Report No 646a IND

Appraisal of Agricultural Research FILE COPYand Extension ProjectIndonesiaApril 8, 1975General AgricultureEast Asia & Pacific Projects Department

FOR OFFICIAL USE ONLY

Document of the Internatonal Bank for Reconstucuon and DevelopmentInternationatl Development Assocatton

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CURRENCY EQUIVALENTS

US$1 = Rupiah (Rp) 415Rp 1 US$0..002Rp 1,000,000 US$2,410

WEIGHTS AND MEASURES

1 metric ton = 1,000 kilograms (kg) = 2205 pounds = 0.98 long ton1 meter (m) = 29.37 inches = 3.28 feet = 1.09 yards1 hectare (ha) 2 = 10,O00 m2 = 2.47 acres1 square kilometer (km ) = 100 ha = 0.39 square mile

ABBREVIATIONS

AETE - Agency for (Agricultural) Education, Trainin* and ExtensionARD Agency for (Agricultural) Research and DevelopmentBAPPENAS = National Planning AgencyBIMAS = Mass Guidance Program for Self-Sufficiency in Rice and PalawJija

CropsBPPB = Estate Crops Research Institute, BogorBPPM = Estate Crops Research Institute, Medan (formerly RISPA=Research

Institute of the Sumatran Planters Association)CSIRO Commonwealth Scientific and Industrial Research OrganizationCRIA = Central Research Institute for AgricultureGOI - Government of IndonesiaIPB = Agricultural University, BogorIRRI = International Rice Research InstituteLIPI = Indonesian Institute of SciencesH = MillionNIC National (Agricultural) Information CenterPNP = State-Owned Estate EnterprisePTP = State-owned Estate Corporation operating under tne Commercial

CodeUSAID = United States Agency for International Development

GLOSSARY

Palawija = Field Crops other than PaddySungei = River

FISCAL YEAR

April 1 - March 31

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION PROJECT APPRAISAL

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS ...... .................... i - ii

I. INTRODUCTION ......**. ...*... .................... 1

A. Project Genesis .... ................. ...... 1B. Previous Credits 2............................ 2

II. BACKGROUND ................... 2

A. Agriculture in the Indonesian Economy ........ 2B. Present Status of Agricultural Research ..... 4C. Present Status of Agricultural Extension .... 7

III. THE PROJECT 9.................................. .... 9

A. General Description ..... 9.............. ..... 9B. Detailed Features ..................... 10C. Cost Estimates . ........................ ...... 12D. Financing ..... ............................... 14E. Disbursement and Flow of Funds .............. 15F. Procurement and Audit ...... ................. 15

IV. ORGANIZATION AND MANAGEMENT .................. ........ 16

A. Project Control and Operation ............... 16B. Staffing ............. 19C. Technical Assistance ........................ 20D. Fellowships ............ 21

V. ECONOMIC BENEFITS AND JUSTIFICATION .............. 22

VI. RECOMMENDATIONS ....... o.......... 9&o*ooo#9....... 24

Thiis report is based on the findings of a Bank appraisal mission to Indonesiain March 1974, comprising Messrs W. P. Panton, J.A.M. Loup, (Bank) and A.H.Moseman, D. Shoesmith (consultants), and on data in the IRI Research Insti-tute, Inc. preparation report. Messers Panton and Shoesmith returned toIrd&nesia in September-October to complete the appraisal. The mission wasgreatly assisted by Bank Resident Mission representatives.

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ANNEXES

1. The Agricultural Economy

2. Presidential Decrees on Departmental Organization

3. IMinistry of Agriculture Organization (Charts 1-3)

4. Organization of Agricultural Research

5. Research Personnel Grades and Salaries

6. National Research Program for Rice

7. National Research Program for Palawija Crops

8. National Research Program for Highland Vegetables

9. National Research Program for Rubber

10. National and Regional Agricultural Information Program

11. Terms of Reference for Chief Research Advisor

12. Terms of Reference for Financial Administrator and EquipmentProcurement Specialist

13. Terms of Reference for Research Program Advisors and ResearchSpecialists

14. Terms of Reference for Agricultural Extension Advisor andExtension Specialists

15. Terms of Reference for Fellowship Awards

16. Fellowships Program

17. Civil Works Program

18. Project Cost and Disbursement

19. Economic Benefits and Justification

MAP

Indonesia, Showing Project Research and Information Centersin relation to Rainfall. (No. 11429)

INDONESIA

AGRICULTURA4 RESEARCH AND EXTENSION

SUMMARY AND OONCLUSIONS

i. The proposed six year project is designed to upgrade agriculturalresearch capability in commodities of major importanco to the Indonesianagricultural sector. It is also designed to strengthen the agriculturalextension service and thereby ensure that the rosults of research are madeav4i1able to and utilized bY the farmers. The project would support a reor-ganized research and extension system recently introduced by the Governmentof Indonesia (GOI) through provision of improved facilities and of fellow-ship programs and consultant specialist staff. Considerable emphasis isgiven to the strengthening of research and extension capabilities in theagre-acologic regions, in order to focus the efforts of the research andextension personnel on the specific problems of the different farming zones.

iie The project would strengthen productionr-oriented research programsfor four commodity groups of importance to Indonesia, namely rice, field orpalawija crops (princIpally maige, soybean, sorghum, and cassava), highlandvegetables, and rubbor. The programs would be carried out principally atfour centors on carefully chosen representative sites within the main regionsof crop concentration. A National and nine regional agricultural informationcenters would be establi8hed to facilitate the assembly and distribution ofinformation of practical or economic sIgnificance emanating from the researchprograms and other sources.

iii. About 170 Indonesianl graduate scientists would he provided withfellowships for treiping, either abroad or in Indonesia, for periods varyingfrow a few months to 4 yegrs, About 20 of these fellowships would be forparvonnel engaged in research programs other than those supported directlythrough the project. Provision has also been made for about 76 manyears ofhiglay qualified consultant research and extension specialists for periodsvaryiug from a few weeks to 4 years, who would compensate for the currentscarcity of Indonesian personnel with the requisite training and experienceneeessary to support the research and extension programs under the project.

kv. Total project costs are estimated at US$46.6M (Rp 19.3 billion),mith1- ebout 46X foreigp exchange component. Bank finan 9 ing would be on the

ais4 of foreign exchange costs. Civil works contracts for the research'avi :gnformation centers would be awarded on the basis of internationalcom.atitive bidding in the case of the larger research centers, while theaomaller contracts would be awarded on the basis of competitive b.idding-Avertised locally, and with no restriction on bidding by foreign con-tractors, in accordance with local procedures which are satisfactory tothe Bank. Research and information equipment would be procured throughprasant shopping. The Government of Indonesia (GOI) would contract withan .rganization or organizations with appropriate international experiencefor the recruitment, administration and servicing of the consultant researcharid extension personnel and for the administration of the fellowships pro-grams.

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v. The specific research and extension components of the projectwould be implemented within the context of a major institutional reformof the Ministry of Agriculture which transfers responsibilities for re-search and extension from the five directorates general of the Ministryto two new agencies, the Agency for Research and Development (ARD) andthe Agency-for Education, Training and Extension (AETE) respectively.

vi. The reorganization of extension services within AETE will completea reorganization which commenced with the establishment of an Agency forEducation and Training, supported by IDA Credit 288 - Agricultural Education.The creation of an additional bureau, for extension, within this agency willachieve the necessary organizational structure, and the support provided foragricultural information centers through the project will pave the way forfurther Bank support now being considered for extension at the provincialand farm levels.

vii. Investment decisions in agricultural research are justifiedmainly by the need to establish an adequate national research organizationcapable of developing or adapting the technology required for the fullestdevelopment of Indonesia's agricultural resources. The size of the projectstrikes a balance between the size of the task, the present research capa-bility and the speed with which it can be effectively expanded through con-sultant assistance and training programs. Quantification of project bene-fits is difficult in view of the uncertainties inherent in research.Nevertheless, experience has demonstrated that properly executed researchcan give very satisfactory, even spectacular, rates of return. Leavingaside the possibilities for revolutionary discoveries, there are stronggrounds for believing that, by concentrating available research resourceson a few important commodities, and programming the investigations towardsthe successful adaptation in Indonesia of discoveries that have provedsuccessful in other countries, a favorable rate of return will be assured.The project has as its objective an improvement in conditions for allIndonesian farmers (between 15 and 18M), their families and employees.Its ultimate success will be measured in terms of increased production andthe rate and extent to which improved production techniques and systems aretaken up by the farmers, and especially the smaller farmers, who dependheavily on the production of commodities selected for improved researchthrough the project.

ix. Since 1969 the Bank Group has provided funds for 20 agriculturalprojects totalling US$391.6M, (4 have been to public sector estates; 6 forirrigation rehabilitation; and 10 for a variety of projects including fertil-izers; seeds; smallholder rubber; smallholder tea; sugar industry rehabili-tation; beef cattle; agricultural education and fisheries). These projects,many of which concern rehabilitation of agricultural infrastructure, are sig-nificantly improving production conditions. This project would complementmany of these earlier projects by supplying improved inputs such as seeds,planting materials, and packages of practices adapted to both large and smallscale farming operations.

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xo Subject to appropriate assurances, the project is suitable for aBanrd Loan of US$21.5M for a term of 25 years including 8iX years grace andwith the principal disbursed over a six year period. The borrower would bethe government Qf Indonesia.

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION PROJECT

I. INTRODUCTION

A. Project Genesis

1.01 In recent years the Government of Indonesia (GOI) has been concernedabout the effectiveness of its agricultural research and extension activitiesand the contribution they make towards improving the agricultural sector ofthe economy. A major constraint has been the lack of production-orientedagricultural research based on improved technology, which in turn has limitedthe usefulness of the extension services for supplying sound practical infor-mation and materials designed to profitably increase production.

1^O2 In 1969 the GOI, with assistance from the United States Agency forInternational Development (USAID), established an Agricultural Research SurveyTeam to assess agricultural research resources and make recommendations fortheir strengthening. The team recommended the setting up of a national agri-cultural research organization formed by grouping the various central researchiListitutes into one body. Such an organization would be better able to launchand support multidisciplinary research programs in major crop and commodityareaLS, decentralize agrilultural research in the regions and provinces accord-4Uag to their need, forge stronger links between research, education and exten-sn and build a well-trained, well-paid cadre of fully-supported scientists.

The recommendations, approved in principle by GOI, proved difficultto inmplement. These difficulties led to GOI requesting the Bank Group toassist in devising a suitable national organizational and administrativestructure and in determining whether a project suitable for Bank Group sup-port could be identified. A Bank mission accordingly visited Indonesia to-wards the end of 1972. On the basis of the interest shown by GOI an IRIResearch Institute Inc. preparation team proceeded to Jakarta in July, 1973,followed by a Bank appraisal mission in March 1974 and a smaller follow-upappraisal mission in September 1974.

1.04 Several important steps were taken by GOI during this period whichconfirm that the need for reorganizing agricultural research and extensionwas clearly appreciated. Substantial institutional reforms have been ini-tiated to provide conditions for developing a viable agricultural researchanid extension system oriented towards accelerating the growth of the agri-cultural sector.

1.05 GOI has appointed a new cabinet level Minister of State for Re-search with inter-ministerial responsibility to bring about administrativeand financial reform of research in the various ministries. His approvalis required of all ministries research budgets prior to National Planning

Agency (BAPPENAS) approval.

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1.06 On August 26, 1974 two Presidential Decrees (Annex 2) whichauthorize a basic organizational reform of GOI ministries, were ratified.These decrees directed, among other things, the establishment of an Agencyfor Research and Development (ARD) and an Agency for Education, Trainingand Extension (AETE) within the Ministry of Agriculture. The remainder ofGOI fiscal 1974/75 was a period of transition during which the agency heads,each with a nucleus of senior staff, were appointed, and made preparationsfor the transfer of research and extension responsibilities from the direc-torates general to the new agencies. The heads of ARD and AETE assumed fullcontrol for all GOI ordinary and development budget financed operations intheir areas of responsibility with effect from April 1, 1975, on the commence-ment of fiscal 1975/76.

B. Previous Credits

1.07 The Bank Group has made 37 credits and 6 loans to Indonesia, total-ling US$561.8M and US$317.5M respectively. Twenty projects totallingUS$391.6M, were for agriculture. Four were for rubber, oil palm and tearehabilitation and development in the Government estate sector (DY 1969, 70,71 and 72). Other credits were for: irrigation rehabilitation (FY 1969,70, 71, 72, 74 and 75); fertilizer production (FY 1970 and 75); fisheries(PY 1971 and 74); seeds (FY 1971); agricultural education (FY 1972); beefcattle development (FY 1973); smallholder and private estate tea (FY 1973);smallholder rubber (FY 1973); sugar industry rehabilitation (FY 1973).

II. BACKGROUND

A. Agriculture in the Indonesian EconomY

2.01 Agriculture accounts for about half the gross national productof Indonesia (Annex 1). The sector contributes about half the foreignexchange earnings and provides two-thirds of the employment. Most farmersare smallholders with about 70% of the farms less than one hectare in sizeand averaging only 0.6 to 0.7 for Java, Madura and Bali. These three islandscontain more than 80% of Indonesia's 120 million population, which accountsfor the high population density of 565 persons per km2 (1971 figures).

2.02 Indonesia requires increased agricultural productivity to meetcontinually expanding domestic requirements and to improve foreign exchangeearnings through exports. GOI recognizes this need and has launched a majoreffort to increase production of paddy, the most important food crop (8.5Mha) which presently accounts for 50% of the value of agricultural production.With the aid of the GOI Bimas program (a mass guidance program for self suf-ficiency in foodstuffs) which includes credit incentives and technological

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and extension support to rice producers, production is estimated to have in-creased at an average of 4.4% annually between 1968-73. National yield aver-age is presently around 2 ton/ha (1973) which is low compared with Malaysia(2.5 ton/ha) and Australia (more than 5 ton/ha).

2.03 The other field crops, called palawija crops in Indonesian becauseof t1neir rotational relationship with paddy, have not kept pace with paddyand ia some instances a decline in production has occurred. The emphasison paddy through the BIMAS program has caused a shift in land use from otherfiel6 crops into paddy particularly on densely populated Java. Price in-creases in some of these second crops including soybean and groundnut, aswell as livestock products, coconut and coconut oil in rural markets reflectthe failure of production to keep pace with demand. In order to encourageproduction a new BIMAS program was implemented in the 1973/74 planting searson to provide support for maize, soybean and groundnut.

2.04 Maize covers the second largest area of land (about 2.6M ha). Thelow yields (about 1.0 ton/ha (1971) compared with 5.5 ton/ha in the USA)indicate the need for substantial inputs of improved technology to increaseproductivity. Other food crops which occupy large areas are cassava (1.5Mha in 1971), fruits and vegetables (estimated at 1.2M ha), and soybean (0.6M ha). East Java is the main maize area with about one million hectarescompared to 500,000 ha in Central Java and 350,000 ha in South Sulawesi.Maize is considered to have a good export potential, with some sourcesforecasting exports of one million ton in 1980. Sorghum is not grown ex-tensively at present but prospects are promising particularly in the sparselypopulated outer islands.

2.05 There is need to emphasize increased production of maize, oilseeds,casszva, pulses and sorghum for dry season cropping to achieve more effectivewater use. Although maize is used mainly for human consumption it could, withcassa.a, sorghum and soybean, be used as a source of feed for livestock par-ticularly if plans for a substantial poultry industry materialize. SoybeancoulcI also meet some of the increased world demand for feed grains and oils.Prcdufction of soybean is expected to increase to one million tons by 1980 ofwhich 200,000 to 400,000 might be exported. There is also a need to strengthensuppOrt for some traditionally produced crops (sugar, tea, rubber, oil palm,live3tock and coconut) and for other highly promising commodities (forestryproduzts, fisheries).

2.06 Rudber accounts for 10% of the value of production and is secondto pE.dy in importance. It is a major foreign exchange earner accountingfor F3ome 55% of the total value of agricultural exports in 1970. Roughlytwo-thirds of rubber production is in the hands of smallholders with aver-age yields of 0.33 ton/ha compared to 0.47 ton/ha on estates. The environ-ment, particularly in Sumatra and Kalimantan, is very favorable for growingrubber yet Indonesia is second in production to neighboring Malaysia, a muchsmaller country, where smallholder and estate yields average 0.56 and 0.93ton/ha respectively. In 1970 US$213.4 million was received for export rubber

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yet output projections indicate a decline from 30% of world production to 20%in 1980. This suggests the need for an intensive effort in replanting andimproved cultivation practices to bring about increased production particu-larly of the smallholders.

B. Present Status of Agricultural Research

2.07 Agricultural research is carried out mainly within the Ministryof Agriculture. Until recently (see para 1.06) fifteen institutes camedirectly under the five directorates general, while three PNP/PTP researchunits were indirectly controlled by the Directorate General for EstateCrops. Additional support for agricultural research comes from the Univer-sities, the Indonesian Institute for Science (LIPI) and private growers.Funds for research are provided principally from the GOI ordinary and devel-opment budget, supplemented by cess funds for certain tree crops. 1/

2.08 Support is also received from approximately 17 foreign donors whoprovide assistance to some 16 research organizations. There has been littlecoordination of this support and in certain instances there is duplicationof effort. The foreign donors provide assistance to nine of the 15 Ministryof Agriculture Research Institutes, three PNP/PTP supported research centersand to at least three Universities. Data are incomplete, but it is estimatedthat the total outside support since 1968 exceeds US$20 million equivalent.Specific programs supported by foreign donors include rice (IDA Credit 246-IND, U.S.AID/Ford Foundation, Japan, Netherlands); maize and soybean (IDACredit 246-IND); rubber (IDA Credit 194-IND, UNDP/FA0, Germany); oil palm(IDA Credit 194, Germany); animal bacterial and viral diseases (Australia);animal research (Australia); fisheries (Netherlands, UNDP, France, Japan);tea (IDA Credit 259-IND, Netherlands); sugar (IDA Credit 405-IND); and plantprotection and horticulture (Netherlands).

2.09 GOI and the Government of Australia have recently approved proposalsfor a ten year project to set up an Animal Research Institute at Bogor forresearch in animal breeding and selection, nutrition, and diseases on chick-ens, ducks, goats, sheep, cattle and buffaloes. The senior research staffand the officer in charge for at least seven years would be provided by theAustralian Government during which time Indonesians will receive on-job-train-ing or be trained in Australia through fellowships under the Colombo plan.

1/ Cess is paid on rubber, palm oil, copra, kapok, tea, coffee, tobaccoand quinine. They are collected by a Cess Council which uses theseresources mainly to finance rural infrastructure improvements andagricultural projects in the main production regions of the severalcrops. In addition, the Cess Council finances, partly or totally,three agricultural research institutes two of which are principallyconcerned with research on rubber, and one on tea and cinchona.

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Investment is estimated at US$14.2 million. There is also a UNDP/FAO pro-posal pending for a coconut industry development project which has a majortechnology compoaent comprising a tall-dwarf hybrid breeding program andassociated research including performance trials, production and processingmethods and intercropping, at an estimated cost of US$2.8M.

2.10 IDA has provided project related assistance for research since 1969which amounts to about US$4.1 million. It was recognized that such supportwas needed to effectively assist production increases in rice, maize, sorghum,soybean, rubber, oil palm, tea, sugar, livestock and beef cattle, since atthe time these projects were initiated, it would have been premature to pro-vide for a comprehensive research and extension project.

2.11 Food crops research has until recently been the sole responsibil-ity of the Directorate General of Agriculture in three research institutes(Annex 4, Table 1). The Central Research Institute for Agriculture (CRIA)is the most important and largely concentrates on rice research. Six for-eign donors are providing assistance to CRIA for rice research and althoughit is generally recognized that better coordination is needed, these cooper-ative efforts have provided Indonesia with promising paddy varieties. Fur-thermore, it is the most production-oriented food research program inIndonesia, being purposefully designed towards increasing the rice produc-tivity of the farmers. Specialists provided by International Rice ResearchInstitute (IRRI) under contract with USAID, Ford Foundation, NetherlandsGovernment and IDA are helping to develop the capability of Indonesianscientists. Much less attention has been given to research on other foodcrops including maize, sorghum, cassava and soybean. A program which bene-fits from Netherlands Government assistance is underway on highland vegeta-bles research (A&=ex 8).

2,12 Research on estate crops is carried out by several different agen-cies. The Directorate General of Estate Crops has until recently controlledthree institutes responsible for research on rubber, oil palm, tea, coffee,cocoa and cinchona. It also controlled an Institute for Industrial Cropsresponsible for research on coconut, tobacco, fiber crops, oil crops, essen-tial oils and spices. The Directorate General of Estate Crops is also indi-rectly responsible for a number of PNP/PTP's which support research on estatecrops including rubber, oil palm, sugar and tea. A limited amount of researchis also done by privately-owned rubber and oil palm plantations, usuallyoriented to their own needs.

2.13 Research on most other agricultural comodities has been largelyneglectel. There is little relevant livestock production research with mostattention being given to vaccine production. Currently, outside donors aresupporting the two animal disease institutes, and very substantial supportis forthcoming for a new animal research institute (see para 2.09). Budget-ary support for forestry research has been very small in the past, even thoughthe forestry staff appear to be a dedicated group eager to undertake morerelevant research. Plans for improving fisheries research with bilateralassistance have been drawn up and if they materialize there would appearlittle need for additional outside support.

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2.14 Several of the research institutes within the Ministry of Agricul-ture have been in existence for many years and some of their past contribu-tions to tropical agricultural research during the early twentieth centuryhave been of international significance. Inadequate operating budgets, lowsalaries, and inadequate training of staff in recent years have seriouslyreduced the quality and quantity of research. Very little production-orientedresearch designed to benefit the farmers has been undertaken. Of approximately400 graduate staff at all research institutes, about 100 hold advanced degrees,of which only 13 hold Ph.D.'s. Many of the research institutes are more in-volved in providing services and carrying out regulatory functions ratherthan conducting useful research.

2.15 Most of the professional staff at the research institutes havereceived their undergraduate education at one of two major agriculturaluniversities. The most important is the Institute Pertanian Bogor (IPB)which is entirely devoted to agriculture. It has a student enrollment ofabout 2,000 and turns out 150 to 180 graduates annually with Ir degrees(Indonesian equivalent to B.Sc) after a six year course. It has six facul-ties which include Agriculture, Veterinary Medicine, Animal Husbandry, Fish-eries, Forestry, and Mechanization and Processing. The professional staffnumbers 442 and it has the greatest number of Ph.D.'s at one location inIndonesia (78). The other major university, Gadja Mada, is located atJogjakarta in Central Java and has 17 other faculties besides agriculture.The faculty group of agricultural sciences has 6 faculties which includeAgriculture, Forestry, Animal Husbandry, Agricultural Engineering, Veteri-nary Medicine and Biology. It has well over 1,000 students and turns outmore than 100 graduates annually after 6 years of training. Both theseagricultural faculties are being strengthened with outside support fromUSAID, the U.S. Midwest Consortium of Universities and the RockefellerFoundation. There are other regional agricultural colleges but the grad-uates must go to IPB or Gadja Mada University for the last two years toreceive the Ir degree. Most of the graduates from these universities areabsorbed into the Ministry of Agriculture.

2.16 The sources of research funds for staff compensation and for opera-ting and capital budgets differed among the five Directorates General. Thusthe Directorates General of Agriculture, Livestock, Forestry and Fisheriesreceived all their research funds from budgetary appropriations. The Direc-torate General of Estate Crops received part of its research funds from bud-getary appropriations and part from a cess on export crops. Accordingly,the research staffs of the estate crops institutes received higher salariesand had more operating funds.

2.17 The equivalent of about Rp 2.52 billion (US$ 6.08 million) was pro-vided to the Ministry's five Directorates General for research in 1973/74.Individual Directorate budgets for research ranged from Rp 126 million(US$303,000) for fisheries to Rp 1,000 million (US$2,410,000) for agricul-ture. Expressed as a percentage of total budget, funds allocated for re-search varied from 11% in the Directorate General of Fisheries to 64% in theDirectorate General of Estate Crops. Total Ministry of Agriculture research

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funds amounted ,o about 0.014% 1/ of the value of agricultural production(Annex 4, Table 2). The proportion of annual research budget available perprofessional researcher is higher in the PNP/PTP research centers than inthe Ministry of Agriculture Research Institutes. In 1974 it was a respecta-ble US$52,200 equivalent at the Pasuruan Sugar Experiment Station but onlyUS$19,000 equivalent for CRIA (Annex 4, Table 3). Funds available per re-searcher at the universities are negligible. Some research talent is beinglost to Malaysia where salaries are about two or three times higher thanthose currently earned in comparable research appointments in Indonesia.For GOI fiscal 1973/74 about Rp 1.54 billion (US$3.73 M) was provided tothe institutes now being regrouped under ARD. The recently announced totalbudget for fiscal 1975/76 for these same institutes atounts to Rp 5.98 bil-lion (US$14.42 M), equivalent to a 300% increase in two years.

2.18 Except for research staff in the Directorate General of EstateCrops, all research workers within the Ministry of Agriculture receive asalary related to level of education and according to stepwise grade levelsestablished for all government employees. A 1974 presidential decree increasedthe salary of all civil servants with effect from April 1, 1974. On thisoccasion an advantage was given to research workers and a few other favoredcategories including judicial officials and some teachers whose salaries wereincreased more than that of other civil servants (Annex 5). An additionalincrease, applicable to all government servants, was granted on January 1,1975. These salary rates are supplemented by "honoraria" the level of whichhas varied between institutes and between projects to which individuals maybe assignedef An important move towards harmonizing salaries and other allow-ances within ARD and raising them to a level sufficient to attract and retainhigh quality professional staff has resulted from the recent approval ofmonthly honoraria levels for fiscal 1975/76 between Rp 75,000 (US$180) andRp 30,000 (US$72) per month according to grade. As a result, commencingApril 1, 1975 t:he monthly take-home pay for scientific staff will vary froma high of about Rp 170,000 (US$410) for senior scientists to a low ofRp 609000 (US$145) for assistant scientists. These rates are a consider-able improvement on those existing at appraisal and have helped considerablyto narrow the gap between government scientific staff and those with equiv-alent qualifications in the private sector.

C. Present Status of Agricultural Extension

2.19 Each of the five Directorates General had their separate agricul-tural extension service up to the end of GOI fiscal year 1975. This occa-sionally led to extension workers representing as many as three differentdirectorates contacting the same farmers. From the provincial level down-ward through the district (kabupaten), the sub-district (kecamatan) and the

1/ Compared to a worldwide average of 0.874% for developed and 0.259%for developing countries; for Southeast Asia, the average is 0.24%.

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village (desa) level the extension workers are primarily funded by localgovernment but received overall direction from the national directoratesgeneral extension staff.

2.20 The largest directorate of extension was in the Directorate Generalof Agriculture. They were primarily concerned with operating small demonstra-tion farms of about 3 ha involving 10 to 20 farmers, demonstrating techniquesrecommended on the basis of small field trials carried out by the Directorateof Techniques, which was responsible for testing out research findings inmultilocation trials with cooperative farms of 0.1 to 0.5 ha size. TheDirectorate of Production then had the responsibility of propagating theimproved techniques, as determined by the Directorate of Techniques and ofExtension, on a larger scale with farmers in areas of 300 ha.

2.21 The Directorate of Extension was also involved with farmer train-ing and provision of short courses at more than 200 rural extension centersthroughout the country. Until very recently, no university trained exten-sionists were located at the district or sub-district level or at the ruralextension centers. The education level of the 13,000 extension workers islow with some 55% having elementary school (6 years) education or less in1970 (Annex 10, Table 5). Salaries, which are geared to education levels,are also low.

2.22 In the past many extension workers at the sub-district and villagelevels spent more time collecting data on crop production and performingother regulatory or administrative tasks than in providing crop-orientedproduction services to farmers. Many of these services are gradually beingtaken over by credit agency staff providing credit for fertilizers, seedsand pesticides.

2.23 The extension services are involved in the BIMAS program for in-creasing paddy and palawija crop production. In 1973/74 it was responsiblefor the distribution of Rp 11 billion (US$26.5 M) in credit through creditagencies to small farmers. Extension workers assist in the program byteaching farmers how best to use the package of materials and practices.Agricultural university students have also been used for the same purpose.

2.24 Government has recognized the need to upgrade the capability ofits extension workers and the Agricultural Education Project (IDA Credit288) is establishing training centers for this purpose. This project isproviding support, inter alia, for 13 agricultural in-service trainingcenters and one Agricultural Training Institute. These training centersand institute have been under the direction of the recently formed Agencyfor Education and Training with the Ministry of Agriculture, now renamedthe AETE following the issuance of Presidential Decrees 44/74 and 45/74(Annex 2).

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III. THE PROJECT

A. General. escription

3.01 The project would strerngthen national production-oriented agricul-tural research programs in commodities of importance to Indonesia. It wouldalso assist with the transfer and uptake of research information by producersthrough the establishment of agricultural information centers. Four commoditygroup research programs would receive support through:

(a) training of Indonesian scientists both locally and abroad;

(b) provision of foreign specialists on short and longer-termassignments; and

(c) construction and equipment of improved research facilitiesat carefully chosen representative sites.

To provide an appropriate organizational structure for strengthening researchcapability and efficiency, an Agency for Research and Development (ARD) hasbeen established within the Ministry of Agriculture under a Governing Boardchaired by the Minister. This Agency, with a headquarters now being construc-ted near Jakarta, is responsible for all GOI ordinary and development-fundedresearch activities within the Ministry of Agriculture. The Head of ARDis also responsible for the cess funded agricultural research institutesthrough his chairmanship of an Executive Committee of the Governing Board.In order to ensure that the results of production-oriented agriculturalresearch are conveyed to farmers, a national and nine regional informationcenters would be established to assemble and communicate information ofpractical or economic significance by audio-visual means. These centerswould be established within a second new agency, the Agency for Education,Training and Extension (AETE) also with headquarters near Jaklarta. Improvedlinkage between research and the farmers would be accomplished by the loca-tion of subject matter specialists at each research center who would beresponsible for assembling research findings into packages of practicessuitable for extension purposes and passing these on to the extension serv-ice through regular contacts, including participation in extension training.

3.02 The project would train about 170 Indonesians abroad and inIndonesian higher training institutions. Foreign specialists for periodsvarying from a few weeks up to four years (total 76.5 manyears) would alsobe provided. Total project costs, disbursed over five years, would beUS$46.6 of which US$21.5 would be the foreign exchange component (para 3.19and Annex 18, Table 2).

3.03 The Head of ARD would have overall control of all Ministry ofAgriculture research programs; coordinate aid from bi-lateral and internationalsources; and be responsible for policies affecting research personnel andstaffing.

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B. Detailed Features

Crop Research Programs

3.04 I1ational production-oriented crop research programs would bedeveloped for the following crops:

(a) Rice, based at an expanded center to be developedat Sukamandi, West Java, jointly with (b);

(b) Palawija Crops, primarily maize, sorghum, soybean,and cassava based at a joint research center atSukamandi, West Java;

(c) Highland vegetables, primarily potato, tomato,European cabbage, and highland bean, based at anexpanded research center at Margahayu near Bandung,West Java; and

(d) Rubbers, based at a new research center to be developedat Sungei Putih estate, North Sumatra, which will bedeveloped as the main experimental plantation.

3.05 An outline of each research program is given in Annexes 6 to 9.Building and equipment needs are shown separately in Annex 17. Each researchprogram would be staffed by a well balanced team of technical personnel. Ex-isting Ministry of Agriculture research staff will provide the nucleus estab-lishments, while other personnel recruited principally from Indonesian agri-cultural universities will supply additional manpower for the project.

3.06 The directors of each of these research programs and the majorityof the staff, including all professional staff, would be based at thecorresponding research centers to be constructed under the project, butsmaller groups of senior and junior technical personnel would be based atregional stations, also controlled by the program directors. Several ofthese regional stations have already been identified and the remainder willbe selected from the large number of existing stations and other land hold-ings now under the control of the several institutes which have been re-grouped into ARD.

3.07 The locations for the national centers and regional stations havebeen determined on the basis of their situation in relation to the main pro-duction areas of particular crops, with proximity to educational, medicaland other amenities being an important secondary consideration. Great carehas been taken to ensure that the sites selected for the three centers arewell suited and representative in terms of topographical and soil charac-teristics for the crops included in the programs. Special attention wouldbe given to amenity improvement where existing facilities are poor, espe-cially at Sukamandi which is a small town where improved educational andhealth services and recreational facilities commensurate with the reasonable

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aspirations of the professional staffs and their families must be provided,preferably within the nearby National Seeds Corporation (NSC) compound. Landat all proposed centers and stations belon4,s to GOI, so that no problems ofsite acquisition should arise, although transfers of title from other GOIagencies to ARD or AETE would be necessary in some cases and assurances weregiven that these would be carried out expeditiously.

3.08 The four commodity groups were selected because of their importanceto the national economy and the need to strengthen research efforts in theseareas. All these commodities involve primarily smallholder operations. Othercomm dities such as oil palm, coconut, livestock, sugar, tea, forestry andfisheries are receiving or are expected to receive outside support (see paras2.08 through 2.10).

Research Objectives and Linkage wfth International Research Centers

3.09 Major research objectives proposed are provided in Annexes 6through 9. Tie-ins with international cesearch centers such as Interna-tional Rice Research Institute (IRRI) in the Philippines, Centro Interna-cional de Mejoramiento de Maiz y Trigo (CIMMYT) in Mexico for maize,International Crops Research Institute for the Semi-Arid Tropics (ICRISAT)in India for sorghum, Centro Internacional de Agricultura Tropical (CIAT)in Coloibia and the International Development Research Center (IDRC) inCanada for cassava, the Asia Vegetable Research and Development Center(AVRDC) in Taiwan for soybean, tomato and potato, and Centro Internacionalde la Papa (CIP) in Peru for potato will be fostered for training, researchinformation and materials.

Agricultural Information Centers

3.10 In order that the results of production-oriented agriculturalresearch of economic significance reach the largest numbers of farmers,the project would provide for the establishment of a national and nineregional agricultural information centers to assemble and propagate infor-mation of practical and economic significance accruing from research andother sources by all audio-visual means. The location of each center isindicated below.

Province/Region Location

National Ciawi, near BogorEast Java Wonocolo, near SurabayaCentral Java Ungaran, near SemarangWest Java Kayuambon, near BandungWest Sumatra Bukittinggi, near PadangNorth Sumatra Tanjung Morawa, near MedanLampung TanjungkarangSouth Sulawesi Maros, near UjungpandangSouth Kalimantan BanjarbaruWest Nusa Tenggara Lingsar, near Mataram

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3.11 Details of the program, priorities, and staffing requirementsare given in Annex 10. Building and equipment needs are given in Annex 17.The National Information Center (NIC) which would be a part of the NationalInstitute for Agricultural Education, Training and Extension would be situ-ated at Ciawi near Bogor since the most extensive agricultural library, thegreatest concentration of agricultural research organizations, and the fore-most agricultural university in Indonesia are to be found in this city. Thisconcentration of facilities provides the most suitable location for gatheringinformation, both local and international, for distribution purposes.

3.12 The regional centers would be constructed in close proximity torelated facilities of the Ministry engaged in extension, training, or re-search activities, mainly at the provincial level. Site acquisition willnot be a problem as the land requirement for each center, which is lessthan 2 ha, can be met in alI cases on available GOI land adjoining train-ing centers or related extension complexes.

Extension Objectives

3.13 The primary function of the agricultural information centers wouldbe to prepare and distribute audio-visual aid materials for use by extensionworkers in production accelerating programs. Such materials would includeradio scripts and tapes, movie films, film strips and slides, posters,pamphlets, news stories and press releases in a wide range of native ver-naculars.

C. Cost Estimates

3.14 Total project cost, including contingencies, is estimated atRp 19.3 billion (US$46.6 million) of which 46.3% would be the foreignexchange component. Details, which are summarized below, may be notedin Annexes 6 to 10, 17 and 18. The agricultural research componentaccounts for about 80% of total cost and the agricultural informationcomponent about 20%. Together the capital inputs (buildings, equipmentand vehicles) make up 50% of the total project cost; the technical serv-ices make up another 25%; and the land acquisition and incremental estab-lishment cost amount to 25%. Establishment costs comprise operating costsfor personnel, maintenance and non-durable goods.

3.15 Capital inputs cost estimates are based on information obtained inIndonesia and experience in operating international research centers. Thecosts for buildings, services and utilities, housing, research and informa-tion centers equipment were estimated on the basis of recent cost levels inIndonesia given by the Ministry of Public Works and architects and quantitysurveyors from the private sector. The nature and extent of existing facil-ities have also been taken into account. The estimates for furniture, farmdevelopment, field equipment and vehicles reflect similar experiences ininternational research centers. A breakdown of these costs is shown inAnnex 17.

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3.16 Estimates for the costs of technical services is based on inter-national experience with professional level specialists and fellowshiptraining. Some flexibility has been allowed for in the case of consultantresearch specialists and fellowships to be engaged in the research programs,and the numbers assigned to each center are intended to be indicative only(Annex 6 to 10 and 16). This flexibility is necessary because the require-ments of the research programs for specialists and fellowships can only befirmed up when the Indonesian staff has been reviewed by the new ARD man-agement with a view to its most effective deployment among the programs.Technical services include provision for in-service training courses onresearch methods and management, and English language, to be conductedwithin ARD for all senior staff with the help of a small number of consult-ant specialists. Satisfactory completion of certain of these courses wouldbe a prequalification for fellowship awards. The project will also contri-bute to the improvement of library facilities and services within ARD.

3.17 Establishment costs for the research centers have been estimatedby using a ratio of US$30,000 per professional (Annexes 6 to 9). This ratiois comparable to those of international research centers but is higher thanmost of the existing Indonesian research centers 1/. This higher level hasbeen retained, however, to ensure adequate funding of research to be carriedout under this project. Reasonably firm cost estimates are possible for theinformation centers, based on a knowledge of their functional requirements(Annex 10, Table 4). In all cases, the establishment cost of the researchcurrently executed has been appraised and subtracted from the total estab-lishment cost, so that the incremental establishment cost only was taken aspart of the project cost.

3.18 In view of the uncertainties bearing on building requirements, in-cluding such amenity improvements as staff housing, schools, health clinicsand recreational facilities, a physical contingency of 20% was taken forthese components. A physical contingency of 5% was applied for all othercomponents including the technical services. The total physical contingen-cies amount to 10.5% of the base project cost, and the price contingencyto 42% of the base cost. Price contingencies are based on projected futureinternational and local price increases (Annex 18, Table 4).

1/ The most accurate estimates obtained by the mission were for the EstateCrops Research Center at Medan and the PNP Oil Palm Research Center atMarihat. In both cases the ratio of operating cost per professionalwas around US$20,000.

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3.19 Project cost estimates, details of which are given in Annex 18, aresumarized below:

For-eign %

Million Rupiah Thousand US Dollars Ex- BaseLocal Foreign Total Local Foreign Total change Cost

Capital input

Buildings & Housing 3,005 2,002 5,007 7,240 4,826 12,066 40 39Research Equipment 52 461 513 124 1,112 1,236 90 4Furniture 24 10 34 57 24 81 30 -Farm Development 134 -76 210 324 183 507 36 2Field Equipment 74 73 147 179 176 355 50 1Vehicles 82 247 329 198 594 792 75 3Information Equipment 29 260 289 70 627 697 90 2Library 10 94 104 25 225 250 90 1

Sub-Total 3,410 3,223 6,633 8,217 7,767 15,984 49 52

Technical Services

Specialists & In-Service Training 285 1,620 1,905 688 3,902 4,590 85 15

Fellowships 135 1,349 1.484 325 3,251 3.576 91 12

Sub-Total 420 2,969 3,389 1,013 7,153 8,166 88 27

Land Purchase 75 - 75 180 - 180 - 1Establishment Cost 2583 - 2,583 6,225 - 6,225 - 20

BASE COST 6,488 6,192 12,680 15,635 14,920 30,555 49 100

Physical Contingency 747 595 1,342 1,799 1,435 3,234 44 11Provision for

Price Increases 3.150 2,164 5,314 7,591 5.214 12,805 41 42

TOTAL PROJECT COST 10,385 82951 19,336 25,025 21,569 46,594 46 153

D. Financing

3.20 The Bank would finance US$21.5 M or 46.1% of total project cost,which is approximately equivalent to the foreign exchange cost. GOI wouldfinance the remaining 53.9%. Breakdown of costs, without contingencies,between the program components are estimated as ARD headquarters $1.9M;rice $7.4M; palawija $3.4M; highland vegetables $4.8M; rubber $7.5M andextension information $5.6M (Annex 18, Table 2).

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E. Disbursement and Flow of Funds

3.21 The Bank loan would be disbursed for 100% of the foreign exchbazgecosts of fellewships and consultants (about US$10.5M) 1/j For civil -wo rksincluding staff ho?zsing, the Bank loan would be disbursed for 40% of totalcosts (about U5$7.OM). For equipment, library supplies and furniture, theloan wiould be disbursed for 100% of CIF value of the directly imported goods,95% of the ex-factory price of equipment manufactured locally, and 65% orimported equipment procured locally (about US$3.2M total). For projectvehicles, the loan would be disbursed for 100% of the CIF value of importedvehicles, and 40% of the total cost of vehicles procured locally (aboutUS$OO8M total) - The disbursement schedule is estimated to follow thepattern belmw

Disbursement Schedule(US$ 1000)

-ank Fiscal Year --------- --1975/76 76/77 77/78 78/79 79/80 80/81 Total

Bank loan 1,100 5,700 6,900 4,300 2,500 1,000 21,500Cumulative 1,100 6,800 13,700 18,000 20,500 21,500 21,500- as %total loan 5% 32% 64% 84% 95% 100%

F. Procurement and Audit-

3.22 Civil works contracts in excess of US$100,000 for the combinedrice and palawija center (US$4.4M) and the rubber center (US$4.OM) would beawarded on the basis of international competitive bidding as there is a pos-sibility that foreign contractors may wish to bid for these two largercenters. Contracts for the construction of the highland vegetable center(US$1.1M) and the ten information centers which are small and scattered(totalling US$2.5M) would be awarded on the basis of competitive biddingadvertized locally, and with no restrictions on bidding by foreign contractors,in accordance with local procedures which are satisfactory to the Bank. Forpurposes of bid comparision for civil works contracts local contractors would

1/ The figures given in this paragraph relate to costs of project compo-nents inclusive of physical and price contingencies. Therefore theyare not directly comparable with the costs given in paragraph 3.19.

2/ Costs in this section are shown without physical and price contingen-cies.

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receive a preference of 7-1/2%. Indonesia has a viable local contractingindustry and it is expected that local contractors would win all bids forcivil works and for the provision of services and utilities therein. Re-search and information equipment (US$1.9M) which is specialized in characterand for which after sales service is of critical importance and must beprovided locally, together with furniture and library supplies (US$0.3M)which would be widely scattered and purchased over several years, would beprocured on the basis of competitive procurement procedures involving thesolicitation of at least three price quotations. Technical services (US$8.2M)would be contracted by the borrower through one or more foreign consultancyorganizations approved by the Bank. Contracts for agricultural vehicles(US$0.5M) in excess of US$50,000 equivalent would be awarded on the basis ofinternational competitive bidding. Agricultural vehicle purchases less thanUS$50,000, and other vehicles (US$ 0.3 M) would be procured locally throughprudent shopping involving the solicitation of at least three quotations.

3.23 A consultant financial administrator would be provided under theproject for a minimum period of three years. He would serve in the ProjectImplementation Unit within the ARD Secretariat (para 4.07) and will assistARD in initiating an accounting system within ARD. A procurement specialistin agricultural research equipment would also be provided for a total periodof 12 months to assist in preparing equipment lists for tender and in eval-uation of bids. Assurances were obtained during negotiation that adequaterecords in accordance with consistently maintained accounting practice wouldbe followed.

IV. ORGANIZATION AND MANAGEMENT

A. Project Control and Operation

4.01 Presidential decrees 44/74 and 45/74 (Annex 4), and recentlyissued Ministerial decrees provide for the establishment of a GoverningBoard, chaired by the Minister of Agriculture, wBhich would provide overallpolicy guidance for the GOI agricultural research program. An ExecutiveBoard, chaired by the Head of ARD, would have administrative responsibilityfor all agricultural research activities in the Ministry (Annex 3, Chatt 2).

4.02 The same Presidential decrees and a parallel set of recently issuedministerial decrees, designate the extension activities now transferred fromthe directorates of the ministry and controlled by AETE.

4.03 Program directors in charge of each research program to be supportedthrough the project, the ARD Project Implementation Unit (PIU) director (para4.07), and the director of the NIC, all with qualifications and experienceacceptable to the Bank, have been recently appointed. Professional andsupport staff for the programs are being assembled from the existing cadreof research and extension personnel on the establishment of the severalorganizational units within the two agencies, or transferred from other GOIorganizations, or directly recruited.

