Climate Resilient Rice Commercialization Sector Development Program

Transcription

1 Climate Resilient Rice Commercialization Sector Development Program ADB PPTA 7904-CAM SUPPLEMENTARY APPENDIX No. IV Paddy Drying and Storage Facility Feasibility Study Svay Antor - PREY VENG September, 2012

2 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility ii TABLE OF CONTENTS I. EXECUTIVE SUMMARY 1 A. Subproject Context and Rationale 1 B. Subproject Design 1 C. Investment Cost and Financing Plan 2 D. Implementation and Operational Arrangements 2 E. Subproject Impact 3 F. Critical Risks 3 II. SUBPROJECT CONTEXT AND RATIONALE 5 A. Need for the Investment 5 1. Provincial and District Development Policies 5 2. Natural Features 5 3. Social and Cultural Environment 6 4. Subproject Rationale 7 B. Subproject Objectives 8 C. Related Development Initiatives 9 1. Projects Implemented by Other Agencies 9 D. Subproject Justification 10 III. SUBPROJECT DESIGN 11 A. Subproject Description Engineering Requirements Cropping Pattern Associated Investments 12 B. Location and Site Socio-economic Conditions Identification Process 15 C. Technology and Equipment 16 D. Land Acquisition and Resettlement 16 E. Environment Environmental Criteria and Standards Management Solutions for Environmental Protection 17 IV. TOTAL INVESTMENT, FUNDING ARRANGEMENTS, FINANCING PLAN 17 A. Total Investment Cost Composition of Costs 17 B. Financing Plan Operational Financing Preparation of Financial Plan 18 V. IMPLEMENTATION AND OPERATING ARRANGEMENTS 19 A. Executing and Implementing Agencies Detailed Design Phase Construction Phase Operational Phase 20 B. Subproject Implementation Management Subproject Organization and Implementation Role of Provincial Steering Committee Role of the PIO / Governor s Office Role of PDA Role of the PDLMUPC Role of Contractors Role of Program Implementation Consultants Role of Detailed Design and Supervision Consultants 23

3 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility iii 9. Role of PPP Operator 23 C. Subproject Implementation Schedule 24 D. Financial Management Preparation of Financial Plan Accounting, Financial Reporting and Audit Arrangements 25 E. Procurement Procurement Plan Contract Management 27 VI. SUBPROJECT OUTCOME AND IMPACTS 27 A. Subproject Outcome and Impacts Performance Indicators Evaluation Arrangements Reporting Arrangements 29 B. Economic and Financial Evaluation 29 C. Social Impact Assessment 30 D. Environmental Impact Assessment 30 VII. CRITICAL RISKS 31 LIST OF TABLES Table SA IV.1: Soil Types and Rice Suitability... 6 Table SA IV.2: Summary Social Statistics for Surveyed Communes Table SA IV.3: Summary Agricultural Practices Table SA IV.5: Summary Investment Costs for Paddy Drying and Storage Facility Table SA IV.4: Procurement Schedule LIST OF FIGURES Figure SA IV.1: Subproject Impact Area Figure SA IV.2: Implementation Schedule... 24

4 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility iv ANNEXES Annex 1 - Design and Monitoring Framework Annex 2 - Socio Economic Survey and Analysis Annex 3 - Engineering Concept Designs Annex 4 - Associated Activities Proposed Annex 5 - Investment Cost Estimates Annex 6 - Initial Environmental Examination Annex 7 - Gender Action Plan Annex 8 - Economic and Financial Analysis

5 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility v ACRONYMS ADB - Asian Development Bank AFD - Agence Francaise de Developpement EIA - environmental impact assessment EIRR - economic internal rate of return EMP - environmental management plan ENPV - economic net present value FAO - Food and Agricultural Organization FBD - fluidized bed dryer GAFSP - Global Agriculture and Food Security Program IEE - initial environmental examination IEIA - initial environmental impact assessment JICA - Japanese International Cooperation Agency LSU - Louisiana State University MAFF - Ministry of Agriculture, Forestry and Fishery MEF - Ministry of Economy and Finance MLMUPC - Ministry of Land Management, Urban Planning and Construction MOWRAM - Ministry of Water Resources and Meteorology NCB - national competitive bidding NCDD - National Committee for Sub-national Democratic Development NGO - non-government organization PAM - Program Administration Manual PDA - provincial department of agriculture PDLMUPC - provincial department of land management urban planning and cadaster PDWRAM - provincial department of water resources and meteorology PIC - program implementation consultants PIO - Provincial Implementation Office PMO - Program Management Office PPCR - Pilot Program for Climate Resilience PPP - public private partnership PPTA - Project Preparation Technical Assistance PSC - Provincial Steering Committee RGC - Royal Government of Cambodia Rice-SDP - Climate Resilient Rice Commercialization Sector Development Program RP - resettlement plan RRP - Report and Recommendation of the President SOP - Standard Operational Procedures TA - technical assistance

6 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 1 A. Subproject Context and Rationale I. EXECUTIVE SUMMARY Prey Veng s goals for the development for its local economy aim for food security, the generation of surplus rice for export, and the creation of employment opportunities contributing an overall reduction in poverty to a level of 19% by Within the agricultural sector, the Province plans to (i) increase rice production 100,000 tons per year with a yield increase of t/ha; (ii) to increase early wet crop from 20-40,000 ha; (iii) to increase the use of good quality seeds so that there is enough food for people and a surplus for export amongst others. Some 73% of the province s arable area has soils suited to rice production, many being suited to the aromatic varieties. Most of the population is engaged in agriculture (94%) and most of those are rice farmers (93%). In spite of this dependence on rice production, high rates of outmigration for wage labor are common both within and outside the country. Prey Veng was responsible for 9.5% (361,272 ha) of the total area planted to rice in 2011, contributing 13% (1,153,782 tons) of national paddy production. It is better endowed with dry season paddy areas largely because of the recently developed capacities around Boeung Sner Reservoir and many canals connecting to the Mekong River. With its suitable resources of water and soil, there is great scope to increase rice production in the Province. The rationale behind the subproject is to establish a buffer stockpile of paddy that will ease the pressure on existing infrastructure during the periods of peak production. To store paddy for any length of time is technically not possible at moisture levels greater than 14%. The drying process is a necessary part of the intervention. By increasing storage capacity, there will be less downward pressure on prices. It will provide a window in time for the public infrastructure including roads and port facilities together with the vehicles that use them, to develop to a stage where they can handle increased volumes. It will provide time for the private sector to adjust their stock management capacities to accommodate increased throughput in their processing plants, and, more importantly, it will hold paddy in Cambodia from where it can be made available at a later date to local millers who currently do not have the storage capacity to keep their plants operational throughout the year. This concept is closely aligned to the Government s Policy on the Promotion of Paddy Production and Rice Exports. B. Subproject Design The overall subproject objective is to increase the net incomes of paddy farmers within the subproject area of influence by having their surplus paddy sold through the drying and storage facility. The immediate outcome of the subproject is Increased production of high quality, single variety paddy that is processed domestically for sale on domestic and international markets. The investment will complement other development partner investments in the sector in support of the Rice Policy. The Subproject involves the establishment of a significant paddy drying and storage facility in a strategic location in Svay Antor District of Prey Veng. The facility will consist of a modern paddy handling complex where the transfer and movement of paddy are carried out mechanically in bulk to minimize the labor requirement of its operation. The equipment to be established within the facility include a cleaning area, phase 1 dryer, holding storage, phase 2 dryer and four 2,000 t capacity silos for paddy storage. To accommodate this drying and storage equipment, an iron framed building will be constructed with an estimated floor area of 2,800 m 2 of sufficient height (25 meters) to house the drying equipment and elevators. The facility will be established on land to be identified by the provincial government that will be purchased on the open market thereby avoiding resettlement issues. The capacity of the

7 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 2 drying and storage facilities has been based on the need for economic efficiency whilst accommodating the conditions in Svay Antor in respect of the extent of mechanization and existing cropping patterns. In addition to the civil works and equipment installation, associated activities will form part of the subproject investment to (i) strengthen the technical extension services available within the impact area, (ii) the demonstration of land leveling on farms electing to amalgamate their paddy areas into one contiguous block to facilitate mechanized production, (iii) support for input supply and other cooperative action to improve access to quality seed, group credit, and the development of supply contracts to the facility, and (iii) participate in the pilot insurance scheme to be implemented under Rice-SDP. An environmental management plan has been prepared that specifies required mitigation activities and measures during design, construction and operation. Environmental mitigation aspects to take account of during design include (i) collection and treatment of organic matter produced in dust form during the handling and drying processes (ii) on site sanitation systems for treatment of waste from workers toilets (iii) siting of waste treatment facilities well above ground level to reduce risks of spread of waste during extreme flood events expected with climate change, (iv) a dust removal plant, (v) noise abatement facilities for power generation and plant operation, and (vi) provision for worker health and safety, including safety equipment and potable water supply. C. Investment Cost and Financing Plan The total estimated cost for the land, building and associated structures, the drying and storage equipment, and the necessary plant to operate the facility is estimated at $3.8 million. The financing of the facility will be from a combination of ADB loan funds and a portion (to cover the drying equipment) from the Pilot Program for Climate Resilience. The Government will finance the purchase of land estimated at about $144,000 as well as taxes and duties on imported equipment. Finance to operate the facility - to buy wet paddy and operate the plant will be provided by the private sector partner engaged to operate the facility. Any resettlement costs associated with access to the facility will also be paid by the Government to be determined once the exact site has been identified. D. Implementation and Operational Arrangements The Ministry of Economy and Finance will be the Executing Agency for the Rice-SDP and will maintain responsibility for overall implementation assisted by a Program Management Office. In Prey Veng, the Governor s Office will be responsible for overall implementation of all subprojects implemented in the province with the assistance of a Provincial Implementation Office. The preparation of the detail design for the facility will be undertaken by private engineering consultants under the supervision of the Ministry of Land Management, Urban Planning and Construction and its provincial counterpart. The Ministry will be responsible for appointing contractors for its construction while drying equipment will be procured based on technical specifications agreed with the Ministry of Agriculture, Forestry and Fishery. Procurement will be supported by the National Implementation Office established in the Ministry of Land Management, Urban Planning and Construction with the assistance of Program Implementation Consultant s procurement specialist. The facility, once constructed, will be leased to a private sector operator under a public private partnership agreement where the operator will pay the Governor s Office a rental fee to utilize the facilities for commercial purpose. The identification and appointment of the operator will be carried out in a competitive, objective and open basis. The operator is likely to have considerable experience in the milling subsector in Cambodia, have access to the necessary resources to purchase paddy for drying and storage in the plant, have well

8 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 3 demonstrated business management skills and will be familiar with the rice subsector in Cambodia. It is important the private sector operator be identified early during the design stage so that the individual can contribute to the efficient layout of the facility. The roles of the respective line agencies are laid out in the document with the Governor s Office providing coordination of the stakeholder agencies at the provincial level. It is estimated the facility should be constructed within the first two years after loan effectiveness. E. Subproject Impact The impact from the investment will be a contribution to the provision of export quality rice from Cambodia by providing a safety-net to the currently over-extended grain handling infrastructure. The provision of storage facilities will provide a buffer for holding stock awaiting processing in Cambodia rather than having the product exported as wet paddy to neighboring countries. This intervention will effectively take pressure off farmers to sell to the first buyer that comes along and will introduce an element of competition amongst the traditional wet paddy buyers. The impact will be expressed through changes in household level benefits of those farming in the area of influence who will receive incremental household incomes. The impact to the local economy will be for employment opportunities to be provided through increased commercial activity in the Province whilst adding to the national GDP with increased value added on a significant quantity of rice processed domestically. The investment was analyzed in two ways - in financial terms to ensure that the investment was sustainable and profitable for the private sector operator, and secondly in economic terms to determine if the investment had an impact on the overall economy. The resulting financial internal rate of return was 19.6% and the financial net present value of the investment was $1.67 million (using a 12% discount rate). After adjusting costs and revenues to economic values, it was determined that the economic internal rate of return was 31.2% and the economic net present value, $4.51 million. Various tests of financial and economic risks were made on these results, including increases in investment and operational costs, reduced operations (by season and quantity), lower revenue, lower prices and a shorter project life. None of these risk variables appear to pose a serious threat to the economic viability of the Subproject. The financial viability, however, is susceptible to negative changes in the price of rice, a decrease in incremental prices due to storage and running the facility for only one (rather than three) crops a year. For the rice sector and economy as a whole, the impact will be for increased quantities of higher quality paddy being made available for domestic processing where the value added content can be captured by the Cambodian economy. Whilst such a statement assumes that the domestic processing industry will remain competitive, there is adequate opportunity for this to be realized with the recent investment in modern processing equipment and the adoption of lower cost power generation options that also contribute to a reduction of greenhouse gases. F. Critical Risks The risk associated with the subproject relates more to the operation of the facility rather than the feasibility of its establishment. The technology is widely adopted in neighboring Thailand and other rice exporting countries of Southeast Asia and it is known to be an effective means of dealing the issue of moisture in paddy and the storage dried grain. The financial analysis would suggest that the risk of the PPP in purely commercial terms is extremely low. There is however a risk with this investment and it relates to the identification of a commercial facility operator. Not only will this require significant and modern management skills requiring financial management control stock control and the like, it will

9 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 4 also need to have the experience of a rice trader who would be familiar with the industry and its idiosyncrasies.

10 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 5 II. SUBPROJECT CONTEXT AND RATIONALE A. Need for the Investment 1. Provincial and District Development Policies 1. The Development Vision for Prey Veng states fairness, improved security of its environment, and hope for better health, knowledge, and wider solidarity for its rural and urban inhabitants whilst respecting state laws, to improve incomes and the standard of living. Goals for its development for the overall economy seek food security, the generation of surplus for export, creation of employment opportunities contributing an overall reduction in poverty to a level of 19% by Its development goals for agriculture include ensuring food security and food safety whilst maintaining the sustainability of its natural resource base including fisheries and forestry. It is striving for a provincial surplus in rice to supplement supplies in other provinces and has a program for the intensification and expansion of rice production in particular but also similar objectives with other industrial crops and vegetables. 2. Specifically, within the agricultural sector, the Province plans to (i) increase rice production 100,000 tons per year with a yield increase of t/ha; (ii) to increase early wet crop from 20-40,000 ha; (iii) to increase the use of good quality seeds so that there is enough food for people and a surplus for export; (iv) to improve soil nutrition, classification, and facilitate land-use planning, identifying cultivation zones to use land properly; to strengthen the capacity of planting technique to at least 85% of households so that the people are able to adopt new technologies, encouraging farmers to intensify production; (v) to assist wholesale and retail markets in districts and city to gain better access to produce, (vi) to improve the capacity of public sector and private partners to follow input standards at reasonable prices for inputs, (viii) to strengthen the capacity of monitoring and evaluation of quality and safely products as well as extension services, (ix) to promote the extension workers at commune level so that they can work close and effectively with model farmers, farmer groups and cooperatives, and (x) create/establish credit with low interest rate so that the farmer can access to those institutions. 2. Natural Features 3. Prey Veng is located in the Southeast of Cambodia with a total land area of 4,883 km 2. It has 13 districts, 116 communes and 1,138 villages and borders Kg. Cham to the North, Svay Rieng to the East, Viet Nam to the South and the Mekong River and Kandal to the West. The Province is well endowed with agricultural land having nearly 5% considered arable of its total area. In addition, the quality of soil is relatively good for rice production with 73% of the arable area coming under category S1 or S2 for rice suitability (Table SA IV.1).

11 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 6 Table SA IV.1: Soil Types and Rice Suitability Province Class S1 Class S2 Class S3 Unsuitable Total Arable % Arable Land Banteay Meanchey 110,668 36,889 79, , Battambang 130,590 47,487 23, , Kampong Cham 303,276 56, ,161 66, , Kampong Chhnang 148,264 10, , , Kampong Speu 97,506 48, , , Kampong Thom 323, , ,265 12, , Kampot 61,352 42,475 75, , Kandal 92,611 17,810 60, , Kep Otdar Meanchey 0 19,894 13, , Phnom Penh 1, , , Preah Sihanouk 12,926 7,756 18, , Prey Veng 80,944 66,660 57, , Pursat 150,615 69, , , Siem Reap 179, , , , Svay Rieng 17,209 43,024 34, , Takeo 55,844 34,902 83, , Total 1,765, ,420 1,794,457 78,787 4,316, Source: CIAP Soil Map for major rice growing areas (1997) based on FAO suitability categories. 3. Social and Cultural Environment 4. The total population in 2010 was 1,145,979 made up of 250,808 families of which some 43,374 are headed by women (17%). It is linked to Phnom Penh and Svay Rieng by National Road No.1 and to Kandal and Kg. Cham by National Road No.6. The Province is mostly comprised of flood plains of the Mekong and its tributaries, and is highly suited to rice production while families often engage in fishing during the peak of the wet season when much of the agricultural land is inundated. The Province has no indigenous people but some ethnic minority people - the Khmer Islam (471 families with people). Although suited for agriculture, this province reports a poverty rate of 21.6% (calculated on the condition of housing as outlined in the Commune Data base, 2010). 2. Most of the population is engaged in agriculture (94%) and most of those are rice farmers (93%). Overall, the size of land holdings in Prey Veng is comparatively smaller than those of the northern provinces. Some 39.7% of households have rice land of less than one hectare, while 61.3% have rice land larger than one hectare. Only 5.2% of households have no rice land at all. Some 94% of all households are dependent upon agriculture for the majority of their livelihoods, 5.4% are dependent upon services for the main portion of their livelihoods while only 0.5% are dependent upon craft work. 3. In 2011, the Province was responsible for 9.5% (361,272 ha) of the total area planted to rice throughout the country, contributing 13% (1,153,782 tons) of national paddy production. It is better endowed with dry season paddy field areas largely because of the recently developed capacities around Boeung Sner Reservoir and many canals connecting to the Mekong River. Rice production is dominated by the wet season crop although the proximity of shallow ground water provides opportunities for tube wells provides for a significant dry season area of 88,480 ha while the wet season area is 272,792 ha including

12 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 7 the early wet season rice (83,854 ha), medium rice (150,802 ha), late season rice (37,998 ha). The production system is trending more towards the early wet season crop with the availability of short maturation varieties and the high risks associated with inundation for the wet season crop. 4. Migration is common to other provinces, Phnom Penh, and even to Thailand in search of employment opportunities that vary from day-labor, construction work and factories. Garment factories located in the outer suburbs of Phnom Penh are the destination for many younger women. About 11.6% migrate to take up positions in a company both within and outside the country, 3.4% migrate taking work on a casual basis while 0.8% migrate for irregular jobs. Those remaining on farms tend to be the older people who have less physical strength to farm. This has been an important stimulus for mechanization together with the high cost and limited availability of labor. Mechanized implements are often used for land preparation, seeding, and combine harvesting. Mechanization also saves time enabling them to take on other tasks such as house-work, animal rearing and vegetable gardening (women) and selling traditional cakes outside the village (men). 5. Whilst traditionally the men assume responsibility for the heavier physical tasks in farming, their role has become more varied with mechanization and under the influence of the high level of female headed households who often have to assume responsibility for the heavier work. Income earning is shared equally amongst men and women household members but frequently, women do not control how funds are spent causing disagreements. Much of the production systems evident today reflect the dwindling labor resources and the improved transport network have enabled greater access to off-farm income sources. There appears to be some reluctance for youth to follow in their parents footsteps as they tend to exit rural areas for the city at every opportunity where life is easier and salaries more regular if not higher. 4. Subproject Rationale 6. There are a number of significant influences are contributing to the situation seen today whereby significant quantities of wet paddy are exported across the border to both Viet Nam and Thailand - both of which are leading exporters and both of which process Cambodian paddy, mill it and sell it on either export or domestic markets. Estimates of the quantities involved are 2.3 million tons per annum depending on supply conditions in the neighboring countries. This situation has prompted the Royal Government of Cambodia (RGC) to issue its Policy on the Promotion of Paddy Production and Rice Exports (the Rice Policy) that aims to increase the value added processing within Cambodia and develop exports from this country rather than through intermediaries where its identity becomes lost. 7. There are a number of other influences fueling this situation. Firstly, the production area and productivity per unit hectare have been steadily increasing over time. Secondly, the increasing incidence of mechanized harvesting using combine harvesters, (reaping and threshing moist paddy), results in increased quantities of paddy being made available on the market during the peak harvesting periods - in this case three time a year. Thirdly, the increasing reluctance by farmers to undertake on-farm drying in view of the limited labor resources and their desire to repay debts incurred during the growing period, are both placing pressure for immediate disposal. Fourthly, the millers have demonstrated a clear preference for receiving moist paddy as drying under managed conditions leads to superior head-yields during milling and traders representing those millers offer similar prices for sundried compared to wet paddy. Collectively, these influences each contribute to increasing quantities of wet paddy being made available for sale at peak harvest periods of the year. 8. However, the condition of infrastructure has not managed to keep pace with these structural changes that have been brewing over the past 5-10 years. Traders have little

