J
PROVISIONAL MILITARY GOVERNMENT OF SOCIALIST ETHIOPIA
I
RELIEF AND REHABILITATION COMMISSION
LOWER DIDESSA
e-scale Rainfed Settlement Projrut
NOVEMBER 1980x/3-M
%
r
This        report referred to
Annex -        1
Annex - 2
Annex - 3
Annex - 4
Annex - 5
is    based    on    the    following    Annexes    which    could    be for details.
Government       Policies,       Prograrrmes       and       Institutions for Agricultural Development and Settlement.
Land Use Proposals
Agricultural Development
Forestry Development and Soil Conservation Farm Mechanization
f **★**★***-*★ ★*★★*★★★★*★*★*♦****★*★*******-*★*★★
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**
This is a restricted document and should
i* 
« 
* * 
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not be reproduced in any forin. It is for
the exclusive use of the Relief and Re
habilitation Commission.
^★★★******* **★*******★*-*****★*★★*********** •****★♦<
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** 
**MAIN REPORT
This report was prepared by the National staff of the Relief and Rehabilitation Coonission.and the Inter national staff of the UNDP/FAO Project Eth/79/007, Assistance to the Planning and Implementation of Large Scale Settlement for Rural Development in consultation with the FAO, Investment Centre.
■★*♦★*★***★****★**(")
COUNTRY DATA
1.       Area
2.       Population
Growth Rate
Urban ■
Rural
3.       Official Language
4.       Adult Literacy Rate
5. Government Structure
: 1,220,000 square kilometers : 30,000,000 (1979 estimate)
: 2.5 percent
10     percent
:     90     percent
: Amharic
: 11* : 9* male, 2* female
a)     Provisional Military Administrative Council (PMAC);
b)     Council of Ministers of Provisional Military Administrative
Councili
c)     National Revolutionary Development Campaign (NRDC) and Central Planning Supreme Council (CPSC);
d)     Ministries and Commissions
6.       GDP 1976/77 (Current Market Prices)
(US$3,297.7) millions
7.       GDP per Capita 1976/77
8. Real GDP Growth Rate at 1960/61 Prices :
(1972/73 - 1976/77)
9 « Sectional Distribution of GDP 1975/76 *
Agriculture
Manufacturing
Buildings and Construction
:
Birr 6,826.3
Birr 227.5 (US$109.9)
0.9*
48.5
4.9
Handicrafts and Small-Scale Industries
Wholesale and Retail Trade
Transport and Conmunications
4.6
8.9
6.6
Other
Total
22.4
100.00(iii)
10. Foreign Trade (1978)
Export
(Birr 1000)
Import
(Birr 1000)
Products.-.-^-
a.   Jtfffee
Products
502,298
Machinery &
300.274
Motor Vehicles
b.    Hides
4 Skins
66,262
Chemicals
108,040
c.    Pulses
17,303
Textiles
100,693
d.    Oil Seeds
12,245
Metals and Metal
64,885
e. Oil.Seed
cake
3,901
Manufacturing
Electrical
Material
63,901
f.    Other
30,314
Other
304,939
Total
632,323
(US$305,470,000)
Total
942,732
(US$455,426
,000)
,Jproject objective
GOVT. IMPLEMENTING AGENCY
(iv)
PROJECT FACTS
:       Rainfed Agricultural development through planned settlement, improvement of income distribution, minimizing rural poverty, unemployment,& under-employment, foreign exchange earning, rehabilitation of drought prone areas and establishment of self-sus taining agricultural settlement models for replication in other areas.
:       Relief and Rehabilitation Commission
PROJECT LOCATION
Lower    Didessa strative Region.
Valley 
of
the
Wollega
Admini
TOTAL PROJECT AREA
:
71,760 ha
AGRO-ECOLOGY OF THE
:
Very suitable for Rainfed mecha
nized/drauchr.
PROJECT AREA
animal      mixed      farming
(Land      capability 
study,
SOGREAH, 1978).
PLACE OF ORIGIN OF
SETTLERS
:
Drought affected areas.
NUMBER OF SETTLERS
15.000
FAMILY SIZE
:
4.4 heads (Adults and children)
JOTAL PROJECT POPULATION                 :
66,000 heads
ECONOMIC ACTIVITY OF
:
Farming 1 but presently inactive
due to very
Maehlers
low land : man ratio and natural
hazards.(V)
ECONOMIC POSITION OF THE SETTLERS
Well below poverty  line, frequently  touching death line and largely  living on relief f000 aid provided by  the Relief and Rehabilitate Conmission.
SMALLEST SETTLEMENT ADMINISTRATIVE BODY NUMBER OF SETTLEMENT UNITS
:      Settlement Unit
: = 30
= Number of cooperative farms.
NUMBER OF FARM FAMILIES PER SETTLEMENT UNIT
LAND USE PLAN OF A SETTLEMENT UNIT
: = 500
: - 1000 ha for cooperative crop production
-  50 ha for individual farming (1000 per settler - homestead).
-  136 ha for forestry development
-  200 ha for pasture production.
-  30 ha for village facilities
-  70 ha for conservation strips.
COOPERATIVE CROP PRODUCTION :      Mainly food crops: maize, sorghum haricot bean and pepper.
HOMESTEAD FARMING
:■ Both subsidiary food crops and livestock Crop cultivation would concentrate on vegetables, green maize and fruits, would be the initial livestock,S03*'’
and oxen would be introduced gradually-
poiiltc r..
infrastructural and institutional facilities
settlement schedule
(vi)
:      All weather roads and fair weather roads connecting the major cities to unit centres primary schools, health stations, storag- marketing and credit, farm input and con sumer conmodlty supply services at unit centre level, veterinary and extension services etc.
First year = 5 settlement units =2,500 fam
Second "      = 5             " Third "          = 10
Fourth "        =10
n           =2,500 n
■           =5,000      11
ii                   =5,000 H
PROJECT COST:
-  Baseline cost minus the repayment during the disbursement period :
-  Baseline cost alonp
-  Baseline cost plus 10% contingencies
-  Cost to the government* *
-  Credit to cooperatives*
-  Credit to individual settlers
-  Cost of civil works*
-  Cost of machineries, vehicles, equipments etc?
-  Cost of farm supplies*
' Running costs of vehicles, farm machineries, generators and
*ater pumps*
■ Costs of local skilled and un billed      personnels      excluding settlers*
Total foreign exchange cost^ :
’
:
:
:
:
;
Birr 8r.8O nfi-WWor US$39.52 million
Birr 103.42 million or US$49.96 million
Birr   113.76 million      or  US$54.96 million Birr      59.40 million      ii          It        -26.09    n Birr      46.14 million       N        a          20.27    u Birr        8.22 million       H        ii               3.61     M Birr      29.04 million      n        0          14.03    a
Birr 20.95 million u 11 10.12 n Birr 21.36 million n 11 10.32 W Birr 11.70 million u 11 5;65 ■' w
Birr        9.49 million      M       M            4.59    •J 47.7%.
*1(vii)
FINANCIAL RESULTS
- Average annual income per settler
family from all the enterprises:-
Year
5:
Year
7:
Year
12:
Birr
II
II
1332/USS644
1469/US$710
1880/USS908
- Average income per head (per caput);
Year
5:
II
7:
II
12:
II                    303/US5146 II                       333/ " 161 II                       427/ " 206
- Average income per settler family from cooperative
Year
5:
11
7:
II
12:
- Average income per settler family
from homestead
Year
5:
II
7:
II
12:
- Renumeration per manday from the
labour contribution to cooperative
s:Year
5:
II
7:
II
12:
- Cash balance per settler family I
Year
5:
M
7:
Birr  1163/USS562
II               1206/USS583
II               1617/USS781
Birr    352/US5170
II                   352/USS170 II                   352/USS170
II              4.07/USS1.97
II              4.19/USJ2.02
II               5.58/US$2.70
II                    743/US$359
II                        848/ "410
II
12:
II
1085/ " 524
★
Internal Financial Rate of Return of a single cooperative : 33.6%
labour contributions of the cooperatives to social components such as watc Health and Education are also included.(viii)
-  *IFRR with 10% increase in costs per cooperative farm :                                .i.z27.2%
-  *IFRR with 10% reduction in revenue per cooperative farm : : 26.6% -*IFRR with 10% reduction in revenue and 10% increase in costs : 20.7%
" The Project is financially viable.
BENEFITS AND JUSTIFICATION
-  Internal Economic Rate of Return of the project : greater than: 50%
-   IRR with the economic costs and benefit stream based on
financial farm gate prices
-  IRR with 20% increase in economic costs and the benefit stream estimated using economic prices
-   IRR with 20% reduction in the economic revenue and with economic costs
IRR  with  20%  increase  in  economic  costs  and  20% reduction   in   the   economic   revenue
.’.T The Project is economically justifiable
: 32.29%
: 44.92%
: 42.87%
34.18%
->
^aGour contribution of the cooperatives to social components such as Water Supply, Health and Education also included.
-r(ix)
.r
SUMMARY AND CONCLUSION
------ -----------------—---------------------------------------
••
r
The aim of Lower 01dessa Large Scale Rainfed Settlement Project is to establish a self-sustaining agricultural settlement model for
replication in other areas by settling farm-families who are unable
to meet their subsistance requirements due to natural calamities coupled with very low land: man ratio and largely living on relief food supplied
by the Government through Relief and Rehabilitation Cormission. The project area is located i’n the Lower Didessa Valley of the Wollega Administrative Region and the proposal makes provision for the resettle ment of 15,000 farm families in a gross area of 71,760 ha. The proposed project would also minimize the existing food deficits in the country and further help to earn foreign exchange both by import substitution and
export promotion.
1.2                      Settlement structure would be in line with the policy of Relief
and Rehabilitation Commission so that 500 farm families would be
grouped together as a settlement unit. Hence there would be 30
settlement units in the whole project each with all weather road
access, water supply and essential services such as education, human
and animal health, extension, supply of farm inputs and consumer
goods, marketing of farm produces and other machinery services.
The land use plan for each unit of 500 families provides for 50 ha
to be allocated for individual household plots, 1,000 ha for coopera
tive crop production, 200 ha for cooperative grazing, 136 ha for
cooperative woodlots, 70 ha for conservation strips and 30 ha for
village facilities.
3                     Relief and Rehabilitation Commission (RRC) would be the Government Agency responsible for the implementation and management of the project until the time the settlers take over fully through their own associations 
the complete management of their settlement units. In order to facilitate close administration RRC would appoint an organization which is physically located in the project area and having high degree of autonomy with a Project Manager as the chief executive. Services of the project organize would be delivered both at project centre and unit centre levels.I
I4
The Project would be implemented over a period of five years
and the estimated total cost for the first five years 1s US$49.96
million excluding contingency allowance, custom duties and other
taxes. Foreign exchange component 1s 47.7%. Internal Financial
Rate of Return of iniindlvldual.cooperativewas.estimated at.33J55%.
1,5
At the end of the fifth year 15,000 families will have been
settled on 71,760 ha of land and involved in Self-sustaining agri-
cultutal production increasing the annual net income per settler
family from Birr 1332. in year 5 to Birr 1469 in year 7 and Birr
1880 in year 12. The overall economic rate of return for the project
over 20 years would be greater than 50%. Economic rate of return
with 20% increase in costs and 20% reduction in benefits would be
34.18%. In this analysis the border prices were considered as
efficiency prices and the foreign exchange component of all costs were
considered as reflecting the border prices; since taxes have been
excluded. Unskilled farm labour was shadow priced at 50% of the
market wage rate. For other costs standard conversion factor 0.75
was adopted.
1-6
Settlement will have been possible due to the elimination of
human and animal diseases which fnow tend to make the areas inhabitable.
Surplus production will be able to reach markets via the newly con
structed road system which connects the project area to all weather
roads. The ultimate beneficiary of the project will be the small
farmers organized into producer cooperatives each comprising of 500
farm families. Positive effects on the beneficiaries will include
I
enjoyment of a higher quality of life, entrance into cash economy
from a subsistence level, an Income well above the average small
Farmers 1n Ethiopia and the participation in social and political
decision-making at the basic or grass root level of Ethiopian Govern*
went.TABLE OF CONTENTS
■’ ”
LOCATION MAP
COUNTRY DATA
PROJECT FACTS
SUMMARY AND CONCLUSION
TABLE OF CONTENTS
CHAPTER - 1        INTRODUCTION
CHAPTER - 2 BACKGROUND
2.1     General
2.2     Agricultural Sector
2.3     Development Strategy and Priorities 
2.4     Institutions 
CHAPTER - 3 PROJECT RATIONALE
CHAPTER - 4 THE PROJECT AREA
4.1     Location
4.2     Climate
4.3     Geology, Soils and Topography 
4.4     Water Resources 
", ■
4.5     Land Use, Farming Systems and Cropping Pattern 10
4.6     Socio-Economic Conditions 
4.7      Infrastructure
4.8     Institutions 
4.9      Input Supply and Produce    Marketing CHAPTER - 5 THE PROJECT
5.1     Project Description
5.2     Detailed Features 
5.2.1       General
5.2.2       Land Clearing 5.2.3      Mechanization 5.2.4       Development
5.2.5       Soil Conservation 5.2.6       Afforestation
5.2.7       Cattle
5.2.8       Homesteads 
5.2.9       Roads 
5.2.10 Water Supply 
,
• Page O')
(") (iv)
O'x) (xi) 1
3
3
4
■5
5
6
9
9
9
10
10
11
12
13
13
14
14
17
17
18
19
22
24
26
28
29
31 33(xii)
5.2.11     Veterinary Services and Tsetse Control 5.2.12       Health
5.2.13       Education
5.2.14       Management and Extension 5.2.15       Technical Assistance
5.2.16       Subsistence in First Year ,3     Cost Estimates
Page
35
37
38
39
41
' 42
42
5.3.1
Project Costs
42
5.3.2
Cost of Individual Project Components
42
5.3.3
Cost by Expenditure Categories
45
5.3.4
Phasing of Project Costs
49
5.3.5
Credits
51
5.3.6
Non-Project Costs
52
CHAPTER -
AGRICULTURAL DEVELOPMENT
1    General
2    Agricultural Activities
3    Cooperative Crop Production
53
53
54
55
6.3.1
Land Use
55
6.3.2
Crop Rotation in Cooperative Farm
55
6.3.3
Land Clearing
56
6.3.4
Soil Conservation
56
6.3.5
First Ploughing
56
6.3.6
Slashing
57
6.3.7
Chisel Ploughing
57
6.3.8
Harrowing
57
6.3.9
Crop Varieties
58
6.3.10
Time of Stand Establishment
58
6.3.11
Crop Establishment
58
6.3.12
Fertilizer Application
59
6.3.13
Plant Protection
60
6.3.14
Harvesting
60
6.3.15
Farm Transport
61
6.3.16       Threshing and Shelling 6.3.17        Production
61
62(xiii)
6.4    Cooperative Livestock Production
6.5    Homestead Farming
CHAPTER - 7 ORGANIZATION AND MANAGEMENT
Page
62
63
65
7.1
General Aspects
65
7.2
Proposed Organization
66
7.2.1 Responsibilities of the Organization
66
7.2.2 Structure of the Organization
68
7.2.3 The Project Manager's Office
69
7.2.4 Monitoring and Evaluation Unit
69
7.2.5 Civil Engineering Division
70
7.2.6 Agricultural Development Division
71
7.2.7 Coop., Training and Marketing Division
72
7.2.8 Administration Division
73
7.2.9 Finance Division
74
7.3    Participation of Settlers in the Settlement Activities
7.4    Producers' Cooperatives
CHAPTER - 8 PRODUCTION, MARKETING AND PRICES
8.1     Production
8.1.1 General
8.1.2 Yields
8.1.3 Production
8.2    Home Consumption
8.3    Marketing
8.3.1         Marketing Requirement 8.3.2         Marketing Situation
8.3.3 Marketing Channels
8.4    Prices
8.4.1 Farm Gate Prices 8.4.2 Economic Prices
75
75
77
77
77
77
77
78
79
79
80
80
8C 81*.
