Report SWAIWRMP Water Supply

SOUTHWEST AREA INTEGRATED

WATER RESOURCES MANAGEMENT PROJECT TA NO. 4079-BAN

Asian Development Bank

Bangladesh Water Development Board

Water Resources Planning Organization

December 2004

Halcrow Group Ltd, UK

in association with

DHI Water & Environment, Denmark

Engineering & Planning Consultants Ltd, Bangladesh

Kranti Associates Ltd, Bangladesh

Halcrow Bangladesh Ltd, Bangladesh

FINAL REPORT

Annex G: Economic and Financial Analysis

Southwest Area Integrated Water Resource Management Project Final Report

TA 4079-BAN Annex G – Economic and Financial Analysis

Economic and Financial Analysis

Annex G

Economic and Financial Analysis



Economic and Financial Analysis i

Table of Contents

1 Introduction ................................................................................................................. 1

2 Financial Analysis ....................................................................................................... 3

2.1 Crop Budgets ................................................................................................. 3

2.2 Farm Budgets ................................................................................................. 5

2.3 Cost Recovery ................................................................................................ 8

2.4 Fisheries Budgets ........................................................................................... 9

3 Economic Analysis ................................................................................................... 11

3.1 Economic prices ........................................................................................... 11

3.2 Economic Benefits ....................................................................................... 11

3.2.1 Increased Agricultural Production ....................................................... 11

3.2.2 Reduction in Crop Losses from Flooding ............................................ 14

3.2.3 Reduction in Damage to Houses and Infrastructure ............................ 14

3.2.4 Increased Culture and Capture Fisheries Production ........................... 14

3.2.5 Water Supply for Arsenic Mitigation .................................................. 17

3.2.6 Livestock .............................................................................................. 18

Sensitivity Analysis ............................................................................................. 20

4 Distribution Analysis and Poverty Impact Ratio ...................................................... 23

List of Tables

Table 2-1: Crop Yields in Chenchuri and Narail Sub-projects ...................................... 3

Table 2-2: Net Crop Returns in Chenchuri Beel and Narail Sub-projects (2004

Financial Prices)............................................................................................................. 5

Table 2-3: Cropping Patterns in Chenchuri and Narail Sub-projects ............................ 6

Table 2-4: Flood Depths in Chenchuri and Narail Sub-projects.................................... 6

Table 2-5: Net Farm Returns in Chenchuri and Narail Sub-projects (2004 financial

prices) ............................................................................................................................. 8

Table 2-6: Water Management Charges as % of Incremental Net Farm Returns ......... 9

Table 2-7: Net Returns from Culture and Capture Fisheries (2004 Financial Prices) . 10

Table 3-1: Net Crop Benefits per Hectare (2004 Economic Prices) ............................ 12

Table 3-2: Crop Production in Chenchuri Beel and Narail Sub-projects .................... 13

Table 3-3: Area and Production of Culture and Capture Fisheries in the Sub-projects

...................................................................................................................................... 15

Table 3-4: Net Benefits per Hectare from Culture and Capture Fisheries (2004

Economic Prices) ......................................................................................................... 16

Table 3-5: Water Supply for Arsenic Mitigation - Least Cost Analysis ...................... 18

Table 3-6: Economic Conversion Factors for Capital Cost Items ............................... 19

Table 3-7: Economic Viability of Chenchuri Beel and Narail Sub-projects ............... 20

Table 3-8: Results of Sensitivity Analysis ................................................................... 21

Table 4-1: Distribution Analysis and Poverty Impact Ratio (2004 Constant Prices) .. 23

Appendices



Economic and Financial Analysis ii

ACRONYMS AND ABBREVIATIONS

ADB Asian Development Bank

AEZ Agro Ecological Zone

BADC Bangladesh Agricultural Development Corporation

BAN Bangladesh

BARI Bangladesh Agricultural Research Institute

BBS Bangladesh Bureau of Statistics

BJRI Bangladesh Jute Research Institute

BKB Bangladesh Krishi Bank

BME Benefit Monitoring and Evaluation

BOD Biochemical Oxygen Demand

BPDB Bangladesh Power Development Board

BRAC Bangladesh Rural Advancement Committee

BRRI Bangladesh Rice Research Institute

BRDB Bangladesh Rural Development Board

BWDB Bangladesh Water Development Board

B. AMAN Broadcasted Aman

B. AUS Broadcasted Aus

CARE Centre for American Relief Everywhere

CBO Community Based Organisation

CIDA Canadian International Development Agency

DANIDA Danish International Development Assistance

DAE Department of Agricultural Extension

DAO District Agricultural Office

DFID Department for International Development

FAO Food and Agriculture Organisation of the United Nations

FAP Flood Action Plan

FCD Flood Control and Drainage

FCDI Flood Control, Drainage and Irrigation

FGD Focus Group Discussion

FINA Farmer Information Need Assessment

FPCO Flood Planning Coordination Organisation

FYM Farm Yard Manure

GDP Gross Domestic Product

GOB Government of Bangladesh

GW Ground Water

HTW Hand Tubewell

HYV High Yielding Variety



Economic and Financial Analysis iii

IA Implementing Agencies

IGA Income Generating Activities

IPM Integrated Pest Management

IWMP Integrated Water Management Programme

IWRMP Integrated Water Resources Management Plan

LGED Local Government Engineering Department

LGI Local Government Institution

LLP Low Lift Pump

MC Mustard Cake

MLSS Member of Lower Subordinate Staff

MOA Ministry of Agriculture

MP Murete of Potash

MT Metric Ton

NAEP New Agricultural Extension Policy

NARS National Agricultural Research System

NCA Net Cultivated Area

NGO Non-Government Organisations

NMIDP National Minor Irrigation Development Project

O&M Operation & Maintenance

REB Rural Electrification Board

RHD Roads and Highways Department

SM Seed Multiplication

SP Sub-Project

SRDI Soil Resources Development Institute

SSWRDSP Small Scale Water Resources Development Sector Project

STW Shallow Tubewell

SW South West

SWAIWRMP South West Area Integrated Water Resource Management Project

TA Technical Assistance

T. AMAN Transplanted Aman

TSP Triple Super Phosphate

T.AUS Transplanted Aus

WAPDA Water and Power Development Authority

WARPO Water Resources Planning Organisation



Economic and Financial Analysis 1

1 Introduction

1. The Southwest Area Integrated Water Resources Management Project (SAIWRMP) is designed to improve and integrate the management of water resources for a number of sub-projects areas in five districts of the Southwest region of Bangladesh. However, most of these prospective sub-project areas have yet to be selected in accordance with the agreed criteria. Nevertheless, to demonstrate the likely financial and economic impact of the proposed project interventions, an analysis was undertaken for two sample sub-projects, namely Chenchuri Beel (cultivated area of 17,900 hectares) and Narail (cultivated area of 23,440 hectares). The remaining sub-project areas will be smaller than these two sub-projects and, in total, would cover an area of approximately 30,000 ha.

2. A financial analysis of the sample sub-projects was undertaken to determine the likely implications of the proposed rehabilitation of the water management infrastructure on farm production and income. The increases in net farm returns generated by the sub-projects then provided a clear indication of the farmers‟ capacity to meet future operation and maintenance (O&M) costs and the extent to which the financial benefits are sufficiently attractively attractive to encourage the full participation of farmers in the rehabilitation works and subsequent O&M.

3. It is anticipated that improved water management, as well as an enhanced agricultural extension service, will create more favourable and sustainable conditions for the adoption of improved farming practices. Cropping intensity and crop productivity are therefore expected to increase. In addition to assessing the impact on farm returns, the analysis also considered the effects on the costs of production including changes in input use and labour requirements. Furthermore, enterprise budgets for both capture and culture fisheries production were prepared to estimate the net financial returns to fish production as a consequence of the fisheries support programme.

4. An economic analysis of the proposed investment was also carried out to assess the costs and benefits of rehabilitating the sub-project infrastructure from a broader, public perspective. In this analysis, the economic costs and benefits of the proposed improvements in civil infrastructure and supporting services were determined. The capital investment and O&M costs required for the two sample sub-project areas – Chenchuri Beel and Narail - were compiled from the estimates made by the water resource engineers and other study specialists. The capital investment costs were then distributed over a seven year period in accordance with the proposed phasing of the project.

5. Sub-project benefits were primarily determined by assessing the impact on changes in the cropping patterns and crop yields as a result of the improved flood control and drainage systems as well as an expansion of the irrigated area. In addition, the benefits of improved capture and culture fisheries production were also evaluated. Other economic benefits taken into account in the analysis included: (i) reduction in crop losses through mitigating flooding, and (ii) reduction in livestock losses and damage to houses/infrastructure.

6. The economic analysis undertaken for the sub-project areas adopted an incremental approach by contrasting with project and without project situations over a 30 year period. The incremental net benefit stream was then used to estimate the Economic Internal Rate of Return (EIRR) and the Economic Net Present Value (ENPV). Detailed sensitivity analysis was also undertaken with particular attention being given to the consequences of not achieving the expected improvements in crop and fish




production, as well as the impact of increases in the capital and O&M costs required for the water management infrastructure. These factors are regarded as the main determinants of economic viability.




2 Financial Analysis

2.1 Crop Budgets

Crop Yields, Input Use and Labour Requirements

7. Information on present crop yields in the sub-project areas was gathered from the agricultural extension staff in Narail District. While data on crop management practices, levels of input use (i.e. seeds, fertilisers and pesticides) and labour requirements were collected during discussions with farmers and local agricultural extension officers in Chenchuri Beel and Narail sub-projects. Prior to the data gathering, a review of the available reports and secondary data relating to crop yields and management practices in Narail District was also undertaken.

Table 2-1: Crop Yields in Chenchuri and Narail Sub-projects

Average Crop Yield (tonne/hectare)

Present and Future Without Project Future With Project

Season/Crop Irrigated Rainfed Irrigated Rainfed

Kharif I

B.Aus 2.15 2.15

T.Aus 3.38 3.69

B.Aman 1.85 1.85

Jute 2.37 2.37

Sugarcane 55.00 55.00

Summer Vegetables 10.00 10.00

Oilseeds 0.60 0.60

Spices 8.00 8.00

Orchard Crops 10.00 10.00

Kharif II

Local T.Aman 2.42 2.42

HYV T.Aman 3.62 3.85

Rabi

Local Boro 2.85 2.85

HYV Boro 5.54 5.85

Wheat 2.50 1.80 2.50 1.80

Potatoes 20.00 12.00 20.00 12.00

Pulses 0.60 0.60

Oilseeds 0.60 0.60

Spices 8.00 8.00

Winter Vegetables 20.00 15.00 20.00 15.00

Source: District Agricultural Office, Narail; Consultants‟ estimate

N.B. Rice yields expressed in tonnes of paddy per hectare

8. The crop yields used in the analysis for the present and future „without project‟ situations are given in Table 2-1, while crop input and labour requirements are detailed in Appendix G1. It can be seen from Table 2-1 that modest yield improvements are anticipated for the HYV paddy crops, i.e. T.Aus, HYV T.Aman and HYV Boro. These higher yields reflect better farming practices and the adoption of improved varieties. For all other crops, yields are expected to remain unchanged. Furthermore, no increase in crop yield is expected in the future „without project‟ situation.




Farmgate Prices

9. Farm gate and market prices of all the major crops current prevailing in Narail District were collected from the Department of Agricultural Marketing. Local market prices for some crops, e.g. potatoes, vegetables and spices, are subject to significant quality and seasonal variations and this was taken into account when estimating the farm gate prices. Agricultural wage rates and hire charges for draft power were collected directly from farmers during the field visits. Seed, fertiliser and pesticide prices were gathered from local private suppliers and farmers. The input and output prices used in the analysis are presented in Appendix G1.

Financial Net Returns

10. The crop yields, input usage, labour and draft power requirements were then valued in 2004 farm gate prices in order to derive financial net returns for each of the main crops grown within the sub-project areas. In this context, net return is defined as gross value of produce (both main and by-product) less variable production costs (i.e. hired labour, draft power, seed, fertilisers, pesticides and irrigation charges). The production costs also included interest on seasonal credit, but excluded family labour. Financial net returns were calculated on both a „per hectare‟ and „per day of family labour‟ basis. To highlight any significant differences between the various farm sizes, net crop returns were derived for four farm categories, i.e. landless/marginal, small, medium and large.

11. The financial crop budgets for the present, future „with project‟ and future „without project‟ situations are detailed in Appendix G1, and the net crop returns for a medium sized farm are summarised in Table 2-2. It is evident from Table 2-1 that, at the present levels of productivity in the sub-projects, all the crops are profitable with respect net returns per hectare. Net returns per day of family labour are also satisfactory in comparison to the daily agricultural wage rate. It is also important to note that the net returns per hectare from spices, vegetables, potatoes and orchard crops are substantially higher than the returns from paddy and other staple crops such as wheat, pulses and oilseeds. However, the attractive returns from these horticultural crops are moderated by the risks associated with large seasonal price fluctuations. It should, however, be noted that the prices used for horticultural crops were based on average prices rather than the high prices which prevail during the off season. Of the paddy crops, HYV Boro, HYV Aman and T.Aus achieved the highest net returns. This is due to the significantly higher yield levels which were more than sufficient to offset the additional production costs. With a more favourable water management environment in the „future with project‟ situation, it is envisaged that that farmers in the sub-project areas will be able to exploit these differences in crop profitability through the adoption of more intensive cropping patterns, greater crop diversification, and improved management practices.

12. It should also be noted that the productivity of the horticultural crops, and consequently their net returns per hectare, were assumed to remain unchanged in both the „future with‟ and „future without project‟ situations. This avoided overestimating the potential benefits from an increase in the production of these high value crops, which would have a significant influence on both the financial and economic viability of the sub-projects.

13. Differences in net crop returns between the various farm size categories generally reflected the level of hired labour costs which increases in relation to farm size, e.g. large farmers employ hired labourers to cover about 66% of their crop labour requirements in contrast to landless/marginal farmers who only use family labour. With regard to crop yields and management practices, no significant differences were identified between the various types of farmer.




Table 2-2: Net Crop Returns in Chenchuri Beel and Narail Sub-projects (2004 Financial Prices)

Net Crop Returns (Tk. per hectare)

Season/Crop Present and Future Without

Project

With Project

Kharif I

B.Aus 11,603 11,603

T.Aus 15,513 16,722

B.Aman 11,227 11,227

Jute 14,615 14,615

Sugarcane 21,264 21,264

Summer Vegetables 46,188 46,188

Oilseeds 9,735 9,735

Spices 68,871 68,871

Orchard Crops 39,084 39,084

Kharif II

Local T.Aman 14,032 14,032

HYV T.Aman 21,846 22,736

Rabi

Local Boro 14,149 14,149

HYV Boro 25,359 26,528

Wheat 13,564 14,638

Potatoes 46,720 50,357

Pulses 10,666 10,666


Spices 68,871 68,871

Winter Vegetables 59,721 66,163

Source: Appendix G1

1/ Net Crop Returns for a medium sized farm of 1.5 ha

2.2 Farm Budgets

Cropping Patterns

14. The present crop patterns were derived from information provided by local agricultural extension officers (Block Supervisors) who compiled data on flood depths, cropped areas, and irrigated areas for the various unions within Chenchuri and Narail sub-project areas. For each sub-project area, cropping patterns and crop areas were prepared for the different flood depths, i.e. highland (F0), medium highland (F1), medium lowland (F2) and lowland (F3). Prior to field data collection, a review of the available reports and secondary data relating to cropping patterns, crop yields and management practices in the Narail district was also undertaken. The detailed cropping patterns used in the analysis for the present, „future without project‟ and „future with project‟ are presented in Annex E – Agriculture, and summarised in Table 2-3 below.




