SST VIE 95008 L-207-VIE(SF)

ASIAN DEVELOPMENT BANK

Post-Evaluation Office

REEVALUATION OF THE

TAN AN INTEGRATED AGRICULTURAL PROJECT

IN

SOCIALIST REPUBLIC

OF

VIET NAM

June 1995

CURRENCY EQUIVALENTS At AppraIsal (November 1974) Currency Unit VN$1.00 $1.00 = = = Dong (VN$) $0.00149 VN$670

At Project Completion (October 1987) Currency Unit Dl .00 $1.00 At Postevaluation (July 1989) Currency Unit D1.00 $1.00 At Reevaluation (February 1995) Currency Unit 01.00 $1.00 = = Dong (D) $0.00009 D11,000 = = = Dong (D) $0.00026 D3,900 = = = Dong (D) $0.01 25 D80.0

ABBREVIATIONS EIRR MWR O&M PCR PPAR REM VBA - - - - - - - Economic Internal Rate of Return Ministry of Water Resources Operation and Maintenance Project Completion Report Project Performance Audit Report Reevaluation Mission Viet Nam Bank for Agriculture WEIGHTS AND MEASURES ha km t t/ha - - - - hectare kilometer tons tons per hectare NOTES (i) (ii) The fiscal year of the Government ends on 31 December. In this Report, "$" refers to US dollars.

IE - 29

TABLE OF CONTENTS Page BASIC PROJECT DATA MAP: Tan An Integrated Agricultural Project HIGHLIGHTS BACKGROUND A. B. Ill. Importance and Location of the Mekong Delta The Project (ii) (iii) 1 2 2 2 4 4 4 5 5 5 5 5 5 7 8 10 10 11 12 12 14 14 14 15 16

POSTEVALUATION RESULTS A. B. C. D. E. Project Facilities - Dikes, Sluice Gates, and Pumping Stations Agricultural Production Economic Evaluation Socioeconomic and Sociocultural Impact Environmental Impact

IV.

REEVALUATION FINDINGS A. B. C. D. E. F. G. H. Basis and Method of Reevaluation Project's Impact on Irrigation Impact on Water Quality and Flood Control Agricultural Production Economic Analysis Socioeconomic Impacts Environmental Impacts Sustainability

V. VI.

KEY ISSUES CONCLUSIONS A. B, C. Overall Assessment Lessons Learned Follow-Up Actions

APPENDIXES

(ii) BASIC PROJECT DATA Tan An Integrated Agricultural Project - Loan No. 207-VIE(SF)

PROJECT PREPARATION/INSTITUTION BUILDING: TA Project Name Type Person-months TA No. Tan An Irrigation 99-VIE PPTA AOTA 243-PHI Binh Dinh, Go Cong, Tan An As per Bank Loan Documents 12.70 5.60 7.40

Amount $80,000 $55,000

Approval Date 4 Dec 1973 24 Aug 1978

KEY PROJECT DATA ($mn): Total Project Cost Foreign Currency Cost Bank Loan Amount/Utilization Bank Loan Amount/Cancellation KEY DATES: Fact Finding Appraisal Loan Negotiations Board Approval Loan Agreement Loan Suspension Loan Reactivation Loan Effectivity Project Completion Loan Closing Months (Effectivity to Completion)

Actual 12.02 6.06 7.37 0.03 Actual 22 August-i September 1973 24 September-9 October 1974 13-14 November 1974 10 December 1974 27 December 1974 26 April1975 19 October 1978 25 June 1979 October 1987 20 March 1987 101 REM 6.5

Expected

26 April 1975 July 1980 30 June 1981 64

KEY PERFORMANCE INDICATORS (%): Appraisal PCR PPAR Economic Internal Rate of Return 14.3 17.5 7.3 -------------------------not calculated---Financial Internal Rate of Return BORROWER: EXECUTING AGENCY: MISSION DATA: Type of Mission Fact-Findi ng/Preappraisal Appraisal/Loan Negotiations Project Administration - Inception (including TA5) - Review (including TA5) - Project Completion Postevaluation Reevaluation Government of the Socialist Republic of Vietnam Ministry of Water Resources

No. of Missions 1 2 6 1 1 1

Person-days 33 90 17 335 30 30 30

(iii) 1 0620E VIETNAM 1 0626E

TAN AN INTEGRATED AGRICULTURAL PROJECT Project Layout and Structures (as completed)
0 \\
1032N CAN QUAN .-

- - k
'RACHGOC

I
TAN AN

1 032N

)/NA

\ \ QIJAN THO NEW CANAL _i\ Funded by Local Governn*nt \\ \

' \

J I//I

LONG AN PROVINCE
KHAN HAU No. 1 (Functioning) KHAN HAU No. 2 (Functioning)

Cu CHI

I
I t
'

U CHIh.2 0 (OutoV(Nonc / CU Ct-Il No 1 / / / (OutotWork)

NI-tAN HAU (Functioning)

O'
--"
I I

--TAN HUONG (Functioning Partly) '- --- - ---

PLAIN OF REEDS

I-

TANHIE

,ii

2 Kilometers

LEGEND:

TIEN GIANG
TAN HIEP (Out ot Work)

PROVINCE

Area Excluded During 1984 Revision of Scope Water Quality Station Pumping Station Sluice Main and Branch Canals

0 A

---- Road
flY No

Sanlinity intrusion Sometimes in dry seas.

-. -

- Main Drains Tertiary Canals River/Creek

- - - - Protection Dyke Propoaed Intake Sluice and Navigational Lock 10021

MY TIlO

Structure should be excured

- - - - - Provincial Boundary (Boundaries not necessarily authoritative) 102 iN

Hydrological and Meteorological Station Bao Dinh Mouth

1 0626E 95-1235 HR

I. HIGHLIGHTS A. Background

1. Objectives and Scope. With the overall objective of minimizing risks and uncertainties in farm production and strengthening the production base of the agriculture sector, the Project was designed to solve the problems of recurrent flooding, salinity intrusion, sluggish surface drainage, and seasonal shortages of fresh water. The Project aimed at increasing the cropping intensity and yield of 8,200 hectares (ha) of farm land in the Tan An area. The main infrastructure facilities to be provided by the Project included: flood protection dikes and sluices, main and subsidiary drains, electric pump stations with auxiliary facilities, improvement of fresh water creeks, gravity irrigation canal network, large intake sluice with navigation lock, and access roads. Project History. The Project was appraised in October 1974, approved in 2. December 1974, and was suspended in April 1975. It was reactivated in October 1978 and after a review and some changes in the scope in 1982, it was completed in October 1987. A Project Completion Report (PCR) was prepared in 1987 and a Project Performance Audit Report (PPAR) in 1989. Postevaluation Findings. The postevaluation concluded that the construction of 3. dikes and the improvements to creeks and water supply channels had been useful. While agricultural production has increased, the contribution of the Project is limited because of the doubtful operational viability and the decrease in utilization of the pumping stations and gravity delivery systems improved under the Project. The Project was rated as partly successful, because the estimated economic internal rate of return (EIRR) was 7 percent. B. Reevaluation Findings

Socioeconomic Findings. The reevaluated EIRR is estimated to be 6.5 percent 4. compared with 14.3 percent at appraisal, 30 percent at reactivation in 1978, 18 percent in the PCR in 1987 and 7 percent in PPAR in 1989. The lower EIRR at reevaluation compared with the estimates at appraisal and in the PCR is attributed to: (i) only a part of the benefits can be attributed to the Project; (ii) the capacities of the major structures such as the canals and the pumping stations are not being fully utilized; (iii) the farmers are incurring additional costs on small mobile pumps and on-farm development; (iv) the increment to paddy production has been delayed; and (v) the economic prices of paddy have fallen. However, appraisal targets for intensity of cropping and yield of paddy have been exceeded largely because of considerable private and public investments, free market-oriented macroeconomic policies, and introduction of short-duration, high yielding varieties. As a result, poverty within the Project area has declined and farm households now own better dwellings and more consumer durables than before. At appraisal, it was envisaged that the Project would increase farm incomes from $265 to $675 per ha at full development. As a result of increases in yield as well as cropping intensity, the current farm incomes are believed to have increased. However, because of a series of devaluations, the shift from a controlled to a market-determined system of farm prices, and the lack of time series data on price indexes, the Reevaluation Mission (REM) was unable to determine the extent of change in farm incomes since appraisal. 5. Sustainability. Despite the need to repair, replace, and maintain the canals, sluice gates and pumping stations, the Project has triggered considerable private and local government investment and interest in developing complementary activities such as canals,

2 mobile pumps, on-farm development, use of high yielding and short-duration varieties and modern inputs and practices. Thus, the benefits of the Project are considered sustainable. Project's Classification. The Project has partially achieved its objectives of 6. controlling floods as well as salinity and acidity intrusion. However, the objective of improving surface drainage has not been achieved. The design of the Project based on delivering irrigation by gravity was not appropriate. However, the Project has brought fresh water and developed creeks. The area covered by the Project has achieved and even exceeded its paddy production targets. However, only a part of this increase can be attributed to the Project. Considering its mixed performance and the reestimated EIRR of 6.5 percent, the Project is rated as partly successful. Lessons Learned. The Reevaluation Study noted several lessons. First, a gravity7. based distribution system to irrigate a generally flat land, as in the Project area, is inappropriate and costly. Second, local personnel with experience and knowledge about the topography and conditions in the area should be given the opportunity to participate in the design of the project. Third, beneficiaries should participate in the design, implementation, and operation and maintenance (O&M) and should be organized into groups and provided with requisite training. Fourth, irrigation works should be comprehensive and cover the measures required up to the end-use. And finally, the monitoring of environment impacts should be built into the design of projects. II. BACKGROUND A. Importance and Location of the Mekong Delta

