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MINISTRY OF AGRICULTURE, MECHANISATION AND

IRRIGATION DEVELOPMENT:

DEPARTMENT OF IRRIGATION DEVELOPMENT

APPRAISAL REPORT

ZHOVHE SMALL SCALE IRRIGATION PROJECT

ZIMBABWE

LIST OF ANNEXES

Number Title

1. Map Showing Project Area

2. List of Goods and Services

3. Environmental Impacts and Proposed Mitigation Measures

4. Tentative Implementation schedule

5. Crop Budget and Financial Analysis

6. Calculation of the Economic Internal Rate of Return

LIST OF TABLES

Number Title

4.1 Summary of Project cost Estimates by Component

4.2 Project Cost by Category of Expenditure

4.3 Source of Financing

5.2 Summary of Other Models of Arrangements

5.5 Expenditure Schedule by Source of Finance

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TABLE OF CONTENTS

BASIC DATA, CURRENCY AND MEASURES, LIST OF (i)-(vii)

TABLES, LIST OF ANNEXES, LIST OF ABBREVIATIONS,

PROJECT BRIEF, PROJECT MATRIX.

1 INTRODUCTION BACKGROUND AND BANK STRATEGY 1

1.1 Origin and History of the Project 1

1.2 Performance of Similar Projects in the Country 1

2 THE AGRICULTURAL SECTOR 2

2.1 Salient Features and Structure 2

2.2 Constraints to the Development of The agricultural Sector 3

2.3 Performance of the Sector 3

2.4 Agriculture Institutions 3

2.5 Government Policies in the Agricultural Sector 4

2.6 Land Tenure and Land Use 5

2.7 Credit System in the Sub-Sector and Constraint 6

3 THE IRRIGATION SUB-SECTOR 7

3.1 Irrigation Sub-sector Analysis 7

3.2 Project Area 8

3.3 Project Beneficiaries 8

3.4 Environment 9

3.5 Gender Issues 9

3.6 Donor Co-ordination 10

4 THE PROJECT 10

4.1 Project Objectives

4.2 Description of Project Outputs 11

4.3 Detailed Description of Activities and Components 13

4.4 Project Assumptions and Risk 13

4.5 Project Costs 14

4.6 Sources of Financing 15

4.7 Environmental Impacts 16

4.8 Impact on Women 16

4.9 Poverty Reduction 16

5 PROJECT IMPLIMENTATION 16

5.1 Executive Agency 16

5.2 Organization and Management 17

5.3 Procurement of Goods, Works and Services 18

5.4 Implementation Plan and Expenditure Schedules 21

5.5 Monitoring and Evaluation 22

5.6 Recurrent Costs, Cost Recovery and Project Sustainability 22

6 TECHNICAL AND ECONOMIC JUSTIFICATION 24

6.1 Technical Justification 24

6.2 Project Benefits 24

6.3 Financial and Economic Justifications 25

7 CONCLUSIONS AND RECOMMENDATIONS 26

7.1 Conclusions 26

7.2 Recommendations and Conditions of Loan 27

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WEIGHTS AND MEASURES

1 Metric Ton (mt) 2.200lb (pounds)

1 Kilogram 2.2lb (pounds)

1 Meter 3.28ft (feet)

1 Kilometer 0.62 miles

1 Hectare (ha) 2.471 acres

LIST OF ABBREVIATIONS

ADB African Development Bank

ADF African Development Fund

AFC Agricultural Finance Corporation

AGRITEX Agricultural Technical and Extensional Services

ASMP Agricultural Services Management Project

CAMPFIRE Communal Area Management Program for Indigenous Resources

COTTCO Cotton Company of Zimbabwe

CSC Cold Storage Company

DDF District Development Fund

DMB Dairy Marketing Board

DRSS Department of research and Specialized Services

DWD Department of Water Development

DVS Department of Veterinary Services

EIA Environmental Impact Assessment

EIRR Economic Internal Rate of Return

ESAP Economic Structural Adjustment Program

FAO Food and Agriculture Organization

GDP Gross Domestic Product

GMB Grain Marketing Board

GNP Gross National Product

GOZ Government of Zimbabwe

ICB Internal Competitive Bidding

IPPM Integrated Production and Pest Management

IMC Irrigation Management Committee

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MIS Monitoring Information System

MLGNH Ministry of Local Government and National Housing

MoLA Ministry of Lands and Agriculture

NGO Non-Governmental Organizations

RDC Rural Development Council

SADC South African Development Community

SEDCO Small Enterprises Development Program

UA Unit of Account

UNDP United Nations Development Program

ZDB Zimbabwe Development Bank

ZIMPREST Zimbabwe Program for Social Transformation

PROJECT INFORMATION SHEET

Date: MAY 2012

The information given hereunder is intended to provide some guidance to prospective financiers,

contractors, consultants and all interested stakeholders. More detailed information and guidance should

be obtained from the Executing Agency.

1. COUNTRY : Zimbabwe

2.

3. NAME OF PROJECT : Zhovhe Small Scale Irrigation Projects

4.

5. LOCATION : Matabeleland South Province

6.

7. PROJECT PROMOTER : The State of Zimbabwe

8.

9. EXECUTING AGENCY : Ministry of Agriculture, MECHANISATION AND IRRIGATION

DEVELOPMENT

No. 1 Borrowdale Road

P Bag 7701

Causeway Harare

10. DESCRIPTION

The activities of the project will involve (a) Development of irrigation Infrastructure which comprises

(i)preparation of a detailed feasibility study (design, BOQ, socio-economic analysis and implementation

plans of the civil works and its supervision , construction of water diversion structure at the Zhovhe dam

site, a 28 km long concrete lined canal to convey water both communal and commercial farmers to

irrigate about 2,520 ha of land, 21 km of secondary canals to irrigate 1,170 ha of land for the communal

farmers and provision of drainage were required); (ii) infield development which would constitute

provision of a sprinkler irrigation system for 500 ha and surface / basin irrigation works for another 500

ha, and installation of 10 sand abstraction pumping units for the provision of water to irrigate 170 ha of

land for the communal farmers who cannot be served by the canal; (b) Agricultural Development which

comprises of provision of credit, extension services and training to the beneficiaries and (c) provision of

the Project Management and personnel and equipment.

11. TOTAL COSTS : US$25 million

12. ESTIMATED STARTING DATE OF PROJECT AND DURATION : July 2013 for 3 Years

PROCUREMENT : project goods, works and services will be procured according to International

standards rules and procedures. Construction of main canal and secondary

canals and infield development will be procured through International

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Competitive Bidding (ICB), while construction of produce collection sheds will be

through NCB. Agricultural inputs, vehicles and motorcycles, office equipment

supplies will be procured through National Shopping. Consultancy services will

be procured through limited completion using short list.

13. CONSULTANCY SERVICES REQUIRED AND STAGE OF SELECTION :Project managers, designers and

other key experts will be required.

SUMMARY, CONCLUSION AND RECOMMENDATIONS

1. PROJECT PROMOTER : GOZ

2.

3. EXECUTING AGENCY : Ministry of Agriculture, Mechanisation and Irrigation

Development

4. PROJECT COST : US$25 Million

5.

POSSIBLE FINANCE TERMS

i. Interest rate : To be negotiated with Financiers

ii. Duration : 20 years including a grace period of 4 yrs

iii. Repayments : Semi –annual installments beginning 5th year after loan

Signature

6. PURPOSE OF THE FUNDING REQUIREMENT

The funds amounting to US$25 million would be used to finance the entire cost associated with

the construction of the canal, infield development, credit, office equipment, supplies and

furniture, farm inputs, training and technical assistance. The funding would also finance both

operating and maintenance cost under the agricultural development and project management

and component of the operation and maintenance of the canals and infield development.