(xiv)
CHAPTER - 9           FINANCIAL RESULTS
9.1 Cooperative Units
9.1.1 Gross Revenue
9.1.2 Cash Flow
9.1.3 Financial Rate of Return
9.2 Individual Settlers
9.2.1 Gross Revenue
9.2.2 Cash Flow
9.2.3 Cash Income
CHAPTER - 10         BENEFITS ANO JUSTIFICATION 10.1 Benefits
10.2 Economic Analysis
10.2.1 Adjustments
10.2.2 Cost and Benefits Streams 10.3 Conclusion
■ Page
83
83
83
83
84
84
84
85
85
87
87
88
88
89
89. ' . “8-
k,
it
E.r.e
jrrai'ts? 't-v. -u ••*-<>’    '   20"
-’.
L.i <2
.
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’ XO? S.Oi
r.s.-:z
"ok . C.GICHAPTER - 1
INTRODUCTION
],1
The frequent occurrences of droughts in the north-east escarp ment of the highlands of Ethiopia has caused high food deficits,
extreme poverty and even loss of lives to a large number of people especially in the Wollo and Tigre Administrative Regions. Matters came to a head 1n the devastating drought of 1973/74, when, in these regions, about 200,000 people died as a result of the concurrent famine. The World Bank, in 1974, during the formulation of the
Drought Areas Rehabilitation Project, 485-ET, recognised that there was a serious problem of over-population in the area, under the existing
land use systems, and therefore allocated funds for the necessary data collection in areas for resettlement were thought to exist.
1.2                      Under the same World Bank Credit, a high level survey and project preparation mission was mounted in late 1974 under the chairmanship of Dr. Leslie Brown, the noted ecologist. The mission report (January 1975) spelt out the requirements for a sound resettlement programme in more detail, involving the delineation of under-populated areas with slopes of less than 20% and rainfall of over 700 mm; and the collection
of basic knowledge of such areas to enable the planning of their rational exploitation.
!-3
2
2
The Relief and Rehabilitation Commission, using I.D.A. Credit 485-ET funds, and with technical assistance from the UNDP/FAO Project ETH/74/005, carried out, in early 1976, a 1:20,000 airphoto coverage of 7,500 Km  of lands potentially suitable for resettlement; and selected 5,000 Km  of
this land, located 1n the Lower Didessa Valley, for further soil studies.
These studies were carried out by SOGREAH in 1978/79, and consisted of
a reconnaisance land evaluation of the whole area, from which 100,000 ha
of the most suitable land was selected for study at semi-detailed intensity. The soil studies are supported by reconwendations covering cropping patterns, land use alternatives, land development and management.2
1.4                      Completion of these preparatory studies coincided with Government's, decision, in the second National Revolutionary Development Campaign,
to find a permanent solution to the twin problems of drought and over population, through the proper development of under-utilised lands. Accordingly, the Permanent Secretary of the Ministry of Agriculture directed the former Settlement Authority, with the assistance of the UNDP/FAO Project ETH/75/025 (presently ETH/79/007 and ETH/80/015) to prepare a project proposal for Lower Didessa Valley to settle 15,000 families from worst affected areas and provide them with stable live lihood based mainly on agriculture.
1.5                     The UNDP/FAO Project together with the staff of Relief and Rehabilitation Commission and the various National and International consultants prepared ten technical annexes as suggested by FAO Investment Centre Mission in March 1979. These annexes and the main report were reviewed by the Project Department of the National Revolutionary Development Campaign and the Central Planning Supreme Council. Subsequently, the staff of FAO Investment Centre and the FAO technical divisions reviewed the same and discussions were held (with
the Ethiopian Delegation led by the Senior Deputy Commissioner of Relief and Rehabilitation Conuiission) in Rome, July, 1980.
1.6                      Following the discussions in Rome, another FAO Investment Centre Mission visited the country in August 1980 to assist in finalising
the main report and the annexes.
1.7                      This report embodies the views of Relief and Rehabilitation Conuiission and represents the request of Provisional Military Govern ment of Socialist Ethiopia for financial assistance in the develop ment of large scale settlement. .3 CHAPTER - 2 BACKGROUND
j GENERAL
2.1.1                    The total area of the country is about 1.22 million sq. km. The topography is characterized by high plateau (from 1,800 to
3,000 meters) with some mountain peaks exceeding 4,000 meters above sea level and the rift valley which divides the country from south to north-east. In spite of Ethiopia's location in the tropics, climatic conditions are affected more by the altitude than by the latitude which accounts for large variations in the type of crops, population distribution and the nature of economic activities carried out in the various regions.
2.1.2                    The estimated population of Ethiopia is 30 million with
an uneven distribution ranging in density from 2.2 persons/sq.km in Borena awraja to 220.1 persons per kilometer in Wolayita awraja. The population is predominantly rural with 87% of the population depending on agriculture for their livelihood. The labour force
is estimated at 15.8 million and the literacy rate is about 11%.
Per capita Income is presently estimated Birr 263 and is planned
to double during the next ten years.
2-1.3                    During the first year of the National Revolutionary Develop ment Campaign (1978/79), the Gross Domestic Project increased at the rate of 5.2% which is an improvement over the previous year which was 0.6% and is expected to grow by 7.3% in 1980/81 and by 9.9% annually in the next ten years.
The country is facing an unfavourable balance of trade, for example in 1977/76 exports grew by 19% while imports increased by 32%, thus resulting in a reduction of the foreign exchange reserve by some 261 million Birr.
•-4
2.2      AGRICULTURAL SECTOR
2.2.1                 The economy is dominated by agriculture which contributes about 50% of the Gross Domestic Product and 90% of all exports with coffee as the single most dominant item contributing 73%
to total export earnings. Due to diverse nature of the topo
graphy a wide range of cereal crops, pulses, vegetables and
oil seeds can be grown in Ethiopia. Although Ethiopia has the
largest number of livestock in Africa and the tenth in the world,
this sector of agriculture only makes a very minimal contribution
to the economy of the country.
2.2.2                Over 85 percent of the population are concentrated in the Southern portion of the highlands which constitutes only 20
percent of the country. The pressure on land coupled with in
efficient traditional farming methods and overgrazing by live
stock have resulted in severe erosions and loss of land pro
ductivity in the highlands. The situation is aggraviated by 
frequent occurrences of droughts and threats of locust destruction especially in the North-East of the country.
2.2.3                 There are, however, large tracks of land at the lower
altitudes which are sparsely populated due to adverse weather conditions and/or presence of endemic human and livestock diseases especially malaria and trypanosomiasis. Such areas in the West •.in-.i South West, where rainfall is above 1,000 mm per annum, could be developed for human settlements based on rainfed agriculture.
2.2.4                 The National Revolutionary Development Campaign was launched in 1978 with the main objective of increasing agricultural pro
duction. The Land Reform Proclamation of March 1975 permitted peasants, some of whom were landless, to utilize land that has hitherto been idle due to the old feudal land tenure system.5
The farmers have also been organized into peasant associations and producers' cooperative societies as a means of mobilizing the nation's human and material resources for productive purposes.
The Settlement Authority, which was created in 1976 to settle land less, nomads and urban unemployed, has now been merged with the Relief and Rehabilitation Commission to permit effective coordi nation. In the second National Revolutionary Development Campaign, settlement of people in the under-utilized areas, has been given
more emphasis as part of the increased production campaign and alleviation of rural poverty.
2.3   DEVELOPMENT STRATEGY AND PRIORITIES (See Annex 1)
The Government is committed to the elimination of poverty, hunger, disease and illiteracy through planned coordination and mobilization of resources. In this regard, the National Revolutionary Development Campaign and Central Planning Supreme Council was established with the objective of planning and spear-heading, the campaign for increasing the material pro duction in agriculture and industry and improving the distribution system.
The main emphasis is increase in production of food and basic necessities 
to reduce the country's dependence on imports. Priority will be given to
the under-privileged areas which have remained comparatively under-developed. In this context settlement of the worst affected people will continue to be
a major priority in the development programme as it will contribute to a large extent to the alleviation of poverty of the people from the poorer areas, increase in food production and improve the well-being of the people Government objectives and strategies are given in detail in annex 1.
24
-  institutions
Following the implementation of Land Reform Proclamation of March 1975, the existing institutions were reformed or new institutions were established in the agricultural sector to accelerate the rate of development. The Ministry of Agriculture.Ministry of State Farms Develop ment, Agricultural Marketing Corporation, Ethiopia Seed Corporation, Institute of Agricultural Research and Relief and Rehabilitation Connission are given in Annex 1.-6-
CHAPTER - 3
PROJECT RATIONALE
31                      Ethiopia will for a long time be dependent on agriculture for
foreign exchange earnings as well as for subsistence. Development of agriculture and increase in food production to reduce the food deficit';
and frequent occurrence of famine, are the major pirority in tne Govern
ment's development programmes. The second National Revolutionary Develop ment Campaign, has as its main theme, the increase in agricultural produc. ion to strengthen the country's economic base. Provision of infrastrucru
and services to the rural areas is also being seriously embarked upon fo stimulate and accelerate agricultural production.
3.2                     The over-population of peasants in the highlands of the country and the poor farming practices which lead to serious land degredation, coupled with frequent droughts, are major constraints to the speedy agricultural development in these areas. In the meantime, the sparse y populated lowlands, which have been under-utilized due to unfavourable climate and prevalence of human and animal disease, provide vast potenti for agricultural development. Settlement of people in under-utilized a •< will continue to be a major strategy in the Government's development pro gramme. The pressure on land in the highlands will be reduced to allo-, the rehabilitation and increase in the productivity of the degraded la:n.r while at the same time provide the opportunity for developing under-uti1 areas for increased agricultural production.
3.3
In addition to the human and animal diseases' constraints in the proposed settlement areas, the settlement activities are being limited by inadequate financial resources and necessary equipments in the country. The proposed project, therefore, is being considered necessary to provide the essential inputs required to permit the mobilization of the available land and human resources for achieving national economic and social objectives.7
3.4                       1° the establishment of settlements, much importance is attached to the development of a production structure that would not only 
guarantee a favourable minimum cash income but also include crops and animals. This will ensure that the settlers will produce
adequate and good quality food for the market and their own con sumption to reduce food deficit and malnutrition in the country. Thus, the project proposes the production of maize, sorghum and legumes, which grow favourably in the area, in addition to live-
,
J            •*
stock and poultry for the production of milk, eggs and meat. The
settlement is also made to include infrastructure and essential social
services e.g. water, health and education to ensure that the project
is integrated with the national economic systems and the settlers 
receive the services that are vital for their livelihood.
3.5                       Ethiopia is undergoing a social and economic revolution in which
much attention is being given to the well-being of the broad masses.
In    order    to    mobilize    the    population    more    effectively    for    production    ai;d provision    of    services,    it    is    considered    that    the    settlers    be    organized into     producers'     cooperatives.     The     cooperative     will,     therefore,     be     the basic     framework     for    settlers'    organization,    management     and    motivation. It   will   also   be   the   medium   through   which   the   natural   and   settlers'   re sources    can    be    pooled    together    to    give    economic    justification    for    the level and magnitude of the proposed managerial and economic inputs.
The 71,760 hectares of land selected in the Lower Didessa Valley represents the most suitable portion of the valley 
that has not been utilized. The valley was studied at the re connaissance and semi-detailed level by M/S Sogreah Consultants who recommended that over 100,000 hectares of land be considered as very suitable for large scale mechanized, rainfed production of
^arable crops, commonly grown in the area. Based on the Relief and Rehabilitation Commission settlement model, the area is considered adequate for 30 settlement units each with 500 settlers.8
The model settlement unit is also reckoned as an optimal entity in terms of management, economic unit and settlers organization. On this basis, 15,000 families, representing 75,000 people, would
be settled in the project area. Although this represents a small proportion of the seriously affected people, it should provide adequate experience in settlement that can be replicated in other similar areas.