13 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 8 warehouse capacity to provide a buffer for the increased quantities that are thrust upon the market. The transport infrastructure - trucks and river based water transport all operate at full capacity and a border closure with either Thailand or Viet Nam has an immediate and significant impact on farm gate prices as the infrastructure is already at full capacity and cannot absorb further deliveries. The capacity to store on-farm is rapidly becoming less of an option with farmers reluctant to dry their grain in order to store and wet paddy has a relatively short shelf life before it deteriorates. In addition, the millers who traditionally have some storage capacity do not have the equipment or the storage capacity to handle the volume of paddy that seasonally becomes available. Furthermore, their limited ability to access reasonably priced finance to expand storage and drying capacity is an oft expressed complaint. 9. As a consequence of these two opposing influences, the only escape valve in the system is to export the wet paddy over the border immediately upon harvest and allow the millers in other countries to benefit from the value added processing. In many ways, this practice has been the savior of the rice industry in Cambodia as the system approaches full capacity with nowhere for the pressure to escape. 10. The rationale behind the subproject is therefore to establish the buffer stockpile that will ease the pressure on existing infrastructure during the periods of peak production. To store paddy for any length of time is technically not possible at moisture levels greater than 14%. The drying process is a necessary part of the intervention. By increasing storage capacity, there will be less downward pressure on prices. It will provide a window in time for the public infrastructure including roads and port facilities together with the vehicles that use them, to develop to a stage where they can handle increased volumes. It will provide time for the private sector to adjust their stock management capacities to accommodate increased throughput in their processing plants, and, more importantly, it will hold paddy in Cambodia from where it can be made available at a later date to local millers who currently do not have the storage capacity to keep their plants operational throughout the year. 11. The rationale for the facility is obvious. However, the means of operating the facility needs its own rationale. Clearly a facility of this nature could not be operated by any district, provincial or similar public entity. To operate effectively in a changing market environment requires considerable flexibility and the ability to make financial commitments at short notice. Governments are not equipped to operate under such an environment. It is therefore important that the facility be managed by a private sector operator. It is proposed that the facility will be leased to a private operator under a public private partnership. In this way, the advantages of the private sector can be tapped while the operator will benefit from gaining access to a facility that would otherwise be beyond its resources to construct. Apart from being a storage facility, with the right form of management, it will be possible to develop other aspects to stabilize the integration along the marketing chain by exploring delivery contracts, risk insurance, input supply management, seed supply arrangements, farmer credit, and even the possibility of developing the concept of a bonded warehouse. The opportunities associated with the facility are limited only by the imagination and capacities of the operator. It is recognized that this investment should be viewed as a pilot and the quantities involved should be able to have an impact on the local situation. To rely on this as a quick fix would defeat the purpose of the exercise. It will buy time to upgrade paddy handling infrastructure but unless that is also addressed in the immediate future, the country could easily fall back into a level of dependence upon its neighbors. B. Subproject Objectives 12. The overall subproject objective is to increase the net incomes of paddy farmers within the subproject area of influence by having their surplus paddy sold through the drying and storage facility. The immediate outcome of the subproject is Increased production of

14 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 9 high quality, single variety paddy that is processed domestically for sale on domestic and international markets. The Subproject has three main outputs including (i) construction of a paddy drying and storage complex to be operated under a public private partnership arrangement between the Province and a private sector operator; (ii) associated initiatives to enhance the impact executed that will improve the impact from the facility, and (iii) efficient subproject management and implementation. C. Related Development Initiatives 13. The Government Policy on the Promotion of Paddy Production and Rice Export set the objective of reaching a paddy rice surplus of more than 4 million tons/year; of achieving milled rice export of at least 1 million ton/year; and ensuring that Cambodian rice is internationally recognized by the year The proposed subproject is consistent with this objective as it intends to significantly increase the capacity for holding paddy in Cambodia reducing the opportunity of rice being dried and milled in neighboring countries. It relieves the pressure on the under-developed state of paddy handing infrastructure in Cambodia. It will also provide the opportunity to test a number of associated initiatives that will also contribute to enhancing productivity, making Cambodian rice more competitive on international markets. The implementation arrangements for the subproject are also consistent with the RGC strategy for decentralized implementation of development initiatives. 1. Projects Implemented by Other Agencies 14. Other related projects being implemented in other parts of Cambodia include a number of farm level agricultural productivity interventions financed by ADB comprising the Tonle Sap Poverty Reduction and Smallholder Development, the Emergency Food Assistance, and the Tonle Sap Lowlands Rural Development Project and the recently completed Northwest Irrigation Sector Project. In addition to these, there are two initiatives being financed by other development partners that are highly relevant to the objectives of the proposed Subproject, the Cambodian Rice Sector Support Program financed by the International Finance Corporation and the European Union, together with the Support to the Commercialization of Cambodian Rice financed by Agence Francaise de Developpement. a. Cambodian Rice Sector Support Program 15. The goal is to increase the revenues of 27,500 Cambodian rice farmers and 60 rice mills, 45 of which are small to medium enterprises. The 15 larger mills include the largest reprocessors and exporters, which have contractual relationships with mills. These goals will be achieved through three components (i) to increase 27,500 farmers access to improved open pollinated planting seed for high value rice varieties. The Project will work with millers to multiply improved open pollenated seed for distribution to farmers and by encouraging farmers to buy seed themselves. Five mills would multiply certified seed during the 2012 season. Each mill would distribute the resulting commercial seed to 500 farmers near their mill for the 2013 season. The improved open pollenated seed could be distributed in one of three ways, by selling it, by loaning it with repayment in the form crop or by exchanging it for poor quality seed being kept by farmers. (ii) The second component aims to increase the efficiency and output quality of 60 rice mills. The project will assist the smaller mills by focusing on equipment audits and the introduction of simple management systems, including training in financial literacy. Larger mills will receive advisory services and training on supply chains, equipment upgrades, energy efficiency and clean tech and mill management software. The quality of paddy entering and milled rice exiting the mills will be monitored to measure the results of equipment upgrades and improved rice quality. (iii) The third component will attempt to develop a strong brand identity for Cambodian rice. Activities under this component will include market research on the attributes of Cambodian aromatic

15 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 10 rice, developing and promoting quality specifications for Cambodian rice and getting the rice mills HACCP certified, and creating a brand, a promotional campaign and building the value of the brand. b. Support to the Commercialization of Cambodian Rice 16. The objective of AFD s project is to support the Cambodia s rice value-chain through enhancing performances of all involved actors and improving access to the domestic and export markets, especially supporting high value-added rice variety for both economic growth and job creation. The specific objectives are to: (i) contribute to the organization of the sector (inter-ministerial coordination, establishment of public/private partnerships, structuring of professional and inter-professional organizations, etc.) and build the capacity of all the actors involved in the sector (rice processors, rice producers, concerned public services, commercial banks, etc.); (ii) establish quality standards in order to optimize the economic value of Cambodian rice when sold on international markets; (iii) promote contract farming and the involvement of farmers organizations in the primary stage of the commercialization of paddy; and (iv) upscale Rural Development Bank's capacities to meet financial requirements of rice millers and farmers. 17. To achieve these objectives, five components are outlined in its design document including: (i) the organization of the rice sector and capacity-building of all the stakeholders, (ii) the improvement, standardization and certification of Cambodian rice quality, (iii) the promotion of contract farming and enhancement of the involvement of the farmer organizations in the collection and processing of paddy, (iv) the up-scaling rice financing program of Rural Development Bank, and (v) institutional support to assist the various management structures. 18. Both of these initiatives are highly relevant and will require considerable coordination at the national level and also the provincial level where the Subproject is to be implemented. Regular meetings should be maintained under the Chairmanship of the Executing Agency to ensure inter-project coordination. D. Subproject Justification 19. The justification for the Subproject is based on the current situation in Cambodia where the state of paddy handling infrastructure has become outdated given the recent changes in the production systems in rice growing areas. The widespread practice of exporting wet paddy to both Thailand and Viet Nam in part reflects the state of Cambodian infrastructure and has served as a useful alternative market outlet in the absence of local capacities. However, to benefit from the potential value added to be gained from drying, milling and subsequent export, and consistent with the objectives of the Government s Rice Policy, greater investment is needed to retain wet paddy in Cambodia. A series of paddy drying and storage facilities dotted throughout the participating provinces financed under Rice-SDP will provide an example to the private sector of benefits to be enjoyed from the initiative. The Subproject is technically feasible; it demonstrates a healthy economic internal rate of return; and has numerous un-measured benefits that can guide the development of the rice sector in Cambodia under the umbrella of the Rice Policy.

16 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 11 III. SUBPROJECT DESIGN A. Subproject Description 20. The Subproject involves the establishment of a significant paddy drying and storage facility in a strategic location in Svay Antor District of Prey Veng. The facility will consist of a modern paddy handling complex where the transfer and movement of paddy are carried out mechanically in bulk to minimize the labor requirement of its operation. The facility will comprise: (i) a weighbridge and sampling station to receive and sample the quality of moist paddy, (ii) a covered receival and unloading station with short term storage facilities where bagged paddy is removed from trucks and prepared for bulk handling, (iii) a bulk intake hopper with elevators to deliver moist paddy to the dryers, (iv) the construction of two fluidized bed dryers to bring the moisture content of paddy down from 30% to 19-21% within 3-5 minutes (Stage I dryers), (v) the construction of eight buffer storage bins to hold the paddy flowing from Stage I dryers before passing to Stage II dryers, (vi) the installation of four Louisiana State University (LSU) columnar drying units to bring the moisture level down to 14% (Stage II dryers) within a period of 6-8 hours, (vii) the construction of four storage silos with a combined capacity of 8,000 tons (dry paddy equivalent), and (ix) the establishment of bulk loading facilities for dispatching dried paddy to traders and millers. The concept design considers the option of incorporating a de-husking plant to improve the efficiency of storage and also to provide husk for power generation. The power source proposed is a combination of power from the provincial grid and that generated by the burning of husk to power the generators as a means of reducing operational costs. 21. The facility will be established on land to be identified by the provincial government that will be purchased on the open market thereby avoiding resettlement issues. It will have administration offices and canteen facilities for staff and those delivering to the facility. It will have a perimeter fence and lockable storage facilities to enable the facility to be used as a bonded warehouse for future financing options. The facility will have an extensive concrete apron with appropriate drainage to allow efficient bulk handling of produce. To accommodate this drying and storage equipment, an iron framed building will be constructed with an estimated floor area of 2,800 m 2 of sufficient height (25 meters) to house the drying equipment and elevators. Concept drawings of the building and plant are presented in SA IV-A Recognizing that a commercial facility of this nature cannot be efficiently managed by any public service institution, the facility will be leased to a private sector entity under a public private partnership agreement for a nominated period of time at a consideration commensurate with the cost of the facility and the additional services to be provided by the operator. The Governor s office will be responsible for the identification of candidate operators of the facility who will be invited to submit a financial proposal under the PPP agreement. The lease shall remain in effect as long as the PPP operator conforms with the conditions outlined in the agreement. Failure to do so will result in the appointment of an alternate operator. 1. Engineering Requirements 23. The engineering requirements are based on the technology adopted in Thailand for drying Thai rice of similar characteristics to those grown in Cambodia. It involves cleaning to remove dirt and other foreign material (including empty grains) followed by a two stage drying process that best preserves the head-rice yield and brings the paddy down to a moisture level at which it can be stored without risking further fungal attack and consequent reduction in milling qualities. The capacity of the drying and storage facilities has been based on the need for economic efficiency whilst accommodating the special conditions in Svay Antor in respect of the extent of mechanization and existing cropping patterns. These are

17 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 12 likely to change somewhat with the improved management of water and the availability of improved rice varieties to which the operations of the facility will need to be adjusted. 2. Cropping Pattern 24. Within the area of impact of the drying facility, three crops are produced each year - not all on the same piece of land but dependent upon local conditions of water and drainage. The three crops include the early wet season crop that is planted in April-May and harvested in August and uses surplus surface water remaining in drainage canals as well as tube wells developed to access the groundwater resource to supplement the less reliable rainfall. The second is the main wet season crop that is planted in June-July and harvested in November- December and is dependent upon the natural rainfall. This crop is more vulnerable to damage because of the heavy wet season and, whilst it remains the main crop in terms of area, it is the highest risk of all. This is dominated by the photo-period sensitive Phkar Romduol (a fragrant variety) that is in demand both domestically and international. The third crop is the recession crop that is planted in October and is harvested in February and uses water that is retained behind usually man-made structures from the previous wet season. There is a limited amount of dry season cropping where farmers have access to greater water supplies. Whilst this is a very productive crop in terms of yield, the short maturation varieties are less favored for domestic consumption. The cropping patterns are presented diagrammatically in Figure SA IV.1. Given that the design capacity of the drying and storage facility is 8,000 tons or the equivalent of 10,000 tons of 30% moisture paddy, and assuming a yield of about 3 t/ha from each of the three crops, the area of impact for the facility is likely to be about 1,000 ha or, assuming an average farm size of 1 ha, 1,000 beneficiary households. Those with the greatest potential for participation will be those farmers whose land is in the immediate vicinity of the drying and storage facility. 3. Associated Investments 25. In addition to the civil works and equipment installation, the Subproject will have associated activities aimed at improving the efficiency of the plant s operations. The cost of operation of the facility can be significantly reduced with improved supply management, the introduction of bulk handling from farmers properties to the facility, from improved quality of single variety paddy deliveries, and from improvements in post-harvest handling on farms. 26. The Program will finance a number of national level initiatives that can be used in the provinces to promote enhanced agricultural productivity of those farmers supplying the facility. National initiatives in relation to the production of quality seed material, the revision of technical information packages, and the zoning of agricultural land will provide a sound basis for the provincial and district departments of agriculture to support rice farming in the area. Similarly, the pilot insurance scheme will be tested within the target provinces and because of the interventions and the detailed knowledge obtained during feasibility studies of farming communities; it will be prudent to test the insurance pilot in the same areas. 27. Associated activities will form part of the subproject investment to (i) strengthen the technical extension services available within the impact area, (ii) the demonstration of land leveling on farms electing to amalgamate their paddy areas into one contiguous block to facilitate mechanized production, (iii) support for input supply and other cooperative action to improve access to quality seed, group credit, and the development of supply contracts to the facility, and (iii) participate in the pilot insurance scheme to be implemented under the Program. Further details as to what is anticipated under each of these areas are presented in Annex 4 hereto.

18 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 13 Figure SA IV.1: Subproject Impact Area Area of Impact B. Location and Site 28. The location of the facility is guided by principles of year round and convenient access as well as being driven by the desire to minimize transport costs in transferring paddy from farmers fields for treatment in the facility. The location should be within an established rice producing area - and preferably one that has a significant area of the preferred export varieties such as Phkar Romduol. It should be in an area where the farmers appreciate the need for uniformity of quality and as such are more prepared to accept that seed material needs to be purchased from quality suppliers on a regular basis if not annually. Finally the location should be within areas where the farm size is - on average higher than in other parts of the country where mechanized farming operations are accepted as the norm and farmers have marketable surpluses they wish to sell on the domestic or export markets. 29. Given these guiding principles and in discussion with the provincial authorities, it was decided to establish the facility in Svay Antor District at a location close to the intersection of the recently rehabilitated national road No.11 that provides excellent access to export destinations and other provinces where milling capacity exists. This intersection also has a number of existing medium scaled millers operating in the vicinity that have indicated their interest in being close to the facility to access additional supplies of quality paddy for milling in their premises. Svay Antor District also has about 25,600 ha of medium wet season crop, 90% of which is planted to Phkar Romduol. 30. The exact location is still to be determined but the indication is that the land will be purchased on the open market in close access to the main road but set back in order to

19 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 14 reduce the unit cost of land purchase. It is likely that the land will comprise a former paddy field that is no longer being farmed and the owners wish to dispose of the asset in view of their own situation be it age or lack of labor resources. In this situation, it is likely that fill will be needed to raise the ground level to reduce the impact from flooding as this area is generally low lying and frequently inundated. The Province has proposed two such investments, one in Svay Antor in the north of the Province and another in the south. Given the early stage of preparation, and that the concept has not been approved by the potential financiers, the Provincial administration requested that the issue of land purchase be deferred until funding approval was confirmed. 1. Socio-economic Conditions 31. The Subproject will impact upon the District of Svay Antor and particularly those in close proximity to the site where the facility is to be constructed. To appreciate the socioeconomic conditions. The demographics for three surveyed communes are presented in Table SA IV.2. Table SA IV.2: Summary Social Statistics for Surveyed Communes Province: Prey Veng Commune Data Input Sheet No. Villages Commune name: Damrei pourn Okandoulkhan gcheng village Preyroung village Beong Veng village Communes Commune name: Angkor tret Kork village T robek lech T robek keut Village menong krom Village Commune name : Chrey Total Households Total People Prohear village Prektamok village % Males 48.34% 44.73% 50.14% 47.10% 47.31% 46.83% 46.78% 51.86% 49.20% % Females % 49.86% % 52.69% 53.17% 53.22% 48.14% 50.80% Ethnic Minorities (Y/N)? 0% 0% 0% 0% 0% 0% 0% 0% 0% % Single Women Headed HHs 29.93% 32.84% 24.66% 2.59% 0.50% 10.77% 10.20% 22.84% 15.00% % Landless HHs 1.46% 2.91% 1.33% 0.84% 1% 0% 4.76% 5.07% 1.75% % Poor HHs? 18.24% 1.60% 2.13% 3.36% 3.26% 3.07% 6.12% 21.32% 18.18% % No. labor/elderly/chronic ill HHs 2.92% 0.72% 0.14% 0.63% 0.30% 7.70% 2.72% 2.03% 1.40% Ave Distance to Clinic (km) 5km 3km in the Village 14km 3km o.5km in the village in the village 2.5km Average distance to primary school (km) in the village in the village 0.5km 2.3km 1.5km 1km 2km in the village in the village Average distance to High School (km) 1.5km 5km 1.7km 2.5km 4km 5km 3km 1km 7.5km No. Ethnic groups in commune main ethnicity of commune Khmer khmer khmer khmer khmer khmer khmer khmer khmer Source: Commune focal group May Income sources of the population within the communes and villages are: 1) agriculture, craft work services and other non-specifics. In these three communes, the income which generates from the agriculture ranges from 97.97% to 99.70%, from craft work ranges from 0% to 0.06%, from services ranges from 0.30% to 2% and other not specifics ranges from 0% to 0%. As mentioned, the main income sources of these three communes are generating from the agriculture activities, the following information is describing the farm size through three categories. They are: (i) farmers who have rice land less than one hectare ranges from 13.53% to 28.63%, (ii) farmers who have no rice land ranges 2.62% to 4.11% and, (iii) farmers who have land bigger than one hectare ranges from 68.31% to 83.87%. The rice production practices in this subproject area are mainly dry and wet season. However, due to the irrigation system is not available; most of farmers do the early rice wet season and wet season. The rice production system is summarized in the Table below.