Table 2-3: Cropping Patterns in Chenchuri and Narail Sub-projects

Percentage of Net Cultivated Area

Chenchuri Beel Narail

Season/Crop Present FWO FW Present FWO FW

Kharif I

B.Aus 23.6 24.4 24.2 25.1 25.1 25.0

T.Aus 1.8 1.8 4.5 3.0 3.0 4.3

B.Aman 32.2 31.2 31.2 28.1 28.1 26.8

Jute 8.2 8.2 5.3 10.7 10.7 10.0

Sugarcane 2.2 2.2 2.0 2.9 2.9 2.5

Summer Vegetables 5.1 5.1 5.3 3.5 3.8 4.5

Oilseeds 6.0 6.4 12.9 3.9 6.7 8.8

Spices 3.6 5.2 7.0 1.7 3.6 3.8

Orchard Crops 2.2 2.2 2.3 2.6 2.6 2.7

Kharif II

Local T.Aman 7.9 7.6 9.0 10.0 10.0 10.4

HYV T.Aman 23.2 27.9 30.6 18.6 25.0 28.7

Rabi

Local Boro 2.3 2.3 2.1 1.8 1.8 1.8

HYV Boro 27.9 34.9 43.6 31.6 36.9 39.0

Wheat 3.3 3.3 4.4 5.0 5.0 6.9

Potatoes 0.4 0.4 0.6 0.3 0.3 0.4

Pulses 24.9 20.7 18.8 19.0 15.7 15.8

Oilseeds 10.3 12.5 7.2 12.1 12.1 12.5

Spices 3.2 4.3 4.4 5.5 5.5 7.2

Winter Vegetables 2.2 4.3 4.9 5.0 6.3 8.6

Cropping Intensity 190.6 204.9 220.0 190.4 205.0 219.6

Source: District Agricultural Office, Narail; Consultants‟ estimate

15. In the „future with project‟ situation, the estimates of crop areas were primarily based on changes in the flood depths and an expansion of the irrigated area. The improved water management infrastructure is expected to lead to changes in flood depths with increases in the areas of F1 and F2 land and a reduction in the area of F3 land (see Table 2-4). This improvement in the flooding regime will help to encourage the expansion of T.Aman in the kharif II season. In the analysis, cropping patterns were not related to specific types of interventions or estimated on a compartment basis, but determined at the sub-project level.

Table 2-4: Flood Depths in Chenchuri and Narail Sub-projects

Net Cultivated Area by Flood Phase (hectares)

F0 F1 F2 F3 Total Area

Sub-project Area % Area % Area % Area %

Chenchuri Beel

Present and FWO 3,910 (21.9) 4,345 (24.3) 6,610 (36.9) 3,035 (17.0) 17,900

Future With Project 3,010 (16.8) 5,550 (31.0) 6,480 (36.2) 2,860 (16.0) 17,900

Narail

Present and FWO 5,665 (24.2) 7,695 (32.8) 7,430 (31.7) 2,650 (11.3) 23,440

Future With Project 5,250 (22.4) 8,010 (34.2) 7,730 (33.0) 2,450 (10.5) 23,440

Source: District Agricultural Office, Narail; Consultants‟ estimate N.B. Flood Phases: F0 (0.00 – 0.30 m); F1 (0.30 – 0.90 m); F2 (0.90 – 1.80 m); F3 (1.80 – 3.00 m)




16. More significant benefits will result from the anticipated expansion in the irrigated area and this will have an impact on cropping patterns in both the kharif I and rabi seasons. In Chenchuri Beel, the irrigated area is expected to substantially expand from 34% of the cultivated in the present situation to 57% in the „future with‟ project situation. While, in Narail, the irrigated area is anticipated to increase from 39% to 54%. With an increase in the availability of water in the khals (as a consequence of khal re-excavation and installation of water retaining structures), there will be considerable scope for the uptake of low lift pumps (LLPs) which will lead to a substantial increase in the irrigated area. In addition, the expansion of the irrigated area will also result from the further adoption of shallow tubewells (STWs).

17. In the kharif I season, the availability of irrigation water will also lead to an increase in the area of T.Aus. Furthermore, through the promotion of crop diversification (one of the main aims of the agricultural extension programme – see Annex E Agriculture), an increase in the areas of summer vegetables, oilseeds and spices is also expected in the kharif I season, while the areas of sugarcane and jute would marginally fall.

18. In the rabi season, the improved irrigation facilities (coupled with the promotion of crop diversification) are expected to result in an increase in the areas of HYV boro, wheat, potatoes and winter vegetables. The improvements to the drainage and water management infrastructure will also help to encourage this increase in rabi cropping as farmers will be able to plant rabi crops earlier in the season. In addition, improved water control in the spring will protect the boro crop during the critical harvesting period. Overall, the cropping intensity in expected to increase from 190% to 220% in both Chenchuri and Narail sub-project areas.

19. In the „future without‟ project situation, less significant changes in cropping pattern are likely, but it is still anticipated that the „future without‟ project cropping pattern would include substantial areas of boro rice and other rabi crops. The irrigated area is expected to increase from 34% of the cultivated area to 43% in Chenchuri Beel and from 39% to 45% in Narail over the next 7 to 8 years. The expansion of the irrigated area, due to the further adoption of STWs over this period, would therefore lead to an increase in the areas of HYV Boro and winter vegetables. Overall, cropping intensity in expected to rise from 190% to 205% in both sub-project areas. The „future without‟ cropping patterns for Chenchuri and Narail are consultants‟ estimates derived from information provided by DAE staff and farmers. The estimates of incremental irrigated area in the „future without project‟ were based on recent trends in the expansion of LLPs in Narail District.

Net Farm Returns

20. Farm budgets were prepared for landless/marginal (0.3 hectares), small (0.8 hectares), medium (1.5 hectares) and large (3.5 hectare) farms. Based on the cropping patterns given in Table 2-3 and the farm sizes, the crop areas for each farm model were calculated and then applied to the respective financial crop gross margin in order to derive the likely net returns to farm households from crop production in the present, „future without‟ and „future with‟ project situations. Following deduction of fixed costs (e.g. sharecrop „rental‟ value and tools/equipment), net farm returns were then obtained. In the analysis, it was assumed that landless/marginal farmers sharecrop 40% of their operated land, while small, medium and large farmers sharecrop 20%, 5% and 0% of their land respectively. For each farm model, the incremental net returns were then calculated and these estimates provided an indication the level of financial viability of the sub-project interventions from the farmers‟ perspective.




21. The farm budgets are presented in Appendix G2 and a summary of the net farm returns in the present, „future without‟, and „future with‟ project situations are given in Table 2-5.

Table 2-5: Net Farm Returns in Chenchuri and Narail Sub-projects (2004 financial prices)

Net Farm Returns (Tk per farm)


Farm Type Present FWO FW Present FWO FW

Landless/Marginal 9,322 10,974 12,573 9,770 11,139 12,919

Small 27,277 31,841 36,398 28,420 32,264 37,145

Medium 51,807 60,281 68,826 53,770 60,974 69,933

Large 102,237 119,193 135,558 105,674 120,052 137,361

Weighted Average 1/ 27,417 31,991 36,540 28,511 32,374 37,219

Source: Appendix G2

1/ Weighted by % farmers in each farm size category.

22. It is evident from Table 2-5 that there are likely to be significant increases in net farm returns. Comparing the present and „future with‟ project situations, average net returns are expected to increase by 33% in Chenchuri Beel and 31% in Narail. With these improvements in net returns, the project interventions will enhance the income and welfare of farm households in the sub-project areas. The increases in household income should also help to ensure the full and active participation of farmers in the maintenance of sub-project infrastructure. However, a comparison between the „future without‟ and „future with‟ project situations suggests that incremental net returns will not be as large, with average net returns rising by 17% in Chenchuri Beel and 14% in Narail.

2.3 Cost Recovery

23. On the basis of the farm budget analysis, an assessment of the farmers‟ capacity to pay the water management charges, which would be sufficient to meet a proportion of operation and maintenance (O&M) costs of the water management infrastructure, as well as 25% of the capital costs of earthworks and 5% of the costs of structures,was also undertaken. Net farm returns were therefore determined both before and after deducting water management charges.

24. In the „future with‟ project situation, the annual costs required to operated and maintain the water management infrastructure were estimated at Tk.1,576 per ha in Chenchuri Beel and Tk.765 per ha in Narail. On the assumption that farmers will be required to meet 50% of the O&M costs (primarily for khal re-excavation), Tk.788 per ha and Tk.383 per ha were deducted from the net farm returns in Chenchuri Beel and Narail respectively. In addition, the contributions to capital costs were estimated at Tk.240 per ha in Chenchuri Beel and Tk.220 per ha in Narail. These estimates were based on the per hectare capital requirements for 25% of earthworks and 5% of structures annualised over a period of 30 years at an interest rate of 12%.

25. With regard to the farmers‟ capacity to meet their capital contributions as well as the future O&M costs, the additional water management (WM) charges were then expressed as a percentage of the incremental net farm returns (before WM charges) for each type of farm. In the present situation, no WM fees are being charged and it has been assumed that this will continue in the „future without project‟ situation. The results of this analysis are summarised in Table 2-6.

26. As a „rule of thumb‟, additional WM charges as a percentage of incremental net farm returns should not exceed 35%. This guideline permits sufficient incremental net returns (after WM charges) to be generated by the project in order to encourage the full




participation of farmers in O&M activities, as well as providing an adequate allowance for the substantial risks and uncertainties associated with crop production. It is evident from the Table 2-6 that, for all farm categories, the 35% ceiling is never exceeded. This suggests that farmers should have an adequate incentive to meet the annual water management charges.

27. If the farmers were required to meet the full costs of O&M, there would be reduction in their incentive to pay the additional charges because WM charges, as a percentage of the incremental net farm returns, would increase from 18.8% to 33.5% in Chenchuri Beel and from 10.2% to 16.4% in Narail. However, this would still be below the 35% threshold and so would also be financial viable from a farmers‟ perspective.

Table 2-6: Water Management Charges as % of Incremental Net Farm Returns

WM Charges as % of Incremental Net Farm Returns

Farm Type Chenchuri Beel Narail

Landless/Marginal 19.3% 10.2%

Small 18.0% 9.9%

Medium 18.0% 10.1%

Large 22.0% 12.2%

Weighted Average 18.8% 10.2%

Source: Appendix G3 - Farm Budgets

1/ Weighted by % farmers in each farm size category.

2.4 Fisheries Budgets

28. Financial budgets were prepared for the four types of culture fisheries system being promoted under the project, i.e. (i) pond culture, (ii) pen culture, (iii) paddy-cum-fish culture, and (iv) culture in beels/hoars, for both Chenchuri Beel and Narail sub-projects. For each system, fish yields, material inputs (e.g. fingerlings, feed and fertilisers) and labour requirements were valued in 2004 prices in order to derive their financial net returns for both sub-projects.

29. The financial budgets for the present, „future with‟, and „future without‟ project situations are detailed in Appendix G3, and summarised in Table 2-7. It is evident from Table 2-7 that all culture fisheries systems are profitable, and that there is a significant improvement in the returns per hectare from pond culture when comparing the present and „future with‟ project situations. This difference is primarily due to the substantially higher yield levels (e.g. 3.5 tonnes/ha in FW compared to 1.8 tonnes/ha in the present situation for pond culture). The returns from paddy-cum-fish culture appear to be low, but it should be remembered that this system merely augments the returns from paddy production.

30. With respect to capture fisheries, the net returns per hectare were estimated for three types of capture fishing, i.e. (i) canals and khals, (ii) beels, and (iv) floodplain. By applying the 2004 fish price and agricultural wage rate to the current yield levels and labour requirements, the net returns from each type of fishing were estimated. The differences in the net returns between the various capture fisheries systems, and between the present, „future with‟, and „future without‟ project situations, merely reflect the current and anticipated changes in fish yields (see Annex D – Fisheries).




Table 2-7: Net Returns from Culture and Capture Fisheries (2004 Financial Prices)

i) Chenchuri Beel

Net Returns (Tk. per Hectare)

Type of Fisheries Present Future Without Project With Project

Culture Fisheries

Pond Culture 33,151 48,065 65,641

Pen Culture 56,347

Paddy-cum-Fish Culture 3,743

Culture Fisheries in Beel 33,739

Capture Fisheries

Canals and Khals 3,684 5,526 5,526

Beels 15,540 9,310 10,053

Floodplains 1,343 977 1,201

ii) Narail



Culture Fisheries

Pond Culture 33,151 48,065 65,641

Pen Culture 56,347



Capture Fisheries

Canals and Khals 15,631 18,803 18,803

Beels 15,794 9,476 11,795


Source: Appendix G4 - Fisheries Budgets




3 Economic Analysis

3.1 Economic prices

31. An economic appraisal of the project was undertaken in order to assess the costs and benefits of the project interventions from a broader, public perspective. The need for economic analysis arises principally from the existence of distortions within an economy, which can lead to a divergence between market prices and real resource costs of the economy. In terms of efficient allocation of resources, the prices applied in an economic analysis should reflect the next best alternative use (or opportunity cost) of those resources.

32. Economic prices of local goods and services required for the project were obtained by making adjustments to their monetary values. These adjustments included the removal of import duties/sales taxes and the use of economic conversion factors for different project costs. Economic conversion factors, which are based on the ratio of world prices to domestic prices at the current rate of exchange, are frequently applied in project appraisal as a simplified method of economic pricing. In the economic analysis of the proposed project, economic conversion factors were therefore applied to the costs of all local goods and services. Foreign costs remained unchanged.

33. The standard conversion factor currently used in Bangladesh is 0.9, and the shadow wage rate factor is 0.85 for agricultural labour and 0.84 for construction labour. These are given in “Estimation of Economic Prices of Selected Products for Use in Evaluation of Water Management Projects in Bangladesh”, Quazi Shahabuddin and Iqbal Ahmed Syed (March 1998).

34. For internationally traded goods, economic prices were derived from the World Bank commodity price projections. These world prices were then used to estimate economic farmgate prices by taking into account various intermediate costs (e.g. sea freight, port charges, transport/handling and processing). The economic prices of rice, wheat, sugarcane and fertilisers were all estimated on an import parity basis, while jute and urea were estimated on an export parity basis. The derivation of economic farm gate values for traded commodities is presented in Appendix G4. It is interesting to note that there was no significant difference between the financial and economic prices for rice and wheat.

35. In Bangladesh, the economic pricing of internationally traded commodities, e.g. rice, wheat and jute, has also been regularly undertaken in order derive a standard set of economic conversion factors for use by government officers and consultants in the preparation of feasibility studies and other economic planning work. These conversion factors were recently updated during the preparation of the National Water Management Plan Project (2001). A review of these conversion factors indicated that the economic pricing used in the present study is entirely consistent with other project analyses being undertaken in Bangladesh.

36. In the analysis, the world price numeraire was used, and all values are expressed in constant 2004 prices. The Bangladesh Taka (Tk) is the unit of account and an exchange rate of Tk.60 per US$ was applied.

3.2 Economic Benefits

3.2.1 Increased Agricultural Production

37. The rehabilitation of the FCD infrastructure, coupled with improved water management and better cropping systems (as a consequence of the agricultural extension




programme), is expected to lead to an expansion of the cropped area and improved crop yields. In order to determine the long term economic impact of the project interventions, cropping patterns were derived for the present, „future without‟ project, and „future with‟ project cropping patterns for Chenchuri and Narail sub-projects. The changes in cropping patterns, as well as increases in crop yield, are presented in Annex E (Agriculture) and summarised in Table 2-1 and Table 2-3. These improvements have already been discussed in Chapter 2.2.

