Document of The World Bank STAFF APPRAISAL REPORT INDIA FEBRUARY 28, 1995

Transcription

1 Document of The World Bank Report No IN STAFF APPRAISAL REPORT INDIA NADHYA PRADESH FORESTRY PROJECT FEBRUARY 28, 1995 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized South Asia Department II Agricultural Operations Division

2 CURRENCY EQUIVALENTS Currency Unit = Rupees (Rs.) US$1.00 = Rs.32 WEIGHTS AND MEASURES The metric system is used throughout this report GOVERNMENT FISCAL YEAR April 1 to March 31

3 ABBREVIATIONS ACF ANR CCF CF DCF DGS&D DEA DFO EDP EDSF ERR FPC FRR FWP GIS GOI GOMP HRD ICB ICFRE IDA ILU JFM LCB MFPF MIS MPFD MPFDC NGO NTFP NVDA OCC ODA OPM PA PAU PCCF PU PME PRA RDF SCF SFRI SOE USAID VRDP VRSF WL Assistant Conservator of Forests Assisted Natural Regeneration Chief Conservator of Forests Conservator of Forests Deputy Conservator of Forests Directorate General of Supply and Disposal Department of Economic Affairs Divisional Forest Officer Ecodevelopment Program Ecodevelopment Support Fund Economic Rate of Return Forest Protection Committee Financial Rate of Return Forest Working Plan Geographic Information System Government of India Government of Madhya Pradesh Human Resource Development International Competitive Bidding Indian Council for Forestry Research and Education International Development Association Industrial Liaison Unit Joint Forest Management Local Competitive Bidding Minor Forest Produce Federation Management Information System Madhya Pradesh Forestry Department Madhya Pradesh Forest Development Corporation Non-Governmental Organization Non-Timber Forest Product Narmada Valley Development Authority Opportunity Cost of Capital Overseas Development Administration Orient Paper Mills Protected Area Policy Analysis Unit Principal Chief Conservator of Forests Project Unit Planning, Monitoring and Evaluation Participatory Rural Appraisal Rehabilitation of Degraded Forest Standard Conversion Factor State Forest Research Institute Statement of Expenses United States Agency for International Development Village Resource Development Program Voluntary Relocation Support Fund Wildlife

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5 INDIA MADHYA PRADESH FORESTRY PROJECT Table of Contents CREDIT AND PROJECT SUMMARY... i I. THE FORESTRY SECTOR A. Forestry in the National Economy... 1 B. Forestry in the State of Madhya Pradesh... 3 C. Lessons from Past Bank Lending II. FUTURE DEVELOPMENT OF THE FORESTRY SECTOR A. Objectives B. Strategy III. THE PROJECT A. Rationale for Bank Involvement B. Project Objectives and Design C. Summary Description D. Detailed Features IV. PROJECT COSTS AND FINANCING A. Project Cost Estimates B. Proposed Financing Plan C. Procurement D. Disbursements E. Accounts and Audit V. PROJECT IMPLEMENTATION A. Sector Strategy B. Project Organization and Management C. Project Supervision E. Reporting, Mid-Term and Completion Reviews VI. PROJECT BENEFITS AND JUSTIFICATION A. Benefits B. Economic and Sensitivity Analysis C. Financial Analysis D. Environmental Effects E. Impact on Women F. Tribal Peoples Development Strategy G. Institutional Benefits H. Project Risks VII. ASSURANCES AND RECOMMENDATION... 56

6 FIGURES 1 Elements of GOMP strategy for the future development of the forestry sector 2 Planning, Monitoring and Evaluation. Structure and Linkages 3 Project Unit. Structure and Linkages 4 Extension, Technology and Research. Structure and Linkages ANNEXES 1 The State of Madhya Pradesh. Natural and Human Resources 2 Technologies for Forest Management 3 Institutions 4 Forest Development on Private and Community Lands 5 Village Resource Development Program 6 Conservation of Biodiversity 7 Issues and Actions 8 Management Development 9 Monitoring and Evaluation 10 Information Systems 11 Extension and Research Centers 12 Planting Stock Improvement Program 13 Adaptive Research 14 Project Costs 15 Procurement 16 Six-Monthly Project Report Format 17 Schedule of Estimated Disbursements 18 Project Committees 19 Project Implementation Schedule 20 Project Supervision 21 Economic and Financial Analyses 22 Environmental Review 23 Tribal Development Strategy 24 Documents Available in Project File MAP 1 The State of Madhya Pradesh (IBRD 26171) The report is based on the findings of an appraisal mission that visited Madhya Pradesh in March, 1994, with a follow-up mission in June, The mission comprised I Hill (Mission Leader), P. Guhathakurta (Forestry Specialist), M. Jansen, R. Crooks (Environmental Specialists), G. Morgan (Planning and GIS Specialist), P. Francis (Rural Sociologist), K. N. Venkataraman (Procurement Specialist), Ms. A. deligne (Consultant Agroforestry Specialist), M. Varadan (Consultant Institutional Specialist) and D. Shields (Consultant Economist). Messrs. Jones, Asibey and Contreras were peer reviewers for the project. The report is endorsed by Mr. H. Vergin (Department Director) and Mr. S. Barghouti (Division Chief).

7 INDIA MADHYA PRADESH FORESTRY PROJECT CREDIT AND PROJECT SUMMARY Borrower: Implementing Agency: Amount: Terms: On-Lending Terms: Poverty Category: India, Acting by its President Madhya Pradesh Forestry Department (MPFD), Government of Madhya Pradesh (GOMP) IDA Credit of SDR 39.4 million (US$58.0 million equivalent) Standard, with 35 years maturity From GOI to GOMP as part of central assistance to the state for development assistance on standard terms and conditions applicable at the time Program of Targeted Interventions The project main beneficiaries, tribal peoples and forest fringe villagers, belong to the poorest sections of society. Tribal development concerns are central to the project and are addressed in an integral fashion under the rubric of social impact, participation and equity, rather than as a subsidiary tribal development plan. The project also incorporates specific measures to safeguard the interests of the landless and women, through participation in village committees, employment preference, and gender sensitive monitoring. Project Description: Objectives and Design. The main objective of the project would be to assist with the implementation of the GOMP strategy for development of the forestry sector in Madhya Pradesh. Future development of the forestry sector in Madhya Pradesh will involve long-term programs, so a strategic plan is needed for the provision of IDA support to the sector over a period of about ten years. Given the area of forest in Madhya Pradesh and its economic and environmental importance to both the state and the nation, investments over a ten-year period could total more than US$200 million. However, the GOMP strategy for the sector, described above, involves substantial change in the way the sector is managed and the introduction of innovative programs for participatory management of forests. Lessons from previous Bank lending show that these changes take time and may slow implementation.

8 ii Consequently, strategic planning for the provision of IDA support to the sector, is based on a two-stage approach. The first stage would be a project of four years duration, which is described below. Approval for a second-stage project of up to five years duration would be sought during the last year of implementation of the first stage. This flexible design allows MPFD to develop the new processes, systems and skills required for implementation of the National Forest Policy and to modify these in the light of experience as necessary. Project Components. The project would have four main components as follows: (i) Management Development to improve the management of the sector through: changing the approach of MPFD from a predominantly regulatory role to one in which communities are treated as partners in the management of forest resources; increasing policy analysis capabilities; and improving the management skills of senior MPFD staff, supported by the introduction of improved management systems, for planning, implementation, monitoring and evaluation procedures, together with improved management information and geographical information systems; and (ii) Forest Development involving: (a) the promotion of natural forest regeneration, supported by enrichment planting, improved silvicultural practices, and forest floor management over an area of about 160,000 ha; and (b) a Village Resource Development Program based on participatory planning, and management and protection of forest resources, integrated with activities to generate alternative incomes or resources, to reduce the pressure on the forests. A total of about 1,140 villages would be involved, managing an area of about 74,000 ha of forest land, in which silvicultural improvements would have been started during the project period. The phasing of activities for this component would be determined by progress in training staff in participatory planning; (iii) Extension, Technology and Research programs with provision of necessary infrastructure and facilities for the development of extension and research service centers in each ecological zone, coupled with staff training, providing a base for improved forestry extension services, tree seed improvement programs, demonstration nurseries and adaptive research trials; and (iv) Biodiversity Conservation through improved management of 12 high priority Protected Areas (PAs) by providing support for development of management plans, staff training, equipment and facilities. Special Funds would be created to support the development of alternative resources or income for communities resident within PAs and in areas peripheral to them. A lower level of project funding would be available for 12 lower priority PAs, whilst the identification and planning of linkages to complete the PA Network would be financed.

9 Estimated Project Costs: Component Foreign Local Total....US$ million. Management Development Forest Development Extension, Technology and Research Biodiversity Conservation Total Baseline Cost Physical Contingencies Price Contingencies Total Project Costs 1/ / Including duties and taxes of US$2.4 million Financing Plan: Soure of Finance Foreign LOcW Total... US$ million. IDA GOI 1/ Total I/ Including duties and taxes of US$2.4 million Estimated IDA Disbursements: (US$ Millions) FY96 FY97 FY98 FY991 Annual Cumulative

10 iv Economic Rate of Return: 11.5 percent Benefits: Risks: The project would increase, directly or indirectly, the production of wood, NTFP, and animal products which would benefit the rural poor and improve the supply of wood to forest-based industries. The project would support a program of assisted natural regeneration in about 160,000 ha of forest. About 1,140 village communities, of which a very high percentage would be tribal peoples, participating in the management of about 75,000 ha of forest would receive direct benefits from the project. The benefits include not only the improved access for communities to forest products, but also the benefits of improved agriculture and alternative income generating activities generated through the Village Resource Development Program and the Ecodevelopment Program. The project would have important benefits in terms of equity as about 18.3 million persondays of employment would be generated, a benefit which would be almost wholly captured by the poorest and landless households. Processors and marketers of wood and NTFPs would also benefit through increased supply of raw material. The direct and quantifiable economic costs and benefits of the project are mainly due to investments in both closed and open forests. The Economic Rate of Return (ERR) for the project as a whole, in terms of direct forestry outputs, and excluding the biodiversity and research components, is estimated at 11.5 percent. However, this understates project benefits as significant indirect and environmental benefits have not been included. These are benefits such as: protection and management in watershed and other areas, including measures to reduce soil erosion and improve moisture conservation; maintenance of biodiversity, including conservation of endangered plant and animal species and critical habitats; and increased productivity of the forest to reduce pressure on the environment. Other environmental benefits may include CO 2 absorption, river flow regulation, and meso-climatic and other effects. These were calculated by means of an environmental premium, associated with each hectare included in the project, to reflect the flow of external benefits, which is estimated to be about US$12 per hectare per year. The main risks facing the project are: (i) the degree of commitment within GOMP to make the necessary policy and institutional changes that would be necessary for the implementation of the agreed strategy for the sector; (ii) the effectiveness of participatory arrangements for the management of forest resources; (iii) the ability of MPFD to provide the private sector with technological advice, in order to take advantage of a changed policy environment. The first

11 v risk is being addressed through agreement on a sectoral strategy with associated policy changes formalized through the issue of necessary Government Orders. In addition, as this four-year project forms the first stage of a planned phased approach to sectoral development, it provides a means for GOMP to demonstrate commitment to change. The project would minimize the second risk through an intensive program of training for staff in the principles and practice of participatory forest management, through building links with NGOs and other government departments involved in village development, and by rigorous monitoring and evaluation of the program. Project support for forest extension programs, research programs targeted on the needs of producers, and the creation of an Industrial Liaison Unit within MPFD would reduce the third type of risk associated with the project.

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13 INDIA MADHYA PRADESH FORESTRY PROJECT I. THE FORESTRY SECTOR A. Forestry in the National Economy 1.1 In 1991, the recorded area of forest in India was 77 million hectares, but only about 64 million hectares, or about 19 percent of the land area of India, is covered by forests. The distribution of forest cover is uneven, with more than 50 percent in five states: Madhya Pradesh, Arunachal Pradesh, Andhra Pradesh, Orissa and Maharashtra. More than 80 percent of Arunachal Pradesh is forested, while the forest cover amounts to less than 4 percent in Rajasthan and Punjab. Forest cover is concentrated in the northeast, in the Himalaya and Siwalik ranges, the central belt, along the Western Ghats and in patches of mangroves. 1.2 Forested areas play an important role in the conservation of environmental quality through conservation of soil and water resources and biological diversity. They are the principal source of timber and wood, for which the demand in 1988 amounted to 260 million m 3. About 90 percent of this demand was for fuelwood. Forests are also the main source of fodder and non-timber forest products. The contribution of the forestry sector to GNP has been estimated at less than 2 percent, but this does not take into account the numerous non-market and external benefits, nor the fuelwood and timber that are harvested illegally and, therefore, unrecorded. Nor does it reflect the great importance of the forests to supporting the enormous cattle population. 1.3 Most of India's forests are degraded and productivity is poor. Only about half the forests have a crown density of over 40 percent and the resources are under pressure due to over-exploitation and encroachment. Forest degradation and deforestation are due to the severe land scarcity in India, which is increasing with the rising population. Poor farmers and the landless sometimes encroach on forest areas, whilst many derive their income from the sale of fuelwood and other forest produce. Other important pressures on the forests are the demands for timber, pulp and fuelwood to supply industries and urban consumers. Over-exploitation of grazing resources in forested areas may further accelerate degradation.

14 1.4 Government is addressing the problems of the forestry sector through policy reforms, legislation and afforestation. Historically, Indian national policy focused on forests as a resource to be managed by government as a source of wood products and to 2 raise revenue. The new National Forest Policy, issued in 1988, is to treat forests: first as an ecological necessity; second a source of goods for use by the local populations, with particular emphasis on non-timber forest products; and only thirdly as a source of wood and other products for industries and other non-local users. The Policy encourages industries to obtain raw materials from farm forestry. Forestry activities are regulated by the Indian Forest Act, the Wildlife Act and the Forest Conservation Act. A number of states have introduced Orders to regulate Joint Forest Management and define benefit sharing arrangements. GOI has sought to increase the area of forest by planting on wastelands and encouraging tree planting on private lands. It is estimated that, since 1985, about 5 million hectares have been developed from a total of about 74 million hectares of wastelands and marginal agricultural lands, paralleled by an increase in agroforestry activities. However, much of the land identified as wasteland may be used by local populations for other purposes, particularly seasonal grazing. The Eighth Five Year Plan ( ) further emphasizes investments for rehabilitation of degraded forests and farm forestry. 1.5 A World Bank review of India's forest sector ' endorses the need to improve forest protection and management as the most important forest policy goal for the next decades. This will require the cooperation of local populations and agencies in forest protection, management and development, which will depend on improving incentives for local participation, the technological means of production and the effectiveness of public sector forest management, and on prioritizing the areas to protect and develop. The report highlights the need to improve the productivity of the sector, through improved planting materials and practices, a strengthened research system and an effective forestry extension service. 1.6 Forestry was the sole responsibility of state governments until 1977, when it was classed as a concurrent subject, that is, GOI and the state governments share responsibility and control over forestry matters. However, management responsibility remains with the states, which decide on the staffing and resources required to implement policies. Whilst India. Forest Sector Review. World Bank Report No IN

15 the National Forest Policy emphasizes the environmental importance of forests, state governments are faced with pressures for forest products, land to satisfy a growing population and industrial interests, and revenue constraints. However, state forestry departments have generally introduced programs and schemes that respond to the 3 objectives of the new forest policy, but a number of issues remain to be addressed. These may vary from state to state, but as recognized in the World Bank Review (op cit), can be grouped into four categories: (a) local people have not been sufficiently motivated to cooperate in forest protection and development and the staff of forestry departments need to be oriented to work closely with local people for this purpose; (b) government regulations and procedures discourage the private sector from engaging in farm forestry and agroforestry and make these activities less profitable than they could be; (c) technological development in forestry operations has not kept pace with the investment in afforestation programs, so the productivity of plantations is below the optimum; (d) traditional forest administrations and arrangements for human resource development need change for the efficient implementation of the new forest policy; and (e) the prominent position of forest departments has discouraged other public and private sector agencies from sharing responsibility for sector development. Issues which pertain more specifically to Madhya Pradesh are discussed in the following section. B. Forestry in the State of Madhya Pradesh Factors of Production 1.7 Natural and Human Resources. The State of Madhya Pradesh has an area of 44.3 million ha, or about 14 percent of the geographical area of India. It encompasses the major part of the highlands of central India and constitutes parts of the upper catchments of five principal river systems, the Yamuna, Ganga, Mahanadi, Godavari and Narmada (Map 1). Maintenance of the ecological balance in the State is of critical importance to the nation as a whole. Rainfall varies from less than 800mm per year in western parts of the state to about 1500 mm in the east and south east. About 19.6 million ha, or 44 percent of the area of the State, are classed as agricultural land, of which 4.3 million ha are irrigated. In 1987, the livestock population was estimated at 45 million head, and migratory herds are thought to number about 2 million head during the year. The total human population of the State was estimated as million in the 1991 census, growing at a rate of 2.6 percent per annum between 1981 and Of the total, 15.3 million are

16 tribal peoples and 9.6 million scheduled castes. Poverty in rural areas is a concern as almost 41 percent of the rural population is below the poverty line, compared to 20 4 percent in urban areas. Average population density is 149 persons per square km. More information on the natural and human resources is presented in Annex Forest Resources. Legally designated forest lands, amounting to 15.4 million ha, are under the control of the Madhya Pradesh Forestry Department (MPFD) and are classified as Reserved Forest (8.3 million ha), Protected Forests (6.6 million ha), and Unclassified (0.5 million ha). Forest vegetation types vary with agro-climatic zones and include dry thorn, dry and moist deciduous, sub-tropical semi-evergreen, and tropical moist evergreen forests. Canopy closure varies greatly with human interference. Closed forests, that is, with canopy density greater than 40 percent, cover 9.5 million ha, or about 60 percent of the total. The remaining four million ha are referred to as open forest, with canopy density of between 10 and 40 percent. Three main forest types are distinguished for management purposes: (i) Teak dominated (2.7 million ha) in which the predominant species is Tectona grandis; (ii) Sal dominated (2.5 million ha) in which the main species is Shorea robusta and; (iii) Mixed hardwoods (10.2 million ha). Bamboo, mainly Dedrocalamus strictus, occurs as an under-story in dry to moist deciduous forests. 1.9 A total of 305,000 ha of forest plantations have been developed in Madhya Pradesh of which about half were planted prior to The remainder were mainly developed by the Madhya Pradesh Forest Development Corporation (MPFDC) between 1976 and Most of the earlier plantations were of teak and mixed species, whilst the later plantations were mainly teak and bamboo. About 5,000 ha of eucalyptus plantations have been developed privately About 2.2 million ha of forest land was legally excised from the forest estate between 1957 and the present. This represents an annual loss of 0.4 percent of the current area, or 61,500 ha per year. This is probably an underestimate, as much land is deforested before it's change of status is recognized legally. There is little data on degradation of existing forests, though the high proportion of forested land with crown density less than 40 percent points to degradation.

17 Planning, Monitoring and Evaluation. Forest Working Plans (FWPs) provide the basis for planning the management and development of the forest sector, containing baseline data and management prescriptions. FWPs often provide only a poor reflection of conditions on the ground, severely limiting their usefulness as practical tools for forest management. This is, in part, due to the fact that inventory and survey teams are often inadequately staffed and equipped to work effectively in the field. However, there are also problems associated with the nature and content of FWPs, which are not oriented toward multiple objective management and rarely address resource conflicts. The system for monitoring the progress of investment programs and special schemes focuses on the achievement of physical targets Forest Development Technology. The prescriptions of FWPs can be grouped into four silvicultural systems, described in more detail in Annex 2. They are applied to teakdominated, sal-dominated, and mixed hardwood forest types: - Coppice with reserves on short rotations for all three types; - Shelterwood on long rotations in teak and sal types; - Selection and selection cum improvement in all three types. - Conversion by clear felling into plantations of mixed hardwoods in either short or long rotations. This system is no longer practiced; 1.13 The main issues related to forest development technology include: The fact that the prescriptions of the FWP have, in many cases, not been implemented, as reflected in a drop in roundwood production. This is partly due to unrealistic assessments of sustainable production, but also due to lack of funds for proper implementation of the FWPs; Management of plantations has also suffered from establishment at too high a density, and a neglect of thinning and other silvicultural practices;

18 6 The need to develop technologies and management practices focused on regeneration of natural forests, with the active participation of communities; The need to address the problems of the impact of livestock on forests, in particular the supply of fodder and grazing; The need to increase the role of the private sector in forest production Planting Material Production. Records indicate that survival of planted trees is sporadic and often poor by international standards. There are many reasons for low survival rates, but the poor quality of planting stock is a major contributory factor. This starts with poor quality of seed, due to the lack of properly identified seed sources, and inadequate seed harvesting and cleaning procedures. Vegetative propagation is increasingly important in forest tree establishment, but is constrained by the lack of properly selected parent trees. The quality of seedlings produced from forest nurseries is a further limitation. Procedures tend to be standardized for all species in all ecological conditions and nursery managers have little access to modern nursery technologies Research. The State Forest Research Institute (SFRI) was established at Jabalpur in 1963, with a large campus and generous provision of buildings, and ten regional subcenters. Decisions on research priorities are mainly based on experience of regional needs and constraints, and the needs or returns to particular species or groups of users. The main constraints affecting forestry research in Madhya Pradesh, in particular within SFRI, relate to: the lack of any strategic medium or long-term research strategy; the lack of a career structure for scientists with specialist skills, coupled with the poor support and status offered to research activities; the transitory nature of many research appointments;

19 7 The Market for Forest Produce 1.16 Supply. The total growing stock in Madhya Pradesh is estimated to be about 600 million in 3, corresponding to an average of about 47 m 3 per hectare of forest land. This is lower than the average in India of 65.4 m 3 per hectare, due to the degraded nature of much of the forest. Recorded annual wood production is about 1.6 million m 3 and the unrecorded production, which includes fuelwood and headload removals, is estimated to be about 3.0 million m 3, giving a total production of about 4.6 million m 3. there is a large production of Non-Timber Forest Products (NTFP). In addition, 1.17 The total quantity of logs and poles supplied from MPFD has declined from over 1 million m 3 in 1982 to about 650,000 m 3 in A further 100,000 m 3 is estimated to be derived from private farmland. Data on the supply of pulpwood and bamboo for paper manufacture are uncertain. It is known that little pulpwood is available and it is estimated that about 170,000 tons of bamboo were supplied from within the State in A further 110,000 tons of bamboo were supplied for civil works and the urban markets. Fuelwood supplied by MPFD has decreased from over 2 million m 3 in 1982, to less than 1 million m 3 in 1992, though the total supply is probably maintained through unrecorded collection. Quantitative data are only available for certain types of NTFP, but the collection of tendu leaves has shown a steady increase. Demand 1.18 The demand for forest products comes from industries, primary processors, forest based cottage industries, and domestic users. Demand for forest products considerably exceeds supply as the actual capacity utilization of most of the forest based industries is only about 50 percent, due in large part to shortages of raw material. The demand for forest products is further demonstrated by the fact that many industries only achieve the present production by the import of raw materials, either from other parts of India, or from abroad. The two paper mills in Madhya Pradesh each have agreements with MPFD to supply 100,000 tons of raw material, mainly bamboo. In 1992, only 30 percent of the agreed total was supplied to the Government owned Nepa Mills and about 85 percent to the Orient Paper Mills, and the supply has declined further in the last year. The remain4der of the raw material is imported, mainly from Assam. Only 5 percent of logs used by the veneer industries are of local origin and most are imported from Burma. On

20 8 a national basis, demand for forest products is enormous and growing. The paper industry alone provides a vivid illustration. Present national production of paper is about 1.5 million tons. The targeted production of the paper industry in the Year 2000 is 2.5 million tons, requiring at least another 2.5 million tons of raw material, 60 percent of which will be bamboo and 40 percent wood Marketing Arrangements and Pricing. MPFD plays a significant role in the marketing of both timber and NTFP, resulting in a number of market distortions and inefficiencies. The reasons for MPFD involvement have little to do with comparative advantage in marketing and more to do with previous industrial policies, the desire to provide forest produce as a social necessity, or prevent exploitation of segments of the population, or revenue collection. Thus, MPFD is contracted to provide supplies to industry at concessional rates, though in recent times contracts have not been fulfilled. Timber is sold by MPFD at auction. Fuelwood is sold at 80 percent of the market price, at MPFD depots, to meet the needs of the urban population. MPFD also have the responsibility of providing Nistar rights, which ensure a supply of forest produce to populations in forest fringe areas. The most time-consuming marketing activity for MPFD is, however, tendu leaf collection. This absorbs virtually all the Territorial Wing of the Department for three months from April to June. MPFD is involved in marketing of trees grown on private land only through the fact that the Department endorses felling and transit permits issued by the Collector. The main issues affecting marketing and pricing are thus: The sale of forest produce at below market price, which is a dis-incentive for communities and individuals to protect and invest in forest management; The need to abolish the felling and transit regulations, at least for selected species, and to simplify the process for other species; The involvement of MPFD in collection and sale of NTFP requires review as it effectively halts the Department's program of forest management. Alternative mechanisms to provide protection for collectors and to ensure revenue is collected on behalf of the State could be developed;

21 9 Legislation 1.20 The control, protection and use of forest land and forest resources in Madhya Pradesh is governed by a legislative framework that sets out the rights of central and state governments, the rights of people, and the rights of nature. The need for review of some of these laws is presently being discussed by GOI and the State Government, in the light of the requirements of the National Forest Policy (1988). The main issues relate to: the fact that the National Forest Policy is not legally binding on either the central or state governments and there is a need to reform the Indian Forest Act (1927) in accordance with the new policy; the need to amend the Madhya Pradesh Panchayat Management of Government Lands Rules (1964) to include important features of the National Forest Act and the Forest Conservation Act, and to ensure consistency between this legislation and the Government Order on Joint Forest Management. Such changes are necessary to resolve institutional issues concerning the relationship between statutory bodies, such as the panchayats, and non-statutory bodies, such as Forest Protection Committees, to clarify peoples rights to forest resources, particularly nistar rights, and peoples rights to reside in forests, particularly in national parks and sanctuaries. Public Sector Institutions 1.21 The main public institutions in the forest sector in Madhya Pradesh are the Madhya Pradesh Forestry Department (MPFD), the Madhya Pradesh Forest Development Corporation (MPFDC), and the Minor Forest Products Federation (MFPF). Government is involved with forest based industries through its ownership of a paper mill and the Narmada Wood Processing Complex, which is managed by MPFDC. Other institutions that have an important role to play include the District Rural Development Agencies, the Tribal Development Department, the Narmada Valley Development Authority, NGOs, and the Panchayats. Activities of the Departments of Agriculture and of Animal Husbandry also impact on the forest sector, through their involvement in reclamation of non-forest wastelands and livestock programs. More details of these agencies are presented in

22 Annex 3. MPFD is the agency with primary responsibility for protection, conservation and production in forest areas, for the promotion of social forestry programs outside the 10 forests, and for legislation affecting the forest sector. Its role and that of the MPFDC are evolving in the light of changes required by the National Forest Policy. The main institutional issues relate to the way in which the organizations are responding, or not, to these new requirements. They include: The need for management procedures and structure of MPFD to be adjusted to facilitate the implementation of the new forest policy, improve the use of staff and resources, and provide a consistent approach to individuals or communities participating in the management of forests and social and farm forestry programs. The need for training, promotion criteria, and policies on staff postings, to support the increasing needs of MPFD for staff specialization; The need to link budgetary allocations to revenue generated from the forests, with an explicit percentage of revenue generated to be reinvested in management and afforestation; The future role and institutional structure of MPFDC, whose original mandate to convert forests into high value, mainly teak and bamboo, forests is inconsistent with the changed emphasis of the National Forest Policy and is prohibited under the Forest Conservation Act; The need to develop improved mechanisms for coordination between MPFD and other agencies that impact on the forest sector. This should include specific means to involve NGOs and local government authorities, possibly through budgetary support.

23 11 The Private Sector 1.22 Production. The private sector is not involved in production in a major way, but provides support to farm forestry programs. Orient Paper Mills (OPM) supports entrepreneurs to establish nurseries, and subsidizes the sale of seedlings to private growers. OPM also run an extension service that promotes the concept of planting trees for profit, and provides technical advice to growers. The scheme does not involve any buy-back contracts, and the grower is free to sell produce on the open market, though OPM will buy material at market prices. MPFD has also provided support to the private sector growers through social forestry programs (See Para. 1.23) and the decentralized nursery scheme, which was brought to a close in Industries. Forest based industries in Madhya Pradesh can be grouped into those utilizing round wood, those based on processed wood, and non-wood based industries. Of the round wood based industries, there is one private paper mill, over 4,000 tiny or very small saw mills, five slicer mills and one peeler mill for production of veneer, four plywood mills, two particle board mills and a parquet factory. The Narmada Wood Processing Complex is state owned and operated by MPFDC. Non-wood based industries include beedi production using tendu leaves, agarbatti production and oil extraction from sal seed. Many of the wood-based industries use only a fraction of their installed capacity due to inadequate and irregular raw material supplies The main issues relating to private sector involvement in the forestry sector concern the agreements on the supply of raw materials by MPFD at preferential prices, and the involvement of private agencies in plantation scale production. Past Development Strategies 1.25 Demand for timber during World War II meant that the prescriptions of working plans were suspended, so that at the time of independence many forests had been heavily exploited. During the early five-year plan periods, priority was given to survey and demarcation, preparation of working plans, plantation establishment and forest utilization. Subsequently, the policy was to maximize timber production and enforce forest protection. In 1972, the National Commission on Agriculture recommended that "there should be a change over from conservation oriented forestry to more dynamic program of production

24 forestry. The future production program should concentrate on clear felling of valuable mixed forests, mixed quality forest and inaccessible hardwood forests and planting these areas with suitable fast growing species yielding higher returns per unit area". The Madhya Pradesh Forest Development Corporation was set up in 1975 to assist with the 12 implementation of this strategy by attracting institutional finance. By the Sixth Five Year Plan period ( ) ecological balance, economic stability for the poor and greater forest protection were being given emphasis. The failure to control unauthorized exploitation and a growing realization of forests as a biological necessity and major part of the nation's natural resource heritage led to the formulation of the National Forest Policy in Social Forestry. The introduction of social forestry in Madhya Pradesh, during the early 1980s, was supported by a USAID project. The principle objective was to make it possible to meet the needs of the rural population for forest products from readily accessible community and private lands, not forest lands, thereby reducing the pressure on productive forests. The work of the project was continued through a number of government-funded social forestry programs (Annex 4), consisting of individual, community and village beneficiary schemes. The individual schemes include the payment of subsidies: for seedling production in private nurseries; for farm forestry involving the planting of trees on field boundaries or other private lands; and for planting of trees in public lands. Community beneficiary schemes include the creation of demonstration plots and village orchards. Village beneficiary schemes were largely focused on the creation of smokeless chullahs Although the social forestry programs have succeeded in making the forest service more aware of the needs of people they have not resulted in sustainable plantations, nor solved the problem of continuing deterioration of the forests. There were a number of reasons for this, including: (i) people were not sufficiently involved because the panchayats did not take on responsibilities for planning or management, the poor and in particular women, were not consulted, and issues related to control of grazing were not resolved; (ii) land for development was not identified early enough and was frequently in small isolated blocks that made management almost impossible; (iii) government officials focused on targets rather than quality; (iv) the programs did not provide sufficient forest produce and it remained cheaper to harvest from natural forests than to contribute to social forestry programs; and (v) the focus on social forestry may have meant that

25 13 funding for maintenance and protection of forests was reduced Joint Forest Management (JFM). JFM has been defined as "the sharing of products, responsibilities, control, and decision making authority over forest lands between forest departments and local user groups. It involves a contract specifying the distribution of authority, responsibility, and benefits" 2, The first major initiative to involve people in JFM in India was started in the State of West Bengal in Initial success led to the formation of over 1,700 Forest Protection Committees covering some 237,000 ha of forest. Similar programs have been started in a number of other states and more details of these experiences are presented in Annex 5. In June 1991, GOI issued a circular supporting joint planning and management of degraded forests in all parts of India JFM arrangements have been initiated in several parts of Madhya Pradesh and over 200 Forest Protection Committees (FPCs) had been established by The Government of Madhya Pradesh has issued an order providing the framework for implementation of the policy, entitled "Community participation in preventing illicit felling of the forests and rehabilitation of the forests", (Order No. 16/4/10/2/91 of December, 1991). The order is currently being revised and would prescribe the formation of two kinds of village committees: Forest Protection Committees (FPCs) would be constituted in sensitive forest areas where villagers are willing to participate in forest protection; while in degraded forest areas, Village Forest Committees (VFCs) are to be formed. In both cases, the committee would consist of a member from each resident family of the village. An informally constituted executive committee would include, as ex officio members, all the Panchs of the village Panchayat, the members of the Antyodaya Samiti, and the village Kotwar, teacher and Mukhia. The Forester or Forest Guard is to serve, ex officio, as the Secretary. The Divisional Forest Officer has the power to dissolve both kinds of committee, or to terminate the membership of specific members. A number of issues relate to the implementation of the Government Order: Institutional and legal arrangements for JFM need attention as viable and sustainable local institutions are essential; The traditional approach of the MPFD with its emphasis on forest 2 Training and Planning for Joint Forest Management. M. Moench. (Undated). Working Paper No. 8. Ford Foundation, New Delhi.

26 14 protection and enforcement has left a legacy of hostility and mistrust in some communities which will have to be overcome; The management of the MPFD has been hierarchical and suited to the downward transmission of orders and directives. Effective implementation of participatory programs will require a change in this culture, accompanied by decentralization to enable site-specific programs to be developed; 1.30 Ecodevelopment Annex 6. The term ecodevelopment has been used in India since the 1980s and a number of different definitions have been proposed. Most commonly, and in this report, it is used in connection with protected areas such as national parks or sanctuaries to define a strategy for protecting ecologically valuable areas from unsustainable or otherwise unacceptable pressures resulting from the needs and activities of people living in and around such areas. It is based on the assumption that if alternative natural and social resources are created in areas peripheral to the PAs, exploitation of resources within the PAs will be reduced. There is also the assumption that the involvement of the PA management in the creation of employment opportunities or fringe area resources, that may include fodder, veterinary services, water supplies, and other village infrastructure, will motivate communities to collaborate in the protection of forested areas. Ecodevelopment involves participatory management of resources, but is not identical to JFM, as communities do not receive direct benefits of forest produce from the PA Village Resource Development Annex 5. In Madhya Pradesh the term ecodevelopment has been used in a more general way to denote economic development of villages close to forest lands. This more general usage is referred to here as a Village Resource Development Program (VRDP). It is similar to ecodevelopment in trying to reduce pressure on forest land by providing alternative incomes or resources. It is also similar in assuming that provision of the alternative resources by the MPFD will generate a willingness to cooperate in forest management. It differs from ecodevelopment in that it explicitly involves communities in protecting neighboring forest areas through Joint Forest

27 15 Management arrangements, with the associated sharing of benefits. There are a number of issues related to both ecodevelopment and VRDP: mechanisms to ensure that communities link the provision of alternative incomes or resources with their participation in the protection of PAs, or the management of forest resources, are not well developed; experience with participatory management of resources in Madhya Pradesh is limited; MPFD does not have all the necessary skills or experience to implement programs outside the forest sector, and the necessary coordination mechanisms are not well developed. C. Lessons from Past Bank Lending 1.32 The World Bank has supported ten projects in the field of forestry and resource conservation in India with lending amounting to about US$500 million. Experiences gained through project supervision, project completion reports and reviews of the sector in India, the Asia region, and worldwide, have been assessed. In the past, forestry projects in India mainly provided support for social forestry and watershed protection activities and have had mixed success. The involvement of local people in some of these projects was inadequate. Many of the projects encountered implementation problems due to slow project start-up, institutional weaknesses and insufficient local funding. The major lessons from the early projects was that the programs were inadequate to address the complex issues affecting the forest sector. Other important lessons include: the need for production of improved planting material; better extension services; more emphasis on the planning and management of plantations and natural forests in the light of environmental concerns, including the conservation of biodiversity; better processes to involve local communities in the planning and management of forest resources and; interagency coordination in project implementation. These lessons have been taken into account in the design of the proposed project.

28 State-wide forestry projects have been recently approved by the Board for the States of Maharashtra (Cr IN), West Bengal (Cr IN) and Andhra Pradesh (Cr IN). The proposed operation would build on the concepts developed for these projects, adapting them for the particular conditions in Madhya Pradesh. It would also be consistent with the findings of the Forest Sector Review (Report No IN) which indicates that the strategic focus for forestry development in the next decade will be to improve forest protection and management through greater participation of communities and the introduction of technologies to improve productivity and permit better land use. Implementation of the strategy will be supported by redefining the role of government and revising regulatory and pricing policies to stimulate more effective private and public investments in the forestry sector.

29 17 II. FUTURE DEVELOPMENT OF THE FORESTRY SECTOR A. Objectives 2.1 The objectives of the future development of the forestry sector in Madhya Pradesh would be, in accordance with the National Forest Policy of 1988: to ensure environmental stability and maintain ecological balance; to conserve the national biological heritage; to increase substantially the forest and tree cover in forest and farm lands; to increase the productivity of forests; and to ensure the participation of the people in the management of forests and trees to achieve these objectives. B. Strategy 2.2 Since these objectives represent a major change from the traditional objectives for the forest sector, a new strategy for the future development of the sector has been formulated by GOMP and involves: changes in the sectoral policy framework and the approach of MPFD; changes in sector management; and changes in program implementation. To realize the changes will require training for staff and communities, so human resource development is a crucial element of the strategy. The GOMP statement of strategy is presented below. The linkages between the various elements of the strategy are illustrated in Figure 1, and presented in relation to issues and actions in Annex 7. Framework 2.3 The strategy would involve changes in the framework governing the management of the sector. These would include changes in sector policy which would focus on creating a market-oriented environment and an appropriate legislative and administrative framework for increasing participatory management of forest resources. The strategy would also involve a change in the traditional culture and approach of MPFD, from a predominantly regulatory role, to one in which communities are treated as partners in the management of forest resources.

