ASIAN DEVELOPMENT BANK

PPA: PAK 15067

PROJECT PERFORMANCE AUDIT REPORT

ON THE

SMALL DAMS PROJECT (Loan 750-PAK[SF])

IN

PAKISTAN

December 1999

CURRENCY EQUIVALENTS Currency Unit Pakistan Rupee/s (PRe/PRs) At Appraisal (September 1985) PRe1.00 $1.00 = = $0.0628 PRs15.93 At Project Completion (December 1996) $0.0248 PRs40.22 At Operations Evaluation (September 1999) $0.0194 PRs 51.42

ABBREVIATIONS
ABAD ADB AR BME DOA EA EIRR FO ha km m3 O&M OEM OFWM PCR PERI SDO SDR t TA WAPDA WUA Agency for Barani Area Development Asian Development Bank appraisal report benefit monitoring and evaluation Department of Agriculture executing agency economic internal rate of return farmer organization hectare kilometer cubic meter operation and maintenance Operations Evaluation Mission on-farm water management project completion report Punjab Economic Research Institute Small Dams Organization special drawing right ton technical assistance Water and Power Development Authority water user association

NOTES (i) (ii) The fiscal year of the Government ends on 30 June. In this report, $ refers to US dollars.

Operations Evaluation Office, PE-532

CONTENTS Page BASIC DATA EXECUTIVE SUMMARY MAP I. BACKGROUND A. B. C. D. E. F. II. A. B. C. D. E. F. G. III. A. B. C. D. E. F. G. H. IV. A. B. C. D. V. A. B. C. APPENDIXES Rationale Formulation Objectives and Scope at Appraisal Financing Arrangements Completion Operations Evaluation Design Contracting, Construction, and Commissioning Organization and Management Actual Cost and Financing Implementation Schedule Technical Assistance Compliance with Loan Covenants Operational Performance Institutional Development Financial Performance Economic Reevaluation Sociocultural and Socioeconomic Results Gender and Development Environmental Impacts and Control Gestation and Sustainability Slow Command Area Development, Participation, and Farmer Organization Poverty and Equity Agricultural Information, Extension, and Input Supply Irrigation System Design and Operation Overall Assessment Lessons Learned Follow-Up Actions ii iii v 1 1 1 1 1 2 2 1 1 1 1 2 2 3 3 1 1 3 4 4 5 6 7 7 1 1 2 3 3 1 1 1 2 5

IMPLEMENTATION PERFORMANCE

PROJECT RESULTS

KEY ISSUES FOR THE FUTURE

CONCLUSIONS

BASIC DATA Small Dams Project (Loan 750-PAK [SF]) PROJECT PREPARATION/INSTITUTION BUILDING Type PersonTA Project Name TA1 No. Months 543 Small Dams PPTA 23 KEY PROJECT DATA ($ million) Total Project Cost Foreign Exchange Cost ADB Loan Amount/Utilization ADB Loan Amount/Cancellation KEY DATES Appraisal Loan Negotiations Board Approval Loan Agreement Loan Effectiveness First Disbursement Project Completion Loan Closing Months (Effectiveness to Completion) KEY PERFORMANCE INDICATOR (%) Economic Internal Rate of Return BORROWER As per ADB Loan Documents 48.82 13.78 39.00 Expected

Amount $390,000

Approval Date 13 Oct 1983 Actual 35.40 11.41 31.03 7.97

17 Apr 1986 11 Dec 1986 30 Jun 1993 79 Appraisal 16

Actual 27 Apr-16 May 1985 30 Sep-4 Oct 1985 31 Oct 1985 17 Jan 1986 11 Dec 1986 17 Jun 1987 14 Mar 1996 14 Mar 1996 112 PCR2 610 PPAR 7.5

Islamic Republic of Pakistan

EXECUTING AGENCIES Small Dams Organization of Punjab Department of Irrigation & Power Punjab Department of Agriculture Punjab Department of Forestry, Fisheries, and Wildlife Agency for Barani Area Development MISSION DATA Type of Mission Fact-Finding Appraisal Project Administration - Inception - Review - Special Project Administration - Project Completion Evaluation Missions (no.) 2 1 1 8 3 1 1 Person-Days (no.) 64 120 24 146 18 76 25

1 TA = technical assistance, PPTA = project preparatory technical assistance. 2 PCR = project completion report, PPAR = project performance audit report.

EXECUTIVE SUMMARY The Project was to increase agricultural production and employment on the Potwar plateau of Punjab province. A total of 12 new small dams of around 24 meters wall height were constructed, and the command areas of 9 dams were improved. Floods in 1992 damaged project and nonproject infrastructure and led to the inclusion of a repair component. The Project was implemented as planned, although the command area of the dams was around 10,400 hectares (ha), 10 percent less than expected at appraisal. Implementation delays resulted from dam site selection (with an average of four sites screened for every dam constructed) and cumbersome government procedures. The Project was completed in March 1996, 2.7 years behind schedule, at a cost of $35.4 million, 27 percent less than budgeted. The loan was about $31 million, net of cancellation of $8 million. Savings resulted from the depreciation of the rupee against the dollar and of the dollar against the special drawing rights. Government financing was around 12 percent of the project cost, rather than the expected 20 percent. Technical assistance inputs were generally satisfactory. The project feasibility study identified most of the key constraints to irrigation based on small dams, but did not fully define the needed solutions. Implementation consultants were retained for 217 person-months, double that expected, due to underestimation at design of the construction supervision requirements and the extended implementation period. The Punjab Economic Research Institute was responsible for project monitoring, and undertook a full set of benchmark and impact surveys. The dams are generally operating at close to expectation, in terms of water storage and use. However, the operation and maintenance (O&M) budget has been limited, and deterioration is evident in project canals and watercourses. Staffing restrictions have prevented the appointment of permanent staff on most schemes, and casual staff have been paid from scheme operating budgets. As maintenance status declines and the area irrigated increases, water availability is becoming limited, particularly at the tail-end of the schemes. This is being addressed by the introduction of water management plans. At appraisal, it was expected that irrigated cropping would extend to 140 percent of the command area nine years after dam completion. The development of irrigation has been slower than anticipated, and by 1999, an average of 6 years after construction, irrigated cropping reached 59 percent. Irrigation development now extends to about half of the aggregate command area, due to the noncompletion of some canal networks, in-field leveling, and watercourse development by farmers. The proportion of high-value crops grown has been limited to date, and farmers mainly treat the irrigation system as an extension of their rainfed agriculture, applying some water to their traditional rainfed crops. Other constraints to agricultural development include lack of capital, aversion to risk, and lack of self-reliance. Quite large areas are owned by absentees with jobs in the army, the private sector, or out-of-country. Substantial land is tenanted out. Despite these negative influences, many farm families have experienced success with vegetable and fruit growing, and there are good prospects for enterprise expansion. Farm size within the command areas averages about 1.2 ha, substantially less than the 1.9 ha assumed at appraisal. Approximately 8,400 farms are benefiting, 40 percent more than budgeted, despite a lower command area. Farm budget analysis indicates that an average

2.5 ha farm with 1.23 ha within the command area should earn approximately $700 per year compared with about $110 without the Project. The overall economic internal rate of return is estimated at 7.5 percent, assuming that the capital costs of the dams whose command areas were rehabilitated are treated as sunk costs. The economic internal rate of return on the new dams alone is 5.3 percent. The main constraint to economic performance is the slow rate of irrigation and agricultural development to date. However, it is expected that the gains of the past three years will continue, justifying a partly successful rating for the Project. Confirmation of this rating will require that responsibility for O&M is successfully passed to the farmer organizations, and that future agricultural development is supported by effective extension support and improved input supply. There is now better understanding of the factors that underpin successful irrigation projects. Given the landholding and power structures in the rainfed areas of the Potwar plateau, it is unlikely that schemes can meet agricultural objectives under a traditional irrigation development model. However, there is considerable interest both by the Government and the farming community in establishing more irrigation areas. For these to succeed within a reasonable time frame, this report concludes that new approaches are required to increase participation in identification, design, O&M, and that land consolidation and (ideally) some land redistribution are highly desirable if irrigation is to be effective. An alternative model, based on minidams and responding to community demand could also be cost-effective and more productive. Ongoing support will be required for existing schemes, particularly during the changeover to the management of irrigation schemes by water users. The 1997 Provincial Irrigation and Drainage Authority legislation together with its recently formulated rules are expected to underpin farmer organization development and operation. There is potential to help develop the project command areas under the planned Third Barani Area Development Project. Alternatively, a project could be considered supporting agricultural extension and water user association development on existing schemes and one or more small and minidam schemes using a participatory approach.

I. A. Rationale

BACKGROUND

1. The Project was to expand irrigated agriculture on the Potwar plateau in northern Punjab province. Through the conversion of rainfed areas into irrigated agriculture, crop production and diversification was to be promoted and the income-earning capacity of 6,000 mainly subsistence rural households increased. The Project supported Punjab provincial government policies by helping accelerate the ongoing program of small dam construction. Project objectives were consistent with the goals of the Pakistan Governments sixth five-year plan, which aimed at national agriculture sector growth of almost 5 percent per year. B. Formulation

2. The feasibility study was carried out by consultants engaged under an Asian Development Bank (ADB) technical assistance (TA),1 which was financed by the Swiss Government. The Appraisal Mission visited Pakistan in April 1985 and the Project was approved by ADB at the end of October of that year. A sector-type implementation approach was adopted under which 2 subprojects were fully appraised. The remaining 10 subprojects were to be prepared by the main Executing Agency (EA), the Small Dams Organization (SDO), and approved individually by ADB. C. Objectives and Scope at Appraisal

3. The Project was designed to increase agricultural production from an area of 11,280 hectares (ha) irrigated from small dams. Aggregate production was expected to rise by around 61,000 tons (t) of vegetables, 15,000 t of fruit, and 11,300 t of wheat. The Project had two main components: (i) construction of about 12 new small dams (with wall heights of around 20 meters) with an irrigable area of 6,140 ha, and (ii) rehabilitation and extension of irrigation systems below 9 existing dams with an irrigable area of 5,140 ha. Extension services were to be provided to irrigation farmers through the appointment of 15 field assistants and supporting infrastructure, while the institutions involved in irrigation development would be strengthened and provided with training. A fish hatchery component was to increase fish production in the project area by about 250 t annually. The Islamabad fish hatchery was to approximately double its annual production to 5 million fry, while rearing facilities were to be constructed in the project area to produce 2.5 million fingerlings yearly. Consulting inputs were set at 107 person months including 66 person-months from an international firm. D. Financing Arrangements

4. The Project was budgeted at $48.82 million equivalent of which $39 million equivalent was financed by a loan from ADBs Special Funds resources. At project commencement, the Government established a revolving fund of PRs144 million to meet Pakistans share of local currency costs.

