Document of The World Bank FOR OFCIAL USE ONLY Report No. 8187 PROJECT COMPLETION REPORT INDIA JAMMU AND KASHMIR HORTICULTURE PROJECT (CREDIT 806-IN) NOVEMBER 21, 1989 Agriculture Operations Division Country Department IV Asia Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their oficial duties. Its contents may not otherwise be disclosed without World Bank authorization. [.|ST F ABBLaU AIC - Agro-Industies Development Corporation CLS - Crop Loan Scheme DOA - Deprment of Agiculture DOH - Deparment of Horticulture DOHPM Depamment of Hoitcultmu Plnning and Marketing GOI - Govenment of India GOJK Govenment of Jammu and Kashimir FAO/CP - FAQ/World Bank Cooprative Programme HP - Himachal Pradesh AP - Indo-Austalian Project IDA - Intemational Developmnt Association J&K Jamnmu and Kashmir JKHPMC - Janmmu and Kashnmir Horticulture Produce Marketing and Processing Corporation Ltd. NABARD - Natonal Bank for Agriculture and Rural Development PPU - Project Preparation Unit SAR - World Bank Staff Appraisal Report SKUAST - Sher-e-Kashmiir University of Agricultural Science and Technology UP - Uttar Pradesh WB - World Bank FOR OFFCAzL uSI ONLY THE WORLD SANK Washington. O.C. 20433 US.A. OlIked Of.cttw.wai November 21, 1989 KENORANDUN TO THE EXKCUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on India Jammu and Kashmir Horticulture Project (Credit 806-IN) Attached, for information, is a copy of a report entitled "Project Completion Report on India - Jammu and Kashmir Horticulture Project (Credit 806-IN)" prepared by the FAO/World Bank Cooperative Program, with an overview memorandum prepared by the Asia Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment Ti documnt has a restd dibutin and may be used by recipients ony in the perfomncee of their offci duties Its contents may not oherwie be dislosed without World Bank authoation. i INDIA FOR OFFIC4L USE ONLY JAMMUI AND KASHMIR HOIRTICULTURE PROJECT (Credit 806-IN) PROJECT CDOMPL^ETION REPOHC lable of Contents Page No. Preface i Basic Data Sheet ii Evaluation Summary iv Overview viii I. INTRODUCTION 1 II. BROAD CHARACTERISTICS OF HORTICULTURE SUB-SECrOR 1 Area and Production 2 Servce Institutions 2 Marketing 3 HI. PROJECT FORMULATON 3 Project Reconnaisce/Identification 3 Project Preparation 4 Appraisal 5 Project Description 6 TV. REVIEWOFPROJECT IMPLEMENTATION 6 Negotiations and Credit Effectiveness 6 Project Changes after Appraisal 7 Implementation Schedule 7 Physical Implementaton 7 Project Cost 9 Project Financing and Cedit Allocation 9 Compliance with Covenants 10 V. ASSESSMENT OF JKHPMC'S PERFORMANCE 10 Expected Scale of Operations 10 Actual Performance I I The Crop Loan Scheme 12 JKHPMCs Financial Position 12 Constraints Affecting JKBPMCs Operational Performance 13 This document has a restricted distribution and may be used by recipients only in the ierforinance of their official duties. its contents m&y not otherwise be disclosed without World Bank authorization. Eap No. VI. PROJECI ePACr 14 14 Assess tfActualProiect mpa 14 V1I. BANK PERFORMANCE 15 Overall Peformace 1S Supevision 16 Vm. CONCLUSIONS AND LESSONS LEARNED 16 1. o inof Appaisal and Acl Costs 2. Costs andComploau as at June 1986 of JKHPMC Facilities 3. JRHPMC O aons with Apples and Walnuts 4. JKHPaC - TeDms of Ma g D & Dem Dircwts 5. Ex ncuredon App WalReseah Compoat 6. Schedule of Dis tu (Cu e) 7. Aoto of Cred Proceds INDIA JAMMU AND AMIR HORTICULTURE PROJECT (CREDIT 806-XN) PROJECT COMPLETION REPORT PREFACE This is the Project Completion Report (PCR) for the Jammu and Kashmir Horticulture Project in India, for which Credit 806-IN in the amount of US$14.0 million was approved on April 25, 1978. The credit was closed on June 30, 1986, two years behind schedule. The last disbursement took place on February 12, 1987, at which time US$7.3 million was cancelled. The PCR was prepared by the FAO/World Bank Cooperative Program and the Overview and Evaluation Summary were prepared by the Asia Regional Office. They are based, inter alia, on the Staff Appraisal Report, the Development Credit and Project Agreements; supervision reports; and internal Bank memoranda. This PCR was read by the Operations Evaluation Department (OED). The draft PCR was sent to the Borrower on September 8, 1989, for comments by October 27, 1989, but none were received. - il. - JAAMU AND KASHMIR HORTICULTURE PROJICT (CMi 06-1N) PROJECT COMPIETION REPORT Daic Dao Sb S KEY PROJECT DATA Actual Col. 2 as Apprall Cuwreist 9 Estlmate Esaimat* of CI. I ll] [121 131 Total Project Cost ('SS milion) 27.6 21.81! 79 Crdit AmoU (USS million) 14.0 6.7 48 - Disbud 14.0 6.7 48 - Casucleld 73 52 Date Phya Compone Compeed Apple Cenes Sept 83 91/922/ Cold SwU SpL 83 91/922/ Waln utC;es Sep. 83 91/9221 M{aXu;xpartCe SepL 81 91/922/ Tra"A_Cmeatcenve SepL 79 1984 Etonamic Raw Of pAtum lkey negie 3/ CUMULATIE DISBURSEMENTS FY JO FY 81 FY82 FY 3 FY 84 FY 85 !Y 86 FY 87 Appsa Esdmate (USS milL) 0S.3 94 4 14.0 14.0 14.0i Actul (UJSS milion) 0.1 0.3 2.1 2.6 3.6 49 6.1 6.7 Actuals * of Appai sL (E() 33 21 40 27 26 35 44 48 Dao of Fina Dlseaut 12-Feb-87 PROJECT DAMS Orlugnal Plan Actual OctNov. 74 Pap-tim (by Gowia _me) Aug-77 - Appaisal SeptL 77 Negodaui Apr-78 BoardAppmval 18-May-78 Cedit Signng 17-Jul-78 CeitEffev s 20Oct-78 6.Jam-79 Credit Closing 30-Jun-84 30-Jun46 (saf" "Oka) fill ma r sn fS tMFlmn an F a EnO r M IAU r2ML Pu.anruIamI 17.7 17.1 2.1 5.6 - _ _ _ _ _ _ _ _ 42. Ae,reiugt - - - 115.4 - - - - - - - - - - 1 .4 N.6s*ImtI^t - - - .- - - - - - - - - - 5.0 6u"vw&emoa - - - *.6 22.1 1.6 1.8. 20.2 6.4 8.2 10.9 5.0 5.7 .6 U1.6 0tb.. - - - -- - - -.J TmrAL 17.7 17.1 2.1 19.? 22.1 11.6 I8.0 20.8 6.4 8.2 10.9 8.0 5.? .6 2.0 - 1il - ISSION DATA No. Ssooclllzallans T Mis1n Dat (t Pesn I Field Reprentd 41 8 6 TrW O Pvod 7j Rec St 0 OcVN@v.74 St 3 63 Appraisal SepOot-77 6 174 a..AI,h.vng. SupWvSln 1 Nov-76 4 24 ,t, 1 S&Pboun 2 Jun-79 3 21 t,h 1 Supevs 3 JuntJul-80 4 32 *.f.0 1 1 o SupevIion 4 Jun-61 :2 16 trng. 2 2 T.0 SupeVbn 5 May-82 3 30 a a 2 u.o SupevIi 6 Mar-83 1 4 a SUP8Vl_l 7 Jul-63 1 6 a 2 2 M.O SupevIo a Aug-44 2 20 *.a 2 2 u.o Supe.vsIo 9 Apr-6 1 65 a 3 2 M.P Swls_ lm Oct-as 1 3 a 3 2 M,P supus InI May-s 1 6 a 3 2 M.P OThER DATA Borroww: Goerment of Indi F1a Yew of 8o0mr: I Aprilo 31 March Nam t Caumn (Ablarevltlon): Ruw p(R) Exdp PaIe PbAl".: Appr"s Yes Avwqa (1977176): US$1 a Rug35 v"nIng Yas (19717 - 641 US$1 * a Ft0 196 A rag: U8$1 - Ast12O *! SXeo ot prea was redce dwrig brmpemeteUn 21 Ukly aMnIlan at ms ao the tad_e In 16611.A tow tfilles Om rquf s*1_t wad tobe IIled my in tnl obe i bI 3J lb* tIU-e_ pleI so t r hve boe We ue, ed tfw bmIl hae bee gerate Deft b not _Avaer ro-eftnWon d Uv ERR. brA ftt I n m and* ne_a tve 41 a * eWkluf*lst* e - mmAnI th. fu nb l w isyiLI h a hutlaaftr a a cei o*peddst a' - spo40ullsk sVg - 'n new. 6I - Protes tre or Mnor Prlm 2 * Modmt Prmns 3 * Mpw Prolm 61 -Improving, 2a .StOy, 3 a Dilenrtg 7/ T - TechnIcMl,M Meni_. P a PaIIi,O a COr 81 Fallow-up msso by IDA In May 1975 sad Jrway 1976. to ast loal PaIl Prepwtn Unit In prepin do prel. - iv - INDIA (0dt 806 - IN) PROJECT COMPLETION REPORT EVALUATION SUMMARY Inoducn 1. The Jmnmu and Kashmir Horticulture Project was financed under redit 806-IN, appVed in 1978. The proect amed at integrating collection, packdng, processing and marketing for apples, waln:us, hrooms and ther by-products by channelling these activies throug a to-be-established Jammu and Kashmir Horticulturl Product Marketing and Processing Corporan Ltd (JKHPMC). After an IDA reconnaissance mission in 1974, the Govent of Jammu and Kashmir (GOJK) established a project preparaton unit which, assisted by consultants from the Agdcultumal Fmance Corpon of Ind, prepaed a draft praration report in 1976. The rport required repeated revisions untl the final draft of late 1977 was appraised by IDA. Total project costs wem esdmated at Rs. 242.2 million (US$ 27.6 million), against which an IDA Credit of US$ 14.0 milLion was negotated. It was expected that the proect would be completed by 31 Decembe 1983, and the Cedit would close on 30 June 1984. 2. bIplementadon began in 1979 after months of delay caused by changes in the onlending charnel for the apple j ice plant component from ARDC (now NABARD) to the Industrial Devdepnt Ba of Edit Because of considebly higher costs than estmated at appraisal, the size of the project was scaled down by about 40%. Considerable delays in establishing prect inas occurred as a result of unfamiliarity with MDA proement polcies (this was the fist IDA assisted project in Jammu and Kashmir), review of cheaper altrnatives sinc the costs were higher than expected, and poor management control over covrucin, ordering of equipment and its installation. After two extensins, the Credit was closed on 30 June 1986, with a balance of US$ 7.3 million that was cancelled. 3. The first Bank assisted hordcultue project in India, for Himachal Pradesh, estabished a new pastaal to offer growers an alternative (public sector) market channel to thatprovidd by the traditonal trade. It aimed at lowering maketing costs, reducing the wide swing in prces due to seasonal apple gluts, itApwving fruit quality and utilizing apple culls.IThis commercially oriented parastatal was to maret fresh ruit through its own collecdon centes, grading and packing houses, coldstores and transhipment centers, to process fruit into apple juice concentrate, and to provide infrructure (roads, aerial cablemays). Included in the project were also technical assistance, training of project staff, andaprojectevaluation study. The project was cnfined to specific marketing posarvest) probles in the apple industry despite the Govemnment's plea for assistance for preharvest activities as welll. 'The Goverment of Himachal Pradesh had requested assistance for research into bredstocks, public sector nurmseies to produce better quality seedlings, on-farm producdon including equipment, agrchemcals, other supplies, and extension, as well as trsport, storage(includlng cold stores), processing and marketing. 4. Prior to the completion of the Hmachal Pradesh Apple Prcessing and Marketing Project (Cr. 456-IN), GOI and the Bank felt they had learned many lessons and proceeded with a sinilar horticulture project for Jammu and Kashmir. In addition to the above components, the J&K project provided for: sawmills to produce fuit boxes; hulling/drying and packing centers for walnuts; seasonal credit to growers; apple, walnut and mushroom rseach; and sudies on apple, walnut and juice marketing. Excepting credit, no preharvest component was included, although the reconnaissance mission had pointed to the need to upgrade the planting material and introduce improved orcharding practices. Furthermore, a component for low cost, on-farm storage included in the preparation report was deleted at the time of appraisal in favor of large, centrally located cold storages. Also, a provision for JKHPMC to provide advances to growers similar to those offered by the private trade was drpped in favor of seasonal credit through banks. hIplementation and Results 5. The project got off to a slow start Effectiveness was delayed due to a change in the financing channel for the juice plant and considerable further delays occurred during implementation. Establishment of project infrastructure was protracted as a result of unfamiliarity with IDA procurement policies (this was the first IDA assisted project in Jamnmu and Kar), review of cheaper alternatives since the costs were higher than expected, and poor managemznt control over construction, ordering of equipment and its installation. Due to considerably higher costs than those estimated at appraisal, the size of the proect was scaled down to roughly 60% of the appraised size. Basically, fewer packcing houes, coldstorages and walnut hulling centers were to be constmcted and the sawmill component was dropped. If account is taken for the reduced scale of investments there was an estimated 45% cost ovenrun in rupee terms (20% in dollar terms). 