30 18 Framework Sector Programs Management l Strategic Planning Policy Analysis Conservation Areas Departmental Approach Closed Forests Sectoral Policy Management System Development Decentralization Open Forests Planning Monitoring Evaluation Technology Administrative Procedures Private and Community Lands Institutional Structures Human Resource Development FIGURE 1. Elements of the GOMP strategy for the future development of the forestry sector in Madhya Pradesh.

31 19 Sector Management 2.4 Changes in management of the sector would support the development of the sectoral framework through the introduction of strategic planning linked to policy analysis. Staff orientation programs would promote changes in the approach of MPFD. Other changes would relate more specifically to the development of management systems. This would include a focus on decentralization of planning that would ensure programs are linked to site-specific conditions and priorities, and the needs of participatory forest management. Budgetary allocations would be linked to these plans. Monitoring and evaluation would be an iterative process, contributing to both planning and implementation. Technologies and silvicultural practices would be suited to management objectives, supported by adaptive research programs. Administrative procedures and institutional structures would be reviewed and changed as necessary, to meet the requirements of the changed management priorities Programs 2.5 The strategy would be to develop implementation programs related to a classification of the state based on management objectives as follows: Area Primary Management Objectives 1. Conservation Areas Conservation of biodiversity 2. Closed Forests (i) Maintenance of forest cover. Enrichment of stocking by natural regeneration to eventually increase production (ii) Timber and NTFP production 3. Open Forests (i) Increase in forest cover (ii) Production of local community requirements for forest products 4. Private and Community Lands Commercial forestry and involvement of forest-based industries 5. Village common lands in forest fringe Production of local community requirements areas for forest products 3 Management changes are discussed in more detail in Annex 3, monitoring and evaluation in Annex 7 and silvicultural practices in Annex 2.

32 Conservation Areas. The strategy for the conservation of biodiversity would be to focus improved PA management on a number of priority areas of biological importance, in which human impacts are readily manageable. Management of sites of lower priority would be maintained, though with fewer resources. PA management would be complemented by an Ecodevelopment Program (EDP) in areas peripheral to the PA. The PA Network, in particular, linkages between existing PAs, would be developed through identification of relatively undisturbed satellite areas and, for the intervening zones, the preparation of management plans that are compatible with biodiversity conservation Closed and Open Forests. Many aspects of the strategies for these areas are similar and there is a gradation from one to the other. Both would be based on the full spectrum of forest products, including minor forest products, fruit, fodder and fuel, as well as timber s. Community involvement in detailed planning and implementation of proposed forestry programs, with an agreement clearly setting out the obligations of, and benefits to, the communities and MPFD, that is, Joint Forest Management, would be a cornerstone of the strategy in both areas. In closed forest, improved productivity would be achieved through natural regeneration and enrichment planting with a variety of species, including those of importance to local communities, and by adopting soil and moisture conservation measures. In open forest areas, the species providing benefits to the community would be given priority. JFM arrangements would be integrated with activities that would include measures to provide alternative resources and income to reduce unsustainable exploitation of the forest. Together, these activities would form part of an integrated Village Resource Development Program (VRDP) 6, 2.8 Private and Community Lands. The strategy would focus efforts on promoting tree planting on private lands. Forest based industries would also be involved in promoting tree farming on private land to ensure availability of raw material. Development of the village commons in forest fringe villages would be based on JFM 4 The strategy for conservation of biodiversity is further discussed in Annex 5. 5 Appropriate technologies for natural forest management are discussed in Annex 2. 6 The Village Resource Development Program is discussed in more detail in Annex 4.

33 21 arrangements as part of a VRDP The Role of the Private Sector. The private sector in Madhya Pradesh includes village communities, graziers, and small farmers as well as large industries. The future role of the private sector will be to extend their involvement in farm forestry and agroforestry in a more meaningful manner. In farm forestry programs farmers would continue to take full responsibility for production and management. Forest-based industries would take a more proactive role in securing raw material supplies by providing credit, material, technological support and buy-back guarantees to small producers. The private sector would also take a leading role in developing small rural nurseries, and provide industrial support to farm forestry programs with a view to producing quality planting materials. Livestock are entirely controlled by private sector owners and their impact on the forest sector through the enormous demand for grazing and fodder is severe. The future strategy to minimize grazing pressures would involve the improvement of livestock productivity through breeding, and an increase in the production of cultivated fodder; 2.10 The Role of the Public Sector. In the future, the role of public sector agencies would be mainly regulatory and supportive, rather than involved in direct marketing, or processing. Thus, they would restrict their activities to the formulation and monitoring of the necessary policy and regulatory framework for the sector, and provide supporting research and extension services for the development, introduction, and dissemination of new technologies and management practices. The implementation of this strategy would require: (i) a review of all the many tasks for which MPFD is responsible; (ii) the identification of those which can be handled by private sector agencies, including NGOs; (iii) the introduction of improved management procedures and structures in public sector agencies to meet the needs of their redefined role; and (iv) staff training and development to enable the agencies to fulfill their role. Programs to support tree planting on private and community lands are discussed in Annex 4.

34 A

35 22 III. THE PROJECT A. Rationale for Bank Involvement 3.1 Future development of the forestry sector in Madhya Pradesh in accordance with the National Forestry Policy will require long-term commitments. The Bank is one of the few institutions that could provide the necessary continuity of support. In addition, the Bank's involvement in similar state forestry projects provides a mechanism for transferring up-to-date practical experience with project implementation. This experience enables the Bank to engage in a constructive dialogue on sector management issues with both state and central governments. The Bank is also in a position to ensure that improved technology will be made available to MPFD in a timely manner, both through its support for the national Forestry Research, Education and Extension Project, and through linkages with international forestry research organizations. The proposed project would be consistent with the overall country assistance strategy, including the strategy for Bank assistance to the agricultural sector in India, which seeks to promote increased productivity through better selection of investments, product diversification, and more efficient public sector management. It is also consistent with the objectives of the Bank's forestry policy and the Asia Region's strategy for lending, which links policy dialogue with major investments in the forest sector. B. Project Objectives and Design 3.2 The main objective of the project would be to assist with the implementation of the GOMP strategy for development of the forestry sector in Madhya Pradesh. More specifically the objectives are: to develop the necessary human resources for the planning, implementation and monitoring of the strategy; to ensure that management procedures and the structure and resources of MPFD are appropriate to its role as the nodal public sector agency in the forestry sector; to assist with the prioritization of various types of land through improved planning at a macro-scale; to increase both forest cover and productivity through development of participatory processes for management and use of forest resources, taking special account of the interests of tribal peoples and other disadvantaged groups; to adapt and improve existing technologies and to provide technical and management advice; to improve incentives for forest management and the cultivation of trees; and to promote the conservation of biodiversity.

36 Future development of the forestry sector in Madhya Pradesh will involve longterm programs, so a strategic plan is needed for the provision of IDA support to the sector over a period of about ten years. Given the area of forest in Madhya Pradesh and its economic and environmental importance to both the state and the nation, investments over a ten-year period could total more than US$200 million. However, the GOMP strategy for the sector, described in Chapter II, involves substantial change in the way the sector is managed and the introduction of innovative new programs for participatory management of forests. Lessons from previous Bank lending (Para. 1.27) show that these changes take time and may slow implementation. Consequently, strategic planning for the provision of IDA support to the sector, is based on a two-stage approach. The first stage would be a project of four years duration, which is described below. This is designed to allow MPFD to develop the new processes, systems and skills required for implementation of the new GOMP strategy and to provide for necessary investments in the sector. Project support for improved management would have an impact on the sector as a whole. Investments in forest development and management would be initiated throughout the state, but in a small proportion of the 15.4 million ha of forest land and in a representative number of the 30,000 villages located in forest fringe areas. These would form the basis of larger scale investments that could be provided in a second-stage project, that would build on experience gained, and incorporate any necessary modifications to programs and processes initiated during the first stage project. Approval for such a second stage project could be sought during the fourth year of implementation of the first stage. It is not possible to be precise about its magnitude as it would depend on implementation experience. However, it can be assumed that successful forest development programs would grow exponentially, so investments would be correspondingly greater. C. Summary Description 3.4 The project area would cover the entire State of Madhya Pradesh which has been described briefly in Chapter I and in more detail in Annex 1. The project would be implemented over a four-year period, from January 1995 to December 1998, and would have four main components, listed below with the main activities in each: Management Development. Development of the management of the sector through: changing the approach of MPFD from a predominantly regulatory role to one in which communities are treated as partners in the management of forest resources; increasing policy analysis capabilities; and improving the management skills of senior MPFD staff, supported by the

37 24 introduction of improved management systems, for planning, implementation, monitoring and evaluation procedures. The project would finance the introduction of improved management information and geographical information systems, linked to a program of training for all levels of staff. Forest Management. This would have two main thrusts: (i) A program of assisted natural forest regeneration (ANR), supported by enrichment planting, improved silvicultural practices, and forest floor management over an area of about 160,000 ha; and (ii) A Village Resource Development Program involving community based participatory planning, and management and protection of forest resources, integrated with activities to generate alternative incomes or resources, to reduce the pressure on the forests. A total of about 1,140 villages would be involved, managing about 74,000 ha of forest land. Staff training in participatory planning would be provided and the availability of trained staff would determine the phasing of activities. Extension, Technology and Research. Provision of necessary infrastructure and facilities for the development of extension and research service centers in each ecological zone, coupled with staff training, would provide a base for improved forestry extension services, tree seed improvement programs, demonstration nurseries and adaptive research trials. Biodiversity Conservation. Improved management of 12 high priority Protected Areas (PAs) through provision of support for development of management plans, staff training, equipment and facilities. Special Funds would be created to support the development of alternative resources or income for communities resident within PAs and in areas peripheral to them. A lower level of project funding would be available for 12 lower priority PAs, whilst the identification and planning of linkages to complete the PA Network would be financed.

38 25 D. Detailed Features Management Development 3.5 Sector Management Annex 8. The project would finance measures to improve management of the forestry sector in three main ways: changing the approach of MPFD, improving the management system and increasing policy analysis capabilities. The project would provide funds for reorientation and training of staff at all levels. Local and international management training would be financed for senior MPFD staff. Through the provision of consultancy funds, the project would also assist the Department to review management procedures and structures, staffing levels and skills, determining whether any modifications are necessary to enable the Department to meet the demanding role required by the proposed strategy. Finance would also be available for the operation of a small Policy Analysis Unit, responsible directly to the Principal Chief Conservator of Forests (PCCF), with resources to commission specific policy studies. Short international utdining courses for present and possible future heads of this unit would be financed, together with longer Masters or Diploma courses for staff of Deputy Conservator of Forests (DCF) level. Computing and other necessary supporting equipment would be provided. The project would further support staff development by providing resources for in-service technical and management training for officers of Assistant Conservator of Forests (ACF) rank and above at SFRI, which would fulfill the function of a staff college. Funds for rehabilitation of the hostel, for training materials and equipment, and for recruitment of resource persons for specific training activities would be available. Support for the training of foresters and forest guards would be provided through financing curriculum development, training of trainers and rehabilitation of facilities at forest colleges Planning, Monitoring and Evaluation (PME). Annexes 9 and 10. The project would finance measures to improve the capabilities of MPFD for PME at both macro- and micro-levels. Consultancies to assist with the design and introduction of improved PME procedures and supporting systems would be financed as part of the development of sector management. Funds would also be available for the development of a Management Information System (MIS) and related Geographical Information System (GIS). The MIS would be based on PME cells that would be developed at headquarters, territorial circle, 8 Training forms an important part of each project component. An outline training plan is presented in each of the relevant Annexes.

39 and divisional levels, and in five zonal wildlife offices. These cells would provide information services to all MPFD activities, that would ensure the conclusions from monitoring and evaluation work are incorporated in future planning. GIS service units would be created at headquarters and in four zones, corresponding to FWP circles. The position of the planned PME Units and Cells and functional linkages within MPFD are illustrated in Figure 2. Project funds would be available for purchase of computer equipment and software. Advanced training in MIS and GIS applications would be 26 provided for selected staff and general computer literacy courses for a much wider range of staff. The project would also support improvements in MPFD capacity for resource assessment and inventory through provision of field survey instruments, equipment and vehicles for FWP survey teams and technology development studies to identify and implement improved forest survey techniques. 3.7 Project Unit. Project funds would be available for the operation of a Project Unit (PU). The staffing and structure of the unit is illustrated in Figure 3, together with the linkages to operational units of MPFD. The project would provide necessary computers, equipment and vehicles for the PU. Forest Development 3.8 Assisted Natural Regeneration (ANR). Annex 2. The project would support a program of assisted natural regeneration of forests, linked to forest ecotypes, rather than oriented to particular species. Based on improved inventories (Para. 3.6), the program would include improved management of the forest floor, through control of grazing and fire protection, and improved soil and moisture conservation to enhance ground vegetation and humification. Natural regeneration from seed would be supported by enrichment planting where necessary, and improved silvicultural practices. A total of about 160,000 ha would be treated during the course of the project, including the rehabilitation of some 21,000 ha in which bamboo has flowered. The forest development program would be supported by staff training and the provision of staff housing and vehicles. 3.9 Village Resource Development Program. Annex 5. The project would finance a program for joint forest management, integrated with activities to promote the sustainable use of forest resources. This would be based on village area plans, developed through a participatory process, leading to agreements that would set out the rights and obligations of local communities and the MPFD. Success would be in large part dependent on the availability of trained staff with a genuine commitment to the participatory process. The

40 project would, therefore, fund orientation workshops and the training of staff and 27 community members. It would also provide for plan formulation through the formation, training and operation of a VRDP Planning Team in each Division, that would include at least one woman, who would meet the criteria for selection as a ranger. It would be difficult for MPFD to recruit women rangers by the date of project effectiveness, so the project would provide funds for special contracts with suitably qualified women, possibly recruited through NGO involvement, as members of the VRDP Planning Teams As part of an integrated program for village resource development, project funds would be available for JFM activities in forest areas used by the communities. A total of about 1,140 villages would be involved over the project period, managing and protecting about 75,000 ha of forest land, for which detailed microplanning would have been completed, and in which silvicultural improvements aimed at the rehabilitation of degraded forests (RDF) would have been started. This would include planting of bamboo in selected areas, totalling just over 8,000 ha. The phasing of the program would be mainly determined by the availability of trained staff. Management practices would involve new plantings of a variety of species according to ecotype, coppice management, and silvipasture. Integrated with this JFM program, the project would provide for investments in schemes to generate alternative resources or incomes, linked to community protection of the forest. Extension, Technology and Research 3.11 Extension and Research Service Centers. Annex 11. The project would finance the development of twelve service centers and one sub-center, one in each of the major ecological zones of the state. Buildings, equipment, vehicles and other facilities would be provided. The centers would provide a focus for extension programs, for seed improvement programs, for demonstration nurseries, for demonstrations of new technologies, and for applied research. The centers would also provide facilities for training of MPFD staff in extension methodology. The linkages between the centers and these activities, and the way in which these support MPFD programs are illustrated in Figure 4.

41 Extension. Annex 4. Project support for forestry extension programs, focused on farm and community forestry, would be provided in 40 priority Forest Divisions, selected on the basis of proximity to markets for farm and community forest products, the amount of irrigated land, population density and the success of previous social forestry programs. Funds would be available for extension materials and equipment, farmer training, demonstrations and vehicles or motorcycles. The project would finance training of DFOs and Rangers in extension techniques An Industrial Liaison Unit would be created under the Chief Conservator of Forests (CCF) for Industries. Its function would be to ensure forest based industries are aware of tree improvement programs, technology advances, supply and demand projections, and market identification for both wood and non-wood forest products. The head of the Unit, a Conservator of Forests (CF), would be supported by a DCF and staff in the E&R centers, responsible for collection of data. The project would finance the provision of a computer, training for staff of the Unit, and special contract studies of market forecasts or industrial technology Seed Improvement. Annex 12. The project would finance a program to improve the quality of seed used in all forestry activities in Madhya Pradesh through financing the identification of superior mother trees, the collection of seed, the development of Seedling Seed Production Areas, and the development and operation of Clonal Seed Orchards with supporting shade/mist houses, for those species of greatest importance to the sector. Project funds would be available to provide facilities for drying, processing, and storage of seeds. Basic facilities would be provided at each R&E center. A cool store and seed testing laboratory would be provided at SFRI. As the basis for improvement of exotic species, project funds would be available for the import of high quality germ plasm. The project would support staff training in seed technology and tree improvement, and provide for short-term international technical assistance for the development of seed facilities at SFRI and the substantial tree improvement program Nursery Demonstration. Annex 12. Project funds would be available for the development of nurseries in each of the E&R Centers, that would demonstrate modem nursery techniques. These would act as models for private sector nurseries of a capacity of between 10,000 and 100,000 seedlings. Construction of the nursery and purchase of necessary irrigation and ancillary equipment would be provided for.

42 Research. Annex 13. Due to lack of staff, SFRI research capabilities are severely constrained. However, the establishment of SFRI as an autonomous agency would provide greater flexibility in staff recruitment. The project would, therefore, provide a limited amount of equipment to upgrade key laboratories supporting the seed and tree improvement programs. Other project support for research would take the form of funding for contract research programs, to be commissioned by SFRI in universities and other agencies. In addition, the project would finance consultancies to assist with the development of a strategic research plan for the State, based on a systematic assessment of research priorities, that would complement national research programs being undertaken in Institutes of the Indian Council for Forestry Research and Education (ICFRE). Biodiversity Conservation. Annex PA Management. The project would support improved PA management planning by financing the operation of five zonal teams, that would provide specialist advice to PA managers, responsible for developing PA management plans. In addition, the project would provide funds for information centers, other necessary buildings, communications equipment, office and field equipment, and vehicles for 12 PAs, selected on the basis of their biological significance and in which human pressures on the PA are readily manageable. A lower level of support would be provided for 12 lower priority PAs. Development of the PA network would be supported through the provision of funds for the identification and survey of important undisturbed satellite areas, and the preparation of strategic plans for the management of these areas and the inter-linking, more disturbed areas. In addition, project funds would be available to contract research on aspects of biodiversity and PA management, and of the impact on biodiversity, of communities resident within the PAs Ecodevelopment Program (EDP). Finance would be made available for the establishment of an Ecodevelopment Support Fund (EDSF), to be used for sustainable management of forests and for the development of alternative resources or income generating opportunities, in village areas peripheral to the PA. This program would be supported through financing the training and operation of five Ecodevelopment Planning Teams, who would, in turn, provide on-the-job training and assistance to Wildlife Rangers, Foresters, and Forest Guards planning and implementing village ecodevelopment programs.

43 Project Preparation Facility (PPF). An advance of approximately US$275,000 was approved from the PPF. This was to enable MPFD to: (i) initiate orientation and training of staff, particularly of staff involved in the VRDP and Ecodevelopment Program; (ii) recruit consultants to assist with the management review; and (iii) establish a Project Unit (See Chapter V). These measures were designed to ensure rapid start-up of project activities

44

45 31 IV. PROJECT COSTS AND FINANCING A. Project Cost Estimates 4.1 Total project costs are estimated at US$67.3 million (Rs million), inclusive of duties and taxes in the amount of US$2.4 million (Rs.85.7 million). Of this 14 percent or US$9.1 miillion are foreign exchange costs. Investment costs amount to 94 percent and recurrent costs to 6 percent of base costs. The base costs are those obtained at the time of appraisal and have been adjusted for inflation to the time of negotiations. Physical contingencies amount to 5 percent. Price contingencies of 2.2 percent per year were added for the foreign exchange component. For local costs, price contingencies were added at 8.0 percent for 1995, at 7.0 percent for 1996, and at 6.0 percent for 1997 and The table below gives a summary of project costs by component. Additional summary tables of project costs by year, by component and by summary accounts are presented in Annex 14. Project Cost Summary Component Foreign Local Total FE....US$ million. Management Development Sector Management Planning, M and E Forest Development Natural Forest Regeneration Village Resource Development Extension Technology and Research E and R Service Centers Extension Seed Improvement Nursery Demonstration Adaptive Research Biodiversity Conservation Total Baseline Costs Physical Contingencies Price Contingencies TOTAL PROJECT COSTS 1/ / Including duties and taxes of US$2.4 million.

46 32 B. Proposed Financing Plan 4.3 The proposed IDA Credit of US$58.0 million equivalent would finance 89 percent of project costs, net of taxes, or 86 percent of total project costs, including taxes. The credit would finance 100 percent of the direct and indirect foreign exchange costs and 84 percent of local costs. Incremental recurrent costs amount to 7 percent of total costs, including contingencies. These would include the operation and maintenance costs of civil works, vehicles and equipment financed by the project. IDA would fund an average of about 50 percent of the incremental recurrent costs, declining from 60 percent to 50 percent over the life of the project (See Para. 4.15). There would be no incremental staff so salaries and allowances are not included in project costs. The financing plan below presents IDA and GOI contributions for the four year project period. Proposed Financing Plan by Foreign Exchange and Local Costs (US$ million) Source of Financing Foreign Local Total IDA GOI 1/ Total / Including duties and taxes of US$2.4 million C. Procurement 4.4 Civil Works (US$9.6 million). Works would be procured following Local Competitive Bidding (LCB) or Force Account procedures as follows: LCB. Civil works in the project consist mainly of the construction of buildings for eco-centers, residential quarters for Forest Guards, Foresters and Range Officers in remote forest areas, a few quarters for Forest Officers in Divisional headquarters, and repairs to forest roads. Works to an aggregate value of US$1.6 million equivalent would be procured under contracts awarded on the basis of LCB procedures acceptable to IDA. The justification for the proposed LCB for civil works is that they consist of rehabilitation of existing buildings, or the construction of new buildings in

47 33 widely scattered interior locations, during the first four years of the project. The works would be grouped together into convenient packages for bidding, but the largest contract is likely to be less than US$150,000 so it is unlikely that foreign firms would find such contracts attractive. Nonetheless, bids from foreign contractors would not be precluded. Arrangements for procurement are presented in Annex 15 and a detailed procurement schedule in Attachment 1 to the Annex. Force Account, including direct contracting and on the basis of quotations from a list of at least three contractors, would be used for all small civil works located in remote areas and valued at less than US$20,000 equivalent or less, up to an aggregate amount of US$8.0 million and would be undertaken by MPFD. This would include materials for works carried out under Force Account, valued in aggregate at US$3.3 million, to be procured following local shopping procedures acceptable to IDA. The works are not suitable for competitive bidding due to the small amounts and remoteness of location. Monitoring of works carried out under Force Account would be done using procedures acceptable to IDA. 4.5 Forest Operations (US$20.8 million). Force account would be used for most forest operations, including the cost of establishing identified seed production areas, clonal seed orchards, seedling seed production areas, and multiplication gardens. This is due to the operations being located in remote areas and MPFD having the necessary personnel and skills in place. 4.6 Goods, Equipment, Furniture and Supplies (US$6.0 million). Goods, in particular, computers to an estimated value of US$1.7 million, would be procured using International Competitive Bidding (ICB) procedures. However, equipment estimated to cost less than US$200,000, up to an aggregate of US$0.8 million would be procured using LCB procedures acceptable to IDA. Small items of equipment, and some field and laboratory supplies, would be procured in small lots over the five-year period. As individual contracts are not expected to exceed US$20,000 they will be procured using local shopping procedures satisfactory to IDA, up to an aggregate amount of US$2.6 million. Directorate General of Supplies and Disposal (DGS&D), New Delhi, rate contracts would be acceptable for procurement under local shopping only. Satellite imagery, aerial photography and maps, valued at about US$0.2 million, would be procured directly from GOI agencies such as the National Remote Sensing Agency or the Survey of

48 34 India. Similarly, books and periodicals, extension and publicity materials, valued at about US$0.7 million, would be obtained under direct contracting procedures. Arrangements for procurement are presented in Annex 15 and a detailed procurement schedule in Attachment 2 to the Annex. 4.7 Vehicles (US$3.4 million). Vehicles for the project consist of four-wheel drive vehicles, cars, motorcycles, light trucks, minibuses, and boats. Vehicles to an estimated value of US$1.8 million would be procured using ICB procedures. However, some vehicles and boats would be needed immediately and others would be required in small numbers in different locations at various times throughout the project period. To meet these requirements, contracts of less than US$100,000 to an aggregate value of US$1.6 million, would in the case of vehicles be procured through local shopping, using DGS&D rate contracts. In the case of boats local shopping procedures based on quotations from at least three suppliers to ensure competitive prices would be used. 4.8 Consultancies, Studies and Training (US$5.7 million). Consultancy services estimated at US$1.2 million would be contracted on terms and conditions in accordance with IDA guidelines for the use of consultants 9. Technical assistance estimated to cost US$1.2 million and training, including a service contract for placement and support of trainees, to a total of US$3.3 million would be procured using procedures and institutions acceptable to IDA. A summary of TA arrangements, studies and consultancies is presented in Annex 15 and detailed training plans are presented in Annex 15, Attachments 3A and 3B. 4.9 Forest Protection (US$14.7 million) are funds available to village communities for satisfactory protection of forest land undertaken as part of JFM arrangements agreed with MPFD. The funds, administered by the DFO, would be utilized to finance the creation of alternative resources, income, or community assets under the VRDP, in accordance with procedures and criteria agreed with IDA (Annex 5) Ecodevelopment Support Fund (US$2.2 million) is designed to provide support for ecodevelopment activities. The Funds would finance small works and income generating activities in about 100 widely scattered village locations over the four-year project period. Procedures for management of the Fund, acceptable to IDA, would be utilized (Annex 6). 9 Guidelines: Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency. August 1981.

49 Operating Costs (US$4.6 million) include incremental operating and maintenance costs of vehicles and equipment, and the purchase of office and computer supplies. Costs of field experimentation and trials, including labor, seed or other planting materials, fertilizers, and chemicals are also considered as operating costs to be disbursed following procedures acceptable to IDA Contract Review. All ICB contracts, and civil works, goods and equipment contracts valued at US$200,000 and above, and the first two civil works and the first two goods contracts, regardless of value, would be subject to prior review by IDA. For consultancies, model documents for inviting proposals, terms of reference for consultants irrespective of value, all single source contracts regardless of value, all contracts for assignments of a critical nature, and all contracts valued at US$100,000 or more awarded to firms, or US$50,000 or more awarded to individuals would be subject to prior review by IDA. This would result in prior review of about 80 percent of all contracts procured under ICB or LCB procedures. Contracts below the threshold levels would be subject to selective post-review by visiting missions. AlLhough this would result in only about ten percent of project procurement expenditures being subject to prior review, the nature of the project, with its emphasis on forest operations, is such that a higher level of IDA review would not have a significant impact on procurement quality Procurement information will be collected and recorded as follows: (i) Contract award information will be promptly reported by the borrower; (ii) Comprehensive half-yearly reports will be prepared by the borrower in the format presented in Annex 16 indicating: Revised cost estimates for individual contracts and the total project; revised timing of procurement actions, including advertising, bidding, contract award, and completion time for individual contracts; compliance with aggregate limits on the specified methods of procurement. (iii) Preparation of a completion report by the borrower within three months of the loan closing date.

50 4.14 The project elements, their estimated costs and proposed methods of procurement are summarized below: 36 Summary of Proposed Procurement Arrangements Project Element Procurement Method J Total ICB LCB Others _Cost... Million..US$ Works Buildings (1.4) (6.8) (8.2) Forest Operations (18.8) (18.8) Goods Equipment/Supplies (1.6) (0.7) (2.3) (4.6) Maps, Aerial Photographs (0.2) (0.2) Books, Periodicals, extension and publicity materials (0.6) (0.6) Vehicles (1.7) (1.4) (3.1) Consultancies, Studies, Training Technical Assistance - Project Implementation i (1.2) (1.2) Studies and Consultancies (1.2) (1.2) Training (3.3) (3.3) Miscellaneous Forest Protection (I 1.9) (I 1.9) Ecodevelopment Support Fund (1.8) (1.8) Operating Costs (2.8) (2.8) Project Preparation Facility (0.3) (0.3) TOTAL (3.3) (2.1) (52.6) (58.0) Note. 1. Figures in parentheses are the respective amounts financed by the IDA Credit. 2. Other methods include force account, shopping, engagement of consultants and training.

51 4.15 Although the Department has some experience of IDA procurement procedures, 37 assurances were obtained at negotiations that a DCF had been appointed to the PU, in charge of procurement, with responsibility of coordinating procurement requirements and prepare equipment specifications, procurement schedules, and bidding documents. Assurances were also obtained at negotiations that procurement plans would be in accordance with the Procurement Schedule presented in Annex 15, Attachment 1 and that standard procurement documents as already agreed with GOI would be used. Progress with procurement would be reported in the six-monthly project report, in the format presented in Annex 16. D. Disbursements 4.16 Disbursements under the Credit would be made for: (a) 85% of civil works for buildings (including construction of nurseries and provision of water supplies); (b) 90% of expenditures on forest development; (c) 100% of expenditures on forest protection; (d) 100% of foreign expenditures, 100% of local ex-factory costs or 80% of other local costs of equipment, vehicles, construction materials and operating costs; (e) 100% of expenditures on consultant services, training, and studies; (f) 100% of foreign expenditures and 80% of local costs of equipment, construction materials, and operating costs financed through the Ecodevelopment Support Fund; (g) IDA would finance 60% of incremental recurrent costs, other than staff salaries and allowances, until June 30, 1997, to enable programs to be initiated successfully. This contribution would be reduced to 50% thereafter, representing a phased increase in Government's contribution to

52 38 incremental recurrent costs. All incremental staff salaries and allowances would be financed by GOMP so the IDA contribution to incremental recurrent costs would amount to an average of about 50% of expenditures on operating costs. These would include the incremental recurrent costs of operation and maintenance of vehicles and equipment, and field expenses of programs supported through the project Disbursements against civil works and equipment, seeds, fertilizer, construction materials and supplies, on contracts exceeding US$200,000 equivalent and consultant contracts exceeding US$100,000 equivalent for firms, and US$50,000 equivalent for individuals, would be fully documented. Disbursements for other expenditures would be made against Statements of Expenditure (SOEs). Supporting documentation for SOEs would be retained by GOI and GIMP and be made available to Association staff during supervision. Forest development costs eligible for reimbursement include costs of nurseries, land preparation, including labor inputs for tree planting, maintenance and protection. Expenditures for project activities incurred after July 31, 1994, would be eligible for retroactive financing, up to a maximum of SDR 3.4 million (US$5.0 million equivalent). All contracts and items to be financed retroactively will have been procured in a manner acceptable to the Association. Disbursements are projected over a period of five IDA fiscal years, from 1995 to The disbursement schedule is presented in Annex 17. The closing date of the Credit is June 30, To facilitate project implementation and to reduce the volume of withdrawal applications, a Special Account in US dollars would be established in the Reserve Bank of India, with an authorized allocation of US$5.0 million, which is equal to the estimated four monthly average disbursement. Assurances were obtained at negotiations that GOI, and GOMP would implement a system satisfactory to IDA for channelling funds required for carrying out the project. An understanding was reached at negotiations that GOI would release about three months anticipated project expenditure in advance to GOMP, and that upon receipt of funds from GOI, GOMP will immediately transfer such funds, together with quarterly counterpart contributions, to project accounts of MPFD as the implementing agency.

53 39 E. Accounts and Audit 4.19 MPFD would establish a separate Project Account. This account, together with supporting documentation, including contributions from GOI and the Credit, would provide a comprehensive record of project financing and expenditures. Assurances were obtained at negotiations that this account and the Special Account would be subject to normal GOI and GOMP accounting procedures and controls. Project accounts would summarize project expenditures under categories to be agreed with IDA, showing: (a) actual versus planned expenditures for each quarter (b) actual versus planned expenditures accumulated to date; and (c) financing source for the quarter, and accumulated, by IDA and GOMP. The summaries, which would provide information for the SOEs would form part of the project account, including those expenditures for which reimbursement would be claimed with full documentation. The project accounts would be supported by a listing with the withdrawal applications submitted for the period. They would be audited annually in accordance with appropriate auditing principles. The Controller and Auditor General and his Accountants General at the State level would be considered acceptable auditors. The consolidated audited project accounts, including the Special Account and SOEs, and the auditor's report, which would include a separate statement on the SOEs and certified copies of the SOEs, would be submitted to IDA not later than nine months after the close of each fiscal year. The audit report on SOEs would specifically comment on their usage and the controls established to ensure their accuracy. The Special Account which would be maintained by the Department of Economic Affairs (DEA) would show all withdrawal requests disbursed, amounts advanced and reimbursed by IDA, and the balance at the end of each accounting period. Auditors' reports would reflect the certification of the balance held by the Reserve Bank of India. MPFD would prepare a project report on a bi-annual basis, in a format to be agreed with IDA, summarizing project progress in physical terms by project component, linked to financial terms, which would be based on the bi-annual unaudited project accounts.

54

55 40 V. PROJECT IMPLEMENTATION A. Sector Strategy 5.1 The GOMP strategy for development of the forest sector has been presented in Chapter 2 and issues and changes identified in the matrix presented in Annex 7. At negotiations it was confirmed that this statement of strategy for the future development of the forest sector in Madhya Pradesh, and the proposed sector reforms presented in the associated matrix has the approval of GOMP. Additionally, it was confirmed that GOMP had issued Orders to: Change pricing policy so that: in rural areas less than 5km from the forest MPFD would charge no more than 50 percent of the market price; in all other rural areas and urban areas of more than 10,000 population, full market prices would be charged; Abolish transit regulations for 31 species of importance for farm forestry, and provide for panchayats to issue transit passes for other species, with the exception of nationalized species, which remain under the control of MPFD; Amend the Government Regulation on Joint Forest Management in accordance with the draft prepared by MPFD, June, 1994, to ensure the representation of women and landless in the village committees; Phase out MPFD industrial supply contracts by June 30, 1997; Establish SFRI as an autonomous institution. 5.2 It would be a condition of project effectiveness that all necessary actions for removing restrictions on felling of trees on private land would be taken. It would also be a condition of project effectiveness that a contract based on terms of reference agreed with IDA, would be agreed with consultants, acceptable to IDA, to assist with the proposed review of the management of the sector. Assurances were obtained at negotiations that the review would be completed by June 30, 1996, its findings discussed

56 with IDA, and agreed modifications to management procedures and structures implemented not later than June 30, B. Project Organization and Management l Project Coordination Committees Annex Project Steering Committee. A Project Steering Committee would be established under the Chairmanship of the Secretary of Forests. The Project Director would be Member Secretary, and members would include the PCCF, CCFs Development, Social Forestry, and Wildlife, Director FDC, and representatives of the Departments of Planning, Finance, Tribal Development, Agriculture, Horticulture, Animal Husbandry, Rural Development and Rural Industries. The committee would meet bi-annually. Assurances were obtained at negotiations that the Project Steering Committee had been established. Details of the membership and functions of this and other project committees and working groups are presented in Annex Regional Project Coordination Committees. These committees would be established for each Territorial Circle and would be chaired by the Commissioner of the region. The CF (HQ) Territorial would be Member Secretary and members would include the CFs Territorial, Wildlife, Working Plans, Regional Manager FDC, and representatives of the Departments of Tribal Development, Agriculture, Horticulture, Animal Husbandry and the District Rural Development Agency. The Committee would meet biannually, or more frequently if the membership agrees this to be necessary. 5.5 District Project Coordination Committees. These committees would be chaired by the Collector and the Territorial DFO (HQ) would be the Member Secretary. Other members would be all other DFOs in the district and district level representatives of the departments involved in the Regional Committees, together with representatives of other departments as necessary. Regional and District Project Coordination Committees would be established for areas as project activities are initiated and would meet biannually. [0 Responsibilities are identified according to the present structure of MPFD. Changes will result from the planned review and development of the management of the sector.

57 42 Project Implementation Responsibilities Annex Project Unit. MPFD would be the main implementing agency for the project under the overall leadership of the Principal Chief Conservator of Forests. A Project Unit (PU) would be established, headed by a CCF, assisted by a small staff. Assurances were obtained at negotiations that the PU had been established and that the CCF (PU), the CFs (Project Planning) and (PME) and the DCFs responsible for human resource development and procurement in the PU had been appointed. Other staff of the PU would be appointed and in post by July 31, The PU would be responsible for coordination of all project-financed activities, in accordance with the summary implementation schedule presented in Annex 19. The project is, however, designed to ensure that project activities are integrated into the normal operations of the MPFD, and that the PU does not become a parallel operational structure. This is illustrated in Figure 3, showing the structure of the PU and linkages with other functional units of MPFD. These linkages would be reinforced by the creation of Departmental Technical Working Groups to ensure the technical quality of project-financed programs. The following Working Groups would be established: PME Working Group to review the development of improved PME procedures and ensure that such procedures are followed; Forest Development Technology Working Group to ensure that silvicultural practices are appropriate and kept up-to-date; VRDP Working Group to review VRDP plans approved by DFOs and provide a focus for exchange of experiences; Human Resource Development (HRD) Working Group to review the development of an HRD plan and approve annual training plans; and the Conservation of Biodiversity Working Group to review PA Management Plans and the development of the PA network. Further details of the responsibilities and composition of these Working Groups are presented in Annex The PU would be responsible for the preparation of annual Project Implementation Plans (PIP). Assurances were obtained at negotiations that the PU would, by each December 31, starting December 31, 1995, prepare in consultation with IDA a PIP for the following financial year. However, for the first year of the project the PIP would be prepared not later than July 31, The PU would coordinate the recruitment of consultants and the commissioning of special studies. The PU would also be responsible for project-related procurement and accounting and would be the main contact for project supervision by the World Bank.