20 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 15 Table SA IV.3: Summary Agricultural Practices Province: Prey Veng Commune Data Input Sheet Wet season rice area (ha) 194ha 123 ha 210 ha 456ha 282ha 135ha 190ha 180ha 280ha Average Wet season rice yield (t/ha) 3 ton 4 tones 3 tones 3 tones 3 tones 3 tones 3 tones 3 tones 2.5tones Dry Season rice Area (ha) 0 ha 10 ha 40 ha 12 ha 0ha 3.5 tones 10ha 20ha 5ha Average dry season rice yield (t/ha) 0 tones 4 tones 4.5 tones 4 tones 0ha 3.5 tones 4tones 4tones 4tone % of HHs using hand tractor to plough 99% 80% 95% 60% 40% 60% 60% 95% 70% % of HHs using large tractor to plough 0% 0% 0% 0% 0% 0% 0% 0% 30% % HHs using Combine harvester 98% 80% 100% 30% 90% 100% 90% 100% 98% T otal dry season rice production last year (tons) T otal wet season rice production last year (tons) Ave distance to nearest mill (km) T hree main sources of agri income 0 tones 40 tones 180 tones 48 tones 0ha 21 tones 40tones 80tones 20tones 582 tons 639 tones 630 tones 1140 tones 700 tones 405 tones 570tones 540tones 700tones in the village in the village in the Village in the village 4km in the village in the village in the village in the village 1 Rice Rice Rice Rice Rice Rice Rice Rice Rice 2 poultry/pig Vegetable poultry/pig poultry/pig poultry/pig Vegetable poultry/pig watermelon watermelon 3 vegetable pet animal vegetable vegetable pet animal palm sugar pet animal cucumber No. FWUC Source: members PPTA Socio-economic Survey, no May no2012, Phnom Penh. no no no no no no - male female No. FWUC meetings last year?? Irrigation service fee/ha/year % of ISF collected last year? 0% 0% 0% 0% 0% 0% 0% 0% 0 % of FWUC committee are female 0% 0% 0% 0% 0% 0% 0% 0% 0 % villages with Farmer Co - Operative? 0% 0% 0% 0% 0% 0% 100% no 0% Ave. No. Farmer Co-Op meetings last year No. Farmer Co-Op members male female % of Farmer Co-Op committee members are female? Commune name: Damrei pourn Communes Commune name: Angkor tret Commune name : Chrey 4. The commune records considers working aged people to be of years old. As observed in Battambang and Kg. Thom, given the community responses during the survey it would appear quite likely that if mechanization results in a significant time saving to the household, and results in expending less labor, it would not be surprising to see an increase in the number of men and women going to other provinces and Thailand to seek work. If households see that, through hiring mechanized services, the household requires less labor for rice production an economic decision would be to maximize use and returns from any labor freed-up. Households may take advantage of both options; increased productivity through mechanization, and, more labor earning off-farm income. a. Domestic Violence 0% 0% 0% 0% 0% 0% 3% % 5. Domestic violence has often been raised as an issue in modern rural Khmer Farmer Farmer Village Village Ave number of other associations in Light of Light of communities, and so much 1 CEDAC so that noit is now monitored Group in the Group national savings census. Input group This savings is not a community Hope NGO Hope NGO subject readily discussed in focal group or household MAFF interviews. MAFF group Information is limited group to reported cases and it must be assumed that the majority of cases go unreported. In most cases it would appear that domestic violence is fuelled by alcohol and money problems. As already mentioned, women are able to earn their own money, but the problem is whether or not they can retain and safeguard their savings and ensure that they are used to benefit the family as a whole, rather than being spent on alcohol and gambling. Members - male Members - female Identification Process 33. A formal process was followed for the identification of potential subprojects that required the participation of the provinces, district authorities and potential beneficiaries. At the commencement of the preparation study, criteria for the identification of subprojects were discussed at a national workshop with the participation of provincial agencies (governors offices, provincial department of agriculture (PDA), provincial department of water resources (PDWRAM), and provincial department of land management urban planning and cadaster (PDLMUPC)). Criteria included (i) general conditions that included the rural nature of the investment, year round access to markets, the confirmed availability of water, and the desire for a significant proportion of commercial sized farming units; (ii) political and community

21 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 16 commitment to the investment in that the subproject was identified in the local development plan and was demanded by the potential beneficiaries; (iii) socio-economic that the benefits must accrue to all beneficiaries equally; (iv) rice exports must be one of the subproject objectives; (v) that the subproject cost must be greater than $750,000 and, less than $2 million (in the case of the grain drying and storage facility, less than $4 million); (vi) that provisions had to be provided for the O&M of the facility; (vii) that environmental and social safeguards were such that no negative impact would result that could not be mitigated; and (viii) that eligible infrastructure would include irrigation rehabilitation, on-farm water storage facilities, seed storage facilities, paddy drying and storage facilities, and other initiatives directed at improvements along the marketing chain. 34. The provincial agencies then undertook an identification process based on these criteria to identify potential subprojects for which subproject investment proposals were prepared with the assistance of the design team consultants. Potential subprojects identified in this manner were subsequently screened to ensure the investments were consistent with RGC development policies in respect of the Rice Sector, that they were consistent with ADB s objectives in its Country Business Operational Strategy, and that there were no negative social or environmental safeguard impacts that could not be mitigated. The screening process was undertaken by the design consultants during the preparation study. Have passed this screening process, identified subprojects became eligible subprojects for Program financing that still needed further detail design preparation but were included on the list of eligible subprojects. This list of eligible subprojects then formed the basis for the sector modality financing arrangement of the investment program. 35. Identified and screened in this manner, the eligible subprojects conform with the development objectives of the Program, RGC and of ADB. They are expected to contribute to the achievement of the RGC s Rice Policy. The eligible subprojects are unlikely to have any significant social or environmental safeguard issues with their implementation. Finally, the identification process ensured that subprojects formed part of local investment plans and that the intended beneficiaries supported the investment. C. Technology and Equipment 36. Refer to Annex 3 for discussion on engineering design requirements where concept drawings of plant composition and layout are presented. D. Land Acquisition and Resettlement 37. There will be no forced acquisition of land to house the facility. It is intended that the land upon which the facility will be established will be purchased on the open market and that it will be in close proximity to existing transport infrastructure (Section III.B). As this will be an open transaction between willing buyer and willing seller, there are not expected to be any resettlement or land acquisition issues arising. Once the land has been identified however, further review of resettlement requirements will be needed as there may be issues over access to the identified land. These investigations will follow procedures outlined in the Resettlement Framework for the overall Program. E. Environment 1. Environmental Criteria and Standards 38. Article 6 of the Sub-decree on Environmental Impact Assessment No. 72.ANRK.BK of August 1999 requires an initial environmental impact assessment (IEIA) and/or an environmental impact assessment (EIA) to be undertaken for every project that applies to a list of project types given in the annex to the Sub-decree. For food processing industrial

22 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 17 facilities, the Sub-decree requires an IEIA/EIA for those that handle greater than 500 t per year. The required IEIA format has a similar scope and format to that of an IEE required under ADB requirements (ADB Safeguards Policy Statement, 2009) and also follows a two stage process, whereby a full EIA is required if significant negative environmental impacts are identified by the initial examination. The category in the ADB s system is category B, and an IEE has been completed, and has found that potential negative impacts can be mitigated by adherence to the EMP that has been prepared for the subproject. No further assessment is therefore required. 2. Management Solutions for Environmental Protection 39. An environmental management plan has been prepared that specifies required mitigation activities and measures during design, construction and operation. Environmental mitigation aspects to take account of during design include (i) collection and treatment of organic matter produced in dust form during the handling and drying processes (ii) on site sanitation systems for treatment of waste from workers toilets (iii) siting of waste treatment facilities well above ground level to reduce risks of spread of waste during extreme flood events expected with climate change, (iv) a dust removal plant (v) noise abatement facilities for power generation and plant operation and (vi) provision for worker health and safety, including safety equipment and potable water supply. Contractors will be required to adhere to the Environmental Management Plan and must prepare and submit plans for health, safety and welfare of workers and the public prior to commencing the works. These plans must be approved and adhered to throughout construction. During construction, measures relating to the minimization of soil disturbance, noise and dust nuisance, and leakage of fuels and chemicals are detailed in the environmental management plan. The cost of compliance with these measures is to be included in contractors bid prices. Potential environmental problems during the operational phase are (i) difficulties associated with the use of the gasifier plant, which will be mitigated by provision for regular routine maintenance of the plant and (ii) worker health and safety, which will be addressed by dust collection, noise abatement features, provision of protective clothing and equipment and regular monitoring of air quality and noise. IV. TOTAL INVESTMENT, FUNDING ARRANGEMENTS, FINANCING PLAN A. Total Investment Cost 1. Composition of Costs 40. The civil works for the subproject investment includes a factory building for drying facilities, an office, guard house and canteen, concrete park truck parking areas and roads, a fence with gate, piling work for the silos, water drainage, land fill and connection to the electric grid. Equipment includes a weigh bridge, laboratory equipment, receiving and cleaning equipment, first stage (fluidized bed dryer) and second stage (columnar) drying equipment, power transformer and generator, a wheel loader, truck, car, office and other building furnishings and equipment, semi-dried paddy bins, four silos and ancillary equipment and control panels. Survey, design, bidding and construction supervision are estimated as 5% of the civil works estimate and contingencies are 10% of the total of civil works, equipment and survey, design, bidding and supervision. Summary costs are presented in Table SA IV.5 and are provided in greater detail in Annex 5 and Annex 8.

23 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 18 Table SA IV.5: Summary Investment Costs for Paddy Drying and Storage Facility Description Amount ($) Percent of Total Equipment 2,170, Civil Works 1,164, Design, bidding and construction supervision Land 144, Contingencies 353, Total Basic Investment Cost 3,889, B. Financing Plan 41. The Subproject will be financed by an allocation that includes funds from both the PPCR grant and loan and the ADB loan. These funds are to be received initially by MEF and made available for subproject purposes through the provincial Governor s imprest account. Counterpart contributions will include the payment of taxes, the purchase of land and the secondment of government employees to be part of the Provincial Implementation Office which will manage and implement the Subproject. While funds from the ADB loan will be made available to the province to operate the PIO, these funds will not be included in the subproject estimated costs. Over-all it is estimated that the ADB loan, PPCR grant and loan and counterpart tax payments will finance the full $3,745,820 of subproject civil works and equipment. The Government will finance the land purchase of an estimated $144, Operational Financing 42. The proposed paddy dryer and storage facility is expected to be operated as a business. To these ends, a public private partnership will be developed to operate the facility that is owned by the province. It will have both fixed and variable costs that must be financed as any commercial business enterprise and where necessary, through credit from existing financial institutions. The financial analysis predicts that the facility will be financially viable and run at a profit. There will be a need for working capital with which to purchase paddy and hold that paddy in storage after drying. That working capital is expected to be made available through commercial bank loans to the plant operator. Defining collateral for such loans may become an issue given that the equipment and buildings of the facility will be owned by the government, at least initially. However it is intended to explore the possibility of converting the storage section of the plant into a bonded warehouse in order to gain access to credit using the dried paddy as collateral. 2. Preparation of Financial Plan 43. The PIO will prepare annual work plans and budget estimates for consideration by the provincial Governor s office for submission as part of its departmental annual work plan and budget. Work plans and budgets in respect of approved subprojects will be forwarded to the national PMO for aggregation into an annual work plan and budget for the overall Program and be presented to ADB and RGC for approval. Work plans will be prepared annually in accordance with local requirements at a time coinciding with departmental annual budget preparation.

24 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 19 V. IMPLEMENTATION AND OPERATING ARRANGEMENTS A. Executing and Implementing Agencies 44. The Ministry of Economy and Finance (MEF) will be the executing agency for the overall Rice-SDP. A national steering committee will be established for overall coordination, and will be chaired by the secretary of state, MEF, with the secretary of state of MAFF as permanent vice chair. The steering committee will include high level representatives of MAFF, MEF, MOWRAM, Ministry of Commerce, Ministry of Industry, Mines and Energy (MIME), Ministry of Land Management, Urban Planning and Construction (MLMUPC), Ministry of Planning, Ministry of Women s Affairs, and the National Committee for Subnational Democratic Development. A Program Management Office (PMO) will be established in MEF to manage Rice-SDP. Detailed implementation arrangements for the program are described in the Program Administration Manual (PAM) (RRP linked document Appendix 2-3). Subproject implementation will be effected by provincial governors office supported by a Provincial Implementation Office (PIO) that will be responsible for the coordination of participating line agencies in Prey Veng. 45. A provincial steering committee (PSC) will be established in the Province to be chaired by the Deputy Governor responsible for the agricultural sector. The Deputy Chairperson will be the Head of the Provincial Administration Office. The Committee will meet bi-annually or as is needed to (i) review implementation progress at provincial level; (ii) authorize allocation of funds for subprojects based on approved feasibility studies; (iii) approve provincial annual work-plans and budgets; and (iv) ensure adequate resource allocation and coordination between concerned provincial agencies. The Governor s Office will be responsible for (i) coordination of implementation of subproject activities at provincial level; (ii) coordination between provincial agencies; and (iii) managing the flow of program funds at province level. 46. A PIO to be established in the Governor s Office, will assist in subproject coordination and implementation and will be the focal point for subproject implementation in the Province. 1. Detailed Design Phase 47. The PMO will be responsible for the recruitment of consulting engineers to prepare detailed designs, bid document preparation and construction supervision of works. Detailed designs will be reviewed by the Ministry of Land Management Urban Planning and Construction (MLMUPC) and then by the engineer from the program implementation consultants (PICs) to ensure internationally acceptable standards have been incorporated and that engineering designs address the potential impact from climate change. Comments will be referred to the detail design consultants for amendment and subsequent preparation of bidding documents. Detailed designs must be approved by MLMUPC in consultation with the PMO and submit to the PSC (along with other documents) for funding approval. Once funding approval has been provided, the recruitment of contractors can proceed. The detailed design consultants can also proceed with the preparation with bidding documents. At this stage, the site would have been identified and the review of resettlement requirements conducted in accordance with the Resettlement Framework for the overall Program. If there are any aspects of resettlement that need attention, then a resettlement plan must be prepared and completed prior to commencement of and construction works or installation of equipment. 48. As the cost is likely to require only National Competitive Bidding (NCB), the PIO will assist the Governor s Office to invite bids for construction of the premises in accordance with ADB s and RGC s requirements as set out in the procurement plan (RRP web-linked documents Appendix 3). The consultant-prepared bidding documents will be used to invite

25 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 20 bids for the equipment supply and installation under international competitive bidding procedures in view of the size of the contract. The national PSC will approve the recommendations of the bid evaluation committee and the contractor invited to sign a contract with the PMO to carry out the works. 2. Construction Phase 49. All resettlement activities must be completed prior to construction. Construction supervision will be provided by MLMUPC with the assistance of the detailed design and supervision consultants. Fortnightly supervision reports will be submitted to the PIO for onward submission to PSC and PMO and MLMUPC. Strict adherence to quality standards will be enforced with the consultants providing continual supervision and progress payments made on the recommendation of the consultant to the Department of Commerce and subsequently to the PIO/Governor s Office. The environmental officer appointed to the PIO will monitor implementation of the EMP. After the construction and warranty period has lapsed, the facility will be handed to the Svay Antor District authority to register the asset on the district registry. 3. Operational Phase 50. The facility is to be leased to the private sector under a public private partnership agreement after commissioning. In view of the need to develop a facility that is acceptable to the intending plant operator, a suitably qualified and experienced candidate should be identified prior to the commencement of construction so that they can contribute to the supervision of construction and installation of the equipment. Once commissioned, the PPP operator will assume 100% responsibility for the operations and maintenance of the facility, its plant and equipment. The PPP operator will have reporting obligations that will enable the Governor s office to remain informed of the operations of the facility (with the assistance of the PIO). Bi-annual inspections will be authorized to confirm that all obligations under the PPP Agreement are being followed. The principle of the PPP Agreement will be to set down the roles and responsibilities of each party and allow the PPP operator to run the facility as if it were their own. The financial capacity of the intending operator should be one of the criteria used in the selection of the operator as considerable funds will be needed to operate a 8,000 t storage facility, even though the quantities might be turned over on a more regular basis. B. Subproject Implementation Management 51. Day to day management of implementation will be carried out by the PIO and will be effected through contracts with the design and supervising engineer with the responsible provincial agency (PDLMUPC) and consultants engaged under the program implementation support contract. 1. Subproject Organization and Implementation 52. Details of organizations for subproject implementation are presented in the PAM (RRP web-linked documents Appendix II.3). The following outlines responsibilities of the organizations involved in subproject implementation. All activities are to be coordinated by the Governor s Office with the cooperation of the PIO. Technical line agencies retain responsibility to ensure the technical aspects of the subproject are addressed adequately. The construction of this facility will be the joint responsibility of PDA and PDLMUPC.

26 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility Role of Provincial Steering Committee 53. The PSC is ultimately responsible for deciding to proceed with the investment. Apart from receiving implementation progress reports, it is the means through which inter-agency coordination is effected and confirmation that the subproject investment is consistent with provincial development plans. Specifically, the main functions of the PSC are to: (i) Approve annual work-plans and budgets of the PIO to implement subprojects. (ii) Approve detailed designs for subprojects based on recommendations from the technical line agency. (iii) Ratify the recommendation for the recruitment of the consulting engineering firm to carry out detail design and supervision, the selection of the construction contractor to carry out the works, and the respective payments against progress reports. (iv) Coordinate the efforts of the concerned line agencies. (v) Provide guidance to the Governor s Office/PIO in subproject implementation in the Province. 3. Role of the PIO / Governor s Office 54. With overall responsibility for implementation of subprojects, the Governor s office is largely responsible for interagency coordination. In order to carry out its functions, it will be supported by a PIO that will deal with day to day implementation management as well as take care of financial management of the second generation imprest account and other progress reporting required under the Program. To add resources for implementation efficiency, a specialist input under the program implementation consultants (PIC) will be assigned to support the PIO for the first three years on a full time basis and after that 30% of the time. Other duties in respect of subproject implementation are as follows: (i) Recruit the engineering consultant to prepare detailed designs, bid documentation and to supervise construction of works and equipment installation. (ii) Recruit the construction contractor to undertake the building works program. (iii) Ensure that subproject safeguard issues are addressed and that RPs and EMPs are implemented according to the design. (iv) Coordinate the provision of agency services to deliver associated activities identified in the design feasibility study. (v) Monitor implementation performance maintaining regular reporting to the PMO and national agencies responsible - in this case MLMUPC and MAFF. (vi) Undertake annual reviews to assess the impact of the investment ensuring that gender specific impacts are noted. (vii) Prepare payment authorization statements on works completed to facilitate payment of consultants and contractors direct from the provincial imprest account or the national imprest account managed by MEF. (viii) Monitor the implementation of the RP if necessary. (ix) Maintain routine reporting of implementation progress to PMO and other concerned national agencies. 4. Role of PDA 55. The following tasks will be completed by PDA under contract to the Provincial Governor s Office: (i) Assist in the refinement of anticipated cropping patterns during detailed design preparation to confirm seasonal cropping patterns based on the rice ecosystem maps prepared by the Program.