TA 543-PAK: Small Dams Project, for $390,000, approved on 13 October 1983.

2 E. Completion

5. The Project was completed in March 1996 compared with the planned date of June 1993. The ADB Project Completion Review Mission visited Pakistan in November 1996, and prepared a report with useful analysis and sound recommendations for actions to improve project outcomes. The economic internal rate of return (EIRR) was estimated at 10 percent compared with 16 percent at appraisal, based on an increase in net farm income for an average (3.8 ha) farm from PRs30,000 to PRs164,000 under the Project. The project completion report (PCR)2 considered the construction cost of the nine dams whose command areas were developed under the Project to be sunk costs. If these costs were included (as assumed at appraisal), the EIRR would have been 6 percent. The Project was assessed as partly successful. F. Operations Evaluation

6. This report presents the findings of the Operations Evaluation Mission (OEM) that visited Pakistan in September 1999. It assesses the Project's effectiveness in achieving its objectives and generating sustainable benefits. It is based on a review of the PCR, appraisal report, and material in ADB files. Discussions were held with SDO, other government agencies, and the International Irrigation Management Institute in Lahore. Visits were made to eight dams, and interviews held with farmers, farmer organizations (FOs), and SDO officers. Discussions were also held with the on-farm water management (OFWM) and agriculture extension directorates of the Department of Agriculture (DOA) and with agricultural research institutions. Copies of the draft report were provided to the Borrower, the EAs,3 and ADB staff concerned for review. Their comments were used to finalize the report.

2 3

PCR: PAK 15067: Project Completion Report on the Small Dams Project, May 1997. The Executing Agencies were the (i) Small Dams Organization of the Punjab Department of Irrigation and Power; (ii) Punjab Department of Agriculture; (iii) Punjab Department of Forestry, Fisheries, and Wildlife; and (iv) Agency for Barani Area Development.

II. A. Design

IMPLEMENTATION PERFORMANCE

7. Compared with many irrigation projects, the design was straight-forward, as it focused on acceleration of SDOs ongoing program. The project feasibility study, undertaken by a consulting firm during 1984, reviewed SDOs small dam development program and identified many of its constraints, particularly the slow rate of irrigation development. Three potential program subprojects were analyzed in detail as a basis for a sectoral development approach. The design of individual subprojects was undertaken during project implementation. Based on screening surveys of about 49 dam sites undertaken by the Punjab Economic Research Institute (PERI), 12 subprojects were selected for implementation. Comprehensive benchmark surveys were undertaken for the selected sites. Feasibility studies were prepared for each subproject as required for Government and ADB approval. 8. A number of design changes were made during implementation. When severe flooding in 1992 caused damage to many dams and related facilities in the project area, ADB approved an additional $1.13 million component to repair project and nonproject irrigation infrastructure. Other significant changes in scope included the dropping of the watershed management component, which was not defined in detail in the appraisal report. B. Contracting, Construction, and Commissioning

9. Following the approval of subprojects, SDO undertook the detailed design of each dam with the assistance of the project implementation consultants. As reported by the PCR (para. 29), a number of contractors experienced financial problems and equipment shortages, resulting in lengthy construction periods. In some cases, particularly for the canals and watercourses, the quality of concrete construction is less than optimal, reportedly mainly due to inadequate curing. There is no indication that this problem has threatened dam safety, and the dams were provided with safety certification by the Water and Power Development Authoritys Dam Safety Organization. In theory, farmers were to provide or pay for labor for watercourse construction. In practice, most refused to do either. However, SDO required contractors to complete their contracts within the tender amount, often leading to poor quality construction. As a result, the majority of the lined watercourses inspected on both new and rehabilitated command areas have deteriorated, often in less than four years from completion. This problem has been made worse by the driving of tractors over the watercourses, and in some cases, by deliberate damage to or modification of structures. C. Organization and Management

10. Project implementation was primarily the responsibility of SDO with overall coordination provided by the Agency for Barani Area Development (ABAD). SDO established the Planning, Design and Command Area Development Division, which prepared feasibility studies, helped form water user associations (WUAs), and constructed watercourses. Several staff were transferred into or recruited for this division, including seven field assistants (extension officers) seconded from DOAs Agriculture Extension Directorate. At the end of the Project, SDO strongly recommended that the division should be retained. However, because funds were not available for further dam construction, this was not approved by the Punjab government, and the division was disbanded. Project extension staff returned to their permanent DOA positions.

2 11. The main organizational problem experienced was the inability of SDO to appoint permanent staff to operate and maintain the dams because of the nonapproval of the positions under the (ongoing) general staffing freeze. This remained a serious issue at the time of the OEM and will only be partly resolved by the proposed transfer of operation and maintenance (O&M) responsibility to the WUAs. Overall, SDO provided sufficient staff for project implementation, although improved management and increased resources were needed for command area development. This could have reduced the approximate two-year delay that occurred between dam completion and watercourse development, with consequent delay in the attainment of project benefits. However, it is recognized that many farmers are willing to invest their own resources in watercourse construction and land leveling only when they are assured of irrigation water, leading to a significant time lag. The Fisheries Department was also unable to appoint permanent staff to operate the rearing facilities constructed at small dams; this has limited the fisheries component performance. Coordination between the main project agencies proved difficult despite the efforts of ABAD.1 This appears to have been due to the belief that the Project was the responsibility of SDO, and that other line agencies did not see full participation as being in their interest. 12. International training was provided to four SDO staff in such disciplines as hydrology and construction management. Two of these staff have subsequently emigrated, one was transferred and one is the project director (head) of SDO. Local training was provided to five staff; three remain with SDO. SDO managers consider that the Project significantly strengthened SDO capacity, particularly for the conduct of feasibility studies. SDO staff continue to use the design manuals prepared by the international consultants, and as a result, dams are better designed and safer than those constructed before the Project. D. Actual Cost and Financing

13. The total project cost was $35.40 million equivalent including $11.41 million in foreign exchange and $24 million equivalent in local currency costs. Devaluation of the rupee against the dollar and efforts by the EAs to contain costs resulted in savings of 27 percent. Government funding amounted to $4.4 million compared with $9.8 million budgeted, limiting the drain on the national budget. Of the loan of SDR36.8 million, 62 percent (SDR22.6 million) was disbursed, resulting in loan savings of SDR14 million, in part caused by the devaluation of the dollar against the special drawing right. A summary of project costs is in Appendix 1, Table A1.2. E. Implementation Schedule

14. While the planned implementation period was 6.5 years, the loan closing date was extended twice from the planned date of June 1993. The loan closed in March 1996, 2.7 years late. The PCR (para. 23) identifies several reasons for implementation delays. Key factors include (i) the time required for screening and feasibility analysis of subprojects, given the rejection of three quarters of the subprojects studied due to technical or economic factors; (ii) slow project and subproject approval procedures by government agencies; (iii) limited geotechnical surveys (due to cost and equipment restrictions) leading to unexpected problems during construction; (iv) the Punjab governments cumbersome procedures for the release of funds; and (v) heavy rainfall in the summer of 1992 that damaged irrigation infrastructure and led to the need for the repair component. The late appointment of international and domestic consultants also contributed to implementation delays.

1 ABAD commented that they very effectively coordinated and monitored activities and this fact stands appreciated

by various concerned evaluating agencies like the Punjab Economic Research Institute.

3 F. Technical Assistance

15. The project feasibility study built on the experience of SDO since its establishment in 1973, and contained substantial information on the project area and design. Because the study (and subsequently the appraisal) recommended a rolling sector approach, detailed information was included for only three dams, including Mirwal and Dhok Sanday Mar, the first two dams constructed. The study did not question SDOs overall approach to small dam development or look in detail at alternative strategies. Beneficiary involvement (command area farmers) in project design was limited to their input to the baseline surveys, which did however place considerable emphasis on socioeconomic factors. While the need for consultation and participation was identified, little emphasis was placed on these aspects as was common with most irrigation projects designed in the 1980s. There was no analysis of equity issues, or information on farm size distribution in the pilot subprojects. This omission was repeated in the benchmark and impact surveys, limiting the potential to assess the Projects equity and distributional aspects. However, overall, the study was detailed and responded adequately to ADBs terms of reference. It proposed an appropriate investment approach and program that was adopted by the appraisal team. 16. Project implementation consultants were retained for 217 person-months, double the appraisal estimate. The overrun resulted from the extended implementation period and underestimation at appraisal of the need for construction supervision. Despite the time overrun, the total cost of consulting, design, and supervision (including institutional strengthening activities) amounted to $3.1 million or 11 percent of civil works costs, a reasonable level. SDO management reports that the overall performance of the international consultants was satisfactory, a view different from that expressed by the PCR. However, some confusion may originate in their objectives not fully being achieved due to communication problems and misinterpretation of the consultants role by SDO. The manuals prepared were broad in scope, but several have nonetheless proved useful. Following the end of the consultants contract in September 1990, a decision was taken to engage a domestic consulting firm to help with the remaining design and supervision requirements. 17. PERI was responsible for project benefit monitoring and evaluation (BME), under a contract with ABAD. PERI undertook a range of studies including (i) screening studies of potential subprojects prepared prior to subproject selection, (ii) benchmark surveys of the new dams, and (iii) an impact evaluation study of eight new and eight rehabilitated dams. Both the subproject selection system and BME were generally of a high standard. The BME system was well designed, and unlike the situation for many ADB-assisted projects, was followed-up and completed in a timely manner. This was largely due to the professional approach adopted by PERI and the fact that BME costs were funded through the loan. However, their reports would have been of more value for postevaluation if they had included information on farm size (irrigated or rainfed, and within or outside the command area) and included more detailed agricultural enterprise budgets. Control surveys on rainfed areas could also have helped identify impact. G. Compliance with Loan Covenants

18. The EAs made substantial efforts to comply with the loan covenants. As noted by the PCR (page 26), the 1981 Punjab Water User Ordinance was amended for DOA but not for the Department of Irrigation and Power; this was intended to support the development of WUAs. In practice this was superseded in 1997 by the establishment of provincial irrigation and drainage authorities, which develop rules for the formation of FOs and WUAs. The Punjab Irrigation and Drainage Authority was formed and is commencing operation.

