Ex-Ante Evaluation (for Japanese ODA Loan)
South Asia Division 1, South Asia Department
Japan International Cooperation Agency
1. Name of the Project（１） Country: India（２） Project: The Project for Promoting Sustainable Horticulture in Haryana (I)（３） Project Site/Target Area: State of Haryana (Total Population: about 25
million (2011))
Loan Agreement: February 20, 2024
2. Background and Necessity of the Project（１）Current State and Issues of the Agriculture Sector and the Priority in India
In India, agriculture is an important industry, accounting for 14.6% of GDP and60% of employment (World Bank data (2018)). In addition, due in part toproductivity gains brought about by the Green Revolution that began in the 1960s,
India has become a major global food producer and exporter, particularly of grains,ranking second in the world in rice and wheat production and first in rice exports(U.S. Department of Agriculture (USDA) (2021)), etc. In particular, the state ofHaryana has made progress in modernizing and expanding agriculture and is
now one of the leading grain producing states in the country, making grain theprimary industry and producing about 15% of India's national grain (HaryanaVISION 2030). On the other hand, Haryana State faces the highest risk ofgroundwater depletion in India, along with Punjab and other states, due toexcessive water pumping for grain production, especially rice, in recent years,
and the risk of groundwater depletion is considered extremely high inapproximately 60% of the state. In particular, groundwater levels have dropped
an average of about 6 meters and a maximum of about 25 meters in every districtof Haryana over the past 40 years (1974-2014) (Haryana State Government
Groundwater Review Committee), and this has become a major issue in recentyears. There is a growing need to promote crop diversification into horticultural
crops such as vegetables and fruits, which use relatively less water.
Against this backdrop, Government of Haryana has formulated andimplemented the “Mera Pani Meri Virasat Scheme,” a crop diversification policythat encourages a shift from rice and other grain crops, which require relatively
high water use and have a large environmental impact, to other crops, including
vegetables, fruits, and other horticultural crops that have a relatively low
environmental impact, thereby promoting sustainable agriculture. However, atpresent, less than one-fifth of the farmland has been converted (about 70,000 ha,of which about 9,000 ha are horticultural crops; Haryana State AgriculturalDepartment), compared to the target of approximately 400,000 ha to be achieved
within three years from 2020. The state government has set a goal of promoting
the conversion of about 30,000 hectares from rice to horticultural crops by 2030.
In order to achieve this goal, it is necessary to provide technical guidance andtraining opportunities by agricultural extension staff, and to develop production
infrastructure such as small-scale irrigation facilities, in addition to marketing
support for profitable horticultural farming so that grain farmers feel incentivized
to switch to horticultural crops (Preparatory Survey Report (2023)).
Haryana has a suitable climate and other growing conditions not only for grains
but also for horticultural crops. Among the 28 states and 7 union territories ofIndia, Haryana ranks first in cucumber, carrot and strawberry production, secondin radish production, third in pepper and bitter gourd production, fourth incauliflower production and fifth in muskmelon production. (Horticultural Statistics
at a Glance 2018). In addition, Haryana has major development potential for
horticultural agriculture focused on the urban and suburban markets, including asignificant comparative advantage in terms of marketing due to its location near
the Delhi metropolitan area and the accessibility of transporting produce to themarket. If the value of horticultural crops can be enhanced and traded profitably
in local markets in Haryana and in major consumption centers such as Delhi andits suburbs, it will become an industry that will drive the state's economy andincrease farmers' incomes.
On the other hand, Haryana is currently unable to fully utilize its potential. Thisis due to the lack of sufficient infrastructure to control spoilage and deteriorationof agricultural products during storage, refrigeration, processing, etc. and tomaintain freshness, resulting in a decline in quality and unit price during thedistribution process, as well as food loss due to disposal (about 5%-15% loss
between harvest and delivery to market). In addition, there is a lack ofinfrastructure in the state with efficient logistics functions to facilitate effective
collection and packaging operations to increase the volume of horticultural cropdelivery and distribution, as well as standardization of specifications and quality
and improved sanitary management to add value and increase unit prices.
Furthermore, in order to achieve higher incomes for farmers, it is necessary to
improve farmers' ability to negotiate prices and establish a system to practicemarket-oriented agriculture, such as off-season farming, which increases