6. At Credit closing on 30 June 1986, only six out of seventeen packing houses, two out of seven coldstores, and two out of eight walnut hulling centers had been commissioned in the scaled-down project. The apple juice processing plant was not financed under the project, because GOJK purchased an existing juice plant from the private sector to be owned and operated by JKHPMC. The component for credit to farmers was not used -.t alL The research component for apples and walnuts was partially completed, while little work was done to support mushroom research. The marketing studies were never undertaken. The PCR estimated that the all project facilities would be complete by 1987/88. However, subsequent data have revealed that no further facilities have been commissioned even though some were almost completed at the dme the Credit was closed. 7. There has been poor farmer demand for JKHPMC services. Consequendy, capacity utilization has been low and the Corporation has incurred substandal losses. Now, with a negative net worth, its financial position is a disaster, and the ERR for the project is almost ceruinly negative. Banks have been unwilling to provide additional term finance to complete the unfmished facilities, and GOJK has not provided funds for this purpose either. Various factors are responsible for the low capacity utilization, the pdncipal ones being: a) Growers were not motivated to deal with the JKHPMC or use its facilities. Either they didn't perceive a benefit in using them, and/or they couldn't market their fruit through JKHPMC or use its coldstores because they were already committed to private agents from whom they had received preharvest advances. b) There were only limited quantities of fruit of a sufficiently high quality to coldstore really welL * vi - c) The C aion was overy concemed with constuction during its early yeas and little attention was given to developing a viable marketing framworl. Theih staff was not truined in merchandising and they were coained by baucaic procedures puting them at a disadvantage with pdvate traders and preharvest contractors. d) The Corpon established for itself a poor reputation regarding prices for the small quantities of fuit handled in the early years a situation that was excploited by private traders. A misconception about the shelflife of apples subjected to longterm coldstorage (that the apples would rot when taken to the market) was also supported by traders not wanting to see their hold on the pmduce diminished. e) JKHPMC established a poor reputation in management, particully financial management, which led to doubts by lending banks that it could manage a major marketing operation, and made them unwilling to finance working capital. 8. Overall, JKBPMC has been unsuccessful in meeting the objectives set forth at apaisal. It has not had the quality of management to ceate demand for its services and opeate effecdvely. In any case, it is a moot point whether the corporation, as a parastatal, could have been expected to compete with the private sector. Nevertheless, JKHPMC has played a developmental role in stimulating awareness of modern handling infas e. It also created awareness, particularly among smaller growers, of pre- and postharvst prtes through a crop loan scheme2 in which ferilizer in kind, custom spraying, packuig matedal and maketing serices were made available to contacted growers. SustainWltv 9. The project has failed to meet its objectives, and there is no evidence to suggest that it will perform any better in the future. In order to make the JKBPMC a financially viable organiztion the Government would have to inject additional equity to pay off the accumulated losses and overdue loan payments of the Corporation, complete the unfinished faciliies, and strengthen management considerably. With a program which ties up input credit and later purchase of the produce from selected orchards the packing/gradirng houses and cold storages established under the project could be utilized. This, however, requires that the Coporation has sufficient working capital to purhase the fruit outright, and also requirs a high degree of management Another option to utilize the facilities created under the project would be to seli or lease them out to the private sector. Traders and farmer groups have expressed interest in udlizing or tadng over the management of the cold storages but so far no party has shown interest in the packing houses. Fndings and Lessom 10. The PCR raises legitimate questions on the project concept, namely the introduction of an untried (in India) technology on a large scale by a newly established parastatal o.rganization.it remains unclear how or when the facilites established under the project (infraructure for apple grading, packing and storage, and walnut hulling and drying) may be fully utilized. Lessons that emerge from the project are: 2The Crop Loan Scheme was not part of the appraised project. It was conceived and implemented by JKHPMC during the project period. - vii - a) The Bank and the Goverment should be more cadful to understmd pnrdu needs and the dynamics of the market place in the subsector. b) Caution mas be exeivised when introducing new technology when its acceptabiity to the proposed beneficiaries has not been established under prvlig conditions c) If efforts to improe the profability of production and marketing are to succeed, emphasis must be given to improving the quality of the fruit produced and maintaining the quality through the maetng chain d) By not including in the project, even on a small scale, the proposals for developing on-farm storage and manual rather than mechanical grading, an oppartunity was lost to ty out a lower level of technology. e) Ihe choice of a public sector corporanon to market and process fruit and culls appears to have been an error, especially consiring that fuit is a perishable commodity which requires flexibilit in opeatng prcedue f) If maketing hvestments are needed they should focus on assistng the idustry to become more efficient and competitive, by encouragig prae ente= nurs to participate in an itegmted marketing process. g) S3tonger direct fanmer paricipation in the mareng process shoud be encouraged. Establishing terminal iarkes closer to the producing aeas and introducing uniform grades should increase growers' maket power. - viii - INDIA WM AND3 KASH HQMCa-mPOJE (Qeif 806- IN PROJECT COMPLETION REPORT OVEPVIEW 1. The Bank has suppored two horticultual projects in India The Hmachal Prdesh Apple Processing and Marketing Project (Cr. 456-IN), approved in 1973, and the Jammu nd Kashmir Horticultuml Project (Cr. 806-IN), approved in 1978. The prmise of both projects WaS that the main problem a0ecting the apple industry was manipuladon of the market by private mechants to the detniment of the growes Under both projects. government corporations were set up to handle a small but significant potion of the crop, thereby providing growers with an alternative market outleL Although most of the planned facilities (grading, packing, cold storage and processing) were establshed, neither crpoation has had much success in atracting farmer clients and oping its facilities on a commercial scale. Both are heavily in debL Problem encounted by the corpratons include weak management, inability to obtin sficient woing capital, dificulties in obtaining high quality frut, percepion among the farmers that the cains pay low prices, misconcepton among producers of the shelf life of colds fri, difficulte in marketing juice concentrate, etc. 2. The attached Prject Completion Report, prepared by FAO/CP, was completed in June 1987. With the benefit of two more years experience it stands clear that while the PCR reflects project background and prncipal implementaion features well, it could have drawn stronger conclusions on weaknesses in pject concept anddesign, and recommendatons for the futre. It could also have questioned whether sipeviszon at yeady intevals was adequate in view of the problems being experienced by the project This project has substantially been a failur. Whatever positive contbutdons the project has made to the hordculture subsector have been achieved at tremendous cost. In the course of preparing for a follow-on hotdculture project for the North West Hill Region (NWHR) in ia, recent missions have collected additional information on the status of the previous projects and of the HPMCs in partcular. The JKHPMC juice factory is the only part of the operatons that is impving; it operated in 1988 at 71% capacity utiization. Notwithstanding their peiformance, the Coporation otherwise has not managed to attract more fresh apple business from the farms; its financial situation has continued to deteriorate to a point where its net worth is negative; it has more staff than is needed for efficient option; and no further facilites have been comssioned, although some were almost complete at the time the Credit was closed in June 1986 (neither the Banis nor the State Goverment have been willing to provide the necessary funds for completing the fahlities). 3. In addition to the main constraints given in the PCR (5.10) affecdng JKHPMC's perforance, ithe following have been importnt reasons why the famers have been reluctantto use project packhouses: (i) most growers have small ohards and family labor is available for packing, thereby avoiding additional transport and packing charges; (ii) a concern that the fuit would get damaged during transport to the packhouse; (iii) cardboard cawra (iriginally planned to be used in packhouses as part of more efficient opertions - quicker paclidng) are twice as costly as tradidonal wooden boxes (Rs. 30/carton compared to Rs. 16/box-- no subsidies are involved). 4. JKHPMC attempted to increase udlization of the cold stores in 1988 by advertsing in local papers and promotion at growers' meetings. The facilites were offered - ix - at a price of about Rs. 2.50/box per month compared to Rs. 5-7/box charged at the Delhi maret Grower response was negligible. Their reasons for not using the facilides include: (i) a concemn to get the fuit out of the valley before the end of December when the main road south often gets blocked by snow and landslides; (ii) an immediate need for money from sale of the fiuit; (iii), cold storage of apples in Delhi itself allows taking advantage of marke price fluctuadons; (iv) low trust in the capacity of HPMC employees to operate the facilities propery, and (v) a feelng that public sector services should be provided free of charge. 