7. THE PROJECT

a) Objective: The project will contribute to the Government sector goal to raise the

productivity and incomes of smallholder agriculture which is the major vehicle to eradicating

poverty, hunger, malnutrition and unemployment. The project’s specific objective is to

contribute to household food security for the communal farmers of the Mtetengwe and

Masera communal lands and raise their household incomes.

b) Description: The activities of the project will involve (a) Department of Irrigation

Development which comprises (i) preparation of detailed and implementation plans for the

civil works and its supervision, construction of a water diversion structure at the Zhovhe

dam site, a 28 km concrete lined canal to convey water both communal and commercial

farmers to irrigate ABOUT 2,520 ha of land, 21 km secondary canals to irrigate about 1,170

ha of land for the communal farmers and provision of drainage where required. (ii) infield

development which would constitute provision of a sprinkler irrigation system for 500 ha

surface/ basin irrigation works for another 500 ha and installation OF 19 SAND

ABSTRACTION PUMPING UNITS FOR THE PROVISION OF WATER TO IRRIGATE 170 ha of land

for the communal farmers who cannot be served by the services and training to

beneficiaries, and (c) provision of the project management and personnel equipment.

8. PROJECT COST

The total cost of the project is estimated at US$25 million including contingencies. A summary

position is shown in table below:-

Summary Activities

Component

a) agricultural infrastructure

i) Design, socio-economic analysis and supervision

ii) Construction of water diversion and canal

iii) Infield development

b) Agricultural development

c) Project management

9. SOURCES OF FINANCE

The project would be financed by any willing organization in partnership with GOZ.

10. IMPLEMENTATION

The project will be implemented over a 3 year period with 2013 being PYI.

11. PROCUREMENT

Procurement of goods and services will be accordance with the international rules and

procedures for procurement of goods and services. Construction of the main and secondary

canals and infield development will be through International Competitiveness Bidding while

construction of produce collection sheds will be through NCB. Agricultural inputs, vehicles,

motorcycles, office equipment and supplies as well as farm inputs will be procured through

National Shopping. Consultancy services will be procured through limited competition using a

short list.

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12. CONCLUSION AND RECOMMENDATIONS

Conclusion :

The project is in line with the GOZ strategy of poverty reduction. Beitbridge District is very dry and

dry land cropping is almost impossible. Maize which is the staple food yields between only 90 kg to

800 kg per ha. The majority of the rural; population therefore relies on Government handouts for

their food requirements. The project will significantly reduce poverty and food insecurity in the area

which is occupied mainly by small holders. At full implementation about 7,899 tons of grain maize

will be produced enough to support more than 2,340 families. Irrigated farming will enable the

farmers to grow grain maize in summer and vegetables in winter. A total of 2,246 tons of sugar

beans, 439 tons of green maize, 2,633 tons of tomatoes, 2,048 tons of onions and 3,218 of

cabbages. In monetary terms the average net income per beneficiary family will increase to an

estimated US$1,005.00 which is substantially higher than the cut-off national poverty line of US$

221.33 and the rural poverty line of US$192.42 as defined in the poverty assessment survey

undertaken in the country in 2005. The commercial farmers who will participate in the Project will

mainly benefit from reduction of water loss from 40 % currently experienced from the utilisation of

sand abstraction method of irrigation to 2% as a result of the construction of the canal. This

amounts to US$1, 682,337 per year in monetary terms.

The harsh climatic conditions experienced in the district necessitate that most food consumed in the

area is brought from Bulawayo, 300 km away. As a result of the project, the amount of food brought

from outside the district will be reduced. The project will therefore directly ensure household food

security of the beneficiaries but it will also indirectly ensure food security position of a significant of

the district population who will be able to buy food from within. All the benefits will be realized with

positive environmental impact. It is therefore concluded that the project is technically sound,

economically and financially viable and socially desirable.

ZIMBABWE

ZHOVHE SMALL-SCALE IRRIGATION PROJECT (ZSIP)

Project Matrix

NARATIVE SUMMARRY (NS) OBJECTIVELY VERIFIABLE INDICATORS (OVI)

MEANS OF VERIFICATION

(MOV)

IMPORTANT ASSUMPTIONS

1

Sectoral Goal To contribute to GDP growth and poverty reduction

1.1 Agricultural sector contribution to GDP increases by at least US$ 2.73 million by the year 2005

1.1.1

Information from projects monitoring and data from Central Statistics Office Report

1 Economic reforms which encourage investment in the agricultural sector continue

1

Purpose To contribute to house hold food security for the target communal farmers and raise

1.1

Diversion structure from Zhovhe dam. Main and secondary canals as well as infield irrigation infrastructure in operation by the

1.1.1

Reports from the project management

1

The required amount of water to irrigate 1.170 ha by smallholder farmers

their household income 1.2

year 2002 …Year… Tons $ 1998 2005 Grain Maize 0 8775 Sugar Beans 0 2245 Green Beans 0 439 Tomatoes 0 2633 Onions 0 2048 Cabbage 0 3218 Average farm gross margin increased by US$1.027 by the year 2005

1.2.1

Farm budget records from the Project Monitoring and E valuation

2 3 4 5

allocated Farmers are willing to adopt new crop production technology Allocation of irrigation plots to farmers is timely Crop prices in the domestic and the world market remain stable Dependable rainfall pattern

1 2 3

Outputs Irrigation infrastructure put into place Agriculture improved Effective project management in place

1.1 1.2 1.3 1.4 1.5 1.6 1.7 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3.6

Detailed design and implementation plan documents A water diversion structure 28km of main canal 21km of secondary canal Sprinkler irrigation system on 500ha Surface irrigation system on 500ha 10 sand abstraction units and pumps All these operational by November 2002 Extension officers trained Extension field assistants trained Farmers trained Credit provided IMCs established Extension services provided Necessary vehicles and equipment Project manager appointed Vehicles and other equipment

1.1.1 2.1.1 5.1.1 5.1.2

Quarterly Progress Reports and Bank Supervision Quarterly Progress Reports and Bank Supervision Quarterly Progress Reports and Bank Supervision Communication with the government

1 2

Government staff expected to be involved in the project remains in place Experienced contractors available

1 2

Activities Develop irrigation infrastructure

Develop detailed design and implantation plan

Construct water diversion

Construct main canal

Construct secondary canal

Install sprinkler irrigation system

Install surface irrigation system

Install sand abstraction

Undertake agricultural development

Provide credit

Project Budget (In UA)

Detailed design and implementation plans Water diversion & canals 6.96 Infield development 3.09 Agriculture development 2.30 Project Management 0.30 Total 12.99

Project management progress reports

1 2 3 4

Contractors recruited in time Project implemented and designs All equipment inputs and supplies procured in time and within budget Qualified staff to implement the project available

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3

Provide extension services and provide vehicles and equipment

Provide training, training material and vehicles

Put in place project management and provide vehicles and equipment

1. INTRODUCTION

1.1.1 Origin and History of the Project

1.1.2 The republic of Zimbabwe is a landlocked country with a total area of 390,759 km. It is located in

the Southern part of African continent and shares boarders with Mozambique in the North East,

and South East, Zambia in the Northwest, Botswana in the South west and South Africa in the

South. Geographically the country lies entirely within the tropics, but most of the Highveld and

the Eastern Highlands experience sub-tropical to temperature climate as a result of modifying

effects of altitude.

