Document ofThe World Bank

Report No. 15454-AR

STAFF APPRAISAL REPORT

ARGENTINA

PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

March 21, 1997

Natural Resources, Environment and Rural Poverty DivisionCountry Department ILatin America and the Caribbean Region

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CURRENCY EQUIVALENTS(As of March 1997)

Currency Unit Peso (Arg$)

EXCHANGE RATE(March 1997)

US$1.00 Arg$1.00Arg$ 1.00= US$ 1.00

FISCAL YEAR

January 1 to December 31

WEIGHTS AND MEASURES

The metric system has been used throughout the report.

Vice President: Mr. Shahid Javed Burki

Director: Mr. Gobind T. Nankani

Division Chief Ms. Constance Bernard

Task Manager: Mr. Guzman Garcia-Rivero

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy

CC Consultative Commissions

CE Total Current Expenditure

CFA Federal Agricultural CouncilConsejo Federal Agropecuario

COPROSA Provincial Commission for Animal HealthComision Provincial de Sanidad Animal

CORFO-RC Corporation for the Development of the Rio Colorado ValleyCorporaci6n de Fomento del Rio Colorado

CPI Consumer Price Index

CR Total Current Revenues

DGI General Irrigation Department - Province of MendozaDepartamento General de Irrigaci6n-Provincia de Mendoza

EA Environmental Analysis

EC Executive Comunittee

EM Project Environmental Manual

EPAF Provincial Unit for Financial AdministrationEntidad Provincial de Administracion Financiera

EPDA Provincial Agricultural Development AgencyEntidad de Programacion del Desarrollo Agropecuario

ERR Economic Rate of Return

FMD Foot-and-Mouth Disease

GATT General Agreement on Tariffs and Trade

GDP Gross Domestic Product

GOA Govemrnent of Argentina

IASCAV National Institute for Phytosanitary Health and Quality ControlInstituto Argentino de Sanidady Calidad Vegetal

IBRD Intemational Bank for Reconstruction and Development

ICB International Competitive Bidding

IDB Inter-American Development Bank

IDC Institutional Development Component

IERR Internal Economic Rate of Return

lNASE National Seeds InstituteInstituto Nacional de Semillas

INDEC National Institute for Statistics and CensusInstituto Nacional de Estadisticas y Censos

INTA National Agricultural Technology InstituteInstituto Nacional de Tecnologia Agropecuaria

LIBOR London Interbank Offered Rate

MA Projects Environmental ManualManual Ambiental del PROSAP

M & E Monitoring and EvaluationSeguimiento y Evaluaci6n

MEyOySP Ministry of Economy and Public Works and ServicesMinisterio de Economia y Obras y Servicios Pzwbhcos

MERCOSUR Southern Cone Common MarketMercado Comtun del Cono Sur

NBF Non-Bank Financed

NCB National Competitive Bidding

NGO Non-Governmental Organization

NOA Northwestern Region of ArgentinaNoroeste Argentino

NPV Net Present Value

O & M Operation and Maintenance

OED Operations Evaluation Department

PDP Provincial Development Project

PIP Project Implementation Plan

POA Annual Operating PlanPlan Operativo Anual

POM Project Operational Manual

PPF Project Preparation Facility

PROMSA Agricultural Services and Institutional Development ProjectProyecto de Modernizacion de los Servicios Agropecuarios

PROSAP Provincial Agricultural Development ProjectProyecto de Servicios Agricolas Provinciales

RF Regional Fora

SAGPyA Secretariat of Agriculture, Livestock, Fisheries and FoodSecretaria de Agricultura, Ganaderia, Pesca y Alimentacion

SBD Standard Bidding Document

SEFINOA Phytosanitary Services for the Northwestern RegionServicios Fitosanitarios del Noroeste Argentino

SENASA National Service for Food and Agricultural Sanitation and QualityServicio Nacional de Sanidady CalidadAgroalimentaria

SIIA Agricultural Statistics Integrated SystemSistema Integrado de Informacion Agropecuaria

SOEs Statements of Expenditure

SSAGyF Undersecretariat for Agriculture, Livestock and Forestry-SAGPyASubsecretaria de Agricultura, Ganaderia y Forestaci6n-SAGPyA

TCG Tripartite Consultative Group

TORs Termns of Reference

UA Environmental UnitUnidad Ambiental

UE Evaluation UnitUnidad de Evaluaci6n

UEC Central Project Coordinating UnitUnidad Ejecutora Central

UEP Project Implementing UnitUnidad Ejecutora de Proyecto

US Monitoring UnitUnidad de Seguimiento

USDA United States Department of Agriculture

UTP Provincial Technical UnitsUnidades Tecnicas Provinciales

WUA Water Users Associations

WRMP Water Resource Management Policy

ARGENTINA

PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

TABLE OF CONTENTS

LOAN AND PROJECT SUMMARY ............................................................... i

1. THE SECTOR .......................................................................................................................A. MACROECONOMIC SETTING ................................................... 1............................ B. AGRICULTURAL SECTOR: PERFORMANCE AND PROSPECTS ........................................... 2C. SECTORAL POTENTIAL AND CONSTRAINTS ................................................................... 3D. DECENTRALIZATION OF DELIVERY OF PUBLIC AGRICULTURAL SERVICES ........ ............. 5

E. PRIVATE SECTOR PARTICIPATION IN DELIVERY OF AGRICULTURAL

SUPPORT SERVICES ............................................................................... 6F. BANK EXPERIENCE IN THE AGRICULTURAL SECTOR ................ ............................ ........ 7G. BANK LENDING IN ARGENTINA ............................................................................... 9

2. THE PROJECT 1............................................................................... 1A. ORIGIN AND RATIONALE FOR BANK INVOLVEMENT .11................................................ 11

B. PROJECT OBJECTIVES ............................................................................... 11C. SUMMARY PROJECT DESCRIPTION ............................................................................. 12D. MAIN AREAS OF INTERVENTION ............................................................................... 13E. PROVINCIAL ELIGIBILITY CRITERIA ............................................ ............................. 14F. SUBPROJECT SELECTION PROCESS AND ELIGIBILITY CRITERIA ......... ......................... 15

G. SELECTION OF PRIORITY SUBPROJECTS ....................................................................... 16H. GROUP A SUBPROJECTS ............................................................................... 17

I. INSTITUTIONAL DEVELOPMENT COMPONENT ....................... 8...................................... 18J. PROJECT COST AND FINANCING .... ....................................................... ................ 19

K. SUBPROJECTS COST RECOVERY............................................................................... 223. PROJECT IMPLEMENTATION ............................................................................... 24

A. INSTITUTIONAL ARRANGEMENTS ..... .............. ........... ... 24B. MONITORING AND EVALUATION ................................. ................................. 28

Project Monitoring ............................................................................... 28Mid-Term Review ............................................................................... 29

Project Evaluation ............................................................................... 29

C. PERFORMANCE INDICATORS - SUBPROJECTS IN GROUP A ..... .................................... 29

D. PROJECT OPERATIONAL MANUAL ............................................................................. 31

E. PROCUREMENT ............................................................................... 31

F. DISBURSEMENTS ............................................................................... 35

G. ACCOUNTS AND AUDITS .................................. ............................................. 38

This report is based on the finding of an Appraisal Mission that visited Argentina between February 12and 28, 1996 comprising: Messrs/Mlnes. G. Garcia-Rivero (Task Manager-LAIER), R. Van Puymbroeck(LEGLA), J. Uquillas (LATEN), and E. Gacitiua (LAIER); and A. del Castillo, P. Anguita and A. Soler(Consultants). The report also incorporates valuable contributions made during preparation from Mr. M.Wilson (MNINE). Peer reviewers were Messrs. J. Parker (LA3NR) and W. Nickel (SA2CI). MmNes. D.Ledesma and R. Rudran (LAIER) were responsible for the production of this report. Messrs/Mmes. G. T.Nankani, 0. Grimes and C. Bernard are Department Director, Projects Adviser and Division Chief,respectively.

4. PROJECT BENEFITS, IMPACTS AND RISKS ................................................................... 39A. PROJECT BENEFITS ......................................................................... 39B. PROJECT SUSTAINABILITY ......................................................................... 41C. SOCIAL ASSESSMENT AND BENEFICIARY PARTICIPATION ........................................... 42

Findings ......................................................................... 42Implementing Participation .............................................. ........................... 43

D. ENVIRONMENTAL ASPECTS ............................................................................ ... 45E. RISKS, EXOGENOUS CONDITIONS AND MITIGATING MEASURES .................................. 47

5. SUMMARY OF AGREEMENTS REACHED AND RECOMMENDATION ....................... 49A. AGREEMENTS REACHED ......................................................................... 49B. RECOMMENDATION ......................................................................... 51

ANNEXES:

A. LESSONS LEARNED ............................................................ 52B. DEscRuIP oN OF INVESTMENT SUBPROJECTS IN GROUP A ................ .................. 59C . SUMMARY PROJECT COSTS AND FINANCING TABLES ........................................................ 78D. DETAILED COST TABLES BY SUBPROJECT ............................................................ 96E. PROJECT BENEFITS AND ECONOMIC ANALYSIS BY SUBPROJECT ...................................... 127F. PROJECT ENVIRONMENTAL ASSESSMENT ............................................................ 141G. PROJECT SOCIAL ASSESSMENT AND BENEFICIARY PARTICIPATION . ........ .............. 147H. INSTITuTIONAL DEVELOPMENT CO PONENT ............................................................ 159I. PERFORMANCE INDICATORS ............................................................ 165J. SUPERVISION PLAN ............................................................. 173

MAP: No. IBRD 27905

ARGENTINA

PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

LOAN AND PROJECT SUMMARY

Borrower: The Argentine Republic

Implementing Agency: Secretariat of Agriculture, Livestock, Fisheries and Food(SAGPyA) and the Provincial Governments

Beneficiaries: Directly, about 120,000 small and medium-sizedcommercial farmers and, indirectly, the entire ruralpopulation in the subproject areas.

Poverty: Not applicable

Amount: US$125 million

Terms: Repayment in 15 years, including a grace period of fiveyears, with loan amortization based on level repayment ofprincipal and standard variable interest rate forLIBOR-based single currency loans.

Commitment Fee: 0.75% on undisbursed loan balance, beginning 60 days aftersigning, less any waiver.

Onlending Terms: Provincial subloans would be repaid in 18 years (including agrace period of five years) with variable interest rates at theaverage between IBRD and IDB rates. In addition,provinces would pay commitment and inspection fees (alsothe average of the rates for both banks) in proportion to theamounts of the provincial subloans.

Financing Plan: See paras. 2.23-2.27 and Tables 2.2-2.3.

Net Present Value: The NPV of total net benefits has been estimated atUS$127.3 million (at a 12% annual discount rate), and theoverall IERR at 22.2%, for a set of subprojects withcompleted feasibility studies ("Group A"), plus the fullcosts of the project institutional development andcoordination components (at federal and provincial levels).This set of subprojects and components has a total baseline

cost of about US$194 million, representing about 63percent of total project base costs.

Staff Appraisal Report: IBRD No. 15454-AR

Map: No. IBRD 27905

Project Identification No.: AR-PA-6010

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1. THE SECTOR

A. MACROECONOMIC SETTING

1.1 In 1991, Argentina initiated a reform program which streamlined the public sector,transformed the monetary system and contracted the foreign debt, and thus restored confidence inthe market as the primary force behind economic growth and monetary stability. As a result,Argentina dramatically reduced inflation (from an annual rate of 4,923 in 1989 to about 3.8% in1994) and sustained an average annual real economic growth rate of 5.5% during 1991-94.

1.2 The Argentine fiscal reform program balanced the federal budget by simplifying the taxstructure, improving tax collection efficiency and rationalizing expenditures. In addition, manyState enterprises were privatized and numerous State-run services eliminated. As one of the mainpillars of this program, a fixed exchange rate regime (Convertibility Plan) was established in 1991,under which the monetary base has to be fully backed by international reserves. The process alsorestructured economic relations between the national and provincial governments supported bytwo Federal Agreements (Pacto Federal and Pacto Fiscal), signed in 1992 and 1993 respectively,through which provinces pledged to reduce the size of their public sector and balance their fiscalsituation. At the same time, the federal government pledged its assistance to this process byimplementing a broad incentive program and establishing an automatic system for sharing with theprovinces the tax revenues collected at the federal level (Ley de Coparticipaci6n).

1.3 Increasing confidence in the economic reforms resulted in the levels of foreign capitalflows expanding from negative US$1.1 billion in 1990 to positive US$3.6 billion in 1994. Thegrowing economy led to imports growing from US$4 billion in 1990 to over US$21.5 billion in1994. Until 1994, capital goods imports led the expansion, indicative of the acceleration ininvestments and the restructuring of the economy. Exports also expanded, from US$12.4 billionin 1990 to more than US$15.8 billion in 1994. Improved economic conditions in Brazilcontributed to the export growth, and the advent of the MERCOSUR pointed towards evengreater economic interdependence with Brazil, which today accounts for 28% of Argentina's totaltrade.

1.4 In 1995, following the fast expansion of the first four years of the Convertibility Plan, as aconsequence of the repercussions of the Mexican financial crisis, the Argentine economy suffereda recession, during which GDP declined approximately 4.4% and unemployment reached 16.6%,even though inflation decreased to 1.6%. During the first half of 1995, capital outflows caused a30% decline in liquid reserves. However, reflecting stronger international commodity prices, areal depreciation of the local currency (Peso) and the fast pace of the economic expansion inBrazil, exports expanded to US$21 billion in 1995. Because of a sharp contraction in importdemand (1995 imports declined to US$20 billion in 1995), the trade balance improved, shiftingfrom a US$5.8 billion deficit in 1994 to about a US$1.0 billion surplus in 1995. As a result, thecurrent account deficit was cut to US$2.8 billion, less than half the 1994 level, or 1.0% of GDP.Despite the improvement in the current account, the sharp drop in net capital inflows resulted in areduction of US$69 million in net international reserves.

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1.5 By the fourth quarter of 1995, the indications were clear that the economic deteriorationhad ceased and that Argentina was pulling out of the recession. The stock and bond markets haverebounded strongly, and deposits and international reserves have recovered the losses sufferedearly in the crisis. The 1995 economic crisis was the first real test and validation of theConvertibility Plan and, more importantly, a clear demonstration to investors, domestic andinternational, of Argentina's commitment to the plan. Preliminary results for 1996 confirmed thatrecession was over. Real GDP growth rate for 1996 is estimated to have reached 4 percent, withinflation during this year almost nil (CPI increased 0.2% in 1996). Lagging fiscal revenuesshowed signs of improvements, reflecting the increase in economic activity. Due to a relativelyhigher increase in imports with respect to exports, the trade balance has been reduced to US$250million in 1996.

1.6 At the provincial level, the 1995 national crisis aggravated an already problematicsituation. Faced with serious deterioration in their fiscal affairs, and social unrest in a number ofprovinces, various provincial governments, assisted by the Federal Government's incrementalsupport to the provincial reform effort, accelerated their adjustment processes. Five provincialbanks were privatized (with another ten in the process of privatization), three social securitysystems were transferred to the streamlined national system, and public salaries and staff levelswere cut. Additionally, of the total of 35 provincial public enterprises scheduled for privatizationin eight provinces, 17 were privatized by early 1996, and privatization laws have been passed forthe rest.

1.7 Between 1990 and 1993, Argentina's poverty level' declined from 35% to 20%. Thehighest rates of poverty --averaging 40% --occurred in the Northern regions. As poverty declineswere greater in the metropolitan areas, the share of the nation's poor living in the north rose from23% to 29%.2 In absolute numbers the urban poor represented three times the rural poor.However, the incidence of poverty was higher in rural areas (34.2%) than in urban centers(16.7%). Although there are not updated estimates for levels of poverty at the national level after1993, partial data for the Buenos Aires metropolitan area 3 indicate that the percentage of thepopulation below the poverty line increased again. In the Gran Buenos Aires, it increased from13.1% in 1993, to 18.2% in 1995.

B. AGRICULTURAL SECTOR: PERFORMANCE AND PROSPECTS

1.8 Argentina's agricultural sector has traditionally played a central role in the economy.Presently, it contributes around 5% of GDP (down from around 15% in the late 1980s), providesabout 12% of total employment (plus another 22% in farm-related manufacturing, transportation

I The poor are classified as, and include: (a) indigent, or those whose income is insufficient to purchase aminimum food basket; (b) the stagnant poor, or those whose income is insufficient to purchase the minimumfood basket and non-food consumption goods, and (c) vulnerable groups, or those whose incomes fluctuatewithin the previously defined poverty band. Argentina 's Poor. A Profile, Report No. 13318-AR, World Bank,1995.

2 Argentina's Poor: A Profile, Report No. 13318-AR, World Bank, 1995.

3 Secretarla de Programaci6n Econ6mica, MEyOySP, 1995.

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and related services), and about 60% of export revenues from agricultural products andmanufactured products of agricultural origin. Argentina's more than 420,000 farms extend over177 million ha. More than 30.7 million ha are cultivated, 91 million ha are natural pasture land;37 rnillion ha are forested and the rest are used for non-agricultural purposes. Large andextensive farms domninate, with 3.2% of the farrns (those with more than 2,500 ha) occupying61% of the total farmland. On the other hand, nearly half the farms have under 50 ha, occupyingless than 8.5% of the area.

1.9 Cereals and oilseeds are the principal agricultural crops, the majority of which arecultivated in the Pampas (very fertile, plain and temperate area covering the Province of BuenosAires, and parts of La Pampa, Santa Fe and Cordoba). In 1994/95, more than 20 million ha ofcereals and oilseeds were planted, occupying about two-thirds of the cultivated farm land. Otherimportant crops include cotton and sugar cane, both concentrated in the Northeast, yerba mate,tobacco, and tea. Wine grapes are grown primarily in Mendoza, San Juan and other westernprovinces. The Pampas support most of the national cattle herd of 52 million head. Sheep areraised in Patagonia and the Pampas.

1.10 The prospects for sustained agricultural and agroindustrial growth are very promising.The agricultural sector is highly competitive, receiving minimum public support, price subsidies ortrade protection to encourage production. The macroeconomic reforms removed many distortionswhich had stultified sectoral investment and growth. Agricultural production costs are decreasingdue to declining freight and transport charges stemming from privatization of port facilities, theelimnination of the diesel tax and lower import charges for fuel, seeds and other production inputs.Liberalization of fertilizer and farm machinery imports have reduced costs to farmers, resulting instronger sales of tractors and increased fertilizer use. The expected impact of the GATTAgreement and the reforms in the European Union have strengthened international priceprojections for major Argentine agricultural export crops, especially cereals and oilseeds.

C. SECTORAL POTENTIAL AND CONSTRAINTS

1.11 Argentina has a significant comparative advantage in agricultural and agroindustrialproduction. The country's rich soils and varied agro-climatic conditions permit the production ofa wide range of commodities. This ensures self-sufficiency in most foodstuffs, provides low-costraw materials for a developing agro-industrial complex, and allows the country to be a significantfactor in world markets for a number of products, especially cereals, oilseeds and beef Inaddition, the country has great potential to diversify into the production and export of fruits,vegetables, fisheries, and forestry products.

1.12 Despite its rich natural endowment, agriculture has been the slowest-growing sector in thenational economy. Between 1991 and 1994, the annual average sectoral growth rate was 1.13%,compared with 7.7% for the national economy, 17.1% for construction, 9.3% for commercialservices, and 7% for manufacturing sectors. Agricultural growth has lagged due to exceptionallylow international prices during 1991-93 and high real domestic interest rates. Past discriminatorypolicies against the sector, including heavy export taxation and an overvalued exchange rate,combined with negligible capital investment in the sector, resulted in a land-extensive agriculture,which offered few opportunities for a quick response to new macroeconomic conditions. With

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the reduction in State subsidies and trade protection, regional economies, which had dependedupon a few non-competitive agricultural products, are experiencing significant adjustmentproblems. For most of these farmers, the rise in the real exchange rate4 experienced since 1990has decreased the prices they receive for their commodities compared with their costs ofproduction.

1.13 In addition, its deteriorated rural infrastructure, resulting from decades of public neglectand minimum private investment, directly restricts agricultural production and productivity. Morethan three-quarters of the national irrigation systems operate inefficiently due to poor maintenanceand management. Most irrigated areas are affected by impeded drainage and salinization. Inmore humid areas, flooding, due to improperly maintained drainage systems, seriously threatensagricultural production, forcing many farmners to permanently abandon agricultural pursuits.

1.14 Any long-term strategy of diversifying Argentina's agro-export mix to penetrate regionaland international markets would require overhauling the sectoral technical services, includingextension, health and quality control and export promotion, as well as investment in productioninfrastructure and advanced technology. To expand market access, Argentina will need to complywith international plant and animal health and sanitary standards. The presence of insects,diseases and agro-chemical residue in Argentinean commodities precludes their entrance intoimportant and valuable markets. Also, many varieties produced, especially of fruits andvegetables, fall below modern consumer quality standards. Extension efforts are needed toencourage producers to upgrade traditional varieties to higher-valued ones.

1.15 Argentina animal health programs have made significant progress in their campaign toeradicate Foot-and-Mouth Disease (FMD), the presence of which excludes Argentinean fresh beeffrom higher-value export markets. While large areas in Argentina have been FMD-free (withvaccination) since 1992, until these areas are internationally certified as such, certain meats fromthese zones cannot enter the FMD-free markets. Certification requires, inter alia, theestablishment and operation of a reliable, internationally acceptable, animal disease protection andprevention system, involving, in some cases, the construction of laboratories and quarantinestations.

1.16 Export market promotion services are also needed to help Argentina expand its worldmarket presence. Traditional Argentine agricultural exports, such as basic grains and oilseeds,have required virtually no market promotion. To diversify agricultural exports and increase valueadded, producers will need market information concerning international demand, technicalassistance to meet world market standards and shipment requirements, and investment capital.

4 Real exchange rate calculated using international trade- weighted indices and domestic combined price index(1988 = 100). Source: Carta Economica.

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D. DECENTRALIZATION OF DELIVERY OF PUBLIC AGRICULTURAL SERVICESS

1.17 As a result of sweeping reforms to decentralize, provinces are fast becoming the mainsource of core public infrastructure and services, spending close to US$29 billion in 1995 (almost10% of GDP and 40% of total public expenditure). In 1996, their share of public investment hasbeen estimated at around 70%. Provinces are now major providers of health, education, security,water and sanitation, and economic development services. However, in the short-run, thesereforms have drastically reduced both the quality and scope of provincial agricultural supportservices.

1.18 The Central Government, through the Secretariat of Agriculture, Livestock, Fisheries andFood (Secretaria de Agricultura, Ganaderia, Pescay Alimentaci6n, SAGPyA) of the Ministry ofEconomy, and Works and Public Services (MEyOySP), formulates national agricultural policyand legislation. It executes intra-provincial and intemational programs, such as quality standardsand grading for export products and consumer goods, and intra-provincial irrigation systems andmeat packing plants. National animal and plant health protection and sanitary campaigns areadministered by National Service for Food and Agricultural Sanitation and Quality (ServicioNacional de Sanidady CalidadAgroalimentaria, SENASA). The new SENASA was recentlyestablished (by Presidential Decree dated 6/24/96) as an autonomous and autarkic institution inthe public domain of SAGPyA, by merging two similar institutions and assuming their roles andresponsibilities: the National Animal Health Service (ex-SENASA) and the National Institute forPhytosanitary Health and Quality Control (IASCAV). The National Agricultural TechnologyInstitute (Instituto Nacional de Tecnologia Agropecuaria, INTA) is responsible for basicagricultural technological research and the provision of agricultural extension through its RegionalCenters.

1.19 The provinces, through their agricultural institutions, formulate agricultural provincialpolicy and are responsible for agricultural research and extension, supervision of meat packingplants, crop and animal disease control, and management and maintenance of irrigation systems atthe provincial level. These provincial agricultural institutions are loosely affiliated with theSAGPyA through the Federal Agricultural Council (Consejo Federal Agropecuario, CFA). Withfew exceptions, provincial support programs are restricted in scope, benefiting relatively fewfarmers. To strengthen extension services, some provinces have recently entered into cooperativeagreements with specialized federal agencies, such as INTA. The exceptions are Mendoza andCordoba which have noteworthy provincial extension programs. Neuquen has an effectivenetwork of local agricultural production centers. Water users' associations have different degreesof organizational development. Most of them are rather weak and unskilled, and have littleexperience with decentralized water management systems. The exceptions are the water users'associations in Buenos Aires and Mendoza, which are relatively sophisticated and well connectedto the provincial governments.

The Argentine State is organized into three political-administrative and territorial jurisdictions: Central,provincial and municipal levels. Within this organization, all government powers emanate from theprovinces whereby provinces delegate limited powers to the Central Government and retain for themselves allother authority. Provinces are autonomous entities governed by their own Constitutions. Municipalities areorganized as part of each province's system of government.

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1.20 Provinces have full jurisdiction over water matters (except navigational) and set waterusers' tariffs. While a volumetric-based tariff could provide a closer estimate of the value of thewater used, tariffs for irrigation and drainage infrastructure improvements are currently basedupon area under irrigation. Some provinces with long experience in irrigation (e.g., Mendoza andRio Negro) are considering implementing a volumetric tariff system.

1.21 Lirnited experience as well as technical and financial constraints severely restrict the abilityof the provincial governments to effectively formulate agricultural plans, implement projects, anddeliver agricultural services. According to a recent study, the payrolls of the provincialagricultural agencies are swollen with non-professional personnel, comprising between 50% and85% of total staff. Low provincial salaries and weak career incentives attract few qualifiedtechnicians and cause high professional turnover. These technical weaknesses, exacerbated bypoor communications among the various provincial agricultural agencies, contribute to theinefficient allocation of scarce provincial resources6 . Comprehensive measures, including betterpersonnel incentives, are urgently needed to improve management. Some provinces are seekingways to fulfill their obligations by reorganizing and strengthening institutions, working moreclosely with the private sector and charging users the full economic value for previouslysubsidized services.

E. PRIVATE SECTOR PARTICIPATION IN DELIVERY OF AGRICULTURAL SUPPORT SERVICES

1.22 The redefined role of the State is to provide only those essential services which, undernormal circumstances, are not provided by the private sector. This covers basic research, thenational agricultural database, animal and plant protection, sanitary and quality controls, andinternational marketing promotion. Although there is a need to proceed gradually, thegovernment is transferring to the private sector the responsibility for irrigation and extensionservices, the provision of which had been highly subsidized.

1.23 Existing provincial legislation permits cost recovery through taxation and beneficiarycharges. Nevertheless, the legislation is flexible, allowing the provincial government to determinerecovery terms on a case by case basis. As responsibility for irrigation 0 & M is being transferredto user groups, increasingly tariffs are being designed to not only recover 0 & M and investmentcosts, but to reflect the resource's economic value.

1.24 Extension services to small and medium farmers had been provided mainly by the publicsector. But, as a result of recent budgetary constraints, the coverage and quality of these serviceshas fallen dramatically. To address this, the government has instigated a pilot program, "RuralChange" (Cambio Rural) which encourages gradual introduction of private extension services.Under this program, farm groups, cooperatives and grower associations, through a competitiveselection process, directly contract private extension services. The government contribution,which covers 80% of costs in the first year, declines to zero by the fifth year.

6 Ministerio de Economia y Obras y Servicios Puiblicos, Secretaria de Agricultura, Ganaderia y Pesca;Fortalecimiento de la Capacidad de Programaci6n del Desarrollo Agropecuario Provincial, Buenos Aires,January 1995.

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F. BANK EXPERIENCE IN THE AGRICULTURAL SECTOR

1.25 Bank experience points to six elements essential for successful agricultural developmentprojects.' First, sound macroeconomic and sector policies, as reflected in a country's publicexpenditure program, create a project-enabling environment, reducing tendencies to overburdenprojects with multiple objectives. Second, intensive consultation with beneficiaries build neededconsensus, support for project objectives and facilitate corrective measures duringimplementation. Third, a phased approach, which begins at project preparation with building asubproject pipeline, reduces the risk of disbursement bottlenecks at project start-up. Fourth,project scale must conform to the implementing agency's institutional capacity. Fifth, whileproject design should be flexible, objectives and indicators need to be clearly defined. Finally,subprojects need to be technically and economically sound.

1.26 Institutional Development. Institutional development has been a common feature ofBank operations because to a great extent the sustainability of development depends on thecharacter and performance of institutions. While components aimed at strengthening institutionsfigured in a high proportion of Bank-financed operations, and the approaches used have beendiverse, many such components have failed to have lasting effects.

1.27 Bank projects administered by competent institutions tend also to have healthy economicrates of return. Technical assistance is the mechanism most commonly used in Bank projects tostrengthen institutions, but the Bank's experience has been mixed. Effective technical assistanceprograms have tended to be flexible, based closely on the beneficiary's needs and skills, subject tofrequent review, modification, and supervision, and focused on strengthening technical,managerial, or administrative systems. Institutional analysis up-front is essential8. Priorities oughtto be promoting the use of more creative technical assistance delivery mechanisms, and expandinglocal consultant capacity. Attention to legal issues is also important, including the regulatoryframework in which projects are carried out; the rules that define the powers, functions, andresponsibilities of institutions as well as their interrelationships; and legal measures to ensure thesustainability of institutions.

1.28 Private Sector Involvement. Bank experience demonstrates that the search for greaterefficiency may involve privatization, and agricultural projects should strive to integrate the privatesector wherever possible, limiting government's role to a narrower focus on: (i) creating anenabling policy framework for production and market efficiency; (ii) funding public goods,principally in agricultural research and extension, and rural infrastructure, and leaving theirdelivery, operation and maintenance, wherever feasible, to private agents, (iii) funding targetedinterventions needed to correct market failures and address acute poverty or food security issues,

7 Annual Review ofEvaluation Results, 1991 and 1992, OED Report No. 11062, 1992 and Report No. 12403,1993.

s Managing Technical Assistance in the 1990s: Report of the Technical Assistance Review Task Force,November 11, 1991.

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but devolving their execution to private entities; and (iv) building institutional capacity so thatpublic sector services are carried out efficiently9.

1.29 Years of public neglect and insufficient 0 & M by users have resulted in impropermaintenance and badly deteriorated irrigation systems. Transferring state-owned andstate-managed systems to user groups would require infrastructure rehabilitation before userswould take charge of the systems. Further, the capacity of users to self-manage systems must beupgraded, through technical assistance arrangements specifically designed for their needs.

1.30 Beneficiary Participation. The experience of several multilateral agencies, including theBank, shows that beneficiary participation is a crucial factor for project success andsustainabilityl°. A review of selected Bank projects reveals a strong association betweenparticipation and project effectiveness. It has been observed that beneficiary participation allowsa better definition of project components and activities, since it ensures that beneficiaries' pointsof view on priority objectives are properly considered in project operation and implementation.Participation prompts the development of ownership and increases the responsibility of theintended beneficiaries contributing towards long-term sustainability.

1.31 Marketing and Technology. Marketing services are an area in which government's roleremains critical: in the modernization of marketing facilities; in market information services,grower organization and access to international markets; and the establishment of standards andgrades to lower transaction costs and open opportunities." Well-designed and appliedagricultural technology is essential for agricultural development. Public, private and NGOresearch efforts should be amalgamated, in order to identify and alleviate gaps impeding greaterproductivity in areas which have special promise. Technology transfer programs should matchlocal fiscal, institutional and human resources, as well as existing farm conditions, and should bedesigned with the participation of all stakeholders.

1.32 Irrigation Lending. The Bank's Water Resource Management Policy (WRMP) proposesa view of water as an economic good, decentralized water management and delivery models,greater reliance on pricing, and the fill participation of water users2 . The lessons emphasizeinstitutional strengthening to improve coordination and analysis, stated to be especially importantin countries like Argentina, whose political structure gives primary authority over water toprovincial governments. Also stressed are technological research and lower-cost rehabilitation.

9 Agricultural Sector Review. World Bank, Agriculture and Natural Resources Department, July 1993.

10 World Bank Participation Sourcebook, Environment Department Papers, June 1995; and ParticipatoryDevelopment and the World Bank, World Bank Discussion Papers 183, 1992.

Annual Review of Evaluation Results, World Bank, OED, December 14, 1994.

12 WaterResourcesManagement: A World Bank Policy Paper, World Bank, OED, September 1993.

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1.33 The Bank experience13 and the WRMP advocate decentralizing responsibility andtransferring irrigation service delivery to the private sector, by relying on water user associations.Water user associations have proven effective in the Argentine Province of Mendoza wheretraditional associations, covering relatively small areas, could not meet costs, and efficiency andmaintenance suffered. Their amalgamation into larger associations enabled them to generate theirown budgets, regulate their activities, and hire professional managers to handle cost recovery,water delivery, and maintenance. Lower costs resulted from fewer, larger associations, and waterdistribution improved markedly.

1.34 Cost Recovery. Evaluations of Bank experience with irrigation and other agriculturalservices world-wide indicate that cost recovery from beneficiaries has been usually insufficient tocover 0 & M costs and has rarely contributed to capital costs'4 . Vaguely worded projectdocuments concerning cost recovery and inadequate institutional arrangements certainlycontribute to poor recovery rates."5 . Bank experience has demonstrated that cost recovery andO & M often improve when these responsibilities are performed with a strong element of water

16users' participation . In this regard, experience indicates that successful projects tend to giveemphasis to ensure effective cost recovery by transferring to the water users responsibility fortariff collection and systems' 0 & M.

G. BANK LENDING IN ARGENTINA

1.35 The current lending portfolio in Argentina comprises 32 loans, principally in theinfrastructure and financial sectors, totaling US$5.4 billion. The First Provincial DevelopmentProject approved in FY91 (PDP-I, Loan 3280-AR) for US$200 million, cofinanced with theInter-American Development Bank (IDB), played a key role in Government's provincial reform.In 1994, the Provincial Reform Project for US$300 million (Loan 3836-AR) was approved toimprove provincial expenditure efficiency. The Second Provincial Development Project,approved in FY95 (PDP-II, Loan 3877-AR) for US$321 million, will continue to assist in thetransfer of fiscal and administrative reforms from the national to the provincial levels and inimproving the fiscal situation.

1.36 The Bank has undertaken eight operations in the agriculture sector since 1967, five ofwhich are closed. The most recent agricultural projects are the following: (a) the AgriculturalCredit II Project (Loan 2970-AR, closed in 1993), oriented toward small and mediumexport-oriented farmers, which successfully increased sectoral capital investments and producerconfidence during a period of macroeconomic instability and hyper-inflation, (b) the on-goingAgricultural Services and Institutional Development Project (PROMSA-Loan 3297-AR), whichwas approved in FY91 and is jointly financed with the IDB, has been supporting the

13 OED, A Review of the World Bank Experience in Irrigation. World Bank OED Report 13676, November 1994and The World Bank and lrrigation, OED Evaluation Study, 1995.

4 O&Mcosts are the annual costs of operating and maintaining the irrigation facilities Capital costs are thoseassociated with the initial construction, upgrading and major rehabilitation of irrigation facilities.

5 World Bank Lending Conditionality: A Review of Cost Recoverv in Irrigation Projects, OED, June 1986.

16 OED, op. cit

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modemization of federal agencies providing support services for the agricultural sector, in theareas of animal health, basic research and technology transfer, plant protection, informationsystems, fisheries development and export promotion. The proposed project would build uponand extend further the progress made in the PROMSA project at the central level by strengtheningthe delivery of support services at the provincial level; (c) the on-going Forestry DevelopmentProject (Loan 3948-AR, approved in FY96), which would contribute to efficient and sustainablegrowth of forest plantations and timber industries, to alleviate poverty and to develop a strategyand consensus for addressing desertification and soil erosion problems, as well as to create asupportive institutional, legal and regulatory frameworks; and (d) the Native Forests andProtected Areas Project (Loan 4085-AR), approved in FY97 (not yet effective) with the objectiveof strengthening the public institutions responsible for native forests and protected areas to beable to establish priorities and define strategies, to develop incentives and a regulatory frameworkencouraging decision makers to intemalize the full range of social costs and benefits associatedwith their decisions affecting native forests, and to increase the level of environmental tourism inthe main national parks.

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2. THE PROJECT

A. ORIGIN AND RATIONALE FOR BANK INVOLVEMENT

2.1 The provinces have requested the Central Government to establish a mechanism tostrengthen agricultural support services and finance investment projects considered to have highpriority to promote provincial development in the rural areas. Consequently, the Government ofArgentina (GOA) requested that the Bank and IDB, based upon their previous experience inArgentina, provide a comprehensive framework for supporting provincial agriculturaldevelopment, combining substantial support for provincial institutional strengthening anddevelopment with funding for priority investments. Strong Bank support of the agriculturalsector is warranted given the significant opportunities it offers for environmentally sustainableeconomic growth, increase employment, and foreign exchange eamings. Bank intervention canplay a catalytic role in rationalizing public sector investment, strengthening key institutions,stimulating private sector investment, and increasing exports.

2.2 The proposed project fully supports the Bank's Country Assistance Strategy (CAS),discussed by the Board of Executive Directors on May 4, 1995, and the progress report discussedon April 25, 1996, by helping Argentina to: (i) consolidate recent macroeconomic reformsthrough economic growth; (ii) reduce poverty and unemployment; and (iii) rebuild infrastructure.The project would foster economic growth through improved international competitiveness;reduce rural poverty by increasing small farmer incomes and rural employment and rehabilitaterural infrastructure, particularly irrigation and drainage, flood control and feeder roads.

2.3 The project would build upon the progress made in the Provincial Development Projects(PDP I and II) by improving the technical quality of the provincial governments' investmentproposals. By encouraging more appropriate user tariffs and a greater private sectorparticipation, the project would increase the financial autonomy of provincial service providers.As a result, the public sector would be able to concentrate more on policy issues with broader andmore long-term implications, such as environmental issues.

B. PROJECT OBJECTIVES

2.4 The main development objectives of the proposed project are to: (a) increase anddiversify agricultural production and exports, through intensifying land use, increasingproductivity per hectare, as well as introducing new crops and modern varieties, (b) increase andstabilize the agricultural incomes of about 120,000 small and medium-sized commercial farms,(c) improve the effectiveness of basic agricultural support services to increase the internationalcompetitiveness of agricultural products, by introducing new and more productive technologies,increasing quality and improving sanitary conditions of products, and eradicating diseases thatlimit access to international markets; (d) improve rural productive infrastructure to reduceproduction and marketing costs, through a significant reduction in the risk of losses (crops,

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livestock, equipment and facilities), as well as more efficient use and better conservation andmanagement of natural resources; (e) strengthen national and provincial institutional capacity toformulate and analyze sectoral development policy, as well as to identify, prepare and implementinvestment projects; and (f) rationalize public investments and promote an expanded privatesector role (e.g. farmers' organizations, NGOs, and service providers) in agricultural development.

C. SUMMARY PROJECT DESCRIPTION

2.5 To achieve its objectives, the project would:

(a) finance subprojects (about 93% of project costs), presented by the participatingprovinces in accordance with their priorities, development strategies andinvestment plans, and which satisfy the eligibility criteria established for theProject. Most of these subprojects would be provincial initiatives to beimplemented at the local level by a provincial executing agency. However, inspecial cases in which several provinces need to address a common regional issueby coordinated actions, the proposed project would finance national subprojectswith multi-provincial coverage. In these cases, the implementation of thesubprojects would be under the coordination of a executing agency with regionalor national coverage to achieve overall consistency at the national level, increaseeffectiveness, and take advantage of potential externalities. Provisionally, theamount of subprojects to be implemented by a single province would be limited to25% of total project costs, and the total amount of the national subprojects to beapproved during the life of the project would be restricted to 30% of total projectcosts.

(b) strengthen institutional development (about 2% of project costs), both at thenational and at the provincial levels, to: (i) establish permanent operationalmechanisms for supporting implementation of the proposed project; (ii) helpdefine the role of the public sector and increase coordination between differentpublic and private entities to increase their effectiveness; (iii) increase capacity toformulate and analyze agricultural policy, as well as to design legal andinstitutional reforms, which would facilitate the transfer of responsibilities to users'groups and promote sectoral development; and (iv) identify, prepare andimplement agricultural development initiatives, promoting an increasedparticipation of the private sector.

(c) provide project coordination and management, and monitoring and evaluation(M&E) (about 5% of project costs), at the national and provincial levels.

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D. MAIN AREAS OF INTERVENTION

2.6 The project would consider all technically feasible, economically sound, andenvironmentally sustainable subproject proposals presented by the provinces, based on theirpriorities and implementing capacities, and when consistent with the project's objectives andeligibility criteria. However, based on diagnostic studies carried out by the provinces and on thereview of extensive lists of subproject profiles presented by these provinces during preparation, itis expected that the project would concentrate mainly on the following areas of intervention:

(a) Water resource management, which would include: (i) rehabilitation andimprovement of existing irrigation, drainage and flood control schemes;(ii) training and technical assistance in water resource management and irrigationsystem maintenance; (iii) water management technology development; and(iv) establishment of watershed management systems.

(b) Rural infrastructure, which would rehabilitate and improve other type of ruralinfrastructure, including inter-alia, feeder roads, rural electrification and marketingstructures.

(c) Technological development, which would improve the delivery of basic supportservices related to the generation and transfer of technology. In addition, it wouldemphasize an increased private sector participation in the delivery of theseservices, through hiring of the best potential supplier through competitive selectionprocesses.

(d) Animal health, which would strengthen programs to protect livestock againstFoot-and-Mouth Disease (FMD), tuberculosis, brucellosis, scabies, mange, ticksand other diseases affecting animal productivity, through (i) eradication campaigns;(ii) establishment of systems to prevent reintroduction of disease; (iii) developmentof early warning systems to detect re-entry; (iv) establishment of internationallycertified disease free zones. The project would support either federal or provincialanimal health entities and other national and provincial programs, public andprivate, involved in animal health and sanitary safety.

(e) Plant health and commodity quality, which would include the strengthening of:(i) disease identification and eradication (or control), (ii) early warning systems;(iii) crop health extension; (iv) biological and integrated pest management andcontrol; (v) registration of marketing and transport, and agrochemical use;(vi) monitoring agro-chemical residues; (vii) training in rational agro-chemical use;(viii) certification of phytosanitary quality; (ix) seed certification; (x) control andregistration of marketing and transport of genetic and plant material;(xi) phytosanitary barriers; and (xii) chemical control of plant disease andsicknesses. According to studies carried out and demands presented by the

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provinces, the project would probably concentrate on the eradication and controlof citrus canker, the Mediterranean fruit fly, the fruit "black spot" and the bollweevil, with the objective of obtaining international certification for "disease-free"areas.

(f) Market development, which would provide assistance in the formulation ofprovincial export promotion strategies by identifying markets, establishing marketcontacts and specifying marketing conditions and requirements.

(g) Agricultural information, which would help design, establish and develop anational integrated agricultural information system, at the provincial and federallevels, to provide valuable information to the public.

(h) Production and regulation offoodproducts, supporting SAGPyA's newresponsibilities related to technological development, regulation and quality controlof food products.

(i) Strengthening ofprovincial agricultural institutions, which would emphasizeproject identification, preparation and implementation. In addition, the projectwould improve agricultural policy design, strategy formulation and evaluation,involving institution-building and strengthening.

E. PROVINCIAL ELIGIBILITY CRITERIA

2.7 Every province would be eligible to participate in the project's institutional developmentcomponent and receive technical assistance from the components to be implemented by thenational government. However, in order to be eligible to receive a subloan for financing a specificprovincial subproject, participating provinces would have to satisfy the eligibility criteria specifiedin the Project Operational Manual (POM), and acceptable to the Bank. These eligibility criteriamust be consistent with the strategy agreed between the Bank and GOA in terms of the need toensure provincial creditworthiness and support improvements in the provincial fiscal situation.These criteria for different type of subprojects are presented in the following paragraphs.

2.8 Sublending to Provinces for Technical Assistance and Institutional Strengthening.Where a provincial government assumes the responsibility for a subloan to implement a subprojectthat includes only technical assistance and institutional strengthening, the province would berequired to have: (i) provincial legislative approval to accept the subloan (Ley Provincial deEndeudamiento); (ii) a Subsidiary Loan Agreement with the Federal Government, conforming toprovincial law and acceptable to the Bank; and (iii) an adequately staffed provincial agriculturalauthority, legally and technically capable of administering the subloan, and of implementing thesubproject.

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2.9 Sublending to Provinces for Implementation of Investment Subprojects. In additionto the above conditions, where a province or a group of provinces seek funds for investmentsubprojects, each province would need to have: (i) a current account fiscal balance 17 in the mostrecent full provincial budget period; and (ii) a debt service ratio below 15 percent 18. As anexception, only in the case of investment subprojects involving the rehabilitation of existing ruralproductive infrastructure, a province unable to satisfy these general conditions would be requiredto have a written agreement with the Federal Government to implement a Provincial ReformProgram, acceptable to the Bank, demonstrating that it would be in a position to meet therequirements within a specified time period.

2.10 Subprojects to be Implemented by the Central Government. Where the Centralgovernment assumes responsibility for the loan proceeds for financing a national subproject, underthe coordination and administration of specialized federal agencies, participating provinces wouldnot need to satisfy the eligibility criteria applicable to direct provincial subloans described above.

F. SUBPROJECT SELECTION PROCESS AND ELIGIBILITY CRITERIA

2.11 All eligible provinces could approach the Project's Central Coordinating Unit (UEC) withsubproject ideas. If the idea is considered promising and consistent with the national andprovincial priorities, the UEC could finance pre-feasibility studies required to continue the analysisof the idea. The UEC would assess the feasibility study against the subproject selection criteria todetermine if the subproject would be included in the pipeline for further consideration. Eachsubproject proposal would be assessed and rated based on the selection criteria, to competeagainst all other proposals presented on the basis of the following characteristics:

- Technical Feasibility: The subproject should be technically sound, incorporatingtechnologies that not only represent the state-of-the-art, but are also appropriate, given theeconomic and social conditions of the beneficiaries and cost-effectiveness considerations.

- Financial Viability: The subproject's net income generation would need to be sufficient toadequately cover, at least, administrative and 0 & M costs, and to certain extent, investmentcosts.

* Scale and Coverage. The proposal should be in agreement with the objectives defined andbased on the location and extent of the problem it intends to address.

17 Defined as a current account fiscal balance, excluding from current revenues all discretionary grants and"aportes".

18 Debt service ratio is defined as interest plus amortization, over current revenues, excluding discretionatygrants and "aportes", on an accrual basis.

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* Environmental Impact: The subproject would need to improve or protect natural resourcesand biodiversity. If potential negative effects are detected, it would have to include adequatemitigatory measures.

* Implementation Capacity: The institutional requirements of the subproject must fall withinthe capacity of the proposed executing agency, the provinces and other entities related tosubproject implementation.

* Economic Return: The subproject would need to be economically sound, with an internaleconomic rate of return of at least 12% when benefits are measurable in economic terms.

* Beneficiary Participation: Strong beneficiary participation in subproject identification,preparation, implementation, 0 & M and long-term administration would be essential.

* Social Impact. The proposed subproject would be reviewed to assess potential social impactson the beneficiaries and the entire population in the sector that may be affected by its actions.If potential negative effects are detected on any group or sector of the society, adequatemitigatory or compensatory measures would be included.

G. SELECTION OF PRIORITY SUBPROJECTS

2.12 During project preparation, provincial governments drafted and finalized ProvincialStrategies and Development Plans, containing long-term objectives, plans and programs to bepursued in their agricultural sector. On the basis of these Plans, the provinces formulated andsubmitted over 200 subproject ideas to the project preparation team. As most of these ideasrepresented long-standing provincial needs, many proposals had well-developed studies and a fewhad completed feasibility studies.

2.13 For these proposals, the preparation team carried out a preliminary review of, inter-alia,their technical quality, financial sustainability, economic efficiency and expected economic returns,provincial commitment, environmental effects, level of beneficiary participation, legalrequirements, and complementarity with other initiatives undertaken by the private and publicsectors. Based on this review, 40 subprojects were identified for further analysis.

2.14 These 40 subproject ideas were assessed more carefully and classified on the basis of theratings assigned according to the eligibility criteria previously presented. The first group ofsubprojects consisted of those not only the most advanced, but also those which best satisfiedproject eligibility criteria and with the highest developmental impact. These tended to beproposals from provincial clients with the most experience in project preparation and the strongestproject administrative skills. Top priority has been given to finalizing feasibility studies andengineering designs for 11 of these subprojects, so that they would be ready for implementationimmediately after loan effectiveness. These 11 subprojects were classified as Group A. There isa close second group, labeled as Group B, with similar characteristics and requiring more time to

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prepare. Preparation for some of these subprojects in Group B continued, although at a slowerpace. From this Group B, about six to eight of the subprojects have feasibility studies movingforward, and could be ready to start implementation within two years after project effectiveness.

2.15 Preparing a pipeline and appraising subproject proposals, including full feasibility studiesand final engineering designs, served the purpose of obtaining a better estimate of project costsand benefits. Since the subprojects appraised could be considered representative of the types ofinvestments the project would finance throughout its implementation, by appraising thesesubprojects, it was possible to understand better the economic, social and environmental viabilityof the project as whole. In addition, having a group of subprojects prepared in advance facilitatesimplementation at least for the first two years, and contributes to ensuring a stable flow ofdisbursements.

2.16 However, having prepared these subprojects does not restrict the proposed project fromconsidering and funding other subproject proposals. The project has no strict funding target, interms of geographic location or subsector, and is open to the review and financing of anysubproject meeting the selection criteria, proposed by any eligible province or the Centralgovernment. The types of subprojects approved would be subject to close monitoring with theintention of avoiding concentration of subprojects in a few provinces or in the same executingagencies. As a preliminary goal to be closely monitored by the UEC, the amount of approvedsubprojects in a single province would be limited to 25% of the total project costs. Similarly, theamount of subprojects to be implemented by the federal government would be limited to 30% oftotal project costs.

2.17 During implementation, the eligible provinces would present subproject proposals tocompete for project funds. With assistance and guidance to be provided by the UEC, theprovinces would submit these proposals to the SAGPyA, consistent with their provincialstrategies and development plans. Based on the technical assessment carried out by the UEC,SAGPyA, in consultation with the Federal Agricultural Council (CFA), would approve financingof the following phase. For approval of a subloan to proceed with implementation, the subprojectwould require a full feasibility study (as well as complete engineering designs, when applicable),including detailed economic, institutional and environmental analyses.

H. GROUP A SUBPROJECTS

2.18 The Group A is formed by the 11 subprojects with feasibility studies that were reviewedat appraisal. Seven of these subprojects are intended to be financed by the Bank loan--fourprovincial irrigation subprojects and three regional subprojects (animal health and phytosanitaryservices). The main features of these seven subprojects to be financed by the Bank loan aresummarized in Table 2.1. The other four subprojects (three irrigation and drainage, and onenational agricultural information) are to be financed by a loan from the Inter-AmericanDevelopment Bank (IDB). A detailed description of all these subprojects is presented inAnnex B. The detailed funding arrangements for these Group A subprojects between the Bank,

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the IDB and the governments, are presented in the Project Cost and Financing sections of thisreport (paras. 2.24-2.28 and Annexes C and D).

Table 2.1: Subprojects in Group A to be Financed by the Bank Loan

Area Direct ExecutingProvince Subproject ('000 ha) Beneficiaries Agency

(no. of farms) ___ _

IBRDlProvincialBuenos Aires Development of the Colorado River 138 1,373 CORFO-RC

Valley

Mendoza Irrigation/Drainage Rehabilitation 9 1,279 DGI-in Montecaseros Mendoza

Mendoza Strengthening Provincial 91 10,200 DGI-Irrigation/Drainage Program Mendoza

Santa Fe Flood Control in Pozo Borrado 400 312 Min.Economia-

Santa FeIBRD/Regional

Salta, Jujuy, Strengthening Phytosanitary 41 1,000 SENASATucuman, Services in Northwestern RegionCatamarca (NOA)

Entre Rios, Strengthening Animal Health 19,710 72,600 SENASACorrientes, Services in MesopotamiaMisiones

Santa Cruz, Strengthening Animal Health 46,900 5,000 SENASAChubut Services in Southern Patagonia

I. INSTITUTIONAL DEVELOPMENT COMPONENT

2.19 To help develop institutional capacities at both the federal and provincial levels, as well assupport subproject implementation, the project would support an institutional developmentcomponent (IDC), in which all provinces would be eligible to participate, whether they havealready presented an investment subproject or not. The primary purpose of the component is toensure sound subproject implementation, as well as to install within the provincial institutions thecapacity to adequately support the agricultural sector. The IDC would also strengthen provincialprogramming capacities to develop an efficient system of agricultural policy, program and project

formulation and analysis. This component would combine extensive technical assistance to the

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provincial entities with training for managerial and technical provincial staff (see Annex H), andwould be implemented by the Federal Government through SAGPyA/UEC.