5. The main lessons from the two horticultural projects are threefold. Fimrd. if efforts to improve the profitability of production and marketing are to succeed, emphasis must be given to improving the quality of the fruit produced and maintaining the quality through the marketing chaun ''his would immediately result in higher returns to the produces Furthermore, the cost of cold storage, which enables a prolonged marketing season, can be justified only if the frit is of high quality. Incidentally, the need for preharvest support (planting material, nurseies, extension, etc.) was recognized in early vers of the preparaton reports for both projects, but on Bank insistence, was subsequentlydroppo Sedondy. stronger direct farmer participation in the marketing process, interms of a more equitable share of market power and risk, should be encouraged. P.resently, the fruit is sold on the farmers' behalf in Delhi, hence giving little incentive to maketin intemediaries to move the fruit quicldy to reduce losses and deterration in quality. Estabishng terminal markets in the producing areas and introducing unifom gs and standards should help reduce the producers' risk. 2bkJLY the saegy of imp ng the rketing system by providing drect competition in the form of a govrmemt managed maketing outlet has not worked. State goverment marketing corporatins have not demonstrated the operadonal flexibility and business acumen necessary to diecdy manage commercial horticultural opans in effective competiton with a vigous private sector. If marketing investments are needed, they should focus on ating the industry to become more efficient and competitive, by encouraging private enh~preneurs to participate in an integrated marketing process. -1- INDIA JAMMU AND KASHNMI HO=UCULTUR PROJECr (Credit 806-1N PROJECr COMEIP=ON REPOR I. INTRODUCTION 1.1 Up to the early 1970s horticulture had remained a largely neglected sub-sectr within the Govermment of India's (GOI) overall development sU=tegy, largely because of the prsg need to increase the output of foodgains. However, there was recognition within GOI of the ince of horticulture in dietary needs and to the economies of certain States, and the consequent need for invesm in order to achieve better regional balance in agriculure development. In line with this, and at GOI request, the World Bank appraised the Himachal Pradesh Apple Prcessing and Marketing Project in 1972 (Cedit 456-IN), followed by the Jammu-Kashmir Horticulture Project in 1977 (Cedit 806-IN). 1.2 The Jammu-Kashmir Horticulture Project, the subject of this completion repoMt, was initiated in recognition of the fact that the overwhelmig majority of the State's rual population relied on horticulture as a major source of income. The project, which was the first Bank group project in Jammu and Kashir (J&K), was aimed at prviding fruit growers with an alenative marketing channel to that provided by the traditional privmate tades, tmugh the establishment of a govemment-owned marketing and processing corporation (the Jammu and Kashmir Horiculture Produce Makting and Processing Corpoation (JKHPMC)). It provided funds for. setting up faciliides and services for apple and walnut grading, packing, processing and marketing; fuit research; supporting mushroom development; seasonal credit to growers; training and technical assistnce; and for undaking fruit markeng studies. Over a six year period (1978f79-1983/84), the project was estmated to cost Rs 242.2 million (US$27.6 million). 1.3 The project was closed on June 30, 1986, after two one-year extensions. Accordingly, the FAO/World Bank Cooperative Programme (FAO/CP) was requested by the World Bank to field a mission to assist the Government of Jamrnu and Kashmir (GOJK) to prepare the PCR. On arrival in Srinagar (in August 1986) the FAO/CP mission found that the Government was pumsng with the World Bank a further one year extension of the project. Consequendy, it was agreed that a PCR would not prepred till the project extension issue had been resolved. The mission, however, was able to collect some data to allow an overall rewew of proqect implementation, in support of an ongoing World Bank hordculture sub-sector review. Data collectd and discussions held with the implementing agencies during the ,aurse of that mission, and additonal data provided subsequendy by JKHPMC provide the basis for this completion report. In addition, the PCR is based on a review of the Staff Appraisal Report (No. 1890-IN); the Development Credit Agreement dated July 17, 1978; and supervision reports and project files (available at the World Bank's New Delhi Office). IL BROAD CHARACTERISTlCS OF HORTICULTURE SUB.SECTOR 2.1 In order to review project frmuladon and its subsequent implementaton, it is necessary to set out briefly the broad cr of the hordculture sub-sector in Kashmir. This chapter prsents the salient features of apple and walnut development since the mid 1970s (when the project was appraised). I -2- Area and Pfaducio 2.2 The project was situated in the Kashmir vallcy where over 80% of the state's fruit pmduction is located, and which has a high potential for temperate fruits, vegetables and flowers. The valley's natural superiority is demonstraued by the fact that it produces nearly 60% of the dtee north-wes hill State's (HP, J&K, and UP) total fruit production on 35% of the planted areas. The total area under horticultural crops in J&K has increased from around 90,000 ha in 1976 to nearly 150,000 ha in 1986. Most new plantings have been of the already domiinant crops, apples and walnuts. Apart from almonds all others (including mushrooms) were, and remain ninor crops. 2.3 A99& are the predominant crop of the state, representing 98% of total fruit production. Between 1976M77 end 1985/86, the area under apples has gone up from 55,000 ha to 6350 ha, while production has gone up fom aound 300,000 tons to 760,000 tons respectively. Red Delicious is the principal variety grmwn, and its prporton in tota production (around 45% at prsent) is gVowing as it fetches higher pices as compared to the other varieties. The majority of holdings are less than 1 ha in si Whfle average yields have increased over this period, most orchards continue to be managed with minimal inputs; very few growers use ferlizers, and crop thinnng is strongly resiste. One disease (apple scab) and one pest (San Jose scale) have serously affected the fruiL More so becaus of the former, fruit quality has been very poor over much of thedcde. Other than orchard spraying, there has been no change since the mid 1970s, n the cultal pces followed by grows While moe recently there have been some povemens in fruit quality, the post-harvest problems have worsened due to the significant incase in production, and the shortage in the availablity of transport 2.4 Walnuts are presendy grown on the equivalent of about 33,000 ha, as compared to 18,000 ha quoted at appraisaL They are gown as scaeed trees or in groups, often witin and arund villages, and the above area estimates are based on the assumption that there are 75 tees p hectam Producion has howeve remaned unchanged at around 17,000 tons since 1974175, uggestng both low productivity and a high percentage of non-bearing trees It is suspected that the low production is on account of nearly all plantng eing from seedlings, which has also sulted in produce not being un=om, and of low quality. Returns to the growers are consequntly low, and there is little incentive for making significant changes. This inevitably hanicaps any processing and maredng efforts. Service Insdtatons 2.5 The principal insdtutions servicing the horticulture sub-sector include the Department of Hordculnur (DOH), the Dep of Horticule Planning and Marketing (DOHPM), the Agro-Indusuies Development Corporaion (AIC), and the JKHPMC which was set up under the projec The Deparment of Agriculture (DOA) retains a small role in some hortculture areas. Research is now the resposibility of the Agncultural University (SKUAST). 2.6 While the two departments of hordculture are essentially responsible for providing extension as well as gathering market inteUligence data, there is an inevitable overlapping of roles. Over, the decade, DOH has been pmoccWied with the distribution of fungicides for the control of apple scab, and there has consequendy been a serious absence of a technical extension. The DOHPM has mostly worked with the Cwoperative Societies; furthermore, its existence, along with the setting up of JKHPMC, has required DOH to absolve itself of responsibilities for post-harvest technology. This has also affected extension services to the growers, because both pre and post- havest technologies for fiuit are intertwined in a manner which makes technology advances .Inedenet -3- 2.7 However, GOJK did introduce the Indo-Australian bilateral aid project (AP) in the lae 1970s to demonsae technology of makeing thrugh packhouse cold stores. Initally under directon of DOHPM and later the DOH both pre and post-harvest technology relevant to fit production, storage and peservaton were demonstred to growers and agents. In temms of pre- harvest opaations, the P concentraed its efforts through a network of demonstration plots. While succssful, there has been litde effort to extend the relevant cultral practices on a wider scale across the apple orchards in the valley. Nevertheless, LAP made a sigpificant contribution to JKHPMC, which used it extensively for staff training and advice, and finally adopted the technology for its crop loan scheme. 2.8 The AIC amages and prvides industry inputs. For a period it managed the supply of fungicides for orchard spraying. However, in 1986 this function was retumned to the DOHL The new Agricultural University (SKUAST) was set up during the decade and its horticulure reseach programs have yet to fully emerge. Consequently, the contribution of research to the hortdculture sector has, so far, been minimal. 2.9 Lending banks have expeinewd poor loan recovery perfo from the agriculte sector, and have been wary of providing loans to growers, including those supplying fruit to the JKHIPMC The cooperative sector is small, and generally not p ing welL 2.10 The private marketng systm, with its inom cit argements, is still the main servicing insdtution tO the J&K apple and walnut producers. 