8. Until 1963, Viet Nam was a surplus producer of rice. About 75 percent of its total rice production was from the Mekong Delta, which covers 16 provinces, and 3.75 million ha and is bounded by the Mekong River and its tributaries. With the substantial decline in rice production after 1963 because of the deteriorating security situation in the country, the Mekong Delta became the focus of the Government's efforts at regaining rice self-sufficiency. Thus, the Government implemented a series of pioneer water resource development projects in the region to redress such problems as frequent flooding, salinity intrusion, sluggish surface drainage, shortage of irrigation water, and lack of proper access for farms, which were identified as the reasons obstructing the growth of rice production in the Mekong Delta region. B. The Project 1. Project Genesis

9. In 1972, the Government engaged a consulting firm from the Republic of Korea to survey the possibilities for irrigation and flood control in the Mekong Delta. Based on this survey emerged the concept of a phased irrigation development plan for the area between the Vam Co Tay River and the My Tho River. However, following the Government's request for a loan on the basis of that report, the Bank concluded that further in-depth study was needed. On 4 December 1973, the Bank approved a project preparatory technical assistance (TA) for $80,000 for a feasibility study of the Tan An Irrigation Project (TA 99-VIE approved in December 1973). The Bank-financed consultants conducted field investigations in May-July 1974 and submitted their final report in September 1974. An Appraisal Mission visited Vietnam from 24 September to 9 October 1974 and the Tan An Integrated Agricultural Project was subsequently approved by the Bank in December 1974.

3 2 Objectives and Scope

10. The Project's main objectives were to minimize the risks and uncertainties in farm production and to strengthen the production base of the agricultural sector. Specifically, the Project was designed to solve the problems of recurrent flooding and salinity intrusion, sluggish surface drainage, and seasonal shortage of freshwater and was aimed at increasing the cropping intensity and yield on about 8,200 ha of farm land in the Tan An area. 11. The components of the Project included: (I) a 25.5 kilometer (km) long, 2.5 meter (m) high protection dike with five sluices to permit drainage; (ii) 145 km of main drains and 370 km of subsidiary drains; (iii) seven electric pumping stations with auxiliary facilities; (iv) improvements to freshwater creeks; (v) gravity irrigation and drainage network; (vi) large intake sluice (with navigation lock) at the main freshwater intake river; and (vii) 47 km of all-weather and 514 km of dry-weather roads. The other components included the establishment of a Project Office, the construction of a pilot demonstration farm facility, and consulting services. 12. Upon reactivation in 1978, the physical scope of the Project was left essentially unchanged from that at appraisal. But in 1982, the Government informed the Bank that it considered the Project was overdesigned. In 1984, the scope of the Project was modified to (i) exclude an area of 600 ha on the western boundary; (ii) omit the major sluice and navigation lock on the Bao Dinh channel; (iii) increase the number of sluice gates from five to six; (iv) reduce the designed command from 8,200 ha to 6,300 ha; and (v) delete the establishment of demonstration farms and the recruitment of the design consultant. 3. Executing Agencies

13. The Executing Agency originally assigned to the Project was the Directorate General of Irrigation of the Ministry of Agriculture. Upon reactivation in 1978, the Ministry of Water Resources (MWR) was assigned as the new Executing Agency. A new Project Office was also established by the MWR with staff from the Provincial Water Resources Service and Provincial Agriculture Service. The new Project Office was given the full responsibility for day-today coordination and implementation of the Project for liaison between MWR and other concerned agencies and political subdivisions, and for O&M. 4. Financing Arrangements

14. At appraisal, the total cost of the Project was estimated at $12.7 million, of which $5.6 million were foreign costs and $7.1 million equivalent were local costs. The Bank was to finance all foreign costs and about 25 percent of local costs through a loan for $7.4 million.' The suspension and subsequent reactivation of the Project did not result in any change in the total amount of the loan from the Bank. However, significant modifications were made in the allocation of loan proceeds. The major revisions included: (i) cancellation of the allocation for fixed equipment (e.g., pumps, motors, switchgear, and electrical supplies) and pilot demonstration farm; (ii) doubling of the allocations for imported construction and O&M materials and equipment; and (iii) substantial reductions in allocations for consultants, mapping, and training costs.

Loan No. 207-VIE(SF), approved on 10 December 1974.

4 5. Project Benefits

15. It was envisaged that full development of the agricultural potential of the Project would be achieved in 1986; six years after its completion in 1980. Paddy yields were expected to increase from 2.5 metric ton per hectare (t/ha) to 4.25 t/ha, resulting in an annual incremental production of paddy of 46,000 t and of soybean of 1,200 t. The Project was expected to benefit about 8,000 farmers, cultivating about 8,200 ha of land, whose average farm income at the time of $245/ha was projected to increase to $675/ha, i.e., 2.75 times higher "with" the Project than "without" the Project. About 714,500 person-days of additional employment opportunities were expected to be generated because of the intensified multiple cropping of paddy made possible by the Project. 6. Rate of Return

16. At appraisal in 1974, the EIRR was estimated to be 14.3 percent. Based on the results of sensitivity tests, even under a combination of adverse circumstances, the EIRR did not drop below 10 percent, and the Project was considered economically justified. Ill. POSTEVALUATION RESULTS 17. The Project was completed in October 1987 and the PCR was prepared in December 1987. The PPAR was circulated in December 1989. The main findings of the PCR and the PPAR are summarized in the subsequent paragraphs. A. Project Facilities - Dikes, Sluice Gates, and Pumping Stations

18. The PPAR indicated that the dikes constructed have protected the Project area against flooding with acidic water from upstream, and salt water intrusion from downstream. However, the operation of the sluice gates was not very successful. In several places, the design of the sluice gates precluded their frequent operations and in others, led to their early deterioration. The PPAR noted that maintenance and repairs were neglected. By the time of Postevaluation Mission in July 1989, only five of the eight pumping stations had been installed. However, even those five pumps needed maintenance and repairs and were grossly underutilized. On the other hand, other specific works funded under the Project such as deepening the fresh water creeks, and constructing new channels and intake basins made more fresh water available for irrigation. Furthermore, the PPAR noted that the backstopping of run-oft water by the sluice gates had raised the water table and water salinity had been reduced. B. Agricultural Production

19. The PPAR noted that the availability of irrigation has enabled the cultivation of a second crop of paddy on 6,300 ha, as well as subsidiary crops on 1,500 ha, and this is increasing further. The cropping intensity had increased from 140 percent to 230 percent and yields increased from a range of 2.3-3.1 t/ha in 1978 to 3.4-4.3 t/ha in 1988-1989. The PPAR, however, concurred with the findings in the PCR that the pumping stations and the gravity delivery systems have only partially contributed to these improvements. The major contributory factors have been the large number of privately-owned and operated small pumps, the rapid adoption of high yielding varieties throughout the Mekong Delta, the privatization of land ownership, and the free markets for farm produce.

5 C. Economic Evaluation

20. At appraisal in 1974, the Project was expected to yield an EIRR of 14.3 percent, which was recalculated to be 30 percent at reactivation in 1978. In the PCR, the reestimated EIRR was 18 percent in 1987, while the estimate in the PPAR was 7 percent. The reasons the estimated EIRR was lower in the PPAR than in the PCR were that the PPAR attributed substantial increases in production to factors independent of the Project, the reduced usefulness of the most costly components of the Project, that is the pumping stations and the gravity delivery system, and incurring of additional costs by the farmers. However, both the PCR and the PPAR, alluded to the difficultly of estimating costs and benefits of the Project and cautioned against using the estimated EIRRs as a basis for evaluating the success or failure of the Project. The PPAR rated the Project as partly successful. D. Socioeconomic and Sociocultural Impact

21. The PCR estimated that while the paddy yields have increased from 2.5 t/ha to 3.7 t/ha, the incremental production was only about 25,000 t compared with the estimates at appraisal and at reactivation of 46,000 t. The real constraint to increased paddy production, the PCR concluded, was the limited availability of urea. Neither the PCR nor the PPAR, however, provided any information about the distribution of benefits among the rural families. E. Environmental Impact

22. The PCR observed that the Project did not generate any adverse effects on the environment and appeared to have had a positive impact on the Project area. However, the PPAR noted that recirculating water, which has leached soils and may have become saline or acidic, may have a detrimental impact on the environment in the Project area . Also, the increase in the use of mobile pumps to convey water from any accessible water source has increased the danger of deterioration of soil quality in the long run. Both the PCR and the PPAR stressed the need to monitor periodically the soil and water quality. IV. REEVALUATION FINDINGS A. Basis and Method of Reevaluation

23. The Project was originally formulated in 1974. Besides making several changes in the components of the Project subsequently, the country itself has moved from a centralized to a market-oriented economy beginning in 1986 under its economic reform program, "doi moi". The Bank decided to reevaluate the Project to determine what impact some of these macroeconomic policies are having on the outcome and sustainability of the Project. The Bank engaged a local consultant to conduct a socioeconomic study of the impact on the Project. This reevaluation takes into account the findings of this study; the observations of the REM, which visited Viet Nam in March 1995; and the views of the farmers and officials in the agencies concerned. B. Project's Impact on Irrigation 1. Project Facilities