2.20 This project component would assist in the establishment of permanent operationalmechanisms between the SAGPyA and its the decentralized agencies regarding projectimplementation. The component would strengthen the coordination between the project and:(i) other secretaries of the Ministry of Economy and Public Works and Services (MEyOySP), toensure that project activities are consistent with national priorities; (ii) decentralized SAGPyAagencies; (iii) INDEC, with respect to the Agricultural Information System (SIIA); and (iv) theMinistry of the Interior, regarding the utilization of the Technical Units (UTPs) established underPDP I and II, in the administration of funds and the establishment of a proper accounting system.On a national level, the component would also strengthen the CFA, clearly defining its functions,especially regarding the allocation of external financial resources for implementation ofdevelopment and social projects.

2.21 At the provincial level, this component would: (i) coordinate the different agriculturalexecutive entities to define policies and plans to be included in the POA; (ii) define the functionsand relationships of the public sector institutions; (iii) define the responsibilities and obligationsfor each institution participating in project as would be formalized in the Subsidiary LoanAgreement; and (iv) formalize agreements between the official sector and the beneficiary producergroups.

2.22 At the operational level, the component would: (i) establish and support the Projectorganizational structure, defining the institutional relations and responsibilities; (ii) improveinstitutional capacity to adopt and enforce the Project Operational Manual, and the EnvironmentalManual; (iii) improve the physical infrastructure and the technical operational capabilities of thecoordinating units, and help provide the technical assistance required for an effectiveimplementation; (iv) provide assistance to executing agencies in the implementation of differentsubprojects; (v) assist in the formulation of Subsidiary Loan Agreements; (vi) ensure that theprocedures for implementation, procurement, competitive bidding and evaluation are followedaccording to the provisions of the Loan Agreement and Subsidiary Loan Agreements; and(vii) support and assist in the preparation of the Annual Operating Plans (POAs) and the progressreports.

J. PROJECT COST AND FINANCING

2.23 The total estimated project cost would be US$357.2 million equivalent over a seven-yearimplementation period. This total project cost includes allowances for physical contingencies ofUS$20.6 million (5.8% of total costs) and for price contingencies (domestic plus internationalinflation) of US$26.5 million (7.4% of total cost), as well as taxes and duties estimated atUS$41.5 million (11.6% of total cost). The main investment categories would be: (i) civil works,US$124.8 million (35% of total costs); (ii) vehicles and equipment, US$38.8 million (10.9%);(iii) consulting and auditing services and technical assistance, US$72.8 million (20.3%);

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(iv) training and institutional development, US$12.1 million (3.4%); (v) incremental local staff,US$50.3 million (14.1%); and (vi) operation and maintenance, materials and supplies, andmiscellaneous, US$58.4 million (16.3%). Project costs are summarized in Table 2.2 and detailsare presented in Annexes C and D.

2.24 From the total project cost estimated at US$357.2 million equivalent, the Bank and theIDB would finance US$125 million each, representing a total of about 70% of project cost. Thenational and provincial governments would provide about US$90.0 million as counterpart fundingfrom their own budgets (about 25.2%), and the remaining US$17.2 million (4.8%) would befinanced directly by the beneficiaries. Project financing between the Bank and the EDB would bedone in parallel, with each donor financing separate subprojects. The exceptions would be theinstitutional development component (IDC), and the coordination and management components(federal and provincial), in which the Bank would finance technical assistance and consultants,and the IDB would finance all other categories within these components. A summary financingplan is presented in Table 2.3 and details are included in Annex C and D.

2.25 The loan would be made at the Bank's standard variable interest rate for currency poolloans, with repayment in 15 years, including five years of grace, with loan amortization based onlevel repayment of principal.

2.26 The provinces would assume responsibility for repayment to the Central Government forloan proceeds on-lent to them for financing provincial subprojects. The Central Governmentwould assume sole responsibility for the loan proceeds which finance regional or nationalsubprojects, implemented by or under the coordination of specialized federal agencies.Regardless of the funding sources (Bank or IDB), repayment by the provinces would be madeover 18 years, with five years of grace, at the average of the terms for the Bank and the IDBloans, including the foreign currency risk and the commitment fees. The commitment fees to bepaid by the provinces would be based on the amount of their subloans, starting on the date of thesignature of the corresponding Subsidiary Loan Agreement with GOA. The provinces wouldguarantee repayment with their shares of funds from federally-collected taxes (Fondos deCoparticipaci6n).

2.27 A Tripartite Consultative Group (TCG), composed by representatives of GOA, IDB andthe Bank, would meet every six months during the course of the normal supervision missions toreview project performance, analyze problems and solutions, propose future activities, analyze thepipeline of new subproject proposals, as well as discuss the approval of subprojects submitted toSAGPyA. This consultative mechanism would review the pipeline of new subproject proposalsand provide guidance to SAGPyA to identify and solve potential issues.

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Table 2.2: Estimated Project CostsPROJECT COST SUMMARY:

Local Foreign Total(- - US$ Million-- --- )

A. rBRD SUBPROJECTS1. Provincial

a. Buenos Aires-Corfo/Rio Colorado 10.0 3.4 13.4b. Mendoza-Montecaseros 4 6 0.6 5.2c. Mendoza-Provincial Program 10.0 3.2 13.2d. Santa Fe-Pozo Borrado 5.2 0.7 5.9

Subtotal Provincial 29.8 7.9 37.72. Regional

a. Northwest-Phytosanitary Services 11.7 4.1 15.8b. Mesopotamia-Animal Health 18.3 2.6 20.9c. Southern Patagonia-Animal Health 8.1 0.7 8.8

Subtotal Regional 38.1 7.4 45.53. Other Projects (to be identified) 51.9 11.1 63.0Subtotal IBRD 119.8 26.4 146.2

B. IDB SUBPROJECTSI. Provincial

a. Mendoza-Constitucion 6.8 0.7 7.5b. Rio Negro-Upper Valley 41.7 6.9 48.6c. Neuquen-Centenario 6.1 1.5 7.6

Subtotal Provincial 54.6 9.1 63.72. National

Agricultural Information System 14.9 6.9 21.83. Other Projects (to be identified) 43.8 9.2 53.04. Miscellaneous

PPF Recovering -- 1.5 1.5Inspection and Monitoring -- 1.3 1.3

Subtotal MisceUaneous -- 2.8 2.8Subtotal IDB 113.3 28.0 141.3

C. IBRD/IDB CO-FINANCED COMPONENTS1. Institutional Strengthening 6.8 0.7 7.52. Provincial Executing Units 5.3 0.2 5.53. Central Coordinating Unit 9.4 0.2 9.6Subtotal IBRD/IDB 21.5 1.1 22.6

Total BASELINE COSTS 254.6 55.5 310.1Physical Contingencies 16.2 4.4 20.6Price Contingencies 23.0 3.5 26.5

Total PROJECT COSTS 293.8 63.4 357.2

Table 2.3: Financing Plan

Local Foreign Total PercentageWorld Bank 94.8 30.2 125.0 35.0Inter-American Development Bank (IDB) 91.8 33.2 125.0 35.0Federal and Provincial Governments 90.0 -- 90.0 25.2Beneficiaries 17.2 -- 17.2 4.8TOTAL 293.8 63.4 357.2 100.0

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K. SUBPROJECTS COST RECOVERY

2.28 Cost recovery systems have been in operation for all the irrigation and drainage schemesfor a long time, achieving, in some of them, relatively high recovery rates. Building on thisexperience, the Project would help strengthen these mechanisms to be able to increase theireffectiveness and ensure a substantial level of cost recovery directly from the beneficiaries. Everyinvestment subproject producing direct benefits for the private sector would include a costrecovery plan and time schedule, including agreements on the mechanisms for establishing orimproving the existing cost recovery system. These agreements would be one of the conditionsfor approving the specific Subsidiary Loan Agreement for that subproject and, therefore, for thedisbursement of funds for its implementation. These agreements would specify the rates andtariffs needed to cover operational, administrative and maintenance costs, and when feasible, asubstantial percentage of the investment costs, based on a realistic assessment of the beneficiaries'repayment capacity.

2.29 For water infrastructure rehabilitation and construction, especially irrigation, beneficiarieswould be expected to recover all 0 & M costs sufficient to sustain efficient operation. Generally,the provincial government would absorb between 20 and 40% of the investment costs, and theremainder would be covered through users' tariffs and rates to be paid directly by the farmers.The actual rate of investment cost recovery to be achieved for each subproject would depend on:(i) the current situation of the physical infrastructure and the type of investment required; (ii) theestimated rate of return of the investment; (iii) the actual beneficiaries' repayment capacity; and(iv) the provincial legislation on cost recovery and real capacity to cover part of the investmentcosts. The project would strengthen the capacity of existing water users' associations to assessand collect water tariffs from members and implement, either directly or through contractedservices, regular operation and maintenance.

2.30 In the Rio Colorado Valley Subproject (Province of Buenos Aires), beneficiaries, throughthe Water Users Association and CORFO-RC, would recover full 0 & M costs as well as part ofthe investments costs. Up to 60% of capital costs would be repaid over time and included in theirrigation water tariff. Economic projections indicate that the increased income and reduction inproduction costs from a more efficient irrigation system would allow farmers to finance theseinvestment costs. In the Pozo Borrado Flood Control Subproject (Province of Santa Fe), theWatershed Committees, with demonstrated experience in implementing flood control works andobtaining financing through beneficiary tariffs, would ensure full 0 & M and 80% of capital costrecovery. In the Province of Mendoza, in accordance with existing provincial water legislation,DGI would recover full O&M costs and the goal for investment cost recovery would be 60% forthe Montecaseros Irrigation and Drainage Subproject, and 80% for the investments carried out bythe Small Works Rehabilitation Fund (Fondo de Rehabilitacion de Obras Menores). The goals tobe sought under the proposed project for each specific subproject are presented in Table 2.4.

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Table 2.4 Subproject Cost Recovery

Subproject Operation and Capital Responsible EntityMaintenance Costs Costs

Development of the Colorado River Water users'Valley (Buenos Aires) 100% 60% Associations and

CORFO-RCIrrigation and Drainage inMontecaseros (Mendoza) 100% 60% DGI and Watershed

CommitteesStrengthening of Mendoza'sProvincial Irrigation Programl' 100% 80% DGI and Watershed

CommitteesFlood Control in Pozo Borrado(Santa Fe) 100% 80% Watershed Committees

Strengthening Animal Health inPatagonia 100% NA SENASA

Strengthening Animal Health inMesopotamia 100% NA SENASA

Strengthening PhytosanitaryServices in the Northwestern 100% NA SENASARegion' For investment financed by the Small Works Rehabilitation Fund

2.31 In animal and plant health protection and quality control subprojects, beneficiaries wouldpay for the services provided through service fees, which would be used to recover operationalcosts and ensure sustainability of the programs. In the Animal Health Subprojects inMesopotamia and Patagonia, livestock producers would pay all operational costs, through servicefees for vaccines, vaccinations and monitoring and surveillance. Similarly, in the PhytosanitarySubproject in the Northwest Region, fruit growers would finance subproject operational coststhrough services fees.

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3. PROJECT IMPLEMENTATION

A. INSTITUTIONAL ARRANGEMENTS

3.1 Institutional Framework for Implementation. The Secretariat of Agriculture,Livestock, Fisheries and Food (SAGPyA), within the Ministry of Economy, would have overallresponsibility for project implementation, coordination and management. Under the ongoingPROMSA project (Loan 3297-AR), SAGPyA has demonstrated adequate capacity for projectcoordination and administration. The Federal Agricultural Council (Consejo FederalAgropecuario, CFA), chaired by the Secretary of SAGPyA and including the provincialauthorities in charge of the agricultural sector, is a forum for discussion of sectoral policies andstrategies between the central government and the provinces. In relation to the proposed project,the CFA would act as an advisory body, ensuring that project objectives and strategies areconsistent across provinces and helping coordinate procedures. In addition, the CFA would alsoserve to promote dissemination and exchange of information, allowing an intensive sharing ofexperiences and lessons learned during implementation, and increasing participation by theprovinces. In order to support this function, the CFA would create a Provincial AdvisoryCommittee (Comision Asesora Provincial, CAP), chaired by the Secretary of SAGPyA andincluding six annually-rotating members of the CFA. The CAP would meet regularly to analyzeproject implementation, including the pipeline of subloans, suggest changes in procedures, analyzespecific implementation issues and recommend corrective measures.

3.2 Within the SAGPyA's Undersecretariat for Agriculture, Livestock and Forestry(Subsecretaria de Agricultura, Ganaderia y Forestaci6n-SSAGyF), the Central CoordinatingUnit (UnidadEjecutora Central, UEC), would coordinate project implementation, and would beresponsible for overall financial administration and management, as well as project monitoring.The UEC would build on the experience gained during the successful implementation of theongoing PROMSA project, taking advantage of procedures and mechanisms already in place, butalso including substantial strengthening in key areas. It would consist of an ExecutiveCoordinator (Coordinador Ejecutivo), and about 16 technical staff in five Technical Units and anAdvisory Group. The internal organization would be the following:

(a) Administrative Unit, involving an Unit Chief, two Accountants, and a Financialand Auditing Specialist;

(b) Subprojects Management Unit, comprising an Unit Chief, and technicalspecialists covering some of the main areas of intervention of the project (e.g.,information, animal health, phytosanitary services, institutional development, andrural infrastructure);

(c) Environmental and Social Unit, with an Unit Chief, a Social AssessmentSpecialist, and two technical specialists (environment and social participation);

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(d) Monitoring Unit, with a Chief and two monitoring specialists;

(e) Preinvestment Unit, with an Unit Chief and two technical specialists, and

(f) Advisory Group, that would include short term advisors and consultants asnecessary. The advisors considered essential for supporting project start-up andearly implementation are: a Senior Procurement Advisor, a Senior WaterManagement Advisor and a Senior Legal Advisor.

3.3 The establishment of the UEC and the appointment of its key staff, with qualifications andon terms acceptable to the Bank, would be conditions for loan effectiveness. These UEC's keystaff would include: (a) the Executive Coordinator, (b) the Chiefs of the Administrative, theEnvironmental and Social, the Subprojects Management, and the Monitoring Units, and (c) theSenior Procurement Advisor and the Senior Legal Advisor (see para. 5.3 (a)).

3.4 National Subprojects. These subprojects would be coordinated by specializedautonomous institutions with adequate capacity and legal competence in the area, and with clearlyassigned responsibilities at the national level. Normally, it would be either SAGPyA itself or adecentralized federal agency under SAGPyA (eventually under other branch of the nationalgovernment). These federal agencies would seek operational agreements with other national orregional institutions and provincial agencies (either public or private), for a more effectiveimplementation of activities at the local level. In the specific case of the three regional subprojectsin Group A, the National Service for Food and Agricultural Sanitation and Quality (SENASA),would be in charge of the implementation of animal health and plant protection subprojects. Thespecialized institutions under SAGPyA, and SENASA in particular, have substantial experience inthe implementation of internationally-financed investment projects, including the Bank under theongoing PROMSA operation, and have already demonstrated adequate executing capacity andsound financial management.

3.5 Provincial Subprojects. At the provincial level, a small unit (Fntidad de Programaciondel Desarrollo Agropecuario, EPDA), would coordinate projects activities for implementation ofall provincial subprojects in each of the participating provinces. These units would be establishedat the highest level possible within the existing structure of the entity in charge of agriculture atthe provincial level, and they would work in close contact with the central UEC. In manyprovinces, the existing Provincial Technical Units (Unidades Tecnicas Provinciales, UTP),established under the Provincial Development Projects (PDP I and II, Loans 3280-AR and3877-AR) in the main provincial financial institution, have experienced and capable staff andwould be used for channeling funds from the Federal Government to each provincial subprojectunder agreement with the EPDA. Individual subprojects would be implemented directly by aprovincial executing agency, designed by the provincial government based on its experience andcompetence, and in agreement with the subproject proposal. Project Implementing Units(Unidades Ejecutoras de Projecto, UEP), would be established within the relevant specializedexecuting agency for coordination of subproject activities and for liaison with the EPDA and the

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UEC. The UEP would seek agreements with other experienced and capable private or publicorganizations (NGOs, farmers' organizations, cooperatives, private service provider, contractors,etc.) in order to increase effectiveness in the execution of specific actions. In the provincialsubprojects included in Group A, all the executing agencies have demonstrated capacity forimplementation of the activities, and have recently implemented similar projects with externalfinancing, even from the Bank (e.g., Mendoza's General Irrigation Department).

3.6 Institutional Responsibilities and Functions. The CFA would: (i) discuss and agree onPROSAP's general policies and procedures; (ii) review and provide recommendations on theOperational, Organizational and Environmental Manuals, as well as on the Implementation Plan;(iii) provide advice on the Annual Operating Plans; (iv) analyze the pipeline of subprojects, criteriafor selection and approval of financing; (v) assist SAGPyA and the provinces in improvingcoordination and management, selecting priority areas for institutional strengthening andrecruitment of staff, and (vi) facilitate inter-institutional coordination between agencies at thefederal and the provincial levels.

3.7 SAGPyA, as the federal institution responsible for overall coordination and management,would: (i) establish UJEC and hire its staff, (ii) approve the Project Operational Manual (POM);(iii) approve subloans for specific subprojects; (iv) approve financial arrangements for eachsubproject and obtain the Bank's "no-objection"; (v) review and approve annual work plans(POAs); (vi) approve and sign subsidiary agreements with the Provinces; (vii) review andprocess requests from the UEC Executive Coordinator to use funds from the loan to providetechnical assistance to the provinces for the preparation of new investment subprojects or forinstitutional strengthening; (viii) transfer responsibility to the UEC to procure goods and servicesin accordance with approved POAs and procurement methods in accordance with the legalagreements; (ix) ensure that the Executive Coordinator provides progress reports on request aswell as any clarification the CFA may need; and (x) organize coordinating meetings with anyentities involved in project implementation, as warranted.

3.8 The UJEC, which would report directly to the Undersecretariat for Agriculture, Livestockand Forestry (SSAGyF), would ensure coordination of all project activities and supervision ofindividual subprojects, in accordance with the approved subproject documents and the annualPOAs. The UEC Executive Coordinator would also ensure that subprojects generation, appraisaland approval is carried out in accordance to the Operational Manual and the loan agreement.Specifically, the UEC would: (i) organize and assist in the preparation of the POAs; (ii) supportsubproject generation and preparation by the Provinces, providing guidance and technicalassistance and transfer relevant information to the Provinces; (iii) implement the project'sinstitutional development component and manage the funds for these activities; (iv) reviewtechnical and administrative documents produced by the Provincial implementing entities andprovide guidance accordingly; (v) review, update and improve the Operational Manual and obtainthe approval from the Bank; (vi) supervise POA implementation in the participating Provinces;(vii) supervise Provincial procurement procedures and channel the no-objection requests to thedonors; (viii) provide information to SAGPyA and to the CFA regarding the subproject proposals

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presented by the Provinces, based on their technical analysis according to the eligibility criteria;(ix) through its Environmental Unit, ensure that proper environmental screening procedures areapplied in subproject selection, effective corrective actions are taken, and subprojectenvironmental impacts are adequately evaluated; (x) establish and maintain an efficientmonitoring system for the entire project; (xi) present the annual progress reports to the donorsand participate in the tripartite meetings carried out during supervision; (xii) manage the Project'sSpecial Account to receive the deposits from the loan account and reimbursing the expendituresincurred by the provinces; (xiii) present to the donors the requests for replenishment of theSpecial Account, with all necessary documentation according to the legal agreements, and therequests for direct payments; and (xiv) hire to private independent auditors, acceptable to theBank, to audit all project accounts, in accordance with the legal agreement and Bank's policies onthe matter.

3.9 The EPDAs would be part of the highest ministerial or secretariat level entities responsiblefor agricultural sector development and project implementation. The project would provide theEPDAs with needed institutional strengthening to carry out their specific project responsibilities,as well as their longer-term functions of sectoral planning and programming. In most provinces,these project-specific responsibilities would be added to suitable existing units. With respect toproject implementation, the EPDAs would: (i) prepare and forward the POAs to UEC; (ii) agreewith SAGPyA on the proposed subprojects Subsidiary Loan Agreements; (iii) manage an account,in a provincial commercial bank, to receive the reimbursements from the Special Account;(iv) maintain adequate financial records for each of the provincial subprojects; (v) implement POAactivities for which they retain direct responsibility; (vi) monitor activities contained in the POA;(vii) consolidate progress reports at the Provincial level and transmit to the UEC;(viii) consolidate accounting reports and submit them to UEC; (ix) directly implement theinstitutional strengthening and agricultural information component at the provincial level; and(x) supervise the implementation of subprojects by the UEPs in the province.

3.10 The UEPs would implement individual subprojects and would be responsible for allmatters related to subproject operations, including contracting for services, in conformity withproject guidelines and loan agreements. The UEP would report to the EPDA and submitquarterly reports on the progress of subproject implementation.

3.11 Subsidiary Loan Agreements between the Borrower and each province would includeclauses by which the province would: (i) assign overall responsibilities for coordination andmanagement at the provincial level to a unit acceptable to the Bank; (ii) assign responsibility forimplementation of each subproject to a competent agency, acceptable to the Bank; (iii) ensure thatsubprojects are carried out in accordance with the Project's Operational Manual (POM),Environmental Manual and Implementation Plan; (iv) enforce cost recovery policies andprocedures as defined in the POM and in the specific subproject documentation; (v) accept allterms and conditions of the Loan Agreement signed between the Bank and the Borrower, inparticular regarding the project's goals and strategy, implementation arrangements, disbursement

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and accounting procedures, and procurement of works, goods and services; and (vi) the provinceswould follow audit arrangements acceptable to the Bank.

B. MONITORING AND EVALUATION

Project Monitoring

3.12 A Monitoring Unit (Unidad de Seguimiento, US) of the UEC, would be in charge ofcarrying out project monitoring, facilitating smoother project implementation by advising theExecutive Coordinator on the progress and impact of the project. The Monitoring Unit wouldalso prepare project progress reports; consolidate information supplied by the project areas andprovinces; and support the strengthening of provincial institutions.

3.13 Project monitoring would be based on the project's Annual Operating Plan (PlanOperativo Anual, POA), which SAGPyA would present to the Bank annually. The POA wouldcover provincial and subproject progress and objectives. Every six months, the SAGPyA wouldprovide the Bank project implementation progress reports, referring to the previously approvedPOA. The SAGPyA report, presented to the Bank within 90 days of the closing of each semester(not later than March 31 and September 30 of each year), would contain an update of the POA,along with the corresponding budget information. Throughout project implementation, based onthe SAGPyA reports, the Bank and the SAGPyA would annually evaluate the progress of projectimplementation.

3.14 The SAGPyA report would be based on the provincial progress reports prepared andtransmitted to the UEC by the EPDAs every three months. The EPDA report would coverinputs, outputs, preliminary impacts and specific characteristics, as well as beneficiariesparticipation and the financial situation of specific subprojects. In addition, every three monthsthe EPDA would prepare and transmit to the UEC a project financial report. The financial reportwould cover the financial status of each subproject, including: (i) disbursements according tofunding source; (ii) disbursements according to cost categories; (iii) comparisons of actualdisbursements with the approved budget and POA; and (iv) financial projections based oncommitted funds. Finally, each year, the EPDA would prepare and transmit to UEC an annualproject financial report. The annual report would describe in detail: (i) the use of funds;(ii) investment and expenditures; and (iii) anticipated income to recover costs.

3.15 Annual review of progress between the Bank and SAGPyA would concentrate on theproject's: (i) outputs and developmental impact for each subproject; (ii) coverage and quality ofsupport services provided; (iii) implementation costs, flow of counterpart funds anddisbursements from the loan; (iv) beneficiary participation; (v) compliance with theenvironmental regulations and impact assessment; (vi) institutional development and training ofprovincial personnel; (vii) compliance with specific cost recovery goals for each subproject;

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(viii) generation and analysis of new subprojects, and technical assistance required; and(ix) compliance with loan covenants.

Mid-Term Review

3.16 After three years of implementation, and no later than June 30, 2000, a comprehensiveMid-Term Review, with scope and terms of reference acceptable to the Bank should be carriedout by an independent agency external to SAGPyA. This review would concentrate on theidentification of constraints and possibilities for increasing effectiveness and efficiency in projectimplementation, and would recommend specific mechanisms to improve project performance. Asa result, the Bank and SAGPyA would agree on a detailed Plan of Action to improve projectimplementation and increase its developmental impact.

Project Evaluation

3.17 Project evaluation would also be carried out by an independent agency acceptable to theBank under the agreement with the UEC. This agency could be a public institution or agency, auniversity or a private organization, with experience in the evaluation of internationally-financedprojects. The agency in charge of evaluation would: (i) extract and document the lessons learnedfrom the experience of project implementation; (ii) perform or supervise studies regarding thespecific problem areas in project execution; (iii) participate in the evaluation of program's andprojects; and (iv) provide technical assistance to the provinces in project evaluation, including indrafting terms of references for evaluation studies and supervising the studies performed.Specifically, the agency responsible for the on-going evaluation would: (i) design an evaluationsystem to assess impacts of specific approved subprojects and of the entire project; (ii) assistprovincial implementing entities, through training activities, to understand and adopt theevaluation system, to be able to produce the required information and prepare the type of reportsneeded; and (iii) perform the evaluation activities and produce the reports needed as managingtools to help increase the efficiency in project implementation.

3.18 The presentation of a draft Project Implementation Plan (PIP) was a condition ofnegotiations (see para. 5.1 (a)) and submitting the final design of a detailed Monitoring andEvaluation (M&E) System acceptable to the Bank would be a condition of loan effectiveness(see para. 5.3 (c)).

C. PERFORMANCE INDICATORS - SUBPROJECTS IN GROUP A

3.19 The primary development objective of the subprojects financed under PROSAP would beto increase beneficiaries' household incomes. Direct gains in farm income would be accomplishedthrough improvements in farm productivity, expanded output, diversification to crops with highermarket values and lower production costs. In addition, some subprojects would increase incomesindirectly by generating rural employment opportunities, Table 3.1 below presents the primary

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development impact objectives of the subprojects included in Group A. Annex I contains theinput and output indicators for these projects.

Table 3.1: Performance Monitoring Indicators for Subprojects in Group ADevelopment Impact Objectives

SUBPROJECT DEVELOPMENT IMPACT OBJECTIVE INDICATORS(DO).................................................................... .............. I.............................I........................................................................... .............. .............................

Development of the Colorado River Valley Increased agricultural production and productivity(Buenos Aires) Reduced agricultural production costs

More efficient operation of the irrigation systemReduced water losses and expanded irrigated areaImprove protection and conservation of natural resources

Irrigation Rehabilitation in Montecaseros (Mendoza) Reduced water lossesIncreased agricultural production and productivityMore efficient operation of the irrigation systemExpanded irrigated and drained areasIncreased arable land areaReduced underground water pumpingLower production costsHigher market value for local produceProtection and conservation of natural resources

Strengthening Mendoza Irrigation Program More efficient O&M of the irrigation systemImproved water qualityLower O&M and production costsProtection and conservation of natural resources

Pozo Borrado Flood Control (Santa Fe) Reduced crop and livestock losses due to floodingIncreased and more stable farm incomesLower production and marketing costsIncreased agricultural production and productivity

Strengthening Phytosanitary Services in the Expanded export marketing opportunities for local produceNorthwestern Region Higher average product value

Greater agricultural production and productivityReduced agricultural production costs

Strengthening Animal Health Services in International certification as a FMD-free zoneMesopotamia Increased livestock production and productivity

Increased market value of livestock productsReduced regional livestock production costs

.~~~~~~~~~~~~~~~~~~~~~Improved long-run export.marketing o.pportui*.ties................................................................... ............................................................ .......... . ..................... . ........................................................................... ................ ......................................

Strengthening Animal Health Services in Southern International certification as FMD-fTee zonePatagonia Increased volume and market value of regional wool

Increased livestock productivity-Decreased_production costs

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D. PROJECT OPERATIONAL MANUAL

3.20 The Project Operational Manual (POM) would cover: (i) project objectives and strategy,(ii) implementation institutional arrangements; (iii) description of the relations among theSAGPyA, the provincial governments, project implementing agencies and beneficiaries;(iv) provincial eligibility; (v) subproject eligibility criteria; (vi) terms and conditions for provincialsubloans; (vii) disbursement and procurement procedures; (viii) cost recovery arrangements;(ix) financial system, Chart of Accounts and auditing requirements; and (x) the Monitoring andEvaluation System. The Manual's Annexes would contain a description of the subproject cycleand the specific selection criteria for subprojects, complete Chart of Accounts, and the biddingdocuments to be used during project implementation.

3.21 A draft Project Operational Manual (POM) was submitted to the Bank as a condition ofnegotiations (see para. 5.1 (a)), and agreement was reached during negotiations that amendmentsor modifications of the Manual would require Bank approval (see para. 5.2 (a)). As a conditionof effectiveness, an Operational Manual, acceptable to the Bank, would be finalized andimplemented by the Borrower (see para. 5.3 (b)).

E. PROCUREMENT

3.22 Procurement would be undertaken by the UEC, the federal agencies in charge ofimplementing national subprojects (i.e., SENASA for the ones in Group A), and each of theimplementing agencies (UEPs) in the participating provinces, under the supervision and with theassistance of the UEC. All procurement of works and goods would be carried out in accordancewith the Bank's "Guidelines for Procurement under IBRD Loans and IDA Credits"(January 1995, revised January 1996). Consultant, auditing and training services would beprocured under contracts awarded in accordance with provisions of the "Guidelines for the Use ofConsultants by World Bank Borrowers and the World Bank as Executing Agency"(August 1981). International Competitive Bidding (ICB) would use the Bank-issued StandardBidding Documents for the procurement of works and goods. National Competitive Bidding(NCB) would be based on agreed standard bidding documents for the procurement of works andgoods. For consulting assignments, the standard forms of contract issued by the Bank would beused. Draft documents were presented as a condition of negotiations (see para. 5.1 (c)). Finalversions of all these documents would be included as annexes to the POM, and approval of thePOM by the Borrower on terms satisfactory to the Bank would be a condition of effectiveness(para. 5.3 (b)). In addition, for large or complex works above US$10.0 million, prequalificationof the bidders would be a requirement.

3.23 SAGPyA and its related federal agencies in charge of national subprojects (SENASA forGroup A) have experience in the implementation of internationally-financed investment projectswith different donors, and have demonstrated adequate capacity for the procurement of civilworks, goods and services. In addition, SENASA has been carrying out procurement successfullyunder the ongoing PROMSA project cofinanced by the Bank and the IDB. For the

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implementation of the proposed project, it would build on its experience and use the proceduresalready established, expanding and strengthening the existing executing unit and hiring new staffto complement its more experienced staff. At the provincial level, all provincial executingagencies also have experience in the procurement of works, goods and services financed bydifferent international donors. Some of them (e.g., Mendoza's General Irrigation Department)have been implementing projects with Bank financing and are familiar with the Bank's procedures.The rest of the provincial executing agencies already identified (CORFO-RC, and Santa Fe'sMinistry of Economy) have been carrying out procurement with financing from other internationaldonors, as well as their own resources, and have capable staff that have already started to betrained in Bank's procedures. However, with the assistance of the Senior Procurement Advisor inthe UEC, capacity gaps and additional needs would be identified for strengthening theprocurement function in all executing agencies. Through the technical assistance funds includedin the project, support and training would be provided to reduce or eliminate these gaps. TheSenior Procurement Adviser would be monitoring all procurement procedures and reviewing alldocumentation to be presented to the Bank.

3.24 Procurement methods to be used for the project activities to be financed by the Bank(which have a total cost of US$185 million) are the following. Contracts for civil works expectedto cost US$5 million or more (to account for approximately US$17.1 million, or 4.8% of totalproject costs) and for goods expected to cost US$350,000 or more (to account for approximatelyUS$7.6 million, or 2.1% of total project costs) would be awarded on the basis of ICB procedures.Contracts for works expected to cost US$350,000 or more, but less than US$5 million (toaccount for approximately US$22.9 million, or 6.4% of total project costs), and contracts forgoods expected to cost more than US$100,000, but less than US$350,000 (accounting forapproximately US$13.0 million, or 3.6% of total project costs), would be awarded on the basis ofNCB procedures acceptable to the Bank. In special cases, where there is a limited number ofsuppliers with established service and maintenance in Argentina, contracts for goods expected tocost $100,000 or more, but less than $350,000 (accounting for an estimated total of aboutUS$1.5 million, or 0.4% of total project costs), would be awarded on the basis of LimitedInternational Bidding (LIB) procedures acceptable to the Bank. Procurement for works costingless than US$350,000 (approximately US$8.2 million, or 2.3% of total project costs) would beprocured under lump-sum, fixed-price contracts awarded on the basis of quotations obtained fromthree qualified domestic contractors in response to written invitations. Contracts for goodscosting less than US$100,000 (approximately US$14.8 million, or 4. 1% of total project costs)would be carried out through international or national shopping involving at least three pricequotations. Consultant and auditing services, expected to cost approximately US$53 million, or14.8% of total project costs, as well as training expenditures, for a total of about US$5.1 millionor 1.4% of project costs, would be procured in accordance with Bank's procedures for the use ofconsultants.

3.25 It is expected that civil works, either for rehabilitation, completion, modernization or newconstruction, would be undertaken entirely through contracts with private firms. To the extentpossible, civil works would be packaged together. However, given the existence of totally

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independent subprojects, financed by separate subloans to different provinces and implementedseparately also by different executing agencies, it would not be feasible to require ICB for anyparticular type of expenditure. The thresholds for ICB reflect the need to have a substantialamount for a contract to be attractive for an international firm in order to decide to participate inthe bidding process which, in most cases, would be carried out at locations distant from urbanareas. Types of goods to be procured include: light civil work equipment for maintenance,vehicles; computers, office equipment and furniture; communications equipment; trainingequipment; field meteorological stations and instruments; software for Geographical InformationSystems (GIS); phytosanitary and veterinary laboratory equipment, precision instruments andsupplies, as well as equipment and supplies for supporting eradication campaigns and thecorresponding field monitoring systems; equipment and instruments for measuring and monitoringwater flows and assessing water quality; and gasoline and lubricants. In the case of vehicles,computers and civil work equipment, ICB, LIB or NCB would be required in all cases. For themost of the products to be procured, there exists already a widely diversified supply in Argentina,at prices competitive with the international market. However, highly specialized goods with alimited number of suppliers with established maintenance and service in Argentina, for contractsexpected to cost more than US$100,000 but below US$350,000, would be procured followingLIB procedures. This would apply to: (i) high precision laboratory equipment for phytosanitaryand veterinary analysis, quality controls, and determination of agrochemical and toxic residues,(ii) field equipment for supporting pest management, monitoring of diseases, and eradicationcampaigns; (iii) software for GIS systems; and (iv) meteorological equipment and instruments.To ensure that the agreed procurement procedures are properly carried out, the Bank wouldreview ex-ante all procurement procedures, documents, bid evaluations and contract awards forICB, LIB and NCB procurement of goods and works during the entire project implementationperiod. Presentation of draft Terms of Reference (TOR) for all major consulting services to berequired during the first year of project implementation for the provincial subprojects in Group A(at both the provincial and federal levels), was a condition of negotiations (see para. 5. 1 (d)).

3.26 These procurement review procedures explained above for works, goods and consultingservices are summarized in Table 3.3. Following the procedures defined in this table, the Bankwould review ex-ante contracts for about US$112.3 million, representing about 62% of the totalcost of the subprojects and components in which the Bank would participate (total cost of theseactivities would be US$185 million). These contracts subject to Bank prior review would requireabout US$94 million of financing from the loan, which represents a coverage of around 75% ofthe total loan amount. Considering only the civil works, goods, and consulting and trainingcategories, the Bank would be reviewing ex-anle about 78 5% of the total cost of theseexpenditures (which have a total cost of US$143.1 million)

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Table 3.2: Summary of Proposed Procurement Arrangements'(US$ million)

PROCUREMENT METHOD TOTALCATEGORY ICB LIB NCB OTHER SUB- NBFe COSTS

TOTALBANK

1. Civil Works 17.1 22.9 8.23 48.2 70.4 118.6(13.5) (18.1) (6.5) (38.1) (38.1)

2. Goods 7.6 1.54 13.0 14.85 36.9 35.6 72.5(5.4) (1.2) (8.6) (8.2) (23.4) --- (23.4)

3. Consulting Services

a. Individual Consultants 33.9 33.9 33.7 67.6(28.2) (28.2) --- (28.2)

b. Finns 19.1 19.1 3.7 22.8(I19. 1) (I19. 1) --- (I19. 1)

4. Training Services 5.1 5.1 6.4 11.5(5.1) (5.1) --- (5.1)

5. Incremental Recurrent 17.8 6.3 24.1Costs6 (5.3) --- (5.3)

6. Incremental Salaries and 24.0 24.0 13.3 37.3Travel7 (5.8) (5.8) (5.8)

7. Financial Services8 2.8 2.8(0.0)

TOTALS 24.7 1.5 35.9 122.9 185.0 172.2 357.2(18.9) (1.2) (26.7) (78.2) (125.0) --- (125.0)

lCB: Intemational Competitive BiddingNCB: National Competitive BiddingNBF: Non-Bank Financed.1. Figures in parentheses represents amounts financed from the Bank loan.2. To be procured in accordance with IDB's procurement procedures.3. Lump-sum, fixed-price contracts for civil works below $350,000 awarded on the basis of three price quotations.4. Goods for which there may be a limited number of suppliers in Argentina, to be procured following Limited Intemational

Bidding (LIB) procedures.5. International or national shopping for goods (except computers, vehicles and civil works equipment) below $ 1 00,000, based

on price quotations requested from at lease three suppliers.6. Insurance, Utilities, Repairs and Maintenance.7. Salaries and travel expenses for incremental project staff.8. IDB's fees, including PPF recovery and Inspection Fees.

3.27 In all cases, however, the Bank would review small civil works contracts awarded on thebasis of three price quotations, goods contracts awarded under international or local shoppingprocedures, and consultant selections below the specified thresholds, on an ex-post basis by

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sampling. If it is determined that procurement was not carried out following agreed procedures,no expenditures for such items would be financed from the loan, the Bank would cancel thecorresponding loan amount, and the Special Account would be reimbursed accordingly by theBorrower. This should not only streamnline project execution but also reduce the Bank'ssupervision burden. However, if a province or implementing agency fails to comply with theagreed procedures, the Bank could require a full ex-ante review for all procedures and categories.

Table 3.3: Summary of Procurement Review Procedures

CATEGORY PROCUREMENT CONTRACTS SUBJECT TO PRIORCONTRACTVALUE METHOD REVIEW BY BANK

WORKSLess than US$350,000 Three quotations N.A.US $350,000-US$5 million NCB AllUS$5 million or more ICB All

GOODSLess than US$ 100,000 Internat./Local Shopping N.A.USS100,000-US$350,000 LIB/NCB AllUS$350,000 or more ICB All

CONSULTING, AUDITING andTRAINING SERVICES

(a) IndividualLess than US$30,000 Selection according to Review of TORs only. Other steps are

Consultant Guidelines exempted from prior review.'

US$30,000 or more All

(b) FirmsLess than US$100,000 Selection according to Review of TORs only. Other steps are

Consultant Guidelines exempted from prior review.

US$100,000 or more " All

1. Exemption from prior review does not apply to consultants below thresholds in the case of: single sourceselection of firms, assignment of a critical nature, and amendments to contracts raising the original contractvalue above the threshold.

F. DISBURSEMENTS

3.28 The loan would include three categories: (a) Category 1-Implementation ofSubprojects; (b) Category 2-Institutional Strengthening and Project Coordination andManagement; and (c) Category 3-Unallocated. Category I would include the followingsubcategories and disbursement percentages for withdrawing the proceeds of the proposed Bankloan: (i) Civil Works, 80% of total expenditures; (ii) Goods, 100% for foreign expenditures (net

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of taxes) and 80% for local expenditures; (iii) Consultant, Auditing and Training Services,100% of total expenditures (net of taxes); and (iv) Incremental Recurrent Costs, a decreasingpercentage of eligible expenditures corresponding to an average of about 3 5% over theimplementation period. Category 2 would include only two subcategories, with the samepercentages as defined in the first category: (i) Consulting, Auditing and Training Services;and (ii) Incremental Recurrent Costs. Allocation of loan proceeds per subcategory and thecorresponding disbursement percentages are presented in Table 3.4.

3.29 The proceeds of the proposed loan are expected to be disbursed over a period of sevenyears. The disbursement period, similar to the seven-year standard profile for Argentina, wasdetermined after taking into account: (i) the advanced status of the Group A subprojectpreparation; (ii) the decentralized nature of project, which would permit several provinces to drawupon loan resources simultaneously; and (iii) the strong national and provincial governmentcommitment towards the project. Therefore, the expected completion date would be December31, 2003, and the Closing Date would be June 30, 2004.

Table 3.4: Allocation of Loan Proceeds

Loan Category Amount Disbursement Rate. . . ............ o tE............ . . E. . en.i... ..

1. SUBPROJECTS

a. Civil Works 40.0 80% of total expenditures

b. Goods 16.0 100% of foreign expenditures80% of local expenditures

c. Consulting, Auditing and Training Services 28.0 100% of eligible expenditures

d. Incremental Recurrent Costs1' 18.0 75% up to US$6 million disbursed50% up to US$12 million disbursed25% up to US$18 million disbursed

2. INSTITUTIONAL STRENGTHENINGAND PROJECT COORDINATION

a. Consulting, Auditing and Training Services 10.0 100% of eligible expenditures

b. Incremental Recurrent Costs' 3.0 75% up to US$1 million disbursed50% up to US$2 million disbursed25% up to US$3 million disbursed

3. UNALLOCATED 10.0 ---

TOTAL 125.0

I/ Salaries and travel of project's incremental staff, insurance, utilities, and maintenance of equipment.

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3.30 A Special Account in US dollars, and with an authorized allocation of US$8 million,would be established in a commercial bank selected by the Borrower and acceptable to the Bank.An initial deposit of up to US$4.0 million would be made and the full amount of the authorizedallocation would be released when disbursements reach a level of US$10 million. The SpecialAccount would be managed by the UEC. Sub-accounts, within the same selected commercialbank, would be envisaged for each one of the participating provinces with effective subloans, inorder to expedite disbursements to these provinces. All disbursements against contracts for lessthan US$350,000 for works, for less than US$100,000 for goods, and for services less thanUS$100,000 for consultant, auditing and training firms, and for less than US$30,000 forindividual consultants, would be made on the basis of certified Statements of Expenditure (SOEs).The documentation for SOEs would not be sent to the Bank but would be retained by the UECand made available for inspection by Bank staff. All other disbursements would be made againststandard documentation.

3.31 Retroactive financing for expenditures incurred after February 12, 1996 (but not earlierthan 12 months before loan signing) in an amount not to exceed US$6.0 million (4.8% of theLoan amount) is recomnmended.

3.32 The project would have specific disbursement conditions to be met by the participatingprovinces for each one of the provincial subprojects, before being considered eligible for obtainingreimbursement of expenditures (see para. 5.4). As a province and a subproject meets theconditions, the Bank would add them to the list of provinces and subprojects eligible forfinancing. During implementation, if a province ceases to meet the conditions, the Bank wouldinstruct its Disbursement Department to suspend honoring withdrawal requests with respect tothat province. The following would be the conditions of disbursement to be met by each provincefor each one of the provincial subprojects:

(a) establishment, adequate staffing and funding of the EPDA and UEP, according tothe subproject proposal and signature of operational agreements between them, allacceptable to the Bank;

(b) execution of a satisfactory Subsidiary Loan Agreement with the FederalGovernment;

(c) evidence that the province had taken all actions necessary for the exemption of allcontracts for goods, works and services to be financed under the loan from alllegal and regulatory provisions limiting the international procurements of goods,works and services;

(d) approval of the subproject feasibility study by the Borrower and the Bank, asprovided in the POM;

(e) satisfactory legal opinion on the validity of the Subsidiary Loan Agreement; and

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(f) provide evidence acceptable to the Borrower and the Bank regarding provincialavailability of counterparts funds for the first year of implementation.

G. AccouNTs AND AuDITs

3.33 Each executing agency would maintain separate project accounts in accordance withsound and accepted accounting practices, acceptable to the Bank. A draft Chart of Accountswas submitted to the Bank as a condition of negotiations (para. 5. 1(b)) and final versions of theChart of Accounts and of the accounting system should be implemented by the Borrower as acondition of effectiveness (para. 5.3 (b)). An audit of the financial status of the program wouldtake place once a year for the national components and for each subproject, either regional orprovincial. The audit would be carried out by an independent auditor acceptable to the Bank,hired under procedures based on Bank Guidelines. The audit reports would be sent to the Banknot more than six months after the end of the calendar year. The report would include, inter alia,specific opinions on: (i) sources of proceeds and their use; (ii) SOEs; (iii) implementation ofcontracting clauses, including the application of eligibility criteria, and compliance withprocurement procedures and other financing conditions included in the POM; and (iv)management of the Special Account.

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4. PROJECT BENEFITS, IMPACTS AND RISKS

A. PROJECT BENEFITS

4.1 The Bank's strategy for provincial reform emphasizes fiscal balance through public sectoradministrative reforms and more efficient resource allocation. Through the proposed project,provinces would redesign their agricultural support services to increase their efficiency,beneficiary and geographic coverage, and private sector participation. By strengtheningbeneficiary management of infrastructure and services, and transferring the delivery of supportservices from the public to the private sector, the project would not only reduce provincial fiscalburdens, but would also improve service quality. The project would increase operation andmaintenance (O&M) administered and funded through water user charges and private sectorcollaboration in agricultural research, technology generation and transfer

4.2 Through the project, provinces would take advantage of new domestic and export marketopportunities, modernize agricultural technology and improve product quality. As a result, theproject would reduce unemployment in the rural and farm-related sectors by contributing toeconomic stability and growth. Finally, the project would encourage a sustainable andcomplementary relationship between the public and the private sectors in the provision ofagricultural support services.

4.3 The proposed project would result in: (a) increased and diversified production with higherproportion of high-value products (in some cases, derived from upgrading and accreditingproduction to internationally recognized sanitary and quality standards), thus increasing thecompetitiveness and value of exports (total value of production would increase about 45% overbaseline levels); (b) increased net incomes (between 25 and 50% in real terms for different typesof farmers) and improved standard of living of about 120,000 direct rural beneficiaries;(c) improved provincial fiscal situation derived from reducing current expenditures through thetransfer of financial responsibilities to the private sector and increased tax revenues from a moredynamic sector; (d) improved provincial capacity to take policy decisions and to plan, select,implement and monitor investment alternatives; (e) strengthened and more integrated privatesector, sharing implementation responsibilities and, therefore, increasing the long-termsustainability of proposed actions; and (f) mitigation of existing environmental problems (e.g. soilerosion, salinization and desertification, seasonal floods, inadequate drainage, and inappropriatewater management) and improved capacity to monitor environmental effects.

4.4 As the poor in Argentina are increasingly rural, the project's poverty alleviation spill-overeffect could be significant. While not exclusively targeted to the poor, the project would benefitmany poor farmers, particularly in the northern regions, which has Argentina's highest incidenceof poverty. These farmers would benefit from improved productivity and higher returns to theirharvests due to diversification to higher-value crops and greater market access. The projectwould also provide substantial employment opportunities in the rural areas, where the

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unemployment rates of 21% surpassed the national average rate of 18.6% in 1995. The project'smany infrastructure rehabilitation works would rapidly provide short-term employment. Moreimportantly, the project would increase longer-term employment opportunities by stimulatingprovincial economies, introducing more labor-intensive technologies. expanding cultivated areaand promoting rural enterprises.

4.5 Estimates of internal economic rates of return (IERR) for the investment subprojects inGroup A are presented in Annex E and summarized in Table 4.1. Estimated IERRs for each ofthese subprojects range between 15.0% and 40.1%. Considering aggregate benefits and totalcosts for the Group A subprojects and adding the full costs for institutional strengthening, projectcoordination and management (both at the federal and provincial levels) for the project as awhole, gives an estimated overall IERR of about 22.2%. This represents the IERR for a totalinvestment of about US$214.2 million, or 60% of the total project costs of about US$357.2million. These results are presented in the following Table 4. 1. Therefore, considering thatseveral of the subprojects and components included in the economic analysis do not haveestimated benefits and assuming Group A is representative of subprojects to be financed, thisIERR could be considered as a very conservative estimate of the final overall project economicrate of return including all benefits and costs for all subprojects and components.

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Table 4.1 Internal Economic Rates of Return of Subprojects

Total Costs EERRLocation Subproject (US$ Million) (%)

IBRD/ProvincialBuenos Aires Development of the Colorado River Valley 15.6 39.7Mendoza Irrigation Rehabilitation in Montecaseros 5.9 21.5Mendoza Support for the Provincial Irrigation 14.9 20.5

ProgramSanta Fe Flood Control in Pozo Borrado 6.9 23.5

IBRD/RegionalSalta, Jujuy, Tucuman, Catamarca Strengthening Phytosanitary Services in the 17.8 40.1

Northwestern RegionEntre Rios, Corrientes, Misiones Strengthening Animal Health Services in 22.7 34.9

MesopotamiaSanta Cruz, Chubut, Rio Negro Strengthening Animal Health Services in 9.6 33.9

PatagoniaIDB/Provincial

Rio Negro Rural Infrastructure Rehabilitation and 55.5 24.9Development in the Upper Valley

Neuqudn Irrigation Rehab. in Colonia Centenario 8.8 15.0Mendoza Irrigation Rehabilitation in Constitucion 8.7 19.0

IDB/NationalNational National Agricultural Information System 24.2 N.A.

IBRD/IDBProject Implementation Support Components

National Institutional Strengthening 7.9 NA.National Provincial Executing Units 5.8 N.A.National Central Project Coordinating Unit 10.5 N.A.

............................................................................... ................................... ............................... . ............................................................................... ....... ......... I......... ......... ........... ........

Total 214.3 22.2a

Calculated on the basis of the aggregate flow of the expected costs and benefits for all these subprojects. No benefits were assigned to the projectimplementation support components or to the National Agricultural Information System.

B. PROJECT SUSTAINABILITY

4.6 Increasing opportunities for the private sector to deliver agricultural support services, aprimary project objective, would contribute to the sustainability of the project's benefits. Withrespect to irrigation systems, the project, by increasing the participation of private water servicecompanies or water user groups in system operation and maintenance (and eventually transferringcompletely the responsibility to these users' associations), would help to ensure that projectinfrastructure investments are adequately maintained. In the animal health and phytosanitarysubprojects, the private sector has an important role from the start, implementing key activities attheir local level, participating in the decisions and contributing substantially in terms of

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counterpart financing. In addition, by improving the sector's competitive position, the project isexpected to attract sufficient capital flows to complement project initiatives, providing sustainedgrowth in agriculture, agro-industry and agriculturally-related service industries.

4.7 In particular, the project would encourage private sector participation in the provision ofbasic agricultural services. Each investment subproject would be supported by basic appliedresearch and extension components. These services would be contracted out by the implementingagencies through competitive processes open to private and public entities with experience andcapabilities. The direct beneficiaries of these subprojects (farmers) would have intensiveparticipation in the determination of priorities, eligibility criteria for selection, contract awards, aswell as the evaluation of results. All project-funded contracts for delivery of services, training andtechnical assistance services would be competitively awarded to private and public entities. Asthis approach is new for Argentina, appropriate expertise would be provided from countries withsimilar experiences, such as Chile and Brazil.

C. SOCIAL ASSESSMENT AND BENEFICIARY PARTICIPATION

4.8 A systematic stakeholder consultation and an organizational diagnosis were implementedduring preparation to analyze and discuss specific mechanisms to ensure beneficiary involvementand participation and to strengthen water user associations. Cases from five provinces (BuenosAires, Mendoza, Neuquen, Rio Negro and Salta) with different agroecological and socioeconomicconditions were selected for the studies. The objectives of both studies were to establish afeedback between the project team and the beneficiaries and to develop an appropriate frameworkfor their participation

Findings

4.9 One of the initial conclusions was that, in general, small-producer organizations tend to beweak and producers do not perceive clear benefits from participating. That is the case of mostwater user associations (WUA), particularly in provinces where water management system arecentralized, and WUA are not perceived as autonomous organizations. Nevertheless, it isimportant to indicate that in most cases where services have been decentralized, the systemoperates more efficiently and users are satisfied with the services provided.

4.10 Very frequently, farmers perceive that key policy and management decisions that directlyaffect them are taken without consulting them, and that there is a lack of clear mechanisms fortheir participation in the decision making process. Regarding PROSAP, producers felt that, untilthe consultation, they had insufficient information about the project and little participation duringthe initial formulation. The consultation showed that while representatives from governmentagencies and WUA have similar assessments of the limitations and potential for increasingbeneficiary participation and decentralizing the irrigation systems, they have different prioritiesregarding the proposed solutions.

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4.11 The key problems identified by the WUA and state officials, can be grouped into threemain categories: (i) Social; (ii) Technical; and (iii) Economic-financial. Among the socialproblems, the most important are the weakness and lack of managerial skills of the WUA, theheterogeneity of producers, and the lack of effective participation. Among the technicalproblems, inappropriate infrastructure, existing technical inefficiencies and lack of technical skillsare the ones most commonly highlighted. The major economic-financial limitations mentioned arethe repayment capacity of the producers, the amount of the proposed investments, and the lack ofresources required to carry out the decentralization of services to the producers (see Annex G).

