Ex-Ante Evaluation

1. Name of the ProjectCountry: Republic of India
Project: Jharkhand Horticulture Intensification by Micro Drip Irrigation Project
Loan Agreement: March 31, 2016
Loan Amount: 4,652 million yen
Borrower: The President of India
2. Background and Necessity of the Project(1) Present State of Development and Problems of the Agriculture and Irrigation
Sector in India
Agriculture sector in India has declined its share in GDP every year from 28.5%
in 2000 to 13.9% in 2013 (Ministry of Agriculture, Department of Agriculture &Cooperation Directorate of Economics & Statistics). Around 46% of the nationalland, however, have been utilized as agricultural land, and nearly 70% of the
population remain to reside in rural areas, with around half of its work force being
engaged in agriculture. Therefore, agricultural and rural development is essential
for balanced social and economic development as well as poverty reduction inIndia. Nevertheless, agricultural productivity tends not only to be subject torainfalls during rainy seasons, but also to floods and droughts caused by either
uneven or instable rainfalls and other factors due to the recent climate change,
since it is difficult to secure stable water resources because of seasonal
fluctuations of river water quantity. In addition, Indian agriculture sector (irrigation)accounts for 83% of the total water usage. It is expected that rapidly increasing
demands for urban and industrial water usage along with economic growth in thecoming period would jeopardize the demand and supply of water resource, whilewater usage efficiency (irrigation efficiency) in agriculture remains at as low as
38% (Twelfth Five Year Plan (2012-2017) Faster, More Inclusive and Sustainable
Growth Volume I). Furthermore, irrigation water source depends on groundwater,
as excessive pumping deteriorated problems such as decline and depletion ofgroundwater. Accordingly, it is required to disseminate irrigation agriculture
efficiently utilizing water resource for stable agricultural development. Improving
both irrigation rates and irrigation efficiency will be vital for economic growth inrural areas.
(2) India’s Development Policies for the Agriculture and Irrigation Sector and theRole of the Current Project
The 12th Five Year Plan (April 2012~March 2017) regards irrigation works asone of the main pillars in its plan as the irrigation works enable to directly
contribute to poor people through enhancing incomes of farmers by expanding
agricultural production. In addition, the plan aims at 4% in the growth ofagriculture sector, together with disseminating effective use of resources as wellas sustainable technology, responding to climate change, and enhancing
productivity. Especially, the plan considers the introduction of small scale
irrigation to contribute to effective utilization of water resource to be a focal priority.
In this regard, “Jharkhand Horticulture Intensification by Micro Drip Irrigation
Project” (hereinafter referred to as “the Project”) consists to the direction in theplan.
(3) Japan and JICA’s Policy and Operations in the Agriculture and Irrigation Sector inIndia
Japanese Country Assistance Program for India (May 2006) raised its
assistance to poverty reduction as one of the prioritized fields to tackle with, andrecognized the necessity to consolidate irrigation facilities for enhancing
agricultural productivity as well as ensuring stable agricultural production. In
addition, it articulated the necessity of realizing bottom up of rural communities asa whole through generating employment opportunities and improving theirincome levels. Furthermore, JICA’s Country Analysis Paper for India (March2012) provides an analysis that it is necessary to secure agricultural water
through effective utilization of limited water resource as well as to enhance
agricultural productivity through efficient water usage in order to increase foodsupply to respond to population increase and poverty reduction in rural areas.
The Project consists to this direction and analysis. Among Yen Loan projects
provided to India, 25 cases, equivalent to 252.9 billion yen, were approved for
agriculture and irrigation sector as of March 2016.
(4) Other Donors’ Activity
United Nations Development Programme (UNDP) has an achievement toinstall micro drip irrigation facilities as part of a project that it conducted forenhancing the livelihood in Jharkhand during the periods from 2003 to 2008 andfrom 2009 to 2012. The World Bank has provided its assistance to petty farmers
in West Bengal Province through management of small scale irrigation facilities
and strengthening residents’ organizations, together with its assistance tolivelihood enhancement targeting poor provinces such as Bihar and Odisha. Asia
Development Bank has supported Chhattisgarh Province for improving livelihood
and reducing poverty through enhancing services of irrigation facilities,
encouraging farming and strengthening water management.
(5) Necessity of the Project