58 43 Management Development 5.8 Sector Management. In addition to project support for the consultancy to assist with the review of the management of the sector (Para. 5.2), an important focus of this sub-component would be management training and this would be arranged through the PU as discussed in Para The Policy Analysis Unit (PAU) reporting directly to the PCCF, would be responsible for commissioning policy studies. Assurances were obtained at negotiations that the PAU, headed by a CF, would be established by December 31, 1995, with staffing and responsibilities agreed with IDA. Four studies are of particular importance: the role of MPFD in the collection and marketing of NTFP, particularly tendu leaves; and the economic and environmental effects of the restrictions on clear felling, on the introduction of exotic species, and on private investment in forest lands. 5.9 Planning Monitoring and Evaluation. Overall responsibility for the Planning Monitoring and Evaluation (PME) activities would rest with the CCF Working Plans. At headquarters, the PME Unit would form a nodal point for system development, the provision of technical advice, quality control and coordination of training. Changes in management of the sector for implementation of the agreed strategy would require changes in the approach to monitoring and evaluation to ensure that these functions become an integral part of the planning and implementation of the work of MPFD. The flow of information is illustrated in Figure 2 and discussed in Annexes 7 and 9, in which a preliminary list of indicators to be monitored is presented. These, together with monitoring and evaluation procedures, and the development of improved procedures where necessary, would be reviewed as an integral part of the overall management review referred to above. The design of PME systems and the choice of hardware and appropriate software would be dependent on the PME procedures developed and no new systems would be introduced until the completion of the review Human Resource Development (HRD). Although there is no separate project component for human resource development, it is an extremely important aspect of the project, with substantial funding in each component allocated to staff training. The responsibility for coordinating the selection of staff to be trained, identifying suitable training institutions or courses, and ensuring timely placement would lie with the PU, specifically with the DCF (HRD). It was confirmed at negotiations that a training plan for the first year of the project had been prepared and agreed with IDA. Assurances were

59 44 obtained at negotiations that annual training plans, acceptable to IDA, would be prepared not later than July 31 of each year, starting July 31, 1995, in order to ensure placement of students in academic institutions in the following October. In addition, a Human Resource Development Plan, setting out a staffing policy linked to proposed changes in the management system would be completed and reviewed with IDA by June 30, The HRD Plan would take account of any necessary reviews of curricula at forest colleges ". The costs of overseas training include funds for student placement services, to facilitate timely placement of students in appropriate courses. Assurances were obtained at negotiations that a contract for placement and support of overseas trainees, with an institution acceptable to IDA, would be agreed by July 31, Forest Development 5.11 Natural Forest Regeneration. Responsibility for implementation of this component would lie with the Territorial Wing of MPFD. Areas treated under the project would be identified according to coup number. The DFO would be responsible for an assessment of the initial status of the area, and ensuring that treatments are linked to ecotype, that appropriate silvicultural practices are employed, and that data to monitor growth and productivity are collected regularly Village Resource Development. Annex 5. Implementation of this component would be through the Territorial Wing of MPFD. In each Circle, the CF would have overall responsibility for the program. At the Divisional level, the DFO would take a lead role in developing the participatory approach, by building divisional teams across the hierarchical structure of the MPFD. He would also, through the operation of the District Project Implementation Committee, ensure coordination with other government agencies. The VRDP Planning Team, that would include women recruited through NGOs or other institutions, would provide introductory courses and practical on-the-job training in the principles and practice of participatory village planning and program implementation to Rangers, Foresters and Forest Guards within the Division. Once trained, these staff would play a continuing advisory role within the community, with a major responsibility for timely and appropriate implementation of the agreed plan. At the community level, responsibility would lie with the village Forest Protection Committee (FPC), which "1 A review of curricula in forest colleges is presently being undertaken by GOI.

60 45 includes representatives from every household in the village, and more specifically, with the members of the Village Executive Committee. The VRDP Departmental Working Group would have a key role in ensuring consistency of approach in various parts of the state. The PU, specifically the CF Project Planning would monitor micro-plans and expenditures and would be a focal point to ensure that the concerns of tribal peoples are adequately addressed Assurances were obtained at negotiations that implementation of the program under the project would be in accordance with procedures and criteria agreed with IDA and that the first three proposals for funding under the VRDP would be submitted to IDA for approval. Agreed procedures and criteria are summarized in Annex 5. In particular: An integrated plan for both the village area and the surrounding forest used by the community would be prepared by the community with the assistance of trained staff, using Participatory Rural Appraisal (PRA) techniques. It would be targeted to meet the needs of the principal users of the forest resource; A formal Memorandum of Understanding between the VFC and MPFD endorsing the agreed VRDP plan would be finalized, prior to the start of implementation of the village program; The amount of investment available to the village would be linked to the cost of protecting the forest in the absence of community participation in their protection and management. An explanation of the way in which the amount of the investment to be made available to a village has been calculated, mechanisms for its management at government and community levels, and criteria for the types of investments to be financed are presented in Annex 5. It was agreed at negotiations that the implementation of the VRDP would be in accordance with procedures and criteria agreed with IDA, and that the first three proposals for funding under the VRDP would be submitted to IDA for approval.

61 46 An independent review of the program would be undertaken in Project Year 3, against the criteria presented in Annex 5. If the criteria are not met, project funds would be reallocated to other forestry activities within the state Non-Governmental Organizations (NGOs) could make a major contribution to the implementation of the VRDP, and the Ecodevelopment Program, as many NGOs have experience of participatory processes. Suitably experienced NGOs would be sought to assist with the orientation and training of MPFD staff and with the implementation of village level programs. It was confirmed at negotiations that suitable institutions or NGOs had been identified to: assist with VRDP workshops for the orientation of senior MPFD staff; wherever possible, to provide women staff to work in VRDP Planning Teams; and to provide training in PRA and other necessary skills, to members of the Divisional VRDP Planning Teams during the project. Technology, Extension and Research 5.15 R&E Service Centers. The centers would be established to provide supporting facilities and services to research, technology improvement, and extension programs. Each of the service centers would be managed by a DFO under the coordination of the CCF (Social Forestry), though for daily operational matters reporting to the CF in charge of the relevant Territorial Circle. Technical advice and supervision would be provided by SFRI Extension. Coordination of the extension program would be the responsibility of the CCF (Social Forestry). Implementation of the extension programs would be the responsibility of the DFO in 40 selected priority Divisions. The Industrial Liaison Unit would report directly to the CCF (Industries). Assurances were obtained at negotiations that the ILU would be established by December 31, 1995, headed by a CF with staffing and responsibilities agreed with IDA Seed Improvement. Planning and technical supervision of the seed improvement program would be the responsibility of the Seed Technologist and Tree Improvement Specialists in SFRI. Implementation of the program in the field would be undertaken at the E&R Service Centers and Range Officers would have specific responsibility for

62 47 operations, under the guidance of the DFOs in charge of the Centers. Assurances would were obtained at negotiations that consultants to assist with the development of the seed improvement program would be recruited by December 31, 1995, with terms of reference agreed with IDA Nursery Demonstrations. SFRI would coordinate the development of demonstration nurseries at each of the E&R Service Centers. As with the seed improvement program, field operations would be under the charge of the DFOs and a specially trained Range Officer would be appointed, with responsibility for day-to-day operations. Assurances were obtained at negotiations that consultants to assist with the development of the nurseries would be recruited by December 31, 1995, with terms of reference agreed with IDA Applied Research. Responsibility for research would rest with the Director, SFRI. Applied research trials undertaken at E&R Service Centers would be supervised by the DFOs in charge of the Centers, but their design and interpretation would be an SFRI responsibility. Assurances were obtained at negotiations that by December 31, 1995: SFRI would be established as an autonomous agency with objectives and responsibilities agreed with IDA; the Research Advisory Committee would be established with a membership agreed with IDA, as presented in Annex 18; research posts at SFRI for a tree improvement specialist and a seed technologist would be filled; and that consultants to assist with the development of a research strategy would be recruited. Assurances were also obtained at negotiations that the objectives and terms of reference for contract research would be agreed with IDA, not later than June 30, Biodiversity Conservation. Annex PA Management. Overall responsibility for this component would lie with the CCF(WL). Five CFs (Wildlife) would coordinate the preparation of management plans for each of the PAs in their respective zones, providing assistance to the responsible PA managers through the zonal PA Management Planning Teams. The CFs (Wildlife) would also be responsible for monitoring and evaluation activities within the zone, for the identification and survey of links in the proposed PA network, and for preparation of plans for management of the various types of land in these links. The managers of each of the priority PAs supported through the project would be responsible for

63 48 implementation. Assurances were obtained at negotiations that the five CFs (Wildlife) would be appointed no later than September 30, The management of contract research on biodiversity and aspects of PA management would be the responsibility of a Wildlife Research Coordinator, to be appointed in SFRI. Research programs would be decided by a Sub-Committee of the SFRI Research Advisory Committee. Assurances were obtained at negotiations that the coordinator would be appointed no later than December 31, Assurances were obtained at negotiations that there would be no involuntary relocation of communities resident within PAs. Any proposals for relocation would be preceded by a study of the impact of the resident communities on the conservation of biodiversity. All proposals would be consistent with GOI provisions and would be agreed with IDA in the light of the recommendations of the Bank's Operational Directives 4.20 (Indigenous People) and 4.30 (Involuntary Settlement). The main recommendations are summarized in Appendix 3, Annex 6. In addition, an independent monitoring program would be established Ecodevelopment. Activities financed under this component in areas peripheral to PAs would be the responsibility of the PA manager. Assurances were obtained at negotiations that: areas which impact on the PAs would be identified on the basis of criteria agreed with IDA; PA managers would have the responsibility and sufficient staff to undertake ecodevelopment programs in these areas; at least two trained Ecodevelopment Planning Teams would be appointed not later than September 30, 1995; and that responsibilities are defined to avoid duplication of the work of Territorial staff. Assurances were obtained at negotiations that implementation of the ecodevelopment program under the project would be in accordance with procedures agreed with IDA and summarized in Annex 6, that presents details of the approach to ecodevelopment, participatory village level planning, and the management of the Ecodevelopment Support Fund. Proposals for funding would be selected in accordance with criteria agreed with IDA. It was also agreed at negotiations that the first three proposals for funding under the EDSF would be submitted to IDA for approval.

64 49 C. Project Supervision 5.23 Project Supervision would be closely linked to the implementation schedule discussed above and would involve monitoring a number of key indicators. Details of the timing of supervision missions, the key indicators and the skills that are likely to be needed for supervision are presented in Annex 20. There would be two missions during each year of the project, and the first mission would correspond with a project launching workshop, to provide assistance during the critical start-up period. Subsequently, the main supervision mission would coincide with the review of annual plans for the various project activities, taking place early in the fourth quarter of each year. In the second year of the project this main mission would coincide with a project review. There would be one additional supervision mission in the second quarter of each year. In addition to the usual indicators of physical and financial progress, which are related to the implementation and disbursement schedules and to the detailed cost tables, supervision would monitor key indicators of development impact in relation to the primary management objectives for the sector, as discussed in Chapter 2. MPFD staff, in particular, PU staff responsible for monitoring and evaluation, would play a key role in these supervision activities. Supervision missions would also monitor the planning and implementation of ecodevelopment programs and PA management, assessing the need for the application of the requirements of relevant Bank Operational Directives (Para 3.41). E. Reporting, Mid-Term and Completion Reviews The PU would be responsible for preparing six-monthly progress reports to be submitted not later than January 31 and July 31 of each year for the preceding six months, in the format presented in Annex 15. It was agreed at negotiations that no later than December 31, 1997, a project review would be held and the recommendations of the review would thereafter be implemented. The review would involve MPFD and IDA and would establish progress towards the main project objectives and not merely an inventory of disbursements. To this end, the review would focus on the key indicators presented in Annex 20, though the more detailed monitoring and evaluation data (See Annex 9) would also be utilized. The review would pay particular attention to changes in the approach of MPFD to the management of the sector and to the success of human resource development programs. Another important aspect would be the impact of VRDP and EDP on the condition of forest lands and PAs and the socio-economic conditions of

65 50 participating communities. The operation and management of supporting funds would be closely examined by the review team. Successful operation of the monitoring and evaluation system would be an important input to the review. To facilitate the review, the PU would take the lead in the preparation of project status reports. The reports would be distributed to all participants four weeks prior to the start of the reviews The project completion report would focus on the achievements of the project and its impact in relation to its objectives. In particular, consideration would be given to the development impact of the project, and changes in the management of the sector. In the light of the findings, recommendations would be made for future development of the forestry sector in Madhya Pradesh. The report would also examine the successes and shortcomings of the VRDP and EDP and make recommendations as to how the programs could be improved. Terms of reference for the review team and its composition would be agreed with IDA, and the report submitted to IDA no later than six months after completion of the project.

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67 51 VI. PROJECT BENEFITS AND JUSTIFICATION A. Benefits 6.1 The project would increase, directly or indirectly, the production of wood, NTFP, and animal products which would benefit the rural poor and improve the supply of wood to forest-based industries. The project would support a program of assisted natural regeneration in about 165,000 ha of forest. Some 1,140 village communities, of which a very high percentage would be tribal peoples, would receive direct benefits from the project, managing about 75,000 ha of forest. The benefits include not only the improved access for communities to forest products, but also the benefits of improved agriculture and alternative income generating activities generated through the VRDP. The project would have important benefits in terms of equity, discussed in more detail in Annex 5, as about 18.3 million person-days of employment would be generated, a benefit which would be almost wholly captured by the poorest and landless households. Processors and marketers of wood and NTFPs would also benefit through increased supply of raw material. B. Economic and Sensitivity Analysis 6.2 The direct and quantifiable economic costs and benefits of the project are mainly due to investments in both closed and open forests. Consequently, a time horizon of 135 years was used in the analysis, to reflect the long cycle of forest growth, and to be consistent with one of the environmental objectives of the project, that is, to conserve and increase the stock of natural capital for future generations to use for economic purposes. The Rate of Return (ERR) for the project as a whole, in terms of direct forestry outputs, and excluding the biodiversity and research components, is estimated at 11.5 percent. In order to conform with more traditional project analyses, an ERR was also calculated over a 45 year horizon, giving and ERR of 11 percent. The ERR is less than the current Opportunity Cost of Capital (OCC) in India of 12 percent. However, this understates project benefits, as indirect and environmental benefits have not been included. A relatively small stream of environmental benefits would be sufficient to surpass the 12 percent threshold, as discussed later in this chapter. The project ERR is quite insensitive to variations in the costs and benefits: a 25 percent increase in costs and a 25 percent decrease in incremental benefits reduces the ERR to 10.4 percent. The ERR for each

68 52 component is sensitive to the shadow wage rate, with a switching value of Rs. 15 per day for the overall project. The analysis is highly sensitive to assumptions about existing productivity and land use, that is, the without-project situation. The analysis is discussed in Annex 21 and detailed in Working Paper 6 (Annex 24). C. Financial Analysis 6.3 Financial benefits to the communities arise from the VRDP, including the benefits of joint forest management and the benefits derived from improved village infrastructure and alternative income generating activities, financed from the VRDP Fund. Under joint forest management arrangements, benefit sharing between communities and government is based on the Government Order (See Para. 1.26). At the community level, the incentive to participate depends on the assumptions made about existing land-use and its productivity. Financial analysis was undertaken for those models involving JFM and on the basis of these models, there is a positive overall benefit flow from year 1. The rate of return to the community, after phasing activities over 7 years, is high (60%) with a negative cash-flow only in year 1. Incremental benefits in year 2 exceed foregone benefits in year 1. The silvi-pasture model requires 2 years before achieving a positive cash-flow. 6.4 Farm forestry is market oriented so that farmers would make their own choices as to whether to grow trees. In addition to direct financial returns, the farmers' decision is affected by factors such as labor availability and management. Consequently, direct analysis of the costs and benefits is unlikely to capture the decision-making process for these farmers. However, the models developed for the economic analysis, based on relatively poor quality land, show relatively high FRRs, and even on good land where the alternative uses of land are more attractive, the FRR remains at more than 12 percent. D. Environmental Effects 6.5 An environmental review undertaken during project appraisal is presented in Annex 22. The review concluded that the project would have beneficial effects on the environment and all project activities would have very low environmental impact potentials. The project addresses many of the priorities in the India Environmental Action Programme, Specifically, conservation and sustainable utilization of biodiversity in

69 53 selected ecosystems, including conservation of endangered plant and animal species and critical habitats; afforestation, based on community participation in forest protection and management in watershed and other areas; wasteland development involving private and community tree planting; and soil and water conservation. Other environmental benefits may include CO 2 absorption, river flow regulation, and meso-climatic and other effects. 6.6 The benefits to be attributed to these externalities were calculated by means of an environmental premium, associated with each hectare included in the project, reflecting the flow of external benefits. Under the assumptions set out in Annex 21, the annual flow of environmental benefits required to obtain an Opportunity Cost of Capital (OCC) of 12 percent, the OCC for India, would need to be about Rs.376 (about US$12) per hectare per year. E. Impact on Women 6.7 Women are the predominant collectors of fodder, fuelwood and NTFPs and would benefit considerably from the project. The proposed JFM arrangements would significantly enhance the availability of many forest products that are collected to provide for household needs and secondary income. Effective participation of women in JFM arrangements would be critical to ensure sustained management of the resource. The project, therefore, includes a number of mechanisms ensuring the participation of women and the representation of their interests. These include: women would be full members of FPCs, encouraged by a change in rules allowing two members per household; village Executive Committees would include female representatives or a women's sub-committee would be established; criteria for selecting income generating activities to be supported under the VRDP would give priority to activities targeted at women; wherever possible VRDP Planning Teams would include a woman; VRDP training for MPFD staff, in particular for the VRDP Planning Teams, would include gender issues; MPFD would actively seek to increase the number of women on its staff; a coordinator for women's activities would be financed in support of the VRDP, until such time as MPFD can recruit a suitable woman.

70 54 F. Tribal Peoples Development Strategy 6.8 The population in and around the forests of Madhya Pradesh consists largely of tribal communities. Tribal groups would, therefore, be the main participants and beneficiaries in the VRDP and Ecodevelopment Program. Tribal development concerns are thus central to the project, and are addressed in an integral fashion under the rubric of social impact, participation, and equity, rather than as a subsidiary tribal development plan or component. Although tribal populations have in the past been bypassed by development efforts, experience with JFM in Madhya Pradesh has been encouraging, as the Forest Protection Commnittees functioning most effectively are those in tribal villages. Similar experiences have been noted in other states. This is probably mainly due to the social and economic homogeneity of tribal communities relative to non-tribal villages. 6.9 The project incorporates a number of activities and institutional mechanisms intended to ensure the appropriateness of project activities for tribal communities, taking account of their high level of dependence on the forest; and their effective participation. These include: giving the CF Project Planning in the PU special responsibility for tribal issues; including modules on tribal social structures and livelihood systems in the training of VRDP Planning Teams; participation of the Tribal Development Department in Project Coordination Committees at all levels. The Tribal Peoples Development Strategy is discussed further in Annex 23, together with details of specific activities, outline organization and management, and impact monitoring arrangements. G. Institutional Benefits 6.10 The project would foster a major change in the approach of MPFD to the management of the sector, resulting from a strategy based on cooperation with local communities, rather than on enforced protection. Implementation of this strategy would also require changes in planning, decentralization of authority, and the contribution of monitoring to revised implementation programs. The project would support any necessary institutional reorganization, and the development of improved procedures and information systems to facilitate the introduction of these changes. Policy changes associated with the strategy for the sector would provide greater incentives for private sector participation and project support for an Industrial Liaison Unit, and for a Policy Analysis Unit, would assist MPFD to encourage the contribution of private entrepreneurs to improved productivity in the forest sector. Arrangements for project coordination would also serve to create stronger linkages with other government agencies.

71 55 H. Project Risks 6.11 The main risks facing the project are: (i) the degree of commitment within GOMP to make the necessary policy and institutional changes that would be necessary for the implementation of the agreed strategy for the sector; (ii) the effectiveness of participatory arrangements for the management of forest resources; (iii) the ability of MPFD to provide the private sector with technological advice, in order to take advantage of a changed policy environment. The first risk is being addressed through agreement on a sectoral strategy with associated policy changes formalized through the issue of necessary Government Orders. In addition, as this four-year project forms the first stage of a planned phased approach to sectoral development, it provides a means for GOMP to demonstrate commitment to change. The project would minimize the second risk through an intensive program of training for staff in the principles and practice of participatory forest management, through building links with NGOs and other government departments involved in village development, and by rigolous monitoring and evaluation of the program. Project support for forest extension programs, research programs targeted on the needs of producers, and the creation of an Industrial Liaison Unit within MPFD would reduce the third type of risk associated with the project.

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73 56 VII. ASSURANCES AND RECOMMENDATION Assurances 7.1 Conditions of Project Effectiveness (a) All necessary actions for removing restrictions on felling of trees on private land would be taken (Para 5.2); (b) A contract based on terms of reference agreed with IDA, would be agreed with consultants, acceptable to IDA, to assist with the proposed review of the management of the sector (Para. 5.2); 7.2 Other Assurances (a) Procurement plans would be in accordance with the Procurement Schedule presented in Annex 15 and that standard procurement documents as already agreed with GOI would be used. Progress with procurement would be reported in the agreed format in the six-monthly project progress report (Para. 4.15); (b) GOMP would implement a system satisfactory to IDA for channelling the funds required for carrying out the project (Para. 4.18); (c) MPFD would maintain separate project accounts, which together with the Special Account to be established by GOI, would be subject to annual audit (Para. 4.19); (d) The consultancy to assist with the review of the management of the sector would be completed by June 30, 1996, its findings discussed with IDA, and agreed modifications to management procedures and structures implemented not later than June 30, 1997 (Para. 5.2);

74 57 (e) All staff of the PU would be appointed and in post by July 31, 1995 (Para. 5.6). The PAU and the ILU would be established by December 31, 1995, each headed by a CF, and with staffing and responsibilities agreed with IDA (Paras. 5.8 and 5.16); (f) The PU would, by each December 31, starting December 31, 1995, prepare in consultation with IDA a Project Implementation Plan (PIP) for the following financial year. However, for the first year of the project the PIP would be prepared not later than July 31, 1995 (Para. 5.7); (g) A Human Resource Development Plan for MPFD linked to proposed changes in the management system, would be developed and reviewed with IDA by June 30, In addition, an annual training plan would be prepared not later than July 31 of each year, starting July 31, 1995 (Para. 5.10). A contract for the placement and support of trainees in overseas establishments, would be agreed with an institution acceptable to IDA by July 31, 1995 (Para. 5.10); (h) Implementation of the VRDP would be in accordance with procedures and criteria agreed with IDA. The first three proposals for funding under the VRDP would be submitted to IDA for approval (Para. 5.13); (i) Seed and nursery specialists would be recruited not later than December 31, 1995 with terms of reference agreed with IDA (Paras. 5.17, 5.18); () By December 31, 1995: SFRI would be established as an autonomous agency with objectives and responsibilities agreed with IDA; the Research Advisory Committee would be reconstituted with a membership as agreed with IDA; research posts at SFRI for a tree improvement specialist and a seed technologist would be filled; and that consultants to assist with the

75 58 development of a research strategy would be recruited (para. 5.19). The objectives and terms of reference for contract research would be agreed with IDA not later than June 30, 1997 (Para. 5.19); (k) There would be no involuntary relocation of communities resident within PAs, and any proposals for relocation would be preceded by an independent study to assess the impact of the communities on the conservation of biodiversity. All proposals would be consistent with GOI provisions and would be agreed with IDA in the light of the Bank's OD 4.20 and OD In addition, an independent monitoring program established (Para. 5.21); (1) The five CFs (Wildlife) would be appointed no later than Septernber 30, 1995 and the coordinator for wildlife research would be appointed in SFRI no later than December 31, 1995 (Para. 5.20). Areas which impact on PAs would be identified on the basis of criteria agreed with IDA; PA managers would have the responsibility and sufficient staff to undertake ecodevelopment programs in these areas; at least two trained Ecodevelopment Planning Teams would be appointed not later than September 30, 1995; and that responsibilities are defined to avoid duplication of the work of Territorial staff (Para. 5.22); (m) Implementation of the ecodevelopment program would be in accordance with procedures agreed with IDA. Proposals for funding would be selected in accordance with criteria agreed with IDA. The first three proposals for funding under the Ecodevelopment Support Fund would be submitted to IDA for approval (Para. 5.22); (n) Not later than December 31, 1997, a project review would be held and the recommendations of the review would be thereafter implemented (Para. 5.24).

76 An understanding would be reached that GOI would release about three months anticipated project expenditure in advance to GOMP. Upon receipt of funds from GOI, GOMP will immediately transfer such funds, together with quarterly counterpart contributions, to the project accounts maintained by MPFD (Para. 4.18). Similarly, it would be agreed that six-monthly progress reports would be prepared in a format agreed with IDA (Para. 5.24). Recommendation 7.4 With the above assurances, the proposed project would be suitable for an IDA Credit of SDR 39.4 million (US$58.0 million equivalent) on standard IDA terms with 35 years maturity. February, 1995 South Asia Department 2 Agricultural Operations Division

77 0 #~~~~~~~~~~~~~ Work ing CF Plan Teff. Circle -Teams (22) (22). Teffitorial fl ~~~~MIS/GIS X Unit 5 1 # Fo~~~rest Divislional 0~~, Deparennt Forest Activities OfficeWs (79) Divisvities Administrative s:ructure Informnation Linkage FIGURE 2. Planning, Monitoring and Evaluation. Structure and linkages.

78 CC WL L,W I ZONAL I CFs TERR CFL I~~~~~~~~ I PROJECT PLANNING CCF ADMi DCF HRD r DCF CCLP, - VRDP r CCF PU CCF DEVT DCF ADNIIN CC WP r DC ;XL ---- ALL CCF CFsFTERR Direct Responsibility Coordination FIGURE 3. Project Unit. Structure and linkages.

79 CCF CCF CCF IN1D SF DEVT 9 9 ~~~~~~~~~~~~CF S LTERR DFO DFO~~~~~~F ~~~~~ TER E&R ServiceEo Center Applied Research 9 Seed 9 Improvement 0 Nursery Demo 9 Demos Direct Responsibility Technical Advisory FF - Extension Programs - VRD _J FIGURE 4. Extension, Technology and Research. Structure and linkages.

80

81 Annex I Page I of 3 INDIA MADHYA PRADESH FORESTRY PROJECT Natural and Human Resources Natural Resources 1. Area and Physiography. The geographical area of the state is 443,000 km 2. It lies mainly on the central Indian tableland with altitude ranging from 50 m to about 1,400 m above mean sea level. The topography is strongly influenced by the underlying geology, in which basalts predominate, giving rise to large well defined plains, interrupted by undulating areas and deeply incised rivers in hilly areas. The state can be divided into five physiogrpahic regions: (i) the Gird region to the north and north east of Gwalior; (ii) the Malwa Plateau between the Vindhyan ranges and the area to the south of Gwalior; (iii) the Satpura ridge stretching across the state from the Maikal range in the east towards Nimar in the West; (iv) the Narmada valley, an area of gently undulating plains bounded by the Vindhyan Hills in the north and the Satpura range to the south; (v) the Chhatisgarh Plains lying to the east of the Satpurs Range. 2. Climate. Mean annual rainfall in the State varies between about 700 mm in the west to about 1,500 mm in the east and south east. Almost 90 percent of precipitation falls in the period June through September. Daily maximum temperatures exceed 40 C throughout the State during the summer, but winter temperatures fall in the 5-10 C range in areas of higher altitude. The State has been divided into 12 agro-climatic zones. 3. Soils. Black soils (Vertisols) predominate throughout the central and western parts of the State, though their depth is variable and they are often in association with shallow skeletal soils in hilly regions. In the western parts of the State, red and yellow soils, mainly Ferric Luvisols, are more common, though they may still be in association with vertisols. Something on fertility here.

82 4. Land Use. The areas of land in major land use classes are summarized below: Annex 1 Page 2 of 3 Land Use Class Area (000 ha) Forest 14,063 Cropped Land 22,708 Permanent Grazing 2,772 Uncultivated Land 1,774 Unculturable Wasteland 2,208 Non-agricultural Uses I Total Agricultural Holdings. The Agricultural Census indicated that there were a total of 7.6 million holdoings in Madhya Pradesh, with an average size of 2.91 ha. This represented an increase of almost 19 percent in the number of holdings recorded in , and a decrease in average size of about 15 percent, higher than the national average decrease. Small holdings predominate, as of the total number of holdings, 36 percent are less than 1.0 ha in size, a further 40 percent are between 1.0 and 4.0 ha in size and only 5 percent larger tahn 10 ha. 6. Livestock and Feed Resources. In 1991, the livestock population of the State was estimated to be 26.8 million cattle, 7.4 million buffalos, 0.9 million sheep, and 7.3 million goats. In addition, an estimated 1.5 million livestock migrate into Madhya Pradesh every year, but estimates vary widely. Livestock obtain their feed from: grazing in forests, wastelands, long-term fallows and village common land; cultivated green fodders; agricultural by-products; and concentrates. There is no precise data about the productivity of grasses in forests and wastelands, but an production of 0.6 tons/ha is commonly assumed. About 850,000 ha are devoted to cultivation of fodder crops and the quantity of crop residues can be calculated for individual crops using conversion factors. The total quantity of feed available from all sources is estimated at almost 42 million tons. The demand for feed is calculated by converting all livestock into Adult Cattle Units (ACU), considered to be 250 kg body weight, and assuming a requirement of 2.6 tons of fodder per ACU per annum. There is an estimated 29.4 million ACUs in the State, so the total fodder demand for feed is almost 80 million tons so there is a very major deficit in the supply of fodder. The deficit is even larger when the demand created by the migratory herds is added. All districts in the State show a deficit, with the five districts in the Chhatisgarh plains showing the largest deficit of about 9.6 million tons. Apart from the crop residues, most of the feed available is low in Total Digestible Nutrients (TDN) and in Digestible protein (DP), so the serious situation represented by the total deficit is exacerbated by the poor quality of the feed available. These data clearly show the huge demand for livestock feed that is in large part met by grazing in forest lands.

83 Annex 1 Page 3 of 3 Human Resources 7. Population Growth and Distribution. The total population of the State was estimated at million in the 1991 census. The growth rate between 1981 and 1991 is estimated to be 2.6 percent per annum. Of the total population, 50.8 million, or 79 percent live in rural areas, in about 75,000 villages. Of these, about 30,000 villages are located within, or close to, forest areas, which means that about 20 million people live in villages located in forest or forest fringe areas. Average population density is 149 persons per ki 2, though this is much higher in districts with a large urban population. About 41 percent of the rural population is below the poverty line, and about 20 percent of the urban population. 8. Tribal Peoples. The tribal population in the State was estimated to be 15.3 million in the 1991 census, or about 23 percent of the total population, the largest tribal population in any state in India. There are 46 different tribes, but only two, the Bhils and the Gonds, account for 65 percent of the tribal population, and ten make up over 80 percent. Tribal people live in all of the 45 administrative districts of the State, but they are concentrated in the eastern, south eastern and south western parts. In six districts, Bastar, Mandla, Surguja. Dhar, West Nimar and Jhabua, more than 50 percent of the population are tribals.

84

85 Annex 2 Page 1 of 6 INDIA MADHYA PRADESH FORESTRY PROJECT Technologies for Forest Management 1. Strategy. In the past, MPFD has adopted a strategy for the development and management of natural forest areas in the State, based on: (a) Working Plans for production areas that specified techniques for the management of natural forest and the creation of forest plantations; and (b) management plans, schemes and policies for Protected Areas (PAs), which, in practice, prohibit the harvest of forest produce of any kind. The Territorial Division of MPFD is responsible for implementing the prescriptions of the Working Plans in natural forest areas, for collection of non-timber forest products, and for enforcing laws and regulations. Harvesting of timber from natural forests and some plantations is the responsibility of the Production Division of MPFD, whilst MPFDC and the Narmada Valley Development Authority (NVDA) have been responsible for plantation forestry, in the areas assigned to them. PAs are managed by the Wildlife Wing (See Annex 6). The development and management of forestry and agroforestry programs on private and community lands are discussed in Annex Silvicultural Systems. The prescriptions of the Working Plans can be grouped into four silvicultural systems, applied to teak-dominated, sal-dominated, and mixed hardwood forest types: - Coppice with reserves on short rotations for all three types; - Conversion by clear felling into plantations of mixed hardwoods in either short or long rotations; - Shelterwood on long rotations in teak and sal types; - Selection and Selection cum Improvement in all three types. Experience with these silvicultural systems is discussed below. 3. Coppice with reserves system. This system has been widely used in teak and sal dominated forests and to a lesser extent in mixed hardwood forests. Management has tended to encourage teak and sal because of their high value, their ability to coppice freely, and their resistance to the adverse effects of grazing and fire. Other hardwoods growing in association with these two species are not so resistant, so many coppice areas have become almost pure formations of teak and sal. Many good coppice areas have been degraded by uncontrolled

86 Annex 2 Page 2 of 6 harvest of coppice material, grazing and fire, which have destroyed natural regeneration from coppice or seed. The Conversion by clearfelling system system facilitates change of unevenaged mixed hardwood forests to commercially viable even-aged plantations. Almost 250,000 ha of hardwood plantations have been established over the past two decades, but in 1986, a moratorium on clear felling was introduced by GOI to prevent further deforestation and loss of biodiversity. Production from these existing plantations is being adversely affected by the lack of appropriate silivcultural practices and management. The Shelterwood system also facilitates a change to an even-aged forest, but is complex and suited only to long rotations, as it is dependent on natural regeneration and the opening of the canopy by cycles of felling prior to final harvest. It has been applied to both teak and sal dominated forests, but for the same factors affecting the coppice system, has lead to the development of almost pure sal and teak formations. Selection and Selection cum Improvement systems are generally now used in place of the shelterwood system, and involve maintaining the health of the crop through removal of mature and unhealthy trees, with thinning, forest floor management, and other silvicultural practices to facilitate overall incremental growth. 4. Constraints. It is apparent that the prescriptions of many working plans have not been implemented. This is reflected in the drop in production of round wood from 1.55 mm 3 in 1974, to 0.86mm 3 in 1986 and 0.68mm 3 in Although there are no precise figures, supplies of bamboos to the paper industry have also declined substantially. This is partly due to the lack of realistic assessments of the sustainable yield of the prescriptions advocated in the Working Plans, but also due to a lack of funds to implement the Working Plans properly, a multiplicity of agencies involved in implementation and insufficient monitoring. Management of planted areas has also suffered from constraints. In many cases the plantations were established at too close a planting density, and thinning and other silvicultural operations have been neglected, adversely affecting incremental growth and the financial returns from the plantations. 5. Forest Development Technologies. Forest development technologies to be supported under the project are designed to meet four basic objectives of forest management: (i) the restoration of natural ecosystems and the preservation of biodiversity; (ii) reduction in land degradation; (iii) improvement of natural regeneration through better forest floor management; and (iv) sustainable production. The technologies would be based on an ecosystems approach, discussed here in relation to two broad forest types, referred to as open and closed forests, broadly corresponding to degraded and undegraded forests. The technolgies also relate to the primary management objectives outlined in the sector strategy presented in Chapter II. Eight different technologies are listed below that have been used to illustrate financial and economic returns, discussed further in Annex 21. These illustrative models of forest development technology should not be considered prescriptive management models, as in practice, the models must be adapted to the requirements of specific sites.

87 Annex 2 Page 3 of 6 Forest Type Forest Development Technology Open Rehabilitation of % coppice resuscitation Forests Degraded Forest (RDF) % coppice resuscitation and 50% planting % planting 1.4 Silvipasture - reforestation with fodder trees, legumes and grasses 2 Replanting with bamboos Closed Assisted Natural 1.1 Coppice management Forests Regeneration (ANR) 1.2 High forest management 1.3 Rejuvenation of flowered bamboo areas 6. Technical Practices and Criteria. The forest development technologies defined above involve the use of a number of technical and silvicultural practices. Some of these are common to all the technologies and these are summarized below. Practices and criteria specific to particular technologies are then described. Estimated outputs from the various technologies are presented in Appendix 2. More details of the practices, required inputs and estimated outputs are discussed in Working Paper 1 (Annex 24). Technical practices common to all technologies: - Contour vegetative barriers for in-situ soil and moisture conservation; - Contour planting; - Use of improved planting materials from identified seed or clones and homogenous stock; - Planting at 3mx3m or 4mx4m to allow better natural regeneration; - Planting density and tree population adjusted to moisture availability; - Multi-tier canopy encouraged. A list of economic species is presented in Appendix 1 to this annex; - Improved forest floor management through regulation of grazing, cut and carry fodder collection, and fire control; - Live fencing of treatment areas; - Use of organic and inorganic fertilizers; - Elimination of nistar operations during regeneration.

88 Annex 2 Page 4 of 6 Technical practices and criteria specific to particular technologies: Technology Practices and Criteria RDF 1.1, 1.2, Use coppice with reserve system - Balance teak and associated hardwoods 50:50, and sal and associated hardwoods 70:30; ANR 1.1,1.2 - Use coppice with reserve system. Allow ANR 1.2 to revert to shelterwood system at the end of current working plan; RDF 2 and ANR Encourage other hardwood associates of bamboo; - Restrict density to not more than 400 bamboos/ha and less in arid areas; RDF Keep spatial balance between the crown of the trees and ground vegetation of grasses and legumes. Practice simple coppicing where feasible; ANR 1.1 and For coppice, encourage natural regeneration in the pre-planting year and follow-up; for selection coupes, use similar treatments for three years prior to harvest and follow up; - Encourage more seedlings of seed origin than of coppice origin.

89 Annex 2 Page 5 of 6 Phasing of Forest Development 7. Projections of the areas of forest to be managed under the different proposed technologies are summarized below. Development Technology Ha per Year RDF Coppice 100% ,050 3,430 Coppice/Replanting 50:50 1,460 5,350 12,310 20,570 Planting 100% ,050 3,430 Silvipasture 490 1,780 4,100 6,860 Bamboo 300 1,110 2,570 4,290 Sub-Total 2,730 10,020 23,080 38,580 Cumulative Sub-Total 2,730 12,750 35,830 74,410 ANR Coppice management 8,000 16,000 16,000 16,000 Forest management 12,000 24,000 24,000 24,000 Bamboos (Flowered) 3,000 6,000 6,000 6,000 Sub-Total 23,000 46,000 46,000 46,000 Cumulative Sub-Total 23,000 69, , ,000 Cumulative Total 25,730 81, , ,410

90 Annex 2 Page 6 of 6 Training 8. The introduction of the proposed management technologies with their emphasis on adaptation to site specific conditions and participation by communities in forest management will require training of staff. Training in participatory management is discussed in Annex 5. Technical training requirements are summarized in Table I to this Annex. Technical Working Group 9. To ensure that appropriate silvicultural practices are adopted a Forest Development Technology Working Group would be established within MPFD, to review existing practices and recommend improvements or adaptations for specific site conditions.

