ne.nment of Fli r fflDV The World Bank a s MDU I FOR OFFICIAL USE ONLY Reprto.3 54 0 THE WORLD BANK PROJECT PFRFORMANCRF. AIMTT REPORT KOREA SECOND AGRICULTURAL CREDIT PROJECT (LOAN 117R-RON) Operation EvaluatiLon Department This document has a restricted distribution and may be used by recipients only in the performance of their offelal duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS EDT - Fronomic DPvelonment Tnstitute KC - Kun Cooperative TAns - T.oan Annraisal Officers of PGCs NACF - National Agricultural Cooperative Federation PrR - Proipct Comnletion Renort PGC - Participating Gun Cooperatives PU - Proert Unit of NACF TU - Technical Unit lst Projent - The First Acriii1ti1r4 Credit Project (335-KO) 2nd Project - The Second Agricultural Credit Project (1328-KO) The~~ Projec~t, - Tntlirnfoc thp~ qpcrnnri Prnipoot FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT KOREA SECOND AGRICULTURAL CREDIT PROJECT (LOAN 1328-KG) TABLE OF CONTENTS Page No. Preface ...........................................................I Basic Data Sheet . . ........ *........ 0..........*..................1 Highlights ...................... 0.................................. iv PROJECT PERFORMANCE AUDIT MEMORANDUM I. Summary .. . . . . .... 0................................. 1 II. Main Issues ............................................ 2 Annex I Borrower Comments .. .................... ............... 5 Attachments: I OVERVIEW ***************************************..... 6 II PROJECT COMPLETION REPORT ............................ 11 M ap itz -hi w.".- = suac- u dUstibuuion and may be used by recipients only in the Performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - 1 - PROJECT PERFORMANCE AUDIT REPORT KOREA SECOND AGRICULTURAL CREDIT PROJECT (LOAN 1328-KO) PREFACE This is a performance audit of the Korea Second Agricultural Credit Project for which Loan 1328-KO in the sum of US$20.0 million was approved in September 1976. The final disbursement was made on March 17, 1980 and the Loan was closed on June 30, 1980 as scheduled. The First Agricultural Credit Project (Credit 335-KO) was approved in May 1972 and fully disbursed in May 1976. This report consists of an audit memorandum prepared by the Opera- tions Evaluation Department (OED), a project completion Overview prepared by the East Asia and Pacific Regional Office and a Project Completion Report (PCR) prepared by the Borrower. The Audit Report is based on: a review of the Appraisal Report (No. 1233-KO) dated September 1, 1976, the President's Report (No. P-1912-KO) of September 9, 1976, the Loan and Project Agree- ments dated October 12, 1976, the Project Performance Audit Report of the First Project (PPAR No. 2263) of November 14, 1978, the Overview and the PCR; a review of correspondence with the Borrower and internal Bank memoranda on proiect issues as contained in relevant Bank files; interviews with staff who have been associated with the project; and on an OED mission to Korea in February 1981. The OED mission held discussions with officials of the National Agricultural Cooperative Federation in Seoul, managers and with other person- nel of the county and Trimarv coonerative and hpnfiriarv fqrmpr. in unrion provinces of Korea. The information obtained during the mission through nhrervations, discusqinn and renorts wq iaed inter nlin n AV1uqt-e the conclusions of the PCR. A copy of the draft report was sent to the Borrower on April 27. Rorrower comments hnve hen taken intn acrount in the PPAR nnd qre netrhad as Annex 1. The audit suggested some changes in the PCR, which were accepted and inrliieae therein- On thp hncic nf tha nl%nua niii-linei nrprure, thei auit- finds the PCR to be a comprehensive review of the project's problems and achievements. The memorandum discusses several mi nor issues related to subproject selection and design which are important for this and future Bank Agricultural VUQ Cooertieedrai in Su and~U he LLL L.L.L of the catiount Agricultural Cooperative Federation in Seoul and the officials of the county and primary CUOperatives aLLd benefi...Cary farmers!L ib ratefCul.ly acknoW.ledged.u  - 11 - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET RORRA SECOND AGRICULTURAL CREDIT PROJECT (LOAN 1328-KO) KEY PROJECT DATA Appraisal Actual or item Expectation Currnt Estimates Overrun (%) 5 Toan. Am-.-4- /TY06 -4 1 1 4m nA Disbursed ) -- 20.0 Cancelled - -- Repaid ) as of 28 February, 1981 1.48 Date Physical Components completed 06/80 05/80 ~~~~~ A~ A.., I. AnAO10 PropuLuu t UunCmpleteu Uy uuve v \"ate"N v v Economic Rate of Return (%) 29-38% 23% Financial refurmance rully satisfactuy Institutional Performance Fully satisfactory Cumulative Estimated and Actual Disbursements (US$ million) FY78 FY79 FY80 Estimated 5.5 12.4 20.0 Actual 4.8 13.5 20.0 Actual/Estimated (%) 87 109 100 OTHER PROJECT DATA Original Actual or Item Plan Revisions Current Estimated First Mention in Files - 05/--/74 Government's Application - - 03/--/75 Neeotiations 08/08/76 - 08/08/76 Board Approval 09/21/76 - 09/21/76 T.nan AorpPmPnt Datp 10/12/76 - 10/12/76 Effectiveness Date 01/10/77 - 03/10/77 Cnine iaatp 06/10/RO - 06/10/RO Borrower Government of Korea Rxprutinp Appnev Natinnal Aprien1ttira1 Conn. Fpd. (NACF) Fiscal Year of Borrower January 1 - December 31 Prerding Prniort Firat Aarititiiral rPdit Prninrt- Credit Number 335-KO Amount (TTQt m4ll4nn) 10.5 Agreement Date September 29, 1972 Walln-a DenaneAnv4 UltUn CreditF Dr04 ^+ TTT Loan Number Pending A--...- /TTo0 1 1A A AgUeementOY ULDaeL.L.IJ Pj.d Agreement Date Pending - iii - MISSION DATA Month/ No. of No. of No. of Date of Item Year weeks Persons Manweeks Report Preparation 03/75 2.0 2 4.0 05/01/75 Appraisal 11/75 4.5 5 22.5 09/01/76 Total 26.5 Supervision I 10/76 1.0 2 2.0 11/12/76 Supervision II 06/77 2.0 2 4.0 08/12/77 Supervision III 11/77 2.0 2 4.0 12/14/77 Supervision IV 04/78 2.0 2 4.0 05/15/78 Supervision V 11/78 2.0 1 2.0 01/12/79 Supervision VI 06/79 2.0 2 4.0 08/01/79 Total 20.0 Completion 06/80 0.5 1 0.5 - COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) Won (W) Year: Exchan2e Rate: Appraisal Year Average (1975) US$1 = W485 Intervening Years Avera2e (1976-79) USA1 - W485 Completion Year Average (1980) US$1 = W580 - iv - PROJECT PERFORMANCE AUDIT REPORT KOREA SECOND AGRICULTURAL CREDIT PROJECT (LOAN 1328-KO) HIGHLIGHTS The project provided medium and long-term credits to farmers for investments to diversify to and increase production of high valued crops under improved technology. The loan continued to support the type of on-farm development initiated through the National Agricultural Cooperative Federation under the First Credit Project, with some shifting to alternative products favored by increasing market demand. Largely because of institutional development achieved under thp first project, including improvement of sub-loan appraisal and on-farm super- vision procedures. disbursements moved ranidly and excedPd annraiRal Pnprn- tions by three months. Demand for sub-loans for sericultural development and snrinkler irrigation fP11 hplow annrniqn1 PwnprAtinnc hiif the cln.V wa tnV rn up by increased demand for other types of investments, especially those for n1aqtir irnn-frampt crPPnhntimP. At nroject ompletIon, 7,648 1ub-lons had been made, just 3% short of the level envisaged at appraisal. Partly bprausp of t-hp ranpid rate of dichursaments in a perIod of hIgh InflatIon, there was a cost overrun of just 5%. The re-estimated economic rate of return to the nrniant ic 917~ At appraisal, thea rates of ret-urn to- #-, s components were estimated at between 29 and 38 %, no overall rate of return to the project was estimated. appraisal of market fur aw silK was LLuC1UCtC krrAM paL. Jz PCR para. 5.01 and 5.07); - technical packages for irrigation of apples and greenhouses for fruits and vegetables were not optIma-l InpAI paa.7 9);. and - technical assistance to farmers investing in high technology pLUjecLs nCCUs t De LLtelgLtelledl kr1 overview para. 10 and PCR para. 5.06).  PROJECT PERFORMANCE AUDIT MEMORANDUM KOREA SECOND AGRICULTURAL CREDIT PROJECT (LOAN 1328-KO) I. SUMMARY 1. The Second Agricultural Credit Project aimed to support the Govern- ment's high priority programs to increase farm output and incomes through diversification and modernization of agricultural production. The three-year project continued to support subprojects similar to those financed under the First Credit Project. The Project was expected to provide medium- and long- term loans to support investments in apple orchard development, sprinkler irrigation for orchards, silkworm rearing houses, plastic ironframed green- houses for vegetable production and on-farm storage for fruits. In contrast, the First Credit Project financed sub-loans for poultry, swine, orchards and sericulture. The National Agricultural Cooperative Federation (NACF) was responsible for implementing both projects. 2. During implementation of the Second Credit, the demand for sub-loans for silkworm rearing houses and sprinkler irrigation for orchards was signifi- cantly less than expected while demand for apple orchard development was only slightly less. These reductions were offset by a moderate increase in the investment demand for on-farm fruit storage and a very large increase in the demand for greenhouses. The Bank agreed in August 1979 to reallocate loan funds from silkworm rearing houses and sprinkler irrigation to greenhouse sub-loans. In total, 7,648 loans were made for all types of subprojects compared with 7,900 expected at appraisal. The total project cost was just slightly above (5 percent) the amount of US$41.2 million expected at ap- nraisal. Sub-loan anrovals and disbursements went well, and the loan was fully disbursed three months ahead of schedule. 3. Because most of the sub-loans are in their grace periods it is too soon to fully evaluate repayment performance. However, for those sub-loans which are in their repayment period, the collection ratio was about 90% in June 1980. The overall successful implementation of the project is largely due to the fact that NACF is a large, long-established, cooperative credit instittion an effective Prolect Unit (PU) was developed in NACF and Loan Appraisal Officers in the Country (Kun) cooperatives were trained during imnlpmntaion of the First Credit Proiect. The development of PU's skills was facilitated by the training of one of its key officers at EDI. The PU rntinued on imnrnue its ability to Drenare and appraise proiects for financ- ing by NACF under The Second Credit Project by internal staff training and through training of three additiona1 stnff members at EDT courses in Washing- ton and East Asia. Through the project, continuity of Unit personnel was mainineA b- an gremaent smnnnrted hy the Rank- that they could be promoted a e i Tr ha been a i n n and remain in the Unit. There had been a rapid turnover in Unit personnel under the first project because, in order to be promoted, they had to transfer to other agencies. The PU also continued to train loan officers in the county offices of the cooperatives in methods of subproject preparation and apprais- al. In addition, it has developed appraisal handbooks in Korean, based on materials it has obtained from EDI. 4. The re-estimated rate of return as presented in the PCR is high for all subprojects financed under the project. All rates of return are above 20 percent, and except for silkworm rearing houses. However, the audit disagrees with some assumptions that were made in estimating future returns to several of the subprojects. This, inter alia, will be discussed in the following section. II. MAIN ISSUES 5. The audit has only a minor concern about the project as it was prepared, appraised and implemented, which is: could the decline in or, in reality, lack of demand for sub-loans for sericulture and sprinkler irrigation have been anticipated and thus could the project have avoided some poor investments and loss of staff time? 6. Concerning the prospects of the silk industry, most of Korea's silk exports have gone to Japan where, because of a special agreement, they received a premium price, significantly above the world market level.I/ When the world market for processed silk declined and stocks rose around 1975, Korea's export quota to Japan was reduced. NACF was then forced either to subsidize sericultural farmers and export to other world markets at lower prices or reduce the prices (real) paid to farmers for cocoons.V NACF chose to reduce prices paid to farmers and to discontinue loans to farmers for mulberry plantings (which it was doing outside of the project). As a result of the reduced price for cocoons, the demand for loans for silkworm rearine houses declined. At the end of the project, loans made for silkworm rearing houses reached only 14 percent of the number expected of anraisal. As a result of the over-optimistic forecasts of silk demand, about 500 cocoon nroducers are now saddled with unnrofitable investments. Further, in the audit's judgment prices used to compute the economic rate of return for thia Qiihnrniprf are too hiah- Tn todAv'a markraf -hp Ponni nrina ii about- 75 percent of the price used to re-estimate the economic rate of return and at this price, the economic rate of return to silkworm rearing houses is negative. 1/ Conversation with Robert Fisher, Fisher & Co., New York City, N.Y. 2/ NACF has both a monopsony and a monopoly in cocoon marketing in Korea. -3- 0. 