The target area of the Project, Jharkhand (population of 330 million), is blessedwith its geographical features and climate characteristics which enable diversehorticulture products, especially vegetable cultivation. However, fluctuations inannual rainfalls are considerable, while water resource within the province islimited, with its irrigation rate remaining at as low as the national 3 rd rank. Inaddition, 72.6% of the farmers in the province are petty farmers possessing
agricultural lands of smaller than 1.0 hectare. It is necessary to enhance land
productivity and profitability for increasing agricultural incomes, but limited water
sources and insufficient irrigation have confined the cultivation period to only
rainy seasons. As a result, cash incomes through selling surplus agricultural
products such as vegetable remain quite limited. Even if agricultural products
could be brought into markets, many farmers are forced to accept unfavorable
conditions offered by buyers as they do not possess sufficient knowledge aboutmarketing and are not capable of conducting appropriate transactions at suitableprices. In fact, the province’s poverty rate is 36.9%, the 2 nd highest at nationallevel, and it is an urgent matter for the province to tackle with poverty reduction
through promoting agriculture by effective utilization of limited water resource.
The 12th Five Year Plan raised by Jharkhand Province, for the purpose ofimproving these situations, clarified its priorities as below:(i) Enhancing agricultural productivity and diversification;(ii) Transforming traditional monoculture production to commercial horticulture
products;(iii) Increasing irrigated land areas through large, middle and small scale
irrigation and effective utilization of groundwater; and(iv) Expanding the irrigated areas from 10% to 15%.
In addition, like other provinces in India, the province has shown low
attendance rates of women in village councils and so on, leaving its genderdevelopment indicator to as low as 0.558 (2007), the 29 th rank among 35
provinces across the country. The province is required to promote furtherassistance to women. The Project targets poor female farmers who are affiliatedto women’s voluntary group (SHG), and contributes to needs for supportingwomen.
Under the circumstances, the Project, which aims at enhancing productivity ofhorticultural products as well as livelihood of petty farmers, consists todevelopment policies of the Government of India, as well as assistance directions
and analysis of the Government of Japan and JICA. Therefore, the necessity ofJICA’s support for the implementation of the Project is considered to be high.
3. Project Description(1) Project Objective
The Project intends to contribute to enhancing livelihood of small and petty
farmers as well as encouraging women’s social participation, through installing
micro drip irrigation to the target farming households in Jharkhand Province andproviding technical support regarding horticultural cultivation and marketing, forthe purpose of improving irrigation rates and irrigation efficiency, enhancing
agricultural productivity, and diversifying agricultural products.
(2) Project Site/Target Area
Dumka District, Giridih District, Gumla District, Khunti District, Lohardaga District,
Pakur District, Ranchi District, West Singhbhum District, amd Simdega District inthe state of Jharkhand(3) Project Components
1) Assistance of agricultural facility development (introduction of drip irrigation
facilities to 30,000 households, consolidating common use agricultural machinery andfacilities such as farm appliances and market centers, etc.)
2）Assistance to farmers’ capacity development (consolidating support system forfarmers, agricultural technical support for farmers)3）Project management structure support (structural improvement of executingagency, research activity)4）Consulting services (procurement and fund management assistance, etc.)(4) Project Cost
5,476 million yen (Loan amount: 4,652 million yen)
(5) Project Implementation Schedule
March 2016 – February 2023 (84 months in total).The project completion is definedas the completion of all activities commencement of the service (February 2023).
(6) Project Implementation Structure1) Borrower: The President of India
2) Guarantor: none
3) Executing Agency: Jharkhand State Livelihood Promotion Society (JSLPS)
4) Operation and Maintenance System: the JSLPS .will implement as well as
monitor and maintenance of the Project.
(7) Environmental and Social Considerations/Poverty Reduction/Social Development
1) Environmental and Social Considerations① Category: FI② Reason for Categorization: Subproject of the Project is not identified before
JICA’s approval of loan under the JICA guidelines for environmental and social
considerations (April 2010) and such a subproject is unlikely to have significant
adverse impact.
③ Other/Monitoring: The Project envisages that the Implementing Agency,
supported by consultants employed by the Yen Loan, will take necessary
measures for a category that it falls in, based on domestic legal system in Indiaand ‘Japan International Cooperation Agency’s Environmental and Social
Consideration Guideline’ which enable categorizing each sub-project.