27 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 22 (ii) Assist in the execution of the RP if any for the Subproject and in the resolution of any disputes that might arise from time to time. (iii) In cooperation with the technical specialists engaged under the PICs, prepare a suite of technical support activities that will develop the capacities of beneficiary farmers in the command area of impact of the drying and storage facility to maximize the impact from the Subproject investment. (iv) In cooperation with the technical specialists engaged under the PICs, prepare a suite of cooperative support activities that will develop the capacities of farmer cooperatives in the command area to maximize the impact from cooperative action to improve access to inputs (including credit) and in product marketing through (v) supply contracts with the operator of the facility. Assist in the identification of beneficiary households in the area of influence of the facility who are interested in aggregating their land plots to be managed as one discrete parcel in order to be eligible for land leveling and enjoy other benefits from mechanization. (vi) Assist in the extension of land leveling as a tool to improve water use efficiency. (vii) Assist the farmer groups to gain access to improved seed material that has been certified as to quality and trueness to type possibly coordinated by the PPP operator. (viii) Assist the PIO in monitoring the impact from the subproject investment by carrying out annual impact monitoring surveys of beneficiary farmers and other value chain stakeholders. 5. Role of the PDLMUPC 56. The following tasks will be completed by PDLMUPC under contract to the Provincial Governor s Office: (i) Assist the consulting engineer by providing necessary information needed to prepare detailed designs for the construction of the facility. (ii) Review the detailed designs prepared by the consulting engineer to determine their conformity with MLMUPC standard design requirements. (iii) Review the cost estimates and the bill of quantities to ensure all items are included in the overall subproject cost estimates for the completion of works. (iv) In consultation with MLMUPC, issue technical confirmation that the design is appropriate to the local circumstances of the Subproject. (v) Respond to questions issued by the Governor s office on technical matters in relation to the proposed design. (vi) Review the bidding documents prepared by the consulting engineer to ensure that all aspects needed for completion of the works are included in the bid documents. (vii) Assist the MLMUPC and PMO in the recruitment of suitably qualified contractors to carry out the works program and installation of equipment. (viii) Supervise the quality assurance supervision to be performed by the consulting engineer during construction of the Subproject. (ix) Prepare fortnightly progress reports on construction progress for submission to MLMUPC, the Governor s Office and the PMO. 6. Role of Contractors 57. The Contractor will be responsible for the construction and quality of works to be established under the contract and the installation of drying storage and other handling equipment.

28 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility Role of Program Implementation Consultants 58. During the preparation of detailed design, the PIC must support the detailed engineering designs as required. The PICs will also review bid documentation to ensure that they conform with the requirements of ADB and RGC. The PIC will also support the detailed design and supervision consultants in matters of quality assurance during construction supervision. Approval for payments under the construction contract must be ratified by the PIC before being authorized for payment. 59. The PICs will also provide a fulltime specialist implementation adviser to the PIO to ensure efficient implementation given the limited resources and experience of the PIO staff in ADB requirements. While considerable capacity building and training is envisaged for PIO staff, the provision of an implementation specialist adviser is considered necessary to facilitate implementation of subprojects requiring significant interagency coordination. 8. Role of Detailed Design and Supervision Consultants 60. The consultants recruited to prepare the detailed designs, and bid documents as well as oversee the construction of works will ultimately be responsible for ensuring that the quality is as described in the detailed design. The engineer will also be responsible for the installation of the equipment into the facility and their connection to services. Specifically, duties shall include: (i) (ii) (iii) (iv) (v) (vi) Prepare a draft detailed design for the construction of the drying and storage building and the installation of the equipment for consideration by MAFF/PDA, MLMUPC/PDLMUPC, the PICs, the PSC, and subsequently, the PMO based on the design outlined in the feasibility study. Prepare bidding documents that will be used for the tendering of works by the PMO. Assist the bid evaluation committee in identifying the relative merits of the proposals submitted. Assist PDLMUPC in the supervision of construction of grain handling facility. Confirm quantities claimed under construction contracts for earthworks and other quantity based cost estimates endorsing their approval for payment. Provide fortnightly reports on implementation progress detailing non conformances to quality requirements as detailed in the contract specifications to the PIO/Governor s office with copy to MLMUPC/PDLMUPC and PMO. 9. Role of PPP Operator 61. The PPP operator should be identified early during the preparation of detailed designs so that the ultimate operator of the facility can contribute to design considerations. Whilst the terms of the PPP Agreement will be negotiated between the two parties, the duties presented here provide an indication of the likely coverage of such Agreement. The responsibilities of the PPP operator shall include: (i) (ii) (iii) (iv) Assist the detailed design consultants in the design and layout of the drying and storage facility. Assist in the supervision of construction to ensure that the completed facility will serve its intended purposes. Upon commissioning of the facility and, based on the terms of the PPP Agreement negotiated, operate and maintain the facility as required in the Agreement. Maintain responsibility for procuring input supplies for the plant in particular wet paddy from all three seasonal harvests.

29 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 24 (v) (vi) With the assistance of PDA, work closely with farmers in the area of influence of the facility to improve access to quality seed, input supplies, credit, and to assist in the development of supply contracts to fully utilize the capacity of the facility. Maintain performance reporting on the throughput of the facility to be submitted on a monthly basis to the PIO to facilitate their monitoring. (vii) Maintain the facility in sound working condition subject to fair wear and tear. (viii) Report significant items of repair of a major structural nature to the PIO/Governor s office and arrange for their repair. (ix) Operate the plant as close to full capacity for as long as is possible in order to achieve lower handling and drying costs from the facility. C. Subproject Implementation Schedule 62. The implementation schedule for the subproject is dependent upon the time needed for program approval through ADB and RGC, as well as the length of time it takes to set up implementation structures and operational accounts. Whilst significant advance action has been proposed and considerable start-up support, it is unlikely that subprojects will be commenced much before mid In addition, for this subproject, the identification of land is a necessary prerequisite prior to the commencement of any detailed design activities. In view of the uncertainty of commencement, the implementation schedule has been phased in months rather than by identifying specific months. Implementation schedules may need to be further modified further once the implementation structures have been established and operating accounts for payment opened (Figure SA IV.2). They may also need to be adjusted further if there is any requirement for resettlement in order to achieve access to the facility. Figure SA IV.2: Implementation Schedule Activity Approval of Subproject Recruitment of detail design consultants Procurement of industrial land Review need for resettlement Detailed design drawing preparation Review and approval of detailed design Preparation of bidding documents Invitation to submit tenders Bid evaluation and contract negotiations Construction of buildings Installation of equipment Construction supervision Associated activities Source Feasibility Study estimates. Month D. Financial Management 63. A financial management risk assessment of the implementing agency has been carried out using the standard Financial Management Assessment Questionnaire specified by ADB. Risks have been assessed in four key areas, (i) public financial management, (ii) procurement, (iii) anticorruption, and (iv) coordination for subproject investments. The risks identified can be largely mitigated by developing formal procedures and through capacity building of implementation staff. As many will be new appointments to the PIO in particular, this is an important aspect of the management plan to reduce risks. Based on the mitigating measures to be adopted during implementation, the overall risk associated with the subproject is considered low.

30 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility The Government is expected to contribute relatively small proportion of counterpart funding for the purchase of land (estimated at $150,000), taxes and duties associated with contracts, and the provision of selected government staff appointed to the PIO. Financial obligations of participating line agencies have been minimized by requiring only the appointment of selected permanent government staff into the implementation management structures, the remainder being contract employees paid under loan funds so there will be no additional call on counterpart resources. This will ensure that unrealistic demands are not made on provincial (or lower level) budget resources to part finance the works or associated works and service contracts. 65. There is a lack of transparency in the procurement process which may lead to a number of irregularities. The Program will establish a website in which it will disclose implementation progress; bid notifications and their results; and provide for grievance mechanism against any corrupt practice. All procurement under the subproject to be financed by the ADB loan as well as those to be financed by the GAFSP and PPCR loans and grants will be carried out in accordance with ADB s Procurement Guidelines. For NCB procedures, the provisions of the Government s SOP as agreed with ADB 1 will be followed. In case of inconsistency between ADB procedures and the SOP, ADB procedures will be applied. 66. Coordination between various implementing agencies and entities is key to efficient implementation of the Subproject and achievement of its objectives. Given the extent public servants who are appointed on non-merit based procedures and the heavy dependence on guardians for promotion, individual relations often exceed the authority of management structures. Under such arrangements, interagency coordination is difficult and territorial behavior pervades. The Program will address this though the appointment of multi-agency steering committees at provincial level and by appointing the provincial governors offices as the PIO responsible for coordination. A relatively modest level of technical support is also provided through the PICs to support provincial implementation and where appropriate, procurement. 1. Preparation of Financial Plan 67. The Prey Veng PIO will prepare annual work plans and budget estimates for consideration by the provincial Governor s office for submission as part of its departmental annual work plan and budget. Work plans and budgets in respect of approved subprojects will be forwarded to the national PMO for aggregation into an annual work plan and budget for the overall Program and be presented to ADB for approval. Work plans will be prepared annually in accordance with local requirements at a time coinciding with departmental annual budget preparation. 2. Accounting, Financial Reporting and Audit Arrangements 68. The PMO will maintain separate program accounts and records by funding source for all expenditures incurred on the Program. Program accounts will follow international accounting principles and practices. 69. The financing units established in PMO and each PIOs involved in program implementation will maintain records and accounts that identify goods and services from 1 Ministry of Economy and Finance (MEF) Manual on SOP for Externally Financed Project/Programs in Cambodia (August 2005). Financial Management Manual for Externally Financed Project/Programs in Cambodia (September 2005); MEF. Procurement Manual for Externally Financed Project/Programs in Cambodia, Phnom Penh (in two volumes), (September 2005) MEF. The Government s SOP are being updated during 2011 in consultation with development partners, including ADB.

31 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 26 loan proceeds and financing sources, expenditures incurred, and use of government counterpart funds. These accounts will be established and maintained in conformity to the Government's accounting laws and regulations and in accordance with sound accounting principles and standards acceptable to ADB. The PMO will be responsible for (i) preparing disbursement projections, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) collecting and verifying withdrawal applications from the PIO, and preparing and sending withdrawal applications to ADB. 70. The MEF will cause the detailed consolidated program accounts to be audited in accordance with International Standards on Auditing by an auditor acceptable to ADB. The audited accounts will be submitted in the English language to ADB within 6 months of the end of the fiscal year by the executing agency. The annual audit report will include a separate audit opinion on the use of the imprest accounts, Second Generation Imprest Accounts, and the Statement of Expenditure procedures. Compliance with financial reporting and auditing requirements will be monitored by ADB and MEF review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor. ADB shall impose the following measures should the PMO and or PIO fail to submit within the due date. E. Procurement 1. Procurement Plan 71. All procurement of goods and works to be financed by the ADB loan as well as those to be financed by the GAFSP and PPCR loans and grants to be administered by ADB will be carried out in accordance with ADB s Procurement Guidelines. NCB procedures will be followed for contracts valued at less than $2,500,000 but more than $100,000 for civil works and less than $500,000 but more than $100,000 for goods. For NCB procedures, the provisions of the Government s Standard Operational Procedures (SOPs) as agreed with ADB 2 will be followed. In case of inconsistency between ADB procedures and the SOP, ADB procedures will be applied. The proceeds of the Loans will be disbursed in line with ADB's Loan Disbursement Handbook (January 2007, as amended from time to time). 72. Procurement of civil works packages and goods and services following NCB procedures will be carried out by the PMO. Goods and civil works packages valued at up to $100,000 may be procured by the respective PIO following shopping procedures acceptable to ADB. The first NCB civil works contract will be subject to ADB prior approval. Subsequent NCB contracts of similar nature will be subject to the ADB post approval. Prior and post review thresholds are included in the procurement plan for the overall Program as part of the PAM presented in RRP web-linked documents Appendix II Three main contracts will be required for the implementation of the Subproject: (i) a consulting services contract for the preparation of detailed engineering designs and for the subsequent bidding documents together with the supervision of construction of works, (ii) the contract for the construction of works, and (iii) the contracts for the associated activities to maximize the benefit from the subproject investment. Table SA IV.4 below presents the likely contracts, the method of procurement, and when procurement is likely to take place. Procurement will be carried out in accordance with ADB requirements as specified in the PAM and those of RGC. 2 Ministry of Economy and Finance (MEF) Manual on SOP for Externally Financed Project/Programs in Cambodia (August 2005). Financial Management Manual for Externally Financed Project/Programs in Cambodia (September 2005); MEF. Procurement Manual for Externally Financed Project/Programs in Cambodia, Phnom Penh (in two volumes), (September 2005) MEF. The Government s SOP are being updated during 2011 in consultation with development partners, including ADB.

32 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 27 General Description Detailed design, bid document preparation, and construction supervision - buildings Table SA IV.4: Procurement Schedule Contract Value ($) Procurement / Recruitment Method Comments $90,000 CQS To be recruited by PMO Civil works construction $870,000 NCB To be procured by MLMUPC/PMO Equipment supply and installation $2,600,000 ICB To be procured by MLMUPC/PMO using ICB Extension and cooperative Support Services procedures $30,000 Force Account Performance based contract with PDA issued by the PIO/Governor s Office Land leveling contract $100,000 Shopping To be procured by PIO in Governor s Office Impact assessment survey $5,000 Shopping PIO/Governor s Office to procure 2. Contract Management 74. National consultants will be recruited by the PMO to prepare the detailed engineering designs, bidding documents, and supervise construction of the works program. The PIC will be recruited by the PMO and assist MEF, the PMO and the PIO in Prey Veng in the management of the various contracts for the development of the Subproject. Because of the need to incorporate social and environmental considerations in the feasibility study, the program implementation consultants will provide technical support to the national consultants in the preparation of these documents. However, as field work is required to collect and analyze technical and social information, the PIOs in conjunction with the concerned district offices who will also assist in the preparation of the feasibility studies. The safeguards officers appointed to the PIO will be instrumental in developing the social and environmental safeguard documents as well as in monitoring their adoption leading up to, and during implementation. Ultimate responsibility for performance under the detailed design contract will remain with the PMO. 81. Similarly, the works contract and equipment supply and installation contracts will be managed by the PMO on behalf of the Government. Responsibility for the monitoring of construction contracts will be passed to PIO and also to District Coordination Offices who will be closer to the contractors on site. Routine reporting of physical progress will be completed by District Coordination Offices and PIO and subsequently forwarded to PMO, RGC and ADB to monitor implementation progress. PIOs will also be required to monitor the performance of the activities under the service contracts for the associated investments. PIOs will ensure that District Coordination Office staff monitor the associated activities, the zoning and leveling of land in the area of influence, and the delivery of technical support services by PDA extension officers along with other forms of support outlined in Annex 4. VI. SUBPROJECT OUTCOME AND IMPACTS A. Subproject Outcome and Impacts 75. The impact from the investment will be a contribution to the provision of export quality rice from Cambodia by providing a safety-net to the currently over-extended grain handling infrastructure. The provision of storage facilities will provide a buffer for holding stock

33 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 28 awaiting processing in Cambodia rather than having the product exported as wet paddy to neighboring countries. This intervention will effectively take pressure off farmers to sell to the first buyer that comes along and will introduce an element of competition amongst the traditional wet paddy buyers. The impact will be expressed through changes in household level benefits of those farming in the area of influence who will receive incremental household incomes. The impact to the local economy will be for employment opportunities to be provided through increased commercial activity in the Province whilst adding to the national GDP with increased value added on a significant quantity of rice processed domestically. 76. The land leveling and support provided to cooperatives in this location will contribute to improved water use efficiency. The use of output based service contracts will add an element of accountability to the operations of the provincial and district offices of PDA and PDLMUPC as they benefit from staff capacity development and the additional funds to carry out this mandated work. The facilitation of increased employment opportunities on farm will provide opportunities for labor to return to the household farm where they can gain meaningful employment at reasonable wages halting the steady drain of labor from rural areas that has been observed country-wide. 1. Performance Indicators 77. Performance indicators against which subproject success will be measured include criteria that reflect agricultural productivity on the area of influence and improved market linkages by way of input supply and contract supply arrangements for produce grown in this area. For the former, critical indicators will include recession paddy yields, early wet season paddy yields and the annual cropping intensity compared with the total district figures prior to the development of the Subproject. The investment impact will also be measured by the incremental change to household incomes amongst beneficiaries compared to those outside the area of influence. The general levels of poverty will also be used as an indicator as will the distribution of same, particularly amongst those identified as vulnerable in the baseline socio-economic survey. Indicators to identify the development of market linkages will include the number of delivery contracts executed with the facility, the extent of consequent change in land use/cropping systems over time that reflects the changing demand for rice growing land dependent upon the different agro-ecological zones. Perhaps the biggest impact will be on the reduced quantity of wet paddy that is exported from the Province and this is a statistic that will be difficult to monitor given the porous nature of the border with Viet Nam. Survey work will be needed to establish the base case scenario. 2. Evaluation Arrangements 78. A base line survey was undertaken in May 2012 in which technical and socioeconomic indicators were measured on a representative sample of households including those of different poverty status and, where possible, of the ethnic origin. Upon subproject completion, a post investment survey will be undertaken to see how beneficiaries perceive the impact from the investment. Subsequently, annual surveys will be undertaken to measure the overall impact in the broadest sense of the word with information being collected by poverty status and by gender and vulnerable group. In this way, it will be possible to measure the extent and depth of the impact across a wide range of potential beneficiaries. The subproject completion report should report the impacts achieved from the investments and post project impact studies at a later stage can test the sustainability of these impacts.

34

35 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 30 project life. None of these risk variables would appear to pose a serious threat to the economic viability of the Subproject. The financial viability, however, is susceptible to negative changes in the price of rice, a decrease in incremental prices due to storage and running the facility for only one (rather than three) seasons a year. 83. The real challenges to the Subproject s viability, though, are likely to be institutional. The Government, through the Program, will build and own the facility but it is expected that a private business entity will lease and run the plant. If the lessee, because of this arrangement, is unable to make decisions and compete in the independent manner of other businesses, the enterprise is likely to fail. Also, because such a drying facility is new to Cambodia (where mechanical drying has not previously been separated from the activities of the rice mills), the establishment of a price reflecting the higher quality of the facility s output may face some difficulties. If this marketing problem can be resolved and if a good leasing arrangement can be instituted, however, this investment can begin to fill an important gap that has limited Cambodia s quest to increase its production of export-quality rice. C. Social Impact Assessment 84. The impact from the investment will be evident in a number of ways at household level, for those involved in logistics of progressing paddy along the rice value chain, and for the economy as a whole. For those households farming within the area of influence of the drying and storage facility, the impact will be seen primarily from increased competition amongst the traders that will mean greater bargaining power of the farmers in negotiating prices either with casual buyers or under contractual supply arrangements. The impact of this is likely to be increased farm gate prices as farmers will be under less pressure to get rid of their paddy at the first available offer and household incomes should increase. This will have a strong empowerment impact on participating farmers. 85. For those operating along the rice value chain, the option of drying locally and storing will add an element of time to their commercial activities and there will be less pressure on the existing infrastructure to move product, sometimes at depressed prices. The situation where border closures disrupt the movement of paddy from farm gate to millers and paddy exporters will receive temporary respite adding to the efficiencies of operations along the marketing chain with associated reduced costs. The increased domestic commercial activity will also provide a boost for employment and provide an alternative to the rural urban drift for employment that has been happening for some time with its associated social issues. 86. For the rice sector and economy as a whole, the impact will be for increased quantities of higher quality paddy being made available for domestic processing where the value added content can be captured by the Cambodian economy. Whilst such a statement assumes that the domestic processing industry will remain competitive, there is adequate opportunity for this to be realized with the recent investment in modern processing equipment and the adoption of lower cost power generation options that also contribute to a reduction of greenhouse gases. The incremental household incomes likely to be realized will contribute to the overall thrust of reducing poverty and create further investment opportunity in rural areas. D. Environmental Impact Assessment 87. The initial environmental examination carried out for this subproject has found that the subproject will not cause significant negative environmental impacts. Potential negative impacts relate mainly to the construction phase and can be managed and brought to acceptable levels through the implementation of the Environmental Management Plan (EMP). No further environmental assessment is therefore required. The EMP has clear stipulations for feasible and practicable mitigation measures to be undertaken during

36 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Facility 31 construction, substantially reducing or eliminating environmental concerns. It also details mitigation measures required during operation, which are to be implemented primarily by the plant operators. It is recommended that the Environmental Management Plan is included in contract documentation for works contracts. VII. CRITICAL RISKS 88. The risk associated with the subproject relates more to the operation of the facility rather than the feasibility of its establishment. The technology is widely adopted in neighboring Thailand and other rice exporting countries of Southeast Asia and it is known to be an effective means of dealing the issue of moisture in paddy and the storage dried grain. The financial analysis would suggest that the risk of the PPP in purely commercial terms is extremely low. This is almost guaranteed by the fact that the price of paddy increased by up to 30% after the main oversupply period at and following harvest. If the facility captured this benefit alone, it would prove highly attractive. With the added quality improvement from the facility, its financial success is considered highly likely. 89. There is however a risk with this investment and it relates to the identification of a commercial plant operator. Not only will this require significant and modern management skills requiring financial management control stock control and the like, it will also need to have the experience of a trader familiar with the industry and its idiosyncrasies. The appointment of the operator cannot be left to the preference of a few influential individuals but must be identified in a truly competitive manner where objectivity will take a leading position in the process. Cambodia is widely known for the appointment of positions in order to win favor or to seek commercial advantage form the placement. This must be avoided at all cost and a truly objecting evaluation process undertaken to identify a suitably qualified and experienced operator. Without the presence of a commercially savvy operator, the success of the Subproject will come into question. 90. Being a pilot initiative to demonstrate the potential for such an investment, it is important to mitigate the risk of too hasty an appointment that will invariably result in failure of the concept - for the wrong reason. Every care should be taken in the appointment and negotiations with the PPP operator.