1H UW o dw U LUL bLinkL irriiLLun Lr apples -Is also due o unsatisfactory profitability. In the appraisal and completion reports, it was assumed that benefits would be constant and continuous over time. ow- ever, according to other experts, and the audit agrees with them, benefits are likely to be very irregular in a high rainfall region such as Korea. Thus, realistically, benefits should be based on a weather pattern or an irregular scenario of production over time. Sensitivity analysis shouU also have been done for this type of investment, using alternative runs of good and bad years in order to give a more realistic picture of irrigation profitability. The audit, lacking sufficient information on relevant weather patterns affecting the sprinkler irrigation subprojects, was unable to do this calculation. How- ever, a rate of return was estimated, using an economic rather than financial price for apples -- the economic price is two-thirds or the financial price. At the economic price, the rate of return to the sprinkler irrigation sub- project is 25 percent compared with the PCR estimate of 36 percent. If realistic incremental production resulting from the project were used, the rate of return would be significantly below 25 percent. 7. Further, the project financed overtree sprinklers. This type ot irrigation is inefficient in the use of water and costs about three times as much to install as drip irrigation. In addition, overhead sprinkling only promotes early apple maturity and improves quality when the ambient tempera- ture is consistently above 87 degrees..! Even under such conditions, the technology may not be profitable. 8. With irrigation from wells, as was the case in Korea, drip irriga- tion would have been the best technology to promote. Such systems as noted above, cost about one-third as much to install as overtree sprinkler irriga- tion. Further, they save water and perform without problem when the water has little sediment to clog orifices, as is usually the case with water from wells. 9. Finally, the choice of technology for greenhouses was not the best either. Fortunately. farmers chose not to take up loans for the greenhouse technology specified at appraisal which included heaters, fans and sprinklers as well as metal pipe frames. They chose instead to adopt only the metal pipe frames which were less costly than the "full technological package" but more costly than the traditional bamboo frames. But metal frames withstand high winds better than wooden frames and, therefore, are cost effective. Further- more. greenhouse farmers appear to be ahead of project specification and experts in that they are, in some cases, using double rather than single vinyl coverings to better retain solar heat. 1/ C.R. Unrath_ "The Evanorative Cooling Effects of Overtree Sorinkler Irrigation on 'Red Delicious' Apples." Journal of the American Society fnr Mart-iriltuirq1 qrlPnrP Vol. 97 No. 1 .Tan. 1972. -4- --=.* k- W*~ ~ J W jJJ .L L ULAL. L L= LL==U U)' LLL= 0aI. to employ personnel or to hire consultants who have sufficient expertise L. LJ - f4L -t" - "b.L F & VU1W U)Y LLL= JJ ~ LL- JL UU-L ir, knowledge of local ecology. In the Second Agricultural Credit Project, this expertJise wras .neeA eA .Mosntly to conterva"w th1 op- sws... J. 4- - _ kc D1 - . . C LLADe Was LCCUGM L-J LUJ t VOLV. L.IC U LIR.LM.LU l UL LLL1 DULLUWtL. 1/ RPP for Pyample. OED's Proiect Performance Audit Renort. No. 3247. Indonesia - Tea Project (Credit 259-IND), December 31, 1980, pp. 3 .qnd 4. WORLDBANK440096o NAPOF K27421 Most 1 TLX 10:440098 WORLDBANK WASHINGTON,D.C. MAY 13, 1981 FOR MR.SHIV S.KAPUR, DIRECTOR, OED, RE YOUR LETTER DATED APRIL 1, '1901. VLLAbtU i RECEIVE TH UMAFI UN PPAR UN UZCA aLUNU AUIUULIURAL URUIt PJLUI. WE PRINCIPALLY AGRL ON AUDIT MEMORANDUM AND OVERVIEW OF PCR, NOTING THAT THE 00NTINUITY OF BANK STAFF WAS SURELY AN ESSENTIAL ELEMENT FOR NACF'S IMdDiAQIKIP ADIITI CTIAnLV AnA DDAPTIC% AIIV Il C UI rWILIV I S1v l NUa LiII I I I- li I; L ) Li g I vuI r \ ..i l LLY I ULVL L M IF I FINANCING THROUGH CLOSE COOPERATION BETWEEN STAFFS OF BANK AND NACF'S PU AND LEAVING A SUSPECT ABOUT THE OPINION ON THE RAWSILK PRICE. ACCORDING TO KOREA RAWSILK EXPORT ASSOCIATION THE PRICE OF THE EXPORTED'TO JAPAN IN 19B0 WAS USDLS 44.11 PER KG WHILE DOMESTIC PRICE IN JAPAN AROUND USDLS 60 AND WORLD MARKET PRICE ABOUT USDLS 33. IT COULD BE SAID THAT THE JAPANESE DOMESTIC PRICE WAS ALMOST DOUBLE THE WORLD LEVEL BUT NOT KOREAN EXPORT PRICE. IN MEMORANDUM PARA I THE WORD PLASTIC GREENHOUSES IS TO BE CORRECTED WITH IRONFRAMED f'DifkIUnIiQCQ Akin DADfA 4% AlIII T 17DI f%C'T AC Q '000r1 T PR f l1 C-r A-0n ski Si~lt i j~.L illu AlU UPF Il JUl I Cf GLuS M1 rr[U ll u fPoI r MINU 11I JVERViEW PARA 11 (A) THE CONIUI IT AS UUNTINUIITY, WE THINK. NACF IS TO SUBMIT A SUPPLEMENT TO PCR PREPARED BY PRLJECT UNIT TO BANK THROUGH LAP PROJECTS DEPT., BUT NOT SURE BY JUNE 3 BECAUSE PU HAS BEEN ALREADY FULLY INVOLED IN THE THIRD PROJECT. REGARDS, HAN BEONG-WOOK, GENERAL MANAGER. END MSG WORLDBANK44JJ96 243423 VORLD.BANK ¿P'5EP3 K23232 Sa - gbul 16 Ju!lE 1981 if. solv S. KAPuR PERATLU.JiO- 1.1 -_ _ _ and will contributetothestabilization of apple price at harvest time. Production under the Project and Total Demand Subprojects Production Full Total demand IBRD Project % Subroecs s develn--ov a 1070 Mi o0QMll ment (A) develop- (C) develop- A/C B/D year ment ment year year (B) 2/ (n} ---- '000 M/T-------- Apple Annle 1000 444 7r3 0.4 61 0.1 8.4 orchard Sprinkler Apple 1990 444 753 0.8 2.5 0.2 0.3 Greenhouses Vegetables 1980 174 -208 33 33 18.9 15.8 Sigworm Cocoon 1981 26 21 0.1 0.1 0.3 1.4 rearing- On-farm Apple 1985 444 670 24 40 5.4 5.9 s t oOrange 1985 133 379 2 3 1.5 0.8 1/ Incase of on-farm storage the effect of the project indicates stored fruits. 2/ Based on the recalculated future demand when the Third project was prpaed in o0. 4.16 Various conditions affecting the project effect might be pointed out as follows; the scheduled input of major materials, the quality of input naterials such as good sapling, the operating technique of agricultural inves- t:.e+nni+i- _+-r wni ic nn LJ. .±±.fIAalS.4. agricultural production. Some specific memories on weathers during project implementation are as follows; - 51 - Subprojects Specific memories on weather Apple orchard development Due to the drought of early spring in 1978 the and sprinkler irrigation apple sapling was much hurted. for orchard Consequently there was a difficulty to purchase a-L sa.Jp.L-L1..Lj In 1979 the typoon Irving bit this country, which had apple fruits drop. Greenhouses for In 1978 the early spring drought made the vegetable vegetable production prices go high and it was noticed that the chinese cabbage produced in.the cool high altitude onland during summer season marked very high nrices due to the unfavorable weather and increased demand. In 19b0 a violent gust destroyed many vinyl houses, amon- whic +h vvil honse-s- nnt-+-riintf tinvipr IBRD project were not hurted owing to the iron frame. Project impact 4.17 in survey to evaluate the project impact the same problem as mentioned in nroiet Pffent onurred on anmle orchard develonment subnroiect and the same way was applied as the project effect was so as to estimate the project impact. In order to calculate the farmers' income the financial analysis form for rate of return was adjusted in the form of farmers income analysis used generally in Korea. Compared with the financal analysis for rate of return the famers income analysis includes the family labor. self canital service and self land service, and to get the year averaged income the invest- ments were devided by its durable period. And so as to keep balance with years all the project impact presented hereinafter are adjusted on the level LA -L7[7 prcs - 52 - PrY oet Tmpant Subprojects Added Value Base Farmers' Income Base Total Per farmer lotal Per farmer '000 Won------------------ Apple orchard 16,d72,555 13,254 14,972,125 11,761 Silkworm rearing 203,326 406 175,482 352 Sprinkler 1 irrigation db1,113 2,460 b61,113 2,460 Gr'eos ese C, rWL, QkA 1 'I'D Wuls 1t. n %^ On-farm storage 3,361,410 2,560 3,216,225 2,450 Tbtal 26,883,364 3,515 23,039,188 3,012 (for reference see the annex tables) 4.18 The actual project impact compared with the appraisal farm model shows very sl ifintn Alf-P--mces as gllve .4.~ the~ below table. The major reasons for the bigger benefits of subprojects associated with apple production were caused by the apple price which went high oy+about jUU% and the bigger price d11ference between harvest time and laterfor the on-farm storage subproject. On the contrary, in the case of greenhouse subproject the net benefit became smaller than was expected at the appraisal time, whioh was caused by the practical farming ofrun-heated one crop greenhouse culture due to the high energy cost. The Actual Impact and Planned Impact 1/ Sunmi6ta Farm Year Project Impact model size after Appraisal 2/ Actual 3/ % -----------L W 'ono -------- Apple orchard 1.5 Ha 12 3,211 15,309 477 Silkworm rearing 22.5 pyeong J 253 3b4 1 2 Rnrinklr w 'rienin 9 un 1' 1 o9 ' a Greenhouses 0.1 Ha 2 72b 249 34 On-farm storage 20 pyeong 4,0 2,72 597 * 1/ This table is based on the financial analysis of farm model. e igures indicates the net benefit from the each subproject. 2/ based on 1975 prices. 3/ based on 1979 prices. 4.19 Many fastors such as agricultural production, price of input aid output, weather ana agricultural policy affect on the project impact. '!he main factor Is consoxuwerle as agicuultural prices. ?%jor memorles on the price fluctuation during project implementation period are as follows; Trend of Agricultural Prices SubDrojects Aa-rl niu t.ral Pri Apple orchard Apple price increased steadily by 15% annually during development and spinlope iad the project period. In 1980 the apple price decreased sprinkler irriga- tion on the contrary due to the general bearish economy. Silkw-orm rearIng Thle cocoon price stagnated during project implementation houses period. From 1979 the cocoon price began to increase after a lond stagnation by 23% p.a. Greenhouses The greenhouse vegetable price during last 3 years have stayed sluggish. In 1980 the greenhouse vegetable prices marked upward turn. Ch-farm storage The price range of apple such as Jonathan and Rall's Janet between harvest time and after has increased for last several years, where as the price range of Fuji variety has decreased from 205% in 1977 to 157% in 1979 Financial and Economic Return 4.20 The financial rates of return calculated at project preparation work were verified as follows; The Actual FRR and ERR Subprojects FRR (%) kt 76) Annraisal Actual ADDraisal Actual Apple orchard development 33 47 30 40 Silkworm rearing houses 30 20 32 25 Sprinkler irrigation for orchard 35 34 38 38 Greenhouses for vegetable production 32 18 38 47 On-farm storage 27 Apple 750 29 Apple 750 for fruits Orange 41 Orange 45 P,o tal1 4.21 As shown on the above table there were some fluctuations between the appraisal and the actual rates of return. The price fluctuations of agricultural products related with each subproject were already reviewed in the xhavr confInna basic assumptions applied to calculation of internal rates of return by subprojects are given as below table. Basic Chanzas of Ansmptions Subprojects Assumptions J%P..LC.LZZ.LAULJ 11CIL%L rLI Ltu .U16; standard 0.75 ha standard 0.3 ha dwarf 0.75 ha dwarf 1.2 ha Sprinkler Installed on only Installed on 84% of irrigation standani nrnayy standard orhaid and 16% of dwarf orchard Ine efect of sprinkler The effect of sprinkler irrigation was estima-. irrigation was estimated ted 10% 10% Greenhouses High level modernized Actually non-heated cultures and inten&ive farming wAre nrantinpd wIth numnTa was expected iron frame Crop pattern was cucumber Actually various crops were (s-farm storae, ProuctIon basedWon Actually on-farm storages 1.25 ha of apple orchard were constructed on 91% of and 0.25 ha of pear apple orchard and 9% of orchard orange orchard. Price range of apple Actual price range of apple between harvest time between harvest time and and after b months was after b months was bb% estimated 4U% - 55 - 4.22 The economic rates of return by subprojects were calculated roughly as follows; (a) The standardx conversion factor was applied 0.9 f, N ML - - .&- A .,4. - -M - " s +.....IIL +*rn,.. .., ft.+V. I'Of ilffl ila+ r ki)) I LM 1)1. LUt V.JLz JULPVi9.LLV mat rm ro nre - couniI .t ry as - al -lat- on the basis of CIF price, transportation cost and other necessary costs. (c) The labor cost was applied b'7f of actual rural labor power. (d) The economic rate of return excluded taxes, capital services and profits of merchants As the results of above criteria the economic rate of return of greenhouse subproject was relatively h-gh due tU the big components of mlor os. 5. OVERALL ASSESSMENT AND LESSONS LEARNED Overall Assessment 5.01 Under favorable conditions surrounding the project the Second Agri- cultural Credit Project has been successfully progressed, which has contri- buted to increase agricultural production and expand participated farmers' income. nring project implementation neriod it would be noticed that the greenhouse subproject has enjoyed bullish loan application in response of rapidly rising demestic demand for greenhouse vegetables while the silkworm rearing house subproject has encountered unfavorable marketing price due to the stagnation of silk export to Japan. 