91 Training Plan - Technical Forestry Course Participants Objectives Resource Agencies Duration Frequency 1. Forestry DCF and above Problem diagnosis; resolution SFRI, Task Force, 2 days 2, 4, and 4 Batches in Development of problems; concepts and Outside experts Years 0, 1 and 2 Concepts norms for various development types. _ 2. Technical DCF, ACF, Forest Survey; contour alignment; SFRI,Working Plan I week 4 courses per year Refresher Courses (to Rangers preparation of site regeration Officers, Silviculture and be followed by on- plans; coppice silviculture; Research Experts (Manual the-job field training silvicultural managment, to be prepared) of divisional staff biometric techniques 3. Technical Foresters and Forest -ditto- Forrest Colleges, FD staff I week 6 batches of 50 Refresher courses Guards participants per year at each of 11 collegesin Years I to 4 (3,300 per year) I~ P ( X

92 ILLUSTRATIVE LIST OF ECONOMIC PLANTS TREES SMALL TREES, SHRUBS & CLIMBERS HERBS, LEGUMES & GRASSES BAMBOOS & OTHERS A. Teak (Trectoa grandis) dominated forests Tectona grandis Buchanania larzan Indigofera Spp Dendrocalamus stnctus Terminalia tomentosa/balenca Emblica officinalis Cymbopogon martinii Bambusa arundinacea Gmelina arborea Soyamida febrifuga Gloria superba Cephalostachyum pergacile Dalbergia paniculata/latifolia Randia dumatorum Tephrosia purpurea Agave sisalana Lagerstroemia parviflora Wrightia tinctoria/tomentosa Swertia chirayita Pterocarpus marsupium Elaeodendron glaucum Chlorophytum arundinaceum Aegle marmelose Cochlospermum religiosum Nigella sativa Sterculia urens Balaritis roxburghii Curculigo orchioides Hardwickia binata Gardenia turida Tinospora cordifolia Cassia fistula Helecteris isora Achyarenthes aspera Madhuca latifolia Nyctanthes arbortristis Calotropis gigantea Diospyros melanoxylon Acacia talsiatpinnata Dodonea viscosa Anogeissus latifolia Leucaena leucocephala Vitex negundo Boswellia serrata Discorea spp Carissa carrandus Holoptelea integrifolia Caesalpinia bonducella Jatropha curcas Acacia catechutnilotica Zizyghus oenoplia Albizia procera/lebbek Butea superba Pongamia pinnata Smilax macrophylla Gliricidia maculata B. Sal (Shorea rousta) dominated forests Shorea robusta Grewia telaefolia Curcuma amada/caesia/aromatica/angustifolia Bambusa vulgaris Terminalia tomentosa/chebaula/balerica Emblica officinalis/robusta Andogaphis paniculata Cephalostachyum pergacile Adina cordifolia Mallotus phillipinensis Acorus calamus Dendrocalamus strictus Albizzia odorotissirnalprocera/lebbek Nyctanthes arbortristis Piper largum/betle Agave sisalana Lagerstroemia parviflora Holarrhena antidysenterica Costus speciosa Diospyros melanoxylon/embryopteris/ Kydia calycina Asparagus racemosus montana/tomentosa Wrightia tomentosa Rauwolfia serpentina Acacia catechu/nolotica Dioscorea daemona Vetiveria zizanioides Pterocarpus marsupium Gardenia gummifera Cannabis sativa Pongania pinnata Abrus precatorius Puervaria tuberosa Anogeissus latifolia Bauhinia vahlii Curculigo orchioides Cleistanthus collinus Caesalpinia bonducella Urgenia indica 0'0 3 Careya arborea Butea superba Pinipenella arisu 0 Cordia latifolia/myxa/gharaf Calamus guruba Carissa carandus Dalbergia latifolia Combretum ovarifolium Dodonea viscosa - N Buchania lengens Litsaea sebifera Vitex negundo Madhuca latifoha Jatropha curcas Cedrela toons

93 C.. TREES SMALL TREES. SHRUBS & CLIMBERS HERBS, LEGUMES & GRASSES T BAMBOOS & OTHERS foe...e h'dwo Albizzia odoratissinmtprocmaiebbrk Colebrookia oppositifoha Imperata cylindrica Dendrocalanus strictus Acacia catecha/nilotica Crotolaria sericea Eulaliopsis binata Bambusa arundinacea Anogeussus latifolia Flacourtea indica Arundinella setosa Agave sisalana Boswellia sernata Gardenia gummiferatresinifera/turgida Themeda triandra Caryea arborea Dodonea viscosa Vetiveria zizaniodes Cleistanthus collinus Ixora parviflora Thysanolaena maxima Lagerstraemia parviflora Randea durnatorum/numulariatxylocarpa Albium cepa Garuga pinnata Vitex negundo Sida cordifolia Hyrddictyon excelsum Wrightia tomentosa Mentha arvensis Kydia calycina Diospyros embryopteris/larzan Ocimum bacilium Lannea grandis Grewia tiliaefotia Curcumna spp Ougeinia dabergioides Carissa carandus Urgenia indica Terminalia tomentosatbalericat Jatropha curcas Curculigo orchioides chebul/aasuna Pterocarpus marsupium Chloroxylon swetinia Pongamia pinnata.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~"a oo* I.,' > I-1X 01 %)

94 Estimates of Output from Various Forest Development Technologies RDF 1.1,1.21v3 ANR 1.1 ANR 1.2 RDF 2 ANR 1.3 RDF 1.4 Yea Practice Output Year Practce Output Year Practice Output Year Practice Output 1-3 Full coppicing Fuelwood: 1-3 Site preparation 1-3 Site preparaton 1-3 Site preparation site preparation 0 to 11.2 m' vegt conservation vegt conservation vegt.conservauon vegt.conservation sowing/plantng sowing/planting sowing/planung sowing/planting 2-3 Identification of 2-3 Identification of natural regeneration natural (for ANR 1.1) regeneration 4 Canopy manipulation Timber: Im' 4 Canopy Timber 3m' (for ANR 1. I) Fuelwood: 1.5m' manipulation Fuelwood: 4.5 m' 2-7 Establishment 2-7 Establishment 2-7 Establishment 2-7 Establishment maintenance maintenance maintenenace maintenance 5-6 Nurturing of natural 5-6 Nurtunng of and planted seedlings natural and planted seedlings I I Marking of resrves 1-61 NWFP collection NWFP: Rp NWFP collection NWFP: Rp NWFP collection NWFP: Rp Grass and legume Grass: 4 t Grass and legume 600 1,200 Grass and legume cutting cutting Grass: t cutting Grass: Pruning, lopping and Twigs: I.Ot Pruning, lopping Twigs: t 2-41 Pruning, lopping Twigs: Pruning, lopping, Fuetwood: 1.5 singling Leaf fodder Leaf fodder 1.0 t 1.0 t thinning to 3m' collection 4 Then 3yr Multiple shoot Fuelwood: NWFP collection Rp cycle to 57 cutting, singling and 3m' thinning 11 then 10 Coppicing and Poles then 10 Thinning Poles: then 4 yr Thinning and Bamboo: then 5yr Reseeding Grass: yr cycle to thinning Fuelwood: 19 to year cycle to Fuclwood: cycle to 40 mounding t cycle to t 38m' m' 61 Final harvest Timber: 49nn' 124 Final harvest Timber: 55m' 41 Final harvest Bamboo: 12 t 31 Final harvest Poles:200 'D Fuelwood: 73m' Fuelwood: 82.5m' Timber: 5m' Fuelwood: lt D Poles: m'.t X O X

95 Annex 3 Page 1 of 5 INDIA MADHYA PRADESH FORESTRY PROJECT Institutions Public Sector Institutions 1. The main institutions in the forest sector in Madhya Pradesh are the Madhya Pradesh Forest Department, the Forest Development Corporation, and the Minor Forest Products Federation. Other institutions that have an important role to play include the District Rural Development Agencies, the Tribal Development Authorities, NGOs, and the Panchayats. Activities of the Departments of Agriculture and of Animal Husbandry also impact on the forest sector, through their involvement in reclamation of non-forest wastelands and livestock programs. Private sector involvement in the marketing and processing of forest produce is discussed in Annex.. Madhya Pradesh Forest Department (MPFD) 2. Mandate. MPFD is responsible for protection, conservation and production in forest areas and the promotion of social forestry, including farm forestry, as a development function outside the forest area. The Department is responsible for advising the State Government on the necessary legislation affecting the forest sector and for its enforcement. 3. Structure. The Department is headed by the Principal Chief Conservator of Forests, reporting to the State Government through the Secretary, Ministry of Forests. The work of the Department is organized functionally according to Development, Production, Social Forestry, Research and Working Plans, Industries, Wild Life, Land Management, World Food Program, Coordination, Administration (Gazetted and Non-Gazetted), Budget, and Vigilance and Complaints. Each functional unit is headed by a Chief Conservator of Forests at Headquarters, with units at State, Circle, Division, Sub-Division, Range, Sub-Range and Beat levels. Each of these units is in charge of a Chief Conservator, Conservator, Deputy Conservator, Forest Ranger, Deputy Ranger and Forest Guard respectively. 4. The traditional functions of the Department, that is, conservation, protection and production are organized in 21 Forest Circles, divided into 79 geographical Divisions, referred to as Territorial Divisions. Social Forestry work is organized in 37 Divisions, and Wildlife and Working Plans in 12 Divisions each, which are not necessarily spatially the same as the Territorial Divisions. Functional staff report to the head of their functional unit and there is no formal mechanism for coordination between units on a geographical basis. This has led to a compartmentalized working pattern within the same geographical areas, with different

96 Annex 3 Page 2 of 5 approaches towards the same beneficiary groups. It has also resulted in less than optimum allocation of staff and other resources, and inconsistent temporal and geographical workloads for staff. 5. Staffing. MPFD has almost 39,500 staff of which about 720 are of the rank of Assistant Conservator of Forests and above. A further 1,670 are Forest Rangers with graduate qualifications. The functional organization of MPFD requires staff specialization, but the training and the tradition of the service work against such specialization. This is compounded by frequent transfers and the fact that promotion criteria favor generalists. 6. Budget. The budgetary allocation to the forest sector in the Eighth Five Year Plan period amounted to Rs crore or 1.7 percent of the total state plan. In percentage terms this shows an increase from the Fifth to Seventh Plan periods, when the forest sector allocation amounted to about one percent. Priorities and budgetary requirements are identified in the Five Year Plans, whilst annual plans determine the actual disbursement of funds. Commitment of funds is based on schemes or projects that do not necessarily cover all the requirements of the working plans. Thus financial planning is divorced from physical area planning. This may mean that important tasks are not funded, or are under-funded, particularly as budgets are based on range, division, or circle plans and budget cuts are distributed proportionately, rather than in relation to tasks. In addition to uncertainty about the amount of funding approved, funds are often not made available in a timely manner, so that there is insufficient time to utilize them effectively. There is further delay due to the lack of delegation of financial authority. A Divisional Forest Officer in Madhya Pradesh only has authority for expenditure up to Rs 10,000 and the Conservator for expenditure up to Rs. 30,000. These limits, set several years ago, require upward revision. Monitoring of achievements against approved budgets is strongly linked to achievements of targets and is discussed in more detail in Annex Total budgetary allocation is not linked to revenue generated from the forests. This was understandable at a time when forest resources were plentiful. Sustainable use of the forests requires that a percentage of revenue generated is reinvested in management and afforestation. Such a requirement should form an explicit part of the National Forest Policy. A precedent has been set in the State of Karnataka where a Forest Development Tax, levied at a rate of eight percent on sale of forest resources to industry, is transferred to a Forest Development Fund, that covers about ten percent of the cost of afforestation. This could be reinforced by the requirement that all working plans include the costs, not only of protection and harvesting, but also of compensatory afforestation. Madhya Pradesh Forest Development Corporation (MPFDC) 8. MPFDC was established in 1972 to convert forests into high value teak and bamboo forests by establishing commercial plantations, afforest degraded land, manage existing

97 Annex 3 Page 3 of 5 plantations, and implement special programs. This mandate, implemented through the replacement of natural forests by man-made plantations, is inconsistent with the changed emphasis of the National Forest Policy and is prohibited under the Forest Conservation Act. MPFDC is divided into 21 Divisions throughout the state. There are a total of just under 2,500 staff in MPFDC, of whom about 80 are professional and supervisory. The MPFDC was established as a means of attracting institutional finance with an authorized capital of Rs 20 crores. The present paid up capital is Rs crores, contributed entirely by the State Government. It was envisaged that revenue surplus from management and harvesting of natural stands would be reinvested in establishing plantations, with a proportion retained by the State Government. In fact, the revenue surplus attracted corporation tax at 55% and the State Government would not release more than 50% of revenue for reinvestment. Consequently, MPFDC lost financial autonomy and worked as an agent of the State Government on a 2% commission basis, with new plantations funded by the State through soft loans. 9. Public Sector Industries. Government owns and operates one paper mill with a capacity of 80,000 tons, producing newsprint based on pulp made from 50 percent bamboo and 50 percent eucalyptus. MPFD has an agreement to provide 100,000 sale units (about 100,000 tons) of bamboo per year at a cost of Rs 974 per sale unit, compared with an average price of Rs. 1,900 per ton. In fact, MPFD delivered only 30,000 tons in 1992 and the remainder was obtained from outside the state. The State also owns the Narmada Wood Processing Complex, established in 1979 to promote the utilization of non-teak species in the production of sawn timber, doors, windows and furniture. The Complex is managed by MPFDC but activities are presently almost at a standstill. Other Public Sector Institutions Involved in the Forest Sector 10. Minor Forest Products Federation. The Federation is charged with the collection and disposal of tendu leaves and sal seed throughout the State. It operates through Territorial Divisions and has an authorized staff strength of about 370, of whom 11 are in senior positions. The Federation is the apex body for 1947 Tendu Patta Cooperatives, which are grouped into 78 district unions. Members collect tendu leaves and are paid a collection fee. After processing and bagging, the cooperative sells the leaves and the profit is shared by the cooperatives after deduction of royalties paid to the State. The cooperatives are entirely run by MPFD staff and members have little or no involvement in their organization and management. 11. Rural and Tribal Development Organizations. There is a District Rural Development Agency (DRDA) in each of the 45 districts in Madhya Pradesh. The mandate of the Agency is to channel central and state government funds for special rural development programs to target groups at the district level. Programs and Expenditure to be updated at appraisal.

98 Annex 3 Page 4 of The Tribal Welfare Department. This Department has the responsibility for administering development programs and special schemes targeted at tribal peoples. There is a Tribal Welfare Officer in each District, who works closely with the Collector to supervise the implementation of these targeted programs. Since 1976, the Department has been less involved with actual implementation, which is the responsibility of other Departments, and is now more concerned with the administration of funds. 13. Panchayats. There is a four tier system of local institutions, based on the Gram Sabha at village level, the Panchayat from a group of villages, Janpath Panchayats at Block level, and Mandal Panchayat at District level. There are almost 19,000 Panchayats covering some 71,000 villages. The Gram Panchayats and Janpath Panchayats are mainly responsible for the distribution of nistar rights. There are examples in Madhya Pradesh where the Panchayats have been actively involved in the protection of the forest area of a village, and in the equitable distribution of poles, firewood, grasses and grazing for village livestock. However-, social forestry programs aimed at raising community plantations were mainly under-taken by MPFD staff with little input from the panchayats, although their collaboration was sought. An important constraint to their participation was the lack of funds. The Private Sector 14. Production. The private sector is involved in production mainly through farm forestry programs supported by MPFD. Orient Paper Mills (OPM) supports nursery development, provides extension advice and subsidizes seedling sales for a farm forestry program to increase raw material supplies. Although the company will buy produce offered, there is no buy-back guarantee and the producer is free to sell in any market. 15. Industries. Forest sector industries can be grouped into round wood based, processed wood based, and non-wood based. In the first group, there is one paper mill with a capacity of 85,000 tons of paper per year, that benefits from a similar agreement for provision of 100,000 tons of raw material at concessional prices from MPFD as the government paper mill. About 85 percent of the agreed supply was delivered in There are over 4,000 saw mills in Madhya Pradesh, but all are very small with simple equipment. Their aggregate capacity is estimated at over 2 million m 3 per year, but actual throughput is much less as many operate only for one or two months per year, when logs are available at an advantageous price. Recovery rates are high, reaching 80 percent for teak and 70 percent for general species. There are six mills for production of veneer, five based on slicing and one peeling mill. All are dependent to a large degree on imported teak logs to maintain production. Five plywood mills and two particle board mills operate in the state and a factory producing parquet, block board and flush doors. In addition there are numerous small joineries and furniture industries. 16. Non-wood based industries include beedi production from tendu leaves, agarbatti production and oil extraction from sal seed. Beedis are mainly produced through cottage industry organized by a factory that provides materials and arranges sale and distribution. Agarbatti production is also largely a cottage industry, though final drying, packing and

99 Annex 3 Page 5 of 5 distribution of the product is organized by factories, of which there are estimated to be about 1,000 in Madhya Pradesh. Oil extraction from sal seed is mainly undertaken at a plant in Raipur, which has an agreement with MPFD to provide 10,000 tons of sal seed per year. The capacity is 30,000 tons per year though production has not been greater than 22,000 tons. Issues 17. Institutions. The main institutional issues affecting the public sector institutions relate to the role, approach, and structure of MPFD. These evolved at a time when the primary role of the Department was production and protection, based on enforcement of rules to prohibit illegal exploitation of the forest resources. Changes in the role of the Department required by the changed emphases of the National Forest Policy, requiring a participatory, extension based approach have not been reflected in changes to the institutional structure. This has led to the overlapping functional responsibilities and less than optimum use of staff and resources. 18. Another important institutional issue is the future role of MPFDC. Its original mandate as a production oriented agency has been outdated by the requirements of the National Forest Policy and its future role requires review. 19. Staffing. The main issues related to staffing involve the need to balance staff numbers with the functional responsibilities of various Divisions and Units within MPFD, and to provide a career structure for specialists required by the service. Issues relating to staff training are discussed in Annex 20. Budget. The main issue related to budgetary allocations to public sector institutions in forestry concerns the fact that the allocation is not linked to revenue generated from the forests. There is a need for some explicit percentage of revenue generated to be reinvested in management and afforestation. Other important issues are the timely release of funds and delegation of financial authority to the level of District Forest Officer, who is mainly responsible for implementation of schemes. 21. Coordination. The main institutional linkages are, at present, between MPFD and MPFDC leading to agreements as to which forest areas are to be used by MPFDC. MPFD also has linkages with the district administration, mainly related to the implementation of farm and social forestry programs and to obtain general purpose funding under various rural development schemes. The only clear mechanisms for coordination of the activities of the various other agencies that work in, or affect the forest sector are the District Development Committees, under the Chairmanship of the Collector. 22. The Private Sector. The main issues relating to private sector involvement in the forestry sector concern pricing policies, the agreements on the supply of raw materials by MPFD at preferential prices, and the involvement of private agencies in plantation scale production. These issues have been summarized in Annex.. (Matrix).

100

101 Annex 4 Page 1 of 4 INDIA MADHYA PRADESH FORESTRY PROJECT Forest Development on Private and Community Lands 1. Social Forestry Programs. A large number of different programs and schemes have been undertaken in Madhya Pradesh in attempts to increase the production of forest products on private, community, and revenue lands, or to improve the utilization of timber. Many of these schemes have been supported by GOI or external donors. Recent programs implemented mainly through the Social Forestry Wing of MPFD include: - MP Social Forestry Project - Decentralized Nursery Scheme - Establishment of Gramvan - Private Plantations - Community Water Source Plantings - Creation of Gram Nikunj - Fuel-saving Chullahs - Improved Crematoria - Award Schemes - Tree Cooperatives - Integrated Wasteland Development - Fuel and Fodder Projects - People's Nurseries - Pilot Agroforestry 2. Program Results. The programs have succeeded in creating an awareness of environmental issues, increasing private tree planting, popularizing energy saving devices, and developing forestry outside forest lands, but it is difficult to estimate the areas planted. Lessons of experience with these programs can be summarized as follows: Low survival rates were due to: (i) poor genetic material; (ii) poor quality seedlings resulting from poor nursery practice; (iii) species not always suited to ecological conditions; (iv) inadequate maintenance; and (v) lack of monitoring and extension advice; A focus on meeting quantitative targets, often set so late that adequate preparation was not possible;

102 Annex 4 Page 2 of 4 Lack of beneficiary participation in program design; Implementation of programs by MPFD, using beneficiaries as wage labor, resulting in a lack of ownership and a sense that plantations were government rather than community owned; The poverty constraints of the poor and landless, in particular access to water, often meant they were unable to operate decentralized nurseries successfully; Subsidy programs aimed at promoting tree planting resulted in beneficiaries failing to take financial responsibility; Lack of market information and inappropriate publicity campaigns. 3. Related Programs. The Department of Horticulture and Farm Forestry promotes fruit tree production, but also distributes non-fruit trees to be grown as windbreaks and protection for the fruit trees. It has its own distribution and subsidy schemes and its own extension service. The Department of Agriculture has a well structured T and V Extension system, involving regular contacts between extension staff and farmers. Some extension messages are relevant to farm forestry, in particular, those linked to watershed management. However, there is little operational coordination between either of these Departments and MPFD. 4. Potential and Constraints. There is a substantial potential for further development of forestry on private and community land linked to: (i) the high demand for raw material from wood processing industries; (ii) high productivity and returns on irrigated land; (iii) an institutional framework with the capacity to deliver extension services to growers; (iv) implementation of the Panchayat Act that will increase responsibilities at the local level, and also the need for income from community lands; and (vi) the possibility of supplementary income from undercropping plantations with herbs and medicinal plants. However, a number of constraints need to be overcome including: (i) the quality of planting material; (ii) lack of market information; (iii) felling and transit regulations that restrict trade in wood products; (iv) difficulties in obtaining credit for tree planting; (v) negative impacts of on-going subsidy programs on privatized markets; (vi) high livestock populations that pose a permanent threat to young plantations; and (vii) limited extension skills amongst MPFD staff. 5. Strategy for the Development of Private and Community Forestry. Forest development on private and community lands would be promoted through the provision of technical advice to individuals, communities and industries for the establishment of nurseries and for tree planting in plantations or on field margins. The choice of species to be promoted would be closely linked to market demand. Individuals and communities would be primarily served by the Extension and Research (E&R) Centers, detailed in Annex 11. Extension activities would be coordinated in

103 Annex 4 Page 3 of 4 the 13 E&R Centers, and focused in some 40 priority forest divisions, that have been selected on the basis of the proximity of markets, the amount of irrigated land, population density, and the success of previous social forestry programs. Nurseries would be entirely private sector enterprises, involving no subsidies. It is estimated that most nurseries would have a capacity of about 50,000 seedlings annually. Seedlings would be sold at market price. The project would provide training in nursery technology and demonstrate modern nursery practice at nurseries to be established at the E&R Centers. Farm and community forestry extension programs would be associated with the existing T&V program of the Department of Agriculture, with MPFD extension workers taking advantage of regular meetings with farmers to provide information on tree production. This linkage would be reinforced by coordination of training of MPFD staff in extension with that of Department of Agriculture staff. Staff and farmer training at workshops and field days would form an essential part of the extension program. 6. An Industrial Liaison Unit (ILU) would provide a central contact point between forest-based industries, both wood and non-wood products, private tree growers, such as farmers, associations, or Panchayats and MPFD. The ILU would maintain supply and demand projections for a range of products and provide basic market information. It would also provide technical information or contacts on subjects such as silviculture, tree improvement and nursery practice 7. Project Support. The project would provide finance for the implementation of the strategy. This would include the provision of extension materials, finance for farmer training, demonstrations and field days, and training of MPFD staff. The project would also provide funds for special studies, contracts and surveys that would include: - Development of curricula for training MPFD staff in extension methods; - Evaluation studies to assess the impact of the extension program; - Production of extension videos; - Studies and market analysis of supply and demand for wood and nonwood products. 8. Program Implementation. The implementation of the proposed extension programs would be the responsibility of the DFO in charge of each of the E&R Centers. The DFO would be directly responsible to the CF in charge of the Forest Circle, but the CCF (Social Forestry) would have functional responsibility for the extension programs. Linkages within the MPFD are illustrated in Figure.. For the implementation of the extension programs, each DFO at the E&R Centers would be assisted by an ACF, a Range Officer and two Forest Guards. The development of the

104 Annex 4 Page 4 of 4 extension program would be linked to the development of the E&R Centers, that is, 2 centers in the first year of the project, three in the second year, and four in each of the third and fourth years. Private nursery development would also be targeted in the same way. This would result in the phasing of project activities as shown below, together with estimates of the development of nurseries and seedling production. Cumulative Totals Year I Year 2 Year 3 Year 4 No. E&R Centers No. of Divisions with Extension Programs No. of private nurseries No. of seedlings produced (million) 9. The ILU would be based in MPFD headquarters in Bhopal and headed by a CF with a background in economics. He would be responsible to the CCF (Industries) and supported by an ACF. Staff of at least Range Officer level, would be assigned to the ILU in each of the E&R Centers, to assist with the collection of supply and demand data. 10. Staff Training. Training of MPFD staff in the new approaches for forest development on private and community land would be an important part of the function of the E&R Centers. Forest Guard training would be provided on a regular basis by ACFs or Range Officers, who had themselves completed the extension training program. DFOs and other senior personnel involved in programs to promote forestry on private and community lands would participate in regular training workshops. International and local training in market analysis would also be provided for selected staff. A training plan summarizing these programs is presented in Table 1 to this Annex.

105 Training Plan - Extension Program Course Participants Objectives Resource Agency Duration Frequency Refresher course DFO (batch of 20) Extension T&V specialists, NGO, workshop of I once techniques Agricultural University week -ditto- RFO (batch of 20) ditto FD staff/ T&V specialists/ workshop of two once in Year NGO weeks I and 2 -ditto- FO & RFO ditto Forestry schools, NGO, workshop I course per Agricultural Extension year Training Centers Forestry technology T&V staff (ADO & RAEO) Introduction to DFO & RFO one day I course per according to T&V schedule forest technology year Training Plan - Market Analysis Course Participants Objectives Resource Agency Duration Frequency International training DFO (1) + ACF (1) of market analysis Overseas 3 months once each ILU Local training DFOs and staff of the market analysis HM (Indian Institute 2 weeks once R&E centers of Management) x._

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107 Annex 5 Page 1 of 12 INDIA MADHYA PRADESH FORESTRY PROJECT Village Resource Development Program Policy Framework 1. The National Forestry Policy of 1988 defines the primary goals of forest management as first, to conserve the natural environment, second, to meet the requirements of local people (particularly tribal populations and the poor), for forest produce, and third, as a source of wood and other products for industries and other non-local users. The policy envisages participation of communities in the management of forest resources as a means of achieving these objectives. On 1 June, 1990, the GOI Ministry of Environment and Forests issued policy instructions to all state forestry departments which defined an operational and institutional framework for the new policy (GOI circular N.6.21/89-FP). These guidelines highlight the role of suitably experienced NGOs and voluntary agencies as an interface between State Forest Departments and local village communities, recommending that the program be implemented under an arrangement between the community, NGOs, and the Forest Department. Only those beneficiaries organized into institutions specifically for forest regeneration and protection would have access to forest land atid benefits. 2. The Government of Madhya Pradesh has issued an order providing the framework for implementation of the policy, entitled "Community participation in preventing illicit felling of the forests and rehabilitation of the forests", (Order No. 16/4/10/2/91 of December, Definitions: Joint Forest Management (JFM) is the sharing of products, responsibilities, control, and decision making authority over forest lands, between forest departments and local user groups, based on a formal agreement. The primary purpose of JFM is to create conditions at the local level which enable improvements in forest condition and productivity. A second goal is to support an equitable distribution of forest products. The Village Resource Development Program denotes a combination of joint forest management and activities, or investments, designed to create alternative incomes or resources in village areas in areas immediately peripheral to forest land. It provides both incentives for communities to participate in JFM, and a mechanism for reducing pressure on forest resources. Ecodevelopment (Annex..) is similar to VRDP, but is restricted to areas peripheral to Protected Areas. It differs from VRDP in that communities would not have access to forest resources within the PAs, which JFM provides within forested land. This lack of access is offset by the greater availability of employment opportunities within the PAs and the benefits of eco-tourism and other activities associated with the PAs.

108 Annex 5 Page 2 of ). The order was revised on January 4, 1995 and prescribes the formation of two kinds of village committees: Forest Protection Committees (FPCs) would be constituted in sensitive forest areas where villagers are willing to participate in forest protection; while in degraded forest areas, Village Forest Committees (VFCs) are to be formed. In both cases, the committee would consist of a member from each resident family of the village. An informally constituted executive committee would include, as ex officio members, all the Panchs of the village Panchayat, the members of the Antyodaya Samiti, and the village Kotwar, teacher and Mukhia. The Forester or Forest Guard is to serve, ex officio, as the Secretary. The Divisional Forest Officer has the power to dissolve both kinds of committee, or to terminate the membership of specific members. 3. The duties of FPCs and VFCs outlined in the revised Order center on the protection of the forest. They include curbing illicit felling, encroachment and grazing, reporting theft and damage to MPFD and, when necessary, arresting offenders. FPC members would be entitled to full NISTAR rights, and NWFPs, but not to a share in the final harvest. VFC members would be entitled to intermediate products and a 30 percent share of the final harvest. These distinctions are summarized in the table below. Area Open Forest Closed Forest (i.e. crown cover < 40%) (i.e. crown cover > 40%) Village-level institution Village Forest Committee Forest Protection (VFC) Committee (FPC) Management objectives Production from! Protection of closed forest (Committee) Management of degraded forest Management Objectives Conservation Conservation / Production (Forest Department) Distribution of Outputs: NISTAR No Yes Intermediate products Yes No Final Products Yes (30% share) No Planning Process Joint Forest Management / Working Plans Village Level Resource Planning The mechanism for calculating the net revenue and distributing it among Committee members is to be detailed in a separate instruction from MPFD.

109 Annex 5 Page 3 of 12 Current Programs 4. Although MPFD had begun pilot work with communities prior to the issuance of the 1991 Order, Joint Forest Management is a relatively recent concept in the state. The process has been promoted most successfully in Harda and Jhabua Divisions. In Harda, 192 FPCs had been established, and more than three-quarters of the Division now comes under the purview of these committees. Over 46,000 ha have been closed to grazing and villagers have been successful in regulating the access of their own stock and excluding the livestock of outsiders. In Jhabua about 20 FPCs have been established, managing over 20,000 ha of forest land. FPCs have also been established in other Divisions. 5. Participatory planning methods have been adopted in most areas where VFCs have been established, but the level of participation by villagers varies, mainly in relation to the training and commitment of MPFD staff. In addition, in Harda Division and elsewhere, a program referred to as "Ecodevelopment " has been initiated. The aim of the program is to provide alternatives to the forest as a source of income and employment for participating villagers. This program includes investments such as irrigation infrastructure and equipment, such as stop dams, wells and pump sets; soil conservation measures; school and community buildings; inputs such as seeds, fertilizer, and horticultural supplies; training in income generation activities, for example, sericulture, mushroom cultivation, and apiculture; and the promotion of fuel saving technologies such as bio-gas plants and energy-efficient stoves. As the program involves both JFM arrangements and activities to generate alternative resources and incomes, it is referred to here as a Village Resource Development Program (VRDP). (See Footnote 1.) Factors Affecting VRDP Implementation 6. Over the last few years, considerable progress has been made by the Department in involving communities in forest protection and management, and the proposed VRDP is rightly seen by MPFD as an opportunity to gain the confidence of communities. However, successful and sustainable devolution of natural resource management will depend on a genuine transfer of responsibility to participating communities, appropriate incentives, and a viable institutional framework. 7. The particular factors which affect the implementation of a wider program of VRDP include the following: (a) The traditional approach of the Forest Department with its emphasis on forest protection and enforcement has left a legacy of mistrust in many communities. The management of the Forest Department has been hierarchical and suited to the downward transmission of orders and directives. Effective implementation of VRDP will require a change in this culture, towards a learning orientation, accompanied by decentralization of decision making to enable site-specific programs to be developed.

110 Annex 5 Page 4 of 12 (b) (c) (d) (e) The implications of participatory planning are still new to the department. The administrative ethos of the Forest Department which links budget releases to working plans and pre-determined targets, does not encourage autonomy and democratic process at the community level. Flexible, adaptive process will be needed for the successful implementation of JFM. The technical and economic viability of proposed management systems, investments and activities needs further assessment (e.g. the economic implications of rotational grazing, the productivity of forest areas under regeneration).. The institutional anid legal arrangements for JFM and Village Resource Development need particular support and attention, as viable and sustainable local institutions will be a necessary for the success of the program. VRDP has important distributional implications. For institutional arrangements to be both equitable and sustainable, those, such as headloaders, whose sources of livelihood are curtailed by new management arrangements (and who often have few alternatives sources of income), will need to be compensated. VRDP Strategy and Activities 8. VRDP would be based on two broad, but related, strategies for involving communities in forest protection and management. These are: (i) increasing the stake of neighboring communities in the management and utilization of the forest; and (ii) creating alternative sources of incomes and employment to reduce pressure on the forest. These two strategies are respectively reflected in: (a) (b) Regeneration of Degraded Forests (RDF), which involves planting and silvicultural practices and is based on Joint Forest Management arrangement with VFCs; and Village Asset Creation (VAC), which is the investment in stop-dams, alternative income generation schemes, etc., which have been referred to by MPFD as ecodevelopment. 9. The program's main activities would be in the following four areas: (i) building village institutions for forest management; (ii) participatory microplanning at village level;

111 (iii) the sanctioning and implementation of formal agreements between communities and the Forest Department; and Annex 5 Page 5 of 12 (iv) investments in alternative sources of forest products, income, and employment. 10. Village level institution building. Effective, representative and sustainable institutions would be the essential foundation for all component activities. If VRDP is to promote meaningful and sustained local autonomy, rather than a continuing dependence on subsidized inputs, a massive task of building institutional capacity at village level would be a fundamental element of the strategy. This would be paralleled by a change in the management culture of MPFD appropriate to the promotion of responsiveness, learning, and a client orientation must be fostered. 11. The proposed revisions to the MP Government Resolution of December 1991 (see paragraph 1 above) would ensure the representation of women and the poor on Village Forest Committees, Forest Protection Committees, and their executives. Formal membership of the committees would include two members, one male and one female, from each household. Further, the VFC/FPC Executive Committee would be required to include at least two women, and at least two members of landless households. Elections would be held annually to the Executive committee. 12. NGOs have an important role to play in implementing the VRDP. While local NGOs are not as numerous or prominent in Madhya Pradesh as in other States, there are a number who have gained the confidence of local communities and whose knowledge and experience of community development would be a great asset in building new forms of relationships between the communities and the Forest Department. Such institutions would be encouraged to work in partnership with the communities and the Forest Department in formulating and implementing VRD plans. In addition to the implementation of JFM, NGOs would have a role in training, monitoring and evaluation. 13. Microplanning. Village Resource Management Plans would be prepared through a participatory appraisal and planning process. This would take into account: the social, political and economic structure of the village; the resource base in terms of the amount and nature of cultivated lands, cropping patterns, livestock ownership, and the distribution, nature and condition of forest land traditionally used by the community; current patterns of use of the forest resource, by category of user; traditional or indigenous organizations and mechanisms for regulating access to forest products; current economic activities, constraints, and opportunities; previous government and NGO programs and their impact; and expressed needs and priorities of different social or interest groups. Under the project, particular emphasis would be given to ensuring that: (a) participatory appraisal would precede the fixing of both social and territorial management units; (b) interest groups, defined on the basis of gender, residence, occupation, or resource endowment would be identified and their

112 Annex 5 Page 6 of 12 problems and priorities assessed through focus group interviewing; and (c) a general consensus of the group as to its goals and priorities would be established before the election of an executive committee. 14. VRDP Memorandum of Understanding (MOU). The planning process will lead to a formal MOU between the Village Forest Committee and the Forest Department defining the Village Resource Development Program (VRDP). This agreement will detail Joint Forest Management arrangements linking defined areas of forest with defined communities, and specify management and protection measures and responsibilities, product sharing arrangements, sanctions, and conflict resolution procedures (both within and between VPCs). In addition, VRDP plans would specify the type and quantity of resources to be made available to the community for alternative income generation activities in return for the successful protection and management of forest land. Such resources would be available for productive activities meeting the criteria of technical, financial and environmental viability and sustainability, and which are equitable in their distributional implications. VRD plans would be approved by the DFO and a copy deposited with the District Collector. 15. VRDP Activities. VRDP Plans would include a range of activities identified by local communities. Given the nature of participatory planning, which provides the flexibility for communities to decide their own priorities, it is not possible to define a precise range of activities. Activities to be included in the VRDP Plan would meet the following criteria: - Contribution to reducing pressure on forest resources; - Equity considerations and the extent that the activities compensate those whose incomes have been reduced by the imposition of forest protection; - Biomass generation; - Individual or family income generation; - Benefits to the community resulting from increased agricultural production. Social infrastructure, such as schools, and other activities that do not result in increased production of produce or goods, would receive a lower priority, as many could be financed from other sources.

113 Annex 5 Page 7 of An illustrative list of activities meeting these criteria, which is not intended to be comprehensive would include: - Establishment of fuelwood and fodder plantations; - Agricultural infrastructure - e.g. minor irrigation, soil and water conservation, etc.; - Village infrastructure - e.g. water supply; - Apiculture, sericulture, mushroom cultivation; - Wages paid for watch and ward activities in the forest areas. 17. Equity considerations. A number of measures will be taken to ensure that those whose access to forest products is restricted by protection have the first claim on benefits, and that the assetless gain a share of the benefits of both Joint Forest Management and related VRD activities: (a) (b) (c) (d) (e) (f) (g) Interest groups would be identified in the participatory appraisal and planning process, and each would contribute to the formulation of plan priorities and objectives. Where appropriate, sub-villages or occupational groups would be constituted as VFCs or FPCs. Interest groups (including women) would be represented on the committee and its executive. Priority would be given to the meeting of subsistence objectives and needs in targeting VRDP activities. A criterion for the selection of income-generation activities would be their appropriateness to the needs of the principal users of the forest resource affected by new protection systems (in particular those with limited alternative sources of income and employment, such as women and the landless). Preference will be given to resource-poor and vulnerable groups in assigning VRD plan-related employment (for forest protection and management, construction. VRD planners and implementors will be trained in issues relevant to equity and village social structure, including the significance gender, caste and ethnicity.