4.12 The key issues that beneficiaries and government officials consider essential for successfulproject implementation are: (i) improving beneficiary participation; and (ii) strengthening producerassociations, particularly developing the organizational, technical and managerial skills of theWUA. The crucial challenges that emerges from the consultation is to develop confidence,credibility and commitment on the producers. Increasing consultation and participation duringimplementation is perceived by the stakeholders as the only possibility to influence and haveincreasing control over project activities.

4.13 The desire for participation and the dynamism of the producers are some of the positivefactors that would facilitate the transition toward decentralized management systems. Increasingresponsibility and participation in the management of the irrigation systems is generally perceivedby farmers as a priority for improving overall efficiency in the operation of the systems andincreasing competitiveness. Producers are aware of the risks and costs that the decentralizationwould imply, and they are willing to take those risks and to pay for a better service.

4.14 The institutional flexibility of the WUA is another asset that would help to respond swiftlyto operational, technical and administrative problems. Producer associations are closer to theusers than provincial government agencies. Producers identify themselves with their associations,and are willing to grant them with the power to enforce and sanction administrative rules. Thenormative flexibility of the associations also facilitates the development of irrigation managementsystems appropriated to the productive activities of the users.

Implementing Participation

4.15 In order to ensure proper analysis of social issues and to promote permanent beneficiaryparticipation during project implementation, specific actions and procedures agreed with keystakeholders and the government have been included in the project design (with correspondingcosts) and the procedures described in the Operational Manual. These actions are summarized inthe following paragraphs and presented in detail in Annex G.

4.16 Screening and Appraisal of Subproject Proposals. During the screening of newsubproject proposals, key socio-economic and organizational factors would be considered toassess the potential social impacts and viability of the proposal.

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4.17 Fostering Beneficiary Participation. Four elements have been proposed to strengthenbeneficiary participation:

(a) Dissemination One of the problems highlighted by the consultation was thedeficient and disparate level of information among the producers, their leaders,provincial authorities and the project staff. To address this issue, the UEPs wouldhave consultants (specialists in participation and social assessment), that would beresponsible for the design and implementation of the dissemination activities. Theactivities proposed would include a short term dissemination campaign organizedat the provincial level to make existing project information available to keyprovincial stakeholders (NGOs, Universities, other government agencies); and apermanent communication system consisting of bulletins and dissemination notes,and periodic meetings with producer associations and other key provincialstakeholders.

(b) Institutional Mechanisms for Participation. As a result of the consultation andorganizational diagnosis, specific institutional mechanisms were proposed fordeveloping and strengthening beneficiary participation in project implementation.The proposed institutional mechanisms involve two levels that would allowbeneficiary participation and would feed the information required for decisionmaking.

(i) Local Fora. These fora, created at the local level, would be comprised ofrepresentatives of producer associations, NGOs, and other relevantstakeholders. They would have an advisory role to the UEPs, and wouldconstitute a mechanism for permanent feedback between the UEPs and thebeneficiaries.

(ii) Provincial Consultative Councils. At the provincial level, the UEPswould stimulate the development of Consultative Councils (CC) withrepresentatives of the LF. The CC would advise the EPDA onparticipation, social and environmental issues. The CC would establish alink between the local level (LF) and the provincial level (EPDAs) thatwould allow beneficiaries to have a voice in the discussion of actionsaffecting project implementation, as well as on policy issues and long-termprogramming.

(c) Training. The objectives of the training activities proposed are to providetechnical assistance and training in managerial and organizational development toproject staff and producers and to stimulate the former to participate in theirorganizations. Proposed activities would be implemented at the regional andnational levels. Training at the regional level would be targeted to producers andadministrative staff of the producer associations. Training at the national level

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would focus on project staff and other agencies or institutions involved inextension and technical assistance. The training activities would be developedduring the first three years of the project. The provincial and national seminarswould be organized by the UEPs and the UEC respectively.

(d) Institutional Strengthening. To ensure the successful implementation of theabove-described activities, the UEC and UEPs would be strengthened with therequired staff. At the central level, the UEC would be required to include twoprofessionals: (i) a Social Assessment Coordinator; and (ii) a Participation,Dissemination and Training Specialist. Also, all UEPs would include a consultanton social assessment and participation.

D. ENVIRONMENTAL ASPECTS

4.18 Environmental analyses were conducted on the Group A subprojects to evaluate theirpotential environmental impacts, and the recommended mitigative actions, along with theirassociated costs, were incorporated into the design of Group A subprojects. The studiesconcluded that the subprojects would have significant positive environmental impacts, including:(i) reduced salinization; (ii) decreased soil erosion; (iii) increased crop diversification; (iv) betteranimal husbandry practices; (iv) natural resource conservation; (v) reduced application ofagro-chemicals; and (iv) more sanitary consumer health conditions. But in a few cases the studiesconcluded that, without appropriate mitigative measures, some subprojects could, in limited areas,increase soil exhaustion or erosion. To eliminate these risks, the studies recommendedcomplementary technology transfer and extension programs. In particular, training for irrigationusers would promote rational and efficient water use, management and administration. Specificmitigative measures have been included in each of the subprojects following the recommendationsof the analyses. These are presented in Annex F. In addition, the environmental studiesrecommended that an environmental monitoring component be included in subprojects withpossible environmental impacts. An Executive Summary of the Project's EnvironmentalAssessment was distributed to the Board on December 21, 1995. As part of the subprojects'monitoring and evaluation component, baseline data would be established to verify the project'simpact on the environment, economy and beneficiaries.

4.19 In the case of the Pozo Borrado subproject, in addition to the environmental analysismentioned above, the need to carry out a complementary study on the potential environmentalimpacts of the subproject on the flora and fauna of the regional wetlands has been identified.Also, a consultation with indigenous communities in the surrounding area is required to ensurethat indigenous communities are informed of proposed project activities, and that their concernsare incorporated in the final project design. Completion of the complementary study and theconsultation process, as well as the incorporation of any new mitigative measures required, wouldbe conditions for the Bank's approval of the subsidiary loan agreement and, therefore, for thedisbursement of funds under this subloan (see para. 5.5).

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4.20 The project would provide extensive support to project institutions, at the national,provincial and subproject levels, to strengthen their capacities to evaluate, monitor and mitigatesubprojects' environmental impacts. The Environmental Unit (UnidadAmbiental, UA), withinthe UEC, would be responsible for screening subproject proposals for their potentialenvironmental impact and would supervise the environmental specialists within the provincialunits. The UA would be responsible for ensuring that the environmental screening procedures,impact assessments and corrective measures, as outlined in the Projects Environmental Manual(Manual Ambiental, MA) would be properly carried out at every relevant project phase and at alllevels of project administration. In addition, the UA would provide technical assistance andtraining at the provincial level, to strengthen local institutional capacity to design and implementenvironmentally sound subprojects. Presentation of a draft Environmental Manual was acondition for loan negotiations (see para. 5.1 (a)). Appointment of the Head of theEnvironmental and Social Unit (on terms acceptable to the Bank) and the adoption by theBorrower of the Environmental Manual, would be conditions of loan effectiveness (see para.5.3 (b)).

4.21 Environmental screening procedures have been established which would be applied to allnew subproject proposals. This procedure begins with the preparation of an EnvironmentalProfile which would include a subproject summary, review of relevant environmental legislation,identification of potential impacts, a preliminary subproject classification (according to the Bank'sclassification system) and identification of required studies. Because of the nature of the project,individual subprojects are expected to fall under either environmental classification B, whichrequires an Environmental Analysis (EA), or C, which does not require any specific study. Theeligibility criteria would exclude any subproject proposal based on the expansion of theagricultural frontier at the expense of natural forests or promoting the conversion of wild lands toagriculture, thus affecting natural habitats. The increase in area under cultivation would beproduced by intensification of the use of agricultural land, which is land classified as capable ofbeing used intensively for agriculture and that has been cultivated before. The project would helpremove some of the constraints (scarce water for irrigation, poor drainage and salinization insections of the potentially irrigated area, low productivity due to diseases and poor culturalpractices, varieties not adapted to market requirements, etc.) that are presently limiting the areaactually being used for agricultural productive purposes in the same period. In order to facilitatethe EA and subproject screening, the Guidelines for Environmental Impact Assessments andEnvironmental Analysis would be a chapter in the Project Environmental Manual, incorporatingthe national and provincial environmental stipulations regarding impact assessments, andconsistent with the Bank policies and procedures. The Environmental Manual would have to beapproved by the Bank, and would not be amended without Bank's consent. As part of thedocumentation to be submitted to obtain the Bank's approval for financing a specific investmentsubproject, the Borrower should submit all environmental studies, analyses and assessmentscarried out for the subproject, as well as a description of all mitigative actions resulting from thesestudies and introduced in the subproject design. These procedures are explained in detail inAnnex F.

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E. RISKS, EXOGENOUS CONDITIONS AND MITIGATING MEASURES

4.22 Project success would be influenced by the following five exogenous conditions:

(a) Provincial Institutional Capacity. Lack of experience and limited technicalcapabilities in some provinces would be addressed by the project's institutionalstrengthening component. In some cases, for the less advanced provinces, theproject would adopt a region, or multi-provincial approach under the responsibilityof a federal agency. The regional approach would provide those provinces neededadditional administrative and technical support for subproject implementation.

(b) Provincial Financial Capacity. The application of provincial eligibility criteriawould ensure sub-borrowers' creditworthiness. Because certain provinces facefiscal constraints, the project would finance 70% of total investment, with debtpartially assumed by the Central Government and partially financed bybeneficiaries' service fees. In addition, since the repayment terms would be anaverage of the terms of the IDB and the Bank, the repayment period would be longrelative to other Bank loans. Strong beneficiary participation and private sectorinvolvement is expected to reduce the provincial fiscal burden and contribute toloan repayment.

(c) Sustained Commitment to the Project. While political commitment for theproject is very strong, possible political changes could shift provincial short-termpriorities The project would have enough flexibility to be able to adapt to thesechanges and shift resources in accordance with commitment and priorities. Moreimportantly, the project, through careful client selection and the generation ofstrong beneficiary participation, would build a consensus sound enough towithstand changes in short-term political priorities.

(d) Complementary Investment Flows. To fully realize project benefits, projectinvestments should be complemented by additional investments. Insufficientlong-term credit and limited access by the agricultural sector are factors that mayaffect on-farm investments and full achievement of project goals. The project, byimproving and rehabilitating rural infrastructure, increasing productivity andpromoting private sector collaboration in agricultural service delivery, wouldattract capital flows to the sector. The stronger Argentine economic position andrenewed confidence for growth, along with the increased sectoral competitiveposition, are expected to ensure adequate investment flows. However, the Bankhas been supporting efforts to identify limitations and constraints to access tolong-term credit. A recently finished study '9 tries to draw conclusions on the

9 The Frameworkfor Secured Transactions and Access to Credit in Agriculture. Report No. 15456-AR (GreenCover), The World Bank, April 29, 1996.

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restrictions to use property in general (other than land) as a collateral, as well asthe issues regarding the framework for security interests. In addition, the Bank iscarrying out, as part of economic and sector work, a study to analyze in depth howfinancial markets work in the rural areas, identify inefficiencies and proposemechanisms to increase access to investment credit. Finally, there are technicalassistance funds allocated in the project to finance complementary studies duringproject implementation to learn more about specific constraints affecting projectbeneficiaries and propose actions to be supported by the project to increase accessto long-term financing.

(e) Liberal Trade Environment. Effects of the MERCOSUR and greater economicintegration on the agricultural sector are uncertain. Argentina has entered into afull customs union with Brazil, Uruguay and Paraguay, including reciprocal zerotariffs for most goods and a common external tariff averaging 14% (varying from 0to 20%) for most goods (except for a few commodities that have a later deadline,such as sugar in 2001). Though the on-going stabilization program in Brazil andthe overall prospects of economic integration are beneficial for the Argentine farmsector, specific provinces and products could suffer in the short and medium terms.However, the project would have an important impact on the internationalcompetitiveness of the agricultural production -through reductions of costs,increases in productivity and improvements in quality and sanitary conditions-which would contribute to mitigate these adjustments. By increasing the sharingof information and experiences between provinces, the project would contribute tohelp some provinces capitalize lessons learned by the rest, and reduce risks.

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5. SUMMARY OF AGREEMENTS REACHED ANDRECOMMENDATION

A. AGREEMENTS REACHED

5.1 The conditions of negotiations of the proposed Loan were:

(a) presentation of draft versions of the Project Implementation Plan (PIP),Project Operational Manual (POM), and the Environmental Manual (paras.3.18, 3.21 and 4.20);

(b) presentation of a draft Chart of Accounts, to be used at national as well asprovincial levels, for all subprojects, components and activities under theProject (para. 3.33);

(c) presentation of draft Standard Bidding Documents (SBD) for Civil Worksand Goods for ICB (based on the Bank-issued SBD), as well as a proposalfor NCB, to be used during all project implementation and for allsubprojects, components and activities under the Project (para. 3.22); and

(d) presentation of draft TORs for all major consulting services to be requiredduring the first year of project implementation for the provincialsubprojects in Group A, at national and provincial levels (para. 3.25).

5.2 During negotiations, the following agreements were reached:

(a) the project would be implemented in accordance with the ProjectOperational Manual (POM), satisfactory to the Bank, which would include,inter alia, provisions regarding procurement, disbursement, accounting andauditing, and environmental procedures. The POM would not be amendedwithout the Bank's prior consent (para. 3.21);

(b) the Central Execution Unit (UEC) would be adequately established, staffedand supported in the implementation of its responsibility under the project.(para. 3.2);

(c) the UEC will prepare and furnish to the Bank a progress report on projectexecution of such scope and detail as the Bank shall reasonably request notlater than March 31 and September 30 of each year (para. 3.13);

(d) when proceeds of the Bank loan are on-lent to eligible provinces, it wouldbe under the same terms and conditions (based on the average cost for theBorrower resulting from the IBRD and IDB loans), with each participatingprovince's revenue sharing serving as a guarantee for repayment ofsubloans (para. 2.26);

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(e) procurement would be carried out by all executing agencies in accordancewith Bank guidelines (para. 3.22);

(f) the national government would open and properly maintain, in US dollars,a Special Account (para. 3.30);

(g) audit arrangements acceptable to the Bank would be followed by federaland provincial governments (para. 3.33);

(h) the UEC and EPDA would carry out environmental analysis studies, asspecified in the POM and the Environmental Manual, in a mannerconsistent with the Bank's environmental policies and procedures (para.4.21);

(i) Subsidiary Loan Agreements between the Borrower and each provincewould include specific clauses (para. 3.1 1) by which the province would:

(i) assign overall responsibilities for coordination and management atthe provincial level to a unit acceptable to the Bank;

(ii) assign responsibility for implementation of each subproject to acompetent agency, acceptable to the Bank;

(iii) ensure that subprojects are carried out in accordance with theProject's Operational Manual (POM), Environmental Manual andImplementation Plan;

(iv) the province would enforce cost recovery policies and proceduresas defined in the POM and in the specific subprojectdocumentation;

(v) the province would accept all terms and conditions of the LoanAgreement signed between the Bank and the Borrower, inparticular regarding project's goals and strategy, implementationarrangements, and procurement of works, goods and services; and

(vi) the provinces would follow audit arrangements acceptable to theBank.

5.3 The following are conditions of Loan Effectiveness:

(a) the establishment of the Central Project Coordination Unit (UnidadEjecutora Central del Proyecto-UEC) and the designation of key staff,with qualifications and on terms acceptable to the Bank. This UEC's keystaff would include: (a) the Executive Coordinator; (b) the Chiefs of theEnvironmental and Social, the Monitoring, the Subprojects Management,and the Administrative Units; and (c) the Senior Projects Advisor and theSenior Legal Advisor. (para. 3.3);

- 51 -

(b) adoption by SAGPyA of a final Project Operational Manual (POM), aChart of Accounts for the whole project and the Environmental Manual,acceptable to the Bank (paras. 3.21, 3.22, 3.33 and 4.20); and

(c) presentation of the final design of the M&E system acceptable to the Bank(para. 3.18).

5.4 The following would be conditions of disbursement for each of the provincialsubprojects (para. 3.32):

(a) establishment, adequate staffing and funding of the EPDA and UEP, by theprovince, according to the subproject proposal and signature of operationalagreements between them, all acceptable to the Bank;

(b) execution of a satisfactory Subsidiary Loan Agreement between theprovince and the Federal Government;

(c) evidence that the province had taken all actions necessary for theexemption of all contracts for goods, works and services to be financedunder the loan from all legal and regulatory provisions limiting theinternational procurements of goods, works and services,

(d) approval of the subproject feasibility study by the Borrower and the Bank,as provided in the POM;

(e) satisfactory legal opinion on the validity of the Subsidiary Loan Agreement;and

(f) provide evidence acceptable to the Borrower and the Bank regardingprovincial availability of counterpart funds for the first year ofimplementation.

5.5 In the case of the Pozo Borrado Flood Protection and Drainage Subproject (SantaFe), the completion of complementary environmental studies and the mitigation planinvolving natural habitats and biodiversity in the area, as well as the consultation processwith the indigenous communities in the surrounding areas, all acceptable to the Bank,would be additional conditions of disbursement (para. 4.19).

B. RECOMMENDATION

5.6 With the above assurances and conditions, the proposed project would be suitablefor a Bank loan of US$125 million, to be repaid over a period of 15 years, including agrace period of five years with level repayments of principal, at the Bank's standardvariable interest rate and fees for LIBOR-based single currency loans. Retroactivefinancing for expenditures incurred after February 12, 1996 (but not earlier than 12months before loan signing) in an amount not to exceed US$6.0 million (4.8% of the Loanamount) is recommended.

- 52 - Annex A

ARGENTINAPROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

LESSONS LEARNED

A. BANKwIDE LENDING FOR AGRICULTURAL DEVELOPMENT

1. The Bank's long experience with agricultural and rural development projects has producedan extensive catalogue of lessons. OED evaluations of the Bank-wide cohort of agriculturalprojects show a combination of internal and external factors adversely affecting their performanceand results over several decades.' Deficient preparation and appraisal, including lack of a strongsectoral rationale or linkage, in part due to the lack of adequate sector work, affected projectquality at entry, i.e., the "project factors" synthesized in the Portfolio Management Task ForceReport. Socio-cultural and technical characteristics particular to the sector required an optimalinformation base for project design. Area development projects, especially integrated ruraldevelopment, had a particularly poor record; many were over-complex, top-down operationswhich required exceptional leadership and commitment, and presented difficulties for supervisionand sustainability.

2. Country factors have played a critical role in project outcomes, where unfavorableborrower incentives ran counter to the production and income objectives of many projects. InLAC especially, inadequate macroeconomic and sectoral policies which discriminated againstagriculture for decades, were probably the main reason for the poor performance of manyagricultural projects. The latter part of the 1980s, however, witnessed dramatic political changein the Region as many countries, including Argentina, democratized, adopting programs ofmacroeconomic reform, markedly different economic and sectoral policies, and decentralizingpublic services to the provincial and municipal levels. In Argentina, the move towards a moreefficient, equitable and fiscally responsible federalism remains a key element in the country'smacroeconomic strategy. Argentina's public services, including agricultural support services, havebeen decentralized to the provincial and local levels, with the devolution of operation andmaintenance to the private sector where feasible and appropriate.

3. A new generation of agricultural projects reflects the influence of direct experience andpolicy changes in the transition to projects whose content and execution are more flexible,expanding and/or deepening successful aspects of preceding operations. The private sector,NGOs and beneficiaries are collaborating increasingly in the design, execution and management ofdemand-driven investment programs. Decentralized implementation stresses the building up oflocal capacity, user organizations, cost-sharing and cost recovery. Sustainability is a keyobjective, with various modalities being used to secure recurrent funding and ensure operationand maintenance (O&M). The proposed project, consistent with these themes of new lending, is

Annual Review of Evaluation Results, Operations Evaluation Department, World Bank, editions for 1988,1990, 1991 and 1992.

-53- Annex A

the first step in Argentina towards the decentralization of agricultural services to the provincesand the promotion of further collaboration with the private sector.

4. Lessons of Irrigation Lending. Water resources have been a major focus of Bankfinancing worldwide since 1950, and the portfolio has witnessed significant change in recentyears. While OED concludes that the breadth and equitable distribution of this lending representsa strong case for its continuation, projects have been affected by design, construction,management, operational and social factors stemming from fragmented public investmentprograms and sector management, excessive reliance on overextended public agencies, and publicinvestments and regulations that have neglected quality, health and environmental concerns.Some three-quarters of the national irrigated area of Argentina is affected by impeded drainageand salinization, with systems operating at very low efficiency due to minimal investment overmany decades. This has become a direct constraint on agricultural growth, and demands a newset of actions reflecting best practices.

5. The Bank's Water Resource Management Policy (WRMIP) paper proposes a newapproach to irrigation lending, the essence of which is the adoption of a comprehensive policyframework, the view of water as an economic good, decentralized water management anddelivery models, greater reliance on pricing, and the full participation of water users. Theobjective is to modernize irrigation practices, direct greater attention to cost recovery, integratedrainage and salinity control, improve operation and maintenance of existing systems, andinvestments in small-scale irrigation and water-harvesting methods. The lessons emphasizeinstitutional strengthening to improve coordination and analysis, stated to be especially importantin countries such as Argentina, whose federalist structure gives primary authority over water toprovincial or state governments.2 Also stressed are technological research and lower-costrehabilitation.

6. Decentralization and Participation. There is broad consensus that decentralization andregionalization of planning and implementation are important strategies to test in Bank projects,but that agencies should not be pushed too far, too fast; priorities and policies should probablyremain more centralized even if implementation is decentralized, given that these are nationalissues, not internalized at the local level. In the case of irrigation systems, the WRM1P advocatesfull Bank support to governments for decentralizing responsibility, and transferring irrigationservice delivery to the private sector, basically by relying on water user associations. Numerousstudies show that when the knowledge and experience of farmers are factored into the planning,development and operation of irrigation systems, overall performance and sustainability improves.Satisfactory organization leads to satisfactory operation and maintenance, which in turn generatesgood cost recovery.

7. Water user associations have proven effective in the Province of Mendoza in which, whentraditional associations covering relatively small areas were unable to meet associated costs,efficiency and maintenance suffered. Their amalgamation into larger associations enabled them togenerate their own budgets, regulate their activities, and hire professional managers to handle cost

2 Water Resources Management: A World Bank Policy Paper, September 1993.

-54- Annex A

recovery, water delivery, and maintenance. Lower costs resulted from fewer, larger associations,and water distribution improved markedly. The process of transferring state-owned and -managed systems to user groups, however, is not easy; many schemes require rehabilitation beforeusers will take them over, an important principle underlying the proposed project. Further,governnent must be willing to devolve systems to users, and the capacity of users to self-managesystems must be upgraded where necessary, through the kinds of technical assistancearrangements proposed in this project.3

8. The Bank and Borrower should foster the conditions associated with durable water usergroup formation, in lieu of covenants requiring their organization. Evidence strongly suggeststhat these conditions for successful user aggregation include: (i) the recognition by users that thebenefits also entail costs; (ii) service to well-defined areas, and with members having specificfunctions and responsibilities; (iii) member contributions proportional to benefits;(iv) participatory processes for establishing water allocation rules and a system of penalties forviolators; (v) low-cost settlement of local disputes; (vi) cohesive organizations incorporating amix of small and larger organizations; and, (vii) a non-challenging stance from governmenttowards user organizations.4

9. Overall, the emphasis should be to service on upgrading existing irrigation systems tostandards appropriate for changing agricultural, economic and social conditions. Such anapproach involves multiple disciplines, and is consistent with the WRMP. Better project designshould heed several key factors: (i) environmental problems caused by poor drainage meansprojects should continue to stress drainage financing; (ii) irrigation investment success isgenerally related to low unit costs and a sound macroeconomic situation; and (iii) sustainability isfostered through direct financing by users and the existence of stable, moderately-sized usergroups.

10. Cost Recovery. It is widely accepted that cost recovery and water pricing shouldaccurately and fully reflect the true value of operation and maintenance costs, even if not theinvestment itself However, OED and others have found little correlation between higher watercharges and good O&M, mainly because the revenue usually goes into general treasury receiptsand is not allocated to O&M. In practice, the key to good O&M is irrigators having financialautonomy, paying for and arranging O&M themselves. Financial autonomy depends on linkage,or feedback, which might be through a public irrigation authority converted to a water service unitwith client involvement in management, with the budget dependent on the collection of user fees,or successful water user associations.5

11. Private Sector Involvement. Bank experience demonstrates that in order to expandproduction and facilitate diversification, investments in irrigation rehabilitation, modernization and

Ibid.

A Review of World Bank Experience in Irrigation, Operations Evaluation Department, August 4, 1994.

s Opk Cit.

- 55 - Annex A

expansion need complementary investments in institutional strengthening and a range ofproduction-related services including technology generation and transfer, animal and plant health,technical assistance and marketing. Greater efficiency may involve privatization, and agriculturalprojects should strive to integrate the private sector wherever possible, limiting government's roleto a narrower focus on: (i) creating an enabling policy framework for production and marketefficiency; (ii) funding public goods, principally in agricultural research and extension and ruralinfrastructure, and leaving their delivery, operation and maintenance, wherever feasible, to privateagents; (iii) funding targeted interventions needed to correct market failures and address acutepoverty or food security issues, but devolving their execution to private entities; and (iv) buildinginstitutional capacity so that public service functions appropriate to the role of government arecarried out efficiently. Governments are often ill-equipped to handle this more limited role,especially at the decentralized levels.6

12. Institutional Development. Institutional development has been a common feature ofBank operations for decades. To a great extent the sustainability of development depends on thecharacter and performance of institutions at all levels. While components aimed at strengtheninginstitutions figured in a high proportion of Bank-financed operations, and the approaches usedhave been diverse, many such components have failed to have lasting effect. Evidence suggeststhere are no generalized prescriptions.

13. According to OED, satisfactory institutional development performance is closely linked torealistic project objectives, and an evolving set of sector-specific experiences. Bank experiencesuggests that institutional development requires a longer time horizon than physical aspects; that"learning by doing" is also important, both for the borrower and the Bank; that institutionalstability is a key factor; and that success is more likely when the groundwork has been laid inprevious projects. There has been a high correlation in Bank projects between good institutionaldevelopment and healthy economic rates of return. Institutional factors which contribute toobserved cross-country differences in overall project performance are: (i) the extent and nature ofbeneficiary involvement in project design and implementation; (ii) the capacity to mobilizefinancial resources for recurrent expenditures; (iii) the presence of clearly-defined, longer-termnational and sectoral development strategies; and (iv) levels of education, skills, organizationalcapabilities, and inter-institutional linkages.

14. Irrigation experience shows that irrigation development programs should be planned anddesigned on the basis of a comprehensive set of institutional and policy decisions which cover awide range of issues affecting the sector. Such programs call for the development of skilledpersonnel at the federal, provincial and local levels, capable of implementing them. Institutionaland policy aspects have coalesced around three basic principles: (i) agricultural and engineeringaspects are not separated in designing and managing irrigation systems; (ii) irrigation systems aredesigned to achieve flexible and efficient water distribution, to facilitate system operation, and toensure easy and prompt use of land and water on-farm; and (iii) farmers are required to maximize

6. Agricultural Sector Review, World Bank, Agriculture and Natural Resources Department, July 1993.

- 56 - Annex A

their production, to fully use water resources available from government investments, to repaypart of these investments and to contribute the full cost of operation and maintenance.7

15. Technical Assistance for Institutional Development. Technical assistance is themechanism most commonly used in Bank projects to strengthen institutions, but the Bank'sexperience has been mixed. The lessons are: (i) the need for a high level of commitment andmutual interest on the part of the donor and borrower; (ii) project design that capitalizes onexisting opportunities and exploits the comparative advantage of different donors in acomplementary fashion, within the context of an identified, country-specific, institutionaldevelopment strategy; and (iii) a thorough linkage with Bank sector work. Effective technicalassistance programs have tended to be flexible, based closely on the beneficiary's needs and skills,subject to frequent review, modification, and supervision, and focused on strengthening technical,managerial, or administrative systems. Attention to legal issues is also important, including: theregulatory framework in which projects are carried out; the rules that define the powers,functions, and responsibilities of institutions as well as their interrelationships; and legal measuresto ensure the sustainability of institutions. Institutional analysis up-front is essential.8

16. Technology and Marketing. Agricultural technology development is an essentialcomplement to irrigation improvement, and needs to be better designed and used. Public, privateand NGO research efforts should be amalgamated, and there should be more precise identificationand alleviation of technology gaps impeding greater productivity in areas deemed to requirereconversion, modernization or which have special promise. Technology transfer programsshould be designed to match local fiscal, institutional and human resources, and existing farmconditions; have a strong participatory basis in project design, problem definition and solution,including all potential stakeholders, public and private; and be based on a thorough understandingof farming systems in the areas served. Marketing services are an area in which government's roleremains critical: in the modernization of marketing facilities; in market information services,grower organizazion and access to international markets; and in the establishing of standards andgrades to lower transaction costs and open opportunities.9

B. BANK LENDING EXPERIENCE IN ARGENTINA

17. The current lending portfolio in Argentina comprises 32 loans, principally in theinfrastructure and finance sectors, totaling US$5.4 billion. The Bank has undertaken eightoperations in the agriculture sector since 1967, five of which are closed. Periodic economic andsectoral difficulties and institutional weaknesses have constituted a daunting context for projectplanning and execution, affecting commitment and counterpart funding, timely implementation,

7 Developing and Improving Irrigation and Drainage Systems: Selected Papers from World Bank Seminars,World bank Technical Paper 178, 1992.

8. Managing Technical Assistance in the 1990s: Report of the Technical Assistance Review Task Force,November 11, 1991.

9- Annual Review of Evaluation Results, OED, December 14, 1994.

- 57 - Annex A

and the sustainability of project benefits. The most recent projects, from where significant lessonsfor the proposed project could be learned, are the Agricultural Credit II Project (Loan 2970-AR;closed in 1993) and the ongoing Agricultural Services and Institutional Development Project(Loan 3297-AR-PROMSA). The credit project, oriented to small and medium export-orientedfarmers, successfully recapitalized the sector and increased producer confidence during a periodof macroeconomic instability and hyperinflation. This project disbursed rapidly and wascompleted two years earlier than planned, due to pent-up demand for investment credit. Indirectly,it demonstrated that to achieve sustainable development, projects should complement and deepenprocesses launched under preceding operations.

18. The implementation of PROMSA, which finances the modernization of public Federalagencies providing support services in animal health, technology research and transfer, plantprotection, information systems and others, has benefited from the greatly improved economiccontext resulting from sweeping changes in macroeconomic policies and management.Furthermore, PROMSA's strengthening of Federal capacity has paved the way for the moredecentralized approach under the proposed project. Several relevant lessons have already beenintegrated into the design of the follow-on project: (i) cofinancing avoids competition betweenlending institutions and duplication of effort, ensures consistent responses to Government whennew issues arise and permits cost savings through the use of a single project implementation unit;(ii) projects promoting and extending decentralization need an entity at the regional or nationallevel, which is technically capable of and responsible for assuring consistency acrossmethodologies and across provinces, and should be prepared to delegate and share with localinstitutions the implementation of activities; (iii) farmers' organizations should have a role inservice delivery and cost-sharing along with federal and local entities; and (iv) projects need towork with provincial governments, even though they may have restricted implementationcapacity.

19. Although outside the agricultural sector, a rather similar project is the ongoing ProvincialDevelopment Project (Loan 3280-AR). By providing financial support to provincial investmentand institutional strengthening subprojects, this operation seeks to help provinces to undertaketheir own adjustment programs, leading to revenue enhancement and expenditure control,improvements in local financial management, and the rationalization of investment decisions at theprovincial level. This US$200 million loan became effective in July 1991 and, although proceedsare now fully committed, disbursements have lagged behind ever since. The main lessons learned,all of which have been addressed in this proposed project, are the following: (i) it is essential togive top priority to the institutional strengthening aspects, starting during project preparation andintensifying them at implementation, in order to have competent executing agencies at theprovincial level; (ii) procurement of goods and services, and the management of project funds,are two crucial areas on which early training and technical assistance produce an important payoffduring implementation; (iii) the existence of a large number of small, rather complex subprojectsspread over several sectors and covering many different provinces, only contributes to increasingthe complexity during implementation; (iv) clear definition of the project scope, and having aportfolio of subprojects ready before effectiveness, are key factors for a smooth execution andfast disbursements at early stages of implementation; and (v) careful assessment of localgovernment's commitment and a realistic estimate of the level of counterpart funds to be madeavailable are key considerations when analyzing alternative subproject proposals.

- 58 - Annex A

C. PROJECT STRATEGY

20. Several new agricultural projects outside the LAC Region, while not identical to theproposed project in Argentina, are similar both strategically and in their objectives and content.The Morocco Irrigated Areas Agricultural Services Project is part of Government's strategy tocreate a more productive and flexible agricultural sector which can respond to the opening of theMoroccan economy and trade opportunities with the European Community and other markets.Its objectives are to raise agricultural productivity; improve the availability and operatingefficiency of agricultural services; promote commodity and service-oriented farmers' organizationsto take an increasing share in development activities; and involve universities and other entities inextension and research development. The focus is strongly on decentralization of services,empowerment of farmers, and better organization of existing services including irrigation (withrehabilitation preceding new investment), more participatory approaches, and divesting publicagricultural services to private agents where feasible. The price for sound performance inMorocco has been a heavy government role, which has evolved over time, and which is now beingmarkedly reduced in favor of greater farmer and private sector participation.

21. The China Agricultural Support Services Project, while not revolving around irrigation,seeks to increase agricultural production and farmers' incomes by strengthening institutions thatsupply support services to farmers. The project would address animal husbandry and animal andplant quarantine management; decentralize crop and livestock extension services from the nationalto the county level; improve extension services through training, better facilities, and farm-level,demand-driven research programs; promote seed commercialization; strengthen veterinary andpreventive animal health services, establish a national breed improvement program and tightenagro-chemical and feed quality control; and promote cost recovery for services to farmers.Benefits are expected to be improved policy formulation, stronger agricultural institutions, inputand market development, and competitive input supply services. Greater weight is given to localinterventions, linkages between provincial and lower level agricultural services, and marketing.

22. Finally, the India Assam Rural Infrastructure and Agricultural Services Project is aprogram of targeted interventions for rural poverty alleviation which seeks to accelerateagricultural growth and income generation in the State of Assam through the improved use ofresources, relieving infrastructural and technical constraints, fostering private sector developmentand sustainability, and improving the state's capacity for strategic agricultural planning. Theproject includes large investments in irrigation and rural roads, complemented by significantfinding for institutional development including technology generation and transfer, education,training and land administration; and poverty alleviation, through fisheries, horticulture andlivestock development. Beneficiary participation is a central theme, and to the extent possible, theproject would transfer or lease production assets to local beneficiary groups. Of particularinterest is the reliance on and expansion of various participatory entities including NGOs, wateruser groups, and field management committees (FMCs), the latter a successful mechanism formanaging common community assets including irrigation systems, for introducing new cropvarieties, and for organizing input and marketing services. State involvement in activities bettersuited for the private sector would be avoided; this would be facilitated through policy adjustmentwhereby the State would create an economic environment conducive to the promotion of theprivate sector in agriculture.

-59- Annex B

ARGENTINAPROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

DESCRIPTION OF INVESTMENT SUBPROJECTS INGROUP A

I. INVESTMENT SUBPROJECTS TO BE FINANCED BY IBRD

The seven investment subprojects intended to be financed by the Bank, four provincialirrigation/drainage subprojects and three regional subprojects (animal health/phytosanitaryservices), are discussed below. The funding arrangements for Group A priority subprojectsbetween the Bank, IDB and the Government are presented in the Project Cost and FinancingSections (Annexes C and D).

1. Province ofBuenos Aires: Development of the Colorado River Valley(Baseline Cost US$13.4 million)

1.1 Description. The Colorado River Valley, located in the Southern part of the BuenosAires province, covers 700 thousand ha, of which 425 thousand ha are agriculturally productive.Nearly 138 thousand ha, owned by 1,373 farmers, have irrigation concessions, of which only68 thousand ha actually receive irrigation. Most farms, about 70%, have extensions under 200 ha.Agricultural production, with an annual value in 1992 of US$54 million, consists of cereals,forage seeds, vegetables and livestock. The region is characterized by a very active privatesector, which developed over two-thirds of the regional irrigation and drainage systems, and asubstantial degree of agricultural diversification, aimed at the growing markets derived fromMERCOSUR.

1.2 The Development Corporation of the Valley of the Colorado River (Corporaci6n deFomento del Valle Bonaerense del Rio Colorado, CORFO-RC), a decentralized and autonomousagency under the Provincial Ministry of Economy, has administered the irrigation and drainagesystem since 1960. With the assistance of the Water Users Associations (Consorcios deRegantes), groups of producers sharing water from the same canal, CORFO-RC collects userstariffs and encourages active users participation in the operation and maintenance of the system.In addition, CORFO-RC has constructed a drainage network to reduce salinization of the land,developed a rotating access system based on users' needs, and established a crop diversificationprogram.

1.3 Main Problems. Area development has stagnated as macroeconomic conditions havechanged relative prices, requiring increased managerial ability in order to maximize resourceproductivity. Producers have not been able to put together production packages with adequate

- 60 - Annex B

technology, capable of generating enough revenue to keep abreast of the increasing cost of living.In addition, CORFO-RC and the water users face serious problems of low efficiency in waterdistribution, water losses, and flooding, resulting from an incomplete drainage network and theoperation of an upstream hydroelectric dam which has modified the physical characteristics of thewater supplied to the system. These negative effects raised the demand for maintenance and itsassociated costs, and lowered water availability in some sectors of the system due to higher waterlosses.

1.4 A recent water resources study"0 indicated that the average efficiency level for the regionalirrigation systems is 38% of the optimal level, due to deteriorated central infrastructure andevapotranspiration and infiltration losses. On-farm inefficiencies, related to poor on-farmtechnologies, maintenance and practices were particularly pronounced. Economic adjustment andausterity requires CORFO-RC to manage better its financial and technical resources and increasecoordination with the private sector.

1.5 Objectives. The subproject would set in place a sustainable system for technologygeneration and transfer aimed at consolidating horticulture production in the region; it would alsoset in motion the first phase of a program to line secondary canals aimed at increasing the overallefficiency of the irrigation system. The subproject is expected to increase production, promotediversification into high-valued horticultural crops and local employment, as well as improveproductivity and marketing, thereby increasing and stabilizing household incomes. In addition, itwould provide valuable information and experience to help design the plan for improving the restof the irrigated area.

1.6 Components. The subproject, which would improve the well-being of farm familiesthrough the stimulation of the regional economy, would include the following components:(i) Agricultural Research and Extension (cost: US$ 8.0 million), that would establish acompetitively-based system of technology generation and transfer, executed by qualified regionalinstitutions ( INTA, universities, consultants, professionals and producer organizations, etc.),designed to orient regional horticultural production and marketing to expanding internationalmarkets; (ii) Improvement of Irrigation Infrastructure (cost: US$3.2 million), which wouldrehabilitate and improve the infrastructure of existing irrigation systems (line 34 km of secondaryirrigation canals serving 52 producers, and some critical sections of the main canal); and(iii) Institutional Strengthening (cost: US$2.2 million), that would strengthen CORFO-RC, theproject implementing agency.

1.7 Costs and Financing. The subproject baseline costs would total US$13.4 million, ofwhich US$3.3 million are for civil works, US$1.1 million for vehicles and equipment,US$2.3 million for technical assistance, US$1.4 million for training, and the remainingUS$5.3 mnillion would be used for financing incremental recurrent costs. Total costs, considering

10 Desarrollo del Recurso HidrAulico, Dinamizaci6n del Desarrollo del Valle Bonaerense del Rio Colorado,Secretaria de Agricultura, Ganaderia y Pesca, Buenos Aires, November 1994.

- 61 - Annex B

physical and price contingencies, amount to US$15.1 million, including US$1.7 million of taxes.The Bank would finance an estimated US$11.6 million of this total cost, and the provincialGovernment the remaining US$3.5 million.

1.8 Benefits. The subproject, which has a Net Present Value"' (NPV) of net benefits ofUS$54.7 rmillion (over a 20-year period), and an estimated Internal Economic Rate of Return(IERR) of about 39%, would benefit directly 570 and indirectly 1,370 farm families within theregion, as well as more than 1,000 farmers outside the region.

1.9 Implementation. Subproject execution would be the responsibility of CORFO-RC, thecurrent administrator of the irrigation system. About 60 percent of the investment cost ofirrigation and drainage rehabilitation, and all operation and maintenance costs, would be coveredby water tariffs to be collected by CORFO-RC. Civil works for rehabilitation, as well as forrepair and maintenance, would be carried out by private contractors.

2. Province of Mendoza: Montecaseros Drainage and Irrigation(Baseline Cost- US$5.2 million)

2.1 Description. The subproject is located in the Northeastern area of the province. It isplaced at the Montecaseros basin, in the mid-section of the Tunuyan river causeway, and covers1,279 farms over 8,531 ha. It is a highly urbanized area, with a well developed roadway system,encompassing the cities of San Martin (population: 98,000 people) at the heart of the basin,Palmira (5 km to the north), Junin (4 km to the south, with a population of 28,500 people) andRivadavia (7 km to the south, 47,000 people).

2.2 The area occupied by farms larger than 1 ha in size is 7,667 ha, 84% (6,434 ha) of whichis under production, 10% (781 ha) is abandoned due to low productivity (265 ha due to highwater table problems), and 6% (452 ha) is set aside. Most of the area under production (78%,5,018 ha) is covered with wine vineyards, while the rest is devoted mainly to peach production(22%, 1,416 ha). The majority of grape produced (93%, 4,675 ha) is common table grape oflesser quality and low yields.

2.3 The Montecaseros canal is a secondary canal located in the Tunuyan river mid-section andconnects to the San Martin primary canal, one of the five primary canals diverting water from theTunuyan river north of the El Carrizal reservoir. It is 11.7 km long, 40% of which (4.7 km) is notlined. Poor infrastructure conditions and low maintenance levels in many areas, have resulted inleakage problems and low system efficiency, which coupled with the excessive irrigation volumesused by farmers, have caused drainage problems. This in turn has led to a high water table,increased soil salinity, reduced yields, larger dependency on water pumping from deep wells, andhigher costs of production.

11 12% annual discount rate.

- 62 - Annex B

2.4 Main Problems. The main problems detected are: (i) high water losses due to thelimited lining of main (28 percent) and secondary canals (60 percent), light textured soils, andtype of water supplied (free of sediments that may naturally line the canals); (ii) inadequate waterdistribution system that supplies large volumes of water in short periods of time; (iii) lack ofknowledge about crop patterns and real water needs by system managers, resulting in poorprogramming of water distribution; (iv) inadequate system maintenance (both at the system andthe farm level); and (v) high water table levels in areas adjacent to the canal, resulting in damagesto crops, roads and buildings.

2.5 Objectives. The subproject would improve farmers income by: (i) increasing farm output,through expansion in planted area and improved yields, as well as increased harvest value,through diversification into higher-quality fruits, especially grapes and peaches; and (ii) reducingfarm production costs by lowering irrigation costs. Through the project, regional employmentopportunities would grow due to the introduction of more labor-intensive activities.

2.6 Components. Actions proposed would improve the Montecaseros irrigation systemthrough: (i) Improvement of Irrigation Infrastructure (cost: US$1.8 million), which wouldrehabilitate 4.65 km. of the Montecaseros canal, including the installation of volume meters;install basin meters at the entrance of the tertiary canals and direct intakes; implement 568irrigation intakes, and increase irrigation efficiency by adjusting the water users rotation system tocrop plans and establishing more rational water user tariffs; (ii) User Training (cost:US$0.3 million) which would train users to better manage water resources and maintain canals;(iii) Improvement of Drainage Infrastructure (cost: US$1.8 million), which would rehabilitate38.6 km of the drainage system to prevent flooding; (iv) Agricultural Research (cost:US$0.4 million) which would develop a program to support applied agricultural research toincrease agricultural productivity, especially from fruit crops; and (v) Agricultural Extension(cost: US$0.9 million), which would develop a program to provide agricultural extension, transfertechnologies and promote producer organizations for small farmers.

2.7 Costs and Financing. The subproject baseline costs would total US$5.2 million, ofwhich US$3.5 million are for civil works, US$ 0.2 million for vehicles and equipment, US$1.2million for technical assistance and US$0.3 million for training. Total costs, considering physicaland price contingencies, amount to US$5.9 million, including US$0.9 million of taxes. The Bankwould finance an estimated US$5.0 million of this total cost, and the provincial Government theremaining US$0.9 million.

2.8 Benefits. More than 1,000 producers would benefit directly from the subproject, whichhas an estimated IERR above 21%, and a NPV of net benefits of US$7.4 million (at 12%discount rate, over a 20-year period).

2.9 Implementation. Subproject execution would be the responsibility of the provincialirrigation authority, the Irrigation General Department (Departamento General de Irrigaci6n,DGI), the current administrator of the irrigation system. The direct beneficiaries would reimburseabout 60 percent of investment costs through an annual quota. In addition, users would be

- 63 - Annex B

expected to pay full operation and maintenance costs through user tariffs. All civil works wouldbe carried out by private contractors following the Bank's guidelines and procedures. The appliedresearch and the extension services would be contracted out through a competitive processfollowing the Bank's guidelines for consulting services, and with strong beneficiary participationin the process.

3. Province of Mendoza: Strengthening of the Provincial Irrigation and Drainage Program(Baseline Cost-US$13.2 million)

3.1 Description. In the Province of Mendoza, all water resources are administered by theIrrigation General Department (Departamento General de Irrigaci6n, DGI), a decentralized,autonomous public entity, under the Provincial Ministry of Works and Services (Ministerio deObrasy Servicios, MOS). The Governor, with Senate approval, nominates the DGISuperintendent. Every river is administered by a DGI Water Sub-delegate. WatershedAssociations (Inspecciones de Cauce, IC), public representatives of the community of irrigationusers, are responsible for the administration of the system. ICs administer 720 of the 1,700provincial watersheds.

3.2 Each of Mendoza's five principal irrigation zones ( Mendoza River, Upper Tunuyan River,Lower Tunuyan River, Diamante River and Atuel River) has a representative in the Council ofAppeals (Consejo de Apelaciones, CA). The Administrative Tribunal, made up of the five CAsand the DGI Superintendent, sets the annual DGI budget, water users' tariff, names and removespersonnel, approves elections of the ICs, and establishes the norms and regulations for theprovincial irrigation system.

3.3 Objectives. This subproject would support the DGI through institutional strengthening,training and technical assistance. It would also provide support to the Fund for Minor Works,which would allow DGI to carry out repairs and improvement work of comparatively low unitvalue in different sections of the provincial irrigation system.

3.4 Components. Actions proposed include Institutional Strengthening (cost: US$6.8million) which would improve DGI's capacity to (a) develop short-and long- term environmentaland irrigation plans; (b) design appropriate user tariffs and rotation schedules to increase wateruse efficiency; and (c) prepare feasibility studies for future investment subprojects to be financedunder this and other projects. The subproject would also analyze the feasibility of introducingalternative cost recovery schemes, including partial or full investment cost recovery. Along withcapital cost recovery, the study would assess the possibility of gradually transferring ownership ofinfrastructure to water users groups (as is the practice in Chile for some publicly supportedirrigation systems), given the prevailing institutional and market conditions in Mendoza.

3.5 In addition, the subproject would provide financial and technical assistance to the Fundfor Minor Works (Fondo de Obras Menores, FOM) (cost: US$6.5 million), to be used forcomparatively low unit value rehabilitation and reconstruction work in different sections of theirrigation and drainage systems, other than the ones with specific subprojects (Constituci6n and

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Montecaseros). This fund would allow urgently needed rehabilitation or improvement works tobe carried out, which would help prevent higher costs and losses arising from breakdowns in thesystem.

3.6 Costs and Financing. The subproject baseline costs would total US$13.2 million, ofwhich US$6.5 million are for civil works, US$0.4 million for vehicles and equipment, US$3.5million for technical assistance and training, and the remaining US$2.8 million would be devotedto recurrent costs. Total costs, including physical and price contingencies, amount toUS$14.9 million, including US$1.9 million in taxes. The Bank would finance an estimatedUS$11.8 million of this total cost, and the provincial Government the remaining US$3.1 million.

3.7 Benefits. The estimated IERR for the subproject, based solely on the calculation ofbenefits from the Minor Works component, exceeds 20%, and the corresponding NPV of netbenefits would total US$2.7 million (calculated over a 20-year period at 12% discount rate).Avoidance of production losses due to unexpected breakages in the system, plus a better overallfunctioning of the system would be the main benefits. The work scheduled for the first two yearsof implementation would repair sections of a system that covers 90,700 ha and provides service to10,200 users.

3.8 Implementation. Subproject execution would be the responsibility of the provincialirrigation authority, the DGI, the present administrator of all irrigation systems. Cost recoverywould cover 80% of the investment costs in Minor Works, as well as 100% of 0 & M costs,through additional tariffs to be paid by the users and collected by their associations (Inspeccionesde Cauce).

4. Province of Santa Fe: Pozo Borrado Flood Control and Drainage(Baseline Cost-US$5.9 million)

4.1 Description. The subproject is located in the Northeastern region of the province. It isplaced in the 9 de Julio and Vera departments, and covers 400,000 ha west of the Golondrinasbrook, which provides natural drainage to the area. The region is characterized land of lowpermeability, which easily floods under excessive rain conditions. The main locality in the area isPozo Borrado (population: 1,700 people), situated near Highway 35, in the western edge of thesubproject area. There are 312 farms in the region. Smaller crop/dairy production unitspredominate to the west, and larger livestock production units become predominant in thelowlands eastern region.

4.2 Main Problems. Low permeability of soils and very flat terrain are the main determinantsof floods when excessive rains occur in the region. As agricultural production increased in thewestern half of the subproject area, construction of a network of canals/roads was started tominimize flood damage. Between 1991 and 1993, the average economic costs due to agricultural

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losses from floods in the region were estimated at US$110 million annually. Since 1972, theregion has been officially declared in a state of emergency eleven times because of heavy floods.

4.3 Farmners in the region are keenly aware of the importance of good flood protection worksto their livelihoods. Through their Watershed Committees (Comites de Cuencas), and usingmachinery from the provincial government, they construct flood gullies running parallel to theroads. The Watershed Comrnmittees collect tariffs and finance much flood control work in theprovince. Tariff collection is presently very effective, with a recovery rate greater than 90%.

4.4 However, much of the farmer-constructed flood protection works are poorly designed,and the effectiveness of this existing network is very low, since it has not been connected to itsnatural drain to the east. In some cases these works have created more severe flooding problemsfor farmers farther downstream, so its net overall effect is probably negative, as it only partiallyalleviates problems in the higher western region, but it worsens conditions in the eastern lowlands.The subproject would address these problems, reorienting many of the flood control works,including redirecting flood gullies, to increase their effectiveness.

4.5 Objectives. The subproject would expand and improve the existing flood protectioninfrastructure in order to: (i) reduce the impact of flooding on production, (ii) stabilize andincrease farm income; and (iii) protect natural resources. The subproject would directly benefit312 producers, in addition to stimulating the agricultural and agro-industrial economies.

4.6 Components. The subproject has the following components: (i) InfrastructureRehabilitation and Expansion (cost: US$5.6 million), which would recondition 424 km. of theexisting network of irrigation canals and drains, and construct 32 km of complementary newcanals; (ii) Environmental Impact Assessment (cost: US$0.2 million), which would monitor theimplementation to verify compliance with the environmental standards and regulations, and assesssubproject's environmental impacts to capitalize significant lessons for the design of similarsubprojects in the future; and (iii) Institutional Strengthening (cost: US$0.1 million), whichwould strengthen Watershed Committees and irrigation water user groups through training andthe establishment of a Project Unit, responsible for subproject implementation and supervision.

4.7 Costs and Financing. The subproject baseline costs would total US$5.9 million, ofwhich US$5.2 million are for civil works, US$0.1 million for vehicles and equipment,US$0.3 million for technical assistance and training, and the remaining US$0.3 million forrecurrent costs. Total costs, including physical and price contingencies, amount to US$6.9rnillion, including US$1.3 million of taxes. The Bank would finance an estimated US$5.5 millionof this total cost, and the provincial Government the remaining US$1.4 million.

4.8 Benefits and Implementation. The estimated IERR for the subproject exceeds 23%, andthe NPV of net benefits is estimated at US$2.5 million (at a 12% annual discount rate over a20-year period). Subproject execution would be responsibility of the Provincial Ministry of Public

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Works, Services and Housing (Ministerio de Obras, Servicios Putblicos y Vivienda) of the SantaFe Province. Cost recovery would cover 70% of investment costs and 100% for 0 & M costs.