3.7                     To enable a systematic and coordinated development of the project, the units will be opened in phases of 5 units in each
of the first and second years and 10 units each in the fourth
and fifth years. This gradual development should also allow for
staff development and necessary experience to develop and assist in the management of the project. Each unit will also be developed over a period of five years before being handed over to the settlers. This period is necessary to put all the unit land under production, complete construction of infrastructure and buildings, train the settlers and stabilize production and marketing systems.
3.8                     The Relief and Rehabilitation Commission is the agency responsible for coordinating international assistance for
relief and settlement activities in Ethiopia. It is, therefore, appropriate that this project be located and executed by the Commission.9
42
CHAPTER - 4
THE PROJECT AREA
4.1 LOCATION
The Project area is located to the North-east of the Lower Didessa/ Anger Valley in the Wollega Administrative Region between latitudes 9° 17’N and 9° 43'N and longitudes 36° 33'E and 36°55’E (See Map 4 of
Annex 2). The proposed project centre is at Anger Gutin, 75 km north
of the Regional Administrative headquarters which is 315 km from the national Capital, Addis Ababa,
The total project area is 71,760 hectares selected from an unuti lized area of the Valley studied at a reconniassance and partly at semidetailed level by M/S Sogreah Consultants in 1978, The area was recommended, on the basis of the land evaluation study, as being suit able for large-scale, mechanized production of arable crops adapted to the area. After a detailed aerial photo-analysis, the area was divid
ed into thirty units as detailed in Annex 2.
-  JLIMATE
The annual rainfall in the area ranges from 1325 rmi to 1650 mm. This quantity of rainfall is adequate to sustain the proposed crops of maize, sorghum, beans and pepper. The rainfall, however, is mono-modal beginning from April/May to end of November. The optimum planting period for the major grains is April/May, the onset of the rains. The
crop growing peirod, when precipitation exceeds half of total evapo transpiration, averages about 7 months from mid-April to mid-November. The period between November and April is very dry and supplementary irrigation is necessary to maintain annual crops during this period. Pasture may need to be preserved to sustain livestock production. The rainfall during June to September is often in excess of 240 mm monthly thus necessitating adequate soil conservation measures (see Annex 4) and normal farming operations are greatly retarded.10
4.3   GEOLOGY, SOILS AND TOPOGRAPHY
The commonest soils (rhodic ferralsols) are deep, red to reddish brown clays which may contain a wavy discontinuous gravel layer at varying depths beyond 50 cms. Although the main underlying geological strata consist of granites, gneisses and magmatites, the predominant soils are formed from clay col 1u-a11uvial deposit and occur on the low plateau and river interfluves which are almost flat to very gently sloping (2-3% slopes). Towards the river valleys the slopes become steeper (up to 5%). This is the predominant physiographic land unit
in the areas selected for settlement. The low river terraces and plateau depressions have seasonally waterlogged clays (gleysols) which become very hard and compact when dry and sticky when wet. These soils, however, occupy only 10 percent of the project area and they could be drained and developed for animal grazing (see Annex 2). The steep valley slopes and hill sides have a range of shallow to deep, reddish brown to yellowish brown clays with frequent rock out crops. Tnese lands are only suitable for forest reserves and reafforestation programmes.
4.4 WATER RESOURCES
The area is drained by the Anger River and its tributaries, es pecially Horo and Aleltu, which are permanent while most of the others are seasonal. The Anger River and tributaries would be the main source of surface water for domestic as well as agricultural water supplies (see Annex 8). In addition, ground water and springs occur
in the area although their capacities need to be determined before they can be developed for reliable use. Waterlogging is frequent in the river terraces and plateau depressions. In future, some of the areas could be developed into ponds for fish farming or water storage for supplementary irrigation (see Appendix 5 of Annex 2).
4.5     LAND USE, FARMING SYSTEMS AND CROPPING PATTERN
Because the area was previously uninhabited, little was being obtained from it apart from honey and wild game on which the native population, who are shifting cultivators, were subsisting. Presently it is estimated that there are about 1767. shifting cultivators in tit Lower Didessa Valley. In addition, thfe fringes of the valley were11
being cultivated by the highlanders for subsistence crops like maize, sorghum and beans. Since 1975, however, the area is being developed for large scale, mechanized State Farms and settlement (see map 4 of Annex 2).
There are presently six State Farms in the Valley and during ]g7?/ 80 the following areas ^were cultivated for various crops mainly 
maize, sorghum and beans:
State Farm
Didessa Djirma Bereda Belo Anger Uke
Total
1979/80 hectarage under crops 2,700
3,500 4,600 4,000 8,675 7,560
31,035
Three settlements  have also been developed in the valley. The number of settlers  and size of the schemes  are presently  as  follows (1980)< \
2
Settlement
Anger Gutin Dimtu
Number of Settlers 2,197
884
Didessa Kersa                               365
Total
4.6 SOCIO ECONOMIC CONDITIONS
3,446
1979/80 hectarage under crops
3,670 1,870
768 6,308
Since the 1975 Land Proclamation, all the land in Ethiopia has 
reverted from feudal ownership to the people under the control of the
Peasant Associations. There are 228 peasant associations 1n the five
Woredas adjacent to the proposed settlement area^.
This area, however, is largely unclaimed and most of the population and
^Source: 'Source:
(3) Source:
Ministry of State Farm Development
RRC 1980 figures
Ministry of Agriculture, June 1980 (Woredas: Gudeye Bile (42) Wayn Tuka (33), Gide Kiremu (73), Horo (52) and Amaru (28)).12
labour supply on the State Farms, come from outside the area. A large number of these people come from the drought affected areas of Wollo and Tigrai Administrative Regions and Kambata Awraja. A number of the original inhabitants have also been absorbed in the State Farms and settlements although a few still retain their homes near the project
area.
The labour force on the State Farms are living in camps construct ed by the State Farm Corporation and they receive essential services like health, water supplies and education from the Corporation. The settlers on settlement schemes, live in houses they construct but receive essential services from the Relief and Rehabilitation Com mission in a manner similar to that proposed in this project. Health, education and other services outside the State Farms and Settlement Projects are very limited and the farmers are essentially on their
own. There is also a malaria eradication programme for the area admi nistered by a health unit at Nekempt.
4.7   INFRASTRUCTURE
The main road from Addis Ababa through Nekempt to the Sudan Border links the project to the capital city of the country. There
is a secondary road from Nekempt through the project area to Bore in Gojjam Administrative Region. This road has been surveyed by the Ethiopian Road Authority (ERA) and is scheduled for up-grading beginning from 1980. In addition, the State Farm Corporation has developed a net work of roads on its farms which link up with the main and secondary roads.Within the project area,the roads are limited to seasonal tracks around the existing settlement of Anger Gutin and foot paths (See Map 1 of Annex 2). Water supplies are obtained from the natural springs and rivers while a number of hand dug wells are also being utilized in the area. There is presently 
no electricity supply in the area except for a generator in the existing Anger Gutin settlement and future supplies will have to
be based on similar generators. Local storage requirements is cater- ed for by stores constructed on the farms but the main marketing centre for the Project area is at Nekempt where the Agricultural Marketing Corporation (AMC) is expanding its storage capacity to
6,000 tons.13
4.8       INSTITUTIONS
—
Projects concerned with rural and agricultural developments are coordinated by the National Revolutionary Development Campaign and Central Planning Supreme Council which is under the Chairmanship of the Head of State. The Development Campaign and Supreme Council has regional offices under the chairmanship of the Regional Chief Admini strators. The Relief and Rehabilitation Commission is the technical
and executing agency for settlement projects at the national and regional levels. There is a regional office at Nekempt that will be directly responsible for this project. The Commission has technical
as well as administrative departments that will provide supervision
and support services 1n liaison with other line institutions of government in the project area (See Annex 1). Such services include: agricultural training, extension and input supplies, livestock pro duction in liaison with the Ministry of Agriculture; and marketing
with the Ministry of State Farms Development.
4.9       INPUT SUPPLY AND PRODUCE MARKETING
The supply and distribution of agricultural inputs is the re sponsibility of the Agricultural Marketing Corporation (AMC) (See Annex 10). In the case of locally produced seeds, the National Seed Corporation is responsible for the production while the AMC undertakes the distribution. The distribution is done directly to productive institutions like State Farms and Relief and Rehabilitation Commission. To the other peasant farmers, however, distribution is effected
through the Peasant Associations and Producers Cooperatives utilizing the personnel of the Ministry of Agriculture which is responsible for cooperatives and peasant farming.
Marketing of farm produce is channelled through the AMC which utilizes the same input distribution mechanism to collect the produce. The Corporation has also put up storage facilities in regional centers. As mentioned above, storage facilities exist in Nekempt to meet the requirement of the region and will subsequently benefit the proposed project. To fullfil the two functions of input supply and marketing
of farm produce, the AMC possesses a fleet trucks and is assisted in transport of goods by the National Road Transport Corporation which commands over 5,200 trucks.t-
- 14 - CHAPTER - 5 THE PROJECT
I
5.1      PROJECT DESCRIPTION
5.1.1                  The Project would assist GOE in its efforts to reduce population pressure in the degradated and drought prone areas of Wollo and Tigrai Administrative Regions by resettling
15,000 families in the Lower Didessa Valley. This area is at present sparcely populated but ecological conditions are good for mixed farming.
5.1.2                  The Project would form part of GOE' resettlement policy and would be executed as a project unit in the Relief and Re habilitation Commission (RRC).
5.1.3                   The Project would establish 30 settlement units, each of - on average - 500 families in an area of around 71,760 ha al - located for this purpose. In each of the first two years, five settlements would be developed followed by ten units in Year 3 and Year 4. Each unit would - on average - consist of:
1,000 ha for          cooperative arable farming; 70 ha for conservation grass strips and roads;
136 ha for woodlots;
200 ha for collective grazing;
50 ha for homesteads (0.1 ha per family); 30 ha for village facilities.
1,486 ha.
Total area developed under the Project would thus cover 30 x 1,486 • 44,580 ha; this indicates that of the total
project aroa of 71,760 ha 62% would be developed; the balance
PSHTJ >«.-
: —-j — . r . ~ m iw i ti . ..r i .1 _i u
1/ PncnuhO of this 
development> the distinction between
’ProJiM I. Yonr* nnd age of individual unit should be kept clearly th mi lick- 15 -
while partly being considered unsuitable for agricultural
use, would offer some scope for extension of the units.
During the project implementation period, 40,115 ha would
be developed ( see Table 5.1).
5.1.4             Each unit would be connected with headquarters and Nekemte by all-weather and fair weather roads and would be provided with essential social services like primary educa
tion, health and water, and production related services mechanical, veterinary, marketing and extension.
5.1.5             The settlers would be organized into Producers Coopera
tives and receive points according to the type and amount of
labour provided; these points would entitle them to a share
in the profit of the cooperative. A project headquarters would be developed at Anger Gutin (existing settlement), to
execute the various construction programmes and to provide managerial and extension assistance to the settlers.
5.1.6             The Project would consist of the following - often close
ly inter-related - components:
(1)    Land Clearing: by hand and tractor - of 33,000 ha
of savannah and light bush over a five-year period.
(2)    Mechanization: the supply and operation of 210
tractors, trailers and implements and the development and operation of service and repair facilities.
W Farm Development: the construction of stores, shops,
and provision of miscellaneous farming and processing equipments, of seed, fertilizers and chemicals.
( 4)          foil  Conservation:  the  construction  of  6,000  km  of contour  strips,  120  km  of  water-ways  and  243  km  of diversion and 600 km of farm roads.
1/ Clearing for grazing land, homesteads and forestry blocks is not included in this component.- 16 -
(5)     Afforestation: the production of 1.6 million Eucalyptus 
trees would be established at the rate of 17 ha per settle ment per year, in order to meet expected future demand for timber and firewood in the settlements.
(6)     Cattle: the provision of 750 dairy cows and 40 bulls to twenty of the settlement units; the construction and equipment of twenty simple dairy buildings.
(7)     Homesteads: the provision of 120,000 pullets and 30,000 cockerels (10 per settler), 300,000 fruit tree seedlings,
to individual settlers to be raised on their homesteads,
and credits on the first 2 years for the purchase of vege table seed, chemicals and poultry feed.
(8)     Roads: the construction, by force account, of 55 km.primary road (all weather road) and 120 km. improved fair weather roads to link the various units either to the primary road
or to the main highway.
(9)     Water Supply: the construction of a full water supply system from rivers to settlement villages consisting of pumps, filters, reservoirs, distribution systems and stand pipes.
(10)     Veterinary Services: the construction and equipment of one health centre and five small clinics; provision for re
current cost for salaries and drugs
(11)     Health: the construction and equipment of a health centre and 29 small clinics, the provision of one ambulance and the costs of salaries and other recurrent costs during the duration of the project implementation period.
(12)     Education: the construction and equipment of 30 school buildings, and the costs of salaries for 150 teachers and one Education Officer and other recurrent costs during the project implementation period.
' (13) Management and Extension: the construction of houses and offices at the Units and at headquarters; the provision of transport, and the costs of salaries and other recurrent costs.- 17 -
(14)   Technical Assistance: provision is made for ten man -years 
of international recruited experts of consultants, and the construction of two houses at headquarters.
(15)   First Year Subsistence: the provision of food, clothing and
other necessities to settlers during the first year of settle ment, partly as subsidy, partly on credit.
5.1.7              The cost of the project during the first years implementation period, including 10% physical contingencies but excluding price contingencies, would be Birr 113.76 m1llion(US. 54.96 million),of this amount, around 52% would be a Government contribution towards settlement, and the balance would be credits provided to the co operatives and settlers for investment and operating expenditure.
5.1.8             It is hoped that the project would provide a comprehensive model that could be replicated in other areas to cope with the growing demand for resettlement.
5.2   DETAILED FEATURES
5.2.1. General
The major component of the project would be to develop the co-operative farms. For the sake of presentation and costing,
project contribution to this purpose is divided into four com ponents: land clearing of co-operative cropland and village centre, mechanization, farm development, soil conservation and co-operative livestock production. Throughout this report, project year is equi valent to financial year of the Government, assumed to start on 1 July. The settlers and staff would arrive middle of Novermber, there fore halfway the first year; the first crop would be sown towards the end of the first year, while first harvesting would take place in the middle of the second year of each unit. This would allow around six months of Year 1 for purchase of tractors, building of houses etc.
