Dment of

The World Bank

FOR OMCIAL USE ONLY

Report No. 5707-IND

STAFF APPRAISAL REPORT

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

June 27, 1986

Projects DepartmentEast Asia and Pacific Regional Office

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = RupiahUS$1.00 = Rupiah (Rp) 1,100Rp I milLion = US$909.09

GOVERNMENT OF INDONESIA FISCAL YEAR

April I-March 31

WEIGHTS AND MEASURES

1 kilometer (km) = 0.62 miles (mi)1 square kilometer (km2) = 100 ha = 0.39 sq miles1 hectare (ha) = 2.47 acres (ac)1 kilogram (kg) = 2.2 pounds (lb)I metric ton (ton) = 2,206 pounds (Lb)

GLOSSARY OF ABBREVIATIONS

AAETE - Agency for Agricultural Education, Training and ExtensionAARD - Agency for Agricultural Research and DeveLopmentADAB - Australian Development Assistance BureauAHO - Animal Health OfficerAIC - Agricultural Information CenterBAE - Bureau of Agricultural Extension, AAETEBAPPENAS - Badan Perencanaan Pembangunan Nasional - National Development

Planning AgencyBIHAS - Bimbingan Hassal Sw Sembada Bahan Makanan, "Mass Guidance for

Self-Sufficiency in Foodstuffs' - a farm input credit programBRI - Bank Rakyat Indonesia - People's Bank of IndonesiaBUUD - Badan Usaha Unit Desa - Village Unit Cooperative (not

incorporated)BULOG - Badan Urusan Logistik - National Logistic BoardDCE - Directorate General of EstatesDGF - Directorate General of FisheriesDCFCA - Directorate General of Food Crops AgricultureDCL - Directorate General of LivestockINMAS - Intensifikasi Kassal - Mass intensification programINSUS - Intesifikasi Khusus - Special intensification programIPS - Institut Pertanian, Bogor-Bogor Agricultural UniversityISTC - In-service Training CenterKCAKANDEP - Head of District Office (Kepala Kantor Department), Minister

of Agriculture's representative at district level.KAKANWIL - Head of Regional Office (Kepala Kantor Wilaya), Minister of

Agriculture's representative at province LevelKUD - Koperasi Unit Desa - Village Unit CooperativeMOA - Ministry of Agriculture (Departmen Pertanian)MOT - Ministry of Transmigration (Departmen Transmigrasi)MOC - Ministry of Cooperatives (Departmen Kooperasi)

NCAE - National Comission for Agricultural ExtensionNFCEP - National Food Crop Extension Project (Loan 1267-IND)NES - Nucleus Estate and Smallholders ProjectNAEP II - National Agricultural Extension Project II (Credit 996-IND)PIR - Perkebunan Inti Rakyat; GOI-financed NucLeus Estate and

Smallholder ProjectPIU - Project Implementation UnitPPL - Penyluh Pertanian Lapangan - field extension workerPPM - Penyluh Pertanian Kadia - field extension supervisorPPS - Penyluh Pertanian Spesialis - extension subject matter

specialistPHU - Project Management UnitREC - Rural Extension CenterREPELITA IV - Fourth Five-Year Plan, 1984-1989SATCAS - Satuan Petugas Lapangan (FieLd task force comprising animal

health, extension and husbandry workers)SOE - Statement of ExpendituresT&V - Training and Visit - a system of agricultural extensionVAT - Value Added TaxvU - Village Unit

FOR OFFCIAL USE ONLY

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Table of ContentsPage No.

LOAN AND PROJECT SUMMARY ................ ........................... iv

I. BACKGR OUND......................................... I

A. *The Agricultural Sector . ............................ 1B. Institutions in the Sector . . ..................... 4

II. ISSUES IN EXTENSION AND PROJECT RATIONALE .................... 7

A. The Status of Agricultural Extension .................... 7B. Bank Group Involvement in Agricultural Extension ......... 9C. Project Formulation .............. ....................... 12D. Rationale for Bank Support . ...................... 13

III. THE PROJECT ....... ... ........................... 14

A. Objectives and Scope ................... 14B. Detailed Features . ............... ..... 14C. Implementation Schedule ...................... ......... 19

IV. PROJECT COST AND FINANCING ................. ............... 20

A. Cost Estimates ........................................ . .. 20B. Financing Plan .......... ............... . .... 21C. Procurement ............................................ . . 22D. Disbursement ............................................ . 24E. Accounts and Audits ...................................... 24

V. PROJECT IMPLEMENTATION, ORGANIZATION AND MANAGEMENT .......... 25

A. Reorganization of Agricultural Extension Service ......... 25B. Organization for Project Implementation .................. 26C. Extension Methodology .................. ... ....... ......... 27D. Farmers' Groups .......... .... ..................... . 28E. Role of wome ........................... 29F. Monitoring and Evaluation . ....................... .. .... 7SG. Research-Extension Linkage ............. ............... ...... 30

This report is based on the findings of an appraisal mission which visitedIndonesia in March 1985. The appraisal mission comprised Messrs. K. Sengupta(Bank) and S. Silbiger (Consultant).

Thi document has a resticted disrbution and may be used by recipients only in the performanceof their official dues Its contents may not otherwise be dislosed without World Dank authoriztion.

Page No.

VI. BENEFITS, JUSTIFICATION AND RISKS .......................... 31

A. Production Targets and Extension Packages . .. ......... 31B. Benefit Estimation ....................................... 31C. Environmental Effects ............................. ....... 33D. Risks ........................... . .................. ..... 33

VII. AGREEMENTS AND RECOMMENDATION ..... ........................... 33

A. Agreements ............................................... 33B. Recommendation ......... 33

LIST OF TABLES AND FIGURES IN THE MAIN REPORT

4.1 Project Cost Summary4.2 Estimated Price Contingencies4.3 Procurement Arrangements

ANNEXES

Annex 1, Table 1: Estimates of Smallholder Agricultural Land Use, byProvince, 1983

Table 2: Number of Households by SubsectorTable 3: Production of Some Major Agricultural Commodities (1978-

83) and Target for 1988

Annex 2, Table 1: Project Cost EstimateTable 2: Summary of Construction CostsTable 3: Construction Program - Settled Areas and Transmigration

AreasTable 4: Number of Rural Extension CentersTable 5: Vehicle ListTable 6: Schedule of Vehicle ProvisionTable 7: Cost of Furniture and Equipment for RECs and AHPsTable 8: Basic Equipment and Furniture for New RECsTable 9: Specialized Extension Package for Food Crops at RECsTable 10: Specialized Extension Package for Estate Crops at RECsTable 11: Specialized Extension Package for Livestock at RECs and

AHPsTable 12: Specialized Extension Package for Fisheries at RECsTable 13: Training Programs and CostTable 14: Specific Skill Course for PPLs, PPMs, PPSs, and FarmersTable 15: Capacity of In-service Training Centers

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Annex 3, Table 1: Schedule of Project ExpendituresTable 2: Proposed Allocation of Loan ProceedsTable 3: Estimated Schedule of DisbursementsTable 4: Implementation Schedule

Annex 4, Table 1: Total Number of Extension Agents (PPL/PPN), 1986/87Table 2: Total Number of Subject Matter Specialists (PPS), 1986/87)Table 3: Extension Staff Requirement for Transmigration AreasTable 4: Monthly Salaries and Allowances of Typical Extension

PersonnelTable 5: Incremental Operational Costs

Annex 5, Tabie 1: Main Constraints to Production and Potential forIncreasing Yields of Major Commodities

Table 2: Calculation of Indicative Economic BenefitsTable 3: Indicative Economic Costs and Benefits

Documents Available in Project FileWorking Paper 1 - Estate CropsWorking Paper 2 - LivestockWorking Paper 3 - Fisheries

CHARTS

1. Organization of MOA2. Organization of BIMAS3. Organization of KANWIL4a. Organization of Directorate of Extension under D.G. Food Crop

Agriculture, D.G. Livestock, D.G. Fisheries4b. Organization of Directorate of Extension under D.C Estate Crops5. Organization of Bureau of Agricultural Extension6. Organization of Project Implementation Unit

MAP

1. IBRD 19132R -- Project Provinces

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INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Loan and Project Summary

Borrower: Republic of Indonesia.

Amount: US$70.0 million equivalent.

Terms: Repayable in 20 years, including 5 years of grace, at thestandard variable interest rate.

ProjectDescription: The objective of the project is to consolidate efforts to

improve extension services for food crops, especially low-land rice, and to further strengthen those for estatecrops, livestock, fisheries and nonrice food and horticul-tural crops, by integrating che various subsectoral exten-sion services into one unified extension service within theMinistry of Agriculture. The proposed project includes:(a) recruitment of 6,000 field extension workers, 3,000extension supervisors, 1,000 subject matter specialists and200 Animal health officers; (b) construction of 400 newRural Extension Centers (REC) in upland, tidal swamp,estate crops, livestock concentration, coastal fisheries,and transmigration areas; expansion of about 1,400 existingRECs; and construction of 200 animal health posts and 210staff houses; (c) pro_urement of necessary vehicles, equip-ment and furniture; (d) overseas and local training ofextension personnel; and (e) technical assistance andstudies. The unified extension service would help increaseproduction of secondary crops, horticultural crops, estatecrops, livestock and fisheries in order to provide thepopulation with a more balanced and nutritious diet, aswell as to increase tree crops and fisheries exports.

Risks There are no significant agricultural risks associated withthe project, although the project could face some manage-ment and organizational constraints, and the funding pro-blems recently encountered by the Government mightcontinue. These risks are minimal, and have been addressedin the project design.

Estimated Cost: Local Foreign Total(US$ million)

Expans ion and improvement of extensioncapabilities of subsectorsCivil works 30.7 6.5 37.2Vehicles, furniture and equipment 7.2 5.4 12.6Training 20.1 4.6 24.7Technical assistance and studies 2.1 1.4 3.5Recurrent cost 28.3 1.0 29.3

Base costs 88.4 18.9 107.3Physical contingencies 5.9 1.3 7.2Price contingencies 18.6 3.1 21.7

Total Project Costs /a 112.9 23.3 136.2

Financing Plan:IBRD 48.9 21.1 70.0COI lb 64.0 2.2 66.2

Totals 112.9 23.3 136.2

Estimated DisbursementsBank FY 1987 1988 1989 1990 1991 1992 1993

(US$ million)

Annual 2.1 7.9 14.0 12.0 16.0 13.0 5.0Cumulative 2.1 10.0 24.0 36.0 52.0 65.0 70.0

Economic Rate ofReturn: Although not applicable for this project, indicative rates of return

are 32Z.

Map: IBRD 191321

la Including VAT of US$9.0 million and other taxes and duties estimated atUS$3.5 million.

/b Including taxes and duties of US$12.5 million, reserved procurement of vehiclesof US$7.0 million, and US$2.2 million of technical assistance and overseastraining expected to be provided by ADAB.

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

I. BACKGROUND

A. The Agricultural Sector

1.01 Objectives. The Government's major objectives for the agriculturalsector are to: (a) create productive employment to raise incomes of the ruralpoor; (b) increase domestic food supply to keep pace with rising demand;(c) expand agricultural exports particularly of tree crops; and (d) ensureproductive, sustainable use of Indonesia's varied land, water and othernatural resources.

1.02 Role and Performance. Over the last one and a half decades,agricultural growth has averaged about 4% p.a. and outpaced population growthby a significant margin. Agriculture continues to be the backbone of theeconomy - providing employment and the main source of livelihood for morethan half of the labor force. The growth of rice output at 5% p.a. accountsfor more than two fifths of gross output, land use and employment, and hasmade a solid contribution to the sector's impressive performance. It has alsotransformed the country from one of the world's largest importers of riceCabout 2 million tons as late as 1978/79) to one with considerable surplusesin 1985186. Other food and cash crops - growing at 3.5Z and 4.5% annually -

have also added to the significant gains registered in rural welfare in thepast several years. Major factors contributing to the current self-sufficiency in rice and an impressive growth in other crops have been heavyinvestment in infrastructure such as irrigation, a rapid increase in the useof high yielding varieties, and subsidized fertilizers, research efforts andextension - all of which helped double rice yields (from 1.5 tons per ha in1969 to 2.7 tons per ha in 1984).

1.3 In the future, a growth in rice output of about 2.5-3% p.a. willhave to be maintained to basically meet domestic demand, since import substi-tution possibilities are minimal and exporting is not profitable with currentdomestic costs of production and international prices. Thus, the strategicimperative is to introduce measures which would encourage efficient riceproduction and to exploit fully the potential for agricultural diversifi-cation. Diversified farming will require considerable success in solvingtechnical problems and providing adequate inputs and services (quality seeds,extension, marketing, etc.) for alternative field and tree crops, and alsopolicies giving appropriate signals to small farmers, and careful monitoringof the relative incentives for farmers to produce rice and other crops.Efforts in the food and field crops will also need to be supplemented by care-fully planned tree crops programs if efficient agricultural diversification isto be achieved. This, in turn, will require substantial improvement in theimplementation capacity of the public sector enterprises involved, vigorousparticipation by the private sector, and improved extension to existing treecrop smallholders.

1.04 Food Crops. In the past GOI has concentrated on increasing theproduction of rice, the preferred staple food of the great majority ofIndonesians. Rice production increased rapidly (4.5% p.a.) between 1970 and1983, chiefly due to irrigation rehabilitation and the provision to irrigatedrice growers of fertilizer, pesticidics and high-yielding variety seed.Estimated 1985 production is 26 million tons, as a result of which GOI reducedits rice imports to only about 0.4 million tons during 1984 compared toimports of 2.3 million tons in 1977. The objective of Repelita IV (FourthFive Year Plan 1984-1989) is to stabilize self-sufficiency in rice for thegrowing population. The target for rice production at the end of Repelita IVhas been set at 28.6 million tons - a growth of 4% p.a.

1.05 Over the past decade, output of secondary food crops (maize, cas-sava, soybeans, peAnuts, and sweet potatoes) grew more slowly, at an averageof only 1.6Z p.a., composed of a 1.1% p.a. average decline in area (much ofthis land shifting to irrigated rice) and a 2.7% p.a. increase in yield. Onboth Java and the Other Islands, secondary food crops offer promising develop-ment prospects. For example, there is room for yield improvement throughresearch, extension and supporting services, and great scope for an expansionin harvested area, particularly in transmigration areas. The annual growth ofsecondary crops during Repelita IV has been targetted at 5.1Z for corn, 5.8Zfor peanuts and 20.7% for soybeans.

1.06 Horticultural and Vegetable Crops. Some 0.55 million ha are estima-ted to be planted with fruit trees and 0.4-0.9 million ha under vegetables inIndonesia. In addition, about 20 million home gardens with a total area of upto about one million ha are also used for fruit and vegetable production. In1984 production was estimated at 8 million tons of fruit and 5.5 million tonsof vegetables. Demand for fruits and vegetables has a high income elasticity,and has grown sharply in recent years. Annual imports of fruit (mainlyapples, oranges and grapes) were about 23,000 tons valued at abouc US$12 mil-lion between 1978 and 1982. In 1983 the Government placed a ban on imports ofthese fruits in order to conserve foreign exchange and encourage domesticproduction. Vegetable imports consisting mainly of garlic and, to a lesserextent, onions totalled 28,000 tons valued at US$19 million in 1982. RepelitaIV targets for increasing production of fruits and vegetables have been fixedat 9% for oranges, 4.1% for pineapple, 10% for mangoes, 5Z for banana, 5.2%for papaya, 6.9% for potatoes, 5.6Z for onions and 3.5% for tomatoes. Tointensify research and to increase production, GOI has recently created aResearch Coordinating Center for Horticulture under the Agency forAgricultural Research and Development (AARD) and a Directorate of Horticul-tural Crop Production under the Directorate General of Food Crops Agriculture(DGFCA).

1.07 Estate and Industrial Crops. Products from these crops continue tobe an important source of export income. Tree crops account for over 8 mil-lion ha of the overall 9 million ha covered by estate and industrial crops andoccupy some 45Z of total cropped land. The most widely cultivated crops inthis subsector are coconuts, rubber, coffee, clove, kapok, sugarcane and oilpalm. Some 86% of the 9 million ha are farmed by smallholders. Coconut,coffee, clove and kapok are almost exclusively smallholder crops while 83% ofsugar and 81% of rubber are on smallholdings; oil palm is grown principally on

government and private estates. In the case of tree crops, static ordeclining production has resulted from the deteriorating age profile of theplantings, which remain of predominantly poor genetic potential. Untilrecently, efforts to revitalize the smallholder tree crop sector werelimited. However, an approach begun in 1976, which has received increasedemphasis by GOI, is for government-owned estates to plant and maintain treecrops for smallholders on previously undeveloped land until they reachmaturity, using farmers selected to be settlers as employees, and thereafterto provide the settlers with inputs, extension services, and processingfacilities. This is the approach supported by seven Bank-financed NucleusEstates and Smallholders (NES) Projects. While the NES approach has beenmainly for new settlers, GOI has also initiated national programs to assistexisting smallholders to replant rubber or coconuts themselves, with fairlyintensive support from Project Management Units (PMUs). Efforts to design alower-cost system of tree crop planting with minimal demands on managementhave also started. Expansion of smallholder tree crops is of high priority,given the vast area of over-aged and low-yielding smallholder rubber andcoconuts, the good market prospects and employment potential for these crops,and the Other Islands' land availability and natural comparative advantage inthem. The Bank is currently financing three smallholder rubber and coconutdevelopment projects. Repelita IV targets have been fixed for annual increaseof 8.2% for rubber, 9.7% for coconuts, 26.5% for oil palm and 20.7Z forcotton. A Bank-prepared Tree Crop Sector Review will assist in determiningthe direction of future investment in the sector.

1.08 Livestock. There are some 8.3 million cattle and 2.5 millionbuffalo in Indonesia, the majority kept by smallholders primarily as a sourceof draft power and manure, and secondly as a capital reserve and source ofcash income. About 70% of all land cultivated for food crops is prepared bycattle or buffalo power, the other 30Z by hand labor. Mechanization isdiscouraged on employment grounds and is still negligible. The herd offtake,at about 12% nationally (14Z on Java), supplies an accelerating demand formeat especially on Java where cattle slaughter has increased by about 3% p.a.over the last 10 years. In order to increase consumption of protein foods toprovide a balanced diet, Repelita IV targets have been fixed at increasingproduction of meat by 6.1%, eggs by 6.6Z and fresh milk by 28.3% per year.

1.09 Fisheries. Indonesia's untapped fisheries resources are consider-able. Some estimates put the potential annual marine fish catch in Indonesiaat between 3-6 million tons. Fish is becoming one of the major foreignexchange earners for Indonesia, and in 1982 Indonesia's fish exports amountedto about 88,000 tons valued at about US$253 million. Fish products play acentral role in the Indonesian diet, providing 62% of animal protein sup-plies. Present production of the subsector is about 2 million tons p.a., ofwhich 70% is from marine fisheries and 30% from other sources. Of the 2 mil-lion tons, more than 85% of production results from small scale or subsistencelevel fishermen. An Indonesia Fishery Sector Study (1983) undertaken by theAsian Development Bank in association with the World Bank recommends that GOIefforts during 1984-88 shou±d focus on (a) the need to encourage privatesector development and participation in the fishing industry by providing theinfrastructure facilities and credit requirements for support services, dis-tributors and marketers; (b) expansion and diversification of the fishery

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export industry in the public and private sectors; and (c) expanding fisheriesresearch, manpower and statistical resources. Of high priority are efforts toincrease shrimp production and exports from brackish-water fish farming. TheRepelita IV targets for annual production increases have been fixed at 6.3%for inland fish and 5.6Z for marine fish.

1.1U The Transmigration Program. Of Indonesia's present estimatedpopulation of about 158 million, over 100 million (62Z) reside in Java, anisland with about 7% of the nation's land. Seventy percent of Java's totalarea is cultivaied, and population densities in irrigated areas rise to2,000 people/km . Meanwhile, vast areas of relatively low fertility soil lieuncultivated in the Other Islands and low population densities in some areasimpede regional development and economic growth. These facts have been sostriking for so long that programs to wed the underutilized labor of Java withthe underutilized land of the Other Islands have been implemented for threequarters of a century. The major purposes of the transmigration program areto: (a) create employment opportunities for and improve the incomes of theimpoverished and landless laborers on Java, Bali and Lombok; (b) alleviatepopulation pressures on these islands, especially pressures in environmentallyvulnerable areas; (c) promote balanced regional development; and (d) increasefood and tree crop production.