19. The covenant requiring soil conservation measures in the catchment areas of project dams was also not complied with. In the case of dams with large areas of rainfed agriculture or degraded hills in their catchments, this may be serious. SDO plans to complete a sedimentation study by the end of 1999 to identify which dams are most at risk and thereby identify a priority program for catchment stabilization. Other covenants not fully complied with were the development of watercourses by the farmers and land leveling by DOA. In practice, the command areas of most dams have not yet been fully developed for irrigation.

III. A. Operational Performance 1. Small Dam Systems

PROJECT RESULTS

20. The 12 dams constructed under the Project have generally performed as expected at design. On average they are 24 meters high, with live storage of 2.1 million cubic meters (m3) and dead storage (i.e., below offtake level to allow for sedimentation) of 1.8 million m3. Annual inflow was around 2.5 times the live storage volume, with outflow to rivers of about two thirds of inflow. The first nine months of 1999 were dry, particularly in the south of the project area following a poor monsoon. The dams with the most highly developed command areas (Nikka and Bhugtal) both ran out of water during the summer of 1999, with adverse impacts on irrigated cropping. However, many dams will end the summer irrigation season at close to full capacity. Information on the characteristics of the project dams and command areas is given in Appendix 2. 21. O&M has proved difficult for both farmers and SDO. Since construction, water distribution has frequently been on an uncontrolled basis, i.e., water has been released from the dam at or close to channel capacity, and farmers have extracted water from their watercourses when available and needed. This has resulted in wastage and shortages of water at the tail end of schemes due to excessive upstream diversions. In the last two years, water allocation plans have been developed for most dams in consultation with irrigators. The plans provide for rotational water allocation between and within watercourses in approximate proportion to demand. This is based in part on a United Kingdom-funded International Irrigation Management Institute pilot project involving three project dams. It is timely as the irrigation systems are confronted with deteriorating infrastructure and increasing command area utilization. If water is to be available to meet the demands of most irrigators in most years, both distribution and field application efficiency will need to increase greatly. 22. Most farmers have been unwilling to maintain the lined project watercourses, while SDOs budget has been severely restricted. As a consequence, both the canal and watercourse networks are deteriorating. Almost half the respondents to a 1999 survey on the Kot Raja system believed the channel to be in worse condition than five years previously, with 61 percent reporting deteriorating watercourses. 23. The development of irrigated agriculture on many systems has been slow, with 12 dams achieving a cropping intensity of less than 60 percent in 19991 (Appendix 2, Table A2.4). One cause is limited leveling and watercourse development by farmers. In other cases, the full command area cannot be irrigated from existing primary and secondary canals, requiring SDO investment in canal extension or lift pumping. The command areas of some systems are unlikely to be fully irrigable, depending on topography, river flows, and system losses. Lack of system management and concerns about water security also constrain development. 24. It was initially planned that several dams would be used for drinking water supply. In practice, no systems were constructed under the Project, though three small schemes have
1

Annual cropped areas of new dam systems range from 24 to 149 percent and those of rehabilitated command areas range from 37 to 153 percent.

2 been developed subsequently by local authorities. These are based on tubewells adjacent to the dams, and represent a significant benefit. Two major water supply systems are also supplied from dams supplying rehabilitated schemes. 2. Agricultural Development
Figure 2: Area of Crops Planted Annually in Project Command Areas (ha)

25. The main project objective was to Figure 1: Extent of Command Area Development (ha) Wheat increase agricultural production in the project Improved sys tems, area. At the time of PCR preparation, annual 7,000 Summer Fodder 70% summer 60% Maize cropping intensity was 30 percent for the 6,000 Improved sys tems, 5,000 50% winter design command area for the new systems, Winter Fodder 4,000 40% New systems, and 50 percent for the improved systems. By 3,000 Groundnuts 30% summer 1999, this had reached an overall average of 2,000 Fruit New systems, 20% winter 10% 59 percent as shown in Figure 1 (new 1,000 Vegetables % of command 0 0% systems, 55 percent, and improved systems, Other area 1996 1997 1998 1999 66 percent). After a slow start, development 0 1,000 2,000 3,000 4,000 5,000 over the past four years has been quite rapid. Source: Small Dams Organization. Source: Small Dams Organization. This is attributed to the increasing familiarity of farmers with irrigated agriculture and the efforts of agencies such as ABAD, SDO, and OFWM directorate of DOA. However, much remains to be done if the appraisal target of an average cropping intensity of 140 percent is to be achieved for the project command areas.

26. While the gains of the past three years were impressive, the nature of development was patchy. Some farmers have become competent irrigation managers and are growing high-value crops such as citrus and vegetables, e.g., coriander, chilies, cabbage, cauliflower, and onions. Others are attempting such activities but lack the management skill and/or technical knowledge to achieve high production. The majority continue to treat irrigation as supplementary to their traditional rainfed agricultural enterprises such as wheat or forage crop production, highlighted by the dominance of wheat in the farming system (Figure 2). In some cases, the move to irrigation has been accompanied by an increase in seed or fertilizer application rate, and farmers report significant yield increases. For wheat, average irrigated yield is reported to be about 2.4 t/ha, approximately double the rainfed yields. Many farmers are only applying two or three waterings, and few are able to approach a reasonable irrigated wheat yield of 4 t/ha, let alone the commercial target of around 7 t/ha. For maize (the dominant summer cash crop) yields are even lower due to lack of precision planting and poor quality seed. In 1999, the production of vegetables is likely to be approximately 3,000 t compared with the full development target of 61,000 t estimated at appraisal. Fruit production is estimated at less than 1,000 t as most citrus trees planted have yet to reach full maturity. Wheat production is close to appraisal targets and is estimated at 4,500 t above the without project levels. 27. The reasons for the low rate of technology adoption identified by the OEM and other studies include (i) the number of absentee owners working internationally, or for example, in Rawalpindi or Islamabad, who visit their farms at varying intervals; (ii) the area of tenanted land with tenants given no security and therefore they are often not prepared to take the risk of investing in high-input crops; (iii) the quite high proportion of land owned by large landowners, some of whom are poor managers; (iv) fragmentation of farms on most schemes, which can make it difficult for individual farmers to irrigate their parcels, particularly if their land is on several watercourses; (v) the fact that plots within the dam command area represent only a

3 small portion of the individual farm holdings; (vi) the risk-averse nature of most smallholders combined with lack of knowledge of potential benefits; (vii) poor irrigation water management and unreliable supplies; and (viii) lack of readily available extension material and services, or agricultural inputs and credit. An important factor in the adoption of high-value crops is prior experience, e.g., from wells or from springs as at Nikka dam where several vegetable farmers were familiar with the spring-irrigated fruit and vegetable farms nearby. 3. Agricultural Extension

28. The establishment of an agricultural extension network was a key component of the Project, due particularly to the lack of irrigation experience by project area farmers. Seven of the planned 15 field assistants (extension officers) were seconded from the Agricultural Extension Directorate for three or four years between 1990 and 1995. No extension inputs were provided to the other eight new and six rehabilitated systems. In practice, four dams were completed in 1994 or 1995, while for others, the watercourse network was not completed until two or three years after dam construction. Provision of extension to these schemes would have required continuing inputs after project completion. Extension staff established about 350 demonstration plots on farmers fields, but two thirds of these were during 1990-1992, when few farmers away from the main canals had any access to irrigation. There was thus a substantial mismatch between the timing of extension activities and the potential for farmers to adopt the techniques being demonstrated. Little if any extension has been provided to project command areas since 1995 due to the Agriculture Extension Directorates capacity and policy. 4. Fisheries

29. The Islamabad hatchery is meeting its target output of around 5 million fry annually, up from 2.5 million before the Project. The facility size and the number and capacity of concrete and earth tanks suggest that a far higher output could be achieved if appropriate budget and staff incentives were available. Fry have been transferred to project-rearing facilities or sold to the private sector. Fishing rights to dams are leased to the private sector normally for three years. Revenues from this source average PRs100,000 per year for the new dams, a low-level compared with the Fisheries Departments annual management and operating costs of around PRs1.5 million. 30. Rearing facilities were constructed as planned at three dams. The tanks at Shahpur dam remained idle for about four years after construction due to severe seepage problems from the earth tanks, the breakdown of a transformer, and the failure to appoint any staff. Under the ADBsupported Second Aquaculture Project,2 a minihatchery was constructed nearby and the Department of Fisheries found sufficient budget to operate both facilities. The project rearing facility at Khokherzer dam is reported by the Fisheries Department to be operating satisfactorily under the district fisheries office, but the pumps at another project facility have not operated for the last few years, and no budget is available to operate the facility. B. Institutional Development

31. SDOs ability to design and supervise construction of small dams increased significantly under the Project as required by the accelerated rate of dam construction. Since project
2

Loan 916-PAK(SF): Second Aquaculture Development Project, for $15 million, approved on 3 November 1988.