38. In the estimation of the agricultural benefits of the sub-projects, economic net returns per hectare were calculated by valuing the physical input and output quantities in terms of their respective economic prices. The net economic benefits for each crop grown are summarised in Table 3-1. The derivation of these net benefits with respect to crop yields, crop inputs, labour and draft power requirements, as well as input and output prices, are presented in detail in Appendix G1.

Table 3-1: Net Crop Benefits per Hectare (2004 Economic Prices)

Net Crop Benefits (Tk. per hectare)

Season/Crop Present and Future Without Project

With Project

Kharif I

B.Aus 7,324 7,324

T.Aus 11,551 12,569

B.Aman 7,454 7,454

Jute 9,484 9,484

Sugarcane 14,581 14,581

Summer Vegetables 33,449 33,449


Spices 56,260 56,260

Orchard Crops 28,031 28,031

Kharif II

Local T.Aman 9,197 9,197

HYV T.Aman 15,699 16,390

Rabi

Local Boro 9,661 9,661

HYV Boro 19,524 20,478

Wheat 10,016 11,213

Potatoes 34,032 37,338

Pulses 6,999 6,999


Spices 56,260 56,260

Winter Vegetables 44,187 47,118

Source: Appendix G4 – Economic Crop Budgets

39. These economic net benefits per hectare were then multiplied by the crop areas to determine the agricultural net benefit streams in the present, „future with‟ and „future without‟ project situations (see Appendix G4). The differences between the net benefits in the present, „future without‟ and „future with‟ project situations were then calculated in order to determine the economic impact of the changes in cropping patterns and crop yields.




40. It is envisaged that the crop production benefits will be fully achieved 3 years after completion of the rehabilitation works. From year 9 onwards, it was assumed that net agricultural benefits would increase by 1.5% per year due to the further adoption of improved varieties and better cropping practices. In the „future without‟ project situation, a similar rate of productivity growth is also envisaged. The anticipated changes in crop production are shown in Table 3-2 below.

Table 3-2: Crop Production in Chenchuri Beel and Narail Sub-projects

Crop Production (tones)


Season/Crop Present FWO FW Present FWO FW

Kharif I

B.Aus 9,117 9,395 9,330 12,684 12,695 12,564

T.Aus 1,117 1,117 2,948 2,046 2,406 3,710

B.Aman 10,625 10,311 10,251 12,146 12,146 11,530

Jute 3,486 3,486 2,224 5,951 5,951 5,518

Sugarcane 21,889 21,890 19,544 36,850 36,850 32,029

Summer Vegetables 9,120 9,120 9,482 8,100 8,850 10,452

Oilseeds 648 684 1,384 552 936 1,235

Spices 5,208 7,408 10,061 3,200 6,800 7,167

Orchard Crops 4,000 4,000 4,192 6,000 6,000 6,371

Kharif II

Local T.Aman 3,430 3,270 3,894 5,676 5,676 5,855

HYV T.Aman 15,007 18,034 21,015 15,745 21,222 25,767

Rabi

Local Boro 1,184 1,184 1,057 1,181 1,181 1,176

HYV Boro 27,615 34,632 45,557 41,007 47,847 53,140

Wheat 1,168 1,168 1,752 2,324 2,324 3,522

Potatoes 900 900 1,597 1,200 1,200 1,593

Pulses 2,671 2,228 2,012 2,676 2,208 2,207

Oilseeds 1,105 1,344 770 1,703 1,703 1,744

Spices 4,544 6,144 6,268 10,280 10,280 13,507

Winter Vegetables 7,500 14,400 16,282 19,767 24,790 36,285

Source: Consultants‟ Estimates based on Narail District Agricultural Office estimates and field survey data.

41. In Chenchuri Beel, the changes in the cropping patterns and crop yields, as a result of improved water management and agricultural extension programme, are expected to increase annual paddy production by 26,541 tonnes (from 69,263 tonnes to 95,804 tonnes). Notable increases in wheat, potato and vegetable production are also anticipated. As a result of these production increases, net agricultural benefits are therefore estimated to rise by Tk.160 M per annum (from Tk.464 M to Tk.624 M). For each crop, the estimates of the net agricultural benefits in the present, „future with‟ and „future without‟ project situations are detailed in Appendix G4.

42. In Narail, a similar impact is anticipated with annual paddy production increasing by 24,086 tonnes (from 93,169 tonnes to 117,255 tonnes) and wheat, potato and vegetable production also rising. Overall, net agricultural benefits are estimated to rise by Tk.193 M per annum (from Tk.632 M to Tk. 825 M).

43. In addition, significant increases in marketable surpluses are also anticipated. In Chenchuri Beel, the marketable surplus is estimated to rise by 28,534 tonnes per annum




(from 68,237 tonnes to 96,771 tonnes) while, in Narail, the marketable surplus is estimated to grow by 30,806 tonnes per annum (from 105,199 tonnes to 136,055 tonnes). In general, the crops that are widely sold in the sub-project areas include jute, sugarcane, vegetables, oilseeds, potatoes and spices. With regard to foodgrains (paddy and wheat), it is estimated that the marketable surpluses in Chenchuri Beel could rise from 25% of total foodgrain production in the present situation to 57% in the „future with‟ project situation. In Narail, a similar increase is expected, i.e. from 26% to 47% of total foodgrain production.

3.2.2 Reduction in Crop Losses from Flooding

44. Flooding regularly causes crop damage in the sub-project areas and is most likely to occur during the kharif II season. The main crops affected are the Aus and Aman paddy crops as well as jute and sugarcane. The extent of the crop losses due to flooding depends on the depth and duration of flooding and the stage of crop development. To estimate the value of the crop losses, data on the average crop damage over a 20 year period were used1. For each type of crop, these data provided the average percentage of the area damaged by flood (relevant to the Chenchuri Beel and Narail sub-project areas) and so it was possible to estimate the average area of crop damaged each year. For this damaged area, it was estimated that about 50% of the crop would be lost.

45. By applying the gross values of production for the various affected crops, the overall value of annual crop losses were determined. When a flood event occurs, the crop inputs have normally been applied so there is no cost saving. However, an allowance was made for a reduction in labour costs (i.e. for harvesting and threshing) and so it was assumed that 25% of labour costs would not be incurred. On the basis of this analysis, the average net value of production lost in Chenchuri Beel was therefore estimated at Tk.6.7 M per annum, while in Narail an economic loss of Tk.8.6 M per annum is being incurred. The detailed calculations are given in Appendix G4.

46. In the „future with‟ project situation, it is anticipated that the improved infrastructure will protect crops from damage and so, in the analysis, it has been assumed that the economic losses currently being sustain will be eliminated. In the „future without‟ project situation, these crop losses will continue to be incurred and, if there is no improvement in maintenance, the water management infrastructure will could deteriorate further which will lead to even greater crop losses being experienced. However, the level and extent of these potential crop losses are difficult to predict.

3.2.3 Reduction in Damage to Houses and Infrastructure

47. In addition to crop losses, flooding also results in damage to houses, shops and rural infrastructure. Severe floods can cause extensive damage, as well as causing temporary dislocation of economic activity but, in most years, the effects of flooding on property and infrastructure are usually small.

48. No specific data were available on these types of economic losses within the sub-project areas, so the valuation of these losses was based on an average of 25% of annual crop losses. This broadly corresponds with the estimates used in the Flood Action Plan (FAP) studies. In an average flood year, the damage to houses and infrastructure were therefore estimated at Tk.1.7 M per annum in Chenchuri Beel and Tk.2.2 M per annum in Narail.

3.2.4 Increased Culture and Capture Fisheries Production

49. The impact of the project interventions on fish production in the sub-project areas has been discussed in Annex D – Fisheries, and the estimated areas of culture and

1 Southwest Area Water Resources Management Project (FAP 4), Halcrow, August 1993.




capture fisheries in the present, „future with‟, and „future without‟ project situations are shown in Table 3-3. With respect to culture fisheries, the „future with‟ and „future without‟ project scenarios show that the areas of pond culture in both Chenchuri Beel and Narail will increase. However, as a consequence of the project‟s fisheries support component, 200 hectares of ponds will benefit from improved management and productivity (i.e. fish yields are estimated to increase from 1.8 tonnes per ha to 3.5 tonnes per ha). In addition, it is anticipated that alternative culture fisheries systems, i.e. paddy-cum-fish culture and culture fisheries in beels, will also be taken up by farmers in the sub-project areas, and the fisheries support component will help to accelerate the rate of adoption of these improved fisheries systems. Furthermore, fish pen culture will also be introduced within both sub-project areas.

50. In the „future with‟ project situation, culture fisheries production is therefore expected to more than double in both sub-project areas, i.e. to 2,420 tonnes in Chenchuri Beel and to 2,857 tonnes in Narail (Table 3-3).

51. With regard to capture fisheries, the future project scenarios shows that the area and production of floodplain fisheries in both Chenchuri Beel and Narail sub-projects will continue to decrease in the floodplain as a consequence of the declining fish stocks. In addition, although the areas of capture fisheries in canals, khals and beels are expected to remain unchanged, fish productivity is also expected to fall. In the „future with‟ project situation, the floodplain stocking programme is expected to partially mitigate this decline by maintaining fish productivity but, in the „future without‟ project scenario, fish yields will continue to fall. Contrasting the „future with‟ and „future without‟ project scenarios, it is can be seen from Table 3-3 that capture fisheries production will be marginally greater as a result of the fisheries support programme.

Table 3-3: Area and Production of Culture and Capture Fisheries in the Sub-projects

i) Chenchuri Beel

Present Future Without Future With

Type of Fisheries Area (ha) Prod’n

(tonne)

Area (ha) Prod’n

(tonne)

Area (ha) Prod’n

(tonne)

Culture Fisheries

Traditional Pond Culture 565 1,017 660 1,650 460 1,150

Improved Pond Culture 0 0 0 0 200 700

Pen Culture 0 0 0 0 50 150

Paddy-cum-Fish Culture 0 0 200 60 400 120

Culture Fisheries in Beels 0 0 200 150 200 300

Total 565 1,017 1,060 1,860 1,310 2,420

Capture Fisheries

Canals and Khals 57 6 57 9 57 9

Beels 853 379 853 227 853 245

Floodplains 12,805 537 12,593 390 12,593 480

Total 13,715 922 13,503 626 13,503 734




ii) Narail

Area (hectare)


Culture Fisheries

Traditional Pond Culture 698 1,256 815 2,038 615 1,538

Improved Pond Culture 0 0 0 0 200 700

Pen Culture 0 0 0 0 100 300

Paddy-cum-Fish Culture 0 0 300 135 600 180

Culture Fisheries in Boars 93 70 93 70 93 140

Total 791 1,326 1,208 2,197 1,608 2,857

Capture Fisheries

Canals and Khals 309 138 309 166 309 166

Beels 277 125 277 75 277 93

Floodplains 15,826 679 15,530 419 15,530 575

Total 16,412 942 16,116 574 16,116 746

Source: Annex 4 - Fisheries

52. In the estimation of the fisheries benefits of the sub-projects, economic net returns per hectare were calculated by valuing the physical input and output quantities in terms of their respective economic prices. The net economic benefits for each the different types of culture and capture fisheries are summarised in Table 3-4.

Table 3-4: Net Benefits per Hectare from Culture and Capture Fisheries (2004 Economic Prices)

i) Chenchuri Beel



Culture Fisheries

Pond Culture 36,765 50,351 66,480

Pen Culture 58,245



Capture Fisheries

Canals and Khals 3,316 4,973 4,973

Beels 13,986 8,379 9,047


ii) Narail



Culture Fisheries

Pond Culture 36,765 50,351 66,480

Pen Culture 58,245


Culture Fisheries in Boars 31,365

Capture Fisheries

Canals and Khals 14,068 16,922 16,922

Beels 14,215 8,529 14,152

Floodplains 1,133 700 953

Source: Appendix G4 - Fisheries Budgets




53. In Chenchuri Beel, the improvements in culture fisheries production, as a result of better water management and the fisheries support programme, are expected to increase the overall net fisheries benefits by Tk.20.0 M per annum (from Tk.27.1 M to Tk.47.1 M). In Narail, a similar impact is anticipated with net fisheries benefits rising by Tk.28.1 M per annum (from Tk.27.1 M to Tk.55.2 M).

54. With regard to capture fisheries, the annual economic value of fish production in Chenchuri Beel and Narail will decrease by Tk.9.1 M and Tk.7.7 M respectively. However, the floodplain stocking programme will help to lower the losses expected in the „future without‟ project situation by approximately Tk.3.1 M in Chenchuri Beel and Tk. 4.6 M in Narail. For each type of fisheries system, estimates of the net economic benefits in the present, „future with‟ and „future without‟ project situations are detailed in Appendix G4.

3.2.5 Water Supply for Arsenic Mitigation

55. The economic assessment of the water supply for arsenic mitigation component was undertaken on the basis of cost effectiveness, in terms of costs per household supplied, as it is assumed that household water demands will have to be met. The provision of clean and potable water to rural households is an important component of the poverty reduction strategy as it is vital to meeting basic human needs. The social and economic benefits of providing universal coverage are substantial, and one of the millennium development goals is to ensure that all households in Bangladesh have access to a potable water supply by 2010. In arsenic affected areas, the provision of universal coverage is therefore urgent.

56. It could be argued that the water supply capacity should be set at an economically optimal level whereby marginal benefits to consumers equate with marginal supply costs. The economic value of the water could be determined on a willingness to pay (WTP) basis (or by similar methods of contingent valuation). For example, in a recent study2, the population affected by arsenic related illnesses is estimated by combining the epidemiological dose response function with the survey estimates of groundwater arsenic contamination, number of households reliant on groundwater, and mitigation strategies employed by these households. Unit values of health costs of the arsenic related illnesses were then derived by predicting the WTP values from a model relating WTP measures with a quality of welfare index and the duration of the illness. However, in the absence of data relating to these factors for the specific pilot arsenic mitigation areas identified for the proposed project, least cost analysis to meet full demand, rather than cost benefit analysis to determine an economically optimal level of supply was therefore adopted..

57. On the basis of the information provided on capital and recurrent costs of alternative systems of water supply, as well as the number of beneficiaries (see Annex C – Water Supply for Arsenic Mitigation), economic present values of the cost streams for the various systems were determined over a 20 year period and then expressed in Tk per household. The results of this analysis are summarised in Table 3-5 below.

2 „Economic Cost of Arsenic Contamination of Groundwater in Bangladesh‟ Maddison,D, Catala R., Pearce,D in a

Report on the Economics of Groundwater in Bangladesh (2004).




Table 3-5: Water Supply for Arsenic Mitigation - Least Cost Analysis

Water Supply System Economic PV of Costs (Tk.’000)

No. Households Benefiting

Economic PV per Household

Rainwater Harvesting – household 6,963 6 1,116

Pond Sand Filter 40,667 100 407

Improved Dugwell + Hand Pump 33,267 50 665

Improved Dugwell + Tara Pump 47,658 50 953

Shallow Tubewell 8,489 50 170

Shallow Tubewell + Iron Removal 23,116 50 462

Deep Tubewell + Hand Pump 36,983 50 740

Deep Tubewell + Tara Pump 49,174 50 983

Piped Water Supply – Type A 1,911,112 2,500 764

Piped Water Supply – Type B 1,223,494 2,500 489

58. The above findings indicate that the shallow shrouded tubewell (with a hand pump) is the most cost effective water supply system. If this system is not technically or socially appropriate, the next best alternatives (from an economic perspective) include pond sand filter systems, piped water supply (Type B), and improved dugwell (with hand pump).

3.2.6 Livestock

59. With regard to the impact on livestock development within Chenchuri Beel and Narail sub-project areas, it is believed that increase in crop production in the „future with‟ project situation will not have a significant impact on livestock production or returns. Although the availability of crop by-products (primarily rice straw) will increase following a change in the cropping pattern and increase in cropping intensity, this will be offset by a decrease in dry season grazing due to the expansion of rabi cropping. Improved crop production is therefore unlikely to make a significant contribution to livestock feed resources, and so will have neither a negative or positive impact on future livestock populations and productivity.