Agency for Research and Development (ARD)

4.04 The powers of the Governing Board for Agricultural Research (Annex4) extend to standardization of policies and priorities regarding agricul-tural research, approval of annual research programs, allocation of researchbudget funds, review of achievements, coordination of assistance from foreigndonors and the establishment of research personnel terms and conditions ofservice designed to attract and retain those of highest caliber. In timethis should lead to ineffective research units being closed down or absorbedinto other more effective groups. Research and related advisory services arebeing separated from service and regulatory functions, with the latter re-maining in the hands of other, more appropriate GOI agencies.

4.05 The Head of ARD is answerable to the Minister of Agriculture whochairs the Governing Board. This Board would have representation from otherMinistries concerned with agricultural research. The ARD Headquarters, whichis being constructed at Pasarminggu on the outskirts of Jakarta, includes aSecretariat with administrative service units responsible for budget and fi-nance, personnel, procurement and accounts.

4.06 Seven bureaux are included in the ARD headquarters organization.Four of these provide support services, namely for plant and animal quaran-tine; library resources; data processing and statistics, including an experi-mental design and analysis capability; and agro-economics, including amonitoring and evaluation capability to cover all research programs. Theremaining three bureaux have been assigned a mainly coordinating functionfor groups of institutes or programs dealing with similar commodities. Theyalso provide some technical services and their chiefs have an advisory roleto the Head of ARD in respect to their areas of specialized technical respon-sibility.

4.07 A PIU has been recently established in ARD to administer theproject research centers construction and equipment program and to coordinatethe fellowship and technical assistance programs. The PIU staff supportedby a financial administrator and a procurement specialist (para 3.23) andin collaboration with executive architects, construction management and costcontrol consultants (see below), and the research program directors, theirconsultant advisors and staff, would prepare development plan reports foreach center. These reports would include, inter alia, a site developmentplan based on topographical, soil and subsoil survey, functional buildingprogram derived from a revised schedule of accommodation, and preliminarylist of major items of research and field equipment together with preliminarybudget covering land preparation, civil works, furnishing and equipment.These development plan reports would be carefully reviewed internally andsubmitted to the Bank for comment before construction contracts are put outto tender. The executive architects, construction management and cost controlconsultants would be engaged as soon as possible and in any event not laterthan December 31, 1975 to accord with an assurance given at negotiation, tocommence preliminary planning and design work for the research centers.Provision has been made for financing retroactively up to US$100,000 of thecost of the above professional services incurred prior to loan signing.

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4.08 The setting up of ARD provides an opportunity to transfer researchac_ivities from Bogor, where there is a disproportionately large concentra-tion of research expertize, to selected regions, as exemplified by thecommodity research centers to be supported through the project. The relo-cation must be a gradual process which can only be successfully carried outafter careful site planning and civil works construction programs have beencompleted, including provision of adequate housing for the staff and fami-lies. The national research programs to be supported under the project willin the initial years be developed by a program director and nucleus staff ofresearch personnel within each of the existing institutes concerned with re-search on the specific crops, namely CRIA (rice and palawija programs), theHorticultural Research Institute (highland vegetables program), and BPPM(rubber program). The nucleus staff would assume immediate responsibilityfor ongoing experimental work on the specific crops. Field development,uniformity trials and some experimental work should be initiated forthwithat each of the new centers, well in advance of the completion of the civilworks construction and equipment programs. It is obvious that the greaterthe support given to program initiation and experimentaL site developmientin the early years of the project, the smoother the physical transfer ofstaff to the new centers will be effected when the facilities are finallyready for occupancy. Assurances that the centers would by established byDecember 31, 1978 were given at negotiation. The program directors withthe assistance of the program advisors would initiate regular reviews ofprogram content and orientation to ensure the development of technologyappropriate for smallholder producers. The goal of an adequate range ofwell planned and well staffed commodity research programs based on nationalcenters with their network of regional experimental stations covering allthe main commodity groups is likely to take several years to attain, withthe project providing the main impetus in the beginning.

4.09 In order to ensure that GOI resources are allocated to priorityresearch projects in amounts commensurate with the scope or magnitude ofthe problems and in accordance with sectoral needs, the Ministry of Statefor Research has been given a review and assessment responsibility in respectto research programs undertaken by all Ministries (Presidential Decree 45/73refers). The review responsibility of this Ministry in respect to the broaderallocation of GOI funds for research between ministries will supplement thatof the Governing Board (para 4.01) and will further ensure that funds allo-cated for agricultural research are adequate in relation to national priori-ties.

Agency for Education, Training and Extension

4.10 An Agency for Education and Training was established by decreesin 1972. Its functional responsibilites have recently been extended and itsname changed under Presidential Decrees 44/74 and 45/74 to include extension.The AETE became operational on April 1, 1975. (Annex 3, Chart 3). The Agencyalso includes a Project Implementation Unit which was set up to implement theAgricultural Education Project (IAD-288) and is staffed by a small but ade-quate complement of architects, accountants and procurement personnel. ThisUnit would also be responsible for supervising the civil works constructionand general equipment procurement program for the project information centers.

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4.11 The AETE includes three bureaux, for education, training and exten-sion. The first of these is responsible for training of future extensionstaff at secondary level, the second for upgrading of existing staff throughin-service training, and the third, and largest, for extension programs.AETE also controls a National Institute for Agricultural Education, Train-ing and Extension and the NIC would be an important component of this Insti-tute. It would coordinate the work of the nine regional information centersin the provinces. Ultimately, each province may have its own informationcenter, but during the life of the project, due to constraints on the avail-ability of trained staff, some centers would serve more than one province,and assurances that the number of centers would not exceed nine during thedisbursement period of the project without agreement of the Bank were obtainedduring negotiation. The information centers are likely to be complementedby future Bank support for extension, now being considered.

B. Staffing

4.12 The establishment of ARD provides a unique opportunity for thereassignment of staff in the existing institutes according to their abili-ties and preferences. An ongoing reclassification of professional researchpersonnel into four categories is providing a useful guide for relatingjob performance to salary and position. The committee responsible for thisreclassification had classified 211 of about 400 scientists on the Ministryof Agriculture establishment at appraisal, and reclassification of all eligi-ble staff followed by periodic re-evaluation will facilitate the assignmentof staff among programs according to their capabilities.

4.13 Salaries for research workers, as for most GOI employees, havebeen inadequate for more than a decade, with the result that in mostinstances research personnel have devoted part time to other jobs in orderto supplement their incomes. In order to permit full time attention ofresearch workers to their research assignments, salaries including honorariahave been raised to more satisfactory levels (para 2.18). Assurances inrespect to maintenance of satisfactory employment conditions were obtainedduring negotiation.

4.14 The initial cadre of staff for the commodity research programs tobe supported under the project would be appointed mainly from the institutesalready concerned with these commodities (principally CRIA, BPPB, and theHorticultural Research Institute). About 70 of the approximately 110 grad-uate scientists presently on the establishment of these institutes are esti-mated to be available to provide the nucleus senior staff for the projectresearch programs, based on an examination of an updated inventory of researchstaff submitted at negotiation. Additional staff required to make up the fullestablishment for the programs would be obtained either through transfer fromother ARD units or through direct recruitment mainly of young university grad-uates during the disbursement period of the project.

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4.15 Staff for the information centers would be transferred principallyfrom the Extension Directorate in the Directorate-General for Agriculture.

C. Technical Assistance

4.16 There is a definite shortage in Indonesia of agricultural researchpersonnel with the training and experience necessary to provide the conceptual,planning, coordinating and operational leadership required to sustain problem-oriented multi-disciplinary research. In order to make good this deficiencyfor the commndity research programs in the project, highly qualified and ex-perienced foreign research scientists would be provided for periods varyingfrom a few weeks to several years. The use of short-term consultants, usuallyfor periods between two weeks and six months, would widen the possibility ofobtaining the services of top ranking scientists from leading research ins-titutions around the world. Such individuals are often unable or unwilling,for institutional or personal reasons, to become involved in long periods ofabsence from their own establishments, but can more easily be released, orare more willing to accept short-term assignments. A short-term input byan acknowledged authority, possibly repeated at yearly intervals, would havedefinite advantages for research program conceptualization and planning pur-poses than could be expected from a longer-term specialist of lesser caliber.Such personnel can also perform an invaluable external monitoring function.

4.17 Continuity on the part of the consultants would be provided by ahighly experienced agricultural science research advisor who would beappointed as early as possible and not later than December 31, 1975, andwho would advise and assist the Ilead of ARD and his headquarters staffduring the early years of the project. Four consultant research programadvisor/specialists with proven competence in the four commodities concerned,would assist the research program directors in formulation, design and super-vision of the research programs, in addition to making a direct contributionto research in their specialized scientific fields. Several additional con-sultant research specialists (para 3.02) would be attached to each programfor long-term assignments exceeding one year, except for rice in which tech-nical assistance specialists sufficient for program needs are already beingfinanced under the 1971 seeds project (IDA Credit 246). A financial admin-istrator with experience in procurement and accounting to assist in arrangingpurchase and developing an improved accounting system would also be providedfor ARD Headquarters, together with an equipment procurement specialist whowould assist in determining equipment needs, preparing specifications, andevaluating tenders (paras 3.23 and 4.07). Terms of reference for thesespecialists are given in Annexes 11 to 14. A total of 62.5 manyears oftechnical assistance expertize would be provided to ARD by these'special-ists.

4.18 The project would provide for four foreign specialists with experi-ence in agricultural extension information techniques to aid in the success-ful development of the AETE agricultural information program for a total of

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14 man-years. One would serve as the agricultural extension advisor/spe-cialist at NIC, where he would work closely with the head of NIC in formu-lating, designing and supervising agricultural information programs and theother three would act as information specialists working with the heads ofthe regional information centers to be located in Java, Sumatra and theouter islands. Their terms of reference are outlined in Annex 14.

4.19 In-service training courses on research methods and managementwould be conducted within ARD for senior staff of the research centers.Teachers for these courses would be mostly found in the Indonesian uni-versities, but a few consultants would be called upon. Library serviceswould also be set up within ARD, to be used by the staff of all the re-search centers. Special courses in English would be provided to upgradethe competence of scientific staff, especially for those prequalifying foroverseas fellowships.

4.20 In view of the large numbers to be employed under the project,the borrower would contract with an organlzation or organizations withappropriate experience to employ, administer and service, the research,extension and management specialists who would be internationally re-cruited under terms and conditions satisfactory to the Bank. The con-tracted organizations would also provide consultants for in-servicetraining courses within ARD and arrange the supply of documentation forthe ARD library. They would handle and administer the arrangements forthe fellowships program. Assurances that these organizations would beappointed by December 31, 1975 were given at negotiation.

4.21 Directors of the programs to be financed under the project havebeen appointed after consultation with the Bank (para 4.03). The directorswould be assisted in overall planning of programs by the internationallyrecruited research advisors and the extension advisor, whose appointmentswould be approved by the Bank under terms and conditions satisfactory tothe Bank. An assurance was obtained during negotiation that the programadvisors, together with the financial administrator for the PIU in ARD,would be appointed not later than March 31, 1976, to ensure their earlyinvolvement in the preparation of plans for the new centers and the initialresearch programs. A similar assurance was obtained regarding the extensionadvisor to AETE.

D. Fellowships

4.22 The project would provide for about 170 fellowships to assist inupgrading the quality of professional personnel at the research and agricul-tural information centers. The fellowships would be for training abroad andin Indonesia and include short and long term fellowships leading to advanceddegrees. 20 fellowships would be reserved for research personnel in ARDHeadquarters and in centers and institutes other than those concerned withthe commodities to be supported through the project, as a contribution

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towards upgrading these organizations which might benefit from future Banksupport. The breakdown, to be firmed up when the research programs arebeing staffed, would be as follows:

Number of Fellowships

Program/Center Long Term Short Term

Rice 18 8Palawiji Crops 18. 9Highland Vegetables 14 7Rubber 26 13Other Programs including ARD

Headquarters 13 7Agricultural Information 30 10

Total 119 54

4.23 Terms of reference for the fellowship program are in Annex 15.Details of the program are in Annex 16. An assurance was obtained duringnegotiation that staff awarded fellowships would be bound to return to theirrespective agency of employment for a period at least equivalent to the timespent on training.

V. ECONOMIC BENEFITS AND JUSTIFICATION

5.01 The project is primarily intended to support the new institutionalsystems for research and extension recently established by GOI. The strength-ening of these systems will take many years and results, measured in termsof economic benefits, are likely to be equally long-term. Given time, theyshould be substantial and be measurable in national terms of increased pro-duction and in the extent to which improved production techniques and systemsare taken up by smallholder producers. Ultimately, the benefits should alsobe measurable in terms of reduction in real prices of commodities to con-sumers.

5.02 Because the type of research that would be carried out would beproduction oriented and directed specifically to the introduction and adapta-tion of modern technology of tested and proven profitability in countrieswith ecologic conditions similar to Indonesia, the economic benefits would besubstantial (Annexes 6 to 9). The margin available for increasing efficiencyis very great in view of the present low levels of performance in the commo-dity fields selected, and the development of an improved Indonesian researchcapability will aid the transfer of benefits. As recent evidence has shown,countries gain little benefit from research done elsewhere, even in regionswith similar geo-clinates, unless they have developed a research capabilityof their own. The modification of existing farming systems to incorporatenew methods and new products alone could produce worthwhile dividends. The

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fields to be covered involve important domestically consumed foods and majorexport commodities, and the work would be directed towards increasing domesticsupply and reducing costs through increased productivity and towards foreignexchange earning and saving potentials. A major breakthrough in one or moreconmodities is not unlikely.

5.03 Attempts to quantify economic ex-ante benefits from agriculturalresearch can only be highly speculative in view of the uncertainty inevitablein research. Historically, for this reason, research endeavor has alwaysbeen justified by subjective judgements of the type made above. Howeverex-post analyses of returns to research have been substantial in manyinstances (Annex 19).

5.04 A similar situation applies to extension, although evidence ofincrease productivity from producers who have been influenced by extensionadvice is more readily available. For example, studies on rice improvementsthrough the BIMAS program show increased yields of 62% by farmers contactedin comparison with those not contacted.

5.05 Good research unsupported by an effective extension service willlead to waste, as also would a strongly staffed extensiorf service if notback-stopped by an equally strong research structure. Provided researchand extension are developed in unison and their programs properly harmo-nized and aligned to the needs of small farmers - and the new organiza-tional structure and other institutional improvements recently introducedby the GOI with the active support of the Bank Group will make this pos-sible - there are a number of intangible and tangible benefits which canreasonably be expected to flow from the project if it is executed alongthe lines proposed. These include:

(a) Improved capability and increased productivityof research and extension staff through on-jobtraining and example provided by foreign con-sultants, and through provision of advanced degreeprograms both in Indonesia and abroad. This wouldassure a foundation of professionally competentstaff for the continuation of national programsof importance to the Indonesian economy;

(b) Production of new and improved varieties of cropswhich would provide the essential plant materialsadapted to improved techniques of cultivation andcapable of responding to higher input levels undera wide range of growing conditions; and

(c) Development and widespread propagation of newtechniques and packages of practices capableof realizing the full potentials of improvedplant varieties under sustained yield condi-tions.

- 24 -

VI. RECOMMENDATIONS

6.01 During negotiation, the following principal assurances were given:

(a) ARD would, before inviting bids for civil worksfor each of the research centers, prepare andsubmit to the Bank for approval, a site devel-opment plan, to include details of the land andits use, the physical facilities to be constructed,and the estimated costs (para 4.07);

(b) ARD would employ, by December 31, 19.75, architects,management and cost control consultants for plan-ning and design of ARD civil works and a researchadvisor to the Head of ARD (paras 4.07 and 4.17);

(c) ARD would, by December 31, 1978, establish nationalresearch centers as headquarters for rice and pala-wija crops at Sukamandi, for highland vege-tables at Marghayu, and for rubber at SungeiPutih (para 4.08);

(d) ARD and AETE would appoint, by December 31, 1975,an organization or organizations to assist inrecruitment, administration and servicing of theconsultant research, extension and managementpersonnel, and to arrange the fellowships program(para 4.20);

(e) ARD would, by March 31, 1976, employ four programadvisors and a financial administrator (para4.21); and

(f) AETE would, by March 31, 1976, employ an agricul-tural extension advisor (para 4.21).

6.02 The proposed project is suitable as a basis for a Bank loan ofUS$21.5M to the Government of Indonesia, representing about 46% of thetotal estimated cost.

April 8, 1975

ANNEX 1Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

The Agricultural Economy

A. Introduction

1. Agriculture is the mainstay of the Indonesian economy, accountingfor 50 percent of GNP, and comprising almost all non-oil exports. It alsoprovides 65 percent of employment. Landholdings on the densely populatedislands of Java and Bali are very small, and highly intensive paddy culturepredominates. Agricultural development in the outer islands has concen-trated on estates and smallholder production for export (oil palm, rubber,coffee and coconut), less intensive cultivation of paddy and the growing ofsubsistence food crops (maize, cassava, soybean).

B. Agricultural Production: Current and Past Performances

2. The agricultural sector made very little headway during the earlyand mid 1960's. Compared with 1961/65, agricultural production was only4% higher and food production 1% higher in 1967, although better perform-ance was registered in 1966. Because of continued population growth ataround 2%, per capita agricultural and food production was lower in 1967than during 1961/65. Thus, during the early 1960's agricultural produc-tion was barely able to hold its own with the growth of population.

3. In 1968 this trend was dramatically altered upward due in largepart to GOI programs to stabilize the economy and to intensify rice pro-duction. Agricultural output in 1968 rose 14% above the 1961/65 averageand by 1972 was estimated to be 28% above that level. Per capita produc-tion was about 5% above the 1961/65 average in 1970, 71 and 72. 1/

4. Because paddy accounts for roughly half the value of agriculturalproduction, its average reported increase of 8% during 1968/71 was the mainfactor pushing up production. Modest growth was also reported in sugarcane,rubber, palm oil and kernel, but the growth in paddy offsets declines orstagnation in other crops.

1/ Agricultural production for 1972 was adversely affected by drought.For most food crops 1972 production was inferior to the 1971 level.This decrease was, however, more than compensated by an increase innon-food and estate crops, forestry and animal husbandry production.

ANNEX 1Page 2

Paddy

5. Over the period 1951-1971, paddy output has grown at an annualrate of 3.4% per year. More than half of the growth in output has beendue to area expansion (1.8% per year) with yield increases amounting to1.6% per year. Over the past 10 years paddy output has also increased ata rate of 3.4% per year but there has been a drop in the rate of area ex-pansion (1.4% per year) and substantial acceleration in yield increases(2% per year). Since paddy acreage in Java has not increased over thepast 10 years, all of the new paddy land development has occurred outsideJava (100,000 ha per year). All of the growth in paddy output in Java hasbeen due to intensification of cropping and higher yields.

Other Field Crops

6. The greater availability of rice to the consumer has apparentlyresulted in the dietary substitution of rice for both maize and cassava -the other staples - which have both suffered declines in output with onlymodest price increases. The other food crops, however, especially live-stock products, coconut and coconut oil, soybean and groundnut, have ex-perienced dramatic increases in prices in rural markets, indicating thefailure of production to keep pace with demand. This is very likely afunction of: (a) the concentration of resources, especially subsidizedcredit and fertilizer on paddy, and (b) greater difficulties in expandingthe output of these smallholder cash crops because of weak organizationmechanisms, serious marketing bottlenecks in the smallholder sector, andthe need for at least minimal assistance in moving to improved varietiesand methods. Yet area expansion of field crops other than rice has amountedto 2.5% per year over the past 23 years, most of it presumably in the outerislands.

Tree Crops

7. Once the largest in the world, the estate industry has sufferedfrom neglect since the depression of the 1930's up to 1968. Recently, aprogram of rehabilitation has been started but the effect of this on pro-duction will be slow to materialize due to the long gestation period charac-

teristic of tree crops. Some benefits are already materializing in estaterubber and palm oil, due partly to picking up slack in these sectors, asso-ciated with generally improved economic conditions and higher palm oilprices. A rapid increase in clove plantings, stimulated by extremely highprices and facilitated by GOI dissemination of planting materials, willalso produce significant results in the next five years. Serious problemsexist in the smallholder rubber, coconut and pepper industries. In thecase of rubber, an overhaul and expansion of the smallholder extensionservice should improve the present situation, characterized by overdensestands, profuse weed growth, poor tapping standards and an insufficientdistribution of improved clonal material. Coconut and pepper productionsuffer from poor cultivation methods and marketing; an improvement in the

ANNEX 1Page 3

varieties growth will also be necessary to increase the yields. Productionin the massive smallholder rubber and coconut industries has stagnated fora long time, and recent efforts at replanting are extremely modest. Pepperproduction has declined since 1968. Yet total acreage under tree crops hasbeen expanding over the past 23 years at an annual rate of 2.3%, most of itrepresenting smallholder production in the outer islands.

Livestock

8. Data on livestock and livestock production are not sufficientlycomprehensive or accurate to detect significant trends in output or num-bers. Reported large animals slaughtered would indicate that the totalfor 1969 was below the 1961 level and considerably below 1964 and 1965.Slaughter of pigs, goats and sheep in 1968 and 1969 was 30% or more belowthe level of 1962/65. On the other hand, exports of animals, mostly cattleand buffalo, to Singapore and Hong Kong are reportedly two to three timesthe level of the early 1960's, and extremely large increases in exports ofhides and skins are reported.

9. Ministry of Agriculture statistics on milk, meat and egg produc-tion for 1969/71 indicate very modest increases, but these appear to beprojections rather than actual recorded production. The Ministry of Agri-culture reported in January 1972 that per capita consumption of "livestockproducts such as meat, eggs and milk has been barely changed since 1969,i.e. 3.5 kg of meat, 11 eggs and 0.5 liters of milk".

10. Over two-thirds of the livestock population is located in Java,Madura and Bali, about the same proportion as the human population. Theexplanation for the low consumption of livestock products in Indonesia isthe low level of income, the use of large animals primarily for power,and the limited feed supply. However, draft cattle provide meat as wellas power. Cattle density in Java is still well below that of Bali andthere appear to be substantial unused feed resources in the form of rough-ages and crop residues. On the outer islands there is a serious shortageof draft animals, particularly in newly settled areas.

11. All studies of consumption patterns in Indonesia indicate, how-ever, that the elasticity of demand for meat is as high as elsewhere. Theextremely rapid increase in meat and egg prices in rural markets since 1968,while rice, maize and cassava prices remained essentially unchanged, indi-cates that there is a serious bottleneck on the supply side, and that thereis a strong rural as well as urban demand for these products. This rein-forces the need for smallholder livestock programs.

Fisheries

12. Per capita consumption of fish was reportedly 10 kg in 1970. Ex-tremely high retail fish prices in Java suggest that for a large segment ofthe population fish is a luxury food. Traditional catching techniques, very

ANNEX 1Page 4

weak marketing and handling facilities, and high cost of inter-island ship-ping and port operations contribute to the high cost of this traditionallyimportant element in the Indonesian diet. Exports of fish, mainly skipjackand shrimps, were reported to be US$1.5 million in 1969, US$5.9 million in1970 and US$9.2 million in 1971. This jump was mostly due to a sharp riseon the Japanese market following the rapid increase in the standard ofliving of that country.

Forestry

13. Production and exports of timber have increased rapidly, exceed-ing targets in the Five-Year Plan, due largely to foreign development ofthe timber industry in the outer islands and favorable world prices. Timberproduction in 1969 was 6.2 million cu m, 10.1 million in 1970 and 13 millionin 1971. Teak production on Java, about 450,000 M per year, was unchangedfrom 1965. Timber exports are reported to have jumped from US$3.5 millionin 1966 to US$100 million in 1970, and US$150 million in 1971.

C. Structure of the Agriculture Sector

14. Indonesia has a dual agricultural structure consisting of around17 million smallholders 1/ and just over one thousand large estates.

The Smallholder Sector

15. Smallholder production exceeds estate production in the case ofall subsistence and cash crops, with the exception of palm oil, which isgrown exclusively on estates. Smallholder exports in 1971 were estimatedat $270 million, compared with an estimated $183 million exported by theestate sector, despite the fact that exports are the major market for theestate sector.

16. In 1963, 12.3 million smallholders were farming 12.9 million hawhereas 1,120 estates had 1.6 million ha. Smallholder farms averaged 1.1 hawhile estates averaged 1,420 ha. With about 18 million ha in farms now 1/,the proportion of smallholders is presumably larger, and their average sizesmaller.

17. Smallholders are mainly concentrated on Java, Madura and Bali.While the primary aim of most smallholders is to provide for his familyfood supply, it is evident that the sector also produces a considerablesurplus. On Java, Madura and Bali where population pressure is especiallyintense and irrigation most extensive, the efforts of smallholders are

1/ Estimates of the Agriculture Survey mission, June 1973.

ANNEX 1Page 5

heavily concentrated on the production of food crops, especially rice andother field crops. In the outer islands, especially Sumatra and Sulawesi,more of the efforts of smallholders are devoted to export crops, especiallyrubber and coconuts.

The Estate Sector

18. Before World War II, the foreign owned and operated estate indus-try in Indonesia was the largest and most technically advanced in the world.Although it controlled only 8 percent of the cultivated land, it produced60 percent of Indonesia's exports.

19. Depressed conditions in the 1930's, World War II and its after-math, followed by the nationalization of foreign estates - between 1957and 1965 - crippled the estate industry. Managerial and technical stand-ards declined, maintenance was minimal, and replanting and other forms ofre-investment practically ceased.

20. Throughout the past four decades, smallholders settled on estatelands, physical facilities deteriorated, the advanced techniques and plant-ing material and cultivation research dwindled away.

21. These developments caused a serious decline in estate production.The area in estates declined from its peak of 3.4 M ha in 1927 to 2.4 M hain 1937, and to 1.6 M ha by 1963. Compared with 1938, sugar production in1963 had falled by 53%, tea 55%, coffee 52%, tobacco 86%, cocoa 64%, andcinchona 78%. Only rubber production matched the pre-war level, due inpart to the substantial increase in smallholder area and output.

22. These declines in area and production were accompanied by de-clining yields on estates and correspondingly higher unit costs. Thosecosts are further aggravated by heavy taxes, and the widespread, nowfortunately declining, imposition of illegal levies.

23. Since 1968, a number of estate rehabilitation projects have beenundertaken by IDA and the Asian Development Bank on the nationalized estateproperties, especially in palm oil and rubber. Between 1969 and 1971, how-ever, the production results from these efforts were modest, which is notunexpected given the long gestation period of most of these programs.

24. Inadequate management and a shortage of trained personnel remaina critical bottleneck to the improvement of these large and once highlyproductive enterprises. An organizational mechanism to link the state-owned and operated estates (PNP's) into effective production and processinggroups is lacking: the key constraint continues to be a top heavy bureau-cratic structure which results in excessive interference and abuse of au-thority in day-to-day management decisions. A comprehensive study of themanagement of PNP's was completed three years ago and the study recommenda-tions are being considered by GOI.

ANNEX 1Page 6

D. Prospects and Targets

25. Rapid agricultural production growth in Indonesia since 1967,after more than a decade of stagnation, has recently produced a great dealof optimism about future agricultural growth. Much of the recent growthcan be attributed to a reported 8 percent average annual increase in paddyproduction. Because paddy amounts to half the value of agricultural pro-duction, its growth has obscured the lack of growth in other sectors ofagriculture. The rapid increase in paddy is partly a result of intensiveGOI paddy production programs, but some of this increase is due to expansionin area, favorable weather, and statistical adjustments. A rice shortagewhich developed following a wet season drought of 1972 combined with anunusually long dry season have resulted in a more cautious view of pros-pects. Some of the factors which caused the recent increase in paddyoutput will not have the same effect in the future and this fact is nowmore widely accepted, and indications are that paddy output will not growat more than 3 or 4% annually. Even the 4% growth rate would involve sub-stantial expansion of paddy area in the outer islands and continued effortsto disseminate high yielding paddy varieties, promote the use of moderninputs and improve water management in irrigated areas. Yet, to sustainoutput increases in agriculture, rapid progress also needs to be made incrops other than paddy. Aware of this necessity, the GOI has expanded theBIMAS program, originally set up to boost paddy production, to Palawija crops.

26. Two major constraints exist to expanded output of crops other thanpaddy: elimination of the bottlenecks impeding the expansion of productionon the outer islands, where great growth prospects exist, and developmentof a strong production thrust in the smallholder sector, which accounts formost agricultural production and is heavily concentrated on Java. Governmentprograms and recent studies place heavy emphasis on increasing the area undercrops on Java. However, area expansion on Java has been minimal since 1968,and for both paddy and maize it has halted or declined. Very little additionalarea increase on Java can be expected, where far more emphasis needs to beplaced on intensification and increasing yields. In the outer islands majoremphasis should be on area increase, but there is also substantial scope forincreased productivity. To carry out such a strategy better transport andmarketing facilities between the islands are imperative. An effective methodof stimulating smallholder production is necessary if this sector is tocontribute substantially to the needed increase in production. At the veryleast, the credit and input constraints for crops other than paddy should belifted and at least minimal smallholder programs should be pushed. Theoptimistic assumptions about agricultural growth in this framework hinge onmany of these changes taking place. Possibilities for an even more dynamicsmallholder thrust exist if village unit organizations are strengthened andused.

27. The world market for all crops that Indonesia exports is highlycompetitive. There is no share or quantitative amount that Indonesia can

ANNEX 1Page 7

be expected to capture automatically. Indonesia has an apparent naturaladvantage in a number of important crops - rubber, oil palm and coconuts -and possibilities for expanding maize, soybeans and some other crops aregood. The amounts that will actually be exported, however, will be deter-mined 1frgely by improving the domestic and export marketing of these cropsand insjring competitive prices and quality.

28. To the extent that a further increase in area offers only a lim-ited and temporary relief, any future increase in production will dependmore and more on an improvement of the yields and the qualities for bothfood and export crops. Such an improvement will be mainly conditioned bythe effectiveness of agricultural research and extension. The past effec-tiveness of the two activities is, of course, difficult to measure; severalconsiderations, however, point to some possibility of improvement. In bothcases, a lack of qualified personnel has brought on disappointing achieve-ments; in both cases, a lack of coordination has made for dispersion andduplication of efforts. GOI has already taken steps to improve the qualityof the extension service. The creation of ea Agency for Education, Train-ing and Extension within the Ministry of Agriculture, to regroup the variousextension services, has ensured a better coordination; an on-going program -supported by the IDA Credit 288, agricultural education project - for up-grading the extension staff should go far toward easing up this importantbottleneck. As for agricultural research, the recent decision to createan Agency for Research and Development was a first step to improve itseffectiveness; this project will constitute the next step towards this goal.

Attached: Table

October 30, 1974

ANNEX 1Table 1

INDONESIA

AGRICULTURAL R&EARCH AND EXT&NSION

Agricultural Sector Mission &xpectations 1/

1980/19711970 1971 1975 1980 Annual %- portedT7 Increase

Population:Total (millions) - 119.2 130.0 145.0Annual-( increase) 2.08 2.4

GDP - Annual 1% increase - - - 6% - - - -Range - - - 5 to 7% - - -

GDP per capita (% increase) - - - 3.9 - - - -Range - - 2.9 to 4.9 - - -

Rice Production:High (million tons milled) 12.0 12.7 15.5 18.1 4.0Low (million tons milled) 12.0 12.7 14.5 16.6 3.0

Paddy Area:High (M ha) 8.2 8.5 - 9.? 1.5Low (M ha) 8.2 8.5 - 9.3 0.9

Rice Yield:High (quintals/ha) 14.7 15.0 - 18.6 2.4Low (quintals/ha) 14.7 15.0 - 17.8 1.9

Per Capita Rice Production:(Net: minus 6% for seed and losses)High (kg/capita) 102.1 102.1 110.1 120.0 1.8Low (kg/capita) 102.1 102.1 105.7 110.1 0.8

Rice Imports:High 1,000 tons) 950 600 300-400 0Low (1,000 tons) 950 600 300-400 300-400 -

Maize and rhuArea (1.000 ha) 3,018 2,687 3,500 4,000 4.5Production (1,000 tons) 2,888 2,138 4,000 5,000 10.6Yield (quintals/ha) 9.6 7.9 11.5 12.5 5.2exports (1,000 tons) - 250 500 1,000 -

Cassava:Area (1,000 ha) 1,434 1,518 1,500 1,500 0.1Production (1,000 tons) 10,451 9,839 11,000 11,500 1.7Yield (quintals/ha) 73.0 64.8 73.0 75.0 1.7Exports (1,000 tons) - - 200 2/ 400 2/ -

Sweet Potato : Area (1,000 ha) 355.8 366.7 370.0 380.0 0.4Production (1,000 tons) 3,030 2,579 3,145 3,500 3.4Yield (n uintals/ha) 85.0 70.3 85.0 91.0 2.9

Groundnut:Area (1,000 ha) 402 413 450 500 2.1Production (1,000 tons) 293 299 360 500 5.9Yield (quintals/ha) 7.3 7.2 8.0 10.0 3.7Exports (1,000 tons) - - 50 2/ 75 2/ -

1/ Indonesia Agricultural Sector Survey Report dated April 10, 1974Volume 1, Page 30, Table 4.

2/ Product equivalen-t

ANNEXLTable 1

(Continued)

1980/19711970 1971 1975 1980 Annual %

Reported)- IncreaseSoybean:Area (1,000 ha) 684 630 700 1,000 5.2Production (1,000 ha) 488 422 560 1,000 10.6Yield (quintals/ha) 7.1 6.7 8.0 10.0 -

Exports (1,000 tons) - - 50 2/ 200-400 2/ -Rubber:Area (1,000 ha) 1,969 1,972 2,000 2,200 1.2iProduction (1,000 tons) 778 810 850 1,000 2.4Yield (quintals/ha) 4.0 4.1 4.3 4.5 1.0Exports (1,000 tons) - - 800 900 -

-iagar:Area (1,000 ha) 135 135 150 200 4.5Production (1,000 tons) 715 833 1,100 1,500 6.7Yield (quintals/ha) 53.0 62.0 73.0 75.0 2.1Imports (1,000 tons) 118 150 50 0 -

Coffee,-Area~ (1,000 ha) 354 - 368 375 0.6Production (1,000 tons) 182 192 232 272 3.9Yield (quintals/ha) 5.1 - 6.3 7.2 3.5Exports (1,000 tons) 97 (100) 120 150-160 -

Clove:Area (1,000 ha) 83 - 100 128 5.2Production (1,000 tons) 12.5 - 20.0 30.0 7.9Yield (quintals/ha) 1.5 - 2.0 2.3 4.3&)tports (1,000 tons) 0 - P 0-5 -Imports (1,000 tons) 8.8. - 3-5 0 -

Tobacco:Area (1,000 ha) 171 - 175 190 1.1Production (1,000 tons) 71 77 100 120 4.5Yield (quintals/ha) 4.2 - 5.7 6.3 4.1Exports (1,000 tons) 14.2 _ 20 30 -Imports (1,000 tons) 1.9 - 3.0 5.0 -

Pepper:Area (1,000 ha) 46.4 3/ - 50.0 55.0 1.8Production (1.000 tons) 15.7 49.0 40.0 30-60 -Yield (quintals/ha) 3.4 - 8.0 5.5-10.9 -exports (1,000 tons) 2.3 37.2 25-30 25-50 -

Tea:v Area (1,000 ha) (120) - 110 100 - 1.8

Production (1,000 tons) ( 85) - 90 95 1.1Yield (quintals/ha) 7.1 - 8.0 9.5 3.0Exports (1,000 tons) 35 - 35 35 -

Coconut:Area (1,0C0ha) 1,684 - ,1,750 2,000 1.7Production (1,000 tons) 1,280 1,300 1,500 1,800 3.3Yield (quintals/ha) (7.5) - 8.6 9.0 --Exports (1,000 tons) 168.6 2/ - 200-250 2/ 300-350 2/ -

Palm Oil and Kernel:Area (1,000 ha) 123 126 150 200 5.3Production (1,000 tons) - oil 207 210 400 600 11.0

- kernel 43.3 45.0 80.0 120.0 9.8Yield (quintals/ha) - oil (16.8) 16.7 27.0 30.0 6.8

- kernel ( 3.5) - - -Exports (1,000 tons) - oil (150) - 200 300 -

-kernel (35) - 45 55 -Cotton:

Area (1,000 ha) 2 2 10-30 100-150 -Production (1,000 tons lint) - - 3-9 40-60 -Yield (quintals/ha) - - 3.0 4.0 -Imports (1,000 tons lint) 40 60 91-97 90-110 -

2/ Product equivalent3/ 1970 crop was abnormally low and 1967 figure has been substitutedT ) Estimated

ANNEX 2

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Presidential Decrees on Departmental Organization

Two presidential decrees authorizing a basic organizational reformof Indonesian Governmental Departments (Ministries) were enacted by thePresident on August 26, 1974. The first, number 44/74, defines the mainorganizational structure for aU ministries (except the Ministry for Defenseand Security) and describes the future functional responsibilities andinterrelationships of secretariats general, bureaux, inspectorates general,expert staff, directorates general and agencies. The second decree,number 45/74, gives details of the organizational units which will beestablished in sixteen Departments in accordance with decree number 44/74,and directs that the transition into the new organization shall be completedby the end of budget year 1974/75 (March 31, 1975). Attachment 7 from thisdecree, which deals with the new organizational structure for the Departmentof Agriculture, is attached as an appendix. Further definition of thetasks, functions and detailed organization for each department will beprovided in separate Ministerial decrees, to be enacted shortly.

Attached: Appendix

October 21, 1974

ANNEX 2AppendixPage 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Department of Agriculture New Orpanization

(Attachment 7, Decision of the President of the Republicof Indonesia, Number 45 Year 1974, dated August 26, 1974 - Department ofAgriculture)

CHAPTER I

POSITION AND MAIN TASK

Article 1.

The Department of Agriculture as part of the State Administration,shall be directed by a Minister who is directly responsible to the President.

Article 2.

The main task of the Department of Agriculture shall be to carryout a part of the general task of administration and development in thefield of Agriculture.

CHAPTER II

FORMATION OF THE ORGANIZATION

Article 3.

The Department of Agriculture consists of:

(1) Minister;(2) Secretariat General;(3) Inspectorate General;(4) Directorate General for Food Crops;(5) Directorate General for Forestry;

ANNEX 2AppendixPage 2

(6) Directorate Gneeral for Fishery;(7) Directorate General for Animal Husbandry;(8) Directorate General for Estate Crops;(9) Agency for Agricultural Research and Development;(10) Agency for Agricultural Education, Training and

Extension;(11) Vertical Service in the Provinces.

Article 4.

The Secretariat General consits of:

(1) Planning Bureau;(2) Personnel Bureau;(3) Finance Bureau;(4) Supply Bureau;(5) Bureau for Law and Public Relations;(6) Bureau for Capital Investment;(7) Bureau for Administration.

Article 5.

The Inspectorate General consists of:

(1) Inspectorate General Secretariat;(2) Inspector for Personnel;(3) Inspector for Finance and Supply;(4) Inspector for Non-food Produce;(5) Inspector for Food Produce.

Article 6.

The Directorate General for Food Crops consists of:

(1) Directorate General Secretariat;(2) Directorate for the Development of Food Crops Programs;(3) Directorate for the Development of the Production of Food

Crops;(4) Directorate for the Development of Means of Operation of

Food Crops Programs;(5) Directorate for Conservation of Food Crops Lands.

ANNEX 2AppendixPage 3

Article 7.

The Directorate General for Forestry consists of:

(1) Directorate General Secretariat;(2) Directorate for the Development of the Forestry Program;(3) Directorate for the Development of Forestry Production;(4) Directorate for the Development of Means of Operation

of Forestry;(5) Directorate for Reforestation and Rehabilitation;(6) Directorate for Conservation and Nature Preservation.

Article 8.

The Directorate General for Fisheries consists of:

(1) Directorate General Secretariat;(2) Directorate for the Development of the Fisheries Program;(3) Directorate for the Development of Fisheries Production;(4) Directorate for the Development of Means of Operation for

Fisheries;(5) Directorate for the Development of Fisheries Resources.

Article 9.

The Directorate General of Animal Husbandry consists of:

(1) Directorate General Secretariat;(2) Directorate for the Development of the Animal Husbandry

Program;(3) Directorate for the Development of Animal Hlusbandry

Production;(4) Directorate for the Development of Means of Operation

of Animal Husbandry Programs;(5) Directorate for Animal Health.

Article 10.

The Directorate General for Estate Crops consists of:

(1) Directorate General Secretariat;(2) Directorate for the Development of the Estate Crops Program;

ANNEX 2AppendixPage 4

(3) Directorate for tne Development of Estate Crops Production;(4) Directorate for the Development of -leans of Operation of

Estates.

Article 11.

Tne Agency for Agricultural Research and Development coAsistsof:

(1) Institute Secretariat;(2) Bureau for Research and Development of Soil and Food Crops;(3) Bureau for Research and Development of Estate Crops and

Forestry;(4) Bureau for Research and Development of Animal Husbandry

and Fishery;(5) Bureau for Research and Development in Agro-Economics;(6) Bureau for the Library of Biology and Agriculture;(7) Bureau for Agricultural Quarantine;(8) Bureau for Statistics and Data Services.

Article 12.

The Agency for Agricultural Education, Training andExtension consists of:

(1) Institute Secretariat;(2) Bureau for Agricultural Education and Training;(3) Bureau for Education and Training of Personnel;(4) Bureau for Agricultural Extension.

Article 13.

The Vertical Service consists of Territorial Offices of theDepartment of Agriculture in the Provinces.

January 21, 1975

INDONESIARESEARCH AND EXTENSION

Ministry of AgricultureProposed Organization 1/

LMINISTERJINSPECTORATE I EXPERTSTAFF]GENERAL I I

SECRETARIATGENERAL

DIRECTORATE DIRECTORATE DIRECTORATE DiRECTORATE AGENCY FOR AGENCY FOR

GENERAL FOR GENERAL FOR GENFRAL FOR GENERALERAL FOR TRAjNIN, RESEARCH &FOOD CROPS ESTATE CROPS FORESTRY FISHERIES ANIRAL TRAINING & DEVELOPMENT

_____ _____ _____ ____ _____ _____ ____ HUSBANDRY EXTENSION

PROVI NCI ALREPRESENTATIVESMINISTER OF AGRICULTURE

1/ Effective April 1, 1975

November 27, 1974 World Bank-9395

INDDNESIA

RESEARCH AND EXTENSION

Minis t~ry of Agriculture

Agency for Research and Development (ARD)and Affiliated Research Institutes

'a Proposed Organization,

Governing Boa-rd for|Agricultural Research

(Minister as Chairman)

Exrecutive Board(ARD Head as Chairman)

Cess FuAned Treasur Funded

Head of ARDHeadquarters Bureaux

Scientific]ManagementCouncil

Estate Tea ard Soil Central Research Forestry Research Veterinary Directorate CentralCrops Cinchona Research Research Institute Research Institute Research of Plant L frbrInstitute Instiitute Institute for Institute br ALimal Institute Quarantine Biology d|Bogor Gafor Agri Industrial Husbandry Agriculture

Estate culSea FisheriesCrops tura Fisheries Teehnology| Inatit2ufr |r| Research |rest Research ResearchIM}ledan- I I lnstitute-/ | Aoducts | |Institute Institute

|Inland l ni l

IFisheries Virus lResearch DiseaseInstitute Institute

Effective April 1, 1975.

To be responsible for the research programs to be supported through the project pending the completion of thecivil works construction and equipmient programs for the new centers, after which the research program directorsand staff would be transferred to the new centers, which would then be ranked equivalent to existing institutes.

ANNEX 3INDONESIA Chart 3

RESEARCH AND EITENSIONMinistry of Agriculture

Agency for Education, Training and ExtensionProposed Organization

Head of Agency

r , Bureau orforAgricultural Education &Secretariat ralaio Edcto&Secretariat . Eduication & Training of Agricultural

Train Pers l Extension

National Institute for Agricultural Education,3Tr & Extension,,Cinwi -fl

National Level l l

--- ----------------------- 4--------------------------- ------------------------- L------__Provincial Level ! I

I I I

-Agricutlturzas Ag turaI AgricuituralSecondary Inservice Informati nSchools Training Centersil

Centers

1/ Effective April 1, 1975.2/ The National Information Center to be supported

under the project will be part of the National Institute.2 These are the regional information centers to be supported under the project.