2.11 Apple maedng, vrtually in its entirety, is caied out by the prate sector compisng forwarding agents, co=ission agents, wholesalers and ilers. An insi t amomI of the apples produced ane proceed. It is claimed that collusion among. and exploitation of the weaker producers is coon pracdce. What is of concern and im to J&K is that while the maing system is "normal", this system also is normally devoid of commitment to overall industy expansion and development. It must however, be acknowledged tbat the marketing sysem has so farbeen able to absorb big increases in annual suLesof apples. even though much has been of low quality. Unforamately prices have increased little if at all while makedng costs have sen. 2.12 The common observation has been that the sector does not exploit the market to f advantage because it does not attempt to regulate supplies, and develop a more effective storage and distibution pater At the same tUme, the consumes' attitudes to "out of season" fruit have to be kept in view, and in partcular their misconcepdons about the quality of cold sored produce. The proect through the etablishment of the JKHPMC, was designed to address these major cnstraits ch have wosned due to increased producton. ]IlL PROJECT FOMLATTO fmiec Reconnaissanlce/Identificatio 3.1 Soon after the Hmachal Pradesh Apple Prcessing and Marketing Project was apprised in 1972173, the GOJK prepared a preliminy report poposing a similar project for J&K State, which included facilities for packing and Processing fmit, otier market development, and a substatial technical assisunce component. In its rview of the proposals, DA found that the report did not consider sufficieny the problems of the horticultual sector in the State. It was felt that a project which did not adess the production problems in the State along with the marketing problems would meet with limited success. -. 4 - 3.2 Following the review, an IDA reconnaissance mission visited J&K in October 1974, to assess the possiblity of designing and implementing an integrated horticultural project, and to assist the State govenment in idenifying and preparing it. Among the prinCipal prblems identified by the mission were: (a) poor quality of planting stock. leading to low yields and poor fruit quality, (b) an indequately trained extension service; and (c) a well entrenched commission agent system for fruit procurement and mareting, which gave growers low prices, thereby discouaging tm from adopting better cultural pactices. At the same time it was recognized that J&K had the basic ingredients for suwessfu commercial development of an integrated horticulral industry, ie. suitable climate and land, and abundant cheap labor. In line with this, a possible project was broadly identified, which was expected to include components for: (a) on-farm development; (b) nursery improvement; (c) horticultral esearch; (d) establishment of a modern mushroom spawn labratory, (e) non-mechanized simple storage facilides, and manually opeated packing shedis (f) cameries and modern walnut prmcessing plants; (g) technical assistance and trmg. 3.3 In making the above proposals the mission recognized that inspite of the need for on-farm devopment and imovement, many fanmers were not interested in borrowing for this purpose. In addidon, the mission observed that no survey or study had been undertken to detenmine the potential size of the domestic market particularly for apple juice and concentrates, and the intematonal market for walnuts. Fnally, the mission suggested that GOI and GOJK set up a Proect Ppaion Unit (PPU) to undertake detailed preparation of the proposed project. aiectP eaM01on 3.4 The Agricultural Finance Corporaton Limited, Bombay, supported by the PPU, prepared the project, based on detailed guidelines prvided by the Worid Bank. A prelimy raftrport was prpared, which was reviewed by an IDA mission in mid January 1976. The principal concern expressed at that stage was about the possibility of over-production of apples in the face of limited consurdemand, patcularly from 1979 onwards The mission found that thre were inuff t data available on which to base reliable estimates of fure production and demand for apples and apple products. Very litde was known about the consumers; furthemore, there were no encoumging prospects of exportmng apples in significant quantities. Accordingly, it that an indepth study be camed out prior to any furtier investment in the industry. It was expected that the findings of such a study would provide guidance in developing a coordined stategy for future apple producon programs in the three states of HP, J&K and UP. 3.5 While a rport on a study of the nantre envisaged above was not available to the mission, it is understood that a study of the maiet for apples and apple p s was done by AFC as part of project preparto However, the prepaation report did not deal in any depth with the issue raised above, as the proposals were aimed principally at developing a public sector apple/walnut distribution and markeing corporation for existing and projected producion, with only limited on-farm support for improving production. To this end, the repot proposed the setting up of the J&K Horticultural Produce Marketing and Processing Corporapion. 3.6 The preparation report, which was completed in August 1977, proposed a project including component for: (a) constructing 5,000 on-farm apple stores; (b) 25 apple grding-cum- pacing cenues, of which 10 were to be mechanicaUly operted (each of 6,000 ton capacity), and 15 (each of 1,000 ton capacity) manually operad; (c) 20 walnut grading-processing centres (each of 500 ton capacity); (d) two processing and canning plants, and one botting plant; (e) one Suit shipm centre; (f) a large mushroom development component, including a spawn poduction latory and mushroom development centre, as well as the delopment of m:usrm farms; (g) support for settng up JKHPMC, including a transport fleet; (h) creit to gowers who entered into contract with JKHPMC, including term loans for orchard equipment; and (i) technical assistance and tmning 3.7 The prncipal reservations ecpressed by the W.9 on the proposed project related to project scale, which was considered to be too large. Due to shortagc of skilled personnel and the diversity of the opaations proposed, it was fel that the JKHPMC would be senously over- extended. 3.8 Based on the above preparation repo, a World Bank mission visited India in September/October,1977 to appraise the J&K Horticulture Project. During apprasal, the project was reduced in scope and size, though for apple giding and packdng, and for walnut processing, the proposals werc more or less in line with those in the prepation repor. The pnncipal diffeences were: (a) deletion of the component for on-farm storage. Instead, the mission proposed the construction of cold stores, as it was felt that these would be needed for year round apple mareutig; (b) prvision for only one apple processing plant; (c) a more modest mushmom component, aimed at research and pilot level field testing of improved technology. (d) increased size of the training and technical assistance component, as well as intoducing a component for apple and walnut research. 3.9 The prncipal issues mised at the time of appraisal related to the following: (a) GOJK had suggested that the existing J&K Agro Inlustries Corporaion (AIC) be considered as a possible project agency. The mission took the view that a new poration be set up, as AIC had a history of poor management and consistent losses. Furthermore, it was felt that the marketing of perishable fruits required speciazed nement, and the AICs existing activities bore litde resemblance to the proposed project acdviis; (b) the mission pointed out that the Corportion would need highly capable management which would have to deal with perishable coodities. compete with the private sector, and handle complex technical problems; and (c) since many growers used pre-harvest contracts to obtain cash advances, GOJK felt that the Corpoaon should provide credit to customers in a similar manner. However, the mission felt, and GOI agreed that banks should provide crop loans, and the Corpomtion should be a lender of last resort only, in case banks faid to provide satisfactory service. In order tO addrss (b) above, it was agreed that the formation of the Corpotion, as wdl as the appointment of a qualified Managing Direct would be conditions of credit negotiations. In addiion, a large component for technical assistance and training was included to support the new Corporation in the early stages. -6 - 3.10 As appraised. the proect aimed to impove the apple mareting systm and to provide processing and stpage facildes to ensure better rumns to growes and tO cater for the rapidly increasing apple production It included the following components: (a) foirag 25 apple grading and packdng centues, of which ten of 6,000 tons capacty and 15 of 1,000 tons; 17,000 tons cold storage; ten sawmills atached to the larger ging and pacing centres to produce fivit containers; a fhuit ans pment ce and a 12,000 tons apples per year capacy juice processng Plan (b) for walnu 14 hulling/drying and pacing cen, of which one 2,000 tons capacity, one 1,000 tons capaciy and twelve 500 tons capaitr, and a 4,000 tons a year procesing centre tO deal mainly with nuts for expor=s; (c) formushrorn, improved spawn producion and research facilites; (d) Rs 20 mdion seasonal credit to hep growers meet frut production and harvestng expenss; (e) specalid cold stoage, laboratory and libary facilies to enable DOH to conduct post-harven trials with ftuit; (f) three studies to improve apple, walnut and apple juice .arketig, and a project evalution study, and () ninety man months consultants' time and 62 man months of overseas trainig to support design and opatdon of pojct faciLides, and to help DOH and DOA improve fruit and mushrom poductio 3.11 Over a six year peiod (1978-1983), the project was esdmated to cost Rs 242.2 million (US$27.6 millon). The JKHPMC was to be the main project executing agency. It was also expected to perform the functons of an apex oanization for fruit growers' cooperatves. The DOlH was to be responsible for lemendng the fnrt research component, wile the DOA was to execute the mushroom rseah component. in addition, it was expected that DOH and the Depanent of Hortculte Planning and Mbarktng (DOHPM) would play an important role in suppordng JKHPMCs field and markig activities. With regard to credit arrangements, it was expected that commrcal banks would anlend to JKHPMC for constructdg and equipping facilies, while both commercial and coopeative banks would finance short-tem crop loans to fruit grwers conacted to JKHPMC Refinance for credit opetions was to be provided by the Agricultural Refnance and Dvelopment Corpoation (now the National Bank for Agriculture and Rural Development (NABARD). IV. sgg"n and Credit Effegiaivns 4.1 Negotiations between (01 and IDA for a US$14 million credit for the project took place in April 1978. The Bank's Board of Diectors approved the proposed IDA credit on May 18, 1978, and it was signed on July 17, 1978. Credit effectiveness however, was delayed on account of changes in the onlending channel for the juice plant component from ARDC. as originally proposed, to the Industrial Development Bank of India. The credit became effective on January 6, 1979. -7- Px= Ca.g._anA-asal 4.2 During implementation the scale of the project was reduced. This was on account of considerably higher actual costs than those esimated at appraisal (see para 4.15). Consequently, the sawmills component was dropped, while the number of apple grading and packing centres was educed from the 25 to 17; the number of cold stores ftm 17 to 7; and walnut processing centres from 14 to 8. The revised scale was based on the funds available for completing the different components. In addition, the proposed apple juice