60. However, increasing livestock production for poor, landless households is an important activity of the project‟s livelihoods support component. Under this component, the focus will on the poultry rearing, but the training courses will also include improved management practices for cattle, sheep and goat enterprises. Although the economic benefits of this livestock training programme are relatively small, a number of poor households in the sub-project areas could significantly improve their incomes through the adoption of improved livestock systems.

3.3 Project Economic Costs

61. The civil infrastructure, as well as other project components, requires the use of materials, machinery/equipment, skilled and unskilled labour. As the financial values of these costs may not reflect their economic values, it was necessary to separate the cost estimates into these different categories to allow the application of economic conversion factors to all local costs.

62. In the derivation of economic conversion factors, the proportion of import duties, sales taxes and other levies were first omitted from the financial costs, as these are transfer payments within the economy and so are not real resource costs. The standard conversion factor of 0.9 was then applied to the financial costs of local materials, machinery/equipment and skilled labour. The cost of construction labour was also




reduced by applying a shadow wage rate factor of 0.84. The financial costs of foreign goods and services remained the same.

63. The conversion factors derived for the various project cost components are presented below.

Table 3-6: Economic Conversion Factors for Capital Cost Items

Component/Cost Item Conversion Factor

Civil Infrastructure:

Embankments 0.84

Khal Excavation 0.83

Regulators/Check Structures/Water Retention Structures 0.83

River Training Works 0.78

Irrigation Scheme 0.83

Upgrading Rural Roads 0.83

Machinery and Equipment 0.80

O&M during Construction 0.83

Survey and Investigation 0.89

Production Support Services:

Agricultural Development 0.86

Fisheries Development 0.87

Land Acquisition and Resettlement:

Land acquisition 3 0.00

Resettlement and Rehabilitation 0.90

Project management:

Project staff 0.90

Vehicles and office equipment 0.80

Operating expenses 0.85

Design and Construction Supervision 0.82

64. These economic conversion factors were then applied to the financial costs of Chenchuri Beel and Narail (as outlined in the Main Report) in order to determine the economic costs of the sub-projects. The costs of IWRM planning and management were excluded from the economic analysis because this component is designed to achieve much wider water management benefits in the SW area. Similarly, the costs of feasibility studies/IWRM plan preparation for other sub-projects areas were also omitted. For Chenchuri Beel, the economic capital costs (including 10% physical contingencies) are estimated at Tk.458.5 M. For Narail, the economic capital costs totalled Tk.424.4 M. Estimates of the economic capital costs of both sub-projects are detailed in Appendix G4.

65. The annual operation and maintenance (O&M) costs of the water management infrastructure were included in the economic analysis as these costs will have to be incurred if the present and future benefits of the investment in rehabilitation and upgrading are to be sustained. An adequate budget is therefore required for khal re-excavation, embankment maintenance, and the operation and repair/maintenance of the water management structures. Furthermore, on the assumption that satisfactory annual maintenance will be undertaken throughout the life of the civil infrastructure, a residual value of 40% of the initial capital investment was included in the analysis.

3 Land acquisition costs taken into account in the economic analysis by reducing the cultivated area in „future with

project‟ situation by the area required for land purchase, i.e. 33 ha in Chenchuri Beel and 106 ha in Narail, while the cultivated area remains unchanged in the „future without‟ project situation.




66. In total, economic O&M costs were estimated at Tk.25.0 M per annum for Chenchuri Beel and Tk.16.4 M per annum for Narail. However, in the analysis, these project costs were offset by the annual O&M costs likely to be incurred in the „future without‟ project scenario costs, which were estimated at Tk.8.4 M and Tk.5.5 M in Chenchuri Beel and Narail respectively. These costs will be saved if the project is implemented and so were deducted from the cost stream.

67. In addition, it is anticipated the about 25% of the BWDB staff seconded to the project will be required after project completion in order to continue with operation and maintenance as well as the identification of future works in Chenchuri Beel and Narail. Furthermore, it was assumed that about 50% of the agricultural and fisheries staff will also be required to provide extension services on a regular basis. This will ensure that agricultural and fisheries production continues to grow at about 1.5% per annum in the medium to long term future. In economic terms, annual recurrent costs after project completion amounted to Tk.21.6 M for Chenchuri Beel and Tk.16.5 M for Narail (including 10% for physical contingencies).

3.4 Economic Viability

68. By deducting the capital and O&M costs from the net benefit stream, an incremental net benefit stream for the each sub-project was determined over the economic life of the project, i.e. 30 year period (in constant 2004 economic prices). The incremental net benefit stream was then used to estimate the economic internal rate of return (EIRR), economic net present value (ENPV) and benefit: cost ratio (B:C ratio). ENPVs and B:C ratios were calculated at a discount rate of 12%, which corresponds to the opportunity cost of capital in Bangladesh.

69. The results of the economic analysis undertaken for the sub-projects are summarised in Table 3-7. It can be seen from Table 3-7 that Chenchuri Beel and Narail are expected to generate EIRRs of 17.0% and 24.1% respectively. The corresponding ENPVs and B:C ratios are also shown. The detailed economic costs and benefits over a 30 year period for both sub-projects are shown in Appendix G-5. These results clearly indicate that, on the basis of an opportunity cost of capital of 12%, the proposed interventions at both Chenchuri Beel and Narail are economically viable. The sub-projects are therefore justified on economic grounds.

Table 3-7: Economic Viability of Chenchuri Beel and Narail Sub-projects

EIRR (%) ENPV (Tk..M) B:C Ratio

Chenchuri Beel 17.0% 140.2 M 1.36 : 1

Narail 24.1% 336.0 M 1.98 : 1

Sensitivity Analysis

70. Sensitivity analysis was also undertaken for both Chenchuri Beel and Narail to test the economic viability of the proposed project investments to various changes in the cost and benefit streams. The results of this analysis are detailed in Table 3-8 below.




Table 3-8: Results of Sensitivity Analysis

i) Chenchuri Beel

EIRR (%)

NPV

(Tk. M)

Switching

Value (%)

Sensitivity

Indicator

Base case 17.0% 140.2

Capital costs increase by 20% 14.4% 78.3 46% 2.21

O&M costs increase by 20% 16.5% 124.7 180% 0.55

Capital and O&M costs by increase 20% 14.0% 63.5 37% 2.74

Project life reduced to 15 years 16.1% 104.3 NPV declines by 25%

Incremental benefits reduced by 20% 13.3% 35.5 27% 3.73

Rice price reduced by 20% 12.5% 12.6 23% 4.55

Cropping intensity in FW reduced to 210% 12.7% 20.5 NPV declines by 85%

No increase in HYV rice yields in FW 14.4% 67.8 NPV declines by 51%

Non-rice crop area – no difference FW v FWO 12.9% 26.4 NPV declines by 81%

Delay in Incremental Benefits by 2 years 12.8% 29.5 NPV declines by 79%

Reduction in Crop Losses not achieved 15.8% 105.7 NPV declines by 24%

Fisheries component not included 14.9% 81.9 NPV declines by 41%

ii) Narail

EIRR (%)

NPV

Tk. M

Switching

Value (%)

Sensitivity

Indicator

Base case 24.1% 336.0

Capital costs increase by 20% 20.6% 279.4 118% 0.84

O&M costs increase by 20% 23.8% 324.2 570% 0.18

Capital and O&M costs increase by 20% 20.3% 267.6 98% 1.02

Project life reduced to 15 years 23.7% 301.5 NPV declines by 10%

Incremental benefits reduced by 20% 19.5% 200.4 50% 2.02

Rice price reduced by 20% 21.1% 245.1 58% 1.35

Cropping intensity in FW reduced to 210% 18.7% 177.7 NPV declines by 47%

No increase in HYV rice yields in FW 20.3% 223.6 NPV declines by 33%

Non-rice crop area – no difference FW v FWO 18.0% 156.5 NPV declines by 53%

Delay in Incremental Benefits by 2 years 17.6% 190.0 NPV declines by 43%

Reduction in Crop Losses not achieved 22.6% 290.2 NPV declines by 14%

Fisheries component not included 21.0% 246.8 NPV declines by 27%

71. For Chenchuri Beel, the results of this sensitivity analysis show that the economic viability of the sub-project is not sensitive to changes in O&M costs, but fairly sensitive to adverse changes in capital costs. Nevertheless, the sub-project still remains viable with increases in capital costs of up to 46%. The sub-project is more sensitive to changes in incremental benefits and becomes uneconomic if incremental benefits are reduced by 27%. It is also important to note that the project will become marginally economic if: (i) rice price falls by 20%, (ii) cropping intensity in future „with project‟ is reduced to 210% (iii) there are no differences in the non-rice crop areas between FW and FWO situations, (iv) incremental benefits are delayed by 2 years. Given that an agricultural support programme is included in the project, the probability of not achieving the expected cropping intensity, or not having any impact on the non-rice crop area in comparison with the FWO situation, is therefore very low. There is, however, a chance that incremental benefits are delayed by 2 years, but this is small. Nevertheless, this analysis clearly shows the importance of implementing an agricultural support programme focused on rice intensification and crop diversification.

72. The analysis also considered the possibility of (i) not achieving the expected reduction in crop losses, and (ii) not including a fisheries component. The EIRRs and




NPVs all declined under these three scenarios, but the sub-project still maintained economic viability.

73. For Narail, the results of this sensitivity analysis show that the economic viability of the sub-project is not very sensitive to adverse changes either capital and O&M costs and still remains viable with increases in capital costs of up to 118%. The sub-project is slightly more sensitive to changes in benefits, but still remains economically viable if incremental benefits are reduced by 51%. It is also interesting to note that the project maintains viability even if: (i) HYV rice yields remained unchanged in FW situation, (ii) rice price falls by 20%, (iii) there are no differences in the non-rice crop areas between FW and FWO situations, (iv) incremental benefits are delayed by 2 years. The analysis also considered the possibility of: (i) not achieving the expected reduction in crop loss, (ii) not including a fisheries component, The EIRRs and NPVs all declined under these scenarios, but the sub-project still maintained viability.




4 Distribution Analysis and Poverty Impact Ratio

74. A distribution analysis of the sub-project costs and benefits was undertaken for both Chenchuri Beel and Narail in order to determine the poverty impact ratio. Firstly, the present value (PV) of the incremental benefits (e.g. increased agricultural production, reduced crop losses, improved culture/capture fisheries, and reduced road transport costs) and project costs (e.g. civil infrastructure, production support, resettlement/rehabilitation and project management) for each sub-project were estimated over a 30 year period at a discount rate of 12%. The PVs were calculated in both financial and economic prices.

75. The financial gains and losses expected to be generated by the sub-project benefits and costs were then distributed between the four main categories of stakeholders, namely farmers, fishers, hired labour and the government. In addition, the differences between the economic and financial present values for the various benefits and costs were also distributed between these stakeholders to reflect the effects of the shadow wage rate, taxes/subsidies, and the standard economic conversion factor (shadow exchange rate) used in the analysis.

76. By adding the net financial gains/losses to the differences between the financial and economic PVs, the net benefits for each stakeholder category were determined. The detailed analysis for each sub-project is given in Appendix G5 and summarised in Table 4-1 below.

77. With respect to the financial benefits, it can be seen from Table 3-8 that, in both sub-projects, the main beneficiaries of the project interventions will be farmers. Culture fish producers will also obtain significant financial benefits. With the exception of about 40% of the recurrent costs which are expected to be met by beneficiaries, the capital investment and the remaining recurrent costs will be incurred by the government. This shows a significant financial transfer between government and farmer/fishers. Overall, net financial gains are made by both projects. The distribution of the difference between the economic and financial PVs indicates that farmers, fishers and, particularly hired labour, will obtain net benefits from the shadow pricing effect.

Table 4-1: Distribution Analysis and Poverty Impact Ratio (2004 Constant Prices)

i) Chenchuri Beel

Distribution of Project Effects (Tk.’000)

Farmers Fishers Hired Labour Government Total

PV Economic – PV Financial 21,582 1,879 34,402 28,326 86,189

Financial Gain/Loss 465,777 81,217 -476,100 70,894

Net Benefits 487,359 83,096 34,402 -447,774 157,083

Proportion of Poor (%) 46% 70% 90% 50%

Net Benefits to Poor 224,185 58,167 32,682 -223,887 91,147

Poverty Impact Ratio 58%




ii) Narail

Distribution of Project Effects (Tk.’000)

Farmers Fishers Hired Labour Government Total

PV Economic – PV Financial 25,190 2,178 29,313 -35,837 21,295


Net Benefits 683,406 123,159 29,313 -459,415 376,463




78. The net benefits of the sub-projects being gained by poor households were then estimated by applying the percentage of poor living below the poverty line to the overall net benefits within the different stakeholder categories. The poverty impact ratio (i.e. ratio of the net benefits accruing to the poor to the net benefits of the sub-project, expressed as a percentage) was then calculated.

79. Table G14 shows that the poverty impact ratios for Chenchuri Beel and Narail are 58% and 52% respectively, which indicates that more than half of the project benefits will be gained by the poor. The project will therefore make an important contribution to poverty reduction in the sub-project areas.

Appendices

Tables

(Chenchuri Beel Sub-project & Narail Sub-project)

Appendix G3, Table 1 Appendix G4, Table 6aIncremental Economic Benefits - Culture Fisheries in Chenchuri Beel Incremental Economic Benefits - Capture Fisheries in Chenchuri Beel

Type of Culture Fisheries Area Net Economic Net Economic Type of Capture Fisheries Area Net EconomicNet EconomicUnit Unit Price Units/ha Tk/ha Units/ha Tk/ha Units/ha Tk/ha Unit Price Units/ha Tk/ha Unit Price Units/ha Tk/ha Unit Price Units/ha Tk/ha (ha) Benefits/ha (Tk) Benefits (Tk) (ha) Benefits/ha (Tk)Benefits (Tk)

Gross Value of Production: Pond Culture 565 36,765 20,772,225 Canals and khals 57 3,316 188,989

Fish tonne 40,000 1.8 72,000 2.5 100,000 3.5 140,000 40,000 3.0 120,000 40,000 0.3 12,000 40,000 1.5 60,000 Pen Culture 0 58,245 0 Beels 853 13,986 11,930,058

tonne 0.0 0 0.0 0 0.0 0 Paddy-cum-Fish 0 3,705 0 Floodplains 12,805 1,209 15,477,404

72,000 100,000 140,000 120,000 12,000 60,000 Fish Culture in Beels 0 15,683 0 Total 13,715 27,596,451