37 ANNEX 1 DESIGN AND MONITORING FRAMEWORK September, 2012

38 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 1 DESIGN AND MONITORING FRAMEWORK Design Summary Impact Increased net incomes of paddy farmers within the subproject area of influence by having their surplus paddy sold through the drying and storage facility. Performance Targets and Indicators with Baselines Average farming household incomes increase from rice production to increase by KR0.7 million by 2017 Exports of wet, unprocessed paddy to Viet Nam and Thailand declines by 60,000 tons a year from Prey Veng by 2017 Data Sources/ Reporting Mechanisms Baseline and subproject completion surveys Records of exports and trader surveys to be completed by PIO Assumptions and Risks Assumption Facility is operated under a PPP to assure sustainability and commercial viability Risk Farmer groups do not commit to growing single varieties making the bulking of paddy impossible Outcome Increased production of high quality, single variety paddy that is processed domestically for sale on domestic and international markets. Output 1: Construction of a paddy drying and storage complex completed and operated under a PPP arrangement with the Province. Incremental production of single variety, quality paddy (by 1,000 tons per annum) by 2017 Incremental commercial sales of dried (14% moisture) paddy reaches 30,000 tons per annum that is sold later than 3 months after harvest by 2017 Facility for drying 500 tons of paddy per day established Facilities for storing approximately 8,000 tons of paddy established and operated under a PPP Baseline survey to identify variety mix at commencement Commune paddy production statistics Records of paddy sales recorded by PPP operative PIO progress and monitoring reports produced quarterly Assumption Farmers agree to buy higher cost quality seed material Risk Large number of small scale farmers prefer traditional varieties for subsistence requirements Assumption An appropriate site can be identified and secured by the provincial authorities Output 2: Associated initiatives to enhance the impact executed. Output 3: Efficient Subproject Management and Implementation. Paddy supply contracts developed with farmers owning about 1,000 ha of surrounding farmland by 2017 Cooperative development and technical extension training provided by PDA by 2015 Land leveling completed on 100 ha by 2016 Insurance pilot tested amongst cooperating farmers on about 1,000 ha of surrounding farmland by 2017 Bonded warehousing established on premises to facilitate access to group credit arrangements by 2017 Provincial implementation advisor appointed within 3 months of loan effectiveness for the overall program Provincial performance monitoring system disaggregated by gender designed and operational within 3 months of effectiveness PIO progress and monitoring reports produced quarterly Annual progress reports of PPP operator to the province Credit applications and disbursement by the PPP operator Notice to proceed issued by EA PIO progress and monitoring quarterly reports Assumption Provincial agencies agree to performance-based contracts to deliver the services Financial institutions are supportive of developing credit packages Risk The limited available precipitation data makes it impossible to establish climate related risk Assumption Qualified staff are appointed to implement SDP initiatives and investment subprojects

39 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 2 Design Summary Performance Targets and Indicators with Baselines Detailed design and supervision contract awarded within 3 months of loan effectiveness Construction contract awarded within 12 months of loan effectiveness Subproject assigned to provincial asset registry and PPP contract for its operation executed Data Sources/ Reporting Mechanisms PIO registry of contract awards and contract manage. reports As above PIO progress and monitoring quarterly reports Assumptions and Risks Risks Provincial capacity is insufficient The availability of qualified staff is limited Activities with Milestones Output 1: Construction of a paddy drying and storage complex completed and operated under a PPP arrangement with the Province. 1.1 Prepare detailed engineering designs by Q Identify an appropriate location and purchase the land by Q Identify PPP partner and negotiate terms of cooperation by Q Prepare ICB bid documents for construction by Q Evaluate and award construction contracts by Q Monitor works construction between Q and Q Monitor impact of rehabilitation annually to program completion 1.8 Conduct socio-economic impact assessment by Q Output 2: Associated initiatives to enhance the impact executed Issue cooperative development contract to PDA by Q Issue technical extension service contract to PDA by Q Issue land leveling contracts to local contractors by Q Issue insurance literature for pilot by Q Provide support for credit subcontracts with financial institutions by Q Output 3: Efficient Program Management and Implementation Establish and operationalize PMO and PIOs to facilitate implementation 3 months after effectiveness 3.2. Appoint and mobilize implementation consultants to support PMO and PIOs within 6 months of effectiveness 3.3. Design and operate SDP s gender disaggregated program performance monitoring system within 12 months of appointment of LICs 3.4. Train PMO and PIO staff in procurement and disbursement procedures required by ADB and other financiers 3.5. Carry out procurement associated with subproject 3.6. Conduct impact monitoring survey by independent socioeconomic survey entity Inputs ADB Loan $3,242,000 Item Amount ($ 000s) Subproject buildings 1,222.2 Subproject drying equipment 1,670.0 Contingencies Subproject implementation and management PPCR Loan $550,000 Item Enhanced water efficiency - Land leveling Drying equipment n/a Amount ($ 000s) PPCR Grant $40,000 Item Amount ($ 000s) Crop insurance The Government $264,000 Item Amount ($ 000s) Land purchase Taxes and duties Item Amount ($ 000s) ADB = Asian Development Bank, EA = executing agency, ICB = International Competitive Bidding, LIC = Loan Implementation Consultants, PDA = Provincial Department of Agriculture, PMO = Program Management Office, PIO = Provincial Implementation Office, PPCR = Pilot Project for Climate Resilience, PPP = public private partnership, SDP = Climate Resilient Rice Commercialization Sector Development Program. 2

40 ANNEX 2 SOCIO-ECONOMIC ANALYSIS September, 2012

41 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject ii TABLE OF CONTENTS A. Introduction 1 B. Community Demographics 1 C. Commune and Village Land Areas 2 D. Wealth Indicators 2 E. Commune and Village Agriculture Data 3 F. Credit and Finance 8 G. Community Associations and Management Bodies 9 H. Gender Task Analysis 10 I. Migration 13 J. Domestic Violence 14 LIST OF TABLES Table SA IV-A2.1: Commune and Village Coverage for Socio-economic Survey... 1 Table SA IV-A2.2: Demographic Statistics of Sampled Communes... 1 Table SA IV-A2.3: Commune Level Agricultural Land Statistics... 2 Table SA IV-A2.4: Household Level Summary Agricultural Statistics by Wealth Category... 3 Table SA IV-A2.5: Rice Dependency and Agricultural Mechanization by Village... 3 Table SA IV-A2.6: Extent of Mechanization and Product Marketing... 4 Table SA IV-A2.7: Household Participation in Extension Services by Wealth Category... 5 Table SA IV-A2.8: Paddy Statistics by Wealth Category... 5 Table SA IV-A2.9: Paddy Statistics by Wealth Category... 5 Table SA IV-A2.10: Income from and Utilization of Paddy by Wealth Category... 6 Table SA IV-A2.11: Paddy Statistics by Wealth Category... 6 Table SA IV-A2.12: Machinery Utilization by Household and Village... 7 Table SA IV-A2.13: Reasons for Non-use of Machinery by Wealth Category... 7 Table SA IV-A2.14: Where Paddy is Sold... 8 Table SA Vi-A2.15: Major Sources of Livelihoods... 8 Table SA IV-A2.16: Households Accessing Credit and Credit Conditions... 9 Table SA IV-A2.17: Existence and Effectiveness of Community Organizations... 9 Table SA IV-A2.18: Numbers of Members of Existing Groups Table SA IV-A2.19: Attitudes to Group Membership and Performance Table SA IV-A2.20: Labor Inputs for Dry Season Activities (Gender Disaggregated) Table SA IV-A2.21: Labor Inputs for Wet Season Activities (Gender Disaggregated) Table SA IV-A2.22: Labor Allocation to Rice Activities by Wealth Category Table SA IV-A2.23: Existing and Preferred Alternative Employment Options Table SA IV-A2.24: Alternative Activities by Wealth Category Table SA IV-A2.25: Proportion of People Migrating for Employment Table SA IV-A2.26: Incidence of Domestic Violence... 14

42 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 1 A. Introduction ANNEX 2: SOCIO-ECONOMIC ANALYSIS 1. A participatory socio-economic survey was conducted in Svay Antor District of Prey Veng in relation to the Paddy Drying and Storage Subproject focusing on those areas likely to be impacted as a result of the investment. The survey was conducted in the communes and villages detailed In Table SA IV-A2.1. Table SA IV-A2.1: Commune and Village Coverage for Socio-economic Survey Districts Communes Villages Surveyed HHs (No.) Total HHs (No.) Svay Antor Damrei Puon Boeung Veng O Kandol Cheung Prey Rung Ankor Tret Trobek Lech Trobek Keurt 9 65 Kork Chrey Menorng Krom Pro Hea Prey Tamok B. Community Demographics 2. The vital statistics provided by the commune and village leaders are presented in Table SA IV-A2.2. Table SA IV-A2.2: Demographic Statistics of Sampled Communes Province: Prey Veng Commune Data Input Sheet No. Villages Commune name: Damrei pourn Okandoulkhan gcheng village Preyroung village Beong Veng village Communes Commune name: Angkor tret Kork village T robek lech T robek keut Village menong krom Village Commune name : Chrey Total Households Total People Prohear village Prektamok village % Males 48.34% 44.73% 50.14% 47.10% 47.31% 46.83% 46.78% 51.86% 49.20% % Females % 49.86% % 52.69% 53.17% 53.22% 48.14% 50.80% Ethnic Minorities (Y/N)? 0% 0% 0% 0% 0% 0% 0% 0% 0% % Single Women Headed HHs 29.93% 32.84% 24.66% 2.59% 0.50% 10.77% 10.20% 22.84% 15.00% % Landless HHs 1.46% 2.91% 1.33% 0.84% 1% 0% 4.76% 5.07% 1.75% % Poor HHs? 18.24% 1.60% 2.13% 3.36% 3.26% 3.07% 6.12% 21.32% 18.18% % No. labor/elderly/chronic ill HHs 2.92% 0.72% 0.14% 0.63% 0.30% 7.70% 2.72% 2.03% 1.40% Ave Distance to Clinic (km) 5km 3km in the Village 14km 3km o.5km in the village in the village 2.5km Average distance to primary school (km) in the village in the village 0.5km 2.3km 1.5km 1km 2km in the village in the village Average distance to High School (km) 1.5km 5km 1.7km 2.5km 4km 5km 3km 1km 7.5km No. Ethnic groups in commune main ethnicity of commune Khmer khmer khmer khmer khmer khmer khmer khmer khmer 3. No ethnic minority or indigenous peoples were reported to reside in the target areas. Several villages do have significantly higher rates of women as single headed households with two villages reporting a rate of 30%. The incidence of poverty is generally less than 5%

43 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 2 although one village reported a rate of 21% and two villages reported 18%. Landlessness followed a similar pattern with two villages reporting around 5% of households without land. C. Commune and Village Land Areas 4. Two of the 9 villages did not have irrigated paddy and most families farm from 1-2 ha. The villages have year-round vehicular access but are not connected to the electricity grid. Water and sanitation facilities are found in almost 100% of villages suggesting the area is relatively better-off than other rural Khmer farming villages. Most households have been issued with title to their production land. (Table SA IV-A2.3). Table SA IV-A2.3: Commune Level Agricultural Land Statistics Province: Prey Veng Commune Data Input Sheet Commune name: Damrei pourn Communes Commune name: Angkor tret Commune name : Chrey Irrigated paddy (ha)? no 10ha 210ha 220ha 0ha 6ha 10ha 20ha 5ha Rainfed paddy (ha) 194ha 213ha 210ha 456ha 282ha 129ha 190ha 180ha 280ha Upland field (ha) no no no no no no no no no Unused Agri land (ha) no 61a no no no no no no no Village Forest (ha) no no no no no no no no no HHs with production land of less than 0.5 ha 2 family 20 family 3 family 80 family 65 family 8 family 15 family 18 family 52 family HHs with production land of between 0.5 to 1 ha 40 family 50 family 13 family 130 family 134 family 15 family 65 family 50family 24family HHs with production land of between 1 to 2 ha 10 family 40 family 132 family 100 family 91 family 40 family 58family 115family 200family HHs with production land of over 2 ha 20 family 48 family 62 family 60 family 60 family 26 family 21family 40family 15family All year road access (Y/N) yes yes yes yes yes yes yes yes yes % of electrified villages? 0% 0% 0% 0% 0% 0% 0% 0% 0% % HH with WAT SAN 100% 100% 95% 0% 100% 100% 100% 90% 80% No. villages with internal land conflicts? 1 no no no no no 1 1 no No. villages with external land conflicts 2 no no no no no no no no No. villages lost land? no no no no no no % villages with agri land titling?? 100% 100% 100% 99% 100% 99.90% 100% 100% 100% D. Wealth Indicators 5. Information on community wealth assessment indicated that perceptions are based on: (i) having more than 3 ha of productive land, (ii) having large concrete houses, (iii) having a motor vehicle, and (iv) having a hand tractor or small scale rice mill. Poor households will have temporary hut like houses with leaf or thatched roof. If they own land, it is usually less than 0.5 ha. These families lack production equipment and basic domestic utensils. Household level data provides a more specific view of production land and household demographics as indicated in Table SA IV-A2.4 below. 6. Wealthier households have more labor resources, and more land (including irrigated paddy areas) that is reflected in the wealth indicators. Land rental was widespread at around 7% for all groups regardless of wealth category.

44 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 3 Table SA IV-A2.4: Household Level Summary Agricultural Statistics by Wealth Category Household Level Province Preyveng Well Off Medium Poor Average % male headed HHs % female headed HHs Average number adults are in the Household Average number children of school age Average number children under school age Average number of people in the household do farming work Average rainfed paddy land owned (ha)? Average irrigated paddy land owned (ha)? Average upland owned (ha) % HHs rent land to cultivate crops? Average area rented (ha) Average rent per ha a season? USD$/ha E. Commune and Village Agriculture Data 7. Wet season paddy yields average just over 3 t/ha while dry season yields average 4 t/ha. Most households use hand tractors to plough during land preparation whilst harvesting is virtually fully mechanized with contracted combine harvesters. Rice production is the main activity throughout all surveyed villages although complimented by poultry and vegetable production as presented in Table SA IV-A2.5. Table SA IV-A2.5: Rice Dependency and Agricultural Mechanization by Village Province: Prey Veng Commune Data Input Sheet Wet season rice area (ha) 194ha 123 ha 210 ha 456ha 282ha 135ha 190ha 180ha 280ha Average Wet season rice yield (t/ha) 3 ton 4 tones 3 tones 3 tones 3 tones 3 tones 3 tones 3 tones 2.5tones Dry Season rice Area (ha) 0 ha 10 ha 40 ha 12 ha 0ha 3.5 tones 10ha 20ha 5ha Average dry season rice yield (t/ha) 0 tones 4 tones 4.5 tones 4 tones 0ha 3.5 tones 4tones 4tones 4tone % of HHs using hand tractor to plough 99% 80% 95% 60% 40% 60% 60% 95% 70% % of HHs using large tractor to plough 0% 0% 0% 0% 0% 0% 0% 0% 30% % HHs using Combine harvester 98% 80% 100% 30% 90% 100% 90% 100% 98% T otal dry season rice production last year (tons) T otal wet season rice production last year (tons) Ave distance to nearest mill (km) T hree main sources of agri income 0 tones 40 tones 180 tones 48 tones 0ha 21 tones 40tones 80tones 20tones 582 tons 639 tones 630 tones 1140 tones 700 tones 405 tones 570tones 540tones 700tones in the village in the village in the Village in the village 4km in the village in the village in the village in the village 1 Rice Rice Rice Rice Rice Rice Rice Rice Rice 2 poultry/pig Vegetable poultry/pig poultry/pig poultry/pig Vegetable poultry/pig watermelon watermelon 3 vegetable pet animal vegetable vegetable pet animal palm sugar pet animal cucumber No. FWUC members no no no no no no no no no - male female No. FWUC meetings last year?? Irrigation service fee/ha/year % of ISF collected last year? 0% 0% 0% 0% 0% 0% 0% 0% 0 % of FWUC committee are female 0% 0% 0% 0% 0% 0% 0% 0% 0 % villages with Farmer Co - Operative? 0% 0% 0% 0% 0% 0% 100% no 0% Ave. No. Farmer Co-Op meetings last year No. Farmer Co-Op members male female % of Farmer Co-Op committee members are female? Commune name: Damrei pourn Communes Commune name: Angkor tret Commune name : Chrey 8. Small scale local rice mills are available in most villages to process paddy held back for household consumption. Households with mills usually buy paddy from poor households who sell in smaller quantities in view of their smaller production areas. The better-off households often act as money lenders within the community. 0% 0% 0% 0% 0% 0% 3% % Farmer Farmer Village Village