plant was not fnanced under the project. This was an account of the fact that GOJK decided against constructing a new plant (as proposed in the SAXR), prefeing instead to purchase an existing private sector juice plant. Institutional responsibilities tor executing some of the components were also changed during implementation. The responsibility for disbursing crop loans was taken over by JKIPMC as gwers were found to be reluctant to borrow from the participating banks given the requrments that they should hypothecate their land to the banks as securty for the seasonal credit. he execution of the fruit research component became the r nity of the Agriculural University (SKUAST). LMIUmDMentti Schedule 4.3 It was expected at appraisal that the construon of project facilities would begin in the second half of 1979, with all of them becoming operzt.onal by September 1983. Complementary technical assistance and taining was expectd to be completed by the end of 1982. i fact implementadon of the project has been conseably delayed, and as at June 30, 1986 the majority of project fciiies had not been cmmisioned. The research components have only been paially completed, while none of the studies proposed at appraisal have been undertaken. The project, which was to have closed on June 30, 1984, was extended twice by the Waord Bank, and closed on June 30, 1986. Ph^ysical Implmenttio 4.4 iPMC Comnents. Observations in the early World Bank Supervsion mission reports inicate that the implementation of the project was initiated under a strong and enthusiastic senior mangement team recruited for the JKIHPMC. Land acquisition, which has often caused sinificant delays in the implementaton of projects had proceeded smoothly. However, as work progressed, various problems emerged which slowed down the pace of implemention, eventually leading to the situation where the majity of project facilities had not been commissioned at the time of project closing on June 30, 1986. 4.5 The table below summaizes the position, as at the end of June 1986, on the extent to which physical implementation has been completed. Details are given in Table 2. Appraisal Revised Not Itm. IaD ts _Targe ComnssDIo ComtmWssonfd --(Number)- -- (as at June 30, 1986)- Apple Grading/ Packing Centres 25 17 6 11 Apple Transhipment Centre 1 1 1 Cold Stores 17 7 2 5 Walnut Centres 14 8 2 6 Walnut Export Centre 1 1 - 1 -8- With regard to overseas training, as against the 9 study tours proposed at appraisal, a total of 12 JIKHPMC officers went on study tours under the prjet Of these. 8 are sti employed in the Corraion, Technical assince was availed of for the design of the JKBPMC facilities, as weil as for management advisory and walnut opeaions. 4.6 Various factors have contributed to the overall delays which have occured in completing the proposed faciliies Being the first WB project to be financed in J&K state there was little prior expience in ICB tendering and bid evaluadon procedures. Furthemore, the bids that were eceved at early stages (particularly for the cold stores and the walnut centrs) quoted prices which were considerably higher than those estimated at appraisaL Consequently, some time was spent on reviewing altemative cheaper designs. For example, it became apparent that the drying equipment for the walnut centres (which esented 80% of the total interationally bid price for all equipment for these centres) could be produced locally from indigenous technology and materials. This had to be investigated in detail, and ievitably caused delays. 4.7 Overall, while there were delays in completing the civil works part of the project facities. these turned out to be less serious. The principal problems experienced in compledng civil works on dme were largely on account of cement shortages in 1980/81 and 1981182. For exmple, no cement was made available to JKIPMC between July 1981 and April 1982. StilL the majority of the civil works for JKHPMC had been completed by 1983. The principal factor esponsibe for the delays which have finally occuared in getting project facilities opaional relate to equipmen ordering, and themafter its installation. There have been significant time lags between completion of civil works, ordering and receipt of eqmipmemn and its final installation. Instances of poor management control over the constuction activities are also cited in the Bank's supnrvision reports. For example it was found in 1982 that some equipment which had actally reached Kashmir had remained unopened in cmes, and in some cases had been offloaded at the wrong sites. Ther were insnces of equipment having been received, but contracts for their installation had not been awarded. In addition, disputes arose between JKHPMC and the cold store equipment supplier. as well as the equipment supplier for the walnut centres. 4.8 There have also been difficultes in getting electricity supply connections for the different sites as J&K State faces a shorage in its supply. While for the apple packhouses 12 KVA generators had been purchased, for the walnut centres the requirement is for 0.75 megawatts of power foreach site, the supply of which is sti a major cause for concern. 4.9 Finally, JKHPMC has faced considerable delays in obtaining bank loans to finance its investment program. Bank loans for the majority of facilities constructed wee largely available from 1983 (see Table 2), with JKHPMC having financed eariier expenditures from the funds received on account of equity contibutons. The credit problem has now become extremely acute, with banks rfuing to provide further finance prior to a detailed review by GOJK of the JKHPMC Discussions with NABARD revealed that the inability of JKHPMC to submit acceptable documentation in support of loan requests has been the pnncipal reason for this etdcene on the part of the banks. The accounts of JKHPMC have not been audited since 1980/81, and according to NABARD, audited statments of earlier expenditures were also not available. Furthemore, the banks express concem that even the facilites completed have not been significantly utilized. Another apparent impediment to the quick disbursement of loans appoved have been delays in obtaining GOJK guarantees of the loans. 4.10 CM Producton Crdit This conponent was not implemented as originally envisaged, as growers were reluctant to borrow from banks due to vanous reasons. Among these, the principal ones were: (a) the reluctance of growers to pay commei tserestrates for such credit. This was parially on account of socialreligious factors (many growers are Muslim), and -9 - ptly because they obtaned inrest free cash advances from commission agents (many of course realiz that agents recover irterest in another form, duing subsequent rasactions); (b) growers' views that loan application procedures were complicated and the insistence of banks on land mortgage as collateral, and that farmers enter into a contract, for selling their apples, with JKHPMC. Subsequently, a crop loans scheme (CLS) was implemented through the JKHPMC, staring in 1984/85 which was only partially supported by the banks. As shown in Table 3, a total of 3,349 growers, covering 4,842 acres benefitted under the scheme over the two years 1984/85 and 1985/86. Data are not available on the total amount spent by JKHPMC on tne scheme; however, draft accounts of JK1HPMC for 1985/86 show that Rs 9 million was due from growers, and Rs 13.6 million was due to the banks for amounts borrowed for the CS, as at March 31, 1986. 4.11 &womb C1m The DOA mushroom component suffered many delays. A pertinent factor was the untmely death of the initial consultant. Subsequently, two other consultants were enlsted, and construction of a spawn producdon and bulk component pasteization facility has been staroed 4.12 The facility is much larger than that poposed under the project, costing Rs 14.6 million (Rs 7 million for civil woris and Rs 7.6 million for equipment) compared with the SAR esemat of around Rs 4.0 million. Furmore, the implementing agency has disregarded World Bank tendering procedures and consultant's advice about risks iherent in bulk paste:rizaton. A contract has been awaded on a turnkey basis, and work has commenced on the proposed facility. The net result is to be a large centraized development to service the whole industry rather than research support tO a distict development program. Staff appoinments, training, and all except one cons (marieting) have been completed. 4.13 Tne Horticulte research component was also delayed. Delays in recruiting consultants and the subsequent transfer of all research work from DOH to the newly established Agricultual University (SKUAST) conmbuted to the overall delay in implementing the compnent. A large number of the training opportities have not been availed of, and one of tht consultancies (codling moth) could not be arranged. The post-harvest research laboratory and cold store were completed and operated on a pilot scale in 1985. SKUAST has applied itse!f ethusiasically to the use of these facilities. &WMec Cost 4.14 Table 1 gives a comparative satement of appraisal cost estimatm actual costs incued up to June 1986 and expected total costs (including esmated cost of completion). These are based on expenditure data prvided by the respective implementing agencies. When allowance is made for costs to complete, the total final cost of the project would amount to Rs 228.5 million (US$21.75 million). Tlis represents 94% (or 79% in US dollar terms) of the originally estimated tosal project cost. If account is taken of the reduced scale of investnents for JKHPMC (as compared to SAR proposals), and appraisal cost estimates scaled down accodingly, there was an estimated 45% cost overun in Rupee terms (20% in US dollar terms). 