWN 10% 35.024 30.583 27.161 24.440 DOWN 10% 2065.1 1782.5 1530.1 1304.9 DCWN 20X 37.046 32.303 28.658 25.765 DOWN 20% 2128.7 1846.1 1593.8 1368.5 DOWN 50% 45.517 39.455 34.851 31 .226 DOWN 50% 2319.6 2036.9 1784.6 1559.3 LAG 1 - 33.248 29.069 25.841 LAG I 1787.0 1534.7 1309.4 LAG 2 - 33.248 29.069 LAG 2 - 1595.5 1370.3 LAG 3 - 33.248 LAG 3 - - 1424.6