5.02 As a continuation of the First Agricultural Credit Project the project implementation agency, NACF enforced the Technical Unit which is solely In charge ot+na l projec+ 'mpem-+ ation- TT hn e anhancrnp- rnrI11v it_ capability under the useful comments of the Bank Mission in every aspect of the.project, intensive training of LAOs, provision of loan appraisal criteria and guideline, frequent supervision and guidance on the site, which are regarded as a major reason for the sucesfu project ±ep±m-uIei on. - Jv 5.03 In addition to increasina agricultural Droduction and expanding farmers' income the Project has had significant institutional building effects for agricultural cooperative organization in Korea and has con- tributed to improve the agricultural financing system through actual financial analysis of respective subborowers which appraise the technical feasibility and financial viability of on-farm investments. 5.04 The summerized project results are as follow table; By subprojects Apple Silkworm Sprinkler Greenu On-farm Total Classification orchard rearing irrigation Storage 1. Agricultural produc- . Apple Cocoon Apple Vegetable tion increase (M/T) M 63,08-5 141 2,564 32,d35 (43,110) 141,735 2. Farmers income increase 14,972 17.5 bbl 3,814~ 3,216 23,039 (in million won) '2/ 3. Land 1,971.4 - - - - 1,971.4 enlarge- extensive ment Interior - 744 - 744 (ha) ev+ensIve 4. Emnlovmpnt incrPase 3/ (man/year) 5. Other relevant impact Promotion labor labor Fromotion Price sta- of new -avine avino of markp bilizatin apple ting group of apple variety formation price in harvest season 1/ Based on the full development year 2/ Based on the average income concept excluding the facility depreciation and capital service from the benefit of the project Bo-~ sed. L.1e avrg " -"o co- - 57 - T - - Ta. -,wried fPrv- +hc Pn+-n-rp Prnipnt 5.05 Under the Secona Project tne witnrawal appiiueon was submitoeu by documents made on the hain of rencrt from PGCs through teletvDe or telephone. Thereby, the required time from lending of PGCs to application for IBRD was taken only 3 days under the second project, which is regarded as a major reason to shorten the project period, about 6 months ahead of project completion date in loan agreement without any provLems. Tnkina ank inon the First Proiect. the anlication document was drawn up from the reports gathered through mail system. Accordingly it had taken averaged 7 days for the project period. If there would have been any measures to conform the actual project progress by the form of collateral evidences the prujeut per-od wuld be longer because it should have been taken too much time from lending to application for withdrawal. 5.06 Although various kinds of technical services were extended to farmers in the Second Agricultural Project, more practical activities should have been done to elevate the effect of the project. Under the Secona Agricultural uredit rroject tne tecnnica services were baslcaly extendpd throuih LAO training. but for the future Droject the tech- nical services which might be extended directly to farmers in the form of leaflet on on-farm investment and cultivation technique, symposium, on the- spot study of advanced farming area and so on are regarded as more effective method for farmers participated in the Project. And in retrospect to tne Secofid Project the systematical confirmation and encouragement on the technical extension services conducted by LAOs should have been estabished through report system. 5.07 Tn the Second Prolect silkworm rearing house subproiet waR di.qon tinued due to,the unfavorable marketing aspects in 1978, the second year of project implementation. For the future project preliminary discussion on project feasibility and project circumstances should be taken periodically duriLng prouject Limp-leenttion J*---. - 58 - 5.08 In the Second Project the loan appraisal precedures have been continuously improved considering the on-the-spot handling of LAOs. The financial analysis by respective farm investment using big and compricated analysis paper was changed into standard analysis with which all respective farmer have to do was making their own investment plan. For the future project the more simlified procedure will need to be studied and prepared on the LAO training, loan appraisal and controll of loan management. 5.09 The apple orchard development subproject reached only 66% of the initial plan made in appraisal period. The local government regulation on allowing the land-use conversion and dc..:.jprofitability of apple orchard management derived from dull apple price ani input price which has been going up year by year were the major reasons. 5.10 The sprinkler irrigation .for orchard subproject also reached only 511o of the initial plan. The strict regulation for eligible apple orchard, i.e. apple orchard more than 2 ha and full-bearing apple orchard, the insufficient effort of LAO and farmers' reluctant decision to invest let this subproject progressed only half of the plan. From the above mentioned problems It is noticed that the subproject which comprises technically difficult investment items should be implemented gradually with collateral measures such as provision of sufficient information on technical aspects and pre.test inLa Invest men t of pu bl ic organ izat ion I n n-A vance. )± lit greenhoius&e ..I oL .A u up %J - - e - -k- exceeding 13)4 of initial plan. At the beginning year the implementation plan for farmers to install high-level greenhouse facilities viz. iron-frame house, nozzle-spray irrigation facility, automatic control stove and so on hadU been set up in o-d.erto moenz L1Ie exisin greehous facilties Such a ideal facility had not been adapted to the greenhouse farmers. As the result this subproject didn't go tast and at last the initial plan was changed regaraine the real farmers' capacity to receive the investment level. Even thngh the imen fnility has a conomin viahilitv th nrplim- inary measures such as certified public verification on the practicality of new investment items, providing generalized information and training of participatkl farmers on the new investment facilities should. oe taken in ad~vance f'or the future project, - 59 - ANNEX I The following sections in this annex were sent by NACF to the Region and OED following the return of the audit mission from Korea and after the preceding PCR was received and accepted by the Region. I. Bank's Performance 1. Assistance of Supervision Mission and Project Department (1) Advices on the institutional building and the improvements of sub-loan appraisal and supervision methods. (2) Exchange of views on the identification of sub-projects under the following Third Project. The broadened sub-projects under the Third Project prepared by Technical Unit had been initiated by the Mission mabers. Their commaents on the progress of and changes in Korean agriculture encouraged TU to see more diversified demands for development financing and the direction of the Third project reflecting this facts was welcomed by NACF management and the Government. (3) Supporting TU in preparing the follow-up project and in training its members through sending vawious publications and materials from time to time on its request or on their judgement. Thus, for example, TU could get the Report No. 3005-KO, KOREA, Current Developments and Policy Issues. Merra. KGV Krishna, Swee Joo Khoo, Abid N. Hasan and Brian Berman in the department had been always good advisors for NACF and strong supporters whom TU could request what ):kthought available in the Bank or even in the United States. (4) Helping TU to solve unique problems related to participating Cooperatives and PCs to reconcile edWplicts with sub-borrowers, - 61 - which sometimes occurred and could not be solved easily due to the acquantance and the community customs, by the means of visits to PCs and farms at every mission. 2. Other-purpose Mission Members' Contribution (1)Exchange of views on policy matters between the mission members and NACF management. (2)Every proposal of TU on discussions on various kinds of matters had been welcomed by the mission members. TU could meet its need for advices and information on institutional building, Bank's policies with regard to the follow-up project, evaluation of the completed project, and etc., which could not fallfiled with the supervision missions due to the long interval between their visits. 3. Contribution of Controllers Department TU had two missions from the department. They heard even minor difficulties in the withdrawal procedures and put every possible effort for TU to have the proceeds of the Loan in due time when TU urgently requested it to the department. 4. Aenefits ft-nm r.Ena^m4o flw.lm.me Tu.646 (1 'TIhe annya,.w4mine~w m4mmin .,Amm. 4h P W4 Deada4 mn -JJ - --------ow. - wes-ue names a £** rayw b woumw1wuU and sn-ored & t"na. %P"W a %,"LW A LLLL%M.L WE.A .UMI sknAd Ike traid at XDI.WhThi rL-e-1-id A- uA" IaN --.a .*a.J.'"n 4w MWanwJ . s AA =UAVRWU A= A%= UJW=-00UK-W n&a#4i%ati,mn Jin Dnwml Towlwwmame r~-Se mt whT 4- 1ai J.. bo r - -t-her(- Se oWn. PAr& o7e jastre before the (Second) Prolect-was started. (2) With Mr. Koh, Deputy Project Manager, who had completed the EDI course, TU could remodel its LAOs Training Course under the First Project as more specialized and developed On-farm Investment Projects Course under the Second Project. (3) Mr. J. Price Gittinger at EDI and Mr. William I. 4ones, course director, supported Mr. Koh's plan to organize an agricultural project analysis course at NACY head-office. In early 1977 EDI airmailed five boxes of course materials in which enclosed are 20 copies of each course note and relavant reference book instructed at the Rural Development Projects Course at EDI. Mr. Koh and Mr. Kim Sung-Kee, who had completed later the Agricultural Credit Projects Course at EDI. offered some special instructions to TU members and some other NACF staff members from time to time durine the first half of 1977. usins these materials. Every covy of the materials was distributed to NACT Library for public use and to Research Denartment. Hmmvep, it is rterretful that NACV eould not ftlly utilized the mater4al. because it was difficult to ormanize a systematie trainin" course and so the traininc remained in somethina like oan-tha-inh traininr- (4) Anyway the nn-th-inb trainin of TH aaesha mmlA help them imrnve the LAOn' trainin. Tn additAnn- qM oulnA hw a ____~~- at_ __a .j .. W. - _ W4114im T Jone T wosew xpsmm4sn the basc rol- a n s4h4 14+w a mal An.l1 m kLA **.J W. **** - v #-4% w06Uymwn. naLw Au m LWW swntwnuw U - 63 - very precisely. Therefore each volume of every year edition of the course notes had it in the title of "Encouragement from the World Bank." (5) During the period of the Second Project, three of TU staff participated in the EDI courses at Washington, D.C. and regional: - KIM Sung-Kee, Agricultural Credit Projects Course at D.C. 1977, - LEE Shil-Kwan, Agricultural Credit Projects Course at Philippines, 1979, and - KIM Dong-Hae, Livestock Development Projeets Course at Philippines and India, 1980. This enabled TU to strengthen its capability in every aspects of a project; identification, preparation, appraisal, monitoring and evaluation; in its on-the-job training and resultingly in LAO training; and futherwore to share its qualified staff with other units in NACF. (6) In 1979, TU found an audio-visual training material C Time Value of oney having published by EDI and asked Mr. Swee Joo Khoo, who led every supervision mission to the Project, to pay for and send it in advance and be reinbursed by NACF later. But he made it airmailed directly by EDI to TU soon and TU could have an on-the-job training using it gratis. It is to be translated into Korean, published and used for the LAO training under the coming Third Project. - 64 - 5. Workshop on Monitoring and Evaluation Organized by Agriculture and Rural Development Departeent. (1) NACF sent KOH Hyeon-8eok, Deputy Project Manager, to the Regional Vork8hop on Monitoring and Evaluation of Rural Developeent Project8 in East Asia held at Kula Lumpur in December 1979. The workshop was just on time for TU which was to complete the Project soon and to conduet the evaluation of it as vell as to establish an more efficient and useful system of monitoring and evaluation for the following Third Projeet to be prepared. (2) TU held an on-the-lob training course presidød by Mr. KOH and desgaed siplified proceduren for tha urgent use for evaluation of tyha Prnijeto (3) Out of TU but within NACF, the reaerch peoplewere taking a growing interest in the ex-facto an-alyss of the rSulte t----- t the integr,.--ted gaee--- - inme Deelopmen+ Progrm condcte by NACF +h,r%ugh a elte& d <~v prm cooprat h4Ri , ural Credit Research Division Started to desi gn a pl an on amor-gnrlaayi fterslso %FWa axwa. in D41 sa. e a-dIum-and n = i o øult.al l~a ext Lende 4 f.a rr throh o r cane. T hølp~ød t by prøvIA ding the worshop aterial. - J - (4) After the workshop Mr. Michael M. Cernea, Agriculture and Rural Development Department, airmailed to Mr. Koh one cepy of "Measuring Project Impact: Monitoring and Evaluation in the PIDER Rural Development Project - Mexico" prepared by himself as a staff working paper. Because Mr. Koh though it would be helpful for Rural Community Research Divisien people to find out their way to evaluate such similar project having a wide range of varieties, TU offered it to the division. As expected, it was highly appreciated and trans- lated into Korean for easy reference and wide use. At leaghth, Research Department published a manual titled in some Rural Development Projects and the Evaluation of Their Impact which contained the PIDER Case as well as other examples of Japan, India and Bangladash. - 6644 TT atman. Dat. Pmema 1. Funding of Government Loan The timely funding of Government Loan amounting to 4.3 billion Won was essencial for the Project Sub-loans to be made on time. NACF asked the government budget for the year through Ministry of Agriculture and Fisheries (MAY) every previous year. At length, Economic Planning Board (EPB) made so suitable appropriations in the budget plan for the Project and Ministry of Finance so timely funding of it during the years of 1977 through 1979 that NACF did not experience any difficulty in meetins the seasonal demands for Project Sub-loans. 