During the dry season, saline water coming into the Vam Co lay River through 24. the tidal wave action from the South China Sea was observed to intrude into the northern side

6 of the area covered by the Project. At the same time, acidic water from the Plain of Reeds used to intrude into the western side of the area. The area was also affected adversely during the wet season by flooding from the Mekong River and its tributaries. In the absence of fresh water supplies, the Project area had limited irrigation. In this context, under the Project, dikes and sluice gates were provided on the western and northern sides to prevent the intrusion of acidic and saline water during the dry season, and to facilitate drainage as well as to control flooding during the wet season. In addition, by deepening and enlarging the Bao Dinh Canal from the My Tho River and installing pumping stations and constructing the main and some secondary canals, the Project has helped augment the supply of irrigable water and its distribution within the Project area. 2. Other Irrigation Development

25. During 1979-1994, a number of small and medium irrigation development works including canals were constructed and financed by individual farmers and local governments in the area. In addition, a large number of small and mobile irrigation pumps, estimated at about 50 in each village in the Long An Province and 200 in the Tien Giang Province, or a total of about 2,000 units, are being operated in the Project area. These small pumps draw water from any available source, such as the main, secondary and even tertiary canals, creeks, ponds, rivers, and reservoirs. A few large canals, e.g., the Quan Tho Canal running from the Tan Gien through the entire western part of the area and up to the Babeo Canal in the northwest region have been constructed by the local government. In short, many other irrigation development activities have been undertaken in the Project area, independent of and in conjunction with the investments under the Project. 3. Estimates of Area Irrigated by the Project

26. Compared with the target at appraisal in 1974 of irrigating 8,200 ha, which was reduced to 6,300 ha in 1982, the PCR estimated in 1987 that only about 2,000 ha were irrigated by the facilities provided under the Project. The PPAR, however, noted in 1989 that only 1,100 ha of second crops and 600 ha of third crops were being irrigated by the pumps installed and the canals constructed under the Project. Estimating the area irrigated exclusively by the facilities provided under the Project is extremely difficult. According to the REM, the total area irrigated under the Project is estimated to be 4,800 ha in Tien Giang and 2,000 ha in Long An or a total of about 6,800 ha (see Appendix 1). Compared with the 3,100 ha irrigated in 1982, the incremental area irrigated by the Project is estimated to be 3,700 ha. Because of the concurrent and complementary investments by the private sector in irrigation in the area in addition to the irrigation facilities provided under the Project, it is difficult to segregate the area irrigated by the investment under the Project. In REM's view, about 40 percent of the total irrigated area can be attributed to the investment under the Project. 4. Reasons for Shortfall in Performance

27. There are several reasons for the shorttall between the expected and the realized impact of the Project on irrigation. First, the design was based on gravity distribution of water which is unsuitable and expensive for the Mekong Delta where the Tan An Project is located. The topography within the area is mainly flat and level; consequently irrigation by gravity distribution is neither effective nor cost-efficient. Second, because of poor maintenance and repair (see Appendix 2), the pumps provided are not all in operating condition. They are old and rusty because of the salinity in the water and in the air. As a result, of the seven pumping stations constructed under the Project (tour in Tien Giang and three in Long An), only four (one in Tien Giang [Tan Huang] and three in Long An) have been in operation for limited periods

ranging from 200-300 hours per year. The pumping station at Tan Huang is only irrigating 80 ha compared with its designed capacity of 800 ha. Third, because of poor maintenance and sedimentation, the canals (e.g., Bao Dinh Canal) carrying the pumped water have become narrow and shallow, which have reduced their water carrying capacity. This is aggravated further by conveyance losses from leaks and seepage. Consequently, the canals are unable to carry the projected quantity of water to tail-end of the irrigation area. Fourth, while the Ong Dao Canal was enlarged to bring more fresh water from the Bao Dinh River, the Ong Dao Bridge was not widened which constricts the flow of water for irrigation in the Project area. Fifth, the exclusion of on-farm development, e.g., field channels and ditches, from the design, has also reduced the area irrigated by the facilities provided under the Project. C. Impact on Water Quality and Flood Control

28. Aside from preventing flood damage, the Project aimed at reducing the intrusion of saline water from the Vam Co Tay River in the north as well as the intrusion of acidic water from the Plain of Reeds in the west. The impact of the Project in achieving these objectives is summarized below. 1. Impact on Salinity

29. As discussed earlier, because of tidal action, the Vam Co Tay River brings saline water from the South China Sea into the Project area particularly during the dry season. Data in the table below indicate that the Project has contributed to a general reduction in salinity of river water entering the Project area. The construction of dikes and the Tan An sluice has helped a reduction in saline water intrusion. Bringing in fresh water from the My Tho River in the south has further helped to reduce salinity levels.
Changes In SalInIty Level

Year (March)
1978 1979 1985 1987 1990

Salinity level in grams per liter of water My Tho Tan An

3.0 1.5 2.0 3.3 1.9 11.4 11.6 11.2 4.2 8.9

Source:

Feasibility Study of Bacdong Project Inception Report 1992 Sub Institute of Water Resources, Planning and Management, Ho Chi Minh City.

30. In addition to the above data, the level of salinity in the selected locations in the Project area declined from 10 grams per liter to less than 2 grams per liter. The reduction in the salinity level was also confirmed by 70 percent of the beneficiary households interviewed in the socioeconomic study. The available evidence, therefore, suggests that the Project has been successful in reducing the level of salinity. The greater availability of fresh water through the Bao Dinh River, deepened and enlarged under the Project, coupled with the reduction of salinity, has stimulated the use of small mobile pumps for irrigation in the Project area. However, during the dry season, intrusion of saline water from the My Tho River, a tributary of the Mekong River in the south, has been reported. It will be necessary to monitor the salinity level at the mouth of this river and to adopt measures to neutralize this new source of salinity intrusion in the future.

8 2. Project's Impact on Acidity

31. Acidity in the soils within the Project area has been caused by two sources. The first, is the water intrusion from the Plain of Reeds in the west. The second, the soils within the Project area itself, particularly in the center of the area, are acidic and water passing through these soils becomes acidic too. By constructing a dike around the western boundary of the area, the REM considers the Project reduced the intrusion of acidic water in the area. The available information on the ph of the soil, however, fails to confirm any such change because the level has remained constant, at about 4.0 to 4.5. Only 38 percent of the beneficiaries confirmed that acidity has been reduced, which raises some doubts about the effectivity of the Project in reducing the acidity level. While the dikes constructed on the western side of the area have been effective 32. in preventing the intrusion of acidic water, the Project did not provide any mitigating measure to reduce the level of acidity originating from the soils within the area. Before the Project, the acidity was washed away naturally by flooding during the rainy season and draining the acidic water into the Babeo Canal. After the construction of dikes provided and the ineffective operations of the sluice gates (see Appendix 2), the natural flushing of acidity by flooding has been impeded. 3. Impact on Flooding and Drainage

The impact of the Project on reducing the frequency, duration, and intensity of 33. flooding during the rainy season is widely recognized. The dikes, particularly in the north, have made a significant impact in reducing the incidence of flooding in the area. However, during heavy rains in 1984, 1991, and 1994, the heights of the dikes proved to be low to prevent flooding. Therefore, the impact of the Project on flood protection, although positive, is only partial. In addition, under the Project, six sluice gates were provided to regulate the entry and exit of the water. During the rainy season, the sluice gates were supposed to drain out the excess water and to bring in fresh water, and during dry season they were supposed to prevent the entry of saline and acidic water. However, these sluice gates, were not designed correctly and were not maintained. First, the sluice gate at Tan An was constructed about eight meters below the surface and as a result, it cannot be opened and closed to both sides when required. Second, the sluice gates are manually operated, which makes opening and closing them very difficult and cumbersome. Third, most of the gates can be opened on only one side which makes them difficult to operate in both directions to regulate flooding and facilitate drainage. Added to these design deficiencies is the problem of lack of maintenance and repair, resulting in rusting, corrosion, and chipping of parts of the gates. As a result, the sluice gates are usually closed and seldom used to flush the acidity and salinity from the Project area. To summarize, while the Project has reduced substantially the incidence of flooding, its impact on surface drainage is debatable. D. Agricultural Production 1. Changes in Cropping Intensity and Diversification

Despite the deficiencies in the design of the Project and the poor maintenance 34. of the structures, the improvements in the creeks, rivers, intake canals, and drainage courses and the construction of the protection dike have played a crucial role in the growth of agricultural production by providing access to fresh water for the farmers' mobile pumps in the Project area. The impact of the Project in improving irrigation was complemented by the improvements in the extension services and in the information available about the new agricultural technology