1.1.3 The population of Zimbabwe is estimated at 12.6 million. It is characterized by a high growth

rate of 3.15% per annum. Women constitute 51% of the population and men 49%. The

projection shows that, by the year 2000, the population would increase to 15.2 million out of

which 73% will be located in the rural areas.

1.1.4 The main resource base of Zimbabwe is agriculture which plays a key role in the Zimbabwean

economy. Almost the whole country has good soils. !about 90% of total land and is therefore

considered suitable for agricultural production. However about 65% of the country receive less

than 65 mm of rain which is unreliable and is subject to frequent droughts and dry spells. The

rainfall is therefore too low and uncertain for crop production. The country’s internal

renewable water resources have been estimated at 12.26 km3/year, of which 11.26 km3 are

surface water resources, and 6.00 km3 are groundwater resources. The overlap between surface

water and groundwater resources has been estimated to be 5.00 km3 The country has potential

to harness these water resources for agricultural development to counter the effects of drought.

1.1.5 With assistance of the donor community, the Government has constructed development, and

most of these dams remain underutilized. In April 1998, the Bank launched 26 dams for

irrigation. The construction of dams did not go hand in hand with agricultural an identification

mission to the country, during which the need to fund development of agricultural to utilize

these dams was identified. The project proposal for utilization of Zhovhe dam was found at an

advanced stage to enable preparation of the project design. In addition due to the state of food

availability in the proposed area (about 80% of the population depend on food relieves), the

project ranks high in the country’s development priority.

1.1.6 Following a GOZ invitation the ADB Bank mounted a field mission from June 1 to June 18, 1985

to prepare the project. The preparation report established that the project is viable and is a

Government priority. The Bank therefore undertook an appraisal of the project from July 27 to

August 9, 1998 and appraisal missions of July / August 1998. The bank had pledged to fund the

project but backtracked when the country started to experience macroeconomic instability.

2 THE AGRICULTURAL SECTOR

2.1 Salient Features

2.1.1 The agricultural sector currently contributes about 17% to the GDP from 40% prior to 2000. It

dominates the national economy through its impact on employment linkages with the

manufacturing industry and contribution to its expert earnings. About 70% of the population

depends on farming for its livelihood and the sector offers employment to 25% of the labour

force. Agriculture is a major source of raw materials for the manufacturing industry. It is also a

major foreign exchange earner through exports of tobacco and cotton. Other agricultural export

commodities include beef, maize, sugar and horticultural crops.

2.1.2 Zimbabwe produces a wide variety of food and cash crops. Food crops include maize, wheat,

sorghum, sugar beans and vegetables while cash crops are comprised of tobacco, cotton, coffee,

tea and sunflower. More recently, horticultural products such as flowers, fruits and vegetables

have made significant contributions to the country’s export earnings. Between 1992 and 1996,

horticultural exports increased in value from US$39 million to US41.03 million.

2.1.3 Majority of Smallholders occupy marginal where rainfall is below 600mm per year. They

therefore depend on extensive livestock production for livelihood. As such the smallholders

raise 68.2% of the national cattle herd, 98.8% of goats, 84.5% of sheep and 59.6% of pigs.

2.1.4 Structure : The agricultural sector is distinctly divided into estates, commercial farm enterprises

and smallholder farms. The principal commercial products are tobacco, beef and maize,

followed by cotton, sugar, soya beans, tea and coffee.

2.1.5 Smallholder farmers, in general, occupy land that is communal or resettled. Most of smallholder

land is situated in marginal areas and therefore is less suitable for intensive agricultural

development. Smallholders mostly concentrate on subsistence farming under which they grow

maize which is the staple food, millets and sorghum. To a small degree they are also involved in

the production of cash crops such as tobacco and cotton.

2.2 Constraints to Agricultural Development

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2.2.1 Zimbabwe’s agriculture experiences serious development constraints, the most important being

recurrent drought. Other constraints include the weak institutional, land reform transitional

challenges and infrastructural support. Unfavorable fiscal policies and declining soil fertility. The

scope of research and extension activities has improved, but access to information by

smallholder sector needs to be improved. The inadequate provision of support service such as

credit, marketing and extension, not only constrain production, but also contribute to soil

degradation and low yields. Investment in physical and social infrastructure has been slow and

the smallholder agriculture areas still require major investments in irrigation, soil amenities such

as schools and health centre, feeder roads and water supply in order to improve their

agricultural productivity.

2.3 Performance of the sector

2.3.1 The contribution of the agriculture sector to the total GDP is depended on rainfall availability

and distribution. In 1991 the sector grew by 3.15% but decline sharply to 24.4 5% in 1992 as a

result of severe drought experienced that year. In 1993 the sector achieved a record growth due

to good rains and hence high maize and tobacco production. However in the subsequent year

the trend was reversed due to recurrence of drought, leading to 12% decline in output in 1995.

The sector recovered again in 1996 and high growth of 41.1% was recorded but however

lowered to less than 17% in 2000 before starting to gain in 2009.

2.3.2 In addition to rainfall the sector is also affected by lack of incentives to invest in the sector and

inadequate institutional support. Low levels of funding of agricultural services, and hence

inadequate research and extension services, and inadequate agricultural credit to a small holder

farmers, result in low productivity by the majority of the rural population.

2.4 Agricultural Institution

2.4.1 The Ministry of Agriculture, Mechanization and Irrigation Development (MAMID) is the main

institution responsible for the development of agriculture in Zimbabwe. Its responsibility is to

promote and sustain a viable agriculture sector based on the development and implementation

of sound agricultural policies which optimize productivity through provision of appropriate

technical, administrative and advisory services. It also provides support services for agricultural

production.

2.4.2 Within the Ministry of Agriculture are four main parastatals namely; AMA, GMB, ARDA and

AGRIBANK which compliment the Ministry in implementation of Government funded projects,

planning and implementation of resettlement schemes and maintenance of farms purchased for

resettlement programs. AGRIBANK is the main source of credit for agricultural sector in the

country. Other parastatal include the main Agricultural Research Council, Tobacco Research

Board and the Pig Industry Board.

2.4.3 The Ministry of Water formulates policies for the utilization of Zimbabwe water for irrigated

agriculture and other purposes. Other institution includes COTTCO, DIARIBORD and CSC. These

are the former marketing parastatals. While the first two have been privatised, GMB has been

commercialised so that while it is still wholly Government owned it operates as a private

holding.

2.5 Government Policies in the Agricultural Sector

2.5.1 The ESAP was launched in 1991 and comprised of fiscal policy reforms including civil service and

parastatal reforms, monetary policy reforms, deregulation of domestic economy including

pricing, marketing and distribution, investment procedures and employment and sectorial

reforms in order to increase enhanced output and efficiency. The aim of the reform was to

attain overall growth stability and high level of social welfare.

2.5.2 The implementation of ESAP which was completed in 1995 largely achieved its objectives. All

pricing and agricultural commodity marketing and distribution controls and subsidies removed.

The main Government still in place is the exportation and importation of maize which is

considered a strategic crop and therefore its external trading is controlled by GMB. All the

Agricultural marketing boards were privatised except for GMB (see 2.3.4). GMB although fully

commercialised still handle the grain strategic reserve on behalf of the Government.