2. Coordination between Similar Prnets. (1) The most imnrtant vnla ^f MAP fen % th& Dw^ah,& -.s 4. Cooreinat4n i+h mq4m41kv. sedaite Ph um- h U-- 4.-- d------- - -- * ---- * **mw w -- n mi a4ae* -mn T &D5A P&V T,ql!,ssmad4 Tevma. m mnA 94 mhamas.. T- l m.a. fa.. 4.1 n ...1~ aMM TM Asa swalammo 0ma mm *a T- - -a O a a . *e uyws EyA m A r IAuuWmeWu omwwU± Tncnme (TnmePa &Ad Proe%am) *nThe +hree -4.-4s 4ind the A&-AulItnal rad4+ Vwn4a#t hae mhrws. - ---- wa s 44- af ml anning. eA eu4io but vm.ilMa-- ...-- J &.U W . nhk4aa64 as ..A .am... -.ay man pw Fowwia The valuma ot dA l4 m an ach crop w.s A. L. IL...* prmrl v m V e bwwaVLois o Af eiatI gpU Wet L U UWGW audam4Tw 4.lk La-J. *& -.AJi --- . yDA smA. s LunJ i,uw IDnoan. usL wolLmabwU gap UWWWWWH uWWWRDi BRd - 67 - Supply and that for each area on the basis of development potential in that area. Moreover,probable concentration of financing into a certain area fesulting in too much volume to be dealt within the year should be avoided. To meet these requirements TU paid periodically its attention to the changes in development policies and long-tern plan, the newly published researches and the discussions with government officials and NACF staff members. Finally, the annual plans of three projects including the size of development to be financed for each sub-project as a whole and in each project area were decided or approved by MAF. During the way, MAF adjusted the kinds of sub-projects to be financed and the size of development in the light of future demand, long-term development plan and policies. In order to minimize the MAF's adjustment of annual implementation plan of the Project, TU hurried to submit the draft to MAF before the annual plans of the other programs would be finalized by MAF and thus MAF usually achieved its control over the annual development through taking it into consideration as a major factor for formulating the Special Program which were under its direct control. (2) During the years the Project had been implemented, MAF was strengthening its policy on main production area. - AR - Originally the concentrated development of the areas most suitable for special crops had been pursuing under both the Special Program and the Project, while the balanced development of each region had been also trying to be achieved through selecting suitable crops for b region. Such policy was so strengthened from 1977 when the Project started that all the development financing for special crops under any project should be put on only the main production area designated by MAF. It reflected the growing necessity for enhancing joint-working for Desticidinr and etc., productivity and marketability. Thus.for the years of 1978 and 1979. the sub-loans under the Project were made in the designated main production areas for apples, oranges and greenhouse vegetables. (3) Durine the period of Proiect inDlementation. some ideas on deveInnment financinr under the Proiect were partly accepted in the Aperial Program and vice v@rma- III. NACF1s Performance ......~~.J. Lg.. ffec- cal TTn~44 .A4 D,~ The establishment of Technical Unit itself was aerextraordinary arrangement, though pursuant to the Agreement, due to the larger number of staff and the higher ranking manager assigned for so small volume of operation than usual. But the management or RAUF accepted the multi-functional unit and allowed some special arran- gements for it and thus utilized it as not only the monitoring body for a pilot credit project but also one of the task forces for improved system. Here are mentioned such major arrangements: (1) More travel expenses per head were appropriated for TU to make more field trips than for other department or division. (2) Participating Gun Cooperatives were allowed to make a sep*rate appropriation to be used only for their extension services for the farmers participating in the Project, according to the Guidelines for Gun Cooperatives' Annual Budgeting which was binding Gun Cooperatives and very restrictive to administration and extension expenses. (3) Every course of Loan Appraisal Officers Training was well supported, though it was only one that took such a long period for a specific project or business operation. NACF paid extra- ordinary amount of training expenses for it. (4) Every year since 1978 TU could send to Japan at NACF's cost one of its staff to see the advanced farming practices and researches; KIM Jin-Woo visited Aomori Apple Experimental Station - 70 - and Nagano Hoticulture Experimental Station in 1978, LEE Guen-Soo learned at Vegetable and Ornamental Crops Research Station in Aichi and Mie-Ken in 1979, and WOO Jong4eon called at Maruyama Farm Machinery Compony in Tokyo, Kusima Fruits Experimental Station and Institute of Agricultural Machinary at Omiga in 1980. (5) With the visits of TU members to Japanese institutions and farms, TU could get valuable data on apple orchard and green- house farming using advanced techniques and facilities.She data selected and processed were included in LAO's Training Course Notes and some of LAOs reprinted and circulated it to the project farms as a means of extension services. The method of pruning dwarf apple tree and other many introduced in the notes were welcomed by farmers. (6) TU was allowed to have a one-week field training course for its members in 1977. It was very much special in NACF that all the members but one of a division were out of the office at a %ime for such long time and especially for training of themselves at the same areas. This training was very much impressive and allowed opptunities for each specialist of TU to hear other specialists and to preside over dicussions with farmers and other TU members at the farm. (7) TU was allowed to edit audio-visual manuals for LAO training and thus slides were prepared during the TU field training and the visits to Japan. They were edited for each sub-project and used at LAO training courses. - 71 - 1 n'n g' urswm s S+nce Pa44.m7 Tr4e mlas-huaA 4hv een UBsigned for 1Ie asuject at. every traiunn course for b~oth managers and staff members i a n oe ocredit operation at Gun cooperatIves know Gun offices of NACF) and KOH Hyeon- Sook have instructed the subject. Fron this year of 1981, UiM Shil-Kwan will take his place. (9) in the second semester of 1980, AgriCutUral Cooperative College sponsored by NACF proposea KOH Hyeon-Seok to have six class-hours on Agricultural Development Financing and Project analysis. The proposal was heartily accepted and is supposed to continue this year. (10) After the completion of the Project,NACF transfered some of well-trained-and-experienced Technical Unit staff to the other positions for which such qualified person is required in order to have the operation developed and improved rapidly. Within the department, KIM In-Sik was put to KFW Projects Division for preparing a new project for milk processing and KIM Dong-Hae was assigned to a general planning in charge of identification and initiation of new projects. KIM Jin-Woo was transfered to Community Development Division which was planning and monitoring the Integrated Development  IL - Program for Increased Saemaeul Income which was in close relation with the Project. In addition to these changes in Assistant Project Managers occurring in 1980, during the project implementation, junior specialists of TU were promoted from time to time and transfered to branch offices out of Seoul according to NACF's guidelines in personnel manaRement. But it does not mean NACF violated the stability of TU because NACF had been keeving the same senior specialists. Assistant Prolect Manarers, within TU during all the time of project imolementation. 2. Implementation of the Recommendations of Management Consultants. The recommendations were renerally regarded too much advanced for NAcr to carry out in near future Rut NAC ham heen tryinz to Innrnve itm manavement na nnaRRion deman-a Tn Mav nf 107A_ Acntini Srtm Diviqien wn newly established within P1snnn& De-artment. The Micio ... been .studyingr nd tryin thep really 'KV.="&ihA= mT%V-qwMRT-V &nevn,a~,n~ Ocz a Wjh.1 &"h~A iv TEVwv, hwneha an- ar4a ea- m co peati_ as a whole. And im n umyt 101--ning Darmmnt and Managmnt -Analysis Div-s----------- -- a fl mAsu rw%4 -4 n -4 on aom om1-mary Coper "Avenu Depu Imnww L..LL v rAn .....JA 4..- - - - - - -.#J WJ=L.. . WWF=.9 - maA e nau dammeAarme camll as Manamnt I.4. 8OfaFAm-1 A evan thsmoefui cpr ions of acwrutwg wea naw - n -oco -x -a - 73 - department, while formerly were separated into Planning Department's and Primary Cooperative Department's functions. It can be safely said that with this arrangement NACY went a step farther toward the recommendations of the management consultant. -1?. - 14 - V. Revised Measurement of Returns S. umry FRRe and ERRa Estimated at the Apprainal and the Evautim Subprojecta FRR at the ER= Evaluation Appraisal Evaluation Apprainal - -------------------- ---------------) AP35333 30 SR 20 30 23 32 P3* 35 36 30 GE i 32 8 38 ST >50 / 2 1 >50 29 y Wnol Pjt. 384 (Notes.) _/ AP: Apple Orchard Development SR: Silkvorm Rearing House SP: Sprinkler Irrigation for Orcharde GH: Greenhouse for Vegetable Productiom ST: On-farm storage for ruits y Apple storage:750%, Orange storage: 41% / Apple and pear storage -75 - AVD IIJ%Jr 'JI& --W ir -A -~ T 1 - 4 (1) The price :of apple was thoroughly reestimated. it is clear that under the Project newly introduced high-quality varieties had been planted and those kinds of apples have been keeping their prices much higher than the old ones. The price of Fuji apples among them has been as high a 2.3 to 2.6 times of prices of old varieties of apples (Table 9 of the oriTinal report). Thus, up to now many subborrowers who established new variety apple orchards under the First Project have been enjoying much profit from their initial production. But it is also easily foreseen that the prices of high quality and at the moment rare apples will go down in real term, or even in the market term as in 1980 under the.general recession, when the facts are considered that most of newly developed apple orchards during 1970's are producing more and more new variety apples year by year and moreover that substantial substitution of new varieties for old ones in the existing orchards will be continued or rather accelerated as happened during 1970's in response to changing opportunities in market and profit-making. The sub-borrowers under the Project will have to be subject to this situation during their producing period. - 76 - Taking this forecast into consideration, TU tried to find a reasonable constant price in terms of 1979 market price for apples which the sub-borrowers would sell during the harvesting seasons in the future. TU had got an idea through a sample survey on the composition of varieties planted under the Project; Fuji: 74%, Aori II: 13%, Jonagold: 4%, Tscaru: 4%, and Others: 5%. Based on this data, W421 per kg was drawn as the weighted averale farm-gate price in 1979 of apples to be produced on the orchards financed under the Project. And this was cut down arbitrarily by 20% to W336.8 per kilogram and applied as the price of apnles during the whole period of the sub-project. This is alightly over the price of Rall's Janet. which was in 1979 more or less than WVon per kiloRram and seems to be accentable. thoucth arhitrarily iudzed- (2) From the revised price of apples, the added value and farmer's income (Table under para. 4.17 of the ori;zinal report) and the net benefit in full development year (Table under para. 4.18) came in the revised amounts an follows: - 77 - (Table 4.17) Annual Income Averaged Through The ProjeCt Life (On the basis of market price in 1979) Average per farm Total investment Added FTrmer'a Added armcrs' Subroect navr fara value infl~O val tio 4n (~ ---.1000---- 1 --lion-- aP *.5, 12,7 7,1 0Ccr J ( d£,?73 cR2.syong 48 32203 175 ort £"V.J JL V~' P 2.3 a 2 1.£ e,% 6 863 Ian~~ iJi TUM UVC ~O ~ .L1 OH0.12 nu1,2 9 5 5777P,505 3,814' ST 22.6 prong 2,560 2,450 3,361 3,216 Whole Project* (7,648 farms) (2,927) (2,424) 2,34 18,539 * Revised figures (Table 4.18) Net Benefit Expected At Full Development Size of Full Met benefit in Suberolects Model Farm development full development year year at Appraisal at Evaluatima ( - --- --W '000 ..- - -) AP* 1.5 ha 12 3,988 y 12,330 SR 22.5 pyeong 3 253 384 ap 2.0 ha 12 1,692 2,563 GH 0.1 ha 2 728 249 ST(apple) 20 pycong 5 652 4/ 2,951 ST(orange) 20 pyconi 5 .. ... - 78 - ( notes.) in termo of 1975 marKel pricCe In ter I of 1979 market prices 2/ In 15th year 4/ Apple and pear storage Caculation of ERR (3) Fnor thiffi tim^, the r tn each subrojeci.t Wa12 ^jatedM+^ T~wh adusvtng inly +w fact*r veVr .o lv eit of tha FRR. The adjustments were made only for the coats, not f^. th ben= ft The for-cc-en components exp,reased in financial tera were v_alued an the bais of estied shadov. cxch.ange ate f0 theecoomc aalyis And the- co-mAdit tax esimte -o bo included An the coss6 a d4ctd ÄInVI Aa rogh way as follows:1. l) The foreign exchan-ge comsponents of the i2nves5tmnentL cost were appli1ed' as sae am- in apaalreport off thec Seccond Aigrilcu'ltu,ral Credit ProJec+ Apple orcha-mrdu 26» S:ilkIw^TrM rarin 29r:%0 Sprinkler 496 Greenhouse 34% On-farm storage 25% - 79 - 2) The foreign exchange components of the operating cost vore estimated roughly 15%, which vore applied to all subprojects. 