4 completion, SDOs capacity has reverted to approximately its previous level. To some degree, knowledge and skills are declining as no new dams have been undertaken since early 1993 due to the Punjab governments financial constraints, while many staff trained under the Project have left. 32. As recommended by the PCR, a small-scale advisory TA3 is developing models to strengthen farmers capacity in small dam operation. Three consultants are working with farmers at Nikka, Bhugtal, and Shakardara dams to help establish or strengthen WUAs, and develop participatory approaches to O&M. It is intended that the models developed will be applied by SDO and other agencies to promote participatory O&M at other project and nonproject dams. SDO management is keen to promote such developments, but middle and lower management will need to modify their attitudes and approaches if a relationship of equality and mutual respect is to be developed with WUAs. Specific budget allocations will need to be made and officers assigned responsibility if the models developed are to be widely adopted. C. Financial Performance

33. Based on a formal agreement with the farmers, SDO recovered 5 percent of leveling costs from the farmers when the leveling was undertaken; 5 percent of watercourse construction costs were also to be recovered. However, farmers have generally refused to pay the watercourse charge, and only 0.2 percent of costs had been recovered on the new dams at the time of the OEM. Legal proceedings have been instituted or completed against farmers on several dams, with the courts so far having found in favor of SDO. 34. During 1996-1997, virtually no O&M funds were provided. However, this has improved in the last two years, and the 1999 budget averages about PRs500,000 for O&M per dam. In addition to routine maintenance and normal repairs, the O&M budget is required to pay for most of the gauge readers, recorders, and workers on the project dams, who are mainly employed on a temporary basis. In 1998, 18 percent of O&M costs were recovered through the irrigation tax. To date, SDO has not been entitled to retain the irrigation tax or the recovered watercourse costs. However, under the new Punjab Irrigation and Drainage Authority legislation, fees may be retained by SDO and used for scheme O&M. SDO is currently establishing the account and procedures required. In future, the FOs will collect and use the fees, allowing them to become self-funding and undertake a range of activities. D. Economic Reevaluation

35. The slow rate of irrigation development and the limited adoption of intensive crops combine to constrain economic performance. However, ABAD and SDO are demonstrating considerable motivation to promote further command area development, and farmers are responding. Overall, it is estimated that by 2007, about 70 percent of the command area will be irrigable compared with the current 49 percent, with an irrigated cropping intensity (cropped area/irrigable area) of 150 percent, an increase from the 120 percent estimated for 1999. Based on these parameters, the EIRR is estimated at 7.5 percent (Appendix 1). As in the PCR (but unlike the appraisal report) the investment in the dams whose command areas were rehabilitated under the Project is treated as a sunk costs. The inclusion of the cost of these dams would reduce EIRR to 5.7 percent. The recalculated EIRR is below that calculated at the time of PCR (10 percent) due to a reduction in estimated fisheries benefits and appraisal (16 percent) due mainly to the slow rate of irrigation development.
3

TA 3131-PAK: Strengthening Farmers Capacity in Small Dams Operations, for $150,000, approved on 15 December 1998.

36. Achievement of the annual cropping target (105 percent of the command area) will require continued effort by SDO, ABAD, and the extension service. If annual cropped area peaks at 90 percent of the command area, the EIRR would decline to 6.6 percent. Conversely, an increase in irrigation development to 80 percent of the command area would increase the EIRR to 8.2 percent. The rehabilitation component makes a significant contribution to return, as expenditure was low. The new dam component on its own is estimated to have an EIRR of approximately 5.3 percent including the (minor) returns from fisheries. The project economic analysis is in Appendix 1. E. Sociocultural and Socioeconomic Results

37. At the time of project design, most project area Figure 3: Overall Farm Size Distribution farms were subsistence, gaining most of their cash (% of land in size class) income from off-farm work. On average, 25 percent of > 10ha household labor is employed off-farm in laboring, <1 ha 20% 29% army, government positions, or out-of-country. This proportion has not changed over the project period 5-10 ha and has contributed to the slow uptake of intensive 14% cropping practices. Extra labor required by irrigated 1 - 2 ha 3 - 5 ha 14% farming has usually been met by the rest of the family 2 - 3 ha 12% and through hiring labor rather than the return of off11% farm workers. However, some farmers said that the Source: Small Dams Organization. irrigation development had contributed to their decision to return to live in the village. The increased requirement for labor is spreading the project benefits beyond landowners in the command area. PERIs 1996 impact survey reported an increase in household wealth indicators, such as number of appliances, number and quality of rooms/household over the project period. This can be at least partly attributed to the Project, but is also influenced by off-farm income increases. The improved financial position of project area families suggests that future investment in inputs for high-value crops may be more feasible, and bodes well for further cropping intensity increases. The percentage of farm income derived from renting out land has increased on 15 of the 16 schemes surveyed pre-Project, and in 1995 by PERI suggesting an increase in the amount of land tenanted out. 38. Farm size varies greatly within and between schemes as shown in Appendix 2. Command area per farm varies from 0.3 ha at Jamargal to 5 ha at Dhok Sanday Mar, while a similar variation is evident in terms of land owned outside the command areas. Within schemes, substantial farm size variation is evident, with 0 to 71 percent of land being held by farms of 1 ha or greater. Figure 3 summarizes command area ownership by size class. 39. Farmers interviewed by the OEM indicated a high level of cooperation between watercourses. However, irrigation introduces a potential source of conflict within and between communities. Thus, there is competition for water between the head and tail of schemes, and also between the powerful and the not-so-powerful. Conflict is more pronounced during dry seasons such as the summer of 1999, when accusations of water stealing and water wastage were prevalent on dams such as Nikka, which experienced major supply restrictions.
Intensive Agricultural Development A Case Study Three brothers (two with wives) and three sisters worked together on their mainly rainfed cropping and livestock farm. Having used a well to irrigate a small area of vegetables, they knew the returns possible from high-value irrigated crops. When Shahpur Dam was constructed, they decided not to wait for the Department of Agricultures subsidized

6
bulldozers to level their land. Instead, the family sold all their livestock and firewood trees to pay contractor costs of about $3,000 to level their 5.5 ha in preparation for irrigation. The risk paid off. They began growing chilies, coriander, eggplant, citrus, tomatoes and onions, and within the first year, they had recovered their leveling costs. They then bought buffaloes so they could continue their milking enterprise. As others developed their land, management of irrigation water became more crucial. Being at the tail end of the command area, the family was not receiving the water it required. Their efforts to ensure water would reach the last village of the four along the irrigation scheme were complicated by the fact that the upper-reach villages were from one caste and they were from another. Consultants from the International Irrigation Management Institute helped develop a farmer organization. A farmer from the tail-end village was elected president and persuaded the other villages to stick to the agreed water allocation schedule. In the meantime, the family invested in a pump, so that when the water does not reach them, they can pump from a nearby well. The change to irrigated vegetables increased their income many times. They are building a new house and sending all of their children to English-language middle schools, except for their 16 year-old daughter, who was born a few years too early. She has joined the men and the older women working daily in the field, supporting the others going to school. Although the women are often exhausted by the fourfold increase in workload, they are happy that they can provide their children with the opportunities they lacked.

40. Farmers consider that they were well compensated for land compulsorily purchased under the Project. Compensation was based on the most recent sale price. Families often sold and repurchased the land among themselves at high prices prior to acquisition by the government, thus increasing the rate of compensation. To some degree this is reasonable, as those farmers with land in the command area can expect an increase in land value of around 200 to 300 percent. For dams built late in the project period, compensation for the inundation area and canal rights-of-way has still not been paid due to cumbersome bureaucratic procedures. F. Gender and Development

41. In the project area, as in most of rural Pakistan, society is highly gender segregated. Although up to 70 percent of farming activities are carried out by women, they rarely play any role in decision making. Men decide which crops to grow and how to manage irrigation water; they buy farm inputs and market produce. It is, therefore, not surprising that women were not included in project design or implementation. However, the Project has brought significant change to the lives of many women, particularly those involved in vegetable production whose workload has increased, and those who previously had limited access to water. Water channels are used by the women for washing clothes, bathing, and in some cases, to supply drinking water. For women without access to a well, this can save a long trip to the river. A few families have built brick structures over the channels, so that they may bathe in private. Women often place stones in the channels to raise the head of water to make washing easier. This may affect irrigation water distribution and cause damage to the channel. 42. The Project has also benefited women by increasing income. Many choose to spend extra income first on the education of children, and second, on their house. In a baseline study of Mirwal and Shahpur dams (with moderate irrigation development), the number of girls attending school was about half that of boys, the same as for the rest of rural Pakistan, perhaps indicating that the Project has yet to have much impact on the education of girls. Males, as future breadwinners, are given priority for education. However, families that are growing highvalue crops, with substantial increases in income, are educating their girls (case study above).

7 G. Environmental Impacts and Control

43. In terms of the settled (human) environment, the increased availability of water is mainly positive. The command areas of the project dams are developing into aesthetically pleasing environments, with extensive tree plantings and some intensively cropped areas. The land leveling undertaken should assist in limiting erosion on project farms, though soil loss is exacerbated by the very fine seedbeds that farmers maintain for an extended period. The use (often over-use) of irrigation is contributing to rising water tables as reflected in some dug wells in the command areas. However, this is a mixed blessing as rising water tables may result in waterlogging or salinization, as well as easier access to water. In one village visited by the OEM at Tainpura dam, about 20 houses were affected by damp caused by irrigation. The dams have affected stream flow, reducing the availability of water to downstream users, e.g., for watering livestock. The dams are not designed to permit compensatory flows, a factor that should be considered in future dam construction. Most dams have some downstream flood mitigation benefits and reduce the silt loadings reaching the Indus River. However, the project dams are insignificant compared with regional runoff and the large dams constructed on the Indus and Jhelum rivers. H. Gestation and Sustainability

44. The Project is in the middle of a long gestation period. At appraisal, it was estimated that full command area development would not occur until 9 years after dam construction. This period is now being reached on the first dams constructed. Experience from both new and existing small dams indicates that 15-20 years will be required to reach full development in terms of both usage and anticipated cropping pattern, due to the factors outlined in para. 27. 45. Project benefits are potentially sustainable. However, at present, they are threatened by the low O&M levels. The ability of most systems to deliver full irrigation supplies to farmers is declining, with damage to many main and secondary canals, siphons, and watercourses. The deterioration of project watercourses will lead to increasingly inefficient water distribution both within watercourses and between head and tail areas of the schemes. Water distribution systems under the Project were basic, with no proportional diversion structures at channel and watercourse offtakes. In future, it will probably be necessary to provide the schemes with more efficient water distribution systems to promote improved command area coverage. The current move to farmer management and O&M of the schemes is positive, but will require substantial support.

IV.