1.11 During REPELITA I (1969-1974) and II (1974-1979) 39,000 and 44,000families were transmigrated, respectively. About 366,000 families were set-tled during REPELITA III (1979-84). The transmigration target of REPELITA IV(1984-1989) was originally been set at 750,000 families but has recently beencurtailed because of financial constraints. The Directorate General of FoodCrop Agriculture (DGFCA) is primarily responsible for food crop productionaspects of transmigration projects, including provision of inputs and agricul-tural extension. The Directorate General of Estate Crops (DGE) is similarlyresponsible for tree crop production aspects of transmigration projects.Integrated agricultural extension is needed to guide the settlers, who mustlearn new cropping systems and agricultural practices to successfully copewith new agricultural environments.

B. Institutions in the Sector

1.12 Directorates General. Prior to 1974, the Ministry of Agricultureconsisted of five commodity-oriented Directorates General, responsible forfood crops, estate crops, livestock, fisheries and forestry. In 1974, theGovernment decided to reorganize the Ministry, by removing the research func-tions and responsibility for extension methodology from the DirectoratesGeneral and placing them into two new agencies, the Agency for AgriculturalResearch and Development (AARD) and the Agency for Agricultural Education,Training and Extension (AAETE), respectively. In 1983, by anotherPresidential Decree, forestry was separated from the Ministry of Agricultureand placed under a new Ministry of Forestry and a Directorate of Extension wascreated under each of the remaining Directorates General in the Ministry ofAgriculture (Chart 1). Each Directorate General has six to seven directoratesresponsible for program development, production, protection, farmers' businessand processing, land expansion and extension.

1.13 Provincial Agricultural Services. Each of the Directorates Generalis represented at the provincial level by a provincial department, headed byan Inspector. The departments are divided into bureaus including a Bureau ofExtension reflecting the functional directorates in the Directorates Gene-ral. Provincial Inspectors are administrativeLy responsible to the Governorand Provincial Government. However, they remain responsible to the respectivecentral Directorates General for implementation of national programs and tech-niral matters in general. Where the work load justifies it and provincialfunds are adequate, the various provincial departments maintain offices atdistrict (Kabupaten) level. Depending on size, population and importance, thedistrict office is divided into sections, including one for extension, corres-ponding to the bureaus at the provincial level. Extension Subject-MatterSpecialists (PPS) are attached to the Provincial Bureau of Extension and thedistrict Extension sections. The lowest level structural position in eachsubsector is that of a subdistrict agricultural officer (Mantri Kecamatan),who is almost exclusively concerned with statistical reporting and regulatorywork. Field extension supervisors (PPMs) are attached to Rural ExtensionCenters (RECs) and field extension workers (PPLs) are posted at village level.

1.14 AAETE. The AAETE is responsible for all agricultural education,training and extension methodology and since 1984 it has had overall respon-sibility for coordinating agricultural extension at the national level. Sinceits establishment in 1974, it has concentrated its efforts in the areas ofrefining extension methodology, producing extension materials and particularlyin managing the education and training of agricultural staff. It supervisesthree types of institutions, (a) agricultural (vocational) high schools pro-ducing technical level graduates; (b) regional in-service training centers(ISTC) to upgrade the skill of agricultural staff; and (c) agricultural infor-mation centers (AIC) to produce extension materials (publications, films,radio broadcasts) and to support extension work through organizing farmercompetitions, field days and conferences. In addition, AAETE runs a nationaltraining center at Ciwai, near Bogor, which provides longer term in-servicetraining courses for agricultural teachers and instructors from the regionalschools and centers, and for senior personnel of the provincial and centralagricultural agencies. The high scl.ools and training centers are beingassisted by three Bank-financed agricultural training projects (Credit 288-IND, Loan 1692-IND and Loan 2341-IND), while the first Bank-assisted agricul-tural research and extension project (Loan 1179-IND) and third agriculturaltraining project (Loan 2341-IND) provided funds for establishing one AIC perprovince.

1.15 AARD. Since its establishmpnt in 1974 AARD has managed to absorbmost ongoing agricultural research programs. Eighteen budget-supportedresearzh institutes were transferred from the five Directors General toAARD. AARD was reorganized in 1979 and 1983 to Improve its effectivenessfollowing the growth in staff and responsibilities. In 1979 the GOI,established five Central Research Institutes (food crops, industrial crops,animal husbandry, fisheries and forestry) and a new Center for AgriculturalResearch Programming. Presidential Decree No. 24 of May 19, 1983 created anew Research Coordinating Center for Horticultural Crops; merged the Centerfor Agricultural Research Programming with its Secretariat; removed thequarantine regulatory function to the Secretary-General, Ministry of Agricul-

ture and transferred forestry research to the newly created Ministry ofForestry. Further changes have been effected involving rationalization ofresearch institutes, research stations and experimental farms grouped underResearch Coordinating Centers in five commodity areas (Food Crops, Horticul-tural Crops, Industrial Crops, Fisheries and Animal Sciences). AARD has anetwork of two research centers for soils and agro-economics, one center forstatistics and data processing, a national library, five research coordinatingcenters, 23 research institutes, 42 research stations, and 151 experimentalfarms/or fish ponds. AARD has been assisted by two Bank-financed projects,the Agricultural Research and Extension Project (Loan 1179-IND) and NationalAgricultural Research Project II (Cr. 1014-IND/Ln. 1840-IND). The thirdresearch project is under appraisal.

1.16 BIMAS. BIMAS (Bimbingan Massal) literally translated means "MassGuidance". It is a national program to raise food crop production and farmincome by applying credit and cash inputs at subsidized prices. The firstcredit package program, the paddy center program, was introduced in 1958/59.Several modifications in approach were progressively introduced as experiencewas gained in handling and organizing farmers, credit and input supply, untilthe BIMAS program evolved and was initiated in the 1965/66 wet season. In1967/68 the INMAS (Intensifikasi Masal) program was initiated in the beliefthat after a few years under BIMAS the farmer's requirement for credit wouldbe less. Under this program, all farmers who are not eligible for BIMAS dueto credit default or who do not wish to take credit can buy subsidizedinputs.

1.17 A BIMAS secretariat within the Ministry of Agriculture administersthe program. Although there was a provision for a BIMAS Secretary as execu-tive head, the Director General Food Crops Agriculture concurrently held theposition until 1983, and BIMAS officers in the provinces and districts werepart of provincial and district food crop offices. Under Presidential DecreeNo. 62 of 1983, the role of BIMAS was expanded significantly and it has becomeorganizationally separate from the DGFCA. A full time Secretary of BIHAS hasbeen appointed at the national level and secretariats of BIHAS have beenestablished in all provinces and districts separate from the provincial anddistrict food crop service (Chart 2).

1.18 The BIMAS rice program is implemented via Village Units (VU). Thesecover 600-1,000 ha of rice land and consist of 2-3 villages and up to about1,500 farm families. A fully established VU is supposed to have a Bank RakyatIndonesia (BRI) credit office, a farmer cooperative (BUUD/KUD) for inputsupply and procurement of paddy or a village kiosk to supply inputs, and atleast one field extension worker (PPL). Initially, BIMAS was largelyrestricted to paddy areas with good water control and later expanded toinclude some upland rice, maize, sorghum, soybean, groundnut, green beans andcassava areas. After the recent Presidential Decree, BIMAS is responsible forcoordinating all supporting services required for the production not only offood crops but of all other priority agricultural commodities such assugarcane, tobacco, cotton, draft animals, local poultry and brackish watershrimp in selected areas. Other participants in the BIMAS program, both inplanning committees at various levels and in field level operations, are BRI(for loan disbursements and collections), the Ministry of Cooperatives (for

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input supply and marketing), BULOG (for purchase of rice and maintenance offloor price), and the Directorate General of Water Resources Development (forirrigation services).

1.19 Coordination of Agricultural Activities. The provincial Inspectorsof Food Crops, Estate Crops, Livestock and Fishery and the corresponding dis-trict heads are administratively responsible to the Governor and district-head, respectively. Their salaries are funded by the provincial governmentsbut they are technically responsible to the Directorates General. There are,however, some institutions at the province and district level which are fundedby the central government. Such institutions are regional in-service trainingcenters, agricultural information centers and the BIMAS Secretariat atprovince and district level. To supervise the activities of such centralgovernment institutions in the provinces and to coordinate the activities ofthe provincial agricultural services, the Minister of Agriculture appoints aregional head or KAKANWIL (Kepala Kantor Wilaya) in each province. There arethree categories of KAKANWIL depending on the size, population and importanceof the provinces. West Java, Central Java, East Java, North Sumatra and SouthSulawesi have type "A" KAKANWILs who have seven divisions under them(i) Regional Program; (ii) General Agriculture; (iii) Technology Application;(iv) Agricultural Education, Training and Extension; (v) Control andEvaluation; (vi) Administration; and (vii) BIMAS Secretariat (Chart 3).Thirteen provinces have type "B" KAKANWILs with six divisions. The remainingnine provinces have type "C" KAKANWILs with five divisions. The Head of theAgricultural Education, Training and Extension division under the KAKANWIL isthe representative of AAETE at the province level. There are no representa-tives of AAETE at the district level.

1.20 Although several other Ministries such as Transmigration, Educationand Cooperatives have representatives at district level known as KAKANDEP(Kepala Kantor Departmen - Head of District Office), the Ministry of Agricul-ture has as yet no KAKANDEP at district level. Within the context of currentbudget and personnel const-;aints, it is unlikely that KAKANDEP for agriculturewould be appointed for all the districts within Repelita IV.

II. ISSUES IN EXTENSION AND PROJECT RATIONALE

A. The Status of Agricultural Extension

2.01 Before 1974 each Directorate General within the Ministry of Agricul-ture had its own extension service. Some of the Directorates General, such asDGFCA, had their own Directorates of Extension but other Directorates Generalcombined production and extension functions under one Directorate. With theestablishment of AAETE in 1974 all Directorates of Extension at the nationallevel were disbanded, with some of their personnel transferring to AAETE.With the exception of the provincial food crop agricultural services,extension bureaus within the provincial agricultural departments of othersubsectors were also disbanded. However, the food crop field level extensionworkers (PPL) and subject matter specialists (PPS) recruited under thecentrally funded BIMAS program for rice production were not transferred to

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AAETE, but continued to remain administratively under BIMAS and technicallyunder DGFCA. The Director General of Food Crops, who was the Secretary ofBIKAS, thus had a large contingent of extension workers.

2.02 Without a central funding source equivalent to BIMAS, the otherDirectorates General did not have PPLs, PPKs and PPSs like DGFCA and conse-quently hardly any extension activity for smallholders. They maintained theirdevelopment operations by hiring field technicians using specific projectbudgets, restricting extension work for nonfood crop subsectors to specialtarget areas. Smallholder activity in the other subsectors is primarily amatter of establishing and maintaining long-lived capital assets, such asstands of tree crops, animal herds, and fish stock. Field work in thesesubsectors thus typically concentrates on assisting small localized numbers offarmers to establish those assets (e.g., via rubber and coconut replantingprograms), involves a considerable amount of credit or grant finance perfarmer, and often involves stationing field staff at physical facilities(e.g., latex and copra processing centers, sugar factories, tobacco barns, anddemonstration fish ponds). Staff so stationed are unavailable to meet farmersregularly and are unable to maintain close contact with them other than forcredit recovery purposes after the establishment phase. The status ofextension services in the nonfood crops is described below.

2.03 Estate Crops Extension Service. In NES, PIR and PMU areas whichcover about 30% of area under estate crops, extension services are being pro-vided alongside the provision of inputs, credit and in some cases processingand marketing. Extension advice is continued when smallholders obtain titleto their own plots. PTPs are currently in the process of devising more com-prehensive extension systems known as "built-in systems" which they would beprepared to oversee for a period of up to 25 years from crop establishment.Typically, PTPs providing extension and input services to smallholders have anaverage of 1 extension officer for every 250-300 families. Smallholders onthe 70% of the estate crop area which is outside NES, PIR and PMU areasreceive little or no extension service.

2.04 Livestock Extension Services. The Directorate General of Livestock(DGL) has established Units of Technical Management (UPT) in the provinces toprovide seed, fodder and breeding stock, artificial insemination, diseaseinvestigation, and quarantine services. At the district level, DGL fieldservices are organized by field supervisors, at the subdistrict level bymantris or assistant field livestock officers (AFLO). An average of 1 AFLO isavailable for every 10-15 villages and 10 AFLO for a typical district with100-150 villages. Most field time is spent on veterinary tasks, littleattention being paid to livestock production, and contact with farmers isgenerally poor because of lack of adequate number of village level extensionworkers. Under a livestock project being funded by the International Fund forAgricultural Development (IFAD), field staff have been organized into provin-cial level task forces (SATGAS) in the stock procurement areas, and intoprovincial and district level task forces (SATGAS) in distribution areas. Inaddition to organizing project and credit activities, these SATGAS provideextension and animal health services to project beneficiaries.

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2.05 Fishery Extension Service. The Directorate General of Fisheries(DGF) has established (a) a Brackish Water Aquaculture Development Center atJepara, (b) a Freshwater Aquaculture Development Center at Sukabumi, (c) aMarine Fishery Development Center at Semarang, (d) a Fishery Product Develop-ment and Quality Control Center at Jakarta, and (e) a Marine AquacultureDevelopment Center at Lampung for adaptive research, training and preparationof extension materials. To strengthen the work of the provincial governmentsin conducting extension activities, the centers have established specializedextension development units in a few provinces. These extension developmentunits are responsible for field trials, demonstrations of fishing methods andtechniques, fish culture training of extension workers, contact with fishermenand fish-farmers, and the supervision and monitoring of extension activi-ties. However, due to an inadequate number of field extension workers, exten-sion messages do not reach most of the fishermen.

B. Bank Group Involvement in Agricultural Extension

The National Food Crop Extension Project (NFCEP)

2.06 The Bank's involvement in assisting the improvement of field exten-sion services for food crops began with extension components in irrigationprojects, whereby a version of the training and visit system of extension-twas progressively introduced in irrigation command areas. In view of thelarge role that agriculture plays in the Indonesian economy and relatively lowproductivity of food crops, tree crops, aquaculture and animal husbandry, GOIsought the Bank's assistance at about the same time that AAETE was created toexpand and improve its extension services. There were two alternatives,either to have separate extension projects under each Direct*rate General, orto unify the extension services under AAETE. After considerable deliberationGOI decided at that time that, while creation of a unified extension serviceunder AAETE was a desirable goal, a major reorganization would seriously dis-rupt the program for increasing rice production. Consequently, the Governmentchose to focus on improving and rationaLizing the extension services under theDGFCA_ In 1976 the Bank approved the National Food Crop Extension Project(Ln. 1267-IND) under the DGFCA originally in nine provinces and later extendedto an additional four provinces.

2.07 Under the NFCEP the link of the food crop extension service with theBINAS program was preserved, but NFCEP deviated from the BIMAS program inseveral positive ways: (a) extension services were provided to all farmers,not only to BIMAS participants, in advance of other components of the BIMASpackage in the project area; (b) field extension supervisors (PPHs) werecreated and additional PPSs were recruited under the project, although thesalaries of PPLs, PPMs and PPSs were paid through BIMAS budget; (c) RuralExtension Centers, the basic modules around which the extension service wasbuilt, were created: each REC serviced 15,000-25,000 farm families and Was

1/ This system is described in detail in a Bank publication entitled"Agricultural Extension: The Training and Visit System," byDaniel Benor, James Q. Harrison and M. Baxter (1984).

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staffed with 2 PPMs covering 10-12 PPLs; and (d) the Training and Visit systemof agricultural extension was introduced.

Second National Agricultural Extension Project (NAEP II)

2.08 As the NFCEP was operating well in the 13 project provinces andparts of Lampung, areas which include nearly 80% of the farm population ofIndonesia, demand grew for other provinces to be covered. Moreover, it wasfelt that the time had arrived to introduce, selectively and in phases, exten-sion information for nonfood crops and smallholder livestock and fisheries, inareas where those activities provide major components of farmers' incomes.This step was considered important both for effective utilization of theinformation delivery system already developed for food crops, and to generatemore farmer interest in the extension process itself, which would also improveeffectiveness of food crop extension. The Bank approved the Second NationalAgricultural Extension Project (Cr. 996-IND) in 1980 with the principalobjectives of (a) strengthening food crop extension services in a furthergroup of 13 provinces not covered by NFCEP; (b) establishing an integratedextension service for transmigration areas; and (c) incorporating extensionactivities for smallholder estate crops, animal husbandry and inland fishculture into the basic extension program and delivery system heretoforeexclusively utilized for food crops.

2.09 NAEP II has been managed at the national level by the NFCEP projectunit under the jurisdiction of the DGFCA, pending completion of an organiza-tional study aimed at examining ways of unifying agricultural extension ser-vices under AAETE's coordination. All PPL, PPM and PPS have been paid throughthe BIMAS budget. The RECs have been constructed through the provincial anddistrict food crop services, mostly in predominantly food crop areas, and havebeen controlled and maintained by the DGFCA.

Experience with Past Lending

2.10 The food crop extension service has been considerably strengthenedunder the above projects. Compared to 3,960 PPLs, no PPMs and 179 PPSs at thebeginning of NFCEP (early 1976), the numbers have increased to 22,162 PPLs(including PPM) and 796 PPSs at the beginning of 1986. There are now two PPMsin each REC and two PPMs in each district food crop extension section. Underthe 2 projects, 1,402 RECs had been constructed or rehabilitated mainly inlowland rice areas and in some transmigration areas. All RECs have beenprovided with furniture and equipment and vehicles have been purchased.In-service training has been provided to about 26,000 extension personnel andoverseas training to about 400 persons. Both the projects thus far haveextended mainly information on rice, with limited attention paid to fruit,vegetables and secondary crops. The major agricultural impact of the projecthas been its remarkable success in combating the severe attacks of brownplanthopper in the main rice areas during 1976-77. In the years following theoutbreak, the expanded corps of field workers has promoted a shift by hundredsof thousands of small farmers to recently released resistant rice varietiesand increased usage of fertilizers and effective insecticides. Although theextension service alone cannot claim all the credit, it has contributedsignificantly to the increase in rice production from about 13 million tons in1976 to about 26 million tons in 1985.

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2.11 Although one of the objectives of NAEP II was to strengthen exten-sion services for estate crops, livestock and fisheries, these services stillremain weak. At the beginning of 1986, there were 6,075 PPLs+PPMs and 29 PPSsin estate crops, 2,170 PPLs + PPMs and 153 PPSs in livestock, and 1,698 PPLs *PPMs and 193 PPSs in fisheries extension services. The DGs other than DG FoodCrops could not create additional positions for extension officers out ofBIMAS funds as there was no national policy to that effect, and therefore hadto remain content with the few positions they could create out of specificproject funds. These three DGs were, in effect, operating outside the purviewof NAEP II. Very few of these extension staff received any training, and theyspent a disproportionate amount of their time in regulatory, licensing anddata collection work rather than in disseminating extension information.

2.12 Over the past years, considerable discussion, partly as a result ofthe above shortcomings, has taken place regarding appropriate measures tounify the extension services. In a national workshop on the subject in 1982,at which all DGs and AAETE participated, two important decisions were taken assteps toward unification: (i) the name of the RECs was changed to refer toMinistry of Agriculture (rather than DG Food Crops), and RECs were offered toall DGs to be used as focal points for extension, and (ii) DGs were requestedto use, as far as possible, the nationwide network of farmers' groups organ-ized by the food crop extension service. However, the DGs of Estate Crops,Livestock and Fisheries showed little inclination to use the existing networkof RECs as bases for their respective extension services for two mainreasons. First, most of the RECs were managed and controlled by DGFCA andwere thus not perceived as a joint facility. Second, there were few RECs inremote geographical areas where tree crops, livestock, and fishery activitiesare concentrated.

2.13 Government has recognized that the structural and functionaldivisions in the extension organization, as they existed until 1983, have beencausing operational inefficiencies. At the field level it was difficult tointegrate the extension function for all crops in a system dominated by thefood crops extension infrastructure. There has also been a mismatch betweendemand for training of extension staff under the DGs and AAETE's capability tomeet that demand. The effectiveness of Agricultural Informatior Centers,under AAETE, has been impaired by the structural separation of producers/dis-seminators and users of information. The linkage between research andextension is also weakened by the splintered extension apparatus.

2.14 To address these institutional weaknesses, the Government made thefollowing changes in the latter part of 1983 and early 1984.

(a) AAETE. By a Ministerial Decree issued in 1984, AAETE was givenoverall responsibility for coordinating extension at the nationallevel and formulating extension policies and methodology. Conse-quently, management of NAEP II, which supports the e_tension activi-ties of all subsectors, was transferred from the DCFCA to AAETE onApril 16, 1984. New coordination forums at the national, provincialand district levels were established by Ministerial Decree No. 482issued July 3, 1985.