3) The shadov exchange rate was estimated 580 Von per US dollar, while the public exchange rate wav 485 Von per US dollar. (5) The 15% of material costs in financial term vas uniformly regarded the commodity tax included. The rate of added value tax has been 10 oercent. And there may be one to three steps for marketing of inputs employed under the Project, each of which incurs 10% of tax on the added value. On the other hand, many of the materials vre and ill be supplied through cooperative channel, where little added value and then\ te'added value tax was and will be realized. Tharefore the rate of tax includad in the prin& differ by commodity and by sub-project. E"saeiallv very high rate of pal4^1 co^naumntiouin tax baR heakin imp nset rn tho ^I 1 4 ), But regardless of these aspect, TU took 1% of the pricda of all lnpuia under every sb-proc iindiffarntly as the total portion of cowe...ity tax throghout the whol ~aketing chne.And th~la estimated oe ty t_~ was9 dediucted fro= tho costs in th financial ataly i4m of ach u b-r4oject In =.Aditio to thea la.or ~4-t fr Uoth in_~*.n and moper-tin,4 howveor, som mataria l such¥ a I ired an1l, *~r4 l--, 1 liMO a ur, h HUhn M and d ~V o W given the amt pric for 1the oconomic ana-lsir afr tha finaciaL naljis. Tn Ivrtilisr ana AiE nEvW uen subsidized and thus had to be valued seperately for the economic analysis. But here are no adjustment for them: no deduction of added value tax from and no addition of indirect subsidy to their market prices. Other materials except them used to be marketed among fares and thus their prices do not seen to include any tax on them. (6) The above-mentioned simplified adjustments resulted in the generally higher ERRs than FRRs to respective sub-projects. At the appraisal, ERR to greenhouse sub-project was estimated higher by 6% than FRR. There seems to have been a shadow pricing of hired labor in winter season. But, at the revised evaluation, this was not considered. (On the contrary, in the original report, the farming labor for all the sub-projects had been shadow-priced uniformly at 67% of wages paid). Still, it may be thought reasonable that the wages for greenhouse farming have to be valued lower than the actual payments, because the most important effect of greenhouse farming on both the farmhousehold and the national economy is utilizing the non-productive winter season economically and providing idle labor with employment. &- 4J .. A -~. re r h 3.S-me AMPIAMlonsf anl VIn bIM'st&mtwu lw.R91 WA.L 1611 I~ JVWSG A pp.le LJUZ Dae!JI-M-Ont. (1) The planned model of apple orchard development shows an even composition of standard and dwarf stocks. But the portion of dwarf stock planting reached 80% of the actual t-- investment. Silkworm Rearing House (2) The actual investment was very much similar to the farm model. But the cocoon price at the evaluation was over that at the apuraisal by about 60% while the costs for both investment and operation were around doubled. This adverse situation resulted in such lower rate of return than at appraisal. 'I U~U 't JUIUe5 spinle system were W inaa"Ie acull onL the "ID AsTA L 4 mL % lo A. -o %199 or1umL---JbTs ofyounge aea V.WeTTd at he? an pa .- a nowwver, the ownwfits anu aew costs in twrms of MarPMeS prAe at the evalustion went up to approximately 16u% of amT at the appraisal in parallel with each other Greenhouses for Vegetable Production (4) All the actual investments were far behind from the model. Even for the metal frame, less iron was used on an average. Advanced but costly systems for irrigation, beating and vantilation had been expected but were not accepted by farmers, The actual investment costs per hectare in market prices at the evaluation showed only 54% of that at the appraisal. - 82 - (5) It is natural that the actual cropping patterns of greenhoses financed under the Project shows a variety of differences by area and even by farm in a same area, while the model farm was formulated on the basis of two kinds of fruit vegetable: cucumber and green pepper which would be paid for at the highest prices and also require the highest costs for production. This fact together with what had happened in investments was represented at the evaluation in the manual benefit and operating cost per farm, which would be respecti- vely estimated at 63% and 71% of the appraised one in spite of inflation during the period. (6) The above-mentioned factor resulted in the substantial difference between the estimated rates of return at the appraisal and at the evaluation. It may be easily said with this that the greenhous farm model was extremely ideal or too* much advanced. But it was so intended to include just in one model all the investment items which would be desirable and expected to be acceptable in the light of the progress of greenhouse farming techniques in Japan strongly influencing Korean advanced farmers. Anyway the results are far behind the expectation. It could be much better for TU to have prepared a really practical model in addition to the leading model. - 83 (7) According to the sensitivity test, the financial rate of return to the averaged greenhouse subproject would be lower than 5 percent if the price of greenhouse veretables would ro down by 10 percent. It seems to show a critical point in treenhouse developsent in Korea. TU vill have to pay much attention to the chances in arices and such effort to find practical wav for increasinc broductivity and reducing costs 4n oweoanhana farminr. On-farm Storage for Fruits (8) Such a big difference between the rates at the appraisal and the evaluation came mainly from the increased value of stored fruits. It can be roughly compared as following: Index of Price (price at harvest = 100) Apple at the Pear(at the Orange(at the S001-4'+- -nn...=I T.Wan ,a+ Appraisal) Evaluation) (9) In addition, the on-farm storages had been financed malaly for apples and oranges. Moreover, the dearer apples of new varieties were stored, substituting in a substantial portion - 84 - the cheaper apples having expected to be stored under the Project. This made the absolute size of not benefit from the on-farm storage for apples become considerably larger (The revised tables 4.17 and 4.18 in Section 2 (2) of this chapter). (10) In the same context with the apple orchard development sub- project, the prices of high valued apples had to be adjusted for the whole project period (Section 2 (1) of this chapter). The Evaulati,m Mission from the Bank also adviced TU to recheck this high rate of return to the on-farm storage. Rut because TU has felt the subproject requirg@#some kind of full discuEsion and thorouvh review on the method of measuring benefits from it, for thie time, however, the result from a survey for evaluation is remaining as it was in the original report AIUKU.Luiven 01 InGlOWC .LCA andU DUULJ 11)J. income ta (seiperattaud as 1f&-i 11-1 k'A -_ [Z_ XU _JI II in fi cost "orU firiac-a- an l is 1", a, tAW~L I~~A L'~ i re 0bL i UL A I AL _A L L~ OA U 61 L . -- apr .La and at the evaluation. And the subsidiea for the inputs were ignored, wnen Tu revised ite caculation of ecunumiUc raLLO of return, though the prices ol fertilizers anud Some inpso for sericulture farming seemed to be subsidized substantially. If the indirect subsidies for the w** 414-**e'vere taken into caculation, ERR's would be lower a little to the apple rhard development and the greenhouse subproject, and to some larger extent to the silkworm rearing house subproject. 4 The Revised Caculations (Table 17) Financial Analysis of Apple Orchard (1.5 ha) (Table 13) Financial Analysis of Total Project (Table 14) Economic Analysis of Total Project - 86 - AP PENDIX Note : Incase of Income Analysis of each subproject, some items 1) Facility depreciation is the total investment amount deUVdU Uy is durable periou. 2) Capital Interest is that generated from investment cost and operating cost 12% per anum. 3) Land service is calculated on the basis of opportunity cost. - o7 - List of Tables 1. Actual Raising status of Project Fund 45 2. Status of Withdrawal by subproject and Year 46 3. Total Investment Cost of the Project 47 4. The Project Progress by Years and Subprojects 48 5. Status of Loans Made by Subprojects and Provinces 49 6. Fruit Prices Received by Farmers 50 7. Cocoon Price and Silk Export Price 51 8. Wholesale Prices of Vegetables Produced in Green house and Field 52 9. Apple Prices by Month 53 10. Apple and Orange Production by Year 54 11. Cocoon Production and Silk E:port by Year 55 12. Vegetable Production Using Vinyl by Year 56 13. Economic Analysis of Total Project 57 14. Financial Analysis of Total Project 58 15. Income Analysis of Apple Orchard (1.5 Ha) 59 16. Economic Analysis of Apple Orchard (1.5 Ha) 60 17. Financial Analysis of Apple Orchard (1.5 Ha) 61 18. " of (Slope Land) 62 19. " of (River Base) 63 20. Income Analysis of Silkworm Rearing Houses (22.5 Pyong) 64 21. Economic Analysis of 65 22. Financial Analysis of 66 - 88 - 24. Economic AnalysIs of " 68 2K P4nancial Anl ysis of 9 2.o - "(warf) 70 7. standar) 71 2 IncVmu AMlLys.L Vf GreeouS V #.1 nt) 72 29. 4 Economie AnaICl"ysis of " 73 Jve r.UCLV.n JUIC£yö5 -U 301. Fiania Anl ti f"7 31 -- hLettuce) 75 of (Lettuce and Chinese Cabbage) 76 - -a /n-ad. , \ .2 knaisnj 77 3. "f" (Tomato) 78 3" (Cucumber) 79 3v. ok ureen Pepper) 80 Jr. i Struw berry) 81 38. of (Sweet Melon) 82 37. £Icomte ulisJ .L ûn-£farm Sturage (21 v ryong) 83 4 "Economic JAn-aly:i oI " (App-Le) g . Finacia AnalyöJis of "Apple) 85 42. Economic Analysis of (Orange) 86 43. Financial Anaysis of "(Orange) 87  Actual Raising Status of Project Fund ( Table 1) (In million Won) Sources 1977 197b 1979 19b0 Total IBRD Loan 1,4b5 4,307 9,662 247 9,701 (u$'000) (3,074) (b,91b) (7,5i) (427) (20,000) Government Fune 700 2, 514 1,0b6 - 4,300 Total 2,1b) 6,b21 4,74 247 14,001 Disbu:rsement Ratio of IBRD 15 44 3t 3 100 Loan (%) (Table 2 ) Status of ithdrawal by Subprojeet and Year Subprojects Allocation in Reallocation ----- WIthdra-n - Ratio (%) Loan Agreement yy-y- 79tal Total (1) () (b79T)a (j)/ (1) --------------------------------U$000--.-------------- ---- Apple orchard .,,900 4 1 669 1,0b? 40 3,247 Development ,9 Silkworm Rearing 4,000 700 597 - lb 10 775 19 Houses Sprinkler Irrigation 2,200 112 121 C for Orchards 2 002 j27 211 12 1,312 b0 Greenhouses for egetable Production 09,00 6 5,092 4,7 333 10,9 2d9 On-farm Storage for Fru.\ts 2,200 3,600 74 1,630 1,237 30 3,bbI 167 Un-allocated 4,200 1,00 - - - - - - Total 20,000 20,000 3,074 b,91b 7,5d1 427 20,000 100 -i_ ___- - 91~ - ( Table 3 ) 13. Total Inivestmenit Cost of~ the Project (Amount Unit: V mill ion), Loans made Farmer's Total Ratio Per .Farm Subproject Contri- Inves- of A No. Area bution Iment, Loan aLon (A) (B) (C=A+B) i(A/C) Apple Orchard 11,273 11,971.4 12,147 1,344 3,491 b2 1.5 I 1.b9 Development l i l Silkworm x4 , 40 2.39 799 bb I2b.77 I1.0 Rearing 4 I » I i 9 b . SDrinkler Ha Irrigatior I n bt4».1 974 4.5 1,430 bb 2.53 2.7b for Orchard fo Vegetable l' i i 1 Lu-uit5 lItora .) 4 t 4, 1 2, 91Y. 1, 270 00, 61 O7 22 .5 1 .9 Total 17,48 114,001 l b,917 i 20,91b i b7 - i 1.b3 • ______I______ . _______ ____ I ________ ( Tab:Le 4 ) The Project ProgresS by Years 197 19ö7 1979 Total Subprojects _ _ __ an Loan Loan Loan No. Area amount No. Area amount No . Area amount No. Area amount Apple archant 234 43.3 350,20J böl 1104.H 1,119,542 33b 433.b 6??,263 1273 19o4 0 n) dev91pmen-t 10-511954 3.t 43-b ö726 123 9'..42,14',7,010 SlIkworm rearing Pyeong houses 394 10-46 40b,602 - - - 104 27ö2 131,400 49ö 13330 540,002 Sprinkler Irrigation Ha for orchar 159 34 37,904 1414 405.7 434,17) 47 124.,4 151.510 350 öb4.1 973,5b9 Greenhouses for 266 33.5 454,206 :2072 235.3 3,679,202 1b76 227.2 3,585,596 4214 4961a 7,749,004 Vegetable production On-farm storage Pyeo i for frults 363 d341 546,226 553 12914 1,168,575 367 b374 ö76,100 1313 29629 2,590,901 Total • 1421 - 2,177,143 34ö0 - 6,401,494 2752 - 5,421,869 7648 14,000,506 ( TabLe 5 ) Statu& af Loans Made by Subproject & Provinces Unit: Loan Amount: M million Apple Orchard Slkworm Rearir g Sprinkler Greenhouses for On-farm Storage Total Province Development Houses Irriatlan for Vegetable Productior for Fruits No. rsa xtunt NoN. ÅA eAMount ao n _ea - Amount No. Area Amotn No Aon t -TWO --_- Gyan ~Ha }la~n 74 182 1,1H 6 Gyeong GI 54 89.3 101 78 1,9 1 13 39 41 595 55-7 751 38 2 189 828 1,156 Gang Weon 62 65.3 83 17 .546 27 15 39.2 41 69 6.8 93 18 487 46 181 290 Obung Bug 100 122 119 48 1,292 38 15 34.9 37 209 12.2 169 142 3,151 266 514 629 Ohung Nam 199 347.9 384 21. 686 26 40 111.1 126 713 99.1 1,384 219 5,286 415 1192 2,335 Jeon Bug 84 135.6 157 52 1,503 6? 2 6.7 7 150 19.4 278 31 750 79 319 588 Jeon Nam 157 137.0 202 81 2,550 104 - - - 1593 186.0 3,223 41 827 72 1892 3,601 Gyeong Bug 425 692.9 640 164. 3,88? 156 253 626.8 691 491 59.8 915 605 12,981 1,218 1938 3,820 Gyeong iýam 192 381.4 261 37 925 48 12 26.2 31 351 52.1 823 43 865 66 635 1,229 Je Ju - - - - - - - - - 43 4.9 113 126 2,800 240 169 353 Total 12:73 1,971.4 2,147 498 15,330 540 350 B84.1 974 4214 496.0 7,749 1313 29,629 2,591 7648 4,001 - 94 - KOREA (Table 6) SECOND AGRICULTURAL CREDITPROJECT Fruit Prices Received by Farmers Year Apple (18.75 kg)1/ Pear (18.75 kg) Orange (3.75 kg) Won Price Won Price Won price - Tndex Index Index 1974 2,159 100 1,980 100 1,064 100 1975 2,642 122 2,549 129 1,263 119 1976 3,008 139 2,737 138 1,227 115 1977 3,473 161 3,126 158 1,779 167 1978 3,944 183 3,930 198 1,461 137 1979 4,692 217 4,639 234 1,381 130 1/ Ralls'Janet variety - 95 - KOREA KOE ( Table 7 ) SEC0ID AGRICULTURJALDT. TT -PRMET Cocoon Prices and Silk Exports Year CocoonPrices 1/ Raw S .ik Export: 2/ ¥/Kg .Price US$/Lb Price Index Index 197 1,_3_____ 13._____ 1975 1,535 100 13.87 . 