KEY ISSUES FOR THE FUTURE

46. Several issues have a major bearing on the current and likely future performance of the Project, and the potential for present and future small dams to contribute to national social and economic objectives. A. Slow Command Area Development, Participation, and Farmer Organization

47. Irrigated areas have expanded over the past three years. However, irrigable and cropped areas remain at a low level, currently estimated at 50 and 59 percent of the cultivable command area. Irrigation is often not a central contributor to family income, but is viewed as a supplement to traditional rainfed agricultural activities. Limited irrigation development and the low rate of adoption of high-value crops are key factors leading to the poor overall economic performance. They will need to be addressed on both present and future small dam projects if agricultural objectives are to be achieved. 48. Further watercourse construction and land leveling are needed at many schemes, while the main canals cannot command the whole area for schemes such as Mirwal and Shahpur.1 Under the Project, basic land leveling was undertaken on part of each command area and for substantial lengths of constructed lined watercourses. Most farmers interviewed by the OEM consider that they are unable to level their fields without (subsidized) leveling by DOA, or to build their own watercourses without the 70 percent subsidy available from the OFWM directorate. This implies a high level of dependency. There are some notable exceptions, but in general, farmers have little concept of self-help, or indeed mutual cooperation. It is highly desirable for both present and future schemes that the level of dependency is reduced, and a spirit of cooperation promoted. 49. All farmers interviewed by the OEM welcome the availability of irrigation water supplies. Nonetheless, it is clear that the extent of their irrigation scheme ownership is limited. In future such schemes, ownership will need to be enhanced by using more effective consultation, needs analysis, and participation at the identification, design, and construction stages. For example, farmers and farm groups generally have the capacity to construct their own watercourses, with assistance from village masons and project staff in the case of required drop structures. Farmers will soon be required to take responsibility for watercourse maintenance and probably for the main canals, and also for the definition of water allocation schedules between and within watercourses. The extent of scheme ownership will have a considerable bearing on the extent to which such initiatives are successful. 50. An attempt was made under the Project to establish WUAs. However, these were not formalized or given any responsibility, and they collapsed at the end of the construction phase. Given the Punjab Irrigation and Drainage Authority legislations focus on farmer participation and user responsibility for O&M of irrigation schemes, far greater emphasis will need to be placed on WUA and FO establishment and nurturing in the future. This is recognized by SDO and

Mirwal dam site was moved about 1 kilometer downstream as an existing landowner objected to his mini-dam being flooded and the canal was then too low to command the whole area. The Shahpur system has yet to be completed.

2 supported by ADB through a small-scale TA (footnote 7) and through the Punjab FarmerManaged Irrigation Project.2 51. At the same time as the methods for establishing participation are being developed, attitudinal change will be required in government organizations. Farmer participation is not a matter of dumping O&M responsibility onto the farmers because the Government can no longer afford it. It needs to be an effective partnership between the Government and the farmers. For this to work, attitudes in SDO and other organizations will need to change from paternalism or condescension to communication between equals and mutual respect. The OEM observed examples of current attitudes, such as the amusement of officers (not from SDO) who drove over a smallholders drying chilies, or the common practice of using the car horn to summon farmers from their fields. While these examples are minor and perhaps unimportant, they are considered by the OEM to be symptomatic of the approach used by many officials in dealing with smallholders in Pakistan. Changing this institutional culture will be a long process, but is necessary if the partnership between the Government, farmers, and their organizations is to succeed. SDO in particular and also the DOA agencies will need to consider how such change can be initiated and supported. It is encouraging that SDO is already well thought of in the project area, providing a sound foundation on which to build. Senior management is committed to the required change in culture, but extending this through the organization will take time and effort. B. Poverty and Equity

52. Subproject design and selection did not place great weight on equity issues. Farm size distribution was one factor considered. However, the approach did not differentiate greatly between schemes, and was not able to take account of the potential distortions caused by one or two large farms within the command area nor of discrepancies between schemes. For example, Pira Fatehal with an average farm size of 12.5 ha received a higher score in the screening assessment than Jawa with 4.3 ha. Figure 3 summarizes land ownership by farm size class. Equity issues exist on several counts. Variation exists (i) between schemes, with command areas of large average farm size benefiting fewer farmers per unit investment cost; (ii) within schemes, with a few farms often occupying a large proportion of the command area, implying a high public investment cost for each farmer; (iii) between landowners and the landless, and between landlords and tenants (however, it is notable that rents in the area are generally low, resulting in some sharing of benefits between landlord and tenant, and improving distributional outcomes); (iv) between the powerful and the weak, with the powerful (and higher caste) often able to access more resources such as land leveling or water; (v) between farmers with land in the command area and those from the same village with no irrigable land; (vi) between farms near the headworks and those near the tail end, with the latter often having less access to water; and (vii) between villages with schemes and those without. 53. In combination, these factors suggest that the Project has not contributed to reducing inequity within the Potwar plateau region. The distributional issues reflect the general inequities in Pakistani society, and it is notable that many farmers without access to irrigation did not consider this to be unfair. However, equity is believed to be a significant issue in Pakistan, and in relation to irrigation development in general. Future projects involving small dams will need to focus on this issue if they are to make a significant contribution to poverty reduction.

Loan 1679-PAK(SF): Punjab Farmer-Managed Irrigation Project, for $7.8 million, approved on 25 March 1999.

3 C. Agricultural Information, Extension, and Input Supply

54. The Projects extension component was relatively weak and ineffective while current DOA extension activities do not support project schemes. The limited extension effort has constrained the expansion of intensive agriculture. No effective research has been undertaken on irrigated agriculture on the Potwar plateau. The agroecological situation on the plateau is considered to be sufficiently different to the plains areas of Punjab that farm-level research on vegetable and other intensive crops would be of value to farmers and the extension service. However, it is recognized that there is limited research capacity in the area, and that research into irrigated agriculture should not be at the expense of rainfed agricultural development. In the meantime, information from other areas should be synthesized into a set of coherent recommendations for the project command areas. 55. Other major constraints to agricultural development include the lack of good quality agricultural inputs such as seed, fertilizer, and chemicals. In part, the slow private sector development in agricultural input supply has resulted from major government involvement over several decades. This has constrained the development of the private sector and developed farmer dependency on subsidized inputs. While the subsidies have largely been withdrawn, farmers continue to be averse to paying full market price. It is highly desirable that more effective private sector agricultural input supplies are made available together with extension advice. Efforts are needed to help private business fill the gap left by the government withdrawal from input supply, to promote correct input specification and reduce product adulteration. D. Irrigation System Design and Operation

56. SDO and PERI made great efforts to ensure that dams sites were well selected. However, in retrospect, more community consultation would have promoted irrigation scheme ownership. Design was largely considered from an engineering rather than a users perspective. Thus, for example, structures were not designed to allow proportional water diversion, and access to several sluice gates is limited; both make water management difficult. The needs of communities for bathing, washing, and watering livestock were not taken into account in design, with the result that communities have made their own scheme modifications, making holes in structures to fill their livestock watering dams, or using distance markers or rocks to dam the canal to raise the head at the offtakes and for washing. The design of future schemes will need to involve detailed discussion with communities to promote ownership and improved utility. 57. A key issue that has yet to be addressed on most dams is that water demand is increasing at the same time as maintenance status is declining. On schemes such as Bhugtal, where the command area is fully developed, the situation is already critical, exacerbated in 1999 by the poor monsoon rains. However, other dams whose command areas are presently only about half developed are likely to experience similar problems over the next few years as their irrigated area expands. In this situation, several actions are required: (i) timely maintenance must be carried on main canals (including leaking siphons) and watercourses (at Walana, the entire scheme was closed for two cropping seasons because of a flood-damaged aqueduct, which ultimately cost $18,000 to repair); (ii) water allocation schedules need to be drawn up and enforced; (iii) in-field wastage of water needs to be reduced, through improved land leveling and water management; and (iv) overall scheme management needs to take account of cropping patterns, dam water level, and expected rainfall, and then farmers advised in good time of likely water restrictions so that cropping intentions can be adjusted. In the long term, improved water allocation efficiency will also be promoted by developing a system of tradable water rights, as

4 those with the greatest demand for water, e.g., for high-value crops, will be able to pay more for water than those with low-value forage or cereal crops.

V. A. Overall Assessment

CONCLUSIONS

58. Twelve dams were constructed as planned and to an adequate technical standard. However, the project watercourses were of poor quality and have deteriorated badly, while some main canals are suffering from problems. Command area development has been slow, and in most cases, farming systems are based on applying supplementary water to traditional crops, rather than on new and intensive crop rotations. Overall irrigated cropping in 1999 is estimated at around 59 percent of the command area, a marked improvement over the last three years. However, it remains far below the appraisal target of 140 percent, due to lack of leveling and watercourse development, as well as low motivation of many farmers. Little irrigation system management has been evident to date, but water-sharing plans are now being introduced as cropping intensity increases and water availability declines. Ways to pass most responsibility for O&M to FOs are currently being defined. EIRR is estimated at around 7.5 percent based on irrigated cropping reaching 105 percent of the command area by 2007 (cropping intensity of 150 percent on 70 percent of the command area). This would increase to 8.2 percent if irrigated cropping reaches 120 percent of command area. 59. Apart from the economic gains resulting from increased cropping intensity, the Project is generating many other benefits. The raising of local water tables is seen as a benefit, although it may also have some costs. The general increase in economic activity and service provision in the villages in or adjacent to the project command areas is largely attributable to the Project, as is the return of some off-farm workers and the slowing of rural-urban drift. On the basis of its expected economic performance and delivery of secondary benefits, the Project is classified as partly successful. This rating will have to be downgraded if command area development and cropping intensity in the future are substantially less than expected. B. Lessons Learned

60. Perhaps the main lesson that can be drawn from the Project is that the traditional approach to small dam and command area development is unlikely to generate high levels of social or economic benefit. New approaches will be required if acceptable performance is to be achieved, with a major focus on ownership, equity, and efficiency issues. Other key lessons include the following: (i) Beneficiaries need to be fully involved in identification, design, and implementation if ownership is to be promoted. In particular, farmers should, where possible, construct their own watercourses with necessary support from project staff. The slow nature of change in traditional rainfed agricultural societies requires that specific measures be taken to promote technology adoption. Where project outcomes depend on technological change, emphasis needs to be placed on adequate agricultural extension and input supply, both during and after the Project. In Pakistan, involving a range of agencies in project implementation is difficult, even where quite a strong agency, such as ABAD, is responsible for coordination. Establishing sustainable WUAs requires time and great effort. Such an activity needs to be specified and funded under the project if it is to succeed. High-level support is likely required for about two years with some support thereafter.

(ii)

(iii) (iv)

2 (v) The timing of command area development must be coordinated with dam construction. Watercourses should be constructed to permit irrigation soon after filling of the dam to avoid excessive delay of benefit generation. Land acquisition and compensation procedures that were agreed on will need to be followed, in accordance with ADBs Resettlement Policy. Project monitoring should be partly or entirely funded by the loan.

(vi) (vii) C.