March 31, 1975

ANNEX 4Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Organization of Agricultural Research

A. Background

1. Most agricultural research in Indonesia has been conducted by theinstitutes within the five Directorates General in the Ministry of Agricul-ture -- for Food Crops, Animal Husbandry, Forestry, Fisheries and EstateCrops. These institutes were established, with varying degrees of autonomy,following the setting up of the Botanical Gardens at Bogor in 1817. Researchcenters of government-owned plantations (PNP's), the agricultural Univer-sities, privately-owned rubber and oil palm plantations, and the IndonesianInstitute for Sciences (LIPI) also support some research. A historicalreview of agricultural research to 1971 has been published by Prof. Dr. Ir.Sutardi Mangundojo. 1/

2. The research institutes were established to support developmentof various estate crops and other commodities, with special emphasis onprimary products, during the Dutch colonial period. The research insti-tutes and programs deteriorated during World War II and in the followingperiod to Indonesian independence. With the departure of expatriate scien-tists, and an almost total lack of trained and qualified Indonesian scien-tists, research in agriculture was seriously neglected for about two decadesafter World War II.

3. A workshop on food, held in Djakarta in 1968 under the jointsponsorship of LIPI and the U.S. National Academy of Sciences, directedattention to the need for improved technology to increase food productionand levels of nutrition in the country. The workshop recommended thatagricultural research resources be assessed and strengthened to meetfuture needs for new agricultural technology.

4. The GOI, with assistance from USAID, established an AgricultureResearch Survey Team in early 1969, composed of eleven Indonesians, fivemembers from the IJSA and one member each from the Netherlands and India.

1/ Report of the Seminar on National Agricultural Research Systems inAsia, New Delhi, India, March 1971. Edited by A.H. Moseman, Agricul-tural Development Council, New York, N.Y.

ANNEX 4Page 2

The Survey Team, functioning over a five month period from March throughJuly 1969, recommended the setting up of an Indonesian.Agricultural ResearchOrganization at the national level that would involve: 1/

(a) the grouping of the various central researchinstitutes serving agriculture, animal husbandry,forestry and fisheries into a strong NationalResearch System;

(b) the launching of a number of national coordinatedresearch projects for improvement of major food,fodder, horticultural and commercial crops, soiland water management, fertilizer use, multiplecropping, agricultural engineering, fisheries,forestry, animal sciences, economics and socialsciences;

(c) the building of a national cadre of well-trained,well-paid, and fully-supported scientists;

(d) the decentralization of agricultural research in thecountry, by establishing and energizing a chain ofexperiment stations to cover the regional and provin-cial needs for agricultural research;

(e) the forging of strong links between research, educationand extension at the central and provincial level; and

(f) the achievement of a balance in, and coordination of,foreign assistance projects, to avoid incoherent andcompeting items of activity and to enhance nationalprograms and plans for research and training.

5. The recommendations of the Survey Team, approved in principle andaccepted by the Ministry of Agriculture and other appropriate authoritiesof the GOI proved difficult to implement. The restraints included: (i) thereluctance of the Directorates General of the Ministry of Agriculture tolose their research units; (ii) the concern of certain institutes such asthe research institutes for estate crops to transfer into a new compositeorganization with a potential loss of their current salary advantages andspecial prerequisites; and (iii) the uncertainties about the magnitude ofproblems of program planning and management of the proposed national researchsystem.

1/ Report of Survey and Recommendations on Organizations, Systems, andRequirements for Research in Agriculture and Related Industries inIndonesia. The Joint Agriculture Research Survey Team. Djakarta,Indonesia, 1969.

ANNEX 4Page 3

6. It was decided to proceed with a coordinated National Rice Re-search Program (NRRP) as an initial vehicle to furnish experience and as-surance with respect to a multi-disciplinary and multi-institutional effort.The NRRP was initiated in 1971 with support from the Ford Foundation, In-ternational Rice Research Institute, USAID, Government of Japan and otherdonors, but was not functioning effectively even as of November 1974. Majorlimitations appeared to be: (i) the lack of strong coordinating leadershipby an appropriate Indonesian officer or institution; (ii) uncertainty withregard to research priorities; (iii) the lack of decision on location ofthe central headquarters, regional stations and substations; (iv) need fordefinition of staffing and training requirements; (v) the organizationalstructure, including relationships with the proposed Indonesian agriculturalresearch organization, other commodity programs, other institutes and theuniversities; and (vi) the role of external assistance.

7. The NRRP instead of providing a pattern for effective organizationand operation of a coordinated national research program, has instead helpedto point up the need for a more effective institutional base or frameworkfor agricultural research. The decision by the Government of Australia, in1973, "that in order to upgrade and to expand the research and developmenteffort of the Directorate General of Animal Husbandry, a new research facilityshould be established where problem-solving research of the highest calibercould be undertaken" also reflects the inadequacy of the existing institutionalbase for research. The Australian Government support of A$ 4.5 million forphysical inputs and A$ 4.5 million for research operations and training overa 10-year period, as a grant, will involve substantial technical guidancefrom the Commonwealth Scientific and Industrial Research Organization (CSIRO)for the new Center for Animal Husbandry Research and Development at Bogor.

B. Present Plans for a National Agency for Agricultural Research

8. The preparat:ion mission for the Agricultural Research and Exten-sion Project, which visited Indonesia from July 29 through August 30, 1973,and the identification mission which preceded it, were timely in furnishingencouragement to the (DI to proceed with the establishment of a new "Badan"or agency for research within the Ministry of Agriculture, to be responsiblefor all research within the Ministry.

9. Two Presidential Decrees (numbers 44 and 45, 1974) establishingauthority for the new Agency for Research and Development (ARD) wereratified on August 26, 1974, and provide for transfer of all researchwithin the Ministry which is supported directly from the GOI ordinaryor development budget, including the existing research institutes, tothe ARD before the end of GOI fiscal 1974/75. It is also proposed thatagricultural research supported by Cess Board funds should come withinARD as a second stage reorganization for which no date is specified. Oilpalm and sugar research centers, which are financed by PNP/PTP's from theirprofits have been excluded from this reorganization.

ANNEX 4Page 4

10. The recently appointed Head of ARD, Ir. Sadikin Sumintawikarta,served for a time, from 1961, as Coordinator for Research in the Ministryof Agriculture. He is aware from that experience of the need for sufficientcontrol of funds, and operational and management authority, to ensureeffective planning and performance of the research. This view appears tobe shared by a number of leaders of agricultural research units includingthe Director of the Central Research Institute for Agriculture (CRIA) atBogor and those responsible for the National Rice Research program.

C. Organization of the Research Agency

Tentative Organization Plan

11. It was not possible to achieve final understanding with respectto the organization of ARD during appraisal as of October 12, 1974, in theabsence of the Ministerial Decree which was to follow the Presidential Decree(Annex 2) on reorganization. After discussing possibilities for transferand/or consolidation of certain activities, of alternative uses of facilitiesat Bogor if present research there were to be decentralized, and of the needto delegate authority to the persons in charge of the various researchprograms, the organizational structure as presented in Annex 3, Chart 2,was agreed upon.

12. In compliance with the Presidential Decree, the following proposalswere accepted:

(a) The bureau leaders would be retained within the ARDheadquarters and be responsible for various services,rather than be identified obviously as the leadersof the respective research programs. This wouldpermit the respective directors of the researchprograms, institutes and centers to continue to reportdirectly to the Head of ARD, as they had previouslyreported to their Director General, and would avoidappearance of downgrading their status by placingthem under a bureau leader.

(b) The number of support and technical bureaux would be heldto a minimum of seven initially, to permit ample time toidentify well-qualified leaders and to avoid political/administrative pressures to fill these posts withnon-qualified persons.

(c) The Scientific Management Council would include all directorsof the research programs, centers or institutes. This wasdeemed desirable to encourage cross-criticism and evaluationsof research by the research directors. An AgriculturalResearch Review Board would also be established under theMinistry of State for Research to serve for the broaderexternal assessment of the research.

ANNEX 4Page 5

13. It will be important to give thoughtful and understanding con-sideration to the foregoing and other similar issues. The resistancesto establishment of an Indonesian Agricultural Research Organization as anational system, as proposed by the Joint Agriculture Research Survey Teamin July 1969, still prevail in varying degrees and must be won over ratherthan run over.

The Governing Board (Dewan Penelitian Pertanian)

14. The Governing Board will be concerned with general policy, in-cluding the review cf research program priorities and funding and theapproval of policies and procedures for accounting, procurement, andsenior personnel appointments and management issues, not only in respectto ARD but also to those agricultural research institutes supported bycess funds.

15. The Governing Board should include representation from otherMinistries and units concerned with agricultural research, such as theMinistry of Finance, Ministry of State for Research, BAPPENAS and others,to extend awareness of the importance of improved agricultural technologyas well as to bring external management competence to bear on researchpolicy matters.

16. Minister of Agriculture Prof. Dr. Ir. Thojib Hadiwidjaja advisedthat the Governing Board, which he would chair, would include the Direc-tors General of the Ministry of Agriculture. This will ensure them of acontinuing relationship with the research that was previously under theirdirect management, and that it should continue to be directed in large partto problems related to their respective programs. The further membershipof the Governing Board is yet to be determined but involvement of repre-sentatives of organizations outside of the Ministry of Agriculture, with aCouncil of about 10 to 12 members, would be encouraged. An executive com-mittee of the Board, to be called the Dewan Harian Penelitian Pertanian,and chaired by the Head of ARD, will provide the necessary degree of unitarycontrol over the treasury and cess funded research activities which togetherconstitute the national agricultural research system.

The Scientific Management Council

17. The Scientific Management Council, under the chairmanship of theHead of ARD, will be essentially a standing committee composed of thedirectors of the research programs, centers and institutes, to be concernedwith a wide range of matters relating to program planning, operations,reporting, and coordination within ARD as well as with external agencies.

18. The retention of the Scientific Management Council as an internalunit for attention to operations of ARD should serve to integrate thevarious research programs into a cohesive new organization, utilizingthe professional capabilities of ARD to the maximum in the planning andexecution of national research programs.

ANNEX 4Page 6

Research Advisory Committees

19. Opportunities should be provided for those concerned with thedevelopment and use of new technology, especially the small producers, toparticipate in making recommendations for and planning of research and inevaluation of progress of research programs. Research advisory committeeshave been established under several of the research institutes and it isplanned to set up such committees, each of 10 to 12 members, for additionalcommodities and program areas when ARD is established.

20. The research program planning and evaluation will be initiatedas the responsibility of the directors of the research programs, institutes,or centers, with the guidance of the one or more technical advisory com-mittees for each program.

Secretariat, Support and Technical Bureaux

21. The Secretariat would provide administrative support services andwould include sections responsible for budgeting and finance; personnelmanagement and staff development; procurement, including specialized, equip-ment items and supervision of design and construction of minor civil works,and accounts. A project implementation unit (PIU) would be located in theSecretariat during the disbursement period of the project, and would beresponsible for the project civil works construction and equipment procure-ment program.

22. The proposed services bureaux of ARD include a variety of activitiesthat should be given special attention in the forming of a national agri-cultural research system. Support services would be provided by four bureaux,one for agro-economics which would include a monitoring and evaluationfunction for ARD programs as a whole to facilitate program planning, coordina-tion, evaluation and reporting; another for statistics and data processing,which would include experimental design and analysis capabilities to ensurethat research is planned in such manner as to extract maximum informationfrom experiments.

23. The other support services would be provided by a bureau for live-stock and plant quanantine; and a bureau for library resources includingpublications, which are serious limitations in agricultural research systemsof most developing nations.

24. Technical coordinating services would be provided by three bureaux.One bureau would be responsible for coordination and advice for the soils andfood crop programs area; a second for the estate crops and forestry programs;and a third for the livestock and fisheries programs.

Extension Linkages

25. A major weakness in the effective application and use of newagricultural technology is the poor linkage between research and the

AirNEX 4Page 7

extension services. A commonly proposed panacea is the addition of "exten-sion subject matter specialists" to the extension organization. However,such persons are usually trained as specialists in communications, withno particular competence in a subject matter field or appreciation of theimportance of keeping intact the components of improved packages of prac-tices. It should be the responsibility of the research organization toassemble the best combinations of new technological advances and to trans-mit such innovations in understandable form to the extension personnel.The subject matter specialist should be allied to the subject mattersource - the research station or laboratory as part of an interdisciplinaryteam - with the dual responsibility of constant contact with research per-sonnel to keep abreast of new developments and constant contact with theextension and education staff to ensure effective transfer including thetesting on farmers fields and packaging of new technology for smallholderproducers. He should be a technically trained person with an understandingof research and should be on the staff of the research center.

D. Future Development of ARD

Upgrading of Research Capability

26. The assembling of all research programs within a national researchorganization should improve research quality by: (i) permitting the designof more problem-oriented research programs; (ii) furnishing greater certaintythat funds budgeted for research will be expended for that purpose; and (iii)providing a management structure better suited to research planning andoperations.

27. Immediate further improvements in research performance outside theproject are in prospect through the upgrading of a number of research insti-tutes and programs, for example, livestock research with a ten year term ofassistance from the Government of Australia. Improvement of these and otherARD commodity programs, many of which receive substantial external assistancefrom a wide range of donor agencies, will furnish patterns for better planningand operational procedures for the overall organization.

The Relocation of Research

28. Technical assistance programs over the past two decades haveemphasized the concentration of agricultural education, research andextension into centers of excellence - with such centers at Chapingo,Mexico; Bangkok, Thailand; Serdang, Malaysia; Los Banos, the Philippines;and at Bogor, Indonesia. In many cases there has been excessive emphasison implantation of the U.S. Land Grant University structure of combinededucation, research and extension -- with the unfortunate misunderstandingby the host developing nations that one or a few such institutions could

ANNEX 4Page 8

supply the research necessary for a continuous flow of new agriculturaltechnology for sustained agricultural growth throughout the country. Ina number of instances this concentration of research and education re-sources has caused a distortion of research, with the highly trainedscientists reluctant to leave the central area and move to research sta-tions in the principal agricultural regions. This reluctance is under-standable so long as centers such as Bogor and Los Banos continue toreceive disproportionate attention and support from donor technicalassistance agencies and so long as the building of effective and attractiveregional research centers is neglected. Indonesia has a colonial heritagein the cluster of research institutes at Bogor, much like the institutionalpattern at Wageningen. However, the geographic dimensions of Indonesia aremore akin to those of the United States or India than the Netherlands andthe varied environments of the country must be served by capable scientistsaddressing the problems in the different farming regions.

29. There is an appreciation by the Minister of Agriculture and thedesignated Head of ARD that research must be strengthened in East Java, inSumatra, Sulawesi and Kalimantan, to improve levels of living in theseregions, to improve prospects for transmigration and to strengthen thetotal national economy. The regionalization of research will be accom-plished only by development of the kinds of field and laboratory facili-ties that will furnish career opportunities for well-trained researchspecialists, in areas where educational, medical and other services andamenities are available for their families.

30. The relocation of research will involve not only the transfer ofcertain activities from Bogor to selected national research program centersbut also improved sites for presently unsatisfactory locations. The gradualtransfer of rubber research from Bogor to Sumatra and of research on palawijacrops and rice to Sukamandi will provide opportunity for use of some facilities-at Bogor for relocation of certain horticultural crops research, fruit andvegetable processing, rubber technology and other activities. The consolida-tion of resources into ARD provides a broad range of opportunities to designa national network of research facilities, with (i) a Headquarters at Pasar-minggu near Jakarta; and (ii) well planned and well staffed national researchprogram centers in the provinces.

Development of a National Research System

31. The past and current practice of giving atteution to selectedcommodity or program areas by the various technical assistance donors, withnew centers designed to serve the individual project, will be useful inbuilding up parts of the national research program. But this approach haslead to excessive fragmentation of research resources and also tends topreclude development of the type of national research structure with themanagement expertise and stability necessary to sustain the individual projectsas external support is withdrawn.

ANNEX 4Page 9

32. During the early implementation phase of the project, attentionwould be given to the planning of ARD as a national research system, withconsideration to:

(a) the development of ARD headquarters facilities atPasarminggu, for the administrative leadership, andfor certain support services;

(b) the establishment of national research program centersfor multi-purpose research, both within Java and inother regions; and

(c) the clarification of the role and relationship ofexisting institutes, such as CRIA Bogor, CRIA Sukamandi,CRIA Maros and other stations.

33. The preparation report proposed that assistance in establishmentof the new research organization should be provided by the project throughthe appointment of a senior research scientist (a research administrator)of international stature to work as program coordinator with the Head ofARD. The Minister of Agriculture has concurred in the importance of thistype of consulting assistance.

E. Relations with the Ministry of State for Research

Organization - Research Review

34. The Presidential Decree establishing the Ministry of State forResearch gives authority to that Ministry for a wide range of functionsdesigned to improve planning and operations of research supported by theGovernment, including:

(a) the review of research priorities;

(b) consideration of allocations of funds to ensurescope or magnitude of support commensurate withthe problems; and

(c) the final decision, after review with the Institutefor Government Organization (LAN), on the organiza-tion structure for the various research agenciessuch as ARD.

ANNEX 4Page 10

35. The authority of the Ministry of itate for Research with respectto organization of research will be useful leverage to the Head of ARD inbringing about transfers and consolidation of programs and in designing aneffective research management structure.

Research Priorities and Funding

36. It is expected that the Ministry of State for Research willexercise its function with respect to research priorities and levels offunding primarily through review of programs and budgets prepared by therespective research agencies. The Ministry will in effect furnish thefinal assessment for research programming for benefit of BAPPENAS andthe Ministry of Finance.

37. In appraisal discussions -about a Scientific Management Councilwithin ARD it was recognized that: (i) the body would be too large andineffective for in-depth assessment of research if directors of all ins-titutes or units of ARD were to be included, providing a Council of 20 ormore persons rather than the 10 or 12 to be preferred; and (ii) a councilcomposed only of staff within ARD would not furnish the broad and externalassessments necessary to ensure that research is directed to the mostcritical problems in agriculture.

38. GOI is fully aware of the importance of having an externalparticipation in the review of ARD research programs. In view of the re-sponsibility of the Ministry of State for Research for final review of allresearch funded by GOt the setting up of agricultural research reviewprocedures in the Ministry of State for Research would appear to be anecessary and logical step for this purpose.

Coordination with Other Agencies

39. ARD, as presently envisioned, would have no direct authorityover or liaison with related research of the Agricultural Universities,the Indonesian Institute of Sciences (LIPI), the private sector and othernon-agricultural sector agencies. It is expected, however, that many ofthe national research programs, such as the National Rice Research Program,would involve the staff capabilities and other resources of the Universitiesand other organizations with allied interests. While the working relation-ships with such organizations should be developed on the initiative of theARD, with cooperative agreements defining the nature of the mutual support,the Ministry of State for Research might facilitate such collaboration incertain instances.

ANNEX 4Page 11

40. The Ministry of State for Research, with its extensive reviewfunctions, should serve as the principal reservoir of information on re-search in progress, and research needed, to serve national development.This will furnish the base for allocation of supplemental funds or forshifting of resources to selected programs as needed to ensure balancedinter-agency attention to priority research.

Salaries and Management Policies for Scientific Personnel

41. Salaries for research workers, as for all government personnel,have been most inadequate for more than a decade. Certain organizationssuch as the research institutes for estate crops have been able to offermore attractive salaries and emoluments because of their special funding.In other cases arrangements have been proposed for payment of salary supple-ments by external technical assistance agencies. In most instances,however, research officers have devoted part time to other duties, forwhich they can be imbursed, to achieve a minimum living income.

42. It is widely recognized and appreciated that salary levels forresearch workers should be raised to permit their full time attention totheir research assignment, to eliminate inequities resulting from a for-tuitous appointment to a privileged institute, and to establish a basefor salaries and promotion on merit and performance. LIPI and some ofthe individual research institutes and programs have developed proposalsfor improving salaries. However, it would seem essential for an organiza-tion such as the Ministry of State for Research to furnish the leadershipin developing uniform grades, standards, evaluation criteria, and salarylevels applicable to scientists in the various research bodies.

43. Action has been initiated to classify research workers in agri-culture into four categories as (i) Senior Scientists; (ii) Scientists;(iii) Adjunct Scientists; and (iv) Assistant Scientists. Of the 350 per-sons invited to submit their records for evaluation to an Evaluation Com-mittee only 293 responded and only 211 had been reviewed as of September 30,1974, with classification as follows:

Senior Scientist 4

Scientist 27

Adjunct Scientist 63

Assistant Scientist 84

Technician 33

ANNEX 4Page 12

44. There was much dissatisfaction expressed by the research workersabout the evaluation procedures and criteria, with excessive emphasis onacademically-oriented performance. It is apparent that the criteria shouldbe improved to develop basic standards for the various job levels and todetermine promotions on meritorious performance. LIPI and the Ministry ofAgriculture have taken initiatives in the grading processes but this wouldappear to be a prime function for the Ministry of State for Research asit becomes established.

45. At appraisal a total of 58 research workers held on the establish-ments of the four institutes most affected by the project (CRIA, Horticul-tural Research Institute, BPPB and BPPM) had been reclassified and placedinto one or other of the four professional scientist categories. It isestimated that the figure will rise to about 90 when the evaluation ofcurrent staff is completed. Not all of these would be involved in theprograms to be supported under the project, as some of the staff will beassigned to work on other crops. Accordingly it is assumed that no morethan 66Z of the existing professional staff (60 persons) in the fourinstitutes will actually be engaged in the programs to be supported underthe project. This compares with a total of 126 professional staff neededto man the four programs by the end of the disbursement period. 'The 76fellowships for Ph.D. or M.Sc. level training assigned to the four programs(Annex 16) should be sufficient to meet the further training needs ofthe additional 66 professional staff, with allowance for wastage.

46. No shortage of eligible candidates for these long-term fellowshipsis foreseen, as large numbers of Ir and SPMA level (roughly equivalent toB.Sc. and Diploma) personnel are held on establishment or can be recruitedfrom Indonesian educational institutions through the life of the project.Agricultural faculties averaged 180 graduates annually in the 1969-73 periodand similar output is expected during the next five years, most of whomare likely to seek public sector employment in the absence of privatesector alternatives.

Attached: Tables 1 - 3

March 31, 1975

ANNEX 4

INDONESIA Tale 1

AGRICULTURAL RESEARCH AND EXTENSION

Staffing and Funding of Naior Agricultural Research Organizations

Professiy7al Ph.D.'s & 1973/74 Budgeq, Foreign DonorStaff - Masters Rp (Million) - Donor US'OOO

A. Ministry of AgricultureDirectorate General of Agriculture1. Central Research Institute of

Agriculture (CRIA) - Bogor 86 3 and 54 677 USAID 1332. Soils Institute - Bogor 26 --- 132 FAO/UNDP 215

USAID 133Netherlands 55Belgium 45

3. Horticulture Institute - Pasarminggu 18 --- 191 USAID 133Netherlands 34

Directorate General of Estate Crops1. Estate Crops Institute - Bogor 31 3 and 28 245 ---2. Estate Crops Institute - Medan 28 1 and 27 453 IDA 600

UNDP/FAO 9333. Industrial Crops Institute - Bogor 37 0 and 4 277 ---4. Tea and Cinchona Institute - Bandung N.A. N.A. N.A. IDA 700Directorate General of Livestock Netherlands 1,0001. Animal Husbandry Institute - Bogor 17 0 and 1 61 ---2. Animal Diseases Institute - Bogor 13 63 Australia 1443. Animal Virus Diseases Institute-Surabaya 13 1 M.D. & 9 D.V.M. 81 Australia 374

Belgium 36

Directorate General of Forestry1. Forestry - Bogor 24 --- 94 --- ---2. Forestry Products - Bogor 21 --- 123 --- ---

Directorate General of Fisheries1. Inland Fisheries - Bogor 15 0 and 2 24 Netherlands N.A.

France N.A.UNDP N.A.

2. Fisheries Technology - Pasarminggu 7 --- 14 Japan 1503. Marine Fisheries - Jakarta 20 O0and 3 88 UNDP N.A.

B. Government-Owned Plantations (PNP's) Research Centers

1. Rubber Research Center - Tanjongmorawa 3 --- 54 ADB 902. Oil Palm Research Center - Marihat 8 --- 96 Germany N.A.

ADB N.A.IRHO N.A.

3. Sugar Experiment Station - Pasuruan 19 --- 412 IDA 1,000

C. University Agricultural Research

1. Bogor Agricultural Institute (IPB)-Bogor 442 22 and 78 50 USAID/MUCIA N.A.2. Sumatera Utara University - Medan 51 --- N.A. New Zealand N.A.

ADC N.A.3. Hasanudden University

a) Agriculture - Makassar 34 0 and 1 N.A. ---b) Animal Husbandry - Makassar 32 --- N.A. --- ---

4. Gadjah Mada Universitya) Agriculture - Jogjakarta 55 --- 36 USAI P/MUCIA

RF_/& FF74 N.A.b) Animal Husbandry - Jogjakarta -- --- 3 USAID/MUCIA N.A.c) Animal Technology - Jogjakarta 19 0 and 2 19 USAID/MUCIA N.A.d) Forestry - Jogjakarta 27 --- 3 USAID/ f CIA

& RF- N.A.

D. Other Organizations

1. LIPI - Jakarta 50 11 and 39 N.A.

L/ Group III and IV of the Indonesian Civil Service Salary Scale2' Includes both routine and development budgets3/ U.S. Midwest Consortium of Universities and Rockfeller Foundation4/ Ford Foundation

January 2, 1974

ANEX 4Table 2

INDCNESIA

AGRICULTURAL RESEARCH AND EXTENSICN

Ministry of Agriculture Research Budgets and Salaries

Research as a Percent of Total Budget 1973/74

Rupiahs (million)

Total Budget Research Budget J % of Total

Directorate General

Secretariat and InspectionGeneral 1,409 - -

Agriculture 5,133 1,000 19.5

Estate Crops 1, 533 975 63.6

Livestock 1,038 205 19.7

Forestry 2,006 217 10.8

Fisheries 1,193 126 10.6

Ministry of Agriculture 12,312 2,523 20.5

GNP (Estimate) 1641 325,O00 I 2,523 .0039

Agriculture Value .Added (1972) 18,550,000 2,523 .0136

June 7, 1974

INDONESIATable 3

AGRICULTURAL RESEARCH AND EXTENSION

Ministry of Agriculture Research Budgets and Salaries

Annual Budget of Research Units(Millions of Rupiahs per Professional Staff Member)

Per Professional MemberResearch OrzAnizAtion RuPiahs (million) 17

Directorate General of AgricultureCRIA 7.9Soils 5.1Horticulture 10.6

Directorate General of Estate CropsEstate Crops - Bogor 7.6Estate Crops - Medan 16.2Industrial Crops - Bogor 7.5Tea & Cinchona - Bandung (n.a.)

Directorate General of LivestockAnimal Husbandry 3.6Veterinary 4.8Animal Viral Diseases 6.2

Directorate General of ForestryForestry 3.9Forestry Products 5.9

Directorate General of FisheriesInland Fisheries 1.6Fisheries Technology 2.0Marine Fisheries 4.4

Government-Owned Plantation PN Pts ResearchCenters

Rubber Research Center - T. Morawa 18.0Oil Palm Research Center - Marihat 12.0,ugar Experiment Station - Pasaruan 21.7

Universities 2/

Bogor Faculty (IPB) 0.10Gadjah Mada - Agriculture Faculty 0.65Gadjah Mada - Forestry Faculty 0.11Gadjah Mada - Agricultural Technology Faculty 1.00

1/ FY 1973/74 includes both routine and development budgets.

2/ FY 1973/74.,

March 27, 1'975

ANNEX 5Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Research Personnel Grades and Salaries

A. Professional Staff

1. At present, there is little uniformity in salaries paid to GOIresearch personnel. Take-home salaries of research workers depend to alarge degree on the organization for which they work. As a rule, privatefirms offer much better salaries than those paid by the public sector.The PNP/PTP and cess-funded institutes give better salaries to theirpersonnel than those financed by the GOI development and routine budget(see Table 1). Even in the latter, however, take-home salaries differ widely.

PNP/PTP Research Units

2. A number of PNP/PTPs jointly finance research units for specificcommodities. Among these, the most important are: Marihat (oil palm),Tanjung Morawa (rubber), and Pasuruan (sugar). Research workers in theseunits are paid according to a uniform PNP/PTP basic salary scale. Allow-ances and fringe benefits are added to this salary, and are often comparableto or exceed the salary itself, thus making it more difficult to estimatethe value of the total remuneration and compare the levels in the variousinstitutes.

Cess-funded Research Institutes

3. The Cess Council currently finances, partly or entirely, threeagricultural research institutes: BPPM (rubber and oil palm), BPPB (rub-ber, coffee and tobacco), and the Tea and Cinchona Research Institute nearBandung. 1/ The research workers of these institutes are paid according tothe PNP/PTP salary scale and also get extra allowances,and other fringebenefits. Again, the extra benefits complicate attempts to compare sala-ries in the various institutes. The take-home pay (including allowancesand other fringe benefits) in the cess-funded research institutes is under-stood to be slightly higher than those in the PNP/PTP research units.

1/ In addition, the cess fund finances some projects in the ResearchInstitute for Industrial Crops at Bogor, while the remainder of theInstitutes finances come from GOI development and routine budgets.

ANNEX 5Page 2

Research Institutes Financed from Development and Routine Budgets

4. Salaries paid by these research institutes include: (i) thebasic salary, which is determined by grades according to a Civil ServiceLaw. It applies to all institutes and is paid from the routine budget;(ii) an extra allowance (honorarium) which varies widely from one insti-tute to another and is paid out of the development budget; and (iii) fringebenefits, such as housing and cars, which also vary. Additions to the basicsalary, which was fixed for all grades in 1968, have been made several timesduring the past few years in a deliberate effort to improve government em-ployment conditions. Certain categories of civil servants, including re-search workers, were recently (April 1, 1974) given a salary addition whichwas double that awarded to other GOI employees (para 7). A harmonizing andsignificant increase in the honoraria levels for research workers is ex-pected in the near future as one of- the first benefits to accrue from theARD reorganization which is pending.

Research Worker Grades

5. Based on qualifications, experience and responsibilities, GOIresearch workers are currently being classified by an Evaluation Committeeset up under Ministerial Decree Number 8/1971 into four categories: (i) SeniorScientists; (ii) Scientists; (iii) Adjunct Scientists; and (iv) AssistantScientists. Each category (echelon) is tied to a certain range in the civilservice salary scale established by a Civil Service Law of 1968 (Table 2).For instance, a Scientist graded as echelon II will receive a salary in theIVa or IVb range of the civil service salary scale (Table 3). The number ofyears service determine his "basic salary" on this scale. This in turn isused to determine his "net salary" according to the successive additionsawarded to all employees in recent years. Tables 4 and 5 give two examplesof the computation required for calculating the "net" from the "basic" salary.

6. The formula for determining the "net" from the "basic" salaryis not exactly the same for all civil servants. Some modifications havebeen introduced for various categories of personnel. At the end of 1972,a special increase was given to personnel of the Ministry of Finance.Their "addition on basic" (line 6 of Tables 4 and 5) was hiked 900% (in-stead of 200% for other civil servants). The remainder are expected toreceive the 900% increase within a few years as a result of progressiveincreases, but no date has been specified.

7. Effective April 1, 1974, a further "addition on basic" of 200%was given to all civil servants except those in the Ministry of Finance.An additional 200% was also given to certain categories, including researchworkers 1/ (see Tables 4 and 5, lines 10 to 13), making an effective 400%

1/ This raise of 400% of the basic salary will be given only to the personnelof the research institutes who have been categorized as research workersafter screening of their curriculum-vitae by an on-going regarding com-mission (see Annex 4), paragraph 43).

ANNEX 5Page 3

increase on basic at that date. It is uncertain whether this slight com-parative advantage will be maintained in the future, when everyone islikely to reach the 900% ceiling. This last salary increase brought abouta raise ranging from Rp 11,000 for an assistant scientist to Rp 40,000 permonth for a senior scientist. Tables 4 and 5 show, however, that the "netsalary" of research workers is still fairly low.

Honoraria

8. The directors of the research institutes can supplement thesalaries of their research workers by using "project funds" from thedevelopment budget. These project funds are attributed to the insti-tutes under their authority by the directors general of the five di-rectorates general in the Ministry of Agriculture; each finances a specificresearch project. Within a certain limit established by their DirectorateGeneral, the directors of the institutes may use part of these project fundsto supplement the salary of their personnel with so-called "honoraria". Thesefunds may also be used to pay the salaries of newly hired personnel, up totwo years. At the end of this period, if the recruit is confirmed in hisposition, he is integrated in the cadre of the civil service. 1/ The amountof the project funds - and, consequently, the level of the honoraria - variesamong the institutes, depending chiefly on the directorates commitment toresearch and on the funds they have at their disposal. Thus, among theinstitutes the supplemental salaries they can offer to their staff varywidely. Depending on the institutes and the qualification of the researchworkers, these monthly supplemental salaries vary from zero to Rp 30,000 or

more.

Fringe Benefits

9. These benefits depend on the institutes. Cars, houses, pension,and medical coverage are provided in some of the institutes but not in others.Travel allowances are another way of supplementing the staff's salary;although they vary from one institute to another, they are higher thanthe actual expenditures, and thus constitute an additional fringe benefit.Three nights allowance is paid for each night spent away from the dutystation in the case of some institutes, to induce staff to undertake fieldwork.

Future Developments

10. The reorganization of the Ministry of Agriculture, which willbecome effective shortly after the requisite Ministerial decree has beenratified, will permit some harmonization and improvement of research workers'

1/ The "honorarium" paid to a recruit during his probationary period, however,is rather low. At the horticulture research station at Lembang, newlygraduated personnel get total monthly emoluments of about Rp 10,000 permonth (US$24) while CRIA (Sukamandi) probationers receive Rp 20.000.

ANNEX 5Page 4

salaries. Both the Minister of State for Research and the designated Readof ARD are intent on improving material conditions of research workers, butno GOI decisions had been made at appraisal. Their proposal, which issubject to approval of BAPPENAS and the Ministry of Finance, is for thefollowing take-home salaries for the four new categories of research workers:

Senior Scientist: (corresponding to echelon I plus all theresearch institute and center directors):monthly take-home salary of Rp 150,000with, in addition, fringe benefits, suchas house, telephone, car and driver.

Scientist: 1/ (corresponding to echelon II plus all Ph.D's):monthly take-home salary of Rp 125,000.

Adjunct Scientist 1/ (corresponding to echelon III): monthlytake-home salary of Rp 100,000.

Assistant Scientist 1/ (corresponding to echelon IV): monthlytake-home salary of Rp 75,000.

These salary proposals are based on research workers living in or aroundBogor. With some geographical variations which affect the cost of living.(higher in Jakarta for instance), they would be the same for all insti-tutes and centers coming into the Agency.

11. These remuneration levels should be sufficient to attract andholding competent research personnel under present Indonesian conditions.The introduction of salary levels comparable to these proposals are stronglyrecommended for the project.

12. The GOI is actively considering a major reform of the governmentsalary structure, which when implemented will bring about much needed improve-ments in the salaries of all government workers. Salaries of researchworkers will be related to their category under the new research workergrading system (para 5) when this reform occurs.

B. Non-Professional Staff

13. The non-professional staff of the research centers are dividedinto four general categories: (i) senior technical including assistantscientists; (ii) junior technical (iii) clerical; and (iv) labor. The salarybrackets used for cost estimation purposes are rather wide.

1/ The fringe benefits for these echelons have yet to be defined. Theywould be proportionate to those given to senior scientists.

ANNEX 5Page 5

Senior Technical

14. This category encompasses the holders of a B.Sc. or a Diploma.A small proportion are likely to continue their studies towards an M.Sc.,possibly by availing themselves of fellowships provided under the project.The salary bracket ranges from Rp 20,000 to Rp 75,000 per month.

Junior Technical and Clerical

15. In this category are personnel with high school educational back-grounds. Their salaries range from Rp 8,000 to Rp 20,000 per month.

General Labor

16. This category comprises workers with limited educational quali-fications (primary school). Drivers, guards, messengers and other non-manual workers earn Rp 8,000 to Rp 10,000 a month. Salaries of manualworkers depend on their administrative status. Daily-paid workers (inor-ganic workers) earn, depending on the region and the employer, from Rp 100to Rp 200 per day. Monthly-paid (organic) workers would get around Rp 7,500per month.

Attached: Tables 1 - 5

December 6, 1974

AMNEX 5Table 1

7 1D CUESIA

AGRICULTURAL RESEARCH AID EXTENISIaN

Comparison of Salaries of Agricultural Research Personnel 1/

(Rupiahs '000/month)

Directorate General Directorateof Agriculture, General ofLivestock, Forestry Estate PRIVATE FIRMSand Fisheries Crops LIPI A 3

New Ir Graduates 5 to 6 20 N.A. 50 50after 6 months 10 35-40 N.A. N.A. N.A.after 2 years 30 N.A. 25-50 80 80after 5 years 35 70-80 N.A. 120 120after 10 years 42 70-80 N.A. 150 150

Housing Yes Yes Yes 2/Pension Plan Yes No Yes No NoCar Yes Yes Yes Yes Yes

1/ Honoraria and other fringe benefits included (prior to April, 1974 salary increase).

21 Loan of 120,000 Rupiahs per year for housing.

3/ Grant of 10,000 (tax free) Rupiahs per month for rental of house.

May 31, 1974

ANNEX 5Table 2

INDCNESIA

AGRICULTURAL RESEARCH AND EXTENSICN

Classification of Research Workers

Salary Scale Based on theEchelon Classification 1968 Civil Service Law

I Senior Scientist IV c to IV e

II , Scientist IV a or IV b

III Adjunct Scientist III c or III d

-IV Assistant Scientist III a or III b

1/ The decree of the Minister of Agriculture defining criteria and procedures for theclassification of all research workers sets forth the following responsibilitiesfor scientists in each of the four categories:

1* Senior Scientist: with full powers to carry out researchwork as a full time job in a given branchof science and give guidance and pur-pose to the research activities of theAdjunct Scientistsand Assistant Scientistsin a certain branch of science.

2. Scientist: with full powers to carryout research work as afull time job in a certain branch of science.

3. Adjunct Scientist. carries out research work as a full time jobin a certain branch of science under theguidance of a senior scientist.

4. Assistant carries out research (technical) as a fullScientist: time job in a certain branch of science

under the guidance of a scientist orsenior scientist.

May 31, 1974

a ~~~~~~~~~~~~~~~~~~~~IJCDOIIESIAAGRICULTURAL RESEARCH AND EXTENSION

1968 Civil Service Law: Basic Salary Scale(Monthly Basic Salary in Rupiahs)

T~~Th ~ Salary Scala I Yar Salary Scale II1Yer Salary Scale III IYasSalary Scale IVof I I of I loft l-IoftIServicel. a t 1 b I I d fServicel a t I bt I 1 d IServicel a t h tb11 1 d JService! at: b I c t d t a

.0 I 4001 I I 1 1 I I I I I. 1 I I I I I I I II I - t I I I I I I I I I I I I I I I I L2 I 4401 I 1 I I I I I 1 I I I I I I I I 3 1 - I5 201 6001 6901 I I I I I I I I t I I I I 4 I 4801 - I - I - I I. I I ' I I I I I I I I I I I 5 I- 1 5841 6801 7921 I I I t I 1 I t I I I I I I 6 I 5201 - I -I - I t 113501 I I I 1 I I I I I I I I I7 1 -16 6481 7601 8881I1I- I- I I I I I I I I I .8 I 560 -1I- I- 12 1 15201 I I I . I I 9 1. -I 712! 8401 98413 I - 118601!20801 23201 I .t I I I I I I I I10 I160 1- 1 4 -I-I 4!116901 I-tI - I I I I I I I I I I III I - 1 7761 920? 10801 5 I. - I 2.0601 23001 25601 0 I 28201 3120! 3440! 37801 0 1 I I I I12 1 6401 - I-I- 16 1 1860! -I -'I -I IlI - I- I- I- Il I I I I 13. I - I 8401 10001 1176! 7 I - I 2260! 25201 28001 2 1 31001 34201 3760! 4120! 2 !1 I I I I14 I -I - I -I-I. 81I.20301 - I - -I -tf.3 - I - I -tI - 13!1 I I I I15 1 700! 9041 10801 12721 9 I - I 2460! 27401 30401 4 .1 33801 3720! 4080! 4460! 4 1 49201 I 16 I - I - I - I - I 10 1 2200! - I -. I - 1 5 I - I - I - I - 1 5. t - I I I 17 I - I - I - I - I 11 I. - I 2660! 2960! 3280! 6 1. 3660! 40201 4400!1 4800! 6 t 5280! 5740! I Iis I 7601 1000! 1200! 1416! 12 1 23701 - I - I - t 7 I - I -. I - I - 1 7 1 - I - 1 I 19 1 I - I - I - I 13 ! 1 28601 3180! 3520! 8 I 39401 432D! 4720! 5140? 8 .1 5660! 6140! 6640! 20 I 1 14- I - I - I14 -I 9 I - I -I I. I - - I - I 9 I - I - I - I I21 1 I 10961. 13201 1560! 15 I 2625! 3060! 3400! 3760! 10 t 4220! 4620! 5040! 5480! 10 1 6040! 6540! 7060! 7600122.1I I- 16.!1 -I - I -I - II I1I -! -!I -!I - I l! -I - I -I -!I23 I I 17 I - I - I - I - I 12 1 4500! 4920! 5360! 5820! 12 1 6420! 69401 7480! 8040! 8620

I 18 1 2880! 3360! 3730! 4120! 13 I - I - I - I - I 13 I - I - I - I - I -I 19 I - I - I - I - I 14 I - I - I - I - I 14 1 - I - I - I - I -I 20 I - I - I - A - I 15 1 4920! 5370! 5840! 6320! 15 1 6990! 7450! 8110! 8700! 9310 ! 21!1 - 13660140601 44801 16 1 - It - I -I -I 16!1 -I - I -I - I -I 22 I - I - I1 - I - I 17 1 - I - I - I - 1 17 I - I - I - I - I -I 23 I - I - I -I - I 18 1 5340! 5820! 6320! 6840! 18 I 7560!140 87401 93601.10000

INDONESIA ANNEX 5Table 4

AGRICULTURAL RESEARCH AND EXTENSION

EXAMPLE OF NET SALARY COMPUTATION: Senior Scientist (echelon I). married,3 Children: (monthy salary in Rupiahs)

- Salary scale: IV/e with 18 years of service within the scale. RP_

1. BASIC SALARY 10,0002. Family compensation:

a. wife: 5% of basic salary: Rp. 500b. children under 18 years old

2% each 3 x 2% x Rp. 10.000 Hp. 600 1,1003. "Operation allowance" 1/: 20% of basic salary 2,0004. "Position allowance" 27 : 20% of basic salary 2,000

Sub-total (A) 15,1005. "Incentive for Services": 100% of Sub-total (A) 15,100

Sub-total (B) 30,2006. Addition on basic: 200% of basic salary: 20 0007. GROSS SALARY per month 50,2008. Less: a) contribution to social services

6.22% of gross salary R Rp. 3,100b) payment for rice

allowance v: Rp. 25 x 50kgRp. 1,250- 4,35o

9- NET SALARY per month before April 1, 1974 45,850

10. GROSS SALARY before April 1, 1974s 50,20011. Addition on basic: 400% of basic salary 40,000

GROSS SALARY after April 1, 19714: 90,20012. Less: a) contribution to social services

6.22% of gross salary: Rp. 5,600,-b) payment for rice allowance v

Rp. 25 x 50kg Rp. 1,250,- 6,850

13. NEr SALARY per month after April 1, 1974 , 83,350

1/ This "Operation allowance" is given to all the research workers.2/ This "Position allowance" is given to relatively few research workers in

a position of authority (sub division and division heads, directors anddirectors general).

2/ 3.89% for medical care1.25% for insurance0.66% for social care0.42% for Sivil Service Cooperative.

2 Rice allowance for: -- Employee : 10kg-- Wife : 10kg-- Children under

18 years old : 10kg each (max 3 children).This rice is usually supplied in kind and a deduction for its cost is madefrom the salary. The price charged for rice, however, is much below itsmarket price.

5/ A further increase, amounting to 200% of basic salary, was awarded onJanuary 1, 1975, after the above table was competed. Honoraria, varyingfrom Rp. 75,000 maximum for echelon I personnel to Rp. 30,000 minimum forechelon IV personnel will be additional to salary for fiscal 1975/76.

March 27, 1975

ANNUt 5INDONESIA Table 5

AGRICULTURAL RESEARCH AND RXTENSION

EXAMPLE OF NET SALARY COMPUTATION: Assistant Scientist (echelon IV). non-married:(monthly salary in Rupiahu)

Salary Scale: III/a, with 2 years of service within the scale.