4.15 Among the factors which have contributed to the cost overrun are significandy higher average unit costs for consructing the proposed JKHPMC facilities than those foreseen at appaisal (as shown in the table below), and delayed project implemenation during a period of high in-'aton. The depreciation of the Rupee against the US dollar duing project implementadon is reflected in the relatively lower cost overrun in US dollar terms. -10 - Average Cost Per Centr -(~Rs Million)-- Apple Centres 1.95 2.84 Apple Transhipment Centre 0.59 1.74 Cold Stores 2.32 5.96 Walnut Centres 1.61 4.14 Walnut Export Centre 7.96 17.29 4.16 Disbursement of the IDA credit has been vcyq slow (see Table 6). To a large extent, the initial delays were caused by unfmilaity with procedus for claniing IDA reimb umements for penditures incurred. Against the US$14 million credit negotiated with IDA, disbursements under the project toalled US$6.7 million (or 48% of total). Details of the allocation c5 credit proceeds disbursed are shown in Table 7. The final disbursment was made in Febmary 1987, and the undisbursed balance of US$7.3 million (52% of tota) was cancelled. The principal factors responsible for the low levels of disbursement are: (a) reduction in the scale of the prqject; (b) depreciation of the rupee visa-visthe US dollar, from Rs 8.75 = US$ at the dme of appraisal, to Rs 12.4 = US$1 at present, combined with a project which had a very low foreign exchange component (9% in SAR) in total cost; (c) vally no IDA funds were disbused for the juice plant (allocation of USS2.4 million), which was purchased and not constucted as envisaged at appraisaL Disbusements aganst vehicles, equipment and materials for the apple and walnut cens were only 57% of the amount eamarked (US$3 million); also, very little was disbursed against the "crops loans" category (only 16% of original allocation of US$1.6 million). Complianc with Coyenants 4.17 As indicated in the final WB Supervision Mission report, most covenants have been complied with, though delays were experienced n meeting the target dates in many cases. HIowever, covenants relating to furnishing auited financial statements to IDA have not been complied with JKHPMC accounts sinc 1981/82 onwards have not yet been audited; in addition, audit certificates for the DOH (SKUJAST) and DOA component expenditues have not been submitted to D)A since the stat of the project V. AS.ESSMIT iE HPM C'S PERFORMANCE 5.1 The Jammu and Kashmir Horicultural Produce Marketing and Processing Corporation Ltd. was established in April 1978, with GOI and GOJK as the principal shareholders. The Head office of the Corporation is at Snnagar. In addition, it has three divisional offices (Ananmag, BarnuUa and Srinaar), a wanshipment centre at Jammu (not operating yet), and a marketing office at Delhi. Under a Board of Directors, the Managing Director is the principal executive offwice, total regular and consolidated staff at the end of June 1986 were 249. j - 11 - 5.2 At apprisal it was expected that by the htmoduction of a new maketing technology. JKHPMC would genrae profits from various operations, which would include: (a) purchase under pre-harest contracts and resale of apples and walnuts; (b) packdng and consigning apples on commission; (c) customer services for the use of its apple packhouse/cold stores and walnut processing centres; and (d) ganufacng and selling apple juice concene. 5.3 In estimating future JKHPMC income, the SAR assumed that it would take a period of throe yeas for the apple and walnut cenres to reach ful opeatng capacity. The juice plant would begin operations in 1982 and also reach full capacity opetion in three years. In aicipation of operations being at full capacity by 1985. a full development rvenue of Rs 189.0 m was prjected, which was expected to generate gross profits (before tax) of around Rs 30.0 m. 5.4 Ihe above results were based on JKlPMCs projected full development operattons to include: (i) grading and packing 75,000 tons of apples; (ii) cold storage of 17,000 tons of apples; (iii) processing 12,000 tons of apples into juice concentrat; (iv) hullng and drying 9.000 tons of walnuts; and (v) processing 4,000 tons of walnuts for sale/exporL It was assumed that 40% of the apples and 60% of the walnuts would be purchased, with the balance in each insmnce being equally divided between commission sales and cusom services. In maIdng the above prections, it was expeted at appraisal that the pre-harvest support to apple production (in terms of ds e controL, quality apple production etc.) would be undertken by the other agencies involved in the sector. Overall, it had been expected that DOH and DOHPM would play an important mle in supportng JKHPMCs activities. Acual Perfom.alce 5.5 Actual operatonal achievements to date are smmrized the table below, details are shown in Table 3. Aooles Walnuts YAs t Cold CHandled -(Tons La)- 1978179 440 1979/80 1,900 - - 1980/81 4,500 - 1 1981/82 2,640 40 - 1982/83 1,520 - 4 1983/84 2,000 320 28 1984/85 5,660 200 13 1985/86 9,660 60 4 L& Derved from number of boxed handled (on average 20 kg of apples per box). 5.6 Ihe total volume of apples handled by JKHPMC over the past eight years is only about 28,000 tons. The amounts handled annually so far repsent an insignificant percentagc of the total apple marketed out of J&K Se (in 1985/86 J&K dispatched an esimated 535,000 tons - 12 - of apples). Of this smal quantity marketed by JKHPMC, almost none has been graded and packed, or stared in the facils prwvided by the project. Also, only a negligible proportion has been purchased outight These activities, ratherthan the consignment operatons, were expected to be the pincipal revenue geneating activities for JKHPMC. The juice plant, which was pu d in 1985/86, opeated for 59 days in that year. It produced a total of 276 tons of apple concentmrte and 10 tons of aroma (using 3,225 tons of apple culls). However, marketing has pwoved to be a problem, and at the time of the mission's visit only 150 tons had been sold. The extent to which the plant will be operaed in 1986/87 was being reviewed, as no finm marketing tie- ups with existing soft drink producers had beer negotiated. 5.7 By the end of 1983, JKHPMC Management had recognized that opertions as originally planned would not be feasible, as (a) the prospects for geting quality apples for its operations remained almost hopeless; (b) the small proportion of quality apples produced were of such value to the traditional trade that attracting it into the new system of grading, packing and marketing was unralistc; (c) the weak segment of the industry which JK1PMC was supposed to help most was the outlying poorer apple gowers who were at the end of the line for Govement extension services or pre-hanest contracr The quality of thdr fruit was among the poorest of all It was decided therefore to intmoduce the crop loan scheme (CLS), which was designed to assist the weaker segment of producers. Ime Cmro Loan Schefe 5.8 The CLS adape the Indo-Austalian demonstration package t the fruit proc t needs of the Corpoaion. It was formulated with two specific objectives: (a) to procure fruit from orchards near JKHPMC facilities and (b) to ensure the fiuit was of a sufficiently high quality for packhoure/cold store operations. Under the scheme, JKHPMC provided gpwers with inputs on credit, based on the procedures that had been established in the demoation plots. These covered spray materials, spraying machinery, ferdlizer and supervisory staff. Growers' orchards were successfully contracted by the JM'- ICs field staff, and in 1984, seasonal opeations were mounted under the guidance of consultant technical experts. A good crop of quality apples was consequently produced. The scheme has covered 1,435 acres (1,031 growers) in 1984/85, 3,407 acres (2,318 growers) in 1985/86, and around 3,700 acres in the current (1986/87) season. It was wholly responsible for JKHPMCs increased apple c aoptions in 1984/85 and 1985/86, as shown in para 5.3 above. It has not been possible to extend the coverage of this scheme on account of the reluctance of banks to prwide additional loan finance to JKHPMC. JKHMCs Financial Position 5.9 The accounts of JlHPMC have not been audited since 1980t81. However, draft accounts are available, which indicate that the Corporation is presently in a poor financial condition, with large debts, significant accumulated losses, and so far very litde inrome generation from its asset. According to the unaudited accounts for 1985/86, accumulated loss,.s as at March 31, 1986, amunted to Rs 58.5 million (US$4.76 million). Total borrowings frm the banks were stated at Rs 103.1 mi'lion (US$8.4 million), of which term loans represented Rs 83.6 nillion (US$6.8 million) and loans for the CLS and for short-tenn workdng capit.l Rs 19.5 million (US$1.6 million). Against these borrowings, amounts overdue for repayn=nt included interest on both, term loan installments (Rs 3.2 million), and the total amount advanced for the latter category. IJteest due on tm loans as at the end of Marh 1986 is esdmated at Rs 15.8 million (US$1.25 million). Income generadon by JKHPMC has so far been negligible, as shown by the low levels - 13 - of operations discussed above. The provisional profit and loss account for 1985/86 shows annual opeating costs (including depreciation and interest charges) of Rs 22.8 million, operating income of Rs 1 iniUiori. other income of Rs 1 million, and a net loss of Rs 20.8 million. On present estimates, and even with rescheduling of bank loans, Government budgetary support (through additional equity contributions and other means) would appear to be essential to enable JKHPMC to meet its obligations. Constrints Affccpne JK HMs Oeaoal PEaformmu 5.10 In assessing the overall performance of JKHPMC in terms of its marketing achievements, it is importat to recogize that the objectives set for it wete ambitious. JKHPMCs major problem was its inability to obtain supplies of apples and walnuts, and the following are considered to be some of the reasons: (a) growers were not mouvated to deal through the JKHPMC and its facilities. The stronger and more proge ssive group did not need them, the weaker group had no understanding of the services being developed. Also, in many instances the latter could not escape the linked credit-contrar system even if they wanted to; (b) the JKHPMC was unable to convince growers tO baow for crop Production, nor the banks to lend to farmers; (c) the Cption was overly preoccupied with completing te procurement and oIsunmuction activities, and till recently, litde attention was devoted to developing a viable markting fhrmework though which growers could be atracted in larger numbers to its faclities; JKHPMC officers were not trained in merchanding. Also in the field they could not escape bureaucratic procedues, which put them at a disadvantage as compared to private pre-harvest contcts; (d) the JKHPMC got a poor reputation regarding prices for the smanll quandties of produce it had mameted in the early yez of the projecL Ihis was exploited by prvate agents; (e) supplies of apples suitable for a packhouse opation were very limited due to the poor quality generally. Furthermore, the existng mareng system, pardcularly at the growers' end, dd notprovide significant incentives to maret uniformty graded quality fruit; (f) there was a complete oncepton about the effects of cold storage in the valley, on the "market" or "shelf' life of apples when moved to the maiet from March onward; and (g) the JIGPMC had established for itself, a poor reputadon in financial management. This placed doubts in dte minds of lending banks that it could manage a major marktng operation through the new systm. The problem has been compounded by the fact that since 1982, there have been four Managing Directors of JKHPMC, and the post of Finance Director has remained vacant for extended periods (see Table 4). 