2.5.3 The main objective of the reforms in the agriculture sector were to eliminate losses and hence

need for the subsidies. In addition the macro-economic aspects of ESAP favoured exports and

economic growth and land emphasis on market forces and the private sector, reducing market

controls and restrictions on farmers and traders. All these have improved incentives for farmers

thus stimulating production, marketing and exports.

2.5.4 The Government of Zimbabwe launched a new agriculture policy and strategy, the Agriculture

Policy Framework (1995-2020) in May 1996. This policy framework has laid the future

development policies for agricultural sector. On other rears emphasis is on future marketing and

trade policy, which would address food security, industrial use, promotion of regional and

international trade. As regard food self-efficiency, the policy would be targeted towards

expansion on the maize and wheat production which are considered food security crops. At the

same time momentum of horticultural sector which took the early 1990s will be maintained

with special attention being given to smallholder participation.

2.5.5 In April 1998 the GoZ launched Zimbabwe programs for Economic and Social Transformation

1996-2000 (ZIMPREST) which is a second phase in change in areas such as access to and use of

water for agricultural purposes, controls to access to land for agricultural, commercial and

industrial purposes will be implemented. Under ZIMPREST, emphasis will be on smallholder

development, oriented to increasing agricultural productivity and production of high value

crops. Access to the small holder information, technology, finance and infrastructure is to be

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facilitated. It is expected that this will encourage such farmers to switch from subsistence to a

balanced mix, which include commercial oriented production.

2.5.6 In 2011 the government launched the Medium Term Plan (MTP), which focused mainly on

restoring productivity in the agricultural sector through irrigation development.

2.6 Land tenure and Land use

The land acquisition act that followed the land reform program saw all land being state land. Zimbabwe

currently has four distinct land tenure systems (i) communal (ii) A1 (iii) A2 and (iv) estates.

2.7 Credit Systems in the sector

2.7.1 Zimbabwe’s agricultural credit intermediaries can be classified into three groups(i) formal

banking system, comprising of commercial and merchant banks which provide agricultural

credit, mostly to commercial farming sub sectors, (ii) the state-owned development financial

institutions- AGRIBANK, the Small Enterprise Development Corporation (SEDCO) and the

Infrastructural Development Bank of Zimbabwe (iii) the Micro-Finance Institutions (MFIs).

2.7.2 The MFIs includes diverse groups as small investment houses, NGO and ago-business companies

who provide credit in physical goods (credit in-kind). These includes COTTCO, SEDCO.

Agricultural cooperatives, on-governmental organisation and informal institution also mobilise

funds principally for collectively self-financing of rural production ventures to improve the

standard of living of the rural population.

2.7.3 The bulk of agricultural credit is mostly provided to the commercial agricultural sub-sector while

small-holder sub-sector attracts only a small percentage. Smallholder farmers are unable to

attract adequate credit because (i) most of the formal and informal credit providers narrowly

focus on the country main urban and sub-urban centres and generally lack the capacity outreach

to the remote communal lands (ii) majority reside in communal areas where land ownership

arrangements do not provide collateral required for commercial lending.

2.7.4 Service charges by the financial sector including interest rates have been deregulated, and

therefore the lending rates are determined on the basis of marginal cost.

3. IRRIGATION SUB-SECTOR

3.1 Irrigation Sub-Sector Analysis

3.1.1 The irrigated agriculture is currently a major contributor to the agricultural GDP. Crops grown

under irrigation constitute nearly half of the total value of all crops sold in the country, although

the irrigated area comprises less than 10% of the total cropped area.

3.1.2 Irrigation farming began in 1859 with small-scale schemes built by missionaries. Commercial

irrigation started in 1910. Since then, irrigation expanded steadily in general, expects for the

period where severe droughts have been encountered. The total area being irrigated is currently

estimated at 135,000 ha from 200,000 ha prior to 2000.

3.1.3 Five basic farming categories are involved in irrigated agriculture (i) large scale commercial

farming, including the privately owned sugar estates. They produce for the national and

international market, and are generally larger than 100ha each (II) Parastatal Estates which

belong to the agricultural and Rural Development Authority (ARDA).The estates are situated on

schemes established in the communal lands. Or on ex-commercial farms which have been

purchased by the government for operation by ARDA (iii) A2 settler farming which average 100

ha - 500 ha (IV) Smallholder area farming which is often semi subsistence farming on plots not

exceeding 2ha in irrigation schemes developed by the government on communal land or ex-

commercial farms. The irrigation schemes in this category are usually less than 100 ha (V)

Informal or traditional irrigation which comprises schemes developed spontaneously by

individuals or groups of individual.

3.1.4 The main implementing agencies for irrigation development outside the commercial sector are

the Department of Irrigation, ARDA, AGRITEX, and NGOs. Overhead sprinkler systems are being

locally manufactured to international standards and are widely used by farmers from all

categories. Gravity irrigation (mainly furrow) is found in the low veld utilizing irrigation water

from regulated river flows and storage dams.

3.1.5 The Zhovhe dam built in 1996 lies in the Jopempi Block in the commercial area along

Umzingwani River in Beitbridge District. It is one of the 12 dams mentioned in paragraph 1.1.4.It

was built to supply irrigation water to commercial, communal and resettlement areas. The dam

has a full capacity of 133 million cubic meters of which 42 million cubic meters in the 10% safe

yield. Of this amount10 million cubic meters has been ear-marked for the smallholder irrigation

sector 18 million cubic meters remain for the commercial farmers, 2.5 million cubic meters for

the Beitbridge District and 12.5 million cubic meters remain un-committed. Commercial farmers

are currently irrigating about 1,350 ha using water in the Zhovhe dam. However the irrigation

scheme for the smallholder to utilize its share of water has not been developed, and therefore

the Zhovhe dam is not being fully utilized. The proposed project is therefore designed to enable

the smallholder farmers utilize the water in the Zhovhe dam, while allowing the commercial

farmers maintain their current level agricultural activities.

3.1.6 The 10 million cubic meters of water per year currently (see 3.1.5) reserved for the smallholder

all the irrigable land available to the smallholder farmers (1,170 ha) a total of 18 million cubic

meters will be required per year. The Government has assured the Bank that required amount

of water will be allocated to the smallholder. This will be a loan condition.

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3.2 Project Area

3.3.1 Geographic Coverage: The proposed project will be located in Beitbridge District situated in the

south-eastern corner of Matabeleland South Province bordering South Africa in the south,

Botswana in the west. Gwanda District in the northwest and Masvingo Province in the North and

east.

3.3.2 Climate: Temperatures are normally above 20oC. In winter the mean daily maximum is 24.4oC,

while in summer it goes as high as 33.5oC .The rainfall in Beitbridge is highly variable but is

generally below 400mm/year. About 90% of total rainfall is associated with thunderstorms,

producing rainfalls of short duration and high density. The rainfall in general is less than half of

the potential evaporation.

3.3.3 Topography, and Soils: The landscape of Beitbridge district is slightly undulating with isolated

hills and intersected by numerous streams and rivers. The altitude ranges from 480 (along the

banks of Mzingwane River) to 540 masl further east. Soils are generally sandy loam to clay loam,

relatively fertile but shallow. Alluvial soils, along the riverbeds are sandy loam, have a depth up

to 40 cm and are considered more fertile.

3.3.4 Vegetation: The area is characterized as shrub savanna that consists of bushes and annual

grasses. The annual grasses disappear during the dry season. The major grass associations

include, Eragrotis and Cenchrus species. The bush vegetation includes various Acacia species

.Colophosperm Mopani and Termanalia, Salvadora angustifolia and Maerua parvifolia.