1. BASIC SALARY 3,100

2. Family Compensation:a. wifeb. children

3. "Operation allowance" s: 20% of basic salary 620

4. "Position allowance a : holding no position ---

Sub-total (A) 3,720

5. "Incentive for saerioE' : 100% of Sub-total (A) 3,720

Sub-total (B) 7,1440

6. Addition on basic: 200% of basic salary 6,200

7. GROSS SALARY per month 13,640

8. Less: a) Contribution to social services 6.22%of gross salaryl/: Rp. 848

b) Payment for rice allowance V:Rp. 25 x10 kg s 4p. 250 1,098

9. NET SALARY per month before April 1, 1974 12,542--- s-----

10. (jRCsS SALARY before April 1, 1974s 13,640.

11. Addition on basic: 400% of basic salary 12,400

GROSS SALARY after April 1, 1974: 26,0640

12. Less: a) Contribution to social services 6.22%of gross salary Rp. 1,600

b) Payment for rice allowancoeRp. 25 x 50 kg Rp. 1,250 2,850

13- NET SALARY per month after April 1, 1974 t 23,190

1/, 3t, 2 , v & see footnotes Table 4.

November 11, 1974

ANNEX 6Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

National Rice Research Program

A. Introduction

1. Rice is the predominant food grain in most islands of Indonesia.The area of greatest concentration is Java where 50% of the native rice cropis produced. The harvested area, total production and yields per hectarefor 1968-73, with projections for 1974-78, are:

lHarvestedArea Production Av. Yield

Year (000 Ha) (000 T) Qtl/Ha

1968 8020 11666 12.681969 8014 12249 13.231970 8135 13140 14.661971 8317 13724 16.591972 7984 13305 16.691973 8388 14455 17.231974 8400 15032 18.401975 8530 15633 18.901976 8599 16383 19.601977 8736 17235 20.301978 8982 18183 20.90

2. The GOI, in its current National Development Plan (Pelita II) hasa stated objective to maintain the continuity of increases in rice productionto achieve national self sufficiency (1.2 M tons were imported in 1972-73).The annual production projected for 1978 would exceed the 1973 production by3,728,000 tons or by 39%. The annual rate of increase from 1969-73 has beenabout 4.4%. The projected production would proceed more rapidly, with a 5.5%increase in 1978.

3. The increased production and increased yield per hectare achievedfrom 1968 through 1973 were the result of improved, higher-yielding varietiesand intensive promotion efforts. The further projections for higher yieldsand higher total production are ambitious and will be achieved only if furtherimprovements are made in varieties - including resistance to diseases andpests -- and in production technology. The outbreaks of tungro virus in

ANNEX 6Page 2

South Salawesi in 1972 and of the brown plant hopper in East Java in 1973are indicative of the types of hazards that must be overcome if productiongoals are to be met. The tungro virus, brown plant hopper and other diseasesand pests are capable of causing complete destruction of rice fields whenthe attacks are severe.

4. A National Rice Research Program (NRRP), established in 1970, hasnot achieved the desired objectives of (a) strengthening the immediateresearch competence to increase rice yields and improve efficiency of riceproduction, and (b) building a national organization with the capability forproducing a sustained flow of improved technology to meet future productiongoals.

B. Present Status of Research and Development

Personnel

5. The staff for rice research at the main station, branch stationsand substations, as reported by the Central Research Institute for Agricul-ture (CRIA), includes 2 scientists trained to the Ph.D. level, 10 M.Sc., 63B.Sc. and 143 Technicians.

6. The two Ph.D. holders and eight of the ten M.Sc. staff members arelocated at Bogor. The staff of the branch stations, other than Sukamandiand Maros, consists largely of technicians, with a few B.Sc. degree (Ir. inIndonesia) holders.

Facilities

7. Rice research and testing is carried out at about 30 locations inIndonesia. The principal research center at the present time is at Bogor,with the Sukamandi station in process of development as another main center.The facilities and staff at the remaining stations are not adequate at thepresent time for producing dependable research results. Attention is beinggiven to development of a few selected branch stations, to serve theprincipal rice growing regions of Indonesia.

Current Research

8. Approximately 30% of the rice grown in the country is of the newvarieties PB-8, PB-5, Pelita I/1 and Pelita I/2. The latter two werereleased in 1971.

9. Since 1971, the work in varietal improvement has developed newmaterials approaching the stage of release which are suited for areas inSouth Sulawesi where tungro is a problem, in East Java where the brown plant

ANNEX 6Page 3

hopper and grassy stunt are serious deterrants to production, and earlyvarieties which can be used in triple cropping programs of rice productionor in areas where moisture supplies are too limited for mid and long durationvarieties.

10. Pathologists and entomologists have developed techniques forscreening for diseases and insects, and workihg closely with the varietalimprovement staff have made progress in identifying sources of resistanceas well as resistant selections from crosses involving these sources ofresistance.

11. Agronomic trials of released varieties have provided data onnitrogen response upon which fertilizer recommendations could be modified inthe light of the existing shortage of nitrogen fertilizer. Areas with othernutrient deficiencies or problems have been tentatively identified butadditional studies are needed by the soil scientists, plant physiologists andagronomists to determine remedial actions.

12. Studies on cropping systems are under way and an early breakthroughin multiple cropping sequence for transmigration areas in Lampung is anti-cipated. These studies have involved economists in order to assess theeconomic and social benefits of various cropping systems.

13. The performance of the NRRP since its inception in 1970 has beenbelow expectations and the GOI as well as supporting technical assistanceorganizations, including the Japanese and Netherlands Governments, USAGENCY for International Development, the Ford Foundation and the Interna-tional Rice Research Institute, are aware that substantial improvement inrice research on a national basis is essential if the objective of sustainedself sufficiency for this major food grain is to be achieved.

C. The Project

Special Considerations

14. The building of a national rice research capability to supply thenew technological inputs in Indonesia on a continuing basis will requireattention to the following:

(a) The restructuring of the present NRRP into an operatingorganization in which an integrated team of scientists ofthe several disciplines involved in boosting productivityand in protecting the crop, direct their attention toproblem-oriented research;

(b) The designation of leadership responsibility and authorityfor the national program to a well-trained and qualified

ANNEX 6Page 4

research scientist with competence in the planning, imple-menting and coordinating functions;

(c) Strengthening and upgrading of the research and supportingstaff through a systemmatic and vigorously pursued staffdevelopment program;

(d) Improved field station and laboratory facilities, includinga National Rice Research Center and a network of RegionalResearch Stations to ensure reliability of new materials andpractices for specific soils, climates, and farming systems;

(e) More effective procedures for ensuring the prompt applicationand use of new technology -- through subject matter specialistsof the research stations who would furnish the linkage intotraining and extension programs.

Organization and Management

15. The NRRP, to be established as a problem-oriented, multi-discipli-nary activity designed to serve all rice growing regions of Indonesia,would be set up as an operating unit within the newly authorized Agency forResearch and Development.

16. The Program Director, who would be responsible for the planning,direction, coordination and evaluation of the program, would be an Indonesianscientist of sufficient stature and ability to handle these activities.

17. The Director would be assisted by a Program Adviser who wouldundertake the role of research program administrator. He would be recruiteddirectly or through international or bilateral assistance. He would assistthe Director in all aspects of the research program planning and operations.He would cosign with the Director all plans and authorizations for expendi-tures for research equipment items prior to disbursement.

18. The research would be organized to give attention to problems ofbroad national scope through coordinated projects involving the NationalCenter and the regional stations, with priority at the respective regionalstations also to specific local or regional limiting factors.

19. Linkages with the extension service and the agricultural informationcenters would be maintained through the subject matter specialists of theNational Center and the regional stations.

The Research Program

20. Thie research, primarily applied and adaptive, would be directedtoward the following program areas: (a) varietal improvement, (b) soilfertility and management, (c) cultural practices, (d) water management, (e)rice cropping systems, (f) pest management, (g) harvesting, processing and

ANNEX 6Page 5

storage, (h) machinery development and evaluation, (i) economic and socialfactors, and (j) training and communications.

21. The types of activities to be undertaken within the respectiveprogram areas may be described as follows:

(a) Varietal Improvement is one of the most critical factors inincreasing rice production in Indonesia and should receivehigh priority in the NRRP.

Varietal evaluation involves agronomic characteristics;quality -- inlcuding protein content; resistance to diseasesand insects; and tolerance to drought, low temperatures, adversesoil conditions, floods and deep water.

A functioning varietAl improvement program involves anumber of disciplines. Breeders collect germ plasm and makecrosses involving varieties which carry the various traitsto be incorporated. The segregating progenies obtained afterthe desired crosses are made are evaluated by the breeder, thepathologist, the entomologist, cereal chemist, and thephysiologist. Screening these progenies can often be pursuedsimultaneously and in some instances with,the same plantingof progenies.

Lack of cold tolerance in the present new varietiesis restricting their use to areas below 700 meter altitude.Cold tolerance exists in local indica types now being grownat high elevations in Indonesia and crossing programs havebeen initiated, with some new selections evaluated. Basicto progress in developing lines which can made use of thischaracteristic will be an understanding of the physiologicalreactions to temperatures at varying altitudes under theconditions which prevail near the equator.

(b) Soil Fertility and Management - A principal factor in riceyields is nitrogen management. This includes determinationof the magnitude of response to nitrogen and the interactionof this response with seasonal conditions to determine thelevels of nitrogen that are economical. Other factorsdetermining nitrogen utilization include soil physical andchemical characteristics, the time and method of application,the management of water in relation to nitrogen fertilization,and the availability of other nutrients.

A recent emphasis in evaluation of new varieties is ontheir efficiency of performance without artificial fertilizer.Varietal response at low to moderate nitrogen levels isespecially important since these are the levels at whichmany of the new varieties will be grown. In situations

ANNEX 6Page 6

where careful water control is not possible, treatments todelay the release of nitrogen after it has been appliedas a basal application offer an opportunity to increase theefficiency of fertilizer use.

New types of nitrogenous fertilizer offer possibilities ofa delayed release which will enable the nitrogen to be suppliedmore equitably through the growing season and be available atthe period of growth when it is most required. This type offertilizer will be especially useful where water cannot becontrolled and the nitrogen can be effectively applied onlyat the time of land preparation. Research on hand placementof pelleted fertilizer could possibly provide a means ofincreasing fertilizer efficiency on small farms.

Studies of nutrient availability, the effect of prolongedsubmergence of soils, and the seasonal availability of nutrientsin flood water are factors of production that need study andevaluation.

Soil tests from various locations are necessary to indicatethe availability of nutrients such as phosphorus and potash aswell as some of the minor nutrients such as zinc which maylimit rice production.

(c) Cultural Practices - Factors of crop husbandry which enablethe favorable interaction of variety and fertilization toproduce high yields include land preparation, placement offertilizer, age of seedling, seedlings per hill, plant spacing,depth of transplanting and time of transplanting in relationto the crop season, rainfall patterns, etc. Research on suchinteractions will involve the agronomist, soil scientist,physiologist, plant breeder and agricultural engineer, toprovide packages of cultural practices which can be applied atthe farm level.

(d) Water Management - Evidence from studies in various countriesindicates that water management can effect rice yields in asubstantial way and has been an important factor influencingthe spread of new varieties. Studies of this type demand tnlejoint attention of the agronomist, soil scieitist, physiologistand agricultural engineer. Since water is a community commodity,often managed by agencies beyond the control of the farmers, itis important that the socio-economic factors in various systemsof water control and on-farm water management be assessed.

A special problem involves the tidal rice cultivation areas.These areas require plants adapted to deeper water conditions,soil fertility characteristics, and to insects and diseases.

ANNEX 6Page 7

Introduction and pure line selection of types suitable to suchconditions will be the most rapid way in which progress can bemade.

(e) Rice Cropping Systems - Rice as the main crop in the croppingsequence involves the research of the agronomist, soil scientist,physiologist, pathologist, entomologist, agricultural engineerand economist to fit new varieties of different maturities, withdifferent levels of resistance to insects and diseases, intocropping patterns to provide the farmer the maximum production,best utilization of land and labor, and the greatest economicreturns.

Identification of problems in existing cropping patternsis basic to improving productivity per unit area of land. Setsof production practices need to be developed to satisfy the needfor high rates of return -- and other sets to provide low riskat lower levels of management ability.

(f) The outbreak of the tungro virus disease in Sulawesi in 1972,and the additional information on the recently released varietiesPB-8, PB-5, Pelita I/1 and Pelita I/2, indicate that thesevarieties lack the necessary resistance to tungro and itsvector, the green leaf-hopper. Likewise tnese four varietieslack the necessary resistance to grassy stunt and its vector,the brown plant hopper, which is presently causing serious damagein East Java. The levels of resistance which were satisfactorywhen these varieties were released are no longer adequate.The present varietial improvement program has produced many linesresistant to major pests or diseases but further evaluation ofthese lines will require a well integrated, interdisciplinaryeffort.

Sources of gall midge resistance identified in 1971 havebeen used in crossing programs and the resultant segregatedpopulations should provide varieties such as Pelita I. Thesevarieties can be expected to greatly stabilize production onthe entire nortlh coast of Java where an area of 100,000 ha islosing as much as 25% of the rice yields because of the insect.Its control by use of insecticides is difficult and expensive.

Other selections now being evaluated involve the C 4-63and Pelita I/1 plant type and carry higher levels of resistanceto both the tungro virus and its vector, the greenleaf hopper.Identification of varieties to put into the multiplicationprogram is expected to be accomplished during 1975 so that arelease could be made in 1976 or 1977. These varieties wouldreplace the more susceptible C 4-63 and IR 20 and should provideresistance to a number of other diseases and pests as well.

ANNEX 6Page 8

Multiple resistance breeding has been pursued extensivelyin IRRI and the selections from this program are being introducedinto the evaluation programs in Indonesia. In addition, crossesof these resistant progenies have been made with Pelita I/1 andother Indonesian varieties. New selections from both thieseprograms should be available to farmers before the end of PelitaII.

(g) Harvesting, Processing and Storage - Research in these areasshould provide information to substantially reduce grain losses.The agricultural engineer, physiologist, entomologist (storedgrain pests) and biologist (rodent control) would be involvedin various aspects of research in the field as well as inpreservation and processing.

(h) Machinery Development and Evaluation - The research wouldinclude all aspects of mechanization in handling the ricecrop, from land preparation to final processing. Of specialimportance would be land preparation to reduce the time lapsebetween the harvest of one crop and the sowing of another.This would conserve moisture, fertility, improve soil tilth,and increase the number of productive days per year duringwhich land can be used.

(i) Economic and Social Factors - Studies of the interactions ofproduction practices, inputs and costs, together with addedcosts of credit and marketing, are essential to evaluate thecomponents in packages of improved technology that should beoffered to farmers -- and to identify opportunities to reducecost of production.

(j) Training and communication services should be constituentsof the rice research program, in which the subject matterspecialists of the research station will play an importantrole in the spread of new technology. These specialistswill provide the linkage between research workers and thedevelopment agencies whose chief role is to work withfarmers in the application of improved technology.

Application of Improved Technology

22. There is increasing awareness that the flow of improved technologyfrom the research station to the farm field must be expedited. This involvesa more effective transmission of knowledge with respect to the new materialsand practices from the research stations into the channels of the extensionor development agencies responsible for carrying innovations to farmers.

23. Limitations in the linkages between research and extension have',Pon recognized in Indonesia and remedial actions proposed by the agricul-

-tension leaders include, in part:

ANNEX 6Page 9

(a) Separation of extension (educational) functions fromregulatory and service functions.

(b) Establishing formal links between research and extensionto lessen dependence on the personal nature of cooperation.

(c) Developing a corps of better trained extension workers withhigher educational qualifications to work with farmers.

(d) Developing a highly qualified corps of specialists as anessential link with agricultural research to serve asinterpreters of research findings for dissemination tofield extension workers and farmer leaders, and tofurnish assistance in training programs.

24. The foregoing represent progressive actions but a major continuingdeficiency is the "quality" or precision of the initial transfer of newtechnology from the research station to the extension organization. Thesometime suggested procedure that research staff devote a portion of theirtime to the extension function has little merit. The research job, to bedone well, requires more full-time rather than further diluted attentionand the diversion of research time usually results in neither the researchnor the extension function being done well.

25. Current procedures in releasing improved agricultural technologyas "ipackages of practices" rather than as single innovations require agreater understanding by extension workers of the nature of the changes inthe individual components of the packages as well as an appreciation of theimportance of maintaining the integrity or completeness of the package. Thetransfer of technology therefore requires special attention by the researchorganization in assembling the package in a form that is useable, reliable,and understandable to facilitate the job of extension personnel in conveyingit to farmers.

26. The transfer of new technology between the research station andthe extension agency should be handled by a team including a "subject matterspecialist" of the research group and the extension specialist of theextension agency. The subject matter specialist should have training inone or more of the technical fields or disciplines, with an understandingof all of the disciplines that interrelate in rice improvement research. Itwould be the responsibility of the subject matter specialist to maintaincontact with the research staff, to conduct trials with combinations of newmaterials and practices, and to present the new technology in understandableform to the extension personnel. Subject matter specialists should belocated at the Central Station, employed as full-term members of the researchstaff and should function at the regional stations as well.

27. The concept of having "extension specialists" serve as "subjectmatter specialists" is not viable since the training of such extension

ANNEX 6Page 10

pe;nnel is concentrated largely on communication techniques, withi littleor no attention to the substance of technical subjects. Therefore, ,heextension specialist is usually not well qualified to understand the aatureand significance of the various biological or technical changes emergingfrom the various research disciplines in sufficient depth to be able toextract and assemble the various innovations into suitable combinationsof dependable new technology.

28. New technology developed at a research station may not be suitedfor some farming localities because of site-specific soils, climatic, orpest or disease factors. Verification trials, to prove out the suitabilityof new varieties or practices under various conditions are the responsibilityof the research organization -- to identify the specific defects and to makesuch modifications as necessary. The verification trials may be conductedat research substations, seed farms, extension training centers or in farmersfields. They should be well designed and carefully conducted to insurereliability of the trials. This final order of evaluation of new technologyshould serve also as the primary working linkages with extension. Theextension personnel should be involved in the planning and conduct of thetrials which could serve the further purposes of demonstration and training.Additional demonstration plots, as required for the communication and transferof technology to farmers would be the responsibility of the extensionorganization.

29. The subject matter specialist of the research station should befully involved in training activities related to the application and use ofnew technology. This would include training for research and extensionpersonnel in field and laboratory facilities of the research station as wellas involvement in training programs at extension training centers. He wouldalso serve as a principal participant and source of technical advice inpreparing materials and programs for agriculture extension and informationcenters.

Research Facilities

30. The research facilities to be developed would include a NationalCenter for Rice Research at Sukamandi and a network of regional researchstations at Bogor, Mojosari (East Java), Maros (South Sulawesi),Banjarmasin (South Kalimantan), Padang (West Sumatra), and Palembang(South Sumatra). This station network will furnish a research resource forthe various geographic areas and may be supplemented by local sub-stationsfor more precise testing and demonstration of new technology under specialproblem situations. The exact location of some of the station sites may besubject to change but the number of stations and general localities appearto be well considered.

31. The National Center at Sukamandi will be developed around therecently established research station at that location. This site is re-presentative of about 20% of the present rice growing area of Java which

AANEX 6Page 1

has been given high priority for more intensive rice production. The exist-ing rice station has a tract of 250 ha of land, with an adjacent area ofnearly 4,000 ha belonging to the National Seed Corporation. The closeassociation with the NSC will facilitate field scale observations on perform-ance of new varieties and the assurance of close liaison in varietal identifi-cation and in testing of improved rice production practices wnich the NSCcould promote as it distributes the seedstocks.

32. The National Center would be the headquarters for the Director ofthe NRRP and the Program Adviser/Deputy Director, as well as a full comple-ment of scientists in the relevant disciplines. Research would beconducted at the Center on all aspects of rice improvement.

33. The Bogor Station (the facilities at Muara) would serve as aninterim headquarters for an initial period of 2 to 3 years while facilitiesare developed at Sukamandi. The close association with the InstitutePertanian will facilitate in service/academic training in upgrading theresearch staff and in furnishing special training programs and workshops forextension personnel as well as research staff from other stations around thecountry. There are special field and laboratory facilities for research ondiseases and pests as well as breeding and improvement research at Bogor.The rice research staff should operate at Bogor and carry on the integrated,multi-disciplinary research work until such time as the Sukamandi Center hasthe facilities to serve as the National headquarters. The research at Bogorshould then be realigned, with more attention to selected background studiesin pathology, entomology, etc. and with special attention to graduatetraining where the students would carry out field and laboratory researchunder guidance of senior rice research scientists while pursuing studies atIPB.

34. Maros, near Ujung Pandang in South Sulawesi, is now emerging asan important research center, and development should be continued so thatstaff can be upgraded further and the research productivity increased.The linkages with the extension activities and with the faculty of HasannudinUniversity create a favorable situation for a research, training and exten-sion center at Maros.

35. Another high priority area would be served by a regional station atMojosari and the several substations linked with this station (which pro-bably should include one on Bali). A master plan has been developed for theMojosari station so action on development could proceecd without undue delay.

36. South Kalimantan and southern Sumatra are classed as high priorityareas primarily because of their potential as transmigration areas. TheBanjarmasin station in South Kalimantan would be developed as the regionalstation to serve that area. A new station would be established at Palembangfor the southern Sumatra region. The experimental garden at Padang would beupgraded with improved facilities and staffing to serve as the regionalstation for West Sumatra.

ANNEX 6Page 12

37. The proposed regional stations would all require attention todevelopment of land, buildings, staff quarters and other facilities. Insome cases consideration should be given to creating such stations close oradjacent to recently established rice estates since the utilization of landdevelopment equipment and expertise provided by these agencies would expeditethe preparation of a suitable tract of 50 to 100 ha for the regional station.In turn, the existing rice technology would be quickly available for adapta-tion in the area of the new estates.

Staffing

38. The staff now available (November, 1974) for rice research inIndonesia, at the National and regional stations proposed for support anddevelopment under the project, are as follows:

Location Ph.D. M.Sc. B.Sc. SPMA

Sukamandi 0 1 8 13Bogor 2 8 30 44Maros 0 1 15 23Mojosari 0 0 3 25Banjarmasin 0 0 4 12Padang 0 0 1 9Paleimbang 0 0 0 8

39. Staff development has been initiated under the existing NRRP,with 14 Ph.D. candidates and 3 M.Sc. candidates presently programmed forstudy abroad. The building of a strong national rice research capabilitywill require a high level of competence in each of the disciplines in thecentral research team. This staff will supply research leadership withinthe respective disciplines, coordinating leadership through visits to thebranch stations, and linkages with development agencies and educationalinstitutions. The profesional staff at the National Center should havetraining through the M.Sc. and preferably Ph.D. level.

40. A critical mass of research competence is required also at eachof the regional stations. The combination of disciplines and the level ofcapability within each discipline will vary with the scope and complexity ofthe problems to be tackled at the individual station. The estimated staffingrequirements for the National Center and for the proposed regional centers,to be considered for training are presented in Table 1. Expansion of theregional stations, which should be carefully phased in relation to thedevelopment of the national center at Sukamandi, would provide opportunitiesfor foreign assistance programs, the need for which should be assessed in theearly years of the project.

41. Additional efforts should be made by the IPB and other Indonesianinstitutions to provide means for upgrading candidates for entrance to theuniversities so that the percentage of rejections is reduced and a greater

ANNEX 6Page 13

number of B.Sc. graduates can become available for employment. With theexpansion of research activities in rice and other crops, and the demandfor college graduates in agro-industries in rice and other crops, and thedemand for college graduates in agro-industries, the number of collegegraduates who can be absorbed in national agricultural development willcertainly increase.

42. After completing a period of indoctrination and training at theRice Research Station at Bogor for carefully selected B.Sc. or Ir. graduates,they could function effectively on the research teams dispersed to thevarious stations of the research network. The in-service training wouldconcentrate primarily on rice production, field plot technique, and famil-iarization with projects in the various disciplines.

Fellowships

43. The upgrading of staff through post graduate training at IPB andother agricultural universities in Indonesia should be emphasized. Personnelof the NRRP could be enrolled for graduate courses, with thesis problems onrice and with senior staff of the rice program serving either as adviser oras members of the students' examining committee.

44. It would be anticipated that in the near future, Indonesian insti-tutions could provide for .a good percentage-of the M.Sc. degree programs.In the meantime the University of the Philippines at Los Banos (UPLB) isbeing utilized and could continue to serve as a major center for M.Sc. degreetraining. Other Asian centers also should be explored. There is real meritin keeping the graduate research oriented toward problems in the tropics,either in Indonesia, at IRRI, or some other location (e.g. Thailand for aproblem on deep water rice). The graduate research training should bedirected toward problems or situations which the student would confront inhis future research. Most of the Ph.D. level training will have to be doneat foreign universities during the term of the project.

45. One of the priority programs for upgrading research would be shortcourses in rice production and plot techniques for the SPMA personnel whoconstitute at the moment a large segment of the "research" force. Thedevelopment of a greater level of competence among these men would providean early payoff in increasing the reliability of research results obtainedthroughout the rice research network. If it is not possible to relievethese men for a crop season so as to attend a six month course, a shorterperiod of 6 to 8 weeks would prove beneficial.

46. Capabilities in rice research and greater awareness of problemsof rice production can be stimulated in the existing staff by their atten-dance at international workshops and research conferences, such as theannual research conference at IRRI, and selected attendance at internationalmeetings of relevant scientific associations or societies.

ANNEX 6Page 14

Technical Assistance

47. The limitations in research personnel for the respective dis-ciplines, and for effective coordinating leadership, are evident from theexperience in implementing the current national rice research effortwhich was started in 1970. In addition to the personnel restraints, theconcept of the present NRRP as a coordination unit rather than an opera-tional research activity has curtailed its effectiveness.

48. The development of the NRRP as a research performing unit -- withemphasis on the multi-disciplinary team approach and on applied and adaptiveresearch directed toward priority problems in rice production --- shouldovercome some of the present deficiencies.

49. The formation of the NRRP as a unit within the newly establishedAgency for Research and Development, involving the creation of an integratedresearch program of national scope, a national network of rice researchstations, and more viable linkages with extension and educational institutionswill require the full-time attention of a professionally qualified ProgramDirector.

50. About 20 man-years of research specialist services will be providedby the IRRI for several special fields under the contract which is supportedby the Indonesia Seeds credit (246-IND). Other rice research officers arebeing provided by technical assistance support from the Governments of Japanand the Netherlands. Only one additional specialist will be supported throughthe project, a Program Advisor to work with the Program Director in the over-all development and operation of the NRRP.

51. The Program Advisor would be appointed as early as possible for afour-year term to serve with the Director of the NRRP in advising on the plan-ning of the integrated research activities, the planning and development ofthe research facilities, the formation and implementation of the staffdevelopment program, including participation in selection of fellowshipcandidates, and in assisting with the coordination of the activities of thesupporting external research specialists.

52. The primary objective of the Program Advisor, and of the otherforeign scientists, would be to assist in building a national rice researchcapability -- with the qualified staff, facilities and operating procedures-- that will be self-sustaining under Indonesian leadership at the end ofthe project.

Cost Estimates

53. The incremental cost without contingencies for the National RiceResearch Program for the six year period would be approximately US$7.4 mil-lion. 1/ The estimated-costs 2/ are summarized in Tables 2, 3 and 4.

1/ In 1975 constant terms, and not including physical contingencies.

2/ Including facilities and equipment for the palawija crops research

program.-

ANNEX 6Page 15

D. Economic Benefits and Justification

54. The goal for increased rice production during the five year periodof Pelita II, by nearly 4 million tons or 39% in 1978 over the production in1973, will not be achieved without improved technology to make possiblehigher yields. In the past 10 years the annual growth in rice productionhas resulted in small part from expansion in area, estimated at 1.4%, withthe balance of about 2.0% from yield increases. The rice growing area onJava has remained static and production increases have come entirely fromincreased yields.

55. The new varieties PB-8, PB-5, Pelita I/1 and Pelita I/2, whichaccount for approximately 30% of the rice grown in the country, have con-tributed significantly in increasing yields during the past five years.However, these varieties lack the disease and insect resistance necessaryfor the more intensive cultural practices required for achieving stillhigher yields. The tungro disease problem in South Sulawesi, the brown planthopper and grassy stunt disease hazard in East Java and the gall midge damagealong the north coast of Java must be brought under control through an inten-sive, multi-disciplinary research program to breed multiple resistance intonew, adapted varieties. Failure to do this would not only preclude furtherannual increases in national production but could see total production actuallydecrease if one of the disease or pest hazards reached widespread epidemicproportions.

56. It is expected that further exploitation of some tidal rice culti-vation areas will contribute to the rice production goals in Pelita II.These areas require varieties especially suited to the soil conditions,fluctuating and deeper water levels, and to the insects and diseases prevelentunder these conditions. An aggresive breeding and selection program will benecessary to achieve the increased production anticipated from the tidal riceareas.

57. It is not feasible to assign a precise value to an improved NRRP.However, this program will be essential if Indonesia is to meet its domesticdemand for rice and reduce its imports at ever increasing costs from adecreasing world supply of food grains. In 1974 Indonesia expected to importabout 1.2 million metric tons to meet the current year's deficit.

Attached: Tables 1-4

March 31, 1975

DYDONEIA A1NEX 6Table 1

AGRICULTJRAI RMSEAIOCW & EXTENiSTION

Rice Research ProRram

Staff List at Full Development/

Senior Junior ClericalProfessionsl /' Technicafl 1 / Technic ll " & General Labor

(e) National Center - Sukamandi /

Adnini stration'ro-rarm Director 1 1 - 1 -

Dro,ri Advisor/Deputy 1 1 - 1 -

Secretsry (Administration) 1 1 2 6 -

Accountant - 1 2 6 -Farm Manager 1 - 4 1 50Farm Service Center -1 2 1 4Food Services - 2 - 4

Technical ServicesExperimental Design & Statistics 1 1 2 2 -Economist 1 1 2 3 -

Library& Information Services - 1 1 2 -Subject Matter Specialist 2 - - 2 6

Cro-o ImprovementBreeder 3 6 6 2 -

Pathologist 2 3 2 1 5Entomologist 2 3 2 1 5

Crop ProductionAgronomist 6 12 12 12 -Soil Scientist 1 2 3 1 5Water Management Specialist 2 4 6 1 10Seed Technologist 1 2 2 1 -

Farm Mlachinery Specialist 1 2 3 1 3

Cron Quality, iutritionChemist 1 2 2 1 5PhysLologist 1 2 2 1

Sub-total, National Center 28 46 57 47 102

(b) Regional Stations -

Farm Manager - 6 6 - -

Breeder - 12 12 - -Pathologist - 6 6 - -Entomologist - 6 6 - -

Agronomist - 18 18 - -

SubJect Matter Specialists - 6 6 _ _

Sub-total, Regional Stations - 54 54 - -

TOTAL 28 100 111 47 102

1/ Year six of project2/ Professional -- M.Sc., Ph.D. or equivalent capability at end of project.3/ Senior Technical -- B.Sc., or equivalent at end of project.4/ Junior Technical -- Agricultural High School or equivalent at end of project .J Support for all aspects of work at National Center by end of project. In the

early project years the program headouarters would be at Iluara, near Bogor,pendiMng completion of the Sukaemandi building and equipment program. Muarawould continue as a major station with emphasis on training, both of graduatestudents and extension end research workers, and as a base for more advancedstudies in the major problem areas of rice research, utilizing Bogor AgriculturalUniversity research personnel whenever possible.April 8, 1975

ANNEX 6Table 2

INU)NESIA

AGRICULTURAL R3EA,RCH AND EXTENSION

Rice Research Program

Technical Services

Research Specia Number Unit Cost TotalResearch,ecialistl ---(Constant 1975 MUT---

Program Advisor/Specialist 1 240,000 240,000for four years

Fellowships Short-term 8 6,000 48,000

Fellowships long-term

M.Sc. in Indonesia 4 10,000 4,Ooo0M.Sc. Abroad 9 24,ooo 216,000Ph.D. Abroad 5 48,000 240,000

Sub-total 18 - 496,ooo

TOTAL - 784,000

1/ IRRI will provide some 20 man-years of research specialist servicesduring the life of the project through a contract which is supportedby the Indonesia Seeds credit, (246-IND). Only one additional specialisttherefore needs to be supported through the project,especially toprovide advice and assist in developing the research program and center,select fellowship personnel and coordinate the work of the researchspecialist team.

March 27, 1975

AnNEX 6Tabl. 3

INDONPESP

AGRICULTURAL RESEARCH AND 1] N !

Rice Research ProarsA

Schedule of Establib iUant Cost

--_----- Projiaot Year ----------------1 2 4 5 6 Total

Number of Professionals2/ 14 14 22 25 28 28 --

Of which:- on fellowships -- -- 8 14 14 11 __- engaged in the program 14 14 14 11 14 17 __

--------------------(Constant 1975 US$) - -Establishment Cost of

the Program i/ 188,000 420,000 420,000 330,000 420,ooo 51O,000 2,228,000

Current Establishment Cost188,000 188,000 188,000 188,000 188,000 188,000 1,128,000

Incremental EstablishmentCost 232,000 232,000 142,000 232,000 322,000 1,160,000

1/ Commencing in the second year, a proportion of the professional staff will beawarded fellowships to study either in Indonesia or abroad.

/ In accordance with the experiences of otber international research centers,the establishment cost has been calculated using a ratio of US$30,000 perprofessional present at the center.. For the first year, however, it was assumedthat there would be no change in the current establisament cost because of delaysin starting the program.

3/ Most of the research on rice is currently carried out at CRIA. Since thisinstitute also does research on palawija crops and no breakdown of its budgetbetween expenditures for rice research and palawija research was available,it was assumed that two thirds of the routine budget was spent to further researchon rice.

March 27, 1975

A NE N 6Table 4

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Rice Research Program

Project Cost(Constant 1975 US$)

Percentage ofForeign Exchange

Local Foreign Total ComponentCapital Input 1

Building, Services,Utilities & Housing 2,663,400 1,775,600 4,439,000 40%

Research Epipment 24,900 224,100 249,000 90%Furniture •/ 13,300 5,700 19,000 30%Farm Development / 145,200 217,800 363,000 60%Field Equi4jent v 78,500 78,500 157,000 50%Vehicles W 17,100 153,900 171,000 90%- Program Adviscr/Specialist §/ 6,000 4.000 10,000 40%

Sub-total 2,948,400 2,459,600 5,408,000

Technical Services 7/Program Advisor/Specialist 36,000 204,000 240,000 85%Fellowships, Short-term -- 48,000 48,000 100%Fellowships, Long-term 49,600 446,400 496,000 90%

Sub-total 85,600 698,400 784,000

Establishment Cost 8/ l.6"O -- 1,160,-000

Total. 4,194,000 3,158,000 7,352,000 43.0%

1/ The figures given here for capital input are for the combined rice and palawijaresearch centers. Some facilities will be common to both and it is impracticableto break down costs between the two centers. The costs given for building services,utilities and housing are presented in Annex 17, Table 6, with design and constructioncontingencies included.

2/ Based on an estimate of US$100 per office based staff (for the two research centers).2/ 400 hectares for rice and palawija - cost of developing irrigation and roads:-

- land shaping @ $500/ha & 350ha = $ 175,000- irrigaticn and drainage Q $250/ha & 350ha = 87,500- fencing @ $5,000/km & lokm = 50,000- road works $5,000/km & 10kni 50,000

$ 362,500 say $363,0004/ Based on an estimate of US$2,750 per professional (57 professionals for the

two research centers).i/ Based on an estimate of US$3,000 per professional (for the two research centers).6/ Automobile for program advisor/specialist.i/ See Table 2.v See Table 3.

March 27, 1975

ANNEX 7Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

National Research Program for Palawija Crops

A. Introduction

1. The Government of Indonesia recognizes the priority need forresearch to improve production of the "palawija" crops, so designatedbecause of their traditional relationships in rotations with paddy.These upland, or field crops other than paddy, which are grown eitherpreceding or following the paddy crop, sometimes both before and after,and occasionally in rotation without paddy, include maize as a principalcereal, cassava and sweet potato as the main tuber crops, and soybeanand groundnut as the most important grain legumes (Table 1). Sorghumand mungbean are two additional crops, presently planted on a smallscale, which have good prospects for expansion.

2. Intensified programs in paddy production sponsored by the GOIwere begun in 1968. Increases in yields are now contributing a higherpercentage to annual production than are increases due to area expansion.From 1951 to 1971, growth was 3.4% per year, with yield increases account-ing for 1.6% and area expansion, 1.8%. From 1961 to 1971 the annual growthrate has been the same, with yields accounting for 2.0% and area expansiondown to 1.4%'. In the last 10 years paddy land development has occurredonlv outside of Java. Rice output growth in Java, therefore, has beenthe product of increased yields. By comparison, maize has shown somedecline during the period 1968-1971 although the long-term trend from1951-1971 has shown a continual increase of about 40,000 ha per year.

3. Maize, sorghum, soybean and the other palawija crops are usuallygrown in rotations rather than a monoculture which makes their yield growthpotential difficult to estimate. Two of the common rotations are:

Type A - Limited dry season, irrigated, no drainage problems:

Crops Planting Time Land Preparation Time(days per ha.)

Paddy December 10 - 15

Soybean May 3

Maize Aug./Sept. 5 - 8

ANNEX 7Page 2

Type B - Limited dry season, irrigated, drainage a problem:

Crops Planting Time Land Preparation Time(days per ha.)

Paddy December 10 - 15

Paddy May 10 - 15

Beans October 3 - 5

4. Palawija crops are concentrated in Java where 75% of the maize,90% of the soybean, 50% of the groundnut, 80% of the cassava, and 60% ofthe sweet potato are grown. By contrast, only 50% of the rice area is onJava. The relationship to size of farms, population density, food habitsand rainfall patterns have all interacted to create resultant patterns ofcrop culture. Sorghum is a new crop and was reported to occupy an areaof 6,000 ha in Central Java where it has been accepted as human food. InNorth Sumatra, it is being produced for export with an estimated 3 to4,000 ha in production in 1973. The area planted to soybean in Indonesiaamounts to over 51% of the cropped area in Asia (excluding Mainland China)and the potential exists for a considerable expansion.

5. The GOI is well aware of the need for intensive research on im-proved production technology for the palawija crops if projected increasesin yields and total production are to be achieved.

B. Present Status of Research and Development

Personnel

6. Research competence applied to all field crops, including paddy,is reflected in the table below summarizing staff information as providedby the Central Research Institute for Agriculture (CRIA). This includesstaff at the main station, branch stations and substations.

1967 1968 1969 1970 1971 1972

Ph.D. 1 1 2 2 2 3

M. Sc. or equivalent 26 31 27 34 41 54

B. Sc. 31 33 24 32 36 41

Technicians 63 63 76 89 164 226

Total 121 128 129 157 243 324

Laborers 6 12 27 47 47 128

Source: Mimeo prepared by CRIA, Bogor, 1972.

ANNEX 7Page 3

Salaries are low so most competent personnel supplement their incomes withother types of employment. This means that even the available researchcompetence is not being utilized full time in addressing its efforts toresearch. However, there has been a noticeable increase in the number ofM.Sc. and B.Sc. personnel during 1971 and 1972. This indicates a desirabletrend in efforts by GOI to improve the manpower resources for agriculturalresearch.

Facilities

7. The research and extension centers involved in various investigationsand promotional efforts to improve production of the palawija crops includethe following:

Research Centers Extension Centers

1. Muneng East Java 1. Bedali (Pandaan) East Java

2. Mojesari East Java 2. Three additional East JavaCenters

3. Genteng East Java 3. Pamekasan Madura

4. Djakenan Central Java 4. Tegal Central Java

5. Cikeumenh West Java 5. Pati Central Java

6. Sukamandi West Java 6. Soropadan Central Java

7. Bontobili South Sulawesi 7. Wonogiri Central Java

8. Taman Bogo Lampung, 8. Bandjarnegoro Central JavaSumatra

9. Bandar Buat West Sumatra 9. Kebumen Central Java

10. Rambatan North Sumatra 10. Klumbon West JavaTanah Datar

11. Kampar Central Java 11. Bulikumba South Sulawesi

12. Belitang South Sumatra

13. Tegineneng Lampung

14. Tanjung Morawa North Sumatra

15. Peninjauan Bali

ANNEX 7Page 4

8. The research stations all present a certain neatness in appear-ance and maintenance of buildings and equipment. Hlowever, the researchplots reflect a lack of appreciation of fundamentals of research and cropculture which reduces reliability of the data collected. This is notsurprising in view of the level of education of most of the personnel whoare entrusted to carry out the research, without close supervision fromthe center at Bogor. The fact that these graduates from agricultural highschools are willing to do much of the work themselves and not delegate datacollection and field supervision to even less educated subordinates indi-cates a wholesome attitude toward physical labor on the part of the staff.This is an important base upon which improvement can be expected to bebuilt as more scientific personnel are added to the staff.

Current Research

9. Research accomplishments on paliwija crops are rather limited.The maize open pollinated variety, Bogor Composite No. 2, matures in110-115 days and is entirely unsuited to the cropping patterns in Eastand Central Java, and in Madura where even 75-80 days to maturity isconsidered late. Some new breeding effort is under way to isolate higher-yielding varieties which possess the earliness of the local varietiesfarmers are using. The DMR 3 and DMR 5 maize varieties from the Collegeof Agriculture, University of the Philippines, have shown resistance todowny mildew at Bogor and have been included in crossing programs. Highlysine is another objective being included in the breeding programs butno payoff is expected for another two years. Observation of some of thebreeding efforts at branch stations was not encouraging. A varietal trialof 20 maize varieties organized by CIMMYT was observed in the field atMuneng but the trial was not under stress conditions for the major diseaseproblem, downy mildew. None of the varieties would fit the maturity re-quirements for existing cropping patterns, although in monoculture situa-tions in Lampung or North Sumatra some of these varieties may find a place.Farmers in Central Java have a definite preference for white maize but areless particular about maturity since the crop is grown in monoculture.

10. Sorghum plantings observed at several stations indicated somereal potential for this crop. UPCA S1, a variety obtained from the Collegeof Agriculture, University of the Philippines, has been grown to the extentof about 6,000 ha by farmers in Central Java. Potentials of a ratoon ofthis variety looked extremely favorable at Muneng where the first cropproduced 4 ton/ha and 3 ton/ha yield was expected from the ratoon crop.

11. An international soybean yield trial conducted at Soropadan wassupplied by researchers at Gajah Mada University. Real differences existedamong varieties in reaction to a distinct but unidentified virus or defi-ciency problem affecting growth. TK 5, a variety developed by CRIA at Bogor,was one of the best in vegetative growth but a few introductions also lookedpromising. Yields of 1.6 ton/ha were reported for this variety which is at

ANNEX 7Page 5

least double the yields farmers reportedly obtain. Three other soybeanvarieties have been listed as varietal improvements. Some segregatingpopulations were being grown under rather poor conditions at Mojesari.Agronomic trials included dates, populations, fertilizer rates, and liming.Real problems in soybean that depress yields are mosaic virus, micronutrientdeficiencies, poor seed quality which reduces stand, and poor pod filling.Difficulties with poor seed quality are so common that a seed trade hasdeveloped where seed newly harvested in one area moves to another area whereit is the season for sowing.

12. Groundnut, another important oil seed crop, is being studied inseveral locations for interactions of variety with fertilizer levels andplant populations. Improved varieties include Gajah, a large seeded var-iety, and No. 21, an old selection. Kidang, a new variety without earlierbuyer acceptance, has recently received attention since buyers in SouthSulawesi report it has a higher oil content. Farm yields average 0.7 ton/ha while research stations can get 2 to 4 ton/ha in trial plantings.

13. Cassava trials were rather limited but the crop offers realpossibilities for on-farm consumption and commercial production becauseof its ability to produce under lower levels of moisture.

14. Mungbean trials, in addition to soybean and groundnuts, werebeing widely grown at experiment stations, and a few farmers have smallplantings for home consumption. Some new introducts at Muneng lookedpromising and problems of seed maintenance are not so serious with mungbeanas with soybean and groundnut.

15. An intensive paddy development and promotion program (BIMAS) hasbeen noticeably effective in recent years, and a similar program for palawijacrops was therefore inaugurated in 1972. In a Kabupaten about 100 km Northof Ujung Padang the extension officer indicated palawija BIMAS has beenapplied to 1,000 ha in 1973 and the program would be extended to 3,500 hain 1974. In this area groundnut is a cash crop sold to buyers in the field.A joint Japanese-Indonesian venture on groundnut for export involves thesupply of seed to farmers and the purchase of the crop. Since seed is oftena limiting factor for farmers, private enterprise of this type should bea real asset to production. Farm crops looked good in this area but only2,000 ha of groundnut were grown following 11,400 ha of paddy.