45 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 4 Information obtained from the mixed farmer group shows that rice is the main crop followed by melons and vegetables. Agricultural produce is bought by traders visiting the village while small quantities of vegetables are sold at local village, commune and district markets. 9. Most farmers use mechanized ploughing and harvesting and all agree that they have attained productivity gains apart from one village where farmers considered costs too high. Farmers in this area do not dry their rice prior to sale; it is sold immediately to traders as wet paddy often at levels of 30% moisture. Farmers agreed that they could get KR125 /kg more by drying their paddy. Around 50% agreed to pay for drying and storage services although 100% agreed that they would pay for a better marketing system. Most agreed to accepting progressive payments if a higher price was guaranteed. There are NGOs and village savings groups in several of the surveyed villages (Table SA IV-A2.6). 10. Farmers were also asked to consider the usefulness of the agricultural extension service. Farmers in eight villages expressed a high level of satisfaction with over 90% having this opinion. In the other surveyed village, only 20% of the group considered extension services to be useful (Table SA IV-A2.7). Households were also asked their views of the government extension service, responses reported in Table SA IV-A2.7. Table SA IV-A2.6: Extent of Mechanization and Product Marketing Three main crops Commune Damreipourn Angkortret Chrey Village Okandolkhang cheng Preyroung Beong Veng Trobeklech Trobekkeut Kok Prekta mok menong krom Prohear -1 Rice Rice Rice Rice Rice Rice Rice Rice Rice -2 no no watermelon watermelon no Cabbages no no cucumber -3 no no no cucumber no no no no no Average area Crop ha 160ha 215ha 108ha 145ha 415ha 298ha 200ha 200ha Crop ha 8h 0 2ha 0 0 5ha Crop ha Main method of sale Crop 1 Crop 2 Travelling merchant Travelling merchant Travelling merchant no Travelling merchant Travelling merchant Travelling merchant Travelling merchant Travelling merchant Travelling merchant Travelling merchant Travelling merchant Travelling merchant no at house no no at house Crop 3 no no no Market no no no no no What % of farmers are satisfied with the Extension service 100% 20% 90% 98% 90% 100% 98% 100% 100% What % of farmers use mechanized ploughing 70% 90% 100% 70% 80% 70% 99% 70% 80% What % of farmers use mechanized harvesting 80% 98% 98% 98% 95% 80% 90% 90% 95% What % of farmers think that they have productivity gains from mechanization 0% because: exspensive 99% 90% 80% 93% 90% 98% 98% 100% What % of the group dry their rice before selling? 10% 2% 3% 10% 5% 0% 1% 5% 0% What is the price difference between selling rice you have dried and rice you have not dried (Riel per kilo) If drying and storage facilities were available, % of group would pay for: (300Riel) 200Riel 200Riel 100Riel 100Riel 200Riel 200Riel 200Riel 100Riel 100% 0% 100% 0% 80% 0% 100% 100% 0% Drying services?? 100% 100% 100% 0% no 0% 100% 100% 0% Silo storage services 100% 100% 0% 0% no 0% 100% 100% 0% Marketing services? 100% 90% 100% 100% 100% 100% 100% 100% 100% Transporting your rice to market, what % arrange transport themselves?? With technical guidance and support, what % of the group would be interested in growing certified seed What % of the group would agree to progressive payments for their rice if it meant getting a higher price 0% 5% 2% 5% 2% 0% 0% 1% 0% 100% 100% 93% 90% 90% 100% 80% 70% 100% 90% 99% 100% To reduce the debt Ave number of other associations in village CEDAC 0 Light of Hope 3 NGO 3 NGO 90% 100% 100% 100% 100% 1 MAFF group 3 NGOs and association Input group Members - male Members - female Savings group

46 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 5 Table SA IV-A2.7: Household Participation in Extension Services by Wealth Category Well Off HHs Medium HHs Poor HHs Ave HH Agri Extension service useful (Y/N) % HHs said Yes How many extension meetings did a HH attend last year??? Ave per HH Is anyone in HH a member of any other group (Y/N)??? At household level, around 79% of households thought the extension service was useful but as can be seen the average visit or extension event participated in by members of the household is one time per year - hardly adequate. It was not possible to evaluate the quality of the technical advice provided by the extension workers to farmers. 12. The household interviews report main crops of rice and fruit and some vegetable. Well off and some medium households grow from ha of dry season paddy whereas for poor households with access to supplementary water, the average plot size is 0.4 ha. Well-off households would appear to benefit from higher wet season yields. Table SA IV-A2.8: Paddy Statistics by Wealth Category Well Off HHs Medium HHs Poor HHs Average Main wet season crop 1 Rice rice Rice 2 Fruit/cane Fruit Average area of wet season crop 1 Ave WS rice ha/hh Ave area of second WS crop Average yield per ha of wet season crop 1 Ave rice yield per HH. Kgs/HH/ha Ave yield second WS crop kgs/ha/hh Main dry season crop 1 DS Rice DS Rice DS Rice Average area of dry season crop ha/hh Average yield per ha of dry season crop?? kg/hh The main varieties planted in wet and dry season included both improved and local traditional varieties, the latter preferred because of their taste rather than yield. The IR-504 variety for example is a higher yielding but is usually sold to Vietnamese traders as Khmer do not like its texture, preferring local varieties for home consumption (Table SA IV-A2.9). Table SA IV-A2.9: Paddy Statistics by Wealth Category Decription Mlis 504 Mong Mang Krosangteap Phkar Rumduol Senpidor Somaly Neang Khon Total Poor HH Medium HH Well off HH Wet Dry Wet Dry Wet Dry % Wet %Dry

47 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject In regards to crop production and marketing, well-off households sold around 9 ton of wet season rice, medium families around 4 ton, and poor households just over 1 ton. Prices received did not vary greatly although poorer households reported receiving slightly lower prices. The well-off averaged sales of around 6 ton of dry season rice whilst medium families sold much less at around 1.5 ton. It also appears that medium families were more likely to grow vegetables in the dry season whilst poor families do not have access to water in the dry and most are not cropping. Interestingly the wet season rice crop realized a higher selling price for paddy than did the dry season crop (Table SA VI-A2.10). Table SA IV-A2.10: Income from and Utilization of Paddy by Wealth Category Main crop sales Well Off HHs Medium HHs Poor HHs Average Crop 1 (Name/ Season) Rice Rice Rice Crop 1 Ave Quantity sold kgs/hh Crop 1Ave Price per kilo CRS/kg Crop 1 Ave Total income per HH USD$ Crop 1 - Point of sale Crop 1 - Ave quantity consumed in HH / kgs/hh Second crop sales 2nd rice DS Rice 0.00 Crop 2 (Name/ Season) % HHs with Crop 2 Quantity sold? Crop 2 Price per kilo Crop 2 Total income? Crop 2 - Point of sale Crop 2 - quantity consumed in HH Third crop sales? 0.00 Veges Crop 3 (Name/ Season) % HHs with Crop 3 Quantity sold Crop 3 Price per kilo Crop 3 Total income Crop 3 - Point of sale? Crop 3 - quantity consumed in HH?? Productivity is affected by the level and type of fertilizer application. All households use fertilizer of some sort while the application rate varied between 140 kg/ha and 250 kg/ha. As indicated above from commune figures, interviewed household mechanization is becoming more common than animal drawn tillage. Hand tractors are used in about 75% of the households for land preparation whereas the remaining 25% tend to rely on buffaloes that are more efficient in terms of dealing with small discrete areas - usually associated with poorer households (Table SA IV-A2.11). Table SA IV-A2.11: Paddy Statistics by Wealth Category Well Off HHs Medium HHs Poor HHs Average % of HHs use fertilizer Average number kilos fertilizer per hectare % HHs use hand tractor to plow % HHs use buffalo to plow % HHs use large tractor to plow? % HHs that would prefer to use large tractor to plow? % HHs that harvest by hand % HHs that harvest by combine harvester? % of HHs that would prefer to use combine harvester?????

48 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject The well-off households use almost twice as much fertilizer as the poor. and most households are using a hand tractor to plow. Use a large tractor is around 8.5% of all households. Some 81% of households are using a combine harvester and over 915 would prefer to use mechanized harvesting. Over 60% of poor households still harvest by hand, and some hand harvesting is also done by the well-off and medium where machines cannot access. The women s focal group provided insights into the use of mechanization as per Table SA IV-A2.12. Table SA IV-A2.12: Machinery Utilization by Household and Village Thnal Cheat Samrong Chaktolouk Khdam Har Prasat Chhuk Khsach Boeung Cheung Boeung Kandal Boeung Tboung What % of the group's HHs hire a tractor for ploughing 20.00% 18.00% 22.00% 23.00% 35.00% 3.00% 30.00% 20.00% 12.00% What % of the group's HHs hire a combine harvester for harvesting 30.00% 28.00% 32.00% 0.00% 10.00% 0.00% 0.00% 0.00% 0.00% Main reason for not hiring tractor Has own hand In raining season harvestor busy Has own cow for Has own cow for Has own cow for not money to hire hiring price is has own cow for tractor the water is deep with other land, plowing plowing plowing and no hand tractor or expensive plowing and not enough mey can't call to harvest money for hire tractor tractor % of group prefer the HH to hire a tractor operator? Yes yes yes yes yes yes yes yes yes Main reason for not using combine harvester has straw for cow eat not money difficult to ask them come to harvest not money to hire Just known harvestor Just known harvestor can't harvest because rainy season rice is too high never know in village there is no harvestor % of group prefer the HH to hire a harvester operator?? Many households still use cattle for ploughing as the cost of hiring a large tractor is too expensive. Hiring combine harvesters appears to be more related to availability although some farmers thought it too expensive. Most households would prefer to use mechanized services in view of the time savings and also to reduce the workload of households. Reasons for not using mechanized services on surveyed farm households are presented in Table SA IV-A2.13. Table SA IV-A2.13: Reasons for Non-use of Machinery by Wealth Category Description Household classification Poor HH Medium HH Well off % Poor HH % Medium HH % Well off Small paddy land Difficult to harvest No money Rice Lodging Waste money Need straw for livestock Difficult to transport Money saving Machine is not available Expensive Enough labor Yield lost machine waste Total Over 30% believe mechanized services are too expensive with 24% of these wanting to retain straw for their livestock. The well-off and medium households were more concerned at having straw to feed livestock and thought that mechanized harvesting resulted in significant grain loss.

49 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject Most households sell their produce from home, i.e. directly from the field after harvest or from their house after transport from the field. Some households make emergency sales of small quantities at the local market to provide for immediate cash requirements. Table SA IV-A2.14: Where Paddy is Sold Point of sale At the rice field Within the village At home At the market (district) At the warehouse Total Poor HH Medium HH Well off HH Wet Dry Wet Dry Wet Dry % DS % WS All households engage in a variety of income generating activities besides cropping rice including vegetables, livestock rearing as well as off-farm employment. Non-agriculture and off-farm employment is a very important livelihood component (Table SA IV-A2.15). Table SA Vi-A2.15: Major Sources of Livelihoods Well Off HHs Medium HHs Poor HHs Average Did you sell any livestock in past 12 months? (Y/N) % HH Yes What was the Ave total income from sale of livestock (in USD$) What was the Ave HH total income from agriculture last year, crops, livestock and other farm goods (USD$) How many sources of non -agricultural income does the household have What is the average household income per year from non- agriculture and off-farm work (USD$) What is the total average household income, agriculture and non-agriculture (USD$) F. Credit and Finance 21. Almost half of all households will borrow money annually, although well-off families are slightly less likely to borrow (30%) compared to medium and poor households (about 60%). Most loans are either taken jointly by husband and wife or wife, and women from poor households are more likely to use credit. The informal credit market is the most frequently accessed which include NGOs, friends and neighbors who appear more accessible (25% respectively), than money lenders (21%). Some families received credit from input suppliers. 22. Banks and savings groups provided additional sources for almost 25% of loans. The interest rates shown in Table SA IV-A2.16 are skewed due to several loans taken by well-off families from money lenders charging interest at 10% per month (120% pa). In general rates averaged closer to 3% per month. Most loans had been repaid by well-off and medium families but poor households appear to have had difficulties suffer from delayed repayment.

50 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 9 Table SA IV-A2.16: Households Accessing Credit and Credit Conditions Well Off HHs Medium HHs Poor HHs Average Do you usually borrow money for agriculture production activities each year? (Y/N)? % Hh say Yes Loan taken by Husband, Wife or Both % Hh say Both % HH loan by Husband % HH loan by wife What is the usual source of the loan % Money lender NGO Bank Saving Group Friend/neighbor Input supplier What was the interest rate the last loan you took (compute to annual rate) Husbands loan? Wife's loan? What was the size of the last loan you took Ave per HH USD$ Husbands loan? Wife's loan? What was the loan used to pay for? Was last loan repaid in full? (Y/N) % HH repaid Husbands loan? Wife's loan? G. Community Associations and Management Bodies 23. Table SA IV-A2.17 reports the presence of community based organizations in surveyed communities, specifically farmers cooperatives and farmer water user communities. It also indicates whether or not the community regards these organizations as useful. Based on focus discussions with the mixed farmers group, cooperatives were present in around half the villages, and although membership is not extensive, the few are reasonably satisfied with the performance of the organization. In addition to these, several savings groups and farmer groups established under NGO initiatives were also present in relatively small numbers. Table SA IV-A2.17: Existence and Effectiveness of Community Organizations Commune Damreipourn Angkortret Chrey Village Okandolkhang cheng Preyroung Beong Veng Trobeklech Trobekkeut Kok Prekta mok menong krom Prohear % of villages with Farmer Cooperative 0% 0% 0% 10% 20% 0% 30% 50% 30% % of group satisfied with FC-Op? 100% 100% 100% 90% 80% don t know 100% 100% 100% Number of times FO met last 12 months?? Farmer Co-Op Strengths share experience can make quality seed quality of price for farmer recieve training from groups no make higher productivity no training and share experience better quality rice make higher productivity save time no no no no no no Agriculture advice, teach how to make natural fertilizer -4 no no no no no no FO weaknesses -1-2 no no no lack of trainer no no no lack of capital investment Group rice price not high enough no no no no no teach how to make fertilizer loan for members poverty reduction for members make higher productivity members late for meetings money transfer late -3 no no no no no no no no no -4 no no no no no no no no no % of villages with FWUC? 0% 0% 0% 0% no 0% 0% 0% 0% % of group satisfied with FWUC 0% 0% 0% 0% no 0% 0% 0% 0% FWUC Strengths make higher productivity save fertilizer Table SA IV-A2.18 norecords the memberships no no for no each nof the novarious nogroups in the -2 no no no no no no no no no surveyed villages. -3 no no no no no no no no no -4 no no no no no no no no no FWUC weaknesses -1 no no no no no no no no no -2 no no no no no no no no no -3 no no no no no no no no no -4 no no no no no no no no no Irrigation system problems? -1 no no no no no no no no no -2 no no no no no no no no no get a good seed no no no

51 % of ISF collected last year? 0% 0% 0% 0% 0% 0% 0% 0% 0 % of FWUC committee are female 0% 0% 0% 0% 0% 0% 0% 0% 0 % villages with Farmer Co - Operative? 0% 0% 0% 0% 0% 0% 100% no 0% Ave. No. Farmer Co-Op meetings last year Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 10 No. Farmer Co-Op members male female % of Farmer Co-Op committee members are female? Ave number of other associations in community Table SA IV-A2.18: Numbers of Members of Existing Groups 0% 0% 0% 0% 0% 0% 3% % 1 CEDAC no Light of Hope NGO Farmer Group MAFF Farmer Group MAFF Village savings group Input group Village savings group Members - male Members - female Light of Hope NGO 25. Based on household information, membership rates are low but satisfaction levels are reasonable, apart from those of poorer households with their lower membership rate and levels of satisfaction. Poor households noted that they do not have time to participate and do not have funds to join in group initiatives. Women were asked their opinions as to the effectiveness of community organizations, and also as to whether or not they would be willing to take on organization committee roles. Their response indicated limited time availability in spite of their interest in participation as members - but not as office bearers as they did not want to deal with conflict situations with other members of the community (Table SA IV-A2.19). Table SA IV-A2.19: Attitudes to Group Membership and Performance Prey Veng Women's Group Village Kork Trobek keut Trobek Lek Preyroung Okandolkhan gcheung Chrey Commune Beong veng Prektamok Menong krom % of group would like a Farmer Coperative Committee position 85% 10% 70% 80% 100% 100% 80% 10% % of group would like a FWUC management committee position? 100% 0% 80% 80% 100% 100% 10% 10% Main reasons for not wanting committee positions? Angkor tret commune Reason Low education Lack trust have business unfair sharing water Damreipoun Commune no no Low education low education Reason 2 have business no no no no too old Lack skills Reason 3 low salary no no no no no work for income What % of group think the existing FWUC performs well?? don't know no 85% 100% 100% 100% 100% 100% What % of the group households belong to the Farmer Co-Op???? 0 0% 20% 0% 0% 0% 10% 10% What % of group think the Farmers Co-Op performs well?? don't know 30% 80% 0% 100% don t know 100% 10% 26. On average around two thirds of women said that they would like a committee role and see the organizations as useful. However, they also offer reasons as to why they would not take on such a position which would appear to indicate that whilst they think they would like to contribute, and feel they could contribute, other factors would constrain them. Reasons for not taking on a position would include lack of time due to other duties, concerns over lack of knowledge and also concerns over conflict. H. Gender Task Analysis 27. Both the women s focal group and the household level interviews examined the role and task allocation between men and women in rice production. The results of the enquiries are somewhat mixed reflecting different conditions in target households. Traditional roles in agriculture have changed both during and as a result of the recent conflict. Women were forced and by necessity, took up many tasks normally done by men. These changes have become permanent and are undergoing further changes with access to mechanization and increased migration for employment. There are no hard and fast rules as to who does what, although in general, men will still be largely responsible for tasks involving the use of draft animals and machinery. The following represent typical household task allocations in rice production (Table SA IV-A2.20).

52 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 11 Table SA IV-A2.20: Labor Inputs for Dry Season Activities (Gender Disaggregated) Task Dry Season Rice Production Time Number taken of days per in day period Period Done Total Time Who does it Clearing husband and sons Plowing husband and sons Seed preparing wife Sowing seedbeds husband, wife and sons Transport seedling husband Broadcasting/Transplanting husband, wife and sons Irrigating husband, wife and sons Applying fertilizer husband, wife and sons Weeding no Scaring birds no Harvesting hire service transport Paddy husband and sons and hire service Dry Rice and Storage rice husband, wife and sons Marketing rice husband 28. Most duties are shared amongst the family and with the male members having more responsibility for the tasks such as land preparation and plowing, being the tasks requiring machinery of draft animal power. The wet season allocation did not really vary significantly again seems to reflect labor availability rather than a gender allocation: Table SA IV-A2.21: Labor Inputs for Wet Season Activities (Gender Disaggregated) Task Wet Season Rice Production Time Number taken of days per in day period Month Done Total Time Who does it Clearing husband Plowing husband Preparing seedbed husband,wife,child Preparing seed :30mn wife Applying seed husband,wife Irrigating husband Applying fertilizer husband,wife Weeding husband,wife,child Harvest machine hire service Transport paddy husband Drying paddy husband,wife,child Storing paddy husband,wife,child Marketing husband,wife 29. Table SA IV-A2.22 presents the results of household interviews and the allocation of labor by wealth category.

53 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 12 Table SA IV-A2.22: Labor Allocation to Rice Activities by Wealth Category Updated division of labor Average Well off Average Medium HH Average Poor HH Tasks Male Female Both Male Female Both Male Female Both Clearing field Plowing Making bunds Seed preparation Preparation seedbed Sowing seedbeds Transport seedlings Transplanting Irrigating Applying fertilizer Weeding Scaring birds Harvesting Threshing Transport paddy Winnowing Dry rice Store rice Manual milling Pounding Marketing rice In the main, tasks are performed together with men taking the main responsibility for tasks involving draft animals and machinery. What is slightly different from other subproject areas was the application of fertilizer that is done by women in the survey area of Prey Veng. Tasks are performed according to the labor base available, and this in itself, is influenced by seasonal migration for employment and other off-farm opportunities. 31. Mechanization does and will save time and may provide additional time for people to pursue other interests. During women s focal group discussions and household interviews, participants were asked what they would prefer to do if they had additional time available. The women provided details of the activities they already undertook as well as those preferred in addition. 32. Off-farm work is an important livelihood component, with significant numbers of women seeking factory and other laboring positions and also seeking work in Thailand. If the group had more time it appears that many would like to have more time to tend to home duties and children, do small scale trading and increase poultry raising. The household level indicated again a high preference by people to spend more time in and around their own households to look after children, maintain and improve housing, as well as spend more time on existing activities such as livestock and poultry, general agriculture.