114 Annex 5 Page 8 of 12 These measure are not intended to make the VFC an organization of the poor. The principle of representativeness implies that all members should have a stake in successful and sustainable forest management. Project Support 18. The project would support the VRDP through: (a) providing funds and; (b) institution building at the village level and within MPFD, mainly through specially designed training programs. Implementation arrangements 19. The Village Resource Development Program would be implemented by the Territorial Wing. In each Circle, the CF would have overall responsibility for the program. The CF Project Planning and the DCF (VRDP) in the Project Implementation Unit would have special responsibility for overseeing the VRDP. Duties would include assisting the coordination of VRDP activities, ensuring adherence to participatory principles, and promoting the exchange of experience between circles. The PIU would also be a focal point for all tribal issues, ensuring that tribal interests were fully integrated into VRD activities and processes. 20. In order to implement the program, Village Resource Development teams, including all staff involved in implementation, would be built at Divisional level, under the leadership of the Divisional Forest Officer. VRDP Spearhead Teams would be created in each Division to support village level assessment and planning. Each would consist of a Ranger, a Deputy Ranger, two foresters and a female NGO facilitator. The role of these teams would be to impart participatory planning skills to field staff in the Division involved in the VRDP. They would be based at the newly created Eco-development Centers in each Division. The work of these teams would be facilitated by a publicity campaign, that would be conducted at the beginning of the project to inform the public of the new policy of transferring responsibility for forest management to local communities and to explain the objectives and activities of the proposed project. Funding of the Village Resource Development Program. 21. The amount of money available to each community for the VRDP would be related to the area of forest land that the community is protecting or managing jointly with MPFD and the per hectare cost to MPFD of protecting this forest in the absence of community participation. The money available would be the product of the per hectare cost of seven years protection using traditional methods (cattle proof trenches and the employment of labor for "watch and ward") and the area to be managed by the community, up to a maximum of 300 hectares. The cost to MPFD has been calculated at Rs.300 per ha per year. For a community protecting and managing 300 hectares of forest, the cumulative total over

115 Annex 5 Page 9 of 12 seven years would amount to Rs. 630,000. These funds have been provided in the project under the category of Forest Protection and may be utilized by communities to finance village asset creation as part of the VRDP in accordance with the criteria defined in the following paragraph. 22. Criteria for the use of Forest Protection Funds. Criteria agreed with GOMP for the use of project Forest Protection funds are set out below. - Completion of an MOU between MPFD and the VFC, specifying amongst other things, the activities to be financedas indicated in Paras of this Annex; - Satisfactory protection by the community of the forest land covered by the MOU; - Completion of site-specific microplanning for VRDP; - Review of plans by the DFO, including an assessment of their environmental and social impact 2; - Endorsement of plans and specific proposals by the concerned VFC and the completion of a formal VRDP Agreement; - Adherence to the agreed administrative procedures for disbursement and monitoring (see below) 23. Administrative Procedures. Each DFO would make an annual request for funds based on the anticipated entitlement for forest protection funds for the VRDP by VFCs within his jurisdiction. Once drawn down, these funds would be deposited in a Deposit Account (DA) in the name of the DFO. The DFO would open a separate ledger for the VRDP program of each VFC. Drawn down, but unspent funds would not revert to Treasury at the end of the fiscal year, to enable VFCs to accumulate sufficient funds to undertake significant village improvements. 24. The expenditure of funds by the DFO would follow the schedule recorded in the VRDP agreement subject to: (a) six-monthly inspection reports made by the DFO indicating the satisfactory fulfillment of the Village Forest Committee (VFC) obligations for forest protection and management; and The environmental and social impact of VRDP plans would be reviewed in the light of the principles of the GOI Environmental Protection Act, the GOI Wildlife Protection Act, and the World Bank Guidelines for environment, involuntary resettlement and indigenous peoples that have been set out in World Bank Operational Directives 4.00, 4.20 and 4.30.

116 Annex 5 Page 10 of 12 (b) all debits from the VFC VRDP ledger being on the basis of the MOU agreed by the VFC Executive Committee. 25. Each VFC would establish a bank account. The Committee Chairman, and Secretary would be joint signatories. The account would be used to deposit money raised by the VFC from any membership contributions, fines collected by the VFC or other sources of income. Training would be provided to selected VFC members in basic bookkeeping and related organizational skills. 26. Funds would be available to the VFC in two ways: (a) (b) Up to one-third of the annual entitlement would be paid, on a monthly basis, to the VFC, either directly or into the VFC bank account to cover the costs of watch and ward of the protected area. The VFC could use this money to pay wages to those undertaking the watch and ward, use it for a mutual guarantee fund, or retain it for investment in village infrastructure. This account could be augmented by members' savings and interest, and additional income from the VFC's share of the proceeds of sales of forest produce, as specified in the JFM agreement, and by fees levied for grazing and headloading, and by fines collected by the committee; The remaining two-thirds of the annual entitlement would be used for investment in village improvement programs, such as minor irrigation works, as outlined in the VRDP agreement. The DFO would make direct payment for these works from the PDA, debiting the VFC ledger account. No expenditure would be incurred until the DFO had ascertained that the VFC had satisfactorily protected the forest area for at least one year. On the decision of the VFC, funds could be accumulated for two or more years, so that more costly works, such as a stopdam could be financed. If a VFC satisfactorily protected the forest for two years, an advance payment, equivalent to the entitlement for the third year of protection would be made to the VFC, to enable construction of more costly village assets to begin. Thus, a community that had satisfactorily protected 300 ha of forest for two years would have an entitlement of 2 X Rs. 90,000. An advance of Rs. 90,000, equivalent to the third year entitlement, would mean Rs. 270,000 would be available for investment in village infrastructure. 27. All Deposit Accounts would be subject to regular audit and the DFO would provide the VFC with a six-monthly summary of the status of the VFC ledger account. 28. Coordination arrangements. Given the diversity of project activities, interagency coordination will be critical to project success. In both Harda and Jhabua Divisions, such coordination has been energetically pursued. Relevant agencies include the Animal Husbandry, Agriculture, Horticulture and Irrigation Departments and the Tribal Development Agency. Coordination committees of these and other relevant agencies are proposed at State,

117 Annex 5 Page 11 of 12 District and Block (Taluk) level. 29. Phasing. A total of about 1,143 villages would be involved over the four year project period, becoming responsible for 343,000 hectares of forest land (about 74,000 hectares of which would have come under active management). The phasing of the program would be linked to the training of staff in participatory planning and the principles underlying the program. Team building, orientation and training during the project preparatory year would develop the necessary skills in an initial group of staff from nine Divisions. The VRD program would begin in these Divisions in Year 1, and in 12 Divisions in the subsequent year (following training and orientation of their staff during Year 1). Work would be undertaken in 3 ranges within each of VRDP Division. In each Range, 3 villages would enter the program in the first year of activities, 4 in each of the second and third years, and six in the fourth and fifth years. It is assumed that there would be significant MPFD involvement in any village for at least three years. The phasing of activities is shown in the table below. Details of the VRD component costs are given in Cost Table 2. Training Project Year No. of Circles No. of Divisions No. of Ranges No. of Villages Cumulative Total No. of Villages 30. As the VRDP represents a significant change in the approach of MPFD, the project would finance a major program for staff and villager training. This is so critical, that the whole of the phasing of the VRDP has been linked to the rate at which staff can be realistically trained in the new approaches and techniques for successful implementation of the program. The main training needs are identified in the following table and an outline training plan presented in Table I of this Annex. 31. Monitoring and Evaluation. The monitoring of the VRDP would be undertaken as part of the regular monitoring and evaluation process to be established in MPFD, as discussed in Annex 9, together with a suggested list of indicators. The project would finance a study to evaluate the VRDP in the third year of the project. Terms of reference for the study are presented in Appendix 1 to this Annex.

118 Annex 5 Page 12 of Studies and Consultancies. The project would finance a study of possible income generating activities that could be supported through the VRDP. The study would examine the technical viability and financial profitability of a range of income generating activities. Terms of reference for the study are presented in Appendix 2 to this Annex.

119 Training Plan - Village Resource Development Program Course Particpants Objectives Resource Agencies Duration Frequency 1. Orientation for DFO and above Familiarization with JFM TTTI, Academy of 2 x 3-day 12 Workshops Senior Staff concepts and methods Administration, IIFM, other modules in each of Years I and 2 2. Training of VRD VRD teams (RFOs, To impart technical, social, Modules by: NGOs, WALMI, 6 weeks 3, 4, 4, 6 and 6 in Years 0 Spearhead Teams Foresters, Guards), participatory planning, and Academy of Administration, to 4. Batches of 21 plus DFO and SDO training skills TTTI, IIFM, FD Staff persons 3 VRDP Teams 3. Circle Team CFs, ACFs, DFOs Familiarization with VRD; Facilitator 2 days 3, 4, 4, 6 and 6 building building Circle-level workshops (by Circle) in managment teams and common Years 0 to 4 vision and methods for VRD 4. Divisional Team DFOs, ACFs, RFOs Familiarization with VRD; Facilitator 2 days 9, 12, 12, 18 and 18 Building building Divisional managment workshops (by Divisions) teams and common vision and in Years 0 to 4 methods for VRD 5. VRD skills for RFOs, Foresters, Impart social and technical, VRDP Spearhead Team I week 27, 36, 36, 54 and 54 field staff (Range Guards. and planning skills to FD field workshops (by Range) in level) staff Years 0 to 4 6. Training for Village Committee Imparting institution building VRDP Spearhead Team, variable Continuous. Courses to be Village Committee Members and income generation skills to NGOs, Other agencies held at Divisional Members village participants Ecocenters o3 ; D

120 Training Plan - Village Resource Development Program (Contd.) couse Participants Objectives Rsource Agencies Duraion tq 7. Experience sharing DFOs and above Review of and reflection on Forest Department I day 3,4 and 6, in Years 2 to 4 workshops VRD experience (at circle level) 8. Annual workshops All resource and Coordination of training inputs n/a 1 day I workshop each year in for trainers training institutes and methods years 0 to 4 9. Study Tours Rangers and above Observation of JFM and n/a 10 days 3, 4, 4 and 6 tours in MPFD Officers (in discussion with participants Years I to 4 country) 10. Study Tours for Participating Observation of JFM and n/a I week 9, 12, 12 and 18 tours in villagers and NGOs villagers and field interaction with JFM Years I to 4 (in country) staff participants 11. International ACF and above (2 Community forestry, joint Overseas 3 months 3 courses each in Years I training for Forest per year); Range forest management, forestry to 4 Officers officers (I per year) extension methods, etc. rn

121 Annex 5 Appendix 1 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Evaluation of VRDP. Terms of Reference Objectives 1. The objectives of the review are: (i) to assess progress in VRDP activities against the evaluation criteria given below; and (ii) in the light of the findings from (i) to advise on use of funds allocated to VRDP during project years 3 to 7. Terms of Reference 2. The consultants will: - Identify 20 percent of villages participating in the VRDP, to form a sample representative of different ecological and socio-economic conditions. - Collate MPFD monitoring data for these sample villages; - Undertake field visits to a sub-sample of villages to provide first hand confirmation of the data; - On the basis of the data and field visits, review the viability and sustainability of the VRDP in the light of the following evaluation criteria; - Technical viability of technical packages and recommendations; - Financial viability in the long term; - Economic implications, including the implications for communities excluded by new forest management arrangements; - Institutional sustainability and the adequacy of the organizational arrangements for participation;

122 Timing and Team composition Annex 5 Appendix 1 Page 2 of 2 Distributional implications, including an assessment of whether the losers from new management systems adequately compensated, the distribution of benefits is equitable, and the proportion of benefits received by women, the landless, marginal farmers, and scheduled castes; Environmental implications in the long term of the kinds of activities promoted under the project. 3. The evaluation study will be undertaken over a three month period during project the third year of the project. The review team will consist of three members with skills including forestry, community development, rural sociology, and institutional development. The report and recommendations will be delivered in advance of the project mid-term review.

123 Annex 5 Appendix 2 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Study of Income Generating Opportunities in VRDP Terms of Reference Objectives 1. The purpose of the study is to identify appropriate income and employment generation activities to be promoted as part of the VRDP. Terms of Reference 2. The consultants will: Review the experience of the development of income generating activities in Madhya Pradesh; Identify the most promising of these and suggest additional activities; Assess each of the activities in terms of: - Technical viability - Financial profitability - Marketing - Equity and gender implications; Make recommendations for activities to be promoted as part of the VRDP in future; Estimate the costs of initiating the activities and recommend ways in which individuals, particularly the assetless, can be assisted through the VRDP, to obtain the necessary funds; Identify training needs for MPFD staff to promote such activities and for villagers to implement them;

124 Annex 5 Appendix 2 Page 2 of 2 Timing and Team Composition 3. The study will be undertaken in two phases. The first will be a review of existing experience, and the identification of a range of possible activities for the future. This will take about two weeks. The team for this phase will consist of a financial analyst and a general technical expert. On the basis of this review, a second phase of the study will assess the viability of the proposed activities in accordance with the TOR above. This second phase will be completed in two months by a team consisting of a financial analyst and one or more technical specialists relevant to the activities being investigated.

125 Annex 6 Page 1 of 9 INDIA MADHYA PRADESH FORESTRY PROJECT Conservation of Biodiversity Protected Areas in Madhya Pradesh 1. Madhya Pradesh is considered to lie within two main biogeographic zones, the Semi-Arid Zone, occupying 22 percent of the area, and the Deccan Plateau Zone, occupying 78 percent of the area. The Deccan Plateau Zone is further sub-divided into three biotic provinces, namely the Eastern Highlands (18.7 percent), Chota Nagpur Plateau (7.7 percent) and Central Highlands (51.3 percent). The Semi-Arid Zone has one biotic province, namely the Gujarat-Rajawa Province. Protected Areas (PAs) have been established in each of these biotic provinces, though they do not represent all the ecological diversity in the state. There is a total of 11 National Parks and 31 Wildlife Sanctuaries covering 16,592 sq.kms. or 3.7 percent of the total area of the State and 11 percent of the forest lands. Four of the national parks have been either included or to be shortly included under the centrally supported Tiger Reserve Program of the Government of India. Although, the total area of the PAs represents the largest extent area under protection in any single State of the country, it falls considerably short of the average national target of 4 to 5 percent. The WH 1/ recommended the creation of two national parks and 16 sanctuaries to strengthen the PA system of the State. Biological and Conservation Value 2. The vegetation of Madhya Pradesh represents the typical Central Indian Peninsular flora and fauna. Forests, which cover 35% of the land area of the State, varies from thorn forests in the western part to dry deciduous and moist deciduous types in the central and southern parts, with some endemic and threatened elements of plants and animals. Botanically, the Deccan Zone attracts considerable interest, particularly in the hill areas. The eastern highlands is the biologically richest area and is the principal catchment for two of India's main river systems (Narmada and Mahanadi). Within the Satpura range of the central highlands are found elements of the biologically important sub-tropical hill forest. This forest tract provide a wide range of environmental gradients and consequently exhibit a rich diversity of habitats and species. The deep gauges of the Pachmarhi plateau are sites of rare species of tree ferns and bryophytes. Along the Chambal River in the western part of the State 1/ Rodgers, W. A. and Panwar, H Planning a Wildlife Protected Area Network in India.

126 Annex 6 Page 2 of 9 are found remnant patches of fast disappearing ravine tropical thorn forests. The last known population of the highly endangered Barasingha swamp deer occurs within the State. Constraints 3. The existing program for the conservation of biodiversity in Madhya Pradesh suffers from a number of constraints. The most important are: - The present network of protected areas in Madhya Pradesh is not representative of the full range of ecosystems and habitats in the State; - The lack of a clear policy for the maintenance of ecological connectivity between protected areas and for the management of the various types of land in the surroundings of the protected areas; - The lack of specific programs to manage the human pressures on protected areas from the small populations resident in the PAs and the much larger populations in the peripheral areas; - Limited managerial capacity to meet the range of planning, monitoring, evaluation and research needs for improving the protected areas programs and for conservation of biodiversity; - Inadequate staffing and resources within the Wildlife Wing of MPFD for the implementation of effective biodiversity conservation programs. Future Strategy for Conservation of Biodiversity 4. The future strategy for the conservation of biodiversity would have three main thrusts: improved management and protection of existing PAs to increase their ecological viability and diversity; maintenance of ecological connectivity between protected areas and the enhancement of the PA network for the State; reduction in the dependency of communities on PA resource through sustainable management of forests in areas peripheral to the PAs, and through ecodevelopment programs to create alternative resources or incomes for local populations.

127 Annex 6 Page 3 of 9 Project Support 5. Area Selection. The project would finance improved planning and management in 24 of the PAs in Madhya Pradesh. These areas, listed below, are considered in two groups: those of highest priority, referred to as P1 Areas, in which the project would provide more comprehensive support for improved management, and would in addition, finance ecodevelopment activities in areas peripheral to the 12 PAs; and those of lower priority, referred to as P2 Areas, in which the project would provide management support, though of a less comprehensive nature, and where there would be no direct project finance for ecodevelopment programs. The 24 PAs selected are as follows: P1 Areas P2 Areas Bandhavgarh NP, Kanha NP, Madhav NP, Panna NP, Sanjay NP, Satpura NP, Bori WLS, Achanakmar WLS, Tamor-Pingla WLS, Palpur-Kuno WLS, Sitandi WLS, Udanti WLS Indravati NP, Kanger NP, Noradehi WLS, Pachmarhi WLS, Pench WLS, Ratapani WLS, Ghatigaon WLS, Son Ghariyal WLS, Sardarpur WLS, Badalkhol WLS, Chambal WLS, Phen WLS 6. Areas of biological importance that are outside present PAs would be of importance in the development of the connectivity of the PA network. These areas, referred to as P3 Areas are listed below. The criteria for selection of the P1, P2 and P3 Areas are presented in Appendix 1 to this Annex. P3 Areas Choral, South Khargone, Kalibit, West Chhindwara, Sumtara, Rukhad, Rangawa, Kawardha, Logurkhara, Tururbaria, Balai, Amarkantak, Golapalli, Sainmura, Hasdobasin, Guna, Shyamgiri, Chachai 7. PA Planning and Management. The project would support the preparation or improvement of management plans in all 24 PAs, through providing for the formation and operation of five zonal PA Planning Teams, each responsible to the relevant Zonal Conservator (Wildlife). Each team would consist of two Range Officers, two Foresters, two Forest Guards and a draftsman. The project would provide training, equipment, vehicles and specialist consultant advice where necessary. Part of the management planning process would include planning workshops for each PA to obtain broad consensus and agreement to the proposed plans from concerned agencies and specialists from outside the forest department, including NGOs, academics, and the public. 8. In each of the priority PAs, a range of development activities would be implemented, current management programs would be rationalized, and protection

128 Annex 6 Page 4 of 9 improved, on the basis of the updated management plans. The development activities proposed in the PAs would include survey and demarcation of boundaries; provision of communication equipment; construction of guard outposts and patrolling huts; restoration of degraded habitats by programs of weed control; improvement of water regimes by the construction of water retention works; and road improvements. In addition, vehicles and equipment (field, camping and specialized equipment) would be provided to each of the PAs in support of the proposed program of work. 9. The project would also finance the development of interpretative programs and facilities in four PAs, Pachmari, Bandhavgarh, Shivpuri, and Panna. The aim of the programs would be to create awareness of conservation issues among visitors to PAs and in neighboring village communities. The programs would be designed as simple, easy to operate and maintain, using local materials as far as possible, and would reflect local biological and socio-cultural conditions. 10. Development of the PA Network. The proposed project would promote the further development of the PA network through: (a) survey and demarcation of a limited number of relatively undisturbed satellite areas; (b) implementation of plans for management of the intervening zones that are compatible with biodiversity conservation values; and (c) implementation of ecodevelopment programs in the more disturbed surroundings and intervening areas. The survey and demarcation of the proposed satellite areas would take into consideration the biological and socio-cultural values of the area. Although, survey alone may not confer on the area a legal status, it would nevertheless, enhance opportunities for improving conservation management and protection in these areas. Specific attention could be focussed on promoting forest production operations that favor the maintenance or improvement of biological diversity and ecological processes in the proposed satellite areas and the intervening zones. Although, the strategy being proposed under the project for development of the PA network is aimed at the enhancement or maintenance of biological diversity as the primary objective, this does not preclude the declaration of these areas as PAs, if concerns of human use and dependencies can be satisfactorily resolved. 11. Ecodevelopment. 2/ The project would finance a phased program of ecodevelopment in about 100 villages around the twelve priority PAs, the P1 Areas, through the provision of site-specific ecologically friendly measures to enhance sustainable use of existing resources, develop alternatives to the use of PA resources, and promote income generation activities, thereby relieving pressures on PAs. These activities would be financed through the establishment of an Ecodevelopment Support Fund (ESF). Draft criteria and procedures for disbursement of funds from the ESF are set out in Appendix 2. 2/ Ecodevelopment is defined as a strategy for protecting ecologically valuable areas from unsustainable or otherwise unacceptable pressures resulting from the needs and activities of people living in and around such areas.

129 Annex 6 Page 5 of The project would support three distinct types of ecodevelopment activities: those based on the use of forest resources, those related to the use of non-forest resources, and those that would cover the interface between forests and other sectors. The activities based on the use of forest resources would be geared to the protection, regeneration and increased productivity of the forest resources of the peripheral areas for fodder, fuelwood, timber and minor forest products and a greater security of access to these resources for the local people through the development of participatory management arrangements with the local people. Improvement and diversification of non-forest lands would be accomplished through programs for improving productivity of agricultural lands, horticulture, sericulture, pisiculture, apiculture, soil conservation and water retention, cottage industries, and other alternative income generation programs. These constitute the traditional ecodevelopment inputs. The third set of activities that cover the interface between forest use and other sectors of the village economy would include programs for livestock and grazing control, and the use of energy efficient stoves and alternative sources of energy. 13. The project would largely support the implementation of those interventions that demonstrate a direct linkage to the protection of PA resources. This will enable enable local people to perceive a direct correlation between the planned interventions and the PA. Otherwise, there is considerable danger that ecodevelopment might become rural development without the direct linkages to improved PA protection and management that constitutes its central rationale. The chart below is a guide to determining the basis for the selection of ecodevelopment activities. Specific Objectives Target Group Intervention Inco- e r oration Income deprived - Employment households - Skills training - Micro-enterprises - Improved agriculture - JFM Resource substitution Resource deprived - Biogas plants households - Improved stoves - Improved livestock - JFM Community Villages peripheral to PAs - Drinking water cooperation - Soil and water conservation - Infrastructure 14. The planning and implementation of the ecodevelopinent program would be very similar to the Village Resource Development Program (VRDP), described in

130 Annex 6 Page 6 of 9 Annex 5. The program would be based on the development of village level, sitespecific, micro-plans through a participatory process, involving all village families. The amount of funding available to each community would be similar to that available under VRDP. The main difference with the VRDP is the emphasis given to protection of PAs, so that communities would not have access to resources within PAs, but only to forest and non-forest resources in the peripheral areas. This would be offset by the greater availability of employment opportunities within the PAs, and the benefits of eco-tourism and other activities associated with the PAs. 15. Microplanning. An Ecodevelopment Planning Team would be established in each of the Zonal CFs, headed by an Ecodevelopment Planning Officer, of at least Assistant Conservator of Forests (ACF) grade. He would be assisted by an Assistant Planning Officer of Forest Ranger grade, one Deputy Ranger and two Forest Guards. The planning team would be completed by two NGO staff, and one of these would be a woman. The planning team would give priority to those communities which have most impact on the PA. Forest Guards and Rangers responsible for beats in areas peripheral to the PA would form part of the planning team, whilst it is working in that particular beat area. Ecodevelopment plans would be approved by the PA Director and submitted to the State Project Implementation Committee for periodic review. Consistency of approach would be ensured by a six-monthly review of approved plans by the Project Steering Committee. Once the plan is agreed with the community and approved by the PA Director, funding would be released and the local Forest Guard, Ranger and NGO staff would assist with the implementation of the ecodevelopment activities. The planning team would move on to the next priority area. 16. Activities financed under ecodevelopment in areas peripheral to the PAs would be the responsibility of the PA manager. This would include responsibility for planning and implementation of alternative income-generation activities and associated JFM programs in villages peripheral to the PAs. Sufficient staff would be available with the Wildlife Wing to undertake the proposed activities. Duplication of work by the Territorial staff would be avoided as this would sent confusing signals to the people. 17. Research. There is, at present, no coordinated program of research that addresses the needs and interests of biodiversity conservation and protected areas in Madhya Pradesh. The project would, therefore, support between problemsolving research studies, leading to improved management for conservation and protection of ecosystems and species. Basic research on wildlife and behavioral ecology would not be given priority over conservation or management-related work. Research topics would be selected based on PA and management plan needs and appropriate institutions to undertake the research would be identified. Procedures for the award of research contracts would be similar to those used for other forestry research to be commissioned by SFRI. In addition, the project would support rapid assessment studies to provide a basic understanding of the status of biodiversity within the State and to determine areas of important conservation value in need of protection.

131 Baseline information needs for monitoring and evaluation would also be obtained through the same contract mechanism. Annex 6 Page 7 of A DCF (Wildlife Research), placed at the SFRI, would be responsible for the coordination of the research contracts related to the conservation of biodiversity and PA management. He would also be responsible for monitoring and evaluating the research work and ensuring that research activities are in keeping with PA needs and interests. A Wildlife Research Advisory Committee would be established with responsibility for determining research priorities, approving the terms of reference for each contract, evaluating proposals, and reviewing research results. The composition of the Committee would be as follows: Chairman Member Secretary Members CCF (Wildlife) DCF (Wildlife Research) Zonal CFs (Wildlife) Director, SFRI Representative WIl Representative University Representative NGO 19. Training. A major training program would be supported under the project to build capacity within MPFD for improved management of the PA system. Particular attention would be focused on the training of foresters and guards through the improvement of the training school at Bandhavgarh. Existing infrastructure at Bandhavgarh would be improved by the provision of additional dormitory facilities, equipment, furniture and a large vehicle for field training visits. In addition, financial support would be provided to meet annual training costs for the duration of the project. It is anticipated that around guards would be trained at the school annually. More details of proposed training programs are presented in Table 1 of this Annex. 20. Higher level professional staff would participate in workshops, study tours and seminars at both national and international levels. Over 60 person months of international training and over 200 person months of national training in wildlife and ecodevelopment planning and managenment would be supported under the project. In addition, the project would support a number of specialized courses to be conducted within the State with technical support from national institutions. Most of the national training be done through existing programs at the WIl. This includes the 9-month diploma and 4-month certificate courses in wildlife management and the 4-month certificate course in ecodevelopment planning. Specific training for staff for implementation of village ecodevelopment would be provided through introductory courses and practical on-the-job training in participatory planning and program implementation.

132 Annex 6 Page 8 of Technical Assistance. The project would also finance the recruitment of specialists to assist with special studies in resource economics, environmental impact assessment, and data management. Support would also be provided for obtaining assistance locally for the design and development of the interpretation programs. Finance to contract services for data entry of PA statistics would be available. The project would enable internationally recruited specialists to be hired for short periods to a total of 12 months and local technical experts to a total of 40 months. 22. Monitoring and Evaluation. Funds would be available for improving capabilities for planning, monitoring and evaluation (PME). Consultancies to assist in the design and introduction of improved PME procedures and supporting systems for the project would also address needs of the conservation of biodiversity component (See Annex 9). In addition, wildlife data management systems would be established in each of the five zonal wildlife offices. Project funds would be available for purchase of necessary computer equipment and software. Issues 23. The main issue affecting this component relates to the fact that there are communities and villages within the PAs. Some are in the peripheries of the PAs and could possibly be excluded by the redefinition of boundaries as is currently proposed for the Kanha Tiger Reserve. Some live in the core areas of the PAs. Excluding these areas would frequently result in a number of islands of uncontrolled land within the PA, which would not be compatible with management of the area for conservation of biodiversity. Government is addressing the problem of resident communities in a pragmatic way. The legal basis for the notification and management of PAs is provided by the Wildlife Protection Act. Rather than immediately trying to solve the problem by enforcing the full rigor of the law, which would be socially and politically difficult, the Government approach is to provide incentives for people to move voluntarily to the buffer or peripheral areas of the PAs. An incentive package of support for housing, village infrastructure, land and irrigation is currently provided as an inducement to people to move out. An added incentive is the provision of ecodevelopment benefits to people in peripheral areas. 24. In the light of this approach to the problem of communities resident within PAs, the strategy to be adopted under the project would be as follows: PAs to be supported under the project are selected on the basis of criteria that minimize the problems of human pressures (See Appendix 1); An assurance would be sought from GOMP that, in keeping with the provisions of the Wildlife Act, there would be no involuntary resettlement of people during the project period;

133 Annex 6 Page 9 of 9 Proposals for relocation would be preceded by an independent study to assess the impact of the communities on the conservation of biodiversity; All proposals would be consistent with the GOI provisions for relocation and would be agreed with IDA, in the light of the recommendations of the Bank's Operational Directives 4.20 (Indigenous People) and 4.30 (Involuntary Resettlement). The main recommendations are summarized in Appendix 3 to this Annex; An independent program to monitor the relocation would be financed through the project.

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135 Training Plan - Conservation of Biodiversity Course Participants Objectives R urce Agewies Duration Frequency 1. Wildlife DCF and ACF Impart field techniques, planning of WII, Dehradun 9 months 3 per year in Years management (27) disease management, socio-cultural 1 to 4 Diploma analysis, etc. 2. Short course on ACF (18) Impart skills in PRA techniques, WIT Dehradun 4 months 2 per year in Years Ecodevelopment preparation of microplans, and I to 4 implementation of ecodevelopment programs 3. Certificate in RO (27) To impart skills in development of water WII, Dehradun 4 months 3 per year in Years Wildlife conservation works, habitat manipulation, I to 4 Management law enforcement, capture techniques etc. 4. Specialized CF, DCF, ACF Training in chemical immobilization and WII and others courses (54) translocation, census methods, PRA I to 2 weeks 6 per year techniques, interpretation, disease management, data management, etc. 5. Orientation course Forest Guards Orientation to all aspects of PA FD staff in each I week Ten courses per (1800) management, ecodevelopment, etc. CF zone year (2 per zone = 200 per year in Years 1 to 4) I.-a

136 Training Plan- Conservation of Biodiversity (Contd.) W00000 f;teouf ts tev; 0 t0prtic t;; 0a Objectives : :; X\Pgesoe R Ago ncies Duration Frequency 6. CF, DCF, ACF Interaction/ update on PA planning and Various institutions 3 to 5 days 5 per year (Years I Workshops/seminars (45) management, interpretation, ornithology, in-country to 4) captive breeding, data management, etc. 7. Study tours ACF, RO, Exposure to approaches in Various institutions 2 weeks 10 per year in Deputy RO ecodevelopment, habitat management, (in country) Years I to 4 (90) animal capture, captive breeding 8. Natural resource CF, DCF (4) Natural resource management, planning USA, UK, 12 months Years 2 and 4 and PA management and management of PA, natural resource Australia, Thailand, (long-term courses) economics, etc. Malaysia 9. Specialized CF, DCF, ACF Data management, natural resource Various institutions I to 3 months 2 per year training (18) management, park interpretation, habitat management, biodiversity assessment, resource economics, park management, remote sensing, etc. 10. Seminars/ CF, DCF, ACF Park management, ecodevelopment, Various institutions 1 to 2 weeks 2 per year workshops (18) resource economics, wildlife tourism, data management, buffer zone management, immobilization 11. Study tours ACF, RO (20) Exposure to park management, Asia / Africa 2 weeks Groups of 10 in ecodevelopment, interpretation, tourism year 3 and 4 development, revenue generation 0 :3 0 rt 0.

137 Annex 6 Appendix 1 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Criteria for the Selection of Priority Protected Areas The project would focus on implementation of a full range of conservation management and ecodevelopment interventions in 12 high priority PAs (referred to as P1 sites); conservation management interventions in 12 second priority PAs (referred to as P2 sites); and specific strategies for improving the PA network through boundary demarcation, ecodevelopment and improved forest operations in a limited number of relatively undisturbed satellite areas (referred to as P3 areas). The following criteria have been used for the prioritization of the PAs of the State into the three referenced categories: Criteria for Selection of P1 Areas 1. Areas of high biodiversity value or species richness; 2. Areas representative of the range of biogeographic zones and provinces of the State; and 3. Areas where existing human impacts are readily manageable. This may be justified by the following parameters: a. areas which have a reasonably good core area and relatively low human impact from within the PA itself; b. areas in which there is substantial dependency on PA resources by adjacent villages; c. areas having sufficient land to allow for the development of realistic core, buffer and peripheral people use zones; d. areas with on-going experiences with ecodevelopment activities or other supportive schemes; e. areas in which the level of people-pa antagonism does not preclude meaningful discussion and dialogue; and

138 Annex 6 Appendix 1 Page 2 of 2 f. interest and capacity to deal with the ecodevelopment programs within the PA management structure. An additional consideration may be the availability of NGOs or parastatal organizations who can participate in the ecodevelopment process. Criteria for the Selection of P2 Areas 1. Areas with high biodiversity value or species richness; 2. Areas representative of the range of biogeographic zones and provinces of the State; and 3. Areas with appropriate PA management structure and capacity. Criteria for the Selection of P3 Areas for PA Network Development 1. Areas with high biodiversity value or species richness; 2. Areas which are relatively undisturbed; 3. Areas which could be readily linked to the PA network through forest corridors; and 4. Areas with sufficient land to allow for the development of realistic conservation and people-use areas.

139 Annex 6 Appendix 2 Page 1 of 3 INDIA MADHYA PRADESH FORESTRY PROJECT Ecodevelopment Support Fund Objectives 1. To provide a means of financing approved ecodevelopment plans the project would provide for an Ecodevelopment Support Fund. The Fund would have two main objectives. The first would be to enable the Ecodevelopment Planning Team in each state to provide finance for any small improvements to community infrastructure that are urgently required. The works could include items such as the repair of a water point or the improvement of an access path. Provision of such finance would aim to generate goodwill and show that ecodevelopment would be more than just a promise. The expenditure on such works to provide the Ecodevelopment Planning Team with credibility would amount to no more than Rs.50,OOO per community. The second objective of the Ecodevelopment Support Fund would be to enable implementation to take place almost immediately a plan is approved. This would be essential if communities are to actively participate in planned activities. Criteria for Use of the Ecodevelopment Support Fund 2. Agreed criteria for the use of the ESF are set out below. - Completion of site-specific microplanning for ecodevelopment; - Review of plans by the PA Director, including an assessment of their environmental and social impact '; - Endorsement of plans by the concerned community; - Identification of community organizations responsible for implementation; - Identification of individuals within the organization with responsibility for management of funds; The environmental and social impact of ecodevelopment plans would be reviewed in the light of the principles of the GOI Environmental Protection Act, the GOI Wildlife Protection Act and the World Bank Guidelines for environment, involuntary resettlement and indigenous peoples that have been set out in World Bank Operational Directives 4.00, 4.20 and 4.30.

140 Identification of individuals within the organization with responsibility for management of funds; Annex 6 Appendix 2 Page 2 of 3 Adherence to the agreed administrative procedures (See below) for disbursement and monitoring. Administrative Procedures 3. An outline of the procedures for utilization of the EDSF is presented here. More detailed procedures would be evolved on the basis of experience, particularly at the community level, but systematic control of funds would be provided as the PA Director would be responsible for approving individual ecodevelopment plans, which the State project Implementation Committee reviews on a regular basis. - Expenditure from EDSF would be on the basis of ecodevelopment plans approved by the PA Director; - Payments would be in accordance with the schedule of expenditures provided in the plan; - To reduce administrative delays, the State Project Implementation Committee would delegate authority to the PA Director to make payments for certain types of ecodevelopment activities. - Payments would be charged to a specially created accounting sub-head; - Direct payments to community members employed within the PA on a daily wage basis for PA management related activities, such as bridle path construction would be authorized by the PA Director. Such payments would be separated from the regular PA management budget and would be of particular importance during the transitional phase; Collaborative or cooperative ecodevelopment activities would be managed by community Ecodevelopment Committees, or any other community organization that the has been agreed as responsible; The community organization would establish a bank account, dedicated to agreed ecodevelopment activities, with signatories as decided during the ecodevelopment planning;

141 An advance payment would be made to the account for authorized expenditures. Subsequent payments would be on the basis of reimbursement against actual expenditures; Annex 6 Appendix 2 Page 3 of 3 All community accounts would be subject to regular inspection by PA administration, with the assistance of the collaborating NGO. Annual audits of all EDSF accounts would be mandatory.

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143 Annex 6 Appendix 3 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Procedures and Criteria for Voluntary Resettlement 1. The project would not involve any involuntary resettlement of communities. However, GOMP may, in the interests of the conservation of biodiversity, consider voluntary resettlement of communities resident within PAs. The recommendations of the Operational Directive on Involuntary Resettlement provide useful guidelines and principles to be followed in any proposals for resettlement, even if this is voluntary. These recommendations include: The preparation of a relocation plan that attempts to restore living standards, earning capacity and production levels of the displaced people. It should include provision to; (a) (b) assist the displaced people in the relocation move and provide support during the transition period in the new site; assist the displaced people in their efforts to improve their former living standards, income earning capacity, and production levels, or at least to restore them. The project would give highest priority for inclusion of these people in the ecodevelopment program in order to improve their incomes and resources. Involving both settlers and hosts in resettlement activities: In designing the relocation plan, special emphasis would be placed on: (a) (b) (c) community participation in planning and implementing of it; establishment of social organizations and supporting and use of existing social and cultural institutions of re-settlers and their hosts, as far as possible; measures to integrate re-settlers socially and economically into host communities so as to minimize adverse impacts on the host communities, if applicable.