In costing of salaries, the Year 1 is counted as full although in practice staff would arrive at Headquarter andUnit sites some six months later; the adopted procedure, however, would allow for farm ing time before actual duties are assumed.- 18 -
5,2.2    Land Clearing of Co-operative Cropland and Village Centre
5.2.2.1     Cooperative crop land in every settlement unit would
be developed in two stages, 400 ha in the first year
and 600 ha in the second year, while all the homesteads in a settlement unit would be developed in the first
year. Total extent of co-operative crop land to be cleared every year along with the clearing requirements of the other components are given in the Table 5.1. The amount to be cleared in each unit under this component would be as follows:
Year
1
2
Cooperative Farm
400
600
Extra for Conservation
Works
30
40
Village Centre
30
460
640
5.2.2.2                 Land clearing would be done manually, by settler
labour, with the exception of pulling of trees for which
tractor hours are allowed. The first 460 ha would be
cleared in the middle of Year 1, that is from November
(when the settlers arrive) to January. The second year's 
clearing could be spread out over a longer period to
avoid peaks in labour requirements. For costing purposes,
it has been assumed that clearing requires, on average,
70 man-days or Birr 140 per hectare and two tractor hours 
or Birr 22 per hectare; a further 18 Birr per hectare has 
been added to allow for the fact that the first ploughing
of cleared land, with disc ploughs, is more time consuming
than ploughing in subsequent years (see Annex 3, page 58)
■
Total clearing costs are thus estimated at Birr 180 per
hectare.- 19 -
Details of cocis for the whole clearing of coopera tive crop land and village centre, which would be completed within the 5 years period, are given in Table 5.2. Total costs of tractor hours for the clearing of 33,000 ha would be Birr 1.30 million; these costs would be charged to the cooperatives for later repayment. In addition, this com ponent would require 2,310,000 man-days of settler labour valued at 4.62 million Birr.
5.2.3   Mechanization
5.2.3,1             In view of the tsetse problem it would not be possible to introduce draught animals into the project area in the initial years; it is therefore, proposed that all land pre paration will be done mechanically. This will also alleviate the problem of labour requirements in peak period and free settler time for other activities. Although it could be considered to introduce draught animals at a later stage
(for in-stance when the first set of tractors have been written off) this would likely bring along numerous problems, and for the financial and economic feasibility of the project, it has been assumed that mechanization will be a permanent, feature of this settlement scheme, although this would place a burden on the foreign exchange resources of the country.
5.2.3.2     If tractor mechanization is to be successfully introduced,
the project will have to invest rather heavily in service ar ■ support services. This component therefore comprises:
-    the tractors and their operating costs
-    the implements and their operating costs
-    construction of workshops purchase of work shop tools and equipments and the running costs of work shops.
-    transport for servicing and repairs
salaries of all staff involved in operations and maintenance 1/
1/ An international recruited expert for this component is included under the Technical Assistance Component.- 20 -
- houses needed for such staff and the
maintenance of houses.
5.2.3.3               Mechanized operations would be restricted to land preparation, and transport. For this., 70 -
75 Hp two-wheel-drive tractors are considered best.
Based on calculations given in Annex 5, Table 1
,
seven tractors would be required per unit. They would
be complemented by seven chisel ploughs, disk harrows and trailers. During the first year, when 400 ha is cultivated, four sets would be provided (due to the additional tractor hour requirement for land clearing), followed by three sets in the second year.
5.2.3.4                Calculations in Annex 5 Tables 3 & 4 show that the tractor running cost would be 11 Birr per hour and the cost of land preparation Birr 45.90 per ha. The total number of tractor hours available for land preparation would be 4272 and to this an estimated 50% or 2136 hours has been added for transport; bringing the total opera ting cost per ha per year to Birr 69.61.
5.2.3.5                Maintenance and repair would be centralized - a main workshop would be built at project headquarters and fully equipped. At each unit only a simple work shop would be erected, basically for washing, fuelling, routine servicing ets.
5.2.3.6                Repairs would be carried into either in the central workshop or in the field by central workshop personnel. The central workshop would require two -Station Wagons and six Pickups for the supervision of field operations and to carry out repairs at fields. Futher a fuel-tanker
for the transport of fuel to unit centres and a truck for the transport of spares are also costed.
5.2.3.7                Under this component the following staffing is envisaged. On each Unit, an assistant to the farm manager (Unit Machinery Supervisor) would specifically be in charge of all tractor operations. The project
would further provide at each unit four tractor opera tors only for the first year and they would train eight- 21 -
settlers, to become tractor operators. In every  Unit,one B-type ouse would be constructed to accomodate the Unit Machinery Supervisor.
5.2.3.8                   At project headquarters, staff responsible for the mechanization component would consist of a machinery manager, a work shop superintendent, three field supervisors (Project Machinery Supervisors), six senior mechanics and twelve
junior mechanics, five craftsmen, one store - keeper two assistant store keepers and ten drivers. This staff would require 31 houses (5 A 2 type, 6 B type and 20 C-type ) jstaff would be phased out and replaced by settlers in years 5-7 and the management of central work shop would be fully taken over by the co-operatives.
5.2.3.9                More specifically, the project would provide for:
-    210 tractors, trailers, chisel ploughs and disc harrows, 120 disc ploughs;
-    one 5 ton truck, two station wagons, six 4x4 pickups and one fuel - tanker;
-    construction and equipment of one large workshop at HQ and 30 small unit workshops;
-    construction of 5 A? type houses, and 6 8 type houses, 20 C-type houses at HQ and of 30 B type houses on the units (total 61 houses);
-     running costs of tractors, vehicles and workshops for the duration of the project implementation period;
-    salaries of staff (five P-4, six S-l and twenty
S-2 at HQ.; One Unit Machinery Supervisor and four tractor operators per Unit).
5.2.3.10                  It is envisaged that the Government would finance the construction of the main workshop and all houses; the HQ vehicles; the salaries of all staff, and the operating costs of vehicles and central workshop. On the other hand, tractors, implements, Unit
workshops and tools would be provided on credit to the cooperatives. Similary, cooperatives would be charged- 22 -
for the running costs of tractors and implements 
(during four years on credit). Settlement units would
be fully responsible for all costs and for their share
in HQ costs from the fifth year of their establishment
onwards.
5.2.3.11               Based on the principles outlined in 5.2.3.10, total
project cost (5 years) for the Government would be 4.50
million Birr, and costs for the cooperatives Birr 16.77
Million. Details are shown in Tables 5.3 - 5.6.
5.2.4     Development
5.2.4.1                  Under this component are arranged all other 'on
farm' costs which would be provided on credit to the
cooperatives. They would consist firstly of capital
costs for stores, cooperative shops, mill houses, shellers.
threshers, grinding mill, a watertank, farm tools and bags;
and secondly of recurrents costs for seed, fertilizer,
agrochemicals and operating costs of mil 1/shellers/
threshers,   maintenance   of   buildings   and   the   working   capita; for co-operative shopJ/ For the financial and economic
analysis,    settler    labour    for    all    recurrent    operations    on the collective farm is also incluaed in this component.
5.2.4.2                Fertilizer costs are based on the following rates of application (kg/ha).
dap
2/
Urea
Maize
100
50
Sorghum
100
50
Pepper
200
100
Haricot beans
100
1/ The cooperative farm would also include a one ha demonstra- tion/nursery area, discussed in Annex 3 and the
costs of this demonstration is included in the Management and Extension component.
2/ Price DAP 1.08 Birr/kg, Urea 0.66 Birr/kg.- 23 -
Agricultural chemicals would be used to control american ball worm and army worm in maize and sorghum; american ball worm, leafworms, bacteral blight and mildew in pepper and american ball worm in beans.
5.2.4.3            Improved seed would partly be supplied by the Ethiopian Seed Corporation, and partly grown on seed production plots within the project. Pepper seedlings would be raised in nurseries at each unit; they have been costed at 48 Birr per ha. of peppers.
5.2.4.4            Specifically the projects would provide:
-    30 grain stores, 30 input stores, 30 mill
houses, 30 shops;
-    30 shellers. 80 threshers 1?/, 30 grinding
mills, 30 water tanks, 30 sets of farm tools,
and 1.8 million Birr worth of bags;
_ Around 500 tons of DAP fertilizer;200 tons of Urea; various agro-chemicals to a total value of
1.7       million Birr; 1,700 tons of maize, sorghum and haricot bean seed.
-    Credit for running costs of mill, shellers and threshers.
-    A credit of 10,000 Birr per Unit for starting working capital of the cooperative shop.
Maintenance of buildings.
2.4.5 Details of costs are shown in Tables 5.7 -5.9
cost of this component would be Birr 22.61 Million. All
in the form of credit for capital and recurrent costs to the cooperatives. During the project implementation period, this component would involve around 7.99 million man-days of settler labour, valued at 15.99 million Birr.
1/ A further 10 threshers would be
required in year 6.24
5.2.5    Soil Conservation
5.2.5.1             Because of their specific nature, the conservation methods, including construction of farm roads, have
been considered as a separate component, although they are carried out during land clearing. Crop cultivation
would be concentrated to slopes of less than five per
cent and to control soil erosion the following four measures would be adopted:
-    contour crop management by establishing contour grass strips as marker lines;
-    diversion channels to divert unavoidable con centration of run-off away from arable land;
-    protection of natural water ways and the con struction of new water-ways where needed;
-    proper location of field roads with adequate road drainage.
5.2.5.2               At an average distance of 50 m and a width of 2m, 200 km of contour grass strips per unit (6,000 km for whole project) would be needed, to be constructed in the year of clearing.
5.2.5.3                Diversion channels would be individually designed; catchments would be kept as small as possible and dis charge would be into natural water ways. A total of 8.1 km of diversion channels per unit are forseen, to be cons tructed in first and second year in proportion to cleared land. Total length of diversion channels for the whole project is estimated at 243 km.
5.2.5.4                Efforts would be made to identify, protect and maintain all natural water ways; wherever necessary additional water ways would be constructed. Total length of required water ways is estimated at 4 km per unit, to be constructed in the first year of each unit. The whole project would require 120 km of water ways.- 25
5.2.5.5                 Field roads would have 4 m carriage way
overall width including side channels would be 10 tn. No surfacing materials would be used. On the average, a unit would require 20 km of such roads; for purposes of costing it is assumed that these are constructed in the first year of each project. Six hundred kilometers 
of such roads would be constructed for the whole project.
5.2.5.6                 Summarizing, the following conservation works would be executed:
Year of Project !
1
2
3
4
5
Total
Contour strips        (km)
400.5
1,000.0
1,400.0
2,000.0
1.200.0
6,000.0
Diversions             (km)
16.2
40.5
56.7
81.0
48.6
243.0
Water ways           (km)
20.0
20.0
40.0
40.0
-
120.0
Roads                    (km)
100.0
100.0
200.0
200.0
-
600.0
TOTAL
536.2
1,160.5
1,696.7
2,321.0
1,248.6
6,963.0
5.2.5.7                 The programme would be executed by staff at project HQ under guidance of a Conservation Officer (part-time). One permanent Conservation Technician and one assistant Conservation Technician at HQ would be supplemented by part-time CT's and part-time assistant CT's; employment would include training periods.
5.2.5.8                 The project would specifically provide for:
construction of one B-type and one C-type house at HQ;
one 4x4 Pickup;
temporary housing and minor equipment (surveying etc.);
direct costs of conservation works; salaries of permanent and part-time staff for 5 years;
running costs of vehicle.
./'
s26
5.2.5.9                A breakdown of various costs is given in Table 5.10. Total project cost for this component exclud ing contingencies would be Birr 0.88 million which includes both direct cost to Government (Birr 0.74 million) and credits to co-operatives (Birr 0.14 million). Co-operative credits would be given from year- 1 to year-5 of every producers' co-operative
3
3
3
mainly for the maintenance of grass strips water ways, diversions and field roads.
5.2.6 Afforestation
5.2.6.1                 The Project would include a minor afforestation programme (Eucalyptus) designed to meet the need for building material and firewood of the settlers.
Based on an estimated average need of 0.8 m  solid volume per person per year, and 2,500 persons per unit, the annual requirement would be 2,000 m . Assum ing an average production of 15 m /ha/year and an eight year cycle, a total of 17 ha would yield the required amount for each unit. The Project would, therefore,
aim at planting 17 ha per unit per year; eventually 
there would be 30 x 8 x 17 ha = 4,080 ha under Eucalup- tus in the whole area.
5.2.6.2                The Project would prepare the required seedlings in a large central nursery at headquarters and supply these to the units at cost price. The cooperatives would provide the labour for clearing the 17 ha, for planting upkeep and eventually harvesting.
5.2.6.3                The Table 5.11 shows the areas which would be planted annually and the corresponding number of seedlings required during the planting period of 11 years. First harvesting would commence on year 9.
2/ Three cycles of regrowth are envisaged and hence no further planting need to be considered.
2/27
5.2.6.4            The programme would be the responsibility of a small forestry unit at headquarters, consisting of one Forest Ranger (SI) assisted by three assistants and two drivers (S2). This unit would be provided with one 5-ton lorry, needed for transporting the large amounts of soil and one small car for ins pection and advisory visits. Seedlings would be transported by the settlers using their co-operative tractors.
5.2.6.5          The Project would, more specifically, provide for
-    the construction of the nursery, including office and storage space;
-     the  construction  of  one  B-type  and  three C-type  houses  at  headquarters,  and  their upkeep for 5 years;
-    one 5-ton lorry and one car
-    salaries of one SI, three S2 and two S3
staff for 5 years;
-    operating costs of vehicles;
-    direct nursery costs (fertilizers, sleeves,
etc.)