9 packages from the Center of Agricultural Extension in the two subproject areas of Tan Gien and Long An. As a result, there have been: (i) changes in the cropping pattern from one to at least two, but mostly three paddy crops in a year; (ii) rapid adoption of high-yielding and shortduration rice varieties; (iii) greater availability and use of inputs; and (iv) diversification of crop production. As a result of the Project, complemented by the use of privately-owned mobile 35. pumps and by the improvements undertaken by the provincial governments, a third paddy crop was cultivated on an area of 7,762 ha in 1994 compared with 2,579 ha in 1982, or an increase of about 200 percent. Because about 75 percent of farmers in the Project area plant three crops of paddy in a year (compared with about 55 percent outside the Project area), the change in cropping pattern has increased the average cropping intensity in the Project area, from 180 percent in 1982 to 260 percent in 1994 (see Appendix 1). The cropping intensity was estimated to be 110 percent at appraisal, 140 percent in the PCR in 1987, and 230 percent in the PPAR in 1989. 36. Given the greater degree of certainty of receiving adequate irrigation water during each cropping season, the increase in information available about the rice technology packages, and the established market linkages for farm inputs and outputs, farmers rely mainly on paddy production as their major source of income. Some subsidiary crops have been produced in small plots, mainly in the Tan Glen subproject area, and have been a source of supplementary income for farmers. The total cultivated area under subsidiary crops increased from 310 ha in 1982 to 954 ha in 1994. However, this is only about 87 percent of the area under subsidiary crops projected at appraisal and about 22 percent projected in the PCR. As the paddy yields and the cropping intensity levels approach the maximum attainable levels, more emphasis and effort should be given to nonpaddy crops that are higher in value and which, in turn, will facilitate additional increases in farmers' incomes. 2. Impact on Crop Production

Agricultural productivity in the Project area during 1978 to 1994 has increased 37. substantially and has exceeded the estimates at appraisal by about 60 percent, despite the limited utilization and operational shortcomings of the facilities provided under the Project. Paddy yields have increased steadily from an average of 3.0 t/ha in 1978 to the current average of 4.8 t/ha, which, in turn, is about 20 percent higher than those being attained by farmers outside the Project area. Similarly, the yields of subsidiary crops have increased by about 45 percent. As a result of the interaction of higher cropping intensity and higher yields per ha, the incremental paddy production is estimated to be 58,000 tin 1994 compared with the projections at appraisal of 46,000 t at full development in 1986. However, because of the other independent investments in the area as well as complementary investments to the Project, only a part of the increase can be attributed to the Project. It is, however, difficult to determine the increase that is attributable to the Project alone. In REM's assessment, about 40 percent of the irrigation in the area can be attributed to the Project. Based on this assumption, the Project has resulted in an incremental production of 23,000 t of paddy per year. The projections at appraisal that an incremental production of 1,200 t of soybean will also be achieved in 1986 have not been met yet, although on about 900 ha, there is a growing trend to plant vegetables and fruit trees. To conclude, while the targets for cropping intensity, yield, and production for 1986 have been met and are being exceeded in 1994, only a part of this impact can be attributed to the effect of the Project.

10 E. Economic Analysis

The REM encountered difficulties in obtaining data to conduct the economic 38. analysis for the reevaluation of the Project. The recalculation of the EIRR (Appendix 3), to measure the performance of the Project, followed the methodology used in the PCR and PPAR except some adjustments were considered necessary to reflect recent observations and developments on land use, agricultural productivity, prices, and exchange rates. Because several of the developments that have facilitated the increases in crop production did not result solely from the Project, the quantified benefits, in turn, cannot exclusively be attributed to the Project. Thus, the estimate of the EIRR in this reevaluation is as conjectural as in previous reports. 39. The economic analysis also assumed that the pumping stations and the canals will be maintained at current performance levels, which will require substantial expenditures for maintenance, repairs, and replacements. Moreover, because the "with" and the "without" Project conditions resemble each other closely and more farmers in the area are now using mobile pump sets, the Project accounts for less of the incremental benefits than assumed in the previous estimates. The liberalization of the exchange rate has resulted in a large devaluation of the 40. local currency since the PPAR in 1989. As a consequence, the REM had to use a lower real value for local currency than was assumed in previous evaluations. Based on estimates of quantified benefits and costs, the reestimated EIRR is 6.5 41. percent (see Appendix 3) which is comparable with that estimated during PPAR. Based on recent experience, the assumptions about higher cropping intensity and yields have been offset by the increase in costs. The reasons the estimated EIRR is lower than the estimate in the PCR and at reactivation, include: (i) only part of the benefits may be attributed to the Project; (ii) a substantial reduction in the utilization of major facilities, such as the pumping stations and the gravity delivery system; (iii) the additional costs incurred by farmers in pumping water to their fields; (iv) the delay in incremental paddy production and implementation of agricultural diversification; and (v) the decline in the economic price of paddy. F. Socioeconomic Impacts

Approximately 21,600 farm households are currently residing within the area with 42. an average landholding of 0.34 ha, compared with about 1 ha at the time of formulation of the Project in 1974. The substantial decline in the estimated average farm holding is attributed to: (i) rapid increases in farm population in the area because of the high annual population growth rate (about 2.5 percent), which alone over the past 20 years has resulted in a 75 percent increase in population; (ii) the influx of farmers returning to their villages after the end of the war and the country's unification; and (iii) the Government's successful implementation of a land reform program that facilitated access to and ownership of surplus farm land by landless farmers. 43. The competitive input and output price regime created under the liberal macroeconomic policies such as freeing factor and product markets and allowing long-term leases for Government-owned land complemented the productivity improvements at the farmlevel and had positive impact on farm incomes. For example, the opening up of the market for agricultural inputs to private suppliers has enabled the farmers to gain access to a readily available supply of inputs such as seeds, fertilizers, and agrochemicals at competitive prices which, in turn, encouraged the use of these inputs. In addition, private sector involvement in the

11 - direct purchase of farm products expanded the markets for farmers and assured them a marketdetermined and often higher price for their output. Moreover, the new land tenure policy that allows farmers to use state-owned land for a period of 50 years, on a renewable and transferrable basis, has provided them with incentives to make long-term investments in farming and to intensify land use. 44. The general welfare of farmers residing in the area covered by the Project has improved. The socioeconomic survey conducted in the area in early 1995 indicated that the proportion of poor farm households has declined since 19791 and that the proportion of well-off farm households has increased from 25 percent in 1979 to 33 percent in 1994. The study also indicated that a greater proportion (55 percent) of farmers within the Project area compared with the nonbeneficiaries (40 percent), both within and outside the area, have improved the quality of their houses, and increased their durable goods such as television sets, motorcycles, water pumps, and barges (see Appendix 4). The study also indicated that while all the households in the area have benefited, the households with larger landholdings have benefited the most. The study revealed that households headed by women have not suffered any disadvantages in the distribution of gains. For example, the yield of rice obtained by households headed by women varied between 4.5 t/ha to 4.8 t/ha compared with 4.2 t/ha to 5.0 t/ha for the other households. Similarly, 75 percent of the households headed by women grew three crops of rice in a year compared with 72 percent of the other households. However, the households headed by women have shown less inclination to cultivate subsidiary crops and to participate in fish and livestock production than those headed by men (see Appendix 5). Because of the small size of the sample and difficulty of segregating the impact of the Project from the total impact, specific conclusions cannot be inferred about the cause and effect relationships. G. Environmental Impacts

The REM concurs with the PPAR that there is a possibility of water being 45. recirculated, particularly during the drier periods when the outflow of drainage water from the Project area is minimal. Because this recirculated water may be highly acidic and/or saline, its use for irrigation could degrade the surface soils. The occurrence of this phenomenon, however, was not confirmed by the REM. Although, there are currently five monitoring substations along the border of the Project area, these mainly measure saline levels outside the Project area along the Baa Dinh River, the Babeo Canal, the Vam Co Tay River, and the Main Canal. Thus, there is, a need to establish a regular monitoring scheme to measure the salinity and acidity levels of the return flows and the water quality within the Project area. Furthermore, with more farmers in the Project area applying large amounts of 46. agrochemicals, runoff may have detrimental effects on the general ecological balance in the Project areas. Also, there is a possibility for pest infestation arising from the unbroken sequence of monocultural rice production. Therefore, more emphasis should be given in farmers' extension and training about appropriate crop protection measures, particularly integrated pest management, to minimize the indiscriminate use of agrochemicals and protect the environment. In addition, some pollution of the Vam Co Tay River and the Bao Dinh River has 47. been observed as a result of the dumping of industrial and domestic wastes from the town of Tan An and the city of My Tho. Because these wastes will probably have an adverse impact on the health and sanitation conditions of the farmers in the Project area, there is a need to monitor

The socioeconomic study did not quantify the decrease in proportion of poor farm households.