3.3.5 Water resources :The main rivers in the District are the Limpopo, the Shashe and the

Umzingwani. The Limpopo generally carries water throughout the year; the other two rivers are

dry for a great part of the year. All rivers at all times have some underflow. The flow under the

river beds can be used throughout the year through various water abstraction techniques. In

parts of the districts without rivers, people depend for water on boreholes (domestic and

livestock) and on earth-filled masonry and dams. A recent inventory of dams in the District

counted 55 dams in the communal areas, ranging from the Zhovhe dam constructed in 1996 in

the Umzingwani River to the various small and partly silted dams in streams in the rural areas.

The lack of water forms a major problem in the project area. Although data are not available

there are indications of dropping ground water levels, wells in the communal lands dry up and

yield of boreholes are decreasing. Also the underflow of the river has reduced.

3.3 Project Beneficiaries

3.3.1 A total of 2,340 smallholder famers occupying about 1,170 ha or 0.5 ha per farmer are expected

to benefit from the project. They constitute mainly subsistence farmers who are catergorised

into two groups. One group comprises those farmers who do not own cattle and constitute 50

to 60% of the target group. They are considered very poor and unproductive in dryland

agriculture development due to the harsh conditions. Maize which is a staple food, yields about

90kg /ha. This group therefore rely more on range of meager non-agriculture income

opportunities beer brewing, knitting, crafts making, casual labour, trading small stock but above

all on government handouts. The second group comprises of subsistence farmers who own

cattle. They constitute 10 to 15% of those who own more than 10 anima and are therefore large

cattle herd owners and 30% to 35% of the farmers who own less than 10 animals. However

most of the farmers cannot rely on agriculture to meet their household needs and seek

additional income from off-farm activities most often as farm laborers. About 45% of the

farmers in this area are women heads of households. For the category 5 ha per beneficiary in

the irrigation scheme is recommended.

3.3.2 There are about five commercial farmers located in the project area who may benefit from the

construction of the irrigation canal. Currently these are farmers are using the Zhovhe dam for

irrigated agriculture. They will benefit from the project only through the utilization of the main

canal that will be constructed passing their estates and these can be given large area. ARDA can

also be involved and allocated part of the project.

3.4 Environment

3.4.1 There are four ecological and physiographic regions in Zimbabwe Eastern Highlands high veld,

middle veld and low veld. The project area lies in the lowveld which is characterized with annual

rain intensity of less than 500 mm (mainly from November to March) temperature range of 22-

30oc and elevations less than 900 meter above mean sea level.

3.4.2 The project area though not environmentally sensitive is rich in flora and fauna. Herds of giraffe,

zebra, wildebeest, impala, kudu and others are common in the area. Various spices of birds exist

in both the communal and commercial lands, and the Zhovhe dam reservoir. The region is

characterized with loose cover of shrubs and trees of different sizes including Baobab trees.

3.4.3 Environmental awareness is generally high and a number of legislative acts deal with the need

to protect the resource base. Zimbabwe has a National Conservation Strategy, was adopted in

1987. The Ministry of Environment and Tourism has the responsibility of implementing the

Environmental Impact Assessment Policy for development project, which are likely to have

significant environmental consequences. Other legislative acts of relevance are Fertiliser, Farm

and Remedies Act and the Pesticides Regulation Act.

3.5 Gender Issues

3.5.1 The population in the project area is rather skewed with constituting 60 %of the population and

men 40%. Nevertheless due to male migration in search of paid labour in South Africa and

Zimbabwe large cities women constitute about 70% of the actual population living in the project

area. In addition 45% of the total households are female headed. Thus the engagement of

women farmers in the project would be essential for food security.

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3.5.2 There is no clear-out division of labour between men and women in agriculture. Traditionally

men predominated in land preparation, ploughing and pest control, women primarily engaged

in watering, planting, weeding, harvesting and marketing. However due to the large number of

women leaving alone, both men and women participate in all regular agricultural tasks. In

decision-making males dominate in the male headed households while women in the female

headed households make all decisions including farm management decisions.

3.5.3 Traditionally women have been denied access to land due to cultural beliefs that only man can

own land. However in the past 10 years this has changed. Several policies have been introduced

to enhance the legal status of women. The most important is the legislation which has made it

possible for married women to acquire immovable property, including land, without having to

obtain consent from their husbands. This has therefore enabled women to own land on their

rights.

3.6 Donor co-ordination

3.6.1 Prior to 2000 as a first step towards a consolidated effort for donor co-ordination in the

agricultural sector, the Government initiated, in 1996 the Agricultural Services and Management

Program (ASMP). ASMP entails strengthening of the agricultural institutions which would

implement the proposed Agricultural Sector Investment Program (ASIP0 Under ASIP sub

programs were expected to be implemented as follows(1) crops and livestock production (ii)

small holder irrigation development(iii) farmer credit and input supply(iv) agricultural education

and farmer training As such IFA and DANIDA had already formulated a project, the smallholder

Irrigation Support and upgrading of existing irrigation schemes and strengthening of Institutional

and policy Framework.

3.6.2 The proposed Zhovhe small scale irrigation project was discussed with representatives of donor

community resident in Zimbabwe including FAO, The World Bank, UNDP, IFAD, THE EC, and

some bilateral agencies such as DANIDA .The project met the donor’s approval as it was found

to be within the framework of ASIP.

4 THE PROJECT

4.1 Project Objective

The project will contribute to the Government sector goal to raise the productivity and incomes of

smallholder agriculture which is the major vehicle to eradicating poverty, hunger, malnutrition and

unemployment. The project, s specification objectives is to contribute to household food security for the

communal farmers of the Mtetengwe and Masera communal lands and raise their household incomes.

4.2 Description of Project Outputs

4.2.1 The projects output include a water diversion structure at the Zhovhe Dam a 28km long

concrete lined canal, 21km of secondary canals, sprinkler irrigation system to irrigate an area of

500ha surface \basin irrigation works to irrigate and additional 500ha and 10 sand abstraction

units to irrigate 170 ha.

4.2.2 Under Agricultural development ,the outputs will comprise of at least 900 persons \days of staff

training at least 5,280 persons \day of farmer training including familiarization tours an irrigation

scheme covering 1,170 ha of communal farmers established with at least 12 irrigation

management committees (IMC) and a demonstration plot per IMC. At full production,

communal farmers will produce annually 8,775tons of maize, 2,246 tons, beans 439tons of

green maize, 2,633 tons of tomato, 2,048 tons of onions and 3,218 tons of cabbages.

4.2.3 Credit to about 60% of the smallholder beneficiaries or 1.404 farmers to procure farm

implements such as animal driven plough and harrows, knapsack sprayers, draught power and

agricultural inputs seed, fertilizer and pesticides.

4.3 Detailed Description of Activities and Components

4.3.1 The project is envisaged to have 3 major components (A) Development of Irrigation

Infrastructure (B) Agricultural Development and (c) Project management

A. Development of Irrigation infrastructure

4.3.2 The activities of this component will mainly be physical works which will involve (i) preparation

of detailed designs and implementation plan and supervision of the civil works (ii) construction

of water diversion structure at the Zhovhe Dam site a 28 km long concrete lined canal to deliver

water to irrigate about 2,350 ha of land on the bank of the river, which comprises both

communal and commercial farmers, 21 km of secondary canals to provide water to irrigate

1,000 ha which will be cultivated by the communal farmers (iii) infield works which will

constitute land clearing and leveling, provision of sprinkler irrigation system for 500 ha of the

land to be developed. surface basin irrigation work for the remaining 500 ha and installation of

10 sand abstraction pumping units to provide irrigation water about 170 ha for communal

farmers in the Southern part of the project area where feasible. The project will provide

infrastructure to convey water to the commercial farmers up to the field edge through the

construction of the canal. The commercial farmers will be expected to finance and undertake

the infield development of their which constitute the remaining 1,350 ha. Crossing for the

wildlife will be in place along the canal.