5. Provinces of Catamarca, Jujuy, Salta and Tucumn: Strengthening the PhytosanitaryServices in the Northwestern Region (NOA) (Baseline Cost- US$15.8 million)

5.1 Description. The subproject is located in the Northwestern Region of Argentina (NOA),and covers the provinces of Catamarca, Jujuy, Tucuman and Salta. The NOA Region producesprincipally sugarcane, soybeans, tobacco, citrus fruits and vegetables. It covers 38.1 million ha, ofwhich 1.1 million are devoted to agriculture, including 41,000 ha planted with citrus, 12,500 haplanted with other fruit trees, and 1 0,000 ha devoted to horticulture production. The area is freeof citrus canker, but plant diseases such as fruit-fly and black spot affect regional production,especially its dynamic, export-oriented citrus sub-sector, precluding entry of its exports topremium international markets.

5.2 Main Problems. The zone has been successful in maintaining citrus canker free status.Nevertheless, the present vigilance system needs upgrading to ensure continued adequate controlof vegetable products and live plant material entering the area. In addition, international marketsare setting increasingly stringent quality and sanitary regulations. The region must take thechallenge of meeting these standards if it is to keep its current markets (second largest lemonexporter in the world), and if it wants to include premium markets among its export destinations.

5.3 Objectives. This regional subproject would ensure that the agricultural products, sub-products and derivatives from the NOA Region meet the quality and health standards required bythe domestic and international markets. In particular, the subproject would strengthen thenational and provincial programs to control and eradicate diseases and insects whose presencepreclude shipment of regional fruit to many international markets. The proposed actions woulddecrease production costs by reducing expenditure in agro-chemicals, increase production, andexpand export markets access.

5.4 Components. The subproject components would include: (i) Fruit Fly Eradication(cost: US$7.0 million), which would conduct a five-year campaign to eradicate the fruit fly andobtain international certification as a fruit fly-free zone; (ii) Citrus Canker Monitoring (cost:US$0.1 million), which would strengthen and support the ongoing citrus canker monitoringprogram and allow international certification as a disease-free zone, (iii) Toxic Residue Control(cost: US$0.6 million), which would monitor toxic residue in agricultural products, ensuring thatthe levels meet accepted national and international standards; (iv) Phytosanitary Protection (cost:US$4.1 million for sanitary barriers, and US$1.6 million for a Plague and Disease DiagnosticCenter), which would enhance plant health protection, including strengthening of phytosanitarybarriers, through investments in equipment, infrastructure and training, (v) Certification of BlackSpot and Citrus Mange Free Production (cost: US$0.1 million), which would establish aprogram to certify producers free of black spot and citric mange; and (vi) Institutional

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Strengthening (cost: US$2.4 million), which would strengthen provincial institutions throughtraining programs.

5.5 Costs and financing. The subproject baseline costs would total US$15.8 million, ofwhich US$2.0 million are for civil works, US$3.9 million for vehicles and equipment,US$1.5 million for technical assistance and training, and the remaining US$8.4 million would bedevoted to recurrent costs. Total costs, including physical and price contingencies, amount toUS$17.8 million, including US$2.7 million of taxes. The Bank would finance an estimatedUS$11.8 million of this total cost, the Beneficiaries an additional US$4.6 million, and theprovincial Government the remaining US$1.4 million.

5.6 Benefits. The subproject has an estimated internal economic return above 18% and anNPV of net benefits of US$18.7 million (over 20 years, at a 12% annual discount rate). In theshort term, the subproject would directly benefit 1,000 citrus growers and their families, and theagricultural public sector of the respective provinces. In the medium term, the subproject woulddirectly benefit 30,000 citrus growers and their families, impacting on the regional economy andreducing potentially negative environmental effects.

5.7 Implementation. Subproject execution would be under the coordination of the NationalService for Food and Agricultural Sanitation and Quality (Servicio Nacional de SanidadyCalidadAgroalimentaria, SENASA). The subproject operational costs would be fully coveredthrough producer fees charged for project services by SENASA.

6. Provinces of Corrientes, Entre Rios and Misiones: Strengthening of Animal HealthServices and Controls in Mesopotamia (Baseline Cost-US$20.9 million)

6.1 Description. The subproject is located in the Mesopotamia region in NortheasternArgentina, which includes Corrientes, Entre Rios and Misiones provinces. The region covers twornillion square kilometers, has a population of over 2.1 million people, and contains 72,600livestock producers with 8.9 million head of cattle (17% of Argentine's total beef livestock). Thearea has been free of Foot-and-Mouth Disease (FMD) for the last two years; vaccination, which isstill mandatory, is carried out systematically and with high coverage. Favorable geographiccharacteristics (surrounded by rivers) gives the region a strong comparative advantage throughvery favorable conditions for the eradication of the disease.

6.2 Main Problems. The zone has been probably the most successful Argentine region inachieving systematic, high levels of bovine immunization against FMD, as well as efficient controlof movement and entry of possible virus vehicles into the area. This has translated into a longperiod without outbreaks, and motivated producers and authorities to seek cease of vaccination,as a first step to attain international recognition as an FMD-free zone. In order to discontinuevaccination, the existing sanitary barrier and other prevention systems must be upgraded to meetinternational standards, and a monitoring and surveillance system in place.

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6.3 As a result of the significant progress made in the campaign against FMD disease,Mesopotamia has been, since 1992, an "FMD-free zone with vaccination." Once the region canbecome internationally certified as an "FMD-free zone without vaccination," meat from the regioncould gain access to higher priced FMD-free markets, including the United States, Europe, Asiaand certain MERCOSLTR markets. Annual losses associated with the presence of FMD areestimated at around US$100 million.

6.4 Objectives. This subproject would establish the necessary sanitary infrastructure andlogistic conditions for adequate monitoring and prevention in order for Mesopotamia to beinternationally recognized as an "FMD-free with vaccination", and to eventually become certifiedas an "FMD-free without vaccination" zone.

6.5 Once internationally certified, regional fresh meat could gain access to profitableFMD-free export markets, which would stimulate regional development of the livestocksub-sector by increasing agricultural returns and reducing production costs. It is estimated thatmore than 70,000 livestock growers and their families would directly benefit from this subproject.

6.6 The subproject would also address other problems affecting the productivity andprofitability of the livestock sector, such as brucellosis, tuberculosis, ticks and mange. Regionaleconomic losses due to these diseases and insects are estimated at US$50 million per year. Theproject would strengthen meat safety controls, increase the welfare of domestic consumers, andenhance export opportunities. Currently, less than half of the local slaughter plants are publiclysupervised.

6.7 Components. The proposed actions include: (i) Surveillance System (cost:US$13.6 million), which would establish a system of continuous epidemiological surveillance;(ii) Sanitary Barriers (cost: US$3.2 million), to prevent disease reentry by upgrading the currentsanitary barriers to meet established international sanitary standards; (iii) Sanitary EmergenciesSystem (cost: US$1.7 million for sanitary emergencies and US$1.7 million for laboratoryservices), to set in place an emergency health program which would respond rapidly should thedisease be detected in the zone; and (iv) Institutional Strengthening (cost: US$0.7 million), totrain public sector personnel and to conduct public education programs.

6.8 Costs and Financing. The subproject baseline costs would total US$20.9 million, ofwhich US$0.6 million are for civil works, US$2.8 million for vehicles and equipment,US$0.8 million for technical assistance and training, US$1.0 million for the creation of anindemnification fund, and the remaining US$15.7 million would be devoted to recurrent costs.Total costs, considering physical and price contingencies, amount to US$22.7 million, includingUS$1.5 million of taxes. The Bank would finance an estimated US$6.3 million of this total cost,the Beneficiaries an additional US$12.7 million, the Federal Government US$2.4 million, and theprovincial Government the remaining US$1.3 million.

6.9 Benefits. The subproject's estimated IERR is close to 35%, and it reflects only theportion of the reduction in production costs that can realistically be assigned to this stage of the

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regional FMD eradication campaign. The estimated NPV of net benefits totals US$9.3 millioncalculated over a 20-year period (at a 12% annual discount rate). The subproject would benefit72,600 producers spread over 19.7 million ha across three provinces.

6.10 Implementation. This subproject, as a component of the "National Plan for theEradication of Foot-and-Mouth Disease", would be coordinated by the National Service for Foodand Agriculture Sanitation and Quality (Servicio Nacional de Sanidady CalidadAgroalimentaria, SENASA) in collaboration with the Provincial Commissions of Animal Health(Comisiones Provinciales de SanidadAnimal-COPROSA), which are composed ofrepresentatives of provincial public and private sectors. Through COPROSA, the private sector(livestock producers and agro-industries) participates actively in decisions regarding animal healthprograms in their provinces, including the allocation of resources. Producer groups are expectedto contribute more than 60% of the total costs of this subproject, absorbing most of theoperational costs, through their actual participation and payment of service fees. The producerswould pay 1.50 pesos per head of cattle per year for the vaccine and the vaccination service. Thisfee would gradually decrease to 0.30 pesos to cover the costs of disease monitoring andsurveillance.

7. Provinces of Chubut, and Santa Cruz: Strengthening of Animal Health Services andControls in Southern Patagonia (Baseline Cost-US$ 8.8 million)

7.1 Description. The subproject is located in Southern Patagonia, and covers all of SantaCruz and Chubut provinces. This area includes 5,000 livestock producers with about 8.6 millionhead of sheep and 150,000 head of beef cattle. In Patagonia, a region covering 780,000 squarekilometers, sheep raising for the production of wool is the most important agricultural and thirdmost important economic activity. Unlike the other two important regional economic activities,fisheries and petrochemical, wool production generates net revenues which are reinvested in thelocal economy. The provinces of Chubut and Santa Cruz, with 39% of the national sheep herd,contribute 40% of national wool production. All wool is exported from the region, and half of itis exported to international markets. National wool exports represent around US$190 millionannually.

7.2 Main Problems. The area is free from Foot-and-Mouth Disease (FMD), but it is notinternationally recognized as such due to the lax prevention system presently in place.Environmental conditions are very harsh in the region, which is semi-desertic and has a lowlivestock carrying capacity. Although barely self-sufficient in beef, the area could benefit frombeef and lamb exports at higher prices if it were recognized as FMD-free. Wool production hasdeclined lately as wool prices have fallen in recent years. This has led to a decrease inprofitability, followed by cutbacks in animal health expenditures, increased sanitary problems andlower productivity. This in turn has given way to problems of large animal stocks, overgrazing,and declining natural resource productivity, which contribute to diminishing rates of return.

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7.3 Sheep mange is another extremely important sanitary problem in the region, producingannual losses estimated at US$5 million. The lack of adequate sanitary barriers precludesinternational recognition of the FMD-free status. This in turn dampens interest in the productionand export of sheep and lamb meat, which reports an additional estimated US$10 million per yearto the local economy. The area is also characterized by the high prevalence of zoonotic diseases,due to the high incidence of clandestine slaughter, and the little attention paid to these diseases atfarm level.

7.4 Because of the ecological constraints already mentioned, particularly desert encroachment,increased sheep production would have to be based upon improved productivity rather thansignificant increases in herd size. Increased productivity would require improved animal diet,genetics and veterinary management, health and business management. While the individualfarmer has much control over many of these factors, improvement in animal health and healthcontrols requires public sector involvement. Prevailing animal diseases represent regionaleconomic costs due to losses in productivity and product quality as well as those associated withpreventive measures. While, there are "FMD-free without vaccination" zones within the region,these lack the international certification permitting entry into higher-priced foreign fresh meatmarkets.

7.5 The National Service for Food and Agriculture Sanitation and Quality (Servicio Nacionalde Sanidady CalidadAgroalimentaria, SENASA), through its Office of Health Campaigns(Gerencia de Luchas Sanitarias), is responsible for national and inter-provincial animal health andmeat quality control. SENASA works through the Provincial Commissions of Animal Health(Comisiones Provinciales de Sanidad Animal, COPROSA), which are composed of provincialauthorities and interested private sector participants. Through the COPROSA, livestockproducers participate actively in provincial decisions regarding animal health programs.COPROSA analyzes, proposes and allocates resources for provincial animal health programs.Nevertheless, lack of continuity and limited resources, due in part to a diversion of funds andpersonnel resources to the FDM campaign, have debilitated the provincial sheep health protectionprogram. The provincial inspection programs of farms, processing plants, abattoirs and animaltransportation are extremely limited and ineffective. In this respect, the relevant institutions wouldneed to be strengthened to provide adequate services during and after project implementation.

7.6 Animal health campaigns require private and public sector cooperation, with the livestockproducers playing an essential role in its implementation. As part of the national FMD program,producer foundations were created to solidify farm level participation, particularly regardingvaccinations. As this organization has proven to be highly effective, it would be replicated in theproposed project. The proposed subproject would promote and strengthen farmer associations inorder to decentralize the health campaign and ensure its sustainability.

7.7 Objectives. The subproject would reduce the economic damage from, and the risk ofspread of, the main animal diseases in the region; improve the quality of wool produced;guarantee the legal origin and suitability of meat products available for consumption by theregional population; and by reducing economic damage would directly benefit 5,000 livestock

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producers by increasing their net incomes. Expected benefits include: (i) increased sheep andcattle productivity; (ii) lower producer costs due to the reduction of disease medications andprecautions; (iii) increased export returns from greater volumes and better quality wool exports,as well as better long term returns from larger sheepmeat exports to higher priced FMD-freemarkets; and (iv) improved consumer protection.

7.8 Components. The subproject actions would cover: (i) Sanitary Campaign (cost: US$6.9million), which would carry out an effective animal health campaign in the region to eliminatemajor sheep and cattle diseases, maintain the region's status as FMD-free without vaccination,and satisfy the requirements to obtain international certification of this status; (ii) Meat Inspection(cost: US$1.5 rnillion), which would provide effective inspection and control of farms, transportfacilities and abattoirs to fulfill the provincial responsibilities as contained in the National MeatLaws, and would ensure acceptable meat production quality controls for consumers; and (iii)Institutional Strengthening (cost: US$0.4 million),which would finance programs to train staff,improve inter-institutional coordination and promote private sector participation, especiallyfarmer associations.

7.9 Costs and Financing. The subproject baseline costs would total US$8.8 million, ofwhich US$0.4 million are for civil works, US$0.5 million for vehicles and equipment,US$1.4 million for technical assistance and training, and the remaining US$6.5 million would bedevoted to recurrent costs. Total costs, considering physical and price contingencies, amount toUS$9.6 million, including US$0.5 million of taxes. The Bank would finance an estimatedUS$6.1 million of this total cost, and the provincial Government the remaining US$3.5 million.

7.10 Benefits and Implementation. The subproject has an estimated IERR of almost 34%,reflecting the reduction in production costs, and the increase in volume and value of wool andsheepmeat production. The NPV of net benefits would total US$9.5 million over a 20-yearperiod (at 12% annual discount rate). Subproject execution would be done under the overallcoordination of SENASA, in collaboration with the COPROSAs.

II. INVESTMENT SUBPROJECTS TO BE FINANCED BY IDB

The four investment subprojects intended to be financed by the Inter-American DevelopmentBank (IDB), three provincial irrigation/drainage subprojects, and one national (agriculturalinformation system) are discussed below.

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8 Province of Rio Negro: Infrastructure Rehabilitation and Development in the Upper RioNegro Valley (Baseline Cost-US$48.6 million)

8.1 Description. The subproject is located in the Northern area of the province. It is placedin the General Roca department, and it includes all the irrigated area of the upper Rio Negrovalley, comprising 5,757 farms (80% under 15 ha) covering 69,525 ha, with 60% underproduction (41,656 ha), and 85% (58,882 ha) with water rights. The valley is 120 km long, and itis home to half of Rio Negro's population. Apples and pears are the main production items, andhorticultural products a distant third.

8.2 Main Problems. Presently, the area shows lack of adequate production technology. Theirrigation and drainage systems are characterized by inadequate maintenance, leading to largewater losses and high water table levels in many areas. This in turn translates into lowproductivity, low quality of produce and low income, which determine the prevalence of lowtechnology production systems.

8.3 Objectives. The main subproject objective is to provide the conditions to start theprocess leading to a competitive and sustainable fruit production system in the longer run. Thesubproject would rehabilitate the existing irrigation and drainage system, improve its performancethrough better operation and maintenance, and facilitate its transfer to users associations in thefuture. Additionally, it would set in motion the process of generation and transfer of newproduction technology, and improve soil and water management and conservation throughout thesystem, as a preparatory step to reconvert production in the valley.

8.4 Components. The subproject would have three components: (i) Generation andTransfer of Technology (cost: US$2.8 million), which would provide users with new production,soil and water management, and conservation technology; (ii) Improvement of Irrigation andDrainage Systems (cost: US$21.9 million), which would rehabilitate 11.5 km of existingdrainage, construct 11.5 km of new drains, line 30.7 km of main canal, construct four newsecondary irrigation canals, and construction 10 km of canals to control flash floods; and(iii) Instittional Strengthening (cost: US$5.9 million), to support better subprojectmanagement.

8.5 Costs and Financing. The subproject baseline costs would total US$48.6 million, ofwhich US$26.3 million are for civil works, US$3.8 million for vehicles and equipment,US$5.6 million for technical assistance and training, and the remaining US$12.9 million would bedevoted to recurrent costs. Total costs, considering physical and price contingencies, amount toUS$55.5 million, including US$7.8 million of taxes. The IDB would finance an estimatedUS$39.5 million of this total cost, and the provincial Government the remaining US$16.0 million.

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8.6 Benefits and Implementation. The subproject has an estimated IERR of almost 25%,reflecting the combined effects of reducing the level of the water table, and the promotion of new,low-investment irrigation, crop management and marketing organization technologies. The NPVof net benefits would total US$47.4 million (over a 20-year period, at a 12% annual discountrate).

8.7 Implementation. Subproject execution would be the responsibility of a foundationcomprised of the Provincial Water Department (Departamento Provincial de Aguas, DPA), and aRegional Forum comprising the Undersecretary of Fruit Culture of the Province, INTA and theBeneficiaries.

9. Province ofNeuquen: Irrigation Rehabilitation in Colonia Centenario(Baseline Cost- US$7.6 million)

Location - Description

9.1 Description. The subproject is located in the East Central area of the province. It isplaced in the right margin of the lower Neuquen river, 10 km away from its junction with theLimay river, and downstream from the Planicie Banderita - Cerros Colorados hydroelectric dam.Colonia Centenario comprises 365 farms that cover approximately 3,500 ha of irrigated land.Apples, pears and peaches are the main production items.

9.2 Main Problems. The area is adjacent to the Alto Valle subproject, and shares most of itsproblems. There is a lack of adequate production technology. Maintenance of the irrigation anddrainage systems is insufficient, leading to large water losses and high water table levels in manyareas. This problem is aggravated here, because the operation of the upstream hydroelectric damhas modified the flow regime, and raised the water level in the river. Excess moisture hasdetermined low productivity, low quality of produce and low income, which perpetuate theprevalence of low technology production systems.

9.3 Objectives. As in Rio Negro, the main subproject objective is to prepare the area so thatsustainable fruit production systems can be set in place in the longer run. The subproject wouldrehabilitate the existing irrigation and drainage systems, improve their performance through betteroperation and maintenance, and facilitate their transfer to the users. Additionally, it would set inmotion the process of generation and transfer of new production technology.

9.4 Components. The subproject would have three components: (i) Generation andTransfer of Technology (cost: US$2.2 million), which would provide users with new production,soil and water management, and conservation technology; (ii) Improvement of Irrigation andDrainage Systems (cost: US$4.5 million), which would rehabilitate 13.4 km of main canal, andrehabilitate and deepen the existing drainage network; and (iii) Institutional Strengthening (cost:US$0.9 million), to support subproject management.

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9.5 Costs and Financing. The subproject baseline costs would total US$7.6 million, ofwhich US$4.8 million are for civil works, US$0.2 million for vehicles and equipment,US$1.2 million for technical assistance and training, and the remaining US$1.4 million would bedestined for recurrent costs. Total costs, including physical and price contingencies, amount toUS$8.8 million, including US$ 1.4 million of taxes. The IDB would finance an estimatedUS$6.4 million of this total cost, and the provincial Government the remaining US$2.4 million.

9.6 Benefits. The subproject has an estimated IERR of 15%, reflecting the combined effectof the high water table abatement, and the promotion of new, low investment irrigation, cropmanagement and marketing organization technologies. The NPV of net benefits would totalUS$1.3 million (over a 20-year period and at 12 % annual discount rate).

9.7 Implementation. Subproject execution would be the responsibility of the Ministry ofProduction and Tourism of Neuquen.

10. Province of Mendoza: Drainage and Irigation Program in Constitucion(Baseline Cost- US$7. 6 million)

10.1 Description. The subproject is located in the Northeastern area of the province. It isplaced at the Constituci6n basin, in the lower section of the Tunuyan river causeway, and serves1,383 farms covering 10,649 ha. This is a highly urbanized area, with a well-developed roadwaysystem, encompassing the cities of Junin (population: 28,500 people), and Rivadavia (population:47,000 people), which account for 12% of total provincial population.

10.2 The net area occupied by farms larger than 1 ha in size is 9,389 ha, 83% (7,832 ha) ofwhich is under production, 16% (1,469 ha) is abandoned due to low productivity (including339 ha due to high water table problems), and 1% (88 ha) is set aside. Most of the irrigated area(79%, 6,187 ha) is covered with wine vineyards, while the rest is devoted mainly to fruitproduction (20%, 1,566 ha), and some horticulture (2%, 157 ha). The majority of grapesproduced now (92%, 5,692 ha ) is a common table wine grape of lesser quality and low yield.

10.3 The basin is served by the Constituci6n canal, which runs 15 km long, 5% of which(0.75 km) is lined. This main canal feeds three secondary canals: Moyano (8.5 km long, unlined),Nuevo Retamo (12.9 km long, unlined), and Viejo Retamo (13.7 km long, 20% lined). The poorgeneral infrastructure maintenance levels in some areas has resulted in infiltration problems, whichcoupled with the excessive irrigation volumes used by farmers have resulted in drainage problems.This in turn has led to high water table and soil salinity levels, reduced yields, larger dependencyon water pumping from deep wells and higher costs of production.

10.4 Main Problems. As in the case of the Montecaseros subproject, the main problemsinclude: (i) high water losses due to limited lining of main and secondary canals (5% and 8% inthis case), light textured soils, and type of water supplied (free of sediments that may naturally linethe canals); (ii) an inadequate water distribution system that supplies large volumes of water inshort periods of time; (iii) lack of knowledge about crop patterns and real water needs by system

- 75 - Annex B

managers, resulting in poor programming of water distribution; (iv) inadequate systemmaintenance (both at the system and the farm level); and (v) high water table levels in areasadjacent to the canal, resulting in damages to crops, roads and buildings.

10.5 Objectives. The main subproject objectives are to improve overall management andincrease the efficiency of the system through rehabilitation of the main system canal, lining of theViejo Retamo secondary canal, improvement of the drainage system, and users training in betterirrigation and system management techniques. All this would lead to an average 51% increase innet financial income for the 1383 beneficiaries (small, medium and large producers).

10.6 Components. The subproject would have five components: (i) Improvement ofImgation Systems (cost: US$4.6 million), which would line 11.5 km of Viejo Retamo canal,improve 2.4 km of Constituci6n canal, install flood control gates at the junctions of theConstituci6n canal and the three secondary canals it feeds, install 70 gauges to regulate flow intothe tertiary system, and install 1600 water intakes to regulate flow to 100 I/s at farm level; (ii)Improvement of Drainage Systems (cost: US$1.4 million), which would rehabilitate 11.5 km ofthe existing drainage network, and construct 1 1.5 km of new drains; (iii) Agricultural Research(cost: US$0.4 million) which would develop an agricultural research program (supportagricultural research conducted through INTA to increase agricultural productivity, especially forfruit crops; and (iv) Agricultural Extension (cost: US$0.8 million), which would develop anagricultural extension program (support agricultural extension, transfer technologies and promoteproducer organizations for small farmers); and (v) Water Management Training (cost: US$0.3million) which would train users to better manage water resources and maintain canals.

10.7 Costs and Financing. The subproject baseline costs would total US$7.5 million, ofwhich US$6.0 million are for civil works, US$1.4 million for technical assistance and training, andthe remaining US$0. 1 million would be destined for recurrent costs. Total costs, consideringphysical and price contingencies, amount to US$ 8.7 million, including US$1.4 million of taxes.The IDB would finance an estimated US$7.2 million of this total cost, and the provincialGovernment the remaining US$1.5 million.

10.8 Benefits. Over 1,380 producers would benefit directly from the subproject, which has anestimated IERR of 19%, and a NPV of net benefits of US$7.6 million (over a 20-year period at12% annual discount rate).

10.9 Implementation. Subproject execution would be the sole responsibility of the provincialirrigation authority, the Irrigation General Department (Departamento General de Irrigacion,DGI), the current administrator of the irrigation system. The direct beneficiaries would reimburseabout 60 percent of investment costs through an annual quota. In addition, users would beexpected to pay full operation and maintenance costs through user tariffs.

- 76 - Annex B

11. Argentina: National Agricultural Information System(Baseline Cost-US$21.8 million)

11.1 Description. This is the only nationwide subproject in the first group of subprojectscovered by the Project. It is an information system subproject designed to improve the availabilityof agriculture related information. The information component would cover the creation of aninformation network, a survey system, an agro-meteorological system, a remote sensing system,and a geographical information system.

11.2 Main Problems. At present, SAGPyA branches work independently and withoutcoordination, generating inefficiencies and shortcomings in the generation of basic agriculturaldata. This in turn affects the Secretary's ability to design, monitor and evaluate sector policies, aswell as the decision making process, and the provision of free, uniform public access toagricultural sector information. Moreover, this is not fully integrated with the national systemcoordinated by the National Statistics Institute (Instituto Nacional de Estadistica y Censos-INDEC)

11.3 Objectives. The main objective is to set in place a national information system thatimproves availability and access to agricultural data, which will strengthen the programming anddecision making processes in the sector.

11.4 Components. The information subproject would include four components: (i) FederalInformation Network (cost: US$15.1 million), composed of a central node and 23 provincialunits; it would provide the framework for data capturing, processing and sharing on a nationwidebasis; (ii) National Agricultural Survey System (cost: US$2.7 million), which would set up asystem in charge of an in depth reformulation of the present National Agricultural Survey;(iii) National Agro-meteorological Network (cost: US$ 1.1 million) which would provide thebasis for agricultural production forecasts; and (iv) Remote Sensing and GeographicalInformation System (cost: US$2.9 million), designed to centralize, integrate, and facilitate accessto geographical data.

11.5 Costs and Financing. The subproject baseline costs would total US$21.8 million, ofwhich US$0.3 million are for civil works, US$6.9 million for vehicles and equipment,US$4.9 million for technical assistance and training, and the remaining US$9.7 million would bedestined for recurrent costs. Total costs, considering physical and price contingencies, amount toUS$24.1 million, including US$2.4 million of taxes. The IDB would finance an estimatedUS$14.1 million of this total cost, the Federal Government and additional US$2.4 million, and theprovincial Government the remaining US$7.6 million.

- 77 - Annex B

11.6 Benefits. The subproject design follows a modular approach that targets maximum costefficiency, while assuring maximum compatibility and versatility to meet differing provincialneeds. Project benefits would derive from better availability of agricultural data to assist publicsector decision makers in their policy making endeavors, and from better access to data forprivate sector agents, to assist them in their management and investment decision processes.However, economic benefits were not quantified for this subproject.

- 78 -

Annex C

SUMMARYPROJECT COST AND FINANCING TABLES

Provincial Agricultural Developmentproeat Cost Smry

* 1 Total('000 Pesos) ('000 US$) Foreign Base

Local Foreign Total Local Foreign Total Exchange Costs

A. Iwo1. Dzoinia

a. *mu no- rIsCorfo 10,002.0 3,435.8 13,431.8 10,002.0 3,435.8 13,431.8 26 4

b. MndoaMontecaseros 4,573.5 580.9 5,154.4 4,573.5 580.9 5,154.4 11 2Rest of Progranmme 10,004.2 3,240.2 13,244.4 10,004.2 3,240.2 13,244.4 24 4

Subtotal Mendoza 14,577.7 3,821.1 18,398.8 14,577.7 3,821.1 18,398.8 21 6c. Santa Ir

Pozo Borrado 5,174.0 711.1 5,885.1 5,174.0 711.1 5,885.1 12 2Subtotal Pzovincial 29,753.6 7,968.0 37,721.7 29,753.6 7,968.0 37,721.7 21 122. Regional

Sefinoa 11,709.1 4,093.3 15,802.3 11,709.1 4,093.3 15,802.3 26 5Mesopotamia - An. Health 18,266.1 2,630.1 20,896.2 18,266.1 2,630.1 20,896.2 13 7Southern Patagonia - An. Health 8,160.1 643.6 8,803.6 8,160.1 643.6 8,803.6 7 3

Subtotal Rogional 38,135.2 7,367,0 45,502.2 38,135.2 7,367.0 45,502.2 16 153. Othar

a. Other Projects 51,880.5 11,113.2 62,993.7 51,880.5 11,113.2 62,993.7 18 20Subtotal IS8D 119,769.3 26,448.2 146,217.5 119,769.3 26,448.2 146,217.5 18 47a. SDD

.. FrovinaIla. Mendoza

Constitucion 6,839.9 708.7 7,548.7 6,839.9 708.7 7,548.7 9 2b. Rio Negro 41,695.6 6,905.1 48,600.8 41,695.6 6,905.1 48,600.8 14 16c. Neuquen 6,123.7 1,458.9 7,582.6 6,123.7 1,458.9 7,582.6 19 2

Subtotal Provinaaal 54,659.2 9,072.7 63,732.0 54,659.2 9,072.7 63,732.0 14 212. National

Int. Agric. Info System 14,879.8 6,926.9 21,806.7 14,879.8 6,926.9 21,806.7 32 7S. Other

a. Other Projects 43,185.3 9,254.0 53,039.3 43,785.3 9,254.0 53,039.3 17 174. Mi±allo

PPF Recovering - 1,500.0 1,500.0 - 1,500.0 1,500.0 100 -Inspection and Monitoring - 1,250.0 1,250.0 - 1,250.0 1,250.0 100 -

Subtotal Miaoollanaous - 2,750.0 2,750.0 - 2,750.0 2,750.0 100 1Subtotal SDB 113,324.3 28,003.7 141,328.0 113,324.3 28,003.7 141,328.0 20 46C. S1RD/SXDB

2. Nationala. Institutional Strengthening 6,795.4 667.1 7,462.5 6,795.4 667.1 7,462.5 9 2b. Provincial Executing Units 5,273.9 218.3 5,492.2 5,273.9 218.3 5,492.2 4 2c. Central Coordinating Unit 9,407.5 159.7 9,567.2 9,407.5 159.7 9,567.2 2 3

Subtotal USZD/XDB 21,416.8 1,045.0 22,521.8 21,476.8 1,045.0 22,521.8 5 7Total ASELINZ COSTS 254,570.4 55,496.9 310,067.3 254,570.4 55,496.9 310,067.3 18 100

Physical Contingencies 16,218.4 4,348.7 20,561.0 16,218.4 4,348.7 20,567.0 21 7Price Contingencies 23,015.8 3,516.2 26,531.9 23,015.8 3,516.2 26,531.9 13 9

Total PROJDCS COSTS 293,804.6 63,361.7 357,166.3 293,804.6 63,361.7 357,166.3 18 115

Mon Jul 08 11:10:51 1996

12-1 Project Coit Summary

ArgentinaProvincial Agricultural Development

Proourmsmat Azrangeints('000 US$)

Procurement Method

International LocalCompetitive Competitive Local Direct

Bidding Bidding ShoPping Contracting N.B.F. Total

A. Civil WorksUnder USS 0:35 - - 8,238.9 - 15,182.5 23,421.4

USS 0:35-5:0 - 22,944.4 - - 35,335.3 58,279.7

Over US$ 5:0 17,061.7 - - - 19,886.0 36,947.7

B. GoodsUnder US5 0:1 - - 14,724.4 - 25,272.7 39,997.1

USS 0:10-0:35 - 14,542.4 - - 1,533.8 16,076.2

Over US5 0:35 7,596.0 - - - 8,851.8 16,447.8

C. Consulting Sezvic-s1. Gral Individual

Under US5 30K - - - 6,804.0 27,955.0 34,759.0

Over US5 30K - - - 27,085.3 5,728.0 32,813.4

2. Ora PixmsUnder US$ 100K - - - 470.3 415.8 886.1 1

Over US5 100K - - - 18,667.5 3,240.0 21,907.5 OD

D. Recurrent Personal Services - - - 23,970.1 13,315.5 37,285.6

E. Training Services - - - 5,121.8 6,407.0 11,528.8

P. UiaosllB sois Sarvine1. Insurance - - - 1,799.1 1,391.1 3,190.2

2. Utilities - - - 2,099.5 1,131.8 3,231.3

3. Other (printing, maintenance, storage, etc.) - - - 13,937.9 3,706.6 17,644.5

4. Financial - - - - 2,750.0 2,750.0

Total 24,657.7 37,486.8 22,963.3 99,955.5 172,103.0 357,166.3

Mon Jul 08 11:10:42 1996

3-1 Expenditure Accounts Breakdown

ArgentinaProvincial Agricultural Development

rteomemt £ooeata by Tuare('000 US$)

Totals Including Contingencies1997 1998 1999 2000 2001 2002 2003 Total

A. Civil WskaUnder US5 0:35 7,680.3 3,209.5 2,866.6 3,177.5 3,222.0 1,612.6 1,652.9 23,421.4US5 0:35-5:0 17,576.9 8,205.8 7,057.5 7,068.0 7,465.8 5,385.5 5,520.2 58,279.7Over US$ 5:0 3,977.0 4,079.2 4,181.3 5,951.4 6,099.2 6,251.7 6,408.0 36,947.7

Subtotal CiviL ibaks 29,234.2 15,494.5 14,105.3 16,197.0 16,787.0 13,249.6 13,561.0 118,648.8S. Goode

Under US5 0:1 10,755.3 7,632.4 5,631.6 5,868.2 6,009.6 2,047.4 2,052.6 39,997.1U5$ 0:10-0:35 4,958.1 1,071.9 574.2 2,548.3 2,584.7 2,142.7 2,196.3 16,076.2Over US$ 0:35 3,805.3 3,314.6 1,325.8 2,623.7 2,686.5 1,329.3 1,362.5 16,447.8

Subtotal goods 19,518.8 12,018.9 7,531.6 11,040.2 11,280.8 5,519.4 5,611.4 72,521.1C. ComaulUe 3OVtoe

1. Xal Zadv aUnder USS 30K 4,817.4 6,337.1 4,271.1 6,033.4 5,494.5 3,825.0 3,920.6 34,759.0Over US$ 30K 4,242.8 3,742.1 3,045.3 6,222.6 6,319.7 4,563.4 4,677.5 32,813.4

subtotal gzal ZoLiV1A-l 9,120.2 10,079.2 7,316.4 12,256.0 11,814.2 8,388.4 8,598.1 67,572.42. arl vix

Under US5 IOOK 416.4 91.8 3.6 92.0 93.9 93.1 95.4 886.1Over US$ 100K 3,467.8 2,380.7 2,340.9 4,099.2 3,759.2 2,950.1 2,909.7 21,907.5

Subtotal Ozaa tim 3,884.2 2,472.5 2,344.5 4,191.1 3,853.1 3,043.2 3,005.1 22,793.7Subtotal cosueltUg Seioea 13,004.3 12,551.7 9,660.8 16,447.2 15,667.3 11,431.6 11,603.2 90,366.0D. Recurrent Personal Services 6,999.9 7,379.3 7,619.2 7,738.1 7,549.0 - - 37,285.6E. Training Services 1,813.0 1,734.9 940.8 2,030.6 1,995.0 1,488.6 1,525.8 11,528.8r. biaoellainous sezviaea

1. Insurance 379.4 437.2 457.8 634.0 644.7 343.5 293.6 3,190.22. Utilities 410.3 425.8 439.4 644.6 655.3 323.9 332.0 3,231.33. Other (printing, maintenance, storage, etc.) 1,274.8 1,406.6 1,451.9 3,828.4 3,897.4 2,882.8 2,902.6 17,644.54. Financial 1,750.0 250.0 250.0 250.0 250.0 - - 2,750.0

Total 74,384.8 51,699.0 42,456.8 58,810.0 58,726.5 35,239.6 35,849.6 357,166.3

Mon Jul 08 11:10:43 1996

5-1 Expenditure Accounts Breakdown

ArgentinaProvincial Agricultural DevelopmentDisbur_mint Accounts by linanciezs

('000 USS$)

Federal Provincial Local

Government Government Beneficiaries IBRD IDB Total For. (Excl.Amount t Amount 9 Amount 9 Amount 9 Amount * Amount 9 Exch. Taxes)

A. DisbursamntS Accounts rinanoed by IBUD

1. Civil WorksBuildings & Labs - - 1,323.2 20.9 - - 5,006.7 79.1 - - 6,329.8 1.8 588.6 4,418.1

Irr. Drainage/ Flood Prot. - - 8,918.8 20.9 - - 33,712.3 79.1 - - 42,631.1 11.9 3,957.6 29,770.2

Subtotal Civil works - 10,241.9 20.9 - - 38,719.0 79.1 - - 48,960.9 13.7 4,546.2 34,188.32. Vehicles 345.9 6.4 703.5 13.0 - - 4,359.6 80.6 - - 5,409.0 1.5 3,728.9 708.93. Equipment 59.5 0.5 2,498.4 20.1 - - 9,885.9 79.4 - - 12,443.8 3.5 9,514.7 1,240.54. Consulting Services - - - - - - 44,493.3 100.0 - - 44,493.3 12.5 8,071.6 36,421.7

5. Training Services - - - - - - 5,387.8 100.0 5 - 5,387.8 1.5 1,413.2 3,974.7

6. Other Investment Costs - - 1,036.0 100.0 - - - - - - 1,036.0 0.3 - 1,036.0

7. Recurrent Costs 2,001.9 3.0 25,936.8 38.5 17,225.8 25.6 22,168.0 32.9 - - 67,332.4 18.9 2,877.6 57,679.6Subtotal Disburs _ ts Accounts Vrimamo. by 1BRD 2,407.2 1.3 40,416.6 21.8 17,225.8 9.3 125,013.7 67.6 - - 185,063.3 51.8 30,152.2 135,249.6

B. Disoursmnts Accounts rimamoed by IDB

1. Civil WorksBuildings 79.6 1.7 892.5 19.2 - - - - 3,676.5 79.1 4,648.6 1.3 437.1 3,243.1

Irr. Drainage/ Flood Prot. - - 14,125.2 20.9 - 53,504.2 79.1 67,629.4 18.9 6,371.2 47,203.0

Subtotal Civil Works 79.6 0.1 15,017.6 20.8 - - - - 57,180.7 79.1 72,278.0 20.2 6,808.3 50,446.12. Vehicles 85.2 3.4 366.3 14.4 - - - - 2,090.4 82.2 2,541.9 0.7 1,991.1 174.13. Equipment 1,473.7 7.9 2,364.1 12.6 - - - - 14,915.5 79.5 18,753.3 5.3 15,848.3 922.14. Consulting Services - - 378.2 1.2 - - - - 31,716.7 98.8 32,094.9 9.0 2,246.2 29,848.75. Long Term Tech Asst - - 5,134.9 66.2 - - - - 2,622.7 33.8 7,757.5 2.2 - 7,757.5

6. Training Services - - - - - - - - 6,673.1 100.0 6,673.1 1.9 1,271.4 5,401.77. Recurrent Costs 1,881.1 5.9 20,311.8 63.5 - _ _ 9,811.3 30.7 32,004.2 9.0 5,044.2 22,509.8

Subtotal Disbur-smnts Accounts Vriom-ed by IDS 3,519.7 2.0 43,572.9 25.3 _ _ - 125,010.4 72.6 172,103.0 48.2 33,209.6 117,060.2 Oo

Total 5,926.9 1.7 83,989.5 23.5 17,225.8 4.8 125,013.7 35.0 125,010.4 35.0 357,166.3 100.0 63,361.7 252,309.9 -

Mon Jul 08 11:10:44 1996

6-1 Disbursement Accounts by Financiers

ArgentinaProvincial Agricultural Development

Cconents by rinai re('000 US$)

Federal Provincial LocalGovernment Government Beneficiaries IBRD IDB Total For. (Excl. Duties

Amount * Amount 8 Amount * Amount 8 Amount 1 Amount 1 Exch. Taxes) & Taxes

A. IBRD1. lrovincial

a. Buenos AiresCorfo - - 3,496.6 23.2 - 11,562.7 76.8 - - 15,059.3 4.2 3,718.2 9,660.6 1,680.3b. ndozaMontecaseros _ _ 939. 5 15.9 _ _ 4,984.4 84.1 - 5 5,923.8 1.7 659.4 4,371.5 893.0Rest of Programme _ - 3,135.0 21.0 - - 11,779.7 79.0 - - 14,914.7 4.2 3,476.8 9,497.3 1,938.7

Subtotal Mmndoza 4 4,074 .5 19.6 - - 16,764.0 80.4 _ - 20,838.5 5.8 4,138.1 13,868.7 2,831.6a. Santa le

Pozo Borrado - - 1,401.5 20.2 - - 5,543.0 79.8 - - 6,944.4 1.9 813.0 4,791.5 1,339.9Subtotal Provincial - - 8,972.6 20.9 - - 33,869. 7 79.1 - - 42,842.3 12.0 8,669.3 28,321.1 5,851.82. Regional

Sefinoa a - 1,441.4 8.1 4,573.3 25.7 11,779.1 66.2 - - 17,793.8 5.0 4,641.3 10,478.9 2,673.6Mesopotamia - An. Health 2,407.2 10.6 1,343.9 5.9 12,652.5 55.7 6,331.5 27.8 - - 22,735.2 6.4 2,911.7 18,333.6 1,489.9Southern Patagonia - An. Health - - 3,421.3 35.8 _ - 6,132.9 64.2 - - 9,554.2 2.7 713.7 8,324.1 516.4

Subtotal egional 2,407.2 4.8 6,206.7 12.4 17,225.8 34 .4 24,243.5 48.4 _ - 50,083.2 14.0 8,266.8 37,136.6 4,679.83. Other

a. Other Projects - - 22,762.7 30.2 - - 52,686.9 69.8 - _ 75,449.6 21.1 13,216.1 53,103.6 9,129.9Subtotal IJRD 2,407.2 1.4 37,942.0 22.5 17,225.8 10.2 110,800.0 65.8 - - 168,375.1 47.1 30,152.2 118,561.4 19,661.5B. IDB

1. Provinciala. Mendoza

Constitucion - - 1,504.0 17.3 - - - - 7,176.2 82.7 8,680.2 2.4 807.5 6,424.9 1,447.7b. Rio Negro - - 15,933.3 28.7 - - - - 39,551.8 71.3 55,485.1 15.5 7,804.6 39,894.1 7,786.5 C5c. Neuquen 2 - 2,384.8 27.2 2 - - - 6,382.0 72.8 8,766.8 2.5 1,603.8 5,823.9 1,339.1 A

Subtotal Provincial - - 19,822.0 27.2 - - - - 53,110.0 72.8 72,932.0 20.4 10,215.9 52,142.9 10,573.32. National

Int. Agric. Info System 2,421.0 10.0 7,642.5 31.7 - - - - 14,064.8 58.3 24,128.4 6.8 7,764.9 14,011.6 2,351.93. Other

a. Other Projects - - 15,153.3 23.4 - - - - 49,575.7 76.6 64,728.9 18.1 11,338.8 45,132.3 8,257.84. Miscellaneous

PPF Recovering - - - - - - - - 1,500.0 100.0 1,500.0 0.4 1,500.0 -Inspection and Monitoring - - _ - _ - - - 1,250.0 100.0 1,250.0 0.3 1,250.0

Subtotal Miscellaneous - - - - - - - - 2,750.0 100.0 2, 750.0 0.8 2, 750.0 - _Subtotal IDB 2,421.0 1.5 42,617.8 25.9 _ _ _ - 119, 500.5 72.6 164, 539.3 46.1 32,069.6 111,286.8 21,182.9C. IBRD/IDB

2. Nationala. Institutional Strengthening - - 2,023.6 25.5 - - 1,543.4 19.5 4,357.9 55.0 7,925.0 2.2 723.1 6,966.4 235.5b. Provincial Executing Units - - 1,406.1 24.1 - - 3,908.1 66.9 530.8 9.1 5,845.0 1.6 238.0 5,538.2 68.8c. Central Coordinating Unit 1,098.7 10.5 - - - - 8,762.1 83.6 621.2 5.9 10,482.0 2.9 179.0 9,957. 1 345.9

Subtotal National 1,098.7 4.5 3,429.7 14.1 - - 14,213.7 58.6 5,509.9 22.7 24,252.0 6.8 1,140.0 22,461.7 650.2Total Diabursment 5,926.9 1.7 83,989.5 23.5 17,225.8 4.8 125,013.7 35.0 125,010.4 35.0 357,166.3 100.0 63,361.7 252,309.9 41,494.7

Mon Jul 08 11:10:45 1996

7-1 Components by Financiers

ArgentinaProvincial Agricultural DevelopmentSapenditure Accouunts by Finaciers

('000 US$)

Federal Provincial LocalGovernment Government Beneficiaries IBRD IDB Total For. (Excl. Duties

Amount i Amount i Amount I Amount i Amount t Amount i Exch. Taxes) & Taxes

I. Invest_nt CostsA. Civil Works

Irrigation/Drainage - - 21,680.3 21.0 - - 28,659.7 27.7 52,954.0 51.3 103,294.0 28.9 9,599.7 72,022.3 21,672.1Flood Control _ - 1,289.2 21.0 - _ 4,849.9 79.0 - - 6,139.1 1.7 568.5 4,281.4 1,289.2Buildings and Labs 79.6 0.7 2,212.5 20.3 - - 4,977.7 45.6 3,646.6 33.4 10,916.4 3.1 1,039.3 7,591.5 2,285.7Project design a supervision - - 459.2 10.2 - - 742.8 16.5 3,296.0 73.3 4,498.0 1.3 836.6 3,661.3 -

Subtotal Civil Works 79.6 0.1 25,641.2 20.5 - - 39,230.0 31.4 59,896.7 48.0 124,847.5 35.0 12,044.1 87,556.4 25,247.0B. Vehicles 431.1 5.4 1,086.3 13.5 - - 4,436.7 55.2 2,090.4 26.0 8,044.6 2.3 5,838.8 904.1 1,301.7C. tquipeent

For Civil works - - 768.6 20.9 - - 606.5 16.5 2,304.8 62.6 3,679.9 1.0 2,604.5 390.0 685.4Laboratories eq. - - 619.4 20.0 - - 1,975.4 63.8 502.3 16.2 3,097.2 0.9 3,024.1 59.9 13.2Computers 771.7 9.2 888.3 10.6 - - 695.6 8.3 6,013.4 71.9 8,369.0 2.3 8,347.9 19.4 1.6Office Equipment 190.2 11.5 155.9 9.4 - - 232.6 14.0 1,078.3 65.1 1,657.0 0.5 1,179.8 168.0 309.3Communications Equipment 49.5 7.6 82.8 12.8 - - 277.8 42.9 238.1 36.7 648.3 0.2 517.3 73.9 57.1Other equip. 521.8 3.9 2,255.8 17.0 - - 5,760.2 43.3 4,755.5 35.8 13,293.2 3.7 9,394.8 1,316.0 2,582.4

Subtotal Iquipent 1,533.2 5.0 4,770.9 I5.5 - - 9,548.2 31.3 14,892.3 48.4 30,744.6 8 6 25,068.4 2,027.2 3,649.0D. Technical Assistance

1. Foreign Consulting ServicesFor. Cons. Long Term - - - - - - 3,544.0 100.0 - - 3,544.0 1.0 3,544.0

For. Cons. Short Term - - - 4,216.5 83.0 863.4 17.0 5,079.8 1.4 5,079.8Subtotal Foreign Consulting Services - - - - - - 7,760.5 90.0 863.4 10.0 8,623.8 2.4 8,623.8

2. Local Consulting SorvicesLoc. Cons. Long Term - - - - - - 26,105.7 62.7 15,536.1 37.3 41,641.8 11.7 519.3 41,122.5 - ILoc. Cons. Short Term - - - - - - 10,005.0 44.7 12,401.1 55.3 22,406.1 6.3 437.7 21,968.4 _ __

Subtotal Local Consulting Services - - - - - - 36,110.7 56.4 27,937.2 43.6 64,047.9 17.9 956.9 63,091.0 - PŽ5. Research Studies - - - - - - - - 166.8 100.0 166.8 - 32.8 134.0 -

Subtotal Technical Assistance - - 43,871.2 60.2 28,967.4 39.8 72,838.5 20.4 9,613.6 63,225.0 -Z. Training

1. FellowshipsFellowship - Local - - - - - - 26.2 100.0 _ - 26.2 - - 26.2 -

Fellowship - Foreign - - - - - - 195.2 100.0 _ - 195.2 0.1 195.2 -

Subtotal Fellowships - - - - - - 221.4 100.0 - - 221.4 0.1 195.2 26.2 -

2. Courses/Seminars - - - - _ - 5,203.3 43.8 6,673.1 56.2 11,876.3 3.3 2,526.1 9,350.2Subtotal Training - 5,424.6 44.8 6,673.1 55.2 12,097.7 3.4 2,721.3 9,376.4F. Other

1. Indemnization Fund - - 1,036.0 100.0 - - - - - - 1,036.0 0.3 - 1,036.0 -

Total Investment Costs 2,043.9 0.8 32,534.4 13.0 _ - 102,510.7 41.1 112,519.9 45.1 249,608.9 69.9 55,286.1 164,125.1 30,197.7II. Recurrent Costs

A. Incr mntal StaffFederal 126.4 20.0 505.8 80.0 - - - - - - 632.2 0.2 - 632.2 -

Regional - - - - 8,894.6 100.0 - - - - 8,894.6 2.5 - 8,894.6 -

Provincial 683.3 1.7 23,287.8 57.1 4,851.1 11.9 9,366.5 23.0 2,622.7 6.4 40,811.2 11.4 - 40,811.2 -

Subtotal Incrental Staff 809.7 1.6 23,793.6 47.3 13,745.7 27.3 9,366.5 18.6 2,622.7 5.2 50,338.0 14.1 - 50,338.0 -

S. Operation end MaintenanceBuildings £ Labs 16.7 2.0 281.0 34.3 177.8 21.7 240.1 29.3 103.6 12.6 819.2 0.2 - 647.2 172.0Equipment 289.3 8.7 1,801.1 53.9 48.9 1.5 856.8 25.6 348.4 10.4 3,344.6 0.9 1,614.9 1,027.3 702.4Vehicles 26.8 1.5 1,050.1 58.7 - - 521.5 29.1 191.1 10.7 1,789.5 0.5 864.2 549.5 375.8

Subtotal Operation and Maintenane 332.8 5.6 3,132.2 52.6 226.6 3.8 1,618.4 27.2 643.2 10.8 5,953.2 1.7 2,479.1 2,224.0 1,250.2C. Materials and Supplies 299.3 2.2 7,219.2 54.0 813.4 6.1 2,390.0 17.9 2,644.1 19.8 13,366.0 3.7 2,846.6 7,842.7 2,676.7D. Miseellaneous

Rent and Utilities 364.9 10.3 1,872.1 52.7 - - 872.7 24.5 445.1 12.5 3,554.7 1.0 - 2,808.2 746.5Insurance, etc.. 135.2 4.0 1,721.9 51.4 250.4 7.5 793.9 23.7 448.8 13.4 3,350.2 0.9 - 2,646.7 703.5

8-1 Expenditure Accounts by Financiers

Other (printing, etc) 1,941.1 6.9 13,716.1 48.6 2,189.7 7.8 7,461.6 26.4 2,936.7 10.4 28,245.2 7.9 - 22,325.1 5,920.1

Finatcial Costs - - - - - - - - 2,750.0 100.0 2,750.0 0.8 2,750.0 - -

Subtotal isllAous 2,441.2 6.4 17,310.1 45.7 2,440.1 6.4 9,128.2 24.1 6,580.5 17.4 37 900.1 10.6 2,750.0 27,780.0 7,370.1

Total Rocurrent Costs 3,883.0 3.6 51,455.1 47.8 17,225.8 16.0 22,503.0 20.9 12,490.5 11.6 107,557.4 30.1 8,075.6 88,184.7 11,297.0

Total DisburSOMent 5,926.9 1.7 83,989.5 23.5 17,225.8 4.8 125,013.7 35.0 125,010.4 35.0 357,166.3 100.0 63,361.7 252,309.9 41,494.7

Mon Jul 08 11:10:48 1996

8o

8-2 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural D*velopmentlZOOtrk55t Amounts by ti hli-rs

('000 USS)

Federal Provincial Local

Government Government Beneficiaries IBRD IDS Total For. (Excl.