12 closely the water and soil quality as well as identify and establish mitigating measures that will prevent these negative impacts. H. Sustainability

48. The area covered by the Project has continued to develop. The facilities provided under the Project such as dikes, canals, and, initially, the pumping stations have acted as a catalyst to both private and public investments. However, facilities such as dikes, sluice gates, and canals need substantial repair as well as replacement. The pumping stations also need to be repaired or replaced by smaller pumps to bring the water to dispersed sites. Additional civil works are needed to raise the height of dikes, replace the existing damaged and manually operated sluice gates, dredge the main and the secondary canals, and construct farm ditches and field channels. 49. Paddy production with yields ranging from 4.0 to 6.0 t/ha per crop and the intensity of cropping reaching 260-290 percent, appear to have reached a plateau from which further increases either in yield or intensity will be difficult to achieve except through the intensive use of fertilizer, pesticides, and water. Under these conditions, the diversification of farming by the production of vegetables, fruit crops, and livestock, has the potential to increase the farmers' income further. However, despite the need for crop diversification, and the repair, maintenance, and replacement of the facilities provided under the Project, the Project is considered sustainable because its impact on agriculture production and incomes in the Project area has been incorporated and owned by the Project population. V. KEY ISSUES 1. Diversification of Agriculture

50. As mentioned earlier, both cropping intensity and yields have reached a plateau. Considering the intensive use of inputs required to raise the yields substantially in future and also the current average size of holding, which is less than 0.5 ha, diversifying into nonrice cash crops such as vegetables and fruits and into animal production, is the key to raising rural incomes and reducing poverty. However, agricultural diversification will require the provision of specific extension services; training for farmers; better control over irrigation water; and better access to storage, credit, transport, and marketing services. The high value vegetable and fruit crops are often perishable and require marketing skills, information, and techniques that paddy farmers in the area presently do not have. The enhancement of the impact of the Project on rural incomes will require an integrated effort to provide the assistance necessary to encourage farmers to diversify. 2. Maintenance and Repair of Project Structures

51. The main and secondary canals, dikes and sluice gates, provided under the Project need repairs or replacement with new ones. The canals have to be deepened, enlarged, and cleaned. The sluice gates need replacement with ones that are automatic and can be opened on both sides, while the height of the dikes needs to be raised. These repairs have not been carried out because of the lack of funds. The Government is collecting only about 20-25 percent of the cost of O&M. A key issue in the future, is the need for the Government to raise irrigation fees.

13 52. Linked to the issue of raising of irrigation fees, is the need to develop a scheme to distribute the responsibilities for O&M among the provincial irrigation offices and the farmers. Such a scheme, if properly devised and implemented, would substantially reduce the Government's expenditure on O&M and increase the farmers' participation in O&M activities. This would, however, require that farmers be organized into groups or associations and be given the responsibility for maintaining, improving and repairing secondary canals, on-farm channels, and ditches. Simultaneously, this should be complemented by a program aimed at improving the capacity of the farmer organizations to fulfill these obligations and strengthening the relationships between the farmer organizations and the provincial irrigation offices. The farmers will need training in basic leadership and management, crop production, financial management, irrigation system management, and group dynamics to enhance their capabilities to undertake O&M responsibilities. 3. The Future of Pumping Stations

53. As mentioned earlier, of the seven pumping stations, only four are presently used for only 200-300 hours per year, a low rate of utilization when the minimum norm is usually about 2,000 hours per year. One of the key issues that needs to be addressed is what should be done with the pumping stations in the future. Should they be abandoned or repaired and used as long as possible? It is recommended that a detailed case-by-case analysis be made of each pumping station to evaluate the options and determine their economic and technical viability in the future. 4. Delivery of Credit

54. The REM interviewed farmers and officials in the Viet Nam Bank for Agriculture (VBA) about the availability of credit. Based on those interviews, it appears that credit is readily available for short-term crop production loans. However, the VBA has expressed serious reservations about the adequacy of funds to meet the expected high demand for loans for diversification purposes, for which the requirements are likely to be much larger and for longer periods as in the case of fruit tree orchards which have longer gestation periods. In conjunction with the drive to promote diversification, the provision of adequate credit particularly for medium and long term will be a key issue to enhance the impact of the Project in the future. 5. Monitoring of Water and Soil Quality

55. The Project has generally improved water quality by reducing salinity and acidity. However, as mentioned in paras. 30, 31, and 32, new sources of acidity and salinity in the soils have been identified. The interruptions to natural drainage because of defective sluice gates is also likely to add to these forebodings. While the sluice gates need to be replaced as suggested in para. 33, it is necessary that the quality of water and soil be monitored regularly by precise instruments and analyzed. At present, most of the equipment is outmoded and located on the boundary of the Project area to check the quality of water entering the area. Consequently, information is lacking about the water and soil quality within the Project area. To achieve diversification and implement remedial measures, the soil and water quality in the Project area needs to be monitored regularly, which is another key issue for future.

14 VI. CONCLUSIONS A. Overall Assessment

56. The actual performance of the Project compared with its designed objectives of solving the problems of recurrent flooding, salinity and acidity intrusion, and sluggish surface drainage, despite several changes in scope, components, and implementation arrangements, has not been very satisfactory. Of the total area irrigated under the Project, the extent attributable to the facilities provided under the Project is a fraction of the estimate of about 8,000 ha at appraisal. The pumping stations are only partially used. The maintenance of canals has not been adequate. The design of the sluice gates provided under the Project was defective and did not improve the drainage in the area. However, by bringing fresh water into the area, the Project has acted as a catalyst to investment in small mobile irrigation pumps and on-farm development, by the farmers, and has controlled the intrusion of saline water and, except in periods of heavy floods, has reduced flooding in the area. As a result of the Project, and of the farmers' as well as of the Government's parallel and complementary efforts, the Project's targets for crop yields and intensity of cropping have been exceeded. The Government's policies of economic liberalization, although external to the Project, have also contributed to the increase in production. Considering the EIRR of about 6.5 percent, along with the sustainability of benefits, the deficiencies in design, and the poor condition of the facilities, the Project is classified as "partly successful."t B. Lessons Learned 1. Project Design

57. The design of the irrigation facilities and distribution structures (such as main and secondary canals) for irrigation by gravity flow was inappropriate and inefficient because the entire Mekong Delta where the Project is located has a generally flat topography. One lesson that the implementation of the Project has reconfirmed is that the gravity irrigation distribution system is inappropriate for irrigating a generally level land. The local irrigation engineers who know the conditions in the area do not seem to have been consulted adequately during the formulation of the Project. Thus, a second lesson is that the Bank should seek the views of local experts and take these views into consideration in the design of projects. 2. Beneficiary Participation

58. The farmers in the area who are the end-users of the facilities provided under the Project were also not involved in either the planning or the implementation of the Project. This resulted in inappropriate designs and sites for some of the main and secondary canals, and their poor maintenance. The lesson here is that the beneficiaries should be involved in the Project as early as possible to make them shareholders and responsible for repair and maintenance. They should also be provided with authority to levy irrigation fees to fund the cost of O&M. However, the Bank is now aware of this issue and has included beneficiary participation as a component in the preparation and implementation of new irrigation projects.

However, staff in the Programs Department considers that the partly successful rating is too generous given the low EIRR and the marginal area irrigated under the Project.

15 3. Measures for Mitigating Environmental Impacts

59. The design of a project should include the identification of possible adverse effects on the environment that may occur during and after implementation. This would require the inclusion of mitigating measures for possible negative impacts, if any, emanating from the project in the design so that these may be prevented and/or minimized. To monitor the impact of projects, a benchmark data base is needed to compare environmental conditions before and after implementation of the project. This benchmark data base should be built into the design of the project. 4. Need for a Comprehensive Approach

60. Yet another lesson that the experience with this Project has provided, is that investment in irrigation, to be productive with minimal gestation period, should be designed with a comprehensive view beginning with the construction of main canals and other major works to the laying of small channels and on-farm development works necessary to carry the water to the fields. An irrigation investment that only includes the major works is incomplete, and requires considerable time, effort, and investment before the water can actually be used for irrigation and converted into higher crop output. Therefore, the lesson is that the design of an irrigation project should cover the sequential interdependent activities required to provide water to the end-user. The financing for these other activities can be determined separately. C. Follow-up Actions

To improve the viability of the Project, the following follow-up actions are 61. recommended: (i) The Bank, in consultation with the Government should review the condition and potential utility of all the seven pumping stations and devise an action plan for their rehabilitation, replacement, or even abandonment; The physical condition and overall utility of the sluice gates need to be reviewed and assessed, possibly through a Bank-financed TA. Changes in the design and technology of the gates may also need to be considered for more efficient operations and effective regulation of saline and floodwater in the area covered by the Project. The water and soil quality at key points in the area should be regularly monitored and remedial action taken to mitigate any deterioration detected in the quality of these two resources; and As a part of the Mekong Delta Development Plan or even independently, the Bank should consider providing a supplementary loan to the two provinces to develop further their irrigation systems. Both the human and the physical resources in the Project area have the potential for further development with minimal incremental investment. The close proximity of the area to the largest city in Viet Nam, the enterprise, experience and skill of its people, and its link with foreign markets, offer scope for further development. The declining size of land holding (0.34 ha per family) makes it necessary that this potential be utilized for continued socioeconomic development of the Project area.

(ii)

(iii)

(iv)

16

APPENDIXES

Appendix

Title

Page

1 2 3 4

Indicators of Agricultural Development, 1982 and 1994 Status and Condition of Actual Facilities Provided Economic Analysis of the Project's Benefits and Costs Proportion of Households Exhibiting Increased Ownership of Durable Goods and Household Appliances, 1994 Relative to 1979 (Percent Increase) Selected Characteristics of Household Headed by Women and by Men

17 18 19

33

34

17

Appendix 1

INDICATORS OF AGRICULTURAL DEVELOPMENT, 1982 AND 1994

1982

1994

Area Development (ha)

Total Cultivated Area First Crop, Paddy Second Crop, Paddy Third Crop, Paddy Total Area Under Paddy Total Area Under Subsidiary Crops Total Cropped Area Cropping Intensity (percent) Total Irrigated

9,130 8,207 5,302 2,579 16,098 310 16,408 180 3,100

8,080 7,411 4,803 7,762 19,976 954 20,930 259 6,800

Yield (ha)

Paddy Subsidiary Crops

3.1

4.8 16.3

10.6

Note:

Area estimates for 1994 were provided by the provincial irrigation office of Tan Gien and Long An. For 1982, estimates of area under paddy and subsidiary crops were made by the REM based oi the available information.