4.3.3 The Department of Irrigation will prepare the detailed and the implementation plan for the

project. The department has the capacity to prepare the implementation plans as far as the in-

field irrigation works, soil survey social aspects and the identification of participating farmers are

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concerned and supervise the related civil works. The department will also prepare the detailed

designs of the water abstraction units, conveyance systems and eventually the construction

supervision of the same.

B Agricultural Development

4.3.4 Agricultural Development will involve support to smallholder farmers to enable them produce

both and green maize, sugar beans tomatoes, onions and cabbages under irrigated farming. The

component will comprise of three sub-components (i) Smallholder Credit (ii) Support to

Extension Services and (iii)Training The project will provide funds also for the construction of a

production collection centre one per IMC to assist farmers in the storage and marketing of

produce.

(i) Smallholder Credit

4.3.5 Most participating farmers have no source of income and will require assistance at the

beginning of the project in order to develop their irrigation plots. Funds will be required provide

farmers with seasonal inputs and farm implements. Short-term credit will be required for the

purpose of seed, fertilizer and chemicals. Medium term credit will be required to allow the

purchase of ploughs and harrows for land preparation and knack sack sprayer for pest and

disease control.

(ii) Extension Services

4.3.6 4.3.7 Extension support will focus on training the farming the farmers in group formation and

management water use management and crop production and marketing. The training will aim

to facilitate the adaption of irrigation agriculture to enable the IMC to become small agricultural

business enterprises.

4.3.7 Demonstration plots will be used to test crops under irrigation conditions. Farmers will be

demonstrated the benefits of Integrated Production and Pest Management (IPPM) techniques

and land husbandry methods to conserve moisture and reduce soil erosion. With regards to

IPPM, the project will collaborate with the FAO supported Integrated Pest Management Project.

One demonstration plot will be established per farmer group. The demonstration plots will be

used as training ground for other farmers within and outside the IMC. Exchange visits and field

tours will be organized.

(iii) Training

4.3.8 The project beneficiaries have been involved in livestock and some limited rain fed farming.

Irrigated farming will therefore be a new technology both to the smallholder farmers and most

of the front line extension staff operating in the area. Training will be an important activity.

Funds will be provided for in service training of the field extension staff in water use

management, crop husbandry practices (including IPPM), and marketing.

C. Project Management

4.3.9 To ensure efficient performance funds will be provided for type 4x4 vehicles. One computer and

printer, a photocopier, a fax machine and funds for office administration and field supervision.

The project will also provide a team of experts to do the project management.

4.4 Project Assumptions Risks

4.4.1 Important assumptions made and risks envisaged under the sector goal include: Government

failure to complete liberalization of the sector which started under ESAP may hinder full

achievements of the expected incentives which would encourage smallholders to invest in

agricultural development. It is expected that the Governments economic reforms will complete

the process in the sector and thus provide the required incentives.

4.4.2 Important assumption made and risks envisaged under the project objective include:

(i) Government failure to allocate at least 18 million cubic meters of water required to irrigate

1170 ha by small holders may reduce the scope and hence the benefits of the project. It has

therefore been assumed that GOZ allocate the required water for irrigation by small holder

immediately so that the uncommitted water is not allocated for other use.

(ii) Most of the project area inhabitants keep livestock and some of them may not readily adopt

crop production technologies. It is assumed that the intensive extension services will remove

such barriers. In addition the effect of persistent food shortage will encourage farmers to adopt

methods which will produce high returns.

(iii) Reduction in world prices may reduce the expected benefits. It is assumed that crop prices in

domestic and world prices will remain stable.

4.4.3 Important assumption made risks envisaged with regards to project outputs include: Persistent

drought may reduce available water in the dam for irrigation. This would reduce yields and

hence the expected benefits. It is assumed that dependable rainfall patterns will prevail.

4.5 Project Cost

The total cost of this project is estimated to be US$25 million. Physical contingencies have been applied

to the construction of canals at 20% and to all other costs at 5% except Technical Assistance and

Government staff salaries where no physical contingency apply.

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4.6 Environmental Impacts

4.6.1 Overall, there scale of the proposed scheme is not likely to have any major effects on the

environment. Training and capacity building will focus on wildlife utilization and environmental

management soil and water conservation techniques, crop diversification and improved crop

and land husbandry activities. The use of IPPM technique will limit the use of fertilizers and

pesticides.

4.6.2 Positive Impact: The positive impacts include reduced water losses by seepages, minimization of

random settlement intensification of production reduced soil erosion, improvement of self

sufficiency in stable food and improvements of the well being of smallholder families.

Continuous cultivation will provide enough vegetation cover that reduces the effect of intensive

rain during the wet season. This will consequently decrease soil erosion that usually occurs

under seasonal (rain fed) cultivation which leaves the land bare for most of the year. In addition,

the project will improve health conditions through improved nutrition.

4.6.3 Negative Impacts: There are no significant negative impacts expected to results. The risks from the misuse of fertilizers and pesticides will be minimized as the project will implement IPPM techniques. Risks of soil deterioration due to salinity and sodicity affecting soil suitability for agricultural production is present in most alluvial soils especially in the South. There may also be some risks of adverse impacts on wildlife due to corridors blockage and conflicts with farmers. In addition, disease ecology in the area could be negatively changed due to the project activities. The mitigation and monitoring of environmental issues are provided in Annex 3.

4.7 Impact on women

4.7.1 It is estimated that women constitute 70% of the population involved in agriculture activities in the project area. By targeting the small-scale producers therefore the project will directly impact on women. Women heads of households who will constitute 45% of the target group will be incorporated as irrigation plot holders as well as position holders in the IMCs. As such they will have a say in decision making in matters that affect the scheme and women activities in particular. The project will ensure that, women and in particular the female heads of households, are accorded equal right to acquire irrigation plots in their own right and receive all services including credit in their own rights.

4.8 Poverty Reduction

4.8.1 The Government of Zimbabwe commissioned a Poverty Assessment Study in 1995. The results of the study were that the country’s total population is poor to very poor, out of which 71% are in the rural areas, and 32% of those in the rural areas are in the communal areas. In the project area, 62% of the population is categorized as very poor to poor, 68% of which are in the rural areas. Of this 68%, 77% and 83% are in the communal lands and resettlement areas respectively.

4.8.2 The main cause of poverty has been identified as inequitable land distribution, which resulted in

congestion in the communal areas, set aside for indigenous population. These lands lie in the low rainfall regions IV and V with poor soils and low availability of water for irrigation. In addition, many people displaced during the war of liberation are landless with no means of livelihood.

4.8.3 The Government has recognized that the structural adjustments that it is undertaken should go hand in the hand with poverty sensitive macro-economic policies and development programs to tackle the problem of mounting poverty. The Zhovhe small-scale irrigation project is a part of these development programs. It will develop irrigation infrastructure to deliver water already collected in the Zhovhe dam for intensive agricultural production. It will provide water for production of food and cash crops by smallholder, including women farmers who constitute a major portion of the poverty stricken population. It will therefore have a sustainable impact on poverty reduction.