5.11 In addition to the above factors, it is important tO recognize that the instituions supporting the horticulture sub-sector in J&K, and which were expected to play an imporant complementary role to that of JKHPMC. have, due to various reasons, been unable tO meet the expections which were there at the tme of appraisal. No serious attempt appears to have been made to bring the maretng of apples from Cooprative Societies (about 9,500 tons in 1986) - 14 - within the JKHPMC fold. As briefly reviewed in chapter II, there has also been a serious absence of a technical extension program. both pre and post-harvest, which has resulted in the industry being unable to produce apples of a quality suitable for JKHPMCs needs. Furthermore, with the edconce of banks to provide additional working capital loans tO JKHPMC. the crop loan scheme could not be operated in a manner and on a scale which would have better tesd the operational capabilities of te facilides constructed, as well as the abilitv of the staff and labor of the JKHPMC. VI. Inended Imact 6.1 At appraisal, project benefits were expected to be derived from mor efficient marketing of apples and walnuts through JKHPMC with resulting cost savings; better quafity apple grading and packdng commanding an estimated 10% price premium over conventionally grded fruit; price premium on *7,000 tons of cold stored apples for post-season marketing; returns from processing 12,000 tons of previously wasted cull apples into juice concenta and other by- products; better processing of walnuts, lading to improved grade quality, estimated to yield a 10% price prmimTr and reduced losses of an estimated 1,300-1,400 tons of walnuts which would have spoiled uider conventional hulling/drying methods. Facilities constructed under the project were expected to reach 100% capacity utilizaion, within thee years to be achieved in year 8 of the project (1985). Based on the above assumptions, an economic rate of return (ERR) of 21% was esdmated for the total project, and ERRs of 22%, 31% and 26% respectively for the apple trading, wanut tading and juice plant components. The SAR noted tat JKHPMC managenal and marketing acumen would be essential in achieving projected benefits. Assement of A= fri je Imm 6.2 The size of the project has been consderably scaled down during the couse of implementation. It is clear fmm the earlier chapters that project implemention is far behnd schedule and the level of JKHPMC operations to date have come nowhere near those anticipated at appisal. Farmers have not come forward in large numbers to use the facilities (even on a consignment basis) which have been commssione. Of the relatively small quantities of apples marketed through JKHPMC dunng uie past eight years, almrost none has been graded and packed, or stored in the facilities provided by the project; and only a ngligible propomon has been purchased outright. Consequently, as a marketing opion, the project has so far not succeeded in generting the kind of opemtions and benefits which were expected of it at the tme of apprisal. As noted in the Bank's final supervision mission report, the problem was compounded when the quality of apples produced in J&K did not improve over the years, and even today remains not entirely suitable for use in the project facilities. 6.3 Given past performance, it is not possible at this stage to make any rational assumptions to project future economic benefits. There are no studies available to indicate farmer atitudes towards JKHPMC, as compared to their atditudes towards the existing private markedng systenr nor are there survey data available which would provide indications of the conditons under which farmers would be willing to adopt JKHPMC as their preferred marketing oudet. Most impoantly, the scale of future JKEPMC operations would depend on the strengths or weaknesses of its management. It must be recognized that the Corporation has to gear up its management to compete with an entrenched private sector in marketing a perishable connodity, to give a price advantage to the growers. In the light of the above crumstances, any easement of the economic rates of return estimated at the time of appraisal would, at this stage, be highly speculatve. - 15 - 6.4 Howev, despite the geneda poor achievement in terms of meeting the perceived goals, the pwject has played an important development tole. Through its crop loan scheme, JKHPMCdemonsd on a smal scale an effective system of extension to smal grower. Data are not available on the total costs incumd by JIHMC on the scheme, so far, and the extent to which recovies have been effected from the grwas. These data partcularly the latter, would beimportant indetming the extent to which KHPMC should and more so whether it can incrase the scale of this progm. However, the credit and technical assistn provided under the scheme has makedly improved quality and quantity of rit produced by its clients lead6in to incrases in the farm incomes of the partcipatng fars 'he scheme has certanly made a worthwhile contribudon to the obetes of increasing quality fit pmducion, which is crtical to eventually bringing the packhouse cold soe facilides into use. While, the scale of operadons is presenty too small to ensure a sigficant utiiion of JKHPMC facilities, the scheme has publicized the Corporaton's activities, and the facilides that have been constructed. An important factor has also been that due to the absence of adequate woring capial to mount the planned operations on time, the CLS has not been fully tested as intended. 6.5 No such service as the CLS was available for JKHPMCs walnut operations. Pilot hulling tials have experienced the problems inherent with seedling nuts, and trial and emrr will play a big part in bringing the facilides into efficient use. At this stage, there is little to suggest that nuts will be procured in reasonable quantities, or that problems of elecuicity supplies will be overcome in the foreseeable fure, in oder to generate benefits on the scale perceived at appraisaL 6.6 Finally, the project has developed a significant asset of trned mnagers, supervisors, staff and labor. It has also generated consideable debate among the growers, and the sub-sector has begun enquiring about the prospects of cold storage, packaging, grade stadards, and the spread of the maret season. In his regard, the options of JKHPMC albeit lied have proved to be an imporant catalyst in the development process. VEL EBANK PERFORMANCE 7.1 The project was the f&-st Bank/IDA financed operation in the State of Jammu and Kashmir. It was targtted at an imporant sector of the State - hotcuture - which was the major souroe of Ivelihood for the rural population. During the course of project formulation the conceptual framework of the project moved from one amed at developing an integrated pacge to addrss both the on-farm production and the marketing and processing aspects of horculture developme, to one essentally aimed at developing a new channel for fuiit markedng and pocessing. With the benefit of hindsight it is now obvious that the design of the project, as finally appraised was ahead of itS dmes. In the absence of a production component. problems at the farm levelassocied with ensuring the producdon of good quality apples still remain. In tenms of insdttuonal arrangements, the decision to set up another corporation, instead of msucturing and strnghening the capabilities of AIC, suggests that it may have been the easier direction to take; at the same time, no attempt was made to ratonalize overall institutional responsibilities. Consequntly, as the project progessed, JKHPMC found itself carying out some of DOH extension functions (through its crop loan scheme), and DOH those of AIC (selling of fungicides), while DOHPM has been the principal agency for servicing coopertives (which at apprisal was expected to be one of the roles of JKHPMC). There was vtually no extension service, pre or post-harvest Given this situation, the agencies were to some extent competing with each other. 7.2 Based on implementation experience so far, conclusions can also be drawn with regard to one other aspect of project design. This relates to the scale of the project, ie. whether it may not have been more appropriate to introduce the new technology on a smaller scale, initially using more the IAP pilot project This would have allowed JKHPMC management to focus on a - 16 - smaler operation, in a more concentrated manner, without getting bogged down with the numerous problems of procurement and installation which the larger progam entailed. Fuhermore, a better understanding of the needs of the market was necessary prior to the inumduction of new technology on such a large scale. As it transpired, the need for grading and better packing across the whole sector was not recognized by the market, pardculaly the contnlling agents at the terminal wholesale markets. Without changes at that level, the success of the new technology was inevitably going to be limited In addition, the local shotages of power supply which are affecting the likely future opeaions of the walnut drying centres were not fully recogoized Finally, by not including in the project even on a smal scale. the proposals for developing on^fann stoage and manual rather an mechanically operated apple gading facilides, meant that an oppo2rtunty was lost to try out a lower level of technology thn that eventually adopted. 7.3 A total of 11 supervision missions were fielded by IDA between November 1978 and June 1986. There was good continuity of staff between missions. and the frequency of the supervsion missions was adequate. Most of the problems of project implementation highlighted in this completion report had been brought out in the supervision reports. The mnssions made efforts, trugh organizing meetings of relevant agencies, aimed at resolving some of the problems. Cetain measres taken by IDA during the course of implemention, in particular the scaling down of project size, were wholly justified. An area where supervmision missions could have contributed better at ensunng more effective implementation, partcularly during the eadier stages, relates to maing local sate agencies beter familiarized wih prcment procedures. VIIL CONCLUSTONS AND lESSONS LFARED 8.1 The project was designed to provide physical facilities, raining, and through JKHPMCb an altemaive technology and marketing channel to the entrenched private ma-rkeIng system which was perceived as unlikely to cope with futue industry development, particularly the expected big increases in production. The project was expected to benefit smaller growers in pardcular, who were most prone to exploitation by the larger growers and merchants. 8.2 The JKHPMC managed to construct about 60% of the facilities and equip them, but most have not been cossioned and brought into use. The Corporation has so far failet to atact growers to its intended opeatons of frit pMent, cold sta, improved grading and presentation, and marketing. Consequently, neither the project not JKHPMC have as yet made significant progress towads achieving the broad objectives as originally perceived. 8.3 Conclusions that can be drawn at is stage are inevitably flavored by the general question of whether public sect corporations can succeed in a highly complex indusuy, in competition with a weil entrenched and organized private sector. Experience under the project so far shows that due to vadous factors JKHPMC has been unable to compete effectively within the existing private marketing system. Furthermore, once the decision to set up JKHPMC had been take it seems that overall and sustained commitment which was necessary to enhance its chance of success was missing. Ihis is particularly pertinent when it is recognized that JKHPMC was charged with achieving objectives within a hostile enviroment of an existing entrenched private makeing system. The leading gr"oers did not perceive the need for a new Corporation; instead they viewed it as a threat to their pre-harvest contract operations. 