54 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 13 Table SA IV-A2.23: Existing and Preferred Alternative Employment Options Prey Veng Women's Group % of group doing any other income generating activities besides agriculture??? Village Kork Trobek keut Trobek Lek Preyroung Okandolkhan gcheung Chrey Commune Beong veng Prektamok Menong krom Activity 1 built the house Labors Labors factory house making Labor Labor in Thai Labors in Thai % 10% 50% 50% 8% 10% 60% 90% 40% Activity 2 factory worker no no laboringg Thai labors Factory worker selling ingredients % 8% 0 no 10% 40% 28% 10% 10% Activity 3 Labors no no Labor in Thailand no no no no % 10% 0 60% 0% 0% no no Activities prefered if had more time? Activity 1: sewing housekeeping working at home house keeper do small business small business educate childrens %? 50% 50% 50% 20% 98% 20% 100% 90% Factory worker family farm Activity 2? educate childs poultry poultry no no housekeeping no housekeeping % 100% 45% 30% 0 no no no 100% Activity 3 Small livestock no no no no no no %? 25% 0 0 no no no no % of group has borrowed credit by themself? 80% 90% 100% 75% 70% 30% 40% 85% Main source of loan Angkor tret commune Damreipoun Commune Table SA IV-A2.24: Alternative Activities by Wealth Category 1 First source? ACLIDA Bank Bank Bank Credit MFI neightbor MFI 2 Second source neighbor Moneylender neighbor neighbor neighbor Bank 36% Bank 36% What was the average interest rate (express per annum) 36% Money lender 36% 36% 36% 36% 48% Money lender Poor HH 60% per year Medium HH Well off Preference 60% per year Occupation % of group taking loans whose husband did not know 0% H W 0% H 0% W H 0% W 0% %H 0% %W 0% 0% Main purpose of loan Housekeeping Agriculture 5 Business and agriculture, Chemical agriculture, using for fertilizer, build agriculture agriculture trading fertilizer living cost living cost house % of women who say Wife controls HH finances?? 90% 100% 90% 100% 100% 90% 100% 98% % of women who say Husband Vegetable controls HH gardening finances?? 3 10% 2 0% 3 10% 1 0% 8.050% % 0% 2% % of women who say Husband makes HH investment decisions?? Livestock 0% 1 0% 9 0% 2 6 0% 0% % % 0% % of women who say Wife makes HH investment decisions?? 0% 0% 0% 0% 0% 0% 0% 0% % of women who say both Husband Poultry and Wife make HH investment % 100% 100% 100% 100% 100% decisions??? Agriculture % 100% Handicraft Battery charging Traditional musician Labor Work in Thailand Selling Khmer cake Teacher Book reading House builder Gabbage collector/recycler Retailers Tailor Police Steel technician Doctor Carpenter Both men and women would seek additional laboring work and some men would consider working in Thailand. I. Migration 34. The following data from the commune records looks at working aged people years of age. As observed in Battambang and Kg. Thom, given the community responses during the survey it would appear quite likely that if mechanization results in a significant time saving to the household, and results in expending less labor, it would not be surprising to see an increase in the number of men and women going to other provinces and Thailand to seek work. If households see that, through hiring mechanized services, the household requires less labor for rice production an economic decision would be to maximize use and returns from any labor freed-up. Households may take advantage of both options; increased productivity through mechanization, and, more labor earning off-farm income.

55 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 14 Table SA IV-A2.25: Proportion of People Migrating for Employment Commune Statistic Angkor Tret % of people migrate to known company/f % of people migrate to unknown job Damrei Puon % of people migrate to known company/factory job % of people migrate to unknown job Chrey % of people migrate to known company/factory job % of people migrate to unknown job J. Domestic Violence 35. Domestic violence has often been raised as an issue in modern rural Khmer communities, and so much so that it is now monitored in the national census. This is not a subject readily discussed in focal group or household interviews. Information is limited to reported cases and it must be assumed that the majority of cases go unreported. In most cases it would appear that domestic violence is fuelled by alcohol and money problems. As already mentioned, women are able to earn their own money, but the problem is whether or not they can retain and safeguard their savings and ensure that they are used to benefit the family as a whole, rather than being spent on alcohol and gambling. Table SA IV-A2.26: Incidence of Domestic Violence Commune Angkor Tret % HHs reporting domestic violence Damrei Puon % HHs reporting domestic violence Chrey % HHs reporting domestic violence

56 ANNEX 3 ENGINEERING DESIGN September, 2012

57 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject ii TABLE OF CONTENTS I. TECHNOLOGY BACKGROUND 1 A. Rationale 1 B. Harvesting Practices 1 C. Two Stage Drying 2 D. Heat Source 3 II. GUIDING DESIGN ASSUMPTIONS 3 A. Design Parameters 3 B. Conceptual Design 3 C. Expected Outcome of Commercial paddy 4 D. Paddy Drying Process and Chart 5 E. Flow Chart and Layout Design 5 1. Weigh Bridge 5 2. Receiving Area 5 3. Intake Pits 6 4. Pre-cleaner 6 5. First Stage Drying 6 6. Conditioner 6 7. Second Stage Drying 6 8. Husk Furnace or Husk Burners 7 9. Silo Storage Section Husk, Ash and Dust Section Automatic Control System Facility Layout Optional 8 III. COST ESTIMATION 9 A. Establishment Cost 9 1. Optional Facility Cost 9 B. Operating Cost 9 IV. CONCLUSIONS 10 A. Supply Paddy to the Facility 10 B. Proposed Scale of Plant Drying Capacity Silo Storage Capacity 11 V. ENGINEERING CONCEPT DRAWINGS 12 LIST OF TABLES Table SA IV-A3.1: Loss of paddy due to Time of Harvest... 1 Table SA IV-A3.2: Relationship Between Head Rice Yield (%) and Time of Harvest... 2 Table SA IV-A3.3: Safe Storage Time for paddy by Moisture Level... 2 Table SA IV-A3.4: Land Area Requirements for Grain Handling Facility... 8 Table SA IV-A3.5: Establishment Costs for Paddy Drying and Storage Plant... 9 Table SA IV-A3.6: Labor Operational Costs for Plant Table SA IV-A3.7: Variable Costs based on Assumed Throughput... 10

58 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject iii ACRONYMS ADB - Asian Development Bank MAFF - Ministry of Agriculture, Forestry and Fishery MEF - Ministry of Economy and Finance MFI - Micro-finance institution MIME - Ministry of Industry, Mines and Energy MLMUPC - Ministry of Land Management, Urban Planning and Construction MOC - Ministry of Commerce MOP - Ministry of Planning MOWRAM - Ministry of Water Resources and Meteorology MRD - Ministry of Rural Development NCDD - National Committee for Sub-national Democratic Development NGO - nongovernment organization O&M - operations and maintenance PAM - Program Administration Manual PIO - Program Implementation Office PMO - Program Management Office PPCR - Pilot Program for Climate Resilience PPTA - Project Preparation Technical Assistance PSC - Program Steering Committee RGC - Royal Government of Cambodia Rice-SDP - Climate Resilient Rice Commercialization Sector Development Program RRP - Report and Recommendation of the President SAW - Strategy on Agriculture and Water SME - small and medium-sized enterprise TA - technical assistance

59 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 1 A. Rationale ANNEX 3: ENGINEERING DESIGN I. TECHNOLOGY BACKGROUND 1. Ideally paddy should be dried on-farm immediately after harvest. Farmers achieve this mostly through sun-drying if weather conditions are favorable. A more effective drying system involves simple batch dryers produced locally, powered by locally available materials such as wood and charcoal. The other advanced technology available uses imported (from Taiwan or Korea) batch circulating dryers, made of thin steel sheet metal that has a relatively short effective life. Traditional paddy handling practices are common in Prey Veng and throughout most of Cambodia, similar to the situation in Thailand 10 years ago - although now are non-existent. Due to Cambodia s extreme labor shortage as farmers household members seek alternative employment off-farm, and production technologies are improving productivity, there is a shift away from on-farm drying with significant quantities of wet paddy being exported as paddy to Thailand and Viet Nam. 1 This represents a significant loss in economic terms to Cambodia s economy. Technologies for the drying of grain have been developed in Thailand and other significant rice producing countries as all means are explored for increasing the cropping intensity - sometimes achieving three crops per annum from the one piece of land. Commercial drying of paddy is one such technology that has developed as this thrust for intensification progresses. B. Harvesting Practices 2. Newly harvested paddy has a high moisture content (of about 30% during the wet season) due to the increasing use of combine harvesters introduced to address the increasing labor shortage. High head yields can only be achieved by harvesting between 1-2 days before paddy maturity. However, this period coincides with the time of maturity when the moisture content is also higher. paddy cannot be stored under this condition as it quickly deteriorates and is attacked by fungal organisms that further reduce the milling yield of rice (quite apart from the brokens). Table SA IV-A3.1: Loss of Paddy due to Time of Harvest Time of Harvest Loss (%) 1 day before maturity 1.52 Just at maturity week after maturity weeks after maturity weeks after maturity weeks after maturity Source: Department of Agricultural Promotion, Ministry of Agriculture, Thailand 1 Current estimates suggest an annual figure of 2.2 million tons of paddy is exported as paddy.

60 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 2 Table SA IV-A3.2: Relationship Between Head Rice Yield (%) and Time of Harvest Time of Harvest Head Rice Yield (%) 23 days after bloom days after bloom days after bloom days after bloom days after bloom 60.4 Source: Department of Agricultural Promotion, Ministry of Agriculture, Thailand (Variety AB 105 has a maturity period of 30 days after blooming) Table SA IV-A3.3: Safe Storage Time for paddy by Moisture Level (days) Ambient Air Temp ( C) Moisture Content of paddy (%) 14% 16% 18% 20% 24% 28% 30% NB Average relative humidity of 70-90%. C. Two Stage Drying 3. Considering the need for rapid drying immediately after harvest to achieve a moisture level that is safe for temporary storage, a two stage drying process has been developed. A typical first stage dryer uses different drying rates during two drying periods (i) to reduce surface moisture that can be removed rapidly from very wet paddy without causing damage to the grain with the use of high temperatures for a short period of time. Drying air temperatures in first stage dryers can reach over 100 C in fluidized bed dryers where the grain is exposed to drying air only for a few minutes. After this rapid pre-drying stage to bring the moisture level to 18-20%, the grain can then dried by slow columnar drying in the second stage to the moisture content of 13-15%. 4. Many research has been conducted on the fluidized bed drying for paddy grain with worldwide commercialized of the application especially at the larger scale. 2 The advantages in brief are: (i) (ii) (iii) Compact and smallest dryer compare to the same capacity of other dryers. As paddy being fluidized, the heat transfer efficiency will be obtained by the perfect mixed flow, so high temperature and short time can be applied without causing damage to the grains For high temperature drying applied to (Thai) fragrant rice varieties indicated that the major aromatic compounds present in relatively high concentration. 3 2 National University of Singapore E-book Volume%202.pdf. 3 Information on Effect of High Temperature Drying on Flavor Components in Thai Fragrant Rice Varieties can be obtained from the University of New South Wales:

61 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 3 5. For the second stage drying stage, many dryers are suitable including (i) traditional sun drying, (ii) in-store drying, (iii) flat-bed drying, and (iv) present-day columnar drying technology. Among them, only the column dryer and batch circulating dryer are suitable for application on a commercial scale - that being the Louisiana State University (LSU) columnar drier which is the most favored dryer and has been adopted and installed widely throughout that country. 4 D. Heat Source 6. Apart from electric power to drive motors, one of the main requirements in the drying facility is the heat source. Apart from fossil fuel combustion to generate heat, agricultural waste products can also be used as fuel. Rice husk is the most feasible and available, even though the cost is steadily increasing as demand for the waste product increases. 7. There are several husk burners that have been developed and are commercially available in Cambodia. Conventional husk burners are mostly used with boiler called grate type. Flue gas types are in-consistent, causing hot air temperature to be unstable and not clean enough, requiring a heat exchanger that would add to the cost of investment. However, the latest technology called cyclonic burner can overcome such problems and is now used worldwide. II. GUIDING DESIGN ASSUMPTIONS A. Design Parameters 8. The proposed facility is designed for handling long grain paddy, especially Phkar Romduol (an aromatic or fragrant variety), IR-504, and other varieties grown in Cambodia. (i) The average moisture content of wet paddy is 30%. During the wet season, bagged paddy will be delivered to the facility by trucks, with a maximum capacity of 45 tons. In the future, the bulk trucking and other bulk transportation will also be considered. (ii) Incoming wet paddy will be delivered between 8 a.m.-5 p.m. providing for at most, an 8-10 hour day. (iii) The maximum impurity and foreign matter content (long stems, straw, ropes, stone, sand, dust etc.) will be 10% (by weight) of wet paddy. (iv) The immature and empty grain portion will be 6% (by weight) of wet paddy. (v) The ambient temperature is that of a tropical with a wind load of 50 kg/m 2 at maximum height of 40 m. (vi) For economic operations, a drying capacity of 500 t/24 hrs is proposed as a pilot. B. Conceptual Design 9. The assumed physical design for the facility is summarized below. (i) (ii) The truck parking area is to be located outside the fence, next to the guard and office for security control. The trucks containing raw paddy waiting to unload, will be queued outside the perimeter fence. Entry to the facility will be by one at a time. To obtain 500 tons of paddy each 8-10 hour day, trucks will be required. There should be 15 truck parking lots, each of 3 x 13 m. (iii) Each truck will take 30 minutes to unload (including sampling to analyze paddy quality). 4 King Mongkut's University of Technology, Thonburi, Thailand. More information can be obtained from:

62 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 4 (iv) 500 t of paddy is to be unloaded within 8 hours or 62.5 t/hr, hence the receiving area must be sufficient to store 500 t of paddy whilst two trucks are being unloaded. (v) The most suitable drying technology for high moisture content paddy is two-stage drying, the first using a fluidized bed technique, and the second, columnar drying. Between these two processes, LSU type is the most favorable at commercial big scale because of its relatively faster drying. (vi) There are two common practices for drying paddy- batch circulation and continuous drying systems. Batch circulation consists of an independent dryer, and provides greater flexibility to accommodate specific requirements of different types of rice for different batches. One batch will be the size of a dryer, holding capacity of 10, 20, 30, 50 t, but take more down time for loading and unloading before commencing drying. By comparison, the continuous system will start running from one dryer to another until the last one is completed. Under this system, greater capacity is possible, requiring one loading and one unloading. It is easy to operate, but not flexible to accommodate different varieties of paddy. However, this design will be available for both systems by one by-pass chain conveyor after cleaning process. (vii) Canteen or rest area will be provided for truck drivers and others next to the truck parking lot on the outer fence area. This area later can be developed into a small community and commercial area; hence some further land reserved for future expansion is desirable. (viii) The office, weigh-bridge and guard facilities will be located next to the main entrance. (ix) The dirty zone includes the dust, husk and ash collection rooms in the drying plant. It should be kept far away from the office or residential/office zone. The wind direction from meteorological data should also be concerned in designing the (x) layout. The silos will be lined up from East to West, at the West end where the heat load will be more in the afternoon, the drying building will block sunlight and give the shadow to silos and shade each other respectively. (xi) The drying plant from receiving area will be installed under cover while the silos will be established without cover. Both facilities will be aligned either in a straight line or L shaped, depending on the land availability (two layouts - I-flow and L-flow drawing - see Appendix of Drawings). (xii) Space for the future expansion of a milling plant should be provided. (xiii) Space for the option A: Semi-dried paddy temporary storage bins in the drying facility and option B: Husking and brown rice section and warehouse facility are also reserved. (xiv) For longer term operations, the dryer equipment should be made of rust-proof or stainless steel material at wet paddy contact areas. If so, the expected life should be at least 10 years without any major repairs needed. (xv) The plant will be designed with state-of-the-art equipment for this region, comply with International Standardization and Organization environmental standard and user friendly by fully automatic control by touch-screen and Programmable Logic Control. C. Expected Outcome of Commercial paddy (i) After drying and proper tempering, the moisture content of paddy will be even at 13-14% (wet basis). (ii) Capacity not less than 500 t/day (24 hours) measuring from the intake pit, continuous running and expect to run 3-4 weeks per season or 10,000 tons, with total 3 seasons or 30,000 tons or more, from multiple crops per year. (iii) paddy quality will be clean in term of head rice yield will be at least 3% more than other traditional sun-drying after being milled by the same milling equipment.

63 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 5 (iv) paddy quality should be at least holding the same standard as traditional drying which taking the same sample in term of milling degree, color, smell and cooking quality will not be different in significantly. (v) The dried paddy with moisture content not more than 14% will safely store in these Silos within three months with proper aeration and circulation system at the tropical weather condition without any hot spot occurrence. (vi) The pilot facility will be served for demonstration, training center and technology transfer to improve the usual practice of new standard grain handling. D. Paddy Drying Process and Chart 10. The paddy drying process chart and capacity balance will be shown in Figure SA IV- A3.1 and incorporates the following. (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) The incoming wet paddy will be weighed on the weigh bridge and the sampling will be taken to the laboratory for analysis. Moisture content, impurity content, milling degree and relative head rice yield will be obtained. Minimum lab analysis equipment requires paddy husker, handy moisture tester, aspirator tester, milling tester, moisture meter, length grader and digital balance. The receiving and cleaning section will be kept separately by partition to prevent dust spread. Around, 10% of impurities will be separated by sieving method. Pre-drying section by fluidized bed dryers: At the first stage, the wet paddy's moisture will be removed from 30% to 20% within the short drying time. 10% of water will be removed, and 5% of immature grain (empty grain), being dried by this process, will also be blown out to dust room. Option A: Semi-dried paddy moisture content 20% will be temporary stored with aeration fans for securing paddy in peak season. Option B: paddy husking section: Husk fuel is to be supplied and converted to heat source for drying by husk furnace. It requires 65 tons of paddy to obtain 15 tons of husk fuel to distribute heat source drying in one day. (long grain husk content 23% of paddy). Post drying section by LSU or any column dryer: At the second stage drying, the moisture will be removed from 20% to 14% within 6-8 hours. 6% of water and 1% of immature grained will be removed. 25% of burnt husk will become black ash. The dried paddy will be stored in 4 Silos with a capacity of 2,000 tons each with proper aeration ambient air. Product of option B, head brown rice (full grain to 3/4 size) 71% from dried paddy and broken brown rice (less than 3/4 size). 5% of grain will be packed and sold. E. Flow Chart and Layout Design (Refer to Drawing No.ADB-CAM-FC-01, 02 and ADB-CAM-LA-01/1, 01/2, 02, 03 and 04 in appendix) 1. Weigh Bridge 11. Each incoming truck must be weighed to register and inspected by closed circuit digital camera. The weigh bridge should be large enough to accommodate a trailer of 2.5 m. x 12.5 m. with a 60 ton capacity. 2. Receiving Area 12. The minimum requirement for receiving area requires space for two trailers to move in together with a temporary storage of 500 t in a warehouse of 20 m. x 35 m.