Follow-Up Actions 1. Command Area and Agricultural Development

61. For schemes with low irrigable/command area ratios, the optimal development path needs to be assessed. This could be undertaken by SDO and include (i) reassessment of the dam hydrology based on experience to date; (ii) study of methods to extend the command area, including additional watercourse development, main or secondary canal extension, and lift pumping by SDO, individual farmers, or farm groups; and (iii) system and in-field water management and O&M systems. A participatory approach should be adopted with the institutions concerned and the beneficiary groups. 62. The move to high-value crops will continue to be slow unless long-term agricultural extension services are provided. One option to be considered is training and appointing of village extension workers either as volunteers, or paid through the FO. Funding could come from the proposed third Barani Agricultural Development Project. Approximately four years are needed to prepare the FOs to take on increasing responsibility for extension. 63. Irrigation farmers in the Potwar plateau region need access to sound agroeconomic information. It is suggested that DOA could gather information from other irrigation areas and research programs for dissemination to project area farmers to guide them in intensive crop production. Consideration could also be given to initiating a small irrigated crop research program in the project area. This could comprise variety and agronomic trials and demonstrations on farmers fields, and link closely with the extension program. The program would logically be undertaken by the Barani Agricultural Research Institute or the National Agricultural Research Council. Farmer-to-farmer technology transfer should also be encouraged and supported. 64. Agricultural input availability needs to be improved. In the case of fertilizers, seeds, and chemicals, this will largely depend on private sector suppliers. The Government could consider ways to help merchants develop or establish businesses, perhaps through one of its small business development programs. Some method of accrediting suppliers could be considered to ensure high-quality inputs and reduced levels of adulteration. Credit is also urgently required; the National Rural Support Program, a local nongovernment organization, and the establishment of FO savings and loan societies could contribute to this. 65. District command area support teams could be established, comprising experienced agronomists/extension experts and community development and irrigation specialists. The teams would support the village extension workers and community mobilizers in their command areas. Because of the coordinated approach required, ABAD could be given responsibility for team management. Further strengthening of the links between SDO and OFWM will also be valuable, particularly in the context of the ongoing OFWM program for the Potwar area which is assisting in accelerating the pace of command area development.

3 2. Farmer Organization

66. For the participatory management approach to work and develop into a partnership between the Government and FOs, a change in corporate culture will be required at all levels. While senior management is supportive of the concept, further work will be required to ensure that middle management and staff enter the relationship from the perspective of equality. It is expected that the ongoing ADB-supported TA (footnote 7) will give consideration to this when recommending models for establishing sustainable FOs. 3. Fisheries

67. The Fisheries Department should consider providing incentives to the hatchery and rearing facilities assisted or constructed under the Project. The performance of both the Islamabad hatchery and the project rearing facilities would be greatly increased if they could retain a proportion of sales revenue over a reasonable target, and use the funds generated for O&M, staff bonuses, and reinvestment in the hatchery. In particular, such funds should be used to revitalize existing fisheries facilities related to the Project. Privatization of the project hatchery and rearing facilities could also be considered. 4. Environmental Management

68. The lack of any significant catchment area stabilization is a potentially major issue for dams whose catchment area is degraded. SDO expects to complete a detailed sedimentation study by the end of 1999 by preparing new cross-sections of the waterbodies. For dams with lives estimated at less than 50 years, catchment area protection will probably be warranted. Such work could be considered, for example, the proposed Third Barani Agricultural Development Project. A careful watch needs to be kept on waterlogging and salinization problems. Advice and assistance may need to be provided at an early stage to farmers experiencing these problems. 5. Future Development

69. The past approach to small dam development has not generated anticipated benefits. In future, a different approach to site selection and dam development will be required if outcomes are to be improved. Some development aspects that may assist are discussed in Appendix 3. In particular, equity issues need to be taken into account. In general, command areas should be planned to exclude large areas belonging to individuals, or where appropriate, consolidation and some land redistribution should be required before approving a dam. Mini-dams also offer good potential for irrigation and aquaculture development at relatively low cost, and avoid many of the social and technical problems of small dams. SDO expertise could usefully be applied to minidam development. 70. The future development of the project command areas and those of any future small or mini-dams will present an opportunity to explore new modalities for working in rural areas. Such modalities are likely to include increased ownership and involvement by farmers and their organizations. Alternative funding sources could be considered for several of the initiatives suggested. Another project could support SDOs existing schemes, including one or more dams employing new approaches for farmer participation and command area development. 71. Reevaluation of the Project would be useful in about 2005, particularly to assess the extent to which target outcomes have been achieved with respect to command area development, high-value crop production, and irrigation scheme O&M by water users. The

4 reevaluation could possibly be undertaken in conjunction with evaluation or reevaluation of the two completed Barani area projects funded by ADB.

APPENDIXES

Number

Title

Page

Cited on (page, para.) 2, 13. 1, 20. 3, 69.

1 2 3

Economic Analysis Project Irrigation Scheme Data Possible Approaches to New Dam Construction

20 36 40

Appendix 3, Page 1

Appendix 1, page 1 ECONOMIC ANALYSIS A. Introduction

1. Project economic performance was reestimated using similar methodology and updated assumptions to the project completion report (PCR). The major changes in the analysis compared with the PCR (where identifiable) and key assumptions made by the Operations Evaluation Mission (OEM) are discussed below. Detailed analysis of the differences is not possible as the PCR tables are abbreviated and the supporting spreadsheets could not be located. However, OEM estimates are more optimistic than those of the PCR except for the command area, which the PCR estimated at 11,385 hectares (ha) (compared with the appraisal estimate of 11,280 ha). The Small Dams Organization (SDO) data on individual dams indicate an actual area of 10,400 ha. The major difference relates to irrigated areas, where actual irrigated area in 1999 is already estimated at 59 percent or half as much again as estimated by the PCR. Table A1.1: Assumptions at PCR and OEM
Item Command Area Irrigable Area, 2005 Irrigated Area, 2005 Average Farm Size Irrigable Area/Command Area, 2005 Irrigated Cropping Intensity Irrigated Area/Command Area, 2005 Unit ha ha ha ha % % % PCR With Without Project Project 11,385 4,400 1,330 3.8 3.8 39 12 OEM With Without Project Project 10,400 7,294 1,150 10,600 1,369 2.46 2.46 70 11 150 110 105 12

= not available, ha = hectare, OEM = Operations Evaluation Mission, PCR = project completion report.

B.

Methodology and Assumptions 1. Project Financial Investment Cost

2. Project costs were assumed to be as defined by the PCR. However, for comparison, the costs estimated by SDO were also analyzed and converted to dollars at the annual average exchange rate. They are listed in the line below Total Investment Cost in Table A1.2 and differ significantly from the costs listed by the PCR. The discrepancy is particularly marked during 1991, with SDO records indicating far higher expenditure. However, aggregate expenditure is similar in the two estimates. 3. In addition to the public investment costs, farmers are required to invest in land leveling and other on-farm work. Initial leveling is included as a project expense. An estimate of additional leveling costs ($200/ha) is included in Table A1.3, together with estimated incremental working capital requirements. 2. Project Economic Investment, and Operation and Maintenance Cost

4. In Table A1.4, foreign exchange costs are converted to 1999 dollars using the international manufacturing unit value index. Local currency costs are converted to 1999 Pakistan rupees using the average annual exchange rate and Pakistans gross domestic

Appendix 1, page 2 product deflator. They were then converted back to US dollars using the estimated average 1999 conversion rate. A standard conversion factor of 0.9 is applied to local costs. 3. Irrigable and Irrigated Areas With and Without the Project

5. The irrigable area (the area that can be irrigated within a command area) is estimated at around 70 percent of total command area from 2006 onward, with a cropping intensity (CI) of 150 percent (Table A1.5). CI refers to the number of times the irrigable area is cropped within a given year. Irrigated area is the total area of irrigated crop. It thus equals irrigable area multiplied by average CI. In the base case analysis, irrigated area is assumed to peak at 105 percent of the command area (70 percent irrigable x 150 percent CI). This may be compared with a target of 140 percent estimated at appraisal. Average irrigated area based on the sum of the areas estimated in individual design studies was 124 percent of total command area. 4. Cropped Area and Cropping Intensity Without and With the Project

6. The with-project cropping levels are recorded reasonably accurately by the SDO field recorders every cropping season for the purpose of assessing irrigation tax (Table A1.6). Recorded data are used for 1998 and 1999 crop areas. For subsequent years, a steady increase in intensive crops is assumed, rising from 7 percent in 1998 to 18 percent of the cropped area by 2007. Similar cropping patterns are assumed for the reduced area of irrigation under the without project scenario. 5. Yields of Major Crops Without and With the Project

7. Despite the number of surveys that have been undertaken, there is no recent and reliable farm budget data that can be drawn on. Thus, reliance is placed on data prepared by the Agricultural Prices Commission, from the National Agricultural Research Centers 1989 and 1992 studies, from project benchmark and evaluation surveys, as well as field interviews by the OEM (Table A1.7). Citrus yields are increased over the early years of the Project to account for the proportion of trees of full bearing age. Peak average yield is reached in 2007 at 16 tons(t)/ha. 6. Estimated Economic Prices for Internationally Traded Outputs

8. Economic prices are calculated for wheat and maize, both of which are imported (Table A1.9). All prices and costs are expressed in 1999 dollars. The 1999 economic wheat price is estimated at $166/t (PRs8,300)substantially higher than the farmgate price reported by farmers of PRs6,000-6,500/t, implying that there is significant distortion in wheat prices. This is considered to be due to the subsidization of urban consumers by the government and is effectively resulting in a transfer of wealth from rural to urban areas. 9. Economic maize price in 1999 is estimated at $143/t (PRs7,200) compared with an estimated farmgate price of PRs6,500/t implying that there is less distortion in the maize market compared with wheat. 7. Estimated Economic Prices for Internationally Traded Inputs

10. Border prices are calculated for the two main fertilizer types used in the project area diammonium phosphate and urea (Table A1.10).