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(b) Directorates General. Realizing the contribution of the food cropextension service to rice production and the intimate relationbetween extension and production, GOI, under Presidential DecreeNo. 24/1983, created Directorates of Extension under all four Direc-torates General. At the same time, AAETE retained its Bureau ofExtension. The Directorates of Extension are responsible forexerting technical and operational control over the extension staffand formulating extension programs to fit the needs of specificcommodity production programs (Charts 4a and 4b), while the Bureauof Extension of AAETE is responsible for carrying out studies forimproving the extension program, methods and formulation ofextension methodology and policies (Chart 5).

(c) BIMAS. The BIMAS Secretariat is responsible for administering theagricultural extension personnel of all subsectors and for synchron-izing provision of inputs, credit, marketing and cooperative devel-opment. In pursuance to the Minister of Agriculture Decree(N)143/KPES/LP 410/31 1985, handover of the extension personnel fromDGs and AAETE to BIMAS was completed by March 31, 1986. BIMAS isalso responsible for administrative control of RECs constructed byDGFCA which have not been handed over to local government.

2.15 The transfer of NAEP II from DGFCA to AAETE caused some problems inimplementation. Between December 1983 and April 1984, all project activitiespractically stood at a standstill. The Project Director, five out of sixAssistant Directors, and several junior officers of the project unit trans-ferred to the offices of the Directors General and BIMAS. AAETE appointed anew Project Director and filled some of the vacancies but it took the newproject management some time to come to grips with the situation. The newmanagement of NAEP II had to evolve different procedures for implementation ofcivil works to fulfill the requirement of new decrees. Considerable time hasbeen spent to collect the supporting documents for applications for withdrawalfrom the offices of provincial inspectors of Agriculture, through whom civilworks were earlier implemented by the DGFCA. Some additional RECs in nonfoodcrop areas are being constructed in line with the new policy of strengtheningextension services of other subsectors. All physical activities are expectedto be completed by March 1987, one year behind schedule, and most of theCredit is expected to be utilized.

C. Project Formulation

2.16 Formulation and preparation of the proposed project grew directlyfrom experience gained in implementing NFCEP and NAEP II. A special team con-stituted by the Director General of AAETE consisting of representatives ofAAETE, DGs and BIMAS, prepared the project report with the assistance of aBank mission.

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D. Rationale for Bank Support

2.17 Bank support will permit GOI to strengthen and reorganize theextension services into one unified extension service to support productiontargets in Rtpelita IV. The first two Bank-supported extension projectsconsiderably strengthened the food crops (especially lowland rice) extensionservices but the other extension services remain weak. The proposed project,in addition to consolidating the efforts to improve rice extension, wouldstrengthen extension for estate crops, livestock, fisheries and nonrice foodand horticultural crops. The agricultural extension service would ber-tionalized by integrating the PPLs, PPMs and PPSs of subsectoral extensionservice into one unified extension service within the Hinistry of Agricul-ture. The unified extension service will operate from RECs and advisefarmers, who have generally complex farming systems (except in predominantlyirrigated rice areas or coastal fisheries areas) involving both annual andperennial crops, livestock and often fish, on a "whole-farm" basis. Theunified extension service would support GOI's objective in Repelita IV tosustain self-sufficiency in rice and to step up substantially production ofsecondary crops, horticultural crops, estate crops, livestock and fisheries toprovide the people a more balanced and nutritious diet, as well as to increasetree crops and fisheries exports. The unified extension service would alsosupport the GOI's transmigration program. The Bank is particularly concernedthat transmigrants, once settled, have the support to enable them to raiseincomes above a subsistence level. The unified extension service would playan important role in training the transmigrants, who are traditionally lowlandrice farmers, in the techniques of growing upland food crops, tree crops, hor-ticultural and vegetable crops.

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III. THE PROJECT

A. Objectives and Scope

3.01 The major objective of the project is to strengthen extensionservices covering estate crops, livestock and fisheries activities, in addi-tion to food and horticultural crops, in all provinces through provision foran increase in trained extension personnel, vehicles and equipment, new 2ECsin areas not covered by earlier projects, construction of limited staffhousing, training and technical assistance.

3.02 Project Scope. The project would provide:

(a) an increase in extension staff by about 6,OOC PPLs, 3,000 PPMs,1,000 PPSs and 200 animal health officers;

(b) construction of 400 new RECs in transmigration, upland, tidal swamp,estate crops, livestock concentration and coastal fisheries areas;210 houses for PPLs in Irian Jaya and East Timor, 200 animal healthposts and expansion of about 1,400 existing RECs;

Cc) procurement of 3,206 motor cycles, 124 four-wheel drive vehicles,45 animal health mobile units, and 11 audiovisual mobile units;

Cd) procurement of furniture for new and expanded RECs, as well as ofbasic and specialized subsectoral equipment for new RECs;

Ce) training of extension staff and key farmers through a limited numberof overseas courses and fellowships, and a large number of localtraining courses; and provision of related facilities;

(f) 6 man-years of long-term consulting services in extension, training,rural sociology, monitoring and evaluation; about 4 man-years short-term consultancies for reviewing and revising extension recommen-dations; and local consultancy services for engineering design andsupervision of project civil works; and

(g) monitoring, evaluation and studies.

B. Detailed Features

Project Staffing

3.03 Under the NAEP II, the PPL requirement was calculated as follows:

Transmigration areas - 1 PPL:500 familiesSparsely populated provinces -- 1 PPL:600 familiesRemaining Other Island provinces - 1 PPL:800 familiesJava and Bali - 1 PPL:1,600 families

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3.04 During implementation of NAEP II, it became evident that the size offarmer groups was rather large for the PPL and the diffusion of extension rec-omuendations was slow. It was also apparent that more emphasis should begiven to the estate, livestock and fishery subsectors to cope with acceleratedagricultural development. AAETE, therefore, proposed 1 PPL for 640 farmfamilies in Java and Bali and 1 PPL for 400 families in Other Islands inNAEP III. Based on the proposed ratio, a total of 44,000 PPL would berequired by 1989. Considering the budget constraints of GOI, availability ofagricultural graduates from high schools and past performance, it was feltthat a more realistic target for recruitment of additional PPLs would be 6,000under NAEP III at the rate of 15 PPLs per new REC. Out of 6,000 PPLs,657 PPLs would be required for transmigration areas (Annex 4, Table 3). Allnew PPLs would be graduates from agricultural high schools where they undergothree years training in food crops, estate crops, livestock and fisheries.

3.05 A total of 3,000 additional PPMs would also be required to achievean average rate of at least 3 PPMs per REC (3 PPMs for each of the 400 newRECs and 1 additional PPM for about 1,402 existing RECs). As PPMs are notrecruited directly but are promoted from among the more experienced andsuccessful PPLs, a total of 9,000 new PPLs would have to be recruited over the5-year project period. As this compares favorably with the number success-fully recruited and assimilated in the extension service, and as accreditedagricultural high schools are increasing their output of graduates with PPLqualifications, these staffing targets are achievable.

3.06 The overall PPL/PPS ratio adopted in NAEP II was 25 to 1. However,due to greater emphasis on the estate crop, livestock and fishery subsectors,GOI has estimated an additional requirement of comodity/discipline-specialized PPSs to be 352 for food crops, 260 for estate crops, 892 for live-stock and 611 for fisheries, or a total of 2,115 by 1989. However, to be con-sistent with the number of PPLs to be recruited under this project and at thesame time to provide sufficient commodity/discipline-specialized PPSs in allthe subsectors, the target for additional PPSs under this project has beenfixed at 1,000. Most of the PPSs would be based in provinces where therespective activities Dredominate. For transmigration areas, an additional57 PPS would be required based on one PPS for 7,500 transmigration families.

3.07 Recruitment of qualified university agricultural graduates to fillPPS positions, particularly in the more remote regions of the Other Islands,would be somewhat more difficult than recruitment of lower level staff,although again the earlier projects have mostly met their PPS staffing targetson schedule.

Construction Program

3.08 Rural Extension Centers serve as the home base of the field exten-sion workers (PPLs and PPMs), as their officefs, the site of their regular(usually biweekly) training and briefing by PPSs, occasional farmer coursesand meetings, simple agricultural field trials, and as storehouses for theirequipment. Under NAEP II, RECs in the 26 project provinces were 130 m2 inarea, located in predominantly food crop producing areas and some intransmigration areas, and included a house for one PPM and site development

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(fencing, access road). On completion of NAEP II, a total of 1,402 RECs willhave been built. Given a ratio of 1 REC for 15,000-20,000 farm families inJava and Bali and 1 REC for about 8,000 farm families in the Other Islands,about 2,000 RECs would be required in 1991. In a survey recently conducted byAAETE, the number of existing RECs was ascertained to be 1,255 and thecequirement of new RECs was determined to be 894. AAETE has planned for147 additional RECs under NAEP II and 400 under the proposed project. Acommittee consisting of representatives of the Ministry of Home Affairs,AAETE, BIMAS, and the four Directorates General would decide the generallocation of RECs so that RECs can serve as many subsectors as possible andthat their areas of operation do not overlap with other existing facilities.The same committee would also decide the general location of 200 animal healthposts taking into consideration other installations such as existing andproposed plant protection centers for food crops and estate crops. Assuranceswere obtained during negotiations that the location committee having deter-mined the general locations, the specific site of each REC and each AHP forsubsequent year satisfactory to the Bank would be submitted to the Bank byNovember 1 of each year.

3.09 The 400 new RECs would be 168 m2 each comprising 1 meeting-room, 1chief's room, 1 room for PPMs and secretariat, 1 library, 1 storage room, 1toilet, 1 generator room, and 2 houses, 1 for the Chief of REC and 1 for 1PPM. All RECs previously constructed under NFCEP and NAEP II would be expand-ed by 48 m2 and would include 1 house of 36 m2 for the REC chief. The RECconstruction schedule is described in detail in Annex 2, Table 3. Of the 400new RECs, 50 RECs would be constructed in NTT/NTB.

3.10 Two hundred and ten houses of 36 m2 each would be constructed inIrian Jaya and East Timor for PPLs because of the difficulty in obtainingsuitable houses in these 2 remote provinces.

Vehicles and Equipment

3.11 Vehicles are one of the most important inputs to the training andvisit system, as they provide the mobility required to meet the demandingschedule of PPL field visits, field supervision and assistance by managers andPPSs, and the bi-weekly training sessions of PPLs by PPSs. Motorcycles at therate of 3 motorcycles per new and old REC for the movement of PPMs and PPLsand 124 four-wheel drive vehicles would be provided to provincial PPSs,project officiers, provincial BIMAS Secretary and PIU. All vehicles would beoperated under a pool arrangement. Forty-five animal health mobile units for18 provinces and 11 audiovisual mobile units for 11 provinces would beprovided. All other provinces have received mobile units for food crops underearlier two Bank-assisted prcjects. Assurances were obtained from GOI thatnecessary funds would be provided, in accordance with a detailed schedule forvehicle procurement given in Annex 2, Table 6.

3.12 Equipment and furniture would be provided under the project to allnew RECs. The basic REC equipment package, largely similar to that providedunder the NAEP II (Annex 2, Table 8) consists of the minimum required officeequipment and furniture, instructional equipment, and basic agriculturalequipment necessary for field extension work. Some inexpensive and portable

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instruments would be provided in quantities sufficient to provide them to mostPPLs, to enable them to demonstrate their use to farmers. In addition, spe-cialized extension packages useful for extension in food crop, estate crop,livestock and fisheries subsectors would be provided to RECs to be built inareas where those activities predominate (Annex 2, Tables 9, 10, 11, 12).These packages have been designed to include only the simplest tools, orequipment to avoid transforming RECs into specialized demonstration farmsincapable of replication by most smallholders.

Training

3.13 Essentially, four types of staff and farmer training would beundertaken under the project. The first is the continuous routine bi-weekly(or as frequently as may be necessary for the different subsectors) trainingor briefing of PPLs by PPSs in the RECs on impact points to be communicated tothe farmer groups during the cycle of visits. The second type of trainingconsists of periodic operational reviews and preparation sessions by fieldstaff and supervisors (paras. 3.14-3.15). The third is the special trainingfor key farmers and for staff to introduce them to new job responsibilitiesand work methods, and to new technical subject matter fields (para. 3.16).The fourth consists of degree or certificate courses both in countrv andoverseas, and study tours abroad for selected staff (para. 3.17).

3.14 Periodic Review Sessions. PPSs and provincial and district exten-sion managers would take part in one or two 2-3 day sessions per year to beheld at provincial level before each main sowing/planting/stocking season.With the assistance of local university and research staff, experts from AARD,consultants, and senior project staff, these meetings would determine andagree on detailed technical recommendations for individual crops and farmingsystems in the various agricultural regions of the province. The schedulingof these recommendations in the overall training and visit cycle would also bereviewed. The most important function of these sessions is to provide aresearch/extension linkage. The researchers would train the PPS on the latestfindings of research relevant to commodities and areas, while the PPSs wouldapprise the researchers of the problems of the farmers. ."'llowing these ses-sions, similar sessions would be held at the district level for the PPLs andPPMs to provide them with the background required to understand the appliedREC training they will receive during the next season.

3.15 Each PPS would attend a 1-2 day review session once a month (or asfrequently as may be necessary for different subsectors) at provincial head-quarters to be organized by the provincial Inspectors and the Heads of theExtension Bureau, during which progress would be reviewed and the REC trainingprogram for the next month planned and prepared.

3.16 Special Training Courses. All newly recruited PPLs, PPMs and PPSswould attend an orientation course concentrated on the training and visit sys-tem and communication techniques to be held in in-service training centers(ISTCs). The ISTCs have been strengthened by three Bank-assisted projects andhave sufficient capacity (Annex 2, Table 15). Short specific skill courses ofless than 14 days duration for the extension staff (Annex 2, Table 14) wouldbe organized by the ISTCs in cooperation with respective provincial agricul-

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tural services. Contact farmers, women farmers and young farmers would attendshort courses of seven days duration to be organized by the ISTCs in consulta-tion with provincial agricultural services, so that they can comprehend andapply new agrotechnologies including methods of storing and using agriculturalproducts and seeds, utilization of home gardens, water management, soil con-servation, cattle breeding, fisheries etc. (Annex 2, Table 13).

3.17 Fellowships and Courses. Long-term fellowships of 1-3.5 yearsduration leading to Diploma, Masters and Ph.D degrees in extension education,home economics, agribusiness, production and post harvest technology would beprovided to qualified PPL, PPM and PPS and district, provincial and centralextension staff and IPB staff. Overseas training would consist of 8 Ph.Ds, 60M.Scs, and 160 short-term training of three months duration for PPS and exten-sion officers at district, provincial and national level. In-country trainingwould consist of 8 Ph.Ds, 180 M.Scs, 300 Diploma courses of 3 years' durationand 340 Diploma courses of 1 year duration. The purpose of this program wouldbe to upgrade the overall technical capability of the cadre of extensionstaff, increasing its capacity to assimilate the flow of research results fromforeign, national, and local research institutions and to utilize them inrefining field extension recommendations. Assurances were obtained from GOIduring negotiations that annual training proposals, satisfactory to the Bank,would be submitted to the Bank by December 31 of each year, beginningDecember 31, 1986.

Consultants

3B18 Consultant technicaL assistance in direct support of project imple-mentation would fall into three categories: long-term advisory service toproject management; short-term technical assistance to Directors of Extensionin reviewing and revising extension recommendations for the entire range ofsmallholder agricultural activities to be eventually covered by the extensionsystem; and local consultants for engineering design and supervision of pro-ject civil works. The first category would consist of a consultant to assesstraining needs (24 man-months) who would assist the Project Director in refin-ing training programs; an Extension Advisor (24 man-months) to assist theProject Director and Director of the Bureau of Agricultural Extension inextension methodology and communication; and 1 consultant in monitoring andevaluation (12 man-months) and 1 in rural sociology (12 man-months) to assistthe Project Director and Director of the Bureau of Agricultural Extension.Assurances were obtained at negotiations that GOI would employ consultants fortechnical assistance in extension, training and rural sociology commencing notlater than June 30, 1987 (para. 4.04).

3.19 The short-term technical agricultural consultants would work withthe Directors of Extension, and would be responsible for reviewing in detailthe conditions of smallholder production in all major commodity fields in theimportant agricultural regions of Indonesia, assessing the relevance ofdomestic and foreign research results for upgrading field practices of small-holders in various regions, and on this basis would help prepare practicalextension recommendations to be delivered by the extension workers. Theprojected distribution of the short-term technical assistance requirement bysubsectors would be food crops, 20 man-months; estate crops, 8 man-months;

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livestock, 6 man-months; and fisheries, 16 man-months. The costs of localengineering firm services are estimated at 7% of the value of civil works.

Studies

3.20 The project would provide funds for carrying out the followingstudies, which will be conducted by the Bureau of Agricultural Extensionwithin AAETE. The outputs of these studies would be used by the Directoratesof Extension in each Directorate General to improve the strategy and guide-lines of extension in supporting respective commodity production programs:

(a) Study and evaluation of the T&V system in relation to productiondevelopment approaches, farmers' socioeconomic conditions and needs,research-extension linkage and management system.

(b) Study and evaluation on the strategy for developing participation offarmers, fishermen, women and youth in agricultural development.

(c) Study and evaluation of selected extension methods as well as deliv-ery systems.

Extension Materials

3.21 No funds would be provided under this project for production ofextension materials. Under the Agricultural Research and Extension Project(Loan 1179-IND) a National Agricultural Information Center (AIC) was estab-lished at Ciwai and 11 ArCs in 11 provinces under AAETE. Another 15 AICs arebeing established in the remaining 15 provinces under AAETE with funds pro-vided by the Third Agricultural Training Project (Ln. 2341-IND). These AICsare equipped with printing machines to produce leaflets and brochures, moviecameras to produce films, cameras to produce slides, facilities to duplicatecassettes, etc. The AICs also have a group of personnel specialized incertain disciplines and trained in producing extension materials. Host commontypes of extension material can be produced by the AICs. Any specialextension material should be written jointly by the Directorate of Extensionand representatives of AARD and finally produced by AICs.

3.22 All RECs are supplied with slide projectors and cassette recorders,and all food crop provincial extension bureaus and ten estate crop provincialbureaus have mobile extension units capable of presenting moving pictures.Since agricultural and linguistic patterns vary widely across Indonesia, theproduction, dubbing, and distribution of film materials would require carefulplanning.

C. Implementation Schedule

3.23 Project implementation would cover a period of about six years fromOctober 1986 to June 1992. The sites for the first year's constructionprogram were selected prior to loan negotiations by the special committee forthis purpose. All civil works design, estimates and bidding are planned to becompleted in the first year and with construction in the second, third andfourth years. PPLs, PPMs and PPSs are scheduled to be recruited from the

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would be procured during the second, third and fourth years. The in-servicetraining program would coincide with the recruitment program. Diploma,Masters and Doctorate courses would commence from the second year so that theycan be completed within the life of the project. Recruitment of long-termconsultants would commence nor later than June 30, 1987. An implementationschedule is shown in Annex 3, Table 4.

IV. PROJECT COST AND FINANCING

A. Cost Estimates

4.01 The total estimated project cost is US$136.2 million equivalent, ofwhich US$23.3 million (17Z) would be foreign exchange (Table 4.1). Base costsare expressed in May 1986 prices and include about US$12.5 million in value-added tax and other taxes and drties. Project costs by item of expenditureare provided in Annex 2, Table 1.

Table 4.1: N D 11OST SEORY

&Bpiah bLlo US$ milli Foreign Z Basiclncal Foreign IXal local Forei Ttal E cost

Civil wrs 33.8 7.1 40.9 30.7 6.5 37.2 18 34Vehicles 3.6 3.3 6.9 3.4 2.9 6.3 48 6Frniture 2.6 0.7 3.3 2.4 0.6 3.0 21 3Bluipmeat 1.4 2.2 3.6 1.4 1.9 3.3 61 3Training 21.9 5.2 27.1 20.1 4.6 24.7 17 25TAal Studies 2.3 1.5 3.9 2.1 1.4 3.5 41 3

tncreamtal ope-ating cost 31.5 1.1 32.6 28.3 1.0 29.3 4 26

Subtotal Base Cost 97.2 21.1 118.3 88.4 18.9 107.3 18 100

Ftlysical 6.5 1.4 7.9 5.9 1.3 7.2 18 -

Price 20.5 3.5 24.0 18.6 3.1 21.7 14 -

ltal Projet Gost /a 124.2 26.0 15D.2 112.9 23.3 136.2 17 100

/a ITxludiag VAT of US$9.0 million and US$3.5 milli other taxes and duties.