16. A new rice research and seed project at Sukamandi, financed inpart by IDA, is now under way. A development engineer (expatriate) and asoybean-breeder (Indonesian) are on location at Sukamandi with about 20 seniortechnical staff, most of whom are recently recruited graduates. Additionalexpatriate and local professional staff, the former engaged through an IDAcontract with the IRRI, are likely to be posted into the area in the nearfuture in compliance with a recent decision of the GOI to upgrade the 250 haCRIA station to become the National Center for Rice Research (Annex 6).

,:NVEX 7l'ag7 6

17. A research program at Tegineneng, Lampung, an extension center,involves a Japanese team of eight working on improvement and extension ofpaddy and palawija crops.

C. The Project

Special Considerations

18. The review of research now under way on palawija crops justifiesthe conclusion of the GOI that priority attention should be given tostrengthening this research on a national basis. While a number of fieldtrials are well conducted, the development of improved technology for in-creasing production on a sustained basis necessary to achieve the goalsprojected to 1980 will not be attained with the present level of researchcapability.

19. The palawija crops are now grown intensivelv on Java but thepotentials are excellent for increasing their production in other regionsof Indonesia. The new national program of research and development should,therefore, provide for the following:

(a) A National Center with sufficient experimental fieldsand laboratories to accommodate a multi-disciplinaryresearch team approach to all problems limiting pala-wija crop production;

(b) Regional stations in other parts of Indonesia wherepalawija crops have promise for further improvementon expansion, with similar suitable land and facilitiesfor a research team approach;

(c) A planned staff development program to produce well-qualified research specialists who will provideresearch leadership at the National Center, and alsothe trained cadre of research personnel who will carryout the nationally coordinated experiments, and planand conduct the supplemental trials necessary at theregional stations;

(d) The development of research for improving productivityof the individual palawija crops and also for improvingcropping systems;

(e) Provision for continuous assembling of the new researchresults - materials and information - by subject matterspecialists who are staff members of the research sta-tion, to ensure the preparation of the new packages ofpractices in a form suitalble for transfer to and throughthe extension system; and

ANNEX 7Page 7

(f) In order to achieve maximum progress the national programshould concentrate on maize, sorghum, soybean, and cassavabut should also give such attention to the other crops asnecessary to ensure their effective use in improved croprotations or farming systems.

Organization and Management

20. The research would be organized on the basis of coordinatednational programs for (a) maize; (b) sorghum; (c) soybean and other legumes;(d) cassava and other tubers; and (e) cropping systems or multiple cropping.

21. The main or National Center would have the following majorresponsibilities:

(a) In-depth research in plant breeding, pathology, entomology,agronoty, soils, economics and other disciplines in a teameffort to address all limiting factors and potentials forimproving productivity of the crop;

(b) The evolution of improved cropping sequences and combina-tions of crops for the different regions;

Cc) Leadership in planning and coordination of uniform trialsof varieties anfd cultural methods to be conducted at theregional stations and at other selected locations. Theplanning of such national trials should be handled throughannual workshops involving appropriate research workersfrom the participating regional stations and other insti-tutions; and

(d) The assembling and field testing of combinations of newmaterials and practices by subject matter specialists.This would involve (i) the evaluation of the new technologyat the National Center; (ii) field testing in selected re-presentative farming areas to determine adaptability todifferent soil and climatic variables; and (iii) conductingtraining and information programs for research and principalextension staff. The subject matter specialists would workequally closely with the research staff in assembling thenew technology and with the extension personnel in facili-tating its orderly and effective testing and transfer intouse through on-farm trials.

22. The regional stations would give principal attention to:

(a) conduct of the national coordinated research trialsas planned with and coordinated by the National Center;

ANNEX 7Page 8

(b) research on those special problems affecting productionof the individual crops in the region, relating to soiland water management, seasonal factors, insect, diseaseand pest problems, etc.; and

(c) liaison by the station subject matter specialists withthe research staff and extension personnel in theassembling of innovations, the field testing, andtraining and information programs as necessary to ex-pedite farmer-use of the new technology.

23. Extension and information centers would not fall under themanagement of the program but would be continuously related and involvedthrough the linkage with the subject matter specialists of the NationalCenter. The extension/information-staff would be responsible for orparticipate in:

(a) Adaptive trials for on-farm testing of promising newcrop varieties and cropping systems as evolved fromthe research program;

(b) Seed multiplication and distribution of new palawijacrop varieties; and

(c) The pilot palawija BIMAS programs for new varietiesand practices.

The Research Program

24. The research program would be crop-oriented with a nationalresearch coordinating leader for each commodity group and for the croppingsystems research. Major attention would be given to:

(a) Varietal Development and Improvement

(i) Maize: Initial attention should be given to a collec-tion of germplasm and crossing with local varietiesof different maturities. Since high lysine varietiesof the flinty endosperm type are available, nutritivevalue should be studied as a part of the selection program,with the high-lysine character incorporated in allnew releases. An additional prerequisite would be thedevelopment and release of only downy mildew tolerantmaterial. Yield performance within maturity groupswould be necessary, to select varieties with the earliermaturities required for palawija cropping before rice,and to later maturities for high productivity in Lampung,North Sumatra and other monoculture areas. Breedingtechniques to generate new varieties at the most rapid

ANNEX 7Page 9

rate would be utilized but development of hybrids wouldbe explored also for the possible development of a hybridseed industry if conditions in the future Justify thistechnique.

(ii) Sorghum: Varieties of potential adaptation from theworld collection of sorghum should be evaluated sincesorghum is still a crop to be exploited and considera-ble latitude in acceptability should be possible. Thenew high lysine selections should be immediately crossedto UPCA S1, KD4 and other varieties that have shownpromise. Varietal evaluation would include screeningfor insect and disease resistance, grain and fodderyield and quality.

(iii) Soybean: More introductions from major collectionsshould be screened, with promising material evaluatedas varieties per se and also used in crossing programsto quickly broaden the germplasm base upon which fur-ther varietal improvement could be made. Specialattention should be given to those factors which haveparticularly depressed yields of soybean in the tropics.

(iv) Cassava: Local and imported varieties should by evaluated,and screened especially for pest and disease resistance.Particular attention should be given to length of timeto maturity, flour content, quality characteristics ofthye product, and its suitability for various end-usepurposes.

(b) Agronomic Practices

(i) Maize and Sorghum: Agronomic studies would involveplantings in monoculture and also fitting the morepromising new selections into various cropping systems.Seed bed preparation, spacing, fertilizer use, watermanagement and weed control practices would be studiedin cropping systems in which maize and sorghum areincluded.

(ii) Soybean: Soybean and other legumes should be fittedinto improved cropping systems with maize and sorghum.Seed production and processing would need to be devel-oped, with special attention to methods for maintainingviability of seed for planting.

(iv) Cassava: Spacing, use of fertilizer, intercropping, andthe place of the crop in improved cropping systems, aswell as monocropping practices needs attention. Differencies

ANNEX 7Page 10

in cultivation techniques in relation to drought, soiltexture and consistency, and soil moisture variablesshould be studied.

(c) Plant Protection Research. The research entomologists andpathologists would be important members of the crop researchteams since insects and diseases are especially severe incrop production in the tropics. Major emphasis should beon development of host plant resistance in collaborationwith the breeders. This would require development ofeffective screening procedures for the principal insectsand diseases, with these techniques applied at earlystages in the plant selection process. Control experi-ments should be complementary to host plant resistancestudies and not a substitute since control by insecticideswithout host plant resistance could be relatively ineffec-tive, uneconomical, or require a level of expertise beyondthe capability of most farmers. Associated ecological andepidemiological studies would be important to the under-standing of insect and disease distribution and the utili-zation of possible "crop escape" practices.

(d) Seed Maintenance and Multiplication. Preservation of seedin the tropics is difficult at best and will be a key tothe supply of new varieties for introduction to farmers.This may involve only adaptive research since knowledgeon preservation is generally available. The preservationand systematic maintenance of pure seed of improved var-ieties is frequently not accorded its true importance andshould be a major responsibility of the National Centerwhich would justify competent staff and proper harvesting,processing and storage facilities.

Research Facilities

25. An almost level 150 ha plot of GOI land adjacent to the recentlyestablished 250 ha CRIA Sukamandi station has been chosen for the NationalCenter for Palawija Crops Research. This selection was based on the readyavailability of the land, its proximity to the proposqd National Center forRice Research, the suitability of the land for palawija crop experimentationafter land forming and drainage facilities have been installed, andavailability of irrigation water. Its proximity to the National SeedsCorporation (NSC) main production and processing facility is another potentialasset, for although the NSC is exclusively concerned with rice seed productionat the present time, recent studies suggest that its production potentialexceeds the likely demand for rice seed, and production of palawija cropseed could be easily accommodated and should improve the financial viabilityof the enterprise.

ANNEX 7Page 11

26. A quarter meter contour survey and a detailed soil survey of the150 ha site, and of the contiguous 250 ha CRIA station, should be carriedout as early as possible in order to confirm its suitability and to providea basis for designing the essential drainage and irrigation system andpreparing a field layout, buildings and roads plan. An irrigation canalparallels the road frontage on the north side of the site while a small riverprovides a -drainage outlet along the south boundary. A complete set ofbuildings for offices, laboratories, greenhouses, service facilities, library,conference rooms, etc., would be required, together with staff housing anddormitories for trainees. Field and laboratory equipment and vehicleswould be needed.

27. Four regional research stations would be selected to serve theimprovement of palawija crops in other regions of Java where present pro-duction is intensive, as well as in South Sumatra and Sulawesi where futurepotentials for these crops are excellent. The exact locations of the fourregional stations have not yet been agreed upon but it is expected thatthese will be existing stations to be incorporated into ARD.

28. The project would not provide for any new buildings and facilitiesfor the regional stations but would help to strengthen the stations through:

(a) staff development and training;

(b) field and laboratory equipment and vehicles;

(c) assistance with improvement of station managementand operations; and

(d) consultation by foreign scientists in specializedfields who would be located at the National Center.

Staffing

29. The Program Director, who would be in charge of the National Centerand its associated regional stations, would be an Indonesian scientist ofsufficient stature and ability. His appointment would be subject to Bankapproval. It is assumed that some of the presenit research staff concernedwith palawija crops would be available for the National Center and theregional stations. However, it is recognized that the mobility of suchpersons may be restricted for various reasons and staff development wouldinvolve a substantial provision of advanced degree training to the M.Sc.and/or Ph.D. level for a substantial number of the professional staff ex-pected to be in place at the termination of the project. The estimatedstaffing requirements for the National Center, together with the seniorand junior technical personnel to be considered for staffing for the fourregional stations, are presented in Table 3. This table excludes all fieldlabor, which will be supplied through the farm managers. All technicalservices and other support for all aspects of work will be at the NationalCenter.

ANNEX 7Page 12

Fellowships

30. Training through the B.Sc. degree should be provided by Indonesianuniversities. Similarly, it is expected that some advance degree trainingto the M.Sc. degree can be furnished in a number of specialized fields atthe University of Indonesia, the Agricultural UTniversity at Bogor (IPB),Gajah Mada University or other Indonesian institutions. MIost of the Ph.D.level training will have to be done at foreigh universities during theterm of the project.

31. The increased number of M.Sc. level personnel available inrecenrt years, as indicated in the CRIA summary (page 3), should providethe base for early selection of some scientists ior Ph.D. training. Itis anticipated that substantial numbers of B.Sc. level graduates will becoming out of the universities, which have been upgraded in recent yearsto produce more specialized training and educatiOn in agriculture.

32. It will be important to exercise critical selection of personsfor advanced training, not only on the basis of their academic recordsbut also in terms of their aptitude for research, their commitment toresearch careers, their willingness to be posted at the Center or stationswhere the research jobs are to be done and their adaptability to multi-disciplinary team efforts. A selection board should assess fellowshipcandidates and all potential awardees should have at least one year ofworking experience in research before being considered for advanced training.

33. In addition to the longer term training for advanced degrees,there would be short-term professional improvement experiences for se-lected staff members at CIMMYT for maize and ICRISAT for sorghum. Similaropportunities would be provided for the Director of the Center and hissenior and more experienced scientists to gain experience and understand-ing of research station and program management. New B.Sc. graduates aswell as some of the presently employed junior staff members for the Centerand the regional stations would be given on-the-job training at the Center,not only to accelerate their useful involvement in research but also toidentify those with special talent and aptitude for research who would beearly candidates for advanced degree training.

Technical Assistance

34. There is a definite shortage of agricultural research personnelwith the training and experience necessary to supply the conceptual, plan-ning, coordinating and operational leadership necessary for national co-ordinated problem-oriented, multi-disciplinary research. This is evidentfrom the summary of the present research staff as presented by CRIA andthe small number of persons graded as senior scientists in the evaluationof agricultural research personnel through the Fvaluation Committee (Annex5, para 5). Also, the difficulty in setting up a National Rice ResearchProgram over the past three years suggests a lack of experienced researchleadership for such coordinated programs.

ANNEX 7Page 13

35. Foreign scientists would be provided for several special fieldsunder the project, including an experienced person in experiment stationfield management and operations who would have high priority in view of theloss of useful research results because of inadequate care and attention todetails in servicing field trials in many research stations in developingnations. A foreign maize breeder and a sorghum breeder would furnish guidancein setting up and implementing the national coordinated multi-disciplinaryteam research for these two crops. A pathologist and an entomologist wouldfurnish competence in two of the disciplines most critical in increasinglevels and dependability of production. The availability of highly trainedand qualified Indonesian scientists in certain disciplines might cause somechange in the foregoing types of specialists but a minimum of five such per-sons for periods of at least two years each would seem to be necessary foreffective development of the national palawija crops research program. Inaddition, provision is made for a number of short term specialists who wouldbe appointed for varying periods, depending on the actual needs of the programas determined during the life of the project.

36. There is a mutual awareness on the part of GOI and the appraisalteam of the need for special attention in the selection of the foreignspecialists and in furnishing proper orientation prior to their assignmentin Indonesia. Similarly, there must be an appreciation by the participatingIndonesian research personnel of the role of experienced foreign scientistsin the development of a research program that will justify the substantialinvestment in the project. The experience with the National Rice ResearchProgram demonstrates the importance of mutual understandings of the rela-tionships with the external specialists. Their role would be as activeparticipating scientists with special attention to:

(a) the planning and conduct of priority research in theirrespective disciplines at the National Center;

(b) the planting of the national coordinated projects forimprovement of production of the selected crops;

(c) cooperation and guidance for the personnel at the re-gional stations in carrying out the coordinated nationalprogram experiments and also in planning the research onlocalized problems; and

(d) furnishing the ongoing research competence that will benecessary to release the Indonesian research staff fortheir advanced training abroad.

37. A Program Advisor would also be appointed as early as possible fora 4-year term. He would work with the Director on the problems involved insetting up the facilities and projects of the Center and in ensuring thatoperating activities are effective. The Program Advisor would be a highlyexperienced specialist in one of the program fields of specialization andwould engage at least part-time in his field of specialization.

ANNEX 7Page 14

38. Although the foreign scientists would be fully and directlyinvolved in their respective research disciplines and will supply activeleadership for research during the period of their assignment, it wouldbe understood that their primary objective would be to guide and traintheir Indonesian colleagues so that the research would be viable andself-sustaining under full Indonesian leadership at the end of the project.

Cost Estimates

39. The cost for the National Research Program for palawija cropsfor the five-year period would be approximately US$3.4 million, 1/ notincluding the construction and equipment costs for the joint center forrice and palawija crops, which has been costed into rice programs (Annex 6).The estimated costs are summarized in Tables 4, 5 and 6.

D. Economic Benefits and Justification

40. It is not possible to evaluate investments in research on anarrowly conceived and precise basis of costs and returns. Well plannedand conducted agricultural research will include a majority of projectsthat will yield steady incremental improvements -- a few that may producesignificant breakthrough -- and some that will be unproductive. In theUnited States, corn improvement enjoyed the spectacular utilization ofhybrid vigor in the breeding and improvement research of a half centuryago. On the other hand, soybeans have emerged as a major economic cropin the U.S. through a steady series of modest incremental improvementsthrough research in the relevant disciplines, with a doubling and redou-bling of yields similar to that for corn. Research that is imaginativeand venturesome will invariably include a few projects that will fail.

41. The prospects for improving palawija crop production throughintensive national coordinated, problem-oriented, multi-disciplinaryadaptive research - utilizing all available materials and methods avail-able from CIMMYT, ICRISAT and other international sources - would appearmost promising in view of present national yield levels, the limitedcurrent and past research attention to these crops, and the nature ofthe problems subject to resolution through research.

42. Measurable improvement in research capability'is certain toaccrue as the result of the training effort. The increased professionalcompetence from the in-service training programs and advanced degree train-ing should have immediate application as well as a long term impact on re-search capability and performance in the program.

1/ In constant 1975 terms, and excluding physical contingencies.

ANNEX 7Page 15

43. In the initial five-year period, research findings should createa base for a much more effective extension program. Without this base anda continuing research productivity, extension is relatively ineffective.The subject matter specialists at the National Center, to provide a moreeffective linkage of research with extension activities, should get research

findings into farmers' hands in the shortest possible time.

44. Until varieties of high economic return become available, thepotential for a seed industry will continue to be limited. With the develop-ment of new varieties a potential is laid for establishing a seed industry.The improved trade in soybean and groundnut would then be sufficient incentivefor the development of a modest seed industry - a specialized agro-industrythat would be an important factor in the spread of new technology.

45. Using Bank Group estimates of increases in production, by 1980,increases in upland crop production could be:

3.0 million ton maize and sorghum;

0.4 million ton soybean.

For one year alone, this would have a value of US$125 M with the price ofmaize at Rp 12/kg and soybeans at Rp 35/kg.

46. The achievement of these production increases will require anacceleration of extension efforts through the palawija BIMAS. The inten-sified research effort should create new high yielding, high lysine, downymildew-tolerant maize varieties within a few years which should immediatelymove into the BIMAS program. Sorghum varieties could be developed whichare high yielding and have high lysine as well. The more or less naturalspread of TIPCA Si to 6,000 ha indicates what could be accomplished with anorganized promotion effort.

47. The improved nutrition from consumption of high lysine maize andsorghum would have a particular impact on the poorer segment of society wheremore coarse grains are consumed, especially in the health and well-being ofthe children.

Attached: Tables 1 - 6

March 31, 1975

ANNEX 7Table 1

INDONi3IA

AGjRICULTURAL REEARCH AND EXTENSION

Palawija Crops Research Program

A ricultural Crops Area -

(millTon hectar&s

Paddy 8.2

hMaize 2.9

Cassava i.4

Soybean o.6

Groundnat 0.4

Sweet potato 0.4

Vegetables 0.2

Tobacco 0.1

SUgurC ane 0.1

'Total 14.3

1/ nlrrioLc.i !,:-ricultural. Sector Survey Report, dated April 10, 1974,Volume II, Annex 1, page 22.

June 7, 1974

ANNEX 7.Table 2

INDON 3IA

AGRICIJLTURAL RE3EARCH AND EXTENION

Possible Growth in Yield, Area. and Prodact4ion of the PrincipalUpland Crops and Paddy, 1970 - 19 70 1

1980 over 19711970 1971 1975 1980 Annual Increase

Maize & SorghumArea (Million Ha) 3.02 2.69 3.50 4-00 4.50Production (Millionton) 2.89 2.14 4.00 5.00 10.60Yield (Qtl/Ha ) 9.6 7.9 11.5 12.5 5.2Exports (1,000 ton ) 250 500 1,000 ---

SoybeanArea (M1illion Ha) 0.684 0.630 0.700 1.00 5.2Production (killion ton) 0.488 0.422 0.560 1.00 10.6Yield (Qtl/Ha ) 7.1 6.7 8.o 10.0 4.6Exports (1,000 ton ) 50 @ 200-400 @

GroundnutArea (Million Ha) 0.402 0.413 0.450 0.500 2.1Production (Million taq 0.293 0.299 0.360 0.500 5.9Yield (Qtl/Ha ) 7.3 7.2 8.o 10.0 3.7Exports (1,000 ton) 50@ 75@

CassavaArea (Million Ha) 3.02 2.69 3.50 4.00 4.5Prodl1cdion (Million ton) 2.89 2.14 4.00 5.00 10.6Yield (Qtl/Ha ) 9.6 7.9 11.5 12.5 5.23xports (1,000 ton ) --- 250 500 1,000 ___

.-weet PotatoArea (M,illion Ha) 0.356 0.367 0.3?0 0.380 0.4Prodaction (,illion to4 3.03 2.58 3.145 3.50 3.4Yield ( Qtl/Ha ) 85.0 70.3 85.0 91.0 2.9

Paddy Area (Million Ha)High 14.7 15.0 --- 18.6 2.4Low 14.7 15.0 --- 17.8 1.9

M:illed Rice Production(Million ton)

High 12.0 12.7 15.5 18.1 4.0Low 12.0 12.7 14.5 16.6 3.0

Per Capita Milled Rice.Production (Kg/Capita)High 102.1 102.1 110.1 120.0 1.8Low 102.1 102.1 105.7 110.1 0.8

© Product Equivalent

1/ Indonesia Agricultural Sector Survey Report, dated April 10, 1974,Vol. I, page 30

June 7, 1974

IIDONESIA NE7Table 3

AGIICULTUPAL °SSEAtCH & EXTENSION

Pa.lawija Crons Research Program1/

Staff List at Full Development

. / Senior Junior 1 4 1 ClericnlProfessional- Technicall/ Technical GCeneral Labor

(a) National Center - SukamandlAt'

AdministrationProgram Director 1 1 - 1Program Advisor/Deputy 1 - - 1Secretary (Administration) 1 1 2 6Accountant - 1 2 6Farm Manager 1 - 4 1 50Farm Service Center - 1 2 1 4Food Services - - 2 - 4

Technical ServicesExoerimental Design & Statistics - 1 2 2 -Economist 1 1 2 3Library - 1 1 2Publications, Photography 1 1 1 3Subject Matter Specialist 3 - - 3 9

Cron InmorovementBreeder, Maize 2 4 4 23rceder, Sorghum 1 2 2 1.reeder, Legumes 1 2 2 13reeder, Tubers 1 2 2 1 -Patholog'ist 2 2 2 1 5Entomologist 2 3 2 1

Cro, ProductionAgronomist, Cereals 1 2 2 2A-ronomist, Legumes 1 2 2 2Agronomist, Tubers 1 2 2 1Agronomist, lNaltiple Crop 1 2 2 2Agronomist, Weed Control 1 2 2 1Agronomist, Seed Production 1 2 2 1Soil Scientist 1 2 1 5Water Management Specialist 1 2 2 1Farr, Machinery Specialist 1 2 3 1 3

Cron Quality, NlutritionChemist 1 2 2 1 5Physiologist 1 2 2 1 5

Sub-total, National Ceitter 29 46 57 50 100

(b) Regional Stations - 4

Farm iLqnager - 4 4 -B3reeder, Cereals - 4 4Breeder, Lsgumes - 4 4Breeder, Tubers - 14 1-Pathologist - 4 4Entomologist - 4 4-Agronomist, Cereals - 4 4Agronomist, Legumes - 4 4Aigronomist, i'iultiple Cropping - 4 4Agronomist, 'eleed Control 1 1 4

Sub-total, Regional Stations - 40 40 -

TOTAL 29 86 97 50 100

1/ Year six of project.2/ Professional -- 1.1.Sc., Ph.D. or equivalent capability at end of project.3/ Senior Techmical -- B.Sc., or equivalent at end of project.

Junior Technical -- Agricultural High School or equivalent at end of project.,/ Support for all aspects of work would be provided at Sukemandi.

October 30, 1974

ANNEX 7Table 4

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Palawija Crops Research Prozram

Project Cost 2(Constant 1975 us$)

Percentage ofForeign Exchange

Local Foreign Total ComponentTechnical Services

Research Specialists 162,000 918,000 1,080,000 85%Fellowships, Short-term - 54,000 54,000 100%Fellowships, Long-term 49,600 446,400 496,000 90%

Sub-total 211,600 1,1418,400 1,630,000

Vehicles / 36,000 24,000 60,000 40%

Establishment Cost 1,660,000 __ 1,660,000 --

Total 1,907,600 1,442,400 3,350,000 43%

1/ No figure has been given here for capital input, since some physical facilitieswill be common to the rice and the palawija research center and their costs cannot be broken down between the two centers. The total cost of capital input forthe combined center is given in the corresponding table for the rice research center(Annex 6, Table 4)j, except for automobiles for expatriate staff.

2/ See Table 5.

2/ Automobiles for research specialists engaged for one year or more (6).

4/ See Table 6.

March 27, 1975

ANNEX 7Table 5

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Palawi.Ja Crops Research Program

Technical Services

RNmber Unit Cost Total1iesearcA....§2gaUstJ -. -- (Constant 1975 _US --

~OiZ2g A' k.:-it/Specialist for 4 years 1 240,000 240,000Research $Socialists for 3 years 2 180,000 360,000

2 3 120-,000 360,0006 months 3 30,000 90,0003 2 15,000 3 0.000

Sub- - otal -_ 1,080,000

Fello-vships Y t-tenn 9 6,000 54,000

M'Sc: in la,:lkuesia 4 10,000 40,000M.Sc_ Aborc16 9 24,000 216,000Ph.D. Abroadi 5 L8 000 240,000

Sub-total 18 - 496,000

TOTAL - 1,630,000

j The Program Advisor would be appointed as early as possible in year onein order to participate in program and civil works planning, and equip-ment proc Aroment. He would be appointed for 4 years in ordertc proride continuity. The remaining specialists would be appointed forVL rying pariods, principally during the last three years of the projectien resecarch facilities are completed. Provision is made for a large

nrmber of short-ten specialists to provide consultative services inspecialized fields, especially towards the end of the program. The needfor flexibility in the type and period of residence of specialists isrecognized. 18 man-years of research specialist services would beprovided.

March 27, 1975

ANNEX7Table 6

INDONESIA

AGRICUIXURAL RESEARCH AND XTENSION

PalawiJa Crops Research Program

Schedule of Establishment Cost

------------------------Project Year …--------- ----

.1 aL 6 Total

Number of Professionals 14 14 22 26 29 29 _

Of which:- on fellowships - - 8 15 15 11 -

- engaged in the program 14 14 14 11 14 18 -

------------ (---------(onstant 1975 US$)--------------

Establishment Cost of 949000 420,000 420,000 330,000 420,000 540,000 2,224,000the Program v/

Current EstablishmentCost / 94,000 94,000 94,000 94,000 94,000 94.,000 564,000

Incremental Establish-ment Cost - 326,000 326J000 236,000 326,000 446,000 1,660,000

2/ Commencing in the second year, a proportion of the professional staff will beawarded fellowships to study either in Indonesia or abroad.

2/ In accordance with the experiences of international research centers, theestablishment cost has been calculated using a ratio of US$ 30,000 per professionalengaged in the program. For the first year, however, it was assumed that therewould be no change in the current establishment cost because of delays in startingthe program.

1/ Most of the research on palawija crops is currently carried out at CRIA. Thisinstitute however, deals with both rice and palawija and the breakdown of itsestablishment cost between the two types of crops was not available. Theassumption is made that one third of CRIA routine budget was devoted to researchon palawija crops and two thirds to rice.

March 27, 1975

ANNEX 8Page 1

ItNDONES IA

AGRICULTURAL RESEARCH AND EXTENSION

National Research Program for Highland Vegetables

A. Introduction

1. A wide variety of horticultural (vegetable and fruit) crops isgrown in Indonesia and contributes a vital part of the Indonesian diet, whiclis otherwise restricted largely to rice ar.d other starchy grains and rootcrops. The minor importance of these crops in census compilations shouldbe considered a statistical abberation, because their culture is a diffuse,indistinct, unorganized part of Indonesian agriculture with much of theproduction not entering the money economy, and thus escaping census. How-ever, interpolations made from production estimates variously list thecombined area devoted to vegetables and fruits at between 1.2 and 1.5 mil-lion ha:

Crop Hectares in 1000's (%)(1972 estimate) Java/Madura Sumatra Remainder Total

Vegetables 585 (82%) 57 ( 9%) 59 ( 9%) 701 (100%)

Fruits 427 (60%) 122 (17%) 165 (23%) 714 (100%)

2. The horticultural industry is located in four agroclimes based onwater distribution and temperature:

Lowlands: up to about 300 meters

-Highlands: 600 meters and above

Wet: no distinctive "dry" season, i.e. anymonth with less than 40 mm of rain

Dry: a distinctive "dry" season (5-7 months)usually less than 2000 mm of rain per year.

3. Because of the wide variation in ecologic conditions within thecountry and the widespread distribution of horticultural crops, no singleresearch station can serve adequately the needs of the nation's horticul-tural industry. A range of existing stations and substations providereasonably good coverage of the main agro climes (Table 1).

ANNEX 8Page 2

4. The GOI, recognizing the importance of vegetables in the agricul-tural economy, and the contribution which they make to tnational food supply,nutrition and well being, has decided to upgrade the inidustry through emphasison research and development. The most commercialized sector of the industryis in the highland vegetable areas of Java, together with two or threesecondary centers in Sumatra. In these areas, where holdings are typicallyless than 1 ha, and the predominant system is intensive multiple cropping,the production is responsive to changing market demand and there is moreadaptability and less reliance on traditional means of production than isthe case in the lowlands. Growers quickly respond to new varieties, newpesticides and new systems of culture, and as a result are presently muchmore accessible through conventional research and extension methods. Forthese reasons, highland vegetable research deserves priority under theproject.

B. The Present Status of Research and Development

Personnel

5. Before 1960, horticultural crops were merely an office in theDirectorate of Extension. In 1960 horticulture and food technology becamedistinct units and in 1966 these were combined into the Horticultural Re-search Institute (Lembaga Penelitian Hortikultura) with the headquartersat Pasarminggu. In 1972 there were 741 permanent and 44 temporary staffin the Horticultural Research Institute distributed as follows:

Number of StaffPermanent Temporary

M. Sc. 15 7

B. Sc. 24 7

Technicians (Agricultural High School) 22 21

Technicians (High School) 20 9

Total 81 44

Laborers 660 -

Facilities

6. The institute is divided into a Central Station at Pasarmingguwith two branch stations (Margahayu and Malang) and a separate food tech-nology laboratory at Jogjakarta. There are two highland sub-stations

ANNEX SPage 4

12. Research on propagation and evaluation of ornamentals was beingcarried out at Pasarminggu including orchids, anthuriums, roses, and annuals.EearMargahayu, extension gardens were collecting and distributing rose plants,the collection was very large and well cared for.

13. In general the research record is spotty. The best example of aresearch achievement is the apple program at Mialang. The research underwayat Margahayu with emphasis on vegetables seemed the most promising and showsthe positive results from active technical assistance of a Netherlands tech-nical assistance program. The new research facility at Segunung on plantprotection was outstanding. This station has bnglv been completed recentlybut field studies were underway on disease-free vegetable transplant produc-tion. The research at Pasarminggu appeared most promising in tlhe ornamentalsarea. In general, however, the atmosphere at Pasarminggu was depressing andthe station was rundown with neglected field facilities. The impression wasof an unfortunate waste of human resources (the station has about 360 staffat all levels).

C. The Project

Special Considerations

4. The project would establish a National Research Program for High-land Vegetables and use the present branch station at Margahayu, close toLembang north of Bandung. The research at the new National Center to beestablished at this site would emphasize production-oriented studies on high-land vegetables. The National Center would be a prototype for other researcheffort on other horticultural crops to be developed in the wet lowlands andthe high and low dry areas at a time when staffing and other essential pre-requisites permit, but such research programs wfould not be components of theproject. The existing plant protection center, based at a horticulturalsub-station at Segunung, about 2 hours distant by road from Margahayu, whichhas been considerably strengthened in recent years through a Dutch aid program,will operate as an ancilliarv facility specializing in pest and diseasestudies, with a view to later transfer of the research staff to Margahayuand the further development of Segunung as a third regional station.

15. The project encompasses an increase in professional and technicalpersonnel with supporting field labor, a technical assistance and a fellowshipprogram, a subject matter specialist linkage with extension, and improvedphysical facilities, including two regional stations in other parts ofIndonesia.

16. The National Center would be restricted to research activities;it would not engage in propagation and distribution of plant materials tofarmers, except that it would serve as a source of foundation seed and

ANNEX 8Page 3

one hour from Bogor (Cipanas and Segunung) and there are eight sub-sta-tions associated with the Malang Branch station (4 lowland, 4 highland).There is an experimental garden at Gurgur in North Sumatra.

Current Research

7. Very little fruit research is being carried out in Indonesia.Some collections of tropical fruits have been established in Pasarminggubut at present the collection is barely maintained and there is littleevidence of active projects in the field with the exception of some minorwork on citrus nutrition.

8. At lowland stations at the Malang branch there were two largemango experiments underway. At Pandean a large mango yield trial (131 localand 111 imported varieties) has been underway since 1941; four promisingselections (all local types) have been idintified. lExtensive data collectedon each tree since 1941 (including the Japanese occupation) has never beencollated, analyzed, or published. At Cukurgondang, another lowland substation,a trial was in progress using the four mango selections identified at Pandean,each with six rootstocks. Promising combinations have been identified. Atthe Banjarsari experimental gardens, two hectares are reserved for grapevariety studies. "Alphonso Lavallee 2" was selected as the most promisingvariety from previous trials. A banana trial was underway at the Margahayubranch station.

9. At the highland substations associated with the Malang branch,an active and very promising program was carried out on apple. Thisappears to be the best example of fruit research in Indonesia. Since 1963,when a local resident (J. Kribben at Batu) succeeded in developing a methodto culture apples, a combination of research studies, extension effort, andlocal farmer ingenuity has resulted in a significant local apple industry.In Batu, the most important of four regions in East Java, 1,200,000 treeshave now been planted, with the industry presently in an expansion phase.As many apples are imported in Indonesia, there is considerable room forcontinued expansion and development.

10. Vegetable research is underway at a number of highland stations.These include studies on garlic ("seed" program at Malang), tomato breeding(at Cipanas), potato "seed" program and various studies on vegetable produc-tion. The most active programs were carried out at Margahayu. A fertilizertrial was underway at Banjussari (Malang branch), a lowland substation.

11. Food technology research was observed at Pasarminggu and at theMargahayu station. The laboratories combine post-harvest and processingstudies including various exploratory studies on cider, pickles, papainextraction, and wine making (from fermented tomato pulp obtained from seedextraction). The research seemed marginal at best. At Margahayu simazinetreatment experiment on bean to increase protein content (after work ofS.K. Reis, 'Iichigan State University, East Lansing) and confirm his previouspromising results was underway.

ANNEX 8Page 5

stock for use and distribution by other agencies. It would not be a diag-nostic laboratory for routine samples but would serve as a resource base todevelop these services. It would also not include food processing but wouldinclude post-harvest handling, marketing, and economics. The program wouldbe limited in crop species to include crucifers, Solonaceous crops, and beans.

Organization and Management

17. The Program Director, who would be in charge of the National Centerand its associated regional stations, would be an Indonesian scientist ofsufficient stature and administrative ability. His appointment-would besubject to Bank approval.

18. The Director would be assisted by a Program Advisor who would under-take the role of research programs administrator. He would be recruiteddirectly or through international or bilateral assistance. He would assistthe Director on research plans and programs.

19. The research would be organized on the basis of coordinated nationalprograms for the principal highland vegetable crops, utilizing the staff andfacilities at the National Center and two regional stations, in the manneroutlined for Palawija crops (Annex 4). Linkage with the extension serviceand with the agricultural information centers would be continuously maintainedthrough the subject matter specialist on the staff of the National Center.

The Research Program

20. Research would emphasize the following crop groups:

Crucifers - cabbage, Chinese cabbage, cauliflower

Solanaceae - potato, tomato

Beans - Phaseolus dry bean and snap bean

21. The research program would cover all production phases includingseed production, selection, introduction (or breeding where appropriate),culture, harvesting, post-harvest handling and marketing short of processing.

22. Research priorities would be to reduce production costs, increaseyields and quality, and increase returns and profits to growers. Emphasiswould also be placed on marketing, transportation and flow through the mar-keting channels with special consideration to movement within Indonesia aswell as the export market in South East Asia.

ANNEX 8Page 6

23. The researclh progran would be based on specific projects submittedby the Program Director aided by his professional staff, and results would bedisseminated through an annual report, reputable scientific journals, researchbulletins and extension programs and publications developed by the extensionspecialist on the staff of the Center.

Specific Commodity Programs

24. Potato. The potato is an ideal highland crop and much favored inIndonesia where it is consumed as a vegetable rather than as a starchy staple.Its storage qualities makes it particularly suited to the tropics. Thelimiting factor in the expansion of potato production in Indonesia is asource of disease-free "seed" stock largely becaube of soil pathogens --nematodes, bacterial wilt, Fusarium wilt, as well as late blight and earlyblight. The present system of culture is based on continued importation ofclean seed from Europe with irregular local seed increase. The first prioritywould be to develop a self-sustaining `seed' program. Such a program hasalready been initiated by fletherlands aid and is presently underway at theUIargahayu station. With about 14,000 hectares of potatoes there is a potentialmarket of 28,000 tons of good seed per year, and more with expansion of theindustry. With sufficient researc! underpinnings the seed production phasecould develop into a substantial hiighland industry and greatly reduce thedependence on imported seed.

25. Tomato. The mlain problem in tomato production is disease controlparticularly the soil pathogens, as in potato, and, especially bacterial wilt.Most of the crop in 1973 at Cipanas wias a total failure because of theincreasing buildup of soil pathogens. The main research approach would bean active breeding program to develop adaptable disease resistant lines forfresh market production. dIybrids might be. of value for staked tomatoes, themain Droduction system in Indonesia, as thev are for greenhouise tomatoes intemperate areas. The possibility exists for the development of a hybridseed program for export. Development or isolation of a pool of diseaseresistant lines would permit rapid seed clhanges possible in specific regionsand areas in response to the disease situation. Other cultural systems fordisease control should be investigated. This includes the production ofgrafted plants using the disease resistant 'natural' Solanums as rootstocksfor special situations. Finally, methods to produce healthy transplants withdisease-free soil might increase yields. The possibilivy of a tomato pro-cessing industry should be explored from unstaked plantings in the dry areas.T'hiis could involve the development of a new industry for Indonesia.

26. Crucifers. Crucifers grow well in hiighland areas. The-main problemto be overcome is one of riarketing and long distance transport. Europeancabbagc is one of Indonesia's chief export vegetables. Priority researchwould involve the development of marlketing procedures, particularly handlingand transnort. This shotld involve the development of export -rades, andgeneral economic research. Seed is inexpensive and will probably continueto be imported but evaluation trials should be maintained to locate a morestiitablo exTort type of both green and red types.

ANNEX 8Page 7

27. Bean. Low yields, particularly of the seed crop and thereforeof the dry seeded types, are the principal problem of highland beans. Theproblem may be genotype and an extensive evaluation of local germplasm andimportations should be carried out along with studies on cultural prac-tices. A bean germplasm hank should be established. The aim would be toidentify more productive genotypes and possibly higher protein types.

Research Facilities

28. The present West Java branch station near Bandung (known as theMargahayu Experimental Gardens) would be developed as the National Centerfor highland vegetable research. This selection was based on the importanceof this area for the commercial production of highland vegetables and alsofor its proximity to Bandung, the provincial capital of West Java which hasready access by air, rail, and paved road.

29. The site is 5 km from the village of Lembang, and 17 km from Bandung.The station already has an active research program and is the recipient ofbilateral aid by the Netherlands Government since 1970 which, until mid-1974,supported three advisers (two in vegetable culture, and one in potato "seed"production). In addition support has been provided by the Netherlands Gov-ernment to establish a plant protection center at Segunung, a substationbetween Bandung and Bogor. A Netherlands plant pathology and entomologyadviser are presently stationed at Segunung with support for virology andnematology forthcoming. This facility, which is well equipped and does notrequire any civil works improvements, will be considered an ancilliary partof the National Center (see para 14).

30. The station at M1argahayu, with substantial assistance from theNetherlands technical assistance personnel, has developed an active researchprogram in a number of highland vegetable crops, particularly "seed' pro-duction in potato, seed technology of vegetables and highland land use andfarming methods. The station has a contiguous area of 41 lha and an addition-al 13 ha of potential experimental land on three separate plots within 3 kmof the station. The largest of these plots (Cikole II, 7 ha in extent) ispresently used as a military training ground, but will be returned to thestation in 1975. The land at Margahayu is gently to moderately sloping andnaturally well drained, typical of that used for vegetable production byfarmers in the surrounding areas. Most of the land is well shaped and idealfor experivental purposes.

31. A food technology and postharvest handling laboratory on a 2 ihanarcel is located 4 kl from the main station, close to the village of Lembang.T4e present research branchi containis a large administration building (1,020m' of floor snace) that is presently user! for offices, temporary researchspace and storage (including potato storage). A new greenhouse lhas just beencompleted. The complex has a power and water supply and a nuriber ofoutbuildincgs, including living quarters for tlie 2'tation Director and Farei%'anager.

ANNEX 8Page 8

32. The University of Bandung has an agricultural faculty. Interestwas expressed by the Director of the Faculty in emphasizing horticulturebecause of the importance of this agricultural discipline to the immediateregion.

33. Additional buildings for laboratories, offices, seed and potatostorage including cold storage, staff quarters, greenhouses and field work-shops, together with reconstruction of existing buildings, particularly theadministration building, would be provided through the project. The greaterpart of these civil works would be constructed on the Margahayu site, nearthe existing buildings, but storage facilities and a limited number of tech-nicians quarters would be built on the outlying plots. The unutilized portionof the 2 ha postharvest handling laboratory plot would be especially suitablefor the construction of technicians quarters. Field and laboratory equipmentand vehicles would also be provided.

34. Two regional stations, one of which would be in Sumatra, would beselected to serve the program. The exact locations of the regional stationshas not yet been agreed upon but it is expected these will be existingstations to be incorporated into ARD.

35. The project would not provide for any extensive new buildingsand facilities for the regional stations but would help to strengthen thestations through:

(a) staff development and training;

(b) field and laboratory equipment and vehicles;

(c) assistance with improvement of station managementand operations; and

(d) consultation by the technical assistance researchspecialists in the specialized fields who wouldbe located at the National Center.

Staffing

36. It is assumed that many of the present research staff concernedwith highland vegetables would be available for the National Center and theregional stations. However, it is recognized that the mobility of suchpersons may be restricted for various reasons and staff development would involvea substantial provision of advanced degree training to the M.Sc. and/or Ph.D.level for a substantial number of the professional staff expected to be inplace at the termination of the project. The estimated staffing requirementfor the National Center, together with the professional and senior technicalpersonnel to be considered for training for the two regional stations, arepresented in Table 2. All technical services and other support for allaspects of work will be at the National Center.

ANNEX 8Page 9

Fellowships

37. Training through the B.Sc. degree should be provided by Indonesianuniversities. Similarly, it is expected that some advance degree trainingto the M.Sc. degree can be furnished in a number of specialized fields atthe University of Indonesia, the Agricultural University at Bogor (IPB).Gajah Hada University or other Indonesian institutions. Most of the Ph.D.level training will have to be done at foreign universities during theterm of the-project.

38. The increased number of M.Sc. level personnel available in recentyears should provide the base for early selection of some scientists forPM.D. training. It is anticipated that substantial numbers of B.Sc. levelgraduates will be coming out of the universities, many of which have beenupgraded in recent years to produce more specialized training and educationin agriculture.

39. It will be important to exiercise critical selection of personsfor advanced training, not only on the basis of their academic records butalso in terms of their aptitude for research, their commitment to researchand to research careers, their willingness to be posted at the Center orstations where the research jobs are to be done and their adaptability tomulti-disciplinary team efforts. A selection board should assess fellowshipcandidates and all potential awardees should have at least one year ofworking experience in research before being considered for advanced training.Fellows would be expected to serve at least one year of service for eachyear of training support.

40. In addition to the longer term training for advanced degrees,there would be short-term professional improvement exercises for selectedstaff members at the Asian Vegetable Research Center, and other Asian Centers.Similar opportunities would be provided for the Director of the Center andhis senior and more experienced scientists to gain experience and understandingof research station and program management. New B.Sc. graduates as well assome of the presently employed junior staff members for the Center and theregional stations would be given on-the-job training at the Center, not onlyto accelerate their useful involvement in research but also to identify thosewith special talent and aptitude for research who would be early candidatesfor advanced degree training.

Technical Assistance

41. Because of the shortage of trained and experienced agriculturalresearch personnel within Indonesia, technical assistant research specialistswould be provided for several special fields under the project. Theseforeign personnel would be additional to the Netherlands technical assistancepersonnel (three plant protection specialists based at Segunung, and ahorticulturist, based at Margahayu) who are likely to continue until 1976under current technical assistance plans. High priority would be given toan economist and a post-harvest physiologist because of the inadequateattention given to production economics and the problems of transportation

ANNEX 8Page 10

and marketing by the institute in the past, and the importance of thesesubjects to the industry. A breeder would furnish guidance in setting upand implementing the national coordinated multi-disciplinary team researchfor the crop improvement program and an agronomist would do likewise forthe crop production aspects.