Appendix 1, page 3 8. Net Value of ProductionWithout Project

11. In the base case, the $10.1 million cost of dams whose command areas were improved and extended under the Project is treated as a sunk cost. Thus, the net value of production without the Project assumes that 1,150 ha within the command area would have been irrigated whether or not the Project was implemented (Table A1.12) The impact of including dam construction cost is tested by including the cost in the first year and assuming all of the irrigated area development results from project activity. 9. Incremental Net Value of ProductionWith Project

12. Incremental value of production is calculated by deducting the without project net value of production from the with project value (Table A1.3). No opportunity cost is estimated for water. Most of the water captured by the dams is essentially surplus water within the context of the downstream Indus basin irrigation systems, as the filling of the reservoirs mainly takes place during the rainy season. 13. An estimate is also made of incremental farm-level costs due to land leveling requirements and the additional working capital requirements due to more intensive and expanded cropping. Incremental working capital is estimated on the basis of 25 percent of incremental operating costs as an indication of the annual average increase in working capital needs. 10. Economic Internal Rate of Return

14. The economic internal rate of return (EIRR) is calculated over 50 years, including estimated benefits from the fisheries component (Table A1.14). Project life is based on the estimated life of the dams. No residual value is assumed. 11. Fisheries

15. The economics of the fisheries component can be considered at three levels: (i) the production of fry and fingerlings from project hatchery and rearing facilities, (ii) the leasing of the project dams to private operators, or (iii) private sector operation of the dams. (i) Based on a market price for fry of around PRs1.00 (average of 1-2 centimeters and 2-2.5 centimeters), revenue from fry would amount to some $70,000 per year. Income from 700,000 fingerlings from all facilities would contribute about the same amount. The margin over operating costs is estimated at $52,000 per year. Leasing of project dams to private operators at present does not cover the Department of Fisheries management costs, and no net gain from leasing is estimated. Based on data provided for one dam (Shahpur), lessees margins are estimated at around $18,000 per year for the six dams built under the Project that are leased out at present. No benefit is ascribed to the dams whose command areas were developed under the Project as they could have been stocked in the absence of the Project.

(ii)

(iii)

Appendix 1, page 4 16. Overall direct incremental benefits from fisheries are thus estimated at $70,000 per year. This is less than the $638,000 per year estimated by the PCR on the basis of PRs10 per fingerling produced. Since most production is of fry, not fingerlings, the PCR estimate is not realistic. It can further be argued that the value of the fry or fingerling is included in the hatchery door market price, and that the profits made by farmers are required to service their own management and investment cost and do not accrue to the hatchery. Overall, the addition of fisheries benefits to the cash flow has a limited impact on the EIRR, as they are small in relation to the total investment cost, as would be expected with a component that represented less than 2 percent of overall investment cost. C. Results

17. The major contribution of the expanded and rehabilitated command areas is evident from the difference between cases 2 and 3 (Table A1.15). The cost of investment in these command areas ($1.6 million) is less than 5 percent of the overall project cost, but contributes approximately 30 percent of the net benefits. This highlights the potential gains from irrigation scheme extension or rehabilitation. Table A1.15: Summary of EIRR estimates
Case 1 Base Case 2 Base Case without Fisheries 3 New Dams Alone 4 All Dams Plus Sunk Costs ($10.1 million) 5 Fisheries Alone EIRR = economic internal rate of return. EIRR (%) 7.5 7.3 5.3 5.7 9.1

18. The individual farm budgets with and without the Project developed in Table A1.16 indicate that net farm income under the Project is approximately $800 compared with around $140 without the Project. The model is synthetic in that it assumes all of the budgeted enterprises are maintained on the model farm. However, it should be representative of overall project performance. Returns per family labor day are estimated to have increased from around $2.40 to $10.00 under the Project in current values. These rates may be compared with a casual labor cost of $1.50 to $2.00 per day.

PROJECT IRRIGATION SCHEME DATA Table A2.1: Physical Features of Dams Constructed and Command Areas Developed
Year of Completion of Construction Catchment Area 2 (km ) Wall Height (m) Crest Length (m) Effective Storage 3 ('000 m ) Dead Storage 3 ('000 m ) Annual a Inflow 3 ('000 m ) Annual Irrigation a Use 3 ('000 m ) Annual Evaporation 3 ('000 m ) Outflow to a River 3 ('000 m ) Potable Water Schemes (no) Population b Supplied (no)

Irrigation Scheme

Construction Type

A. New Dams Dhok Sanday Mar Mirwal Bhugtal Nikka Dhok Qutab Din Kot Raja Jamargal Shakardara Tainpura Pira Fatehal Jabi Jawa Average

1990 1990 1990 1990 1991 1991 1992 1994 1995 1995 1991 1994

CG CG CG CG EF EF EF CG EFZ EFZ CG/EF EFZ

9.1 37.6 22.6 28.8 15.3 24.2 15.2 156.9 42.5 68.7 35.3 9.4 38.8

19.8 18.3 22.8 28.0 24.7 24.1 16.3 35.0 24.0 27.5 21.8 25.1 23.9

40.0 30.0 35.0 22.0 20.0 25.0 16.7 30.0 40.0 61.0 35.0 10.0 30.4

640 3,304 833 1,024 1,020 1,660 1,147 4,380 4,030 3,580 2,409 1,110 2,095

164 1,281 574 1,357 1,167 1,850 1,853 2,630 2,170 6,550 1,328 833 1,813

5,705 2,342 1,408 9,645 9,696 11,609 3,154 17,860 7,460 4,256 3,920 1,552 6,551

613 1,827 859 2,413 1,835 1,912 2,080 1,336 2,667 2,880 2,100 437 1,747

157 417 288 180 253 583 252 803 820 1,050 572 266 470

4,932 95 261 7,050 7,606 9,111 819 15,717 3,971 326 1,246 846 4,332

3 1

3,000 2,000

5,000

B. Command Area Rehabilitation and Extension Gurabh 1966 EF Dhurnal 1971 EF Qibla Bandi 1971 CG Garat 1982 EF Khokherzer/Surlahc Khasala Walana Shahpur Average 1979/1985 1985 1984 1986 EF EF CG CG

16.8 21.0 23.6 14.0 20.7 + 15.5 25.4 25.9 203.9 47.2

23.3 20.7 21.9 20.1 23.5+ 18.6 18.3 21.3 25.9 21.6

8.2 18.3 30.0 18.3 24.4+ 59.4 40.0 33.0 85.0 33.3

837 976 1,391 2,084 3210+ 1918 1,848 1,576 5,031 1,963

837 1,089 854 700 876+ 432 1,129 1,128 12,571 2,615

2,971 2,104 5,128 4,120 11,147 6,790 3,800 72,457 13,565

2,971 1,605 2,523 1,301 7,995 912 1,587 1,131 2,503

260 290 685 306 500 382 200 1,246 484

206 1,918 2,510 2,650 5,494 2,011 70,078 12,124

40,000

100,000

CG = concrete gravity; EF = earthfill; EFZ = earthfill zoned; km = kilometer; m = meter; m3 = cubic meter.
a b c

Three-year average 1996/97 to 1998/99. Potable water schemes were not developed under the Project. Two dams that serve one command area.

Source: Small Dams Organization.

Table A2.2: Land, Canals, and Water Supplies

Reservoir Area (ha) Design Command Areaa (ha) Number of Farms <1 ha Number of Farms 1 to 2 ha Number of Number of Farms 2 to Farms 3 to 5 3 ha ha Number of Farms 5 to 10 ha Number of Number of Farms Offtakes >10 ha Primary Canal Length (km) Secondary Canal Length (km) Tertiary Canal Length (km)

Irrigation Scheme

A. New Dams Dhok Sanday Mar Mirwal Bhugtal Nikka Dhok Qutab Din Kot Raja Jamargal Shakardara Tainpura Pira Fatehal Jabi Jawa Subtotal

20 94 27 20 24 68 50 63 79 98 67 31 641

223 425 248 283 293 347 267 1,699 1,380 304 605 324 6,398

5 55 50 138 238 234 245 175 1,528 40 74 92 2,874

6 39 30 45 29 38 55 90 202 45 48 67 694

11 25 25 12 6 9 26 77 40 30 69 45 375

9 45 15 10 5 1 7 20 66 16 37 27 258

8 17 10 3 2 11 9 56 10 21 5 152

6 4 4 2 2 37 10 19 4 88

1 1 1 1 1 1 1 2 2 1 1 1 14

4.3 6.9 5.5 1.3 5.1 4.5 3.0 14.5 6.0 8.7 10.0 7.1 76.9

1.2 1.7 3.2 1.7 3.2 20.0 7.0 2.8

40.8

24 39 22 26 26 41 24 155 126 50 55 30 618

B. Command Area Rehabilitation and Extension Gurabh 75 545 Dhurnal 34 283 Qibla Bandi 59 344 Garat 42 438 Khokherzer/Surlah 82 1,068 Khasala 43 506 Walana 41 336 Shahpur 283 498 Subtotal 659 4,018 C. Total Project 1,300 10,416

55 50 176 706 497 300 87 151 2,022 4,896

30 30 56 66 159 100 44 94 579 1,273

20 20 20 9 25 47 17 63 221 596

20 20 11 10 34 11 41 147 405

29 10 10 5 21 7 31 113 265

10 10 9 13 8 5 12 67 155

1 1 1 1 2 1 1 1 9 23

5.9 6.0 4.5 3.0 3.7 3.6 6.1 12.0 44.8 122

3.3

9.1 12.4 53

13 11 31 59 111 46 44 92 407 1,025

ha = hectare; km = kilometer. Appraisal report indicated a potential command area of 11,280 ha. Dams selected under the Project had a design command area totaling 10,416 ha.

Table A2.3: Cropped Areas

Design Command Area (ha) Number of Farms Average Command Area per Farm Irrigated Area Summer 1999 Irrigated Area Winter 1998/99 Irrigated Area Summer 1998 Irrigated Area Winter 1997/98 Irrigated Area Summer 1997 Irrigated Irrigated Irrigated Area Area Winter Area Winter Summer 1996 1996/97 1995/96

Irrigation Scheme

A. New Dams Dhok Sanday Mar Mirwal Bhugtal Nikka Dhok Qutab Din Kot Raja Jamargal Shakardara Tainpura Pira Fatehal Jabi Jawa Subtotal Irrigated area/command area (%)

223 425 248 283 293 347 267 1,699 1,380 304 605 324 6,398

45 185 134 210 280 284 986 408 1,892 151 268 240 5,083

5.0 2.3 1.9 1.3 1.0 1.2 0.3 4.2 0.7 2.0 2.3 1.4 1.3

44 29 120 66 81 80 26 72 5 65 107 33 728 11.4

81 268 249 242 172 182 253 342 450 223 242 76 2,780 43.5

39 81 121 66 81 79 26 66 5 46 107 26 743 11.6

47 138 248 242 172 183 245 284 500 198 136 58 2,451 38.3

32 74 119 80 77 75 20 14 19 37 106 17 670 10.5

45 123 234 230 170 166 214 88 331 130 135 58 1,924 30.1

30 78 119 81 54 62 33 55 12 103 627 9.8

37 115 203 206 134 152 242 49 90 113 5 1,346 21.0

B. Command Area Rehabilitation and Extension Gurabh 545 Dhurnal 283 Qibla Bandi 344 Garat 438 Khokherzer/Surlah 1,068 Khasala 506 Walana 336 Shahpur 498 Subtotal 4,018 Irrigated area/command area C. Total Project Irrigated area/command area (%) Annual Irrigated area/command area (%)
ha = hectare.