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4.02 Construction cost estimates are based upon updated standard costssupplied by BAPPENAS and the Mini try of Finance and updated Cipta Karya datato estimated May 1986 level per m for the lowest (Grade C) category ofoffices. Prices have been weighted considering the differences in the variousprovinces. For Irian Jaya and East Timor, prices are higher than the weightedaverage, based on available data from BAPPENAS, Ministry of Finance and CiptaKarya. Cost estimates for equipment and furniture are based on recent con-tracts for identical items purchased under NAEP II with a 10Z increase allow-ing for estimated price escalation through May 1986. For locally assembledvehicles, estimates are based on local experience with possible price escala-tion in 1985/86. Unit costs for local training programs are based on detailedbudgets for training courses prepared by AAETE, while costs for overseascourses are based on recent experience under NAEP II and other Bank Group-financed projects in Indonesia. Salaries and allowances for the projectimplementation unit and incremental field staff are derived from currentscales under NAEP II which provide a graduated structure according to theyears of employment of tLe field staff. Other operational expenses are basedon recent experience under NAEP II allowing for estimated price increases in1985/86. Cost estimates include physical contingencies at 10% of all costsexcept incremental field staff salaries and allowances. Price contingenciesare indicated in Table 4.2 and equal 20% of base costs.

Table 4.2: ESTIMATED PRICE CONTINGENCIES (X)

Calendar year 1986 1987 1988 1989 1990 1991-93

Foreign 7.0 7.0 7.5 7.7 7.6 4.5Local 6.0 6.0 6.0 6.0 6.0 4.5

B. Financing Plan

4.03 The proposed Bank loan of US$70 million equivalent would cover 60%of the project cost excluding the estimated cost of vehicles (aboutUS$7.0 million) and taxes and duties estimated at US$12.5 million. TheGovernment of Indonesia would provide annual budget eppropriations to coverexpenditures estimated at Rp 70.4 billion (US$64.0 million). The loan wouldfinance US$21.1 million of foreign costs (91Z) and US$48.9 million (43%) oflocal costs.

4.04 The Australian Development Assistance Bureau (ADAB) has confirmedits interest in providing A$2.8 million (equivalent to US$2.15 million) asgrant over the project period for technical assistance covering long-term andshort-term consultancies and 15 Master's degree fellowships abroad. Theconditions for the ADAB grant are: (a) technical assistance would be providedby Australian consultants; and (b) M.Sc. fellowships would be for studies inAustrialia. APAB cofinancing of A$2.8 million would be in addition to theBank loan of US$70 million.

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C. Procurement

4.05 Civil Works. Procurement arrangements are shown in Table 4.3.Nearly all project civil works (US$37.2 million) would consist of the con-struction or upgrading of small rural installations and houses, representingan expenditure of about US$47,000 at any one location.- These works would becarried out following local competitive bidding with contract packagesgenerally encompassing entire provincial or district construction programs.On this basis, contracts for works would average US$0.4 million in size, withthe largest contract worth up to about US$1.5 million. As these works arescattered over 27 provinces and are to be impLemented over 3 years, it wouldbe difficult to combine them into large contracts suitable for internationalcompetitive bidding. Local contracting procedures have been reviewed by theBank Group, and are acceptable. Contracts subject to prior review by the Bankwould be about 30% of total civil works contracts. There are numerous localcontractors capable of executing the required works. The engineering firmswould be responsible for site surveys, preparation of tender documents andcontracts, and supervision of construction. Tender and contract documents forcivil works would be in the same format as in NAEP II. All contracts forcivil works estimated to cost US$1 million and above would be subject to priorBank review. Land purchase (US$10.0 million) would be carried out accordingto standard government procedure.

2/ The building costs per square meter would be Rp 170,000 on average,except Irian Jaya and East Timor where it would be Rp 280,000(para. 4.02).

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Table 4.3: PROCUREMENT ARRANGEMENTS /a(US$ million)

Component ICB LCB Other N.A. Total

Civil Works - 37.2 - 10.1/b 47.3- (32.0) - - (32.0)

Vehicles - 8.1 - - 8.1

Furniture - 3.8 - - 3.8- (3.0) - - (3.0)

Equipment 4.2 - - - 4.2(3.5) - - - (3.5)

Training - - 29.5 - 29.5- - (29.5) - (29.5)

Technical Assistanceand Studies - 2.0 2.2 - 4.2

- (2.0) - - (2.0)

incremental OperatingCost - - 39.1 39.1

Total 4.2 51.1 31.7 49.2 136.2(3.5) (37.0) (29.5) - (70.0)

/a Costs including physical and price contingencies and taxes. Figures inparentheses ( ) are Bank loan amounts.

lb Purchase of land.

4.06 Vehicles, Furniture and Equipment. Vehicles (US$8.1 million) wouldbe procured by LCB and will be treated as reserved procurement because of aban on importation. Assurances were obtained during negotiations that thenecessary funds would be provided by GOI for the vehicles required for theproject in accordance with an agreed schedule. Furniture (US$3.8 million)would be procured through local competitive bidding procedures as these wouldbe purchased in small lots for the RECs spread over 27 provinces, unattractiveto international bidders. Office and technical equipment worth a total ofUS$4.2 million would be procured under international competitive bidding (ICB)in accordance with Bank Group guidelines, and would be grouped in contractpackages large enough to attract international competition. A preferencelimited to 15Z of the c.i.f. price of imported goods, or the custom duty,whichever is lower, would be extended to local manufacturers of such items inthe evaluation of bids. All contracts for equipment and materials exceeding

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US$200,000 in value would be submitted to the Bank Group for review beforebidding and award. Contracts subject to prior review by the Bank would beabout 30% of total contracts.

4.07 Services. Overseas short-term and long-term courses (US$5.0 mil-lion) will be administered by the PIU and conducted in selected countries anduniversities. The average cost assumed per student for studies abroad areUS$55,000 Ph.D, US$38,000 for M.Sc and US$9,000 for short course of 3 months'duration. The domestic specific-skill short courses for PPLs, PPSs, contactand master farmers, and rural women would be carried out by AAETE at the ISTCsaccording to a training program reviewed and agreed by the Bank (US$24.7 mil-lion). Contracts for engineering design and supervisio2 (US$1.7 million)would be awarded on the basis of Bank Guidelines on the Use of Consultants.Studies wouLd be carried out by AAETE (US$0.1 million). Technical assistanceand overseas training (US$2.2 million) expected to be provided by ADAB wouldbe procured under their procedures. Routine expenditures totallingUS$39.1 million are also included in project costs.

D. Disbursement

4.08 The proposed allocation of loan proceeds is shown in Annex 3,Table 2. The loan would be disbursed at the following rates: 90% of the costof construction and site development including VAT, and 100% of the cost oftraining, technical assistance and studies; 100% of the foreign exchange costof directly imported equipment and goods, 65% of the total cost of locallyprocured imported equipment and goods, and 95% of the ex-factory costs oflocally manufactured equipment and goods. The Bank would not disburse againstland purchases, salaries, or operation and maintenance expenditures. For mostcomponents, disbursement would be made on the basis of standard documenta-tion. Disbursement would be made on the basis of statements of expenditures(SOEs) for equipment and furniture purchases under US$50,000 (contract value),and for local training expenses; all other disbursements would require fulldocumentation. Detailed documentation for SOEs would be retained in Indonesiaand made available to the Bank for supervision. Minimum size of reimbursementapplication should be around $100,000 equivalent. Minimum size of letter ofcredit for goods to be disbursed under agreements to reimburse should be$10,000 equivalent.

4.09 An estimated schedule of disbursements is shown in Annex 3,Table 3. Disbursements are projected over a six and one-half year period fromFY87 to FY93 (Annex 3, Table 3). Disbursements are expected to be completedfaster than the profile of actual disbursements under previous Indonesianagricultural projects. This is a reasonable expectation because this is thethird phase of an ongoing project with well-developed operations. The Loanclosing date would be December 31, 1992.

E. Accounts and Audits

4.10 Assurances were obtained during negotiations that (a) separateaccounts would be maintained for the project; (b) these accounts and thestatements of expenditure would be audited annually by an independent auditoracceptable to the Bank; and (c) these audited accounts and the audit report

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would be submitted to the Bank within nine months of the close of each GOIfiscal year.

V. PROJECT IMPLEMENTATION, ORGANIZATION AND MANAGEMENT

A. Reorganization of Agricultural Extension Service

5.01 The agricultural extension service has been recently reorganized onthe basis of Presidential Decrees Nos. 24/1983, 62/1983, Ministerial Circularof January 25, 1985 and Ministerial Decrees No. 143 of March 11, 1985 and 482of July 3, 1985. These decrees establish and strengthen the unified extensionservice.

5.02 Coordination. The coordination of agricultural extension at thenational level is being carried out by the National Commisission for Agricul-tural Extension (NCAE) comprising the Director General of AAETE as Chairman,the Secretary of BIMAS as Vice Chairman, the Director of the Bureau of Exten-sion, AAETE, as Secretary, the Directors of Extension and other Directorswithin the Ministry of Agriculture closely linked with agricultural extension(including Directors of Research Coordinating Centers for Food Crops, Horti-cultural Crops, Industrial Crops, Fisheries and Animal Sciences of AARD) asmembers. The provincial coordination forum comprises the KAKANWIL asChairman, the Secretary of Provincial BIMAS as Secretary, and the heads ofprovincial agricultural services and chiefs of technical units and otherinstitutions closely linked to agricultural extension as members. Thedistrict coordination forum comprises the head of one of the subsectorsdesignated by Bupati (district administrative head) as Chairman, the Secretaryof district BIMAS as Secretary, and the heads of the other subsectors andinstitutions closely related to agricultural extension as members. Each ofthe three coordination committees is being assisted by a working group tocarry out daily duties. At the REC level, the coordination committee wouldconsist of the Chief of the REC and the PPMs and PPLs based at the REC.

5.03 The main tasks of the NCAE, which meets once a month, are tocoordinate: (a) formulation of national policies and strategies for agri-cultural extension, (b) preparation of the national agricultural extensionplan with the agricultural production program, and (c) research/extensionlinkages. The functions of the provincial and district level coordinationforums, also meeting once a month, are to: (a) translate the national agri-cultural extension policies and strategies into provincial and district opera-tional plans according to regional needs, and (b) coordinate management ofagricultural extension activities in the region in accordance with the programof the forums. The functions of the REC committee are to: (a) formulate theagricultural extension program of all subsectors in the REC area through acooperative planning exercise with contact farmers, and to draw up a workschedule for each PPL, (b) monitor and supervise the implementation ofagricultural extension activities in the REC area, and (c) coordinate regulartraining of PPLs at the RECs and visits by PPLs to farmers' groups.

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5.04 Administration of Extension Staff. Administration of the agricul-tural extension service within the Ministry of Agriculture (MOA) now devolveson BIMAS. This involves appointment, placement, salary assignment, salaryincrease, promotion, transfer and retirement of extension personnel andoperational expenses. In administering extension personnel, the Secretary ofBIMAS would consider: (a) extension policy as outlined by the DirectorGeneral of AAETE, (b) the agricultural development program of the Directors-General within MOA, and (c) existing laws and regulations on personnelaffairs. The handover of the extension personnel whose administration wasbeing managed by the DGs and AAETE to the Secretariat of BIMAS was completedby March 31, 1986.

5.05 Control over and Responsibility of RECs. The RECs constructed bythe DGFCA which have not been turned over to the Regional Government would bemanaged by the Secretary, District BIMAS. Assurances were obtained from GOIduring negotiations that necessary funding for operation and maintenance ofRECs (approximately Rp 3 million per REC) would be made to BIMAS. Accordingto Ministerial decree, the Secretary of BIMAS would appoint for each REC(a) one Chief of REC, and (b) according to need, no more than five PPMs eachassigned to organize, develop and control the execution of agricultural exten-sion programs in Ci) agricultural resources, (ii) food crops, (iii) estatecrops, (iv) animal husbandry, and (v) fisheries. Depending on the situationand condition, two or more subsectors may be managed by one PPM. Just assubsector staff at the provincial level are under the administrative controlof the Governor while technical control is retained by the four DGs at thenational level, the administrative control over PPMs and PPLs is underdistrict BIMAS while technical control is retained by the subsectors at thedistrict, province and national level. One PPM in each REC has beendesignated as Chief of REC.

B. Organization for Project Implementation

5.06 PIU. The proposed project would be implemented at the nationallevel by the same project implementation unit (PIU) under AAETE which is exe-cuting NAEP II. The responsibility for providing technical guidance to andsupervision of the PPSs, PPMs and PPLs rests with the Directorates of Exten-sion under the DGs. The key positions such as Procurement Officer, FinancialOfficer, Training Officer, Planning and Monitoring Officer, Treasurer andSecretary of the PIU have been filled on a full-time basis for the properimplementation of the project.

5.07 Project Implementation at the Provincial Level. The project wouldbe implemented at the provincial level as follows: (a) civil works and pro-curement of furniture and equipment would be implemented by KAKANWIL/Head ofTraining and Extension Division; (b) training program would be implemented byISTCs; and (c) production of extension materials would be implemented by AICs.

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C. Extension Methodology

5.08 The basic principles of the Training and Visit system of agricul-tural extension are by now well understood widely in Indonesia, both in theoryand in concrete implementation in the field. NFCEP and NAEP II managementhave been quite effective in communicating those principles to the provincialagricultural staff. However, this task will be made difficult in the proposedproject due to the increased difficulty of communication in the upland, tidalswamp, transmigration, and coastal fisheries areas to be included in theprogram and the involvement of PPLs and PPSs from all the subsectors. Train-ing programs under the project would thus be increased in frequency, and wouldconcentrate on teaching extension methodology as well as the simple elementsof technical background of other subsectors to the PPLs of all subsectors. Asfar as possible only one set of extension farmer groups will be formed in anylocality served by one set of PPLs in a REC.

5.09 PPSs of the different subsectors would be responsible for introduc-ing extension packages for their subsectors and for training, briefing andbackstopping the PPLs in their specialized subsectors. The Chief of the RECwith the help of the PPMs would prepare an integrated program of all fourextension services for delivery to the farmers. Tne PPLs of different sub-sectors would work together to prepare a joint program for the individualfarmers of the group, and initially the PPLs of all four subsectors (or asmany as are present) would jointly visit the farmers to advise them on theirindividual needs. Given the long-term asset establishment and maintenancenature of nonfood-crop activities, extension on such matters as constructionof, water supply to, and fertilization of, fishponds, construction of chickenhouses, and inoculation and breeding of cattle is not particularly time-boundand can be fitted into the slack periods of the seasonal crops. In manycases, extension recommendations for the various activities must be integratedto be relevant to actual farm-level decisions. This applies for example tointercropping (upland paddy under the rubber or coconut), fish raising inpaddy fields, estate crops (e.g., sugar) rotated with food crops, or a mutual-ly bereficial farming system involving animals (for manure and draft power)and forage crops.

5.10 In many such areas, generalist PPLs with guidance from PPSs of diff-erent subsectors would be able to deliver simple extension messages for mostof the commodities with which the farmers are concerned, calling on requisitespecialist PPL or PPS when problems arise. However, for some estate cropssuch as rubber, coconut, oil palm, for animal health, and for brackish waterand marine fisheries, specialist PPLs may be needed depending on the nature ofjob they would have to perform, as indicated in the following paragraphs.

5.11 Estate Crops. For rubber, coconut and oil palm, the extensionmessage would focus on cultivation methods, nursery techniques, weeding,processing and marketing, with the ultimate aim of introducing the farmers tosomewhat more sophisticated and financially viable packages. For tree crops,a major constraint to progress in the smallholder sector has been the non-availability of high quality planting materials. However, there is scope forremedying this shortage of planting material through harnessing the resourcesand capabilities of PTPs, PHUs and even the private sector in the target

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areas. The provision of improved planting material would have to be accom-panied by the requisite fertilizer, pesticides, equipment, credit, processingand marketing. (For further details, see Project File Annes 6, WorkingPaper 1 - Estate Crops.)

5.12 Livestock. Increase in livestock output would largely come fromextension of better nutrition and animal health services. While nutritionextension may be handled by generalist PPLs, animal health extension could beperformed better by specialist PPLs. The project includes animal healthposts, mobile animal health clinics, and animal health officers (AHO) in addi-tion to PPLs. The concept is to provide low cost delivery of basic animalhealth services through these posts, the AHOs and the mobile animal healthclinics. The AHOs and specialist PPLs would be trained to recognize the mostcommon forms of major diseases such as Newcastle, hemorrhagic septicemia andanthrax, administer vaccines and advise on other treatments and procedures andthereby achieve a wide dispersion of the benefits that improved animal healthcan yield. Improvement in livestock production from better nutrition andanimal health would make increased draft power available for increased cropproduction. (For further details, see Project File Annex 6, Working Paper 2-- Livestock.)

5.13 Fisheries. Extension activities for brackish water fisheries wouldinclude pond engineering, shrimp hatchery development, shrimp culture develop-ment and feed production technology. However, most development constraintsare in the marine subsector. The average productivity of a small-scale marinefisherman is about 1.1 mt per year. To ensure the well-being of small-scalemarine fishermen on a sustained basis, it may be necessary in some cases toreduce fishing effort in the coastal areas by limiting the number of fisher-men. Special effort needs to be made to encourage the introduction of marineor brackish water aquaculture for underemployed marine fishermen. Fisheryextension for small-scale marine fishing communities would include communicat-ing improvements in postharvest technology, fisheries technology, and assist-ing social welfare and community development programs, and in the managementand operation of small-scale enterprises and organization. (For furtherdetails see Project File Annex 6, Working Paper 3 - Fisheries.)

D. Farmers' Groups

5.14 Rural people have lived for centuries within strong communal groupsor cooperatives (such as subak, gotong-royong, maphalus, etc.). These haveclear membership ties, strong individual affiliation, and considerable powerinvested in the chosen leader, who receives high loyalty from the members.Principally, the traditional groups' agricultural activities (subak, maphalus)have a close parallel with the T&V system as they have regular meetings (every35 days) to discuss field problems, transfer government policy and technology,and try to apply new technology. It has thus not been difficult to adapt themto form groups for agricultural extension purpose. Farmer group formation isgenerally based on contiguous field areas (23-50 ha/farmer group) rather thanbeing village neighbors. Generally, each farmer group consists of approxi-mately 100 farm families in irrigated areas comprising one contact farmer,20 progressive farmers from the upper layer and 80 followers from the lowerlayer. The demarcation of the area is decided by natural factors such as

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canals, roads, forests, or villages. Selection into groups emphasizes thatthe group has: (a) a similar purpose; (b) the same activities; (c) very easycommunication with each other; and (d) weekly or monthly activities arrangedand done together by group members. The effectiveness of farmer groupsdepends upon the degree of interaction within the group. The task of theextension services is to motivate and maintain the social interactionpermanently among members and between the group and external institutionsconcerned with agricultural development. The farmer group was the embryo ofthe Special Intensification (INSUS) Program which has been expanded to theentire country. The PPLs have had an important role in maintaining and sup-porting the communication of the group with other social institutions, andguiding the farmers, in analyzing their farm management needs to get maximumprofit and in practicing new technology in their own field. The growth anddevelopment of farmer groups depends upon the activity of the groups them-selves as well as that of PPLs. Whereas farmers' attitudes were changing veryslowly when based on individual approach, it has become much faster with theapproaches based on farmer groups.

5.15 Every ye-- he GOI selects the best farmer group in the country foraward as an incentive to motivate the growth and development of farmergroups. The competition encourages farmer involvement in the program, andraises its social status. Some farmer groups evolve into cooperative systemswith a strong legal foundation and a more formal constitution.

E. Role of Women

5.16 Women continue to play an important role in extension both as exten-sion agents and as members of the target groups. About 15Z of the PPLsengaged under NFCEP and NAEP II are women. The proposed project would providesupport for training women in food crop production and improved householdmanagement practices. Although the most direct communication by extensionworkers has been with the husbands, the women are reached indirectly throughdemonstration plots, leaflets, and film shows. On the whole, the extensionsystem has been essentially neutral regarding the role of women in smallholderagriculture but efforts are underway to increase the direct impact of exten-sion services on women.

F. Monitoring and Evaluation

5.17 Monitoring of the project's physical and financial programs would beconducted by provincial implementation units under the guidance of the PIU.The provincial implementation units would prepare half-yearly progress reportswhich would be reviewed by the PIU. Based on these semiannual reports the PIUwould prepare semiannual progress reports, as well as a project completionreport within six months of the completion of the project for submission tothe Bank.