42. The availability of highly trained and qualified Indonesian scien-tists in certain disciplines might cause some change in the foregoing typesof specialists but a minimum of four such persons for periods of between 2and 4 years would seem to be necessary for effective development of thenational highland fruits and vegetable research program. In addition aProgram Advisor, who would be a specialist in a relevant field, and wouldengage at least part-time in his field of research specialization, would beengaged as soon as possible for a minimum period of 2 years, with a view topossible extension for a maximum of five years.

43. The Program Advisor would work with the Program Director on theproblems involved in setting up the facilities of the Center and in ensuringthat project operating activities are effective. The Program Advisor wouldbe a highly experienced specialist in one of the program fields of speciali-zation and would engage at least part-time in his field of specialization.

44. Although the foreign scientists would be fully and directlyinvolved in their respective research disciplines and will supply activeleadership for research during their assignment, it would be understoodthat their primary objective would be to guide and train their Indonesiancolleagues so that the research would be viable and self-sustaining underfull Indonesian leadership at the end of the project. Felowship andtechnical assistance details are summarized in Table 4.

Cost Estimates

45. The cost for the national research program for highland vegetablesfor the five-year period would be approximately US$4.8 million. 1/ Theestimated costs are summarized in Table 3, 4 and 5.

D. Economic Benefits and Justification

46. Among the benefits which should accrue from a well planned andconducted research program as proposed for highland vegetables through theproject are:

(a) An oncoming stream of well trained professionals whowill direct vegetable research for the nation untilthe beginning of the next century;

1/ In constant 1975 terms, and excluding physical contingencies.

ANNEX 8Page 11

(b) Development of a basic research infrastructure, flexibleenough to expand research capabilities in vegetableresearch to both inner and outer Indonesia;

(c) Creation of a national vegetable seed industry whichwill reduce the importation of all but long day crops.In addition, Indonesia should emerge as an export seedproducer of speciality crops, especially those that mayrequire intensive culture such as hybrid tomato;

(d) Self-sufficiency in seed potato production;

(e) Doubling of potato production from 70,000 tons to140,000 tons;

(f) An increase in the production of tomato and snap beanby 10% per year. Present production of each crop isabout 30,000 tons;

(g) Tripling of the export market of fresh vegetables toSouth East Asia, presently about 20,000 tons per year;

(h) National confidence in vegetable research capability;and

(i) Emergence of horticulture as a leader in Indonesianagriculture. At the present time horticulture is losingits prestige to the extent that at Bogor the entire 1973graduating class in horticulture is only 7 and is madeup entirely of women students. In five years thegraduating class should at least triple and hopefullyparity will be resumed.

Attached: Tables 1 - 5

March 31, 1975

ANNEX 8Table 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Location of Horticultural Research Stations and Substations

HorticulturalResearch Station

Agro-clime or Substation Typical Fruit and Vegetable Crops

Low Wet Pasarminggu, W. Java Fruits : tropicalVegetables : shallot, chilli,

cowpea

High Wet Margahayuu, W. Java)Cipanas, W. Java) Fruits ./: avocado, citrusSegunung, W. Java) Vegetables : European typesGurgur, N. Sumatra)

Low Dry Pandean E. Java)Kraton E. Java) Fruit : mangoCukurgondang E. Java) Vegetables : shallotBanjussari E. Java)

High Dry Banaran E. Java)Punten E. Java) Fruits 1/: apple, citrusTlekung E. Java) Vegetables : European types, garlicKlurar E. Java)

1/ Principal highland vegetables include cabbage, Chinese cabbage, cauliflower,potato, tomato, leek, onion, garlic, carrot, radish (Japanese type), andbean (Phaseolus)

Oct. 30, 1974

INDONESIA ANNEX 8Table 2

AGRICULTURAL RESEARCH AND EXTENSION

Highland Vegetables Research Program

Staff List at Full DeveloEment/

Senior / Junior ClericalProfessional/ Technical- Technical & General Labor

(a) National Center - Margahayi5AdministrationProgram Director 1 1 - 1 -

Program Adviser/Deputy 1 1 1Secretary (Administration) 1 1 1 3 -

Accountant - 1 1 3 -

Farm Manager 1 - 3 1 40

Farm Service Center - 1 2 - 3Food Services - - 2 - 2Engineer 1 - 3 2 6

Technical ServicesExperimental Design & Statistics 1 1 1 2 -

Economist-Production 1 1 1 2 -

Economist-Marketing 1 1 1 2 -

Library - 1 1 1 -

Publications, Photography 1 1 1 2 -

Subject Matter Specialist 1 1 1 1 3

Crop Improvement & Seed ProductionBreeder 2 2 2 2 -

Seed Technologist 2 2 4 2 _

Pathologist 1 1 1 1 -

Entomologist 1 1 1 1 -

Physiologist 1 1 1 1 -

Crop ProductionSoil Scientist 1 1 1 1 3

Water Management Specialist 1 1 1 1 3

Agronomist 2 2 2 2 -

Post Harvest Physiolog' (Quality)Physiologist 1 1 1 1 2

Engineer/Food Technologist 1 1 1 1 2

Sub-total, National Center 23 24 33 34 64

(b) Rezional Stations - 2. at sites to be designated

Farm Manager - 2 2

Crop ImprovementPlant Breeders - 2 2 - -

Pathologist - 2 2 - -

Entomologisb - 2 2 - -

Crop ProductionSoil Management - 2 2 - -

Water Management - 2 2Agronomy - 2 2 _ _

Sub-total, Regional Stations - 14 14 - -

TOTAL 23 38 47 34 64

1J Year six of project./ Professional -- M.Sc., Ph.D. or equivalent capability at end of project.

# Senior Technical -- B.Sc., diploma or equivalent at end of project.Junior Technical -- Agricultural High School or equivalent at end of project.Support for all aspects of work would be provided at Margahayu and its ancillaryfacility to be developed at the plant protection center at Segunung where twoprofessionals (entomologist and pathologist) together with a complement'oftechnical and clerical staff will be based. Eventually, the Segunung stationwill be developed as an additional regional station and the plant protectionstaff transferred to Margahayu.

Oct. 30, 1974

ANNEX 8Table 3

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Highland Vegetables Research Program

Project Cost(Constant 1975 US$)

Percentage ofForeign Exchange

Local Foreign Total ComponentCapital Input 1/

Building, Services,.Utilities & Housing 686,400 457,600 1,144,000 40%

Research Equipment 28,200 253,800 282,000 90%Furniture 4,900 2,100 7,000 30%Farm Development 2/ 36,000 12,000 48,000 25%Field Equipment -7 33,000 33,000 66,000 50%Vehicles T_ 7,200 64,800 72,000 90%- Research Specialists / 30.000 20,000 50x000 4C%

Sub-total 825,700 843,300 1,669,000

Technical Services 6

Research Specialists 162,000 918,000 1,080,000 85%Fellowships, Short-term -- 42,000 42,000 100%Fellowships, Long-term 39,000 351,000 390,000 90%

Sub-total 201,000 1,311,000 1,512,000

Establishment Cost ./ 1,595,000 -- 1,595,000

Total 2,621,700 2,154,300 4,776,000 45.1%

1/ Details on this component are given in Annex 17, Table 7. The costsgiven here are without design and construction contingencies.

2/ Based on an estimate of US$2,000 per professional (24 professionals).3/ Based on an estimate of US$2,750 per professional.4/ Based on an estimate of US$3,000 per professional.:/ Automobiles for research specialists engaged for one year or more (5).6/ See Table 4.7/ See Table 5.

March 27, 1975

ANNEX 8Table 4

INDONES IA

AGRICULTURAL RESEARCH AND EXTENSICN

Highland Vegetables Research Program

Technical Services

Unit Cost Total1/ ~~Number _0S$ (US$)

Research Specialists-'

Program Advisor/Specialist for 4 years 1 2h0,000 240,000Research Spe6ialists for 4 years 2 240,000 480,0oo

it II 1" 2 years 2 120,000 240,000

of 1" 6 months 3 30,000 90,000t it" 3 months 2 15,000 30,000

Sub-total - - 1,080,000

Fellowships Short-term 7 6,000 42,000

Fellowships Long-term

M.Sc. in Indonesia 3 10,000 30,000M.Sc. Abroad 7 24,000 168,000Ph.D. Abroad 4 48,000 192,000

Sub-total 14 - 390,000

TOTAL - - 1,512,000

1/ The Progran Adviser would be appointed at an early stage in the projectand would remain through the life of the project. Other researchspecialists would be appointed for varying periods, depending on theactual needs of the program, as determined during the life of theproject. One long-term specialist (2 to 4 years) would be associatedwith each of the four principal research groups: Technical Services,Crop Improvement and Seed Production; Crop Production and Post HarvestPhysiology. About 18 man-years of technical specialist services wouldbe provided.

ANNEX 8Table 5

INDONESIA

AGRICULTURAL RSMEARCH AND EXTENSION

Highland Vegetables Research Program

Schedule of Establishment Cost

-________---_-_ Project Year -------------------1 2 3 i 5 6 Total

Number of Professionalsi! 11 11 19 22 24 24 __

Of which:- on fellowship -- -- 7 10 12 9 --

- engaged in the program 11 11 12 12 12 15 __

Establishment Co t of theProgram (US$)2' 53,000 330,000 360,000 360,000 360,000 450,000 1,913,000

Current ystablishment Cost(US$)J 53,000 53,000 53,000 53,000 53,000 53,000 318,000

Incremental EstablishmentCost (Us$) -- 277,000 307,000 307,000 307,000 397,000 1,595,000

j Commencing in the second year, a proportion of the professional staff will beawarded fellowships to study either in Indonesia or abroad.

2/ In accordance with the experiences of international research centers, theestablishment cost has been calculated using a ratio of US$30,000 per professionalengaged in the program. or the first year, however, it was assumed that therewould be no change in the current establishment cost because of delays in startingthe program.

2/ The current establishment cost has been taken as the operating budget for theexisting horticulture station at Lembang.

February 10, 1975

ANNEX 9Page 1

INDONES IA

AGRICULTURAL RESEARCH AND EXTENSION

National Research Program for Rubber

A. Introduction

1. Indonesia produces roughly 800,000 tons of rubber per annum or27% of the world's total, and is the second largest producer. In 1970 thevalue of rubber exports (US$213 million) constituted approximately 56% of thevalue of all agricultural exports or 21% of the value of all exports forthat year, and is thus an important foreign exchange earner which shouldbe protected and promoted. Domestic consumption of rubber is relativelysmall at approximately 35,000 tons per annum largely for the manufactureof tires and tubes. Consumption may be expected to increase in the future.

2. The major regions and areas of production inside Indonesia aregiven in Table 1 which indicates that about 71% is produced by smallholders.

3. It is estimated that the area under rubber will increase by roughly1% per annum and the production by 2 - 3% per annum to 1980. There is,hiowever, considerable scope thereafter for further increases in production,through the application of research findings to currently established rubberanrd to rubber to be established by replanting of worn-out areas, particularlythose of smallholders.

4. It is against this background that the GOI recognizes the need toestablish a National Center for Rubber Research at a site representative ofthe rubber growing areas of North Sumatra, which is the major rubber producingregion of the country.

5. The site recommended after reviewt of all major facilities, is atSungei Putih Estate near PNP V Headquarters at Sungei Karang. This 2,250ha property would provide the land for the experimental plantation and otherfacilities for the Center. Its selection is based on its location on amajor soil type in an area of substantial rubber production. Further, itlies at a distance of only 48 km from Medan, a large university city. Rubberresearch conducted at the BPPM, BPPB and the Tanjung Morawa Rubber Researchstation, as well as at other organizations, will be incorporated into theNational Program for Rubber Research and staff transferred after completionof the civil works construction program for the Center.

ANNEX 9Page 2

B. Present Status of Research and Development

Historical Background

6. Rubber Research in Indonesia has been primarily carried out inJava and Sumatra. In Java it was first carried out under the auspices ofCentrale Proefstation Verevniging (CPV) at the Indonesische Instituut voorRubber Onderzoek at Bogor. In 1969 this was converted to the ResearchInstitute for Estate Crops (RIEC) under the control of the Directorate Generalof Estate Crops (which in turn was responsible to the Minister of Agriculture)and financed by Ministry Grant. The Institute at Bogor is now known as theBogor Estate Crops Research Institute (Balai Penilitian Perkebunan or BPPB)and is financed by Cess.

7. Research on rubber in Sumatra was first carried out at theAlgemene Proefstation voor Rubberplanters Oostkust Sumatra (AVROS) whichwas founded in 1915 and supported by voluntary contributions from rubber-growers. AVROS became the Research Institute of the Sumatran PlantersAssociation (RISPA) in 1958. This came under the auspices of the Ministryof Agriculture in 1966 and was financed by compulsory contributions. In1969 RISPA was converted to the Medan Estate Crops Research Institute(Balai Penelitian Perkebunan Medan or BPPM) and financed by Cess.

8. - Rubber research in Indonesia was also carried out by researchstations financed by private plantation companies. Prominent among thesewas the Plantations Research Department of the Hollandsche AmerikaanschePlantage Maatschappij (HAPM, now Uniroyal) at Kisaran, Sumatra. Researchby the private sector within Indonesia has now fallen into desuetude.

Current Situation

9. In general, rubber research is mediocre in all centers and wellover half the activities is in service and regulatory functions and notin research. It is now mainly carried out under the auspices of the Councilfor Estate Crops Institutes Bogor and Medan (Dewan Pembina BPP Bogor danMedan) which control both BPPB and BPPM. Some of the Government ownedestates also conduct small amount of research on their own properties,related to the special problems of their localities.

10. The Council is responsible to the Minister of Agriculture. TheChairman of the Council is the Director General of Estate Crops and repre-sentatives of the Central Cess Board (Badan Usuran Cess or BUC) and thePNP's/PTP's are members of the Council. The Council also controls a thirdorganization, namely the Tea and Cinchona Research Institute at Rancabalong,West Java.

11. The BPPB and BPPM are chiefly financed (at the rate of aboutRp 175 million per annum each for routine budget) from the Central Cess

ANNEX 9Page 3

Board and to a certain extent from the local Cess offices for regionalprojects. The professional staff of the BPPB and BPPM (Senior ResearchWorkers, Research Workers and Assistant Research Workers) are subjectto assessment and approval by the Indonesian Institute for Sciences (LembagaIlmu Pengetahuan Indonesian or LIPI).

12. The Government owned PNP's/PTP's operate the Rubber ResearchCenter at Tanjung Morawa, North Sumatra (RRC/Tanjung Morawa) on a jointsupport basis. The RRC is controlled by a Special Board of the PNP's/PTP's (Badan Khusus Urusan PNP/PTP) which is headed by the Minister of Agri-cui'ture and assisted by the Director General of Estate Crops and the Secre-tary General of the Ministry of Agriculture.

Estate Crops Research Institute, Bogor (BPPB)'7

13. The offices and laboratories ot the BPPB are located in the oldbuildings of the CPV. These offices and laboratories are extensive butrambling. The Director of BPPB has a staff at Bogor of 7 senior researchworkers, 8 research workers and 5 assistant research workers. The areaserved by the BPPB includes Southern Sumatra (Sumatra Selatan, Lampungand Bengkulu Provinces), Java, Kalimantan and Sulawesi. The crops underinvestigation include rubber, tea, cinchona, coffee, cocoa, tobacco, etc.

14. The Institute has three divisions, namely Technology, StandardIndonesian Rubber and Crop Production. The Technology Division has thefollowing laboratories relevant to work on rubber:

Leaf and soil analysis.General chemical analysis (for fertilizers, etc.).Rubber sampling.Chemical testing of rubber and rubber latex.Physical testing of raw and vulcanized rubber.

15. The Standard Indonesia Rubber (SIR) Division has recentlybeen organized to deal with the analysis, cross-check and certificationof Standard Indonesian Rubber. There are or will be SIR laboratoriesunder the control of Bogor and situated as follows:

Java: Bogor, West Java.Sumatra: South Sumatra, Lampung, Bengkulu.Kalimantan: West, Mid and South Kalimantan.

16. The Crop Production Division has sections dealing with thefollowing:

Agronomy (fertilizer, tapping, upkeep).Botany and selection.Plant Protection.Economics.

ANNEX 9Page 4

Experiments are carried out on a co-operative basis on estates in theareas served by the BPPB.

17. A Small Experimental Garden for rubber is currently maintainedby BPPB at Ciomas About 3 km from Bogor. This garden serves chiefly forthe maintenance of a genotype collection and hence also for the provisionof planting material for the area served by the BPPB. It is the intentionto discard this garden and transfer its functions to a new branch stationof BPPB at Sembawa near Palembang, South Sumatra.

18. Sembawa was originally set up in 1937 as a center for provisionof rubber planting material, especially seed, for distribution to surround-ing planters. It belongs to the Local Government but would be gifted to theBPPB and developed as a branch station under the proposal. It lies at adistance of 29 km from Palembang and currently has an area of 700 ha plantedchiefly with clonal rubber and 2,300 ha of reserve land currently undersecondary forest. The only permanent buildings at present are a guest houseand general storage building. It is currently under the control of an actingmanager. Since the two most important estate crops in Southern Sumatra arerubber and coffee it is the present intention of the BPPB to carry outinvestigations on both these crops at Sembawa. However, the areas wherecoffee is grown lie at some distance from Sembawa in the western hills, soSembawa may not be wholly relevant to coffee research. It is proposed byBPPB that the Sembawa branch station should in the long term serve the wholeof Southern Sumatra (Sumatra Selatan, Lampung, Jambi and Bengkulu). It isrelevant to the development of Sembawa that two technical assistance projectsare currently based at Palembang. One is a FAO project concerned with Soiland Water Resources Development in South East Sumatra, while the second isa British ODA project concerned with a survey of smallholder rubber (725,000ha) and methods of improving the rubber plantings, rubber exploitation andthe preparation of rubber for marketing.

19. The BPPB publishes in the Indonesian language the journal "Menara -

Perkebunan" (successor to 'De Bergcultures" originally published in theDutch language). This contains among other matter contributions on rubberresearch by the staff of BPPN and by outsiders.

20. The BPPB maintains a branch station at Jember, East Java. TheAssistant Director of this station is supported by a professional staff ofthree research workers and two assistant research workers. The Jemberbuildings are old (1908) and not extensive, there being'about 17 rooms toserve as offices and laboratories. The library has about 10,000 volumes,mostly old material, but there is a reasonably good current subscriptionlist. The laboratories are equipped for chemical analysis, soil surveywork and leaf and soil analysis. Jember is somewhat isolated, the nearestairport being Surabaya, distant about 4 hours by road travel.

ANNEX 9Page 5

21. Jember branch station maintains an experimental garden at Kali-wining which is 18 km from Jember. This garden is roughly 45 m above sealevel and consist of 160 ha of flat, principally low-humic gley soil.Much of the area is under rubber but there is some coffee and cocoa and alittle tobacco. It is adjacent to Renteng Estate of PTP XXIII which is wellspecialized in cocoa. Neither coffee nor rubber is typically grown on low-land gley soils in East Java. Experiments on rubber clonal behaviour,manuring and upkeep, and tapping are carried out at the Kaliwining Gardenand on a co-operative basis on estates in East Java served by the JemberBranch.

Estate Crops Research Institute, Medan (BPPM)

22. The offices and laboratories of BPPM are located in the old(1919) buildings of AVROS plus some newer additions including onecompleted in 1973. The Director of BPPM is assisted by a staff of sixsenior research workers and 14 research workers. The area served by BPPMincludes northern and western Sumatra (Aceh, North Sumatra, Riau and WestSumatra).

23. The BPPM has the following Divisions in which research relevantto rubber is undertaken:

Breeding and Agronomy.Plant Protection.Soils and Plant Nutrition (including leaf and soil analysis).Technology (including chemical analysis and rubber quality

testing).Miscellaneous investigations (statistics, agriclimatology).

24. It is relevant to the work at BPPM that it is currently receivingassistance under UNDP/FAO Project INS/72/004 "Strengthening Research onRubber and Oil Palm in North Sumatra". The project staff have made recom-mendations concerning the conduct of agronomic research and plant protection.It has also been concerned with the upgrading of the laboratories for leafand soil analysis and for rubber analysis. It has recommended that rubbertechnology including the testing of vulcanized rubber be introduced. Theproject staff have also recommended that the library be upgraded by theacquisition of modern books and more journal subscriptions. The UNDP con-tribution to the project, which began in mid 1972, is US$880,000. It pro-vides for seven full time specialists of which six are on strength. Theproject lasts until 1976 at which time the rubber breeder project chief,oil palm agronomist and agricultural economist will still be in Indonesia.IDA Credit-194 includes US$600,000, which is to be used by BPPM by fellow-ships (US$200,000) and equipment (US$400,000).

25. The BPPM maintains experimental gardens at Aek Pancur (350 ha) andSungei Pancur (80 ha) about 20 km from Medan. These gardens are ongently undulating yellow-red latosol typical of large rubber-growing areas.

ANNEX 9Page 6

Experimental work on rubber is conducted at Aek Pancur and Sungei Pancurand on a co-operative basis on estates in the area served by the BPPM.

26. The BPPM has recently established a branch station at Prabu Malik,Padang, West Sumatra. A University of Bonn, West Germany team at Padangis concerned with developing facilities for leaf and soil analysis and soilfertility investigations. The BPPM undertakes analyses and certificationof Standard Indonesian Rubber, and the Padang branch will also undertakethese analyses but certification will be by BPPM. Similar analyticalfacilities for Riau are also proposed.

27. BPPM proposes shortly to institute a smallholders training andadvisory schemes which would have centers at Bukit Sentang near Sawit Sabrangabout 45 km north of Medan, and also in South Tapanuli where there is alarge area of smallholder rubber. The BPPM publishes a quarterly bulletinwhich contains articles on rubber experimentation and advisory work.

The Rubber Research Center, Tanjung Morawa, North Sumatra

28. The RRC Tanjung Morawa was set up under joint ownership by PNP'sI-V in 1964. It occupies the old offices of a former estate about 20 kmsouth-west of Medan. The Director is supported by two graduate researchstaff. There are two sections which deal with agronomy and soil fertilityrespectively.

29. The RRC formerly carried out some breeding selection work but thishas now been discontinued. A considerable number of experiments on tapping/stimulation, disease control, weed control and manuring are carried out onthe PNP estates. The laboratories of the RRC undertake a small number ofanalyses of soils and fertilizers. There are proposals to upgrade thelaboratories to increase their capacity and to introduce leaf analysis,and to assist in this, RRC has received US$90,000 worth of research equipmentfrom the Asian Development Bank duplicating similar equipment at BPPMfor soil and leaf analysis.

The Rubber Research Center, Getas, Central Java

30. The RRC Getas was set up in 1964 under joint ownership of a groupof rubber PNP's in Central Java. In 1968 its scope was extended to serveall of the rubber PNP's/PTP's of Java and southern Sumatra (South Sumatraand Lampung) namely PNP's/PTP's X-XIII, XVIII, XXIII and XXVI with a totalarea of about 100,000 ha of rubber. It also services a small area of cocoa(1,200 ha) and kapok (2,000 ha). It is situated at Getas Estate whicii lies54 km south from Semarang and 7 km from Salatiga. Semarang has an airservice. The premises were built in 1964 and consist of offices, a libraryand four laboratories. Water and electricity are provided by Getas Estate,but the supply is not good. The Director is supported by a staff of sevengraduate Research Workers. The library has principally very old material.There are relatively few modern books or journals.

t%uE` 9

Page 7

31. The laboratories are equipped to carrv out chemical and physicalanalysis of soils and fertilizers. There are aot yet facilities for leafanalysis but it was hoped thiat these wouldl be available in a few years time.RRC Getas has three divisions dealiing witli rubber research:

(a) Agronomy, dealing with selection, tappinig, pestand disease control and planting methods.

(b) Economics, dealing with cost and managemient studies.

(c) Soils and climate, dealing with detailed soil surveys,fertilizer experiments and weather recording.

32. Getas Estate lies at 350 m above sea level and consists of 1,200ha of rather undulating red latosol. "lost of the area is under clonalrubber planted in 1962. It is reasonably typical of PNP/PTP estates through-out Java. Experiments are carried oiut on Getas Estate and on a co-operativebasis on PNP's/PTP's throughout the area served. 'N.o work is carried outon rubber preparation or on rubber quality. The PRC Getas publishes theBulletin RRC Getas but not on a regular basis.

C. The Project

Description

Special Considerations

33. A National Research Program for Rubber would be set up at SungeiPutih Estate about 50 km from Medan, North Suimatra. It would have a branchat Sembawa, South Sumatra and perhaps in Kalimantan and Java at a later stage.

34. The purpose of this Center would be to undertake all aspects ofproduction research, i.e. the breeding and growing of rubber and associatedcover and intercrops, the exploitation, and the preparation of rubber andrubber latex for shipment.

35. Provision would be made for inclusion of subject matter specialistsat the Center and its regional station to channel the results of researchout to extension and the farmers. The Center would also publish an annualreport and a journal on a regular basis.

36. The Center would undertake clhemical analysis of leaf, soil, fertilizer,and rubber etc. as necessary for advisory work but would not engage in theanalysis of rubber or rubber latex for the purpose of regulatory service.The regulatory service should be entirely in the hands of the Ministry ofTrade, which should have enforcement powers.

ANNEX 9Page 8

37. In order to effect maximum economies in laboratory use and toavoid serious dislocation in operation in view of the recently completionof a large laboratory construction program at BPPM, the existing laboratoriesat BPPM would continue in use as the analytical base for the Center, res-ponsible for analyses of leaf, soil, fertilizet, etc. materials and of rubberand rubber latex for all research service and advisory functions. Theregulatory analysis functions could also continue in the BPPM (and BPPB)facilities, but under Ministry of Trade control.

38. The Center would engage in the provision of foundation breeding/planting material but not in the provision of commercial planting materialwhich would be left to public or private enterprise,

39. Soil survey activities should be confirmed to detailed soil surveyof rubber areas, as necessary to support research and advisory functions ofthe Center, using a classification correlated with the National SoilsInstitute system.

40. The Center would also not engage in work on rubber technology,as distinct from rubber and rubber latex preparation for shipment. Rubbertechnology is here taken to mean that technology concerned with vulcanization,the properties of vulcanized rubber and the use of rubber in manufacture.Rubber technorogy would be regarded as the proper function of the Institutefor Industrial Research and Development, (Lembaga Penelitian dan PengumpanangIndonesia or LPPI), which is to be set up near Bogor under the second Develop-ment Plan 1974-79.

41. All the rubber research now carried out in Indonesia at Government,including PNP/PTP, centers would be transferred to the National ResearchCenter for Rubber or its branches. Rubber research at BPPB and its Jemberbranch, BPPM and its Padang branch, and RRC Tanjung Morawa and Getas wouldonly continue until the Center at Sungei Karang is in full operation, duringwhich time programs and appropriate staff would be transferred.

Organization and Management

42. The National Center would be under the control of a resident ProgramDirector who would be responsible for the national research program as out-lined in paras 44 to 45 below. The Director would be Chairman of a rubberresearch advisory committee, having representation from the rubber industry,which would advise on the content and direction of the,research program. Thedirector, who would be appointed after consultation with IDA, would be assist-ed during the course of the project by a research Program Adviser recruitedunder terms and conditions acceptable to the Bank.

43. The UNDP/FAO Rubber and Oil Palm Research Project will provide animpetus to the rubber research program until the National Center for RubberResearch is established at Sungei Putih. It is unlikely that the newCenter would be in full operation before 1976, when the 1JNDP/FAO project

A14NEX 9Page 9

is completed. At that. time, or as soon as practical thereafter, all researchequipment including that purchased under IDA Credit 194 and research staff,except those responsible for operating the analytical base (see para 37above), would be transferred to Sungei Karang from Medan or other centers.Arrangements for the continued services under the project of the remainingforeign specialists still on the TNDP/FAO project in 1976, could be consideredby GOI, the Bank and UNDP/FAO at that time.

Research Program

44. The research program of the National Research Center for Rubberwould include work on the following:

(a) Breeding and selection.

(b) Agronomy of rubber (nursery practice, vegetativepropagation, transplanting, manuring, upkeep).

(c) Agronomy of cover and intercrops.

(d) Plant protection.

(e) Exploitation (tapping, stimulation).

(f) Processing and preparation of rubber and rubber latex.

(g) Economics of rubber and latex production.

Work on the selection of clones to suit local conditions should proceed assoon as possible so as to obtain further information relevant to the extensivereplanting programs which are already urgent. Reliance is placed on a verysmall number of clones at present. Breeding will be for longer term prospects.

45. Work is needed on nursery practice and transplanting with a view toreducing the length of immaturity period. Work on crown-budded rubber forareas withi leaf disease problems would be desirable. Work on root disease inrelation to method of replanting should be started immediately.

Research Facilities

46. Appropriate accommodation for the proposed institute cannot beprovided within the existing buildings at Sungei Karang. A program of newconstruction on a site adjacent to the Sungei Karang PNP compound will beinitiated to Provide new laboratories, administrative offices and.supportingfacilities. The schedule of accommodation is included in Annex 17. Housingfor the professional and technical staff of the proposed institute will beprovided on sites within the Sungei Karang compound by agreement with the PNP.

ANNEX 9Page 10

47. Sungei Putih is a functioning estate of about 2,250 ha which willbe taken over by ARD shortly. About 700 ha can be made available irmmediatelyfor replanting to support the experimental work of the new Center. Topograplhicand soil surveys to assist in identifying and planning the experimental lay-out are being undertaken by GOI, and some experimental plots would be laidout prior to the commencement of the project, in cooperation with the estatemanagement. The BPPM experimental plantation at Aek Pancur and Sungei Pancurcould be retained or phased out depending on the timing of the land transferand other ARD land requirements.

48. Laboratory and office facilities, and staff housing on a smallerscale will also be required at Sembawa.

Staffing

49. Estimated staff requirements are given in Table 2. It is assumedthat most of the BPPM staff will chose to transfer from Nedan to the Centerand that many of the BPPB staff will be willing to transfer from Bogor, sothat a nucleus staff could be quickly assembled once the building programis completed. Mlany of the staff of the RRC's at Tanjung Iforawa and Getasare also likely to transfer to this new Center. The remainder of the estab-lishment would be made up by direct recruitment in the early years of theproject.

Fellowshjips

50. An estimated 40 fellowships would be awarded leading to post-graduate degrees in breeding, agronomy, pathology, analytical chemistry,chemical engineering, engineering, economics and statistics. An estimated13 short-term training fellowships would also be awarded: these would beof about 6 months duration and would not lead to a degree.

51. Some advanced training to the M.Sc. level can be furnished in anumber of specialized fields at Indonesian universities but most of the Ph.D.level training will have to be done at foreign universities during the termof the project. The substantial numbers of B.Sc. level graduates coming outof Indonesian universities should provide a good cadre of senior technicalpersonnel from which early selection of some scientists for M.Sc. and Ph.D.level training could be made.

52. Candidates for fellowships would be carefully assessed by aselection board in accordance with the criteria outlined in Annex 7, para32.

53. The short-term training fellowships would comprise professionalimprovement experiences for selected staff, including the Director of theCenter and his senior and more experienced scientists, which would be pro-vided at foreign institutions engaged in similar research activities, inorder that they may gain experience and understanding of research stationand program management.

ANNEX 9Page 11

Technical Assistance

54. Experienced foreign specialists who would help to provide theconceptual, planning, coordinating and operational leadership necessaryto promote a strong problem-oriented national research program would beprovided. They would be specialized in several relevant research fields,preferably breeding, agronomy, pathology, chemical engineering and economics.

55. One of these foreign specialists would serve as research programadvisor. He would work with the director on the problems involved in settingup of the research facilities and projects of the Center and in ensuring thatoperating activities are effective. The program advisor would be a highlyexperienced specialist in one of the program fields of specialization andwould engage at least part-time in his field of specialization.

Cost Estimates

56. The cost for the national research program for rubber for thefive-year period would be approximately US$7.5 million. 1/ The estimatedcosts are summarized in Tables 3, 4 and 5.

D. Economic Benefits and Justification

57. Rubber research as currently organized is carried oult by severalorganizations and at two or three levels. X single organization as suggestedwould be more efficient in the use of staff and equipment.

53. Indonesia formerly led the world in plantation efficiency. Thisefficiency has declined and will decline further if nothing is done toprovide the necessary technical information based on research. The standardof research is variable and lower than is desirable in such an importantindustry and researchers lack good contact with research effort elsewhere.Provision of good working conditions will improve both amount and qualityof output. The proposal to eliminate all regulatory and service functionsfrom the research organization is to place proper emphasis on the researchand related advisory functions and to avoid sidetracking.

59. The general conditions of soil and climate for growing rubber inIndonesia are excellent, but much has to be done to realize the productionpotential. Assuming an ultimate steady state with 3-4% replanting eachyear it should be possible to attain an average annual yield per plantedhectare of 1,000 kg. i.e. the current yields could be doubled or tripledthus yielding a large increase in revenue, while quality improvements couldmake Indonesian natural rubber even more competitive in the world's markets.

1/ In constant 1975 terms, and excluding physical contingencies.

Page 12

60.- Indonesia produces about 800,000 tons of natural rubber per annum.The cost of the rubber program project is esLimated to be roughly US$6.0million. Assuming the price of rubber to be stable at US$65 per kg (belowthe current forecasts for this commodity), then this total cost will beequivalent to 10,000 tons of rubber. It is considered that an extra 10,000tons of rubber could easily be obtained bv the application of research.Thle benefits to be obtained from improved tapping/stimulation could alonemore than pay for the project in the early years. The same is true ofimprovements in rubber preparation and marketing. A series of medium termbenefits could accrue from control of panel disease and improvementS innutrition. Longer term benefits would accrue from improvements in replantingtechniques, including intercropping and the control of root disease.

61. The onlv permanent solution to the nroblem of improvement ofsmallholder rubber is by replantin- so that it is difficult to quantifythe benefit from the application of research. However, with regard to estaterubber some calculations can be made. If we assume the area under estaterubber to remain constant with a 2-3%/annum linear increase in yield, theyield would have increased by 1980 to about 290,000 tons from the present230,000 tons, i.e. 60,000 tons more than the current rate. If only about17%. of this increase were due to applied research then the project would havepaid for itself in one year alone.

Attached: Tables 1 - 5

March 31, 1975

ANNEX 9Table 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Rubber Area and Production by Region

Estate - - - - - Smalholder

NumberRegion of Estates Area Production Area Production

('. OOOh7) (QOOton) (tOQOha) (TOOOto

North Sumatra 211 265 135 515 160

South Sumatra 24 25 15 725 220

Java 394 185 75 60 20

Other Islands 15 10 5 400 160

Total 644 485 230 1,700 560

May 6, 1974

INDONV-SIA ANNEX 9Table 2

AGRICULTURAL RESEAFCH A N EXTENSION

Rabber Research Program

Staff List at iull Development

Senior Junior ClericalProfessional-' Technicala' Technicei2' & General Labor

(a) National Center - SungeijPatih4'AdministrationProgram Director 1 1 - 1 -Program Advisor/Deputy 1 1 - 1 -Secretary (Administration) 1 t 2 6 -Accountant 1 2 6 -Plantation Manager 1 1 2 1 _Plantation Service Center - 1 2 1 _Food Services - - 2 - -Engineer 1 - 2 2 -

Technical ServicesExperimental Design & Statistics 2 2 4 1 -Economist 2 2 4 1 -Library l - 2 4 _Publications, Photography 1 1 2 3 -

Subject Matter Specialist 2 2 4 2 -

Crop ImprovementBreeder 2 3 4 6 _Pathologist 3 3 6 4 _Entomologist 1 1 2 1 -Physiologist 1 1 2 1Biochemist 1 1 2 1 -

Crop ProductionAgronomy 6 9 12 9 -Soil Science 4 8 12 4 -

Processing TechnologyChemist 2 2 4 1 -Technologist 2 2 4 2 -Engineer 1 1 2 1 _

Sub-total, National Center 37 44 78 59 low

(b) ReAional Station - Semjbawa

Station Manager 1 1 - 1Secretary (Administration) 1 - 2 4 -

Engineer 1 - 2 2 -Agronomy 3 3 6 2 -Crop Protection 1 2 4 1 -Soil Science 1 2 4 1 -Technologist 2 2 4 1 -Subject Matter Specialist 1 2 4 1 -

Sub-total, Regional Station 11 12 26 13 20 6

TOTAL 48 56 104 72 120

j Year six of project/ Professional -- M.Sc., Ph.D. or equivalent capability at end of project

3 Senior Technical -- B.Sc., diploma or equivalent at end of projectJunior Technical -- Agricultural High School or equivalent at end of project

/ Support for all aspects of the work will be provided at Sungei Putih and its ancillaryfacility to be developed at the Estate Crops Institute in Madan, where four professionals(economist, statistician, soil scientist and processing technologist) together with fivesenior technical, four junior technical and two clerical staff will be based. Other stafffrom the Institute will be transferred to the Sungei Patih Center after the civil worksconstruction program has been completed, most likely in year 3 of the project.

/ Allocated according to need, and excluding any labor required for the commercialexploitation of existing rubber.

AN'NEX 9INDONESIA Table 3

AG?JICULJtk ?.EkSEitCH LD ETEI.iSIOI7

Rubber Research Program

Project Cost(Constant 1975 US,)

Percentageof ForeignExchange

Local Foreign Total ComPOnent

Capital Input l/Buildings, Services,Utilities & Housing 2,412,000 1,608,000 4,020,000 40%

Research Equipment 70,500 634,500 705,000 90%Furniture 10,500 4,500 15,000 30%Farm Development 2/ 72,000 24,000 96,000 25%Field Equipment 37 66,00o 66,00o 132,000 50%Vehicles 4/ 14,400 129,600 144,000 90%- Research Specialists 30,000 20,000 140%

Sub-total 2,675,400 2,486,600 5,162,000

Technical Services 6/Research Specialists 117,000 6b3,0O 780,000 85%Fellowships, Short-term -- 78,ooo 78,000 100%Fellowships, Long-term 70,800 637,200 708,000 90%

Sub-total l87,600 1X37d,200 1,566,000

Land Purchase ./ 180,000 -- 180,000

Establishment Cost 8/ 640,000 -- 640,000

Total 3,683,200 3,864,8o0 7,548,000 51.2%

1/ Details on this component are given in Annex 17, Table 8.The costs given here are without design and construction contingencies.

2/ Based on an estimate of US$2,000 per professional (48 professionals).3/ Based on an estimate of US$2,750 per professional.4/ Based on an estimate of US$3,000 per professional.i/ Automobiles for research specialists engaged for one year or more (5).6/ See Table 4..L/ 2,250 hectares belonging to the Government but currently used by PNP V

will be made available for the Rubber Research Program. The amount hereprovided is for compensating PNP V for the use of the plantation, at anominal price of Rs33,000 or US$80 per ha.

8/ See Table 5.

March 27, 1975

ANNEX 9Table 4

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Rubber Research Program

Technical Services

Number Unit Cost TotalResearch Specialists!!/ --- (Constant l975 TS--

Program Advisor/Specialist for 4 yrs. 1 240,oon 2Lo,000Research Specialists for 2 years 4 120,000 480,ooo

IT In 6 months. 1 30,000 30,000" 3 months 2 15,000 30,000

Sub-total 780,000

Fellowships Short-term 13 6,000 78,000

Fellowships Long-term

M.Sc. in Indonesia 6 10,000 60,000M.Sc. Abroad 13 2h,000 312,000Ph.D. Abroad 7 48,000 336,000

Sub-total 26 - 708,000

TOTAL - - 1,566,000

j/ A substantial input of technical assistance.will continue through 1976under the FAO Rubber and Oil Palm project, based at the Estate CropsInstitute, Medan. The bulk of the technical assistance input throughthe project will therefore be deferred,until the last four years ofthe project, after the civil works construction program has beencompleted at Sungei Patih. The Program Advisor would be the onlytechnical assistance specialist to be provided through the project inthe early implementation years.

March 27, 1975

ANNEX9Table 5

INYNThQEIA

AGRICULTURAL RESfARCH AND EXTENSION

Rlubber Researchi emro-ra

Schedule of Establishment Cost

Project Year --1 ? 4 6 Total

Number of Professional 4 ! 22 22 40 44 48 48

Of which:- on fellowships - -- 13 24 24 18 --- engaged in the program 22 22 27 26 24 30 -_

(---------------------(Constant 1975 Us$)…---------------------Establi shment Coat of the

Program g 610,000 660,000 810,000 600,000 720,000 900,000 4,300,000

Current. Establishment Cost610,000 610,000 610,000 610,000 610,000 610,000 3,660,000

Incremental EstablishmentCost -- 50,000 200,000 (10,000) 110,000 290,000 640,U00

1/ Commencing in the second year, a proportion of the professional staff will beawarded fellowfships to stuidy either in Indonesia or abroad.

2/ In accordance with the experiences of other international research centers, theestablishment cost has been calculated using a ratio of tTS$30,000 per professS.onalpresent at the center. For the first year, however, it uas assumed that therewould be no change in the current establishment cost because of delays in staztingthe program.

;/ The current establishment cost has been taken as the operating budget for theexisting BPPM research center at Medan.

October 31, 1974

AMEX 10Page 1

INDONESIA

AGRICULTUIRAL RESEARCH AND EXTENSION

National and Regional Agricultural Information Program

A. Introduction

1. Indonesia is an archipelago. The whole territory extends 5,000 kmfrom East to West and 1,750 Ian from North to South. In terms of population,Indonesia is one of the five largest countries. One of the striking featuresof the population is its distribution. Almost 65% of the population isconcentrated in Java and Madura, which land represents less than 7% ofthe total. Java and Madura have a population density of about 565 persons/kin 2 while the density for the whole country is only 59/km 2 .

2. Agriculture is the main sector of the Indonesian economy. About70% of the total population is engaged in agriculture, either directlyor indirectly. Approximately 50% of the total national income (someUS$9 billion) is derived from this sector and more than 70% of the totalexport product in terms of value comes from this sector.

3. I4 1970, the rural population amounted to about 99 million people,with an extremely imbalanced distribution over the whole country. Thereare over 12 million farm families spread across the length and breadth ofthe nation, two-thirds of which are in Java; the average number of farmsper village is 500 in Java, but only 225 on the outer islands. Thesenumbers of decision making farm heads are to be reached and persuaded.rrhere are a similar number of farm women and an even greater number ofrLral youth whio also must be reached if extension is to have any significantimpact on the development of agriculture and rural society.

4. T7he farm lands comprise dry land (two-thirds of the cultivated area)and irrigatcd1 land (one-third). Irrigation is of great importance since paddy,the most iinportant food crop, is mostly cultivated on wet or irrigated land.Out of the country's total of about 14 million ha devoted to food crops,about hIalf are under paddy. Many irrigation networks are traditional, butmost of the lowlands in Java have been equipped with modern infrastructure.In recent years their maintenance has been neglected, but they are now beingrelabilitated.

5. Farming in Indonesia is characterized by very small productionunits, averaging 0.3 ha of wet paddy land and 0.8 of *dry land. In Java theland distribution is extremely fragmented and farm size averages only 0.7 ha;in addition, land ownership is concentrated and an important proportion

AlNEZ-r 10

Page 2

of farmers are tenants and sharecroppers. iTith such .ilslll production units,the advice of an extension worker must be both technically correct andfinancially sound, in view of the average farmers small margin for error.

6. Traditional society in Indonesia has had some highly developedorganizations for farmers, farm 'vomen and youth in the past. If the approx-imately 6,000 field extension tworkers are to have any impact (the ratio is1:2,000 farm families), they must become skilled in group extension methods,involving mass media communication.

7. Increasing food production leading to attainment of self-suffi-ciency in food supply has been a national objective since independence.Agriculture, including forestry, animal husbandry, and fisheries has receivedfirst priority in the First and Second Five Year Development Plans, andemphasis has been put on increasing food production, particularly rice, andexport commodities, including timber.

B. Present Status of Extension

8. The broad function of agricultural extension in the past has beenshared by several Directorates General under the control of the Ministryof Agriculture. Extension work at the farm level in Indonesia is theresponsibility of the province, but at the central government level theDirectorate General of Agriculture, the Directorate of Agriculture Extension,and the Minister of Agriculture manage the funds to subsidize agriculturalextension activities in the province. The total staff of the DirectorateGeneral of Agriculture including the provincial staff is 13,774; approximately3,154 perform purely administrative work. From the technical staff of10,590, there are 4,292 Kecamatan (subdistrict) level extension workersserving 10-15 villages each. The balance of the technical staff (6,298)are backstopping these extension workers in a variety of ways from researchand subject matter specialists to purely service functions at Kabupaten(district), provincial and national levels.