Production Costs: Total 565 20,772,225Materials

Fingerlings/Fry no. 0.80 8,000 6,400 10,000 8,000 12,500 10,000 0.70 12,500 8,750 0.70 2,500 1,750 1.75 2,500 4,375 Type of Capture Fisheries Area Net EconomicNet EconomicFYM kg 0.25 5,000 1,250 7,500 1,875 10,000 2,500 0.25 0 0 0.25 0 0 0.25 0 0 (ha) Benefits/ha (Tk)Benefits (Tk)Chemical Fertiliser kg 4 0 0 250 1,000 500 2,000 4 0 0 4 0 0 4 0 0 Type of Culture Fisheries Area Net Economic Net Economic Canals and khals 57 4,973 283,484Lime kg 5 0 0 0 0 350 1,750 5 500 2,500 5 0 0 5 250 1,250 (ha) Benefits/ha (Tk) Benefits (Tk) Beels 853 8,379 7,147,287Rice Bran/Oil Cake kg 6.6 2,000 13,200 3,000 19,800 5,000 33,000 6.6 4,500 29,700 6.6 500 3,300 6.6 1,750 11,550 Pond Culture 660 50,351 33,231,330 Floodplains 12,593 879 11,075,033Medicines LS 1,200 1 1,200 1 1,200 1 1,200 1,200 1.0 1,200 1,200 0.2 240 1,200 0.5 600 Pen Culture 0 58,245 0 Total 13,503 18,505,803Miscellaneous LS 2,000 1.0 2,000 1.0 2,000 1.0 2,000 2,000 1.0 2,000 2,000 0.2 400 2,000 0.5 1,000 Paddy-cum-Fish 200 3,705 741,000

sub-total 24,050 33,875 52,450 44,150 5,690 18,775 Fish Culture in Beels 200 15,683 3,136,500Labour Total 1,060 37,108,830 Type of Capture Fisheries Area Net EconomicNet EconomicPond rehabilitation/Pen construction day 60 5 300 15 900 25 1,500 60 50 3,000 60 0 0 60 25 1,500 (ha) Benefits/ha (Tk)Benefits (Tk)Removal of weed, predators etc day 60 30 1,800 30 1,800 30 1,800 60 0 0 60 0 0 60 0 0 Canals and khals 57 4,973 283,484Pond/Pen preparation day 60 10 600 10 600 10 600 60 10 600 60 10 600 60 10 600 Beels 853 9,047 7,717,458FYM/Fertiliser Application day 60 5 300 7 420 10 600 60 0 0 60 0 0 60 0 0 Type of Culture Fisheries Area Net Economic Net Economic Floodplains 12,593 1,081 13,615,145Feeding day 60 10 600 15 900 20 1,200 60 20 1,200 60 10 600 60 15 900 (ha) Benefits/ha (Tk) Benefits (Tk) Total 13,503 21,616,087Harvesting/marketing day 60 50 3,000 75 4,500 100 6,000 60 85 5,100 60 15 900 60 50 3,000 Pond Culture (under project) 200 66,480 13,296,000

sub-total 110 6,600 152 9,120 195 11,700 165 9,900 35 2,100 100 6,000 Pond Culture (other ponds) 460 50,351 23,161,230 Incremental Fisheries Benefits 0 3,110,283

Pond Rent ha 6,000 1 6,000 1 6,000 1 6,000 6,000 1 6,000 6,000 0 0 6,000 0 0 Pen Culture 50 58,245 2,912,250

Interest on Seasonal Credit % 12% 2,199 2,940 4,209 12% 3,603 12% 467 12% 1,487 Paddy-cum-Fish 400 3,705 1,482,000

Total Production Costs 38,849 51,935 74,359 63,653 8,257 26,262 Fish Culture in Beels 200 31,365 6,273,000

Net Returns per ha 33,151 48,065 65,641 56,347 3,743 33,739 Total 1,310 47,124,480

Net Returns per day 361 376 397 341 107 337 Incremental Fisheries Benefits 745 10,015,650of labour

Paddy-cum-Fish Fish Culture in Beels

Future With ProjectFuture With Project Future With ProjectFutureWithout Project

Financial Budgets for Culture Fish Production (Tk per ha)

Pond Culture Pen Culture (khal/canal)

Present FutureWith Project

Future With Project

Future Without Project

Present Situation


Future With Project

Present

Appendix G4, Table 5a CHENCHURI BEELEstimated Crop Losses from Flood Damage, 2004 Financial Prices

Crop Total % Area Crop AreaGross Value Value of Less 25% Net Value Crop Area Damaged Damaged per ha Crop LossLabour Costof Crop Loss

(ha) 1/ by Flood 2/ (ha) (Tk) (Tk) 3/ (Tk) 4/ (Tk) Broadcast Aus 4,362 3.04 133 17,742 1,176,307 248,634 927,673Transplanted Aus 330 3.30 11 26,869 146,303 22,869 123,434Broadcast Aman 5,585 6.25 349 16,338 2,851,572 523,594 2,327,978Jute 1,471 4.06 60 24,171 721,777 179,168 542,610Sugarcane 398 0.25 1 44,000 21,890 4,478 17,413Local Transplanted Aman 1,354 1.32 18 21,236 189,775 37,533 152,242HYV Transplanted Aman 4,988 3.40 170 31,965 2,710,537 457,898 2,252,638Total 741 7,818,161 1,474,173 6,343,987

Estimated Crop Losses from Flood Damage, 2004 Economic Prices

Crop Total % Area Crop AreaGross Value Value of Less 25% Net Value Crop Area Damaged Damaged per ha Crop LossLabour Costof Crop Loss

(ha) 1/ by Flood 2/ (ha) (Tk) (Tk) 3/ (Tk) 4/ (Tk) Broadcast Aus 4,362 3.04 133 17,503 1,160,493 211,339 949,154Transplanted Aus 330 3.30 11 26,700 145,384 19,439 125,945Broadcast Aman 5,585 6.25 349 16,021 2,796,144 445,055 2,351,090Jute 1,471 4.06 60 25,111 749,861 152,293 597,568Sugarcane 398 0.25 1 46,199 22,984 3,806 19,178Local Transplanted Aman 1,354 1.32 18 20,997 187,637 45,576 142,061HYV Transplanted Aman 4,988 3.40 170 31,814 2,697,658 140,549 2,557,109Total 741 7,760,160 1,018,056 6,742,104

1/ Crop area in future without project (FWO) situation2/ Average kharif season crop area damaged by floods (based on BBS data over 20 year period) 3/ Average crop loss on area damaged by flood estimated at 50% of gross value.4/ Future labour costs not incurred for harvesting, threshing etc

Appendix G-4, Table 3c CHENCHURI BEEL

Net Agricultural Benefits under Future With Project, 2004 Economic Prices

Net Cultivated Area: 17,867 ha

Crop % of Net Cropped Net Benefit Net Agric.

Cult. Area Area (ha) (Tk/ha) Benefit (Tk)

Kharif I

Broadcast Aus 24 4,332 7,324 31,728,981

Transplanted Aus 4 799 12,569 10,036,842

Broadcast Aman 31 5,553 7,454 41,387,369

Jute 5 938 9,484 8,898,828

Sugarcane 2 355 14,581 5,181,130

Summer Vegetables 5 948 33,449 31,717,757

Oilseeds 13 2,307 6,117 14,110,294

Spices 7 1,258 56,260 70,756,194

Orchard Crops 2 419 28,031 11,751,120

Kharif II

Local Transplanted Aman 9 1,612 9,197 14,825,788

HYV Transplanted Aman 31 5,464 16,390 89,554,063

Rabi

Local Boro 2 371 9,661 3,587,397

HYV Boro 44 7,793 20,478 159,574,435

Wheat 4 779 11,705 9,113,263

Potatoes 1 100 37,388 3,731,879

Pulses 19 3,354 6,999 23,473,233

Oilseeds 7 1,283 6,117 7,845,836

Spices 4 784 56,260 44,082,232

Winter Vegetables 5 868 49,828 43,269,967

Total 220 39,315 624,626,609

Appendix G-1, Table 2

Financial and Economic Farmgate Prices for Farm Outputs and Inputs in 2004 (Taka).

FARM OUTPUTS Unit Financial Conversion Economic FARM INPUTS

Price Factor Price

Main Products: Farm Labour

Kharif I Draft Power (excl. driver)

Broadcast Aus tonne 6,900 1.003 6,923 Seeds:

Transplanted Aus tonne 7,200 1.003 7,224 Broadcast Aus

Broadcast Aman tonne 6,900 1.003 6,923 Transplanted Aus

Jute tonne 8,300 1.071 8,887 Broadcast Aman

Sugarcane tonne 800 1.050 840 Jute

Summer Vegetables tonne 6,000 0.90 5,400 Sugarcane

Orchard Crops tonne 5,500 0.90 4,950 Orchard Crops

Kharif II Local Transplanted Aman

Local Transplanted Aman tonne 7,550 1.003 7,575 HYV Transplanted Aman

HYV Transplanted Aman tonne 8,150 1.003 8,177 Local Boro

Rabi HYV Boro

Local Boro tonne 6,900 1.003 6,923 Wheat

HYV Boro tonne 7,200 1.003 7,224 Potatoes

Wheat tonne 9,800 1.004 9,837 Pulses

Potatoes tonne 5,000 0.90 4,500 Oilseeds

Pulses tonne 23,500 0.90 21,150 Spices

Oilseeds tonne 20,500 0.90 18,450 Vegetables

Spices tonne 10,000 0.90 9,000 Fertiliser:

Winter Vegetables tonne 4,500 0.90 4,050 Urea

By Products: TSP

Kharif I MoP

Broadcast Aus tonne 1,200 0.90 1,080 FYM

Transplanted Aus tonne 1,000 0.90 900 Pesticide:

Broadcast Aman tonne 1,200 0.90 1,080 Average Cost of Pesticide

Jute tonne 1,500 0.90 1,350

Sugarcane tonne 0 0.90 0

Summer Vegetables tonne 0 0.90 0

Orchard Crops tonne 0 0.90 0

Kharif II

Local Transplanted Aman tonne 1,200 0.90 1,080

HYV Transplanted Aman tonne 1,000 0.90 900

Rabi

Local Boro tonne 1,000 0.90 900

HYV Boro tonne 1,000 0.90 900

Wheat tonne 1,200 0.90 1,080

Potatoes tonne 0 0.90 0

Pulses tonne 0 0.90 0

Oilseeds tonne 0 0.90 0

Spices tonne 0 0.90 0

Winter Vegetables tonne 0 0.90 0

Unit Financial Conversion Economic

Price Factor Price

person day 60 0.85 51.00

pair day 60 0.90 54.00

kg 13.50 1.00 13.50

kg 14.00 1.00 14.00

kg 13.50 1.00 13.50

kg 50.00 1.00 50.00

kg 1.80 0.90 1.62

kg 5.00 0.90 4.50

kg 14.50 1.00 14.50

kg 16.00 1.00 16.00

kg 13.50 1.00 13.50

kg 14.50 1.00 14.50

kg 17.50 1.00 17.50

kg 15.00 0.90 13.50

kg 38.00 0.90 34.20

kg 32.00 0.90 28.80

kg 800.00 0.90 720.00

kg 400.00 0.90 360.00

kg 5.20 1.39 7.25

kg 11.90 1.23 14.66

kg 8.90 1.46 12.96

kg 0.65 0.90 0.59

kg 750 0.90 675

Appendix G-2, Table 1a

a) Landless/Marginal Farm Farm Size: 0.30 hectares CHENCHURI BEEL

Crop Area Net Returns Total Net Area Net ReturnsTotal Net Area Net Returns Total Net

(ha) per ha. Returns (ha) per ha. Returns (ha) per ha. Returns

Kharif I

Broadcast Aus 0.07 13,511 959 0.07 13,511 988 0.07 13,511 983

Transplanted Aus 0.01 18,057 100 0.01 18,057 100 0.01 19,584 263

Broadcast Aman 0.10 12,549 1,210 0.09 12,549 1,175 0.09 12,549 1,170

Jute 0.02 18,431 454 0.02 18,431 454 0.02 18,431 290

Sugarcane 0.01 26,352 176 0.01 26,352 176 0.01 26,352 157

Summer Vegetables 0.02 49,368 755 0.02 49,368 755 0.02 49,368 786

Oilseeds 0.02 10,371 188 0.02 10,371 198 0.04 10,371 402

Spices 0.01 71,733 783 0.02 71,733 1,113 0.02 71,733 1,515

Orchard Crops 0.01 42,900 288 0.01 42,900 288 0.01 42,900 302

Kharif II

Local Transplanted Aman 0.02 16,258 387 0.02 16,258 369 0.03 16,258 440

HYV Transplanted Aman 0.07 25,026 1,741 0.08 25,026 2,092 0.09 26,234 2,407

Rabi

Local Boro 0.01 16,375 114 0.01 16,375 114 0.01 16,375 102

HYV Boro 0.08 29,175 2,438 0.10 29,175 3,057 0.13 30,662 4,012

Wheat 0.01 15,154 148 0.01 15,154 148 0.01 17,036 223

Potatoes 0.00 36,814 46 0.00 36,814 46 0.00 55,445 93

Pulses 0.07 11,302 843 0.06 11,302 703 0.06 11,302 636

Oilseeds 0.03 10,371 320 0.04 10,371 389 0.02 10,371 223

Spices 0.01 71,733 683 0.01 71,733 923 0.01 71,733 944

Winter Vegetables 0.01 71,887 482 0.01 71,887 925 0.01 71,887 1,048

sub-total 12,114 14,015 15,996

Less Fixed Costs

Sharecrop Value 2,493 2,741 3,122

Tools and Equipment 1.00 300 300 1.00 300 300 1.00 300 300

sub-total 2,793 3,041 3,422

Net Farm Returns 9,322 10,974 12,573

Additional Returns in FW and FWO Project Situations 1,652 3,252

Incremental Farm Returns (i.e. FW Income less FWO Income) 1,600

Water Management Fees 0.30 0 0 0.30 1,028 308

Net Farm Returns (after WM fees) 1,652 2,943

Incremental Farm Returns (after WM fees) 1,291

Water Management Fees as % Incremental Net Returns (before WM fees) 19.3%

Farm Budgets, 2004 Financial Prices (Tk per annum)

Present Future Without Project Future With Project

Appendix G-2, Table 1b

CHENCHURI BEEL b) Small Farm Farm Size: 0.80 hectares CHENCHURI BEEL

Crop Area Net ReturnsTotal Net Area Net ReturnsTotal Net Area Net Returns Total Net


Kharif I

Broadcast Aus 0.19 12,748 2,412 0.19 12,748 2,485 0.19 12,748 2,473


Broadcast Aman 0.26 12,040 3,097 0.25 12,040 3,005 0.25 12,040 2,993

Jute 0.07 16,905 1,111 0.07 16,905 1,111 0.04 16,905 710

Sugarcane 0.02 24,317 433 0.02 24,317 433 0.02 24,317 387

Summer Vegetables 0.04 48,096 1,960 0.04 48,096 1,960 0.04 48,096 2,042

Oilseeds 0.05 10,116 488 0.05 10,116 515 0.10 10,116 1,045

Spices 0.03 70,588 2,054 0.04 70,588 2,921 0.06 70,588 3,975

Orchard Crops 0.02 41,374 740 0.02 41,374 740 0.02 41,374 777

Kharif II

Local Transplanted Aman 0.06 15,368 975 0.06 15,368 930 0.07 15,368 1,109


Rabi

Local Boro 0.02 15,484 288 0.02 15,484 288 0.02 15,484 257

HYV Boro 0.22 27,648 6,161 0.28 27,648 7,727 0.35 29,008 10,121

Wheat 0.03 14,518 379 0.03 14,518 379 0.03 16,273 567

Potatoes 0.00 35,288 118 0.00 35,288 118 0.00 53,410 239

Pulses 0.20 11,047 2,198 0.17 11,047 1,833 0.15 11,047 1,659

Oilseeds 0.08 10,116 833 0.10 10,116 1,013 0.06 10,116 581

Spices 0.03 70,588 1,792 0.03 70,588 2,423 0.04 70,588 2,477

Winter Vegetables 0.02 69,598 1,244 0.03 69,598 2,389 0.04 69,598 2,706

sub-total 30,941 35,818 40,854

Less Fixed Costs



sub-total 3,664 3,977 4,455

Net Farm Returns 27,277 31,841 36,398



Water Management Fees 0.80 0 0 0.80 1,028 822




Future With Project


Present Future Without Project

Appendix G-2, Table 1c

(c) Medium Farm Farm Size: 1.50 hectares CHENCHURI BEEL

Crop Area Net Returns Total Net Area Net Returns Total Net Area Net Returns Total Net