5.18 The Bureau of Agricultural Extension (BAE) of AAETE would beresponsible for establishing and managing the project's evaluation system toenable evaluation of the overall success of the project. BAE would also eval-uate achievements of each project component in relation to its objectives and,where feasible, estimation of quantified benefits. Funds have been provided

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in the project for seve-al studies and ongoing evaluations and for an expa-triate expert on monitoring and evaluation. The main purpose of the evalua-tion and studies would be to make recommendations to project management onmodifications or improvements to ongoing extension activities so that they maybe better adapted to the needs and characteristics of the farmers.

G. Research-Extension Linkage

5.19 AARD is responsible for conducting research in the four subsectors,while each DC is responsible for technical inputs to extension in his subsec-tor under the coordinating umbrella of AAETE. In response to the need forclose linkages with extension agencies, AARD has (a) established a farmingsystem research program with a whole-farm approach, and (b) established a com-munication unit responsible for providing technical assistance to trainingcourses for extension workers, technical meetings, seminars, and publicationcf technical bulletins and papers. The PPLs and PPSs under the DGs areresponsible for conducting verification trials and other simple on-farm trialsunder the supervision of research scientists. The PPSs are required to spendone third of their time in visiting research institutes, stations, and farmsto interact directly with multidisciplinary research teams working there. Thespecialists at the AIC under AAETE are responsible for preparing extensionmaterials based on their contacts with research scientists and PPSs. Anational technical committee and five regional technical committees wereestablished under NFCEP and NAEP II comprising representatives from AARD,AAETE, the DGs and universities to coordinate the technical support programand workshop and training activities for extension workers at the national andprovincial levels.

5.20 Research-extension linkage would be further strengthened under theproposed project through (a) meetings once every two months of the Directorsof Extension, Director of the Bureau of Agricultural Extension, and Directorsof Central Research Institutes of AARD; (b) a semi-annual dialogue with theNational Farmers Representative and master farmers by the Directors of Exten-sion, Director of the Bureau of Agricultural Extension, Directors of CentralResearch Institutes, Heads of Bureaus of BIHAS, DG-AARD, DC-AAETE and Secre-tary of BIMAS in accordance with the Minister's Decree; (c) more frequent,systematic and effective meetings of research and extension specialists in theperiodic review sessions (para. 3.15); (d) increase in the frequency of visitsby PPSs to research institutes; (e) more verification and on-farm trials to becarried out by PPLs and PPSs under supervision of research scientists;(f) more involvement of farmers in the identification of research problems andinterpretation of research findings; and (g) quicker distribution of extensionmaterials from AICs based on new recommendations resulting from on-farmtrials. Under the Third National Agricultural Research Project beingappraised by the Bank, the farming systems research program would be streng-thened and placed under a national coordinator and research scientists wouldbe encouraged to visit farmers more frequently than at present.

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VI. BENEFITS, JUSTIFICATION AND RISKS

A. Production Targets and Extension Packages

6.01 Assessments have been made of the main constraints to smallholderproduction of the more important commodities, present average yields, agrono-mically feasible smallholder yields, and expected yields with extension, whichare in each case taken at levels assumed to be far below what could bepotentially achieved with intensive area- and commodity-specific developmentprograms. These assessments are presented in working papers in the projectfile (Annex 6) and summarized in Annex 5, Table 1. In many cases, constraintsare identified in areas outside the purview of the extension effort: forexample, the development of new varieties by research and improvements inmarketing and credit arrangements and price policies. In most cases, however,yield increases profitable to the smallholder are possible with improved agri-cultural te-hnique alone, even under present institutional arrangements andwith the varieties currently available.

B. Benefit Estimation

6.02 An economic assessment of the proposed project is difficult forseveral reasons. First, its implementation and impact would be dispersedthroughout 27 provinces of Indonesia, and across the entire range of small-holder agricultural activity. Second, other variables such as researchresults, availability of inputs, and attitudes and response of farmers affectthe estimation of benefits in every area or subsector. Finally, it is theore-tically and empirically difficult to isolate the effects of extension fromthose of research, improved inputs, weather trends, changes in relative pricesand marketing systems, general improvements in education and access to massmedia, and programs of investment in transport, agricultural and irrigationinfrastructure. The following economic analysis is therefore presented as abroad indicator of the economic rate of return for the project based on ar.identification of certain key parameters and conservative but reasonablevalues for these parameters.

6.03 Potential Incrermental Yields. The assessments of the potentialimpact of the project were narrowed to a few selected commodities which wouldbe emphasized in this project and which would be readily amenable to produc-tion increases through improved extension. These include the major food crops(rice, maize, cassava, groundnuts, soybean, sweet potatoes), estate crops(rubber, coconut, coffee, cloves, pepper, sugar, tobacco, cotton), freshwaterand brackish water fisheries, and livestock (cattle, dairy cattle, poultry,ducks, sheep and goats). For these commodities, a potential incremental yieldwas estimated based on the projected impact of extension alone (Annex 5,Table 1) assuming only relatively simple improvements in culti'vationpractices, minimum increase in purchased inputs and no major on-farm invest-ments. These assumed yield increments are far below both the geneticpotential of improved varieties and increases attainable with more intensivespecialized programs.

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6.04 Farmer Participation. Farmer participation was projected on pastexperience and on a model of the actual implementation of excension at thefield level, where farmer response depends on the PPL's ability to organize agroup and a visiting schedule, to build close rapport with at least a minimumnumber of contact farmers, and to improve their practices and pass on to theirneighbors by demonstration practices. Based on this model, two categories offood crop farmers and fishermen were defined:

(a) Contact farmers and fishermen (1 for each farmer/fisherman group)following most of the PPL's recommendations and achieving 100% ofthe potential yield increment. This is equivalent to 16 farmers/fishermen per PPL in Java and Bali where one PPL handles 16 farmer/fishermen groups, and eight in Other Islands.

(b) Partially participating farmers/fishermen who follow some of therecommendations of the PPL, i.e., 44 farmers/fishermen per groupachieving 30% of the potential yield increment, 23 per groupachieving 60Z, and 22 per group achieving 80%. It is estimated tobe 99 per farmer/fisherman group formed and 1,584 farmers/fishermenper PPL in Java and Bali, and 792 in Other Islands.

For estate crops, it is assumed that only an average 50% of the potentialincremental yield will be achieved by the farmers reached. For livestock,about 30% of the livestock population is expected to be covered which wouldachieve 100X of the potential increment. Using the number of incrementalfield staff to be recruited under this project and their projectedfarmer/area/livestock coverage, the impact of the project was calculated.

6.05 Development Period. The final incremental production due to theproject is given in Annex 5, Table 2. It is assumed that achievement ofpotential incremental yields and production of the representative food cropsand poultry products would require five years, commencing in the yearfollowing introduction of extension in various districts and provinces. Thedevelopment period for fish production is assumed to be three years, and fortree crops, ten years. A two-year lag was assumed for the benefit streamfollowing the construction of RECs and the recruitment of the staff. Theseassumptions are built into the total benefit stream given in Annex 5, Table 3.

E.06 Prices. Estimates of farmgate prices for the food and tree cropsfor 1985 and beyond are based on projections of world prices in constant 1986currency value for those commodities. For the local fish, food crop and live-stock products, which are generally not internationally traded and for whichlong-term price projections are not available, estimates of typical localfarmgate prices have been made for 1985, and these prices have been assumed toremain constant in real terms over the life of the project. Although thepotential yield increments were derived under the assumption of negligibleincreases in input usage, the gross benefits for each commodity presented inAnnex 5, Table 2 have been reduced by 25% in Annex 5, Table 3 to account forany incremental input usage which may be necessary.

6.07 Rate of Return and Sensitivity Analysis. The indicative projecteconomic rate of return based on the foregoing set of conservative assumptions

- 33 -

is 32Z. The ERR is relatively insensitive to change in either costs or bene-fits. Costs could rise by 236% before the ERR would fall below 10Z. Benefitscould decrease by 70X and the ERR would still be 10Z (Annex 5, Table 3).

C. Environmental Effects

6.08 The only foreseeable significant environment impact of the projectwould be a positive one in that the introduction of extension recommendationsin the upland and transmigration areas, where erosion due to agriculturalpractices is currentLy a problem, would be reduced.

D. Risks

6.09 There are no significant agricultural risks, but the project couldface some management and organizational constraints, and the funding problemsrecently encountered by GOI might continue. These risks are minimal and havebeen addressed in the project design.

VII. AGREEMENTS AND RECOMMENDATION

Agreements

7.01 During negotiations, agreement was reached with the Government onthe following points:

(a) A location committee having determined the general locations, GOIwould determine or cause to be determined by November 1 of each yearthe specific site of each REC and each AHP, satisfactory to theBank, for the subsequent year (para. 3.08).

(b) Necessary funds would be pr3vided by COI, in accordance with anagreed schedule, for the reserved procurement of vehicles(para. 3.11).

(c) Annual training programs satisfactory to the Bank would be submittedto the Bank by December 31 each year starting in 1986 (para. 3.17).

(d) Consultants for technical assistance in extension, training andrural sociology would be employed commencing not later than 'une 30,1987 (para. 3.18).

(e) An adequate level of funding for the operation and maintenance costof RECs would be made available to BIMAS (para. 5.05).

Recommendation

7.02 With the above assurances and conditions, the project is suitablefor a Bank loan of US$70 million for a term of 20 years, including a 5-yeargrace period, at the standard variable race. The Borrower would be theRepublic of Indonesia.

IND0Nt SIA

THIRD NATIONAL AORICULTURAL EXTFNSION PROJECT

Etimates of Sallholder Aaricultural Land Use, by Province, 1953

Total SmAllholder t total area Num'er of Estimated Estimated arem Estimated arem Eatimatad arms tstiomted Area Annual crops as Populationares agric. area In cealihol- amallhold- averaAe tarm smallholder annual Vet season other annual eoallholder peren- 2 of smAllhold- density per

(eq km) CnOO ha) day farm (Y) Inps ('000) sIte (ha) crops (0nnn ha) ('nnn ha) crop. (onn ha) nial crops ('o00 ha) er area (2) aq km (1950)(1) (2) (3) (4) (5) (6) (7) (R) (9) (10) (11)

West Java 46,300 6,129 13 3,551 1.72 1,911 1,209 702 4,218 7R 593Central JavY 34,2n6 4,617 13 3,SR9 1,.9 1,796 I,1i5 751 2,521 77 742Yoxy4ksrta 3,169 510 16 429 1,19 172 66 106 138 R3 868East Java 47,922 6,n30 13 3,916 1,5 2,2`1 1,19n 1,n6I 3,779 79 609IIX Jakarta 590 91 is 23 1,96 19 1I a 72 94 11,023Sell 5,561 R33 S 346 2.41 25n 99 151 577 60 444

SubtotWl 137.74S 15,210 23 11.914 1.53 6.399 3.59n 2,8ng 11s805 78

North Sumatera 7n,7R7 5,956 13 1,n06 5.90 9n4 45n 454 R5n,2 52 115West Sumster 49,778 4,426 9 506 8.75 402 208 194 4,024 68 65Laspuns 33,107 4,166 13 724 5,75 202 147 s5 3,964 sn 139North Sulaweal 19,023 2,883 is 290 9.94 152 43 109 2,731 38 IIISouth Sulavesl 72,781 9,1n7 12 Anl 11.26 1,123 545 s7R 7,A94 14 * 3West Nuea Tenggara 20,177 1,949 10 395 4.90 333 187 146 1,616 77 135Laet Nums TenRars 47,876 2,993 6 457 6.55 311 7n 241 2,hR: 65 57

Subtotal 313,729 34,39n 1 4,2R2 8.25 3,427 1,650 1,777 30n963 59

South S "matera 203,6h8 12,256 12 S68 21.5R 369 146 223 11,AR7 27 45Aceh 55,392 7,493 14 397 18,87 5s6 273 313 6,907 Ss 47Riau 94,5h2 5,750 9 2R4 3n.91 324 130 194 0,456 32 23Jambi 44,924 5,852 13 212 25.22 320 146 174 5,531 23 12IBengkulu 21,165 2,ns5 In 114 15,14 121 66 55 1,934 54 36Veet Kalimnten 146,760 14,632 10 193 37,23 426 234 192 24,206 58 17South Eallmntan 37,660 2,74n 7 319 5.59 446 311 131 2,294 67 55Central Kalimantan 152,600 16,464 11 151 209.03 220 94 126 16,244 48 6East Kalimantan 202,44n 16,061 a 115 139,66 231 197 34 25,53n 6n 6Central Sulavesi 69,725 5,255 R 207 25.39 94 41 51 5,161 43 i8Southeast Sulawesl 27,656 4,832 17 144 12.43 R9 26 73 4,741 45 14Naluku 74,505 ,., ,,, 191 .,, , ,, ,,, ,,. 37 19

Subtotal 2.032.122 96.419 9 3.140 30,71 3,226 1.656 2,570 93.193 47

Irian JAYA 421,921 ... .,. 161 ,,, ,,, .,, .,, 65 35 5

Total 2,904,i50 149,019 9 19,399 7.65 23,2 6,R96 6,1S6 115,961 62

Notes, (1) Column& 1, 7, 9 and 10 from, Statictical Yearbook of Indonetla, 1983,(2) Column .n estimated fron irrigated paddy field, dryland And tainfed, grassland, garden, ponds and 8n0 of total plantation excluding forest land,(3) Column 3 equals column 2 divided by coluon 1.(4) Column 4 smallholdtngs by number of farms from Asricultural Creiasu 1953,(5) Column S equAls column 2 divided by column 4.(6) Column 6 equals column I plus column A.(7) Column 9 equals column 2 minus column 6.

- 35 -ANNEX 1Table 2

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Number of Households by Subsector /a /b('000)

(1) (2) (3) (4) (5) (6) /dAll /c Fisheries

All agric- Food All Freshwater CoastalProvince sectors culture crops livestock culture fisheries

Aceh 557 396 314 110 3 14North Sumatra 1,639 1,060 845 187 16 29West Sumatra 730 509 430 96 65 10Riau 462 286 160 39 3 24Jambi 325 230 183 41 4 2South Sumatra 908 570 434 80 13 14Bengkulu 170 136 106 24 6 1Lampung 926 730 631 95 13 5DKI Jakarta 1,265 27 7 4 1 3West Java 5,552 3,929 3,032 733 121 33Central Java 5,552 3,929 3,032 733 121 33DI Jogjakarta 608 440 370 101 15 1East Java 6,804 4,663 3,276 1,284 33 92Bali 501 357 262 164 8 11West Nusa Tenggara 651 442 332 150 3 19East Nusa Tenggara 513 460 447 188 2 14West Kalimantan 505 377 343 96 6 12Central Kalimantan 210 149 127 25 2 4South Kalimantan 479 323 28- 38 3 9East Kalimantan 256 116 91 22 3 8North Sulawesi 416 299 248 76 12 24Central Sulawesi 255 209 159 56 3 15South Sulawesi 1,176 805 673 311 3 20Southeast Sulawesi 187 159 117 24 1 26Maluku 244 191 149 29 1 49West Irian 228 161 139 65 2 17East Timor 121 114 110 32 1 2

Total 32,232 21,190 16,356 4,490 699 493

/a As of 1983./b Rounded.T7 Includes tree crops.T7 Columns 3,4,5,6 are not additive due to double counting and subsector

omissions.

Source: GOI, Agricultural Census 1983.

ANNEX 1

- 36 - Table 3

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Production of Some Major Agricultural Commodities (1978-1983) andTarget for 1988 (last year of Repelita IV)

(in thousand tons)

Items 1978 1979 1980 1981 /a 1982 /b 1983 /d 1988

Rice 17,523 17,872 20,163 22,286 23,191 23,462 28,624Maize 4,029 5,606 3,991 4,509 3,207 5,180 6,656Cassava 12,902 13,751 13,726 13,301 12,676 13,219 17,756Sweet potatoes 2,083 2,194 2,079 2,094 1,897 2,231 2,564Soy beans 617 680 653 704 513 580 1,370Peanuts 446 424 470 475 434 477 724Sea fish 1,227 1,318 1,395 1,408 1,490 1,527 2,058Inland fish 420 430 455 506 530 552 753Meat 475 486 571 596 629 671 894Eggs 151 164 259 275 297 316 432Milk /c 62 72 78 86 117 135 586Rubber 884 898 1,002 1,046 861 1,017 1,514Palm oil 532 642 701 748 874 972 2,470Coconut 1,575 1,582 1,759 1,812 1,736 1,628 2,914Coffee 223 228 285 295 266 234 348Tea 91 125 106 110 92 111 130Pepper 46 47 37 39 38 32 49Tobacco 81 87 116 118 117 122 267Sugarcane 1,516 1,601 1,831 1,700 1,861 2,164 3,204

/a Revised figures/b Tentative figures/c In million liters7T Forecasted figure.

-37 - ANLN 2Table 1

INDONESLA

THIRD NATIONAL ACRICuLTuRAL iEnmsioN PROJECT

Project Cost Estimte

Foreign Proportion ofLocal Foreign Total Local Foreign Total exchange base coat

(Rp billion) - - (USS millien) - (I)

Civil VorksConstruction of new RECs R.7 2.7 11.4 7.9 2.5 10.4 24Purchase of land for new and existing RECs 8.0 - 8.0 7.2 - 7.2 -Site development 1.7 0.6 2.1 1.6 0.5 2.1 24Expansion of existing RECa 8.7 2.8 11.5 7.4 2.5 In4 24Construction of animal health posts 1.6 n.5 2.1 1.4 0.5 1. 24Construction of PPL houses In Irian Jaya and

E. Timor 1.6 0.5 2.1 1.4 0.5 1.9 24

Subtotal 30.3 7.1 37.4 27.4 6.5 33.9 19 34

VehiclesMotorcycles 1.6 1.6 1.2 1.4 1.5 2.9 50Four-wheel drtve vehicles 0.8 0.9 1.7 0.8 0.8 1.6 50Animal health mobile vehicles 0.6 0.6 1.2 0.5 0.3 1.0 50Audiovisual mobile vehicles 0.1 0.2 0.3 0.2 0.1 0.3 48

Subtotal 3.1 3.3 6.4 2.9 2.9 5,R 50 6

FurnitureFor new RECs 1.1 0.3 1.4 0.9 n.3 1.2 24For expanded RECs 1.1 0.4 1.5 1.1 0.3 1.4 24

Subtotal 2.2 0.7 2.9 2.0 0.6 2.6 24 3

EquipmentBasic equipment for new RECs 0.2 0.5 0.7 0.2 0.4 0.6 64Basic equipmnat without generator nd pressure

lamp for new RECs 0.1 0.1 0.2 0.1 0.1 0.2 64Specialized equipment for new RECs 0.8 1.3 2.1 0.7 1.2 1.9 64For aniuml health posts 0.1 0.3 0.4 n.1 0.2 0.3 64

Subtotal 1.2 2.2 3.4 1.1 1.9 3.0 64 3

TrainingPm? basic training 3.0 0.2 3.2 2.8 0.1 2.9 5PPM basic training 1.0 - 1.0 0.9 - 0.9 5PPS bastc training 1.0 - 1.0 0.9 - 0.9 5PPL & PPM skill training 7.7 0.4 8.1 7.0 0.4 7.4 5FPS skill training 1.3 0.1 1.4 1.2 0.1 1.3 5Farmers' skill training 2.8 0.2 3.0 2.6 0.1 2.7 5Diplom course (3 years) 2.1 0.1 2.2 1.9 n.1 2.0 5Diplom course (l year) 0.8 - 0.8 0.7 - 0.7 5Masters degree (in-country) 1.8 n.1 1.9 1.6 0.1 1.7 5Ph.D. degree (in-country) 0.1 - 0.1 0.1 - 0.1 53 montha overseas traintng 0.1 1.4 1.5 0.1 1.1 1.4 9nMasters degree abroad 0.2 2.3 2.5 0.3 2.0 2.3 gnPh.D. degree abroad - 0.4 0.4 - v.4 0.4 90

Subtotal 21.9 5.2 27.1 20.1 4.C 24.7 19 25

Technical Assistance and StudiesLong- and short-term consultancies 0.1 1.4 1.5 0.1 1.3 1.4 90Engineering consultant 1.8 0.1 1.9 1.6 0.1 1.7 5Studies 0.1 - 0.1 0.1 - 0.1 5

Subtotal 2.0 1.5 3.5 1.8 1.4 3.2 44 3

Incremental Operational CostSalaries and operating cost of PTl 1.2 - 1.2 1.1 - 1.1 -09 of RECs 1.7 0.2 1.9 1.5 0.2 1.7 100OE of vehicles 1.3 0.9 2.2 1.2 0.8 2.0 40Salaries of incremental PPLa. PIKs. PPS. 24.0 - 24.0 21.8 - 21.8 -