(Reference in text: pages 6 and 9, paras. 26 and 35)

18 Appendix 2

STATUS AND CONDI11ON OF ACTUAL FACILITIES PROVIDED

Description

Unit

Quantity

Date of Last Repair

Nature of Repair

Description of Current Operating Status

Flood Protection Dikes Tan Glen LongAn Main Drain Tan Glen Long An Subsidiary Drain TanGien Long An Electric Pump Station Tan Gien Long An Gravity Irrigation Canal Tan Glen LongAn Intake Sluice Tan Glen Long An Roads Allweather Dryweather km km - - - - - - - - 4 2 1994 1985 Repair gates Repair gates. Difticult to operate. Difficult to operate. - - - - - - - - Poor condition. no. no. 4 3 No repair undertaken yet. 1995 - Replace corroded pipes. Operating at low capacity. Poor operating condition. km km - 27.1 - 1994 - - km km 49.9 12.6 No repair undertaken yet. 1991 - Upgrade Can Dot Sluice. Excavate Ong Hu River. Full of sedimentation. Has become narrow. Sedimented and narrow. km km 14.3 - 1994 - Raise the height of dike. Height of the dike needs to be raised further.

(Reference in text: pages 6 and 8, paras. 27 and 32)

19

Appendix 3 Page 1

ECONOMIC ANALYSIS OF THE PROJECT'S BENEFITS AND COSTS

A.

Assumptions Used 1. General

In the calculation of the economic internal rate of return (EIRR), the "with" and 1. "without" Project scenario has been used to determine the net benefits and costs, which were expressed in 1994 constant prices using the World Bank's manufacturing unit value (MUV) index (January 1995). A standard conversion factor (SCF) of 0.90 was used to convert the price of nontradeable factor inputs (e.g., seeds) to border prices, while the cost of labor (current market rate of $1.48 per person-day) was valued by using a shadow wage rate of 0.60 to reflect the underemployment rate of 40 percent. The economic value of fertilizers and agrochemicals (i.e., pesticides, herbicides, etc.) was valued by multiplying their market prices by a SCF of 0.90. The calculated border prices for paddy (i.e., Thai rice, 5 percent broken) were 2. based on the Commodity Price Outlook of the World Bank, January 1995, from which the economic farmgate price was derived for valuing paddy production in the Project area. The economic prices of subsidiary crops (i.e., cucumber and watermelon) were calculated by multiplying their actual farmgate prices ($98/t and $90/t, respectively) by 0.90. A free market exchange rate of Dong 11,000 per $1 .00 was assumed in converting 3. the benefits and the costs into dollars. 2. Economic Benefits

Under the "with" Project situation, the total cropped area estimates for 1978-1981 4. were derived from the Project Completion Report (PCR) and Project Performance Audit Report (PPAR), while the actual data were used for years 1982-1994. Under the Project, the paddy cropped area in 1978 was estimated to be 10,060 ha, while area devoted to subsidiary crops was 1 040 ha, or a total cropped area of 11,100 ha. The same area increased to 16,408 ha (paddy 16,098 ha, and subsidiary crops, 310 ha) in 1982 and increased further to 20,930 ha in 1994. The total cropped area was assumed to remain at 1994 levels until the end of the Project. The estimates of total cropped area under the "without" Project situation followed the estimates presented in the PCR and in the PPAR. 5. The paddy yields for 1978-1988, under the "with" and the "without" Project situations, were based on the estimates in the PCR and in the PPAR, while the estimates of actual yields for 1989-1994 were based on the actual data obtained from farmers and information provided by the officials in the provincial irrigation offices in Tan Gien and Long An. The paddy yields were assumed to remain at 1994 levels until the end of the Project. The estimates of yields of subsidiary crops were mainly based on information obtained from interviews with individual farmers and from the provincial irrigation offices.

(Reference in text: page 10, paras. 38 and 41)

20

ppendix3 Page 2

6. The agricultural production attributable to the facilities provided under the Project was assumed to be a declining percentage of the total production in the area. In 1984, the contribution of the Project facilities was assumed to be 90 per cent of the area's total production. This percentage contribution would decline by 5 per cent annually, until it reaches 40 per cent in 1994, and would stay at that level until the end of the life of the Project. 3. Costs

The cost estimates for the Project were obtained from the PPAR and were adjusted 7. to 1994 constant prices using the MUV of the World Bank. The cost of operation and maintenance (O&M) was estimated at $5/ha, which was based on actual cost/ha incurred in 1994 in the Project area. The projected O&M costs, starting in 1995, were assumed to increase at a rate of 5 per cent of the previous period's cost to reflect the deterioration of the facilities and the higher cost involved in operating them. B. Economic Analysis

The recalculation of the EIRR, as a measure of the performance of the Project, 8. followed the methodology used in the PCR and in the PPAR, except for some adjustments to reflect recent changes in land use, agricultural productivity, prices, and exchange rate. As several of the developments which have facilitated increases in crop production did not result solely from the Project, the quantified benefits, in turn, cannot exclusively be attributed to the Project. In this regard, the Reevaluation Mission considers the EIRR as conjectural as in previous reports. Based on estimates of quantified benefits and costs, the reestimated EIRR at the 9. reevaluation of the Project is about 6.5 percent, which is somewhat lower than the estimate in the PPAR. The reasons for the lower estimated EIRR, compared with the estimates in the PCR and in the PPAR are: (i) some increases in crop production have occurred independently of the Project; (ii) the substantial reduction in the utilization of the major components of the Project, i.e., pumping stations and the gravity delivery system; (iii) the additional costs incurred by farmers in pumping water to their farms; (iv) the low economic price of paddy; and (v) the slow pace of agricultural diversification.

Table 1: Economic Prices of Paddy

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Import parity price for rice: Thai, 5% broken FOB Bangkok current prices a (S/mt) FOB Bangkok 1994 constant prices b ($/mt) Less: Adjustment for quality C (S/rn) Adjusted rice price ($/mt) Add: Shping costs (S/ni) 144144434434434434434216216216216218287314287270357315315320320320332365365385365365365385 267 236 647 645 655 670 685 338 287 261 243 245 308 330 289 278 357 310 305 302 302 302 291 320 320 320 320 286 286 286 53 47 129129 131 134 137 68 57 52 49 49 62 66 58 56 71 5261 6080605864646484575757 213 188 518 516 524 536 548 270 229 209 195 196 248 264 231 222 286 248 244 241 241 241 233 256 256 256 256 229 229 229 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18

CF Ho Chi Minh City ($Imt) Less: Port charges and handling (S/ni) Exporter's margin (S/ni) Transport to Ho Chi Minh Part (S/mt) Wholesale price in Mekong Delta (S/ni) Less: In province transport (S/ni) Wholesaler's margin (S/ni) Ex- mill factory price (S/nd) Less: Miller's margin (S/mt) Add: By-product value (S/ni) Less: Losses in drying and milling ($/mt) Dealer's maIin (S/mt) Economic price of rice at mill (S/ni) Equivalent price of paddy at mill d (S/nd) Less: Cost of handling and transport from farm ($/mt) Economic farmgate price of paridy (S/mt) Economic farrngate price of paddy (S/l)

231 206 536 534 542 554 566 288 247 227 213 214 264 282 249 240 304 266 262 259 259 259 251 274 274 274 274 247 247 247 8 5 10 8 6 10 8 5 10 8 6 10 8 6 10 8 8 10 8 8 10 8 6 10 8 8 10 8 6 10 8 6 10 8 6 10 8 6 10 8 8 10 8 6 10 8 6 10 8 6 10 8 6 10 8 6 10 8 6 10 8 8 10 8 6 10 8 6 10 8 6 10 8 6 10 8 6 10 8 6 10 8 6 10 8 6 10 8 6 10

207 182 512 510 518 530 542 264 223 203 189 190 240 258 225 216 280 242 238 235 235 235 227 250 250 250 250 223 223 223 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 184 159 489 487 495 507 519 241 200 180 166 167 217 235 202 193 257 219 215 212 212 212 204 227 227 227 227 200 200 200 , -s 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10 14 10

153 128 458 456 464 478 488 210 169 149 135 138 186 204 171 162 226 188 184 181 181 181 173 196 196 196 196 169 189 169 97 81 288 287 292 300 307 133 107 94 85 86 117 128 108 102 142 119 116 114 114 114 109 123 123 123 123 106 106 106

7 78

90 74 281 280 285 293 300 126 100 87

79 110 121 101

95 135 112 109 107 107 107 102 116 116 118 118 99 99 99

0.09 0.07 0.28 0.28 0.29 0.29 0.30 0.13 0.10 0.09 0.08 0.08 0.11 0.12 0.10 0.10 0.14 0.11 0.11 0.11 0.11 0.11 0.10 0.12 0.12 0.12 0.12 0.10 0.10 0.10

a Source: World Bank, Commodity Price Outlook as of February 1995. b Paddy price calculated in 1994 constant prices; GV- MUV in 1990 constant prices readjusted to 1994 prices (1994=100). c Quality adjustment factor of 20 per cent. d Average milling recovery rate of 63 per cent. -o CD

Table 2: Detailed Breakdown of Project Costs

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Annu cost al 1987 pncss ($020)

106

140 4051

537

532

632 1,196 1196

590

124

MNal1990conslmtpdces a 57.94 65.62 71.97 72.26 71.15 69.53 68.05 MUVatl9Q4consWrtpdces b Mnual costat lOO400nsteit _s (S'020)

68.6 80.89 88.84 95.31 94.65 10000 102.23 10664 104,22 107.35 10899 11094 11381 11381 11381 122.53 122.53 122.53 122.53 122.53 13689 13689 13680

53.97 61.13 67.04 67.31 66.28 64.77 63.39 63.90 75.35 82.76 88,78 88.17 93.15 95.23 90.34 97.08 10000 101.53 10334 10602 10802 10602 11414 114,14 11414 114,14 114.14 127.52 127.52 127.52 128 169 4,695 649 643 764 1,445 1,445 713 150

a Source; Wortd Bank Commodity Price Projectbns, 9 November1992. b GV-MUV in 1990 constant prices readjusted to 1994 pnces (1994=100).