Kharif I

Broadcast Aus 0.35 11,603 4,116 0.37 11,603 4,241 0.36 11,603 4,220

Transplanted Aus 0.03 15,513 429 0.03 15,513 429 0.07 16,722 1,121

Broadcast Aman 0.48 11,277 5,438 0.47 11,277 5,278 0.47 11,277 5,257

Jute 0.12 14,615 1,802 0.12 14,615 1,802 0.08 14,615 1,151

Sugarcane 0.03 21,264 709 0.03 21,264 709 0.03 21,264 634


Oilseeds 0.09 9,735 881 0.10 9,735 930 0.19 9,735 1,885

Spices 0.05 68,871 3,757 0.08 68,871 5,344 0.11 68,871 7,272

Orchard Crops 0.03 39,084 1,310 0.03 39,084 1,310 0.04 39,084 1,376

Kharif II

Local Transplanted Aman 0.12 14,032 1,670 0.11 14,032 1,592 0.14 14,032 1,899


Rabi

Local Boro 0.03 14,149 493 0.03 14,149 493 0.03 14,149 441

HYV Boro 0.42 25,359 10,595 0.52 25,359 13,288 0.65 26,528 17,355

Wheat 0.05 13,564 664 0.05 13,564 664 0.07 15,128 989

Potatoes 0.01 32,998 207 0.01 32,998 207 0.01 50,357 422

Pulses 0.37 10,666 3,978 0.31 10,666 3,319 0.28 10,666 3,003

Oilseeds 0.15 9,735 1,503 0.19 9,735 1,827 0.11 9,735 1,048

Spices 0.05 68,871 3,278 0.06 68,871 4,432 0.07 68,871 4,530


sub-total 54,178 62,785 71,534

Less Fixed Costs


Tools and Equipment 1.00 1,000 1,000 1.00 1,000 1,000 1.00 1,000 1,000

sub-total 2,371 2,505 2,708

Net Farm Returns 51,807 60,281 68,826



Water Management Fees 1.50 0 0 1.50 1,028 1,542






Appendix G-2, Table 1d

d) Large Farm Farm Size: 3.50 hectares CHENCHURI BEEL

Crop Area Net Returns Total Net Area Net Returns Total Net Area Net Returns Total Net


Kharif I

Broadcast Aus 0.83 8,741 7,235 0.85 8,741 7,456 0.85 8,741 7,418


Broadcast Aman 1.13 9,369 10,543 1.09 9,369 10,231 1.09 9,369 10,191

Jute 0.29 8,891 2,557 0.29 8,891 2,557 0.18 8,891 1,634

Sugarcane 0.08 13,632 1,061 0.08 13,632 1,061 0.07 13,632 949


Oilseeds 0.21 8,781 1,854 0.22 8,781 1,957 0.45 8,781 3,968

Spices 0.13 64,578 8,220 0.18 64,578 11,693 0.25 64,578 15,910

Orchard Crops 0.08 33,360 2,609 0.08 33,360 2,609 0.08 33,360 2,740

Kharif II



Rabi

Local Boro 0.08 10,810 879 0.08 10,810 879 0.07 10,810 786

HYV Boro 0.97 19,635 19,142 1.22 19,635 24,007 1.53 20,327 31,029

Wheat 0.11 11,179 1,277 0.11 11,179 1,277 0.15 12,266 1,871

Potatoes 0.01 27,274 400 0.01 27,274 400 0.02 42,725 835

Pulses 0.87 9,712 8,452 0.73 9,712 7,051 0.66 9,712 6,380

Oilseeds 0.36 8,781 3,163 0.44 8,781 3,846 0.25 8,781 2,206

Spices 0.11 64,578 7,172 0.15 64,578 9,698 0.15 64,578 9,912


sub-total 104,037 120,993 137,358

Less Fixed Costs

Sharecrop Value 0 0 0


sub-total 1,800 1,800 1,800

Net Farm Returns 102,237 119,193 135,558



Water Management Fees 3.50 0 0 3.50 1,028 3,598




Future Without Project Future With Project


Present

Item

Financial EconomicFinancial EconomicFinancial EconomicFinancial EconomicFinancial EconomicFinancial EconomicFinancial Economic

Projected World Price for Year 2010 1/ 208 208 137 137 179 179 138 138 111 111

Quality Adjustment Factor 2/ 75% 75% 80% 80% 100% 100% 100% 100% 100% 100%

Projected Price for Bangladesh Product 156 156 109 109 179 179 138 138 111 111

International Shipping and Insurance 35 35 50 50 55 55 50 50 49 49

FOB or CIF Price, Chittagong 191 191 159 159 276 276 234 234 118 118 187 187 160 160

Exchange Rate : US$ = Tk60

CIF or FOB Price, Chittagong 11,450 11,450 9,567 9,567 16,541 16,541 14,032 14,032 7,067 7,067 11,238 11,238 9,628 9,628

Port Charges, Storage and Transport to/from Regional Market 2,200 1,980 2,200 1,980 -2,350 -2,115 2,200 1,980 -1,100 -990 2,200 1,980 2,200 1,980

Transport/Handling Costs between Local and Regional Market -950 -855 -950 -855 0 0 -950 -855 600 540 600 540 600 540

Marketing Costs/Margin between Local and Regional Market -700 -630 -650 -585 0 0 -800 -720 400 360 700 630 600 540

Commodity Price ex-Mill 12,000 11,945 10,167 10,107 14,191 14,426 14,482 14,437 6,967 6,977 14,738 14,388 13,028 12,688

Processing Ratio 4/ 65% 65% 100% 100% 85% 85% 8.0% 8.0% 100% 100% 100% 100% 100% 100%

Local Mill or Local Market Price 7,800 7,764 10,167 10,107 12,062 12,262 1,159 1,155 6,967 6,977 14,738 14,388 13,028 12,688

Processing/Admin. Costs -400 -360 0 0 -1,250 -1,125 -100 -90 0 0 0 0 0 0

Value of Secondary Product 3/ 100 90 0 0 0 0 50 45 0 0 0 0 0 0

Transport and Handling Costs to/from Farm -300 -270 -300 -270 -2,500 -2,250 -300 -270 300 270 300 270 300 270

Farmgate Price 7,200 7,224 9,867 9,837 8,312 8,887 809 840 7,267 7,247 15,038 14,658 13,328 12,958

Farmgate Price, Taka per kg 7.20 7.22 9.87 9.84 8.31 8.89 0.81 0.84 7.27 7.25 15.04 14.66 13.33 12.96

Footnotes:

1/ World Bank commodity price projections for 2010 in constant 2004 prices

Rice : Thai, milled, 5% broken, fob Bangkok

Wheat : US, Hard Red Winter, export price

Jute : Raw White D, fob Bangladesh

Sugar : Raw Sugar, fob Caribbean ports

Urea : Bagged, fob NW Europe

TSP : Bulk, fob US Gulf

MoP : Bulk, fob US Gulf

2/ Reflects the estimated difference in quality between the traded and locally produced commodity.

3/ Value of any economically useful products (e.g. rice husk, mollases) obtained through primary processing.

4/ Processing ratio (out-turn) for milled produce.

MoP

US$ per tonne

Taka per tonne

APPENDIX G4, Table 1

Derivation of Economic Farmgate Prices for Internationally Traded Commodities

Rice Sugarcane Urea TSPWheat Jute

Appendix G4, Table 7a

Foreign Local Taxes/2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 Total Costs Costs Duties

Civil Infrastructure Resectioning and Construction of Embankments 0 1,321 6,607 3,964 1,321 0 0 13,214 1,982 11,232 0 Khal Excavation 0 5,832 29,158 17,495 5,832 0 0 58,317 1,458 56,859 0 Rehabilitation of Regulators 0 703 3,516 2,109 703 0 0 7,031 703 6,328 0 Construction of Regulators 0 1,707 8,534 5,120 1,707 0 0 17,068 1,707 15,361 0 Check Structures 0 4,595 22,973 13,784 4,595 0 0 45,945 4,595 41,351 0 Water Retention Structure 0 833 4,166 2,499 833 0 0 8,331 833 7,498 0 Navigation Lock 0 1,247 6,234 3,740 1,247 0 0 12,468 1,247 11,221 0 Inlet and Outlet Structures 0 944 4,718 2,831 944 0 0 9,436 944 8,492 0 River Training Works 0 8,261 41,303 24,782 8,261 0 0 82,606 24,782 57,824 0 Irrigation Scheme 0 1,628 8,138 4,883 1,628 0 0 16,277 1,628 14,649 0 Upgrading Rural Roads 0 1,230 6,148 3,689 1,230 0 0 12,297 1,844 10,452 0 O&M during Construction 0 0 808 4,830 0 0 0 5,638 846 4,792 0 Transport and Equipment 0 2,404 5,609 0 0 0 0 8,012 6,009 2,003 0 Survey and Investigation 0 2,678 1,339 446 0 0 0 4,463 669 3,793 0

sub-total 0 33,380 149,250 90,173 28,299 0 0 301,102 49,246 251,856 0

Production Support Services Agricultural Development 0 0 7,982 5,132 5,132 5,132 5,132 28,511 2,538 25,974 0 Fisheries Development 0 0 4,709 2,837 2,837 1,871 1,871 14,125 1,610 12,515 0

sub-total 0 0 12,691 7,969 7,969 7,003 7,003 42,636 4,148 38,488 0Land Acquisition and Resettlement Land Acquisition 0 0 0 0 0 0 0 0 0 0 0 Resettlement and Rehabilitation 0 2,811 4,685 1,874 0 0 0 9,370 0 9,370 0

sub-total 0 2,811 4,685 1,874 0 0 0 9,370 0 9,370 0Project Management Support Design and Construction Supervision 0 8,574 8,168 8,168 7,366 0 0 32,276 936 31,340 0

sub-total 0 8,574 8,168 8,168 7,366 0 0 32,276 936 31,340 0Project Management Project staff 108 2,484 2,484 2,484 2,484 2,484 2,484 15,012 0 15,012 0 Vehicles and office equipment 0 7,335 0 0 0 0 0 7,335 5,127 2,208 0 Operating expenditure 0 1,519 1,519 1,519 1,519 1,519 1,519 9,114 2,233 6,881 0

sub-total 108 11,338 4,003 4,003 4,003 4,003 4,003 31,461 7,360 24,101 0

Base Cost 108 56,103 178,796 112,188 47,638 11,006 11,006 416,845 61,690 355,156 0

Physical Contingencies @10% 11 5,610 17,880 11,219 4,764 1,101 1,101 41,685 6,169 35,516 0

Total Cost 119 61,714 196,676 123,406 52,401 12,107 12,107 458,530 67,859 390,671 0

Capital Investment Costs - Chenchuri Beel , Constant 2004 Economic Prices (Tk '000)

Cost Item

Appendix G5, Table 1aTable 6.1. CHENCHURI BEEL: BENEFITS AND COSTS, Tk ' 000 (2004 Economic Prices)

Year 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

PROJECT BENEFITS

Increased Crop Production

Net Crop Benefits in Future With Project 463,805 463,805 486,780 509,754 532,729 555,703 578,678 601,652 624,627 633,996 643,506 653,159 662,956 672,900 682,994

Net Crop Benefits in Future Without Project 463,805 463,805 475,183 486,561 497,938 509,316 520,694 532,071 543,449 551,601 559,875 568,273 576,797 585,449 594,231

Incremental Crop Benefits 0 0 11,597 23,194 34,790 46,387 57,984 69,581 81,178 82,395 83,631 84,886 86,159 87,451 88,763

Reduction in Crop Losses

Reduction in Crop Losses from Flooding 0 0 0 1,686 3,371 5,057 6,742 6,843 6,946 7,050 7,156 7,263 7,372 7,483 7,595

Reduction in Crop Losses from Saline Intrusion 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Reduction in Crop Losses 0 0 0 1,686 3,371 5,057 6,742 6,843 6,946 7,050 7,156 7,263 7,372 7,483 7,595

Improved Culture Fisheries Production

Net Culture Fisheries Benefits With Project 20,772 20,772 26,043 31,313 36,584 41,854 47,124 47,831 48,549 49,277 50,016 50,766 51,528 52,301 53,085

Net Culture Fisheries Benefits Without Project 20,772 20,772 24,040 27,307 30,574 33,842 37,109 37,665 38,230 38,804 39,386 39,977 40,576 41,185 41,803

Incremental Culture Fisheries Production 0 0 2,003 4,006 6,009 8,013 10,016 10,166 10,318 10,473 10,630 10,790 10,952 11,116 11,283

Improved Capture Fisheries Production

Net Capture Fisheries Benefits With Project 27,596 27,596 26,400 25,204 24,008 22,812 21,616 21,616 21,616 21,616 21,616 21,616 21,616 21,616 21,616

Net Capture Fisheries Benefits Without Project 27,596 27,596 25,778 23,960 22,142 20,324 18,506 18,506 18,506 18,506 18,506 18,506 18,506 18,506 18,506

Incremental Capture Fisheries Production 0 0 622 1,244 1,866 2,488 3,110 3,110 3,110 3,110 3,110 3,110 3,110 3,110 3,110

Reduction in Damage to Houses and Infrastructure 0 0 0 421 843 1,264 1,686 1,711 1,736 1,763 1,789 1,816 1,843 1,871 1,899

INCREMENTAL BENEFITS 0 0 14,222 30,551 46,880 63,209 79,538 91,411 103,289 104,791 106,317 107,865 109,436 111,031 112,650

PROJECT CAPITAL COSTS

Civil Infrastructure 0 36,718 164,175 99,191 31,129 0 0 0 0 0 0 0 0 0 0

Production Support Services 0 0 13,960 8,766 8,766 7,704 7,704 0 0 0 0 0 0 0 0

Resettlement and Rehabitation 0 3,092 5,154 2,061 0 0 0 0 0 0 0 0 0 0 0

Design and Construction Supervision 0 9,432 8,984 8,984 8,103 0 0 0 0 0 0 0 0 0 0

Project Management 119 12,471 4,403 4,403 4,403 4,403 4,403 0 0 0 0 0 0 0 0

Sub-total 119 61,714 196,676 123,406 52,401 12,107 12,107 0 0 0 0 0 0 0 0

RECURRENT COSTS

Operation and Maintenance of Civil Infrastructure 0 0 0 0 0 0 0 25,035 25,035 25,035 25,035 25,035 25,035 25,035 25,035

Production Support Services 0 0 0 0 0 0 0 3,852 3,852 3,852 3,852 3,852 3,852 3,852 3,852

BWDB overheads 0 0 0 0 0 0 0 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101

less O&M costs without project 0 0 0 0 0 0 0 -8,345 -8,345 -8,345 -8,345 -8,345 -8,345 -8,345 -8,345

Sub-total 0 0 0 0 0 0 0 21,643 21,643 21,643 21,643 21,643 21,643 21,643 21,643

TOTAL CAPITAL AND RECURRENT COSTS 119 61,714 196,676 123,406 52,401 12,107 12,107 21,643 21,643 21,643 21,643 21,643 21,643 21,643 21,643

INCREMENTAL NET BENEFITS -119 -61,714 -182,454 -92,855 -5,522 51,102 67,431 69,769 81,646 83,149 84,674 86,222 87,794 89,388 91,007

ECONOMIC NET PRESENT VALUE @ 12% : 140,147 BENEFIT : COST RATIO : 1.37 : 1

ECONOMIC INTERNAL RATE OF RETURN : 17.0%

Appendix G5, Table 2aDistribution Analysis and Poverty Impact Ratio for Chenchuri Beel, Tk '000 (2004 Constant Prices)

a) Distribution Analysis

Financial Economic Difference

Present Present (Econ. minus Hired Labour

Value Value Financial) Fin. Gain/Loss SWR effect Fin. Gain/Loss SWR effect SWR effect Fin. Gain/Loss SER effect/Tax