Subtotal 28.2 1.1 29.3 25.6 1.0 26.6 4 26

Base Costs 8A.9 21.1 110.0 80.9 18.9 99.8 19 100

Value-added tax (VAT) A3 - 8.3 7.5 - 7.5 8Physical contingencies 6.5 1.4 7.9 5.9 1.3 7.2 7Price contingencies 18.8 3.5 22.3 17.1 3.: 20.2 20VAT (price contingencies) 1.7 - 1.7 1.5 - 1.5 I

Total Project Cost 124.2 26.0 150.2 112.9 23.3 136.2 17 13.6

- 38 - ANNEX 2Table 2

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Summary of Construction Costs

CostNumber Area per per unit Total costof unit unit m Rp million Rp million

Construction of new RuralExtension Centers 400 168 28.56 11,424

Fencing, site development andaccess roads for new RECs 400 - 5.71 2,284

Expansion of existing RECs 1,402 48 8.16 11,440

Construction of AnimalHealth Posts 200 72 10.8 2,160

PPL housing in East Timorand Irian Jaya 210 36 10.08 2,117

Total 29,325

39- ANNEX 2Table 3

INDONESIA

THIRD RATIONAL AGRICULTURAL EXTENSION PROJECT

Construction Program - Settled Areas and Transuigrtion Areas(number of units)

1987/88 1988/89 1989/90 TotalA B C D A B C D A B C D A B C 1

Aceh 6 10 3 - 11 17 4 - 5 10 2 - 22 37 9 -

North Suatera 7 20 8 - 9 40- 19 - - 21 79 8 -

West Sumatera 5 16 - - 6 29 2 - - 13 2 - 11 58 4 ARiau 5 7 3 - 8 12 2 - 8 5 - - 21 24 5 -

Jambi 7 7 - - 8 12 4 - 5 5 - - 20 24 4 -

South Sumatera 10 17 2 - 10 28 4 - 10 11 - - 30 56 6 -

Bengkulu 5 6 - - 6 10- - - 3 2 - 11 19 2 -

Lampung 7 14 - - 7 234 - 6 8 2 - 20 45 6 -West Java - 60 4 - - 105 9 - - 44 - - 209 13 -

Jakarta - 2 - - - 4 - - - 2 - - - 0 - -

Central Java - 35 3 - - 68 6 - - 33 2 - - 136 11 -

Jogjakarta - 4 3- - 8- - - 3 - - - 15 3 -

East Java - 40 10 - - 74 12 - - 33 - - - 147 22 -

Bali - 8 2 - - -14- - - 5 - - - 27 2 -

West Nusa Tenggara 10 10 2 - 7 18 5 - 5 7 - - 22 35 7 -

East Nusa Tenggara 10 23 - - 9 10 3 - 9 9 - - 28 42 3 -

West Kalimantan 5 10 2 - 5 20- - 4 9 2 - 14 39 4 -

Central Kalimantan 3 5 - - - 84 - - 3 2 - 3 16 6 -

South Kalimantan 6 10 4 - 8 17 3 - 4 5 - - 18 32 7 -

East Kalimantan 5 4 2 - 10 7- - 5 3 - - 20 14 2 -

Nortb Sulavesi 4 10 3 - 5 15 2 - 4 5 - - 13 3- 5 -

Central Sulawesi 5 7 3 - 4 12- - - 5 - - 9 24 3 -

South Sulawesi 10 12 3 - 20 49 5 - 15 10 - - 45 77 8 -

Southeast Sulavesi 5 7 2 - 4 12 - - 3 5 - - 12 24 2 -

Maluku 5 6 2 - - 9 - - 7 3 - - 12 18 2 -

Irian Jaya 10 3 3 40 14 5 - 70 10 2 - 31 34 10 3 141East Timor 4 3 - 20 5 5 - 30 5 2 - 19 14 10 - 69

Total 134 356 64 60 1S6 631 69 100 110 268 14 50 400 1.255 147 210

Note: Column A - Construction of new Rural Extension Center, fencing. mite development and accessroads.

Column B - Expansion of existing RECs (addition of one PPM house).Column C - Expansion of 147 RECs being constructed under NAEP II (addition of one PPM house).Column D - PPL housing in Irian Jaya and East Timor.

- 40 - ANNEX 2Table 4

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Number of Rural Extension Centers

Beingconstruc- Proposed

Existing ted under underREC NAEP II NAEP III Total

Aceh 37 9 22 68North Sumatra 79 8 21 108West Sumatra 58 4 11 73Riau 24 5 21 50Jambi 24 4 20 48South Sumatera 56 6 30 92Bengkulu 19 2 11 32Lampung 45 6 20 71West Java 209 13 - 222Jakarta 8 - - 8Central Java 136 11 - 147Jogjakarta 15 3 - 18East Java 147 22 - 169Bali 27 2 - 29West Nusa Tenggara 35 7 22 64East Nusa Tenggara 42 3 28 73West Kalimantan 39 4 14 57Central Kalimantan 16 6 3 25South Kalimantan 32 7 18 57East Kalimantan 14 2 20 36North Sulawesi 30 5 13 48Central Sulawesi 24 3 9 36South Sulawesi 77 8 45 130Southeast Sulawesi 24 2 12 38Maluku 18 2 12 32Irian Jaya 10 3 34 47East Timor 10 - 14 24

Total 1,255 147 400 1,802

- 41 - ANNEX 2Table 5

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Vehicle List

Unit TotalVehicle types, placement and ratios Numbers cost cost

- Rp million -

Four-wheeled vehicles

PPS, provincial project officers,provincial BIMAS secretary 121 14.0 1,694

PIU 3 14.0 42

Motorcycles

For 1,802 RECs 3,206 1.0 3,206

Mobile Units

Animal health 45 25.0 1,125

Audiovisual 11 31.0 341

Total 6,408

- 42 - ANNEX 2Table 6

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Schedule of Vehicle Provision

TotalType numbers 1987 1988 1989

Four-wheeled vehicles 124 54 40 30

Motorcycles 3,206 1,200 1,200 806

Animal health mobile unit 45 14 22 9

Au*diovisual mobile unit 11 3 6 2

- 43 - ANNEX 2Table 7

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Cost of Furniture and Equipment for Rural Extension Centersand Animal Health Posts

Cost perNumber of REC or REC Total cost

Item animal health posts Rp million Rp million

Rural Extension CentersFurniture 400 (new) 3.37 1,348.00Additional furniture 1,402 (expanied) 1.07 1,500.14Equipment 100 (new) 1.57 157.00Equipment 300 (new) 2.25 675.00Specialized extensionpackage for food crops 180 4.29 772.20

Specialized extensionpackage for estate crops 95 3.00 285.00

Specialized extensionpackage for livestock 132 1.12 147.84

Specialized extensionpackage for fisheries 220 4.25 935.00

Animal Health PostsEquipment 200 1.93 386.00

Total 6,206.18

- 44 - ANNEX 2Table 8

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Basic Equipment and Furniture for New RECs

Basis of Unit Totalsupply cost cost

Item per REC (Rp '000) Rp million

FurnitureDesk with chair 8 125 1.00Meeting table 10 60 0.60Meeting chair 20 25 0.50Cupboard 4 120 0.48Book rack 4 60 0.24Filing cabinet 4 125 0.50Blackboard 2 25 0.05

Total 3.37

EquipmentTypewriter 1 400 0.40Calculator 3 30 0.09Cassette recorder 1 100 0.10Megaphone 3 75 0.225Slide projector 1 750 0.75

Total 1.57

EquipmentPressure lamp 3 25 0.08Generator 1 600 0.60

Total 0.68

Additional Furniture for Expanded RECs

Desk with chair 3 125 0.375Book rack 3 60 0.18Cupboard 2 120 0.24Filing cabinet 2 125 0.25Blackboard 1 25 0.025

Total 1.07

- 45 - WM 2Table 9

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Specialized Extension Package for Food Cropsat Rural Extension Centers

Basis of Unitsupply cost Total cost

Item per REC Rp '000 Rp million

Hand duster 10 15 0.15Insect net 10 10 0.10Hand sprayer 10 45 0.45Mist blower 2 350 0.70Light trap 1 80 0.08Measuring cylinder 5 20 0.10Household scale 1 50 0.05Soil auger 1 50 0.05Farm tool set 3 70 0.21Spring scale 25 mg 5 10 0.05Measuring tape 5 10 0.05Magnifying glass 5 10 0.05Hand tally 5 10 0.05Chart board 5 10 0.05Flip chart frame 10 5 0.05Thresher 1 150 0.15Winnower 1 200 0.20Groundnut peeler 2 75 0.15Corn peeler 2 50 0.10Cassava cutter 2 400 0.80Plowing tool 2 40 0.08Corn grinder 2 100 0.20Dry-land weeder 2 100 0.20Row marker 2 35 0.07Rake 2 25 0.05Pruning knife, scissors, hoe, sickle, etc. 2 50 0.10

Total 4.29

- 46 - ANNEX 2Table 10

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Specialized Extension Package for Estate Cropsat Rural Extension Centers

Basis of Unitsupply cost Total cost

Item per LEC Rp '000 Rp million

Penetrometer 2 27 0.054Coagulation tank 2 7.5 0.015Tapping knife for rubber 3 1.5 0.005Occulation knife 3 15.5 0.047Occulation tape 5 1.2 0.006Wire spring for cup 5 0.5 0.003Latex cup 5 2 0.010Spout 25 0.75 0.019Plastic tape 1 5 0.055Sharpening stone for rubber 2 0.5 0.001Snap cut 5 15 0.075Hand mangel 1 200 0.200Metrolax 1 75 0.075Huller for coffee 1 1,250 1.250Drying floor for coffee 1 200 0.200Fermentation tank for coffee 1 75 0.075Moisture tester for coffee 1 125 0.125Filter mesh type 2 5 0.010Bag for coffee 5 0.5 0.003Basket 5 1.5 0.008Free injection instrument 1 250 0.250Package 2 0.5 0.001Stage 2 2.5 0.005Basket for pepper 5 1.5 0.008Rake 5 5 0.025Kacip knife 5 10 0.050Cutting knife 5 2 0.010Sui 4 1.5 0.006Smoke room 1 300 0.300Saccharometer 1 75 0.075Drying mat 3 2 0.006Bamboo rack 1 20 0.020Boiler 1 10 0.010Cloth 3 10 0.030Drier/drum for green tea 2 10 0.020

Total 3.000

- 47 - ANNEX 2Table 11

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Specialized Extension Package for Livestockat Rural Extension Centers dnd Animal Health Posts

Basis of Unitsupply per cost Total cost

Item REC/AHP Rp'000 Rp million

Livestock Care at RECEar marking plier 5 10 0.050Tatooing forcep 5 30 0.150Castration knife 5 5 0.025Artificial insemination set 5 40 0.200Forcep for applying bull ring 5 20 0.100Egg test'ng lamp 5 8 0.040Egg grader 5 25 0.125Killing cone and knife 5 5 0.025Shear master 1 140 0.140Milk tester 1 200 0.200Weighing scale 1 60 0.060

Total 1.115

Animal Health at AHPDesk with chair 2 125 0.250Filling cabinet 1 125 0.125White board 1 40 0.040Syringes 10 40 0.040Borduzzotang 2 170 0.340Scalpel 4 5 0.020Scissors 5 5 0.025Artery klem 10 5 0.050Forceps 5 5 0.025Suture needles 5 15 0.075Needle holder 5 15 0.075Suture 5 15 0.075Pincet anatomis 5 5 0.025Pincet cairrurgis 5 5 0.025Automatic injection 1 50 0.050Obsetric equipment set 1 400 0.400Rubber gloves 6 5 0.030

Total 1.930

Grand Total 3.045

- 48- ANNE 2

Table 12

INDONESIA

THIRD NATIONAL AGRICULTMRAL EXTENSION PROJECT

Specialized Extension Package for Fisheriesat Rural Extension Center

Basis of Unitsupply cost Total cost

Item per REC Rp '000 Rp million

Hapu net 6 50 0.300Cotton pieces 10 10 0.100Plastic bowl 5 15 0.075Funnel 5 10 0.050Casting net 5 50 0.250Plastic bag 10 20 0.200Oxygen tank 3 100 0.300Plastic rope 10 12 0.120Hoe 5 15 0.075:' ckle 5 6 0.030Spade 5 15 0.075Container 5 100 0.500Portable pH meter 1 600 0.600Filter paper 5 12 0.060Thermometer 1 5 0.005Sechi disc 1 200 0.200Portable water test kit 1 500 0.500Drying rack 1 100 0.100Tray 1 10 0.010Cooling box 1 500 0.500Noozle tester 1 200 0.200

Tota'l 4.250

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Training Programs and Cost

Number of participants by area of trainingExt. Ed. Prod. P har- Unit Total

Training program Duration & Homec Agrib tech. vest T Total cost cost

OverseasShort-term training for PPSand ext. officers at Provin-cial and Kabupaten level 3 mos. 30 30 40 60 160 9.n4 1,446

Masters degree 2-5 yrs 10 10 15 25 60 38.6 2,316Ph.D, 3 yrs 2 4 - 2 8 55.0 440

In-Country TrainingPh.D. 3-S yrs - 3 3 2 8 16.0 128 1Masters degree 2-5 yrs 30 80 40 30 180 9,275 1,669 XDiploma course 3 yrs 60 90 60 90 300 6,820 2,046Diploma course 1 yr 90 90 90 70 340 2,000 680PPL basic training 30 days 9,n00 - - - 9,000 0,318 2,862PPM basic training 30 days 3,000 - - - 3,000 0.318 954PPS basic training 30 days 1,500 - - 1,500 0.590 885PPL and PPM Specialskill training 7 days 2,000 8,000 30,o0o 50,000 90,000 0.082 7,380

PPS special skill training 14 days 200 600 1,000 1,400 3,200 0,410 1,312Key .^rmer-men, women andyouth-special skilltraining 7 days 6,000 7,700 9,000 10,000 32,700 0.082 2,618

Total i40j456 24,736

Note: Ext. Ed. & Hlomec - Extension Education and Home Economics. |Agrib, m Agribusiness.Prod. Tech. - Production Technology.P, Harvest T - Post Harvest Technology.

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Specific Skill Course for PPLe, PPMF. PPSs. and Farmer.

Extension education and Production technology PoathaTeeat technologyhuman resource development Agribusiness and economics and marketing Kiscellaneous

Development Communication Agribusiness of Production Production TechnoloRy Postharvest TechnologY Orientation training for(Communication elements, supplies Production of soybeans, Technology of rice, secon- PPL, PPStechniques, evaluation) Seed/seedling improvement corn, horticulture dary crops, horticulture

program Production of coconut, rechnoloRy of milk, egg, Basic training for PPLs,Group Dynamics Animal breeding improve- cocoa, rubber meat PPM., PPSs(Role of members, role of ment program Dairy cattle, beef cattle, Technology of fish/shrimpfacilitators) Fish breeding Improvement poultry Technology of estate Intensification of brack-

program Fish/shrimp culture crops: coffee, cocoa, ishwater cultureHome Economics Animal feeding program tobacco, vanillaFamily welfare Fish feeding program Farm Hansaement Water managementFamily business Integrated farm business Marketini ofUse of resources ARribusiness ot Product Food crop farm business Food crop products Mobile unit operation tech-

Processing of Estate crop farm business Animal products niqueSecondary crops Livestock farm business Estate crop productsHorticulture Fishing business Audiovisual aidFish/shrimpKilk/egg Adaptation training

. .~~~~~~~~~~~~~I1'-1

-51- ANNEX 2Table 15

INLe)NESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Capacity of In-Service Training Centers

Existing Additional byCapacity in 2341 Total

Province Number (man-month) Number Capacity capacity

Aceh 1 950 - - 950North Sumatra 2 2,050 - - 2,050West Sumatra 1 950 - - 950Riau 1 950 - - 950Jambi 1 950 - - 950South Sumatra 1 950 - - 950West Sumatra 3 4,850 1 900 5,750Central Java 3 3,800 - - 3,800Yogyakarta 1 950 - - 950East Java 3 2,500 1 900 3,400Bali 1 950 - - 950East Nusa Teuggara 1 950 - - 950West Kalimantan 1 950 - - 950South Kalimantan 1 950 - - 950North Sulawesi 2 1,850 - - 1,850South Sulawesi 1 1,5000 - - 1,500Maluku 1 1,200 1 900 2,100Irian Jaya 1 600 1 900 1,500Lampung 1 900 900East Kalimantan - - 1 900 900Yogyakarta(Estate T.C.) 1 2,600 - - 2,600

Indonesia 25 30,450 6 5,400 35,850

Note: (a) West Java includes Ciawi National Training Center and FisheryAcademy Out Station.

(b) Fishery Training Centers are located in: North Sumatra, CentralJava, East Java, North Sulawesi, Maluku and Irian Jaya.

(c) One Animal Health T.C. in West Java and one Milk Production andProcessing T.C. in East Java.

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Schedule of Prolect Expenditures /a(US$ million)

1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 Total exe endituresLocal Foreign Local Foreign Local Foreign Local Foreign Local Foreign Local Foreign Local Foreign Total

Civil workB 2,4 - 9.2 2.1 11.0 2.9 4,8 1.5 - - - - 27.4 6.5 33.9

Vehicles - - 1.1 1.1 1.1 1i1 0.7 - - - - - 2.9 2.9' 5.8

Furniture - - 0.6 0.2 0.9 0.3 0.5 0.1 - - - - 2.0 0,6 2.6

Equipment - - 0.3 0.6 0.5 0.9 0.3 0,4 - - - - 1.1 1.9 3.0

Training 2.5 0.3 4.9 1.0 5.3 1.5 3,9 1,2 3.1 0.6 0,4 - 20.1 4.6 24.7

Technical assis-tance & studies 0.3 - 0.4 0.3 0.4 0.4 0,4 0.3 0,3 0,3 0.1 1.8 1.4 3.2

Incremental ope-rating costs 2.o 0.1 5.1 0,2 5.1 0.2 5.1 0,2 5.1 0.2 2.6 0.1 25,6 1.0 26.6

Total 7.8 4.0 21.6 5.5 24.3 7,3 15.7 4,4 8.5 1.1 3.0 0.2 80.9 18.9 99.8

,^ GOI Fiscal Year - April I to March 31.

II1

- 53- ANNE- 3Table 2

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Proposed Allocation of Loan Proceeds

Total costincludingprice con- Disbursementtingencies Foreign Proposed in % ofand VAT exchange allocation total cost

Categories of expenditur. - (US$ million)

Civil works 35.4 7.6 30.0 90Furniture 3.4 0.7 6.0 /aEquipment 4.0 2.2 hTechnical assistance,training and studies 33.7 7.0 27.0 100

UnallocatedLand acquisition 9.5 -Vehicles 7.7 3.3Incremental operations cost 35.3 1.2Physical contingencies 7.2 1.3 7.0

Total 136.2 23.3 70.0

/a Disbursement would be 100% of foreign exchange of directly imported equip-ment and g3ods, 65% of total cost of locally procured imported equipmentand goods, and 95% of ex-factory costs of locally manufactured equipmentand goods.

- 54 - ANNEX 3Table 3

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Estimated Schedule of Disbursements /a

IBRD fiscal Profileyear and Cumulative Banksemester disbursements Project projects

(USS million) (%)

FY87First 0.1 0.1 2Second 2.0 3 5

FY88First 5.0 7 12Second 10.0 14 19

FY89First 16.5 24 27Second 24.0 34 36

FY90First 30.0 43 44Second 36.0 51 51

FY91First 45.0 64 58Second 52.0 74 65

FY92First 58.0 83 76Second 65.0 93 78

FY93First 70.0 100

/a Closing date December 31, 1992.

- 55 - ANNEX 3Table 4Page 1

IDNESIA

THIRD N&TIONAL AGRICULTI2AL EXrENSION PROJECT

Implementation Schedule (October 1986-June 1992) /a(Number)

1987188 1988/89 1989/90 1990191 1991/92 1992/93 Total

Recruitment of Extension StaffPPL - 1,000 1.000 1,000 848 - 3,848PPM - 425 600 500 400 - 1,925PPS - 200 237 200 200 - 837Animal health officer - 50 50 50 50 - 200

Construction of RECsLand acquisition for new RECs 134 156 110 - - - 400Cost estimates, invitation of bid,

bid evaluation and signing of con-tract for new RECs - 134 156 110 - - 400For expansion of RECs - 700 702 - - - 1,402For PPL houses - 105 105 - - - 210For animal health posts - 100 100 - - - 200

Civil works and site development fornew RECs - 134 156 110 - - 400

Expansion of existing RECs - 420 700 282 - - 1,402PPL housing - 63 105 42 - - 210Animal health posts - 60 100 40 - - 200

Procurement of VehiclesMotorcycles - 1.200 1,200 806 - - 3,206Four-wheel drive vehicles - 54 40 30 - - 124Animal health mobile units - 14 22 9 - - 45Audiovisual mobile units - 3 6 2 - - 11

Procurement of Furniture: For newRECs - 134 156 110 - - 400

Procuiement of EquipmentBasic for new RECs - 134 156 110 - - 400Additional for expanded RECs - 420 700 282 - - 1,402Specialized extension packageFor food crops - 50 80 50 - - 1S0For estate crops - 28 47 20 - - 95For livestock - 40 61 31 - - 132For fisheries - 66 110 44 - - 110

/a GOI Fiscal Year - April to March 31.