Meanwhile, sub-projects that fall into Category A will not be implemented. If
necessary, however, the Implementing Agency is required to formulate a dueplan for aboriginal residents based on the aboriginal residents’ framework
which was agreed at the time of appraisal.
2) Promotion of Poverty Reduction: The Project targets petty farmers in Jharkhand,the 2nd highest province in poverty rate in India. In addition, it will implementmarketing and agricultural technical support, together with drip irrigation which

contributes to enhancing agricultural productivity, in order to improve livelihoodof petty farmers.
3) Promotion of Social Development: The Project targets SHG comprising female
members and implements activities based on women’s needs. Criteria for
selecting target blocks include areas with high ratios of designated ethnic groups
and designated castes. The Project will be implemented with consideration forsocially vulnerable; when target farmers are selected, households withhandicapped family members are prioritized.
(8) Collaboration with Other Donors: It is expected to expand the target area of theProject, by assisting to secure the agricultural water for the areas where manyhouseholds with no spring wells reside, in collaboration with National Watershed
Management Programme (NWMP) which conducts maintenance of Check Dam under
the supervision of Department of Rural Development and Mahatma Gandhi National
Rural Employment Guarantee Act (MGNREGA) which constructs spring wells.
(9) Other Important Issues: None in particular

4. Targeted Outcomes(1) Quantitative Effects
1) Performance Indicators (Operation and Effect Indicator)
Baseline*1
Indicators(actual value in2016)
Number of farmers who benefit from drip
irrigation (household)Area of drip irrigation (ha)Number of annual planning (number/year)
Farming period utilizing drip irrigation(number/year)
Increase rate for main product yield (%)
Increase rate for gross farm return in drip
irrigation installed farm per household andper year (%)

Target (2025)[2 years after projectcompletion]
30,0003,000
21248※2227

Increase rate for gross agricultural income
in drip irrigation installed farm per233
household and per year (%)
Loan recovery rate (%)
90
Total amount of repaid loan (Rupee)
450 million
Annual average agricultural income in drip
32,552
irrigation installed farm(Rupee/o.1ha)＊ 1: Reference values are fixed after the implementation of a baseline survey
targeting farmers who are selected upon the launching of the Project.
＊2: Target values were calculated based on the main products as of the present.
However, there are possibilities that main products in the target areas in 2025 might
be changed according to needs of farmers and markets.
(2) Qualitative Effects: Enhancement of living standards of residents, promotion ofwomen’s social participation and economic activities, and so on(3) Internal Rate of Return: Based on the following presuppositions, the Project’s
economic internal rate of return (EIRR) is fixed at 15.0%. Meanwhile, since the Project
does not aim at obtaining profits, financial internal rate of return (FIRR) is not
calculated.
【EIRR】
Cost: Project cost (excluding tax), operation and maintenance cost
Benefit: part of agricultural income increased
Project Life: 20 years
5. External Factors and Risk ControlDeterioration of political economic circumstances as well as natural disasters inIndia and the target/neighboring areas
6. Evaluation Results and Lessons Learned from Past Projects(1) Results Similar Past Projects: An Ex-post evaluation for the Yen Loan Project“Attappady Wastland Environmental Conservation Project” in India indicated that, as
one of the factors for considerable delay of the project implementation, around 4 years
were required for establishing a cooperative relationship between the implementation
agency and residents. Evaluation results show that, in a case of residents’participatory project, it is important to conduct sufficient surveys as to relationships
between residents and governmental organizations, social situations, livingenvironment, development needs, and so on, to confirm whether or not there are any
inhibiting factors for the project implementation.
(2) Lessons for the Project: Since the Project is a participatory project involving
residents, it adopts an implementing system, vis-à-vis the Project’s target, to utilize
SHG with which the Implementing Agency has established a cooperative relationshipthrough other schemes in order to implement the Project smoothly. In addition, itenvisages a system which enables easily to reflect more local needs, by arranging afield manager and community resource person (CRP) who are thoroughly
knowledgeable about community information, in order to avoid any disturbances for
activities at community levels.
7. Plan for Future Evaluation(1) Indicators for Future Evaluation
1） Number of farmers who benefit from drip irrigation (household)2） Area of drip irrigation (ha)3） Number of annual planning (number/year)
4） Farming period utilizing drip irrigation (number/year)5） Increase rate for main product yield (%)6） Increase rate for gross farm return in drip irrigation installed farm per household
and per year (%)7） Increase rate for gross agricultural income in drip irrigation installed farm perhousehold and per year (%)8） Loan recovery rate (%)9） Total amount of repaid loan (Rupee)10） Annual average agricultural income in drip irrigation installed farm(Rupee/o.1ha)(2) Timing
Two years after project completion