9. The role of extension at present is to see that farmers have thefacts necessary for making decisions on matters which concern them, in orderto motivate them to action. This has not always been extension's role inthe past, but will be in the present and in the future. To implement thisgoal, certain extension teaching methods are being given priority; e.g. farmbroadcasting, various types of demonstration, and farmer courses. In thiscontext the use and development of key farmers, farmer leaders and ruralcommunity leaders are of prime importance.

10. The changes in the political and general situation since 1965 haveprovided opportunities for reshaping the pattern and methods of agriculturalextension more in accordance with democratic principles. The agricultural

ANNEX 1 0Page 3

inspectors' meeting in 1969, the first year of Pelita I, gave some funda-mentals for developing the agricultural extensipn institution, refreshingthe staff, renovating the facilities and executkng progrvmis and methodswhich can convev the application of modern agricultural technology to thefarmers and their families, and also arousing their participation and self-generating activities.

11. During the first two years of IEPELITA I (1969-74), extension hasreactivated work through key-farmers; given increased attention to programsfor farm women and rural youth; and has emphasized the development of moreorganizations of and by the farmers. The following special efforts have beenconducted among others:

- the reapplication of working methods which areeducational, and generating autoactivities such asdemonstration plots, demonstration farms, farmbroadcasting, farmers' group activities and youthprojects;

- the reorientation of extension personnel to non-political working patterns;

- the renovation of extension institutions like ruralextension centers, so that they function as training,field experiment and demonstration centers; and

- the development of a more integrated agriculturalextension cadre of field extension workers andsubject matter specialists, especially in the frame-work of the BIMAS program.

12. The GOI has recently decided that an Agency for Education, Train-ing and Extension should be established with the special responsibilityfor planning and impleinenting these new extension objectives. The nucleussenior staff for this Agency have recently been appointed and is workingclosely with the project implementation unit staff set up as a vehiclefor imDlementing the agricultural education project (IDA Credit 228-IND).Later, after the signing of an appropriate Mfinisterial Decree, staff fromthe extension directorates in the directorates general for agriculture,animal husbandry, fisheries, estates crops and forestry ,will be transferredinto the new agency, which is likely to become operational on April 1, 1975.The current financial year is therefore a transitional year in regard tothe establishrnent of the new agency.

13. The task faced by extension in quantitative terms is illustratedby the ratio of farm families to the number of field extension workers.The current ratio is 1:2,000 farm families (6,000 agricultural field staffto 12.5 million farm families).

ANNNE 1I)0Page 4

14. The challenge, therefore, is to improve the quality of such staffand to increase their effectiveness through better training, the use ofmore effective and more massive educational methods, the provision of betterworking facilities, equipment, transport and teaching aids, and the developmentof a better integrated staff structure reaching down to the village level.

15. The effectiveness of extension will also depend on its closeintegration with the sources of new information and technology. Thus closerelationships must be developed with research and training institutions bothas recipient of and contributor to such sources of knowledge.

16. The improvement of program methods involves several major changesin emphasis to achieve greater efficiency. This will include the greateruse of organized groups and related leadership development. Such anapproach enlists the aid of volunteer village leaders as intermediariesbetween the field extension workers and the farmers, thus multiplying thenumbers reached by each extension worker. The use of groups further extendsteaching efficienlcy. An important complementary approach is achieved throughthe use of mass media communications. Increased attention must be given totihe wider use of printed materials, audio-visual aids, and especially ofradio, and later of television. The effectiveness of thelatter can be furtherstrengthened by the use of organized listening groups under trained volunteerleaders.

17. It is apparent that the development of a stronger extension in-formation program will require the expansion of the regional agriculturalextension information centers, especially staffed and equipped to providethis tvpe of support. With the increasing level of literacy, more printedmatelrials can be used. Sucn information centers have already demonstratedtheir usefulness in promotin- and coordinatinc- the expansion of extensioiradlio work anid serving radio listening groups.

18. Finally, there is a continuing need for the further in-servicetraining of key me1ebers of the extension staff at ii:tional and provinciallevels through short tern study tours and longer courses abroad, aimed atadvanced degrees, and for tie assistance of international experts in variousaspects of the extension prograri, wh-o can bring the benefit of their broaderexperience to extension staff members at the national and provincial levels.

19. Several province extension information offices are using radiofor mass media communication purposes. East Java at Surabaja and 1%estSumiatra at both Padang and Bukittinggi are doing very commendable work inradio and publications, as well as demonstration-farm promotion. Wqest Sumatraprovince is equipped with a remote radio-broadcasting and recording studiowhich was being used in nine centers twice a week. They make recordings withkey farmers and use the recordings on their radio programs.

ANNEX 10Page 5

20. These province centers do not have any movie-film productionequipment and they are doing a poor job of producing slide sets of qualityfor use as teaching aids and motivating factors toward farmer acceptanceof research-recommended practices. Three of the centers have audio-visualmobile units, but there is a lack of film and slide presentation materialsthat would relate to the Indonesian farmer. Most of the films were producedabroad, such as in Japan or Australia, and so had limited appeal to thelocal people.. There is a need for the information centers to produceIndonesian films on research-recommended practices and approved methods offarming and technology that would relate specifically to the Indonesianfarmer and his situation. There is very little news-writing and publicationgoing on. Most of the bulletins and pamphlets were produced elsewhere.

21. The key to quality production in the information centers is awell-trained staff using quality equipment. Ten persons employed at Bukittinggiare well-trained, with five of them having university degrees. In the lesseffective centers there is a definite lack of both a qualified staff anddirectorship for effective and dynamic leadership in communications work.

22. The need for improvement in the present agricultural extensionservice is well recognized by GOI, which has had some exhaustive studies madein recent years. An examination of these study reports, consultations withagricultural leaders within the Ministry of Agriculture and visits to severalof the proposed sites for information centers, and observation of presentpractices have all formed the basis for the following project proposal.

C. The Project

Special Considerations

23. The present condition of extension services in Indonesia is farbelow a satisfactory level to maximize benefits from research findingsgeared to farmers' needs for economic growth. The administration andorganization of extension and information offices now in operation couldbe described as emergent, with growth and development ready for expansionbut inhibited by shortages in trained personnel, lack of adequatebuildings and equipment, and insufficient coordination between the agri-cultural agencies involved.

24. Proposals for assistance in the development of improved centersof information to better serve extension are encompassed in the project.The objective would be to unify efforts of research and extension througha better organized, equipped and staffed institution that could therebycontribute to a substantial increase in farm production. The goal in up-grading the extension service is to make it a more effective organizationfor meeting the needs of the extension workers, the farmers, and theconmunity in general.

ANNEX 10Page 6

Organization and Management

25. It is proposed that one National Information Center and nineregional information centers would be established under the project. TheNational Infornmation Center will be located at Ciawi, near Bogor and closeto the National In-Service Training Center. This choice was made becauseBogor contains the largest concentration of agricultural research centersand agricultural training institutions including the Agricultural University.The location of the nine regional information centers are:

1. East Java ............ Wonocolo, near Surabaya2. Central Java ......... Ungaran, near Semarang3. West Java ............ Kayuambon, near Bandung4. West Sumatra ......... Bukittinggii5. North Sumatra ........ Tanjung Morawa, near Medan6. Lampung .............. Tanjungkarang7. South Sulawesi ... Maros, near Ujungpandang8. South Kalimantan ..... Banjarbaru9. West Nusa Tenggara ... Lingsar, near Mataram

For proper functioning, adequate facilities would have to be provided com-prising land, buildings including housing for some of the staff, andequipment.

26. The project encompasses an increase in professional and technicalpersonnel with provision for about 40 fellowships for advanced degree andshort-term training.

27. The staffing requirements for the national information center includea National Director assisted by five professionals, one each in chiarge of cropand animal production information, agricultural engineering and farm machinery,farm management and economics, production techniques, and communications(audio-visual aids, broadcasting, publications andproduction of films andslides). Four junior staff members, with training in communications wouldassist the professional staff. An office staff, laborers and drivers wouldalso be included.

28. Staff for each of the nine regional centers would consist of adirector with four staff personnel. The directors would be qualified andexperienced agriculturalists who are university graduates in agricultureor related sciences, with additional knowledge and experience in the fieldof communications. For the four staff personnel, a bachelor degree or diplomain agriculture with additional experience in communications would be anecessary qualification. Adequate technical and clerical staff are includedin the program. The four staff members at the regional offices will needspecial training in four major fields, namely, audio-visual aids production;radio-broadcasting and script writing; news writing and special featurestories production; and publications and printing.

ANNEX 10Page 7

The Agricultural Information Program

29. The function of the agricultural information centers would beto provide audio-visual aid materials to be used by extension workers inproviding the farming community with improved agricultural information.By establishing closer links between research and extension they will providesound advice on improved technology which is of economic significance tofarmers.

30. The functional responsibilities of these centers would be asfollows:

(a) Collect data and information from all sources avail-able, especially from farmers and villages, governmentservices, research institutions, universities andlibraries;

(b) Process and produce or reproduce required informationmaterials in a well-prepared and suitable form forinformative purposes;

(c) Supply and distribute information materials for infor-mative purposes by all methods and through all com-munications media in order to achieve maximum results; and

(d) Constantly evaluate the effectiveness of the informa-tion released and the efficiency of the disseminationprocess.

Facilities

31. The sites for the national and nine regional information centershave been selected on the basis of their proximity to other facilitiesbelonging to the extension directorates and research institutes of thedirectorates general within the Ministry. In most cases they are contiguouswith in-service or rural training centers or other existing extensionservice or related complexes such as provincial extension offices, seedproduction farms or universities. Land acquisition will not be a problem asall the sites are on GOI land.

32. All the centers will need completely new builtings and equipmentfor efficient functioning, and housing will need to be provided for thedirectors and staff.

33. The buildings would include sufficient rooms for office; library;display; printing and publishing workshop; store-room for informationr,aterials and aocuments; darkroom for photographic processing; studio forrecording and broadcasting; workshop and garage.

ANNEX 10Page 8

34. New equipment needed for all the centers will include those foroffice administration activities; prodtction and processing of photographs,slides, or films; recording of agricultural broadcasting materials; printingand publication; library and display; transportation and mobile units; andworkshop and maintenance of materials.

Fellowships

35. A total of about 40 fellowships will be awarded for short termand for advanced degrees to provide training in communications media.The division would be as follows:

(a) 30 for agricultural extension personnel who areselected to work in the information centers. Thebasic study program will be an M.Sc. course in agri-cultural subjects including agri_ultural journalism,communications, audio-visual technology, documentaryfilm production and like subject specialists; and

(b) 10 for center directors. These would be short termstudies mainly for observation of outstanding infor-mation centers, their operation and management.

Technical Assistance

36. There is a serious shortage of trained and experienced personnelwho could provide the guidance and advice necessary for proper organizationof staff and utilization of equipment in the information centers duringthe early years of the project. Four internationally recruited agriculturalinformation specialists would therefore be provided to assist in formulation,design and supervision of the information programs. One of these would workclosely with the Head of the NAIC. He would be termed an agricultural informa-tion administrator and would be concerned especially with the definition ofprograms and the management of the national center. The other three, whowould be termed agricultural information co-supervisors, would be responsiblefor supervising the regional information centers in Java, Sumatra and theother islands in the early establishment years.

Cost Estimates

37. The cost estimates for the ten agricultural information centers,including buildings, equipment, and operating costs for five years, and withprovision for the 40 fellowships and technical assistance personnel isestimated as approximately US$5.6 million. 1/ The estimated costs aresummarized in Tables 1, 3 and 4.

I/ In constant 1975 terms, and excluding physical contingencies.

ANNEX 10Page 9

D. Economic Benefits and Justification

38. The agriculture sector in Indonesia can expect to gain substantialeconomic benefits through the strengthening of agricultural extension asproposed in this project. With gradually increasing levels of literacy,greater benefits may be expected to accrue through expanded use of massmedia communications. Improved practices developed through research canonly result in increased production if applied on the farm and the projectwill contribute to this process by strengthening and developing the qualityof the information materials produced.

Attached: Tables 1 - 5

March 31, 1975

ANNEX 10Table I

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Projeot Cost - Information Centers(Constant 1975 US$)

Regional PercentageNational Information of Foreign

Information Centers Total Local Foreign ExchangeCenter Unit Cost Cost Cost Cost Component

1. Capital Inputs

Building, Service,Utilities & Housing 447,000 22h,000 2,463,000 1,477,800 985,200 ho

Equipment J 135,000 62,500 697,500 69,750 627,750 90Furniture 7,200 3,600 39,600 27,720 11,880 30Vehicles 30,000 15,000 165,000 16,500 148,500 90- Specialists v/ 4o.000o - 40,000 24 000 16.000 40

Sub-Total 659,200 305,100 3,405,100 1,615,770 1,789,330

2. Technical Services

Information Specialists 840,000 - 840,000 126,000 714,000 85Fellowships, Short-term 60,000 - 60;000 - 60,000 100Fellowships, Long-term 810,000 - 810,000 81,000 729,000 90

Sub-Total 1,710,000 - 1,710,000 297,000 1,503,000

3. Establishment Cost 90,000 45,000 495,000 495,000 -

Total 2,459,200 350,100 5,610,100 2,317,770 3,292,330 58.7

j National InCormation Center plus 9 Regional Information Centers.

/ See Annex 17, Table 9 for detailed costs. The costs given here are withoutdesign and construction contingencies.

, See Table 2

v Automobiles for specialists engaged for 1 year or more (4)

See Table 3. These fellowships are for staff at national and regional levels.

6 See Table 4.

March 31, 1975

ANNEX 10Table 2

IND, IESIA

AGRICULTURAL RE§SEARCH AND EXTENSICN

Equipment for One Regional Information Center

A. AUDIO VISUAL EQUIPMENT Value (US$)

1 Film projector 16 m.m. 2,0002. Film projector 8 m.m. 7003. Slide/Filmstrip projector 8004. Overhead projector 1,8005. Movie camera 8 m.m. accessories (+ flood lamp) 1,1006. Movie camera 16 m.m. and accessories 4,5007. Still camera and accessories - 1 set 700

-camera 35 m.m.-telelens 135 m.m.-close-up lens (+ 1, +2, +3)-filters (red, U.V., yellow, blue color)-flash unit-sun cap-tripod

8. Darkroom equipment-enlarger unit (large type) - 1 set 400-processing equipment - 1 set 200

9. Pablic address system 80010. Tape recorders & radio 80011. Recording unit 18,100

-cassette tape recorder - 1 pc(for field operation)

-stationary tape recorder - 1 pc-radio - 2 pG

12. Megaphone - 5 pc 50013. Mobil unit 18,800

Sab-total: Audio visual equipment 51,200

B. CFFICE AND PRINTED EQUIPMNT

1. Standard typewriters 9002. Electric Typewriter 1,1003. Rotary duplicating machine 1,8004. Rotary recording machine 220 3,6005. Hand press & spare parts 1,4006. Paper cutter and reserve cutter 7007. Books for library 1,800

Sub-total: Office and printed equipment 11,300

Total 62,500

December 24, 1974

ANNEX 10Table 3

IRD(OESIA

AGRICULTURAL RESEARCH AND EXT34SICN

Information Centers

Technical Services

Number Unit Cost Total

Information Secialists --(Constant 1975 _Th_T?_

Extension Advisor/Specialist ofthe National Center for 5 years 1 300,000 300,000

Extension Specialists for 3 years 3 X80,0.00 540,ooo

Sub-total 4 - 840,000

Fellowships Short-term 10 6,ooo 60,000

Fellowships Long-term

M.Sc. in Indonesia 9 10,000 90,000M.Sc. Abroad 12 24.,000 288,000Ph.D. Abroad 9 48,ooo 432,000

Sub-total 30 - 810,000

TOTAL - 1,710,000

March 27, 1975

ANKEX 10DIJO.'ESIA Table 4

AGRICTLTURA-L RESEARCh AND EXTElSION4

Establishment cost of a Regional Information Center

Annual Cost

---- Rp----1. S

-1 Head 12xRp.30,000.- 360,000-4 Senior staff 4x12xRp.25,000,- 1,200,000-4 Junior staff 4x12xRp.20,000.- 960,000-1 head of administration

1 x12xRp.25,000.- 300,000-2 Administration Workers

2x1 2xRp.1 5,000.- 360,000-3 Labourers (for printing

cleaning, etc.) 3X12xRp.10,000.- 360,000-3 Drivers (for jeep, pick-up I

and mobil unit) 3x12xRp.15,000.- 540,000

a&b-total 4,080,000

2. Travel Allowance-1Head lxl2xRp.15,000.- 180,000-4 Senior staff 4x12xRp.15,000.- 720,000-4 Junior staff 4x12xRp.10,000.- 480,000-3 Drivers 3xl2xRp. 6,000.- 216,000

Sub-total 1,596,000

3. Expendable material- Material for administration

12XRp. 7,500.- 90,000- M4aterial for printing

(magazines, leaflets, posters,bulletins, etc.) 12xRp.30,000.- 360,000

- Negative films(black andwhite, color) 35mm. 100 rolls 60,000

- SLide films 15 rolls 45,°°°O- Cassette tapes 90 pieces 66,000- Tape for recording 324,000 feet 540,000- Batteries 100,000 pieces 90,000- Movie film 100,000 feet 600,000- Paper for printing photos 60,000- Chemicals for developing photos 15,000

Sub-total 1,926,000

4- Miscellaneous- Utilities 180,000- Jeep, pick-up and mobile unit

(gasoline, oil, maintenance)3xRp.450,000.- 1,350,000

- Motorcycles (gasoline, oil,maintenance) 2xRp.50,000.- 100,000

- Maintenance of building andequipment 200,000

Sub-total 1 .830,000

Total 9.432.000

Annual ProJect period (6 yrs)Additional establishment costi/: - in rupiahs Rs3,75000 Rsl8,780,000

- in US dollars Us$9.000 US$ 45.000/ Since the extension services have already on their rolls the personnel to carry

out the implementation program, it is assumed that only the other items of theoperating cost (i.e. expendable material and miscellaneous) will be additional.The additional establishment cost for the National Information Center has beentaken as double that of the corresponding cost for the regional centers. Itwas assumed that the establishment cost will be the same as without the project

and that the additional establishment cost will therefore be nil.

February 10, 1975

ANNEK 1 0Table 5

INDONESIA

AGRICULTURAL RESEARCH AJID EXTLNSICN

Education Level,of Extension Workers - 1970

JAVA

Sub Rural Ext.Level of Education Province District District Center Projects TOTAL

Literate < 6 yrs. 253 179 102 106 417 1,057Elementary - 6 yrs. 657 846 1,142 182 516 3,343Junior H. S. - 9 yrs. 179 556 1,134 81 129 2,079Senior H. S. - 12 yrs. 243 324 75 4 67 713Academy - 15 yrs. 35 60 0 0 4 99University - 17 yrs. 49 20 0 0 0 69

7,360

OUTER ISLANIlS

Literate < 6 yrs. 91 66 0 4 134 295Elementary - 6 yrs. 623 1,093 1,171 64 231 3,182Junior H. S. - 9 yrs. 216 649 491 7 15 1,378Senior H. S. - 12 yrs. 458 507 280 6 38 1,289Academy - 15 yrs. 50 23 0 0 0 73University - 17 yrs. 74 23 0 0 0 97

6,314

Total Java & Outer Islands 13,674

December 24, 1974

ANNEX 11Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Terms of Reference for Research Programs Advisor

1. The Agency for Research and Development (ARD) requires the servicesof a research programs advisor for a minimum period of 2 years but witha view to continuation for a maximum of 4 years, to assist the Head of theAgency and its staff in the organization and management of the Agency. Hewould be recruited directly or through international or bilateral assistance,-under terms and conditions acceptable to the Bank, which would be financingthe position under its Agricultural Research and Extension Project, withthe following terms of reference:

Research Programs Advisor

2. An internationally experienced agricultural research scientist withproven administrative competence is required to assist ARD in strengtheningits research program planning, operational and administrative competence.He should have the ability to communicate effectively with others, and shouldrecognize the special needs of research scientists and research programs andbe able to assess scientific competence.

3. The research programs advisor would advise and assist themanagement of ARD in:

(a) programing, staffing and the establishment ofpersonnel policies;

(b) the formulation of policies and programs that willfurnish a profesional environment conducive to moreproductive research to increase agricultural pro-ductivity;

(c) the selection of, and make recommendations for,candidates for appointment to positions in the researchprograms, institutes, centers and regional stations;

(d) the allocation of funds and programs from outsidesources to minimize duplication of effort;

(e) the processing of fellowship awards includedin the project, in close consultation withnational and international staffs, in

ANNEX 11Page 2

accordance with established procedures of thenew Agency.

The research programs coordinator would also directly advise and assistthe Head of ARD:

(a) in reviewing applications for Bank disbursement such asconstruction works, equipment and technical services.

(b) in developing and maintaining close working relationshipswith the Ministry of State for Research, AETE, Universi-ties and other pertinent organizations; and

(c) in maintaining contact with the research program advisorsand research specialists associated with the commodity groupsreceiving Bank financing in order to ensure continuous mutualunderstanding of the cooperative relationships and programobjectives.

March 31, 1975

AYNEX 12Page 1

NONTES IA

AGRICULTURAL RESEARCH AND EXTENSION

Terms of Reference for Financial Administrator andEquipment Procurement Specialist

1. The Agency for Research and Development (ARD) requires the servicesof a financial administrator to advise and assist in establishing: and developinga budget and finance, and accounting system within ARD lieadquarters. TheAgency also requires the services of an equipment procurement specialist toadvise and assist in establishing and developing a centralized equipmentpurchasing, stock control, repair and maintenance system. They would berecruited directly or through international or bilateral assistance, underterms and conditions acceptable to the Bank, which would be financing thepositions under its Agricultural Research and Extension Project, with thefollowing terms of reference:

Financial Administrator

2. A capable financial specialist or similarly experienced profes-sional is required for three years to assist ARD to establish and developbudget and finance, and accounting units.

3. The financial administrator would:

(a) develop, in association with the equipment procurementspecialist (see below), a system for centralizedprocurement from local or international suppliers, oflaboratory and field equipment, goods and generalservices;

(b) develop within ARD an accounting system to coverall expenditures of ARD;

(c) supervise the accounting systems of the ARD researchcenters, ensure their consistency with the accountingsystem of ARD itself and their amenability to regularcheck and audit;

(d) coordinate procurement work between the ARD procurementand accounting unit and the Project Implementation Unit,which would be responsible for the main construction andgeneral equipment program for the four research centersto be set up under the project; and

ANNEX 12Page 2

(e) advise on budgeting and financing procedures.

Equipment Procurement Specialist

4. *A specialist with wide experience in purchase, operation andmaintenance of agricultural research laboratory and field equipment isrequired for one year to advise and assist ARD in assessing equipment needsand developing a centralized procurement, stock control, repair and maintenanceunit.

5. The equipment procurement specialist would:

(a) develop, in association with the financial administrator (seeabove), a system for centralized procurement from local orinternational suppliers, of laboratory and field equipment,goods and services;

(b) assist the PIU in evaluation of equipment needs, and prepara-tion of equipment lists, including specifications forspecialized items, to be procured for research centers tobe assisted under the project;

(c) assist PIU in the evaluation of tenders for equipment tobe procured under the project; and

(d) advise on the establishment of a centralized stock control,repair and maintenance system.

December 26, 1974

ANNEX 13Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Terms of Reference for Research Program Advisors and Research Specialists

1. Each of the four national research programs to be supported underthe project would require the services of several research specialists toassist Indonesian scientists in establishing and implementing effectivecommodity-oriented research programs. In each program, the leadership ofthese research specialists will be made the responsibility of a programadvisor/specialist. In addition to their work as research specialists,these program advisors would be associated with the program directors inthe organization of the program. Research specialists and program advisorswould be recruited directly, or through international or bilateral assis-tance, under terms and conditions acceptable to the Bank with the followingterms of reference:

Program Advisor/Specialists

2. An internationally experienced agricultural research scientistwith leadership and administrative competence will be required for eachof the four national research programs to be supported through the proj-ect. These program advisors would have proven research competence in thecommodity concerned. They would also have some experience in research,team leadership and management of a research center.

3. The program advisor/specialists would:

(a) cooperate with the national research programdirectors or their alternates in formulating,designing, and supervising research projectsof significance relative to the national researchprogram;

(b) assist program scientists to develop, and partici-pate in, effective commodity-oriented programs;

(c) assist the program directors in the selection ofresearch staff for the programs, and, with them,recommend all appointments to ARD;

(d) assist the program directors in the selection andplacement overseas of professional personnel forfellowship training for graduate degree or study;

ANNEX 13Page 2

(e) assist the program directors in the design of civilworks facilities and in the selection of equipmentto be acquired under the project; and

(f) contribute directly to the research programme intheir special field of expertise.

Research Specialists

4. For each of the national research,programs, internationally ex-per!renced research specialists will help in establishing and implementingtli research program and training of the local staff. These research,,,specialists will have a wide research experience on the commodity con-cerned. They will be able to provide guidance and advice to theirIndonesian colleagues.

5. Each research specialist would:

(a) assist program scientists to develop, and participatein, commodity-oriented adaptive research programsthat are problem solving and multi-disciplinary;

(b) furnish leadership in establishing nationalcoordinated research programs involving partici-pation by scientists of regional research stationsand other institutions, including annual and periodicworkshops for research planning and review;

(c) arrange on-the-job training of local staff;

(d) assist in the selection of personnel for trainingand fellowships;

(e) assist in the location and guidance of fellowshipsabroad; and

(f) contribute directly to the research programs intheir special field of expertise.

March 31, 1975

ANNEX 14Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Terms of Reference for Agriculture Extension Advisorand Information Specialists

1. The National Information Center (NIC) of the Agency for Education,Training and Extension (AETE) requires the services of four internationallyrecruited agricultural information specialists. One of these specialistswould be called agricultural extension advisor/specialist and would adviseand assist the head of NIC and his staff. The three others would be calledinformation specialists and would advise and assist the regional agricul-tural information centers in Java, Sumatra and the other islands respec-tively. These four specialists would be recruited directly or throughinternational or bilateral assistance, under terms and conditions accepta-ble to the Bank, with the following terms of reference. As a team theywould be responsible to the Head of the extension bureau.

Agricultural Extension Advisor/Specialist

2. The agricultural extension advisor/specialist would be an exten-sion specialist who is familiar with the techniques of information dissemi-nation. He would have good experience in managing extension services anddefining programs in this field. He would also have the ability to commu-nicate effectively with others.

3. The agricultural extension advisor/specialist would advise andassist the head of NIC and his staff in:

(a) designing and organizing training programs inagricultural information;

(b) formulating, designing and supervising agri-cultural information programs;

(c) the selection of staff for NIC and regionalcenters;

(d) the selection and placement overseas ofprofessional personnel for fellowship train-ing or study;

(e) the selection of equipment to be acquired underthe project;

ANNEX 14Page 2

(f) developing the organization, administrationand management of information centers;

(g) establishing good working relationships withresearch program;

(h) developing an evaluation system for agricul-tural information;

(i) integrating the work program for NIC with thoseof other units of AETE and of the Ministry ofAgriculture; and

(j) other appropriate tasks as requested by thehead of the agency.

Agricultural Information Specialists

4. The three agricultural information specialists would be extensionspecialists familiar with the techniques of information dissemination. Theywould have professional experience in managing of extension service programs.They would advise and assist the regional information centers in Java,Sumatra and the outer islands respectively.

5. The agricultural information specialists would assist the heads ofthe regional centers and their staffs in:

(a) developing and participating in effectivecommunications media oriented informationprograms to benefit the agricultural com-munity;

(b) on-the-job training of information centerstaffs;

(c) the selection of personnel for training andfellowships;

(d) the location and guidance of fellowshipsabroad;

(e) organizing and managing the centers;

(f) establishing good working relationships withresearch programs;

(g) organizing and participating in training programsfor extension workers;

ANNEX 14Page 3

(h) integrating the work programts for the centerswith those of other units of AETE and of theprovincial extension authorities; and

(i) other appropriate tasks as requested by thehead of the agency.

March 31, 1975

ANNETX 15Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSIO.N

Terms of Reference for Project Fellowship Awards

1. Selection of personnel for fellowships for training abroad andIndonesia would be processed through selection boards by the Agency forResearch and Development (ARD) for research fellowships and by the Agencyfor Education, Training and Extension (AETE) for extension fellowships.Candidate approval would be made by the heads of these two organizations ortheir designees with the Heads of the Research Centers and National Agricul-tural Information Center respectively. The selection would be with theadvice and assistance of the internationally recruited Research ProgramsAdministrator, Information Administrator, research group leaders, informationco-supervisors and research specialists.

2. The university or training institution and the course of trainingwould be approved by the joint agreement of the senior center staff, theresearch programs and information administrators, research specialistsandinformation co-supervisors. The internationally recruited staff would advisein making institutional contacts abroad and arrangements for placement ofthe personnel, in consultation with the organization obtained to administerthe overseas component of the fellowship program.

3. Fellowships would be of two types:

(a) long term fellowships leading to the award of a doctorateor masters level degree, requiring approximately fouror two years respectively. Where possible, the graduatethesis would be based upon an Indonesian agriculturalproblem and return visits would be encouraged, especiallyduring summer semesters to obtain data and provideorientation to Indonesia's needs prior to receivingthe graduate degree; and

(b) short term fellowships for senior staff for v,isits toselected international institutions involved inactivities similar to those of the programs and centers.These fellowships would be up to six months duration.

ANNEX 15Page 2

4. An indicative break down for the fellowships would be as follows:

Numbert of FellowshipsProgram Long Term Short Term

Rice 18 8Palawiia Crops. 18 9Highland Vegetables 14 7Rubber 26 13Other ARD Programs 13 7Agricultural Information 30 10

Total 119 54

5. Long term fellowships would be in countries, including Indonesiathat can provide the training most appropriate for the needs of the project.Short term fellowships would be for visits to specific institutions orcountries abroad for specific project purposes.

6. All fellowships would be conditional on recipients agreeing toreturn to, or remain,-in Indonesia for service in government research orextension for a minimum period equivalent to the time spent in trainingunder the fellowship.

7. Estimated cost for overseas long term fellowships is US$12,000per year and reflects present international experience plus additional travelcosts to return to Indonesia to work on the thesis prior to receiving thegraduate degree. Estimated cost per short term fellowship is US$1,000 permonth. Estimated cost of long term fellowships in Indonesia is US$5,000per year.

8. The 'Ministry of Agriculture would organize the fellowship programiby making contract arrangements satisfactory to the Bank with the sameinternational research organization or organizations, selected to handle therecruitment and financial administration of the internationally recruitedtechnical assistance personnel.

November 1, 1974

ANNEX 16Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Fellowships Program

1. Under the project, fellowships would be provided for ARD andAETE staff to pursue their studies in Indonesia or abroad. These fellow-ships would cover short-term training abroad, studies for the M.Sc. bothin Indonesia and abroad and studies for the Ph.D., mainly abroad. Anindicative allocation for these studies between the programs is shown inTable 1.

2. Fellowships would be available for professionals and seniortechnicians engaged in the research programs and working in the informationcenters to be set up under this project. In addition, about 20 fellowshipsfor the Headquarters and other programs staff under the authority of ARDwould be provided. The final distribution of these additional fellowshipsamong the programs will be at the discretion of the Ilead of ARD, actingon the advice of the Research Programs Coordinator, and subject to Bankapproval. Preference will be given to established staff having satisfactoryperformance records. New hired staff would normally be required to spendat least one year at the research or information centers before they areawarded a fellowship. Beneficiaries would be bound to work on the appro-priate program for a period equal to the duration of the fellowship aftertheir return.

3. Short-term fellowships would be mainly for senior research staff.They would consist of tours and residential periods of about six months inforeign universities and national or international research or extensioncenters. The unit cost of such short-term training fellowships is estimatedat US$6,000.

4. Studies for the M.Sc. would last two years on the average; they wouldbe offered to professional or senior technician personnel who already holda B.Sc. These studies could be taken in Indonesian or foreign universities.The cost per year is estimated around US$5,000 in Indonesian universities,US$12,000 in foreign universities.

5. Studies for the Ph.D. would be open to professionals holding anM.Sc.; they will also be offered, as an extension of their studies, tostaff members who had initially been selected for an M.Sc. On an average,these studies should last four years. Since few Indonesian agriculturaluniversities offer studies for the Ph.D., it is expected that most ofthese fellowships would be for studies in foreign universities; their costper year is estimated around US$12,000.

ANNEX 16Page 2

6. Since the academic qualifications and suitability for further studyof the Suture staff cannot be assessed at this time, it is assumed thatfellowships equivalent to about 90% of the final professional staff estab-lishment would be awarded, broken down as follows 1/:

30%7' for short term training

15%' for an M.Sc. in Indonesia

30% for an 'f.Sc. abroad

15% for a Ph.D. abroad

7. Numbers and costs of fellowships, determined under the aboveassumptions, are given in Tables 1 and 2.

Attached: Tables 1 and 2.

October 31, 1974

1/ These percentages are, of course, averages and final allocation withregard to both program and type of studv will be determined by the headof the respective agency, acting on the advice of the program directorsand their technical assistance advisers.

ANNEX 16Table 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Feflovships for Training in Indonesia and Abroad:!

- ----- Project Research Program------Palawija Highland Other ARD Information

Rice Crops Vegetables Rubber Progr Centars Total

Short term 8 9 7 13 7 10 54

M.Sc. in Indonesia 4 4 3 6 4 9 30

M.Sc. abroad 9 9 7 13 5 12 55

Ph.D. 5 5 4 7 A 2 3

Total fellowships 26 27 21 39 20 40 173

Professional staffl/ 28 29 23 48 _ 51

/ The breakdown given here is only indicative with regard both to the type of fellow-ship and the distribution among the programs.

i/ These fellowships will be for other ARD staff, including those in other institutesand at Headquarters, and are intended to strengthen overall research program,professional staff planning and administrative competence and to support otherpriority crop programs identified during the course of the project.

/ Restriction of fellowships to 90% of the professional staff at full establishmentwill provide an element of competition for these awards, and will reduce the possi-bility of selecting personnel who are unlikely to benefit substantially from moreadvanced training.

Nov. 1, 1974

ANNEX 16Table 2

INDONESIA

AGRICULTURAL RESEARCH AND EOTE!NION

Phasing and Cost of the FeflowaiDs Progra!/

------ Year------------------ CostFellowship T 1 2 L IL 5 6 Total (US$'OOOs)

Short term(unit cost $6,000) 3 12 13 13 13 -- 54 324

M.Sc. in Indonesia starting - 10 10 10 -- - 30 --($5,000 per year) on-going - 10 20 20 10 -- 60 300

M.Sc. abroad starting - 18 19 18 -- -- 55--($12,000 per year) on-going - 18 37 37 18 -- 110 1,320

Ph.D. abroad starting - 17 17 -- -- -- 34 --($12,000 per year) on-going - 17 34 34 34 17 136 1.632

Total Cost / 3,576

1/ This phasing is only indicative.

2/ In constant 1975 terms

November 1, 1975

ANNEX 17Page 1

INDONES IA

AGRICULTURAL RESEARCH AND EXTENSION

Civil Works Program

Costs

1. Uncertainties regarding site conditions and future costs forconstruction and equipment prevent precise braeketing of the cost of thisproject component.

2. The exact location of the buildings for some of the centers couldnot be decided at appraisal. A 25 cm contour and a soil survey of the landfor the National Centers for Rice and for Palawija Crops at Sukamandi isrequired to confirm the suitability of the site and to aid the preparationof a masterplan which would identify the sites for buildings, and facilitatethe design of an efficient irrigation cum drainage system. The possibilityof utilizing some of the unoccupied land within the National Seed Corporationcompound for staff housing and other amenities also needs to be investigated.The National Center for Rubber at Sungei Putih has been previsionally locatedin proximity to the existing PNP V's headquarters compound at Sungei Karangbut this must be refined after subsoil and topographic surveys have beenundertaken. It is known that 10 houses in the Sungei Karang compound couldbe made over for professional and senior technical staff, while additionalunoccupied land within the compound could be used for the remainder of thehousing needs.

3. The uncertainties bearing on the cost of construction in Indonesiaare even bigger. Construction cost increased by 34% in 1973. Even thoughno comparable figure was available for equipment cost, it has admittedlyincreased considerably. Bearing in mind both that Indonesia has a longhistory of inflation and that construction costs have been escalatingrapidly during the past year throughout the world, it is impossible topredict the escalation of construction cost with any reasonable degreeof accuracy. The price contingencies retained for this component mustnecessarily be very high; in view of the recent history,of price escalation,even these may turn out to be conservative.

Civil Works Implementation

4. A Project Implementation Unit (PIU) has already been establishedwithin AETE to administer the Agricultural Education Project (IND 223). Thepresent staff is adequate to deal with the additional responsibility of the

ANNEX 17Page 2

Agricultural Information Centers. A new PIU however, must be establishedwithin ARD to administer the Research Centers construction and equipmentprogram. The PIU would be staffed by an architect (Appendix 1) appointedor seconded by the PWD, a financial administrator to 'be provided throughconsultancy services during the first three years of the project, and anequipment procurement officer together with supporting staff. The procure-ment officer would be supported as required by consultancy services in thearea of Bank procurement procedures and also in establishing the essentialpre-ordering schedule for laboratory equipment and supplies.

Professional Services

5. The technical problems presented by the Information Centers andmore particularly by the Research Centers are within the competence of localarchitects and engineers and no foreign consultancy services are recommended.Architects would be selected from a prequalified list through the standardprocedures of the PWD and the appointments will be subject to Bank approval.The appointment of local architects, however, would be conditional on theirassociating with Project Construction Management and Cost Control Consultantsin order to strengthen these aspects of project implementation. Consultantswith this expertise are currently represented in Jakarta. BAPPENAS hasappreciated the value of their services and has agreed a fee of 4% of con-struction costs, which has been included in the project budget. Terms ofreference for these consultants are set out in Appendix 2.

6. Resident Clerks of Works would be appointed at each site to pro-vide day to day supervision of the construction work. They would be subjectto the direction of the executive architects who would provide customaryperiodic supervision.

Pre-financing

7. Local funds are available to finance professional services includ-ing preliminary surveying work and the establishment of the PIU for ARD. Anearly start to the civil works program, ahead of loan effectiveness, willtherefore be possible.

Sites

8. All sites are now owned by GOI except Sungei Putih/Sungei Karangwhich is at present nominally owned by PNP V, even though it does not possessclear title to the land. Problems of site acquisition should not arise.

Development Plan and Report

9. A development plan and report for each research center will be pre-pared by the Director, the Program Advisor and the project unit architect incollaboration with the executive architects, construction management and costcontrol consultants.

ANNEX 17Page 3

The topics should cover, inter alia:

(a) Site development plan for both land and physicalfacilities;

(b) Soil, sub-soil and climatic data, together withtopographical survey;

(c) Functional program indicating outline of proposedactivities and staff needs;

(d) Schedule of accommodation refining the material inthis annex as necessary;

(e) Preliminary list of major laboratory equipment;

(f) Preliminary budget covering land preparation, civilworks, furnishing and equipment; and

(g) Anticipated progress schedule for implementing theconstruction program.

Each plan and report will be subject to Bank review and approval.

With regard to the AETE Information Centers, site surveys andpreliminary site development plans will be submitted for review and approval.

Basis for Cost Estimates

10. In working out the cost estimates for the various centers, thefollowing assumptions have been used:

(a) The construction costs of the buildings were computedon the basis of the existing cost in Jakarta. A "pro-vincial cost variation" was then added or subtractedto allow for regional differences in construction cost(see Tables 6 to 10). All sites are in rural areas, andin consequence an allowance has been made for well con-struction, pumps and electric generators. The allow-ance for cost escalation has been reflected in theoverall project cost estimates (Annex 18) rather thanin the civil works cost estimates for individual centers(Tables 6-9 of this annex).

(b) 9% of the construction cost has been allowed forprofessional fees (5% for architectural and engineer-ing fees and 4% for construction management and costcontrol).

ANNEX 17Page 4

(c) Housing has been provided of-an appropriate stand-ard and construction costs have been based on theunit costs established by BAPPENAS. The availa-bility of some existing houses has been taken-intoaccount.

(d) The schedule of accommodation prepared for each researchcenter is based on the proposed staffing, the functionalprogram and the support services needed. These schedulesof accommodation are provisional and are intende'd to pro-vide a measure of the construction needed. It is anti-cipated that the schedules will be refined after theappointment of the program directors and advisers foreach center, and the executive architects have been made.

(e) The requirements and costs of research equi:pment has beenestimated from recent comparable experience in Indonesia.To arrive at the approximate cost of furniture an estimateof US$100 per office-based staff has been used.

(f) In the light of experience with farm development, fieldequipment and vehicles in international research centers,a fixed ratio per professional staff was assumed for thesetypes of equipment: US$2,000 per professional for farmdevelopment, US$2,750 for field equipment and US$3,000for vehicles. The allowance for farm development isdeemed to cover road works, irrigation, boundary fencingand land shaping.

Attached: Appendices 1 and 2Tables I - 9Chart

March 31, 1975

ANNEX 17APPENI)iIX 1Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Outline of responsibilities of the Project ImplementationUnit Architect

1. The Project Implementation Unit (PIU) will be the locus of overallproject coordination and liaison witih the Bank in respect to civil works andequipment. Tihe staff of the PIU will include an architect appointed orseconded from the Public Works Department who will provide professionalcounsel to the client agency (ARD) and administer and maintain progress inthte civil works component of thle project on behalf of that agency. He willbe supported by a financial administrator and an equipment procurementofficer, accounting, secretarial and clerical staff.

2. In particular the responsibilities of the PIU architect willinclude:

(a) assisting ARD in assembling the architectural brief for tileexecutive architects.

(1)) assisting APR and PWD with tuie selection and appointment ofthe executive architects and the retaining of otherprofessional services.

(c) participating witlh RD and the executive arcllitects inpreparing the development plan report for each of theResearch Centers.

(d) arran%'ing for the review and approval of architectural andengineering reports, plans, specifications, equipmentlists and other submitted material by ARD and the i3ank atthe following stages:

(i) sche-.latic design,

(ii) final design; and

(iii) working drawings and contract documents.

(e) participating in the following:

(i) weekly meetings between the client body and thleexecutive arclhitects during the desigin phase;

.,:>: 17AMPPENDJIX 1Page 2

(ii) monthly progress meetings with the contractorsand architects during thle construction phase;

(iii) selection and prequalification of contractors;

(iv) approval and supervision of bidding procedures; and

(v) adjudication and award of contracts.

(f) ensuring that furniture and equipr.ent is designed and installedaccording to specification as well as ensLiring timely procurementin order that the Centers may be commissioned on schedule.

(g) overseeing project progress, make weekly progress reports toARD and quarterly reports-to the Bank;

(h) processing contractors bills for payment bv tile FinanceMlinistry and subsequent forwarding to the Bank fordisbursement; and

(i) preparing a commissioning program, and at the completion ofconstruction participate with the executive architects inadvising ARD on the acceptance of the completed buildings.

November 27, 1974

AX NL 17ArPEND)IX. 2Page 1

INIDONESIA

AGRICULTURE RESEARCH AND EXTENSION

Terms of Reference for Project Construction Management andCost Control Consultants

These consultants should be associated with the executive architectsto supplement and strengthen management and cost control aspects of the pro-ject. Appropriately skilled consultants are currently available in Jakarta.They would:

(a) establish and manage a work program, utilizing appropriateprogramming tools such as network analysis, for all activitiesduring the design, construction and commissioning phases ofthe project. This includes establishment of a pre-orderingschedule for major equipment and materials taking into accountanticipated lead time;

(b) provide cost control services. In the design phase thiswill include advice on alternative construction methods andmaterials taking into account regibnal variations in availa-bility and costs of material and labour. During the workingdrawings and specification phase a Bill of Quantities shouldbe prepared on the basis of "The Standard Ilethod of Measure-ment of Building Works for Indonesia", (December 1973). ThisBill of Quantities should form part of the contract documents;

(c) provide counsel on the prequalification of contractors, andadvise on adaptations required to the standard form ofconstruction contract now frequently used, namely the"Standard Form of Contract with Quantities of the SingaporeInstitute of Architects";

(d) participate in the checking and evaluation of bids andaward of contracts;

(e) prepare cash flow projections to indicate funding requirementsthroughout the construction period;

(f) provide field inspection to monitor construction progress andassist architects and contractors to maintain momentum of work,and to ensure that materials used are in accordance with thespecification;

LANN EX 1 7APpE,N,DIX 2Page 2

(g) measure construction work and verify contractors monthly bills;

(h) evaluate contractors claims for extra work and processcharge orders; and

(i) assist with the preparation of final accounts.