5. PROJECT IMPLEMENTATION

5.1 Executing Agency

5.1.1 The Executing Agency of the Zhovhe small-scale irrigation project will be the Ministry of Agriculture (MAMID), which will play the co-ordination role for the project implementation.

5.1.2 DOI, within the Ministry of Agriculture, Mechanisation and Irrigation Development is responsible for planning, designing, constructing and managing smallholder irrigation schemes, and providing extension services. It is therefore the Department that will be responsible for the implementation of the project. The Department is decentralized and is represented at Provincial and District levels. The Department of Water Development (DWD) is responsible for planning ware utilization. It also designs and supervises the construction of major water structures such as dams.

5.1.3 The administration of the credit funds will be through any agreed agency.

5.2 Organisation and Management

5.2.1 The implementation of the project will be through the existing Government institutions. As such, the Director of DOI will be responsible for the execution of the project. However, in order to ensure timely implementation of the project, the Director of DOI will delegate this responsibility to a team of senior staff and designate them Project Managers. The Project Managers will be answerable to the Director of DOI.

5.2.2 Consulting Services and Training: Procurement of consulting and training services will be done for the project.

5.2.3 National Procedures and Regulations: Zimbabwe`s national procurement laws and regulations have been reviewed and determined to be accepted

5.3 Implementation Plan and Expenditure Schedule

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5.3.1 The project will be implemented over a 3-year period from 2013 to 2016. The first of the

project, which will take 1 year, will include preparation of detailed design for the irrigation infrastructure development, including topographic surveys and socio-economic analysis. The second stage which will commence during the second year of the project will involve the construction of the water diversion structure from the Zhovhe dam, the main canal and the infield works including the installation of sprinklers and the surface water structures and the drainage system. This stage is expected to take one year during which the demarcation of the irrigation plots and their allocation to the farmers will be undertaken. It will be completed during the beginning of the fourth year of the project. The third stage will involve the agricultural development and will be implemented during the last one year of the project.

5.3.2 The selection of the smallholder subsistence farmers will be based on willingness to acquire irrigation plots, and capability to undertake irrigated agriculture. Invitations will be sent out through the Rural District Councils (RDC`s) and area councilors. A list of applicants will then be prepared and appraised for past performance by the project team, councilors, District administrator and AGRITEX staff. Those selected will be allocated plots, and then organised into Irrigation schemes. Since about 45% of the households in the project area are headed by women, 40% of the irrigation plots will be allocated to women. The other Part will be allocated to either ARDA, potential partners or leased to commercial entities.

6. TECHNICAL AND ECONOMIC JUSTIFICATIONS

6.1 Technical Justification

6.1.1 A dam was constructed in 1996 to provide irrigation water to both communal and

commercial farmers. While commercial farmers have been utilizing their share of water

through sand abstraction, communal farmers have not been able to utilize their share. The

construction of a canal for irrigated agriculture, from an existing dam will therefore be fully

justified. The proposed concrete lining of the canal will reduce the water loss through

seepage by about 38%, hence increasing the area to be cropped due to the additional

(saved) water. The canal option, if compared to the presently used sand abstraction system,

is further justified in that, once constructed, it will need minimal maintenance.

6.1.2 The project has opted to use overhead sprinkle irrigation method for shallow soils. It will

improve application efficiency, and minimize adverse effects of using fertilizers. Surface

irrigation method has been considered for areas with deep soils. This method is attractive

because of its comparatively low investment, replacement and maintenance cost.

6.1.3 The communal areas covered by the project are, if used at all, mainly used as dryland

ranches. There will be no resettlement of people. However, where displacement will take

place it will only be that of farmers who, voluntarily, will move closer to the nearest water

outlet for irrigation purposes. These farmers will be given the option to retain a piece of dry

land for rearing their cattle. The absence of displacement implies that the project will not

have to invest in social amenities such as schools, rural health clinics etc.

6.1.4 Crop selection is based on agro-ecological suitability and their response to supplemental

irrigation. The primary crop to be grown during summer is maize, and during winter, sugar

beans, and vegetables such as onions, tomatoes, cabbages and green maize. These crops

have all successfully been grown in the area and are readily marketable. Private traders are

present in the area to market surplus produce.

6.1.5 Irrigation Management Committees will see to it that irrigation schemes will operate

efficiently by taking care of the operation, repair and maintenance costs. The project will be

sustainable, as these committees will have to meet the full costs of running the project. The

establishment and capacity building of the IMC will be assured through a vigorous training

program provided by AGRITEX.

6.1.6 The Integrated Production and Pest Management strategy to be introduced by the project

has proven to be technically and economically viable and environmentally sound. The IPPM

strategy consist of a limited use of agro-chemicals by introducing economic thresholds, the

use of disease tolerant varieties and other appropriate crop husbandry practices, including

crop rotation and use of farm yard manure.

6.2 Project Benefits

6.2.1 At full development, the project will produce on communal land 8,775 tons of maize, 2,246

tons of sugar beans, 439 tons of green maize, and 7.899 tons of vegetables which will be

either locally consumed or sold to nearby markets. The commercial farmers who are

utilizing water from the Zhovhe dam are currently producing 50,400 tons of citrus, 945 tons

of cotton, 1,760 tons of wheat, 1,200tons of tomatoes and 25 tons of paprika. This

production level is possible by using their water allocation as well as a portion of water

reserved for communal farmers who have not been able to utilize their portion of water

allocation. With the construction of the canal, the commercial farmers will be able to

produce the same amount of crops as water loss, currently estimated at 40%, will be

reduced to 2%. Development of small holder irrigation scheme without a larger water

conveyance system to serve commercial farmers as well would have reduced the

commercial farming activity by 38%. The project will therefore significantly contribute

towards the Government`s objective of food self-sufficiency and poverty alleviation.

6.2.2 Maize is the staple food and it is estimated that almost the total production under the

project will be consumed by the beneficiaries, while about 60% of the beans and vegetables

that will be produced will also be consumed. These crops will therefore improve household

food security. The surplus produce will be sold in the domestic market. The district is very

dry and the level of food production is very low. All vegetables produced will therefore be

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absorbed in the local markets. There are local traders and canning companies who buy

beans and vegetables on the farms in the existing irrigation schemes in the district. The

project beneficiaries will make such marketing arrangements through their Irrigation

Management Committee. The feeder road work is adequate to provide accessibility to the

irrigation scheme.

6.2.3 The project will directly benefit 2,340 smallholder farm families. The introduction of

irrigation and two harvests per year will provide food security to these families or 14,000

individual average size of a household is 6 people). Farmers` disposable incomes will

therefore increase which will raise their purchasing power and thus their demand for

consumer goods. These will in turn attract entrepreneurs to open retail shops and establish

workshops thereby establishing rural growth centres. Such growth centres are important to

reduce rural – urban migration. The project would benefit a large group of women due to

the fact that approximately 70% of the area population is composed of women.

6.3 Financial and Economic Justification

6.3.1 Financial Justification:

6.3.2 The project`s financial rate of return is estimated at 28% from previous studies, under

conservative assessment is considered satisfactory. The project would be in a position to

provide comfortable margins that would cover its operation, repair and maintenance costs

as well as operating expenses.