Incremental Benefits

Incremental Crop Benefits 456,155 454,909 -1,246 456,155 20,510 10,725 -32,481

Reduction in Crop Losses 37,725 40,092 2,367 37,725 858 449 1,061

Incremental Culture Fisheries Production 65,914 63,145 -2,769 65,914 1,253 655 -4,678

Incremental Capture Fisheries Production 19,996 17,997 -2,000 19,996 625 327 -2,952

Reduction in Damage to Houses and Infrastructure 9,431 10,023 592 7,791 214 1,641 112 265

Total Benefits 589,222 586,166 -3,056 501,670 21,582 87,551 1,879 12,268 0 -38,784

Costs

Civil Infrastructure -304,887 -250,523 54,364 15,417 -304,887 38,947

Production Support -36,083 -31,214 4,870 0 -36,083 4,870

Resettlement and Social Development -9,263 -8,336 926 0 -9,263 926

Design and Construction Supervision -33,007 -27,128 5,878 0 -33,007 5,878

Project Management -29,519 -25,308 4,211 0 -29,519 4,211

Recurrent costs -105,569 -86,574 18,995 -35,893 -6,334 6,717 -63,341 12,278

Total Costs -518,328 -429,083 89,245 -35,893 0 -6,334 0 22,134 -476,100 67,110

Net Benefits 70,894 157,083 86,189 465,777 21,582 81,217 1,879 34,402 -476,100 28,326

b) Poverty Impact Analysis

Beneficiaries Farmers Fishers Hired Labour Govt./Economy Total

PV Economic - PV Financial 21,582 1,879 34,402 28,326 86,189


Net Benefits 487,359 83,096 34,402 -447,774 157,083




Distribution of Project Effects

Farmers Fishers Govt./Economy

Appendix G4, Table 6b

Incremental Economic Benefits - Culture Fisheries in Narail Incremental Economic Benefits - Capture Fisheries in Narail

Type of Culture Fisheries Area Net Economic Net Economic Type of Capture Fisheries Area Net Economic Net Economic

(ha) Benefits/ha (Tk) Benefits (Tk) (ha) Benefits/ha (Tk) Benefits (Tk)

Pond Culture 698 36,765 25,661,970 Rivers and khals 309 14,068 4,346,981

Pen Culture 0 58,245 0 Beels 277 14,215 3,937,444

Paddy-cum-Fish 0 3,705 0 Floodplains 15,826 1,133 17,932,441

Fish Culture in Boars 93 15,683 1,458,473 Total 16,412 26,216,866

Total 791 27,120,443

Type of Capture Fisheries Area Net Economic Net Economic

(ha) Benefits/ha (Tk) Benefits (Tk)

Type of Culture Fisheries Area Net Economic Net Economic Rivers and khals 309 16,922 5,228,977

(ha) Benefits/ha (Tk) Benefits (Tk) Beels 277 8,529 2,362,467

Pond Culture 815 50,351 41,035,658 Floodplains 15,530 700 10,867,921

Pen Culture 0 58,245 0 Total 16,116 18,459,365

Paddy-cum-Fish 300 3,705 1,111,500

Fish Culture in Boars 93 15,683 1,458,473

Total 1,208 43,605,630 Type of Capture Fisheries Area Net Economic Net Economic

(ha) Benefits/ha (Tk) Benefits (Tk)

Rivers and khals 309 16,922 5,228,977

Beels 277 10,615 2,940,452

Type of Culture Fisheries Area Net Economic Net Economic Floodplains 15,530 959 14,893,077

(ha) Benefits/ha (Tk) Benefits (Tk) Total 16,116 23,062,506

Pond Culture (under project) 200 66,480 13,296,000

Pond Culture (other ponds) 615 50,351 30,965,558 Incremental Fisheries Benefits 0 4,603,141

Pen Culture 100 58,245 5,824,500

Paddy-cum-Fish 600 3,705 2,223,000

Fish Culture in Boars 93 31,365 2,916,945

Total 1,608 55,226,003

Incremental Fisheries Benefits 817 11,620,373

Future With Project


Present Situation


Future With Project

Present

Appendix G4, Table 5b NARAIL

Estimated Crop Losses from Flood Damage, 2004 Financial Prices

Crop Total % Area Crop AreaGross Value Value of Less 25% Net Value

Crop Area Damaged Damaged per ha Crop Loss Labour Costof Crop Loss

(ha) 1/ by Flood 2/ (ha) (Tk) (Tk) 3/ (Tk) 4/ (Tk)

Broadcast Aus 5,894 3.04 179 17,742 1,589,443 335,958 1,253,485

Transplanted Aus 711 3.30 23 26,869 315,216 49,272 265,944

Broadcast Aman 6,579 6.25 411 16,338 3,359,086 616,781 2,742,304

Jute 2,511 4.06 102 24,171 1,232,076 305,840 926,236

Sugarcane 670 0.25 2 44,000 36,850 7,538 29,313

Local Transplanted Aman 2,350 1.32 31 21,236 329,373 65,142 264,231

HYV Transplanted Aman 5,870 3.40 200 31,965 3,189,826 538,866 2,650,960

Total 948 10,051,869 1,919,397 8,132,472

Estimated Crop Losses from Flood Damage, 2004 Economic Prices

Crop Total % Area Crop AreaGross Value Value of Less 25% Net Value

Crop Area Damaged Damaged per ha Crop Loss Labour Costof Crop Loss

(ha) 1/ by Flood 2/ (ha) (Tk) (Tk) 3/ (Tk) 4/ (Tk)

Broadcast Aus 5,894 3.04 179 17,503 1,568,075 285,564 1,282,511

Transplanted Aus 711 3.30 23 26,700 313,236 41,881 271,354

Broadcast Aman 6,579 6.25 411 16,021 3,293,793 524,264 2,769,529

Jute 2,511 4.06 102 25,111 1,280,014 259,964 1,020,051

Sugarcane 670 0.25 2 46,199 38,692 6,407 32,285

Local Transplanted Aman 2,350 1.32 31 20,997 325,662 79,101 246,561

HYV Transplanted Aman 5,870 3.40 200 31,814 3,174,670 165,402 3,009,268

Total 948 9,994,141 1,362,583 8,631,557

1/ Crop area in future without project (FWO) situation

2/ Average kharif season crop area damaged by floods (based on BBS data over 20 year period)

3/ Average crop loss on area damaged by flood estimated at 50% of gross value.

4/ Future labour costs not incurred for harvesting, threshing etc

ecbudgets


Crop Costs and Returns per Hectare under Present Conditions, 2004 Economic Prices (Taka).

Crop Gross Value of Production Farm Draft Seed Fertiliser

Main Prod.By-Prod. Total Labour Power FYM

Kharif I

Broadcast Aus 14,911 2,592 17,503 6,375 1,890 1,148 585

Transplanted Aus 24,450 2,250 26,700 7,140 1,890 420 585

Broadcast Aman 12,781 3,240 16,021 5,100 1,890 1,215 0

Jute 21,061 4,050 25,111 10,200 2,430 350 878

Sugarcane 46,199 0 46,199 15,300 2,430 8,100 1,170

Summer Vegetables 54,000 0 54,000 10,200 2,430 2,520 878

Oilseeds 11,070 0 11,070 3,315 1,350 288 0

Spices 72,000 0 72,000 8,670 2,268 4,320 0

Orchard Crops 49,500 0 49,500 10,200 1,620 5,400 585

Kharif II

Local Transplanted Aman 18,297 2,700 20,997 7,140 1,890 435 293

HYV Transplanted Aman 29,564 2,250 31,814 9,180 1,890 480 293

Rabi

Local Boro 19,704 1,800 21,504 7,140 1,890 405 0

HYV Boro 40,010 2,700 42,710 10,200 2,268 435 0

Wheat 19,674 2,160 21,834 5,355 1,890 2,275 0

Potatoes 67,500 0 67,500 11,730 2,430 13,500 878

Pulses 12,690 0 12,690 3,315 1,350 1,026 0

Oilseeds 11,070 0 11,070 3,315 1,350 288 0

Spices 72,000 0 72,000 8,670 2,268 4,320 0

Winter Vegetables 67,838 0 67,838 12,750 2,430 2,520 878


Crop Costs and Returns per Hectare under Future Without Project, 2002 Economic Prices (Taka).

Crop Gross Value of Production Farm Draft Seed Fertiliser


Kharif I

Broadcast Aus 14,911 2,592 17,503 6,375 1,890 1,148 585


Broadcast Aman 12,781 3,240 16,021 5,100 1,890 1,215 0

Jute 21,061 4,050 25,111 10,200 2,430 350 878

Sugarcane 46,199 0 46,199 15,300 2,430 8,100 1,170

Page 1

ecbudgets


Oilseeds 11,070 0 11,070 3,315 1,350 288 0

Spices 72,000 0 72,000 8,670 2,268 4,320 0

Orchard Crops 49,500 0 49,500 10,200 1,620 5,400 585

Kharif II



Rabi

Local Boro 19,704 1,800 21,504 7,140 1,890 405 0

HYV Boro 40,010 2,700 42,710 10,200 2,268 435 0

Wheat 19,674 2,160 21,834 5,355 1,890 2,275 0

Potatoes 67,500 0 67,500 11,730 2,430 13,500 878

Pulses 12,690 0 12,690 3,315 1,350 1,026 0

Oilseeds 11,070 0 11,070 3,315 1,350 288 0

Spices 72,000 0 72,000 8,670 2,268 4,320 0

Winter Vegetables 67,838 0 67,838 12,750 2,430 2,520 878


Crop Costs and Returns per Hectare under Future With Project, 2002 Economic Prices (Taka).

Crop Value of Production Farm Draft Seed Fertiliser


Kharif I

Broadcast Aus 14,911 2,592 17,503 6,375 1,890 1,148 585


Broadcast Aman 12,781 3,240 16,021 5,100 1,890 1,215 0

Jute 21,061 4,050 25,111 10,200 2,430 350 878

Sugarcane 46,199 0 46,199 15,300 2,430 8,100 1,170


Oilseeds 11,070 0 11,070 3,315 1,350 288 0

Spices 72,000 0 72,000 8,670 2,268 4,320 0

Orchard Crops 49,500 0 49,500 10,200 1,620 5,400 585

Kharif II



Rabi

Local Boro 19,704 1,800 21,504 7,140 1,890 405 0

HYV Boro 42,232 2,700 44,932 10,710 2,268 435 0

Wheat 21,642 2,160 23,802 5,610 1,890 2,275 0

Potatoes 72,000 0 72,000 12,495 2,430 13,500 878

Page 2

ecbudgets

Pulses 12,690 0 12,690 3,315 1,350 1,026 0

Oilseeds 11,070 0 11,070 3,315 1,350 288 0

Spices 72,000 0 72,000 8,670 2,268 4,320 0

Winter Vegetables 72,900 0 72,900 13,770 2,430 2,520 1,170

Page 3

ecbudgets

Crop Costs and Returns per Hectare under Present Conditions, 2004 Economic Prices (Taka).

Fertiliser PesticidesIrrigation Total Net Benefit Net Benefit

Urea TSP MP Costs per hectare per day

181 0 0 0 0 10,179 7,324 110

580 733 130 338 3,335 15,149 11,551 134

362 0 0 0 0 8,567 7,454 126

725 513 194 338 0 15,627 9,484 98

1,739 1,686 518 675 0 31,618 14,581 100

1,087 1,466 1,296 675 0 20,551 33,449 218

0 0 0 0 0 4,953 6,117 145

145 0 0 338 0 15,740 56,260 382

1,087 1,319 583 675 0 21,469 28,031 191

580 440 130 338 556 11,800 9,197 117

1,268 1,319 454 675 556 16,114 15,699 138

362 147 65 169 1,665 11,842 9,661 120

1,449 1,759 842 675 5,558 23,186 19,524 149

652 440 194 338 675 11,819 10,016 146

1,160 1,319 1,101 675 675 33,468 34,032 199

0 0 0 0 0 5,691 6,999 159

0 0 0 0 0 4,953 6,117 145

145 0 0 338 0 15,740 56,260 382

1,087 1,612 1,361 338 675 23,650 44,187 228

Crop Costs and Returns per Hectare under Future Without Project, 2002 Economic Prices (Taka).



181 0 0 0 0 10,179 7,324 110

580 733 130 338 3,335 15,149 11,551 134

362 0 0 0 0 8,567 7,454 126

725 513 194 338 0 15,627 9,484 98

1,739 1,686 518 675 0 31,618 14,581 100

Page 6

ecbudgets

1,087 1,466 1,296 675 0 20,551 33,449 218

0 0 0 0 0 4,953 6,117 145

145 0 0 338 0 15,740 56,260 382

1,087 1,319 583 675 0 21,469 28,031 191

580 440 130 338 556 11,800 9,197 117

1,268 1,319 454 675 556 16,114 15,699 138

362 147 65 169 1,665 11,842 9,661 120

1,449 1,759 842 675 5,558 23,186 19,524 149

652 440 194 338 675 11,819 10,016 146

1,160 1,319 1,101 675 675 33,468 34,032 199

0 0 0 0 0 5,691 6,999 159

0 0 0 0 0 4,953 6,117 145

145 0 0 338 0 15,740 56,260 382

1,087 1,612 1,361 338 675 23,650 44,187 228

Crop Costs and Returns per Hectare under Future With Project, 2002 Economic Prices (Taka).



181 0 0 0 0 10,179 7,324 110

652 953 194 675 3,335 16,354 12,569 135

362 0 0 0 0 8,567 7,454 126

725 513 194 338 0 15,627 9,484 98

1,739 1,686 518 675 0 31,618 14,581 100

1,087 1,466 1,296 675 0 20,551 33,449 218

0 0 0 0 0 4,953 6,117 145

145 0 0 338 0 15,740 56,260 382

1,087 1,319 583 675 0 21,469 28,031 191

580 440 130 338 556 11,800 9,197 117

1,341 1,466 583 1,013 556 17,310 16,390 137

362 147 65 169 1,665 11,842 9,661 120

1,594 1,906 972 1,013 5,558 24,455 20,478 149

688 513 194 473 945 12,588 11,213 153

1,196 1,393 1,101 675 945 34,612 37,388 204

Page 7

ecbudgets

0 0 0 0 0 5,691 6,999 159

0 0 0 0 0 4,953 6,117 145

145 0 0 338 0 15,740 56,260 382

1,232 1,612 1,361 473 1,215 25,782 47,118 226

Page 8

Appendix G-4, Table 4a NARAIL

Net Agricultural Benefits - Present Conditions, 2004 Economic Prices




Kharif I

Broadcast Aus 25 5,889 7,324 43,133,065


Broadcast Aman 28 6,579 7,454 49,036,674

Jute 11 2,511 9,484 23,815,190

Sugarcane 3 670 14,581 9,769,035


Oilseeds 4 920 6,117 5,627,640

Spices 2 400 56,260 22,503,821

Orchard Crops 3 600 28,031 16,818,358

Kharif II



Rabi

Local Boro 2 415 9,661 4,009,470

HYV Boro 32 7,404 19,524 144,552,400

Wheat 5 1,162 10,016 11,638,019

Potatoes 0 80 34,032 2,722,586

Pulses 19 4,460 6,999 31,215,540

Oilseeds 12 2,839 6,117 17,366,163

Spices 5 1,285 56,260 72,293,527

Winter Vegetables 5 1,180 44,187 52,141,233

Total 190 44,620 631,932,368

Appendix G-4, Table 4b NARAIL

Net Agricultural Benefits - Future Without Project, 2004 Economic Prices




Kharif I

Broadcast Aus 25 5,894 7,324 43,169,687


Broadcast Aman 28 6,579 7,454 49,036,674

Jute 11 2,511 9,484 23,815,190

Sugarcane 3 670 14,581 9,769,035


Oilseeds 7 1,560 6,117 9,542,520

Spices 4 850 56,260 47,820,621

Orchard Crops 3 600 28,031 16,818,358

Kharif II



Rabi

Local Boro 2 415 9,661 4,009,470

HYV Boro 37 8,639 19,524 168,663,990

Wheat 5 1,162 10,016 11,638,019

Potatoes 0 80 34,032 2,722,586

Pulses 16 3,680 6,999 25,756,320

Oilseeds 12 2,839 6,117 17,366,163

Spices 5 1,285 56,260 72,293,527

Winter Vegetables 6 1,480 44,187 65,397,479

Total 205 48,060 719,402,303


a) Landless/Marginal Farm Farm Size: 0.30 hectares NARAIL

Crop Area Net Returns Total Net Area Net ReturnsTotal Net Area Net Returns Total Net