November 27, 1974

ANNEX 17INDONESIA Table 1

Page 1AGRICULTURAL RESEARCH AND EXTENSION

Schedule of Accommodation: National Research Centers for Rice & PalawiJa Crops(Combined

Staff or No. of Total AreaSpace Capacity Units4 Area m2 m2

1. CENTRAL FACILITIES

A. Joint LaboratoriesPathology 6 techs. 1 150 150

4 assts.Preparation Room 1 25 25

Entomology 6 techs. 1 150 1504 assts.

Preparation Room 1 25 25Instrument Room (a/cXshared) 1 25 25

Researchers Offices 1 4 18 72Secretaries & Filing 30

Soils Science 4 techs. 1 150 1506 assts.

Preparation Room 1 25 25Instrument Room (a/c) 1 15 15

Researchers Office 1 2 18 36Secretaries & Filing 15

Crop Quality & NutritionChemistry 4 techs. 1 120 120

4 assts.Preparation Room 1 .25 25

Physiology 4 techs. 1 120 1204 assts.

Preparation Room 1 25 25Instrument Room (a/c)(shdre) 1 25 25Glassware & Chemical Store 1 35 35

Researchers Offices 1 6 18 108Secretaries & Filing 40

B. Administrative Offices -Director 1 1 18 18Research Co-ordinator 1 1 16.5 16.5Assistants 2 1 22 22Secretary General 1 1 16.5 16.5Assistants 2 1 22 22Secretaries and Filing 6 1 42 42Clerks 3 2 14 .28Storage and Photocopy 1 1 10 10

C. Technical Services 1/Experimental Design andAnalysis 1 1 16.5 16.5Assts., Clerks & Secs. 5 1 35 35

Economist/Farm Management 1 1 16.5 16.5Assts.,Clerks & Secs. 6 1 42 42

Subject Matter Speaiaists 1 3 16.5 49.5Assistants 3 2 33 66Secretaries 3 1 21 21

ANNEX 17Table 1Page 2

Staff or No. of Total AreaSpace Capacity Units -,Area m2 m2

Publication and Photo 1 1 16.5 16.5Studio & Darkroom 4 1 28 28

Library 1 30 30Display & Periodicals 1 1 25 25Office 1 1 18 18Stacks (a/c) 10,000 books 1 55 55Wo2?kroom 2 1 20 20

D. Crop Improvement 2/Breeders 1 5 16.5 82.5Assistants 110Secretaries & Filing 28

E. Crop Production 1/Agronomists 1 8 16.5 132Assistants 374Secretaries & Filing 85

F. Ancillaries 1/Lecture Room (a/c) with

Projection 35 1 52 52Conference Rooms 10 3 18 54Exhibition/Reception 1 50 50

G. SupportGeneral Storage & Records 75Toilets 175Cleaners 30

Plant Room & Switch Gear 40

3117Grossing factor 35% 1091

Total Gross Area 4208

2. FIELD SERVICES CENTER

General Service Building 500Field Chemical Store 100Fertilizer Store 300Tractors & Mechanical Workshop 400Maintenance Workshop 100Offices, Farm Manager

EngineerAssistantsClerical, Secretaries & Filing 100

1,500

ANNEX 171Table 1Page 3

Staff or No. of Total AreaSpace Capacity Units -Area m2 m

ADDITIONAL FIELD SERVICE FACILITIES FOR RICE (Supplementing Credit 246-IND) -

Vehicle Service Shop 150Implement Sheds 500Service Building 400Expt'l Samples Drying Area 250Expt'l Materials Shed Storage 100Green Houses 100Screen Houses 1,000

3. SCREEN HOUSES ETC. 2,500

Screen Houses 1,000Green Houses 3 200 600Implement & Vehicle Sheds 500

2,1004. DRYING FLOORS 211

Experimental Sample Drying Area 500Seed Drying Area 1,000

1,500

5. HOUSING AND MESSES

Directors 2 houses 250 500Experts 6 houses 240 1,440Professionals 33 houses 150 4,950Senior technical 37 houses 120 4,440Junior technical 9 houses 70 630Clerical & General 25 houses 36 900

Mess accommodationProfessionals 17 places 20 340Senior technical 37 places 20 740Junior technical 38 places. 15 570Clerical & General 24 places 12 288

14,798

General note: This schedule of accommodation is based on the assumption that (i) newlaboratories will be provided for the combined rice and palawija researchprograms; (ii) the recently completed buildings will be utilized for thenon-laboratory functions of the rice program; and (iii) new facilitieswill be provided for the non-laboratory functions of the palawija program.

j These facilities are primarily for the palaw'ija program.2 These facilities are primarily for palawija but could be constructed

as an addition to the rice field service center.f This is an extension to the rice field service center.

Located in the existing NSC village.Ten junior techniciar accommodated in existing houses.Rice experts accommodated in existing seven experts houses.

March 25, 1975

ANNEX 17Table 2

INDONESIA Page 1

AGRICULTURAL RESEARCH AND EXTENSION

Schedule of Accommodation: National Research Center for Highland Vegetables(Extension to existing facilities I

Staff or No. of Total AreaSpace Capacity Units Area m2 m2

CENTRAL FACILITIES

A. Labc-atoriesEntomology 1 tech. 1 30 30

1 asst.Pathology 1 tech. 1 30 30

1 asst.Soil Science, Water 3 techs. 1 90 90Management & Agronomy 3 assts.

(Nutrition)Preparation Room 25Instrument Room (a/c) 10

Breeding & Seed Technology 4 techs. 1 150 1506 assts.

Physiology, Post Harvest 3 techs. 1 90 90Physiology & Eng./Food 3 assts.

TechnologyPreparation Room 30Instrument Room (a/c) 20Glassware & Chemical Store 20

Researchers Offices 1 12 18 216Secretaries & Files 80

B. SupportToilets 20Cleaners 15Plant Room and Switch Gear 15General Storage and Records 30

871Grossing factor 35% 305

Total Gross Area 1,175

2. FIELD SERVICES CENTER

Additional Storage Facilities 100

3. GREEN HOUSES 200

ANNEX 17-2- Table 2

Page 2

Staff or No. Of 2 Total2 AreaSpace Capacity Units Area m m

4. HOUSING AND MESSES

HousesDirector 1 1 250 250Experts 5 5 240 1,200Professionals 11 11 150 1,650

Mess accommodationProfessionals 6 6 20 120Senior technical 9 9 20 180Junior technical 10 10 15 150

3,550

1/ It is assumed that the following, functions will be accommodated in upgradedspace in existing buildings:

AdministrationTechnical ServicesLibraryConference & Seminar RoomsPotato StorageRefrigerated StorageGreen Houses

2/ (a) The nine existing houses will,be allocated to senior technicians.(b) Adequate housing is assumed to be available locally for married junior technicians.(c) Experts and professionals housing will be located at Lembang.

March 25, 1975

ANNEX 17INDONESIA Table 3

Page 1AGRICULTURAL RESEARCH AND EXTENSION

Schedule of Accommodation: National Research Center for Rubber

Staff or No. of Total AreaSpace Capacity Units Area m2 m

I. Rubber Research Center. Sunmei Putih. Sumatra

1. CENTRAL FACILITIES

A. Administrative OfficesSenior Administrators 1 4 16.5 66Assistants 2 6 22 132Clerical and Secretarial 55Storage and Photocopy 1 10 10

B. LaboratoriesBreeding 3 techs.I 1 105 105

4 assts.Plant Physiologist & 3 techs. 1 105 105Biochemistry 4 assts.

Crop Protection 4 techs. 1 180 1808 assts.

Preparation Room 1 60 60Instrument Room (a/c) 1 40 40

Soil Science 6 techs. 1 270 27012 assts.

Processing Technology 3 techs. 1 135 1356 assts.

Preparation Room 1 60 60Instrument Room (a/c) 1 40 40

Glassware & Chemical Store 1 40 40Researchers Offices 1 14 18 252Secretaries & Files 100

C. AgronomyProfessionals 1 6 16.5 99Assistants 3 7 33 231Clerical & Secretarial 65

D. Economics/Statistics/BiometricsProfessionals 1 2 16.5 33Assistants 3 2 33 66Clerical & Secretarial 14

E. Subject Matter SpecialistsProfessionals 1 2 16.5 33Assistants 2 2 22 44Clerical and Secretarial 2 1 14 14

F. AncillariesLecture room withProjection (a/c) 50 1 75 75

Exhibition Foyer 1 30 30Conference rooms 10 3 18 54LibraryDisplay and periodicals 1 1 25 25Office 1 18 18Stacks (a/c) 10,000 vols. 1 55 55Workroom 2 1 20 20

ANNEX 17Table 3Page 2

Staff or No. of -Total AreaSpace Capacity Uiiits Area m2 m2

G. SupportGeneral Storage & Records 100Toilets 150Cleaners 40Plant Room & Switch Gear 50

2, 866Grossing factor 35% 1.003

3,869

2. FIELD SERVICES CENTER

Field Chemicals Store 100Fertilizer Store 300Tractors & Mechanical Workshop 400Maintenance Workshop 100Offices. Plantation Manager

EngineerSecretarial & Clerical 100

1,000

3. SCREEN HOUSES ETC.

Screen Houses & Green Houses 1,200Implement & Vehicle Sheds 600

4. HOUSING AND MESSESI/ 1,800

Directors 1 house 250 250Professionals 9 houses 150 1,350Senior technical 16 houses 120 1,920Junior technical 12 houses 70 840Clerical & General 12 houses 36 432

Mess accommodationProfessionals 10 places 20 200Senior technical 16 places 20 320Junior technical 23 places 15 345

51657

1/ Experts to be accommodated in ten houses currently available at Sungei Putih.

ANNE 1 7Table 3Page 3

Staff or No. Of Total AreaSpace Capacity Units Area m2 m

II. Rubber Research Regional Station. Sembawa

1. CENTRAL FACILITIES

A. AdministrationStation Manager 1 1 16.5 16.5Administrative Secretary 1 1 16.5 16.5Assistants 3 1 33 33Clerical & Secretarial 35

B. LaboratoriesCrop Protection 1 tech. 1 45

2 assts.Soil Science 2 techs. 1 90 90

4 assts.Processing Technology 1 tech. 1 45 45

2 assts.Preparation Room 1 30 30Instrument Room (a/c) 1 20 20Glassware & Chemical Store 1 15 15

Researchers Offices 1 3 18 54Secretaries & Files 21

C. AgronomyProfessionals 2 2 16.5 33Assistants 7 77Clerical & Secretarial 22

D. Subject Matter SpecialistsProfessionals 1 1 16.5 16.5Assistants 2 1 22 22Clerical & Secretarial 7

E. AncillariesConference Room 30Support: Storage, Records, Toilets,

Cleaners, Plant room, Switch gear 75

703.5Grossing factor 35% 246

949.5

2. FIELD SERVICES CENTEIR

Fertilizer & Field Chemical Store 200Tractors & Mechanical Workshop 200Maintenance Workshop 50Engineers Office &a Clerical Support 50

500

ANNEX 17Table 3Page 4

Staff or No. of Total AreaSpace Capacity Units Area m2 m

3. SCREEN HOUSES ETC.

Screen Houses 200Implement & Vehicle Sheds 200

400

4. HOUSING AND MESSES

Professionals 7 houses 150 1,050Senior technical 5 houses 120 600Junior technical 4 houses 70 280Clerical & General 4 houses 36 144

Mess accommodationProfessionals 3 places 20 60Senior technical 5 places 20 100Junior technical 9 places 15 135

2,369

March 25, 1975

ANNEX 17INDONESIA Table 4

AGRICULTURAL RESEARCH AND EXTENSION

Schedule of Accommodation: National AaricultLral Information Center. Bogor

Staff or No. of Total AreaSpace Capacity Units Area m2 m2

1. CENTRAL FACILITIES

A. AdministrationDirector 1 1 20 20Foreign Experts 1 4 1665 66Senior Staff Professionals 1 5 16.5 82.5Junior Staff Members 2 2 22 44Secretaries 42Storage & Files 1 10 10

B. ProductionPhotographic Studio &Dark Room 5 1 20 20

Filmroom/Previewstudio 1 1 12 12Recording Studio 2 1 20 20Illustration Studio 2 1 22 22Printing & Duplicating 1 40 40rnstrument Workshop 1 1 15 15Storage 1 20 20

C. AncillariesConference Room 4O 1 65 65ReceDtion/Exhibition 1 30 30Library 4OLibrarians Office 1 1 16.5 16.5Work Room 1 1 12 12

D. SupportToilets 4 5 20Cleaner 1 2 2Tea Pantry 1 5 5Electric Plant Room 1 5 5Garage & Mechanical Workshop 50

659Grossing factor 25% 166

Total Gross Area 825

2. HOUSING

Director's House 1 120 120Foreign Expert Houses 4 120 480Senior Staff Houses 5 70 350Junior Staff Houses 4 70 280

Total Gross Area 1,230

December 24, 1974

ANNEX 17INDONESIA Table 5

AGRICULTURAL RESEARCH AND EXTENSION

Schedule of Accommodation: Provincia. Agricultural Information Dissemination Centers

Staff or No. of Total AreaSpace Capacity Units Area m2 m2

1. CENTRAL FACILITIES

A. AdministrationDirector 1 1 16.5 16.5Asst. Director 1 1 16.5 1605Staff Offices 1 3 13 39Secretaries 21Storage and Files 1 10 -- 10

B. ProductionPrinting and Duplicating 1 30 30 KPhotographic Studio andDarkroom 1 20 20

Illustration Studio 1 15 15Recording Studio 1 15 15Workshop 1 15 15Storage 1 20 20

C. AncillariesConference Room 25 1 40 40Library 1 25 25Reception/Exhibition 1 25 25

D. SupportToilets 2 5 10Cleaner 1 2 2Tea Pantry 1 5 5Electric Plant Room 1 5 5

330Grossing factor 25% 82.5

412.5

2. HOUSING

Director's House 1 120 120Senior Staff Houses 5 70 350Junior Staff Houses 4 50 200Garage 25

695

March 27, 1975

ANNEX 17Table 6

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Cost Estimate: National Research Centers for Rice and Palawijia Crops

1. Construction cost, including site works 6/ Rupiahs US' 1/deep well, pump and generator

Central facilities 4208m2 @ 165,000 rps/m2 694,320,000 1,673,000Field Service Center 1500m2 @ 50,000 t" 75,000,000 181,000Green/screen haouses &

hImprovecent shsds 2100n,2 @ 20,000 i 42,000,000 101,000Drying floors 150om2 @ 7,300 tI 10,500,000 25,000Housing 1480Cm @ 60,ooo " 900,000,000 2,169,000Clinic 400m2 @ 100,000 " 40,000,000 96,000Upgrading schools (a]Llo-ance) 41,355,000 100,000

T tJ°3, 1 75, uvu 4,3145,000

2. Provincial cost variation (-8%) 144,420,000 348,ooo1,656,755,000 3,997,000

3. Design contingsncy (10%) 166,000,000 400,0001824, 755,000 4,397,000

4. Construction contingency (10%) 182,600,000 440,0002,007a,355,000 4,o837,000

5. Professional fees5% architecture & engineering4% construction management 180,525,OGO 435,000

2,1d7,550,000 2,7 F, MT

6. Clerk of Works - ll years 2,905,000 7,0002,190,78,0 5,7,0

7. Equipment23 Lab staff x (say) 4,500,000 rps i /$ 103,335,000 249,000

Clinic equipment and furniture 8,300,000 20,000

8. Office furniture190 x (say) 41,500 rps 2/2/ 7,885 000 19 000

5--310,305,D 5,6,09. Additional field service facilities for rice

component supplementing Credit 246-INm(Costs derived by E.V. Aggasid 19 Aug. 1974)Vehicle service shop )Implement shed )Services building )Expt'l samplee drying area ) 112,465,000 271,000Expt'l materials shed storage )Green houses )Screen houses )

2,1422,770,000 5,3,010. Total 4/

1/ 415 rps = US$ 1.00 (Oct. 1974)/ Order of magnitude estimate based on Tea Institate at Gambung.

.Prices current at March 1974.J Rough estimate at $100 per office based staff.L Based on construction costs at Oct. 1974. Construction costs are unstable and no

estimate can be made of actual cost by time of completion. Hence a nominalcost escalation factor will be applied as described in Annex 18, Table 3.

$1 Laboratory equipment and furniture for rice component covered in Credit 246-INDt/ The cost of road works, drainage and irrigation, boundary fencing and land

reshaping is carried under the allowance for farm development.

March 27, 1975

ANNEX 1 7

INDONESIA Table 7

AGRICULTURAL RESEARCH AND EXTENSION

Cost Estimate: National Research Center foriHighland Vegetables

Rupiahs US$ /

1. Construction costs, including site works, /5well, pump (main electrical supply available)

New Laboratories 1175m2 @ 180,000 rps/A2 kil,o3U,000 510,000Field Service Centre 100m2 t 50,000 rps/m2 5,000,000 12,000Housing 3550m2 @ 60,000 rps/m2 212,895,000 513,000Upgrading extg. bldgs. 10OOm2 @ 30,000 rps/m2 29,880,000 72,000

Greenhouse 200m2 e 20,000 rps/m2 4,150 000 10 000-u3 m1 7,000

2. Provincial cost variation (-8%) 36,935,000 89,0004-26.620 000 o,o2FW

3. Design contingency (10%) 42,745,000 103,000469.365.000 1,131,000

4X Construction contingency (10%) 46 895,000 113 000bl o, z,u. u44, 000

5. Professional fees5% architecture & engineering4% construction management 46,480,o00 112,000

56o2.740 000 1,356,0o

6. Clerk of Works, 1 year 1,660,000 4O00

7. Equipment /2110300280026 Lab. staff x Rs4,500,000 - 117,030,000 282,000

8. Office furniture70 staff x Rs41,500/3 2,905,000 l7000

9. Tota:4 684,335.000 o,649,000

/1 415 rps. = US$ 1.00 (Oct. 1974)

/2 Order of magnitude estimate based on Tea Institute at Gambung.Prices current at March, 1974.

/3 FRugh estimate at $100 per office based staff.

/A Based on construction costs at Oct. 1974. Construction costs are unstableand no estimate can be made of actual cost by time of completion. Hencea nominal cost escalation factor will be applied as described in Annex 18.

/5 The cost of road works, drainage and irrigation, boundary fencing andland reshaping is carried under the allowance for farm development.

March 27, 1975

INDONESIA ANNEX 17Table 8

AGRICULTURAL RESEARCH AND EXTENSION

Cost Estimate: National Research Center for Rubber

Rapiahs US$ 1/

1. Construction cost, including site works,well, pup and generator.

Central facilities 4818m 2 @ 160,000 rps/m2 771,070,000 1,858,000Field Service

Center 1500m2 @ 50,000 ") 75,115,000 181,000Screen hozes & sheds1800m @ 20,000 " 35,690,000 86,000Housing 8026m2 6 60,000 " 481 400 000 1,160,000

f,13 63, 275,000-m 3,2d5,000

2. Provincial cost variation (+10%) 136,535,000 329,0001,499,010,000 3,614,000

3. Design contingency (10%) 149 815 000 361,0001,649,625,-00O 33,975,000

4. Construction contingency (10%) 165,170,000 398,000l,T14,795,-0 4,373,000

5. Professional fees5% architecture and engineering4% construction management 163,5102000 394,000

V)97M,-305,000 4,1707,000

6. 2 Clerks of Wrks, 1½ years 5 395,000 1300001,983,7UO,0013 470000

7. Equipment65 lab staff x (say) 4,500,000 rps 292,575,000 705,000

8. Office furniture150 staff x (say) 41,500 rps 3/ 6,225,000 15,000

9. Total 4 2,28 2),500,000 5,500,000

1/ 415 rps = US$ 1.00 (March i975).

2/ Order of magnitude estimate based on Tea Institute at Gambung.Prices current at, March, 1974.

Li' Dbugh estimate at $100 per office based staff.

k/ Based on construction costs at Oct. 1974. Construction costs are unstableand no estimate can be made of actual cost by time of completion. Hence anominal cost escalation factor will be applied as described in Annex 18.

2/ The cost of road works, drainage and irrigation, boundary fencing and landreshaping is carried under the allowance for farm development (Annex 18).

March 27, 1975

ANNEX 17INDONESIA Table 9

AGRICULTURAL RESEARCH AND EXTENSION

Cost Estimate: National (1) and Provincial (9) Agricultural Information Centers

Rupiahs u /11. Construction costs, including site

works, well, pump and generator

Central facilities 4537m2 @ 95,OOO rps/m2 431,185,000 1,039,000Housing 7485x2 @ 60,000 rps/m2 449,030,000 1,082,000

S80721,0-00 2,121,000

2. Provincial cost variation (avr. + 3.5%) 30 710 000 74,000910,925,000 2,195,000

3. Design contingency (10%) 90,885,000 219,0001 ,00o,T10,00 2r, 7Wij1000

4. Construction contingency (10%) 100,O1°,000 241,0001,101,5-25-,00065,0

5. Professional fees /25% architectural & engineering4% construction management 91 0 239,000

6. Clerks of Works (10 x 8 months) 12,035,000 29,0001,213,O45,000 2,913,000

7. Equipment and Furniture/3 188,825,000 455,000

5. Total /4 1,401,870,000 3,378,000

/1 415 rps = Us$ 1.00 (Oct. 1974)

/2 May be reduced on account of repetitive work.

/3 From preparation report, excluding vehicles, supplies and btiilding equipment.

/4 Based on construction costs at Oct. 1974. Construction costs are unstableand no estimate can be made of actual cost by time of cmpletion. Hence anoeinal cost escalation factor will be applied as described in para 3.19

March 27, 1975

INDnESIA

AGRIaCLTURAL RISKARa! MAD EXTEIQsI

Civil lorks Schedule

BalancS Calendar 1975 Calendar 1976 Calendar 1977 Calendar 1978

42 Fiscal 1975-76 4 fiscal _7_- l'isc 9F77|70 Fiscal 119779|

Appointment of archts1

s«tabithment of PIU ____.--

Ste surveys and _.

Deeopment plans =._

_ Design & constn iction do 'ts. ad) dication "h bstrUCUic 24 monl ss Commis8 ioning,rm. Research Centers

Def i;t5eod

k.ational Rubber _ }Constr4ti_ 91 > =t

Z gtnale terch Cent m l3 l_

_. . _ ~~~~~~~~~C nstructk 9 montl - _ __

April 9, 1975 |

ANNEX 18Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Project Cost and Disbursement

Calendar of Implementation

The fiscal year July 75 - June 76 has been taken as year 1 of theproject.

I. Capital Input: The first year would be mostly taken up in layingthe ground work i.e. staffing of the PIUs, preparation of the civil worksdevelopment and equipment programs for the centers, preliminary designof the buildings, drawing up of tender documents and invitation of bids.Physical works works should commence in the second and continue throughthe third year of the project. For working out the disbursement schedule,it was assumed that 10% of the disbursement for this component will takeplace in the first year, 25% in the second, 30% in the third and 35% inthe fourth year.

WI. Technical Services:

Specialists: It was assumed that six man-years of consultantspecialist time would be utilized in the first year to help in preparingdevelopment plans. Most of the other specialists would arrive in thesecond year. Because of the need for flexibility in the selection ofconsultants, and their duration of stay, the calendar for their recruit-ment has not been firmed up. For disbursement estimating purposes itwas assumed that the man-years for these specialists will be equally spreadover year 2 to 6 of the project.

Fellowships: Their indicative phasing is given in Annex 2,Table 6. It has been assumed that only a few short-term fellowships willbe taken up in the first year, and that the program would continue throughto year 5; the fellowships for M.Sc. commencing in years 2 to 4 and thefellowships for Ph.D. in years 2 and 3.

In-Service Training and Library: It was assumed that the expen-diture for this component should take place early in the project period(90% of the total expenditure included during the first four years).

ANNEX 18Page 2

III. Land Purchase: Apart for the rubber research program at Sungei Putih,all the land required for the project is already owned by the participatingproject entities. For Sungei Putih, the land, which belongs to GOI, willbe transferred from PNP V to the Rubber Research Program during the projectperiod.

IV. Establishment Cost: The establishment cost for each of the entitiesparticipating in the project has been worked out from assumptions on thebuild-up of their staff over the project period. These assumptions aregiven in the corresponding annexes (Annex 6, Table 3; Annex 7, Table 6;Annex 8, Table 5; Annex 9, Table 5; Annex 10, Table 4; and Annex 18, Table 1).

Attached: Tables 1 - 6

February 7, 1975

ANNEX 18Table 1

INDONESIA

AGRICULTURAL RESEARCH AND XTENSIQN

ProJect Cost and Disbursement

Project Cost - Agency for Research and Development(Constant 1975 US$

Number Unit Cost Total

l) Capital InputVehicles ~/30,000Library Supplies 250,000

Sub-Total 280,000

2) Technical Services

SpecialistsResearch programs administrator for 3 years 1 180,000 180,000Financial administrator for 3 years 1 180,000 180,000Equipment procurement specialist for 1 year 1 60.000 60,000In-service language training specialists

.'or 2-: years 1 150,onn 150,000

Sub-Total 570,000

Fellowships Short-term * 7 6,000 42,000

Fellowships Long-term 1M.Sc. in Indonesia 4 10,000 0,000A.Sc. abroad 5 24,ooo 120,000Ph.D. abroad 4 48,000 192,000

Sub-Total 352,000

Total Technical Services 964,000

3) Establishment Cost 3/ 675,ooo

total 1,919,000

1/ Automobiles for specialists engaged for more than one year (3).

/ These fellowships are for ARD research centers other than the four includedunder the project (See Annex 16).

/ This cost corresponds to the operating cost of the Project Implementation Unitin the ARD for the project period. The annual operating cost has been taken asequal to the operating cost of t.he PIU currently existing in the AETE, sincethe PIU to be set in ARD will be approximately the same size. It has been assumedthat the PIU in AETE will be able to handle the component of this project relatedto extension without any increment in staff.March 31, 1975

ANNEX 18Table 2

INDONSIA

AGRICULTURAL RESEbRCH AND E;TENSION

Project Cost and Disbursement

Total Project Cost

Agency forFalawija Highland Information Research and

Rice CrOpS 2 Vegetables Rubber Certers Development TOTAL------------------------------ Constant 1975 US$ 000--------------------------------

Capital

Building, Service,Utilities & Housing 4,439 - 1,144 4,020 2,463 - 12,066

Research Equipment 249 - 282 705 - - 1,236Furniture 19 - 7 15 40 - 81Farm Development 363 - 148 96 - - 507Field Equipment 157 - 66 132 - - 355Vehicles 181 60 122 194 205 30 792Information Centers Equipment - - - - 697 697Library Supplies - - - - - 250 250

Sub-Total 5,408 60 1,669 5,162 3,405 280 15,9814

Technical Services

Research Specialists 240 1,080 1,080 780 840 420 4,440Fellowships - Short term 48 54 42 78 60 42 324

- Long tenm 496 496 390 708 810 352 3,252In-service Training & Librar - - - - - 150 150

Sub-Total 784 1,630 1,512 1,566 1,710 964 8,166

Iand Purchase - - - 180 - - 180

Establishment Cost 1,160 1,660 1,595 640 1495 675 6,225

BASE COST 7,352 3,350 4,776 7,548 5,610 1,919 30,555

Physical Contingency

- Buildings, Services,Utilities & Housing(20%) 840 - 216 759 460 - 2,275

- All Other (5%) 158 168 183 188 166 96 _'@

Sub-Total - Constant $ 8,350 3,518 5,175 8,495 6,236 2,015 33,780

Provision for PriceIncreases - Current 12,805

TOTAL - Current $ 4659

.1/ Breakdowns of the costs of the various components are given in the following tables:Rice: Annex 6, Tables 2, 3 and 4.Palawija: Annex 7, Tables 4, 5 and 6.Highland vegetables: Annex 8, Tables 3, 4 and 5.Rubber: Annex 9, Table 3, 4 and 5.Information Centers: Annex 10, Tables 1 to 4.Agency for Research and Development: Annex 18, Table 1.

2/ Capital input costs for Palawija crops is included with rice, as the two programs will operate from a joint center.

March 27, 1975

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Project Cost and Disbursement 1/

Expenditure Committment Schedule(in Current US$ '000)

----------------------------------- Fiscal Year----------------------------1975/76 1976/77 1977/78 - 1978/79 1979/80 1980/81 TOTAL

Capital Input

Building, Services, Utilitiesand Housing 650 10,671 3,388 2,567 _ _ 17,276Research Equipment 138 314 872 192 103 96 1,715Furniture 9 21 57 12 7 6 112Farm Development 57 128 357 78 43 40 703Field Equipment 40 90 250 55 30 28 493Vehicles 90 200 558 122 67 62 1,099Information Equipment 78 176 491 108 59 55 967Library Supplies 28 63 176 39 21 20 347

Sub-Total 1,090 11,663 6,149 3,173 330 307 22,712

Technical Services

Specialists and In-ServiceTraining 324 935 1,403 1,886 1,319 844 6,711Fellowships - Short & Long Term 22 676 417 1543 1.225 358 5.241

Sub-Total 346 1,611 2,820 3,429 2,544 1,202 11,952

Land Purchase 189 - - - - - 189

Establishment Cost - 1Z7 2.108 1.621 2,536 3.927 11.741

TOTAL 1624,3 11.077 8.293 5.4106 46,59

1 (a) Physical Contingencies of 20% on building,services, utilities and housing, and5% on all other, have been applied to each line item

(b) Price contingencies (Annex 18, Table 4) have been applied to each line itemZ/ GOI Fiscal Year, April 1 - March 31. (D

March 27, 1975 m

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Project Cost and Disbursement

Provision for Expected Price .ncreases

1975/76 1976/77 1977/78 1978/79 1979/80 1980/81

Local Foreign Local Foreign Local Foreign Local Foreign Local Foreign Local Foreign

Cost Exchange Cost Exchange Cost Exchange Cost Exchange Cost Exchange Cost Exchange TOTAL--_-_______ --_---------------------------------------------- (Constant 1975 US$ 'DoD) --------------------------------------------------------------

Base Cost IncludingPhysical Contingencies:

Civil Works 378 252 5,612 3,740 1,573 1,049 1,062 708 - - - - 14,374

Equipment and othercapital inputs 103 309 205 618 514 1,543 103 309 51 154 51 154 4,114

Technical Services 38 264 168 1,189 267 1,886 298 2,107 204 1,436 89 629 8,575

Land Acquisition 189 - - - - - - - - - - - 189

Establishment Costs - - 1,129 - 1,376 - 966 - 1,281 - 1,785 - 6,537

Sub-Total 708 825 7,114 5,547 3,730 4,478 2,429 3.124 1,536 1,590 1,925 783 33,789

Expected Price Increases: --------------------------------------------------------------- (Current US$ '000)---------------_____- _______-__-_-__-______-__-___-_-_____ -__-_

Civil Works & Land Acquisition

- Annual 2; 0Z 16% 1:% 14% 12% 12% 12% 12%- increase factor over 1975$

base cost 1.0 1.08 1.075 1.24 1.22 1.40 1.37 1.57 -

- current $ increase 0 20 421 898 346 420 393 404 _ _ _ _ 2,902

Equipment and other CapitalInputs

- Annual % 20% 11.5% 18% 9.8% 16% 8.5% 14% 8% 12% 7.5% 12% 7%

- increase factor over1975$ base cost 1.10 1.058 1.31 1.17 1.53 1.28 1.75 1.38 1.98 1.49 2.20 1.60 -

- current $ increase 10 18 64 105 272 432 77 117 50 75 61 92 1,373

Technical Services &Establishment Costs

- Annual % 20% 11.5% 18% 9.8% 16% 8.5% 14% 8% 12% 7.5% 12% 7%

- increase factor over1975$ base cost 1.10 1.058 1.31 1.17 1.53 1.28 1.75 1.38 1.98 1.49 2.20 1.60

- current $ increase 23 21 402 202 871 528 948 801 1,455 704 2,198 377 8,5 30

Sub-Total 33 59 887 1,205 1,489 1,380 1.418 1,322 1.505 779 2,259 469 12,805

TOTAL ( 741 884 8,001 6>752 5,219 5,858 3,847 4,446 3,041 2,369 4,1S4 1,252 46,594

1,625 14,753 11,077 8,293 5,410 5,436

ml

ANNEX 18Table 5

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

ProJect Cost and Disbursement

Estimated Bank and GOI Disbursements(Current US$'000)

------------------ GOI Fiscal Year/ --------------------1975/76 76/77 77/78 .78/79 79/80 80/81 81/82 Total

GOI Expenditurei.

Civil Works23/ 619 10,840 3,410 2,701 20 18 __ 17,608

Materials & Equipment 350 792 2,203 484 263 245 -- 4,337Vehiclesv 63 139 389 85 47 44 -- 767Technical Services 346 1,611 2,820 3,429 2,544 1,202 -- 11,952

Land Acquisition &Establishment Cost 189 1j,49 2,108 1,691 2.536 -- 11,930

Total 1,567 14,861 10,930 8,390 5,410 5,436 -- 46,594

Bank Disbursementsi/~./

Civil Wiorks (40%)6/ 81 2,090 3,353 1,244 262 8 2 7,040

Materials & Equipment(90%)7/ 174 534 1,398 689 240 189 46 3,270

Vehicles (90%)7/ 38 114 291 144 52 41 10 690Technical Services

(88%)8/ 304 1415 2,476 3,017 2.2-32 1,056 _ 10,500

Total 597 4,153 7,518 5,094 2,786. 1,294 58 21,500

1 Based on Annex 18, Table 3: assumes GOI expends 100% of cost and IBEDdisbursement of foreign exchange cost.

/ April 1 - March 31.2 Assumes i) 66% design fees disbursed prior to bidding - remainder over period of construction.

ii) 50% construction cost expended during initial 1/3 of constructionperiod, 40% over remaining period, with 10% withheld until 6 monthsafter completion.

/ Automobiles (procured locally) transfered into civil works cost.Foreign exchange % shown against each item.

/ Assumes 6 months lag between GOI expenditure & IBRD disbursement.*/ Assumes 3 months lag between GOI expenditure & IBRD disbursement./ Assumes no lag between GOI expenditure & IBRD disbursement.

March 28, 1975

ANNEX 18Table 6

INDONESIA

AGRICULTURAL RESEARCH AND EKT2NSION

ProJect Cost and Disbursement

Estimated Schedule of Disburseme4ts(uS$'000)

IBRD Fiscal Year Disbursement during Cumulative Disbursementand Quarter the Quarter at end of.Quarter

F! 19761st -012nd 3001' 3003rd 300 6004th 500 1,100

FY 19771st 600 1,7002nd 1,500 3,2003rd 1,500 4,700hth 2,100 6,800

F! 19781st 2,200 9,0002nd 1,700 10,7003rd 1,500 12,2004th 1,500 13,700

FY 19791st 1,100 14,8002nd 1,400 16,2003rd 1,100 17,3004th 700 18,000

FY 19801st 900 18,9002nd 600 19,5003rd 600 20,1004th 400 20,500

FY 19811st 400 20,9002nd 300 21,2003rd 200 21,4004th 100 21,500

1/ Includes $100,000 of retroactive financing for expenditures incurredbefore loan effectiveness.

March 28, 1975

ANNEX 19Page 1

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Economic Benefits and Justification

1. When trying to estimate the economic contribution of agriculturalresearch and extension, the most convenient yardstick is the history ofsimilar experiences in other countries. A considerable number of studieson the 1,'conomic contribution of research systems has now been undertaken 1/;lesF -ctention, however, seems to have beein devoted to similar studies ofe;,.'ension systems. The mnost salient features of these studies, as pre-

,sented below, are: the high rates of return from research programs, thenecessity of a domestic agricultural research capability as a prerequisite

7' to technology transfer from abroad; and the better profitability of basicresearch as against applied research and extension.

2. Two approaches have been generally followed when trying to quantifythe pay-off to investment in research: studies of specific commodityresearch programs and studies based on aggregate production function analysis.

3. Summary information for 8 studies of specific commodity researchprograms are given in Table 1. The research costs were identified includingall research activities associated with the commodity. Most of the studiesclaim a "conservative" position by including all reasonable research costs.It is therefore all the more noticeable that all these studies show hignrates of return, much above what is usual for investments in most economicsectors.

4. Aggregate productivity based studies use the same basic principle.They first relate increases of production over a period of time to thechanges in the conventional input use; any production increase that cannotbe statistically explained by these changes in inputs is partiallyattributed to the technology produced by research. Table 2 summarizesthe results of 12 of these studies; it can be seen that they confirm thesame pattern of high returns emerging from the first se2t of studies.

5. For purpose of research policy, it is not enough to show thatresearch programs usually yield a high economic pay-off. It might in factbe argued that the new technology brought on by domestic research programscould have been obtained in a cheaper way by a simple transfer of technology

1/ A survey of these studies was made for the Consultative Group of Inter-national Agricultural Research in October 1973 by Robert Evenson in"Investment in Agricultural Research -- A Suirvey Paper." Much of thisannex refers to his survey.

ANNEX 19Page 2

and research results from other countries. Even though very few studiesexist on the link between research and transfer of teclnology, there issome evidence that the extent to which a country benefits from the researchfindings of other countries depends on its own research capability. Astudy by Evenson and Kislev on wheat and maize research concludes thatcountries without the capacity to produce internationally significant researchpublications also lack the capacity to benefit from the research findingsof other countries and that extension and related programs on their own donot facilitate transfer. Furthermore, these studies show that countries whichhave indigenous research capability in wheat and maize production are ableto benefit from research done in similar regions, but not from research con-ducted outside these regions. For example, research findings are not easilytransferred from temperate climate zones to tropical climate zones.

6. A distinction may be shown between applied agricultural research(covering such fields as plant breeding, agronomy, animal breeding) andthe more fundamental agricultural sciences (plant physiology, genetics,pliytopathology). Even though this distinction sometimes is arbitrary, itis interesting to note that studies based on this distinction seem toindicate that investments in the more science-based research has the highestmarginal pay-off. Likewise, a comparison between investment in agriculturalresearch and in extension show a higher return for research than for extensionand other programs.

7. To summarize, studies show that investment in agricultural researchhas usually a high pay-off, especially in developing countries. Transferof technology may add to indigenous research but it cannot substitute forit.

8. In the case of this project, the benefits will be all the moresignificant since research programs will be specially reinforced for farmcommodity groups particularly important for the agricultural sector. Table 3gives prices, production and yields of tile main crops t,iat will come underthe research program; it also shows the yields achieved for the sanme cropsin other countries. Rubber currently grown mostly for export; in fact thiscrop accounts for about one quarter of the total value of exports, on theaverage 1969-71. For rubber th-e Agricultural Sector Survey miission liasforeseen an increase in acreage and production. The current yields, however,renain low when compared to those attained in West 'talaysia (Table 3). Thereanpears, therefore, to be considerable room for improver-ent and researchs,hould make major contribution towards increasing these yields. Currently,Incdonesia is still dependent on imports for rice, the miain crop and staplefood. The agricultural sector mission forecasts that, in spite of somefuture extension of the paddy area and improvement of the yields, the countryis not likely to reach self-sufficiency for rice before 1980, even in themost optimistic assumption. Since the scope for increasing the acreageunder paddy is rather limited (see Annex 129 Table 1), any boost in riceproduction must be entrustecd to an increase in the yields. Table 3 of this

ANNEX 19Page 3

annex shows that Indonesian yields for rice production lag behind the yieldsobtained in other parts of the world. Even though such a comparison withcountries situated in different ecological zones must be handled carefully,it also points to some potential for improvement. In this improvement,research should play a major role. Similar results apply to palawija crops.These are currently grown mainly for domestic consumption but Table 3 showsthat bv 1980 a significant part of their production could be exported. Italso shows that the current yields are much below those attained in othercountries. Regarding highland vegetables, data on acreage and productionare lacking; data on yields in particular, are totally absent. Comparisonswith the similar yields in other countries are therefore impossible. Themission is confident, however, that, here too, research should make a signi-ficant contribution to the improvement of yields and qualities.

9. The four commodity groups to be supported by this project aresignificant sources of income for small farmers. Rice cultivation, inparticular, provides most of the resources of many small farmers as wellas the staple diet of the poorest part of the population. By helping toincrease the productivity of these four commodity groups, the project willhave a direct effect on the well-being of the small farmers and poorestclasses in the country.

Attached: Tables 1 to 3

November 27, 1974

ANN EX 1 9Table 1

INDCNESIA

AGRICULTURAL RESEARCH ANDATENSICN

Summary of Direct Inference Commodity Stuudies

Ratio of BenefitTime Flow to Internal

Stud& Country Commodity Period Adjusted Costs! Rate of Return

1 . Griliches U.S.A. hybrid 1 940-1955 7 35-40(1968) maize

2. Griliches U.S.A. hybrid 1940-1955 3.6 (20)(1968) sorghum

3. Peterson, W. U.S.A. poultry 1915-1960 21-25(1963)

4. Ardito-Barletta Mexico wheat 19433=1963 7.5 90(1970)

5. Ardito-Barletta Mexico maize 194 3-1963 3.0 35(1970)

6. Evenson, R. S. Africa sugarcane 1945-1962 2.47 >40(1969)

7. Ayer, H. (1970) Brazil cotton 1924-1967 77+

8. Hines, J. (1972) Peru maize 19541 -1967 35-4° ~/50-55 3/

1/This is not a benefit cost ratio. It j# the ratio of the benefit flow as of theending period plus the accumulated benefits to that date converted to a flow atthe same interest rate (usually 6 percent) divided by the cumulated costs alsoconverted to a flow at the same interest rate.

2/Returns to corn research only.

3/Returns to corn research plus cultivation "package".

Source: Evenson. R., Investment in Agricultural Research--A Survey Paper for Consulta-tive Group on International Agricultural Research. Yale University, October 1973.

June 7, 1974

ANNEX 19Table 2

INDONESIA

AGRICULTURAL RESEARCH AND EXTENSION

Suvuary of Implicit TechnoloxY Generation Function Studies

Estimated Marginal,Country (commodity) Output per Internal

Study and Time Period Research dollar Rate of Return

1. Griliches USA (aggregate) $ 7 --

(1964) 1949-1959

2. Latimer R. USA (aggregate) -- significant(1 9645 ~1949-1959

3. Evenson (1968) USA (aggregate) $10-12 471949-1959

4. Khaldi, N. USA (aggregate) not calculated, but high1949-i964 returns implied

5. Tang, A. Japan (aggregate) 35(1963) 1880-1938

6. Ardito-Barletto Nexico (crops) 2.9 45-93(1970) 1943-1963

7. Peterson (1966) USA (poultry) 1.4 21

8. Evenson (1969) South Africa (sugarcane) 15 401945-1958

9. Evenson (1969) Australia (sugarcane) 35 501945-1958

10. Evenson (1969) India (sugarcane) 40 601945-1968

11. Hayami & Rattan International not directly calculated,(1972) 1955-1965 but high returns implied

12. Kislev & Evenson International(1973) 1955-1968

Applied ResearchLDC's 42DC's 21

Scientific Research Relatedto AgricultureLDC t 60DC's 36

Souret: Evenson, R., Investment in Agricultural Research--A Survey Ler for ConsultativeGroup on International Agricultural Research. Yale University, October 1973.

June 7, 1974

IADONESIA

AGgaCULTUARL RSESAH AND EXTENSION

Rubber, Rice and Palawija Crops: Comparison of Areas Planted. Productioa and Yields

Indonesia 1971 1ronesia 198Cn' Yield (ton/ha)Area Production Yield Ex;port 2/ Area Production Yield Mxport 2/ Indonesia West Malaysia USA Europe Australia

(OO0s ha) ('000e ton) (ton/ha) ('OOOs ten) ('OOOs ha) ('000e ton) (ton/ha) ('000. ton) Estates Smallholders Hatates Smalholders 1971 1971 1971

Rubber 1,972 810 - 789 2,200 1,000 - 900 .47 .33 .93 .56 - - -

Rice 8,500 12,700 1.5 (600) 9,300 16,6o0 1.78 (350) - - - - 3.53 3.05 5.25

Maize ani Sorghum 2,687 2,138 .79 250 4,000 5,000 1.25 1,000 - ,- - 5.52_/ 3 .51 / 2.46_/

Soybeans 630 422 .67 - 1,000 1,000 1.0 3003L/ _ - - - 1.85 1.09 1.22

Groudinute h13 299 .72 - 500 500 1.0 750/ - -- - 1.6

Sweet Potatoes 367 2,579 7.0 - 380 3,500 9.1 - _ _ - 11.6 13.6

1 Sector Survey Report forecasts (see Annex 2, Table 1). For 1980, the figares retained here for rice correspond to the "low" assumption of the Sector Survey.

/ Figares between brackets correspond to imports.

3/ Maize only. H

4/ Product equivalent.

Source: World BaGaroup Agricultural Sector Surveys for Indonesia and Malaysia.FAO Production Yearbook.

December 24, 1974

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