144 Annex 6 Appendix 3 Page 2 of 2 Preparation of a time-bound resettlement plan. When displacement is unavoidable, a detailed resettlement plan should be prepared, with time table and budget as required. Resettlement plans should be based on a strategy to improve or at least restore the economic base for those relocated. The content of the resettlement plans, should normally include a statement of objectives and policies and other features. Valuation and compensation for land and other assets affected by the project. Prior to relocation, people would be provided a compensation package of support for housing, village infrastructure, land and irrigation to compensate for lost assets. Compensation would be facilitated by: (a) (b) (c) (d) paying special attention to the adequacy of legal arrangements concerning land title, registration, and site occupation; publicizing among affected people to be displaced the laws and regulations governing relocation and compensation; and development of mechanisms to prevent illegal encroachers to take advantage of such benefits and to prevent nonresidents moving into those areas vacated by the oustees; establishment of a simple grievance mechanism to resolve any dispute that may arise. In addition, the project would attempt to provide alternative incomes and resources to protect the livelihood of the displaced people through the ecodevelopment program.

145 Annex 7 Pagel of 7 INDIA MADHYA PRADESH FORESTRY PROJECT Issues and Actions The GOMP strategy for the future development of the forestry sector in Madhya Pradesh has been discussed in Chapter 2 of the report. Implementation of the strategy requires a number of policy changes and actions to resolve issues affecting the sector. These issues and actions are summarized in the following matrix, which is based on the GOMP statement of policy.

146 MADHYA PRADESH FORESTRY PROJECT Issues and Actions ISSUE EFFECTS PROPOSED CHANGE ACTION Policies Affecting Prcing and Marketing Pricing. Sale of forest Forms a disincentive for Local concessions of forest GOMP have issued orders for proposed changes produce by MPFD at below communities and individuals to produce known as NISTAR to in NISTAR policy. (No. F-7-22/93/10/3 dated market price. protect and invest in forest be restricted to villages lying 26 December, 1994 management. within 5km of the forests. Forest produce to be sold at market prices for villages lying beyond 5 km. Felling and Transit Disincentive to planting trees Felling and transit regulations Amendments have been made to MP Transit Regulations. Restrictions on on private land. to be abolished for all except Rules (1964) exempting 31 species from Transit felling of trees on private land five nationalized species. Regulations. Letter issued by GOMP for Gazette and on transit of wood. notification (No. F30/28/94/10/3 Bhopal dated 10 November The proposed amendments in felling rules are under consideration by GOMP and are expected to be approved by 15 June, NTFP. Monopoly collection Disincentive to private sector Role of MPFD in NTFP Study alternative mechanisms for NTFP of some NTFP by MPFD. participation. Disrupts MPFD collection to be phased out. collection that will provide protection for forest management programs. collectors and ensure revenue is collected for the state. Industrial Supplies. GOMP System fails to meet the No further industrial supply GOMP have decided that all long-term industrial committed to provide forest requirements of industry and contracts to be entered into. supply contracts will cease to be effective on produce to industries. may lead to inefficient use of 30 June resources. oq ed o) rd

147 MADHYA PRADESH FORESTRY PROJECT Issues and Actions ISSUE EFFECTS PROPOSED CHANGE ACTION Legislation Indian Forest Act (1927). Does not provide a National Forest Policy is not Recast the Indian Forest Act to GOMP to discuss with GOI the ongoing comprehensive legal basis for legally binding. meet the requirements of the review of the draft legislation. the National Forest Policy National Forest Policy (1988). (1988). Joint Forest Management. Govemment Regulation (GR) Women and landless not Ensure representation of GOMP have issued revised GR making on JFM requires modification. included in village committees women and landless in village provision for representation of women and committees. landless in Village Committees. Other minor modifications have been made. (Order dated 4 January, 1995) Inter-Agency Linkages Govemment Departments. Mechanisms for effective Lack of coordination, leading Develop inter-agency linkages GOMP have issued orders for setting up consultation between to duplication of effort and at state, circle and district state level Project Steering Committee. departments are lacking, in inefficient use of staff and levels. Regional Project Coordination Committees particular with those funds. and District Project Coordination responsible for agricultural Committees. (No. F-3-69/94/10-2 Bhopal extension and animal dated 23 July, 1994). husbandry programs. Linkages with NGOs. Little NGOs comparative advantage NGOs to be involved in 12 Spearhead Teams have been participation by NGOs in in planning and participatory village resource constituted in the divisions of first year MPFD programs. implementation of participatory development programs operations. Women are included in activities is not fully utilized. wherever possible. Spearhead Teams wherever possible. NGOs have been associated with staff training. ( Oct X

148 MADHYA PRADESH FORESTRY PROJECT Issues and Actions Sector Management ISSUE EFFECTS PROPOSED CHANGE ACTION Management Approach. Reluctance of communities to Develop new vision of the role Terms of reference of contract Regulatory, rather than collaborate in participatory of MPFD. for proposed consultancy for participatory client-oriented forest management programs. management development approach to management of have been finalized. Contract the sector. award expected by 30 April Management Procedures. Local initiatives required for Decision making authority to Centralized. top-down decision successful participatory forest be brought closer to the client Review management making management, and to ensure interface, that is, to the users procedures to empower staff programs are linked to site of forest resources. to make area and situationspecific conditions and specific decisions. priorities are restricted. Planning, Monitoring and Decisions are based on limited Improve management Review PME procedures and Evaluation (PME). Lack of information, little input from information systems. Modify introduce necessary iterative procedures and systematic M&E of ongoing planning procedures to include improvements. inadequate information programs, and inadequate the requirements of the new systems. analysis, particularly of forest policy, site-specific economic consequences of needs, economic factors, and programs. feed-back from M&E programs. Management Structure. Overlapping management Modify management structures Review management structure Organization of MPFD is not responsibilities and inefficient to meet the requirements of and responsibilities and make fully adjusted to the needs of use of scarce resources. revised management necessary modifications. the agreed strategy. procedures. CD O CD X

149 MADHYA PRADESH FORESTRY PROJECT Issues and Actions ISSUE EFFECTS PROPOSED CHANGE ACTION Staffing Staffing Levels. High staffing High recurrent expenditure on Staffing levels to be related to Formulate staffing policy levels. Skill mix not related to staffing. Limited capacity to functional units of the related to the functions of the needs of the sector implement sector strategy. modified management MPFD. strategy. structure. Staff Specialization. No Lack of staff with specialized Specialized career development Identify incentives to incentives or career structure skills and no continuity in to be encouraged. encourage specialization. for specialization. positions that require Ensure continuity of specialists, eg. research. appointments to specialized posts. Initiate discussions with GOI for promoting specialization within IFS. Human Resource Development Many staff lack up-to-date Staff training to be given high A training plan has been (HRD). No systematic HRD technical and management priority with appropriate finalized. Planned project plan. Many training programs skills. rewards or incentives for activities include training of and facilities out-dated and trainers and trainees. village communities. inadequate. Undertake study to identify training requirements linked to curriculum development. -D orn x

150 MADHYA PRADESH FORESTRY PROJECT Issues and Actions ISSUE EFFECTS T PROPOSED CHANGE ACTION Village Resource Development VRDP Implementation. Varied Differing levels of support to Standardize support and Criteria for activities and procedures for VFCs within the state. implementation arrangements. funding under VRDP have implementation. been finalized. VRD Agreements. Village Responsibilities and benefits of Formal MOU to be finalized MOU under consideration by plans endorsed by VFC but VRD program not clear to on completion of village GOMP fornal MOU not prepared. communities. planning process. Protected Areas Population. People resident Possible adverse impact on Determine extent of any Examine PA boundaries within proposed PAs. conservation of biodiversity. adverse impact and define PA where legal processes have boundaries to exclude village not been completed and areas where legal processes undertake studies to assess have not been completed. adverse impacts. PA Management Plans. PAs not managed to the best Use PA management plans and Complete PA management Incomplete or inadequate of advantage of wildlife or associated ecodevelopment plans, initiate the planning management plans for PAs adequately protected from programs as a basis for and implementation of with inadequate funding. outside interference. provision of funding. ecodevelopment programs and facilitate their implementation through provision of funds and staff. -e O (

151 MADHYA PRADESH FORESTRY PROJECT Issues and Actions Technology ISSUE EFFECTS PROPOSED CHANGE ACTION Planting Materials Lack of Poor quality seedlings resulting Seed stock, nursery practices Design and implement effective tree improvement in poor establishment and and planting methods to be programs for seed programs, and poor seed growth, with long-term loss of improved. procurement and processing, selection and nursery financial and economic and for improving nursery and practices. benefits, planting practices. Research. Lack of overall Research makes little Research to be linked to key Identify applied research research strategy contribution to management of development problems and needs and implement priority complementing national the forest resource, to the adequately funded. programs. research programs. Litle identification of the most linkage with priorities productive material, or to identified in the field. problem solving in the field. Inadequate staff and funds. SFRI. As part of MPFD Lack of continuity of research SFRI to be established as an Orders have been issued recruitment of specialized staff due to rotation of deputed autonomous institution. establishing SFRI Jabalpur as research staff is inhibited. staff. an autonomous institute (No. F-316/94/1012 dated 29/10/94) Exotic Species. Introduction Loss of economic benefits as Introduction of exotics to be GOMP will request MOEF to of exotic species is restricted. many exotic species are bighly decided on economic as well draft operational guidelines productive. as environmental grounds. for the introduction of any new exotic species in forest areas. o0

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153 Annex 8 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Management Development 1. The strategy for the future development of the forestry sector (Chapter 2) requires significant changes in sector management. The changes, which MPFD have already initiated, would have three main thrusts involving the development of: A new vision of the role of MPFD and a changed approach, from a predominantly regulatory role to one in which communities are treated as equal partners in the management of forest resources, within a strategic policy framework developed by the Department; New management systems to implement the new role of MPFD, based on support, rather than command structures; Human resources and skills to enable staff to implement the system. 2. The Role of MPFD. The changed role of MPFD is mandated by the requirements of the National Forest Policy. Developing the new vision of this role and the changing the traditional approach would be dependent on changing staff attitudes. The project would assist this change by providing for an intensive program of orientation workshops and staff training. 3. Management Systems. Changes in the management system would aim to make the system: Client oriented, that is, designed to respond to the needs of the users of forest resources through empowerment of staff and accountability to the client, and through ensuring decision-making authority lies close to the client. This would require the identification of clients, client representatives, programs and program

154 Annex 8 Page 2 of 2 managers, and the linkages between them '. Further, it would require a support, rather than a command structure. Adaptable, that is, responding to creativity and initiative, and promoting the development of a learning organization. 4. Operation of the new system would be based on: - Decentralization of authority for decision making and budgetary allocation; - Planning, Monitoring and Evaluation procedures and data collection to ensure feed back and application of corrective processes, related to both long-term planning and evaluation and short-term monitoring and control; - Reporting and Administrative Structures; - Institutional Structures based on an analysis of strengths and weaknesses and staffing needs, leading to a strategy for future institutional development; - Human Resource Development related to the required skill-mix and adequate career development for staff. 5. The project would support the development of the new management system through financing a consultancy to assist MPFD to review existing management procedures and institutional structures, and to develop new management systems. Terms of reference for such a consultancy are presented in Appendix 1 to this Annex. Illustrative linkages between clients and programs.cl-000 i: nt 0 Client Linag Prora P Pro:a =Manager _ ; : ; i i i Representative Society CCF WL Expert Opinion PA Manager Conservation of Biodiversity Economic Society CF Economic Analysis Ranger Closed Forest Management Village VFP Committee Participatory Ranger Open Forest Community Planning Management Farmer Farmer Individual Choice Ranger Private Forestry

155 Training Plan - Management Development Course Participants Objectives Resource Agencies Duration Frequency 1. Institution building CCF (13) To familiarize with concepts and measures for institution building IIMs, ASCI 1 week Individual courses - Years I to 3 (structure, systems and processes) 2. Personnel DCFs and above To provide exposure to IIMs, HRD Academy, I week Individual courses over years I management and HRD (132) management development and XLRI, consultants to 4 concepts creative use of human resources 3. Leadership and DCFs and above To familiarize with leadership In-house program with 1 week 6 batches over years I to 4 team building styles and practical team building external expertise measures 4. Project planning and DFOs To familiarize with project In-house program using 2 weeks 2 batches per year in Years 0, 1, formulation formulation methods based on external expertise in log- 2 client needs frame methodology 5. Policy analysis CFs (3) Appreciation of policy analysis Overseas 3 1 each in Years I to 3 (appreciation) methods months 6. Policy analysis DCFs (6) Exposure to practical application Overseas 18 2 each in Years I to 3 (applied) methods months 7. Environmental CFs (2) To impart concepts of Overseas 3 1 each in Years I and 3 Economics environmental economics months (introductory) 8. Environmental DCFs (2) Application of environmental Overseas 12 1 each in Years 2 and 4 Econornics (applied) economics methods months A 9. Study Tours on CCFs (13) To expose senior managers to WWII and similar agencies per year in Years I to 4 X Management Practices modern management practices at weeks m work in actual situations

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157 Annex 8 Appendix 1 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Development of the Sectoral Management System Terms of Reference Approach 1. MPFD have already made significant progress in assessing the need for change in the management of the sector and evaluating alternatives for future development. Consultants would, therefore, assist with an on-going process as an integral part of an MPFD team, rather than initiating a separate management study. This would require full collaboration with MPFD staff, with conclusions and recommendations discussed in group meetings and workshops. Step-by-step endorsement of proposals by MPFD and the Public Service Commission would be essential to ensure ownership and subsequent implementation. Terms of Reference The consultants would: (i) (ii) (iii) Review the present management system and institutional structure and staffing, and identify the main constraints affecting the system. Identify: clients, client representatives, programs and program managers, the linkages between them; the level within MPFD at which decisions affecting these relationships are made; and the role of MPFD staff, particularly that of the Forest Guard, in relation to the client. Identify mechanisms for operation of the management system at different levels, based on: Decentralization of authority for decision making and budgetary allocation;

158 Annex 8 Appendix 1 Page 2 of 2 Planning, Monitoring and Evaluation procedures and data collection to ensure feed back and application of corrective processes, related to both long-term planning and evaluation and short-term monitoring and control '; Reporting and Administrative Structures; Institutional Structures based on an analysis of strengths and weaknesses and staffing needs, leading to a strategy for future institutional development; Human Resource Development related to the required skill-mix and adequate career development for staff. (iv) (v) Organize workshops and discussion groups to ensure endorsement of conclusions and recommendations by MPFD. Prepare a report presenting the agreed recommendations, including Terms of Reference for any further studies required. The design of supporting MIS and GIS systems would be the subject of separate and subsequent consultancies.

159 Annex 9 Page 1 of 6 INDIA MADHYA PRADESH FORESTRY PROJECT Monitoring and Evaluation ' Present MPFD Approach to Monitoring and Evaluation (M&E) 1. A range of physical and financial data are presently collected by MPFD and used to monitor programs and schemes implemented by the Department. The data are designed to measure progress towards the achievement of physical targets, and to monitor expenditures. There is little attempt to evaluate the achievements, as there is no systematic mechanism to monitor their success, or quality. Nor are there means to ensure that the conclusions drawn from the data are used in future planning. Future Strategy 2. M&E in the Management System. Changes in management to implement the agreed future strategy for the forest sector, would require changes in the approach to M&E, to ensure that M&E functions become an integral part of the planning and implementation of the work of MPFD. This requires that M&E Units are not merely surveillance agents, but form part of the process of management, assisting in decision making through provision of relevant data, appropriately presented in a timely manner. M&E results would become a critical input to planning, enabling site-specific variables to be taken into account in the short term, and providing a realistic framework for strategic long-term planning. Implementation of the plans followed by continuing M&E completes the cycle. The flow of information would be facilitated by a Management Information System, discussed in Annex Under the future strategy, a distinction would be drawn between monitoring and evaluation. Monitoring is a continuous internal departmental activity, whilst evaluation is an assessment of performance and impact on populations or areas. Factors to be taken into consideration in the development of monitoring and evaluation systems are discussed below. A list of indicators to be used for project monitoring are then considered, many of which would be applicable to all MPFD programs. However, these are not prescriptions, as final decisions will depend on system design. 4. Monitoring. Monitoring is a continuous assessment of the activities of MPFD in the The discussion of general principles and techniques of monitoring and evaluation presented here, is drawn mainly from "Project Monitoring and Evaluation in Agriculture" Casley D. J. and Kumar K Joint Publication of the World Bank, IFAD, and FAO. John Hopkins University Press, Baltimore, MD.

160 Annex 9 Page 2 of 6 context of implementation schedules and of the use of resources. There are two approaches to the design of the monitoring system and associated MIS. The first is the blueprint approach, in which detailed objectives, required data, studies and schedules are established in advance. Although this approach has some advantages it may not give managers sufficient flexibility to respond to information needs that may arise during implementation. The second, or process approach, is more evolutionary, in that although recording requirements are defined, it allows the flexibility for managers to define additional information needed to make management decisions, based on implementation experience. System design would therefore be based on: - A clear identification of the decisions to be made at each level of management. This requires agreement on a hierarchy of management objectives for the sector; - The information required to make decisions and the parameters to be monitored to provide the information; - The most appropriate way in which the parameters can be monitored, or the information collected; - The presentation of monitoring data in agreed formats and the degree of aggregation of data at each level, so that senior managers are not overwhelmed with detail; - Mechanisms to link progress with implementation schedules; - A systematic identification of problems and a mechanism to commission diagnostic studies to resolve the problems; - The linkages between functional units and the need for information to be shared, particularly between allied functions in the same geographical area; - Linkages between M&E Units and functional units, with agreement on the collection of monitoring data on a regular basis by staff of functional units, to obviate the need for the creation of a separate cadre of data collectors; 5. Evaluation. Evaluation is a periodic assessment of the relevance, performance, efficiency and impact of sectoral programs in the context of stated objectives. Although evaluation uses much of the same data as monitoring, it is a separate activity, with different objectives, reference periods, and primary users. It is not necessarily such an integral part of the management system as it deals with formal impact evaluation, measuring changes that have come about. This is commonly time-consuming and requires information that may not

161 Annex 9 Page 3 of 6 be required by the manager for decision making. In addition, the impact of a program may only become apparent after some time, or the completion of a program, so evaluation studies may be mid-term, terminal or ex-post, rather than continuous. Evaluation would be most effectively undertaken by an independent agency outside MPFD for following reasons: Indicators - A measure of independence from functional managers facilitates objectivity; The range of professional skills required to interpret evaluation data would not be available within MPFD; Data from within and without areas affected by MPFD programs are necessary for purposes of comparison. 6. Indicators to monitor the progress of programs in the forest sector relate to: Physical delivery of forest programs, structures and services; Financial records; - Beneficiary contact, that is the use of forest resources, siructures and services by target populations, and the socio-economic and environmental impact of programs. Indicators specific to the various project components are presented in the following table. Most of these would be relevant to all MPFD programs 2. 2 Terms of reference for an evaluation study of the VRDP are presented in Annex.. Appendix 2.

162 Annex 9 Page 4 of 6 Project Component and Sub-Component Indicators Management Development Sector Management Planning Monitoring and Evaluation Project Coordination Unit - Nos. staff trained in management - In-service training courses at SFRI - Establishment of Policy Analysis Unit - No. of policy studies commissioned or completed - Progress of management consultancy - Completion of HRD Plan for MPFD - Completion of annual training plans - Review of curricula in forest training colleges - Progress of PME system design consultancy - Nos. staff trained in MIS - Nos. staff trained in GIS - Nos. staff trained in computer literacy - Establishment of Information Unit, Bhopal - Establishment of PME Units at Circle level - Establishment of PME Cells at Divisional level - Establishment of Zonal GIS Units - Provision of support to FWP teams - Establishment of Unit Forest Development Natural Forest Regeneration Village Resource Development - Total ha treated - Location of treatment blocks - Species planted - Survival of planted species - Ha of bamboo rehabilitation - Estimates of crown cover for sample blocks - Estimates of MAI for sample blocks - Cost/benefit analysis for representative blocks - No. of staff orientation workshops - No. of staff trained in PRA and VRDP principles - No. of VRDP Planning Teams established - No. of NGO women recruited for VRDP teams - No. of VPCs established - No. of VRDP plans completed - No. of VRDP Agreements finalized - Disbursements from VRDP Fund - Ha of forest under VRDP - Ha of village land under VRDP - No. and type of village infrastructure - No. and type of income generating enterprises - Cost/benefit analysis for representative villages

163 Annex 9 Page 5 of 6 Project Component and Sub-Component Indicators Extension technology and Research Extension and Research Centers - No. of Centers established - No. of DFOs (E&R) in post as managers - Staff assignments Extension Seed Improvement - No. of DFOs (R&E) - No. of Rangers, Foresters and FGs trained in extension techniques - No. of demonstrations established - No. of farmer training sessions - Production of extension materials - Establishment of Industrial Liaison Unit - No. of ILU staff trained - Contacts with Industries and nature of requests - Range of data collected by ILU - No. of special market studies commissioned by ILU - No. of staff trained in seed technology - Recruitment of tree improvement specialist in SFRI - Recruitment of consultant seed improvement specialist - No. and species of superior mother trees identified - Quantities of seed collected - Quantities of selected seed - Establishment of SSPAs - Establishment of CSOs - Completion of seed processing facilities at E&R Centers - Completion of seed testing laboratory at SFRI - Quantities of seed tested at laboratory - Quantities of seed imported Nursery Demonstration - Recruitment of consultant nursery design specialist - Completion of demonstration nurseries - Production of seedlings - Financial accounts for nurseries to demonstrate profitability - No. of private sector nurseries established Research - No. of specialist staff recruited to SFRI - Introduction of priority setting methodology - Completion of strategic research plan - No. of research contracts awarded

164 Annex 9 Page 6 of 6 Project Component and Sub-Component Indicators Biodiversity Conservation PA Management Ecodevelopment - Revision or preparation of PA Management Plans - Identification of satellite areas for PA network - Preparation/completion of management plans for interlinking areas - Completion of baseline and monitoring studies - Preparation of ecological database - No. of research contracts awarded - No. of staff trained in PRA and ED principles - No. of ED Planning Teams established - No. of NGO women recruited for ED teams - No. of Village ED Committees established - No. of ED plans completed - No. of ED Agreements finalized - ED Costs - Disbursements from ED Fund - Ha of forest land under ED programs - Ha of village land under ED programs - No. and type of village infrastructure - No. and type of income generating enterprises Other Project Activities Technical Assistance, Studies and Consultancies Physical Financial - Preparation of Terms of Reference - Number of months/discipline - Completion of consultant reports - Completion of works and buildings - Procurement of project-financed equipment and supplies - Expenditure by component - Expenditure by category - Audits Reporting - Timeliness of bi-annual reports

165 Annex 10 Page 1 of 4 INDIA MADHYA PRADESH FORESTRY PROJECT Information Systems Present Information Systems 1. Forest Database. There is. at present, no systematic mechanism to collate information on the geographic extent and physical condition of the forest resource in Madhya Pradesh. Available information is scattered in numerous Divisional offices, or included in Forest Working Plans, and not readily accessible. As a result, the information has not been aggregated or synthesized into an up-to-date State-wide, or even regional forest database. 2. Forest Working Plans (FWP). The FWP provide the basis for planning the management and development of the forest sector, containing baseline data and management prescriptions. In addition to the problems of the accessibility of information, FWP often provide only a poor reflection of conditions on the ground, severely limiting their usefulness as practical tools for forest management. This is, in part, due to the fact that inventory and survey teams are often inadequately staffed, and do not possess the necessary instruments, field equipment or vehicles to work effectively in the field. This also means that FWP are seldom up-dated in a timely manner. However, there are also problems associated with the nature and content of FWP, which are not oriented toward multiple objective management and rarely address resource conflicts. Further problems result from the lack of consultation with local forest users in the design and implementation of FWP. 3. Monitoring and Evaluation. The MPFD system for monitoring the progress of investment programs and special schemes focuses on the achievement of physical targets. It would be difficult to use the system to evaluate program impacts on forest resources or intended beneficiaries, or in socio-economic terms. Tracking financial expenditures and other administrative functions is time-consuming. This situation is mainly due to the limited availability of modern information management skills within MPFD and the lack of a strategic plan for information management for the sector as a whole. Thus, although computers have been available at the Forest Circle level for some time, trained manpower has been lacking and the systems are under-utilized. Future Strategy 4. The strategy for management of information related to the forest sector would be to develop information flows, so that the information contained in plans is utilized during implementation, and information obtained during the monitoring of

166 Annex 10 Page 2 of 4 implementation is fed into the planning process. Such information flows, or loops, would be developed at Divisional, Forest Circle and State levels, as illustrated in Figure.. The information required for improved management would be of four main types: (i) Scheduling, Time Management and Achievement of Physical Targets that would be handled by the use of software such as Microsoft Project; (ii) Financial Management using financial accounting and cash flow tracking software; (iii) Impact Assessment using socio-economic data stored in a conventional database; and (iv) Geographic Information stored and manipulated on a Geographic Information System (GIS). 5. The first three types of information would be the core of a Management Information System (MIS), facilitating information flows at each level of MPFD. The MIS would be an integral part of Planning, Monitoring and Evaluation (PME) Units or Cells, so that it is clearly seen as a service to management and not a technologydriven end in itself. An important element of the strategy for information management would be to decentralize the MIS to the greatest possible extent, so that data are aggregated from the bottom-up. 6. The GIS would be developed to provide a means for the recording and analysis of the spatial distribution of much of the MIS data. The development of the GIS would have operational, as well as developmental or demonstration objectives. Thus, by the end of the project GIS should be operational in the following areas: cartographic and database support to village resource development planning; project monitoring; multi-variate site analysis; and cartographic support for working plan development. In addition, GIS prototypes for state-wide forest database development would be thoroughly tested, together with a range of applications related to biodiversity data and the management of planning and management of protected areas. Successfully tested prototypes would be used as the basis of expanded operational programs in a follow-up project. 7. There is a need to ensure close integration of the MIS with the GIS. However, manipulation of geographic data is more complex than the processing of the other data, and requires more specialized equipment and training, so a less decentralized system is more practicable, linked to the primary users of geographic information, the FWP teams. 8. Management of the forest sector in the future, with its changed orientation, will require additional and different information from that collected traditionally. A review of information required for site specific, multiple objective planning, and impact oriented monitoring and evaluation would be a first step in the development of the MIS and GIS, as discussed further below.

167 Annex 10 Page 3 of 4 Project Support 9. MIS Design. The project would provide for system design, linked to the information requirements for sector management. This would require a review, not only of the data to be collected, but of data collection methods, including the introduction of rapid rural appraisal methods. Of particular importance would be the data needed for monitoring and evaluation (M&E), which would be dependent on the M&E procedures, discussed in Annex 9. System design would also be dependent on an identification of the needs for sharing information among and across administrative lines. The MIS would be based on the use of personal computers, with appropriate spreadsheet, database management, computerized project management and word processing software, but detailed decisions on software would only be possible after completion of the studies. 10. Development of MIS Capabilities at Forest Circle and Divisional Levels. The project would finance the development of MIS capabilities within Planning Monitoring and Evaluation (PME) Units in each of the 22 Forest Circles. PME Cells would be developed in all 79 Forest Division. The functions of each of the Units and Cells would be to collate physical, administrative, and M&E data, in a format that is most useful to the CFs or DFOs, the local sector managers. Each PME Unit or Cell would be equipped with a personal computer and appropriate software, with a small trained staff of one computer applications specialist and three staff capable of data entry and other intermediate business software applications. 11. Development of GIS Units at Territorial Circle Level. In order to manage the geographically referenced data, the project would finance the introduction of Geographic Information Systems (GIS) in five Territorial Circles on a trial basis. The main function of each unit would be to develop a comprehensive digital forestry database for each Territorial Circle. In addition, each Unit would develop and promote GIS analytical techniques to support the development of forest working plans, and for the planning and monitoring of major project investments. The forestry database would be derived primarily from the 1:15,840 stock maps and available topographic and thematic maps of soils, rainfall, terrain units, etc., where available. Where appropriate, gaps in the forestry database will be supplemented using satellite imagery as a raw data source. Each Unit would also provide cartographic and database management services to MPFD units within the Territorial Circle. Each Circle GIS team would consist of four technicians: a GIS specialist and a minimum of two GIS operators. Each Unit would be equipped with a PC-based GIS workstation, including digitizers, pen-plotters, UPS, printer and GIS software. 12. Development of Information Services at MPFD Headquarters. An Information Unit at Bhopal would be responsible for development and coordination of information services within MPFD. The Unit would not be a repository for all information in the Department, but rather it would take the lead in MIS and GIS systems development, identify and evaluate new forest survey technologies, including

168 Annex 10 Page 4 of 4 satellite remote sensing and the use of the Global Positioning System, and would be responsible for the organization of training and technical assistance. It would also provide technical support to all units in the Department involved in MIS, GIS and remote sensing. The Unit would be headed by an Information Manager at the level of Conservator, responsible to the CCF (PME). The Unit Manager would be assisted by a core staff of 8 information technology specialists with advanced skills in MIS and GIS applications. The Unit would be provided with equipment and software to enable it to fulfill its function as a nodal technical unit for the Departmental MIS, GIS equipment similar to that in the Zonal Units, funds to purchase digital image processing services from State and Regional Centers as appropriate. 13. Support to FWP Field Teams. The project would provide improved field instrumentation, field equipment, office and cartographic equipment, and vehicles for each of the 22 FWP field teams. Teams would receive training in the application of new survey techniques including air-photo and satellite image interpretation, together with training in the application of GIS in the development of FWPs. Finance would be available for the purchase of necessary air photos and satellite imagery. 14. Training. Computer and information management skills are virtually nonexistent at the field level in MPFD, so skills will have to be built. The project would finance a modular training program giving emphasis to a large number of short term training activities. These would include courses to provide basic computer literacy, DOS training, and introductory and intermediate courses in the use of spreadsheets, databases, and word processing. These courses would be arranged in existing local training institutions. 15. There are fewer institutions in India capable of providing training in GIS technology. The project would, therefore, finance training at the Forest Survey of India, or the national Remote Sensing Agency, coupled with software vendor training available from local distributors. About 30 staff would be given about 6 weeks training in GIS techniques, in several short courses. International study tours would also be financed. An outline training plan is presented in Tables 1 and 2 of this Annex. 16. Technical Assistance. The project would provide funds to recruit local and international consultants to assist with program design and implementation. Terms of reference for these consultants are presented in Appendix 1 to this Annex.

169 Training Plan - MIS Course Participants Objectives Resource Agencies Duration Frequency 1. Introduction to ACFs and above Familiarization with basic NIC, Private institutes Iweek 71 courses during Yrs computers (Computer computer concepts and capabilities I to 4 Literacy) (710 participants) 2. Data Entry Technician Clerks To impart basic MS-DOS, word NIC, Private institutes 6 weeks (2 three 41 courses during Yrs processing and spreadsheet week modules) I to 4 operations skills (492 participants) 3. Assistant Programmer Senior Clerks Intermediate level MS-DOS, word NIC, Private Institutes 9 weeks (3 three 10 courses during Yrs processing, and spreadsheet week modules) I to 4 operations programming skills (120 participants) 4. MIS (50) Year 0 (Dx I-

170 Training Plan - GIS Course Participants Objective Resource Agencies Duration Frequency I GIS Workshop Officers ACF and above Introduction to GIS concepts and Forest Survey of India, NRSA, 3 days 8 workshops in applications in forestry Private institutes. State Remote years I to 4 (240 Sensing Centers participants) 2. GIS Technician GIS Operators from To impart basic GIS data entry, Forest Survey of India. NRSA, 6 weeks (2 14 technicians to be Territorial Circle and HQ editing and map production skills Private institutes, software three week trained in first two GIS units (Assistant Programmer level) vendors modules) years of project 3. GIS Specialist Head of GIS unit in Intermediate GIS data processing FSI, NRSA, State NIC, Private 6 weeks 9 Specialists to be territorial circle and all GIS and analytical skills (Pre-requisite Institutes, software vendors trained in Year I staff from HQ GIS unit GIS Technician course) and 2 4. GIS GIS Specialists from Advanced, comprehensive skills Asian Institute of Technology 3 months 9 Specialists in International territorial circle and HQ development work in GIS (AIT) Bangkok, ICIMOD years I to 3 Course GIS units applications (Kathmandu), ITC (Netherlands) 5. Arc-Info trainers (4) RRSSC Jodhpur, FSI, Private 1-2 weeks Yr 0 Institutes 0

171 Annex 10 Appendix I Page 1 of 4 INDIA MADHYA PRADESH FORESTRY PROJECT Terms of Reference Management Information Systems Consultant 1. Scope of Work. A consultant is required to provide comprehensive services to the Madhya Pradesh Forestry Department in the field of Management Information Systems (MIS). The consultant will assist the MPFD to implement a decentralized MIS strategy addressing priority information management requirements for the department. The consultant will assist the MPFD to develop and implement a detailed action plan for MIS modernization. Specifically, the consultant will: (1) Prepare a detailed functional requirement analysis (FRA) of current and expected record keeping functions in Territorial Circle (22) and Territorial Division (79) offices. The FRA will identify essential business processes and objectives of the MPFD and it will identify the salient information requirements for meeting those objectives. The FRA will prioritize those record keeping and information reporting tasks which are most appropriate for automation (e.g. expenditure tracking, physical progress monitoring, word processing, work program planning and budgeting etc).; (2) Prepare and evaluate a detailed inventory of all MPFD's existing computer systems (hardware and software) and available data. The consultant will recommend a standardized PC based hardware and software configuration appropriate for record keeping at the Territorial Circle and Division levels. Emphasis should be given to systems which are low cost, easy to maintain, and easy to operate under existing field conditions. The consultant will be required to visit a number of sites to familiarize himself with technical and human resource constraints in MPFD field offices; (3) Define a detailed implementation schedule for introducing automated systems at the Circle and Divisional levels. The consultant will develop a detailed phasing schedule including a description of activities to be included under pilot test phases as well as full scale implementation scheduling; (4) Oversee the procurement procedures required to purchase all required hardware and software. In particular the consultant will help to prepare tender

172 Annex 10 Appendix 1 Page 2 of 4 notifications, prepare systematic criteria for evaluating bids, and will assist in the bid evaluation process. The consultant will advise on the upgrading of physical facilities required for system installation. The consultant will also oversee the initial phases of computer system delivery, field implementation, and system acceptance testing; (5) Assist MPFD to develop a human resource development plan addressing staff recruitment and training needs required to achieve MIS objectives. The consultant will develop a modular training curriculum addressing basic computer literacy, PC operating systems (DOS), introductory and intermediate business software applications (i.e. Word processing, Spreadsheets, Computerized Project Management, Database management systems). The training program proposed should be comprehensive and should address the needs of least three levels of MPFD staff: managerial and professional users; computer specialist, and data entry technicians. 2. Qualifications. The MIS consultant should have extensive academic and professional experience in the field of MIS design and applications. The consultant should have at least 7 years experience in the application of a wide range of business software applications. The incumbent will have detailed knowledge of personal computer based MIS technologies and should have experience with designing MIS and PC training programs. The consultant will have experience in the application of principles of Information Strategic Planning (ISP). The preferred candidate will have some familiarity with forestry information management requirements. Preference will be given to a qualified domestic individual consultant or consulting firm 3. Reporting arrangements. The MIS consultant will report directly to the Project Director. The incumbent will also be expected to work closely with the CCF for Planning Monitoring and Evaluation and will liaise on a daily basis with staff of the electronic data processing cell at MPFD headquarters. 4. Duration of Consultancy. 12 months 5. Location. The consultant will work primarily at the MPFD headquarters in Bhopal. However, there will be a need for frequent field visits to Circle and divisional offices throughout the State. 6. Timing. The consultant will commence the assignment during the first 24 months of the project. The consultancy need not be a single continuous assignment but may be split into a number of 2 to 3 month assignments as required.

173 Annex 10 Appendix 1 Page 3 of 4 Geographic Information Systems Consultants 7. Scope of Work. Two consultants are required to provide comprehensive consulting services to the Madhya Pradesh Forestry Department in the field of geographic information systems (GIS) design and applications. The consultants will assist MPFD in establishing PC level GIS capabilities at MPFD headquarters as well as at four Zonal Offices to support the mapping and statistical analysis needs of 22 Forest Working Plan teams. It is anticipated that one international GIS specialist and one domestic GIS specialist will be utilized during the project. Specifically the consultants will: (1) Prepare a detailed functional requirements analysis of GIS capabilities required at the MPFD Zonal and MPFD Headquarters levels. The consultants will inventory and assess all current mapping systems and data availability with a view to determining which maps and statistical information will be appropriately held in a GIS format; (2) Make detailed recommendations on the appropriate GIS configuration (hardware and software) required at the Zonal and MPFD Headquarters offices. The consultants will identify an appropriate GIS package to handle the mapping and analytical needs of forest working plan teams. The consultants should consider issues of compatibility with existing systems being used for forestry applications India and should consider the use of indigenous hardware and software products where appropriate; (3) Oversee the procurement procedures required to purchase all required GIS hardware and software. In particular, the consultant will help to prepare tender notifications, prepare systematic criteria for evaluating bids, and will assist in the bid evaluation process. The incumbent will also oversee the upgrading and preparation of physical facilities for GIS and will oversee system delivery, implementation and acceptance testing procedures to insure that GIS equipment and software are fully operational in the MPFD field offices; (4) Develop a detailed training program which will address the needs of the MPFD. The preferred training program would emphasize a modular, in-service approach. As a minimum, the consultants will develop a training program which focuses on training needs of managers and professional users, GIS technical specialists and GIS data entry technicians. The consultants should identify, evaluate, and commission appropriate domestic training facilities in GIS and he will be required to oversee all vendor provided software and hardware training. The consultants will also be expected to provide on-site training and technical assistance on a routine basis;

174 Annex 10 Appendix 1 Page 4 of 4 (5) Develop an appropriate database model for structuring forest inventory and forest resource evaluation data gathered through by field inventory and surveying teams. The consultants will assist the MPFD to develop appropriate GIS methodologies for digitizing forest stand maps and recording relevant map attributes. The consultants will develop standards for all GIS data layers and attribute table formats and structure. The consultants should establish technical approaches for structuring and partitioning the Zonal databases; (6) Provide overall technical assistance and general quality control at the MPFD field offices during the first year of the project. The consultants will conduct periodic field evaluations of digital base map development and will develop institutional mechanisms for ensuring quality standards are being maintained by the Zonal teams; 8. Qualifications. The consultants should have strong academic and professional qualifications in the field of GIS. The consultants will have 7-10 years experience in GIS applications in the forestry sector and should be familiar with forest stand mapping, forest inventory, forest management planning, and statistical techniques used in the forestry sector. The consultants should have detailed practical experience in the use of a range of GIS software products and should be able to configure and troubleshoot technical problems in a field situation. 9. Reporting arrangements. The consultants will report directly to the Project Director but will work closely with the CCF for Planning, Monitoring and Evaluation. The consultants will work closely with all working plan teams in the State and should liaise on a routine basis with the project MIS consultant. 10. Location. The consultants will share their time evenly between the four zonal GIS units and the MPFD headquarters in Bhopal. 11. Duration of Assignment. The international consultant will be required for a period of approximately 3 months. The domestic GIS specialist may be required for a period up to 6 months. The assignment need not be contiguous but can be spread over a series of 2 or 3 week field visits.