106 1976 1,635 107 14.29 109 1977 1,635 107 14.83 113 1978 1,.774 116 17 .19 3 1979 2,161 141. 20.40 156 1/ Means theprices received by farmvrs am are rgulated w by +he Govrnment . 2/ Indicates the rawsilk prices exported directly to Japan. KOREA ( Table d ) . 1SECOND AGRICLTURAL CREDIT PROJECT Wholesale Prices of Vegetables Produced in Greenhouse and Field (In Won,4 ) Cucumber Tomato Green Pepper Lettuce Chinese Cabbage . Year Green House Field Green House Field Green House Field Green House Field Green House Field 1974 227.6.3 47.56 151.41 65.11 725.19 86.59 121.33 62.48 56.36 14.62 1975 214.44 59.89 297.59 74-17 680.74 129.41 99.00 119.81 27.95 30.60 1976 270.17 78.89 337.29 75.61 855.08 101.19 144.45 88.19 50.22 23.65 1977 332.00 77.22 421.21 111.07 1,152.44 138.15 281.15 141.59 91.51 46.07 1978 328.35 123.33 424.99 133.33 1,283.69 317.03 189.33 257.46 70.62 64.97 1979 318.50 103.73 371.16 91.77 1,573.59 307.36 259.99 14.93 22,69 24.09 1/ Means the average monthly auction prices of Seoul vegetable market on the basis of medium graded vegetables. ( Table 9 ) Apple Price by Month' ( Unit : Won/15g ) Price by month Index by month Variety Year Oct. Nov. Dec. Next Feb. Mar. Apr. May At 1 2 3 4 5 6 Jan. harv!stborthmonthsmonthsmonthsimonthsmonthe later later later later later later 1973 2,206 2,783 3,236 3,300 3,200 3,347 3,208 3,000 100 126 147 150 147 152 145 1974 3,225 3,430 3,700 3,891 4,062 4,5ý0o 4,987 4,700 100 106 115 121 126 141 155 Jonathan 1975 3,900 4,289 4,412 3,709 3,832 4,048 3,966 4,416 100 110 118 95 98 104 102 1976 3,218 3,980 4,303 4,951 5,346 5, 300 - - 100 124 :134 154. 166 165 - 1977 3,508 3,886 4,243 4,681 4,800 - - - 100 111 121 133 137 - - 1978 5,490 5,033 5,340 6,891 ö,696 - - - 100 92 97 126 158 - - 1979 6,225 5,50 6,968 ö,935 10,620 11,312 - - 100 b9 112 144- 171 102 - 1973 - 2,112 2,435 2,643 2,700 2,796 2,956 3,373 100 115 125 128 132 140 160 1974 2,513 2,722 2,9ö3 3,330 3,717 4,220 4,54-3 5,034 100 110 123 137 155 167 15 Ra11's 1975 - 3,2b3 3,49b 3,098 3,316 3,b41 3,26 4,172 100 107 94 98 111 117 127 Janet 1976 - 2,d50 3,322 4,119 4,809 4,809 5,000 - 100 1:17 145 172 172 175 - 1977 4,147 3,200 3,700 4,322 4,46 5,0ö4 5,232 D,ö24 100 116 135 140 1359 164 182 1978 3,744 4,0W7 5,0b5 b,222 6,910 b,941 7,500 10,064 100 1|25 153 170 171 193 247 1979 - 4,2ö9 5,30b 7, 355 7,551 7, 952 9,016 - 100 124 171 176 185 210 - 197 3,704 3, 1.5 4,b03 >,296 6,090 b, 32b 7,200 - 100 123 139 1bo lib 109 - Indo 1977 3,460 3,314 4,771 ,37Ö 5,376 5,930 6,232 5,00 100 144 162 162 179 188 175 1978 4,575 3,54b 6,150 7,126 7,650 7,970 9,133 - 10(- i?3 201 216 225 257 - 1979 4,357 4,216 ,4335 7,725 9,120 ö,b29 9,934 d,742 100 153 183 216 205 236 207 1976 - 6,790 b,774 9,6b0 12,10 14,033 16,000 - 100 129 143 179 207 236 - Fuj 1977 8,516 7,200 d,757 10,696 10,400 13,140 14,7ö0 14,8ö0 100 122 149 144 183 205 207 1978 ö,77b 9,17b 13,220 14,47d 14,142 14,3ö7 16,266 19,306 100 144 158 157 157 177 210 1979 13,210 11,000 14,032 14,919 15,276 15,225 17,233 lb,403 , 100 128 136 139 138 15? 150 Apple and Orange Production by yeaLr (Table 10 ) Fruit Classification Unit 1972 1973 1974 1975 1976 1977 1978 1979 Planted area ha 20,8B28 23,083 27,536 30,867 39,704 42,909 44,718 46,088 Apple Yield per 10a kg 1,254 1,259 1,080 906 789 920 958 962 Production M/T 261,120 290,591 297,373 279,608 313,099 394,744 428,291 443,561 Planted area ha 8,302 9,466 10,145 9,258 9,902 10,388 10,321 10,966 Orange Yield per 10a kg 148 282 304 928 436 980 1,042 1, 326 Production M/T 11, 850 26,676 30,766 67,392 43,136 10,816 107,535 145,456 Source : MAF Year Book, 1979 -99- ( Table 11) Cocoon Production and Silk Production by year Mulberry Years W - I Cocoon Silk Production Production 1972 78,441 ha 26,800 M/T 3,639 M/T 1973 80,267 30,980 3,721 1974 88,006 37,178 4,955 1975 90,955 36,091 5,462 1976 82,87b 41,704 5,493 1977 67,831 31,884 5,581 1978 54.349 27,975 4,235 1979 45,202 26,232 4,067 Source i MAF Year Book 1980 ( Table 12 ) egetalb.e Production Using Vinyl (by year) Greenhouse Cultivated, Area (ha) Production (M/T) Year Area (ha) House Tunnel Total House Tunne. Total 1969 646.3 1,099.1 3,310.5 4,417.6 34,105.b 120,57'.4 174,601.0 1970 762.b 1,209.3 2,431.7 3,721.0 47,990.b 91,561.b 19,542.2 1971 1,014.9 1,692.5 3,Ob1.b 4,754.0 50,707.0 74,904.0 133,751.0 1972 976.2 1,b07.0 -3,055.4 4,b,2.4 43,b50.7 94,23t.0 137,007.5 1973 1, 743 .5 2, 544 .0 2,752.6 5,276.b 64, 00b.6 79, 037.3 144, b44.3 1974 1,746.5 3,503.3 4,133.4 7,630.7 05,205.0 93,291.0 170,49.0 197b 1,746.2 3,349.1 3,269.2 b,b10.3 76,363.0 60,971.0 137,334.0 1976 1,796.0 3,275.7 3,930.7 7,214.4 01,020.5 95,s19.1 17,547.0 1977 2, . 3,701.2 >,24 .7 9,227.9 09,194.0 94, 094 .0 104, 000.0 1970 3,730.0 4,971.0 ,961.0 10,932 115,5323 .0 117,471 .0 272, 99b 1979 4,b73.0 0,346.0 - - 174,013.0 -- (Table 13) F~iancial Analysis of Total Prolect (In Million Won) Tear 1 2 3 4, 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FR i. Sale- Apple orchard - - :L593 3585 8498 12880 16997 20052 22972 23239 23504 23903 24168 24434 22043 1952 19785 172631 17263 14607 15138 15138 13545 13545 11951 Silkor re-ring house. 220 355 Sprinkler Irrigation 91 438 587 724 836 947 1021 1113 1187 1261 1297 1328 1315 1301 1296 1264 1250 1231 1220 1201 1182 1127 1127 Greenhousos 905 2- an-frn storage 1941 2913 3423 4013 4502- Total 11304 12758 15010 17799 23263 27756 31947 135094 38088 38429 38730 39160 39412 39664 37273 25793 25912 23371 23360 20704 20880 20861 19249 19194 17600 II. Coot Apple orhard 10338 2989 3051 2021 2129 3192 4018 3383 4890 7139 6041 5614 5953 5748 5837 5894 6855 5454 6061 5371 5554 5359 4648 6181 5048 Silkwor- rering houseo 1171 12 8-) 332 128 340 128 263 173 128 332 128 Spr1nkler Irrigation 1860 123- 3h 232 123 82r 195 123 161 123 195 123 123 827 123 123 195 123 Greenhouso 14930 7817- -) 8958 7817- ) 9672 7817--· On-farr storoge 6304 262 306 362 401 401 952 401--- p 952 401-- '> 951 401- - - 952 Total 34603 11319 11425 10490 10598 13115 13038 11852 13359 16104 17281 14155 15108 14262 14306 6788 7507 6178 7264 6023 6782 %883 53172 6777 6123 II[. Net Benefit Apple orchmrd (10338) (2989) (1458) 1564 6369 9688 12979 16669 18082 16100 17463 18289 18215 18686 15206 13758 12930 11809 11202 9236 9584 9779 8697 7364 6903 35% Silkvom redring house. (951) 227- -y 23 227--- - 13 227 92 182 227 23 227- . _ 201 Spr]nkler Irrigatlor (1769) 315 464 601 713 715 898 990 1064 1138 470 1133 1192 1178 1173 1103 1127 1036 1097 1097 393 1078 1059 932 1004 34% Greenhouee. (5878) 1235 )4 94 1235- - - (620) 1235 - - --=7 18% an-faro otorage (4363) 2451 3117 3721 4121 4121 3570 4121- -- 3570 4121- ->3570 4121-- 3576 S0% Total (23299) 1439 3585 7309 12665 14641 18909 23242 24729 22821 21449 23005 24304 25402 22967 19005 18405 17193 16096 14681 14098 14979 13877 12417 11477 38% ECONOMIC ANALYSIS OF TOTAL PROJECT (In million 42oni (1,(1111- W-1 (Table 14) year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ERR I, Sales Apple orchard - - 1,553 3,588 8,498 12,880 16,997 20,052 22,972 23.239 23,504 23,903 24,168 24,434 22,043 19,652 19,7851 17,260 17,263 14,607 15,138 15,138 13,545 13,545 11,951 Silkworm rearng hous.e 220 355- -- -- - Sprinkler irrtgation 91 438 587 724 836 974 1,021 1,113 1,187 1,261 1,297 1,328 1,315 1,301 1,256 1,2,4 1,250 1,231 1,220 1,201 1,182 1,127 1,127 Greenhouse- 9,052 -- 0n-farm storage 1,941 2,913 3,423 4,083 4,522 - TotaL 11,304 12,758 15,010 17,799 23,263 27,756 31,947 35,094 38,088 38,429 38,730 39,160 39,412 39,664 37,268 25.793 25,912 23,371 23,30 20,7714 20.,80 20,861 19,249 19,194 17.600 1I, COSt Apple orchard 9,734 2,938 2,872 2,001 2,112 3,097 3,858 3,354 4,846 6,853 5,742 5,!62 5,721 5,690 5,762 5,600 6,380, 5,407 5,762 5.322 5,390 5,1.49 4,793 5.756 4,849 Silk,or rearng houses 1,097 126 314 126 223 126' 260 171 126 3,5 126 SprInkler Irrigation 1,798 1]6 211 116 749 177 116 1,8 116 177 116 136 749 116 116 177 116 Gree,hous 14,702 7,795 8.794 7,795 9,421 7,795 - 0n-farm storage 5,922 270 315 373 413 413 980 413 - 980 413 980 433 --- - - -- 980 Total 33,253 11,245 11,224 10,411 10,562 12,829 12,875 11,804 13,296 15,303 16.548 14,073 14,872 14,185 14,232 6,476 7,035 6,123 6,984 5,927 6,552 5,678 5,322 6,346 5.965 11, Net benefit Apple orchard ( 9,714) ( 2,9:38) 1,279) 1,584 6,386 9,783 13,139 16,698 18,126 16,386 17.762 18,341 18,447 18.744 16,261 14,052 13.405 11,856 11,501 9,285 9,7,8 9,989 8,752 7,789 7,102 38% Silkorm rearing hounes ( 877) 229 - 41 229 132 229 95 184 229 4.0 228 23% Sprikler irriMgtion ( 1,707) 322 421 608 720 736 905 997 1,071 1,145 548 1,251 1,199 1,185 1,280 1,116 1,1314 1,054 1,104 1.,104 471 1,085 1,066 950 1,011 362 Greenhouse ( 5,650) 1,257 - - - - - --- 258 1,257 ( 369) 1,2'57 182 0n-farmsorage ( 3,981) 2,6,3 3,108 3,710 4,109 4,109 3,542 4,109 - 3,542 4,109 - 3,542 4.109 - - -- - - -- 3.42 >50% (1 (21,94.9) 1,513 3,786 7.388 12,701 14,927 19,072 23,290 24,792 23,126 22,182 25,087 24,540 25,479 23,36 19.3.7 18,877 17,245 16,376 14,727 14,328 15,183 13,927 12,848 11,655 40% - ALUJ - (Table 15) Income Analysis of Apple Orchard (1.5 ha) ( w '000 ) Classification River Slope Weighted Basin Land Average Portion 2b% 72% 100% I. Sales 15,163 15,163 15,1b3 J_TlT TV Fertilizer/Manure/Lime 3b4 364 Pesticides/Borax 529 529 529 Boxes for Apple Sales 7b1 761 701 k I Miscellaneous o a cJ Facilities Depreciation bbl 541 572 Sub-total 2,414 2,294 2,325 Hired Labor 1,446 1,44b 1,44b I Sub-total i3. b0 3.740 3.771 I Family Labor j 161 1b1 1b1 1 Caita Tvtr*n 29 2C)LJ _00 Land Service I_Sub-total 4,240 4,105 4,141 V. Net Benefit (I-II) 10,923 11,058 11,022 VI. Income (I-III) 11,303 11,423 11,392 VII. Added Value (I-IV) 12,749 12,b6 12,3b poLnofio Ana:Lydlå of . ý h8 (o m (Table 16) w 000) years 4 ý LassIficatI.on . Croppng patten St 0. ha Apple orchard . ha(D 1.2 - aDi 1.2 hå . Production 4 . v 4 3 0 - - - Apple Sb,andarcl trees -4 i- -- ---- -. . Dkvrf 6se . 1 li. k> &P1, 4s*. - - - -~. a.i. i.-,0 44. "p Ö. '. '.i 1.Sales i ~j/< ~ i Låj_ 2Lää -w 2Ä_ s- -u kvå Ä>_4 !JP 2,2 ýÄ I-OL ±_w' 4 0'>p[IM 4095Z-90 ft a .. Investnent and Replacement Cost o. SapllIng s J.M o. Land preparation 4!4. o. Labor de 4-Pl o. Fertil izer/Manure/LIn - A o. Pesticildes/Borax 3b o. Small hand toole M k- o. Fower sprayer . o . Concrete mixlng tank o. Miacellaneous '94 sub-total. ~, * ., ~~ 1 -L~ Operating Costs o. Fertilizer/Manur"/LImO . ) å Jl ---7 2 Åe .«--, -d o. £eEticidcs/Borax u l - J , - os Fuel for sprayer d a .- - - - - ö. Boxe for Apple åale o. e irel,laneouae o. Lbor .- - - - - - - --S -~ -~ - - -- - -. - 4 -o- & } Sb-t°tal._ -.-.--. rj r± tu u_y ut, kpris0,4 > 11. Total costs ,.m£ - -P- -. KIL ,II. met IncrentaL Value(Ii Econonio Rite of Retan i 4t% Financial Analysis nf Apple Orhard (1.5 H.) (W '000) (Table 17) (Slope Land: 727) (River Bise: 28%) Claasifcsoo I. Cropping pattern (S: 0.3 h.) Apple orchad 1.5 1a (D: 1.5 ha) II. Production Apple: Standard tees 0.3 1.2 1.5 2.4 3.3 1.9 4.5 5.1 6 6.6 7.2 7.8 8.4 8.7 9.0 9.0 Darf trees 3.6 7.8 18.0 27.6 36.0 42.0 48.0 - 48.0 42.0 36.0 36.0 30.0 30.0 24.0 25.2 25.2 21.6 18.0 18.0 Subtotal 3.6 8.1 19.2 29.1 38.4 45.3 51.9 52.5 53.1 54 54.6 55.2 49.8 44.4 44.7 39.0 39.0 33.0 34.2 34.2 30.6 30.6 27 i1. Sale. Apple: 336.0/kg T212 2758 6466 800 12933 15257 17479 17682 17884 18187 18389 18591 16772 14953 15054 1313 13135 11124 11518 11510 10306 10306 9093 111. Coat 1. Inest:ent & Replacement cost o. S"pling. E: q?2o0 2 2 o. Land Preparation 1827 . aber 1023 725 0. Fertlitne/Manure/Llne 442 255 o. P:tcides/Boran 109 144 o. Sta11 hand toola 206 206 206 206 206 206 206 206 206 o. Power sprayer 17 226 226 226 o. Concrete mixing sank 101 . 1ellaneoue 290 1090 169 1090 169 169 1090 169 1090 169 Subtoal 7087 1431 1316 206 169 206 1296 396 206 396 1090 432 169 206 1090 396 2. Operattng Costs o. Fnrtlizer/Manure/L4ne 196.4 183.3 204 221.4 240.6 270.6 301.5 307.8 357.6 400.9 411 412.8 417.6 422.1 423.9 424.8 429.3 429.3 429.3 429.3 435 - - - 435 Pesticides/lorax 20.2 53.4 97.5 130.2 207.0 290.4 411.3 472.5 536,6 629.1 640.5 652.5 666.9 680.1 685.2 698.1 698.1 70.4 707.4 - 707.4 n. Fuel for sprayer 3.6 5.7 8.1 12.0 15.0 18.9 21.9 26.1 26.4 27.0 27.6 28.2 28.2 29.1 29.4 29.4 29.4 -;- 29.4 o. Boxes for pple salea 55.2 181.2 470.0 650.1 861 1014.3 1175.4 1196.4 1210.5 1224.6 1238.4 1259.4 1133.1 1147.2 1161.3 1191.2 1a98 1050 909.6 769.2 714 630 n. Labos, 564 607.2 700.8 853.2 970.8 1201.2 1407.6 1602.6 1725.3 1830.6 1861.2 1903.8 1922.1 1939.6 1979.4 1897.8 1757.4 1757.4 1757.4 1757.4 1770.3 1724.7 1682.7 1662.3 1999.9 o. M jsellaneons 66 - - - - 66 Subtotal 780.6 843.9 1005.9 1331.7 1673.7 2260.2 2851.5 2571.9 3721.7 4137.1 4201.5 4272.6 4324.8 4374.6 4442.1 4244.7 4127.1 4152.8 4180.6 4087.5 4058.1 3872.1 3639.7 3614.1 6.7 v. Total cost 7807.6 2274.9 2321.9 1537.9 1673.7 2429.2 3057.5 2574.9 3721.7 5433.1 4597.5 4272.6 4530.8 4374.6 4442.1 4553.7 5217.1 4152.8 4612.6 4087.5 4227.1 4078.1 3689.7 4704.1 3041.7 vi. bnt Inceeantal Vale (III-V> (7807.6) (2274.91(1109.9) 1220.1 4792.3 7370.8 9875.5 12682.1 13757.3 12240.9 13286.5 13914.4 13858.2 14216.4 12329.9 10399.3 9836.9 8984.2 8522.4 7026.5 7290.9 7439.9 6616.3 5601.9 5251.3 1F1nnial Oste ef Renurn: 35% (Table I) Financial Analysis of Apple Orchard (1 Ha) ( W 000) Standard UJ.'5 Ha (Slope Land) Dwarf 1.2 Ha Years Classification - .. 1. Cropping pattern Apple orchard 1.5 ha(.- S. *.« * o - --- - - 11. i-roduction -- btandaru txees a t - *----- --- ¯--- --4 sx, ' g 39. It -t, k°41 " "p- Apple:t Dwarf trees sy g. 4,iA a paæ x ] b 3t s_ 111. Sales Apple : 435/kg - W t swjk, tt <0 4-7.p -*il> nyJ t '12 - . -e. 9-e6 'PAV / 'Mt 'd ,res 4;e> '4e8)2 '- Å-- IV. Cost 1. Investment & Replacement Cost o. Sapllngs(å;: 60 " D: 1,200 o, 4,8 o. Land Preparation -. o. Labor '3 o. Fertilizer/'Manure/Lime o. kesticides/Borax o. Small hand tools 6 >l - o. Power sprayer 2 . / . o. Concrete mixing tank o. Misce!llaneous -, aer i;-}'P 'f'°'a jub-total -6 (k A ~.