Amount * Amount * Amount * Amount t Amount t Amount _ Exch. Taxes)

A. Civil IWrksUnder US$ 0:35 79.6 0.3 4,823.8 20.6 - - 6,520.6 27.8 11,997.4 51.2 23,421.4 6.6 2,322.6 16,239.9

USS 0:35-5:0 - - 12,238.7 21.0 - - 18,126.1 31.1 27,914.9 47.9 58,279.7 16.3 5,385.8 40,655.2

over US5 5:0 - 7,759.0 21.0 - - 13,478.7 36.5 15,709.9 42.5 36,947 .7 10.3 3,406.9 25,781.8

Subtotal Civil Works 79.6 0.1 24,821.5 20.9 - - 38,125.5 32.1 55,622.2 46.9 118,648.8 33.2 11,115.3 82,676.9

s. ooodsUnder US$ 0:1 2,469.3 6.2 12,384.5 31.0 1,465.2 3.7 8,225.6 20.6 15,452.5 38.6 39,997.1 11.2 16,588.2 17,814.9

USS 0:10-0:35 542.2 3.4 4,491.1 27.9 320.5 2.0 9,750.2 60.6 972.2 6.0 16,076.2 4.5 9,840.9 3,956.5

Over USS 0:35 1,612.2 9.8 3,292.8 20.0 - - 5,411.1 32.9 6,131.7 37.3 16,447.8 4.6 9,412.3 3,842.7

Subtotal Goods 4,623.6 6.4 20,168.3 27.8 1,785.9 2.5 23,386.9 32.2 22,556.4 -31.1 72,521.1 20.3 35,841.4 25,614.1

C. Consulting Services1. Gral Individual

Under USS 30K 3.5 - 4,728.5 13.6 - - 4,196.7 12.1 25,830.4 74.3 34,759.0 9.7 1,967.9 32,768.7

Over USS 30K 28.6 0.1 4,645.4 14.2 - 23,976.1 73.1 4,163.2 12.7 32,813.4 9.2 4,959.4 27,143.5

Subtotal Gral Individal 32.1 - 9, 373.9 13.9 - - 28,172.7 41.7 29, 993.6 44.4 6, 572.4 18.9 6,927.3 59,912.1

2. Gral rirusUnder USS 1OOK - - 11.7 1.3 - - 470.3 53.1 404.1 45.6 886.1 0.2 136.0 746.9

Over USS 1$ 0K - - 378.2 1.7 - - 18,667.5 85.2 2,861.8 13.1 21,907.5 6.1 3,704.6 19,202.9

Subtotal Gral irms - - 389.9 1.7 - - 19,137.8 84.0 3,265.9 14.3 22,793.7 6.4 3,840.6 18,949.8

Subtotal Consulting Servics 32.1 - 9,763.8 10.8 - - 47,310.6 52.4 33,259.5 36.8 90,366.0 25.3 10,767.9 78,862.0

D. Recurrent Personal Services 809.7 2.2 14,456.4 38.8 13,610.9 36.5 5,785.9 15.5 2,622.7 7.0 37,285.6 10.4 - 37,285.6

E. Training Services - - - - - - 5,121.8 44.4 6,407.0 55.6 11,528.8 3.2 2,585.4 8,943.3

r. Misoells.ous Services1. Insurance 135.2 4.2 1,646.3 51.6 250.4 7.8 718.7 22.5 439.6 13.8 3,190.2 0.9 - 2,520.3 0

2. Utilities 240.0 7.4 1,801.7 55.8 - - 808.5 25.0 381.1 11.8 3,231.3 0.9 3.9 2,548.8

3. Other (printing, maintenance, storage, etc.) 6.6 - 11,331.5 64.2 1,578.7 8.9 3,755.9 21.3 971.8 5.5 17,644.5 4.9 297.9 13,858.8 I

4. Financial - - - - - - - - 2,750.0 100.0 2,750.0 0.6 2,750.0 -

Subtotal Miscellaneous Services 381.8 1.4 14,779 s 5.1 1,829.2 6.8 5,283.0 19.7 4,542.5 16.9 26,816.0 7.5 3,051.8 18,927.9

Total 5,926.9 1.7 83,989.5 23.5 17,225.8 4.8 125,013.7 35.0 125,010.4 35.0 357,166.3 100.0 63,361.7 252,309.9

Mon Jul 08 11:10:49 1996

10-1 Procurement Accounts by Financiers

ArgentinaProvincial Agricultural Development

Diabursaments by S*stara and Gov xt Cash rlow('000 USS)

Costs toFinancing Available be

Provincial Financed Federal GovernmentGovernment Beneficiaries IBRD IDB Project Cumulative

Amount Amount Amount Amount Total Costs Cash Flow Cash Flow

1 - - - - - 37,192.4 -37,192.4 -37,192.42 5,799.2 1,378.8 12,782.3 16,648.8 36,609.1 37,192.4 -583.3 -37,775.73 5,799.2 1,378.6 12,782.3 16,648.8 36,609.1 25,849.5 10,759.6 -27,016.14 4,304.8 1,534.0 7,883.5 11,415.7 25,137.9 25,849.5 -711.6 -27,727.75 4,304.8 1,534.0 7,883.5 11,415.7 25,137.9 21,228.4 3,909.6 -23,818.16 4,766.8 1,719.0 6,680.7 7,601.0 20,767.5 21,228.4 -460.9 -24,279.07 4,766.8 1,719.0 6,680.7 7,601.0 20,767.5 29,405.0 -8,637.5 -32,916.58 7,766.3 1,880.7 11,511.0 7,699.7 28,857.8 29,405.0 -547.2 -33,463.79 7,766.3 1,880.7 11,511.0 7,699.7 28,857.8 29,363.2 -505.4 -33,969.210 8,710.5 2,100.4 10,563.6 7,330.9 28,705.4 29,363.2 -657.8 -34,627.011 8,710.5 2,100.4 10,563.6 7,330.9 28,705.4 17,619.8 11,085.6 -23,541.412 5,129.6 - 6,618.0 5,870.5 17,618.1 17,619.8 -1.7 -23,543.113 5,129.6 - 6,618.0 5,870.5 17,618.1 17,924.8 -306.7 -23,849.814 5,517.5 - 6,467.7 5,938.6 17,923.8 17,924.8 -1.0 -23,850.715 5,517.5 - 6,467.7 5,938.6 17,923.8 - 17,923.8 -5,926.9

Total 83,989.5 17,225.8 125,013.7 125,010.4 351,239.4 357,166.3 -5,926.9 -5,926.9

Mon Jul 08 11:10:51 1996

11-1 Disbursements by Semesters and Government Cash Flow

ArgentinaProvincial Agricultural Development

r3Wenditure Acocunts by Cponents - Bae Costs('000 US$)

I BRD IDBProvincial Regional National

Santa Southern Int.Buenos Mendoza Fe Mesopotamia Patagonia Other Provincial Agric. OtherAires Rest of Pozo - An. - An. Other Mendoza Rio Info OtherCorfo Montecaseros Programme Borrado Sefinoa Health Health Projects Constitucion Negro Neuquen System Projects

I. Investent Costsk. Civil works

Irrigation/Drainage 3,177.2 3,355.5 6,423.0 - - - - 15,850.5 5,827.3 23,515.3 4,406.1 - 20,436.4Flood Control - - - 5,133.0 - - - - -Buildings and Labs 29.8 - - - 2,034.6 559. 4 311.5 2,194.9 - 1,606.1 210.8 316.8 1,615.3Project design & supervision 81.6 74.3 106.4 58.3 - 55.7 24.8 229.0 173.8 1,244.9 142.0 - 1,450.1

Subtotal Civil Works 3,288.6 3,429.8 6,529.4 5,191.3 2,034.6 615.0 336.3 18,274.4 6,001.1 26,366.3 4,758.9 316.8 23,501.8B. Vehicles 118.5 7.5 109.0 30.3 281.8 1,997.7 190.6 2,005.0 7.5 658.7 69.8 559.7 835.1C. Zquilent

For Civil works 204.5 177.1 - - - - - 274.3 - 1, 460.9 - - 1,052.9Laboratories eq. 280.8 - - - 835.2 70.7 58.4 888.0 - 288.5 25.8 - 228.0Computers 80.5 2.0 122.1 21.8 69.0 89.5 46.6 312.0 2.0 283.2 33.2 3,372.2 2,332.0Office Equipment 58.6 - 4.0 16.2 59.6 52.8 73.0 - - 370.1 42.6 730.4 -Communications Equipment 51.6 - 6.6 7.1 28.7 160.6 60.2 - - 188.2 17.7 61.5 -

Other equip. 300.2 - 110.5 7.6 2,654.9 458.8 107.0 2,481.0 - 539.1 22.3 2,165.3 2,392.3Subtotal Kquipent 976.2 179.1 243.2 52.7 3,647.4 832.3 345.1 3,955.3 2.0 3,130.0 141.7 6,329.4 6,005.2D. TecS-ical Assistazce

1. Foreign Consultig ServicesFor. Cons. Long Term - - 1,699.6 - - - - 1,588.0 - - - - -For. Cons. Short Term 1,350.0 59.8 370.0 120.0 150.0 _ - 1,888.0 59.8 223.2 63.0 72.0 388.0

subtotal roreign Consulting Servicos 1,350.0 59.8 2,069.6 120.0 150.0 _ - 3,476.0 59.8 223.2 63.0 72.0 388.02. Local Consulting Services OD

Loc. Cons. Long Term 511.7 1,069.7 448.3 144.0 754.7 401.2 1,232.0 9,748.0 1,069.7 1,465.5 598.1 3,197.0 5,716.0Lpc. Cons. Short Term 429.0 65.2 959.9 60.0 81.7 150.0 192.4 6,112.0 65.2 2,937.9 401.7 693.5 7,180.0 1

Subtotal Local Consulting Services 940.7 1,134.9 1,408.2 204.0 836.4 551.2 1,424.4 15,860.0 1,134.9 4,323.4 999.8 3,890.5 12,896.05. Research Studies - - - - - - - - - 75.0 - - 76.0

Subtotal Technical Assistano. 2,290.7 1,194.7 3,477.8 324.0 986.4 551.2 1,424.4 19,336.0 1,194.7 4,621.6 1,062.6 3,962.5 13,360.0I. Training

1. r.llowshipsFellowship - Local - - 10.8 - - - - 12.9 -Fellowship - Foreign 36.0 - 25.0 - - 25.0 - 96.0 - - - _ _

Subtotal Fellowships 36.0 - 35.8 - - 25.0 - 108.9 - - - - -2. Courses/Seminars 1,382.5 254.1 13.3 10.6 541.2 197.2 - 2,359.6 254.1 949.0 135.4 899.1 2,722.1

Subtotal Training 1,418.5 254.1 49.0 10.6 541.2 222.2 - 2,468.5 254.1 949.0 135.4 899.1 2,722.1r. otber

1. Indemnization Fund - - - - - 967.5 - - - - - _Total Investment Costs 8,092.5 5,065.2 10,408.4 5,608.8 7,491.4 5,186.0 2,296.4 46,039.2 7,459.5 35,725.6 6,168.6 12,067.6 46,424.1II. Recurrent Costs

A. Incrental StaffFederal - - - - - - - - - - - 582.0Regional - - - - - 8,306.5 - - - - - - -Provincial 2,025.6 28.1 1,528.2 108.9 1,575.4 3,509.5 4,863.7 5,172.0 28.1 8,078.2 678.3 3,096.0 2,200.0

Subtotal Incrmental Staff 2,025.6 28.1 1,528.2 108.9 1,575.4 11,816.0 4,863.7 5,172.0 28.1 8,078.2 678.3 3,678.0 2,200.0B. Operation and Maintenae

Buildings 6 Labs 1.0 - - _ 332.9 31.7 - 107.5 - 126.8 68.5 - 51.6Equipment 445.6 - _ _ 93.8 527.4 98.8 711.1 - 163.3 32.4 660.1 189.1Vehicles 307.9 28.4 197.3 60.1 - 40.1 32.4 390.5 28.4 258.8 31.9 76.4 115.1

Subtotal Operation and nten 754.4 28.4 197.3 60.1 426.7 599.2 131.2 1,209.0 28.4 549.0 132.7 736.6 355.7C. Materials and Supplies 731.6 - - 15.8 1,559.9 433.3 585.9 1,685.4 - 1,004.9 161.1 2,555.2 1,664.3

14-1 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development

Lv.nd±tu. Aoooumts by Compnts - aan. Costs('000 US$)

IBRD/ IDBMiscellaneous Provincial National

Inspection Provincial Provincial Central PhysicalPPF and Coordination Institutional Executing Coordinating Contingencies

Recovering Monitoring Units Strengtheninq Units Unit Total * Amount

X. Investment CoatsA. Civil Works

Irrigation/Drainage - - - - - 62,991.2 14.7 12,184.0Flood Control - - - - - - 5,133.0 15.0 770.0Buildings and Labs - - - - - - 8,879.3 15.0 1,331.9Project design & supervision - - - - - - 3,640.8 14.6 530.2

Subtotal Civil Works - - 100,644.3 14.7 14,816.0B. Vehicles - - - - - 60.5 6,931.6 10.0 693.2C. Zquipmmt

For Civil works - - - - - - 3,169.7 10.0 317.0Laboratories eq. - - - - - - 2,675.5 10.0 267.6Computers - - - 288.1 103.3 64.0 7,221.6 10.0 722.2Office Equipment - - - 44.4 2.0 25.1 1, 478.7 10.0 147.9Communications Equipment - - - 0.6 - - 582.7 10.0 58.3Other equip. - - - 11,238.9 10.0 1,121.1

Subtotal Equpment - - - 333.1 105.3 89.1 26,367.2 10.0 2,634.0D. Technical Assistance

1. Ioreig Consultin Soevice.For. Cons. Long Term - - - - - 3,287.6 - -For. Cons. Short Term - - - - - - 4,743.S

Subtotal toreign Consulting rices- - - - - - 8,031.4 - -2. Local Consulting Services 0

Loc. Cons. Long Term - - - 2,238.6 1,287.0 8,036.8 37,938.2 0.1 37.9Lpc. Cons. Short Term - - - 394.7 1,383.8 - 21,007.1 - 5.6 1

Subtotal Local Consulting Services - - - 2,633.2 2,670.8 8,036.8 58,945.3 0.1 43.55. Research Studies - - - - - - 151.0 - -

Subtotal Tecnaical ,aaist - - - 2,633.2 2,670.8 8,036.8 67,127.7 0.1 43.5S. Staining

1. Iello"hipsFellowship - Local - - - - - 23.7 - -Fellowship - Foreign - - - - - - 182.0

Subtotal lellomebim - - - 205.7 - -2. Courses/Seminars - - - 882.4 313.0 - 10,913.4

Subtotal Training 882.4 313.0 - 11,119.1 - -t. Other

1. Indemnization Fund - - - - - - 967.5Total Invetant Costs - - - 3,848.7 3,089.1 8,186.4 213,157.4 8.5 18,186.6U2. Dacurret Costa

A. Incremetal StaffFederal - - - - - - 582.0 - -Regional - - - - - - 8,306.5Provincial - - - 2,656.5 2,115.0 - 37,663.5

Subtotal Incrmntal Staff - - - 2,656.5 2,115.0 - 46,552.0 - -S. Operatio and ILiutenanoe

Buildings 6 Labs - - - - - - 720.0 5.0 36.0Equipment - - - - - 15.2 2,936.7 5.0 146.8Vehicles - - - - - 9.9 1,577.0 5.0 78.9

Subtotal Operatin and istenae - - - - - 25.1 5,233.8 5.0 261.7C. Materials and Supplies - - - 957.3 288.1 126.7 11,769.5 5.0 588.5

14-2 Expenditure Accounts by Components - Base Costs

D. MiscellaneousRent.'and Utilities 623.5 - - 38.7 - 455.3 58.1 752.5 _ 511.9 181.3 - 318.2

Insurance, etc.. 166.9 - - - 469.5 253.6 211.0 589.1 - 360.5 37.4 527.5 292.4

other (printing, etc) 1,043.1 32.8 1,110.5 52.7 4,279.5 2,152.9 657.4 7,546.5 32.8 2,370.6 223.3 2,241.9 1,784.5

Financial Costs - - - - - - -Subtotal Miscellansous 1,833.6 32.8 1,110.5 91.4 4,749.0 2,861.7 926.5 8,888.1 32.8 3,243.1 441.9 2,769.4 2,395.1

Total Recurrent Costs 5,345.2 89.2 2,836.0 276.3 8,311.0 15,710.2 6,507.3 16,954.5 89.2 12,875.2 1,414.0 9,739.2 6,615.1

Total MZSU.ZIZ COSTS 13,437.8 5,154.4 13,244.4 5,885.1 15,802.3 20,896.2 8,803.6 62,993.7 7,548.7 48,600.8 7,582.6 21,806.7 53,039.3

Physical Contingencies 768.7 555.1 799.4 795.4 1,032.1 570.0 186.2 3,926.3 923.1 4,573.7 777.4 1,039.5 4,430.1

Price Contingencies 852.8 214.3 870.9 264.0 959.3 1,269.1 564.4 8,529.6 208.4 2,310.7 406.8 1,282.1 7,259.6

Total PUOJECT COSTS 15,059.3 5,923.8 14,914.7 6,944.4 17,793.8 22,735.2 9,554.2 75,449.6 8,680.2 55,485.1 8,766.8 24,128.4 64,728.9

Taxes 1,680.3 893.0 1,938.7 1,339.9 2,673.6 1,489.9 516.4 9,129.9 1,447.7 7,786.5 1,339.1 2,351.9 8,257.8

Foreign Exchange 3,718.2 659.4 3,478.8 813.0 4,641.3 2,911.7 713.7 13,216.1 807.5 7,804.6 1,603.8 7,764.9 11,338.8

Mon Jul 08 11:10:56 1996

.

14-3 Expenditure Accounts by Components - Base Costs

D. Escaollarous

Rent.'and Utilities - - - - - 161.3 3,100.7 5.0 155.0Insurance, etc.. - - - - - 13.1 2,920.9 5.0 146.0Other (printing, etc) - - - - - 1,054.6 24,583.0 5.0 1,229.2Financial Costs 1,500.0 1,250.0 - - - - 2,750.0

Subtota lacell o 1,500.0 1,250.0 - - - 1,228.9 33,354.6 4.6 1,530.2Total teau=ceat Costs 1,500.0 1,250.0 - 3,613.8 2,403.1 1,380.8 96,909.9 2.5 2,380.4

Total BMs.lTh COSTS 1,500.0 1,250.0 - 7,462.5 5,492.2 9,567.2 310,067.3 6.6 20,567.0Physical Contingencies - - - 81.2 24.9 84.0 20,567.0 - -Price Contingencies - - - 381.3 327.9 830.8 26,531.9 6.1 1,629.7

rotal P2 TaZCT ss 1,500..0 1,2500 - 7,925.0 5,845.0 10,482.D 357,166.3 6.2 22,196.7

Taxes - - - 235.5 68.8 345.9 41,494.7 10.2 4,231.4Foreign Exchange 1,500.0 1,250.0 - 723.1 238.0 179.0 63,361.7 7.3 4,608.0

14-4 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development

Pro.oet Co_oo.ts b Yer(COOo USS)

Base Cost1997 1998 1999 2000 2001 2002 2003 Total

A. ZUDD1. Provinmial

a. Snamsa ALMSCorfo 3,865.2 2,221.6 2,927.7 2,430.5 1,992.7 - - 13,437.8

b. MendozaMontecaseros 1,968.0 2, 484.4 348.7 236.4 116.8 - - 5,154.4Rest of Programme 3,488.8 2,661.7 2,500.8 2,372.1 2,071.1 150.0 - 13, 244. 4

Subtotal Yi 5o,a 5,456.8 5,146.1 2,849.5 2,608.5 2,187.9 150.0 - 18,398.8a. Santa fe

Pozo Borrado 2,127.2 2,194.7 1,563.1 - - - - 5,885.1Subtotal ovinal 11,449.2 9,562.4 7,340.4 5,039.0 4,180.6 150.0 - 37,721.72. Regional

Sefinoa 5,438.9 2,067.7 2,837.8 2,691.1 2,766.9 - - 15,802.3Mesopotamia - An. Health 7,048.9 3,479.7 3,483.6 3,445.6 3,438.3 - - 20,896.2Southern Patagonia - An. Health 2,600. 1,568.1 1,556.0 1,523.0 1,556.0 - - 8,803.

Subtotal Rogioal 15,088.3 7,115.5 7,877.5 7,659.6 7,761.2 - - 45,502.23. otbe

a. Other Projects 600.0 600.0 600.0 15,541.2 15,617.5 15,017.5 15,017.5 62,993.7Subtotal IJRD 27,137.6 17,277.9 15,817.8 28,239.9 27,559.3 15,167.5 15,017.5 146,217.5S. 33s

1. lrovinaila. Mendoza

Constitucion 6,353.6 493.1 348.7 236.4 116.8 - - 7,548.7b. Rio Negro 20,641.2 12,072.6 10,520.9 2,891.7 2,474.4 4 - 48,600.8c. Neuquen 2,019.0 2,355.0 2,389.5 480.3 338.9 - 7,582.6

Subtotal ULoVinial 29,013.8 14,920.7 13,259.1 3,608.3 2,930.1 - - 63,732.0 'D2. ational

Int. Agric. Info System 3,476.3 8,608.0 3,979.2 2,764.9 2,764.9 169.9 43.6 21,806.73. Otb.z

a. Other Projects 600.0 600.0 600.0 13,109.8 13,109.8 12,509.8 12,509.8 53,039.34. Miaoelloan..

PPF Recovering 1,500.0 - - - - - - 1,500.0

Inspection and Monitoring 250.0 250.0 250.0 250.0 250.0 - - 1,250.0Subtotal Kisoellanoua 1,750.0 250.0 250.0 250.0 250.0 - - 2,750.0

Subtotal SDB 34,840.0 24,378.7 18,088.3 19,733.0 19,054.8 12,679.7 12,553.5 141,328.0C. DRD/mDB

2. Nationala. Institutional Strengthening 2,582.2 2,330.6 1,104.1 722.8 722.8 - - 7,462.5b. Provincial Executing Units 1,619.8 1,335.8 970.6 783.0 783.0 - - 5,492.2c. Central Coordinating Unit 1,649.9 1,568.2 1,587.9 1,583.4 1,573.1 777.9 826.6 9,567.2

Subtotal IaD/IDB 5,851.9 5,234.7 3,662.7 3,089.2 3,078.9 777.9 826.6 22,521.8Total SASZLIU COSTS 67,829.5 46,891.3 37,568.8 51,062.1 49,692.9 28,625.1 28,397.6 310,067.3

Physical Contingencies 5,456.3 2,837.3 2,302.6 2,876.6 2,899.5 2,100.6 2,094.2 20,567.0Price Contingencies 1,099.0 1,970.5 2,585.3 4,871.4 6,134.0 4, 513.9 5,357.8 26,531.9

Total P5CS COSTS 74,384.8 51,699.0 42,456.8 58,810.0 58,726.5 35,239.6 35,849.6 357,166.3

Taxes 8,832.0 5,782.3 4,843.7 6,439.0 6,634.7 4,442.4 4,520.6 41,494.7Foreign Exchange 19,619.8 8,204.4 5,115.8 8,931.0 8,656.6 6,446.8 6,387.3 63,361.7

Mon Jul 08 11:10:58 1996

16-1 Project Components by Year

ArgentinaProvincial Agricultural Development

Pro5oet Comonents by Year('000 US$)

Totals Including Contingencies1997 1998 1999 2000 2001 2002 2003 Total

a. IwoD1. lrvinoial

a. sno_ aireaCorfo 4,113.4 2,352.2 3,325.9 2,854.1 2,413.6 - - 15,059.3

b. IbndOzaMontecaseros 2,255.2 2,897.2 377.4 262.6 131.5 - - 5,923.8

Rest of Programwme 3,629.2 2,874.5 2,883.4 2,810.1 2,548.4 169.0 - 14,914.7Subtotal Mendoza 5,884.4 5,771.7 3,260.8 3,072.7 2,679.9 169.0 - 20,838.5a. Santa re

Pozo Borrado 2,456.8 2,601.7 1,886.0 - - - - 6,944.4Subtotal Provincial 12,454.6 10,725.6 8,472.7 5,926.8 5,093.5 169.0 - 42,842.32. Regional

Sefinoa 6,039.2 2,227.2 3,180.6 3,091.8 3,255.0 - - 17,793.8Mesopotamia - An. Health 7,573.3 3,671.3 3,767.3 3,818.7 3,904.6 - - 22,735.2Southern Patagonia - An. Health 2,768. 1,651.7 1,681.5 1,685.6 1,766.5 - - 9,554.2

Subtotal Regional 16,381.4 7,550.2 8,629.4 8,596.0 8,926.1 - - 50,083.23. Other

a. Other Projects 600.0 600.0 600.0 17,978.4 18,505.7 18,353.4 18,812.2 75,449.6Subtotal 1BRD 29,435.9 18,875.9 17,702.2 32,501.2 32,525.3 18,522.3 18,812.2 168,375.1D. IDS

1. Provinciala. Mendoza

Constitucion 7,385.7 523.0 377.4 262.6 131.5 _ - 8,680.2b. Rio Negro 23,167.8 13,774.5 12,328.1 3,279.2 2,935.5 - - 55,485.1c. Neuquen 2,265.7 2,729.8 2,849.6 535.7 386.0 - - 8,766.8

Subtotal Provincial 32,819.3 17,027.3 15,555.1 4,077.5 3,452.9 - - 72,932.02. Rational

Int. Agric. Info System 3,751.9 9,451.0 4,400.3 3,095.3 3,172.4 203.8 53.7 24,128 .4

3. Othera. Other Projects 600.0 600.0 600.0 15,468.9 15,835.9 15,616.8 16,007.2 64,728.9

4. MiscellaneousPPF Recovering 1,500.0 - - - - - - 1,500.0Inspection and Monitoring 250.0 250.0 250.0 250.0 250.0 - - 1,250.0

subtotal 3iaoe2laneous 1,750.0 250.0 250.0 250.0 250.0 - - 2,750.0Subtotal IDS 38,921.1 27,328.3 20,805.4 22,891.7 22,711.2 15,820.6 16,060.9 164,539.3C. IIRD/lDB

2. Nationala. Institutional Strengthening 2,668.3 2,441.5 1,190.9 802.2 822.2 - - 7,925.0b. Provincial Executing Units 1,655.5 1,400.1 1,043.2 862.3 883.8 - - 5,845.0c. Central Coordinating Unit 1,703.9 1,653.3 1,715.1 1,752.6 1,783.9 896.6 976.5 10,482.0

Subtotal 1UD/IDB 6,027.7 5,494.9 3,949.2 3,417.1 3,489.9 896.6 976.5 24,252.0Total PR3ZCT COSTS 74,384.8 51,699.0 42,456.8 58,810.0 58,726.5 35,239.6 35,849.6 357,166.3

Mon Jul 08 11:10:59 1996

17-1 Project Components by Year

ArgentinaProvincial Agricultural Development

Exenditure Accounts by Years

('000 US$)

Totals Including Contingencies1997 1998 1999 2000 2001 2002 2003 Total

I. Invetaent CostsA. Civil Works

Irrigation/Drainage 22,180.2 13,666.2 12,576.8 15,014.5 15,575.1 11,990.7 12,290.5 103,294.0Flood Control 2,117.8 2,376.7 1,644.6 - - - - 6,139.1Buildings and Labs 5,630.4 202.3 107.2 1,198.6 1,228.4 1,259.1 1,290.5 10,916.4Project design & supervision 1,475.7 477.4 351.6 455.5 565.0 579.1 593.6 4,498.0

Subtotal Civil Works 31,404.1 16,722.7 14,680.1 16,668.6 17,368.5 13,828.9 14,174.6 124,847.5B. Vehicles 3,999.2 451.8 105.1 840.9 860.9 882.4 904.4 8,044.6C. Xquipment

For Civil works 1,849.2 200.4 - 393.0 402.3 412.4 422.7 3,679.9Laboratories eq. 1,724.5 5.1 0.4 329.6 337.3 345.8 354.4 3,097.2Computers 2,854.2 1,692.7 571.4 792.7 799.2 819.2 839.7 8,369.0Office Equipment 1,067.1 401.4 188.2 0.4 - - - 1,657.0Communications Equipment 594.4 39.9 14.0 - - - - 648.3Other equip. 1,642.7 2,580.4 1,010.6 2,469.9 2,523.6 1,514.1 1,551.9 13,293.2

Subtotal Zquipment 9,732.1 4,919.9 1,784.6 3,985.5 4,062.4 3,091.4 3,168.7 30,744.6D. Technical LAsistano-

1. roreign Conulting SezviosFor. Cons. Long Term 801.1 52.9 233.3 835.6 546.3 616.3 458.5 3,544.0For. Cons. Short Term 1,165.4 569.1 341.8 851.9 853.5 641.1 657.1 5,079.8

Subtotal roroign Consulting Services 1,966.5 622.0 575.1 1,687.6 1,399.8 1,257.3 1,115.6 8,623.82. Local Consulting Sezyioe

Loc. Cons. Long Term 4,941.6 6,433.4 4,900.2 7,499.3 6,977.6 5,348.5 5,541.3 41,641.8Loc. Cons. Short Term 3,731.8 3,946.0 2,718.2 3,957.5 3,798.4 2,100.9 2,153.4 22,406.1 i

Subtotal Local Consulting Servios 8,673.3 10,379.4 7,618.4 11,456.8 10,776.0 7,449.4 7,694.7 64,047.9 95. Research Studies - 26.0 26.7 20.8 49.2 21.8 22.3 166.8 p.

Subtotal Teohnsial Assistance 10,639.8 11,027.4 8,220.1 13,165.1 12,225.0 8,728.5 8,832.6 72,838.5Z. T-ripng

1. rellowshipsFellowship - Local 2.2 2.2 2.3 5.9 6.0 3.7 3.8 26.2Fellowship - Foreign 48.4 17.5 11.5 31.1 31.9 27.0 27.7 195.2

Subtotal rellowships 50.6 19.7 13.8 37.0 37.9 30.8 31.5 221.42. Courses/Seminars 1,946.1 1,891.3 1,057.9 2,045.7 1,983.2 1,457.9 1,494.3 11,876.3

Subtotal Training 1,996.7 1,911.0 1,071.7 2,082.7 2,021.1 1,488.6 1,525.8 12,097.7r. Other

1. Indemnization Fund 197.1 202.0 207.1 212.2 217.6 - - 1,036.0Total Investment Costs 57,969.1 35,234.7 26,068.7 36,955.0 36,755.5 28,019.8 28,606.1 249,608.9II. Recurrent Costs

J. Inremental StaffFederal 48.9 50.1 173.4 177.7 182.1 - - 632.2Regional 1,692.2 1,734.5 1,777.8 1,822.3 1,867.8 - - 8,894.6Provincial 6,151.2 6,509.4 6,605.5 8,704.6 8,539.6 2,123.9 2,177.0 40,811.2

Subtotal Inoremental Staff 7,892.3 8,294.0 8,556.7 10,704.5 10,589.6 2,123.9 2,177.0 50,338.0S. Operation and ULintsnance

Buildings & Labs 119.7 139.9 145.8 153.1 163.3 48.1 49.3 819.2Equipment 295.7 406.3 482.0 731.6 733.5 384.9 310.5 3,344.6Vehicles 186.5 242.5 271.9 387.0 382.2 164.8 154.6 1,789.5

Subtotal Operation and Masintenane 601.9 788.7 899.7 1,271.7 1,278.9 597.8 514.5 5,953.2C. Materials and Supplies 1,825.0 2,337.0 1,994.3 2,544.1 2,624.7 1,007.9 1,033.1 13,366.0D. Misellaneous

Rent and Utilities 470.3 488.0 503.1 712.6 724.7 323.9 332.0 3,554.7Insurance, etc.. 412.3 471.0 492.4 663.0 674.4 343.5 293.6 3,350.2Other (printing, etc) 3,463.8 3,835.7 3,692.0 5,709.0 5,828.7 2,822.7 2,893.3 28,245.2

20-1 Expenditure Accounts by Years

Financial Costs 1,750.0 250.0 250.0 250.0 250.0 - - 2,750.0

Subtot&g1 Usa11-anboUS 6,096.5 5,044.7 4,937.4 7,334.6 7,477.8 3,490.1 3,518.9 37,900.1

Total Roacurznt Costs 16,415.7 16,464.4 16,388.0 21,855.0 21,971.0 7,219.8 7,243.5 107,557.4Total PROJCT COSTS 74,384.8 51,699.0 42,456.8 58,810.0 58,726.5 35,239.6 35,649.6 357,166.3

Mon Jul 08 11:11:02 1996

2l

20-2 Expenditure Accounts by Years

- 96 -

Annex D

DETAILED COST TABLES(IBRD-FINANCED SUBPROJECTS IN GROUP A)

ArgentinaProvincial Agricultural Development - CorFo Subproject

Uxpenditure kocouuts br linanciers('000 USS)

Federal Provincial Local

Government Government Beneficiaries 1BRD Total For. (Excl. DutiesAmount S Amount s Amount t Amount I Amount I Exch. Taxes) s Taxes

X. Znvest t CostsA. Civil Worka

Irrigation/Drainage - - 834.9 21.0 - - 3,140.8 79.0 3,975.7 26.4 366.5 2,774.3 834.9Buildings and Labs - - 7.3 21.0 - - 27.6 79.0 34.9 0.2 3.2 24.3 7.3Project design S supervision - - 3.3 3.5 - - 92.1 96.5 95.4 0.6 17.9 77.6 -

Subtotal Civil Works - - 845.6 20.6 - - 3,260.5 79.4 4,106.0 27.3 387.6 2,876.2 842.2

B. Vehicles - - 13.1 10.0 - - 118.3 90.0 131.4 0.9 124.2 7.2 -C. Kquip -nt

For Civil works - - 45.5 20.0 - - 182.0 60.0 227.5 1.5 155.2 72.3 -Laboratories eq. - - 62.3 20.0 - - 249.2 80.0 311.5 2.1 311.5 - -

Computers - - 17.9 20.0 - - 71.4 80.0 89.3 0.6 89.3 - -Office Equipment - - 13.3 20.4 - - 51.9 79.6 65.2 0.4 44.8 14.8 5.6Conmunications Equipment - - 11.5 20.1 - - 45.9 79.9 57.4 0.4 39.2 17.0 1.2Other equip. - - 69.4 20.8 - - 264.8 79.2 334.2 2.2 222.6 58.1 53.6

Subtotal Zquipmsnt - - 219.9 20.3 - - 865.1 79.7 1,085.0 7.2 862.5 162.2 60.3

D. Technical AssistatDe1. lrozign Consulting Services

For. Cons. Short Term - - - - - - 1,396.1 100.0 1,396.1 9.3 1,396.1 - -2. Local Consulting Services

Loc. Cons. Long Term - - - - - - 540.0 100.0 540.0 3.6 - 540.0 -Loc. Cons. Short Term - - - - - - 454.2 100.0 454.2 3.0 20.7 433.6 -

Subtotal Looal Consulting Services - - 994.2 100.0 994.2 6.6 20.7 973.5 -

Subtotal Technical Assistan-e - 2,390.3 100.0 2,390.3 15.9 1,416.8 973.5 -

R. Training1. Wellwships

Fellowship - Foreign - - - - - - 36.8 100.0 36.8 0.2 36.8 - -

2. Courses/Seminars - - - - - - 1,456.3 100.0 1,456.3 9.7 331.3 1,124.9 _Subtotal Tzaining - _ 1,493.0 100.0 1,493.0 9.9 368.1 1,124.9

Total Inv-eat t Costs - - 1,078.6 11.7 - - 8,127.2 88.3 9,205.8 61.1 3,159.2 5,144.0 902.5

II. Recurrent CostsA. Incr mtal Staff

Provincial - - 846.7 39.4 - - 1,303.4 60.6 2,150.0 14.3 - 2,150.0 -S. Operation and Maintenance

Buildings 6 Labs - - 0.5 39.4 - - 0.7 60.6 1.1 - - 0.9 0.2Equipment - - 219.9 44.2 - - 277.4 55.8 497.3 3.3 240.2 152.6 104.4

Vehicles - - 121.6 35.4 - - 221.7 64.6 343.3 2.3 165.9 105.4 72.1Subtotal Operationand a aint-annoe - - 341.9 40.6 - - 499.8 59.4 841.7 5.6 406.1 258.9 176.8

C. Materials and Supplies - - 379.9 46.4 - - 438.5 53.6 818.4 5.4 152.9 493.7 171.9D. miaoellansous

Rent and Utilities - - 328.7 46.9 - - 372.4 53.1 701.0 4.7 - 553.8 147.2

Insurance, etc.. - - 86.1 46.0 - - 101.3 54.0 187.4 1.2 - 148.0 39.4other (printing, etc) _ - 434.7 37.6 - - 720.2 62.4 1,154.9 7.7 - 912.4 242.5

Subtotal Misoellaneous - - 849.5 41.6 - - 1,193.8 58.4 2,043.3 13.6 - 1,614.2 429.1

Total Recurrent Costs - - 2,418.0 41.3 - - 3,435.5 58.7 5,853.5 38.9 559.0 4,516.8 777.7Total Diabursant - - 3,496.6 23.2 - - 11,562.7 76.8 15,059.3 100.0 3,718.2 9,660.8 1,680.3

Thu Jul 11 11:33:08 1996

8-1 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural Development - CorFo Subproject

Zxpenditure Accounts by Coucom.mt - Base Costs('000 USS)

Technology PhysicalGeneration s Institutional Contingencies

Transfer Canals Lining Strengthening Total I Amount

X. Xnvestm_nt CostsA. civil Works

Irrigation/Drainage - 3,177.2 - 3,177.2 15.0 476.6

Buildings and Labs 29.8 - - 29.8 15.0 4.5Project design A supervision - 81.6 - 81.6 15.0 12.2

Subtotal Civil Works 29.8 3,258.8 - 3,288.6 15.0 493.3

B. Vehicles 98.0 - 20.5 118.5 10.0 11.8

C. KqipentFor Civil works - - 204.5 204.5 10.0 20.5

Laboratories eq. 280.8 - - 280.8 10.0 28.1

Computers 69.7 - 10.8 80.5 10.0 8.1Office Equipment 43.7 - 14.9 58.6 10.0 5.9

Communications Equipment 50.8 - 0.8 51.6 10.0 5.2

Other equip. 292.0 - 8.2 300.2 10.0 30.0

Subtotal Equipment 737.0 - 239.2 976.2 10.0 97.6

D. Technical Assistanmo1. Foreign Consulting servioes

For. Cons. Short Term 506.0 - 844.0 1,350.0 - -2. Local Consulting Services

Loc. Cons. Long Term 511.7 - - 511.7 - -Loc. Cons. Short Term 127.0 - 302.1 429.0 - -

Subtotal Local Consulting Services 638.7 - 302.1 940.7 - -

Subtotal Teabnical Assistance 1,144.7 - 1,146.1 2,290.7 - -

Z. Training1 Fellowships '.

Fellowship - Foreign 36.0 - - 36.0 - - °°2. Courses/Seminars 1,254.2 - 128.3 1,382.5 - -

Subtotal Training 1,290.2 - 128.3 1,418.5 - -

Total Xnvestmt Costs 3, 299.7 3,258.8 1,534.1 8,092.5 7.4 602.8

II. Recurrent Costs

A. Inoremntal StaffProvincial 1,728.9 - 296.7 2,025.6 - -

S. Operation and WbintenanowBuildings & Labs 1.0 - - 1.0 5.0 0.1

Equipment 425.0 - 20.6 445.6 5.0 22.3Vehicles 256.5 - 51.4 307.9 5.0 15.4

Subtotal Operation and M)intenano- 682.5 - 71.9 754.4 5.0 37.7C. Materials and Supplies 652.4 - 79.2 731.6 5.0 36.6

D. YisollouRent and Utilities 559.0 - 64.5 623.5 5.0 31.2

Insurance, etc. 142.1 - 24.8 166.9 5.0 8.3

Other (printing, etc) 949.6 - 93.5 1,043.1 5.0 52.2

Subtotal Miscellaneous 1,650.7 - 182.9 1,833.6 5.0 91.7Total Recurrent Costs 4,714.5 - 630.7 5,345.2 3.1 166.0

Total DASELIUK COSTS 8, 014.2 3, 258.8 2,164.8 13,437.8 5.7 768.7

Physical Contingencies 237.3 488.8 42.7 768.7 - -Price Contingencies 418.8 323.5 110.5 852.8 6.3 53.8

Total ROJZCT COSTS 8, 670.2 4,071.1 2, 317.9 15, 059.3 5.5 822.5

Taxes 767.0 834.9 78.3 1,680.3 9.1 152.4Foreign Exchange 2,107.4 384.4 1,226.4 3,718.2 4.5 166.9

Thu Jul 11 11:33:11 1996

14-1 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development - CorFo Subproject

-pxend4turze Aoocunts by Years

('000 US$)

Foreign

Base Cost Exchange1997 1996 1999 2000 2001 2002 2003 Total t Amount

I. Invest_ent Costs

A. Civil WorksIrrigation/Drainage 218.3 - 1,033.0 1,009.9 915.9 - - 3,177.2 9.4 298.2

Buildings and Labs 29.8 - - - - - - 29.8 9.4 2.8

Project design & supervision 81.6 - - - _ - - 81.6 18.9 15.4

Subtotal Civil Works 329.7 - 1,033.0 1,009.9 915.9 - - 3,288.6 9.6 316.4B. Vehicles 118.5 - - - - - - 11B.5 94.6 112.0

C. Kquip entFor Civil works 204.5 - - - - - - 204.5 68.5 140.0

Laboratories eq. 276.6 4.2 - - - - - 280.8 100.0 280.8

Computers 80.5 - - - - - - 80.5 100.0 80.5

office Equipment 58.6 - - - - - - 58.6 68.8 40.4

Communications Equipment 51.6 - - - - - - 51.6 68.6 35.4

other equip. 282.1 9.8 4.3 3. 9 - - - 300.2 66.7 200.3

Subtotal Zquipient 954.0 14.0 4.3 3.9 - - - 976.2 79.6 777.4

D. Technical Assistance1. roreign Consulting Services

For. Cons. Short Term 648.0 227.0 169.0 153.0 153.0 - - 1,350.0 100.0 1,350.0

2. Local Consulting ServicesLoc. Cons. Long Term 140.6 140.6 140.6 57.2 32.7 - 511.7 - -Loc. Cons. Short Term 126.3 103.4 77.6 71.2 50.5 - - 429.0 4.7 20.0

Subtotal Local Consulting Services 266.9 244.0 218.2 128.4 83.2 - - 940.7 2.1 20.0

Subtotal Tecbnical Assistance 914.9 471.0 387.2 281.4 236.2 - - 2,290.7 59.8 1,370.0

Z. Training1. rellovships '4

Fellowship - Foreign 18.0 12.0 6.0 - - - - 36.0 100.0 36.0

2. Courses/Seminars 371.3 372.2 325.9 208.4 104.7 _ - 1,382.5 23.1 318.9

Subtotal Training 389.3 384.2 331.9 208.4 104.7 - - 1,418.5 25.0 354.9

Total lnvestsent Costs 2,706.4 869.3 1,756.4 1,503.7 1,256.8 - - 8,092.5 36.2 2,930.6

1I. Recurrent CostsA. Incremental Staff

Provincial 426.7 594.4 471.8 327.7 205.1 - - 2,025.6 - -B. Operation nad Maintenance

Buildings & Labs 0.3 0.3 0.3 0.3 - - - 1.0 - -Equipment 70.4 84.7 87.8 106.2 96.5 _ - 445.6 48.7 216.8

Vehicles 49.4 60.2 63.5 69.3 65.5 - - 307.9 48.7 149.8

Subtotal Operation and Maintenance 120.0 145.1 151.5 175.8 162.0 - - 754.4 48.6 366.6

C. Materials and Supplies 148.8 148.8 148.8 145.9 139.2 - - 731.6 18.9 138.6

D. YiscellaneousRent and Utilities 124.7 124.7 124.7 124.7 124.7 - - 623.5 - -Insurance, etc.. 35.9 34.4 32.9 32.2 31.4 - - 166.9 - -Other (printing, etc) 302.6 304.9 241.5 120.6 73.5 - - 1,043.1 - -

Subtotal Miscellaneous 463.3 464.1 399.1 277.5 229.6 - - 1,833.6 - -

Total Recurrent Costs 1,158.8 1,352.4 1,171.3 926.8 735.9 - - 5,345.2 9.5 505.2

Total BSASLrZU COSTS 3,865.2 2,221.6 2,927.7 2,430.5 1,992.7 - - 13,437.8 25.6 3,435.8

Physical Contingencies 193.3 39.3 190.4 181.8 163.9 - - 768.7 21.0 161.7Price Contingencies 54.9 91.3 207.8 241.7 257.0 - - 852.8 14.2 120.7

Total PxOJ 3CT COSTS 4,113.4 2,352.2 3,325.9 2,854.1 2,413.6 - - 15,059.3 24.7 3,718.2

Taxes 281.1 176.4 431.9 412.0 378.9 _ - 1,680.3 - -

Foreign Exchange 1,871.6 458.3 497.9 466.0 424.4 _ - 3,718.2 - -

Thu Jul 11 11:33:14 1996

19-1 Expenditure Accounts by Years

ArgentinaProvincial Agricultural Development - Mendoza Montecaseros Subproject

tapenditure Aooounts by Financiers('000 US$)

Federal Provincial Local DutiesGovernment Government Beneficiaries IBRD Total For. (Excl. 6Amount % Amount t Amount 9 Amount * Amount t Exch. Taxes) Taxes

I Invwstnent Costsa. Civil Works

Irrigation/Drainage - - 834 .9 21.0 - - 3,140.6 79.0 3,975.5 67,1 368 6 2,772.0 834. 9Project design & supervision - - 88.5 100.0 88.5 1.5 16.5 72.0 -

Subtotal Civil Works - - 834 .9 20.5 - - 3,229. 1 79. 5 4,064. 0 68 .6 385.1 2,844 .0 834. 9S. Vehicles - - 1.7 21.0 - - 6.6 79.0 8.3 0.1 6.6 - 1.7C. Equipmnt

For Civil works - - 42.1 21.0 - 158.3 79. 0 200.4 3 .4 138.8 19.5 42.1Computers - - 0. 5 20.0 - - 1.8 80.0 2 .3 - 1.8 0.5 -

Subtotal rquipment - - 42 5 21 0 - - 160.1 79.0 202.6 3.4 140.5 20 0 42.1D. Technical Assistance

1. roreign Conaulting ServicesFor. Cons. Short Term - - - - - - 62 .3 100.0 62.3 1.1 62. 3 - -

2. Local Consulting ServicesLoc. Cons. Long Term - - - - - - 1,153.3 100.0 1,153.3 19.5 - 1,153.3 -Loc. Cons. Short Term _ _ - - - _ 69.1 100.0 69.1 1.2 - 69.1 -

Subtotal Local Consulting Services - - - - - - 1,222 .4 100.0 1,222 .4 20.6 - 1,222.4 4Subtotal Technical Assistance - - 1,284.7 100.0 1,284.1 21.7 62.3 1,222. 43. Training

2. Courses/Seminars _ - - - - - 266.1 100.0 266.1 4 .5 49. 6 216.5 -Total Investment Costa - - 879 1 15 1 - - 4,946.5 84.9 5,825.7 98.3 644.1 4,302 9 878.7II. pecurrent Costs

A. Incremental StaffProvincial - - 30. 0 100.0 - - - - 30. 0 0. 5 - 30. 0 -

D. Operation and daLint.nanceVehicles - - 15.9 50. 3 - - 15.8 49 7 31.7 0.5 15.3 9.7 6.7

0. MisoellaneousOther (printing, etc) - - 14.4 4 395 - - 22.0 60.5 36.4 0.6 _ 28.7 7.6

Total Recurrent Costs _ 60. 3 61.5 - - 37 .8 38.5 98.1 1.7 15.3 68 .5 14.3Total Disbursennt - - 939. 5 15.9 - 4,984 .4 84.1 5, 923. 8 100.0 659. 4 4,371 .5 893. 0

Thu Jul 11 11:31:14 1996

B-1 Expenditure Accounts by Financiers

Argentina

Provincial Agricultural Development - Mendoza Montecaseros Subproject

tzp nditure Acoounta by Components - Base Costs

('000 US $)

Water Physical

Agricultural Agricultural Irrigation Drainage Management Contingencies

Research Extension System System Training Total t Amount

X. Xavemstmnt Costa

A. Civil borks

Irrigation/Drainage - - 1,599.3 1,756.3 - 3,355.5 15.0 503.3

Project design r supervision - - 21.9 52.4 - 74.3 15.0 11.1

Subtotal Civil Works - - 1,621.2 1,808.6 - 3,429.8 15.0 514.5

B. Vehicles - 7.5 - - - 7.5 10.0 0.8

C. XquiyentFor Civil works - - 177.1 - - 177.1 10.0 17.7

Computers - 2.0 - - - 2.0 10.0 0.2

Subtotal Mquipment - 2.0 177.1 - - 179.1 10.0 17.9

D. Tecbnical Assistance1. roreign Consulting services

For. Cons. Short Term - 59.8 - - - 59.8 - -

2. Local Consulting Services

Loc. Cons. Long Term 378.9 690.8 - - - 1, 069. 7 1.8 18.9

Loc. Cons. Short Term - 9.4 - - 55.8 65.2 -

Subtotal Local Consulting Services 378.9 700.2 - - 55.8 1,134.9 1.7 18.9

Subtotal Technical Assistance 378.9 760.0 - - 55.8 1,194.7 1.6 18.9

R. Training2. Courses/Seminars - - - _ 254.1 254.1 - -

Total Investaent Costs 378.9 769.5 1,798.2 1,808.6 309.9 5,065.2 10.9 552.1

XX. Recurrent CostsA. Incremental Staff

Provincial - 28.1 - - - 28.1 - -

B. Operation and Maintenance O

Vehicles - 28.4 - - - 28.4 5.0 1.4

D. MiscellaneousOther (piinting, etc) - 32.8 -Z - 32.8 5.0 1.6

Total Recurrent Costs - 89.2 - - - 89.2 3.4 3.1

Total ASRZLII COSTS 378.9 858.7 1,798.2 1,808.6 309.9 5,154.4 10.8 555. 1

Physical Contingencies 18.9 4.0 260.9 271.3 - 555.1 - -

Price Contingencies 20.0 53.8 38.0 87.2 15.2 214.3 8.1 17.3

Total PROJ CT COSTS 417.9 916.5 2,097.2 2,167.2 325.1 5,923.8 9.7 572.4

Taxes - 16.0 435.0 441.9 - 893.0 12.7 113.6

Foreign Exchange - 86.0 317.6 206.3 49.6 659.4 9.8 64.3

Thu Jul 11 11:31:19 1996

14-1 Expenditure Accounts by Components - Base Costs

Argentina

Provincial Agricultural Development - Mendoza Montecaseros Subproject

tzpaniituro aaounta by Tezs

('000 USS)

Foreign

Base Cost Exchange

1997 1998 1999 2000 2001 2002 2003 Total I Amount

I. Investmnt CostsA. Civil works

Irrigation/Drainage 1,599.3 1,756.3 - - - - - 3,355.5 9.4 314.9

Project design & supervision 16.3 57.9 - - 74.3 18.9 14.0

Subtotal Civil Works 1,615.6 1,814.2 - - - _ - 3,429.8 9.6 328.9

S. Vehicles 7.5 - - - 7.5 79.0 5.9

C. *qyip-ntFor Civil works - 177.1 - - - - - 177.1 69.4 122.9

Computers 2.0 - - - - - - 2.0 77.8 1.6

Subtotal Equyipent 2.0 177.1 - - - - - 179.1 69.5 124.5

D. T5obnical Aasistaun1. Toreign Consulting Services

For. Cons. Short Term 22.2 9.4 9.4 9.4 9.4 - - 59.8 100.0 59.8

2. Local Consulting ServicesLoc. Cons. Long Term 202.2 367.7 251.4 174.2 74.3 - - 1,069.7 - -

Loc. Cons. Short Term 18.2 18.2 11.2 10.6 7.0 - - 65.2 - -

Subtotal Local Consulting Srvices 220.3 385.8 262.7 184.8 81.3 - - 1,134.9 - -

Subtotal Tchnical Assistance 242.5 395.2 272.1 194.2 90.7 - - 1,194.7 5.0 59.8

E. Training2. Courses/Seminars 81.4 78.7 58.4 23.9 11.7 - - 254.1 18.9 47.9

Sotal Znvest-nt Costs 1,949.1 2,465.2 330.5 218.1 102.4 - - 5,065.2 11.2 567.1

IX. kecurrent CostsA. Incrental Staff

Provincial 5.6 5.6 5.6 5.6 5.6 - - 28.1 - -

B. Operation and Maintenance

Vehicles 3.7 4.9 6.2 7.4 6.2 - - 28.4 48.7 13.8

D. MiscellaneousOther (printing, etc) 9.7 8.6 6.5 5.4 2.7 - _ 32.8 - -

Total Recurrent Costs 19.0 19.1 18.2 18.4 14.5 - - 89.2 15.5 13.8

Total BASELINE COSTS 1,968.0 2,484.4 348.7 236.4 116.8 - - 5,154.4 11.3 580.9

Physical Contingencies 248.8 298.1 4.4 3.4 0.4 - - 555.1 11.4 63.1

Price Contingencies 38.3 114.7 24.3 22.8 14.2 - - 214.3 7.2 15.4

Total PraoaCT cOSTS 2,255.2 2,897.2 377.4 262.6 131.5 - - 5,923.8 11.1 659.4

Taxes 397.7 487.1 3.0 3.1 2.2 - - 893.0 - -

Foreign Exchange 225.7 373.8 24.7 19.0 16.2 - - 659.4 - -

Thu Jul 11 11:31:21 1996

19-1 Expenditure Accounts by Years

ArgentinaProvincial Agricultural Development - Mendoza Rest of Prgramme Subproject