8.4 Appraisal perceptions that the other GOJK departments dealing with horticultue would play their role in addressing the producton problems did not matialize. There was no cmprehensive development plan within which the roles of the different agencies responsible for hortculture in the state were clearly defined. Consequently, there was little effecive cdinaon - 17 - of the project sector development generally. or of institutional support for the JKHPMC. Within lKHPMC itsdf problems arse on account of poor financial management, and the relatively high tunover in Managing Direcus in the later period of project implemenaion. 8.5 The project tried to establish a big and new commercial operation, which in hindsight was too much to introduce over the period allocated. In funding further developments on pernn.ial fit crops, projects may need to allow more gradual implementadon over a longer 8.6 Lessons which emerge from the implementation experience of the prject so far, include the following: (a) caudon must be exercised in introducing a wholy new technology on a large scale, when its acceptability to die proposed beneficiaries and under prevailing conditions has not been established through smaller scale operations; (b) while there was clearly a need for a bette fnrt maketing system and the intrduction of cold stores, the choice of using a public sector corporation to address these problems is questionable, partdculady in marketing a perishable commodity which requires flexibility in operatng procedus; (c) to ensure the wider adoption of a wholly new technology introduced under a projec it must be accompanied by a suitable promotion/incentive package to enable an inidal brakough in achieving farmer accepmnce; the success of the project was wholly dependent on JKHPMC being able to provide better prices to grower and when this did not mateialze immediaely, JKHPMC found it difficult to establish a sustainable relationship with gowers (d) the projection and phasing of likely futue benefits in a situaton where a public sector agency is to be established to opert a new commercial venture must allow for a longer learning period, particulaly when there are few people available with the relzvant entepreneurial skills; it should not be expected that dte provision of a large training progam will ensure the rapid development of the required experise to run tie opeation; and (e) the importance of good financial planing and management should not be underestimtd I ND a A JAMU A tV_"^S R H m1luLlURE PROJECI iCredit 6000-IN Cougo-Crton ot Anarlsasl end ActuAl Co-tL ...hllML*I- 1 Estlpata .jV EmoenditurOS_ Estlmgtid Total cgalgZ.. Actual as S X"§1slk UnIts Is000 USgo000 Up to 30 June s0 UnIte 3s600 USS 000 *i Untts Rs Cost USS Co- Annie P.UcCsJMJjM1 833 . G 9a GredinglPachign Collto 0 25 48.630 S.560 39.649 1 40.333 3.90b 00 e9 et Cold Storag- FacIlIttes 1 39.440 4.505 30.532 7 4t,724 3.90J 41 Juice Concentrate Plant * 34.220 3.910 - 21 - - - 0 0 Seth- lustal 122.100 13.915 70.161 90.05J 043I 14 Oo le.,lllng/Prplng OCue,.es. 5s 24.170 2.160 24.116 a 33.153 3.104 53 131 lot l.a.n.l lentro I 7.960 901 13.521 * 11.293 1.401 lo1 217 154 bub- luIal 321630 3.610 31.631 50.446 4 505 I51 i2J ILAIUhO_nL CebbktL # 690 To 1,740 I s.740 375 100 295 2Ol Apple and Walnuts 6.960 495 6.500 ai 7.141 623 303 l01 mushrooms _ nco. Pilot st.e,1e) 5.430 $to 7.300 it 14.600 1.140 269 184 Sub-lotal V2-.390 I,45 ,oo600 21.741 .773 *75 1.5 i qnl.U. I A&.i a3.SIfa-3 6.300 S00 4.222 4.222 42S 62 '~~salai SWAS 20.000 2.205 ~~~~~~~~~~~15.563 Il15.563 1.215 94 SG IELUUUEUL.UhLIJl.IJihl-fDI-IQ.I 41.000 5455 45.000 II 45.0s0 5.15 94 !fA C°df1-o 242,200 27.630 1' 3.143 226.526 21.754 94 j Psce sond PMevle-l Cosetlss gncles hove bee#s roughtly alucated to tndIwvdu8l coste. st bot Implem@et.ed a propposed at appraisal. stimated. Os.tstandlfng Item Includes fIttIngs *nd delivarY of 2 refrigerattd vans. 51 A much le.o. *esentch unit boing constructed (us coopared to SAN proposals). Uupenditwoes *epr-sent advance payments made tO contractor. §/ Replesoetsb awuuots outstandlno end due to S01 'r JKU as at 30.6.80 for loans taken bt JMHPMC to tinslbce corop loans hIncd. power sprayers). go eepresentisg Issued and paid top share cap4tal. Share capital worth an additlonal os,23 .1111o6e is poending allotment. zi l.,l,,sIS.s o*5l.bdtesI cests for completing physiCal structures. 31 Convwoslo" at awerage eOLhange rate over the period of Implementation. F US1.1 JAL-imicuLTUIIE ekuL,IE * tC.eu3 SS06-S Costs . Camnlatiln.Statun 1.3 eJuine_tM9ot_.aJKHPNC fae4i" l"'. aasF1L.~ OCast lsi- It Ss n, ieO 11* ............. w so. t , Zabt,re 6919 2.242 3.615 Sol 1980, 61166 6.122 Cg 6*I.u2d DosOgalt 3060 3.210 2.104 SOS ISIS. USd66 1.11 Co6 s.Ioe,..s "-h--por- l606 3.414 2.500 553 1013. 15116{ 6.653 :raLJ; 1960 2.493 2.069 Sal t993. notes I S403 s 6190 2.402 2.626 Sal 1903. 05186 1.740 s thnoeu o . 6150 2.502 3.025 501 062. 65/66r 1.46 _ *-o1rpor- 198 2.72S 2.005 503al 1904S. 36/66 1.720 3' Trailpora Igo4 2.532 23010 Sol 160146. a5106 3.320 5 Xanl*para *Sol 2.796 2.435 Sal 0904188f. W5oe 1.437 Tr-gore 4994 2.912 2197§ set 1994E6ffi Was@ 1.330 ge-t 1912 2.760 i629 Sal 19341l6. 1516 1.622 Chabthenjan 6900 2.203 2.623 Joe . l06o 36116 6.15 Cometslsoned Patten 1960 3.412 3.330 Jis 6032. 65166 3.694 to Sumba$ 6360 2.440 2.160 JiS 3902. o5gle 6.641 Coe_isslon"44 Cboedhrloguwl 1900 2.020 23.12 Jug 6383. 051006 t.9S CoM3se3o..ed * erwab 6960 3.520 2.662 A6 3062. 151.6 6.080 Coomtsaoned C3hadure 1003 3.624 3.161 .353 3064. 66 6.106 3 Sirgep"ure 1062 2.006 2.066 its 1945 60S04 a36.40) 11 man-hnm~~ _ t-r- Jaw Al 1.449 SoI l - - completed *ii 1)3 t6.1405 Chaklhanj-n 3063 4.e90 5.955 is& 3983. 65460 3 635 CoamtsetoneaS lBohrs l060 4.930 o.6oa Sot 1904. o5gl6 3.726 Coe ossi00nd 0000oh 19930 5.034 5.740 Sal 1094. 566 3.152 I5 Souma$ 1902 5.025 5.640 jug 3064 4.020 At Ramapoora 9032 5.063 s.335 set 1984i45* 15/oS 3.034 at andware 3 0.0 6.000 Sol 3148/66. o5gle 2.061 5e *ajpora 3062 6.363 6.412 S3l 934#95. UOS6 3.006 2'o 8 1.1 . I 4j**32j 32 A.I._ M Seormah 1960 4.157 4.592 JM6 9dI, 85/66 2.024 *tndoO-salangem I980 4.046 4.381 Jug 1982, 35s66 2.199 Chowdbrtgund 1990 3.304 4.174 Jug 0962. *5s66 2.189 mesas #990 3.659 3.99S JBs 1963. S5SI6 2.491 Chadura 1994 * 3.454 3.668 JMS 1983. USBSB 2.256 Aojpors 1960 2.510 3.930 So 1984. 65/66 1.930 Tral 1980 3.646 3.6b4 S5t 1954. OSI06 2.253 Achabal 1980 4.130 4.695 Sa6 1994. 65886 2 G6a CO_ SBSUS DOa ft Ceastra Quazlgund 1964 12.683 1.293 .0 1934/S5 9.920 Total 42.1AU OILAiM 2L34 437.631) 2/ 1p AS approveU by NASAeD. excludtng tlec Cost of land (the letter Is included In totals above). II S0 has not yet approved the scheme. and lsence aso disbursement. *o far. Ii Sanitary fttIngs. slectrtftcotton and Inetallatton of tranatoraur *till to be completed. i/ Electrltfcatlon and transformer installation to bo templeted. I/ InntatlleSIon of tose machinery and electrificatlon to be Completed. §1 Aspects of c1vIl works. machinery Installation and electrificatlon to be completed. Is Impenditures up to 30 June 1956. I* INDIA JGK HORTICULTURE PROJECT (Credit 806-IN) JKUPNC Operations with Apples and walnuts Item Unit 1978179 1979/80 1980/81 1981/82 1982/83 1983M84 1984/85 1985/86 APPLE OPERATIONS Crop Loan Scheme Area Acres 1,435 3,407 6rowers under Contract No. 1,031 2,318 Market Operations Sales under CLS Boxes - - - - - - 283,000 483,000 Other Comission Sales 0 22.000 95,000 225,000 132,000 76,000 100,000 - - Sales on Outright Purchase " - - - 3,000 - - - - Total Sales 22,C*X) 95,000 225,000 135,0d 76,000 100,000 283,000 483,000 Of Total Sates: i) Carton Packed at JKPC" n.a. n.a. n.a. n.a. n.a. 14,000 10,000 4,000 ii) wooden box " It n.e. n.a. n.s. n.a. n.a. 25,000 54,000 87,000 iii) Quantity Field Packed n.a. n.a. n.e. n.a. n.a. 61,000 219,000 392,000 Apptes Cotd Stored 2,000 16,000 10,000 3,000 Gross Sales Value Realised Rs'OOO 872 3,800 9,300 S,600 3,640 4,200 11,900 20,503 Gross Average Sales Value Per Box Rs/box 39.64 40.00 41.33 41.48 47.89 42.00 42.05 42.45 WALNUT OPERATIONS No. of Growers/Agents Dealt With No. 3 28 37 7 Green Walnuts Processed - Outright Purchase Tons 112 49 - Custom Service 14 15 Dry Walnut Recovery 4 28 13 4 Source* J.lItt INOIA J&K HORTICULTURE PROJECT (Credit 806-1N) JKIPNC - Terms of Managing Directors 8 Department birectors Name Date of Date Period Post Joining Relieved Remained Vacant Managing Iirectors Mr. M. Habibullah Feb. 1978 Jul. 1982 Mr. A. Hafiz Jut. 1982 Aug. 1982 Mr. N. A. Kamili Aug. 1982 Apr. 1983 Mr. S. Shuja Hussain Apr. 1983 Mar. 1986 Mr. 6. J. Nahvi Mar. 1986 Director finance Mr. R. N. Dawai Dec. 1978 Nov. 1980 Nov. 1980 - Feb. 1983 Mr. M. L. Jain Feb. 1983 Dec. 1984 Jan. 1985 - Jul. 1985 Mr. U. K. Kiul Aug. 1985 Nov. 2985 Nov. 1985 - Aug. 1986 N Mr. Ramanathan Sept. 1986 Director Operation 6 Mr. A. Kar 1978 Not Available Mr. A. Hafiz Nov. 1979 Oct. 1984 1/ Mr. M. Y. Mani Sept. 1985 Director Marketing Mr. R. Anandum May 1979 Oct. 1981 Nov. 1981 Apr. 1983 Mr. M. Y. Wani Apr. 1983 Director Engineering Ms. S. Shuja Hussain Feb. 1979 Apr. 1983 1 1/ The respective Managing Directors have held the additional charge of these posts when they were vacant. - 23 - TabL 5 INDIA JSK HORTCUL. PROJECT (Credit 806-IN) &MVitureS InMurred al DIe/WllrU Retsearch Comomt .Sh~ SAR 1/ Act *........... (R00.... a CiviL Wm" Cous ctim of CA itoe, l _ratory 28.0 1,392.57 Custrtcticn of Library 121.0 898.66 CA Cotd Store Ejimw,t Refrgpratiat Eo4pi.it 578.S 0G SEo & Electric Truufoi19r i125 58.32 GJ ul>yser/Otaor & 6rwro 671.49 PL;tlc Craet 39.77 ftfH2mtsd vus Q wits) 2/ - l,ao.m L;rstory Eaitt 481.2 2.8L89 Library awks & Jowruls 2187 168.69 EqWAP 77.0 98.12 Tedvhical Asistamice Cotd Store Eirwr 131.2 36D X Fmt"~R"ioLost 175.0 14G.M Entaoist 87.3 niL Training 8 St* Tanm 3/ 367.5 22.50 TotaL Cost 2,137.6 7,923.51 1/ ExcLuing Price Cotingpcies. 2/ Estiae cos, which incl.W aLL etrigaian ewiui 0Aich ha rat yet be irutLLed 3/ Agairut 42 an .ut of st* tears pr o Pi in the SAR, 12 man w tJot be i _ntd. - 24 - TabLe 6 J&LK HORrICULn.U PROJECT (Credit 806-IN ScheduLe of Disb.rsememts (Ctuuative) Apaisai ACtuAL ActuaL as Percumt IDA Fiscal Year Estin?e Disbjsu'ns of AcwraisaL Estiue ..U S ftte)......... O Lin ...... .... ...... m 1979/80 0.3 0.1 33 1980/81 1.4 0.3 21 1981/82 5.3 2.1 40 1982/83 9.6 2.6 27 1983/84 14.0 3.6 26 1984/85 14.0 4.9 35 1985/86 14.0 6.1 44 1986/87 14.0 6.7 48 Date of FinaL Disbjruunit - Februry 12, 1987 - 25 - TabLe 7 IMOIA JSK HOCRW.U PRE ECT (Credit 8of6-w ALLomaia9 of Credit Prwes1s DwAisal bma fll.l JIdstIJrud Cat!=_ ALLocaicDan O1dr Xe- of ALLocaio .......... *... css ao (1) Wle & 6ltmA Cottres (a) Civil Wrlks 3,10 2,395 (b) Vehictes, E*Aipi 4,5 ZM573 1,927 43 g Met ials (2) DOwe Juice Pi cemsin Pait (a) CiviL Wwts 3D niL m0 1m (b) VehicLes, EApwt 2,100 97 2,gM 95 & pte,iaLs (3) MAhro., AML I WA" Ruset ch (a) Civiltrks 100 niL 100 1O (b) VehicLes, 5Waip.-t s0 143 757 84 & etoriaLs (4) Cro Lam IAM 255 1,345 84 (5) Stdies, Tecticat Assiste 1, 19 (24) (24) & Training (6) LUaLLocat 5gm niL 5gm 1 ToutL 14, 6,73 7,2 52