64 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 6 3. Intake Pits 13. The two connecting intake pits total dimension of 2.5 m x 6.0 m x 4.5 m depth will serve for receiving incoming wet paddy, each pit capacity not less than 20 t/hr. Actually, one pit is enough to feed the daily capacity, however, the other pit is still necessary. For instance, if there is an unexpected breakdown caused by impurity, leading to a pit blockage, the other will feed continuously. Also, it can be used for future expansion or a different variety process may be required. 4. Pre-cleaner 14. The two parallel lines of pre-cleaners with aspirators, each with a capacity of 20 t/hr. This section will similarly have double capacity for the same reasons as the intake pits. 5. First Stage Drying 15. After cleaning the paddy is directed to the fluidized bed dryer (FBD) where it is dried from 25-30% moisture content. to 19-21% moisture content without any untoward damage to the grain in quality and color. The highly efficient process ensures a higher head-rice yield when compared with other drying methods as the process produces a partial gelatinization of the grain reducing the instance of grain surface cracks and in turn reducing the head-rice loss during milling. The higher the moisture content into the plant, the higher the head-rice yield obtained. 16. From the feed control hopper of the FBD the high moisture content (22% and above) paddy is fed into to the drying chamber and deposited on the fluidizing screen. The cross flow of hot air delivered from beneath the fluidizing screen passes vertically through the grain bed floating the grain to a height of approximately cm initiating the fluidizing action. 17. The fluidizing action ensures the whole surface of each grain is subjected to the hot air. As the moisture is transferred from the grain to the hot air the dried paddy flows toward the discharge outlet of the drying chamber while the moisture laden hot air is exhausted through the exhaust ducts at the top of the chamber. Up-stream of the discharge outlet an adjustable height flow control weir controls the resident time of the paddy in the drying chamber. Only paddy dried to the desired moisture content will cross the weir. 18. Space in the dust room will be reserved for immature empty grain which is blown out during the drying process. This empty grain later will be mixed with the husk to be used as fuel or sell for rearing livestock. Another advantage of the FBD is that irrespective of the input of mixed paddy with different moisture contents, the output moisture content of all the paddy will be even. 6. Conditioner 19. The temperature of the paddy discharged from the FBD is up to 60 C and proceeds to the conditioning area for tempering for 30 minutes where it is stabilized by passing ambient air through the grain for another 30 minutes from where it proceeds on the basis of first-in-first-out. 7. Second Stage Drying 20. This initial drying will be continuous process with either LSU or batch or any columnar dryer used to bring down the moisture content from 20-14% or less with a minimum of four passes with the continuous capacity of 20 t/hr in about 6-8 hours.

65 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject It is possible to by-pass the FBD and deliver directly from the cleaner straight to any one column dryer if the moisture content of incoming paddy is less than 22% by using a chain conveyor at the top feed. 8. Husk Furnace or Husk Burners 22. The cyclonic burner type with direct heat is recommended as the hot clean air produced from husk burning and the discharge warm ash are environmental friendly. Heat capacity will be calculated from the winter ambient temperature 20 C based on the drying capacity of water evaporation 16% of 20 t/hr paddy, (depending on the dryer manufacturer), plus 20% loss in the pipeline. The total heating power required will be approximately 12 MW. 23. Since there is two-stage drying, the first stage requires higher drying temperature at C and the second stage requires lower drying temperatures of C. Hence, two husk burners different temperature application are recommended for ease of operation. 9. Silo Storage Section 24. Dried paddy with moisture content not more than 14% is transferred into four silos, each with 2,000 t capacity. These silos will serve for maximum four different paddy varieties and first-in-first-out storage if only one variety paddy is used. 25. In-loading and out-loading conveyors will convey the dried paddy to any silo and outloading from any silo for packing, bulk delivery, re-circulation or husking as desire. 26. Flat bottomed, weather-proofed silos are made of corrugated sheets with vertical coverage galvanized steel US Standard G115, with nominal 350 gm of zinc per m 2, completed with full floor ventilation system, power sweep augers and temperature monitoring devices. 10. Husk, Ash and Dust Section 27. Husk will be fed to the husk storage for feeding to the burners. Ash from burnt husk will be kept in the ash room. Dust discharged from cleaner and dryers will be kept in the room with the proper dust collecting system either cyclone or water spraying system. 11. Automatic Control System 28. The automatic control systems will be user friendly. Programmable Logic Control (PLC) with man-machine interface (MMI) using touch screens are recommended for all settings, i.e. temperature, moisture content, level, speed, time and sequence operation will be programed as well as all present value, data record and history failure operation report at real time via touch screen monitor or internet available. 12. Facility Layout 29. Total land requires approximately 3.6 ha, including future expansion for milling and double the drying facilities with full options as per Table SA IV-A3.4.

66 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 8 Table SA IV-A3.4: Land Area Requirements for Grain Handling Facility Description Dimensions Area (m 2 ) Truck Parking Area (Concrete Floor) 20 m. x 65 m 1,300 Office 5 m x 15 m 75 Weigh bridge 3 m x 13 m 39 Canteen 5 m x 10 m 50 Guard House 2 m x 2 m 4 Drying Facility 35 m x 80m 2,800 Silo Facility 25 m x 100 m 2,500 Option A Semi-dried paddy bins 6 m x 12 m 72 Option B Husking and brown rice warehouse 20 m x 50 m 1,000 Road (Concrete) 7,300 7,300 Other facilities, husk bin, and power house etc. 1,000 1,000 Total utilized area Square meters 16, Optional 30. In this grain handle facility design, there are optional facilities. Hectares 1.62 Option A: Semi-dried paddy 20% moisture content bins, holding capacity of 8 x 65 = 520 t requires 6 m x 12 m = 72 m 2, to be located between the first and the second stage drying for more margin to purchase more wet paddy during peak season, keeping buffering for period of 7-10 days before continue drying when the peak period passed. Option B: Husk produce facility comprised of fine cleaner, huskers, paddy separator, de-stoner, weighing and packing machines with capacity of 65 t/day (2.7 t/hr). For the daily use of husk fuel 15 t per day (or t/hr) for the drying facility. 31. This facility will be comprise a warehouse for packed brown rice product and husk bin protected from the rain. The area for the husking plant is 20 m x 30 m, for the warehouse is 20 m x 20 m, and for husk bin is 5 m x 6 m. a. Layout Design Option 32. Two layout designs are possible depending on the land availability the I-flow and L- flow layout as per Drawing no. ADB-CAM-FC-01, 02 and ADB-CAM-LA-01/1, 01/2 respectively. b. Other Options 33. For the drying process option, though Batch Circulating or LSU dryer is used, it is not significant in the layout design for any column dryer. The same goes for the two stage dryer, even with the fluidized bed pre-drying added, the additional area is only a few space required.

67 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 9 III. COST ESTIMATION A. Establishment Cost 34. Table SA IV-A3.5 summarizes the construction costs of the facility. Table SA IV-A3.5: Establishment Costs for Paddy Drying and Storage Plant Unit Price Total Machinery Costs Weigh bridge unit 40,000 40,000 Laboratory equipment set 10,000 10,000 Receiving and cleaning section unit 80,000 80,000 First stage (FBD) drying section unit 350, ,000 Second stage (columnar) drying section unit 400, ,000 Silo with in-out loading four 700, ,000 Ancillary equipment and service support platform, walk way, control panel, installation, commissioning etc. set 150, ,000 Subtotal 1,730,000 Civil Works Factory building for drying facilities 2, ,000 Office, guardhouse and canteen ,000 Parking and road (concrete) 6, ,000 Fence ,000 Piling work for silos 120,000 Water drainage 12,000 Subtotal 870,000 Miscellaneous Electric power transformer, generator set, cable wiring set 100, ,000 Wheel driven loader unit 40,000 40,000 Truck, car, tools, etc set 160, ,000 Subtotal 300,000 Total excluding land, fill and power connection Total 2,900, Optional Facility Cost Option A: Semi-dried paddy bins and conveyor system for 520 tons is $120,000. Option B: Husking, brown rice, husk bin equipment $200,000. Building for husking and warehouse $140,000. Total $460,000. B. Operating Cost 35. Cost estimates for the operations of the facility have been based on: (i) electrical power for drying facility 440 HP = 330 KW; (ii) electrical power for silo aeration fan 100 HP = 75 KW; (iii) maximum power consumption is 80% of power rating; (iv) husk consumption is 15 t/day or 0.03 t/hr for drying; (v) the unit cost of electricity is $0.3 /kw; (vi) the unit cost of husk fuel is $10/t; (vii) the plant drying capacity is 20 t/hr (500 t/day); (viii) the total paddy storage is 3 months with 8,000 tons, and the average time of aeration is 5 hr/day; (ix) the pant operates for 3 crops (months) per year operation - each crop stores 10,000 t; and (x) spare parts and lubrication costs amount to $2,000 per year.

68 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject Manpower for operation 24 hours (3 shifts) are detailed in Table SA IV-A3.6. Table SA IV-A3.6: Labor Operational Costs for Plant Position No. Unit Cost Total Management 2 1,200 2,400 Operators ,600 Administration staff ,000 Casual labor, guards and maid ,000 Total 33 12,000 Table SA IV-A3.7: Variable Costs based on Assumed Throughput Variable Costs No. Unit Cost Total ($/t) Fixed Operating Costs per ton Labor costs Spare parts Variable Operating Costs per ton Power costs for drying Husk as fuel Power costs for 3-month storage Total Variable Cost per ton Optional Costs for Option A Electric aeration fan 20 KW Cost per day day temporary storage Option B Husking - Brown Rice Power cost for dehusking 60 KW Power cost per ton Rubber roll husker inc spares 0.50 IV. CONCLUSIONS A. Supply Paddy to the Facility 37. Based on the site visit in the vicinity of Svay Antor and discussions with local farmers, there are three main periods of harvest. (i) The first significant crop of Phkar Romduol (an aromatic, photoperiod sensitive variety) starts in early November for a period of about three weeks and is expected to contribute 10,000 t of facility throughput. (ii) The second late wet season crop (mainly traditional local varieties) begins in December and continues through to January. (iii) The third crop is comprised mainly of higher yielding IR varieties that start in January and continue through to about May, and are dependent upon the time of planting

69 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 11 being non-photoperiod sensitive. These last two crops are expected to contribute about 20,000 t of the facility throughput. B. Proposed Scale of Plant 1. Drying Capacity 38. From the operating cost analysis (refer Annex SA IV-A5.) for drying and storage for 3-month period will be $10.2 /t, which is consistent with local millers costs at $10 /t and is similar to those in Thailand. One of the most significant costs is that of labor equivalent to $4.8 /t based on annual capacity of 30,000 t. The lower the plant capacity, the higher the operating cost. As each harvest season will take one month or less, especially the main crop of Phkar Romduol in early November, the facility would operate seasonally. 39. The facility is expected to receive 10,000 t of wet paddy within a 2-3 week period at each harvest for a total of about 8,000 t of dried and clean paddy as described in Figure SA IV-A3.1. Also, it is expected to operate for three seasons per year or 30,000 t/annum, hence the drying facility should handle 500 tons per day in order to operate economically. 2. Silo Storage Capacity 40. The silos should have a capacity of 8,000 t, sufficient to support seasonal drying at each harvest for storage of up to three months depend upon market conditions amongst others as well as the timing of the next harvest. 41. However, there is an oversupply of a large portion of wet paddy exported to Vietnam, especially the aromatic rice paddy, even at the risk of rejection at the border due to moisture content that is above a safe storage level. Therefore, it is obvious that many rice millers in Prey Veng and other provinces are looking for dried paddy supplies for milling. This indicates a general lack of drying facilities to the extent that wet paddy is often exported to neighboring countries. An efficient drying facility would be an option that rice millers are willing to invest and welcomed to have such facility from any investors without regarding as a competitor. 42. In the period of a year, the total 30,000 t throughput should be accomplished due to the effective planning for the facility's infrastructure and design. The facility should be located near the public road or in the area that is easy year round access. It also should be located in close proximity to the national or provincial electricity grid to allow that options for power supply. 43. Moreover, traffic management within and around the facility can influence efficient operations. The facility has been designed with adequate truck access for loading and unloading to reduce undesirable traffic, including relative problems and increase sufficient operation.

70 Rice-SDP Supplementary Appendix IV - Svay Antor paddy Drying and Storage Subproject 12 V. ENGINEERING CONCEPT DRAWINGS

71 MAN HOLE MAN HOLE MAN HOLE MAN HOLE MAN HOLE MAN HOLE MAN HOLE MAN HOLE L L 2.1 T DRIED PADDY 13-14% M.C. 9.2 T V AIR MIXER 2.2 T CD-20T L L L L1 L 4.1 L L2 L 4.2 L3 L 4.3 L4 L 4.4 M M M M L L SILO 2000T SILO 2000T SILO 2000T SILO 2000T T V AIR MIXER S S S L L L L LSU DRYER S LSU DRYER S LSU DRYER S LSU DRYER S IMMATURE GRAIN DUST ROOM DUST ROOM DUST ROOM DUST ROOM DUST ROOM TO HUSKING SECTION(OPTION B.) CLEAN AIR OUT CYCLONIC FURNACE CYCLONIC FURNACE OUT LOADING WATER SPRAY ASH ROOM HUSK AIR COMPRESSOR ASH ROOM HUSK DUST AIR IN (FROM DRYER BLOWER) DRY DUST ROOM WET DUST ROOM OPTION DUST ROOM SYSTEM MAIN MACHINE ITEM DESCRIPTION Q'TY POWER(HP) PRE CLEANER WITH ASPIRATOR 2 2x2= SUCTION BLOWER(1.4 FOR OPTION A.) 2 2x20= st.STAGE DRYER (FBD) 2 25x3x2=150 3 CONDITIONER nd.stage DRYER (COLUMN) 4 4x40= CYCLONIC HUSK FURNACE 2 2 x9.5 = BUCKET ELEVATOR 10 5x10= BELT CONVEYOR 6 (3x1)+(3x3)= SILO PADDY 2000Tons 4 4x20= CHAIN CONVEYOR = AIR COMPRESSOR 1 10 TOTAL ELECTRIC POWER HP

72 L L BROKEN RICE L HEAD RICE PADDY INTAKE 3 7 IMPURITIES S S FINE BROKEN RICE S MAIN MACHINE ITEM DESCRIPTION Q'TY POWER (HP.) 1 FINE CLEANER WITH ASPIRATOR SUCTION BLOWER PADDY HUSKER & ASPIRATOR PADDY SEPARATOR DESTONER SUCTION BLOWER ROTARY SIFTER LENGTH GRADER AUTO WEIGHING MACHINE BUCKET ELEVATOR 5 1x5= BLOWER 2 5x2= ROTARY FEED 2 0.5x2=1 11 SCREW CONVEYOR AIR COMPRESSOR TOTAL ELECTRIC POWER 80 HP 1.1 DUST ROOM S S 10.1 TO DRYING PLANT 4.1 HUSK BIN DUST ROOM AIR COMPRESSOR

73 230m. CLEANING SECTION 30 m. 20 m. 12m. SCALE 20 m. 10m. 20 m. 136m.

74 180m. 100m. SCALE 25m. 20 m. 180m. 200m. 12m.

75 ELE m. ELE m. ELE m. ELE m. DOOR DOOR 35000

76 100m. 25m. TOP VIEW

77 ELE m. ELE m. 20m.

78 ANNEX 4 ASSOCIATED INITIATIVES September, 2012

79 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject ii TABLE OF CONTENTS I. GENERAL OUTLINE 1 A. Subproject Description 1 1. Cropping Pattern 1 II. ASSOCIATED INITIATIVES 3 A. Incremental Technical Extension Services 3 B. Cooperative Development 4 C. Pilot Insurance Scheme 4 D. Development of Supply Contracts 5 1. Engineering Requirements 6 2. Cropping Pattern 6 E. Land Leveling 7 LIST OF FIGURES Figure SA IV-A4.1: Subproject Impact Area... 2 Figure SA IV-A4.2: Subproject Impact Area Cropping Pattern... 7

80 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject iii ACRONYMS LSU - Louisiana State University MAFF - Ministry of Agriculture Forestry and Fishery MOWRAM - Ministry of Water Resources and Meteorology PDA - Provincial Department of Agriculture PDWRAM - Provincial Department of Water Resources and Meteorology PIO - Provincial Implementation Office PMO - Program Management Office Rice-SDP - Climate Resilient Rice Commercialization Sector Development Program

81 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 1 A. Subproject Description ANNEX 4: ASSOCIATED INITIATIVES I. GENERAL OUTLINE 1. The Subproject involves the establishment of a significant paddy drying and storage facility in a strategic location in Svay Antor District of Prey Veng. The facility will consist of a modern paddy handling complex where the transfer and movement of paddy are carried out mechanically in bulk to minimize the labor requirement of its operation. The facility will comprise: (i) a weighbridge and sampling station to receive and sample the quality of moist paddy, (ii) a covered receival and unloading station with short term storage facilities where bagged paddy is removed from trucks and prepared for bulk handling, (iii) a bulk intake hopper with elevators to deliver moist paddy to the dryers, (iv) the construction of two flatbed dryers to bring the moisture content of paddy down from 30% to 19-21% within 6-8 minutes (Stage I dryers), (v) the construction of eight conditioning bins to hold the paddy flowing from Stage I dryers before passing to Stage II dryers, (vi) the installation of four Louisiana State University (LSU) columnar drying units to bring the moisture level down to 14% (Stage II dryers) within a period of 6-8 hours, (vii) the construction of four storage silos with a combined capacity of 8,000 tons, and (ix) the establishment of bulk loading facilities for dispatching dried paddy to traders and millers. The concept design considers the option of incorporating a de-husking plant to improve the efficiency of storage and also to provide husk for power generation. The power source proposed is a combination of power from the provincial grid and that generated by the burning of husk to power the generators as a means of reducing operational costs. 2. The facility will be established on land to be identified by the provincial government that will be purchased on the open market thereby avoiding resettlement issues. It will have administration offices and canteen facilities for staff and those delivering to the facility. It will have a perimeter fence and lockable storage facilities to enable the facility to be used as a bonded warehouse for future financing options. The facility will have an extensive concrete apron with appropriate drainage to allow efficient bulk handling of produce. To accommodate this drying and storage equipment, an iron framed building will be constructed with an estimated floor area of 2,800 m 2 of sufficient height (25 meters) to house the drying equipment and elevators. Concept drawing of the building and plant are presented in SA IV- A3. 3. Recognizing that a commercial facility of this nature cannot be efficiently managed by any public service institution, the facility will be leased to a private sector entity under a public private partnership agreement for a nominated period of time at a consideration commensurate with the cost of the facility and the additional services to be provided by the operator. The Governor s office will be responsible for the identification of candidate operators of the facility who will be invited to submit a financial proposal under the PPP agreement. The lease shall remain in effect as long as the PPP operator conforms with the conditions outlined in the agreement. Failure to do so will result in the appointment of an alternate operator. 1. Cropping Pattern 4. Within the area of impact of the drying facility, three crops are produced each year - not all on the same piece of land but dependent upon local conditions of water and drainage. The three crops include the early wet season crop that is planted in April-May and harvested in August and uses surplus surface water remaining in drainage canals as well as tube wells developed to access the groundwater resource to supplement the less reliable rainfall. The second is the main wet season crop that is planted in June-July and harvested in November-

82 Rice-SDP Supplementary Appendix IV - Svay Antor Paddy Drying and Storage Subproject 2 December and is dependent upon the natural rainfall. This crop is more vulnerable to damage because of the heavy wet season and, whilst it remains the main crop in terms of area, it is the highest risk of all. This is dominated by the photo-period sensitive Phkar Romduol (a fragrant variety) that is in demand both domestically and international. The third crop is the recession crop that is planted in October and is harvested in February and uses water that is retained behind usually man-made structures from the previous wet season. There is a limited amount of dry season cropping where farmers have access to greater water supplies. Whilst this is a very productive crop in terms of yield, the short maturation varieties are less favored for domestic consumption. The cropping patterns are presented diagrammatically in Figure SA IV-A4.2. Given that the design capacity of the drying and storage facility is 8,000 tons or the equivalent of 10,000 tons of 30% moisture paddy, and assuming a yield of about 3 t/ha from each of the three crops, the area of impact for the facility is likely to be about 1,000 ha or, assuming an average farm size of 1 ha, 1,000 beneficiary households. Those with the greatest potential for participation will be those farmers whose land is in the immediate vicinity of the drying and storage facility. Figure SA IV-A4.1: Subproject Impact Area 5. The purpose of this Annex is to outline the sort of activities that might be undertaken under the investment to improve the impact of the investment in civil works (irrigation rehabilitation). Four key areas have been identified for supplementary assistance to be financed under the subproject including (i) technical extension services, (ii) support for cooperative development to assist in accessing credit amongst others, (iii) participation in a pilot crop insurance scheme to minimize the risk from flooding, (iv) establishment and support to FWUCs to be developed within the command area to facilitate improved water