__ ~ 6h 9 - __ _'9 2. Operatirg costs o. Ferti.lizer/hianure/LimE! ,ty '93 s.e4 1/4 1*• J, i 3<' j 'Å.Y &9/ 8' 1) > 4,-l? ~.e W'23 -5p- e^P -'pj at3- o. Pesticides/Borax 4é. <41 t >-.it . - t 65.., 6at - r , >- . --------- - 681- _0P9 o. Fuel for sprayer k,6 . s ex se yg >-. ygav -- - o. Boxes for Apple sales _' o. Labor '-) " >«u 8 t P 1 t VJ.1 l 'P.6 si/t '^3. 8 "4/ 14 9-4.V 1 iv t -j22£ ,>ko iy o. Mliscellaneous _ _-_-_____ V. Total Cost ?e5I *32y i3 y 1 ,J1 ) . -4".?a k_å't-y .' L 3 _ 4 VI. Net Increlental Value (11-N Financial biate of Return : 46>t (Table 19) Financial Analysis of Apple Orchard (1.5 Ha) (- '000 Standard 1 0.3 Ha (W.ver 3kse) {Dwarf :1.2 Ha Years Glassification 1. Cropping pattern ,had .-5HaS: 0.3 ha Apple orchard 1.5 Ha(D 1.2 ha 11. Iroduction Applei Standard trees P Dwarf trees 6 - -- -ø .ø é 6 Sub total 4* 4, Yo 3_el- 111. S;ales C) Apple . 435/kg IV. Gost 1. Investment & heplacement Uost o. aapl Ings (standard 0 Land Lwarf preparation 0. Labor o. Fertilzer/Nanur/Lirme fte ¢ o. ,esticides/Borax -, "e' o. Small hand tools --e o. Power sprayer { o. Concrete mixing tank o. Miscellaneous , .,o''.° Sub--total 6rJ>t 2. Operating Costs o. Fertilizer/Nanure/Lime , > a - - J o. lesticides/Borax 7 -- - p o. Fuel for sprayer 4 ) > £ 8 8 ' & -- o. boxes for Apple sales o . Labor y 8y (ne > e > y n y > o. ?iscellaneous ---_ - -- - - - - V. Total costs s'_ __ A _ _ 4 " - _ Y _ /f Fet ncrenental Value .II-V) " )-,-" Financial Rate of heturn : 40>ý -1.AQ - (Table 20) Income AnalXsis of Silkworm Rearing Houses ( w '000 ) Classification Rearing House of 22.5 pyeong under Mulberry Branch - Feeding Method Portion 100 f+ 1. Sales 599.7 II III IV Fertilizer & Manure 20 Pesticides 2 0 5 Sterilizers 12 0 a W Other materials 9 0 Maint. & repair 36 o o Facilities depreciation 159 slj total 2U*,U FAmily labor 71 Capital interest Wo T nd service- Snh-total 6)4*5 v. N+ enefit (ITTT 4) VI. Income (I-III) 296.2 VIII. Added Value (I-IV) 343.2 (Tablie 21) EC:onoml, AnalysIs of Silkworm Rearing Houses(U.D Py-ig) ( '000 4ithout 1 2 3 4 7-iC 11 14 16 17-20 ~eroje___L_____7~1C____1__12_l,.!__15 lhje17____0 1. Yeld - - - - - - - - - - - - - - - - - - - - - - - - -- - - Ke/Ha). - - - - - - - - - - 0. Cocoons Å2,300/kg 377 b00 1,057 - - --- -- -- - - - .- o. mulberry Branches Ab/kg 5,000 6,000 7,500 - ------ - - --- - ---- - - -- o. Silkworim Låitter .I6/kg 2,594 5,511 7,134 - - ---- -- -- - - - - o. Increase Cocoon quality M15,0/kg II. Sale s - - - - _ - - - - - - - - -- - - -- - - - - - - - - (- 0) o . ericulture cocoons 29 1 617.4 15W --- - - --- -- - -- ------ ---- - 0. By-products 17.5 25.6 32.4- ----- --- - .---_ .__--_____ --____ o. Total 30C .51 643 c4e.2 ----- - ---- --- _ - --- - - ------ ----- -- - -- III. Investiment & 1eplacement Jost o. hearing House 22.5 pyeong) o. Equlpment for Rearing House 322.2 311.4 322.2 311.4 o. Fertilizers & Manure 72 o. 1-estiides for Mulberry 7.6 o. Labor 11 o. Hired Animals 19 o. Silkworm Egg (4 cases) 11.3 o. Sterilizers 7.2 o. Other materials 5.4 o. Establish Mulberry Fields - - - 199.? 65.2 Sub-total 1,747.7 311.4 322.2 199.3 65.2 311.4 IV. (perating Cost o. Fertilizers & Manure 50.4 - 72 --- - -- - - -- - --- -- - -- o. iesticides for Yulberry 5.4 - 7.2 --- --- -- - - - -- o. Labor 131 .3 61.6 210.4 --- - _ __ _ o. Hired Animals 19 - 19 o. Silkworm Eggs 11.3 11.3 28 - - ------4 - - - -- - __ _ _ o. dterilizers 7.2 7.2 1 --- --4-- - -- -_ _ o. Other Vaterials 5.4 5.4 13.5 --- - - o. haint,. & hepair (2>) - 32.4 32.4 ---- - - _ oub-total 230 117.9 400.5 - -- - - - --- - - -- - - V. Total (11I + IV) 230 1,b65.6 400.5 400.5 400.5 400.5 711.9 400,.5 722.7 400.5 599.8 465.7 400.5 711.9 400.5 VI. bet value 78.5 1,222.6 447.7 447.7 447.7 447.7 136.3 447.7 125.5 447.7 24d.4 362.5 447.7 13t.3 447.7 V1,1. Incremental value - <1,301.1 Jb9.2 .2 309.2_109.2 57. 309.2 47 3o9.2 1o9.9 369.2 5.o 369.2 ,conomic Rate of heturn 25;. Financial Analysis of Silkworm 1earirne Houses (22.5 lyong) (Table 22) ( . 000) 4ithout l Assumption ProjeCt basen on farmer • • roject 1 24 5 (D '1-10 11 12 1 14 15 1b 17-2 alreaCy having established mulberry 1. Y d~~ ¯ - ~ ¯ --- - --el --ukl/ ) - plantings of U.35 ha but in need ot o. Cocoons s2,jO/kg 9' -o - - improved rearing facillties. o. Mulberry Branches AC/kg .6*'O4 6,~0 93,60 - o. Silkworm Litter -D/kg .4p 4 r// _ - - - 1/ Price averaged by adding weight o. Increase Cocoon Jualty3/ monthly average price by grades in (_9150/kg) 79. 11. .ales - --- - - -- -- - - - (W do - - - -t g - o. Sericulture Cocoons 329-3 2/ Young mulberry 4 year old, low o. By-products 19,44 .p-5 3, --,K- - - - --- . oducts /94 2 - -- -- ;- production, ~little fertilizer used. Total 41g/ //1 0 - III. Investment-& Replacement Cost 4 case without project, 0 cass first o. hearing House (22.5 pyeong) year of project and 10 case each o. Euquipment for Rearing House 1 year thereafter. Yield per case o. Fertilizers & Manure é¢9 before project 13 kg/case, 1st year 0 o. Iesticides for Nulberry o± project, 35 kg/case and 2nd year o. La bor 5/ /40 on 37Okg/ cs . o. Hikredk Anl,nals on)./gcae o. Silkworm Egg (4 cases) /M 3,1 Improve quality as a result of o. Sterilizers 5.0 proper housing, pivot cocoon-bed, o. Other materials improve sanitation ana cisease control. o. Establish Mulberry Fields Sub-total /.AOJ 4,1 Investment provides tinancing for IV. Operatingst one year's inputs, including costs o. Fertilizers & Munure MI - éZ I---for muloerry field improvement and o. Lesticides for Mulberry - 3 /4 -- - for rearing curing the first batch of o. Labor 5/ '~ -- -- - -- ' , 4 case of silkworm in the new rearing o. Hired Animals -- l/ - house. o. Silkworm bggs A-- o. återilizers J,o A0 5/ Labor for mulDerry field and silkworm o . Other material 1< 41 A-- o. Oat m aterial (2,ý) -- ig- Od -- -rearing, included family labor. o. Maint, & RFepair (2%) - aél 6 -- - -3 -___ Sub-total 2976~ r.fit CS 3 /3 t/, t/3k 3/ V. Total (III + IV) 290-s- ;MsC - g/* 653 g 3 k.i/ dn, . j t,3 kli/ 3's3 V1. Net Value 444rý 'rtuf 5aß g4A a/YÄ 49.y 9 499,Å#q O. 42P,4 Zpgkfi >_m.g Aw %9 P3.¥ ¥£ Vll. Incremental Value - :/l. m A 3m. 232 b Z 3 3 Financial hate of heturn 204, - 111 - (Table 23) Income Analysis of Sprinkler Irrigation (2 Ha) (w '000) Classification Standard Apple Dwarf Apple Weighted Averare Portion j4 16 100 I. Sales 2,383 2,639 2,424 TT TTT TV Mnl '70 70 170 ~f -r p ' " " 80 -80 80 O O C+ HC I Faculities 317 317 317 depreciation Hired labor - Sub-total - Family labor 120 120 120 Capital interest 488 488 33 Land Service Sub-total 608 608 608 V. Net Benefit (I-Ii) 1,299 1,550 1,339 VI. Income (I-III) VII. Added Value (I-IV) 1,907 2,163 1,948 (Table 24) Econof,ic nalysls of Sprinkler 1rriFation (2 Ha) (W 000) -- -- i6 ~ 9 ~ i -- -6 /_9- -- dith project a.4 9 v 6( I-c 61 t tto é<6 633 6. , )o( bo) o i? i 9 1 4i dithout project. __ , ~ 37 ~ ~ ~ ~ ~ ~fj~t~ II. Sales 1I. W1ith pro jec t hk <>k6yair- | 9,9< r /9 95 1ttip 9 3+pa ,1 2 . W itho ut p roject o 9 9' y ' 3 ' 6 - '? M ! ' p b ' . 6, , 4 e / l eN / t % iff / '+ L 3. uross Denefits12 III. Investment and Replacement Costs I-umping Station ., Sprinkler system Installation cost IV. Operating Cost Labor i -- - -- -- -- Fuel Æ- -i-_-_, ---_-_-_- -- - --- -- - - Maintenance/repairs ¯ ¯¯¯-- -- - --- - V. Net Benefit (II 3 - 11I-IV Economic Rate of Return 38% Sprinkler Irrkgation (2 Ha) :Farm Model (Table 25) I. iroduction aith project , > -e - L r .¿ti >-o Lk.. 63,3 '! 4D3 9 † † & ;4ithout project,3 49,?NT? ^?N, 73i eà t ?T II. Sales 1. Wlith project, MT 29 9 4 p ær49 2. wlthout project 3. Gross Benefits (1-2) III. lnvestment and Replacement Josts lumping Station Sprinkler system Installation cost IV. Cperating cost Labor Fuel Maintenance/repairs V. Net Benefit (II 3 - III - IV )7 Financial Rate of Return : 34% Financial Analysis of Sprinkler Irrigation (2 Ha Dwarf Apple Orchard) (Table 2b) ( ü' 000 ) - ~ Year Classification - 2 -' 1. kroduction with project 41 69 -j3 2-- - - d 4 e,4a ' 31 1 A 2 1 - Aith project d 34 -- - --- .e .11 Jo 5 . II. Sales 1. With project Wj)bl.2/K ;>,)( -?.P å/j jk lp' atP ----- -784 )&p 2,.xwå2>,UrK 2 . Without projectyüY44/ >é -F-n- 3. Gross Benefits (1-2) III. Investment & heplacement costs bIfuMping Station Sk6 Sprinkler Jystem Installation cost iV. (Aperating Cost Labor - ¯¯ - ¯ F u e l-- - - -- - - - -- - --- Maintenance/repairs -- -- - - - - ---- -- - - -- -- ---- - V. Net Beneft't Financial Rate of Return More than 5U% Finaicial Analysis of Sprinkler Irrigation (2 Ha Standari Apple Orchazd) (Table 27) ( W 000 ) 1 ~ £- d 7 c 9 m~ rj ta 3 l- 6t ' 12 réd',:> ay 1. kroduction dith project without project P, 64 -1 t-, jt f f j - -- --- - 11 1- 17 £7 II. Sales 1. With project 0j.U/kg 7 p » 1 - - - -- ---- -y X0 II. Investment and Replacement Costs MA or /JU 1k Pumping Station 43/o Sprirdkler system Installation cost IV. Operating Cost Labor -- -- -- - - -- - Fuel -- -- --- - - - Maintenance/repairs ¯¯ ¯¯ ¯ ¯¯-¯ V. Net BenefIt (i i - i a - IV) 7>k? rn Financial Rate of Heturn 1 29% Income Analysis of Greenhouse (0.1 Ha) (Table 28) ( W ooo ) Urop Patterns Lettuce Lettuce and Radish Tomato Cucumber Green Strawberry Sweet melon Weighted Average Chinese cabbage Pepper Portion 2 6 4 17 23 19 21 b 100 1. Sales 900 1,300 . 1,200 2,2b0 2,360 1,943 1,235 1,600 1,25 ii I IV Seed 19 1. 1 50 10 1.92 d 59 Seed pot - 4 6 d 14 5 - 5 6 Seed bedsoil - 30 40 - 30 96 - 13 30 o & Heating materials - 15 b 1ö3 - 9 45 Supports 13 19 10 1b 14 33 6 20 17 :3 Fertilizer 46 109 b0 ö2 296 67 bl 107 131 ni Pesticide 7 57 2 70 19 36 2 21 30 m Fuel - 142 4 - 42 - - 15 22 Electricity - 54 - - - 24 - - 9 P .E .flmö 11 162 65 200 123 232 164 165 171 Phatch 10 24 6 93 125 72 - 27 62 Micellanecus 21 24 1D 19 34 60 29 22 33 Facilities 1/ depreciatIon- 73 90 57 73 122 96 51 63 ö4 Sub-total 357 734 336 >66 1,0,4 731 525 495 699 HIred labor 100 100 50 200 2:00 200 100 100 157 Hired capital service ly 19o 116 196 260 249 111 104 200 Sub-total - 2 29b 160 39b 4Ö0 L449 211 264 37 Family-labor 200 329 166 1,273 620 771 4ö0 630 740 Capital interest 2/ 24 26 26 51 51 39 27 35 39 Land service 3/ - 60 50 - 105 120 50 - 64 Sub-total 224 413 264 1,324 976 930 57 065 _43 V. Net Benefit (1-II) 62 -145 432 -26 -150 -167 -5b -44 -74 VI. Income (I-III) 26 270 696 1,29b 626 763 499 b21 769 VII. Added Value (I-IV) 543 b6 62 1,694 1,306 1,212 710 1,105 1,126 1/ Facillties depreciation ls the investment amount devided by its' durable period 2/ Capital interest is generated from Investment cost and operating cost 12% per anum 3/ Larsi service is caliclated on the basis of opportunlty cost - 117 - (Table 29) Economic Analysis of Greenhouse (0.1 Ha) (N '000) Year 1 2-5 6 7-10 11 12-15 F .T Sales I ,643 ,643 , 1 1,643 1,64 II. Investment and Replacement Costs Metal Frame 909 116 Irrigation Facility 33 16 30 Oil Stoves 29 29 29 Polythylene Film 169 Thatch 196 Sprayers 101 101 101 Small tools 61 61 61 1,498 207 337 III Operating Costs Seed 53 5 3 5 3 5 Seed Pot 5 5 5 5 5 5 Seed bed soil 27 27 27 27 -27 27 Heating materials 41 41 41 41 41 41 up1 15 15 15 15 15 Fertilizer 128 12b 12b 12b 12b 12b lesticide 27 27 27 27 27 27 Fuel 1I 18 18 18 18 18 Electricity b b b b b b F.E. film - 154 154 154 154 154 Thatch - 56 56 56 56 56 Labor 601 601 601 601 601 601 Miscellaneous 30 30 30 30 30 30 953 1,163 1,163 1,163 1,163 1,163 TV. Beneft (T TT TTT) 0 480 27 4 14 4^ . V. Opportunity Cost of Land 58 58 58 5d 58 58 VI. Net Benefit (IV-V) -66 422 215 422 b5 422 Economic Rate of Return : 47% - 118 - (Table 30) Financial Analysis of Greenhouse (0.1 Ha) (w '000) Year 1 2-5 b 7-10 11 12-15 i. Sales Greenhouse vegetables 1,025 1,25 1,b25 1,ö25 1,b25 1,ö25 II. Investiment and Replacement Costs Metal Frame 1,010 129 Irrigation Facility 37 1 33 0il Stoves 32 32 32 Polyethylene Film 1bb Thatch 21b Sprayers 112 112 112 Small tools 6bd6_ 6b iii. Operating Gosts Seed 59 59 59 59 59 59 Seed pot b b 5 b b b Seed bed soil 30 30 30 30 30 30 Supports 17 17 17 17 17 17 Fertilizer 131 131 131 131 131 131 Fuel 22 22 22 22 22 22 Electricity 9 9 9 9 9 F.E. film - 171 171 Thatch - b2 b2 b2 b2 b2 Labor 97 Ö97 C97 Ö97 ö97 C97 Iviscellaneous 33 33 33 33 33 33 5,29 n,1 1,5«12n -1,3512n 1 n2 1 n IV. Benefit (1-II-III) -1,119 313 ö3 313 -ö1 313 V. Opportunity Cost of Land b4 64 b4 b4 b4 b4 VI. Net Benefit (IV-v) -1,1ö3 249 19 249 -125 249 Financial Rate of Return : tJ 119 - (Table 31) o.1 Ha Green House (Lettuce) Year 1 2-r 6 7-10 11 12-15 T Sales Lettuce 1/ 900 900 900 90 C00 900 II. Investment and Replacement Costs Metal Frame . 