175 Annex 11 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Extension and Research Centers 1. Functions of Centers. The project would finance the development of twelve Extension and Research (E&R) Centers, and one sub-center, to provide facilities in the major ecological zones of the state. The centers would provide a focus for extension programs, described in Annex 4, providing sound technical advice to individuals, communities, or other groups involved in tree nursery development, farm forestry, plantation development, or production of NTFP. The centers would also support planting material improvement programs, discussed in Annex 12, by provision of facilities for seed improvement and testing, and demonstration nurseries. The centers would also provide facilities for demonstrations and applied research programs, planned and implemented by SFRI (See Annex 13). 2. Location. The location of the E&R Centers would be as shown below, together with the Districts they would cover: LAcation Districts Note Gwalior Gwalior, Datia, Bhina, Morena, Based on SFRI sub-center at Shivapuri, Guna Morena Bhopal Bhopal, Sehore, Raisen, Vidishi, Rajgarh Indore Indore, Dewas, Dhal, Ujjain, Ratlam, Sub-center at Jhabua Manosaur, Shahjapur Khandua Khargoni, Khandwa SFRI Center at Nepanagar to be incorporated Betul Betul, Chhindwara, Hoshangabad Based on Betul training center and SFRI center Seoni Seoni, Balaghat, Narangpur Jabalpur Jabalpur, Mandla Existing SFRI Sagar Shahdol Sagar, Damon, Panna, Chhatarpur, Tikamgarh Shahdol, Sidhi, Rewa, Safna Bilaspur Bilaspur, Raigarh, Sarguja Based on Sal Research Center Raipur Raipur, Durg, Rajnendgaon Jagdalpur Bastar Incorporates SFRI center at Kurandi

176 3. Phasing of Development. The E&R Centers would be developed as follows: Annex 11 Page 2 of 2 ProjectYear 1I Project Year 2 Project Year 3 Project Year 4 X Bilaspur, Jabalpur Betul, Raipur, Seoni, Gwalior, Bhopal, Shadol, (SFRI) Indore Jagdalpur, Khandwa Sagar, Jhabua Sub- Center 4. Facilities. All centers will have basic office and simple laboratory buildings and equipment, vehicles and facilties for field operations. The investments have been calculated on the basis of upgrading existing facilities where these exist. Details of facilities for the planting stock improvement and applied research programs, which would be placed at the E&R Centers are given in Annexes 12 and Management and Staffing. Each of the E&R Centers would be under the management of a DFO responsible to the Territorial CF. Functional responsibility for the E&R Centers would lie with the CCF (Social Forestry), with the Director, SFRI providing technical supervision of the planting stock improvement and applied research programs. The linkages are illustrated in Figure.. Staffing of each of the centers for all programs is summarized below: Mana*gement? 0 Extension Planting Stock Nursery tadmnistrton 0 Improvement, i;; Applied Research DFO ACF ACF RFO Administrative Staff RFO RFO Forester FG FG FG FG Economist/Data Collection FG

177 Annex 12 Page 1 of 3 MADHYA PRADESH FORESTRY PROJECT Planting Stock Improvement Program Introduction 1. Records indicate that survival of the great number of trees that have been planted annually in Madhya Pradesh is sporadic and often poor by international standards. There are many reasons for low survival rates, but the poor quality of planting stock is a major contributory factor. This starts with poor quality of seed, due to the lack of properly identified seed sources, and inadequate seed harvesting and cleaning procedures. Vegetative propagation is increasingly important in forest tree establishment, but is constrained by the lack of properly selected parent trees. The quality of seedlings produced from forest nurseries is a further limitation. Procedures tend to be standardized for all species in all ecological conditions and nursery managers have little access to modern nursery technologies. One of the primary objectives of SFRI is to increase productivity and an improvement in planting stock can make a dramatic impact on the productivity of the forest sector. The project would, therefore, finance a program to improve the production of planting stock, with SFRI, in collaboration with TFRI taking a lead in the introduction and, if necessary, adaptation of proven technologies, providing demonstrations and advice to staff of MPFD and the private sector. Project Proposals 2. The project would include support for the following: Seed Improvement - Seed Stands - Seed Purchase - Clonal Seed Orchards - Seedling Seed Production Areas - Seed Harvest, Handling, Testing and Storage Nursery Development Multiplication of grass and fodder legumes 3. Seed Stands. The project would finance the establishment and maintenance of teak seed stands, each of about 50 ha in size, to a total of about 1,600 ha, in high quality natural forests or plantations. This is to supply an estimated annual requirement of 400 tons of teak seed. In addition, about 750 ha of seed stands of miscellaneous species commonly used in forestry operations in Madhya Pradesh would

178 Annex 12 Page 2 of 3 be selected progressively from natural forests or plantations. Each would be about ha in size. 4. Seed Purchase. It is likely that eucalypts will remain the preferred species for farm forestry initiatives in Madhya Pradesh. Research results indicate that the commonly planted Eucalyptus hybrid (a form of E. tereticornis) is not the most highly productive selection for Madhya Pradesh conditions. On the basis of results from dry areas elsewhere in India, the project would, therefore, finance the purchase of selected seed of the Petford provenance of E. camaldulensis, as the basis for first stage selection and tree improvement. Provision would also be made for the purchase of seed of grass, fodder and legume species, as necessary. 5. Clonal Seed Orchards. The project would finance the development of clonal seed orchards for Teak, Gmelina and Eucalyptus. For Teak, the clonal orchards would be based on the 360 plus trees which SFRI have already selected for superior characteristics, and further selection to provide a total of 1,000 plus trees. Orchards would be established with 150 trees per ha, with a total of 500 ha by the end of the project period. Establishment of clonal seed orchards for Gmelina would follow the same procedure as for Teak, with selection of plus trees, and the establishment of about 60 ha of clonal orchards. For Euclayptus, the selection of plus trees would follow provenance trials with purchased seed. About 60 ha of orchards would be established in Project Years 6 and Seedling Seed Production Areas (SSPA). Seed collected from selected plus Teak trees in natural forests or plantations would be used as the basis for development of SSPAs. The project would finance the collection of the seed and the development of the SSPAs to a total of about 625 ha. 7. Seed Harvest, Handling, Testing and Storage. Each of the E&R Centers (Annex 11) would be provided with equipment and facilities for collection, cleaning, handling and storage of seed. This would include an air-conditioned room and refrigerators for storing orthodox seed. A cold storage facility would be established at SFRI. Elevated, well-ventilated storage sheds for storing large volumes of teak seed would be established at Seoni, Betul, Raipur, Jabalpur and Bilaspur. A central seed testing service would be developed at SFRI, building on the existing staff, laboratory and infrastructure. 8. Nursery Development. At each E&R Center, the project would finance the development of a nursery with a capacity of about 100,000 seedlings, to provide training to MPFD staff and a demonstration of good nursery practices to the private sector. The project would not finance the development of a large facility to provide commercial quantities of clonal eucalypt material, as this would be a private sector function. A shade house of 300m 2 area with mist facilities would be constructed, to provide for robust vegetative propagation techniques. The use of root trainers would be an important element of nursery techniques. Irrigation facilities, other necessary

179 Annex 12 Page 3 of 3 equipment and a tractor/trailer with ancillary equipment would also be financed. A green house for advanced techniques in vegetative propagation and hardening of tissue cultures plantlets would be developed at SFRI only. 9. Multiplication of Grass and Fodder Legumes. Seed multiplication areas of 5 ha will be maintained of 16 selected cultivars of the following priority species:... Training 10. International training in seed technology and tree improvement techniques would be financed under the project for staff responsible for these programs at SFRI and the E&R Centers. Training in seed technology would also be provided at FRI, Dehra Dun. Regional study tours to examine nursery techniques would be provided and training in nursery techniques would also be provided at institutes and private sector organizations within India. A summary training plan is presented in Table 1 of this Annex. Technical Assistance - Internationally Recruited 11. Seed Technologist. The appointment would be for four months, two in Project Year 1 and one in each of Project Years 2 and 3. The specialist would assist with the establishment of the seed storage facilities and the seed testing laboratory at SFRI. The specialist would also advise on the development of protocols and procedures. 12. Tree Improvement Specialist. A one-month visit would be made in Project Year 1, with a follow-up visit in Project Year 3. The specialist would assist with the scientific design of the program and advise on a realistic implementation program. 13. Nursery Specialist. Short-term visits by a specialist would assist with the design and development of the nurseries at the E&R Centers. The specialist would advise on the lay-out of the nurseries and the specification and installation of appropriate equipment. Studies and Consultancies 14. Pasture Specialist. A locally recruited specialist would be appointed for two months in each of the first three years of the project. The specialist would advise on the selection of species, purchase of suitable seed, and the selection and development of sites for seed multiplication.

180

181 Training Plan - Nursery Technology Course Participants Objectives Resource Agency Duration Prequency Nursery technology and training DFO (13 DFO) Production of high T.A.from industry/ ICFRI/ one week twice (year 1,3) techniques quality seedlings with CSIRO at HQ/Jabalpurmodern technology SFRI RFO (batch 5 RFO) T.A.from industry/ NGO two weeks 2,3,4,4, courses in at SFRI/R&E centers Years 1-4 Study tour (industry) for nursery DFO & RFO (2 industry one week once per year technology DFO + 10 RFO) Local training for FO and FG FO & FG DFO at R&E centers on-job Training of private nursery- farmers or small Developing private DFO & RFO at R&E one week 2,6,8,8 courses in men/women entrepreneurs (600) quality nurseries centers Years 1-4 Study tour international DFO & RFO (1 Nursery management 4 weeks once per year DFO + 3 RFO) International training DFO & RFO (I Nursery management 3 months 4,6,8,8 courses in DFO + I RFO) Years 1-4 rdx

182

183 Annex 13 Page 1 of 4 INDIA MADHYA PRADESH FORESTRY PROJECT Adaptive Research Research Institutions 1. State Forest Research Institute (SFRI). This was established in Jabalpur in 1963, as one of only two state forest research institutes. The SFRI research program is determined by a Research Advisory Committee, chaired by the PCCF, and a membership consisting of 5 PCCFs, the Director SFRI, and invited specialists. MPFD is considered the main client, but there is no formal mechanism of identifying research priorities. At present decisions on research priorities are based on knowledge or experience of regional needs and constraints, and the needs of, or returns to particular species or groups of users. These factors are seldom explicitly recognized or systematically evaluated and there is no long-term strategic research plan for the Institute. 2. SFRI is headed by a Director, of the rank of a Conservator of Forests, reporting to the CCF (Research and Working Plans). He is assisted by a staff of 3 Deputy Conservators, 8 ACFs, 28 Rangers and 55 other staff, all of whom are members of MPFD. There are in addition, posts for specialist scientists, including a forest botanist, a soil scientist, a geneticist, a seed technologist, and a number of technicians. There is a rapid rotation of research staff, many of whom have little experience of research. Attempts to provide a core of research staff through the establishment of the specialist research posts at SFRI have failed because of the difficulty of recruiting well qualified staff to posts with no promotion prospects. 3. SFRI has a large campus at Jabalpur, with generous provision of buildings. The Institute also has ten regional research centers, at Seoni, Amarkantak, Betul, Nepanagar, Morena, Raipur, Bilaspur, Jagdalpur and Indore. All have suffered from a lack of investment in equipment. 4. Forest research within SFRI aims to cover the broad spectrum of forestry related activities. There are Divisions dealing with Silviculture, Mensuration, Forest Botany, Forest Genetics and Tree Improvement, Seed Technology, Forest Utilization and Socio-economics, Statistics, Soil Science, Forest Ecology and Documentation. A seed certification and tree improvement program initiated under an Indo-Danish program in 1987 has left a valuable legacy of plus trees, seed orchards and seed production areas. In addition, the Institute has undertaken contract and collaborative research for a number of government and private sector agencies.

184 Annex 13 Page 2 of 4 5. Tropical Forestry Research Institute (TFRI). TFRI, located in Jabalpur, is one of the ICFRE institutes, with a broad mandate to address generic forest research in three states, including Madhya Pradesh. An expansion of the Institute is underway and research programs are being supported through the World Bank assisted Forestry Research Education and Extension Project (FREEP). TFRI undertakes fundamental as well as applied research, but FREEP provides for an improved research management system to ensure that the needs of the users of research results are given a high priority. This should ensure that research done in TFRI is complementary to that done in SFRI. 6. Other Institutions. There are a number of universities within Madhya Pradesh with well established Botany Departments and two with Forestry Departments. However, university capacity to undertake research related to the forest sector is not fully utilized, though the Agricultural University is involved with agro-forestry. There appears to be little research on fodder grasses and legumes, or the intensified use of fodder trees within, or adjacent to forest land. The Indian Institute for Forest Management (IIFM) is involved with a number of research programs with a socioeconomic focus. Private sector organizations are not presently involved in forestry research in Madhya Pradesh, though Orient Paper Mills have expressed an interest in becoming involved in tree improvement programs for eucalypts. Constraints 7. The main constraints affecting forestry research in Madhya Pradesh, in particular within SFRI relate to: - the lack of a career structure for scientists with specialist skills, coupled with the poor support and status offered to research activities; - the transitory nature of many research appointments; - the lack of any strategic medium or long-term research strategy; - insufficient resources. Project Support 8. Improved Research Management. The project would support the improvement of research management through the reconstitution of the SFRI Research Advisory Committee. The Committee would meet once per year and its membership would be as presented in Annex The project would also support the development of a methodology for setting research priorities, that would reflect the needs of the users of research results. To avoid unnecessary duplication of work, the methodology would be closely linked to

185 Annex 13 Page 3 of 4 that to be used for setting research priorities within the network of ICFRE institutes, modified if required, for the specific needs of Madhya Pradesh. Application of the methodology would lead to the development of a medium-term strategic research plan for SFRI. The project would finance consultancies to assist with the adoption of the methodology and the development of the plan. 10. Adaptive Research Programs. The project would support a program of adaptive research trials to be undertaken at the E&R Centers. These would be designed and supervised by SFRI staff, but their implementation would be managed by E&R Center staff. Project support for tree improvement programs is discussed in Annex Contract Research. Given the difficulty of recruiting well qualified research staff to SFRI, and the research skills available in universities and elsewhere, the project would also provide funds for contract research. Research contracts would be for specific priority problems identified by SFRI and form part of the strategic research plan. Request for proposals to undertake the research would be made to at least two different institutions. The SFRI Research Advisory Committee would assess the proposals against criteria set out below. Administrative procedures and contract details would be agreed with IDA prior to the award of contract. 12. Criteria for Type of Research. Contracts would normally be for three years in the first instance, with the possibility of extensions for successful programs. Proposals would be made in the form prescribed by MPFD and would be assessed against the following criteria: - Relevance to the priorities established by MPFD; - Likelihood of success and the probability of producing usable results within a reasonable time-frame; - Complementarity with, or contribution to, past or on-going research in India or elsewhere, justified by a literature review; - Multi-disciplinary approach and the integration of skills available in the agency applying for the contract; - Relationship to the long-term research program of the institution concerned; - Appropriateness of experimental approach and methodology; - Ability to complete the proposed research using existing facilities and equipment;

186 Annex 13 Page 4 of 4 - Cost, based on detailed lists of equipment, scholarships and other costs. 13. Criteria for Type of Expenditure. The expenditure eligible for support under contract research arrangements would depend on the type of research, but would include: - Equipment; - Operational expenses, including the running costs of vehicles and equipment, the cost of casual labor for field experiments and travel and subsistence expenses for research staff; and - Scholarships or fellowships for post-graduate students participating in the proposed research program; - Publication of research results. Expenditure not eligible for support under contract research arrangements would include: - Staff salaries and allowances; - Staff training and consultancies; - International travel; - Civil works of any kind. 14. Training. Short international training courses would be provided in tree breeding for the SFRI tree improvement specialist and in research management for the Director, SFRI and his Deputy, during the first year of the project. Attendance at international workshops or conferences would also be provided for. 15. Technical Assistance. An international research management specialist would be recruited to assist with the development of a strategic research plan for SFRI. He would assist with the development of a methodology for setting research priorities and the application of that methodology to develop a medium-term research plan. The appointment would be for two months in the first year of the project, with a follow-up visit of one month in the second year.

187 India Madhya Pradesh Forestry Project Project Cost Sumary (Rs Million) (USS Million) t ' Total % I Total Foreign Base Foreign Base Local Foreign TotAl Exchane C L Foreign Total Exchanae Costs A. Management Development Sector Management Planning M&E Q Subtotal Management Development B. Forest Development Forest Regeneration Village Resource Development 497A W Subtotal Forest Development 1, , C. Extension Technology & Research E&R Service Centers Extension Seed Improvement Nursery Demonstration Adaptive Research Subtotal rxtension Technology & Research D. Biodiversity Conservation Total BASSLINE COSTS 1, , Physical Contingencies Price Contingencies 3I A i Total PROJECT COSTS 2, , Tue Jul 19 15:34: J- O P es 1-1 Project Cost Summary

188 India Madhya Pradesh Forestry Project Project Components by Year Totals Including Contingencies (Rs Totals Including Million) Contingencies (USS Million) 1995; Total Total A. Management Development Sector Management Planning M&E Subtotal Management Development B. Forest Developmant Forest Regeneration Village Resource Development Subtotal Forest Development , C. Extension Technology & Research E&R Service Centers Extension Seed Improvement Nursery Demonstration Adaptive Research 9.7 _ Subtotal Extension Technology & Research D. Biodiversity Conservation ? Total PROJECT COSTS , Tue Jul 19 15:38: WQ D (DA O P tt 1-1 Project Components by Year

189 India M4adhya Pradesh Forestry Project Mm.sditure Accounts by Comonets - Totals Including Contingence±s (US$ Million) Management Fo.e-t lsve1 ont Develo t village Ehltension Tcbnno1v L R-sg-rch Sector Planning Forest Resource E&R Service Seed Nursery Adaptive Biodiversity RegeneraNtion 2C3MrahiOf Clnt-A rl PDtI... ionxn x2ym=1 D -trx tion R.. Iarch coflxtal T.ni I. ZnY.5tmt Costs A. Forest Operations _ B. Civil Works C. Equipent and Supplies D. Vehicles e. Training, local F. Training, international G. Studies & Consultancies H. Technical Assistance I. Ecodevelopment Fund J. Forest Protection _ - _ K. Project Preparation Fund Total Investmnt Costs xi. acurrt Costs A. Civil Works B. Equipment C. Vehicles s Total Recurrent Costs 0-3 0L J Total PCSJ? COSTS Taxes Foreign Exchange Fri Feb 17 16: (D( x L Expenditure Akccounts by components -Totals Including Contingencies

190 India Madhya Pradesh Forestry Project Expenditure Accounts by Yeaor Totals Including Contingencies (Rs Totals Including Million) Contingencies (USS Million) -1995L B Total ,1998 Total I. Investment Costs A. Forest Operations B. Civil Works C. Equipment and Supplies D. Vehicles E. Training, local F. Training, international G. Studies & Consultancies H. Technical Assistance I. Ecodevelopment Fund J. Forest Protection K. Project Preparation Fund Total Investment Costs , II. Recurrent Couts A. Civil Works B. Equipment C. Vehicles Total Recurrent Costs Total PROJECT COSTS , Fri Feb 17 13:27: o 4> CD C X-

191 Annex 15 Page 1 of 3 INDIA MADHYA PRADESH FORESTRY PROJECT Procurement Civil Works - LCB Arrangements for civil works to be procured using LCB procedures include: Packages of Works. Works have been grouped into convenient packages for bidding purposes, with all new construction at a particular location made into one package, as far as possible. There are 13 packages, valued at US$1.165 million, all for post review, and spread over the four-year project period; Procurement Schedules. Detailed procurement schedules for the 13 packages are presented in Attachment 1 to this Annex; Design and Specifications. The design, specifications, bills of quantities and estimates of costs for standard designs of the various types of buildings to be constructed under the project have been prepared by MPFD and reviewed by IDA; Bidding Documents. Standard bidding documents acceptable to IDA and already agreed with GOI, have been used and contracts would be concluded following procedures acceptable to IDA; Land. MPFD land is available for all new works; Procurement Agent. The concerned officers of MPFD prepare the designs and specifications, prepare the bid documents, invite and evaluate bids, and supervise the works. No procurement agent would be needed.

192 Annex 15 Page 2 of 3 Goods, Equipment, Furniture, Supplies, Vehicles 2. ICB/LCB. Arrangements for items to be procured using ICB and LCB procedures include: Training - Procurement Packages. Convenient procurement packages have been defined for each category of goods and agreed with IDA. There are six ICB Pre-review packages and seven LCB Post-review packages; - Procurement Schedule. Detailed procurement schedules for all the packages have been prepared and are presented in Attachment 2 to this Annex; - Design and Specifications. The specifications for goods and vehicles for ICB/LCB Pre-review packages to be procured during the first two years of the project have been prepared by MPFD and agreed with IDA; - Bidding Documents. Standard bidding documents agreed with GOI would be used and contracts concluded using procedures acceptable to IDA; - Procurement Agent. The concerned officers of MPFD prepare the designs and specifications, prepare the bid documents, invite and evaluate bids, and administer the contracts. No procurement agent would be needed; 3. Local and international training for the staff and officers of MPFD would be based on the detailed training plans that have been prepared by MPFD. These plans, presented in Attachments 3A and 3B to this Annex have been reviewed by IDA and set out the number of personnel to be trained, the areas of study, the training institutions, and the years in which the training would take place. MPFD would contract placement and support services for international training to an international organization, and appropriate terms of reference have been prepared. Local training would be arranged by MPFD in the identified training institutions.

193 Annex 15 Page 3 of 3 Technical Assistance, Studies and Consultancies 4. Project funds for internationally recruited consultants, that is for technical assistance and for studies and consultancies undertaken by locally recruited consultants are to assist with institutional development, or project implementation as shown below: Activity Institutional Project Development Impletatio... million..us$ Technical Assistance VRDP Evaluation 0.9 Ecology 0.2 Seed Technology 0.1 Studies and Consultancies Sector Management 0.2 MIS/GIS 0.2 VRDP Evaluation 0.1 Research 0.1 Ecology 0.5

194

195 F PROCUREmENT SCHEDULE FOR CML WORKS DESCRIPTIONOFlTw N MET1HOD EST. AND CF OCOST Package i I1j COUAttio o l XiBisp PCMAM4 S ID N JI CJrSO D J IFIMIAI.1 IJ {JIA S 0N ConswucIJon of BuildingsI D J IF MIAM J~ A S 1 N 0 alaspurc020n0 V LCB-Post-r I 10 i+ 1 - Packa.ge 2:1 III Constucaon of BuildngsI at idore LCB-Post-rov 2.56 I1 I PaCKage 3: Ij I j 3 11 I I I I [1 I I at Khardwa LCB-Post-rev 3.01 I I I I1 I11112i 1 Package Cons utcon 01 Buildings 9 4: II!lI I I Cons of Buildings /t'uon I I I I1 Par-Kage 5:I Consuucflon of Bu g at LCB-Post-rev Shahdol I III I fr I Package 6: K 7 Y atjagdapwu elcb-po Conskucfon of BuildingsI atjseani LCB-Post-rev I J atjadaipu C P I~ -9-1_ 12*il L11 Package 8: ~i 41 8 I gi 1 101! i Contsb'ucon of Budldings j at Jaepur LCB-Post-rev , Constucdon of Buildlings 1iI{ j5l 35Ls 8111SAFl-re 1.7 I1I _20 I - I E IIIIIIIE IIII I II I lls I [1-15w I t 2 L...-L..- Consamucon of BuNdngs at Shoped LCB-POSH.V a '4 rt~ 0 0, I-

196 PFtREENT SCHEDULE FOR CMVL WORKS DESCRtPTION OF itiem METHO EST. j _9_ _19 AND I a: i COST 1_ oa kg1t1 PFC C RS SIO NDJ FMAMJ IJ J F MIA:MIJJ A SOINIDJ 'FIM AiM JJ A!S0'NIJiF MIA;J.J A S O N ID Package 11.F 1 Tij1 Consarucflon olt Buildings II at Sagari LCB-Post-rev 3.47: I I I _I t 121 Package 12:I Constructon of Buildings4 t I - j I at GwaIoor LCB-Post-rev I 3.07 ir d 1 5, 8' 9~ ! Package 13: ConstrLucton oc Iulig at BeMco * if i5nslcd-post-rev i I12 i PRECUtALFlCATiCN ACTIONS PR0QUREMENTXQQtaDN 9 - CONSTRUCTION 25 % COMPLETE A - tnrtiate PREPARAT)ON OF PREOUAUFCATION DOCUMa4TS AND EVALUATION CRITERLA 1 - INrITATE PREPARATICN OF SPECIFICATIONS AND EiD DOCLJMENTS 10 -CONSTRUCTION SO % COMPLETE B - TRANSMIT DOCUMENTS AND CRiTERLA TO IDA 2 - TRANSMfT SPEC FICATIONS AND BID DOCUMENTS TO IDA I I - CONSTRUCTION 75 % COMPLETE C- IDACLEARANCE OF DOCMENTS AND CRfTERiA 3- IDA CLEARANCE OFSPECIFICATION AND BID DOCUMENTS 12 - CONSTRUCTION 1t00% COMPLETE D - SSUE PREOUALFlCATKN NOTICE 4 - ISSUE INVITATION TO BID E - RECEIPT OF CONTRACTOR PREQUALIFICATICN' DATA 5 - OPEN BIDS MltOD OF PRCURFNT F- TRANSMIT EVALUATION REPORT AND RErOtMMENDATONS TO IDA 6- TRANSMIT EVALUATKN REPORT AND AWARD RECOMMEiNDATIONS TO IDA CB - iterfatecnal COMIPE1TT7VE BiDDO G -IDACLEARANCE OF RECOMMENDATIONS 7- IDA CLEARANCE OF PECOMMENATINS LCB- LOCAL COMPETiTlVE BIDDING 8 - AWARD CONTRACT FA - Force Account rt P nq r,t rd lb M o x gtn rt

197 PROCIRAENT SCHEDULE FOR VEHCLES, E IP.ENT AND MATERIALS DEsCfvP,N OF 8E n= EST. AND CF COST A N OUANTITY PX FtS N 0 XD IJ F_MAM JiAlAO J!A, inionj N0 F,M M AMMiJ J S Commes- 49 ICB/P1r aCkaol7nr I I 1_ 40rr3 1 PadirCa 2II 1111ji :;1 1 t8r! I i 11 t _ Compu 318P 03 _..L... _ rvh r LJii! 4 S ]1/1 4-i L ' ti H i Ii.I i i I Coau1ets 40 CBr/Por e tas2 j ill I I I I_ [spu 6 LS C /31 1 ;j.6.71 ' 1 Comp_A_rs _3 mcbpr 7.85 *1, Jeep LS I_B/Po r1 1.0 I 3 I I I I 1 K _ 1i2IB/415P I 1 i i I I _ i -4 W D _ _ H - JCeepdr S o LIV Y 3 - ICB/Pr Air Cord o_s ir CoNItfiot ANDCRrlE0IC/Post IDA IT 2 - COI I BID W I T IDA I I A SI 61 1 Package 10: CIDelns 12 LOCS/Post BDC Ph*locppier 6 LO N/Post il i I I IREPORTI A I Package 12: Seivsu EqujOtents LS ilos/post 2.40 _ ~.11III C - ID acearace OF DOCUTSNC R 3 - IA CLEARANCE OF SPECFICATION AND DOCUMENTS -ID D - SnSWJPFAMMIFATION NOTICE 4 - ISSM INVATION TO BIDnJDFPOURAI E - FAMOFCtNTRACTOA PRIBOLINICATION DATA 5 - OPEN BIDS F -TRANSMITEVALUATION U-u 9419M4OOKCOM1f11W REPORT AND BKM REOOMM4C MT1N TO IDA 6 - TRANSdiFT EVALLIATIONI REPORT AND AWARD RECOM4MENDOATIONS TO NY108 CO- LOCAL CCAPETTITVE G - IDACLEAPANCE CF RECOMMEDATU6 7 -CIA CLEARANCE OF RECOMMENDTIONS PS -ppkccw4t oppu 8 - AWARD CONTRACT NEG -NEGOTIATION Page 1 sioohg r

198 TRAI116, LOCAL CWATION TOTAL FREFERD ITEMS No. COST NO. COST NO. COST NO. COST No. COST INSTITUTION _ _ listitution building - CCF I week 4 0. e In-house progran using eoternal expertise from TTTI, Bhopal HfR- Xf I week liks, HRD Acadety, ILRI, Consultants Leaderstip/team biilding -- DCF I week In-house progras with external enpertiu frog IlMs, HRD Academy, ILRI, Conseltants Projectformulation/planning-C 2 weeks MIRD, Hfyderabad 615 Study tours Forest Department 615 Workshop 3 days Forest Survey of India, NRSA, Private institutes, State Remote Sensing Centers 615 Specialist 4 weeks IIFM, Bhopal MIS Data entry 6 weeks Q e 0.4 Acadeny of Adn., Phopal 115 Asst Prog 9 weeks (.4 Afadesy of Adn., Bhopal Data entry 6 weeks II Acadeoy of Adn., Bhopal Asst. Programmer 9 weeks le S B Acadesy of Aden., Bhopal Computer literacy! weev Academy of Adn., Bhopal days I 0.5 I 0.5 I Forest Survey of India, NRSA, Private institutes, State Remote Sensing Centers Study tours I 0.3 I 0.3 I 0.3 I Forest Department 615 specialist 6 weeks IS FSI, MRSA, State NIC, Private institutes, OQ rt : Software Vendors n X Orientation Ishop-Senivr staff203-day TTTI, Academy of Administration, O to n IIFN, other sh Spearhead teams 6 weeks Modules by: N60s, WALMI, Academy of > Adoinistration, TTTI, IIFM, FD Staff

199 Circle team-building eshops 2 days Facilitator Divisionial team building wkshp 2 days IB Facilitator SR[' principles/ skill - RIOS I week bo tO VPOF Spearhead Teas Tralning - Oil) cettees Variable l b u VRDP Spearhead Team, H50s, Other agencies EUperience sharing wsrops I day C 3 (., I Forest Department Annual moikshops 4 or trainers I day l 2 o.1 5 '. n/a Study totirs - RFC,DFO 10 days nia Study tours - villagers/n60s I week I n/a Market analysis 2 weeks ! M (Indian Institite of Manaqement) FD Staff 2 days SFRI, Task Force, Outside experts Workshops - DFOs I week I 1 I '2 Forest Department Workshops - hfos Forest Department Course - RFO/FO I Forest Department Course - T4V staff I 0.01 I O,04 Forest Department Seed TechnologylFRAf Forest Department - DFO r 13 1 week a. from industry/lcpruicsir8 at If/Jabalpur-SFRI > - RFO x 5 2 weeks I T.A. 4rom industry/noo at SFRI/RlE centers D0 P (D 0 CD - FO/F6 on-job I DFO at RSE centers -e, 'a.'

200 - Pvt nursery operators I wek & OFO I RF0 it ShE cnters - Study tor OF0D/FO I wek industry Workshos I Forest DeWtuet Eco - Dev_pmut Trainin lm uikslop/pa Staff I Fornt opwltnt Sparhead Tese IO Forest hpartmt IL cows. (4 mnthb) Fornt kpartmt Study twr ! 20 2 Forest kpwrtmt IL rrai.iag UI iploea, 9 nith I mtho I III, hrado I Cestre, 4 mth 4 mths iil, Wad" Specialized, 15I dy 1-2 mes Nil and others Orientatin for fss Iuk I2 F8 staff in eac CF zoue rhkshp/seoinars n -5 days I Various institutions (in country) Study tows 2 ees Various institetims (ir ceutry) Traiminglperatises 1 2 I Fornt epartw t " OQ rr : o (lbnfi' rt

201 TRAINING, INTERNATIONAL PAGE I OF I PARTI- DURATION TOTAL TOTAL PREFERED ITEMS CIPANT 0/ NO. COST NO. COST NO. COST NO. COST No. COST INSTITUTION Policy analysis CFs 3 n ( Q 3 9 YALE UNIVERSITY,CONNECTICUT, U.S.A DCFs e COLUMBIA UNIVERSITY, NEW YORK, U.S.A UNIVERSITY OF CALIFORNIA,BERKELEf,U.S.A Economics CFs t YALE UNIVERSITY,CONNECTICUT, U.S.A DCFs 12 N UNIVERSITY OF CALIFORNIA,BERKELEY,U.S.A MANASEIIENT Study tours CCFs 2-4W U.S.A 615 DCFs 3 N ASIAN INSTITUTE OF TECH.,BAN6KOk IG5 Study Tours I N O ICIMOD, KATHNANDU ITC, NETHERLANDS VILLAGE RESOURCE DEVELOFMENT ACF UNIV. OF READING, U.K RO IDS, SUSSEX Seed technologyimanage.ent DFO 3 N 24 2 to 2 le 2 le PETAWANA NATIONAL FORESTRY INST., CANADA DANIDA TREE SEED CENTRE FOREST SEED CENTRE UNIV. OF UME AO, SWEDEN Fodder shrub/legume Froduction DFO 3 N I 5 0 u 2 10 UNIV. OF QUEEENSLAND, AUSTRALIA Study tours on fodder dev. DFO I N IS THAILAND, SWEDEN, AUSTRALIA ACF RO Nursery Manaqement DFO 3 n la 6 24 B CSIRO, AUSTRALIA, BRAZIL, CHINA Study tour -Nursery Manageeent RO I N I BRAZIL, CHINA, THAILAND Tree improvement DFO i 2 6 INSTITUTE OF FOREST GENETICS SCHNACENBECK HEMBUR6, GERMANY OHIO STATE UNIV. OHIO, U.S.A > Researc. Management CF O d 2 6 CSIRO, SYDNEY, AUSTRALIA ARBORETUM, HORSHOLAN HUMLAEECK, DENMARK - D3) D Conferrence I N 0 0 I I I O NJ

202 PAGE 2 OF 2 PARTI- DLRATION TOTAL TOTAL PREFERED ITENS CIFANT e/n NO. COST NO. COST NO. COST NO. COST No. COST INSTITUTION MARkET ANALYSIS CF 3 N YALE UNIVERSITY,COMIECJICUT, DCF U.S.A UNIVERSITY OF CALIFORNIA,BERkELEY,U.S.A Protected area Long-term CF EAST NEST CENTRE DCF LUIV. OF HOUOLULU,HANAI,U.S.A SHITHSONIMN INST.,NATIONAL ZOOLOGICAL PARI,MISHIN6OI,lU.S.IA DUREL INST. OF CONS. I ECOLOBY,UNIV. OF KENT,U.K. Short course CF 3 N 24 KF do-- ACF Sniur/lmrkshs CF ACF Stedy tws AF IN IS I5 KW A, UW6, TA IIZANIA U DO rt n M 0rm o 0 kn rt

203 Annex 16 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Six-Monthly Project Report Format TABLE OF CONTENTS 1. INTRODUCTION 2. PROJECT IMPLEMENTATION Management Development Project Steering and Coordination Committee Meetings Schedule of Meetings Decisions Institutional Development Institutional Changes Project Implementation Unit Policy Analysis Unit Human Resource Development Personnel Matters Training Courses Planning Monitoring and Evaluation System Development Data Collection and Processing Evaluation Studies Forest Development Natural Forest Regeneration Physical Progress Village Resource Development VRDP Planning VRDP Implementation VRDP Fund

204 Annex 16 Page 2 of 2 Extension, Technology and Research E&R Service Centers Extension Programs Seed Improvement Nursery Development Research Biodiversity Conservation PA Management Planning Relocation Ecodevelopment ED Planning ED Implementation ED Support Fund 3. CONTRACTS AND PHYSICAL PROGRESS Tender Document Preparation for Works and Goods Tendering and Contract Awards Physical Progress by Contract Compared to Contract Timetable 4. CONSULTANT RECRUITMENT AND WORK PROGRESS Terms of Reference Short Lists Requests for Proposals Contract Awards Consultant Activity Progress Consultant Reports 5. FINANCIAL MANAGEMENT Accounting Systems and Procedures Project Expenditures Disbursement Claims Documented SOEs Financial Statements and Audits

205 Annex 17 Page 1 of 1 INDIA MADHYA PRADESH FORESTRY PROJECT Schedule of Estimated Disbursements (US$ millions) IDA FY IDA Semester Disbursement Cumulative Percent Disbursement

206 Annex 18 Page 1 of 5 INDIA MADHYA PRADESH FORESTRY PROJECT Project Committees Project Steering Committee A. Project Coordination Committees Membership: Chairman Secretart-y of' Forests Secretary CCF (PILJ) Members PCCF CCFs Development. Social Forestry, Wildlife Director, FDC Joint Secretary, Financc Joint Secretary, Planning Secretary or Representative - Tribal Dcvelopment Department - Agriculture Departmiient - llorticulturc Dcpartmllent - Animllal HUsbandry Department - Rural Developrmient Departmiient - Rural Industries Department Function The Committee would meet bi-annually to review progress and ensure: - Overall coordination of project activities; - That proposed changes in management approach and institutional structures are introduced; - That project agreements and assurances are tultilled in a timely manner; - That Government contributions to project expenditures are made available.