- 56 - ARMEX 3Table 4Page 2

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Implementation Schedule (October 1986-June 1992)(Number)

1987/88 1988/89 1989/90 1991/91 1991/92 1992/93 Total

Overseas TrainingShort-term training 20 40 40 40 20 - 160Masters' degree - 30 30 - - - 60Ph.D. - 4 4 - - - 8

In-Country TrainingPh.D - 4 4 - - - 8Masters' degree - 90 90 - - - 180Diploma course (3 years) 60 120 120 - - - 300Diploma course (1 year) 40 100 100 100 - - 340PPL basic training 900 2,100 2,100 2,100 1,800 - 9,000PPM basic training 300 900 1,200 300 300 - 3,000PPS basic training - 450 450 300 300 - 1.500PPL and PPM special skill training 18,000 18,000 18,000 18.000 18,000 - 90,000PPS special skill course 600 900 900 600 200 - 3.200Key farmer-men, women and

youth-special skill training 3.900 6,400 6,400 6,400 5,600 4,000 32.700

Technical AssistanceExtension advisor (mm) - 12 12 - - - 24Training advisor (mm) - 6 12 6 - - 24Monitoring and evaluation

advisor (mm) - 6 3 3 - - 12Rural sociology advisor (mm) - 6 6 - - - 12

StudiesStudy and evaluation of T&V system

(months) - 3 3 - - - 6Study and evaluation of farmer's

participation (months) - 3 3 3 - - 9Study and evaluation extension

methods (months) - 3 3 - - - 6

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Total Number of Extenslon Agents (PPL/PP1)Fiscal Year 1986/87

Food crop Livestock Fishery Estate AIC TotalPn Hr Total Pn Hr Total Pn Hr Total Pn Hr Total Hr Total Pn Hr Total

Jabar 3,384 502 2,886 46 133 179 118 106 224 200 2nn I 1 2,54R 942 3,49nJateng 1,945 717 2,662 20 liq 139 23 I1I 134 294 294 1 1 1,988 1,242 3,21n0.l, Yogya 286 R1 367 14 63 77 8 22 31 39 39 308 205 513Jatim 2,119 554 2,673 lln 144 254 32 98 130 552 552 2,261 1,348 3,609Sumut 836 27n 1,106 16 140 156 15 81 96 284 2R4 1 1 867 776 1,643Sumbar 588 191 779 27 73 inn 18 6l 79 249 849 3 3 633 577 1,210Lampung 394 429 823 6 56 62 q 36 45 319 319 409 840 1,349Kalsel 475 287 762 21 7n 92 19 41 6n 153 153 515 551 1,n66Sulsel 829 498 1,327 19 62 82 36 71 In7 294 294 1 1 884 926 1,810Bali 368 IR 3R6 28 43 71 25 47 72 17n 170 421 27R 699DKI Jaya 37 51 RR 15 36 51 17 17 52 104 156D.I. Aceh 322 I1n 422 14 7n 84 23 60 83 291 29l 359 521 q88Riau 29n 294 584 8 65 73 3 33 36 384 384 301 776 1,n77

U'Jambi 266 219 485 11 44 55 20 17 37 411 411 1 1 297 692 989Sumsel 787 729 1,516 12 70 82 in 51 hl 367 367 1 1 8n9 1,219 2,n27Bengkuliu 173 174 347 11 $5 66 2n 26 46 1IQ liq I 1 204 375 579Kalbar 283 330 613 14 45 59 9 31 42 3nl 301 306 7n9 l,015Kaltent 1,i 247 438 6 13 39 3 16 Iq 162 162 2nn 458 658Kaltim 164 226 39n 1l 5n 68 13 35 48 138 138 195 449 644Sulut 229 IR8 417 16 2R 44 26 41 67 294 294 271 551 822Sulteng 245 190 435 3 36 39 42 42 143 143 24R 411 65qSultara 111 399 512 A 11 39 16 i5 51 29l 191 137 656 793NTR 3n6 175 481 18 45 63 2 41 43 IR2 182 6 6 326 449 779NTT 161 457 61h 2n 86 In6 in 32 42 197 199 191 774 965Maluku 77 315 392 6 34 40 13 26 39 195 195 96 57n 666Irja 68 5nq 577 12 24 36 13 26 29 98 98 93 647 74nTimtim 9 67 76 16 16 19 19 46 46 9 148 157

Total 13,945 8,217 22,162 499 1,671 2,17n 484 1.214 1,698 6,n75 6,075 16 16 14,928 17,193 32,121

Legend:AIC - Agricultural Information CenterPn - Civil Service I|Hr s Honorary 1

-58- SNu8 -

Table 2

:.4DONESIA

THIRD NATIONAL ACRICULTURAL EXTENSION PROJECT

Total Number of SubLect Matter Specialists (PPS)Fiscal Year 1t98687

Food crop Livestock Fishery Estate AIC TotalPn Nr Total Pn Hr Total Pn Hr Total Pn Hr Total Pn Hr Total Pn Hr Total

Jabar 43 23 66 - 7 7 5 5 10 - - - 6 14 20 54 49 103Jateng 61 16 77 - 6 6 7 6 13 - 4 4 10 2 12 78 35 113D.I. Yogya 11 4 15 - 6 6 2 2 4 - - - 1 4 5 14 16 30Jatia 6n 26 86 - 7 7 5 7 12 - 8 8 13 2 15 66 63 128Sumt 24 7 31 - 6 6 3 7 10 - 2 2 5 2 7 28 28 56Sumbar 24 7 31 - 6 6 2 7 9 - 2 2 7 2 9 23 34 57Lampung 25 - 25 - 11 11 2 3 5 - I 1 6 3 9 33 18 51Ralsel 20 4 24 - 6 6 - 9 9 - - - 6 5 11 28 22 50Sulsel 38 31 69 - 7 7 11 6 17 - - - 5 5 10 52 51 103Bsli 16 6 22 - 6 6 3 9 12 - 2 2 - 8 8 19 31 50DKI Jaya 7 6 13 - 2 2 - 2 2 - - - - 3 3 7 13 200.I. Aceh 13 13 26 - 3 3 3 - 3 - - - q 1 10 25 17 42

Risu 18 7 25 - 3 3 3 5 8 - - - - 5 5 21 20 41Jambi 16 R 24 - 6 6 I a 10 - - - 4 6 10 20 30 50Susel 23 4 27 - 8 8 1 2 3 - I 1 - 5 5 27 17 44Wengkulu 16 3 19 - 7 7 - 2 2 - - - - 3 3 19 12 31Kalbar 18 5 23 - 6 6 7 £ 11 - I I - 6 6 26 21 47Kalteng 12 R 2n - 6 6 - 6 6 - 1 1 - 2 2 14 21 35Kaltim 12 9 21 - 7 7 - 1 1 - - - - 4 £ 14 19 33Sulut 14 5 19 - 5 5 1 3 4 - I 1 - 5 5 17 17 34Sulteng 5 14 19 - 5 5 2 3 5 - 2 2 - 7 7 8 30 38Sultars 13 4 17 - 3 3 3 5 8 - - - - A 4 16 16 32NTB 15 3 18 - 7 7 5 3 8 - - - 6 8 14 25 22 47nTT 9 15 24 - 8 a 12 2 14 - - - - 4 4 22 28 50Maluku 10 7 17 - 4 4 1 1 2 - - - - 6 6 11 18 29Irjs 9 14 23 - 2 2 2 - 2 - 4 4 1 4 5 13 23 36Tiutim 13 2 15 - 2 2 - 3 3 - - - - 6 6 13 13 26

Total 545 251 796 - 153 153 81 112 193 - 29 29 79 126 205 705 671 1.376

Legend:AIC - Agricultural Infornstion CenterPo - Civil ServiceHr - Honorary

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Extension Staff Requirement for Transmigration Areas

Number of transmigrants No. of PPLs No, of PPSs Total TotalNot covered As targeted available available no. of PPLs no. of PPSs

Province by NAEP II in Repelita IV Total (as of December 1984) required required

Aceh 2,700 17,938 20,638 35 5 41 5North Sumatra 616 5,687 6,303 26 1 13 2Riau 3,850 56,243 60,093 110 5 120 5West Sumatra 5,400 4,345 9,745 23 4 19 4Jambi 9,350 29,550 38,900 78 4 78 4 1Bengkulu 6,862 10,728 17,590 44 2 35 2South Sumatra 17,307 66,588 83,895 213 5 168 10Lampung 20,799 11,315 32,114 0 0 64 6West Kalimantan 5,171 70,842 76,013 111 6 152 8Central Kalimantan 2,000 126,756 128,756 78 2 258 14South Kalimantan 7,667 9,450 17,117 80 4 34 4East Kalimantan 7,618 110,204 117,822 60 2 236 12North Sulawesi 2,155 1,500 3,655 11 0 7 1Central Sulawesi 9,633 10,307 19,940 50 0 40 3South Sulawesi 8,009 5,570 13,579 19 0 27 2Southeast Sulawesi 8,641 15,345 23,986 5 3 48 3Maluku 536 13,970 14,506 13 2 29 3Irian Jaya 1,594 167,739 169,333 50 3 339 17

Total 119,908 734,077 853,985 1,051 48 1,708 105

Note: Minimum PPL required is one PPL for 500 transmigrants.

w I

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Monthly Salaries and Allowances of Typical Extension Personnel(Rp)

Spouse Children's Position Special Project OtherBasic allowance allowance allowance allowance allowance allowances Net salar

Status and years of service salary (2%) (5%) /a (20%) (10%) (Avg) (Rp) (US$) _

Head District Extension Service 140,400 2,888 7,020 17,500 none 25,000 none 192,808 175.315 years experience(salary scale III/b)

Subject Matter Speciallst (PPS) 88,300 1,766 4,415 none none 19000o 39,000 152,481 138.6 *3 years experience o(salary scale III/a)

Middle Level Extension Worker (PPH) 58,200 1,164 2,910 none none 11,500 40,00n 113,774 103,43 years experience(salary scale Il/b)

Field Extension Worker (PPL) 36,500 730 1,825 none none 11,50n 40,000 90,555 82,33 years experience(salary scale II/a)

/a 5% per child. Maximum allowance for three children.T7 US$ u Rp 1,100.

- 61 - ANNEX 4

Table 5

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Incremental Operational Cost

Unit cost Total Rupiab billior US$ million 2 ForeignItem Unit (Rp OOO) units Local Foreign Total Local Foreign Total exchange

Project Implenentation UnitSalaries - - - 0.32 - 0.31 0.21 - 0.29 -

Operating expenses - - - 0.91 - 0.91 0.83 /b 0.83 -

Subtotal 1.22 - 1.22 1.12 - 1.12 -

REC's Operation and Maintenance One year 3,500 540 1.70 0.19 1.89 1.54 0.18 1.72 10

Vehicle Operation and MaintenanceMotorcycles One year 330 5,406 0.97 0.71 1.78 0.88 0.60 1.48 39Anlial health obile units One year 2,500 45 0.07 0.04 0.11 0.06 0.04 0.10 394-vheel drive vehicles One year 1,500 178 0.17 0.09 0.26 0.20 0.10 0.30 39Nobile units One year 2.500 11 0.02 0.01 0.03 0.01 0.01 0.02 39

Subtotal 1.28 o.q0 2.18 1.15 0.80 1.95 39

Incremental Field StaffSalaries

PPLs/PPMa Man-year 2,300 9,000 20.7 - 20.7 18.8 - 18.8 -PPSa Man-year 2.750 1.000 2.8 - 2.8 2.5 - 2.5 -Animal health officer 2,300 20n 0.5 - 0.5 - - 0.45 -

Subtotal 24.0 - 24.0 21.8 - 21.8 -

Total Cost 28.2 1.1 29.3 25.6 1.00 26.6 4

/a 10T on all recurrent cost except Incremental field staff and allovances.

/b Negligible.

INDONESIA

TlRJI NATIONAL ACRICULTUlAl EXTENSION PRDJECS

Maitn Constratnts to Production end Potential for Increasing the Yields of Hlior Casom4itles

Provinces with major Present Agrononically Expected yieldmallholder activities Main constraintr to Increasing Key points for averaRe emall- feasible with tsproved

Comodity In order of itpor:ance small holder production emphasis In extensloo holder yield average yield exteneinn(1) (2) (3) (6) (5) (I) (7)

Paddy (rice) W.Jav, PR.Jave, C.Java, S.Sulaweail Peetr (chiefly brown plant hoppers Selection of varieties resistant to Jeva: 45 ton/ha Javal 6n tnn/ha Javal 50 ton/he(dry gabah) N.Su.ntra, S.Sumatra, Wi.Kaliantan, and rate); diseamers limited periods local pnsta/diseases; improved nur- Other Islandst Other Imland.s Other Island.:

S.Kali.antan. W.Sumatra, Acsh, Lom- of w ;er eupply or floodingl lack of sary management; timing, rate and 10 ton/he 45 ton/ha 3S ton/hapuns, Kra, Bali, luau, Jambi, NIl upland blast-resistant varietiea. method of applicetion of tertilizerr

and pesticides; correct age oftransplantingI pest surveillancelcomwnal rat control; water unage-ment including drainage In maturityperiod.

Haize (dry seed) E.Java, :.Java, S.Sulaweat, NTT, Downy mildew and inaufficient Rood Introduce short duration NW In Javal 1.7 ton/he Jeva: Javat 2.1 ton/haN.Suiawest, V.lava, N.Sumatra, Ralf, seed of mildew-reasitant varinty; I.!Java and in other provincee Other Islands: 2.75 ton/ha Other Island.sS.E.Sulaweat, Jogjakarta, yield ciceely linked to rainfall and mildew-resietant NYV; correct time 1.6 ton/he Other Islands: 2.3 ton/haC.Sulavesi, Laspung, NTi, risk factor and unreltable marketing of plantiOg and peat control; rate, 2.3 ton/ha

discourage farwere from using cash time, method of application of far-input. tiliserl Improved proceesing and

atorage.

Cassava (fresh E.Java, C.Java, W.Java, Jogjakarta, Poorly developed marketing system Selection of high-yielding bacterial Java: 9.9 ton/ha Javat 20 ton/ha Javalroot) LWmpung, NTT, S.Sulavesl and low frugeAte price; Inadequate blight-resistent vartetlas; improved Other Islands: 12.3 ton/ha

supply of Inproved planting procesaing to achieVe better quallty 9.8 ton/ha OtWer Islands:material; crop nragsement poor due and pricel promote use of ferti- 12.2 ton/hato lack of incentives and knowledxe. lier; better plant spacing; erosion

control mecures.

Croundnut E.Java, C.Jeva, W.Java, Jogjakarta, Marketing system and price fluctue- Introduce Improve HYVs; ur. of good n.95 ton/ha 1.5 ton/ha 1.25 ton/ha(shelled) S.Sulawesi, N.Sunatra NM. tion; inadequate supply of good geed seed rate, time, method of applica-

of Improved vaztetite; rather poor tion of fertilizerl Improved pestquality of product due to lack of and disease control and poet-harvesteffective peat control and poat- handling: improve sowing timing andharvest handling, land preparation, ItiLng where

necessary.

Soybean (dry E.Java, C.Java, NTd, Lampung, Pod-boring tneecte uncontrolled; Introduce improved varietiea; to- 0.90 ton/ha 1.sn ton/ha 1.1 ton/haseed) W.Javs, JogJakarta, N,Suutra, Bali indeterminate fruiting pattern, proved seed and preparation/planting

cercospors rust disease; rather poor technique, best control, end post-quality due to lack of effective harvest handlinag rhtiohtuapast control and low standard of inoculation; btaal phosphatic andmanageoent. initial nitrogen fertilIter

application.

Sweet potato X.Java, W Java, C.Java, Irian Jaya, Lack of effective marketing system Introduce improved planting 7l. ton/ha 2n ton/ha If ton/ha(fresh r-)t) N.Sumatra, NTT, Bali, NTB, Maluku and adequate toproved planting materials; improved rate, time, and

Materiall titmted use of cash Inputs method of application of fertLizerdue to lack of market end price and poet-harvest handling.level.

Si (El~~~~~~w1

Provincese vith eaJor Present Agronomically Impected yieldemallholder sctivities Main constraints to increasing Xey points for average smal- feasible vith Improved

Commodity In order of Importance small holder production emphasis in extension holder yield average yield extenxton(1) (2) (3) (4) (5) (6) (7)

Coconut (dry Java harat: Java Tiaurl Jaws Tengshl Poor maintenance and production Rehabilitation postbilities Includ- 62n kg/ha p.s. 2,O0-3,000 7S0 ks/ha p.m.copra) Sulewesi Utara: Riau; Sulawesi techniquesl Insufficient replanting, ing maintenance methods, response to kg/ha p.x. from

Tengahl Malukul Sulavesi Seletan: poor transport, communication and fertiliners, removal of ste.1le tall hybrid materialLampung; Sumatera Utxare mrketing system. Little Incentive palms, pest and diseset recognition

to produce good quality cnpra. end action, and intercropping possi-bilities. Processing, marketing andcooperative formAtion. Replantingposslbilities.

Rubber (dry Sumatera Selatan: Jambil loliantan Aging protble Of Poor genetic poten- Rational tAppInA syste*zs ccording 340 ks/ba P.A. 7O-60Nn kg/ha 40n kg/ba p.s.rubber) retail Sumatera Utera; ltaul tiall poor muantenancel Injurious to tree age and condition. Improved from Improved of improved

lKlimantan Tangahl Ralimantan tapping methods; no sanuringl poor tapping standards and latex collec- quality clonal quality.Selatan; Sumatera earet, transport and processing tion and processing methods. Inter- saterial

infrastructurel no price incentive croppinx possibilities. Karketinilfor quality, and cooperative forsation, Rsplant-

ins possibilities.

Coffee (dry Sumatera Selatan: Lampungi Sengkulu: Credit and marketingl premature Improved uaintenance procedure with 375 kg/ha P.a. 1,000 kg/ha p.m. 5no kg/ha p.aegreen beans) Aceh: Java Timurl SumAtera Utaral harvest of cherries to get cash; particular reference to pests and from Improved of tmproved

selt. Sulawesi Selstang Javw Tensgh; poor knowledge of maintenance and diseses pruning and manuring. Cor- clonal mterial qualityRuse Tenggara Timur processing procedures. rect harvesting stage and process-

ing, Marketing and cooperative for-mation. Raplanting possibilities.

Cloves (dry Java Tengahi Lampung; Jaws Sarat: Credit and mrketingA smll term Improved mAintenance proceduree. 60 klt/l& p.o. 4An kg/ha p.a. lStlke/ha p.a.buds) Jeav Timur: Sulawesi Tengsh: sisal poet and disease problems: lmproved harvesting and proceseing from improved of improved

Sulgveai Selatan: Sulawesi Utarea poor quality of farmer produce: far- techr..ques. Correct manuring. material. qualityAceh: Maluku; Sumatere Utara mre' lack of knowledge of crop man- Possibility of intercropping market-

ageent, harvesting eod processing Ing and cooperative formAtion, techniques. loproved varletlee.

Pepper (day Lampung; Sumaters Selatani Disease problems: poor maintenance:l Improved mintenance procedures. SW kg/ha p.m. 1,500 kq/ha p.m. 600 kg/ha p.a.corne) Kalimanten Timurg Kallmntan garat: unbalanced manurlng: lack of mulch- Improved harvesting and processinp of Improved

BSngkulu Inge: harvesting and proceesing techniques, Proper support trees or qualitydeficiencies, poles, Poesibility of intercrop-

ping, Marketing and cooperativatormation. Improved varieties,

Sugar (sucrose) Javw Timur: Java Tenrgah; Java Sarat; Land preparation and maintenance Improved land preparation and 4,400 kg/ha p.s. I0,nn0 kg/ha 5,000 kg/ha p.m.Sumatera Earat: Topyakarta procedureel poor harvesting maintenance procedures. Peat and p.A.

procedures. disease control, Improvedvarieties.