6.3.3 Economic Justification:

6.3.4 An Economic Internal Rate of Return (EIRR) has been estimated in order to assess the

economic justification of the project. The infrastructure being put in place, the canal is

durable and is expected to last for about 35 years without major rehabilitation. The project

costs and benefits have therefore been projected over a period of 35 years. Replacement

costs have been added for the sprinkler system and the sand abstraction facilities. The

replacement costs for the sprinkler system amount to US$1,170,000 every ten years while

the replacement cost for the sand abstraction facilities amount to US$900,000 every fifteen

years. The benefits include incremental production by the small holders of grain maize in

summer and sugar beans, green maize, tomatoes, onions and cabbages in winter. The water

available in the dam would not allow commercial farmers to expand their cultivation under

the project as they would need to share with the small holders. However, commercial

farmers would gain through reduction of water loss.

6.3.5 The costs include the investment cost, operating costs of the project and incremental

variable crop production costs. At full development which is estimated to be the fifth year of

the project, the economic value of the benefits accruing to the project would amount to

US$2,729,858 per year.

6.3.6 The estimated EIRR is 15%. Sensitivity analysis has been done for various possible situations.

An assumption of ten percent increase in the investment costs of the project would reduce

the EIRR to 14%. A combined increase of 10% in investment and 10% in operating costs

would reduce EIRR to 13%. On the other hand, a 10% reduction in expected benefits would

reduce the EIRR to 12%, and a delay in project benefits by two years would have an effect of

reducing the EIRR to 10%. The sensitivity analysis therefore shows that the project is only

moderately sensitive to changes in costs but more to changes in benefits. Reduced benefits

are likely to result from crop failure due to droughts. This risk would be mitigated through

the proposed provision of irrigation water.

7. CONCLUSIONS AND RECOMMENDATIONS

7.1 Conclusions

7.1.1 The project is in line with GOZ Strategy of poverty reduction. Beitbridge district is very dry

and dryland cropping is almost impossible. Maize which is the staple food yields between

one and two bags per ha. The majority of the rural population therefore relies on

Government handout for their food requirements. The project will significantly reduce

poverty and food insecurity in the project area which is occupied mainly by small holders,

majority of who are women. Food crop production will be the first priority for he small

holders. At full implementation, about 7,605 tons of grain maize will be produced, enough

to feed about 14,000 individuals or 2,340 families. Irrigated farming will enable the farmers

to grow grain maize in summer and vegetables in winter. A total of 2,246 tons of sugar

beans, 439 tons of green maize, 2,633 tons of tomatoes, 2,048 tons of onion and 3,218 tons

of cabbages.

7.1.2 In monetary terms the average net income per beneficiary family will increase to an

estimated US$1,027.00. This is substantially higher than the cut- off national poverty line of

US$221.33 and the rural poverty line of US$500. The commercial farmers who will

participate in the project will mainly benefit from the reduction of water loss currently

experienced from the utilization of sand abstraction method of irrigation as a result of the

construction of the canal. This amounts to US$153,763 per year in monetary terms.

7.1.3 The harsh climatic conditions experienced in the district necessitate that most of the food

consumed in the area is brought in from Bulawayo, 300km away. The project will therefore

directly ensure household food security of the beneficiaries and indirectly improve food

security position of a significant portion of the district`s population. All these benefits will

be realised with positive environmental impact. It is therefore concluded that the project is

technically sound, economically and financially viable and socially desirable.

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7.2 Recommendations and Conditions

It is recommended that GOZ extensively seek a potential partner both financial and technical for the

implementation of the above project .

Figure 1: Zhovhe Small Scale Irrigation Project Area

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Zhovhe Small Scale Irrigation Project

ENVIRONMENTAL SUMMARY

The project is classified as Category ii according to the ADB Environmental guidelines, as all the necessary mitigation measures will

be incorporated into the project design as follows:

Anticipated Environmental Impacts Mitigation measures

Change in river ecology due to flow blockage An existing downstream tributary (Mazowe river) is providing enough compensation to maintain same river ecology

Surface and ground water pollution due to improper use of pesticides and fertilizers

The use of pesticides and chemical fertilizers will be kept at the minimum, with the use of non residual pesticides and organic fertilizers(e.g manure and compost) recommended by the project.

Irrigation will provide dense land coverage (crop vegetation) all the year around. This in addition to conservation of natural trees will help reduce soil and sheet erosion. In addition, the use of organic fertilizers mentioned above will increase soil stability in the long term.

Risks of soil salinity (common in most alluvial soils)

Problems of salinity, water logging and ground water table rising will be avoided through the Best Management Practices(BMP, )introduced in the project. These mainly include design and implementation of a good drainage network, good on –farm water application (via leveling, water control, etc) and deep tillage when necessary.

Destruction of Ecology and Bio diversity: Fauna and Flora

This will be conserved through: 1. Environmental education of project beneficiaries 2. Prohibition of huge tree cuttings 3. Provision of canal crossings in conformance with the wildlife corridors

and migration routes. 4. Electrical fencing of main canal (by the project) to minimize destruction to both

project infrastructure, increased incomes through the project that will indirectly reduce pressure on local ecology and wildlife hunting for food.

Socio-economics The project does not involve displacement or (involuntary) ressettlment. On the other hand the project will result in higher incomes, improvement in the role of women and empowerment of producers, through their involvement in identification, design, and implementation and management of the project schemes.

Health risk of water borne diseases (e.g malaria and schistosomiasis) in the irrigation water

This will be minimized through proper canal design to avoid stagnant or slow moving water. Moreover , pests and weeds (as habitats for snails) should be reduced using biological methods where possible or the application of limited quantities of degradable pesticides. In all project areas, the Health Department would provide the necessary health services.

Projected Crop Production Summary

Crop Year1 Year 2 Year 3 Year 4 Year 5 Year6 Year 7 Year 8

Citrus 50,400 50,400 50,400 50,400 50,400 50,400 50,400 50,400

Cotton 945 945 945 945 945 945 945 945

Wheat 1,760 1,760 1,760 1,760 1,760 1,760 1,760 1,760

Tomatoes 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200

Paprika 25 25 25 25 25 25 25 25

ASSUMPTIONS MADE IN THE CALCULATION FOR EIRR (Economic)

1. The commercial farmers who are currently utilizing water from the Zhovhe dam to cultivate

1350 ha of irrigated land producing 50400 tons of citrus, 945 tons of cotton, 1760 tons of wheat,

1200 tons of tomatoes and 25 tons of paprika will not increase their hectrage. They will however

be able to produce the same amount of crops because the water loss currently estimated at

40% will be reduced to 2%. Development of smallholder irrigation scheme without a larger

water conveyance system to serve commercial farmers as well would have reduced the

commercial farming activity by 38%.

2. The amount of water loss reduced by 38% is a benefit to the project. Without the project water

for irrigation was released 40% more than the farmer’s requirement, which would be lost

through seepage. If this water was used for irrigation, farmers would pay the government this

water at a rate of $12 per mega liter.

3. Most of the crops to be produced by the smallholders, maize beans and vegetables will be

mainly for consumption by the producers taking into account that they have been experiencing

severe food shortages. However, some of these commodities especially maize and beans have

potential for external market. The analysis therefore uses local market prices for the vegetables

and green maize, while for maize and beans, price used was that quoted at the Zimbabwe

Commodity Exchange which involves internal traders and is therefore in line with parity prices.

4. The commercial farmers have been growing citrus, cotton, wheat, tomatoes and paprika which

they will continue to grow. Citrus, cotton and paprika are grown for export while tomatoes are

for domestic market. While wheat is grown for domestic consumption, a substantial volume is

imported. Parity prices were therefore used for citrus, cotton, wheat and paprika. Local market

prices were used foe tomatoes.