Zr-enditure hncounts by rinanciers1(000 USS)

Federal Provincial Local

Government Government Beneficiaries IBRD Total For. (Excl. DutiesAmount I Amount t Amount 4 Amount 4 Amount % Exch. Taxes) S Taxes

1. lnvestmnt CostsA. Civil Works

Irrigation/Drainage - - 1,596.4 21.0 - - 6,023.4 79.0 7,619.8 51.1 703. 7 5,321.1 1,595.1Project design & supervision - - 10.8 10.0 - - 97 .4 90.0 108.2 0.7 20.2 87 .9 -

Subtotal Civil Works - - 1,607.2 20. 8 - - 6,120.8 79.2 7,728 .0 51.8 723. 9 5,409. 0 1,595.1B. Vehicles - - 25.2 20.6 - - 97. 0 79. 4 122.2 0.8 97.0 - 25.2C. Equilment

Computers - - 27.2 20.0 - - 108.8 80.0 136.0 0.9 116.0 18.4 1.6Office Equipment - - 0.9 21.0 - - 3.5 79.0 4.5 - 3.1 0.4 0,9Communications Equipment - - 1.5 20. 9 - - 5.8 79.1 7.4 - 5.2 0.7 1.5other equip. - - 25.5 20.3 _ - 99.9 79.7 125.4 0.8 85.8 31.3 8.2

Subtotal Zquisi_nt - - 55.2 20.2 - - 218.1 79.8 273 .3 1.8 210. 1 50. 8 12.3D. Technical Assistance

1. Foreign Consulting Servic eFor. Cons. Long Term - - - - - - 1,775. 5 100.0 1,775.5 11.9 1,775.5 - -

For. Cons. Short Term - - - - - - 379.2 100.0 379.2 2.5 379.2 - -

Subtotal tcreign Consulting Services - - - - - - 2,154.8 100.0 2,154 .8 14.4 2,154.8 - -

2. Local Consulting ServicesLoc. Cons. Long Term - - - - - - 479.3 100.0 479. 3 3.2 - 479.3 -

Loc. Cons. Short Term - - - - - - 998.9 100.0 998.9 6.7 157.5 841.5 -

Subtotal Local Consulting Services - - - -s - 1,478.2 100.0 1,478.2 9.9 157.5 1,320.8 -

Subtotal Technical Assistance - - _ - _ - 3,633. 0 100.0 3,633. 0 24 .4 2,312 .2 1,320.8 -

S. Training

1. FellowshipsFellowship - Local - - 11.5 100.0 11.5 0.1 - 11.5 -Fellowship - Foreign - - - - - - 26.3 100.0 26.3 0.2 26.3 - _

Subtotal rellowships - - 37 .8 100.0 37.8 0.3 26. 3 11.5 -

2. Courses/Seminars - - - - - - 14.1 100.0 14.1 0.1 2.6 11.5 -

Subtotal Training - - 51.9 100.0 51 9 0 3 28 9 23.0 -Total Inveat_ nt Costa _ - 1,687.5 14.3 - - 10,120 8 85. 7 11,808.3 79.2 3,3722 6,803.6 1,632.5II. Reourrent Costs

A. Incri_ tal Staff

Provincial - - 827 .7 50. 2 - - 820. 9 49.8 1,648 .6 11.1 - 1,648 .6 -B. Operation an4 Ikintenanoe

Vehicles - - 110.5 50.1 - - 110.1 49.9 220.6 1.5 106.6 67.7 46.3D. miscellaneous

Other (printing, etc) - - 509.3 41.2 - - 727.8 58.8 1,237.1 8.3 - 977.3 259.8Total Rocurrent Costs - - 1,447 5 46 6 - - 1,658.8 53.4 3,106.4 20.8 106.6 2,693.7 306.1

Total Disbnrs_nt _ - 3,135.0 21.0 - - 11,779.7 79.0 14,914.7 100.0 3,478.8 9,497. 3 1,938.7

Thu Jul 11 11:30:44 1996

8-1 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural Development - Mendoza Rest of Prgramme Subproject

Iapenditure Accounta by Cmponnts - Base Costs('000 USS)

Modernization,

Monitoring Physical

and ContingenciesEnvironment Minor Works Total I Amount

I. Investment Costs

A. Civil WorksIrrigation/Drainage 74.6 6,348.3 6,423.0 10.9 698.8Project design & supervision - 106.4 106.4 - -

subtotal Civil Works 74.6 6,454.7 6,529.4 10.7 698.8

B. Vehicles 109.0 - 109.0 10.0 10.9

C. Kquip-ntComputers 122.1 - 122.1 10.0 12.2

Office Equipment 4.0 - 4.0 10.0 0.4Communications Equipment 6.6 - 6.6 10.0 0.7

Other equip. 110.5 - 110.5 10.0 11.1

Subtotal Equipment 243.2 - 243.2 10.0 24.3

D. Technical Assistanoe

1. Foraign Conaulting SarvioesFor. Cons. Long Term 1,699.6 - 1,699.6 - -For. Cons. Short Term 370.0 - 370.0 - -

Subtotal Yoreign Consulting Services 2,069.6 - 2,069.6 - -

2. Local Consulting Services

Loc. Cons. Long Term 448.3 - 448.3 - -

Loc. Cons. Short Term 959.9 - 959.9 - _Subtotal Local Consulting Servioce 1,408.2 - 1,408.2 - -

Subtotal Technical Assistance 3,477.8 - 3,477.8 _

U. Training1. Tellowsbips

Fellowship - Local 10.8 - 10.8 - -4

Fellowship - Foreign 25.0 - 25.0 - -Subtotal rellowahips 35. 8 - 35.8 - -2. Courses/Seminars 13.3 - 13.3 - -

Subtotal Training 49.0 - 49.0 - -

Total Investment Coats 3,953.7 6,454.7 10,408.4 7.1 734.0II. Recurreut Costs

A. Incre ntal StaffProvincial 1,528.2 - 1,528.2 - -

S. Operation and MaintenanceVehicles 197.3 - 197.3 5.0 9.9

D. MiscellaneousOther (printing, etc) 1,110.5 - 1,110.5 5.0 55.5

Total Securrent Costa 2,836.0 - 2,836.0 2.3 65.4Total ASRIIUM COSTS 6,789.7 6,454.7 13,244.4 6.0 799.4

Physical Contingencies 111.8 687.6 799.4 - -Price Contingencies 376.8 494.1 870.9 7.2 63.0

Total PRDJUCT COSTS 7,278.2 7,636.5 14,914.7 5.8 862.4

Taxes 357.7 1,580.9 1,938.7 9.1 176.3

Foreign Exchange 2,763.3 715.5 3,478.8 3.0 102.8

Thu Jul 11 11:30:49 1996

14-1 Expenditure Accounts by Components - Base Costs

Argentina

Provincial Agricultural Development - Mendoza Rest of Prgramme Subproject

txpsmditur Aooounta by Yars('000 US$)

Foreign

Base Cost Exchange

1997 1998 1999 2000 2001 2002 2003 Total * Amount

I. IXv5st5nt Costs

A. Civil WorksIrrigation/Drainage 1,315.6 1,250.9 1,273.7 1,291.4 1,291.4 - - 6,423.0 9.4 602.8

Project design 4 supervision 106.4 - - - - - - 106.4 18.9 20.1

Subtotal Civil Works 1,422.0 1,250.9 1,273.7 1,291.4 1,291.4 - - 6,529.4 9.5 622.9

B. Vehicles 45.0 64.0 - - - - - 109.0 79.4 86.6

C. XquipsitComputers 102.1 20.0 - - - - - 122.1 85.4 104.3

Office Equipment 4.0 - - - - - - 4.0 69.4 2.8

Communications Equipment 2.5 4.0 - - - - - 6.6 70.4 4.6

Other equip. 10.2 95.6 1.6 1.6 1.5 - - 110.5 68.8 76.0Subtotal Zquipfmnt 118.9 119.6 1.6 1.6 1.5 - - 243.2 77.1 187.7

D. Technical. Assistance1. roreign Consulting Services

For. Cons. Long Term 794.8 51.5 222.3 381.1 100.0 150.0 - 1,699.6 100.0 1,699.6

For. Cons. Short Term 205.0 90.0 30.0 30.0 15.0 - - 370.0 100.0 370.0

Subtotal roreign Consulting Services 999.8 141.5 252.3 411.1 115.0 150.0 - 2,069.6 100.0 2,069.6

2. Local Consulting ServicesLoc. Cons. Long Term 95.1 95.1 86.0 86.0 86.0 - - 448.3 - -Loc. Cons. Short Term 419.1 237.8 238.5 34.7 29.9 - - 959.9 15.6 150.0

Subtotal Local Consulting Services 514.1 332.9 324.5 120.8 115.9 - - 1,408.2 10.7 150.0

Subtotal Tecnxical Assistance 1,513.9 474.4 576.8 531.9 230.9 150.0 - 3,477.8 63.8 2,219.6

*. Training

1. Fellowsips

Fellowship - Local 2.2 2.2 2.2 2.2 2.2 - - 10.8 - -

Fellowship - Foreign 5.0 5.0 5.0 5.0 5.0 - - 25.0 100.0 25.0 °

Subtotal rellowsaips 7.2 7.2 7.2 7.2 7.2 - - 35.8 69.9 25.02. Courses/Seminars 2.7 2.7 2.7 2.7 2.7 - - 13.3 18.9 2.5 1

Subtotal Training 9.8 9.8 9.8 9.8 9.8 - - 49.0 56.1 27.5

Total Inv-stuent Costs 3,109.5 1,918.7 1,861.9 1,834.7 1,533.6 150.0 - 10,408.4 30.2 3,144.2

II. R current CostsA. Inor m ntal Staff

Provincial 147.8 308.6 357.3 357.3 357 .3 - - 1,528.2 - -B. Operation and Maintenance

Vehicles 18.5 44.7 44.7 44.7 44.7 - - 197.3 48.7 96.0

D. MicGOllaneousOther (printing, etc) 213.0 389.7 236.9 135.5 135.5 - - 1,110.5 _

Total Pocurrent Costs 379.2 743.0 638.9 537.4 537.4 _ - 2,836.0 3.4 96.0Total BaSASrLI COSTS 3,488.8 2,661.7 2,500.8 2,372.1 2,071.1 150.0 - 13,244.4 24.5 3,240.2

Physical Contingencies 88.4 99.9 205.3 202.9 202.9 - - 799.4 12.2 97.8

Price Contingencies 52.1 112.9 177.3 235.2 274.5 19.0 - 870.9 16.2 140.7

Total PROJCT COSTS 3,629.2 2,874.5 2,883.4 2,810.1 2,548.4 169.0 - 14,914.7 23.3 3,478.8

Taxes 360.9 405.7 393.3 384.6 394.1 - - 1,938.7 - -

Foreign Exchange 1,319.5 457.6 597.7 622.9 312.0 169.0 - 3,478.8 - -

Thu Jul 11 11:30:51 1996

19-1 Expenditure Accounts by Yeats

ArgentinaProvincial Agricultural Development - Pozo Borrado Subproject

SXpenittre ARcouont by Vinanjezrs('000 US$)

Federal Provincial LocalGovernment Government Beneficiaries IBRD Total For. (Excl. Duties

Amount t Amount 4 Amount 4 Amount * Amount I Exch. Taxes) & Taxes

X. xnvestmsnt CostsA. Civil Works

Flood Control - - 1,289.2 21.0 - - 4,849.9 79.0 6,139.1 88.4 568.5 4,281.4 1,289.2Project design s supervision - - - - - - 68.6 100.0 68.6 1.0 12.8 55.8 -

Subtotal Civil Works - - 1,289.2 20.8 - _ 4,918.5 79.2 6,207.7 89.4 581.3 4,337.2 1,289.2B. Vehicles - _ 7.1 21.0 - _ 26.5 79.0 33.6 0.5 23.3 3.3 7.1C. Equipment

Computers - - 4.8 20.0 - - 19.3 80.0 24.2 0.3 24.2 - -Office Equipment - - 3.7 20.8 - - 14.2 79.2 18.0 0.3 12.4 2.7 2.9Communications Equipment - - 1.6 20.4 - - 6.3 79.6 7.9 0.1 5.4 1.9 0.6Other equip. - - 1.8 21.0 - - 6.7 79.0 8.5 0.1 5.9 0.8 1.8

Subtotal Cquipimnt - _ 12.0 20.4 - - 46.6 79.6 58.6 0.8 47.9 5.4 5.3D. Tochnioal Assistance

1. roreign Consulting ServicesFor. Cons. Short Term - - - - - - 123.6 100.0 123.6 1.8 123.6 - -

2. Local Consulting servicesLoc. Cons. Long Term - - - - - - 150.4 100.0 150.4 2.2 - 150.4 -Loc. Cons. Short Term - - - - - - 63.0 100.0 63.0 0.9 - 63.0 -

Subtotal Local Consulting Services - - - - - - 213.4 100.0 213.4 3.1 - 213.4 -Subtotal Tochnical Assistance - 337.1 100.0 337.1 4.9 123.6 213.4 -1. Training

2. Courses/Seminars - - - - - - 11.0 100.0 11.0 0.2 2.1 9.0 -Total Inves-tnt Costs - - 1,308.2 19.7 - - 5,339.7 80.3 6,647.9 95.7 778.2 4,568.2 1,301.6II. Recurrent Costs

A. Incremental StaffProvincial - - 34.4 30.2 - - 79.3 69.8 113.7 1.6 - 113.7 -

D. Operation and Maintenance

Vehicles - - 21.0 32.2 - - 44.3 67.8 65.3 0.9 31.6 20.0 13.7C. Materials and Supplies - - 5.6 32.2 - - 11.7 67.8 17.3 0.2 3.2 10.4 3.6 1D. Miscellaneous

Rent and Utilities - - 13.7 32.2 - - 28.8 67.8 42.4 0.6 - 33.5 8.9Other (printing, etc) - - 18.6 32.2 - - 39.2 67.8 57.8 0.8 - 45.6 12.1

Subtotal Miscellaneou - - 32.3 32.2 - - 67.9 67.8 100.2 1.4 - 79.2 21.0Total Recurrent Costs - - 93.2 31.4 - - 203.3 68.6 296.5 4.3 34.8 223.3 38.4

Total Disbursement - - 1,401.5 20.2 - - 5,543.0 79.8 6,944.4 100.0 813.0 4,791.5 1,339.9

Thu Jul 11 11:29:09 1996

8-1 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural Development - Pozo Borrado Subproject

Expenditure Accounts by Ca ponents - Base Costs('000 US$)

Canals/Road Environmental PhysicalRehabilitation Impact Institutional Contingencies& Construction Surveillance Strengthening Total t Amount

I. Investmet CostsA. Civil Works

Flood Control 5,062.4 70.6 - 5,133.0 15.0 770.0Project design 8 supervision 58.3 - - 58.3 15.0 8.7

Subtotal Civil Works 5,120.7 70.6 - 5,191.3 15.0 778.7B. Vehicles - - 30.3 30.3 10.0 3.0

C. EquipmentComputers 13.6 - 8.2 21.8 10.0 2.2Office Equipment 10.8 - 5.3 16.2 10.0 1.6Communications Equipment 4.5 - 2.6 7.1 10.0 0.7Other equip. - 7.6 - 7.6 10.0 0.8

Subtotal Equipment 28.9 7.6 16.1 52.7 10.0 5.3D. Technical Assistance

1. Woreign Consulting ServicesFor. Cons. Short Term - 120.0 - 120.0 - -

2. Local Consulting ServicesLoc. Cons. Long Term 144.0 - - 144.0 - -Loc. Cons. Short Term 60.0 - - 60.0 - -

Subtotal Local Consulting Services 204.0 - - 204.0 - -

Subtotal Technical Assistance 204.0 120.0 - 324.0 - -

Z. Training2. Courses/Seminars - - 10.6 10.6 - -

Total Inves - nt Costs 5,353.6 198.2 57.0 5,608.8 14.0 787.0II. Recurrent Costs

A. Increftntal StaffProvincial 64.8 44.1 - 108.9 - -

B. Operation and MaintenanceVehicles 60.1 - - 60.1 5.0 3.0

C. Materials and Supplies 15.8 - - 15.8 5.0 0.8D. Miscellaneous

Rent and Utilities 38.7 - - 38.7 5.0 1.9Other (printing, etc) 52.7 - - 52.7 5.0 2.6

Subtotal Miscellanecus 91.4 - - 91.4 5.0 4.6Total Recurrent Costs 232.1 44.1 - 276.3 3.0 8.4

Total BASELDNt COSTS 5,585.8 242.3 57.0 5,885.1 13.5 795.4Physical Contingencies 779.4 11.3 4.6 795.4 - -Price Contingencies 254.2 8.9 0.9 264.0 11.9 31.4

Total PROJ3CT COSTS 6,619.4 262.5 62.5 6,944.4 11.9 826.8

Taxes 1,311.5 19.5 8.9 1,339.9 12.8 171.1Foreign Exchange 635.1 137.3 40.5 813.0 10.3 84.0

Thu Jul 11 11:29:14 1996

14-1 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development - Pozo Borrado Subproject

Expenditure Accounts by YearsCOOO US$)

ForeignBase Cost Exchange

1997 1998 1999 2000 2001 2002 2003 Total t Amount

I. Zovestnent CostsA. Civil Works

Flood Control 1,910.2 1,983.5 1,339.4 - - - - 5,133.0 9.4 481.7Project design s3upervision 42.4 15.9 - - - - - 58.3 18.9 11.0

Subtotal Civil Works 1,852.6 1,999.4 1,339.4 - - - - 5,191.3 9.5 492.7B. Vehicles 30.3 - - - - - - 30.3 69.4 21.0

C. EquipmentComputers 21.8 - - - - - - 21.8 100.0 21.8

Office Equipment 16.2 - - - - - - 16.2 69.2 11.2

Communications Equipment 7.1 - - - - - - 7.1 68.8 4.9

Other equip. 5.0 - 2.5 - - - - 7.6 69.4 5.3

Subtotal Equipment 50.1 - 2.5 - - _ _ 52.7 81.9 43.1

D. Technical Assist-nce1. Foreign Consulting Services

For. Cons. Short Term 36.0 36.0 48.0 - - - - 120.0 100.0 120.02. Local Consulting Services

Loc. Cons. Long Term 48.0 48.0 48.0 - - - - 144.0 - -

Loc. Cons. Short Term 15.0 15.0 30.0 - - - - 60.0 - -

Subtotal Local Consulting Services 63.0 63.0 78.0 - - - - 204.0 - -Subtotal Technical Assistance 99.0 99.0 126.0 - - - - 324.0 37.0 120.0L. Training

2. Courses/Seminars 3.2 4.2 3.2 - - - - 10.6 18.9 2.0

Total Investment Costs 2,035.2 2,102.6 1,471.1 - - - - 5,608.8 12.1 678.9II. Recurrent Costs

A. Incremental StaffProvincial 36.3 36.3 36.3 - - - - 108.9 - - °

B. Operation and Haintenance coVehicles 20.0 20.0 20.0 - - - - 60.1 48.7 29.3

C. Materials and Supplies 5.3 5.3 5.3 - - - - 15.8 18.9 3.0

D. MiscellaneousRent and Utilities 12.9 12.9 12.9 - - - - 38.7 - -

Other (printing, etc) 17.6 17.6 17.6 - - - 52.7 - -

Subtotal Miscellaneous 30.5 30.5 30.5 - - - - 91.4 - -

Total Recurrent Costs 92.1 92.1 92.1 - - - - 276.3 11.7 32.3Total BASELINI COSTS 2,127.2 2,194.7 1,563.1 - - - - 5,885.1 12.1 711.1

Physical Contingencies 288.7 302.7 203.9 - - - - 795.4 10.3 81.9Price Contingencies 40.8 104.3 118.9 - - - - 264.0 7.5 19.9

Total PROJECT COSTS 2,456.8 2,601.7 1,886.0 - - - - 6,944.4 11.7 813.0

Taxes 469.0 511.9 359.1 - - - - 1,339.9 - -

Foreign Exchange 323.7 272.7 216.6 - _ _ _ 813.0 - -

Thu Jul 11 11:29:17 1996

19-1 Fxpenditure Accounts by Years

Argentina

Provincial Agricultural Development - SeFiNOA SubprojectErend iture Accounts by Vinmnci.rs

('000 US$)

Federal Provincial LocalGovernment Government Beneficiaries IBRD total For. (Excl. Duties

Amount * Amount t Amount I Amount t Amount * Exch. Taxes) & Taxes

I. Investment Costs

A. Civil WorksBuildings and Labs - - 499.9 21.0 - - 1,880.4 79.0 2,380.3 13.4 221.3 1,659.1 499.9

B. Vehicles - - 62.7 20.0 - - 250.8 80.0 313.5 1.8 213.9 99.6 -C. 3quiIent

Laboratories eq. - - 185.4 20.0 - - 741.5 80.0 926.9 5.2 853.8 59.9 13.2Computers - - 15.3 20.0 - - 61.2 80.0 76.5 0.4 76.5 - -Office Equipment - - 13.9 21.0 - - 52.3 79.0 66.2 0.4 45.9 6.4 13.9Communications Equipment - - 6.5 20.3 - - 25.5 79.7 31.9 0.2 21.9 8.2 1.8other equip. - - 657.8 21.0 - - 2,478.3 79.0 3,136.2 17.6 2,170.4 323.0 642.8

Subtotal Xquiment - - 878.9 20.7 - - 3,358.8 79.3 4,237.6 23.8 3,168.4 397.5 671.7D. Technical Assistance

1. roreign Consulting ServicesFor. Cons. Short Term - - - - - - 152.6 100.0 152.6 0.9 152.6 - -

2. Local Consulting ServicesLoc. Cons. Long Term - - - - - - 808.1 100.0 808.1 4.5 - 808.1 -

Loc. Cons. Short Term - - - - - - 84.7 100.0 84.7 0.5 - 84.7 -Subtotal Local Consulting services - - - - - - 892.7 100.0 892.7 5.0 - 892.7 -

Subtotal Technical Assistanoe - - - - - - 1,045.3 100.0 1,045.3 5.9 152.6 892.7 -Z. Training

2. Courses/Seminars - - - - - - 570.8 100.0 570.8 3.2 334.5 236.3 -

Total Invest_ent Costs - - 1,441.4 16.9 - - 7,106.1 83.1 8,547.6 48.0 4,090.8 3,285.3 1,171.6II. Recurrent Costs

A. Incremental StaffProvincial - - - - 1,093.1 64.5 601.3 35.5 1,694.4 9.5 - 1,694.4 - O

D. Operation and MaintenanceBuildings & Labs - - - - 177.8 47.4 197.0 52.6 374.7 2.1 - 296.0 78.7Equipment - - - - 48.9 46.8 55.5 53.2 104.3 0.6 50.4 32.0 21.9

Subtotal Operation and Maintananoe - - - - 226.6 47.3 252.4 52.7 479.1 2.7 50.4 328.1 100.6C. Materials and Supplies - - - - 813.4 46.6 930.5 53.4 1,743.9 9.8 500.2 961.4 282.3D. Miscellaou-

Insurance, etc.. - - - - 250.4 47.4 277.9 52.6 528.4 3.0 - 417.4 111.0Other (printing, etc) - - - 2,189.7 45.6 2,610.8 54.4 4,800.5 27.0 - 3,792.4 1,008.1

Subtotal Miscellaneous - - - - 2,440.1 45.8 2,888.8 54.2 5,328.9 29.9 - 4,209.8 1,119.1Total Recurrent Costs - - - _ 4,573.3 49. 5 4,673.0 50.5 9,246.2 52.0 550.6 7,193.6 1,502.0

Total Disbursement - - 1,441.4 8.1 4,573.3 25.7 11,779.1 66.2 17,793.8 100.0 4,641.3 10,478.9 2,673.6

Thu Jul 11 12:53:32 1996

8-1 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural Development - SeFiNOA Subproject

u renditure Accounts by Ca eonts - Sase Costs('000 USS)

Plague andCitrus Agrochemicals Disease Production Physical

Fruit Fly Sanitary Canker and Toxic Diagnostic Certification Institutional ContingenciesEradication Barriers Montoring Residues Center Center Strengthening Total t Amount

1. Investmnt Costsk. Civil Works

Buildings and Labs - 2,034. 6 - 2,034.6 15.0 305.2B. Vehicles - - - - - - 281.8 281.6 10.0 28.2C. Zqui,snt

Laboratories eq. - 131.7 - 155.0 549.5 - - 835.2 10.0 83.5Computers - - - - - - 69.0 69.0 10.0 6.9Office Equipment - 34.2 - 11.3 10.5 - 3.6 59.6 10.0 6.0Communications Equipment - 3.0 - - - - 25.7 28.7 10.0 2.9Other equip. 2,594.1 14.3 - - - - 46.4 2,654.9 9. 9 262.7

Subtotal Kquipont 2,594.1 183.2 - 166.3 559.0 - 144.8 3,647.4 9.9 362.0D. Technical Assistance

1. Voreign Consulting Services

For. Cons. Short Term - - - - - - 150.0 150.0 - -2. Local Consulting Services

Loc. Cons. Long Term - - 754.7 754.7 - -Loc. Cons. Short Term 60.2 - - 21.5 - - - 81.7 - -

Subtotal Local Consulting Services 60.2 - - 21.5 - - 754.7 836.4 - -Subtotal Teobnical Assistance 60.2 - - 21.5 - - 904.7 986.4 - -3. Training

2. Courses/Seminars - - - - - - 541.2 541.2 - -Total Inesotment Costs 2,654.3 2,217.8 - 187.8 559.0 - 1,872.4 7,491.4 9.3 695.3ZX. Recurrent Costs

A. Incrental StaffeProvincial 206.4 1,369.0 - - - - - 1,575.4 - - °

S. Operation and MLintenanoeBuildings G Labs - 40.0 - - 175.2 - 117.7 332.9 5.0 16.6Equipment - - - 93.8 - - - 93.8 5.0 4.7

Subtotal Opratio aond M intenanoo - 40.0 - 93.8 175.2 - 117.7 426.7 5.0 21.3C. Materials and Supplies 236.5 270.9 108.2 221.8 627.5 95.0 - 1,559.9 5.0 78.0D. Misoollaou

Insurance, etc.. 10.2 39.3 - 58.2 205.3 - 156.4 469.5 5.0 23.5Other (printing, etc) 3,912.9 129.0 - - - - 237.6 4,279.5 5.0 214.0

Subtotal Misellaneous 3,923.1 168.3 - 58.2 205.3 - 394.0 4,749.0 5.0 237.4Total Rcurrent Costa 4,365.9 1,848.2 108.2 373.8 1,008.1 95.0 511.7 8,311.0 4.1 336.8

Total BAS3LTYg COSTS 7,020.3 4,066.0 108.2 561.6 1,567.1 95.0 2,384.1 15,802.3 6.5 1,032.1Physical Contingencies 464.6 347.5 5.4 35.3 106.3 4.8 68.2 1,032.1 - -Price Contingencies 536.2 182.5 7.5 27.5 74.8 6.6 124.2 959.3 5.1 49.2

Total PROJ CT COSTS 8,021.1 4,596.0 121.2 624.4 1,748.2 106.4 2,576.6 17,793.8 6.1 1,081.3

Taxes 1,619.0 617.5 25.4 91.4 175.1 22.3 122.8 2,673.6 7.4 197.8Foreign Exchange 2,173.5 473.6 22.6 271.9 844.8 19.9 835.1 4,641.3 7.8 360.8

Thu Jul 11 12:53:35 1996

14-1 Expenditure Accounts by Components - Base Costs

ArgentUnaProvincial Agricultural Development - SeFiNOA Subproject

Lqendltuze Accueta bI Tests('000 Us$)

ForeignBs- Cost Exchange

1997 1998 1999 2000 2001 2002 2003 Total I Amount

X. zwvt m_t C taA. ciil Ibe

Buildings and Labs 2,034.6 - - - - - - 2,034.6 9.4 191.0

B. Vehicles 281.s - - - 281.8 68.5 192.9

C. _ u1ummtLaboratories eq. 835.2 - - - - - - 835.2 92.2 770.0

Computers 69.0 - - - - - - 69.0 100.0 69.0

Office Equipment 59.6 - - - - - - 59.6 69.4 41.4

Co munications Equipment 28.7 - - - - - 28.7 68.7 19.7

Other equip. 88.4 - 855.5 855.5 855.5 - - 2,654.9 69.4 1,842.0Subtotal SqmipAut 1,080.9 - 855.5 855.5 855.5 - - 3,647.4 75.2 2,742.1

D. Technical AaJaUtA_1. tom±vg Comaulting satyito

For. Cons. Short Term 75.0 75.0 - - - - - 150.0 100.0 150.0

2. Local ConaultiMg Servio aLoc. Cons. Long Term 150.9 150.9 150.9 150.9 150.9 - - 754.7 - -

Loc. Cons. Short Term 43.0 21.5 17.2 - - - - 81.7 - -

Subtotal Loca Consulting Servioe 193.9 172.4 168.1 150.9 150.9 - - 836.4 - -Subtotal Techniaol assistance 268.9 247.4 168.1 150.9 150.9 - - 986.4 15.2 150.0Z. Trainin

2. Courses/Seminars 160.0 84.7 106.8 82.8 106.8 - - 541.2 58.9 319.0

Total Inv-tat Coats 3,826.2 332.2 1,130.5 1,089.3 1,113.3 - - 7,491.4 48.0 3,594.9XI. Recurrent Coats

A. Inoremntal Sta ffProvincial 200.6 343.7 343.7 343.7 343.7 - - 1,575.4 - - .

S. Operation and M3intenanooBuildings & Labs 60.5 68.1 68.1 68.1 68.1 - - 332.9 - -

Equipment 18.8 18.8 18.8 18.8 18.8 - - 93.8 48.7 45.7Subtotal Operation and Msintenano. 79.3 86.99 86.9 86.9 86.9 - 426.7 10.7 45.7C. Materials and Supplies 301.0 '15.1 314.6 314.6 314.6 - - 1,559.9 29.0 452.7

D. MiaellInsurance, etc.. 86.0 95.9 95.9 95.9 95.9 - 469.5 - -

Other (printing, etc) 945.8 894.0 866.4 760.8 812.6 - - 4,279.5 - -Subtotal Miecellaneous 1,031.8 989.8 962.2 856.6 908.5 - - 4,749.0 - -

total Recurrent Costa 1,612.7 1,735.5 1,707.4 1,601.8 1,653.6 - - 8,311.0 6.0 498.3Total 3ASULIN COSTS 5,438.9 2,067.7 2,837.8 2,691.1 2,766.9 - - 15,802.3 25.9 4,093.3

Physical Contingencies 509.3 69.6 153.7 148.5 151.0 - - 1,032.1 33.4 345.2Price Contingencies 91.0 89.9 189.1 252.2 337.1 - - 959.3 21.1 202.9

Total PROJTC CO SS 6,039.2 2,227.2 3,180.6 3,091.8 3,255.0 - 17,793.8 26.1 4,641.3

Taxes 835.9 303.1 511.9 498.8 523.8 - - 2,673.6 - -

Foreign Exchange 1,768.0 228.6 869.9 864.1 910.8 - - 4,641.3 - -

Thu Jul 11 12:53:37 1996

19-1 Expenditure Accounts by Years

ArgentinaProvincial Agricultural Development - Mesopotamia Subproject

Zxpezditure Acoounts by rinanoiers('000 US$)

Federal Provincial LocalGovernment Government Beneficiaries IBRD Total For. (Excl. Duties

Amount t Amount t Amount t Amount % Amount _ Exch. Taxes) i Taxes

I. Inveatment CostsA. Civil borks

Buildings and Labs - - 137.4 21.0 - - 517.0 79.0 654.4 2.9 60.9 456.2 137.4Project design & supervision - - - - - - 65.1 100.0 65.1 0.3 12.2 52.9 -

Subtotal Civil Works - - 137.4 19.1 - - 582.1 80.9 719.5 3.2 73.0 509.0 137.4B. Vehicles 345.9 15.6 48.6 2.2 - - 1,824.7 82.2 2,219.2 9.8 1,531.3 358.5 329.5C. Zquipeant

Laboratories eq. - - 15.7 20.0 - - 62.7 80.0 78.4 0.3 78.4 - -Computers 6.5 6.5 6.9 6.9 - - 85.9 86.5 99.3 0.4 99.3 - -Office Equipment 10.9 18.5 1.4 2.4 - - 46.3 79.1 58.6 0.3 40.6 6.7 11.4Communications Equipment 34.9 19.6 2.4 1.3 - - 141.0 79.1 178.3 0.8 123.5 19.9 34.9Other equip. 7.2 1.4 95.6 18.7 - - 408.0 79.9 510.7 2.2 366.0 46.5 98.2

Subtotal Equipment 59.5 6.4 121.9 13.2 - - 743.9 80.4 925.3 4.1 707.7 73.1 144.5D. TechnOoil Assistanoc

2. Local Consulting Servio-sLoc. Cons. Long Term - - - - - - 428.4 100.0 428.4 1.9 - 428.4 -Loc. Cons. Short Term - - - - - - 160.6 100.0 160.6 0.7 - 160.6 -

Subtotal Loaal Consulting Services - - - - - - 589.0 100.0 589.0 2.6 - 589.0 -

E. Training

1. VallowshipsFellowship - Foreign - - - - - - 25.2 100.0 25.2 0.1 25.2 - -

2. Courses/Seminars - - - - - - 209.2 100.0 209.2 0.9 38.9 170.3 -Subtotal Training - - - - - - 234.4 100.0 234.4 1.0 64.1 170.3 -r. Other

1. Indemnization Fund - - 1,036.0 100.0 - - - - 1,036.0 4.6 - 1,036.0 -Total Invest mnt Costs 405.4 7.1 1,343.9 23.5 - - 3,974.1 69.4 5,723.4 25.2 2,376.1 2,735.9 611.4II. Recurrent Coats

A. Inor _ tal StaffRegional - - - - 8,894.6 100.0 - - 8,894.6 39.1 - 8,894.6 -

Provincial - - - - 3,757.9 100.0 - - 3,757.9 16.5 - 3,757.9 -

Subtotal Zarmental Staff - - - - 12,652.5 100.0 - - 12,652.5 55.7 - 12,652.5 -

S. Operation and iLintananc-Buildings 8 Labs 16.7 46.9 - - - - 18.9 53.1 35.6 0.2 - 28.1 7.5Equipment 274.7 46.8 - - - - 311.8 53.2 586.4 2.6 283.4 179.9 123.1Vehicles 18.1 41.1 - - - - 26.0 58.9 44.1 0.2 21.3 13.5 9.3

Subtotal Operation and Maint.msnae 309.5 46.5 - - - - 356.7 53.5 666.1 2.9 304.7 221.5 139.9C. Materials and Supplies 201.6 42.1 - - - - 277.0 57.9 478.6 2.1 230.9 184.2 63.6D. Miacallaceous

Rent and Utilities 240.0 46.9 - - - - 271.9 53.1 511.9 2.3 - 404.4 107.5Insurance, etc.. 123.8 43.7 - - - - 159.6 56.3 283.4 1.2 - 223.9 59.5Other (printing, etc) 1,127.0 46.6 - - - - 1,292.2 53.4 2,419.2 10.6 - 1,911.1 508.0

Subtotal Misoellaneous 1,490.8 46.4 - _ _ - 1,723.7 53.6 3,214.5 14.1 - 2,539.4 675.0Total Reocurrent Costs 2,001.9 11.8 - - 12,652.5 74.4 2,357.4 13.9 17,011.8 74.8 535.6 15,597.7 878.5

Total Disburwannt 2,407.2 10.6 1,343.9 5.9 12,652.5 55.7 6,331.5 27.8 22,735.2 100.0 2,911.7 18,333.6 1,489.9

Thu Jul 11 11:31:44 1996

8-1 Expenditure Accounts by Financiers

Argentina

Provincial Agricultural Development - Mesopotamia Subproject

Expenditure Aoocunts by Coponents - Base Coats

('000 US$)

Physical

Field Sanitary Laboratory Sanitary Institutional Contingencies

Services Barriers Services Emergencies Strengthening Total 8 Amount

I. Invtmnt Costa

A. Civil Wbrks

Buildings and Labs - - 559.4 - - 559.4 15.0 83.9

Project design 4 supervision - - 55.7 - - 55.7 15.0 .3

Subtotal Civil Works - - 615.0 - - 615.0 15.0 92. 3

B. Vehicles 1,610.0 217.3 47.8 122.7 - 1,997.7 10.0 199.6

C. Equipmnt

Laboratories eq. - - 70.7 - - 70.7 10.0 7.1

Computers 58.5 2.0 8.0 - 21.0 89.5 10.0 9.0

Office Equipment 46.6 - 6.2 - - 52.8 10.0 5.3

Comnunications Equipment 149.8 6.1 - - 4.6 160.6 10.0 16.1

Other equip. 48.6 33.2 - 376.8 - 458.8 10.0 45.9

Subtotal zquimant 303.8 41.3 84.9 376.8 25.6 832.3 10.0 83.2

D. Technical Assistano-2. Local Consulting Services

Loc. Cons. Long Term - - - - 401.2 401.2 - -

Loc. Cons. Short Term 72.0 - - - 78.0 150.0 - -

Subtotal Local Consulting Services 72.0 - - - 479.2 551.2 - -

E. Training

1. Sellovahips

Fellowship - Foreign - - 25.0 - - 25.0 - -

2. Courses/Seminars - - - - 197.2 197.2 - -

Subtotal Training - 25.0 - 197.2 222.2 - -

F. Other

1. Indemnization Fund - - - 967.5 - 967.5 - -

Total Invest mnt Costs 1,985.8 258.6 772.7 1, 467.0 702.0 5,186.0 7.2 375.3

II. Recurrent CostsA. Incrm -ntal Staff

Regional 8,306.5 - - - - 8,306.5 - -

Provincial - 2,787.1 722.4 - - 3,509.5 - -

Subtotal Incremntal Staff 8,306.5 2,787.1 722.4 - - 11,816.0 - -

S. Operation and Maintenance

Buildings & Labs - - 31.7 - - 31.7 5.0 1.6

Equipment 472.3 55.1 - - - 527.4 5.0 26.4

Vehicles - - 9.2 30.8 - 40.1 5.0 2.0

Subtotal Operation and Y-intanance 472.3 55.1 40.9 30.8 - 599.2 5.0 30.0

C. Materials and Supplies 262.6 - 170.7 - - 433.3 5.0 21.7

D. MiaoollanmosRent and Utilities 455.3 - - - - 455.3 5.0 22.8

Insurance, etc.. 190.4 21.1 25.8 16.2 - 253.6 5.0 12.7

Other (printing, etc) 1,921.2 54.3 5.4 172.0 - 2,152.9 5.0 107.6

Subtotal Miaoellanmoc 2,566.8 75.5 31.2 188.2 - 2,861.7 5.0 143.1

Total Reaurrent Costs 11,608.3 2,917.7 965.1 219.1 - 15,710.2 1.2 194.7

Total SASEL. coSTS 13,594.1 3,176.3 1,737.8 1,686.1 702.0 20,896.2 2.7 570.0

Physical Contingencies 356.5 32.4 117.7 60.9 2.6 570.0 - -

Price Contingencies 846.3 209.2 78.9 89.7 45.0 1,269.1 1.4 17.3

Total PROJZCT COSTS 14,796.8 3,417.9 1 ,934.4 1,836.6 749.5 22, 735.2 2.6 587.3

Taxes 1,107.6 48.4 194.4 139.5 - 1,489.9 6.9 102.8

Foreign Exchange 1,952.5 227.4 266.5 399.7 65.7 2,911.7 8.2 238.6

Thu Jul 11 11:31:49 1996

14-1 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development - Mesopotamia Subproject

xpenditur- Aaaoumta by Years

('000 US$)

ForeignBase Cost Exchange

1997 1998 1999 2000 2001 2002 2003 Total I Amount

I. Investment CoatsA. Civil Works

Buildings and Labs 559.4 - - - - - - 559.4 9.4 52.5Project design & supervision 55.7 - - - - - - 55.7 18.9 10.5

Subtotal Civil Works 615.0 - - - - - - 615.0 10.2 63.0B. Vehicles 1,997.7 - - - - - - 1,997.7 69.1 1,381.0C. quyipant

Laboratories eq. 70.7 - - - - - - 70.7 100.0 70.7Computers 69.5 - - - - - - 89.5 100.0 89.5Office Equipment 52.8 - - - - - - 52.8 69.3 36.6Communications Equipment 160.6 - - - - - - 160.6 69.3 111.3

Other equip. 434.5 6.1 6.1 6.1 6.1 - - 458.8 71.7 328.8Subtotal quip ment 808.1 6.1 6.1 6.1 6.1 - - 832.3 76.5 637.0D. Teocnial Assistanoe

2. Local Conmulting SezvicaeLoc. Cons. Long Term 91.6 86.4 74.4 74.4 74.4 - - 401.2 - -Loc. Cons. Short Term 39.6 15.6 39.6 15.6 39.6 - - 150.0 - -

Subtotal Local Consulting S.rvioes 131.2 102.0 114.0 90.0 114.0 - - 551.2 - -Z. Training

1. lellow bipsFellowship - Foreign 25.0 - - - - - - 25.0 100.0 25.0

2. Courses/Seminars 50.5 46.2 33.5 33.5 33.5 - - 197.2 18.9 37.2Subtotal training 75.5 46.2 33.5 33.5 33.5 - - 222.2 28.0 62.2r. other

1. Indemnization Fund 193.5 193.5 193.5 193.5 193.5 - - 967.5 -

Total Investa Dt Costs 3,821.0 347.8 347.1 323.1 347.1 - - 5,186.0 41.3 2,143.2II. Recurrent Costs

A. Inarinmntal Staff

Regional 1,661.3 1,661.3 1,661.3 1,661.3 1,661.3 - - 8,306.6 - -Provincial 701.9 701.9 701.9 701.9 701.9 - - 3,509.5 - -

Subtotal Increental Staff 2,363.2 2,363.2 2,363.2 2,363.2 2,363.2 - - 11,816.0 - -S. Operation and Miintenanoe

Buildings & Labs 6.3 6.3 6.3 6.3 6.3 - - 31.7 - -Equipment 105.5 105.5 105.5 105.5 105.5 - - 527.4 48.7 256.6Vehicles 15.4 6.2 6.2 6.2 6.2 - - 40.1 48.7 19.5

Subtotal Operation and Maintenance 127.2 118.0 118.0 118.0 118.0 - - 599.2 46.1 276.1C. Materials and Supplies 131.6 82.4 82.4 82.4 54.7 - - 433.3 48.6 210.8D. Misoellanoua

Rent and Utilities 91.1 91.1 91.1 91.1 91.1 - - 455.3 - -Insurance, etc.. 66.1 53.7 48.7 44.4 40.7 - - 253.6 - -Other (printing, etc) 448.8 423.6 433.3 423.6 423.6 - - 2,152.9 - -

Subtotal hisoellan-oua 605.9 568.4 573.1 559.0 555.4 - - 2,861.7 - -Total Pecurrent Coats 3,227.9 3,131.9 3,136.6 3,122.6 3,091.2 - - 15,710.2 3.1 486.9Total DAS=LIMP COSTS 7,048.9 3,479.7 3,483.6 3,445.6 3,438.3 - - 20,896.2 12.6 2,630.1

Physical Contingencies 416.1 39.0 39.3 38.6 37.0 - - 570.0 41.3 235.6Price Contingencies 108.3 152.6 244.3 334.5 429.4 - - 1,269.1 3.6 46.0

Tbtol PROJ CT COSTS 7,573.3 3,671.3 3,767.3 3,818.7 3,904.6 - - 22,735.2 12.8 2,911.7

Taxes 796.6 168.1 173.3 174.2 177.6 - - 1,489.9 - -

Foreign Exchange 2,439.5 123.7 123.9 126.8 97.8 _ - 2,911.7 - -

Thu Jul 11 11:31:51 1996

19-1 Expenditure Accounts by Years

ArgentinaProvincial Agricultural Development - Patagonia Sur Subproject

Expendituro Aocounts by linanoiers('000 USS)

Federal Provincial Local Duties

Government Government Beneficiaries IBRD Total For. (Excl. &Amount t Amount t Amount t Amount 8 Amount t Exch. Taxes) Taxes

I. Inv staent CostsA. Civil Works

Buildings and Labs - - 76.5 21.0 - - 287.9 79.0 364.4 3.8 33.9 254.0 76.5Project design & supervision - - 29.0 100.0 29.0 0.3 5.4 23.6 -

Subtotal Civil Works - - 76.5 19.5 - _ 316.9 80.5 393.4 4.1 39.3 277.6 76.5

B. Vehicles - - 44.4 21.0 - - 167.2 79.0 211.6 2.2 146.7 20.5 44.4

C. EquipmentLaboratories eq. - - 13.0 20.0 - - 51.8 80.0 64.8 0.7 64.8 - -Computers - - 10.3 20.0 - - 41.3 80.0 51.7 0.5 51.7 - -Office Equipment - - 16.7 20.6 - - 64.4 79.4 81.1 0.8 55.9 14.6 10.6

Communications Equipment - - 13.5 20.2 - - 53.4 79.8 66.9 0.7 45.8 18.8 2.3

Other equip. - - 24.1 20.2 - - 94.9 79.8 118.9 1.2 81.4 31.9 5.6Subtotal Equipmont - - 77.6 20.2 - - 305.8 79.8 383.3 4.0 299.5 65.3 18.5

D. Technical Assistance2. Local Consulting Servicos

Loc. Cons. Long Term - - - - - - 1,319.2 100.0 1,319.2 13.8 - 1,319.2 -Loc. Cons. Short Term - - - - - - 200.0 100.0 200.0 2.1 - 200.0 -

Subtotal Local Consulting Servioes - - - - - - 1,519.1 100.0 1,519.1 15.9 - 1,519.1 -Total Invest-nt Costs - - 198.5 7.9 - - 2,309.0 92.1 2,507.5 26.2 485.5 1,882.5 139.5

I1. Recurrent CostsA. Xncrmental Staff

Provincial - - 2,382.2 45.7 - - 2,825.9 54.3 5,208.0 54.5 - 5,208.0 -

S. operation and MaintenanceEquipment - - 51.4 46.8 - - 58.4 53.2 109.8 1.1 53.1 33.7 23.1Vehicles - - 16.9 46.8 _ - 19.1 53.2 36.0 0.4 17.4 11.0 7.6 6

Subtotal Operation and Mainten - _ 68.3 46.8 - - 77.5 53.2 145.8 1.5 70.5 44.7 30.6 1n

C. Materials and Supplies - - 287.0 44.0 - - 364.7 56.0 651.7 6.8 157.7 366.4 127.6

D. MiscellaneousRent and Utilities - - 30.6 46.9 - - 34.7 53.1 65.3 0.7 - 51.6 13.7

Insurance, etc.. - - 111.2 46.9 - - 126.0 53.1 237.2 2.5 - 187.4 49.8

Other (printing, etc) - - 343.4 46.5 - - 395.2 53.5 738.6 7.7 - 583.5 155.1

Subtotal Misoellaneous - _ 485.3 46.6 - - 555.8 53.4 1,041.1 10.9 - 822.5 218.6

Total Reourrent Costs - - 3,222.8 45.7 - - 3,823.9 54.3 7,046.7 73.8 228.2 6,441.7 376.8

Total Disbursmnt - - 3,421.3 35.8 - - 6,132.9 64.2 9,554.2 100.0 713.7 8,324.1 516.4

Thu Jul 11 11:30:06 1996

8-1 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural Development - Patagonia Sur Subproject

Expenditure Accounts by Components - Base Costs

o000 USS(

PhysicalSanitary Meat Institutional ContingenciesCampaigns Inspection Development Total % Amount

I. Investmnt CostsA. Civil Works

Buildings and Labs 311.5 - - 311.5 15.0 46.7Project design & supervision 24.8 - - 24.8 15.0 3.7

Subtotal Civil Works 336.3 - - 336.3 15.0 50. 4B. Vehicles 63.5 127.1 - 190.6 10.0 19.1C. Zquiyeent

Laboratories eq. 58.4 - - 58.4 10.0 5.8Computers 33.0 13.6 - 46.6 10.0 4.7Office Equipment 42.6 30.4 - 73.0 10.0 7.3Communications Equipment 34.2 18.6 7.3 60.2 10.0 6.0Other equip. 76.2 30.8 - 107.0 10.0 10.7

Subtotal Equipment 244.4 93.4 7.3 345.1 10.0 34.5D. Tehnical Assiatance

2. Local Consulting SevioesLoc. Cons. Long Term 1,232.0 - - 1,232.0 - -Loc. Cons. Short Term - 37.6 154.8 192.4 - -

Subtotal Local Consulting Services 1,232.0 37.6 154.8 1,424.4 - -Total Investmnt Costs 1,876.1 258.1 162.1 2,296.4 4.5 104.0I. Recurrent Costs

A. Incremental StaffProvincial 4,360.6 503.1 - 4,863.7 - -

S. Operation and MainanceEquipment 98.8 - - 98.8 5.0 4.9Vehicles 32.4 - - 32.4 5.0 1.6

Subtotal Operation and Maintensnce 131.2 - - 131.2 5.0 6.6 cyC. Materials and Supplies 334.3 251.7 - 585.9 5.0 29.3 1D. Miscellous

Rent and Utilities 58.1 - - 58.1 5.0 2.9Insurance, etc.. 113.0 98.0 - 211.0 5.0 10.5Other (printing, etc) 79.0 370.2 208.2 657.4 5.0 32.9

Subtotal Misollaneous 250.0 468.3 208.2 926.5 5.0 46.3Total Recurrent Costs 5,076.0 1,223.0 208.2 6,507.3 1.3 82.2Total DASULJX COSTS 6,952.1 1,481.1 370.4 8,803.6 2.1 186.2

Physical Contingencies 117.0 58.0 11.1 186.2 - -Price Contingencies 451.8 91.2 21.4 564.4 1.2 6.8

Total PROJECT COSTS 7,521.0 1,630.4 402.9 9,554.2 2.0 193.0

Taxes 263.3 204.1 48.9 516.4 6.5 33.7Foreign Exchange 481.8 226.3 5.6 713.7 7.9 56.6

Thu Jul 11 11:30:11 1996

14-1 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development - Patagonia Sur Subproject

ZTp.ndtuZto Accounts by Years('000 US$)

Foreign

Base Cost Exchange1997 1998 1999 2000 2001 2002 2003 Total % Amount

I. Investment CostsA. Civil Works

Buildings and Labs 311.5 - - - - - - 311.5 9.4 29.2

Project design & supervision 24.8 - - - - - - 24.8 18.9 4.7

Subtotal Civil Works 336.3 - - - - - - 336.3 10.1 33.9

B. Vehicles 190.6 - - - - - - 190.6 69.4 132.3

C. Zquip -tLaboratories eq. 58.4 - - - - - - 58.4 100.0 58.4

Computers 46.6 - - - - - - 46.6 100.0 46.6

office Equipment 73.0 - - - - - - 73.0 69.1 50.4

Communications Equipment 60.2 - - - - - - 60.2 68.6 41.3

Other equip. 107.0 - - - - - - 107.0 68.7 73.5Subtotal Zquipent 345.1 - - - - - - 345 .1 78 .3 270. 1

D. Technical Assistance2. Local Consulting Services

Loc. Cons. Long Term 246.4 246.4 246.4 246.4 246.4 - - 1,232.0 - -Loc. Cons. Short Term 104.3 55.9 10.8 10.8 10.6 - - 192.4 - -

Subtotal Local Consulting Services 350.7 302.3 257.1 257.1 257.1 - - 1,424.4 - -

Total nves-t nt Costs 1,222.6 302.3 257.1 257.1 257.1 - - 2,296.4 19.0 436.3

II. Recurrent CostsA. Incr mental Staff

Provincial 972.7 972.7 972.7 972.7 972.7 - - 4,863.7 - -D. Operation and Maintenance

Equipment 19.8 19.8 19.8 19.8 19.8 - - 98.8 48.7 48.1

Vehicles 6.5 6.5 6.5 6.5 6.5 - _ 32.4 48.7 15.8

Subtotal Operation sad Maintenance 26.2 26.2 26.2 26.2 26.2 - - 131.2 48.7 63.8C. Materials and Supplies 185.4 83.6 116.7 83.6 116.7 - - 585.9 24.5 143.4

D. MiscellaneousRent and Utilities 11.6 11.6 11.6 11.6 11.6 - - 58.1 - -Insurance, etc.. 42.2 42.2 42.2 42.2 42.2 - - 211.0 - -Other (printing, etc) 139.7 129.4 129.4 129.4 129.4 - - 657.4 - -

Subtotal Miscollaneous 193.5 183.2 183.2 183.2 183.2 - - 926.5 - -

Total Recurrent Costs 1,377.8 1,265.8 1,298.9 1,265.8 1,298.9 1 - 6,507.3 3.2 207.2Sotal SASZLINI COlTJ 2,600.5 1,568.1 1,556.0 1,523.0 1,556.0 - - 8,803.6 7.3 643.6