profitability by targeting the marginal season and selling during the high-demand
period. Specifically, smallholder farmers with an operation area of 2 ha, or about
70% of farmers in Haryana (Indian Ministry of Agriculture Statistics (2018)), areunable to secure a stable quantity of crops and are not benefiting from economies
of scale because they are distributing their crops to the market on their own. As
a result, farmers' ability to negotiate prices with market stakeholders is low, andthey do not earn sufficient income through crop sales. Therefore, it is necessary
to organize farmers as producer groups engaged in corporate activities, tostrengthen the capacity of farmers belonging to these groups, and to organizeand strengthen the capacity of the executing agencies that support these groups,
and to develop marketing strategies that contribute to improving price negotiating
power.
With this as a background, the Government of Haryana launched the producer
organizations in 2018 through the Crop Cluster Development Programme(CCDP), an initiative undertaken by the state government. While the organization
is working to develop packhouses (equivalent to a distribution and processing
center in Japan) as infrastructure for freshness and logistics functions such ascollection, grading, packing, storage/chilling and processing, strengthening thefinancial management and marketing capacity of the producer organizations, andimproving their business planning capacity, its efforts are still in progress.
The Project for Promoting Sustainable Horticulture in Haryana (hereinafterreferred to as “the Project”) aims to promote sustainable agriculture and increase
the income of the target farmers by promoting the marketing of horticultural
products through the diversification of horticultural crops such as fruits andvegetables and the development of facilities and capacity building for value chain
promotion, and it is positioned as the most important project in the agricultural
sector in India.
（２）Japan's and JICA's Policy Cooperation and Operations in the Agriculture
Sector (especially in relation to key foreign policies such as the Free andOpen Indo-Pacific Partnership (FOIP))Country Assistance Policy for India (March 2016), formulated by theGovernment of Japan, stipulates “supporting sustainable and inclusive growth(income generation programmes for the poor)” as one of the priority areas. TheJICA Country Analysis Paper for India (March 2018) also identifies “inclusive ruralgrowth” as one of the development challenges, and analyzes the need to increasefarmer’s income by improving agricultural productivity. In addition, The JICA

Global Agenda (JICA’s Strategies for Global Developmet) 5. Agriculture and RuralDevelopment (Sustainable Food Systems) states that the project aims toincrease farmers' income by stimulating agriculture and related industries(processing, distribution, etc.), and the Project is in line with these policies andanalyses. Furthermore, from the perspective of food security, this Project isconsistent with one of the Pillars of the “Free and Open Indo-Pacific” initiative,“Addressing Challenges in an Indo-Pacific Way”.
（３）Other Donors’ Activities
The World Bank has supported the development of a horticultural training
facility in Haryana State in 1998. In addition, Israel is supporting the developmentof research and cultivation facilities in Haryana, including a testing center, basedon the Indo-Israel Work Plan agreed with the Government of India in 2006.
3. Project Description（１）Project Description① Project Objective
The project aims to contribute to the socio-economic development of the stateof Haryana by supporting crop diversification into horticultural crops such as fruits
and vegetables, and by improving facilities and strengthening capacity to promotethe value chain, thereby promoting sustainable agriculture and increasing theincome of the target farmers by promoting sales of horticultural crops.
② Project Components
１） Support for crop diversification into horticultural crops (strengthening thecapacity of producer organizations and farmers' groups (support for theformulation of project plans, support for the establishment of a jointdelivery system, etc.), promotion of water-saving horticulture(development of small-scale irrigation systems, etc.), strengthening offarmers' production systems (training for the formulation of “farming asa business” plans, etc.).
２）

Support for value chain development (development of packhouses, data
linkage infrastructure (e-marketplace, inventory management system,etc.), promotion of private sector collaboration (implementation of pilot
projects such as for matching between private companies and producer
organizations, etc.)