5.2.6.6            The various costs components are shown in Table 5.12. The initial investment costs and salary costs would not be recovered from the cooperatives; only direct costs, equivalent to 0.08 Birr per seedling,or Birr 0.25 million over 5 years, would be recovered from the cooperatives. In addition, the progranwe would require 114,000 man-days (years 1-5) for clear ing and planting the woodlots, valued at 0.23 million Birr. It is assumed that after year - 7, the line agency (Ministry of Agriculture) would manage the central nursery and provide advisory services to the
co-operatives on wood lot management.
1/ Three.cycles of regrowth are envisaged, therefore no further planting need to be considered.28
5,2,7 Cattle
5.2.7.1               At the beginning of the fourth year of each unit, it is proposed to introduce 50 dairy cows (heifers)
and 3 Fresian bulls, followed by a further 50 cows and
2 bulls at the beginning of Year 5, This programme assumes that, by this time, the tsetse problem would
be sufficiently under control. Each settlement unit
would clear 200 ha. rough grazing land in the third
year which would be ample for a herd of 200-250 heads of cattle. Construction of cowsheds and purchase of equipments for cattle management are included in the programme and in addition the grazing areas would be fenced to facilitate rotational grazing. Each co-opera
tive farm would construct a trench silo for the pre paration of silage.
5.2.7.2                The cattle would be owned and managed by the co operatives; produces (milk and meat) would be primarily for consumption by the settlers.
5.2.7.3                It is envisaged that, as a result of the intro duction of cattle, after about five years each unit would have the following herd:
Breeding cows
Heifers (1-3 years)
82
47
Males (1-2 years)
63
Calves
30
Bulls 17
4
Total           226
5.2.7.4                Operating costs would be increased on the supple mentary feeding of concentrates and other miscellaneous items. Annual requirements of concentrates and miscella neous items from year -12 is estimated at Birr 5,200 per settlement unit. It is estimated that this component, once in full development (from year - 12 onwards) would require 4,900 man-days of settler time per year(mi1king, feeding, herding, silage preparation, hay making and other management operations) per settlement unit.- 29 -
5 2.7.5                 Costs of this component would be fully charged to the cooperatives. Capital costs and operating
costs in the third and fourth year of each Unit would be.covered by credit. Because of the fact that, up
to Year 5, only one third of the settlements would
have been supplied with cattle, the contribution of
the project to this component is limited. Specifi
cally, the project would provide:
-     750 dairy cows and 40 bulls;
-    credit for clearing 4,000 ha of grazing
land ;
-    credit for cowsheds and dairy equipment
in settlements . ;
-    credit for fencing and trench silos in
20 settlements ;
-    recurrents costs up to Year 5 of the disbursement period.
5.2.7.6                 Details of costing are shown in Table 5.13;
project costs during the five-year disbursement
period would be Birr0.88 million, all in the form
of credit to the cooperatives.
.8 Homesteads
5.2.8.1                 Each settler would receive an area of 0.1 ha on which to build his house, to grow part of his own food, and to keep poultry. Since staple food commodities would be produced on cooperative farms, a rough assess ment of the subsidiary food requirements of the settlers along with the market prospects and the availability 
of information led to the selection of annual crops and fruit trees for homestead farming. Although each settler will be free in the use of his plot, for the purposes of costing the following composition has been assumed:- 30 -
Green maize
vegetables (onion, cabbage, potatoes,
beans)
poultry house etc.
house
fruit trees, waste etc.
Total
5.2.8.2                Settlers would receive 8 pullets and 2 cockerels 
on the latter part of first year, which would commence production of eggs from the second year onwards, at
the rate of 150 eggs per chicken per year. The settlers would be encouraged to construct their own poultry houses using local materials such as bamboo etc. Arrange ments would be made with the Livestock Development Co poration for the initial supply of birds and the settlers would be expected to develop their flocks. Necessary technical assistance for the development of poultry 
would be provided by the Home Economic Agents.
5.2.8.3               In the first year, settlers would be provided (on credit) with ten papaya seedlings (Birr 20) and ten banana suckers (Birr 20). This the total credit requirement per settlement unit (500 settlers) for seedlings would be Birr 20,000.
5.2.8.4                Necessary annual inputs such as vegetable seed, fertilizer, agro-chemicals would be obtained from the cooperative shop. For the feeding of poultry, 20 kg
per chicken of maize or sorghum would be supplied from the cooperative farm. All these inputs, valued at
Birr 49.60 per settler on the first year and Birr 89.20 from year-2 would be provided on credit for the first four years of each homestead.
It is envisaged that settlers would consume all green maize, about half of all vegetables and fruit, and about one third of the eggs produced and would market the balance in the area.- 31 .
5.2.8.5                Specifically, the project would provide:
-    150,000 pullets and cockerels;
-   300,000 fruit tree seedlings and suckers;
-    credit to individual settlers for the
purchase of poultry feed, vegetable seed
and fertilizer in the first year to a total
amount of 0.75 million Birr.
5.2.8.6                Details of this component are shown in Table 5.14 and in Annex 3. Total costs over a five year period would be Birr 4.47 million. In addition, this com
ponent is estimated to require 32 man-days per homes- stead in the first year, and 48 in each of the follow
ing years; over the first five years this would corres pond to 2.04 million man-days for the whole project area, valued at Birr 4.08 million.
5.2.9     Roads
5.2.9.1                 In addition to the present 75 km all-weather
road from Nekempte to Anger Gutin, proper development of the area would require the construction of rural
roads to connect this main road with all settlements,
and to facilitate access from one settlement to anothe". For this piiriw" estimated 175 km of roads (55 km.
of primary road and 175 km. of fair weather road) would be required, including two major bridges across the
Anger and Aleltu rivers and culverts across numerous minor water courses.
5.2.9.2                  Standard ERA rural roads specifications all weather road are proposed for primary road i.e. 6 meters widtn between shoulders and a compacted gravel paving initials 
15 cm
'  -°ter wide. The fair weather roads
would be 4 meters w I Uv l« • w( I f/M rking out-bays every 300 meters. As  the Ethiopian Road Authority  estimates  that construction by contractor would be 50% more expensive.,32 .
it is proposed to carry out construction by force
account: the project would provide machinery in
Year 1, and a road engineering unit within project headquarters would carry out all construction, using additional settler labour; target would be 60 km of
road per year. The proposed road system is shown
in Map.,
'5.2.9.3              The project would specifically finance:
-    the purchase of plant and machinery and minor equipment v;
-    the provision of four 4x4 pickups, a
tractor, trailer and fuel-tanker
-    the construction of one B-type house at Headquarter.
-    construction of temporary site offices 
and shelters.
-    the salaries of one Road Construction Superindentent (P4) two foreman (SI), eleven equipment operators (SI), six artisans,(S2), etc. and ten drivers, guards etc(S3), for a period of tnree years, and or greatly reduced staff in Year 4;
-    the operating costs of machinery and vehicl";
-    cost of two Bailey bridges and of drainage structures;
-    cost of labour for construction;
-    Miscellaneous cost.
The settlement units would provide the nece .>arj
r
labour for upkeep, estimated at 700 man-day per settlement per year; it is assumed that after Year 7 the Road Authority would bear the other costs of road maintenance.
1/ Full details are provided in Annex 8;
2/ The estimated salvage value of the equipments after Year- 3 would cover the annual maintenance cost of Birr 42,000 to the Government from Year-4 onwards.33
5.2.9.4                 Details of costs are presented in Table 5.15; total project costs for this component (excluding contingencies) would be Birr 5.21 million, to be
borne by the Government.
5.2.10     Water Supply
5.2.10.1                 The project would provide clean water to all settlers, by constructing water supply systems. Pre liminary investigations suggest that the project area has a poor groundwater potential. Although some water wells and springs exist, from which limited amounts of water could be expected and for the purposes of costing only the large rivers have been considered as potential source of water.
5.2.10.2                Water supply requirements are based on 25 litre per capita per day (human consumption). For calcula tion of total water demand, a design period of 15 years, an annual population growth rate of 31, and extra requirements for social services and cattle
have been taken into account. Total water require ment - at full development of all units - would thus be in the order of 3.6 million litres per day(3.577
m^/day =0.12 m /sec).
5.2.10.3                The system designed to supply this amount is based on five water supply groups, with take-in points at convenient locations along the rivers.
Each group would supply 5 to 8 units, and would basi cally consist of a pumping unit, a water reservoir combined with a slow sand filtration treatment plant;
and pipes with gravity flow to connect the pumping station with each of the units. Each unit would hav< a service reservoir, which could store one third of the daily requirement; from this water would be dis tributed to a number of stand pipes, and to small water tanks in public buildings and houses.
3- 34 -
5.2.10.4
5.2.10.5
5.2.10.6
The construction is envisaged to be carried 0'h.
by contractors while operations would be under the responsibility of the Civil Engineering Division at
Project's HQ.
The project would specifically finance:
-    The five water supply groups (one in
Year 1, one in Year Year 2, two in Year 3
and 1 in Year 4), including the distri
bution system in each village;
-    One A-type and six C-type houses at HQ
and one C-type houses at each of the five
pumping stations ( total 12 houses);
-      One  five  ton  lorry,  two  4  x  4  pickups,  and five     motorcycles     required     for     construction and maintenance;
-    Annual operating costs of pumps and water treatment plant, running costs of vehicles and upkeep of houses, up to four full years of each settlement unit;
-    Personnel costs of the following HQ staff: one superintendent (P4), six water workers (S2) and three drivers (S3); salaries at each pumping station for one pump operator (SI), and one assistant (settler)
From the fifth year onwards each settlement cooperative would take over its share in operating and staffing costs; in addition each cooperative
would be debited with an annual charge of Birr 3867 to cover replacements. From Year 8 onwards all costs of the system would be borne by the settler's co-operu tives; total costs would amount to Birr 630,000 or
Birr 42 per settler per year, to be recovered as a 'water rate'.- 35
Details on costing are presented in Annex - 8 and in Table 5,16; project cost of this component (excluding contingencies} would be Birr 13.26 million.
5.2.11   Veterinary Services
5.2.11.1        Adequate information on the likely incidences 
of animal diseases or their effects in the project
area are not available. However, the major diseases affecting livestocks in the area are known to be Trypanosomiasis, Rinder pest, Black leg, Anthrax, Internal parasites, External parasites, New Castle, Fowl Cholera and Laryngotracheitis. Present veteri nary services in the area would not be adequate for any livestock introduction in the project. In parti
cular the presence of the tsetse fly would make the introduction of cattle at the start of the settlement programme impossible.
5.2.11.2               It is expected that the implementation of the proposed "Tsetse Control Project in South-Western Ethiopia would create a.reasonably Trypanosomiasis - tree environment at least on the fourth Year of the project for the introduction of cattle.
5.2.11.3               In order to provide basic veterinary facilities for the livestock introduced in the project (poultry 
in Year 1 and cattle in Year 4), a livestock health
centre would be built at project HQ, headed by a veterinary assistant. This health centre would meet
the vaccination and treatment needs of the five settle ment units in the immediate vicinity and also would serve as a reference centre for the other units. The centre would be closely supported by the main health centre at Nekempt and the Regional Disease Investiga .vr Laboratory at Buno Bedelle.5.2.11.4
36
In addition, clinics consisting of a dip for tick control and a vaccination and treatment yard would be constructed for every five units (5 in total). These clinics would be staffed by a
"vaccinator" who would be a trained settler.
5.2.11.5                   More specifically, the project would finance:
-     the construction and equipment of one
"health centre" at HQ and five "clinics";
-     the construction of two B and two C type houses at HQ;
-     the provision of one 4x4 pickups/land rovers and two motorcycles;
-     the provision of equipment and supplies such as drugs and insecticides needed for the veterinary services and the tsetse control programme, during a period of five years;
-     the salaries of one Veterinary Assistant(Sl), one Laboratory Assistant (SI), two Animal Health Assistants (S2) and one driver (S3);
-     running costs of vehicles and upkeep of houses for a period of 5 years;
5.2.11.6                    The settlers would provide six vaccinators who would work under the supervision of Animal Health Assistants and the annual labour cost per vaccinator is costed at Birr 1,500. The direct labour cost to
the co-operatives for the first 5 years is estimated at Birr 28,500.
5.2.11.7                     Details on costing are given in Annex - 6 and Table 5.17., Total project costs for this component for five years (excluding contingencies) would be Birr 0.407 million to be borne by the Government and at the end of year - 5 the line agency (Ministry of Agriculture) would take over all the costs and the responsibilities for the delivery of veterinary seru'37
5.2.12.1                The project would finance basic health facili
ties in each unit and a Health Centre at HQ. The
proposed health programme would focus on the follow
ing aspects:
control and prevention of communicable diseases in the area such as malaria,
bilharzia, gastrointenstinal diseases, haelmintiasis, tuberculosis, trypanosomiases, upper and lower respiratory diseases, injuries and farm accidents and other contagious diseases;
-    maternal child health and family welfare pro- g rairnne;
-    first aid service and patient referrals;
-    complementary service in health education, community organization and epidmiological serve'll lance.
5.2.12.2                The Health Centre would be headed by a Senior Health Officer (P4), and staffed by two nurses (SI), a laboratory technician (SI), two health assistants(S ),
?
one Sanitarian,two Dressers^),and one ambulance Driver (S3). Health Centre would also deliver first and
services like health station to a nearest unit and would be provided with beds for referral patients to be transferred to outside hospitals. The project would finance the construction and equipment for the buildings, and houses and of one ambulance. The project would also finance recurrent costs (supplier, running costs of vehicles and upkeep of buildings) far a period of five years.
At each unit (except the unit serviced by health Centre), a simple Health Station would be built, with a Health Assistant (S2) in charge. In addition to
take .care of daily medical problems • This Health__
- 38 -
1
Assistant would develop health programmes in the community; he would train two settlers per unit as 'health promotors and midwifes.
5.2.12.4              The project would specifically finance:
- the construction of one health centre and 29 health stations.
the equipment and furniture;
-    the construction of 1 A? tyP >
e
3 B“tyPe ar*d
35 C-type houses;
I
-    one ambulance ;
-    the cost of drugs, vaccins and other supplies during five years;
-    the cost of salaries during five years
-    the running costs of the ambulance and upkeep of buildings and houses during five years.