Physical Contingencies 124.3 14.7 16.3 14.7 16.3 - - 186.2 29.9 55.7Price Contingencies 44.1 68.9 109.2 148.0 194.1 - - 564.4 2.6 14.5

Total PROJ CT COSTS 2,768.9 1,651.7 1,681.5 1,685.6 1,766.5 - - 9,554.2 7.5 713.7

Taxes 228.6 65.5 74.9 68.8 78.6 - - 516.4 - -

Foreign Exchange 543.1 37.8 45.6 39.6 47.7 - - 713.7 - -

Thu Jul 11 11:30:14 1996

19-1 Expenditure Accounts by Years

ArgentinaProvincial Agricultural Development - Institutional Strengthening Subproject

xpemditw Aocounta by Financiers('000 USS)

Federal Provincial Local Duties

Government Government Beneficiaries IBRD IDB Total For. (Excl. SAmount 4 Amount * Amount % Amount * Amount 4 Amount * Exch. Taxes) Taxes

I. Investnt CostaC. Equipment

Computers - - 63.9 20.0 - - - - 255.5 80.0 319.4 4.0 319.4 - -office Equipment - - 10.3 21.0 - - - - 38.9 79.0 49.3 0.6 34.2 4.8 10.3Communications Equipment - - 0.1 21.0 - - - - 0.5 79.0 0.7 - 0.5 0.1 0.1

Subtotal quip-ment - - 74.4 20.1 - - - - 295.0 79.9 369.4 4.7 354.0 4.8 10.5D. Tehnical Assistane

2. Local Consulting ServicesLoc. Cons. Long Term - - - - - - - - 2, 326.3 100.0 2, 326.3 29.4 - 2,326.3 -Loc. Cons. Short Term - - - - - - - - 408.9 100.0 408.9 5.2 - 408.9 -

Subtotal Local Consulting Services - - - - - - - - 2,735.2 100.0 2,735.2 34.5 - 2,735.2 -. Training2. Courses/Seminars - - _ - - - - - 904.2 100.0 904.2 11.4 168.9 735.3 -

Total Invoatanst Coats - - 74.4 1.9 - - - - 3, 934.4 98.1 4,008.8 50.6 522.9 3,475.4 10.51. Recurrent Costs

A. Incrmental StaffProvincial - - 1,301.1 45.7 - - 1,543.4 54.3 - - 2, 844.6 35.9 - 2, 844.6 -

C. Materials and Supplies - - 648.1 60.5 - - - - 423.5 39.5 1,071.6 13.5 200.2 646.4 225.0Total Recurrent Costs - - 1,949.3 49.8 - - 1, 543.4 39.4 423.5 10.8 3, 916.2 49.4 200.2 3, 491.0 225.0

Total Diabursement - - 2,023.6 25.5 - - 1, 543.4 19.5 4,357.9 55.0 7,925.0 100.0 723.1 6,966.4 235.5

Thu Jul 11 11:32:29 1996

Eo

8-1 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural Development - Institutional Strengthening Subproject

Kpenditure Accounts by Ceponmte - Dase Costs

('000 US$)

Physical

ContingenciesFederal Provincial Total % Amount

I. Investment CostsC. Equipment

Computers 15.4 272.7 288.1 10.0 28.8

Office Equipment - 44.4 44.4 10.0 4.4

Communications Equipment - 0.6 0.6 10.0 0.1

Subtotal Equipment 15.4 317.7 333.1 10.0 33.3

D. technical Assistance

2. Local Consulting ServicesLoc. Cons. Long Term 78.2 2,160.4 2,238.6 - -Loc. Cons. Short Term 185.0 209.7 394.7 - -

Subtotal Local Consulting Servie-s 263.2 2,370.0 2,633.2 - -

Z. Training2. Courses/Seminars 177.7 704.8 882.4 - -

Total Investnt Costs 456.3 3,392.4 3,848.7 0.9 33.3

II. Recurrent Costa

A. Increnintal Staff

Provincial - 2,656.5 2,656.5 - -C. Materials and Supplies 105.6 851.7 957.3 5.0 47.9

Total Recurrent Costs 105.6 3,508.2 3,613.8 1.3 47.9Total SDIfIUK COSTS 561.9 6,900.6 7,462.5 1.1 81.2

Physical Contingencies 6.8 74.3 81.2 - -

Price Contingencies 23.6 357.7 381.3 0.9 3.4

Total PROJECt COSTS 592.3 7,332.7 7,925.0 1.1 84.6 1

Taxes 24.8 210.7 235.5 5.0 11.7

Foreign Exchange 73.5 649.6 723.1 5.8 41.7 uD

Thu Jul 11 11:32:31 1996 1

14-1 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development - Institutional Strengthening Subproject

xpnditure A_counts by Years('000 US$)

ForeignBase Cost Exchange

1997 1998 1999 2000 2001 2002 2003 Total E Amount

I. Invest mt CostsC. Equi_eint

Computers 288.1 - - - - - - 288.1 100.0 288.1

Office Equipment 44.4 - - - - - - 44.4 69.4 30.8

Communications Equipment 0.6 - - - - - - 0.6 69. 4 0.4

Subtotal Kquipmnt 333.1 - - - - - - 333. 1 95.9 319. 3

D. TobsLical Assistance2. Lacal Coasulting ServiceJ

Loc. Cons. Long Term 746.4 1,179.4 312.8 - - - - 2,238.6 - -

Loc. Cons. Short Term 193.7 132.4 60.6 - - - - 394. 7

Subtotal Local Consulting Sorvios 940.1 1,311.8 381.4 - - - - 2,633.2 - -

*. Training2. Courses/Seminars 586.3 296.1 - - - - - 882.4 18.9 166.5

Total Investamet Costs 1,859.4 1,607.9 381.4 - - - - 3,848.7 12.6 485.8

II. Recarrent Costs

A. Incrremntal StaffProvincial 531.3 531.3 531.3 531.3 531.3 - - 2,656.5 - -

C. Materials and Supplies 191.5 191.5 191.5 191.5 191.5 - - 957.3 18.9 181.3

Total Recurrent Costs 722.8 722.8 722.8 722.8 722.8 - - 3,613.8 5.0 181.3

Total SRULIUZ COSTS 2,582.2 2,330.6 1,104.1 722.8 722.8 - - 7,462.5 8.9 667.1

Physical Contingencies 42.9 9.6 9.6 9.6 9.6 - - 81.2 50.5 41.0

Price Contingencies 43.3 101.3 77.1 69.9 89.8 - - 381.3 3.9 15.0

Total PROJ CT COSSS 2,668.3 2,441.5 1,190.9 802.2 822.2 - - 7,925.0 9.1 723.1 1

Taxes 53.4 43.9 45.0 46.1 47.2 _ - 235.5 - -

Foreign Exchange 503.9 96.4 40.0 40.9 41.8 - - 723.1 - - 0

Thu Jul 11 11:32:34 1996

19-1 Expenditure Accounts by Years

ArgentinaProvincial Agricultural Development - Provincial Technical Executing Units Subproject

Xzp.mditur. hcooonta bY Irinancms( 000 US$)

Federal Provincial Local DutiesGovernment Government Beneficiaries IBRD IDB Total For. (Excl. &

Amount % Amount t Amount I Amount I Amount I Amount I Exch. Taxes) Taxes

I. Inv--tnt CostsC. Squip_nt

Computers - - 23.2 20.0 - - - - 92.1 60.0 115.9 2.0 115.9 - -Office Equipment - - 0.5 21.0 - - - - 1.8 79.0 2.2 - 1.6 0.2 0.5

Subtotal Equip_et - - 23.7 20.0 - - - - 94.5 80.0 118.1 2.0 117.5 0.2 0.5

D. T ehnical Assistance2. Local Consultinz Servica

Loc. Cons. Long Term - - - - - - 1,364.9 100.0 - - 1, 364.9 23.4 - 1,364.9 -Loc. Cons. Short Term _ - - - - - 1,430.8 100.0 - - 1, 430.8 24.5 - 1,430.8 -

Subtotal Local Consulting Servicos - - - - - - 2,795.6 100.0 - - 2,795.6 47.8 - 2,795.6 -Z. Training

2. Courses/Seminars - - - - - - - - 319.8 100.0 319.8 5.5 59.8 260.0 -Total Znvestwent Cost - - 23.7 0.7 - - 2,795.6 86.5 414.3 12.8 3,233.6 55.3 177.2 3,055.9 0.5II. Recurrent Costs

A. Incremntal StaffProvincial - - 1,173.5 51.3 - - 1,112.5 48.7 - - 2,286.0 39.1 - 2,286.0 -

C. Materials and Supplies - - 209.0 64.2 - - - - 116.5 35.8 325.4 5.6 60.7 196.4 68.3Total Rocurrent Costs _ 1 1,382.4 52.9 - - 1,112.5 42.6 116.5 4.5 2,611.4 44.7 60.7 2,482.3 68.3

Total D±sbursm_nt _ - 1,406.1 24.1 - - 3,908.1 66.9 530.8 9.1 5,845.0 100.0 238.0 5,538.2 68.8

Thu Jul 11 11:34:33 1996

8-1 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural Development - Provincial Technical Executing Units Subproject

Kzend.itur Accounts by Cotponmnts - Base Costs

(1000 USS)

Provincial Physical

Executing Contingencies

Units Total % Amount

I. Investmn t CostsC. rquip5mst

Computers 103.3 103.3 10.0 10.3

Office Equipment 2.0 2.0 10.0 0.2

Subtotal 3quipment 105.3 105.3 10.0 10.5

D. Tchonical Assistance2. Local Consulting Services

Loc. Cons. Long Term 1,287.0 1,287.0 - -Loc. Cons. Short Term 1,383.8 1,383.8 - -

Subtotal Local Consulting Services 2,670.8 2,670.8 - -

E. Training2. Courses/Seminars 313.0 313.0 - -

Total Investent Costs 3,089.1 3,089.1 0.3 10.5

II. Reuzrrent Costs

A. Innrmantal StaffProvincial 2,115.0 2,115.0 - -

C. Materials and Supplies 288.1 288.1 5.0 14.4Total Recurrent Costs 2,403.1 2,403.1 0.6 14.4

Total DASKLZN COSTS 5,492.2 5,492.2 0.5 24.9Physical Contingencies 24.9 24.9 - -Price Contingencies 327.9 327.9 0.4 1.3

Total PROJ CT COSTS 5,845.0 5,845.0 0.4 26.2

Taxes 68.8 68.8 4.8 3.3

Foreign Exchange 238.0 238.0 5.7 13.6

Thu Jul 11 11:34:36 1996

14-1 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development - Provincial Technical Executing Units Subproject

tIpenditure Accounts by Years

('000 USS)

ForeignBase Cost Exchange

1997 1998 1999 2000 2001 2002 2003 Total * Amount

I. Investment Costs

C. ZquipmmntComputers 52.1 37.8 13.3 - - - - 103.3 100.0 103.3office Equipment 2.0 - - _ - - - 2.0 69.4 1.4

Subtotal Equipment 54.2 37.6 :-.3 - - - - 105.3 99.4 104.7D. Tecbnical Assistaino

2. Local Consulting Servio-eLoc. Cons. Long Term 387.0 315.0 195.0 195.0 195.0 - - 1,287.0 - -Loc. Cons. Short Term 726.8 482.7 174.3 - - - - 1,383.8 - -

Subtotal Local Consulting Services 1,113.8 797.7 369.3 195.0 195.0 - 2,670.8 - -a. Training

2. Courses/Seminars 247.3 65.7 - - - - 313.0 18.9 59.1fotal Investment Costs 1,415.3 901.2 382.6 195.0 195.0 - - 3,089.1 5.3 163.7II. Recurrent Coats

A. Increme_tal StaffProvincial 180.0 382.5 517.5 517.5 517.5 - - 2,115.0 - -

C. Materials and Supplies 24.5 52.1 70.5 70.5 70.5 - - 288.1 18.9 54.6Total Recurrent Costs 204.5 434.6 588.0 588.0 588.0 - - 2,403.1 2.3 54.6

Total WASULIN COSTS 1,619.8 1,335.8 970.6 783.0 783.0 - - 5,492.2 4.0 218.3Physical Contingencies 6.6 6.4 4.9 3.5 3.5 - - 24.9 52.9 13.2Price Contingencies 29.0 57.9 67.8 75.8 97.3 - _ 327.9 2.0 6.5

Total IROJEcT COSNT 1,655.5 1,400.1 1,043.2 62.3 883.8 - - 5,845.0 4.1 238.0

Taxes 6.0 11.9 16.6 17.0 17.4 _ - 68.8 - -Foreign Exchange 111.3 66.1 30.1 15.1 15.4 _ _ 238.0 - -

Thu Jul 11 11:34:37 1996

19-1 Expenditure Accounts by Years

Argentina

Provincial Agricultural Development - Central Executing Unit SubprojectExpenditure Accounts by rinaeiers

('000 US$)

Federal Provincial Local Duties

Government Government Beneficiaries IBRD IDB Total For. (Excl- .

Amount * Amount I Amount 4 Amount * Amount t Amount I Exch. Taxes) Taxes

I. Investment Costs

B. Vehicles 14.1 21.0 - - - - - - 53.1 79.0 67.2 0.6 46.6 6. 5 14.1

C. Zquipsent

Computers 7 .3 10.0 - - - - - - 65.5 90.0 72.8 0.7 72.8 - -

Office Equipment 5.9 21.0 - - - - - - 22.1 79.0 27.9 0.3 19.4 2.7 5.9

Subtotal Zquip.ent 13.1 13.1 - - - - - - 87.6 86.9 100.7 1.0 92.2 2.7 5.9

D. Technical Assistance2. Local Consulting Services

Loc. Cons. Long Term - - - - _ - 8,762.1 100.0 - - 8,762.1 83.6 - 8,762.1 -

Total Invest-t Costs 27.3 0.3 - _ _ - 8,762.1 98.1 140.7 1.6 8,930.0 85.2 138.7 8,771.3 20.0

II. Recurrent Costs

D. Oppration and Maintenance

Equipment 14.7 84.4 - - - - - - 2.7 15.6 17.4 0.2 8.4 5.4 3.7

Vehicles 8.6 78.0 - - - - - - 2,4 22.0 11.1 0.1 5.4 3.4 2.3

Subtotal Operation and Maintenance 23.3 81.9 - - - - - - 5.2 18.1 28.5 0.3 13.8 8.8 6.0

C. Materials and Supplies 97.7 68.9 - - - - - - 44.2 31.1 141.9 1.4 26.5 85.6 29.8

D. MiscellaneousRent and Utilities 124.9 68.9 - - - - - - 56.4 31.1 181.3 1.7 - 143.2 38.1

Insurance, etc.. 11.4 76.1 - - - - - - 3.6 23.9 15.0 0.1 - 11.8 3.1

Other (printing, etc) 814.1 68.7 7 - - - - - 371.3 31.3 1,185.4 11.3 - 936.4 248.9

Subtotal Miscellaneous 950.4 68.8 - - _ - - - 431.2 31.2 1,381.6 13.2 - 1,091.5 290.1

Total Recurrent Costs 1,071.4 69.0 - - - - - - 480.6 31.0 1,552.0 14.8 40.3 1,185.8 325.9

Total Disbursment 1,098.7 10.5 - _ _ - 8,762.1 83.6 621.2 5.9 10,482.0 100.0 179.0 9,957.1 345.9 1

Thu Jul 11 11:33:54 19964.

8-1 Expenditure Accounts by Financiers

ArgentinaProvincial Agricultural Development - Central Executing Unit Subproject

Zxpenditure Acoouts by C nomAmta - Bass Costs('000 US$)

Central Physical

Coordinating Contingencies

Unit Total % Amount

I. Invetmnt CostsS. Vehicles 60.5 60.5 10.0 6.1

C. zqui ntComputers 64.0 64.0 10.0 6.4

Office Equipment 25.1 25.1 10.0 2.5

Subtotal quiynt 89.1 89.1 10.0 8.9

D. Technical assistance2. Local Consulting Servicea

Loc. Cons. Long Term 8,036.8 8.036.8 - -Total Invest_nt Costs 8,186.4 8,186.4 0.2 15.0

II. Reaurrent CostsS. Operation ad Maintenance

Equipment 15.2 15.2 5.0 0.8Vehicles 9.9 9.9 5.0 0.5

Subtotal Operation and Maintenane 25.1 25.1 5.0 1.3C. Materials and Supplies 126.7 126.7 5.0 6.3

D. MiscellaneousRent and Utilities 161.3 161.3 5.0 8.1Insurance, etc.. 13.1 13.1 5.0 0.7Other (printing, etc) 1,054.6 1,054.6 5.0 52.7

Subtotal Miscellaneous 1,228.9 1,228.9 5.0 61.4

Total Recurrent Costs 1,380.8 1,380.8 5.0 69.0Total ASKLIUI COSTS 9,567.2 9 567.2 0.9 84.0

Physical Contingencies 84.0 84.0 - -Price Contingencies 830.8 830.8 0.6 5.2

Total PROJKCT COSTS 10,482.0 10,482.0 0.9 89.2 U,

Taxes 345.9 345.9 5.0 17.3Foreign Exchange 179.0 179.0 8.1 14.5

Thu Jul 11 11:33:57 1996

14-1 Expenditure Accounts by Components - Base Costs

ArgentinaProvincial Agricultural Development - Central Executing Unit Subproject

zMeiniieer ace.te by Tears(O000 US$)

Foreign

Base Cost Exchange

1997 1998 1999 2000 2001 2002 2003 Total * Amount

I. v-esrtmrt CostsB. Vehicles 60.5 - - - - - - 60.5 69.4 42.0

C. UqWdsm_tComputers 19.0 20.0 15.0 10.0 - - - 64.0 100.0 64.0

Office Equipment 23.8 0.6 0.4 0.3 - - - 25.1 69.4 17.4

Subtotal Rquigin_t 42.8 20.6 15.4 10.3 - - - 89.1 91.4 81.4

D. Technical Assistatnm

2. Local Consulting ServioesLoc. Cons. Long Term 1,272.3 1,272.3 1,297.3 1,297.3 1,297.3 775.1 825.1 9,036.8 - -

Total lZn,ust t Costs 1,375.6 1,292.9 1,312.7 1,307.6 1,297.3 775.1 825.1 8,186.4 1.5 123.4

II. R-current CoatsD. Operation and Mintenanc.

Equipment - 2.4 3.0 3.5 3.5 1.8 1.0 15.2 48.7 7.4Vehicles - 2.5 2.5 2.5 2.5 - - 9.9 48.7 4.8

Subtotal Operation and Maintenance - 4 9 5.5 5.9 5.9 1.8 1.0 25.1 48.7 12.2

C. Materials and Supplies 25.3 25.3 25.3 25.3 25.3 - - 126.7 18.9 24.0

D. MiscellaneousRent and Utilities 32.3 32.3 32.3 32.3 32.3 - - 161.3 - -

Insurance, etc.. 1.7 2.1 2.5 2.7 2.7 1.0 0.5 13.1 - -

Other (printing, etc) 215.0 210.7 209.6 209.6 209.6 - - 1,054.6 - -

Subtotal Miscellaneous 248.9 245.1 244.3 244.5 244.5 1.0 0.5 1,228.9 - -Total Recurrent Costs 274 3 275.3 275.2 275.8 275.8 2.8 1.6 1,380.8 2.6 36.2

Total B S&SLM COSTS 1,649.9 1,568.2 1,587.9 1,583.4 1,573.1 777.9 826.6 9,567.2 1.7 159.7Physical Contingencies 24.0 15.8 15.3 14.8 13.8 0.1 0.1 84.0 16.8 14.2

Price Contingencies 29.9 69.2 111.9 154.4 197.0 118.6 149.8 830.8 0.6 5.2

Total PROJECT COSTS 1,703.9 1,653.3 1,715.1 1,752.6 1,783.9 896.6 976.5 10,482.0 1.7 179.0

Taxes 81.2 63.5 65.0 66.7 68.3 0.7 0.4 345.9 - -

Foreign Exchange 91.0 30.8 25.9 20.7 8.9 1.1 0.6 179.0 - -

Thu Jul 11 11:33:58 1996

19-1 Expenditure Accounts by Years

- 127 - Annex E

ARGENTINAPROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

PROJECT BENEFITS ANDECONOMIC ANALYSIS BY SUBPROJECT

1. PROVINCE OF BUENOS AIRES: DEVELOPMENT OF THE

COLORADO RiVER VALLEY SUBPROJECT

Benefits

1.1 The combined effect of the proposed components would be to set in motion aproduction and management technology change. This would help producers attainadequate levels of income, improve conservation and management of available resources,and strengthen their involvement in the operation and improvement of the irrigationsystem.

1.2 Benefits were calculated as the aggregation of results from eight farm modelswhich represent the four main farm types in the region, replicated into two differentcategories depending on whether they would benefit from the pilot canal lining componentor not. Production levels evolve for each farm type according to the scheduling andexpected combined impact of the proposed components. Implementation of thesecomponents determine the availability and adoption rates of new production technology,better water availability and water management techniques, and better marketingstrategies. The streams of subproject costs, plus the streams of costs and benefits for allfarm models representing 1,373 beneficiary farms were aggregated and discounted inorder to obtain the net present value (NPV) of the net benefits attributable to thesubproject.

1.3 In all, a 136% increase in area under cultivation would take place when thesubproject is fully implemented. This expansion in area would be complemented by anincrease in average yields (ranging from a 33% increase in horticulture yields, for farmsnot benefiting from lining of secondary canals, to a 129% increase in cereal crops forfarms directly benefiting from lining of secondary canals). Lining of secondary canals inconjunction with better irrigation system management, would lead to a 45% reduction inwater costs for those farms included in the pilot lining program.

- 128 - Annex E

Colorado River Valley (Buenos Aires): Subproject Benefits And Costs_in000US$, 1996 = 0

Present Value of Present Value ofEconomic Flows Financial Flows

Benefits 103,793 95,485Costs 49,055 52,593Net Benefits 54,738 42,893IERR 39.7% 34.2%

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical items:Value of production: -53%Production costs: 140%Investment costs: >250%

Nature of benefits:expanded and intensified horticultural, crops and livestock production

- 136% increase in total area under cultivation- 33% to 57% increase in horticulture crops yields- 80% to 129% increase in cereal crops yields- 43% to 122% increase in forage yields- 67% increase in forage seeds yields

reduced water costs (45% - 50%) in lined secondary canalsDirect beneficiaries:

1,373 farm families

2. PROVINCE OF MENDOZA: MONTECASEROS IRRIGATION ANDDRAINAGE SUBPROJECT

Benefits

2.1 The combined effect of the proposed components would reduce water losses andincrease the efficiency of the system, raise productivity of existing vineyards and orchards,and increase the area under production. Productivity increases (6% for grapes, 19% forfruit trees) would result from lower water table level and soil salinity, increased wateravailability, increased frequency and efficiency of water delivery, increased technologysupply, more efficient input use, and better user training in irrigation methods and otherspecialized agricultural practices. In addition, the cost of production would drop due tolower pumping requirements.

2.2 Production would also rise due to the increase in area under production (11%),following the larger, more regular water supply, and the recovery of areas now

- 129 - Annex E

unproductive due to water table level problems. Value of production would also increase(47%) as a result of a larger area under production with higher priced fine grapes varieties.All this would lead to an average 52% increase in net financial income for the 1,279beneficiaries (small, medium and large producers).

2.3 Net benefits were estimated using three different farm models which simulate farmdevelopment for the main farm types currently in the region. Production levels andproduction values evolve for each farm type in accordance with the scheduling andexpected combined impact of the proposed components. Implementation of thesecomponents determine the availability and adoption rates of new production technology,better drainage, decreased water losses, and rehabilitation of unproductive areas. Totalnet benefits were obtained by aggregating and discounting the streams of subproject costs,and the costs and benefits for all farm models representing 1,279 beneficiary farms.

Montecaseros: Subproject Benefits And Costs_in'000,US$, 1996,= 0)

Present Value of Present Value ofEconomic Flows Financial Flows

Benefits 19,618 18,165Costs 12,251 14,893Net Benefits 7,367 3,271IERR 21.5% 16.2%

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical items:Value of production: -38%Production costs: 87%Investment costs: >250%

Nature of benefits:increased productivity (6.1% overall for grapes, 19.3% for fruit trees)increased area of production (10.9%)increased value of production (46.6% for area converted to higher priced, similar yielding finegrapes).

Direct beneficiaries:1,279 farm families

- 130 - Annex E

3. PROVINCE OF MENDOZA: STRENGTHENING OF TSE PROVINCIAL IRIGATION ANDDRAINAGE PROGRAM

Benefits

3.1 Avoidance of production losses due to unexpected breakages in the system, plus abetter. overall functioning of the system would be the main benefits. Other non-quantifiedbenefits would include improvement of water quality, as well as enhanced awareness ofenvironmental issues associated with system management.

3.2 The benefits quantified cover only those stemming from the proposed activitiesincluded in the Minor Works component. In this case benefits were calculated as theexpected difference in repair costs and average income per hectare with and withoutsubproject. In the situation with subproject needed repair and maintenance work areproperly planned and scheduled, disruption of the operation of the system is the leastpossible, and repair costs and negative impact on average income per ha are kept to aminimum. In the situation without subproject, repairs are done after breakage of thesystem occurs, thus costs are higher, disruption is considerable and impact on averageincome per ha is significant.

Strengthening of the Irrigation and Drainage Program (Mendoza): Subproject Benefits And Costs(in'000 US$, 1996 =0)

Present Value of Present Value ofEconomic Flows Financial Flows

Benefits 11,400 11,083Costs 8,734 9,793Net Benefits 2,666 1,290IERR 20.5% 15.0%

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical items:Value of benefits: -23%Investment costs: 38%

Nature of benefits:diminished (15% to 20%) production losses due to irrigation system failuresreduced (30%/6) repair costs

Direct beneficiaries:users of the system sections where repairs are scheduled for the first to years of implementationpotentially all users of irrigation systems under DGI supervision

- 131 - Annex E

4. PROVINCE OF SANTA FE: Pozo BORRADO FLOOD CONTROLAND DRAINAGE SUBPROJECT

Benefits

4.1 The projected works would alleviate the negative economic impact of recurrentfloods on crop, dairy and livestock production. As added, indirect benefits, more stablefarm income would promote investment and further economic growth, and better yearround roads conditions would improve farm life and facilitate management.

4.2 The benefits were calculated with the assistance of a hydraulic simulation model,and three different farm models which represent the prevailing farm types in the area (dairyfarms in the Western sector of the subproject area, mixed crop and livestock enterprises inthe Central area, and cow-calf operations of the Eastern lowlands). The hydraulicsimulation model provided the data to evaluate the difference in drainage systemperformance under different rainfall conditions, with and without the project. With thisdata in hand, the econornic impact of different climatic adversities was assessed for thedifferent farm models, and weighted according to their respective probability ofoccurrence.

Pozo Borrado: Subproject Benefits And Costs(n'000 US$, 1996 = 0)

Present Value of Present Value ofEconomic Flows Financial Flows

.......... ................................................................................................. .....................................

Benefits 8,145 7,994Costs 5,668 6,436Net Benefits 2,477 1,558IERR 23.5% 18.0%

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical items:Value of production: -30%Production costs: 176%Investment costs: 96%

Nature of benefits:reduced losses of crops, milk production, and livestock production due to flooding

Direct beneficiaries:312 crop, dairy and livestock farms

- 132 - Annex E

5. PROVINCES OF CATAMARCA, JUjuY, TuCUMAN AND SALTA: STRENGTHENINGPHYTOSANITARY SERVICES IN THE NORTHWESTERN REGION (NOA)

Benefits

5.1 The projected interventions would drastically reduce the possibility of introductionof exotic diseases to the area, and support attainment of international sanitary and qualitystandards for regional vegetable products exports, thus expanding marketing opportunitiesand increasing the final value of products.

5.2 The benefits were calculated using 15 farm models representing the main four farmtypes in each of the provinces in the region. Main benefits are lower costs of production astreatments for Fruit Fly are eliminated once the plague is eradicated (US$ 1.2 millionannual savings for the whole area), increased production (3%) since there are noproduction losses from fruit fly, and from higher average product value as control of BlackSpot is more efficient, and a larger share of total production can access higher pricemarkets. Total net benefits were obtained by aggregating and discounting the streams ofsubproject costs, and the costs and benefits for all farm models representing 1,000 directbeneficiary farms

NOA Phytosanitary Services: Subproject Benefits And Costs(in'000 US$, 1996 = 0)

Present Value of Present Value ofEconomic Flows Financial Flows

Benefits 23,758 23,546

Costs 5,051 6,456

Net Benefits 18,707 17,090IERR 40.1% 35.9%

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical items:Value of production: -79%Production costs: n/aInvestment costs: 64%

Nature of benefits:reduced losses due to fruit fly, black spot, and scab

- citrus production increases 2.7% due to eradication of fruit fly (13% destined toexports, 87% destined to domestic consumption)- US$ 1.2 million annual savings in fruit fly treatment costs

assure compliance with international sanitary and quality standards that preserve and expandmarketing opportunities

- 133 - Annex E

Direct beneficiaries:1,000 citrus producersin the long run: all producers (30,000) in the region

6. PROVINCES OF CORRIENTES, ENTRE RIos AND MISIONES: STRENGTHENLNG OFANIMAL HEALTH SERVICES IN MESOPOTAMIA

Benefits

6.1 The projected interventions would allow a US$ 12 million annual reduction ofregional livestock production costs (only partially assigned to the project). These savings,which start in the second year of the subproject, result from the discontinuation of thevaccination requirement against Foot-and-Mouth disease (FMD). Benefits of thesubproject were assigned in proportion to its contribution to the ongoing sanitarycampaign against FMD. Total net benefits were obtained by aggregating and discountingthe streams of subproject costs, and the proportion of benefits in cost savings for 72,600livestock owners in the region.

6.2 Additionally, the subproject would establish conditions that may allowinternational recognition of FMD free status, and improved long run marketingopportunities for regional animal products exports through access to higher price markets(not quantified).

Mesopotamia: Subproject Benefits And Costs(in '000 US$, 1996_= 0)

Present Value of Present Value ofEconomic Flows Financial Flows

Benefits 30,004 29,925Costs 20,697 22,013Net Benefits 9,307 7,911IERR 34.9% 28.7%

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical itemsValue of production: -31%Production costs: n/aInvestment costs: 188%

Nature of benefits:reduced production costs due to discontinuation of vaccination requirement

Direct beneficiaries:72,600 livestock producers.

-134 - Annex E

7. PROVINCES OF SANTA CRUZ AND CHUBUT: STRENGTHENING OF ANIMAL HEALTHSERVICES AND CONTROLS IN SOUTHERN PATAGONIA

Benefits

7.1 The projected interventions would increase volume and quality of regional woolproduction; improve quality and increase average price level received for wool marketed;decrease livestock production costs; ensure regional FMD free status, and thus provideimproved export marketing opportunities for regional animal products; and increasegeneral population welfare through better control of enzootic and zoonotic diseases, andquality standards of livestock products consumed.

7.2 The main benefits for this subproject were calculated as the increase in woolproduction (22%) and sheepmeat production (7% to 33% depending on category)following the reduced incidence of mange (from 15% to 2%). Better animal healthmanagement practices, and better product shearing and conditioning techniques, wouldalso improve wool quality and lead to better sale prices (US$ 0.05 per kg). Othersubproject actions would increase general population welfare through better control andreduced incidence of zoonotic diseases. These benefits were quantified as the reduction inhealth care costs, and number of days away from work or with reduced productivity forpatients afflicted with zoonotic diseases. Finally, by ensuring regional FMD free status,the subproject may allow international recognition of FMD free status, and improved longrun marketing opportunities for regional animal products exports through access to higherprice markets (not quantified).

Southern Patagonia: Subproject Benefits And Costs(in '000 US$, 1996 = 0)

Present Value of Present Value ofEconomic Flows Financial Flows

................................... ......... i ...................................................... I.................. ................

Benefits 26,823 28,632Costs 17,299 18,567

Net Benefits 9,523 10,064IERR 33.9% 32.9%

< Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

- 135 - Annex E

Switchine values of critical items:Value of production: -36%Production costs: n/aInvestment costs: >250%

Nature of benefits:reduced production losses due to mange and bnicellosis

- mange incidence drops from 15% to 2%- average wool production per head increases 22%- sheepmeat production increases between 7% (rams) and 33% (ewes)- total value of sheep production (wool + sheepmeat) increases by US$ 4 million per year

increase proportion of producers that obtain price premiums due to better shearing andconditioning of woolreduced costs associated with human health problems related to zoonotic diseases

Main beneficiaries:5,000 livestock producers, and consumers of animal products in area population

8. PROVINCE OF RiO NEGRO: INFRASTRUCTURE REHABILITATION AND

DEVELOPMENT OF THE UPPER RIO NEGRO VALLEY SUBPROJECT

Benefits

8.1 The combined effect of the proposed components would be to abate the high watertable level in the area, and to promote new, low investment irrigation, crop managementand marketing organization technologies. All this would result in an average 219%increase in net financial income for approximately 4,380 direct beneficiaries (small andmedium producers).

8.2 Benefits were calculated via aggregation of results from 17 different farm modelswhich represent the main farm types in the region. Farm models differ in size, type ofproduction, technological level, and their access to better input purchase prices andproduct sale prices depending on their degree of vertical integration. Production levelsand production values evolve for each farm type according to the scheduling and expectedcombined impact of the proposed components. Implementation of these componentsdetermine the availability and adoption rates of new production technology, betterdrainage, decreased water losses and rehabilitation of unproductive areas (all leading to a31% increase in productivity), and better marketing strategies as a result of better productquality and larger quantities (leading to an average 12% increase in farm gate prices).

Upper Rio Negro Valley: Subproject Benefits And Costs(in '000 US$, 1996 = 0)

Present Value of Present Value ofEconomic Flows Financial Flows

Benefits 131291 123,835Costs 83,888 108,159Net Benefits 47,403 15,676EERR 24.9% 16.2%

- 136 - Annex E

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical items:Value of production: -36%Production costs: 98%Investment costs: > 250%

Nature of benefits:increased value of production (14.5% overall, 5 points due to larger volume, 9.5 points due tobetter price)- overall 31.5% increased productivity by year 20- overall 12.4% increase in average farm gate price by year 20

Direct beneficiaries:4,380 small and medium farm families

9. PROVINCE OF NEUQUEN: IRRIGATION REHABILITATION INCOLONIA CENTENARIO SUBPROJECT

Benefits

9.1 The combined effect of the proposed components would be to abate the high watertable level in the area, and to promote new, low investment irrigation, crop managementand marketing organization technologies. All this would lead to an average 179%increase in net financial income for the 365 beneficiaries (small and medium producers).

9.2 The benefits were calculated as the aggregation of results from 10 different farmmodels which represent the main farm types in the region. Due to the proximity andproduction similarities to the Rio Negro Valley, farm models are very similar to thoseutilized in that project.

9.3 As in the case of Rio Negro, farm models differ in size, type of production,technological level, and their access to better input purchase prices and product sale pricesdepending on their degree of vertical integration. Production levels and production valuesevolve for each farm type according to the scheduling and expected combined impact ofthe proposed components. Implementation of these components determine the availabilityand adoption rates of new production technology, better drainage, decreased water lossesand rehabilitation of unproductive areas (all leading to a 39% increase in productivity),and better marketing strategies as a result of better product quality and larger quantities(leading to an average 11% increase in farm gate prices).

- 137 - Annex E

Colonia Centenario: Subproject Benefits And Costs(i- n 000 US$, 1996 = 0

Present Value of Present Value ofEconomic Flows Financial Flows

Benefits 11,400 9,881Costs 10,056 11,474Net Benefits 1,344 -1,593IERR 15.0% 8.6%

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical itemsValue of production: -12%Production costs: 29%Investment costs: 136%

Nature of benefits:increased value of production (18.5% overall, 8. 5 points due to larger volume, 10 points due tobetter price)- overall 39% increased productivity by year 20- overall 11.4% increase in average farm gate price by year 20

Direct beneficiaries:365 small and medium farm families

10. PROVINCE OF MENDOZA: CONSTITUCI6N IRRIGATION AND DRAINAGEREHABILITATION SUBPROJECT

Benefits

10.1 The combined effect of the proposed components would reduce water losses,increase the efficiency of the system, increase productivity, and increase the area underproduction. Productivity increases (5% for grapes, 19% for fruit trees) would result fromlower water table level and soil salinity, increased water availability, increased frequencyand efficiency of water delivery, increased technology supply, more efficient input use, andbetter user training in irrigation methods and other specialized agricultural practices. Inaddition, cost of production would drop due to lower pumping requirements.

10.2 Production would also rise due to the increase in area under production (14%),following the larger, more regular water supply, and the recovery of areas nowunproductive due to water table level problems. The larger value of production (49%)would result in part from an increase in area under production with higher priced finegrapes varieties. All this would lead to an average 51% increase in net financial incomefor the 1,383 beneficiaries (small, medium and large producers).

- 138 - Annex E

10.3 As in the case of Montecaseros, benefits were calculated through aggregation ofresults from three different farm models which portray the prevailing farm types in theregion. Production levels and production values evolve for each farrn type in accordancewith the scheduling and expected combined impact of the proposed components.Implementation of these- components determine the availability and adoption rates of newproduction technology, better drainage, decreased water losses, rehabilitation ofunproductive areas, etc. Total net benefits were obtained by aggregating and discountingthe streams of subproject costs, and the costs and benefits for all farm models representing1,383 beneficiary farms.

Constitucion: Subproject Benefits And Costs(in '000 US$, 1996 = 0)

Present Value of Present Value ofEconomic Flows Financial Flows

............................................. ........................ ................ .. .........................................

senefits 23,184 21,466Costs 15,590 19,447Net Benefits 7,594 2,020IERR 19.0% 13.8%

Main assumptions:Discount rate: 12%Time horizon: 20 yearsGrowth in real prices of output: constantReal Exchange Rate: constantInput prices: constant third quarter 1994 pricesOutput prices: constant average 1992-1994 prices

Switching values of critical items:Value of production: -33%Production costs: 78%Investment costs: >250%

Nature of benefits:increased productivity (4.9% overall for grapes, 19.3% for fruit trees)increased area of production (13.9%)increased value of production (46.6% for area converted to higher priced, similar yielding finegrapes).

Direct beneficiaries:1383 farm families

11. NATIONAL AGRICULTURAL INFORMATION SYSTEM SUBPROJECT

Benefits

11.1 The subproject design follows a modular approach that targets maximum costefficiency, while assuring maximum compatibility, and versatility to meet differingprovincial needs. Project benefits would derive from better availability of agricultural datato assist public sector decision makers in their policy making endeavors, and from betteraccess to data for private sector agents, to assist them in their management and investmentdecision processes. Because of the difficulties of quantifying such benefits, however,economic benefits were not estimated for this subproject.

- 139 - Annex E

National Agricultural Information System: Subproject Costs( in million US$, 1996 = 0)

Information Sub-component CostFederal Information Network 15.2National Agricultural Survey System 1.5National Agro-meteorological Network 4.0Remote Sensing and GIS 3.2Total 23.9

12. ECONOMIC ANALYSIS OF THE PROJECT

12.1 The internal economic rate of return (IERR) for the project was calculated basedon the streams of estimated benefits and costs for eleven appraised subprojects included inthe first group of proposed initiatives (Group A), plus costs of the institutionaldevelopment and coordination and management components (at both national andprovincial levels) and other administrative costs (IDB's PPF repayment, inspection andmonitoring). The sample of subprojects and components evaluated represents 62.5% oftotal baseline project cost. The overall IERR for this first phase of the project is 22.2%.Assuming that the group of subprojects in the next phase is similar to those included in thefirst phase, the stated first-phase IERR should be a conservative estimate of the overallIERR. This follows from the fact that all the project implementation support componentscosts were already accounted for in the calculation of the IERR for the first phase.

12.2 The following Table E. 1 summarizes the estimated subprojects IERRs, and thecalculated overall IERR for the first phase of the program:

- 140 - Annex E

Table E. 1: Economic Rates of Return for Phase A, by Subproject

Baseline NPV of ERRLocation Subproject Costs Net (%)

(US$ Million) Benefits(US$ ilin

IBRD/ProvincialBuenos Aires Development of the Colorado River 13.4 54.7 39.7

ValleyMendoza Irrigation and Drainage in Montecaseros 5.2 7.4 21.5Mendoza Strengthening of Provincial Irrigation 13.2 2.7 20.5

ProgramSanta Fe Flood Control in Pozo Borrado 5.9 2.5 23.5

IBRD/RegionalSalta, Jujuy, Strengthening Phytosanitary Services in 15.8 18.7 40.1Tucuman, Northwestern Region (SEFINOA)CatamnarcaEntre Rios, Strengthening Animal Health Services 20.9 9.3 34.9Corrientes, in MesopotamiaMisionesSanta Cruz, Strengthening Animal Health Services 8,9 9.5 33.9Chubut in Southern Patagonia

1DB/ProvincialRio Negro Infrastructure Rehabilitation and 48.6 47.4 24.9

DevelopmentNeuquen Irrigation Rehabilitation in Colonia 7.6 1.3 15.0

CentenarioMendoza Irrigation Rehabilitation in Constituci6n 7.6 7.6 19.0

iDB/NationalNational National Agricultural Information 21.8 N.A. N.A.

SystemIBRD/IDB

Project Implementation Support ComponentsNational Institutional Strengthening 7.5 N.A. N.A.National Provincial Executing Units 5.5 N.A. N.A.National Central Project Coordinating Unit 9.6 N.A. N.A................ ................................................. . . . . . . . . . ........... . .. ........................... .. - .............................................. . . . . . . . . . . . . . . . .. .: .. . .Grand Total 193.5 127.3 22.2"

Economic values; 12% discount rate

b Calculated on the basis of the aggregate flow of the expected costs and benefits for all these subprojects. No benefits were assigned tothe project implementation support components or to the National Agricultural Information System.

- 141 - Annex F

ARGENTINAPROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

PROJECT ENVIRONMENTAL ASSESSMENT

The Project

1. The Provincial Agricultural Development Project (Programa de ServiciosAgricolas Provinciales, PROSAP), as part of the process of the modernization anddecentralization of the State, has been designed to improve the delivery of essentialservices to the agricultural sector at the provincial level and improve productive ruralinfrastructure, in order to achieve sustainable development. PROSAP's main objectivesare to expand agricultural production, increase and stabilize farmers' incomes, andincrease international competitiveness.

2. The project has been designed to promote economnic growth in the agriculturalsector, improving the competitive position of exports and increasing incomes bysupporting: (i) rural infrastructure initiatives; (ii) improved provincial agricultural supportservices; (iii) introduction of productive and cost-effective technologies; (iv) strengtheningof provincial institutional capacity to identify, prepare and implement investment projects;and (v) an expanded private sector role (e.g. farmers' organizations, NGOs, and servicesproviders) in sector development.

Subproject Selection Criteria

3. The process begins when provinces submit subproject proposals, consistent withtheir priorities, development strategies and investment plans. The selection of thesesubprojects is based on technical and institutional feasibility, financial sustainability,estimated rate of return, expected socioeconomic and environmental impacts, beneficiaries'participation and commitment, and complementarity with private sector initiatives. Tofacilitate project start-up, a set of 11 priority subprojects (Group "A") was defined, whosefeasibility studies and engineering designs were ready by appraisal, representing more than50% of total project costs.

4. PROSAP promotes the presentation of subprojects in the following areas:(i) rehabilitation, modernization or improvement of rural infrastructure (irrigation, floodcontrol and drainage, feeder roads, rural electrification); (ii) establishment of watershedmanagement and natural resources conservation systems; (iii) improvement in the deliveryof provincial support services for the generation and transfer of technology, productiondiversification, export promotion and quality control, animal health and plant protectionservices, and provision of basic statistical and geographical information; and(iv) establishment of new arrangements for the provision of support services, integratingthe private sector's organizations and gradually sharing financial and technicalresponsibilities to increase long-term sustainability.

- 142 - Annex F

5. The basic environmental eligibility criteria of PROSAP are that subprojectsimprove environmental conditions, either by reducing or controlling past damages or byinitiating practices that have beneficial effects on biophysical and socioeconomicsurroundings. Additionally, potential adverse effects need to be anticipated and theirimpacts mitigated by the corresponding environmental action plan. The eligibility criteriawould exclude any subproject proposal based on the expansion of the agricultural frontierat the expense of natural forests or promoting the conversion of wild lands to agriculture.The increase in area under cultivation would be produced by intensification of the use ofagricultural land, which is land classified as capable of being used intensively foragriculture and that has been cultivated before. The project would help remove some ofthe constraints (scarce water for irrigation, poor drainage and salinization in sections ofthe potentially irrigated area, low productivity due to diseases and poor cultural practices,varieties not adapted to market requirements, etc.) that are presently limiting the areaactually being used for agricultural productive purposes in the same period.

6. The above environmental eligibility criteria have been established for severalreasons: (i) agricultural lands currently used have a significant deficit of infrastructure andpublic services, due to lack of investments during the last few decades; (ii) land use can beintensified by improved technologies, services and the rehabilitation of productiveinfrastructure; and (iii) under current available technology, there is no comparativeadvantage to start using lands which have not been under exploitation already.

Environmental Screening

7. The Environmental Unit (UnidadAmbiental, UA), within the Project's CentralCoordination and Management Unit (UnidadEjecutura Central, UEC), would screensubproject proposals for their potential environmental impact and supervise theenvironmental specialists within the provincial project implementing units. The UA wouldensure that the environmental screening procedures, impact assessments and correctivemeasures, as outlined in the Projects Environmental Manual (Manual Ambiental, MA) areproperly carried out at every relevant project phase and at all levels of projectadministration. In addition, the UA would provide technical assistance and training at theprovincial level, to strengthen local institutional capacity to design and implementenvironmentally sound subprojects.

8. Environmental screening procedures shall be applied to all subproject proposalspresented by the provinces (see Table 1). This procedure is initiated with the preparationof an Environmental Profile which includes a subproject summary, relevant environmentallegislation, identification of potential impact, a preliminary subproject classification(according to the Bank's classification) and identification of required studies. Because ofthe nature of the project, almost all individual subprojects in the future are expected to fallunder either environmental classification B, which requires an Environmental Analysis(EA), or C, which does not. Projects classified as either A or B shall prepare anenvironmental impact assessment, which upon preliminary revision by PROSAP and apublic consultation process, shall be drafted in final form, incorporating the results of the

- 143 - Annex F

consultation. During implementation, each subproject would be closely monitored andrecommended mitigation plans executed. To facilitate the EA and subprojects screening,the Project Preparation Unit has drafted Guidelines for Environmental ImpactAssessments and Environmental Analysis (a chapter in the Project EnvironmentalManual), incorporating the national and provincial environmental stipulations regardingimpact assessments at different stages during the subproject cycle.

Table 1: PROSAP's Environmental Impact Assessment Procedures

Project Stage Environmental Procedur Methodological Tool Result Responsible Supervisory'SAtag .......... Body Bod.. i~y~~~~~~~~~~~~~~~~~~ ............ .................. .. .................... ............ + ~ # ...................... ......... I............ --:c

Identification Completion of EP . ETA Guide & EP* Project Team . EPDA*

.................................. .................................................... .. ....................................., .,,,,,,(.,,,E,P Revision and approval of EIA Guide Approval of EP UEC*

EP. i . _ I

Preparation Environmental. Impact EIA Guide & EIA Study Project Team EPDAStudy provincial legislation (Draft _U1EP)

evision and approval by EIA Guide Approval of the UEC CAPPROSAP of the draft EIA EIA Study

...................... ..... .......... s tuy: ,,,,,,,,,,,,, ,,....................... ..................................... ............ ......................... .........................Public Consultation, final Environmental. Environmental. Provincial. EPDA andevision of EIA and legislation on EIA and Impact Declaration Application UECEnvirorunental. Impact PROSAP`s and Minutes of Authority orDeclaration. 3methodological Consultation UEP

................................. ................. .ec...............................................................................:.....................................................................................Execution implementation of -Plan of mitigation Monitoring Report UEP EPDA and

nitigation measures. neasures (EIA Study) UEC

mplementation of -Environmental. Monitoring Report UEP EPDA andnvironmental. MonitoringtFollow-up and Control . UEC

... an.. ?!!~......................Plan (EIA Study)~~~~~~~~~~~~~~~~~~~~~~..........I................. . .. ...... .......... .I. fi.,,,,,,,,,, ,,1 E td)....................... ............................ ............... ...tEPDA: Entdad de Prograinacidn del Desarrollo Agropecuario (Agricultural Development Progranuning Entity)

*UEC: UnidadEjecutora Central (Central Executive Unit)*UEP: UnidadEjecutora Provincial (Provincial Executive Unit)CAP: Comisi6n Asesora Provincial (Provincial Advisory Commission) of the Consejo Federal Agropecuario (Federal

Agricultural Council)*EIA: Environnental Impact Assessment;EP: Environmental Profile.

Environmental Analysis for Priority Subprojects in Group A

9. Based on the existence of a subproject considered to have potential negativeimpacts (i.e., Pozo Borrado-Province of Santa Fe), it has been decided to classify thePROSAP Project as Environmental Category A. Therefore, for all subprojects in thepriority Group A, detailed environmental analyses were conducted to evaluate theirpotential environmental impacts and, when needed, recommend mitigation actions. Therecommended mitigation actions, along with their associated costs, were incorporated intothe Group A subprojects' design. The studies concluded that, on the whole, thesubprojects would have significant positive environmental impacts, including: (i) reducedsalinization; (ii) decreased soil erosion; (iii) increased crop diversification; (iv) betteranimal husbandry practices; (v) improved natural resource conservation; (vi) reducedapplication of agro-chemicals; and (vii) more sanitary consumer health conditions.

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10. However, the studies identified four areas of intervention, which, withoutappropriate mitigation measures, could have potential negative environmental impacts.These were: (i) water resource management; (ii) crop pest management; (iii) livestockhealth management; and (iv) basic infrastructure.

I1. Water Resource Management These subprojects would improve and rehabilitateexisting irrigation and drainage systems, as well as expand drainage works. To improve orrehabilitate soil conditions, the project would construct drainage works. PROSAP wouldnot consider subproject proposals which would open up new areas of cultivation. Watermanagement subprojects would include the following components having positiveenvironmental impacts: (i) an institutional strengthening for the efficient watermanagement, including environmental impact evaluation; (ii) investments to restoresalinized soils or elevated water tables, and control of the factors which contribute to thesenegative processes, including measures to encourage rational water use and infrastructuremaintenance; (iii) development and transfer of technologies for better water management;and (iv) water and soil management training for extension workers and producers.

12. Nevertheless, such interventions, by encouraging agricultural expansion orintensification, could increase soil exhaustion or erosion, pollution, arising from greaterapplication of agrochemicals, and water nutrient levels, resulting in aquatic weedproliferation and eutrophication in downstream lakes and dams.

13. Appropriate mitigation measures to be included in subproject design are:(i) promotion of cultural practices for proper agrochemical use, including integrated pestmanagement and alternative, less harmful products; training and education programs forprofessionals, technicians and producers, covering health and environmental risksassociated with agrochemicals, as well as proper practices; (ii) data collection (river andcanal flow, rainfall, water table level, meteorological information); (iii) periodic samplingof water and soil salinity; in addition, sampling of water for content of pesticides,fertilizers and pathogens; (iv) inventory and analysis of pests and invading weedstransported by canals; (v) adoption of tolerance levels and standards of water quality, anddetermination of control measures; (vi) preparation and introduction of norms andprocedures for the control of agrochemicals, pests, diseases and invading weeds,transported by water; (vii) elaboration of regulations for works affecting drainage; and(viii) elaboration of norms and procedures for the management and conservation of naturalareas affected by the project and their wildlife; creation of reserves and protected areas.

14. In the case of the Flood Control and Drainage Subproject in Pozo Borrado, inaddition to the environmental analysis mentioned above, additional studies on thebiological diversity of the eastern part of the project area and the potential environmentalimpacts on the flora and fauna of the regional wetlands would be carried out. Once theresults of this study are ready, the first and second EIA report should be subject to a newconsultation process. Completion of this study and incorporation of new mitigationmeasures required, including the strengthening and/or creation of protected areas wouldbe conditions for Bank's approval of the Subsidiary Loan Agreement for this subproject

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between the Federal Government and the Santa Fe Province and, therefore, for thedisbursement of funds under this subloan.

15. Crop Pest Management. The most serious environmental impacts could be:(i) an increase in the level of toxic substances in the environment, especially in naturalwater bodies; (ii) greater risk to the health and safety of producers of intoxication; and(iii) the risks inherent in the use of biological control. To ensure the safety of farmers, aswell as to minimize potential environmental effects, the subprojects would adhere to stricthealth and safety standards, establish monitoring plans and controls, and conductappropriate training in the use of the techniques and products involved, and the promotionof integrated pest management practices. The training events will be carried out followingstrict safety standards and using adequate protective equipment to avoid accidents. Theeducational level and language of farmers will be fully taken into account for thepreparation of training materials to be distributed among beneficiaries.