1,062 Irrigation Facility - Bil Stoves Polyethylene Film 181 Thatch Sprayers 20 20 20 small tools 15 15 15 Ill. Operating Costs Seed 6 6 6 6 6 6 Seed pot - - - - - - Seed bed soil - - - - - - Heating materials - - - - Supports 13 13 13 13 13 13 Fertilizer 46 46 46 46 46 46 71 7 7 Fuel - Electiricity - - - - P . . fil. - 11 11 181 '.n 1i1 Thatch (1/3) - 10 10 10 10 10 Labor 2/ 300 300 300 300 300 300 iiiscellaneous 21 21 21 21 21 21 393 5b4 IV. BenefiLt (T-TT-TTT) -01 316 261 316 261 316 V. Opportunity Cost of Land - - VI. Net Benefit (Iv-V) -801 316 2b1 316 2 1 316 Financial Itaté of Return 39 1/ 300kg per 0.1 ha / 10 nanda.ys x -.6,500 and 30 womandays x .4,500 - 120 - (Table 32) 0.1 Ha Green House (Lettuce and Chinese Cabbage) Year 1 2-5 b 7-10 11 1 2-1 I. Sales 1/ Lettuce and Chinese cabbage 1,300 1,300 1,300 1,300 1,300 1,300 II. Investment and Replacement Costs Metal Frame 1,020 Irrigation Facility 107 .50 -57 Oil S+nvae f0 n I0 Polyethylene Film 162 Thatch 116 Sprayers 1)0 1w0 Small tools 1.5 1.5 1 1,b32 12) 22 III. Operating Costs Seed 19 19 19 19 19 19 Seed pot 4 4 4 4 4 4 Seed bed soil 30 30 30 30 30 30 Heating materials - - - - - - Supports 19 19 19 19 19 19 Fertilizer 109 109 109 109 109 109 Pesticide 57 57 57 57 57 .57 Fuel 142 142 142 142 14 142 Electricity 54 .54 44 4)4 P.E. film - 162 12 162 162 162 Labor 2/ 429 429 429 429 429 429 Miscellaneous 24 24 24 24 24 24 IV. Benefit (I-I-III) -1,219 227 102 227 102 227 V. Opportunity Cost of Land 60 60 60 60 60 60 3/ VI. Ve + eei '(T11 U) ~ 1 ,29 17 42L 16W7 429 16W7 Vinanial Rate f RAturn 1 74 1/ Lettuce 1,500kg, Chinese cabbage 13,b/)kg, Chinese -cabbage 9,250kg 2/ 143 Womandays x @3,000 3/ land rent per 0.1 ha - 121 - (Tab-l-- '1) 0.1 Ha Green House (Radish) Year 1 2-5 6 7-10 11 12-15 I. Sales Rad1/ i Sh 1 900 1 ,9) 1 AA 1 )AA) 1 OM II. Investment and ReDlacement Costs Irrigation Facility Oil Stoves Polyethylene Film 85 Thatch 18 Sprayers 120 120 'mail tools 15 TC r5 965 15 135 III. Operating Costs Seed 18 18 18 18 18 lb Seed bed soil 40 40 40 40 40 40 Heating materials 15 15 15 15 15 15 Sunnorts 10 10 10 10 In 10 Fertilizer 80 80 8 o0 80 80 Pesticide 2 2 2 2 2 2 Fu el 4444 Electricity - - - - - - P.E. film - 85 85 85 85 85 Thatch - 6 6 6 6 6 Labor 238 238 238 238 238 238 Miscellaneous (2%) 15 15 15 15 15 15 428 519 519 519 519 519 IV . Dene; IT (i-11- III) -193Y- DO1 666 681 54 081 V. Onnortunitv Cost of Land 50 I0 50 50 50 50 VI. Net Benefit (IV-V) -243 631 616 631 496 631 Financial Rate of Return More than 50% 1/ 8000 Kg per 0.1 ha 2/ 25 mandays x 44,500 and 50 womandays x @2,500 (Table 34) 0.1 Ha Green House (Tomato) Year 1 2-5 6 7-10 11 12-15 I. Sales Tomato 1/ 2,280 2,260 2,280 2,280 2,20 2,2b0 II. Investment and Replacement Costs Metal Frame 936 irrigation Facility - Oil Stoves - Polyethylene Film 250 Thatch 2b0 Sprayers 150 150 Small tools 15 15 15 1,631 15 165 Seed 15 15 15 15 15 15 Seed pot 8 8 8 8 8 8 Seed bed soil Heating materials b 8 8 8 8 8 Sunnorts lb 18 18 1b 1b lb Fertilizr 82 82 82 82 82 82 Pestinian 70 70 70 70 70 70 Fuel - - - - - - P.E.film - 200 200 200 200 200 Thatch (1/3) - 7j 73 9 Labor 2/ 1,473 1,473 1,473 1,473 1,473 1,473 --1 nn t q n 10O Miscellaneous (4) 19 17 19 19 1 1 1,693 1,986 1,986 1,986 1,986 1,986 IV. Benefit (I-II-III) -1,044 294 279 294 129 294 V. Opportunity cost of land - - - - - - .r+ fTt I F).06 244Q4 279 294 129 294 Financial Rate of Return : 27% 1/ 8,400kg per0.1 ha 2/ 155 mandays x @5,500 and 155 womandays x @4,000 -1235- (Table 35) 0.1 Ha Green House (Cucumber) Year 1 2-5 6 7-10 11 12-15 I. Sales Cucumber 1/ 2,360 2,360 2,360 2,360 2,360 2,360 II. Investment and Replacement Costs Metal Frame 1,550 irrigation Facill- 1210 011 Stoves 120 120 120 Polyethylene Film 123 Thatch 375 Sprayers 30 30 Small tools 135 135 135 2,333 255- 285 III. Operating Costs Seed 50 50 50 50 50 50 Seed pot 14 14 14 14 14 14 Seed bed soil 30 30 30 30 30 30 Heating materials 183 183 183 13 183 IS3 Supports 14 14 14 14 14 1 Fertilizer 298 298 298 298 298 298 Pesticide 19 19 19 19 Pel 42 42 42 42 42 42 Electricity --- - E le .i t - 123 123 123 123 123 P .aä .m 125 125 125 125 125 Thatch (1/3) 1i020 1.020 1.020 1,020 1,020 1,020 Labor 1. Miscellaneous %) (23) - 34 34 1,704 1,952 1,952 1,952 1,952 ,95? IV. Benefit (1-U-CII) -1,677 408 15 408 123 408 V. opportunity Cost of Land 105 105 105 105 105 105 VI. Net Benefit (IV-y) -1,782 303 48 303 18 303 Financial Rate of Return 1 13% 1/ 7,500kg per 0.1 ha 2/ 90 mandays x 25,000 and 150 womandays x 3,800 al land rent per 0.1 ha /.1 ...1 (Table 30) 0.1 Ha Green House (Green Pepper) Yer1 2-5 6 7-10 11 12-15 I. Sales Green pepper 1/ 1,943 1,943 1,943 1,943 1,943 1,943 II. Investment and Replacement Metal Frame 1,078 678 Irrigation Facility 120 60 120 M11 q+nv n - Polyethylene Film 286 Sprayers 150 Small tools 85 85 805 2,079 145 1,033 III. Operating Costs Seed 10 10 10 10 10 10 Seed pot 5 5 5 5 5 5 Seed bed soil 96 96 96 96 96 96 Heatin7 materials - - Supports ,33 33 33 33 33 33 Uf ur U( V7 Q( Pesticide 36 36 36 36 36 36 Fuel - - - Electricity 24 24 24 214 24 24 P.E. film - 232 232 232 232 232 Thatch (1/5) - 72 72 72 72 72 Labor 2/ 971 971 971 971 971 971 Miscellaneous (5%) 60 60 60 60 60 60 1,302 1,606 1,606 1,606 1,606 1,606 IV. Benefit (I-II-III) -1,438 337 192 337 -696 337 V. Opportunity Cost oa Land 2/ 120 120 120 120 120 120 VI. Net Benefit (IV-V) -1,558 217 72 217 -816 217 Financial Rate of Return 3% 1/ 2,800 kg per 0.1 ha 2/ 70 mandays x 45,300 and 200 womandays x @3,000 3/ land rent per 0.1 ha - 125 - 0.1 Ha Green House (Strawberry) Year 1 2-5 6 7-10 11 12-15 I. Strawberry 1/ 1,235 1,235 1,235 1,235 1,235 1,235 II. Investment and Raplacement Metal Frame 570 Irrigation Facility - Ail q.nvp, - Folyethylene Film 164 M . . -I Sprayers 120 120 Small tools 71 r1 r1 925 71 191 TTT AOm+rn in c ' Seed 192 192 192 192 192 192 Seed pot - - - - - - Seed bed soil - - - - - - Heating materials - - - - - - Support 6 6 6 6 6 6 Fertilizer 81 81 81 81 81 81 Pesticide 2 229 Fuel - - - - - - Electricity - - - - - - P.E.film - 164 164 164 164 164 Thatch - - - - - - Labor 580 580 580 580 580 580 Miscellaneous (5%) 29 29 29 29 29 29 890 1t054 1,054 1,034 1,054 1,054 IV. Benefit (i-I-III) -580 181 110 181 -10 181 V. Opportunity Cost of Land 50 50 50 50 50 50 VI. Net Benefit (IV-V) -630 131 60 131 -60 131 FAnancial Rate of Return : 18% 1/ 2,080 kg per 0.1 ha 2/ 9 mandays x @5,000 and 214 womandays x @2,500 3/ land rent per 0.1 ha - 26- (Table 38) 0.1 Ha Green House (Sweet Melon) Year 1 2-5 6 7-10 11 12-15 I. Sales Sweet Melon '1/ 1,600 1,600 1,600 1,600 1,600 1,600 II. Investment and Replacement Costs Metal Frame 984 Trrioation Vanliiv 100 50 100 Oil Stoves L, 'I Thatch 80 Sprayers 150 150 Small tools 15 15 15 1,530 65 265 III. Operating Cotts Seed H H H 8 8 Seed pot 5 5 5 5 5 5 Seed bed soll 13 113 13 1_3 13 Heating materials 9 9 9 9 9 9 Supports 20 20 20 20 20 20 Fertilizer 10? 107 107 107 107 107 Pesticide 21 21 21 21 21 21 Fuel, 15 15 15 15 15 15 Electricity - - - - - - P.P. film - 1Ar 1 F 1A 1AC 1Ar Thatch (1/3) - 27 27 27 27 27 Miscellaneous (2%) 22 22 22 22 22 22 1,150 1,342 1,342 1,342 1,342 1,342 IV. Benefit (I-II-III) -1,080 258 193 258 43 258 V. Opportunity Cost of Land - - - - - - Financial Rate of Return a 22% 1/ 2,500 kg per 0.1 ha 2/ 60 mandays x @5,000 and 180 womandays x @3,500 - 127 - (Table 39) Income Analysis of On-farm Storage (20 Pyong) ( W '000 ) Glassification Apple orange Weghted Portion 91 9 100 I. Sales 2,681 - 1,322 2,559 I III IV Repair & .Maintenance Building 61 47 60 Boxes 66 39 64 Facilities . depreiation 169 130 166 Sub-total 296 216 290 I labor 13? 98 Sub-total 391 353 388 Family labor 95 92 94 Capital Interest 506 391 495 Land service - Sub-total 992 836 977 V. Net Benefit (-li) 1,689 486 1,582 Vi. income (I-III) 2,290 969 2,171 VII. Added Value (I-IV) 2,385 1,106 2,269 Economic Analysis of On-farm Storage (20 pyong) Apple (Table 40) (w '000) 1 2 3 4 5 6 7 8-12 13 14-18 19 20-24 25 Typical ïields iIt/Ha 12 Years old tree 13 15 17 20 22 24 26 30 30 30 30 29 27 8 Years old tree 3 5 8 11 13 15 17 24 29 30 30 30 29 PToduction >I/T 12 YeaisoL, 1.7ha 22.1 25.5 2b.9 34.0 37.4 40.8 44.2 51.0 51.0 51.0 51.0 49.3 45.9 8 Yearsold, 0.3ha 0.9 1.5 2.4 3.3 3.9 4.5 5.1 7.2 e.7 9.0 9.0 9.0 b.7 Apple åtored 12.42 19.05 22.50 27.00 30.00 --- - 30.00 sales --(don '000)--------------- ----------------------------------- A.¯ithout Project #210.67/kg 2,354 3,612 4,266 5,119 5,6 88 5,688 B. With Project åold after 2 months (W:286.51/kg) 1,08b 1,669 1,970 2,364 2,625 - - 2,625 Damaged (#85,95/kg) 10 15 19 22 25 25 bold after 4 nonths (w339 .1/kg) 1, 645 2,525 2,983 3,578 3,974 --> 3,974 Damaged (#101 .75/kg) 1b 20 33 40 44 44 Sold after 5 months (#370.78/kg) 77b 1,194 1,411 1,696 1,02 1,882 Damaged (#111 .23/kg) 15 23 27 32 36 -3t, Sub-total 3,554 5,454 6,443 7,732 0,506 0,586 Ineremnental Income from Irojet (B-A) 1,200 1,042 2,177 2,623 2,090 2,ö98 Investment Storage building 3, 790 (20 pyeong #211,000/pyeong) Opera n oggý2st Handling & repacking 56 05 101 121 134 134 Repair & maintenance Bulling 342 342 342 342 boxes 19 29 36 42 47 --47 aub-total 75 114 137 163 101 101 520 101 520 101 52b 101 528 N e t Incremental (2,673) 1,720 2,04,0 2,4o0 2, 717 2,717 2, 370 2, 717 2,370 2,717 2,370 2,717 2, 370 tconomical Rate of Return : more than 50% Financial Analysis of On-farm Storage (2 y4! pl (Table 41) 1 2 3 4 5 6 7 8-12 13 14-18 19 20-24 25 Typical Yields ht/Ha 12 Yearsold tree 13 15 1? 20 22 24 26 30 30 30 30 29 27 8 Yearsold tree 3 5 8 11 11 15 1? 24 29 30 30 30 29 Production Mt 12 Yeaisold, 1.7ha 22.1 25.5 28.9 34.0 37.4 40.8 44.2 51.0 51.0 51.0 51.0 49.3 45.9 8 Yearsold, 0.3ha 0.9 1.5 2.4 3.3 3.9 4.5 5.1 7.2 8.7 9.0 9.0 9.0 8.7 Apple stored 12.42 19.05 22.50 27.00 30.00 ----- -- ---- 30.0 Sales ----------------------------------------- ---'000------ A. Without Project W210.67/kg 2,616 4,013 4,740 5,688 6,320 ----. 6.320 with Project Sold after 2 months (W286 .51/kg) 1,209 1,854 2,189 2,627 2,917 2,9117 Damaged (W85.95/kg) 11 17 21 24 28 28 Sold after 4 months (W339.18/kg) 1,828 2,805 3,314 3,975 4,416 4,416 Damaged (WlO1.75/kg) 20 31 37 44 49 49 1 Sold after 5 months (W370 .78/lkg) 864 1,327 1,568 1,884, 2,091 2,091 Damaged (Wll1.23/kg) 17 26 30 36 40 40 Sub-total 3,949 6,060 7,159 8,590 9,541 -541 Incremental Income from Project (B-A) 1,333 2,047 2,419 2,902 3,221 3,221 Investment Storage building (20 pyeong W211,000/pyeong) Operating Costs Handling & repacking 83 127 150 180 200 200 Repair & maintenance Bluilding 380 380 380 380 Boxes 29 44 2 3 63 70 -. 7 sub-total 112 171 203 243 270 270 650 270 650 270 650 270 658 Net Incremental (2 1, 876 2,216 2,659 2 951----9516 Financial Rate of Return :more than 50% Note) Apple sold as follows. After 2 months After 4 months After 5 months Normal apple 33 95% 43.40% 9- - 18.80% Damaged apple 1 .05% 18.60% 1 .20% Total. 3500% 45.00% 20.00% Econ.cmic Analysis ot On-farm Storage (20 pyong) Orange (Table 42) (W'000) _1 3 4 5 0 7 ö-12 13 14-10 19 20-24 25 Typical YeldsMtHa 10 Years old tree 14 16 17 20 20 24 24 2b 2y 29 30 29 27 b Years old tree 9.1 11 14 1b 17 20 20 24 20 27 29 30 29 Production Yt lha, 10 years old tree 14 10 17 20 20 24 24 2b 27 29 30 29 27 0.5ha, 10 years old tree 4.b 5.5 7.0 0.0 b.5 10 10 12 13 13.) 14.5 15 14.5 Orange Stored 1 17 1b 19 20 20 Sýales ----------------------------- ..------..:- .._-- - --- ------- -..- ...._.. ---...__. (w '000)- - - ...-. .... -. - _ _ A. ålthout l-roject W320/kg 4,00 4,09t 3,104 3,472 5,760 -,70 B. WIth 1,roject Sold after 1 month (w34D.bO/kg) 1,277 1,357 1,436 1,-17 1.597 1597 Damaged (#34.56/kg) 1 1 1 1 1 Sold after 2 months (C393.60/kg) 073 920 903 1,037 1,092 1,092 o Damaged (#39.3/kg) 2 2 2 2 2 2 Sold after 3 months (W454.40/kg) 1,709 1,901 2,012 2,124 2, 23'7 ' 2,237 Damaged (#45.44/kg) b 9 9 10 11 - 11 Sold after 4 months (W492.00/kg) 1,b14 1,715 1,015 1,..6 2,017 2,017 Damaged (W49.28/kg) 15 16 17 18 19 19 Sub-total 5,579 5,929 6,275 6,625 6,976 -#6,976 Incremental Income from Project (B-A) 971 1,033 1,091 1,153 1,216 --. 1,216 investment Storage building 2,934 (20 pyeong #163,000/pyeong) perating Costs Handling & repacking 125 133 141 149 157 157 Repair & maintenance Building 264 264 264 264 Boxes 21 23 24 25 26 - 26 Sub-total 146 156 165 174 183 183 447 183 447 183 447 183 447 Pet Incremental (2,10)9) 87? 926 979 1,033 1,033 769 1,033 769 1,033 769 1,033 769 Economical Rate of Return : 45 Financial Analysis of On-farm Storage (20 Fyong) Orange (Table 43) 2 3 4 5 6 7 b-12 13 14-10 19 20-24 25 Typical Yeids MYt/Ha 10 Years old tree 14 1ö 17 20 20 24 24 26 27 29 30 29 27 b Years old tree 9.1 11 14 16 17 20 ' 20 24 26 27 29 30 29 Production Mt lha, 10 years old tree 14 16 17 20 20 24 24 26 27 29 30 29 27 0.5ha, 10 years old tree 4.b 5.5 7.0 0.0 0.5 10 10 12 13 13.5 14.5 15 14.5 Orange stored ib 17 10 19 20 - - 20 Sales A. fithout ,roject 0320/kg 5,120 D,440 '760 6,000 b,400 . .. . 6,400 b. dith iroject Sold after 1 month (WJ4D.b0/kg) 1,419 1,50t 1,596 1,6b5 1,774 > 1,774 Damaged (*34.56/kg) 1 i 1 1 . 1 Sold after 2 months (#393.60/kg) 970 1,031. 1,092 1,152 1,213 - 1,213 DaMaged (#39.3/kg) 2 2 2 2 2 2 2 ,old after 3 months (#454.40/kg) 1,968 2,112 2,236 2,3b0 2,4ö5 - -- 2,485 Damaged (445.44/kg) 9 10 10 11 12 . - 12 Sold after 4 months (#492.0/kg) 1,793 1,905 2,017 2,129 2,241 - 2,2,41 Damaged (#49.2ö/kg) 17 1t 19 20 21 , 21 Sub-total 6,199 6,587 6,973 7,360 7,749 : 7,749 Inc:re,ienl,a lIcme, from ~* ___________________________ ,4 1 a IBo_A f 1,079 1,147 1,213 1,2d0 1,349 1,349 Investment jtorage Building (20 pyeong W13,000/pyeong) 3,260 Operating Costs Handl &r¯epacking 1ö7 199 210 222 234 - 234 Repair & maintenance Building 293f 293 293 293 doxes 32 34 36 3e 40 - 40 sub-tota. 219 233 246 260 274 274 567 274 567 274 567 274 567 het Incremental (2,400) 914 967 1,020 1,075 1,075 782 1,075 7U82 1,75 7T72 ,75 7Fr Financial Rate of Return s 41 Note ) Orange sold as follows; 1 month 2 months 3 months 4 months Normal orange 2>.bb% 15.41% 27.34% 22.74% Damaged orange 0.16 u.27% 1 .27 2.13% Weight loss 0.1t% 0.'2% 2.39% 2.13% Total 2b5. 167 31% 27%  IBRD 10375 5 USSR 7 128 129• APRIL 1973 jNj m fiL UTY K-OR E A-l ( o l Japon 1 cno East Sea \ ,-,KOREA aunme>.- w -38' i>GY G Ga ChuncheEN gneung pa c, f, eonqbu China Seau, ceankho 125 26SÉ 0LL n ncheog eoceguNG * g -, J gJeongseo L37. 37. Benseobseon 1111 -35'-ýH' amUN23' 'Kl> 36* Jonngsnungpo N9" ngeu K Ol N Ak Expressways Wand. E xpressways under construction Primary roods --Railways Ye/-a- RSiways under on strcti 3co -34° A ir ports Port s Rivers ] 'ý Special cities Provincial boundaries ---- nternationai boundories U0 20 40 60 KL E S 0 10 140 160 K' i LOMETERS j ip 02 40 MLES 60 , 8P I00 125 126' 127' 128* 129