164 140 282 984 709 510 171 392 3,352

3.3 2.0 1.2 0.4 1.5 1.0 2.0 1.3 1.2

77 22 196 48 215 59 57 674 16.8 1,402 13.5 59.3

208 121 329 112 789 135 143 157 1,994 49.6 4,774 45.8

77 23 165 47 215 43 53 623 15.5 1,366 13.1 53.9

208 120 196 122 789 110 143 109 1,797 44.7 4,248 40.8

25 23 128 42 214 23 39 57 551 13.7 1,221 11.7 46.7

127 178 192 103 775 89 158 98 1,720 42.8 3,644 35.0

22 127 44 200 28 40 42 503 12.5 1,130 10.8 38.7

100 169 138 130 805 49 149 18 1,558 38.8 2,904 27.9

10,416

8,435

1.2

Table A2.4: Main Irrigated Crops By Season

Irrigation Scheme Summer 1999 Summer Fodder Vegetables Total Summer Winter Fodder Winter 1998/99 Total Winter Year 1999 Percent of Command Area Area

Maize A. New Dams Dhok Sanday Mar Mirwal Bhugtal Nikka Dhok Qutab Din Kot Raja Jamargal Shakardara Tainpura Pira Fatehal Jabi Jawa Subtotal

Groundnuts

Fruit

Sugarcane

Wheat

Fruit

Sugarcane

Oilseeds

Pulses

30 17 14 7 19 30 4 46 167

3 96 5 16 2

3 2 23 39 62 66 7 34 18 22 30 306

5 4 1 8 3 4 5 5 34 3 72

3 5

1 1 2

1 42

1 3

4 15

165

44 29 120 66 81 80 26 72 5 65 107 33 728

70 246 245 239 157 174 234 292 376 220 160 50 2,463

6 5

10 43 68 48 20 200

5 8 1 3 4 2 9 6 6 1 33 6 84

9 3 4 1 1 2 1 11 10 12 7 5

81 268 249 242 172 182 253 342 450 223 242 76 2,780

125 297 369 308 253 262 279 414 455 288 349 109 3,508

56 70 149 109 86 76 104 24 33 95 58 34 55

B. Command Area Rehabilitation and Extension Gurabh 46 Dhurnal Qibla Bandi 150 2 Garat 21 8 Khokherzer/Surlah 22 Khasala 20 Walana Shahpur 31 Subtotal 244 56 C. Total Project 411 221

31 22 7 19 170 5 18 272 578

15 22 34 3 74 146

20

2 1

77 22 196 48 215 59 57 674 1402

20 23

5 8 23

207 121 275 77 758 40 140 115 1,733 4196

1 19 20 61 38 138 338 16 15 6 34 1 4 76 160 19 25 2 19 30 28 38 0 12

208 121 329 112 789 135 143 157 1,994 4774

285 143 525 160 1,004 194 143 214 2,668

52 51 153 37 94 38 43 43 66

Appendix 3, page 1 POSSIBLE APPROACHES TO NEW DAM CONSTRUCTION A. Types of Dam

1. In the past, the Small Dams Organization (SDO) had only constructed dams defined as small. While no precise definition of small exists, it has been taken to mean dams generally of 15 to 35 meters in height with live storage of about 1 to 5 million cubic meters. They are thus larger than the mini-dams built by the Soil Conservation Directorate and smaller than the dams built and operated by the Water and Power Development Authority. 2. In future, consideration could be given to permitting SDO construct mini- as well as small dams, as the two have similar design and construction requirements. Mini-dams have few of the command area development problems of large dams, as they are often built for one farmer or group of farmers who are keen to develop irrigation on their land. In suitable catchments, it would be possible to build a number of relatively inexpensive mini-dams, to support irrigation and aquaculture. The dissected nature of the Potwar plateau would limit the areas in which such dams could be built economically, due to the difficulty of moving water from mini-dams at some sites to reasonably level command areas. However, if most mini-dams are constructed in the upper catchments where the height of the stream banks is relatively low, this should not be a major problem. Equity issues would need to be taken into account, to ensure that the benefits of a publicly funded mini-dam program are not restricted to large and powerful landowners. B. Site Identification

3. Sites have been identified based mainly on suitable topography and geophysics for dam construction. While good siting is essential for dam safety and construction cost, other factors are equally important. Irrigation should be a genuine felt need in the community. This need could be identified (as it is presently for the mini-dams) by responding to requests from communities for dams to be constructed. Demand may also be determined, for example, from National Rural Support Program community mobilization programs. Whichever method is used to identify sites, it will be desirable to undertake an extended period of preparation before dam construction commences. This should involve the establishment of farmer organizations (FOs) whose capacity to contribute to irrigation scheme design, construction, and management should be established well before dam construction. Village leaders could be taken to other existing irrigation schemes to develop their capacity to make contributions to design and implementation from an informed basis. 4. Equity considerations should be taken into account during design to ensure a reasonable distribution of benefits and prevent a few rich and powerful landowners receiving most benefit from public investment. Thus, farms should have a reasonable size distribution, based on management and social criteria. There are two principal ways to promote equity in command area development: (i) ensuring that the command areas include only farms within a given size range; or (ii) requiring farms over a given size to relinquish part of their holding. It is appreciated that land redistribution is a contentious topic in Pakistan, and that option (ii) may be difficult or impossible to achieve in many areas. However, given the 170 or so sites that are considered by SDO to be suitable for small dam construction on the Potwar plateau, it should be possible to find some where the large landowners are prepared to contribute part of their land for appropriate compensation. This will be particularly true in areas where farmers have relatively large landholdings outside the command areas, where relinquishing part of their land within the command area would have an insignificant effect on their overall holding.

Appendix 3, Page 2 5. Equity considerations may also dictate dam designs which permit compensatory flows (i.e., which maintain at least a defined flow in the watercourse below the dam). This would be particularly relevant for watercourses which provide water supplies for livestock, domestic or irrigation use downstream of the dam site which would be adversely affected by construction of the dam. 6. Fragmentation of landholdings is a major contributor to slow agricultural development. Where a farm is in several parts, particularly if it is on several watercourses, management of the farm under irrigation is difficult. Some fragmentation may be desirable, as it gives farmers access to more than one soil type. However, more than two blocks is seldom desirable. For example, bird scaring becomes difficult or impossible on scattered blocks, while agricultural operations such as harvesting or plowing become more complicated, requiring movement of equipment between blocks. Consolidation, where required, should be a necessary condition for dam site approval. C. Water User Associations and Farmer Organizations

7. Appendix 7 of the project completion report contains a useful summary of the need for the development of effective user organizations. These include water user associations (WUAs) at the watercourse level and FOs at the overall command area level. The approach was further defined under the three-year International Irrigation Management Institute project on Shahpur and Mirwal dams, and will be developed under the current Asian Development Bank-funded technical assistance.1 8. There was some consultation with project area farmers during the design process for the Small Dams Project via the screening and benchmark surveys. WUAs were also consulted about watercourse alignment. However, without irrigation experience, farmers ability to suggest items that they subsequently required such as watering holes for livestock, outlets in specific locations, and tractor crossings was limited. Most deliberate damage to or modification of structures results from the farmers perception that the existing structure does not meet their needs. This highlights the need for preparation and awareness raising prior to design so that participation in design can be effective. It is essential that the level of effective ownership of the dam and irrigation system is entrenched as far as possible before construction is approved. This preparation period may be critical to the long-term success of a scheme. 9. Where command area FOs exist, they provide scope for mutual cooperation. This would normally begin with rotational water sharing and system maintenance, but could extend to setting up savings and loans schemes, combined purchase of inputs, provision of agronomic advice, or cooperative marketing. WUAs and FOs are based on democracy, unlike traditional rural society on the Potwar plateau where larger landholders can have considerable power. In a WUA, each shareholder has one vote independent of land size. This should give small landholders a voice, although people of more influence or the majority caste will still usually be elected into the executive positions. Under the Punjab Irrigation and Drainage Authority, it is intended that all irrigators should be entitled to join the WUA, thus potentially providing tenants with a say in water management. 10. Water-sharing agreements need to be put in place at the time of opening the dam. Where they have been introduced to project schemes, they have led to a rapid decline in disputes and conflict, and provided far greater equity of water distribution between the head and tail end of the schemes.
1

TA 3131-PAK: Strengthening Farmers Capacity in Small Dams Operation, for $150,000, approved on 15 December 1998.

Appendix 3, Page 3 D. Possible Development Systems

11. The major constraints to command area development identified in this report are such that it is virtually impossible for a conventional small dam irrigation scheme to be economically viable. Farm size, existing ownership boundaries, and land fragmentation are particular problems which limit the efficient development of the command area, and in the long term, the rate of agricultural development. Overcoming these constraints would require a process of land resumption and consolidation. While it is recognized that these are difficult options in Pakistan, where communities agree, they could be attempted. A (pilot) approach that could be attempted initially within one new dam command area would be as follows: (i) (ii) Demarcate the command area and confirm the ownership of each block. Design an optimal irrigation layout taking account of topography and existing bunds but not necessarily of land ownership. This would allow development to match contours and hydraulic requirements, rather than being dictated by ownership patterns. The Government nominally resumes land, based on values for each major class of land. This would probably not be practicable to value every block. Reallocate the land to farmers based on their preference and/or the location and size of their main holding. Farmers with large holdings, e.g., over 5 or 10 hectares (ha), would relinquish excess land. This would be reallocated to increase the size of small farms, e.g., those less than 1 ha, or allocated to persons not owning land in the command area. This would need to be undertaken with the agreement of the large landowners. Forcible redistribution is unlikely to succeed, and could be circumvented (as in the past) through large landowners selling their land to relatives or nominees. Allocate land titles to farmers for their blocks. These would be used as collateral against the leveling and watercourse development costs. Where farmers relinquish land, this would be credited to their account at the resumption price with any balance over the cost of development of their remaining holding paid in cash. Where farmers are allocated more land than their original holding, this would be charged to them against the security of their land title at the resumption price. Fully level the land to the design field layout. The WUAs undertake watercourse construction. SDO supervises and supplies materials.

(iii) (iv) (v)

(vi)

(vii) (viii)