Tobacco (dry Jaws Tensgh: Javw Timur; Sulaeesi Poor selection of areas relative to Improved land selection and prepara- Vlrginia tobacco VT VTcured leaf) Selatan: Nuee Teongara Baratl Jaws nutrient status and varietiee: pest tion methods. Improved maintenance (VT) 620 kgha 1,0)0 kg/ha p.s. 700 kg/ha p.s.

Sarat: ASch and disease control; procesetng particularly mAnuring. On-farm pro- p.s. LT Local tobaecoshortcomings, caseinA methods. Markating and Local tobecco 1,000 kg/ha p.o. LT

cooperative formtion. Improved (LT) 520 kg/ha 575 kg/ha p.s.varieties. p.m.

Cotton (seed Sulawesi Selatan; Jaw:% Tlxur: Nuss Land preparation; past and diseaea Improved 'hnd selection and prepara- 700 kg/ha pa. 1,x.0 kg/ha x.a. 775 kg/ha p.s.Cotton) Tenggara Srat; Java Tengah control; processing deficier,cies, tion. Pest and disease control

particularly ..'^.,ting. Maintenancemethods. On-farm processingmethods. Marketing and cooperativeformation. Improved varieties.

Provinces with malor Present Apronomlcelly Expected yieldmallholder activities M41n constraints tn increallng Key points for average etuli- feasible vith Improved

Commodity in order of Importance smail holder production emphasis in extension holder yield average yield extenston(1) (2) (3) (4) (S) (6) ( 71

h,a1rine fisheries SumatrR, Java, Sulawei, KalimantAn Overfishinp; lack of extension; poor Coemunity development; education; 1,non kg/year Not Applicable I.5 t/yearquality of products at landing tranimigration.places.

Brsckhihwater Javal S.Sulawesi; Acch Water controll extension; fry for Water control; pond enAineering; uu Qn kg/ha qnn ky/ha 300-S00 kI/hafleheries stockinA. of seedstock; predator control.(prawn)

freshwater W.Ilaval C.Javal E.Java; WVSumatra, Water supply and quaity and water Water qualityl pond engineering and 1,nof kg/ha/year I,RO-2,5nn IAlnn kt/ha/rearflsherieo N.Sumatra; N.Sulavesi, Jamblj managemnt; lack of quality and mAnagement; fertiliser and feeding kg/ha/year

Bangkulu quantity of fish fry; laek of techniquel parasites controll pro-knowledge abeut pond manaseent. c'iremnt; production and handling of

fry and fingerling.

Beef cattle and W.Javal C.lav, ?.Java, 5.5ulawesi, Host cattle and buffalo kept for Iducation farmers to potenttal and '6 kg - 57.f6A kg live-buffalo mat Aceh, Balt, NTS, C.Kalimsntan; draft purposes and farmers not methods of keeping animAl. for meet ltvAweieht/ weight/totalproduction W.Sumatra oriented to meat production; need production; concentrate extension total population population

breed isprovewnt, better nutrition, effort Initially on improved Lower mortalityhusbandry, credit, marketing and nutrition and disease control,slaughter facilities and farmer followed by pen construction, feededucation. and fodder production, and basic

breeding guidelines.

IRg production E.Java; W.Javn; C.Java, LamounR, Lack oft adequate Improved breading Educate farmses to potential commer- 1n eggs/laying R0 eggs/laying 42 eggs/layingS.ulawesi, Aceh, N.Sumatra, atoTe fective grading, price And cial egg production; concentrate ex- hen/year hen/yeAr hen/yearS.Kalimantan marketing system; knowledge of tech- tension efforts initially on im-

niques of small-scale poultry proved nutrition and diseasemanagement. control. r

K1lk production W.Jsval C.Javal W.Javal N.Sumatra Lack ofi adequate improved breeding leproved nutrition of dairy cattle 2,snn 2,625stocks knowledge and skill of far- and disease control. liters/lactation liters/lactationmere, cashi small farm elsel collec- /cow /cowtion, processinA and sarketing sys-teme must be improved.

Sourceet Directorate General of Food Crops AgricultureDirectorate General of letnte CropsDirectorate Ceneral of FisheriesDirectorate General of Livestock.

-1%A

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTFINSION PROJECT

Calculation of Indicative Economic benefits

Expected yield Inere- ToL. annual Typical current Typical future Potential grossPresent with t proved mental Extension Incremental economic economic annual economic

Commodity average yield extension Potential increment /a no. of coverage /t production farm-gate price farm-gate price benefits(tone/ha) (tone/ha) kahe/y r I PPL (ha) (tons) (USS/ton) (Us$/ton) (MUS million)

_ j~rf .I..

liddj Irice)Java 4.S S.n SOO 12.5 4no 22,360 11,120 l3n 233 2.6Other Islands 3.0 3.5 500 17.0 900 47,480 26,n90 6.1

3a45:Java 1.7 2.1 400 25.0 400 21,080 8,430 190 385 1.6Other islands 1.6 139 300 25.0 900 50,445 15,133 2.8

Ciasava 9.9 12.3 2,400 25.0 13300 7,475 17,94n IS IS 0.3Croundnut (sholled) 0.95 1.25 200 33.0 13200 7,475 2,242 580 600 1.3Soybean 0.9 1.1 200 32.n 1,300 7,475 1,495 300 350 0.5Swat potato 7.8 10.0 2,200 28.0 1,300 7,475 16,445 25 30 0.5

Estate Croops LbItubtsr 0.34 0.4 60 18.0 son 250,000 35,n0O 62n 760 11.4Coconut 0,62 0,75 110 21.0 565 282,500 36,725 290 460 16,9Coffee 0.375 0.5 125 33.0 100 50,n00 6,250 1,39n 3,500 9.4Cloves 0.06 0.15 IS 25.0 100 50,000 75n 6,600 6,800 5._Pepper 0.5 0.6 100 2n00 50 25,000 2,500 755 780 1.9Sugar 4.44 5.0 560 13.0 125 50,000 28,000 200 220 6.2Tobacco

Virginia n,62 0.7 80 13.0 SO 25,000 21000 3,245 1,404 2.8Local 0,32 0.575 55 11.0

Cotton 0.707 0.775 68 10.0 10 S,nno 340 1,062 1,100 0.4

Fishery leFreshwater l. 1.8 800 - 2,0no 32,000 fully 57,ono 7n0 77n 43.9Marine 1.0 1.5 SOO participatingbrackish water On.9 n.3-(.5 310 fsherhmn

198,000 pertiallyparticipating

fisherven

Livestockpopulation

Livestock coveredCow/ Tfalo weat 56 kg liveweight/ 57.68 kg liveweitht 1.68 kA/cow/buffalo 3.0 1,200 2.4 million 4,032 tons 0.6/kA tl9/kg 3,6

total population total populationMilk 2,00ln lI:ar/ 2,625 liters/ 125 liters/milk cow 5.n 1,200 42,non milk cowa 5.25 win liters n.25/liter (0.34/liter 1.8

milk cow milk cowLocal chicken meat - - 0.03 kg/chieken 5.0 1,200 41.9 million 1,257 tons 1.3/kag I3./kg 3.Local chicken egAs 40 apgs/chicken 42 egRs/chicken 2 *goe/chickan 5.0 1,200 41.9 million 83.8 *ln eggs 005/egg 0,07s5/ea 6.3Duck meet 0 - .012 kg/total 2.n 21,20 7.2 million 86 tons 3.07/kg 1 2/kg 0.1

populationDuck eggs - - 4 egtgs/duck 2.n 2,200 7.2 million 28.8 mln egIs o0n./esg n.32/egg 3.4Sheep and goat meat - - 0.27 kg/goat/sheep 3.0 1,200 3.6 million 972 tons 0l.4/kR 1.26/kg 1.2Draft power /d - - per kg paddy price - - - - 0.18/kg 2.33/kV 11.1

/a Asaming only one crop per annum, full bensfits achieved over five years. Representative holding aesumed to produce all sitx ujor food crops.i Pull benefits aehieved over ten years.

Pull benefIts rehieved over three years./d Bnefits froumncresezd draft power are aesumed to be shown through a 31 increase in the aoulint of land prepAred annual for rice croppimn. Data usedl 2.7 million ha to be covered,

3 tons/he paddy rice at $0.14/kg farm-gate price.l Based on difference between present average yield and expected yield with improved extension.

_F Por food crops, assuming that one PPL will have 16 contact farmers in Java and Bali (S In other islands) who will achieve 1002 of potential Increment and rest of the farere covered(1,584 in Java and ail and 792 In other Islands) achieving 502 of the potential increment; reprosentative holding site is 0.4 ha for paddy, n.2 ha for mAte and 0.l ha each for restof food crops. for estate crops, 50S achievement of incremental yield ti aesumed and figures are In full ha equivalent of WO2 adoption; eR,g, PPLs In rubber would cover sn,o000 hawhich vould achieve 502 of the potential increments, thus equal to 25n,00n ha achieving 3002 of the potential incraese. For fishery, assuninp 36 contact fishermen per rPL willattain 1002 of the potential incremnt, and rest of fishermn (1,585) will attain 25 of potential increxent.

- 66 - ANNEX 5Table 3

INDONESIA

THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Indicative Economic Costs and Benefits

Year: 1 2 3 4 5 6 7 8 9 10 11 12-20Incremental

benefits(BI) - - - 1.6 5.1 14.5 35.6 62.8 92.2 117.1 129.7 132.4

Incrementalcosts (C1) 6.7 28.9 35.0 20.0 15.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0

IncrementalNet Benefit(NI) -6.7 -28.9 -35.0 -18.4 -9.9 2.5 23.6 50.8 80.2 105.1 117.7 120.4

Internal Rates of Return of Net Strems

Down Down Down Lag Lag LagBi Up 10% Up 20% Up 50% 10% 20% 50% 1 yr 2 yrs 3 yrs

Cl 31.626 33.504 35.254 39.906 29.594 27.373 18.933 27.068 23.676 21.040Up 10Z 29.786 31.626 33.339 37.888 27.793 25.611 17.282 25.533 22.353 19.876Up 20Z 28.137 29.945 31.626 36.086 26.177 24.028 15.784 24.151 21.158 18.820Up 50% 24.028 25.763 27.373 31.626 22.139 20.060 11.961 20.678 18.140 16.145Down 10% 33.704 35.627 37.419 42.192 31.626 29.358 20.777 28.791 25.155 22.340Down 20% 36.086 38.062 39.906 44.822 33.953 31.626 22.867 30.753 26.832 23.809Down 50% 46.297 48.522 50.603 56.174 43.901 41.299 31.626 39.016 33.810 29.870Lag 1 year - - - - - - - 31.626 27.068 23.676Lag 2 years - - - - - - - - 31.626 27.068

Lag 3 years - - - - - - - - - 31.626

Switching Values at 10%

Appraisal Switching PercentageStream value value change

BI 456.97 L.>.9Z -70.26

Cl 135.92 456.97 236.21

Net present value at OCC 10% - 321Internal rate of return - 31.6%

Coupon equivalent rate of return - 43Z

INDONESIATHIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Organizatlonal Chort of the Mlnlstiy of Agdculture

| M!nistoa d Agcltt

In2 3 4 5 -51 Sectela r1Go rwal Gerwwala

D4rectoate Cenerol of Drectoate Genera l ectorote General dt Dvnctorate General alFood Crops Figiorlos LIstok ~~~~~~~~~~~ ~~ ~~~~~~~~~~~~~~~~~Estate Crops -.

R9 ~~~~~~~~~~~~~~~~930312334356378390

Agency for Agricultural Agency for AgriculluralReseorch & Developmrnen| Educant foin rx

W.eld B onk-27395

-6 - Chart 15

INDONESIANA7IONAL AGRICULTURAL EatENUON PROJECT 111

DWIded OrganIonka1 l Choit at he Mhinsi d AAgfculfute

V .-.. d l _.I

_~~~~ (t d__ _ df

,0 D- . IC W U

_ s o qvea_

~~ (t _V'Ih.. o

U £ eO D

sJ .

II &w

2s 0 sow-_sOCow_

f ~

ofcv.Pc. e0 De cn. .- &P.-_ so ezvz~~3

r~~J r e>C~.

.w c 2 3 D_O".f E.% D@_. V%

43 C-r, ft-k _r_

e f _ | X D e cl _ D_Ke a-0c4I CZ D

AG.ftf 5 Or_esw_w{_ao

- 69 -

Chart 2

INDONESIATHIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

BIMAS Organizaffon Structure

BUBS 80Ae aCtoriorD: MinistertofrAgibuto

n> Expe|B rtE Team d l

NATIONALBIMAS SECRETARIAT , TednKI reOM

Head: Bknos Sacrly

Bureau at AnmimHsbratond

- Bureau of Plannros

- hB3auo of CGetli Dist but on &Repayywnt

- Bureau dt Farrn nput Supl& Daskiotrin

Cnops PiAcu.-aiteceou oH Aneia HusbDndri &

- BLbreset of Estate Cop Pt-Neou dStatsticw Repoft

& Evaluation

PR4OVINCIA LBWAS UNrr.CholmrKcn: GowrwDal Exeuo: Kcdovl AgrkeW

IPRONCIALID BIMAS SECRErARlAT

Rccr BWIW UNITf|Choimfnan: BupalDaily Executor. Head of Dominant

_ 9t~~~ubsector1

. ~~~~~DtSMCT BWAS SECETMAPrAT

VAbd Boznk-27398

- 70 -

Chart 3

INDONESIANAllONAL AGRICULTURAL EXTENSION PROJECT III

Organization of Kakonwal of Minishy of Agriculture (Type A)

NATKOCJD&

Mniw5ter ir Mnter torHome Alla Aqcufwe

I Seceftw sea J e c-6t ,eneri

PROCINCE

Go________ ___ _ _akO_Ar

1 I xSecret I

Rega Geneal TeChnology Education Contol &Ptogrm AgCuftue _ Apct'on Traininlg & _ Evauat AS

Extenson

Data ~~~Farn AgnaiulturaEtnsol -b*Io -MDevetVgment Troining *CbOflPzvi

Anxlysas& i

Progrcmn Commodity Fretd Ex~~TensiongDcto

World Bank-273J99

- 71 -

Chart 4 a

INDONESIATHIRD NATIONAL AGRICULTURAL EXTENSION PROJECTOrganization of the Directorate of Extension Under

- Directorate-General Food Crop Agriculture- Directorate-General of Livestock- Directorate-General of Fisheries

I Director-General

r Director 0W |

Extenon Faf fnrs Extension | | EKnernson Tronsder at

PFfgan kIstMiti Staff Gucoc Techro"bGuKknoe Guidance G_ICOnC Focilfitij Gukidonce

jPpaoiont foRzr w |m Staf of dExden Eil:xsostctions

Prucio P.P laffnin EquTiprnntl

Guc1nc -1:1<{< -

EKtension Pm~~~~~~~~~~~~~U duBonk-70

- 72 -

INDONESIATHIRD NATIONAL AGRICULTURAL EXTENSION PROJECT

Organization of the Directorate of ExtensionUnder

Directorate-General of Estate Crops

I DWedorGeCartat EstateCrops

L. ~~~II

I Directr of Estae |Crops Exdenslon

I Secretarial

EAd Program Ext. Program Guidance for FGuidance for Guidance for Ext. Workers & Ext. MaterilsProject Area Non Proj. Area hsttutionis

Program PrvmProject]H Guknc for GuJac fo Arec Fame Reeac

OMU Area Trormnigrcdion ~~~~~~Institutions GopRonwdfo

Guidance for Progrom Guiionce for Non Project 1 a s Trials and

NES Areo l NonPrj Area Area lnstitution |Skid Applicajon

Ext. Method Bd- MethociExtension Copxten ih dnsionfor Project for Non Mol8*f

Area Pfojocf Area ~~Workrers Professional Org. Pouh

Monitoring & Extension Jans

Ewikxflon kFcilities MaterLio

Note- PMU - Project Management Unit.NES - Nucleus Estate Smoliholder. World Bank-30526

INDONESIANATIONAL AGRICULTURAL EXTENSION PROJECT III

Organizatlon of the Bureau of Agrcuhural Extenslon under AAETE

Diroctor Gonoral

Buroau of AgrExtenion

Orroctor

DMsio of Dvatn of Dsisnt of Division of Dvsion dAanc Extondcn 4c Extonstn Acrk Fxtonsion Fcrmuts Agnc Extonw

nno Eltrdtns on ~~~~~~~Prcogram a Forsuonno & Organization CcopotolionMalhodologtes FiCilty indution_

SubdsOdmsion of SUbdfAwSOn ot SuWiviwon d SSuudMs*n dtAgnrc Ex?ens on Agnc Externson _ Agrnc. ExtAQn _ Extension0 A ftic dxacn

M6thodologess Ftagrom p hsll Formr/ hrnan Cooperation

SUbdmsion 0i Stwbdision | Subdivilim d SubWmwn of SubcIatsKn ofAgnc. Exlension Agnc Extension Agnc Extrnm ForYalh M o lton &

Mechanismf FocilitisIsiuinWociOgnztinEauto

SubdMsian Cf SubdMsOnw Ofo fSbmo fk mwoAgrnc Extension Agric Exlension AgcEtmi gcExeinAn xos

Sytem Impact analysisCutc ams/FtYohAdnntrtnSysiem Irmccol orVztivSs { Fishermen F | Ogoonuzoton ] l u a

WOMBo 3cnk-2739'4 r

INDONESIATHIRD NATIONAL AGRICULTURAL EXTENSION PROJECTOrgonization of Proposed Project Implementation Unit

~~~~~Natk3mlo= r,IsdonrDirecfor Genera INtOlic*liisin AretAM fofefal AC _ _ _ _ _ _ E4 enshl - 4-- Directors-Generat

Director of I Directoos ofPIU Extenscn _

AsstantProject Director

Treasurerl l | ~~~~~~~~~~~~~~~~~~~~SecretoV |

wEL 7JZ 7ZZ1Z Im IProcufomont Fnoncalai I troining 1 Cdvll Works Planning &Monitoring Officei z J [ j z J rstOffier Offcer

Eat. material CMtl Works &Production Equlpffent Tfaining

AIC ~~Procufrement OTCKANMI

World Bonk-27397

ro

THAILAND '05' Iio- 1i5

Banda Aceh

13 MALAYSIA . .ea BRUNEI - r

0. ~ ~ ~~~~~~N~rrf~

n~~~~~~~~~~~~~~~~~~~~~~~

12 ( MALAYSIA 1

J ~~~~-.:-SINGAP0RE \rn>- Pe.kanbaru

9.K.I PontAanak A A PaL A N a AtN

< e J V1 ~~~~~~~~~~~~~~~~~~~~~~SamarindaPadang 4 o

rJ ',ro xA ( ~~ ~~~~~~15

tD.K.I. JAKARTAi A Plakrv / _

2 JAWA BARAT Palembang3 JAWA TENGAH4 D1. YOGYAKARTA-. JAWA TIMURt B nkuluet/,Bnarnn3r-a LAMPUNG O 6 :

7 BENGKULU J

a SUMATERA SELATAN. RIAU Java Sea Ujungpandu

10 JAMBI arClg'lavaSe 11 SUMATERA BARAl UAnpnrA

12 SUMATERA UTARA JAK A13 Di ACEH J14 KALIMANTAN BARAT

K5 KALIMANTAN TENGAH 3 LADRA16 KALtMANTAN SELATAN Ba3dung MSemaangIRA

17 KALIMANTAN TIMUR Bd Sernara ya

18 SULAWESI TENGAH 2 e 5 SUMBAWA

19 SULAWESI UTARA Y2Syukart L-20 SULAWESI SELATAN Y v ( aAU -U-A =21 SULAWESI TENGGARA22 BALI22 NUSA TENGGARA BARAT t _-UBOK

24 NUSA TENGGARA TIMUR25 MALUKU 22 2326 IRIAN JAYA _ tl wf_r_h27 TIMOR TIMUR W---y lar Of b30A".. W ,d

100. 105- 110° 115

(ORD 19132R5'I 130 1t5" INDONESIA

THIRD NATIONAL AGRICULTURALPHIUPPINES EXTENSION PROJECT

Manado, -) PWN HE.DUkeS Ig ~~~~~~~~~~~~~~ROWINCE HENDM l

19 HALMAHERA BNDAo

18

?alu 25 (LAUAN SULA

* to ( oafl JayapuraO'SULAWESI \

21 * GERAU IRIAN JAYA i,/21 V s~~~~ CERAM

*Kelldari BURU AmllbonB 26 C G 5,

z

- ~~~~~~~~~~~~~~~~~~~13

FL ORES 'P.-

r 0 100 200 300 400 500 to°_,/ % rTIMORI

MILES

'BA 24 Kupang o tOo0 200 300 400 500 e00 700 800

KILOMETERS

120' 125P 130° 135, 140°

JULY 1986