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N Ng N -4 0 N -4 0 0 OCrN
Cr -'N N 0 0 Cr01 N Cr

OCnN O(rN OCrN CrOU,P4

Cr CO (r N CCC

N N N : N j CO

N -4 0 00CrCIC N N
N

9 8bc CXIPLJeckty

CCCOCCCN

Table 4: Farm Production Costs Without Project (S/ha)

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Without Project A. Rainfed paddy Cost of Material Inputs a

Seeds Fertilizers Agrochemicals Total Cost of Material Inputs
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 58 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 91 97 97 97 97 97 97 97 97 97 97 97 97 97 97 97 91 97 07 97 97 97 97 97 97 97 97 97 97 97

Cost of Labor b
Land preparation Sowing Fertilizer/Pesticide Application Weeding Harvesting/Threshing Total Labor Cost
25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

4 4 4 4 4 4 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 4-4 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119 119

Total Production Cost B. Cucumber c Cost of Material Inputs

Seeds Fertilizers Agrochemicals Total Cost of Material Inputs

217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217

14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 59 50 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 103

Cost of Labor
Land preparation Sowing Fertilizer/PesticideApplication Weeding Harvesting/Threshing Total Labor Cost
25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 71 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174 174

Total Production Cost Cucumber C. Watermelon c Cost of Material Inputs

Seeds Fertilizers Agrochemicals Total Cost of Material lnptrts

16 16 16 18 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 87 67 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 87 67 87 87 87 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142 142

Cost of Labor
Land preparation Sowing Fertilizer/Pesticide Application Weeding Harvesting/Threshing Total Labor Co St
25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 11 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5 17 17 5U 17

68 68 68 68 88 68 68 68 68 68 68 68 68 68 68 68 68 68 68 68 68 68 88 68 68 68 88 88 68 68 (1)

Total Production Cost

a b c

210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210 210

C')

Cost of material inputs adjusted by a Standard Coversion Factor of 0.90 and expressed in 1994 constant prices. Cost of labor adjusted by a Standard Conversion Factor of 0.60. Representative subsidiary crop.

Table 5: Crop Area Development (ha)

1978 1979 1980 1981 1982 1983 1984 1985 1960 1967 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

With Project a Paddy Subsidiary Crops

Cucumber Watermelon 572 472 382 314 155 186 217 248 279 310 341 372 403 434 465 496 525 525 525 525 525 525 525 525 525 525 525 525 525 525 468 388 294 180 155 178 201 224 247 270 223 316 339 362 385 406 429 432 429 429 429 432 432 428 428 425 432 429 432 429 iO,080 11,570 13,080 14,590 18,028 16,421 16,744 17,067 17,390 17,713 18,036 18,359 18,682 19. 19,328 19,651 19,976 19,976 19,976 19,976 19,978 19,978 19,976 19,976 19,976 19,976 19,978 19,976 19,976 19,976

Area Under Subsidiary Crops 1040 856 676 494 310 384 418 472 526 580 634 688 742 798 850 904 954 954 964 954 964 954 954 964 964 964 954 954 954 954

Without Project b Paddy Subsidiary Crops

Cucumber Watermelon 608 606 608 906 608 624 624 824 824 838 647 847 647 647 847 647 647 1,177 1,177 1,177 1177 1,177 1,206 1,206 1,206 1,206 1,208 1,206 1,208 1,206 744 744 744 744 744 782 782 782 782 778 791 791 791 791 791 791 791 294 294 294 324 324 202 302 302 303 202 303 10,306 10, 10, 10,303 10,203 10,458 10,458 10,458 10,458 12,584 12,654 12.654 12,654 12,654 12,854 12,854 12,654 13,841 13,841 13,841 13,841 13,641 14,005 14,005 14, 14,005 14,025 14,005 14,905 14,035

Area Under Subsidiary Crops 1.352 1.362 1352 1352 13S2 1.388 1388 1386 1388 1,414 1438 1438 1438 1.438 1438 1.438 1,471 1,471 1,471 1,471 1,471 1,471 1508 1.506 1.508 1.508 1.506 1.508 1.508 1508

a Area estimates based on information provided by the provincial irrigation offices of Tan Glen and Long An. b Total area under paddy and subsidiary crops were based on PCR and PPAR estimates.

-u (D

C')

Table 6: Crop Yields a (mt/ha)

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

With Project Paddy Subsidiary Crops Cucumber Watermelon Without Project Paddy Subsidiary Crops Cucumber Watermelon
3.0 3.0 3.1 3.1 3.1 3.2 3.3 3.3 3.3 3.3 3.4 3.5 3.5 3.7 38 4.1 4.3 4.3 4.3 4.3 4.3 4.3 43 43 43 43 43 43 43 43 1) 0) 7.3 7.3 7.3 7.3 7.3 7.7 7.7 7.7 8.0 8.5 8.9 9.1 9.4 9.5 9.6 9.9 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 3.1 3.2 3.2 3.2 3.2 3.4 35 3.5 3.6 3.7 4.1 4.2 4.3 4.5 4.6 4.7 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8

12.5 12.5 12.5 12.5 12.5 13.1 13.1 13.1 13.5 14.0 14.5 14.8 15.2 15.8 16.1 16.6 16.8 16.8 16.8 16.8 16.8 168 16.8 16.8 16.8 16.8 16.8 16.8 16.8 16.8

7.0

7.0

7.0

7.0

7.0

7.2

7.4

7.5

7.7

8.1

8.4

8.7

8.9

9.2

9.4

9.6 10.1 10.1 10.1 10.1 10.1 10.1 10.1 10.1 10.1 10.1 10.1 10.1 10.1 10.1

11.8 11.8 11.8 11.8 11.8 12.2 12.5 12.9 13.3 13.7 14.1 14.5 14.9 15.4 15.9 16.3 16.5 16.5 16.5 16.5 16.5 16.5 16.5 16.5 16.5 16.5 16.5 16.5 16.5 16.5

Paddy yield estimates over the period 1 978- 1988 were the same as those of the PCR and PPAR.

-o
CD

(a)

Table 7: Crop Production (mt)

1978 1979 1980 1961 1962 1963 1984 1985 1986 1987 1988 1980 1990 1991 1992 1993 1994 1995 1986 1997 1998 1989 2 2061 2 2 2004 5 2 a07

With Project
Paddy Production 31188 37,024 41,858 46,688 51,514 55,831 58,804 50,735 62,804 65,538 73,948 77,108 80,333 85,533 88,906 92,380 95,885 95,885 95,865 95,885 95,685 95,885 95,885 96,865 95,885 95,885 95,685 95,885 95,885 95,885

SuIay Crops Cucumber Watermelon 4,176 3,446 2.789 2,322 1,132 1,426 1,663 1,901 2,245 2,620 3,026 3,4(X) 3,794 4,126 4,465 4,906 5,445 5,445 5,445 5,445 5,445 5,445 5,445 5,445 5,445 5445 5,445 5,445 5,445 5,445 5,850 4,825 3,675 2,250 1,968 2,338 2,838 2,940 3,335 3,701 4,237 4,661 5,150 5,733 6,205 6,773 7,191 7,191 7,191 7,191 7,191 7,191 7,191 7,191 7,101 7,191 7,191 7,191 7,191 7,101

Subsidiary Crops Production 10,028 8,271 8,464 4,542 3,060 3,762 4,351 4,841 5,580 6,411 7,262 8,081 8,944 9,848 10,670 11,679 12,635 12,635 12,635 12,635 12,635 12,835 12,835 12,635 12,535 12,635 12,635 12,635 12,635 12.635

Without Project
Paddy Production 30,906 30, 31,939 31939 31,930 33,468 34,511 34,511 34,511 41,527 43,024 44,280 44,289 46, 48,085 51,881 54,412 59,518 59,518 50,518 50,518 50,516 80, 83, 80,322 80, 80, 80, 66,232 80.