5.2.12.5                Total cost of the progranwe are detailed in Annex - 7 and Table 5.18. It is envisaged that
after 7 years (when the last group of settlements 
would be four years old) the Ministry of Health
would take over the responsibility for and financing
of this component. Total project costs during the
five-year disbursement period would be 2.62 million
Birr.
5.2.13 Education
5.2.13.1                Facilities would be provided for primary education (1-4 grade). It is estimated that 355 school age child ren in every settlement unit will require primary educa tion. To comply with the standard of the Ministry of Education, that reconnends a primary school for 300 students, one primary school with 4 class rooms would be established in every unit. Five teachers with 10-
12 grade high school formal eduction plus teacher train ing (3-12 months) would be appointed and they would be given residence facilities in every settlement unit.At project Headquarters, one eduction officer in the Cooperative, Marketing and Social Services Division would be in charge of supervision.
5.2.13.2                It is envisaged that at the end of 5 years,in each unit, the Ministry of Education will take over- the responsibility for this component.
5.2.13.3                More specifically, the project would provide for:
the construction of
30 school buildings
in the first year of each uniti
-    furniture and equipment;
- 150 C-type houses for teachers;
. 1/
-    one A2 type house at HQ for the Education Officer;
-    salaries of school teachers 2,/ and Education Officer during the five year disbursement period;
-    books and other supplies during the five- year disbursement period;
-    upkeep of buildings during the five-year disbursement period.
5.2.13.4                Costing details are given in Annex 7 and are summarized in Table 5.19. Total project costs over five years would be 4.40 million Birr, to be born
by the Government.
Management and Extension 3/'
5.2.14.1                In principle, each settlement unit would be under active management from projects headquarters for a period of four years. During this period, the settlers associations and cooperative societies would be built up, and the management role would gradually changed into one of extension.
'ly material cost is included in the project cost, settlers would n-days^e/unit^ 3b°Ur constructl’on» estimated at 5,000
ring the first year of each Unit, costs of salaries are taken as since settlers would only arrive in thp middle
is component Is more full/dis^sei in Chapter 6 tMS year’* 40 *
The following activities, are considered as
part of this component and financed under the
project:
a)     The construction at each Unit of an office, and three B-type houses; (totalling Birr 2.34 million).
b)     The construction at Headquarters of the
central office, a training building, a
store,one A} type house,seventeen A£
type houses, five B-type houses, and twenty-six C-type houses (totalling Birr
1.00 million).
c)     The provision of thirty 4x4 pickups (one
for each Unit), thirty motorcycles (one
for each Unit), and of nine 10-ton lorries,
one bus, six 4x4 pickups and two cars at Headquarters (totalling Birr 2.39 million),
d)     Radio Reaching aids, and office equipments 
(0..13 million Birr).
e)     Generators at HQ and Units and powerlines as required (total 0.16 million Birr).
f)      Salaries, at each Unit, of a Farm Supervisor
('Unit Leader' SI), a Cooperative Organizer (51)    and an Administrative/Accounting Assis tant (SI), each for four years; a storekeeper (52)    and a clerk (S2), each for one year ; total cost during project implementation period Birr 2.37 millions.
g)     Salaries at Headquarters of a Project Manager (Pl), Civil Engineer (P2). 5 heads of divisions (P3), 11 professional staff (P4)
5 senior support staff (SI), 26 junior support staff (S2) and 18 drivers (S3). While all staff is envisaged to remain in post for seven years, project costs would only cover five years, at a tolaljof Birr 2.09 million.h)         Upkeep of buildings under (a) and (b) running costs of vehicles and generators under (c and ej, general office expenses at an annual rate
of 3,000 Birr per Unit plus 20,000 Birr for Headquarters, totalling (for 5 years) 3.01
million Birr.
5.2.14.3                Costs are further detailed in Annex - 10 and in Tables 5.20 - 5.22. prefect costs for. 5 years for
this component would be. Birr-<5.53 million/ they would be entirely bom by the Government (not charged to
the cooperatives). It has been assumed that settlers would replace Unit staff after 4 years, and they would also be financially responsible for replacement Co operative         vehicles,equipment, running costs, etc., after this period. On the other hand, extension activities of HQ. would be taken over by staff of the Ministry of Agriculture. Consequently, of the total
cost of this componenet, cooperatives are charged with a progressive share from Tear 5 onwards: from Year
8 onwards, total costs for the 30 cooperatives to gether would be Birr 0.74 million per annum. In addition, settler labour would constitute another Birr 0.39 million per annum.
5.2.15 Technical Assistance
The project would provide ten man-years of international recruited staff and consultants, and of sixty man-months over seas training. The construction of two A type houses, one of
]
which could be used as a guest house, is also inc-luded in this - component. Total costs are-estimated as 1.51 million Birr.
(See Table 5.23)
1/ See also Chapter 7..1
5.2.16 Subsistence in First Year
In line with current policies of RRC, it is assuned
that settlers during the first full year of their settlement,
when they would have no income (except from vegetables and
chicken on their homesteads), would be provided with a sub
sidy for food^ and a credit for other expenses. The food
subsidy has been assumed to value 500 Birr per family, of
which 280 Birr is charged to the first year(effectively 7
months) and 220 Birr to the second year. The credit would
be 200 Birr per family paid in the first year for clothing
and other consumable goods. Total cost of this component
would be 7.5 million Birr for food subsidies and 3.0 million
Birr for credit (See Table 5.24.)
5.3 COST ESTIMATES
5.3.1    Project Costs
5.3.1.1             Total costs of the project during the five years 
implementation period are estimated as 103.42 million' 
Birr(US$ 49.96 million) excluding contingencies; In
clusion of 10% physical contingencies would bring
the costs to 113.76 million Birr (US $ 54.96 million.
The foreign exchange component is estimated as 47.7%
or US $ 49.37 million.
5.3.1.2              Of the total project costs, 52.2% would be
direct costs to the Government; tjie balance constitutes 
credits to the settlement cooperatives and individual
settlers   which   would   be   recovered;   during   the   five   year implementation period it 1s expected that 21.62
million Birr wcbld be repaid; (See Table 9,20).
5.3.2    Cost of Individual Project Components
The tables on the following pages show the breakdown
■* * .•
of project costs during the implementation period by components as discussed in previous sections. Costs to Government and credits are shown separately. Further details are given in 1,c
1/ Pood subsidies may be arranged with World Food Programme. 2/ No price contingencies have been considered in this report.=U-
PROJECT COSTS BY COMPONENT ( 'OOO' BIRR)
1
3
X
'|
..     .. PROJECT YEAR
COMPONENT
1.- Land Clearing
2. Mechanication
,3. Farm Development
4.Soil Conservation
5. Afforestation
" 6. Cattle
7. Homesteads
89
1.3
.2617
1047
208
230
.    299
8. Roads
9. Water Supply
10.Veterinary Service
3S40
2947
130
11.Health
628
12. Education u
j , 13, Management Extension
14. Technical Assistance
i,o. Subsistence
Total base line costs
10% Contingencies.
Grand Total
522
2784 ’
384
1200
16625
2
217
.3315
.2592
113
48 A
522
824
24/0
TT"
355
602
2052
281
1750
15202
16722
• .
306
5145
4848
190
90
“W
1044
824
“76“
654
1192
3255
281
2950
25303
■"zssb—■
4
434
6575
7505
240
108
318
1490
11
3o86
66
711
1412
3567
281
3500
29298
’1930
5
256
3620
6620
135
94
440
1115
11
429
•79
270
672
1870
- 281
1100
16992
18691
TOTAL IN
6 000 BIRR
1302
21272
22612
886
j     570
&80
4470
5210
13257
406
2618
4400
13529
1508
| 10500
|l 03420
110342'
|l 1^762
20.6
21.9
0.8
0.5
0,8
4.3
5.0
12.8
0.4
2.5
4.3 .
13.1
1.5
10.2
100.0
1
18288
27833
32228
TOTAL IN
'OOO'USS
629
il0276
10924
428
276
425
2159
2517
6404
196
1265
2126
6536
728
5072
49961
«'56’
54957
-
•
.—
*
»
. . ....
9
r.
1> 1PROJECT COSTS OF IN DIVIDUAL C( 1J1P0NENTS (       IN MILLIO NS )
COMPONENTS
MIL1
.ION
Credit t< Co-onera.-
1R
LION
Cost to Anvornmoni
BI
credit t( Settlers,
1         US LOSL LO Governmen
$ MIL
credit to tlo-opera-
tives
Alters
% QF THE                   J
Total
Iotal Cos v
‘
1. Land clearing
2. Mechanization
4. Soil conservation
A Afforestation
6. Cattle
7. Homesteads
8. Roads
9 water supply
10. Veterinary
11. Health
12. Education
-
-
-
0.63              1.3
4.50
tive
1.30
16,77
22.61
0.14
0.25
0.88
0.63
8.10
10.92
0.07
0.12
0.43
10.92            21.9
0.74
-
-
-
-
-
4.47
-
10.27            21.4
0.43              0.8
0.32
0.28
0.5
-
0.43              0.8
-
2.16              3.3
5.21
-
2.52              5.1
13.26
Total
1.30
21.27
22.61
0.88
0.57
0.88
4.4Z
5.21
13.26
0.41
2.62
4.40
13.53
1.51
10.50
6.41            12.9
0.41
2.17
1
0.36
0.16
•-
2.52
6.41
0.19
1.27
2.13
6.54
0.72
3.62
26.09
2.61
28.70
0.19            ■0.4
2,62
-
-
-
-
2.16
-
*
•*
-
—
-
1.45
1-27
2.5
4.40
Management & Extension
14. Technical Assistance
15. Settlers' Subsistence
Total Baseline-Cost
10% Contingencies
Grand Total
13.53
1.51
. 7.50
-
-
3.00
7<47
0.75
8.22
-
-
-
-
20.27
2.03
22.30
2.13 4.3
6.54 13.1
0.72 1.5
5.07 1      10.2
54. OQ
41.95
4.19
46.14
.103
10.34
113.76
-
36
-
l
49.97 J
.IQQtQ-
5.40
59.40
0.36"
3.97
5.o’o
54,97
•
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5.3.3
Cost by Expenditure
Cate
gories
• -
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In addition to a
breakdown according
/ f>4
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to components, project costs can be arranged
i *>
according
r
<*' <• ' . ’r
. • «'
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to type of expenditure; as the following pages
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5Expenditure
Categories
Cost     in
'%   of   the
Mi 1 lion
Total
Forei gn
Exchange
Foreign j Foreigh
'Exchange       Exchange Millian
1. Civil Works
Functional Buildings
Houses______________
Bridges     &     Drainage
Struct.
1.18
0.83
0.40
Water Supply System:
-   Distribution systeme
1.19
0.57
-  Free-flow system
2.58
1.25
-  Water treatment Plants
-  Group Water Reservoir
3.40
3.68
2.37
0.16
-   Pressure pipes '*■________
-   Pumps
0.46
0.53
Sub-total
0.58
1.06
29.04
7.05
0.22
0.26
3.40
2. Machineries Equipments
Vehicles'Tools and
Furnitures^
Road building equipments 
Tractors and Implements 
10.7
Shelters Threshers & Mil
Vehicles
Equipments
1.73
11.07
2.41
3.31
1.53
Farm Hand Tools
0.61
Gener.^j-
1.56
9.96
2.17
2.98
1.38
0.31
0.75
4.81
1.05
1.44
0.67
0.15
u. 0 I
0.05
i47
ire
y
* Expenditure
Cost in
W i ^ri
X of the
-— Foreiqn
Foreiqn
VI LJ                       t LI Foreian
a Categories 
|
Million
Total
J
.i
n Million
birr
n Million
LOSt
T"
Birr
US $
3. Material Supplies'
0.65
0.6
55.0
0.36
0.17
4. Farm Supplies
Seeds/Planting Materia
s 3.03
2.9
0
-
Chemical fertilizers
11.33
11.0
90
10.20
4.93
Agro-chemincals
2.35
2.3
90
2.12
1.0002
*              Bags
1.80
1.7
30
0.54
0.26
Livestocks
0.72
0.7
0
-
-
Livestock feeds
2.13
2.1
0
-
-
Sub-total
21.36
20.7
60.2
12.86
6.21
| 5. Other Supplies
Drugs (Vet. +<Health)
0.37
0.3
90
0.33
0.16
Office + School suppli
ssO.46
0.5
0
-
-
Food
7.50
7.3
0
-■
-
Credit for Co-op.Shop
. 0.55.
0.5
-
-.
-
Clothing Etc.
3.00
2.9
0
«•
- Sub-total
11.86
11.5 ,
2.8.
0.33
0.15
k1
yj 6.Running costs of Vehicle
J
Machineries etc.
11.70
11.3
70
8.19
4.00
} 7.Water Treatment
0.38
0.4
0
-
-
8.Upkeep of buildings
0.24
0.2
10
0.02
0.01
9.Personal Costs
Salaries
9.33
9.0
0
-
-
T
Waces‘!
! C.16
102
L. -
-
1.
L.
i
f
• ' .                                    —- — -U X. 
.     »• wJPROJECT COSTS BY EXPENDITUE CATAGORIES (Contd....)
Fxnpndi turp
Cost in
% of the
Foreign
Foreign
Foreign
------- [------- '
i
Million
Total
Exchange
Exchange
Exchange
»
— ;
n Million
in Mllliot
Birr
Cost
%
Birr
in US $
Expatriates
T.20
1.1
90
1.33
0.64
i
Overseas Training
0.20
0.2
90
0.18
0.09
Sub-total
10.89
10.5
13.9
1.51
0.72
10.Miscellaneous
1135
1.3
50
0.68
0.33
i
TOTAL PROJECT COST
103.42
100.0
47.7
49.37
23.85
i
1
----------------1
•
• •
Foreign E
(change coi
the Projec
t Cost wou
Id be
47.7%
—*——1
1/. Mat
•rials for
temporary
iponent of
housing.
cattle she
ds etc.