３）Strengthening the organizational structure of the state government:
strengthening the functions of the Project Management Unit [PMU](training, equipment provision, etc.), strengthening the expansion
system of the “faming as a business” model (training, etc.), formulationand implementation of marketing strategies (support for the formulatingthe strategy), etc.)
４）Consulting services: detailed planning support, bidding assistance,construction supervision, support for strengthening the organizationalstructure, implementation of various surveys such as market research,
support for promoting private-sector collaboration, support forformulating data infrastructure development strategies, support forenvironmental and social considerations, etc.

③ Project Beneficiaries (Target Groups)
Direct beneficiaries (number of farmers using the developed packhouses:
about 44,000; and number of farmers eligible for capacity building: about
112,000)
Final beneficiaries (number of consumers who will benefit from value-added
horticultural products through value chain promotion: about 52 million)（２） Estimated Project Cost
47,921 million yen (Japanese ODA loan: 16,215 million yen)
（３） Schedule (Cooperation Period)
February/2024-January/2033 (108 months)
Completion of all activities (January 2033) is considered completion of theProject.
（４） Project Implementation Structure１） Borrower: President of India
２） Guarantor: N/A
３） Executing Agency: Department of Horticulture, Government of Haryana(hereinafter referred to as “DoH”)
４） Operation and maintenance system:
The PMU will take the lead during implementation and the DoH will operate
and maintain the project after completion, while the organization in charge of eachproject content will be responsible for operation and maintenance management.
Specifically, among the facilities to be developed through the project, theoperation and maintenance of the packhouses will be carried out by the producer
organizations (however, the operation and maintenance of the large-scale
packhouses will be outsourced to the private sector). Capacity building for thispurpose will be conducted through the Project, and the producer organizations

will pay for operation and maintenance costs from the investment and sales
proceeds by their members. In addition, the DoH will take over from the PMU toprovide support for capacity building of producer organizations etc. after thecompletion of the Project, but there are no particular concerns about the technicalaspects of the Project since the DoH will be involved in the PMU work from theimplementation stage and will also support it with consulting services. There areno particular financial concerns as the Haryana State Government Finance
Department has already confirmed that budget allocations will be made for thenecessary operation and maintenance costs required including for thepackhouses.
（５） Collaboration and Sharing of Roles with Other Donors
１） Japan's Activities: None
２） Other Donor’s Activities: None
（６） Environmental and Social Consideration① Category: FI② Reason for Categorization:
The Project cannot identify subprojects before JICA's loan approval under the"Japan International Cooperation Agency (JICA) Guidelines for Environmental
and Social Considerations" (issued in January 2022), and such subprojects areexpected to have environmental impacts.
③ Other/MonitoringUnder the Project, the executing agency, with the assistance of the Japanese
ODA Loan consultants hired under the ODA loan project, will classify subprojects
into categories based on India's domestic legal system and JICA Guidelines forEnvironmental and Social Considerations, and the necessary measures will betaken for the relevant category. Subprojects will not include Category A projects.
（７） Cross-Sectoral Issues① Climate change related projects
The Project is expected to contribute to climate change adaptation measure bypromoting water-saving agriculture through the introduction of drip irrigation andother small-scale irrigation development, thereby reducing the risks of climatechange impacts.
② Poverty measures and considerations
The Project mainly targets small and marginal farmers, including poor farmers.
The specific effects of the Project on poverty reduction will be confirmed throughbaseline and impact surveys to be conducted after the start of the Project.