Subslmaiy Craps Cucumber Watermelon 4,250 4,259 4,250 4,259 4,250 4,407 4,632 4,678 4,772 5,158 5,457 5,620 5,769 5,953 6, 6,204 6,514 11,850 11,850 11,850 11,850 11,850 12,142 12,142 12,142 12,142 12,142 12,142 12,142 12,142

8,774 8,774 8,774 8,774 8,774 9,285 0,543 9,899 10,124 10,643 11,145 11,419 11,824 12,178 12,544 12,920 13,049 4,850 4,850 4,850 4,850 4,850 4,962 4,962 4,982 4,962 4,962 4,962 4,962 4,962 17,196 17,613 18,141 18,826 19,124 19,563 16,705 16,700 18,796 16,705 16,705 17,124 17,124 17,124 17,124 17,124 17,124 17,124 17,124

Subsidiary Crops Production 13,963 13,963 13,963 13,963 13,963 13,762 14,175 14,507 14,896 15806 18,

-u

Ca CD Co
(A)

Table 8: Value of Production ($'OOO) a

1978 1979 1060 1981 1082 1983 1984 1985 1968 1967 1968 1980 190] 1991 1902 1903 1994 1995 1996 1997 1998 1999 2

2981

4 9905

With Project ProductionVakiePaddy Stsid.iy Crops Cucumber Watermelon ProductionValue Sthsidiry Crops Without Project Production Value Paddy &asmsy Crops Cucumber Watermelon Production Valus
Sthsidiary Crops
417 417 417 417 417 441 2,772 2.285 8.998 8,948 9,110 9,603 10,352 4,333 3,440 3,602 3,348 3,484 4,893 5,683 4,848 4,948 7,353 6,840 6,477 6.388 6,388 6.368 6,130 405 338 273 355 111 140 163 186 220 257 2796 2,737 11,781 13,080 14,693 16,354 17,596 7.505 6.240 5,685 5,754 6,086 8,875 10,381 8,963 8,808 12,957 10,698 10,434 10,291 10,291 10.291

9,161 11,158 11,158 11.158 11,158 9,537 9.537 9.537

297 333 372 404 438 481 534 534 534 534 534 534 534 534 534 534 534 534 534 534 647 647 647 047 647 647

527 434 331 208 174 210 337 265 300 341 381 420 464 515 558 610 647 647 647 547 847 647 647 647 936 772 604 427 265 350

4(3)

451

520

508

678

753

835

919

996 1,050 1,181 1,181 1,181 1,181 1,181 1,161 1,181 1,181 1.181 1,181 1,181 1,181 1,181 1,181

7,

7,086

7,OZ 7,986 5,998 5.993 5.90)

454

458

488

505

535

551

567

584

590

608

838 1,161 1,161 1,101 1,161 1,161 1,190 1,190 1,190 1,100 1,190 1,190 1,190 1,190

790 790 798 790 790 834 859 885 911 958 1,933 1,053 1,954 1,056 1,129 1,183 1,174 437 437 437 437

437 448 448 448 448 448 448 448 448

1,207 1,207 1,201 1,207 1,207 1,275 1,313 1,343 1,370 1,463 1,538 1,564 1,631 1,680 1,725 1,771 1,813 1,506 1,598 1,508 1,506 1,596 1,698 1,638 1,638 1,636 1,688 1.898 1,638 1,838

a Exchange rate: VND1 1 ,)0 per US dolar.

-u ca
(D -to. o
CA)

Table 9: Production Cost ($'OOO) a

1978 1979 1980 1981 1982 1983 1984 1985 1988 1987 1088 1989 1990 1001 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

With Project Production Cost Paddy Subsidiary Crops Cucumber Watermelon Production Cost Subsidiary Crops Without Project Production Cost Paddy Subsidiary Crops Cucumber Watermelon Production Cost Subsidiary Crops
106 106 106 106 108 109 109 109 109 111 113 113 113 113 113 113 113 205 205 205 205 205 210 210 210 210 210 210 210 210 156 156 158 156 156 160 160 160 160 163 166 166 166 166 166 166 168 62 62 82 62 02 83 63 03 63 63 83 63 03 282 262 262 262 282 269 260 269 269 274 279 279 279 279 279 279 279 267 267 267 267 207 273 273 273 273 273 273 273 273 2,232 2,232 2,232 2,232 2,232 2,265 2,285 2,265 2,265 2,728 2,741 2,741 2,741 2,741 2,741 2,741 2,741 2,998 2,998 2,998 2,998 2,998 3,033 3,033 3,033 3,033 3,033 3,033 3,033 3,033 158 131 106 87 43 51 132 109 83 51 44 50 60 69 77 86 94 103 111 120 129 137 145 145 145 145 145 145 145 145 145 145 145 145 145 145 57 83 70 76 83 89 96 102 109 115 121 121 121 121 121 121 121 121 121 121 121 121 121 121 2,712 3,119 3,526 3,033 4,340 4,427 4,514 4,601 4,688 4,775 4,883 4,950 5,037 5,124 5,211 5,298 5,386 5,386 5,386 5,386 5,386 5,386 5,386 5,386 5,386 5,386 5,386 5,386 5,388 5,386

291240189138 87102117 132 147162 177192207222237253286266286266268286266266266266286268266268

a Exchange rate: VND1 1,000 par US dollar.

-u cD ('3

Table 10: Incremental Benefits, ($'OOO) a

1978 1979 1980 1981 1982 1983 1984 1985 1988 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Net Beneft ($000) With Project 729 150 8,670 9,436 10,552 12,175 13,366 3,218 1,925 1,346 1,393 1,677 4,466 5,954 4,511 4.348 8,485 6,227 5,963 5,820 5,820 5,820 5,290 6,687 6,687 6,687 6,687 5,066 5,066 5,066 999 7,703 7,661 7,823 8,543 9,141 3,142 2,285 2,068 1,866 2,049 3,505 4,344 3,553 3,699 6,146 4,974 4,810 4,721 4,721 4,721 4,462 5,339 5,339 5,339 5,330 4,321 4,321 4,321

Without Project 1,485

Incremertal Benefits (756) (848) 967 1,774 2,728 3,450 3,802 64 (288) (540) (332) (242) 577 885 479 292 938 501 481 439 439 439 331 539 539 539 530 298 298 298 C') 0 a Exchange rate: VNDI 1.000 per US dollar.

0 ro C')

Table 11: Operation and Maintenance Cost ($000) a

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Paddy

50 58 5 4

65 73 80 82 84 85 87 89 90 92 93 95 97 98 100 105 110 115 121 127 134 141 148 155 153 171 179 188 3 2 2 2 2 2 3 3 3 3 4 4 4 5 5 5 5 6 6 6 6 7 7 7 8 8 9 9

Subsidiary Crops

Total Operation and

55 52

69 75 82 84 86 88 90 91

93 95 97 99 101 103 105 110 115 121 127 134 140 147 155 162 170 179 188 197

Maintenance Cost b

a Operation and maintenance cost per hectare was based on actual 1994 O&M cost, estimated at about VNDI 00,000 or about US$9.00 which is about 500 per cent of O&M cost per ha in 1993. b O&M cost per ha was assumed to increase by 10 per cent yearly over the period 1995-2007 to reflect increasing cost of O&M of the Project facilities.

C,)

CD C.) 5 C,)

32

Appendix 3 Page 14

Table 12: Calculation of Economic Internal Rate of Return (EIRR) Cost O&M ($'OOO) 56 62 69 75 82 84 86 88 90 91 93 95 97 99 101 103 105 110 115 121 127 134 140 147 155 162 170 179 188 197 EIRR= 6.5% Incremental Benefits ($'OOO) 756 848 967 1774 2728 3450 3802 64 288 540 332 242 577 885 479 292 936 501 461 439 439 439 331 539 539 539 539 298 298 298

Year

Investment ($'OOO) 128 169 4,895 649 643 764 1,445 1,445 713 150

Total ($'OOO) 184 231 4,964 724 725 848 1,531 1,533 803 241 93 95 97 99 101 103 105 110 115 121 127 134 140 147 155 162 170 179 188 197

Cash Flow ($'OOO) (939) (1,080) (3,997) 1,050 2,003 2,602 2,271 (1,469) (1,091) (782) (425) (337) 480 786 378 189 831 391 346 318 312 306 191 392 384 377 368 119 110 100

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

33

Appendix 4

PROPORTION OF HOUSEHOLDS EXHIBITING INCREASED OWNERSHIP OF DURABLE GOODS AND HOUSEHOLD APPLIANCES. 1994 RELATIVE TO 1979 (PERCENT INCREASE)

Proportion of Household Type of Property 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Dwelling Draft animals Water pump Grinder Barge TV sets Motorcycle Cassette radio Sewing machine Electric fan Within the Project Area 55 17 32 2 13 47 36 19 11 11 Outside the Project Area 40 20 25 0 5 40 15 35 15 20

Source:

Socioeconomic Survey, Reevaluation of the Tan An Integrated Agricultural Project (L207VIE[SF]), March 1995.

(Reference in text: page 11, para. 44)

34

SELECTED CHARACTERISTICS OF HOUSEHOLDS HEADED BY WOMEN AND BY MEN

Households Headed Characteristics 1. ______ byWomen 8

Households Headed by Men 39

Number of total households in the sample Proportion in the Total (percentage) Percentage of households growing three crops of rice Proportion of households growing subsidiary crops Proportion of households undertaking fish culture Proportion of households engaged in animal breeding Average production mt/ha per season of rice crops in the three rice seasons

2.

17

83

3.

75

72

4.

25

33

5.

12

56

6.

50

62

7.

4.5 to 5.0

4.2 to 5.0

Source:

The Socioeconomic Study 1995, Final Report by Consultant on Reevaluation of Tan An Integrated Agricultural Project, Appendixes 9 and 10.

(Reference in text: page 11, para. 44)