' '"1
*
2/ SaL
a tries of si
til-led lnr;
1—persnnr
el pyrliirl'
nn Qpttlpr
. labour
3/ Wag
ts of unsk
11 laboi,
r excludi
nq settler
S.
--------  ■ —               —•— ------------
------------- _
}-
-J  - -
—
J   _ — _ . —
——49
2                      Details of number of units and costs for functional buildings and houses and their phasing are shown in Tables 5.28 and 5.29 a total of 252 functional buildings and 415 houses would be constructed. Houses would be of four types (see Annex 8 ) as follows:
Number
Type                Unit
Costs (Birr) At HQ. at Units and
pumping stations
A1
52,000.-
3
A2
30,000.-
25
-
B
16,000.-
19
120
C
10,000.-
63
185
108
310
Details of number and costs of vehicles are shown in Table 5.30. The project would provide the following:
Unit costs (Birr)
-    9 ten ton lorries 
100,000
-    3 five ton lorries 
80,000
-  52 4 x 4 pickups., and other
four wheel drive vehicles 
35,000
-    1 Ambulance
38,000
-   3 cars 
20,000
-    1 fuel tanker
45,000
■ 37 motorcycles 
3,000
•    1 bus (32 seatdr)
70,000
Sunmary of personnel costs and the number and their phasing are presented in Table 5.31 and 532 ( for details see Annex - 10, Appendix 1/1 - 1/8). In Year 4, total project staff would amount to 586, of which 410 on the Units and 176 at Headquarters.
Phasing of Project Costs.
Project costs during each of the five implementation yo would be as shown in the next page. More details are given
in the table 5.25.
'50
»
PHASING OF PROJECT COST (in '000' Birr)
Project Year
1
3
7
5
Total
Detai 1
Direct cost to Government
13,266
8,882
13,697
12,827
5,312
53,984
Credit to Co-operatives
2,560
5,298
9,562
13,981
10,565
41,966
.      Credit      to      individual
^4 C „ 4-4-1 ~
^Settlers
799
] ,022
2,044
2,490
1,115
7,470
Base - line cost
16,625
15,202
25,303
29,298
16,992
103,420
101 Contingencies
Grand Total
1,662
18?288
l,52o
~16?722
2,530
27,833
2,930
32,228
J_,£99
18,691
10,342
113,76251
5.3.5 Credits
5.3.5.1                     Those investments which would not be provided free by the Government, would be charged to the settlement cooperatives; production inputs would be similarly charged. During the first four years of
each settlement, all the above inputs would be pro vided on credit to the Cooperatives. Repayment of these loans would start in the third year and be completed in the eighth year.
5.3.5.2
Individual farmers would receive as credit in the first year: 200 Sirr subsistence credit (project component 15), 70 Birr investment credit (chickens and seedlings) and 50 Birr 'operating' credit
(fertilizer, poultry feed); this credit would be
repaid in the second to fourth year. In 2nd, 3rd
and 4th year, settlers would receive their homestead inputs on credit (89 Birr per year), to be repaid
the following year.
5.3.3.3                          All credits would be charged at 5% interest, with a 2 year interest free period for the cooperatives and one year for the settlers. (Details are
shown in the cash flow statements for cooperatives and settlers, Tables 9.5 and 9.17). Total funds resulting from repayment of credits (including interest) are shown in Table 9.20; they would, during the 5 year project implementation period, amount to the following:
Project Year (Millions nf
2
3
4
5
Total
0.39
3.02
7.08
11.13
21.6252 ;
5.3.6 Non-Project Costs
5.3.6.1                 In the last year of the project implementation period, five units would be five years old, and there fore no longer receive inputs on credit; operating costs in this year have been charged directly to the cooperatives, and the settlers (total Birr 2.01 million), and are not Included in project costs.
5.3.6.2
5.3.6.3
In Years 6 and 7, Government would still have
to finance most costs of Headquarters, while credits would need to be provided to the younger units.
Table 5.27 shows these costs to amount to Birr 6.28 Million for credits (sum of Year 6 and 7). From
Year 8 onwards, costs for the Government are shown to be Birr 1.24 Million per year; this is presumed to be financed by the line agencies (Ministry of
Education and Ministry of Agriculture; Veterinary services; Road Authority).
As stated before, all direct costs to the cooperatives and settlers (from Year 5 onwards) and all settler labour costs (this is the labour provided by the settlers costed at 2 Birr) from Year 1 onwards are not included in the project costs. Table 5.27 shows that these costs together, from Year 8 onwards, would amount to around Birr
25 Million per year.CHAPTER 6
AGRICULTURAL DEVELOPMENT
' . . ■*
GENERAL
6.1.1                Maintenance of higher efficiencies 1n the resource utilization, especially the economies of scale in the organization and operation
of resources require developiwnt on a^cpoperatlve basis and hence agricultural activities would be concentrated nalnly on 30 Producers cooperatives 1n the project area each of which would have:
-  500 famfami lies having 1250 man equivalents :Of .labour.
-  1000 ha. of arable land for food crop production which Intends to generate marketable surpluses.
ha of arable land for pasture production and subsequent ley farming mainly to maintain 100 heads of milking cows in the long run to satisfy the,Milk and meat requirements of settlers.
-  136 ha of wood lot (supported by central nursery and staff)
to meet the bu1 Iding/fire wood requirements of the settlers.
-  A unit workshop with 7 tractors (70 h.p) and necessary ments equipments and tools (supported by central work shopjtc generate the needed farm power.
-  70 ha of soil conservation strips and other structures to conserve soil and water.
-  Managerial and extension staff (supported by central training centre and professional staff) to train settlers to develop leadership and self management in the adoption of modern farm technologies and systems to provide incentives for fepi work and thus ensure suitable resource mobilization for cooperative development.’
-  Primary school which could accommodate 355 students.
-  A health station
-   A market place for the occasional marketing of surpluses fron homestead farming.- Cooperative
goods.
54
shop for the sale and distribution of consumer
- Cooperative mill to
settlers.
meet the milling requirements of
- Cooperative
. All weather
office and staff houses 
road access.
teads would be located with adequate considerate
SettlerS'. "Tties to central services (School, Health, Coop shop
to the accessibi 1
etc) and the cooper.’ J 
fie]ds> According to the settlement policy
homestead plot is 1000 ane
of wester in • 
un(t 1s 50 te' Th«
of the plot is fixes at 40 » x 25 n. in order to facilitate
'tX disposal of run off water through the interception ditches 
«Mch would be located with the needed vertical intervals. Each h«.
stead would have independent access to road.
Further to improve the efficiency of utilization of family labour
(consists of not only male labour but also female labour) farming
activities would be undertaken in 900 m^ of the homestead area.
This would satisfy the family requirements of food commodities althci::
market outlets would be needed for occasional surpluses.
2 AGRICULTURAL ACTIVITIES
This     chapter     outlines     the     agricultural     development     activities     of     the proposed project especially:
-  Cooperative crop production
-  Cooperative livestock production
-  Homestead farming
The other activities have been outlined in the previous chapter (The Project) and further elaborated in the respective annexes.COOPERATIVE CROP PRODUCTION
Crop production would be the major initial agricultural activity 
tn the cooperative farm. Suitability of agro-ecology of the area for
crop production is highly evident from the land capability study of
SOGREAH. Major food crops like maize,, sorghum, haricot beans and pepper would be cultivated in! the cooperative fawn.
6.3.1       Land Use
Land use for crop production a .single cooparative f^rra and a homestead ari depicted in the'fabliS ili4 and B4-1 of
,ann$x 3.
6.3.2       Crop rotation in cooperative farm
Proposed crop rotation for the first 10 years is shown i*: figure 6.1. This rotation would be practiced from the first year
and becomes fully operational from the third year. As maize is particularly suitable as the first crop after land clearing, the proportion of maize during the first two years would be substantially higher than during the following years. Haricot beans would be grown as a pulse crop 1n the intended rotation^iiue to its prospective external market. Pepper is the promi sing ^ash crop which would be introduced gradually with intensive extension efforts due to its technological pecularity (See annex 3 for detail).
FIGURE 6.T
’F■
PROPOSED CROP ROTATION FOR COOPERATIVE FARM
Maize               jT Uncleared 2
Sorgh.
Uncleared
Pulses
Sorghum
Maize
Pep.
Maize
Sorghum
Pepper
Maize
Sorghum
Pulses
Sorghum
Pulses
Pepper
Maize
Pulses
Pepper I
Maize
Sorgh
um
Maize
Pepper
Sorghuro
Pulses
Sorghum
Pulses
Maize
Pepper
Pulses
Maize
Pepper
Sore
hum
Pepper
Maize
Sorghum
Pulses
Sorghum
Pulses
Pepper
Maize56
6.3.3      Land clearing
Cooperative crop land - •_
i in every settlement unit would be
cleared in two s ag .
woo ha of crop
land and 70 ha
the second *   -
ear
Land c1earing would be done mainly with
settlers'labour exception the pulling of trees with tractor power.
cording to the existing vegetation and tree density in the project
area the labour requirement per ha is estimated at 70 man days 
and the pulling of trees requires 2 tractor hours per ha. Total
labour and machinery requirements for cooperative crop land clearing
are given in annex 3 (Table Bl.2 and Bl.3). Accordingly, 63,000
tractors hours would be needed for the whole project during the first
five years of the project life and the labour requirement for the sane
period is estimated at 2,310,000 mandays.
6.3.4     Soil conservation
Field   roads   (20   km*),   waterways   (4   km*),   Diversions   (8.1   km*)   and contour    strips    (200    km*)    will    be    constructed    per    cooperative    farm.    !!,• conservation   layout  would  occupy  an  area  of  70  ha  per  1000  ha  of  coop erative    crop    land.    Conservation    layout    requirements    for    the    whole    pro is   given   in   the   section   5.2.5.6   of   the   previous   chapter   and   in   annex   . Accordingly,    6000    km    of    contour    strips,    243    km    of    diversions    120    ’• of   waterways   and   600   km   of   field   roads   would   be   completed   within   the first 5 years of the project.
6.3.5     First ploughing
After   land   clearing   the   ground   contains   roots   and   stumps   and   r.fcr.c- disc    plough    (tractor    power    )    would    be    needed    for    the    first    ploughing opposed   to   chisel   plough   which   is   the   recommended   plough   for   the   pro.i- area    from    the    second    year    of    cultivation,    (see    annex    5).    But    the    d>' plough   requires   more   hours   per   ha   than   the   chisel   plough   and   this   adJ tional    tractor    hour    demand    is    given    in    the    table    Bl.3    of    annex    3.    Tot number   of   tractor   hours   needed   per   cooperative   farm   would   be   1510   hou and the estimated figure for the whole project is 45,300 hours.
T«al length in k. per 10D0 ha of coop cropland.- 57 -
6.3.6          Slashing
Manual slashing is recomnended to improve the labour intensiveness and the labour requirements during different
years are estimated at the rate of 8 man days per hectare as shown in the table Bl.23 of annex 3. Annual labour re
quirement for siahing was estimated at 8000 mandays per cooperative crop land.
6.3.7          Chisel ploughing
From the second year of cultivation, .chisel plough, (tractor power) would be used due to its quickness and simplicity of operation and maintenance (see annex 5). Re quirement of tractor hours per hectare is estimated at 1.89
and the total tractor hours needed for a single cooperative
farm from year 2 onward would be 1,890 and the project demand for plough-hours from year 5 can be estimated at 56,700 hours.
6.3.8         Harrowing
In view of the further need to chop the surface trash
still left after the chisel ploughing and the need to break down the cloddy surface, a heavy offset disc harrow (trailor power) with cut away discs on the front and plain discs at
the rear would be used, for two harrowings 2 hours per hectare
is needed and hence the total number of tractor hours per
co-operative farm from year-2 would be 2000 and harrow-hour demand of the project could be estimated at 60,000 from year 5.
6-3.9 Crop varieties
The crop varieties are those which produce high yields under local conditions. For maize the following varieties are considered: SR 52, Alamaya Composite, KCC (Kenya Composite C and KCB (Kenya Composite^ and KCB (Kenya Composite B), all late varieties, and an intermediate variety, Awassa 511.58
varieties.
Other crop varieties would also be considered for the project
as they are tested and released by research institutions and aft
an initial cultivation on demonstration plots.
6.3.10       Time of stand establishment
High yields could be obtained with maize and sorghum with earl. May planting while haricot bean would be established on June and
the transplanting of pepper would be on July.
6.3.11       Crop establishment
Maize, sorghum and haricot bean would be established with seec materials while pepper seedlings would be raised from nursery and transplanted. Establishment of crop would be effected with manual labour according to the recommended spacing. Spacing, seed rate ar labour requirement (including the basal dressing of fertilizer) per hectare would be as depicted below:
Cro£
Maize
Sorghum
Seed rate (ha)
75x30
75x10
40x10
25 kg
8 kg
Haricot bean
50 kg
Pepper
380 m2
20
20
20
33
(nursery size)- 59 -
Requirement of planting materials and labour for crop establishment along with basal dressing of fertilizers are given in the tables Bl.14 and Bl.7 respectively in the annex 
3 on Agricultural Development. From year 3 when the produc tion 1s stabilized each cooperative would require 4250 kg of maize seeds, 2664 kg of sorghum seeds, 16,650 kg of haricot bean seeds and about 6 ha pepper nursery to supply the seed lings. About 22,000 mandays per year would be required from
year-3 (and above) old cooperative farm for establishing all the cooperative crops. Project labour requirement of this operation from year 5 onwards could be estimated at 660,000
mandays.
.-
’
Project planting material requirements from the year 5 onwards would be as listed below:
Crops
Maize
Sorghum
Pepper
Requirements of planting materials
127.5 tons
79.9 tons
180 ha of Nursery
Haricot bean
499.t tons.
6.3.12
Fertilizer application
The red and reddish brown
soils of the project area nee
ds 
only nitrogen and phosphorous fert
ilizers while potassium is 
found to be unlimiting for all crops.