Kharif I

Broadcast Aus 0.08 13,511 1,018 0.08 13,511 1,019 0.08 13,511 1,013


Broadcast Aman 0.08 12,549 1,057 0.08 12,549 1,057 0.08 12,549 1,008

Jute 0.03 18,431 592 0.03 18,431 592 0.03 18,431 552

Sugarcane 0.01 26,352 226 0.01 26,352 226 0.01 26,352 197

Summer Vegetables 0.01 49,368 512 0.01 49,368 559 0.01 49,368 663

Oilseeds 0.01 10,371 122 0.02 10,371 207 0.03 10,371 274

Spices 0.01 71,733 367 0.01 71,733 780 0.01 71,733 826

Orchard Crops 0.01 42,900 329 0.01 42,900 329 0.01 42,900 351

Kharif II

Local Transplanted Aman 0.03 16,258 489 0.03 16,258 489 0.03 16,258 507


Rabi

Local Boro 0.01 16,375 87 0.01 16,375 87 0.01 16,375 87

HYV Boro 0.09 29,175 2,765 0.11 29,175 3,226 0.12 30,662 3,583

Wheat 0.01 15,154 225 0.01 15,154 225 0.02 16,546 341

Potatoes 0.00 50,854 52 0.00 50,854 52 0.00 55,445 71

Pulses 0.06 11,302 645 0.05 11,302 532 0.05 11,302 534

Oilseeds 0.04 10,371 377 0.04 10,371 377 0.04 10,371 388

Spices 0.02 71,733 1,180 0.02 71,733 1,180 0.02 71,733 1,557

Winter Vegetables 0.02 64,173 969 0.02 64,173 1,216 0.03 68,567 1,777

sub-total 12,572 14,198 16,242

Less Fixed Costs



sub-total 2,802 3,060 3,324

Net Farm Returns 9,770 11,139 12,919



Water Management Fees 0.30 0 0 0.30 603 181







b) Small Farm Farm Size: 0.80 hectares NARAIL



Kharif I

Broadcast Aus 0.20 12,748 2,562 0.20 12,748 2,564 0.20 12,748 2,550


Broadcast Aman 0.22 12,040 2,703 0.22 12,040 2,703 0.21 12,040 2,578

Jute 0.09 16,905 1,449 0.09 16,905 1,449 0.08 16,905 1,350

Sugarcane 0.02 24,317 556 0.02 24,317 556 0.02 24,317 486


Oilseeds 0.03 10,116 318 0.05 10,116 539 0.07 10,116 714

Spices 0.01 70,588 964 0.03 70,588 2,048 0.03 70,588 2,168

Orchard Crops 0.02 41,374 847 0.02 41,374 847 0.02 41,374 904

Kharif II



Rabi

Local Boro 0.01 15,484 219 0.01 15,484 219 0.01 15,484 219

HYV Boro 0.25 27,648 6,987 0.29 27,648 8,152 0.31 29,008 9,040

Wheat 0.04 14,518 576 0.04 14,518 576 0.05 15,783 866

Potatoes 0.00 49,200 134 0.00 49,200 134 0.00 53,410 182

Pulses 0.15 11,047 1,682 0.13 11,047 1,387 0.13 11,047 1,393

Oilseeds 0.10 10,116 980 0.10 10,116 980 0.10 10,116 1,008

Spices 0.04 70,588 3,096 0.04 70,588 3,096 0.06 70,588 4,086


sub-total 32,092 36,261 41,472

Less Fixed Costs



sub-total 3,671 3,997 4,327

Net Farm Returns 28,420 32,264 37,145







Future With Project


Present Future Without Project


(c) Medium Farm Farm Size: 1.50 hectares NARAIL



Kharif I

Broadcast Aus 0.38 11,603 4,373 0.38 11,603 4,377 0.38 11,603 4,351


Broadcast Aman 0.42 11,277 4,748 0.42 11,277 4,748 0.40 11,277 4,528

Jute 0.16 14,615 2,348 0.16 14,615 2,348 0.15 14,615 2,188

Sugarcane 0.04 21,264 912 0.04 21,264 912 0.04 21,264 796


Oilseeds 0.06 9,735 573 0.10 9,735 972 0.13 9,735 1,288

Spices 0.03 68,871 1,763 0.05 68,871 3,746 0.06 68,871 3,967

Orchard Crops 0.04 39,084 1,501 0.04 39,084 1,501 0.04 39,084 1,601

Kharif II



Rabi

Local Boro 0.03 14,149 376 0.03 14,149 376 0.03 14,149 376

HYV Boro 0.47 25,359 12,015 0.55 25,359 14,019 0.58 26,528 15,501

Wheat 0.07 13,564 1,009 0.07 13,564 1,009 0.10 14,638 1,506

Potatoes 0.01 46,720 239 0.01 46,720 239 0.01 50,357 322

Pulses 0.29 10,666 3,044 0.24 10,666 2,512 0.24 10,666 2,522

Oilseeds 0.18 9,735 1,769 0.18 9,735 1,769 0.19 9,735 1,819

Spices 0.08 68,871 5,663 0.08 68,871 5,663 0.11 68,871 7,475


sub-total 56,140 63,484 72,583

Less Fixed Costs



sub-total 2,371 2,510 2,650

Net Farm Returns 53,770 60,974 69,933









Appendix G-2, Table 2d

d) Large Farm Farm Size: 3.50 hectares NARAIL



Kharif I

Broadcast Aus 0.88 8,741 7,687 0.88 8,741 7,693 0.88 8,741 7,649

Transplanted Aus 0.11 11,697 1,242 0.11 11,697 1,242 0.15 12,429 1,869

Broadcast Aman 0.98 9,369 9,204 0.98 9,369 9,204 0.94 9,369 8,777

Jute 0.37 8,891 3,334 0.37 8,891 3,334 0.35 8,891 3,105

Sugarcane 0.10 13,632 1,364 0.10 13,632 1,364 0.09 13,632 1,191


Oilseeds 0.14 8,781 1,206 0.23 8,781 2,045 0.31 8,781 2,711

Spices 0.06 64,578 3,857 0.13 64,578 8,196 0.13 64,578 8,678

Orchard Crops 0.09 33,360 2,989 0.09 33,360 2,989 0.10 33,360 3,188

Kharif II



Rabi

Local Boro 0.06 10,810 670 0.06 10,810 670 0.06 10,810 670

HYV Boro 1.11 19,635 21,707 1.29 19,635 25,328 1.36 20,327 27,714

Wheat 0.17 11,179 1,940 0.17 11,179 1,940 0.24 11,776 2,828

Potatoes 0.01 40,519 484 0.01 40,519 484 0.01 42,725 638

Pulses 0.67 9,712 6,467 0.55 9,712 5,336 0.55 9,712 5,358

Oilseeds 0.42 8,781 3,722 0.42 8,781 3,722 0.44 8,781 3,828

Spices 0.19 64,578 12,391 0.19 64,578 12,391 0.25 64,578 16,354


sub-total 107,474 121,852 139,161

Less Fixed Costs

Sharecrop Value 0 0 0


sub-total 1,800 1,800 1,800

Net Farm Returns 105,674 120,052 137,361



Water Management Fees 3.50 0 0 3.50 603 2,109




Future Without Project Future With Project


Present

Appendix G4, Table 7b

Foreign Local Taxes/2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 Total Costs Costs Duties

Civil Infrastructure Resectioning and Construction of Embankments 0 3,970 19,849 11,910 3,970 0 0 39,698 5,955 33,744 0 Khal Excavation 0 7,580 37,900 22,740 7,580 0 0 75,799 1,895 73,904 0 Rehabilitation of Regulators 0 426 2,128 1,277 426 0 0 4,256 426 3,831 0 Construction of Regulators 0 5,814 29,071 17,442 5,814 0 0 58,142 5,814 52,327 0 Check Structures 0 1,784 8,920 5,352 1,784 0 0 17,841 1,784 16,057 0 Water Retention Structure 0 1,904 9,522 5,713 1,904 0 0 19,043 1,904 17,139 0 Navigation Lock 0 0 0 0 0 0 0 0 0 0 0 Inlet and Outlet Structures 0 315 1,573 944 315 0 0 3,145 315 2,831 0 River Training Works 0 0 0 0 0 0 0 0 0 0 0 Irrigation Scheme 0 0 0 0 0 0 0 0 0 0 0 Upgrading Rural Roads 0 1,230 6,148 3,689 1,230 0 0 12,297 1,844 10,452 0 O&M during Construction 0 0 876 5,283 0 0 0 6,160 924 5,236 0 Transport and Equipment 0 2,297 5,359 0 0 0 0 7,656 5,742 1,914 0 Survey and Investigation 0 2,678 1,339 446 0 0 0 4,463 669 3,793 0

sub-total 0 27,996 122,685 74,796 23,022 0 0 248,499 27,272 221,227 0

Production Support Services Agricultural Development 0 0 9,468 6,325 6,325 6,325 6,325 34,767 3,094 31,673 0 Fisheries Development 0 0 4,709 2,837 2,837 1,871 1,871 14,125 1,610 12,515 0

sub-total 0 0 14,178 9,162 9,162 8,195 8,195 48,892 4,704 44,187 0Land Acquisition and Resettlement Land Acquisition 0 0 0 0 0 0 0 0 0 0 0 Resettlement and Rehabilitation 0 7,417 12,362 4,945 0 0 0 24,724 0 24,724 0

sub-total 0 7,417 12,362 4,945 0 0 0 24,724 0 24,724 0Project Management Support Design and Construction Supervision 0 8,574 8,168 8,168 7,366 0 0 32,276 936 31,340 0

sub-total 0 8,574 8,168 8,168 7,366 0 0 32,276 936 31,340 0Project Management Project staff 108 2,484 2,484 2,484 2,484 2,484 2,484 15,012 0 15,012 0 Vehicles and office equipment 0 7,335 0 0 0 0 0 7,335 5,127 836 0 Operating expenditure 0 1,519 1,519 1,519 1,519 1,519 1,519 9,114 2,233 6,161 0

sub-total 108 11,338 4,003 4,003 4,003 4,003 4,003 31,461 7,360 22,009 0

Base Cost 108 55,326 161,395 101,073 43,553 12,198 12,198 385,852 40,273 343,488 0

Physical Contingencies @10% 11 5,533 16,140 10,107 4,355 1,220 1,220 38,585 4,027 34,349 0

Total Cost 119 60,858 177,535 111,180 47,908 13,418 13,418 424,437 44,300 377,837 0

Capital Investment Costs - Narail, Constant 2004 Economic Prices (Tk '000)

Cost Item

2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 2035/36 2036/37 2037/38

916,354 930,099 944,051 958,211 972,585 987,173 ####### 1,017,011 ####### 1,047,750 1,063,466 1,079,418 1,095,609 1,112,043 1,128,724 1,145,655 1,162,840 1,180,282

798,425 810,401 822,557 834,896 847,419 860,130 873,032 886,128 899,420 912,911 926,605 940,504 954,611 968,931 983,465 998,217 1,013,190 1,028,388

117,929 119,698 121,493 123,316 125,165 127,043 128,949 130,883 132,846 134,839 136,861 138,914 140,998 143,113 145,260 147,438 149,650 151,895

9,869 10,017 10,168 10,320 10,475 10,632 10,791 10,953 11,118 11,284 11,454 11,625 11,800 11,977 12,156 12,339 12,524 12,712

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

9,869 10,017 10,168 10,320 10,475 10,632 10,791 10,953 11,118 11,284 11,454 11,625 11,800 11,977 12,156 12,339 12,524 12,712

63,145 64,092 65,053 66,029 67,020 68,025 69,045 70,081 71,132 72,199 73,282 74,381 75,497 76,630 77,779 78,946 80,130 81,332

49,858 50,606 51,365 52,136 52,918 53,711 54,517 55,335 56,165 57,007 57,863 58,730 59,611 60,506 61,413 62,334 63,269 64,218

13,287 13,486 13,688 13,894 14,102 14,313 14,528 14,746 14,967 15,192 15,420 15,651 15,886 16,124 16,366 16,611 16,861 17,113

23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063 23,063

18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459 18,459

4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603 4,603

2,467 2,504 2,542 2,580 2,619 2,658 2,698 2,738 2,779 2,821 2,863 2,906 2,950 2,994 3,039 3,085 3,131 3,178

148,155 150,308 152,494 154,712 156,964 159,249 161,569 163,924 166,313 168,739 171,201 173,700 176,237 178,811 181,424 184,076 186,769 189,501

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -109,340

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -109,340

16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371 16,371

4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507 4,507

1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101 1,101

-5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457 -5,457

16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522

16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 16,522 -92,818

131,633 133,786 135,972 138,190 140,442 142,727 145,047 147,402 149,791 152,217 154,679 157,178 159,715 162,289 164,902 167,554 170,247 282,319

Appendix G5, Table 2bDistribution Analysis and Poverty Impact Ratio for Narail, Tk '000 (2004 Constant Prices)

a) Distribution Analysis

Financial Economic Difference

Present Present (Econ. minus Hired Labour

Value Value Financial) Fin. Gain/Loss SWR effect Fin. Gain/Loss SWR effect SWR effect Fin. Gain/Loss SER effect/Tax

Incremental Benefits

Incremental Crop Benefits 626,464 595,450 -31,014 626,464 23,826 8,541 -63,381

Reduction in Crop Losses 48,360 51,328 2,968 48,360 1,091 610 1,267

Incremental Culture Fisheries Production 93,849 73,263 -20,586 93,849 1,456 814 -22,856

Incremental Capture Fisheries Production 29,594 26,635 -2,959 29,594 722 404 -4,086

Reduction in Damage to Houses and Infrastructure 12,090 12,832 742 9,878 273 2,212 152 317

Total Benefits 810,357 759,507 -50,850 684,702 25,190 125,655 2,178 10,521 0 -88,739

Costs

Civil Infrastructure -249,054 -206,827 42,226 13,089 -249,054 29,137

Production Support -41,268 -35,693 5,575 0 -41,268 5,575

Resettlement and Rehabilitation -24,441 -21,997 2,444 0 -24,441 2,444

Design and Construction Supervision -33,007 -27,128 5,878 0 -33,007 5,878

Project Management -29,519 -25,308 4,211 0 -29,519 4,211

Recurrent costs -77,900 -66,091 11,809 -26,486 -4,674 5,703 -46,740 6,106

Total Costs -455,189 -383,044 72,145 -26,486 0 -4,674 0 18,792 -424,028 53,352

Net Benefits 355,168 376,463 21,295 658,216 25,190 120,981 2,178 29,313 -424,028 -35,387

b) Poverty Impact Analysis

Beneficiaries Farmers Fishers Hired Labour Govt./Economy Total

PV Economic - PV Financial 25,190 2,178 29,313 -35,387 21,295

Financial Return 658,216 120,981 -424,028 355,168

Net Benefits 683,406 123,159 29,313 -459,415 376,463




Farmers Fishers Govt./Economy

Distribution of Project Effects

Report SWAIWRMP Water Supply

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