16. The Crop Pest Management Services in Northwest Argentina, the only Group Asubproject of this nature, includes the following mitigation measures: (i) applicationmethods were carefully designed based on a determination of adequate time, frequency,doses and treatment for specific insects; methods and equipment which reduced risks wereselected; (ii) continuous surveillance of applications doses and frequency,(iii) enforcement of safety norms, including proper washing and storing of equipment;(iv) definition of procedures and contingency plans for cases of poisoning fromagrochemicals; (v) safety controls for agrochemicals, including in marketing, transportand storage, as well as container disposal through programs which support recycling ofcontainers by manufacturer; (vi) design and implement emergency procedures for cases ofpesticide spills or poisoning; (vii) training and education for inspectors, producers andfarm workers in monitoring, control and emergencies; (viii) education campaigns onagrochemicals and their use among the population of the region; and (ix) monitoring theeffectiveness of the safety procedures and health standards and proper recording ofaccidents.

17. Livestock Health Management Subprojects in this area of intervention wouldhave positive or neutral environmental impacts. Their primary component is thevaccination against Foot-and-Mouth disease (FMD), which poses no environmental risk.The establishment of quarantined areas and controls would block the introduction andspread of disease, as well as allow for a better control of transport and commerce oflivestock. These subprojects, by controlling and preventing disease, would improve thequality of meat products.

18. Nevertheless, other chemicals needed to control livestock diseases could: (i) posehealth and safety problems to individuals handling and applying them; (ii) contaminate soiland water; and (iii) harm wildlife, including beneficial organisms. Therefore, the followingspecific mitigation measures are recommended the design and implementation of:(i) environmental standards, and monitoring and control activities; (ii) training programsfor professionals, technicians and workers concerning environmental and health risks; and

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(iii) training and education programs to introduce integrated pest management practicesand use of alternative, less harmful, products when possible.

19. Basic Infrastructure As these subprojects would improve existing roads andexpand existing electrification systems and would not open up new areas of cultivation,they are not expected to affect the environment in a significant way. Nevertheless, carewould be required to ensure the protection of wildlife and their habitat, and monitor theenvironmental impacts of possible changes in production patterns. Principal mitigationmeasures to be applied in rural road rehabilitation investments are: (i) modification and/orconstruction of structures for the adequate evacuation of excess surface waters;(ii) protection of roads against floods; (iii) protection of sites of special cultural, historicalor aesthetic value; and (iv) training and education of members of user's cooperatives inenvironmental protection.

20. In rural electrification projects, the main mitigation measures contemplated are:(i) adoption of adequate procedures for the selection of electrification routes anddeforestation; (ii) protection of sites of particular cultural, historical or aesthetic value,and/or species of special genetic or ecological value; and (iii) environmental education forusers and providers of the electrical service.

Further Mitigation Measures

21. All PROSAP subprojects would be based upon the principle of sustainabledevelopment, watershed management and integrated pest management. Theenvironmental problems, currently affecting the project areas, as well as those which couldresult from the subprojects, arising from the intensification of land use and pesticideapplication, would be addressed within the framework of those fundamental concepts.The identification of mitigation actions, discussed above, does not exclude the possibilityof the need for additional measures specific to each case and area of intervention.Mitigation of negative environmental impacts of projects would be undertaken, to themaximum extent possible at the subproject design stage, but as the result of continuoussubproject environmental surveillance, subprojects would be adjusted throughout the lifeof the project, as required.

22. As has been mentioned, the Borrower has presented draft environmental analysesfor each individual subproject included in Group A, as well as an environmental report forthe whole project. These documents are currently being reviewed by the Bank. TheAppraisal Mission examined the effectiveness of PROSAP's subproject environmentalscreening procedures, and the monitoring and impact evaluation systems to ensurecompliance with environmental guidelines and procedures. In addition, the Missionevaluated the adequacy of the mitigation measures incorporated into the project designand presented recommendations for revision either of the individual environmentalanalyses, the design of each of these investment subprojects, or the institutionalarrangements defined for their implementation.

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ARGENTINA

PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

PROJECT SOCIAL ASSESSMENT ANDBENEFICIARY PARTICIPATION

A. PROJECT CONTEXT

1. The rural population in Argentina12 represented less than 13% of the totalpopulation, or around 4.3 million people, in 1991. Census figures indicate that ruralpopulation has been declining steadily during the past three decades as a result of thecomplex transformations of the agricultural sector and the increasing social mobility andjob opportunities available in the urban areas. Most of the rural population is scatteredthroughout the countryside; however, there are significant regional differences. Whilealmost 50% of the total rural population is concentrated in the 'Regi6n Pampeana', theNortheast and Northwest provinces have the highest proportion of rural population (seeTable 1).

Table 1: Rural Population in Argentina by Regions, 1991

Region Rural Population Percentage of Total Percentage of Rural(thousands) Population Population in the

Country

Pampeana 1,805 8.1 42.1

Northeast 862 30.6 20.1

Northwest 936 25.5 21.8

Cuyo 468 21.0 10.9

Patagonia 215 14.5 5.0

Country 4,286 13.1 100

Source: National Institute of Statistics and Census (INDEC)

2. The uneven distribution of the population reflects the heterogeneity of theagricultural sector in Argentina. Large differences exists between regions regarding farmstructure, production systems, resources allocation, and the competitiveness of thedifferent types of agricultural producers. While the agricultural sector in the Regi6nPampeana continues to be dominated by large farms; small farms, mostly poor, areconcentrated in northeast and northwest regions. More than half of the total number ofsmall farmers in the country (estimated in 200,000) are in these areas. The problem of

12 For census purposes, rural population is defined as the population living in the countryside or in towns

with less than 2,000 inhabitants.

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regional economic disparity and uneven performance of the agricultural sector is a criticalpolicy challenge. According to the National Statistics Institute (INDEC) about 34%percent of the rural population, or 1.5 million people is poor (see Table 2)'3. Incidence ofpoverty is higher in the northern provinces. More than 50% of the rural population in theNEA and NOA provinces is poor, that is twice as much than in the Regi6n Pampeana.

Table 2: Rural and Urban Poor by Regions, 1991

Rural Poor Urban Poor

............................................................................................................................ Riiiw...........................w......................

Number % Number

Pampeana 400,000 22.2 2,730,000 13.3

Northeast 438,000 50.8 530,000 27.2

Northwest 501,000 53.6 518,000 18.9

Cuyo 155,000 33.3 242,000 13.8

Patagonia 64,000 29.8 197,000 15.6

Total 1,558,000 34.2 4,217,000 16.7

Source: National Institute of Statistics and Census (INDEC)

3. Extensive cultivation, relatively low efficiency added to little public and privateinvestment have resulted in an increasingly poor agricultural performance, particularly insome sub-sectors, such as fruit production, tobacco, cotton and sugar cane. Thedeterioration of public services has contributed to a loss of sectoral competitiveness. Toincrease overall competitiveness, the sector requires investment for its modernization andrestructuring. Central to this process is the decentralization of the public sector, thedevelopment of appropriated support services, and the transfer of certain services to theprivate sector where possible.

4. The long-term perspectives for the agricultural sector are promising. The newmacroeconomic framework and the conditions created by the market liberalization (GATTand MERCOSUR), provide a crucial incentive for increasing sectoral productivity.However, the impacts of these policies would not be homogeneous among regions andproducers. To ensure the effects of these macroeconomic policy changes would have apositive impact on the regional economies, sectoral policy should focus on the reductionof these dualities of scale and location.

5. A key instrument to increase the competitiveness of the sector is the rehabilitationand modernization of irrigation infrastructure and the decentralization of watermanagement systems. In some provinces, such as Mendoza, the system is decentralized

13 INDEC's estimate of poverty is based on an index of unsatisfied basic needs build upon the 1991population census information on housing, education, employment and, sanitation.

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and the management of the secondary and tertiary network is administered by the users. Inother provinces, irrigation systems are administered by a central agency with almost noparticipation of the users. In most provinces there is little experience with decentralizedsystems, and water user associations are rather weak and unskilled. Sharp differencesexist between associations regarding size, composition, institutional arrangements andparticipation levels, among others. All these factors influence the effectiveness of theassociations and their participation in the management of the irrigation systems.

B. KEY CONSTRAINTS AND SOLUTIONS

6. For a successful decentralization and modernization of services, beneficiaryparticipation and solid producer associations are required.. Beneficiary participation is acrucial factor for project success and sustainability. A review of selected Bank projectsreveals a strong association between participation and project effectiveness'4 .Participation prompts the development of beneficiary ownership and increases theresponsibility of the intended beneficiaries on project implementation. Participation buildsskills and strengthens institutional effectiveness because it contributes to moretransparency and better use of existing resources.

7. To ensure beneficiary involvement during project preparation, a systematicstakeholder consultation was implemented to analyze and discuss specific mechanisms forbeneficiary participation. In addition to the consultation, an organizational diagnosis wascarried out to explore how the project could strengthen water user associations andbeneficiary participation during implementation'5 . The main goal was to provide essentialinformation for designing specific procedures for beneficiary participation as well asmechanisms to strengthen the organizational and managerial skills of water userassociations for administrating the irrigation systems.

8. Cases from five provinces (Buenos Aires, Mendoza, Neuquen, Rio Negro andSalta) with different agro-ecological and socioeconomic conditions were selected for thestudies. The overall objectives of both studies were to establish a feedback between theproject team and the beneficiaries and to develop an appropriate framework for theirparticipation during project implementation. Workshops and focus groups with mainstakeholders and in-depth interviews with key informants were held in the provinces.

14 It has been observed that beneficiary participation allows a better definition of project componentsand activities because it ensures that beneficiaries' objectives and priorities are properly considered inproject preparation and implementation. For more information see The World Bank ParticipationSourcebook (The World Bank 1996).

5 The studies were partially funded by a grant from the Fund for Innovative Approaches in Human andSocial Development (FIAHS). Two local consultants carried out the field work with the assistance ofthe Project Preparation Unit between May and September, 1995.

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Client Consultation

9. A systematic client consultation with water users associations and other keystakeholders, including state officials from the central water management agency (WaterState Society), provincial level agencies (Water Directorates), and inter-state wateragencies (Watershed Authorities) was implemented. The consultation focused on thefollowing issues: (i) users' priorities; (ii) perceptions of key problems and potentialities fortransferring management to the users; (iii) a framework for beneficiary participation; and(iv) requirements for strengthening beneficiary organizations.

Organizational Diagnosis

10. To assess, from the users' perspective, the organizational weaknesses and potentialof their associations to manage decentralized irrigation systems, an organizationaldiagnosis was carried out. Its objective was to identify with the water user associationsalternative ways to strengthen their organizations and to improve the transition towarddecentralized water management systems. The organizational diagnosis followed aclient-oriented methodology, trying to bridge the gap between the goals of the users andthe proposed institutional structure for the management of the irrigation systems. Theassessment focused on the following issues: (i) external and internal constraints toorganizational effectiveness; (ii) identification of the conditions that can be changed mostreadily; and (iii) ways to change those conditions and to improve the organizationaleffectiveness.

Main Results

11. The results of the studies provided valuable inputs to the definition of operationalissues, such as institutional arrangements, mechanisms and activities for strengtheningbeneficiary participation, consultation and dissemination strategies, and criteria andprocedures to assess potential social impacts of the projects.

12. Small-producer organizations tend to be weak. Most of them lack organizationaland managerial skills, and they control little resources. Membership is reduced andproducers do not perceive clear benefits from participating. That is the case of most wateruser associations (WUA), particularly in provinces where water management system arecentralized. There is a general mistrust of central water management agencies amongproducers. WUA are not perceived as autonomous organizations by the producers giventheir weak functions, little autonomy, and unclear demarcation among state and WUAfunctions. It is important to indicate that in most cases where services have beendecentralized, the system operates efficiently and users are satisfied with the servicesprovided. Nevertheless, participation in the WUA, measured as meetings attendance andvoting, is low. Even in decentralized systems, producers believe their participation wouldhave little impact on the management of the irrigation systems.

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13. Another issue highlighted by the consultation and organizational diagnosis is thatproducers perceive that key policy and management decisions that directly affect them aretaken without consulting them. Producers think there is a lack of information and no clearmechanisms for their participation in the decision making process. Regarding PROSAP,producers felt that, until the consultation, they had insufficient information about theproject and little participation during the initial formulation stage.

Key Problems and Alternatives

14. The consultation showed that while representatives from government agencies andWUA have similar assessments of the limitations and potential for increasing beneficiaryparticipation and decentralizing the irrigation systems, they have different prioritiesregarding the proposed solutions. The key problems identified by the WUA and stateofficials can be grouped into three main categories: (i) Social; (ii) Technical; and(iii) Economic-financial. Among the social problems, the most important are the weaknessand lack of managerial skills of the WUA, the heterogeneity of producers, and the lack ofparticipation. Among the technical problems, inappropriate infrastructure, existingtechnical inefficiencies and lack of technical skills are highlighted. The majoreconomic-financial limitations mentioned are the repayment capacity of the producers, theamount of the proposed investments, and the lack of resources required to carry out thedecentralization of services to the producers. Table 3 shows the main results of the clientconsultation.

15. Economic-financial problems and related technical-productive constraints are themost frequently mentioned in a number of ways. Solving the indebtedness problem andthe lack of financing are considered by producers and government officials (see tableabove) as a necessary condition for project implementation and, particularly fortransferring the water management systems to the users. Similarly, the lack of technicalassistance is perceived as a key bottleneck for improving the management of the systemsand the competitiveness of the producers. Although stakeholders agree that the projectprovides sound technical solutions to the problems identified, producers are concernedwith their capacity to repay. There is a growing concern regarding the cost of the projectvis-a-vis a the crisis that small and medium producers face. All this was configuring forthe producers an uncertain and risky panorama as compared to the commitments that theproject implies. Producers believed the resolution to their financial and economicproblems is out of their reach and in the hands of the provincial and national government.Also, this uncertainty panorama was fed by the poor information available and lack ofparticipation during the initial stages of project preparation.

16. Finally, both beneficiaries and government officials signaled out that the existinglegislation has certain restrictions that hinder further development of the WUA. In thisregard, two main issues need to be addressed in the future. First, greater autonomy has tobe granted to the WUA to ensure they would have the power to enforce regulationsregarding recovery of fees, alternative water uses and conflict resolution, among others.

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Second, to ensure a more efficient water use, a volumetric-based tariff system would berequired.

Table 3: Perception of Key Problems and Alternative Solutions

Area BX Producers By Government OfficialsProblems

Social * Lack of information * 'Mentality' of producers (State* Lack of participation as provider)* Mistrust of govermnent * Producer associations are not* Heterogeneity of producers representative and lack* Weak social integration and managerial and technical

Individualism skills* Lack of appropriated legal * Water use conflicts between

and institutional frameworks producers* Lack of political decision of

provincial authorities* Legal and institutional

constraintsTechnical * Inappropriate infrastructure * Dissociation between research

(leakage, drainage, and technology transferequipment) * Lack of resources for extension

* Lack of technical assistance services* Lack of productivealternatives

Economic-Financial * High cost of project * High level of indebtedness* High level of indebtedness * Lack of financing* Lack of operational capital* Lack of financing* High Delinquency

SolutionsSocial * Dissemination of project * Increasing consultation and

information beneficiary participation* Increasing participation * Organizational development* Strengthening producer * Improve legal and institutionalassociations framework

Technical * Decentralization (better * Training of producerorganization of the systems) associations

* Increasing technical * Strengthening of extensionassistance to producer groups services

Economic-Financial * New financial support and * Financial support (forrenegotiation of debt improving infrastructure and

productive reconversion)

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17. The key problems that beneficiaries and government officials consider essential fora successful project implementation are improving beneficiary participation andstrengthening producer associations, particularly developing the organizational, technicaland managerial skills of the WUA. The crucial challenges that emerges from theconsultation is to develop confidence, credibility and commitment on the producers.Increasing consultation and participation during implementation is perceived by thestakeholders as the only possibility to influence and have increasing control over projectactivities.

C. IMPLEMENTING PARTICIPATION AND SOCIAL ASSESSMENT

Potentialities

18. Parallel to the problems above mentioned, there are important social/institutionalvariables that could facilitate project implementation. The desire for participation, anddynamism of the producers are positive factors that would facilitate the transition towarddecentralized management systems. Increasing responsibility and participation in themanagement of the irrigation systems is generally perceived by farmers as a priority forimproving overall efficiency in the operation of the systems and increasingcompetitiveness.

19. Producers are aware of the risks and costs that the decentralization would imply,and they are willing to take those risks and to pay for a better service. In this regard, theexisting experience of the WUA in Mendoza and Rio Colorado, with the recovery of userfees and the maintenance of secondary and tertiary irrigation networks, represents animportant asset to build upon.

20. The institutional flexibility of the WUA is another asset that would help to respondswiftly to operational/technical and administrative problems. Producer associations arecloser than provincial government agencies to the users. Producers identify themselveswith their associations and are willing to grant them with the power to enforce andsanction administrative rules. The normative flexibility of the associations also facilitatesthe development of irrigation management systems appropriated to the productiveactivities of the users.

21. Regarding the issue of organizational and administrative flexibility, theorganizational diagnosis showed that more homogeneous associations are bettermanagers. To optimize the use of existing infrastructure and resources and to increase theinstitutional effectiveness of the associations, it would be recommended to encourage theformation of homogeneous WUA. This could be accomplished by the organization ofsmaller -more homogeneous- associations and their federation into larger associations thatwould benefit from the scale of the operation, while maintaining the flexibility andopenness for beneficiary participation found in small organizations. According to thediagnosis, the optimum number of producers to draw community support and to facilitatedecision-making that an association can manage, fluctuates between 25 and 40 producers,

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with an irrigated area between 400-600 ha. These numbers change across differentregions and production systems. In some cases, where producers are more homogeneousand better organized, the number of producers and areas managed by an association couldbe increased, such as in Mendoza. However, to facilitate the transition in areas with lessorganizational experience, the scale problem should be taken into consideration whenplanning the transfer to the WUA.

Project Design and Implementation

22. The participation process triggered by the organizational diagnosis and the clientconsultation generated expectations among stakeholders. The following sectionsummarizes the actions and procedures agreed with key stakeholders and the governmentto ensure proper analysis of social issues and to channel beneficiary participation duringproject implementation, which have been included in the project design (withcorresponding costs) and in the Operational Manual.

23. Screening and Appraisal of Subproject Proposals. During the screening of newsubproject proposals, key socio-economic and organizational factors would be consideredto assess the potential social impacts and viability of the proposal. If potential negativesocial impacts are foreseen, specific mitigation plans would be required for the proposalsto be considered. Subproject proposal that do not consider appropriate mitigationmeasures would be returned for reformulation. Proposals would be screened by ainterdisciplinary committee that would include a social analyst to ensure key social issues,including beneficiary participation, are properly addressed. To achieve a more balancedranking and assessment of subproject proposals and feasibility studies, beneficiaryparticipation and social issues would be assign a weight of 25% of the total score.

24. Fostering Beneficiary Participation. Participation is an iterative process thatmoves along the project cycle. Participation describes both the end and the means toensure beneficiary access to the decision making processes and to define developmentpriorities and activities. That is, participation is not an 'either/or' situation, but it includesa wide range of activities and approaches, each with its own tradeoffs in terms of process-related and informational goals and implementation. Perhaps the most important step indefining the procedures and activities for strengthening beneficiary participation duringimplementation is establishing clear goals and objectives, which in this case are thedevelopment of appropriated support services, the transfer of certain services to the usersand, the development of the public sector and community organizations institutionalcapacities. Given the above, the following elements have been proposed to strengthenbeneficiary participation: (i) dissemination; (ii) institutional mechanisms; (iii) training; and(iv) institutional strengthening.

25. Dissemination. Information-sharing focuses on the gathering and dissemination ofinformation involving local people through means such as public meetings, radioprograms, or written materials. One of the problems highlighted by the consultation wasthe deficient and disparate level of information among the producers, their leaders,provincial authorities and project team. The objectives of this subset of project activities

-155- Annex G

are to provide producers with the required project information to participate in thedecision making process and to develop and facilitate the communication between thebeneficiaries and the UEP. The UEPs would have consultants (specialists in participationand social assessment), that would be responsible for the design and implementation of thedissemination activities. The activities proposed are:

(a) Short-term consultation and information sharing. A first activity to bedeveloped by the UEPs would be a dissemination campaign organized atthe provincial level to make existing project information available toproducer associations and other provincial stakeholders. This operationwould involve: (i) public dissemination of project documents; and(ii) meetings with interested groups at the local level to inform and discussproject implementation.

(b) Long-term dissemination and communication system. In the long term,the UEPs would develop a permanent communication system comprising:(i) bulletins and dissemination notes; and (ii) periodic meetings withproducer associations and other key provincial stakeholders (NGOs,Universities, other government agencies).

26. Institutional Mechanisms for Partcipation. As a result of the consultation andorganizational diagnosis, two institutional mechanisms were proposed for developing andstrengthening beneficiary participation in project implementation:

(a) Local Fora. As a result of the dissemination activities, permanent advisorygroups, or fora (LF) would be created at the local level. These fora wouldbe comprised of representatives of producer associations, NGOs, and otherrelevant stakeholders. They would have an advisory role to the UEPs,contributing to the planning of project activities and analyzing projectimplementation progress, particularly regarding social and environmentalissues.

The LF would constitute a mechanism for permanent feedback between theUEPs and the beneficiaries, who would have a direct input in the discussionof the POAs and in the monitoring and evaluation of project activities. TheLF would have direct access to the UEPs and would be responsible forchanneling information and demands between the beneficiaries and theUEPs. The LF would meet regularly every two months, or at the requestof one of its members to analyze specific issues. The UEP would maintaina permanent contact with the LF through the participation and socialassessment specialists, twice a year (prior to the approval of the POAs andat the end of the first semester) they would meet with representatives of theLF.

- 156 - Annex G

(a) Provincial Consultative Councils. At the provincial level, the UEPswould stimulate the development of Consultative Councils (CC) withrepresentatives of the LF. The CC would advise the EPDAs onparticipation, social and environmental issues. Also, the EPDAs woulddiscuss and analyze with the CC progress made in project implementationat the provincial level.

The CC would establish a link between the local level (LF) and theprovincial level (EPDAs) that would allow beneficiaries to have a voice inthe discussion of policy issues and long term programming. In summary,the proposed institutional mechanisms involve two levels that would allowbeneficiary participation and would feed the information required fordecision making. The LF would be in direct and permanent relation withthe beneficiaries and the UEPs, while the CC would be the link of the LF tothe EPDAs that have a broader policy-making role at the provincial level.

27. Training. While producer associations need to enhance their organizationaldevelopment skills, project staff need to broaden their technical skills with participatorymethodologies and organizational techniques that would facilitate their work with projectbeneficiaries. The objectives of the training activities proposed are to provide technicalassistance and training in managerial and organizational development to project staff andproducers and to stimulate the former to participate in their organizations. Proposed -activities would be implemented at the regional and national levels. Training at theregional level would be targeted to producers and administrative staff of the producerassociations. Training at the national level would focus on project staff and other agenciesor institutions involved in extension and technical assistance.

28. The training activities would be developed during the first three years of theproject. The provincial and national seminars would be organized by the UEPs and theUEC respectively.

(a) Provincial Level. Two five-day seminars would be offered twice a year atthe provincial level. Participants (15) would be nominated by the LFaccording to their needs.

(i) Organizational development and participatory methods: Thisseminar would address methodological issues on a number of toolsand techniques for developing participation and organizationalstrengthening. The seminar would then lead to a discussion ofexisting experiences and best practices.

(ii) Management and negotiation skills: The first half of this seminarwould focus on basic organizational management andadministration principles for rural organizations and producerassociations. The second part would discuss essential negotiationtechniques for conflict resolution and consensus-building.

- 157 - Annex G

(b) National Level. Two five days seminars on the topics listed below wquldbe organized by the UEC once a year. These seminars would be targetedto the technical staff of the projects, and the participants would be selectedby the UEPs. The objective is to provide all staff with a commonmethodological framework.

(i) Social assessment: This seminar is an introduction to socialassessment methods for technical staff. The seminar would reviewbasic concepts and discuss the use of a wide range of techniques forsocial assessment and participatory planing.

(ii) Organizational development and participatory techniques: Thisseminar would analyze key concepts of groups dynamics,institutional diagnosis and tools for promoting beneficiaryparticipation.

29. Besides these seminars, informal training activities such as field days and visitswould be organized by the UEPs. The specialist in participation and social assessmentwould be responsible for the design and implementation of these activities in coordinationwith the LF.

30. Institutional Strengthening. To ensure the successful implementation of theabove-described activities, the UEC and UEPs need to be strengthened with the requiredstaff. At the central level, the UEC would be required to include two professionals:(i) Social Assessment Coordinator; and (ii) Participation, Dissemination and TrainingSpecialist. Also, all UEPs would have to include a consultant specialist on socialassessment and participation.

(a) The social assessment coordinator in the UEC would have the overallresponsibility for the screening and analysis of social and participationissues in project proposals and feasibility studies. Also, the coordinatorwould collaborate with the M&E unit in the monitoring of social indicators(performance and impact) and would coordinate all activities aimed atpromoting beneficiary participation.

(b) The participation, dissemination and training specialist would collaboratewith the social assessment coordinator in the implementation of all socialassessment and training activities. This specialist would be in charge ofdesigning and implementing the training activities, and would providesupport to the UEPs on these issues.

-158 - Annex G

31. The consultants on social assessment and participation in the UEPs would be incharge of the monitoring of social and participation issues at the project level. Thesespecialists would provide advice to the UEPs coordinators on social issues, particularlyduring the preparation of the POAs and in the identification of potential negative socialimpact and in the design of mitigation measures. They would also provide support to theLF and CC on organizational development and participation issues.

- 159 - Annex H

ARGENTINAPROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

INSTITUTIONAL DEVELOPMENT COMPONENT

1. Effective and well-focused provincial institutions are needed to implement theproposed project, and strengthen and continue the public decentralization process. Thiswill require clearly delineated mandates and jurisdictions, a rational organizationalstructure, as well as sufficient financial and technical resources. This component of theproject would address many of the weaknesses inherent in the institutional relationshipbetween the national and provincial levels of government and at the provincial level.

2. As part of project preparation an Institutional Capacity Analysis (ICA), based onthe Institutional Capacity Analysis and Development System (ICADS), was performed toidentify institutional capacity gaps and appropriate measures to close this gaps. The ICAevaluated: (a) "rules of the game"; (b) inter-institutional relationships; (c) internalmanagement organization; (d) personnel policy and incentives; and (e) technical andmanagerial skills.

3. Poorly delineated responsibilities (the rules of the game) between the national andprovincial levels weaken coordination between the two levels and restrict provinces fromassuming an independent role with respect to support service delivery. Inter-institutionalrelationships are often unproductive as the mechanisms, between the levels and withineach level, for assigning sectoral priorities and facilitating institutional coordination areineffective. Intemal institutional managerial structures inhibit effective management withredundant assignment of responsibilities, inflexible and out-dated construction and poorcommunication flows. Personnel policies (in practice, often non-transparent) andincentives do not attract professionals with the skills needed to implement national andprovincial programs. Severe deficiencies were identified in: (i) modern management andorganization skills; (ii) policy, program and project design; (iii) data generation, processingand application; and (iv) specific technical skills.

4. Given these institutional weaknesses, a carefully designed institutionaldevelopment strategy and action program would be needed to ensure sound projectimplementation and the sustainability of its benefits. The project's InstitutionalDevelopment Component (IDC) would provide technical assistance:

(a) at the national level: (8 person/months (p/m)) to strengthen sectoralplanning and programming capabilities, as well as project monitoring andevaluation skills;

(b) at the provincial level: (1133 p/m) for provincial agricultural supportservice coordinating entities; and

-160 - Annex H

(c) complementary subproject level technical assistance, funded through thespecific subprojects and not the IDC, would include 1399 p/m forimplementation of the following subprojects:

(i) Bonaerense Valley of the Colorado River (Buenos AiresProvince): 88 p/m of technical assistance in technical skills,especially in water management, agronomy, social development,systems analysis, rural sociology and rural training. This wouldsupport the system designs, market studies, communication andtraining programs;

(ii) Mendoza Province Irrigation Program: 175 p/m of technicalassistance in economics, water management, systems analysis andenvironmental issues, as well as provide support for theestablishment of the project financial administration, provincialdatabase, and operational system for elaboration of consultants'terms of reference, contract review and supervision.

(iii) Alto Valley of the Rio Negro (Rio Negro Province): 373 p/m oftechnical assistance in management, economics, water management,agronomy, law, accounting/audit systems, data base management,communication and group dynamics, rural diagnosis, irrigationsystems and administration. The technical assistance wouldcontribute to subproject design and implementation.

(iv) Pozo Borrado Project (Santa Fe Province): 20 p/m of technicalassistance in accounting, water management, law and economy tosupport project implementation and strengthen existing institutions;

(v) Patagonia Livestock Regional Project: 40 p/m of livestockspecialists to assist the provincial implementation units installproject management and technical services, including theinstallation of the coordination unit. In addition, technical assistancewould be provided in epidemiology, animal diseases, and sanitaryextension, as well as meat processing;

(vi) Foot and Mouth Disease Campaign in Mesopotamia Zone(Misiones, Corrientes and Entre Rios): 115 p/m of specialists inepidemiology, animal health, sanitary education as well as in projectmanagement;

(vii) Phytosanitary Services of the NOA Region (SEFINOA): 319 p/mof technical assistance would cover environmental impactmanagement, expertise in laboratories administration andmanagement; and,

- 161 - Annex H

(viii) Neuquen Colonia Centenario: 3 p/m of technical assistance tohelp perform the rural diagnostic and design rural communicationprograms; and,

5. At the national/provincial level, 1503 p/m of technical assistance would providedto support the Agricultural Information System (SIIA) (see Annex B).

6. The IDC would support 60 training-activities, including formal courses,workshops, seminars and fellowships to upgrade skills of staff implementing project tasks,especially at the provincial level. At the national level, 12 courses would train 344 staff inagriculture and livestock planning and programming coordination, including policy design,project appraisal, follow-up organization and procedures, and environmental impactmanagement and organization. Specific subproject training activities, to be fundedthrough the subprojects, are:

(a) Bonaerense Valley of the Colorado River: Three seminars and twocourses to train 62 staff in regional development, irrigation and othertechnical topics;

(b) Mendoza Irrigation Program: One workshop, two courses and afellowship program to upgrade skills of 30 provincial staff in irrigationdevelopment and irrigation;

(c) Alto Valley of the Rio Negro: Four courses to train 12 provincial staff indata collection and processing, fruit and vegetable production, irrigationdistrict management and operation and maintenance;

(d) Patagonia Livestock Program: Four courses to train 42 staff in basicskills in animal health, specifically to deal with Foot-and-Mouth disease forparamedics, in applied epidemiology for field personnel, diagnosistechniques for laboratory personnel, and meat processing for healthinspectors;

(e) Foot-and-Mouth Disease Campaign in Mesopotamia Zone: Threeseminars, one workshop and a fellowship program to improve the skills of406 staff in epidemiology, animal health and production, data systemsmanagement, laboratory diagnostics and emergency sanitary programs;

(f) Phytosanitary Services of the NOA Region: One course and sixfellowships to train 259 provincial technical and supervision staff inphytosanitary services in plant protection, agro-chemistry, biochemicaldiagnosis, laboratory work for biological testing, and regional plantpathology;

- 162 - Annex H

(g) Neuquen Colonia Centenario: Four courses to train 12 provincial staff indata collection and processing, fruit and vegetable marketing, irrigationdistrict management, and operation and maintenance; and,

(h) Integrated Information System: Eight courses and four workshops totrain 934 staff in information systems.

- 163 - Annex H

Institutional Strengthening Component for Subprojects' Implementation

Training Activities

Subproject Activity

Development of the Colorado River Valley Seminars and workshops on regional developmert,and irrgionIrrigation Rehabilitation in Montecaseros Workshops, courses and scholarships on regional developMent and iigationSupport for the Provincial Irrigation Workshops, courses and scholarships on regional development and irrigationProgram

Flood Control in Pozo Borrado Courses on irrigation and drainage and watershed managementStrengthening Phytosanitary Services in Course, scholarships and field work on monitoring plant disease and protection, laboratoryNorthwestern Region (SEFINOA) diagnostics, plant quarantine and agro-chemials for technicians and inspectors.Eradication of Foot and Mouth Disease in Seminars, scholarships and courses on epidemiology, animal health and production, dataMesopotamia management, laboratory diagnostic techniques, and health emergencies.Strengthening Animal Health in Patagonia Courses on basic animal health and epidemiology, disease diagnostic techniques for lab

technicians, and principles of meat marketing for meat inspectorsRural Infrastructure Rehabilitation in Rio Courses on data processing, marketing of fruits and vegetables and irrigation managementNegro ValleyIrrigation Rehabilitation in Colonia Courses on data processing, marketing of fruits and vegetables and irrigation nmanagementCentenarioIrrigation Rehabilitation in Constitucion Workshops, courses and. scholarships on regional development and irrigation

National Agricultural Information System Initial training in information technologies and basic statistics; Workshops on theGeographic Ifnormation Systems; Courses on GIF, basic teledetection, special agriculturalapplications of the inforrmation system and personnel training of INDEC staff; andworkshop on the National Agricultural Survey

- 164- Annex H

Institutional Strengthening: Technical Assistance Sub-Component

K5b kpO .j ect and yeo Asssance.-Develolment of theColorado River Valley . 8=

.Sor techicalexpers in irrigation aMifrtture m gmetfit :Hydraulic engineer, agnicultural economist,ition exet,aroev. , ma ual ri ter,d i nfomain eiprt, evaluatiodspecialist, supervision expet, rrianstc exp, rua trining0 x.marking expert,t tra:nexpe::S1106trf6r the.Mendoza Irrifation:Pofram 175Senior technical expertEconomic finance, expert in systems anlysis and database, irrigaionw evaluation: specialist, hydraulic specialist,, exet ui:drainage, envigonmetntal expertFloobd Control in Pozo Borrado 20Senior techniical expertLegal expert, hydraulic engineer, expert in prkoect eviluation and follow-uP :Strenkthenin2 Phvtosanitarv ServiSces in No rthwestern Re2ion(SEFINOA) 3 19Senior technca expertsProject Director, environmental texpert, expert in project financial ad stion, data processin specialist, agiculrltengineerEradicationa of Foot and Mouth Disease in Mesopoatama 115Senior technical expertProject Director, expert in anmal health and: protection, expet in tmiical statistics, eet in animtl sanition:Strengthening Animal Health in Patagonia 40Senior technical expertsProject Coordinator, expert in epidemiology, veterinary speialists extension advisor, expert in slauheoses Rural Infrastructure Rehabilitationin iRio Negro ville: 373Senior technical expertProject Director, sociologist, legalj expert, agricultural economist, data processingtechnician, expert:in rural diagnostic, expertin group dynarnics, expert in financial administration of irrigation systems:Irriization Rehabilitation in Colonia Centenario 3.2Senior technical epertExperts in rural diagnostic and group dynamics, social comnimmcatorNational Akricultural Information6System , ::1503Senior technical expertsGeogr ic iformation system exerts, information processing specialists, rural sociologist, agricultural economists, computerprogrammer,

-165 - Annex I

ARGENTINAPROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

PERFORMANCE INDICATORS

SUBPROJECT: DEVELOPMENT OF THE COLORADO RIVER VALLEY (Buenos Aires)

IMPACT INDICATORS BASELINE IMPACT TARGETSArea producers' average annual income . $ 7,677/year * $ 8,831/yearbyyear 5

$ 29,929/year by year 10Yields per ha of main crops * onions = 1,000 sacs/ha onions =1,500 sacs/ha (year 10)

. pumpkin = 700 sacs/ha * pumpkin = 1,100 sacs/ha (year 10)

. wheat = 2,500 kg/ha * wheat = 4,500 kg/ha (year 10)* corn = 3,500 kg/ha . corn = 8,000 kg/ha (year 10). alfalfa seed = 180 kg/ha * alfalfa seed = 300 kg/ha (year 10)

Area under cultivation * 41,820 ha * 98,8 10 ha (year 10)PRODUCT INDICATORS BASELINE PRODUCT TARGET

Efficiency of water use * Conveyance (w/o lining) .67% a* Conveyance (w/ lining) = 95%. Operation = 90% * Operation =90%. Farm level = 15% . Farm level = 50%

Length of lined canals *a____ _______ 33.8 km of lined canalsChange in canals maintenance costs . $ 21.9 per ha/year (average) * $ 19.2 per ha/y (average)Producers assisted by the Generation and Transfer of . 570 producers (incorporated at a rate of 114Technology compon nent (GTT per year) assisted by project agents by year 5Transfer of canals administration to Users * 100% transferred by year 3Associations

MAIN PERFORMANCE INDICATORS BASELINE PERFORMANCE TARGETEstablish the UEP 0* IUEP established before start of project

implementationPercentage of budget disbursed 0* 28% during Ist. year; 44% by 2nd. year; 65%

by 3rd. year; 84% by 4th. year, and 100% by._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ y ea r 5

Quantity, type and cost of civil works contractsawardedQuantity, type and cost of technical assistancecontracts awarded for each component and activityCreation of the Regional Forum to oversee GTT * _ ___________ Regional Forum created by year ICreation of the Regional development technical * CODETEC created by year ICommittee (CODETEC)Quantity, type, cost and number of participants intraining events

-166 - Annex I

SUBPR1OJT: 4IRRtIGATIONjANUDDRAl4GE I~E*ADIL TION IlN MONTECASEOS S oIza)

; 7::IMPACT: INDICATORS- 0 0:t 775 BASRL3fiNZ : : IMlPACT RGZT : Change in production of grapes and peaches * Conunon table grapes = 77,600 MT * Common table grapes = 59,800 MT by year 7

* Fine table grapes = 4,800 MT * Fine table grapes = 39,900 MT by year 7Change in area dedicated to production of grapes * Common table grapes = 4,675 ha * Common table grapes = 3,272 ha

* Fine table grapes = 343 ha * Fine table grapes = 2,450 haProducers income (1,279 direct and indirect * $ 6,981 * $ 7,841 by year 7beneficiaries) * S 12,392 by year 20

PRODUCT INDICATORS BASELINE PRODUCT TARGETIncrease in water use efficiency * Conveyance and distribution: 75% * Conveyance and distribution: 85% by year 5

* Farm level: 39% * Farm level: 55% by year 5Amount of surface water available at farm level . 7,000 m3/ha * 11,000 m3/ha by year 5Reduction in underground water pumping . 10,600 m3/ha/year . 2,400 m3/ha/year by year 5Reduction in O&M costs * $ 50.14/ha/year a $ 48.64/a/yearArea drained by the rehabilitated system * 2,660 haWater table depth * At less than 1.5 meters in 38% of irrigated * At less than 1.5 meters in 10% of irrigated

land land by year 5Amount of farmers assisted by project agents * 338 farmers assisted directlyAmount of farms that adopt technological packages . 320 farms ( approximately 2,100 ha)generated by the project, and increase theirproductivity

MAIN PERFORMANCE INDICATORS BASELINE PERFORMANCE TARGETPercentage of budget disbursed . 39% by year 1; 49% by year 2; 57% by year

3; 86% by year 4, and 100% by year 5Quantity, type and cost of civil works contracts . 11.7 km of irrigation canals, 10 gauges andawarded for irrigation system rehabilitation 568 farm level intakesQuantity, type and cost of civil works contractsawarded for drainage systemrehabilitation/expansionQuantity, type and cost of equipment purchasedQuantity, type and cost of consulting contractsawarded for each componentQuantity, typ and cost of personnel hired for eachcomponentQuantity, type, cost and number of participants intraining eventsIntegrated technological packages tested and * At least 3 integrated packages available byavailable year 2

-167 - Annex I

SUBPROJECT: STRENGTHENING OF THE PROVINCAL4 IRRIGATION AND DRAINAGE PROGRAM Mendoza)

I:MPACTI NDICATORS BASELINE IMPACT TARGET:Increased agricultural yields, as a result of an . Common table grapes: 23 MT/ha . Common table grapes: 27 MT/haimproved distribution of water * Peaches: 12 MT/ha * Peaches: 14.5 MT/haIncrease beneficiaries' in net farm income * US$6,000/year * US$7,000/year by year 5

PRODUCT INDICATORSMore efficient distribution of water for irrigation * Conveyance and distribution efficiency: 60% * Conveyance and distribution efficiency: 75%Reduction of O&M costs * US$17/ha/year * US$12/ha/yearStudies on water resources management * Three studies completed:

(a) Underground water resources on theTunuyan and Mendoza River basins;

(b) Water Balance in Mendoza(c) Water Management Policies

Studies on availability of surface water * Five studies completed:(a) Sources of water losses;(b) Updated water distribution patterns;(c) Database for the GIS;(d) Distribution of rain water;(e) Water availability

Preparation of full feasibility studies for * Feasibility studies completed for sixrehabilitation of irrigation/drainage systems subprojects:

(a) Mendoza River;(b) Mendoza - El Carrizal;(c) Diamante River;(d) Socav6n Frugoni - Marcos;(e) Reducci6n -Los Andes(f) Los Tunas - Canal Tupungato

MAIN PERFORMANCE INDICATORS BASELINE PERFORMANCE TARGETPercentage of budget disbursed . Civil Works: 24% i year 1, and 19% per year

from 2 to 5. Institutional strengthening and studies:

41% in year 1; 30% in year 2; 21% in year 3;8% in year 4

Total Cost . Small civil works US$6.1 million* Other components US$2.9 million

-168 - Annex I

SISBPROJECT: OOD PROTECTON AND DRAINKAE IN THE POW BORAO ARA (SantaFe)

IMPACT INDICATORS IMPACT TARGBASELET,Change in production of grains, milk and beef due to * grains = 33,900 MT/year * grains = 35,750 MT/year by year 3decrease in risk of long term floods . milk = 243,900 kg fat/year . milk 251,100 kg fat/year by year 3

______________________________________ * beef 19,050 MT liveweight/year . beef= 19,902 MT liveweight/year by year 3PRODUCT INDICATORS BASELINE PRODUCT TARGET

Length of drainage canals built or rehabilitated . 405 km of canals rehabilitated and 32 km ofcomplementary drainage canals built byyear 3

Degree of participation of Basin Cormittee in * Basin Committee only performs 20% of . Basin Committee performs all administrativeadministration and maintenance of canals system maintenance tasks and maintenance tasks by year 3Nature Reserves created and established _ Nature Reserves established in the

hydrological system Golondrinas - Calchaqui- Salado

MAIN PERFORMANCE INDICATORS BASELINE PERFORMANCE TARGETPercentage of budget disbursed * 35% by year 1; 75% by year 2, and 100% by

year 3Percentage of budget for hydraulic works committed . 73% during year 1, and 27% during year 2and with bidding documents completedQuantity, type and cost of equipment purchasedQuantity, type and cost of consulting contractsawardedQuantity, type, cost and number of participants intraining events

-169 - Annex I

SUBPROJECT: STRENGTHENING ANIMAL HEALTH SERVICES IN SOUTHERN PATAGONLA

IMPWA.CT INl)CATORS A _MPACT TARGETPercentage of prevalence of Mange in sheep herds in * 15% prevalence * 10% by year 2; 5% by year 3; 2% by year 4,project area and I% by year 5Number of FMD outbreaks in the region . FMD-free area (0 outbreaks) * FMD-free status is maintainedPercentage of wool marketed classified as "very poor . 30% in Chubut and 20% in Santa Cruz * 10% in Chubut and 0% in Santa Cruz by yearconditioning" 5Percentage of meats consumed by population without a 30% in Chubut and 20% in Santa Cruz * 20% in Chubut and 10% in Santa Cruz bysanitary control year 5

PRODUCT INDICATORS BASELINE PRODUCT TARGETPercentage of farms in the areas of active and . Control only when Mange outbreak is * 100% of herds controlled from year Ipreparatory control work, checked by project agents denouncedPercentage of vehicles entering the area from N of * 100% controlled in precarious conditions . 100% controlled under good conditions for anthe 420 parallel, controlled by the sanitary barrier efficient inspection from year IPercentage of farmers enrolled in the controlling . 30% * 40% by year 1; 50% by year 2; 60% by yearsystem endorsed by SAGPyA (PROLANA) 3; 70% by year 4, and 80% by year 5Percentage of slaughter with veterinary inspection . 70% in Chubut, and 80% in Santa Cruz * 80% in Chubut, and 90% in Santa Cruz

MAIN PERFORMANCE INDICATORS BASELINE PERFORMANCE TARGETPercentage of budget disbursed . 30% by year 1; 48% by year 2; 66% by year

3; 83% by year 4, and 100% by year 5Quantity, type and cost of equipment purchasedQuantity, type and cost of consulting contractsawarded for each componentQuantity, type and cost of personnel hired for eachcomponentQuantity, type, cost and participants in training * 1005 of project agents by year 2events

-170 - Annex I

SUBIlROJECT: SBTENCGIIENING ANIMAL HIMALM ISEICES IN THE NORThWESTtRNREGION

IMAfcT1 IN iCATR BASELIN IMPAT TARG.ET ....Percentage of reduction in fruit fly trappings * To be determined in year I a 50%, 90%, 94%, 98% and 100% reduction in

trappings from years 1 to 5 respectivelyArea status with relation to citrus canker * Region free of Citrus Canker . Maintain Citrus Canker free status in the

regionQuantity of citrus fruits marketed as "free" of Mange * Nil . 230,000 MT by year 5and Black SpotIncrease in fruit exports * 108,000 MT . 115,000 MT by year 5

PRODUCT INDICATORS BASELINE PRODUCT TARGETNumber of traps installed, area dusted, and covered . 660 Jackson and 330 Mc Phail traps installedwith sterile flies . 55,000 ha dusted in years 1 and 2, and

covered with sterile flies in years 3-5Tucuman and Jujuy laboratories analyze and certify . Chance of certification for citrus, tomatoes,fruits for toxic residues table grapes and peachesPercentage of vehicles entering and exiting the * 90% in precarious working environment . 100% since year 1 in adequate workingregion, controlled by the sanitary barrier environmentQuantity of citrus fruit seedlings certified by the new . Laboratory functioning by year 2,micro-propagation and variety identification . 950,000 seedlings certified by year 5 (total)laboratoryQuantity of samples processed by provincial . 21,000 samples by year 5 (total)diagnostic laboratoriesNumber of farms enrolled in the "Mange and Black . 30 farms enrolled by year 5 (total)Spot-Free" certification system

MAIN PERFORMANCE INDICATORS BASELINE PERFORMANCE TARGETPercentage of budget disbursed . 34% by year 1; 46% by year 2; 64% by

year 3; 82% by year 4, and 100% by year 5Contracting of dusting services against fruit fly * Complete dusting of fruit & horticulture

production area during years I and 2Purchase and dissemination of sterile flies . Massive dissemination in citrus, tomato and

pepper producing areas during years 3, 4and 5

Number of diagnostic laboratories equipped * 4 diagnostic laboratories ( 1 per province)equipped during year 1

Regional Laboratory for control of toxic residues . Laboratory equipped during year IequippedNumber of sanitary control posts built . 8 control posts built by year 2Construction and operation of the NOA Center for . Center built and in operation by year 2Control of Introduction of Plant Material I

- 171 - Annex I

SUBPROJECT: STRENGTHENING ANIMAL HEALTH SERVICES IN THE NORTHWESTERN REGION

IMPACT INDICATORS BASELINE WIPACT TARGETEstablish a register of Mange and Black Spot-free * Register open during year IfarmsQuantity, type and cost of consulting contractsawarded for each componentQuantity, type and cost of personnel hired for eachcomponentQuantity, type, cost and number of participants in * 153, 95, 100, 52 and 148 technicians trainedtraining events in control and monitoring during years I to 5

-172 - Annex I

0i t 0V0 0:; : SUI3PROJFCT S5<NT1IEI?G N IMAl iIALIISERVICES INMEOPOTAM tIA t jt00-:j:20000\:0000: :: :: : : .:: : :: . . - . .... . : .... .. . ..~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ . ....

IMACT INDICATORS: BASELIE IMATt TARGETArea internationally recognized as FMD-free * "FMD-free" with vaccination * "FMD-free" without vaccination (recognized

._____________________________________ by OIE) by year 5FMD outbreaks . 0 * Maintain status

PRODUCT INDICATORS BASELINE PRODUCT TARGETPercentage vehicles entering the region, controlled * 100% under precarious working conditions * 100% under good working conditionsby the sanitary barrierSanitary Emergency funds available . * A minimum $ 1,000,000 available by year 2Maximum time interval between notification of . 48 hours * 24 hourspossible outbreak, and clinical diagnosisNumber of samples processed by regional * 100 % of the area sampled and serology testslaboratories performed once a year

MAIN PERFORMANCE INDICATORS BASELINE PERFORMANCE TARGETPercentage of budget disbursed * 32% by year l; 48% by year 2; 65% by year

3; 82% by year 4, and 100% by year 5Number of diagnostic laboratories equipped * 2 diagnostic laboratories (I in Corrientes, and

I i-n Parana) equipped during year INumber of sanitary barrier control posts equipped * 3 permanent and 2 mobile control posts

_ _ ~~~~~~~~~~~~~~~~~~~~~~equipped during year IQuantity, type and cost of consulting contractsawarded for each componentQuantity, type and cost of personnel hired for eachcomponentQuantity, type, cost and number of participants in * 50% and 100% of project agents trained intraining events their specific duties by years 1 and 2

_ respectivelyEstablish an Administrative Unit for the sanitary . Unit established by year Iemergency fund I

-173-

ARGENTINAPROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT

SUPERVISION PLAN

Approximate Expected Skill TotalMission Activity Requirement StaffweeksDates (Field)06/97 Launching Mission/ Task Manager 10.0

Organizational Arrangements for EnvironmentalistImplementation Irrigation Engineer

Institutional SpecialistSociologist

10/97 First Supervision Mission Task Manager 12.0Review start-up of implementation and Sociologistorganizational arrangements Institutional Specialist

Irrigation EngineerEnvironmentalist

04/98 Supervision Mission Task Manager 12.0Progress Review Economist/SociologistAnalysis of Subprojects Pipeline EnvironmentalistReview preparation of Annual Irrigation EngineerOperating Plan Agriculture and Natural

Resources Expert (ANR)Financial/Auditing Analyst

FY1999 Two Supervision Missions Task Manager 16.0Economist/SociologistIrrigation EngineerANR ExpertEnvironmentalist

FY2000 Two Supervision Missions Task Manager 16.0Economist/SociologistEnvironmentalistIrrigation EngineerANR Expert

FY2001 Two Supervision Missions Task Manager 20.0Mid-Term Review Economist/Sociologist

EnvironmentalistIrrigation EngineerANR ExpertInstitutional SpecialistFinancial Analyst

FY2002 Two Supervision Missions Task Manager 16.0Economist/SociologistEnvironmentalistANR Expert

-174-

FY2003 Two Supervision Missions Task Manager 16.0Economist/SociologistEnvironmentalistANR Expert.................... I......................................................I.................................................................. ............. .......... .....................................................................................................................................

FY2004 Two Supervision Missions Task Manager 16.0Economist/SociologistEnvironmentalistANR Expert.......... ........... ...................................................... I.............I.............................................................. ...............................................................................................................................................

FY2005 Final Supervision Mission Task Manager 20.0Preparation of ICR Economist/Sociologist

EnvironmentalistsANR ExpertIrrigation EngineerInstitutional ExpertFinancial Anayst

Guzman P. Garcia-RiveroM:\GGRIVEROMBUFFINNEX.DOCMarch 21, 1997 6:04 PM

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u f |_ e LlF. N',jp_ 2 /1< \ Sonto Rosa LJFN- ;

_ Ir' 5>_ | L A Mar del PIat

- :( L > -pNP:3A

T I ) ,) Neuquen ARGENTINA

C rmende PROVINCIAL AGRICULTURAL_40- ( , ,J rr<~>)f.f tDEVELOPMENT PROJECT 4

0 Selected Cities

- Province Capitals

' t Rawsonf 3 National Capitol

H C ) P11 ! H 0 7 ) _ Province Boundaries

Internationol Boundories

MILES o 100 200 300 400 500

S / I I ~~~~~~~~~~~~~I I I IIL_r, Ig

KILOMETERS o 200 400 600 800

FALKLAND ISLANDS(MALVINAS)

50 h iRia Gallegos This map was produced4> @ \ kfCby the Mop Design Unit

of Mte World sank.(1 =,A XISP,Tt COAJCCWERJNG S0ErVEN?Y OfER 'HlE The boundaries, colors,

hS4.N.S EX,$,$ SEr WEEN AIGEnrINA -nCH CWAISTHIS SOVEREIGNt Alo rnlE us1 WICk AOMIISITEr denominctions and any'He ,1515S5 other information shown

on this map do notim'ply,o the part of

Ush The World Bank Group,any judgment on the legal

T I E R RA status of ony territory,MDE L or any endorsementDEL70 or acceptance of such

80 70' FUEGO 60o SO° boundaries.

MARCH 1997

IMAGING

Report No.: 15454 ARType: SAR