（８）Gender Category:■GI(S) Gender Informed (Significant)<Details of Activities/Reason for Categorization>
The gender analysis identified a gender-based challenge in that women's
participation in producer organizations and training is limited due to the impact of
the gender division of labor, such as time constraints due to domestic work andtaking on supplementary tasks in production work. On the other hand, thecultivation of horticultural crops generally requires more labor than the cultivationof grains, and it is important to support women as the bearers of production labor.
Against this background, the Project created a Gender Action Plan, which is a
project plan to improve access to training opportunities related to horticultural
crop cultivation, food processing, marketing, etc., mainly by promoting women'sparticipation in producer organizations and forming producer organizations
composed exclusively of women. The percentage (%) of the total number ofwomen producers' organizations is set as an indicator. For these reasons, theProject is classified as a “gender activity integration project”.
（９） Other Important Issues: None
4. Targeted Outcomes（１） Quantitative Effects
１） Outcomes (Operation and Effect Indicators)
Baseline(ActualvalueIndicator

2021)
Farm income in the project area
(Indian Rupees)

Target (2035)
in (2 years after projectcompletion)(Note 2)

(Note 3)

-10,500

141,750

43,785

Food loss rate from post-harvest tomarket (vegetables) (%)

9.3

3.7

Food loss rate from post-harvest to
market (fruits) (%)

11.6

4.6

(Note 2)

(Note 3)

Area of crop diversification area (ha)(Note 1)
Groundwater consumption
project area (1,000 m3 )inHorticultural crops sales results(Indian Rupees)thePercentage of producer organizations-10for women (%)(Note 1) Refers to the area converted from rice to vegetables or fruits.
(Note 2) The baseline is defined by the results of the baseline survey conductedin the initial phase of the Project.
(Note 3) The target will be defined through detailed activity plan and baseline
survey conducted by PMU in the initial phase of the Project.
２） Qualitative Effects
Mitigation of groundwater depletion, improvement of women's social andeconomic status, efficiency of horticultural crop transportation, etc.
３） Internal Rate of Return
Based on the assumptions listed below, the economic internal rate of return(EIRR) for the Project is 12.6%. The Project is not intended to generate businessincome, and the financial internal rate of return (FIRR) is not calculated.
[EIRR]
Cost: Project costs, operation and maintenance costs (all excluding taxes)
Benefit: Effects of reducing post-harvest losses and increasing profits throughhigher added value by promotion of horticultural crops through support for crop
diversification of horticultural crops and support for value chain development.
Project Life: 30 years
5. External Factors and Risk Control（１）Preconditions: None
（２）External Factors: None
6. Lessons Learned from Past Projects
Lessons learned from agricultural sector projects in ODA loans to India include
the limited number of staff available for agricultural extension and the failure insome cases to provide adequate agricultural guidance to the target farmers. In
this Project, it is necessary to secure a sufficient number of agricultural extension
staff and ensure their appropriate assignment, and to establish a system tomonitor the status of agricultural guidance at the Project implementation stage.
In addition, in order to complement farmer guidance activities, training
opportunities for farmers to share their skills and knowledge, farmer guidance by
instructors from contract farming companies and farmer guidance services

provided by private Agri-tech companies will be considered as part of the support
to promote private-sector partnerships.
7. Evaluation Results
This Project is in line with India's development issues and policies as well as
the development cooperation policies and analysis of Japan and JICA. In addition,
it is highly necessary to support this Project because it is considered to contributeto SDGs Goal 1 (End poverty), Goal 2 (Zero hunger and promote sustainableagriculture), Goal 8 (Economic growth and employment), and Goal 13 (Combatclimate change).
8. Plan for Future Evaluation（１） Indicators to be Used
As described in 4. (1) to (3).
（２） Future Evaluation Schedule
Ex-post evaluation: 2 years after the project completion
ENDAppendix:

Map of the Project for Promoting Sustainable Horticulture inHaryana (Phase I)

Appendix
Map: The Project for Promoting Sustainable Horticulture in Haryana(Phase I)
Delhi Metropolitan Area

Map of India

Source (top right): Draft Regional Plan 2041: NCR

Project Area (Haryana State)

Himachal Pradesh State
Chandigarh

Punjab State
Province

Uttarakhand State

Delhi

Jaipur

Source (top left and bottom): Maps of India(https://www.mapsofindia.com / https://www.mapsofindia.com/maps/haryana/haryana.htm )