207 Annex 18 Page 2 of 5 Regional Project Coordination Committee Membership Chairman Commissioner Secretary Territorial CF (HQ) Members CF Territorial CF Wildlife CF Working Plans Regional Manager, FDC Representatives - Rural Development Department - Tribal Development Department - Agriculture Department - Horticulture Department - Animal Husbandry Department Function The Committee would meet bi-annually to: - Review planned project activities within the region; - Identify activities planned by other agencies that would complement or overlap with project activities; - Agree action to coordinate such complementary activities or to avoid duplication. District Project Coordination Committees Membership Chairman Collector Secretary DFO Territorial (HQ) Members Other Territorial DFOs DFO Wildlife Working Plan Officer Representatives - District Rural Development Agency - Tribal Development Department - Agriculture Department - Horticulture Department - Animal Husbandry Department Function The Committee would fulfil the same functions within the District as the Regional Coordination Committee within the region

208 Annex 18 Page 3 of 5 B. Departmental Technical Working Groups Departmental Working Groups would be established to provide technical oversight and coordination of project activities within MPFD. The functions of the various Working Groups are presented below. Each group would be chaired by the PCCF or the appropriate CCF. The core membership of each group would include the CCF (PIU) and the appropriate CFs or DCFs from the PIU. Suggested membership of each group is presented below, but membership would be finalized following completion of the management review. Planning Monitoring and Evaluation Membership Chairman CCF (PME) Secretary DD (PME) Members CCF (PIU) CF PME (PIU) Manager PME Unit 2 CFs Territorial 2 DFOs Territorial Function The Working Group would: - Approve TOR for the review of PME procedures; - Review the conclusions of the review and approve recommended information systems; - Ensure the introduction and development of agreed PME procedures and systems; - Oversee the development of zonal GIS Units; - Review the development of improved Working Plans; - Review the implementation of the procedures and the application of conclusions to sectoral planning; Village Resource Development Program Membership Chairman PCCF Secretary CF VRDP (PIU) Members CCF (PIU) CF Project Planning (PIU) 2 CFs Territorial 2 DFOs Territorial Representative NGO

209 Annex 18 Page 4 of 5 Function The Working Group would: - Review proposed orientation programs for MPFD staff and training for VRDP Planning Teams; - Agree criteria for utilization of VRDP Fund; - Approve annual work plans for VRDP; - Review VRDP plans approved by DFOs; - Review implementation of VRDP and agree modifications to procedures, if necessary; - Approve TOR for evaluation of VRDP in Project Year 3. Forest Development Technology Membership Chairman CCF (Working Plans) Secretary CF Project Planning (PIU) Members CCF (Development) 2 CFs Territorial 2 DFOs Territorial Director SFRI Function The Working Group would: - Review silvicultural prescriptions of Working Plans and VRDP microplans; - Ensure that silvicultural practices are environmentally sound; - Oversee studies of silvicultural practices including the preparation of terms of reference for such studies; - Supervise the preparation of manuals and other publications on silvicultural practice, in particular for degraded forests, for the guidance of MPFD staff at various levels. Human Resource Development Membership Chairman PCCF Secretary DCF HRD (PIU) Members CCF (PIU) CF Project Planning (PIU) CCF (WL) CCF (Social Forestry) CCF (Development) CCF (Admin) Function The Working Group would: - Agree priority training needs on an annual basis; - Approve proposed training institutions and courses; - Approve selection of trainees; - Endorse annual training plans.

210 Annex 18 Page 5 of 5 Conservation of Biodiversity Membership Chairman CCF (WL) Secretary CF Project Planning (PIU) Members Project Director DCF (WL) 2 Zonal CFs (WL) 2 CFs Territorial Function The Working Group would; - Review PA management plans; - If necessary, commission studies of the impact of resident communities on PAs; - Agree procedures for the use of the VRSF; - Review ED plans approved by PA Managers; - Agree criteria for use of EDSF; - Review implementation of ED programs and agree modifications to procedures, if necessary; - Review proposals for development of the PA network. Research Advisory Committee Membership Chairman PCCF Secretary Director SFRI Members CCF (Social For. K i CCF (PIU) Managing Director i-dc Director TFRI Representative - Forest Industries - Universities - NGO Function The Committee would: - Approve TOR for a study to cevelop a strategic research plan; - Agree criteria for setting research priorities; - Review the conclusions of the study and endorse a strategic research plan; - Review SFRI annual work programs; - Approve contract research proposals; - Review progress or researc.i contracts.

211 Annex 19 Madhya Pradesh Forestry Project Page I of 3 _ i ID Name l10Q20Q3Q04 01 I IBRO PROJECT TASK MANAGEMENT 2 Negotiation 3 Board Presentation 4 Effectiveness 5 Completion Date 6 Closing Date 7 REVIEW REPORT AND AUDIT a Project Launch - Supervision Ill 9 Supervision S E Superviseon 211 S 11 Supervision 3v11 12 Supervision 4/11 13 Project Review e 14 ProJectCompleteon Report 15 PROCUREMENT DEELPMN 16 Procure EquT p '17 Procure Vehicles LPS 9 Constructaon 19 SECTORAL STRATEGY e ment ICBILPSRve 20 Pnepare Sectoeal Sategy Sbtement Md 21 PROJECT COORDINATION tn 22 Establish Project steering Committee 23 Estabkish PIU Sdi 24 Appoint Key Stufe r_ 25 Complete Sifo Appointments S 26 Establish Technical Working Groups= 27 MANAGEMENT DEVELOPMENT 28 Prepare TOR Sor Management ReSiewar 29 Fonalize Contrct for Managelent Review sm 30 Complete Management Revtew cl p 31 f Introduce Agreed Management Modmfcbations _ 32 Estblilsh Policy Analysis Unitt 33 Underae Polic Studies 34 Priority I Stu dies = 35 Priority 2 Stbidles _ 36 PLANNING MONITORING AND EVALUATION 37 Design PME Procedures = 381 Design and Commission GISIMIS System= 39 Procure GISIMIS Hardware and Software 40 Preparation Annual ImplemenStaton Plan (AIP) 41 AIP PY I 42 AIP PY2 EC= 43 AIP PY3r Al AP Py4 Project MP Forestry Project Critical Progress summnary Date 2/2195 ~~~~~~~~Noncntical Milestone *Rolled Up

212 Madhya Pradesh Forestry Project Annex 19 Page 2 of ID Name Q2TQ3 Q4 I1Q2I Q ITQ Q2 Q Q 2 Q3 I Q4 I Q1 I Q2 Q3 04 Q1 45 HUMAN RESOURCE DEVELOPMENT 46 Appoint DCF HRD in PIU 47 Prepare HRO Plan 48 Finalize Placement Services Contract 49 Prepare Annual Training Plan (ATP) Year 1 50 Prepare ATP Year 2 51 Prepare ATP Year 3 52 Prepare ATP Year 4 53 NATURAL FOREST REGENERATION 54 Area Started Year I 55 Area Started Year 2 56 Area Started Year 3 57 Area Started Year 4 58 VILLAGE RESOURCE DEVELOPMENT 59 Contract VRD Orientation Training 60 Train VRDP Planning Teams 61 Year I Teams 62 Year 2 Teams 63 Year 3 Teams r 64 Year 4 Teams 65 VRDP implementation 66 VRD Started Year t 67 VRD Started Year 2 68 VRD Started Year 3 69 VRD Started Year 4 70 VRDP Evaluation 71 EXTENSION 72 Establish ILU 73 Construct 2 E&R Centers 74 Construct 3 E&R Centers 75 Construct 4 ESR Centers 76 Construct 4 E&R Centers 77 SEED IMPROVEMENT 78 Recruit Consultants 79 Program Development 80 Implement Program 81 NURSERY DEMONSTRATIONS 82 Recruit Consultants 83 Program Design 84 Develop nurseries at 2 EaR Centers,_...,_ 85 Develop nurseries at 3 EaR Centers 86 Develop nurseries at4 E&R Centers 87 Develop nurseries at 4 E&R Centers... Project MP Forestry Project Cr tical Progress Summary - Date 2/2/95 Noncrit cal Mi estone * Rolled Up

213 Annex 19 Madhya Pradesh Forestry Project Page 3 of 3 ID Name I Q Ql 1 Q2 I Q Q1 1 I Q2 IQ Q2 I Q3 04 Q1 Q2 Q3 04 Q1 Q2 I I Q31 04 I E1 n APPLIED RESEARCH 89 Research Statbgy 90 Recruit Consuhants * 91 Develop Strategy 92 Contract Research 93 Year I 94 Year 2 95 Year 3 96 Year 4 97 BIOOIVERSITY CONSERVATION 96 Identify PriorIty PAs 99 Prepare PA Management Plans 100 Design Interprta ton Center 101 Contract Research 102 Year I 103 Year Year Year Implement PA Mgmt Plans and ED Programs P PAs Started Year I 106 6Pi PAsStartedYear P2 PAs Started Year I 110 6P2PAs StartedYear Baseline MonntorIng and Evaluaton Studies 112 Basellne Study 113 M&E Year 3 Proect MP Forest Pnoje Cr,itcal Progress Summary V Dafe 2=95 Noncntcal Mliestone * Rolled Up >

214

215 Annex 20 Page 1 of 2 INDIA MADHYA PRADESH FORESTRY PROJECT Project Supervision Supervision Plan 1. IDA supervision of the project would be closely linked to the implementation schedule presented in Annex 19. Supervision would be undertaken jointly with GOMP. The schedule of supervision missions presented below includes two visits in each year of the project. In the first year of the project, one supervision mission would coincide with the project launching workshop to provide assistance during the critical start-up period. In this and subsequent years, a supervision would coincide with the review of annual programs of project activities, to be undertaken early in the fourth quarter. One additional supervision would be undertaken in the second quarter of each year. In the second year of the project this would coincide with a project review. CY Quarter Supervision * * * * * * Project Review Expected Skill Requirements 2. In addition to the Task Manager responsible for supervising compliance with IDA procedures, supervision missions would include personnel with skills in: - Management - Monitoring and Evaluation - Forest Management and Silviculture - Farm Forestry, Agroforestry and Forest Extension - Planting Material Improvement - Forestry Research - PA Management - Participatory Development

216 Annex 20 Page 2 of 2 Key Indicators 3. Supervision missions would focus on an assessment of success in implementing the agreed strategy for the sector. This would involve consideration of development impact in relation to the primary management objectives. These are summarized below together with key indicators, summarized from the more comprehensive list of indicators for monitoring the progress of each project sub-component, presented in Annex 9.,.~ ii7< e ipr imy ;aaeiu Ke Iuiat: Conservation Conservation of biodiversity - Completion of PA Management Plans Areas - Results of ecological monitoring studies - Local community involvement in PA management - No. of communities participating in Ecodevelopment Programs Closed Forests Maintenance of forest cover - Improved forest cover Timber and NTFP - Successful tree improvement program production - No. of FPCs established - Production of timber and NTFPs - Successful VRDP Open Forests Increase in forest cover Production of local community requirements for forest products Private and Private and community - Area of private plantations established Community Lands forestry - Success of agroforestry programs - No. of private nurseries established

217 Annex 21 Page 1 of 10 INDIA MADHYA PRADESH FORESTRY PROJECT Economic and Financial Issues Introduction 1. The Madhya Pradesh Forestry Project introduces policy changes, new institutional arrangements and managerial systems for the protection and management of forest areas. The benefits of these changes are wide-ranging and include benefits other than the economic outputs quantified in this annex. The project consists of three planting programs: assisted natural regeneration in close forest areas where canopy cover is greater than 40%, regeneration of degraded forests in open forest areas where the canopy cover is less than 40% and tree planting on private farm land. The different areas, objectives and institutional arrangements for each of these programs are set out in Table 1. The biodiversity component and policy reform issues have not been subject to detailed economic analysis. Further, the environmental benefits of the project have not been quantified directly. Instead, a calculation is made of the stream of environmental benefits necessary to increase the economic rate of return on the project above the 12 percent opportunity cost of capital threshold. In other words, an environmental premium is calculated. (See the discussion on overall returns (Paras. 23 to 25)). 2. The forest development programs involve some 240,000 ha. of forest land, representing only a small proportion (less than 2 percent) of the state's total forest area. The forest production activities under these programs face a large and growing statewide and national demand for forest products, as discussed in Chapter Time Horizon. An unusual time horizon of 135 years was used in the analysis. This is due to the long cycles involved in the forestry technologies applied in the project, technologies that lead to sustainable yields in perpetuity. This time horizon allows for a startup period for establishment/planting activities plus almost two complete cycles of the VRDP. In addition, the long time horizon is consistent with one of the environmental objectives of the project; namely, to conserve and increase the stock of natural capital for future generations to use for economic purposes. For comparative purposes, a 45 year horizon that conforms with more traditional project analyses was also assumed and the results of the analysis presented. Full details of the analyses are presented in Working Paper 6 (Annex 24).

218 Annex 21 Page 2 of 10 Project and Establishment costs 4. Total Project Costs. The total project cost in April 1994 financial prices is Rs.2,459 million including physical contingencies of 5 percent for planting costs and 10% for other costs. This is about US$67.3 million at projected exchange rates. Project costs are summarized in Annex 14 and given in detail in Working Paper 8 (See Annex 24). Project costs do not include "establishment" costs such as salaries and office operating expenses of existing staff. 5. Economic Project Costs. These have been derived from the financial costs by excluding the costs of research and biodiversity conservation and adjusting for transfers and distortions (Table 2). A shadow wage ratio of 0.60 has been used to convert the Official Wage Rate paid by government to average market rates. This average market rate has been confirmed by field surveys in the project zone, which consists of fringe forest areas where the inhabitants face very limited employment opportunities. Inputs and outputs under this project are not generally internationally traded, and an SCF of 0.9 has been applied to convert to border equivalent prices '. Therefore, adjusted July 1994 financial prices have been used in the economic analysis for both costs and benefits. These prices have been assumed to reflect long-term equilibrium values. 6. Establishment Costs. These have been estimated on the basis of the 'Non-Plan' Budget Estimates for 1993/94 of expenditure at Circle, Working plan and Divisional level, average over the 69 Divisions in the state (Demand No 10, Ministry of Finance, GOMP). The project is assumed to take up an estimated 20% of Circle headquarters and 50% of Working Plans resources as well as 33% of Divisional resources, assuming that two out six ranges per division are included in the project. This gives a cost per division of Rs million per division per year. The establishment cost for Farm Forestry and Extension Program (FFEP) division was lower since no guards (or foresters) would be employed. 7. Project Component Costs. These costs have been estimated by apportioning overhead costs among the three planting programs - roughly on the basis of the total area which would have been planted by year 12. As a result, 70% of the costs have been apportioned to the Village Resource Development Program (VRDP), the most innovative of the programs, 20% to the Assisted Natural Regeneration Program (ANRP) and 10% to the Farm Forestry and Extension Program (FFEP). 8. The overall returns to each of these three components are analyzed in the following sections before overall project returns are estimated. I World Bank Guidelines for India as of May 9, 1994.

219 Annex 21 Page 3 of 10 Assisted Natural Regeneration Program (ANRP) 9. Background. The benefits of this program were estimated using representative models based on the treatment plans for the two different management regimes for closed forest areas - selection with reserves and coppice management - together with a bamboo replanting in flowered areas of the closed forest. (Details of these treatment plans are discussed in Annex 2). The models should not be seen as prescriptive models but as an analytical tool to estimate costs and to characterize benefit flows; in practice, actual costs, and benefits, will depend on site-specific factors. 10. Planting Costs. These have been derived from estimates of inputs as set out in each treatment plan. These areas would come under the protection of the Forest Protection Committees and therefore no provision is made for protection costs - in terms of either Cattle Proof Trenches or Watch and Ward. This is based on the assumption that areas with a canopy cover greater than 40% are subject to less biotic pressure than more open areas. Planting costs average Rs.5015 per hectare at July 1994 prices. 11. Area and Phasing. The major difference between activities under the project and existing programs comes from the managerial and planning framework. Working plans would have a more central role and staff would be trained in order to enable them to make sitespecific decisions. Quality control mechanisms would come into play to measure outputs and feed this information into better technical specifications and better quality of field implementation. However, the technical specifications are closely based on existing practice. As a result, the program envisages an increase of 24,000 ha in the area treated, phased in over two years. This is considered to be well within the capacity of MPFD as actual planting in 1991/92 was 36,000 ha, and the annual target for the Eighth Five-Year Plan beginning in 1993/94 is 50,000 ha. 12. Economic Costs. Total costs of the component include project overhead costs as apportioned above (Para. 5) and planting costs based on areas, phasing and planting costs. The major element is labor; employment rises from 780,000 workdays in the first year of planting, to 4.1 million in the fourth year, a cumulative total of 10.9 million workdays during the project period of four years. 13. Incremental Benefits. For all models, the final state of the forest as a result of project interventions is that of natural forest with a sufficient range and mix of species and age classes to ensure the sustainability of the forest. Yields depend on site quality. More importantly, incremental yields depend on the without project situation for which social and economic pressures are more important than site quality. However, although reasonable estimates of project yields are available, the quality of data for existing yields in degraded areas is less reliable. The assumption used is that land productivity under both the coppice and selection systems would be roughly double land productivity without the project. In the case of coppice management, the land is protected but the coppicing is delayed in order to

220 Annex 21 Page 4 of 10 establish superior quality growing stock, and this reduces the returns to the model. In the case of bamboo rejuvenation in flowered areas, it is assumed that there would bc no bamboo yield without the project. 14. Overall Returns. On the basis of these assumptions, the overall return to the component shows an ERR of II percent, that is, an NPV of Rs million (12%, 135 years). Incremental benefits are summarized in Tables 3 and 4. The estimated ERR for this component is less than the opportunity costs of capital (12%) but no allowance has been made for unquantified environmental benefits, discussed further below. The rate of return is also sensitive to the value of the estimated shadow wage rate. Over a 45 year time horizon, the ERR is 10% with an NPV of Rs million (12%, 45 years). Village Resource Development Program (VRDP) 15. Background. The Village Resource Development Program in areas of degraded open forest enables Joint Forest Management (JFM) procedures to be introduced on a wide scalle throughout the state. Under the Government Order, the Village Forest Committee (VFC) would jointly plan and manage the forest and, in retu;,-n, would receive all intermediate outputs together with 30% of the final product. As a result of this order, the management of these areas would come within a comprehensive framework, with the VFC taking into consideration both forest and non-forest areas as well as existing stakeholders and their requirements from the forest areas. The analysis is based on a model of a community protecting and managing 300 ha of forest land. A variety of silivicultural treatments would be used, depending on the existing situation. In areas with sufficient rootstock, the emphasis would be on coppicing, while in the more highly degraded areas, replanting would be needed. In practice, most areas would require a mix of coppice and replanting management. In addition to the rehabilitation of degraded forest, bamboo areas would be replanted and silvipastoral systems introduced. 16. Planting Costs. Planting costs are based on the treatment practices described in Annex 2 and include site preparation, planting, establishment and the cost of plant material, but not the costs of protection and watch and ward. Planting costs average Rs.9557 per hectare. 17. Funding of VRDP. The institutional arrangements for JFM enable local resources to substitute for project costs of protection and watch and ward, releasing these forest protection funds for use by the VPC. The VFC can use these funds for a range of prescribed investment activities, which would create village assets and thereby generate income-earning opportunities. The analysis of the benefits of these additional resources is assumed that 33% is spent on wages for protection (that is, no incremental production) while the remainder is spent on construction of a stop-dam providing irrigation to 20 ha of previously rainfed maize. It is assumed that this irrigation would increase maize yields during Kharif but would not permit a second crop.

221 Annex 21 Page 5 of Phasing. The introduction of JFM would inevitably be slower than for the ANRP since procedures would need to be developed and staff and committees would take time to become familiar with new roles. However, there has already been some experience in MP and the training program which has already started would be accelerated with funding from the Project Preparation Facility (PPF). Further, the Government Order has already been promulgated and experience from other states shows that demand from villages would be high. The overall phasing is based around a gradual introduction of new villages per Range Forest Officer (RFO) as well as the phasing of new ranges per division and new Divisions and Circles. Village plans are also phased over a ten-year period in order to enable new practices to develop and evolve. 19. Economic Costs. These are based on the apportioned overhead costs together with total planting costs. As with ANRP, the major cost element is labor; employment rises from 185,000 workdays in the first year of planting to 4.2 million workdays in the fourth year, a cumulative total of 7.4 million workdays during the project period. This excludes labor provided by the community for protection and management. 20. Incremental Benefits. The estimates of yield as a result of project activities are based on experience. However, there is less reliable data about the without-project productivity, which has traditionally been regarded as zero on wasteland. The annual productivity of heavily grazed or cut land may also be relatively high even though the capital value of the biomass at any particular point in time would be much lower, and as a result there is a tendency to undervalue existing productivity. Despite this, if the biotic pressure builds up to the stage at which there is no regeneration, or only poor quality biomass can be regenerated, there is then rapid degeneration leading to zero productivity. Incremental benefits were calculated using estimates of the without-project productivity and assuming that this would fall to zero in ten years. 21. Overall Returns. The ERR to this program is just over the 12% opportunity cost of capital. This return is sensitive to the shadow wage rate. A shadow wage rate of Rs per day - which is typical of head-loading rather than agricultural labor reduces the ERR to just over 11%. The analysis of individual models show the best returns per hectare to bamboo replanting with an ERR of 16%. The RDF model, consists of a mixture of coppicing, replanting and silvi-pastoral management shows low returns to the silvi-pastoral element, where the opportunity costs of lost grazing land are greatest. This reinforces the need for JFM planning to be phased and to rotate land management systems over a wider area. Over a 45 year horizon, the ERR would be 12%. Farm Forestry and Extension Program (FFEP) 22. Background. Despite the limited overall success of social forestry programs, there was some success in areas with access to markets for planting on private land. This demand remains high and with the removal of felling and transit permits and the denationalization of

222 Annex 21 Page 6 of 10 more species is likely to grow, despite the fall in Eucalyptus prices. The objective of the program is to provide private farmers with access to superior plant material and to technical advice. Staff would be based in the Extension and Research Centers. Most of the planting is expected to be on private irrigated, land by wealthier farmers faced with excess land or labor management problems. Planting on community land would also be encouraged, but estimates of the benefits or uptakes has not been made. The program is meant to be market-led and therefore no targets have been set. The approach used has been to estimate the break-even level of uptake required to obtain a ERR of 12% and then to determine if this is a feasible level in terms of staff workloads and population demand. 23. Incremental Benefits. Benefits have been estimated for two models based on block planting of one ha by large and medium farmers and strip planting along bunds and paths by small and marginal farmers. The block model assumes a mix of species: Eucalyptus (50%), Supabol (20%), Bamboo (20%) and Teak/Sissoo (10%), although, in practice, individual farmers are likely to plant a single species. Most of the land would be irrigated (75%) and the opportunity cost of planting trees is valued by means of the loss in annual crop, represented by maize. Strip plantations of 100 trees are assumed to have a mix of Eucalyptus (50%) and Acacia Nilotica (50%) representing irrigated and rainfed situations, respectively. The agricultural area/yield lost by planting trees is estimated to be 2% of one hectare of maize. Fruit trees are also highly demanded especially for homestead gardens, and it is assumed that each adopting farmer would plant three fruit trees per ha or per strip. 24. Adoption and Phasing. The actual phasing of this component would be demanddriven. However, for planning purposes it was conservatively estimated that 0.25% of the population would participate in farm forestry programs, phased over the four-year project period. 25. Overall Analysis. Assuming adoption by 0.25% of the population the ERR for this component is estimated at 14% and NPV of Rs. 25 million. The returns are sensitive to the rate of adoption and changes in future product prices. Over a 45 year time horizon, the ERR would be 13%, and an NPV of Rs. 23 million. Overall Project Returns, Externalities and Sensitivity Analysis 26. Overall Project Returns. The analysis of the whole project investment excluding the bio-diversity and research components using the assumptions set out in this annex was estimated to give an ERR of 11.5% and an NPV of Rs million (12 percent, 135 years). As mentioned previously, each component's rate of return is sensitive to the shadow wage rate, with a switching value of Rs. 15 per day for the overall project. An ERR over a 45-year time horizon was also calculated to be 11I% and an NPV of Rs million (12 percent, 45 years). Despite an overall project ERR that is less than the OCC, investments in forestry tend to have greater, unquantifiable, externalities compared to other types of investment. These benefits are grouped into two categories: (a) environmental externalities and (b) equity

223 Annex 21 Page 7 of 10 considerations, which are discussed in turn below, before analyzing the sensitivity of the overall results to changes in costs and benefit assumptions. 27. Environmental Externalities. The environmental benefits derived from the maintenance of forest lands are difficult to quantify in terms of level, direction and extent and thereafter to attribute economic values. Nonetheless, the project is likely to have an impact on: CO 2 absorption. This is greatest in young fast-growing trees. Ultimately, net benefits depend on the use to which the harvested wood has been used - fuelwood merely releasing the CO 2 back into the atmosphere, while wood used for house construction and furniture acts as a carbon sink. Meso-climate. The existence of contiguous forest (10 km deep) is thought to have an impact on the climate in the immediate area (perhaps up to 100 km away) in terms of reducing maximum temperatures. This is beneficial to crop growth where there is a danger of crop damage due to extreme temperatures. Rainfall. Evapo-transpiration from trees provides increased rainfall in areas affected by wind patterns; in practice the benefit from this is marginal on any particular hectare and is only additional where there is sufficient groundwater. Soil erosion. The direction of these 'benefits' are highly contestable; the costs associated with de-silting have to be offset by the gains in production from the annual replenishment of top soils. Water harvesting. The presence of trees in the watershed may reduce the run off into reservoirs and other storage devices. River flow. Water flow into rivers, although perhaps reduced, is better regulated by the presence of trees in the catchment since water absorbed by trees is released more slowly into the flow. This reduces the risks of extreme flooding and extends the flow season. 28. Sensitivity Analysis: Break-even Level of Externalities. The break-even level of benefits required to achieve a 12% ERR was estimated to compare with estimates of externalities. This was approached by means of an environmental premium, associated with each hectare included in the project, and reflecting the flow of external benefits. To annualize this flow of benefits, it is assumed that the flow begins 5 years after planting and lasts for 20 years, with a discount rate equal to the OCC of 12%. The annualized value is very sensitive to the delay in the start of benefit flows. Nonetheless, under the assumptions set out earlier, the annual flow of environmental benefits required to obtain an OCC of 12% would need to be about Rs.368 per year per ha or US$ 12 per ha per annum. Various

224 Annex 21 Page 8 of 10 estimates in the literature of the value of carbon sequestration from forest conservation would indicate that this environmental service alone could account for a US$ 12 per ha. per annum environmental premium from this project. Breakeven Annual Flow of Environmental Benefits Present value of environmental benefits per ha Rs.2750 Environmental discount rate 12% Delay in onset of environmental values Duration of benefit flows Annualized equivalent (12%, 20 years) 5 years 20 years Rs.368/hatyear (US$12/ha /year) 29. Sensitivity Analysis. The overall returns to the project are quite insensitive to increases in project costs (Table 5): a 25% increase in costs (overhead costs, excluding planting) reduces the ERR to 11% and a 50% increase reduces the ERR to slightly less than 11% (10.7%). A reduction in the stream of incremental benefits (net of planting costs) by 25% reduces the ERR to 11% and a reduction of 50% to 10%. A 25% increase in costs and a 25% reduction in benefits reduces the ERR to 10%. This would nearly double the annual environmental premium required to obtain a 12% ERR from Rs. 376 to Rs. 703 per ha, which would still maintain the enviornmental premium in a reasonable range. The reason why the ERR is so relatively insensitive to these changes is due to the fact that the incremental benefits (net of planting costs) are negative during the initial years of the analysis, followed by a long time-span of growing incremental benefits. Switching values by project component are presented in Table Summary. Although the project ERR is only 11.5%, the benefits associated with environmental externalities have not been included. These would raise the overall rate of return and the analysis suggests that the level of environmental benefits required to obtain a 12% rate of return are modest. However, the analysis is sensitive to assumptions about existing land use and productivity - for which there are only limited data at present. The success of the project depends on the financial viability of the proposed investments, which is discussed below.

225 Annex 21 Page 9 of 10 Financial Viability 31. Background. Project implementation assumes that the relationship with project clients would be based, in the case of the VRD program, on a partnership between the Forest Department and VFCs and, in the case of the FFE program, would be driven entirely by market conditions. In this section the financial viability to project clients of these programs is reviewed, using the same models as were developed for the economic analysis. 32. VRDP. The project operates within the framework of the Government Order on Joint Forest Management, with sharing of responsibility for management of forest between the Forest Department and forest users as represented by Village Forest Committee (VFC). The incentive for individuals and communities to participate in such an arrangement need to be carefully examined, particularly since the effect of this change would be to transfer responsibility to a new body, the VFC. Under the project, the VFC would gain economic benefits from their share of planting benefits as well as financial benefits which would be accumulated from VRDP funds. However, for existing users there would be economic costs - these would fall on two main groups of stakeholders: fuelwood head-loaders and grazers. Before looking at the effect on each of these groups, the returns to the community, from the VRDP funds, are discussed. 33. Financial Returns to VRDP. Protection of forest areas initially would reduce the economic offtake, or increase collection and grazing costs, although the VFC would eventually gain from the share of produce as set out in the Government Order. The analysis is based on a model village, managing 300 ha of forest with a mix of silvicultural practices, and benefiting from the income derived from forest protection funds. The FRR on this investment is 60% to a typical village under the assumptions set out above (Table 7). The cashflow is negative for the first six years reflecting the opportunity cost of taking land out of current production and the increased costs of collecting fue!wood further away or grazing animals over wider areas. However, taken together with the income derived from the VRDP funds, the cashflow is positive in all years. Further, additional employment income from the Forest Department would be available to villagers as a result of planting activities. 34. VRDP Funds. The benefits to each VFC consist of: (a) VRDP funds consisting of cash for protection management of the forest area assigne(i to the village; and (b) their share of intermediate (100%) and final (30%) outputs under JFNM. The actual amount flowing into the VRDP funds depends on the area to be managed and planted as agreed in the JFM plan and the cost of protection which would otherwise have been paid by the Forest Department. Protection costs are based on the cost of Cattle-proof trenches (CPTs) and Watch and Ward over a period of 7 years. This amounts to approximately Rs.2,100 per ha, that is, Rs.300 per ha per year. On the basis of the assumptions used for budgeting (a protected area of 300 ha per village, with protection payments over 7 years the VRDP would grow by Rs.90,000 per year, reaching Rs.630,000 after seven years. Arrangements for disbursing and accounting for this money are discussed in Annex 5.) The VFC can use part of this money to pay for watch

226 Annex 21 Page 10 of 10 and ward directly. 35. Individual Gainers/Losers from VRD. In practice, this analysis depends on the existing land-use productivity in any particular village. Further, it must be recognized that many existing users do not have legitimate rights to the economic benefits they currently derive the success of the project. Analysis of the incentives to sub-groups within the VFC would need to be carried out village by village, since the suczess of the project depends on specific economic losers (grazers, headloaders, etc) either b&nrg compensated for their loss or being forced to forego their livelihood. Although transfer of ownership' and an explicit say in forest management to the VFCs is expected to provide mnce itives for external pressure on the forest to be resisted by the community, there would still be strong pressure by sub-groups within the village especially given the individual incentivi s for headloading and grazing. 36. FFEP. The FFEP program is market-oriented in tha' farmers would make their own choices as to whether to participate in the program. Experience from the social forestry program suggests that while most farmers, particularly marginal and small farmers, are not interested in farm forestry, there are some farmers for whom private tree planting is financially attractive. This mostly reflects the owners concern about managing labor, especially where the owner is employed elsewhere. As a result, direct economic analysis of the costs and benefits of typical planting models is unlikely to capture the decision-making process for these farmers. Nonetheless, the models developed for the economic analysis and based on poor quality land show relatively high financial returds to the individual farmer. The FRR falls to 12% if trees were planted on better quality land with expected maize yields of 2,500 kg per ha, that is, 2.25 times the base case assumption. 37. Equity Considerations. Most of the people living in the project area are tribal people living in some of the most remote, fringe, areas of the state Investment in forest development is therefore one of the few opportunities to inject resources into these areas. The production technologies are based upon sustainable harvests of products showing positive growth rates in national and international demand. As a result, the project would increase sustainable economic opportunities for some of the lowest opportunity cost labor in the state.

227 Annex 21 Table 1 Planting Programs Assisted Regeneration of Private Natural Degraded Forest Forestry and Regeneration Extension Institutions Forest Village Forest Private Protection Committee Farmers Committee Planning process Working plans JFM Market Forest type Closed Open Private land >40% <40% Objectives Forest Dept/ Production/ Conservation Conservatio Government conservation n Partners/ Protection Production Production Clients Outputs to Nistar yes no Community Intermediate no yes 100% Final no 30% 100% Outputs to Final 100% 70% Forest Department Incentives/ Watch and Watch and ward - transfers ward Fire protection Fire protection labour labour Cattle-proof trench (CPT) Models/ Selection Coppice (100%) Block Activities Coppice Coppice (50%) Strip Bamboo Replanting (100%) Fruit Silvi-pastorial Bamboo Table ]. Project Planting Programs

228 Annex 21 Table 2 Unit Financial Economie Price Price Labour Government rate Workday Market rate Workday Plant material Seeds kg Cuttings kg Stumps kg Legumes/grass kg Seedlings-tree No Seedlings-bamboo No Fertilizer DAP kg Conditioner kg FYM kg Pesticide kg Wood products Poles pole Timber- teak cmt 12, , Timber- misc cmt 4, , Timber- mixed cmt 4, , Fuelwood cmt Bamboo cmt Contour products GrassesAegumes tonne Fodder/topfeed tonne Twigs/branches tonne Fruit Leaves Other Rs Rs Rs Grazing tonne Table 2. Financial and economic prices (July 1994) SCF = 0.90

229 Project Year Costs (a) Project Costs (85) (80) (93) (95) (non planting) (b) Establishment Costs VRDP (17) (39) (62) (96) (29) (29)( (29) (29) (29) ANR (26) (51) (51) (51) (5) (5) (5) (5) (5) Private (5) (13) (24) (34) Total (133) (184) (230) (276) (34) (34) (34) (34) (34) Incremental Benefits (a) Planting benefits VRDP (10) (40) (98) (176) (207) (221) (225) (217) (193) (163) (122) (28) ANR (231) (480) (497) (292) Private (1) (3) (7) (13) (7) (5) (0) (b) Ecodevelopment Total (242) (522) (603) (481) (151) (84) (I 1) (48) (c) Environmental benefits TOTAL (375) (706) (832) (758) (185) (118) ( 11) (48) Table 3. Net Incremental Benefits (Rs. millions) I-30 M X

230 Period (Years) Mean Annual Net ,475 1,540 2,600 4, ,651 1, ,524 4,977 Incremental Benefit. _ Table 4. Mean annual net incremental economic benefits after year 15. XD (D X

231 Anne: 21 Table 5 ERR (135 years) Change in Benefits Base - 25 % - 50 % Base 11.5 % 10.9 % 9.9 % Change In costs +25% 11.0 % 10.4 % 9.5 % +50% 10.7 % 10.0 % 9.0 % ERR (45 years) Change in Benefits Base - 25 % - 50 % Base 11.1 % 10.5 % 9.5 % Change in costs +25% 10.6 % 9.9 % 8.8 % +50% 10.2 % 9.5 % 8.3 % Table 5. Sensitivity Analysis

232 Annex 21 Table 6 Benefits Component Base Case Switing Values2 Percentage NPV at 12% NPV at 12% ERR Change Discount Rate for Project ANR ,940 VRDP EFEP Ecodevelopment ,213 Costs Total Beneflts ANR VRDP FFEP Non-Planting Total Costs Net Benefit -194 Table 6. Sensitivity Analysis - Switching Values 2 Switching value = NPV of benefits (costs) for that component which would provide 12% ERR for the entire project. 3 Includes costs of ecodevelopment and institutional support

233 Project Year Cash Fund from Protection Gross receipts 90,000 90,000 90,000 90,000 90,000 90,000 90,000 Cumulative total 90, , , , , , ,000 Incremental Benefits (share) Total: Annual (16,300) (2,733) (5,533) (5,667) (8,467) 16,267 74,959 Total: Cumulative (16,300) (19,033) (24,567) (30,233) (38,700) (22,433) 52,526 Employment Income Total: Annual 69, , , , , , ,849 Total: Cumulative 69, , , , , , ,956 Total Benefits Production (share) (16,300) (2,733) (5,533) (5,667) (8,467) 16,267 74,959 Protection 90,000 90,000 90,000 90,000 90,000 90,000 90,000 Production and Protection 73,700 87,267 84,467 84,333 81, , ,959 Wage employment 69, , , , , , ,849 TOTAL 142, , , , , , ,809 Table 7. Village Resource Development Program Cashflows (Rs.) 0 x D I-.X

234

235 Annex 22 Page 1 of 4 INDIA MADHYA PRADESH FORESTRY PROJECT Environmental Review 1. The project was subject to an environmental review based on field inspections of operations which would be undertaken under the project and review of relevant documents including Forest Working Plans. The objective of the review was: (a) to evaluate the environmental impact potentials of particular forest and protected area management technologies which could be implemented under the project; and, (b) the degree to which the project addresses environmental issues at the State and National levels. Environmental Impact Potentials 2. Activities having environmental impact potential include : (a) PA management activities; (b) forest management activities; and, (c) VRDP/Ecodevelopment activities. 3. PA Management Activities. Activities to be supported in the 12 priority PAs include: survey and demarcation of boundaries; provision of equipment; construction of guard posts and patrolling posts; rehabilitation of existing structures; restoration of degraded habitats; improvement of water supplies; and road improvements. All are very low impact activities involving limited land disturbance. Restoration of degraded habitats would mainly consist of activities such as weed control and encouragement of regeneration of native species. The main weed is lantana and the control method comprises uprooting with follow up weeding in each of the subsequent two years. Where necessary, vegetative soil conservation works are applied. The use of all herbicides and pesticides is banned in PAs. Improvement of water supplies typically would involve de-silting of natural stream-bed hollows and construction of small check dams. Check dams are built in accordance to a standard design having quite massive foundations well keyed into the stream bank. All construction is done by hand during the dry season so construction impacts are very limited. All roads in PAs are constructed at grade and the design provides for table drains on both sides and dry stone stream crossings. Again, adverse impact potential is very limited. 4. Forest Management Activities. Two broad forest management strategies are provided for: (a) Rehabilitation of Degraded Forests (RDF) to maximize biomass production in degraded open forests (i.e. <40% cover). Silvicultural treatments will range from 100% coppice resuscitation to 100% planting (where coppiceable rootstock is not available) with various combinations in between. Bamboo will be replanted and