Hence the following rates 
would be adopted:
Crop
Urea
dapt/
Maize
' 50
100
Sorghum
50
100
Haricot bean
100
Pepper
100
200
According to the availability of fertilizers in the country Dianmonium phosphate and urea? were selected and the costs of tii; fertilizers required during different years for a single coopera tive farm is depicted 1n the table Bl.15. (annex 3). From year 3
.onwards about 120 tons of DAP and 40 tons of urea would be needed per cooperative farm. Total Project requirements of DAP and urec from year 5 were estimated at 3600 tons of DAP and 1200 tons of ?.
DAP: Di ammonium phosphate60
6.3.13        Plant protection
rtices such a
s weeding and pest and disease
Protects pra
. since diff
1abour erent
control woulu oe carrie
disease control only
type of sgro-cne
the labour requirerent fw
co! t per ha of
pleet protection and top dressing
si g o
„   f fertilizers are listed be>«:
Crop
Cost per ha of
agro-chemicals
Labour    in    MD/ha    for
plant
protection    and    top    dree.,-
(in Birr)
of fertilizers 
Sln -
Ma i ze
20.27
40
Sorghum
20.27
40
Haricot bean
32.43
40
Pepper
55.38
123
See tables Bl.16 and Bl.17 of annex 3
for the cost of agro-chemicals.
Labour   requirements   of   this   operation   from   year   3   was   estimated   at   «,$: mandays and project labour need from year 5 would be 1,305,000 mandays.
6.3.14       Harvesting .
Harvesting of all crops would be done manually. Mechanical trans port related to harvesting is described in the next section.
Harvesting of maize would be done during November and December while harvesting of sorghum would be done from November to January,
crops would require about 30 md/ha for harvesting which includes labour required for transporting the harvest to the farm or
to the nearest threshing/shelling place.
rvesting of pulses would take place during October and
it is assumed that 20 md/ha would be required for this operation (includinj retired tra„sport operations as for .aize ««
sorghum).»‘ < i ‘ r I
5 3 16
61
First picking of pepper would be done during December and the second one during January. The first picking would require 20 md/ha
and the second 10 md/ha. Considering 2 mandays for transport to the drying floor, the, total labour requirements for harvesting and trans
port to the drying floor would be 32 MD/ha.
Labour requirements and cost estimates for harvesting are given, in annex 3, table Bl.9. Accordingly total labour demand per cooperative farm would be about 30,000 mandays from year 3 and the project demand of labour from year 5 would be 900,000 mandays.
6.3.16 Farm Transport
The essentional assumptions concerning the farm transport are given in Annex 5 - Farm Mechanization. .Here should be mentioned in addition that in calculating monthly machinery requirements the assumption was made that two major peaks of transport activities 
would occur viz during the planting time and later during harvesting
time. Machinery requirements and cost estimates for on farm transport
per crop year for single cooperative farm are given in table Bl. 10
of annex 3. About 700 tractors hours would be needed by a cooperative which is 3 year old and above.
Farm transport demand of the project from year 5 onward could be estimated at 21,000 Tractor hours. For cost analysis Birr 11.10 per tractor hour
was used.
• •   Threshing and Shelling
As the machinery to be used for this operation is described in Annex 5, here reference would be made only to respective labour requirements and timing. The shelling of maize would be done by the end of December and during January and would require 15 md/ha.
require 11 md/ha.
and would require 10 md/ha.
The threshing of sorghum would be done during January and would require 11 md/ha. Threshing of pulses would be done during November
Drying , bagging and transport of pepper
from drying floor to store would require 9 md/ha.62
The labour estimates also include store operations. LaboUr , machinery requirements for threshing, shelling and handling for cooperative farm are presented in tables Bl, 11 and Bl. 12 respe^^
From year 3 onwards the total labour demand per cooperative farin w. ' about 11,000 mandays and that of the project would be 330,000 manadv from year 5. Total sheller/thresher hour demand per cooperative c.-
be amounted to about 1500 hours from year 3 and that of the project'
be 45,000 hours.
6.3.17 Production and Revenue
Annual production of different crops from a single cooperative farm and the whole project are shown in the table 5.2 of the chapte
6.4 COOPERATIVE LIVESTOCK PRODUCTION
6.4.1                    Attempts would be taken to meet the milk requirements of the settlers by providing the necessary facilities to develop dairyinc 
on a cooperative basis. Estimated requirement of dairy cows is 
about 100 and it is expected that the tse-tse eradication as propose,
in the annex - 6 would create a reasonably trypanosomiasis free environment at least on the 4th year to introduce 50% of the require: heads followed by the balance on the subsequent year. Observation reveals that the native Horro breed is fairly resistance to trypanoso miasis. Hence the programme would conmence with Horro cows and sub sequently be upgraded through cross breeding with Friesian. The pr herd population at full development would be around 7,000 heads aw productive heads can be- considered at 50%.
6-4.2                    Animals would be maintained on the native hyperrhenia pasture which would be supplemented by hay, silage, crop residues and con centrate feeding. Estimated hectarage for intensive grazing along
with hay and silage making is 200 ha and hence the total pasture - for the whole project would be 6000 ha. Labour and machinery require ment for pasture land clearing is given in the annex 3, table B2-4- Fencing would be done in the pasture land to facilitate rotational grazing and the cost per settlement unit is estimated at Birr 18 A (materials only).Amounts of supplemwrttfryifeeds needed during dlfTE’
years for a single cooperative farm are shown in the table B2.7 o1 Project requirements of ground maize; and rioug cake (at full develop
: would be 144 tons 363 tons respectively.
;63
Maintenance of good animal health and productivity especially during the wet seasons would require adequate housing and spaces. Accordingly sheds as proposed in the annex 3 would be constructed with the total material cost of Birr 18,000 per cooperative farm
and the labour cost is estimated at Birr 4,000 for the construction
of the same.
Manual labour would be used for all the management operations and the labour requirement in mandays for a single cooperative farm
is depicted in the tables B2-3 and B2-6 of annex 3.
Animals would be protected from all the diseases of the project area according to the proposal in annex 6.
Milk and meat production during different years for a single cooperative farm and the whole project are given in the chapter 8.
6.5. HOMESTEAD FARMING
6.5.1                     Annual crops, fruit trees and poultry would be the three major components of homestead fanning. According to the availability of information on the production process of the different crops and live stock enterprises in the project area, the food requirements of settle and the future market prospects, 6 types of annual crops, 2 types of fruit trees and poultry have been selected for initial introduction, though efforts could be taken during the implementation period for further diversification of homesteads in order to upgrade the nutri tional levels of settlers. An example of a homestead layout is given in fig. 6.2.
Requirements of birds, seedlings and other inputs such as seed materials, fertilizers and agro-chemicals for single homesteads and
the whole settlement unit during different years are shown in the tabl B4-6, B4-7, B4-8 and B4-9 (annex 3).
$•3
All the homestead farming operations would be done manually anc
the      annual      labour      requirement      per      homestead      is      estimated      at      48      mandays. Annual project labour demand from year 5 would be 720,000 mandays.
5*4                    Production from single homestead plot and the whole project from homestead farming during different years are given in the chapter 8.64
Figure _6-2.
Homestead Layout
Fruit trees
/<
Open Area 160 m2
I
I
I 16 m
House
70 m2
Feeding Area 138 m2
Poll try 3m
i
i
Green Beans
60 m2
I
1
f
I
r
0.5 tn
Green maize
240 m2
i
i
Cabbage 50 m2
Pepper 50 m2
I
5 m                Potato 50 ni^ V
1m
-—-•*
Fruit
trees
1 jn
1 m. 10
12 m
m
Not to
House
=
Vegetables         = (onion,   caDbage, pepper,   potato   & beans).
m
126 m2
160 m2
70 m2
260 m2
J m
Fruit trees  =
Open Area =
o
Green maize = 240 nr feeding area with
poultry house = .144,.
r 1000 m2
T.
I65
CHAPTER 7
ORGANIZATION AND MANAGEMENT
7 ] GENERAL ASPECTS
Planned project components have very high complementarity and hence successful implementation requires strict adherence to schedules and care ful integration of a number of activities. This essentially needs a high
standard of staff capability at all levels and an overall organization
that can efficiently coordinate all major activities.
Implementation of planned activities needs close administration by an organization physically located in the project area and the organiza
tion must have direct control over the facilities necessary for its 
purposes. Hence the organization should have a high degree of autonomy subject of course, to general policy direction from the Relief and Rehabi litation Commission which is adopting a little different management
pattern in the existing settlement areas by directly supervising the settlement units through Regional Representative Offices (see annex - 1).
Chief executive would be the Project Manager who would be appointed by the Relief and Rehabilitation Commission. He and his staff should be located in the project area and responsible for implementation and manage ment of the project until the time the settlers take over fully, through
their own associations the complete management of their settlement units.
A special project committee would also need to be formed to deal with the problems and decisions concerning roads, marketing, water supply, livestock, cooperative training, research etc. Inevitably a close work
ing relationship would be required with organizations responsible for such activities. As for example Institute of Agricultural Research, Ministry of Agriculture, Agricultural Marketing Corporation, Ethiopian Highway Author!e etc.66 -
PROPOSED ORGANIZATION
7.2.1
Responsibilities ofJh^rganijat^
Responsibilities of the organization can be listed as TollOwS;.
(1)
Design and construction of road, essential buildings  and water- supply  system and the maintenance of the same till the antici. pated phase out of the project.
(2)   Undertake farming activities both on cooperative and individual basis.
(3)   Investigate the agricultural problems in the new area and improve the farming systems by coordinating the relevant institutions (Institute of Agricultural Research).
(4 )   carry out local adoptability trials and demonstrations along
with other extension tools and improve the agro-technical know how of the settlers by coordinating the Agricultural Develop ment Department of the Ministry of Agriculture.
(5)  Promote settlers associations (producers' cooperative) and improve the managerial activities in a cooperatives basis by coordinating the Peasant Association and Cooperative Develop ment Department of the Ministry of Agriculture.
(6)    Undertake livestock development activities for milk, meat and other purposes.
) ke efforts for the local multiplication of seeds of improved op varieties in order tc meet the project demand.
( ) Establish forest nursery and undertake afforestation activities m a cooperative basis.
( ) ke arrangements for the efficient use of forest resources e -9- charcoal production etc.
Undertake soil
conservation activities.67
(11)      Coordinate the Animal Resource Development Department of the Ministry of Agriculture and control all the animal diseases in the project area.
(12)      Maintain a proper management of the available machinery pool.
(13)      Control the purchase of investment items and production inputs.
(14)      Control and manage the vehicle pool of the project.
(15)      Provide all social services like education, health etc. by coordinating the necessary institutions like Ministry of Education, Ministry of Health etc.
(16)      Make arrangements for the timely availability of farm credits and the repayments.
(17)      Make arrangements for the marketing of all agricultural produces.
(18)      Provide facilities for the local payment of salaries and allowances to the project employees.
(19)      Provide centralized accounting, using modern techniques for all elements of programme implementation.7.2.2 Structure of the Organization
An organic vn
• th the above responsibilities should have
d together
under
al l the necessary  PerS0 ^oposed structure of the organization i5
various  K^0"5'  illustrated in this  Chart there are 5 major
given in Chart 7.1. * divisions and one unH under each division accord,
Project Manager vnth vanous brane, functions of the respective diw
CHARI__Ll- 69
y 2 3 The Project Manager's Office
Project Manager
1 Secretary Typist
The Project Manager would ba a Farm Management Specialist or Agricultural Economist with many years of practical experience in farm management and administration. He should have at least a B.Sc degree from a recognized Institution. Preferably he should have experience in development of settlements. He would be responsible
for the overall smooth and efficient running of the project and in particular would have the fol lowing functions:
-  he would be responsible for the overall administration coordination, and management of the project.
-  he would be the chief liaison officer between the project and the Relief and Rehabilitation Commission and other Government or concerned agencies.
-  he would be responsible for proper utilization of project funds and resources.
-  he would be responsible for recruitment of, and remunera tion of project personnel.
-  he would be responsible for preparing situational and progress reports of the project to RRC.
7
•
2
•  Monitoring and Evaluation Unit
4
1 Agricultural Economist (Head)
1 Agronomist
1 Secretary Typist
The agricultural economist who is to be the head of the monitoring and evaluation unit should be a person with practical experience in evaluation of projects. The functions of the unit ace to be as follows:
Follows if project implementation is going according to schedule and recommends corrective measures.- 70
- Collects essentiat es
.
. , feed-backs of the implementation process 
O f project actlV^ary data and compiles them.
. collects all nece
. Formulates standards^or
iter ion and evaluates project
activities ac‘°^"9/ tion reports including recommendation
. submits periodic eval
aw)
Mkes a fo”« “p StU'11''
• -l FnoineeringOlYiAi^ ' 
.* <
7.2.5 £ivij_£_a---------- -        '              Division would be headed by an experienced
Th e   Civil   Engine^   branches     of     the     division   are   given   in   chart r:” Tbe'division »ould bare the foiling functions:
■ .nd construction of all roads and buildings: • ’ DeS’9"- inn of contract construction of buildings;
:
XX               constructiw’ Maintenance of roads and bridges;
°f
“ ter
supp’!'wteK;
: Operation and .intenance of »ater supply system
CHART 7.2 CIVIL ENGINEERING DIVISION
inagement and extension6 branches are
iv
9 en in annex 10 on organization,71 -
2fi Agricultural Development Division
The Agricultural Develop rent Division would be headed by a farm management specialist with many years of practical experience.
The division would be divided into four branches as shown in Chart 7.3 and would have the following functions.
-  Undertake farming activities,
-  Maintain of Farm Records as a pre requisite for the improve-
1 •
ment of cooperative management;
-  Develop mixed farming systems by combining crop and live
stock and continuously improve the systems by constantly 
studying the ecological conditions and by testing and
introducing new agro-technologies;
-  Purchase of the basic livestock & poultry;
-  Control plant and animal diseases and pests;
-  Undertake agricultural extension activities by establishing
demonstration plots, farmers training, field days, group
discussions etc., in order to improve the technical know-how
and the managerial abilities of the settlers;
-  Multiply seeds of improved varieties in order to meet the local
demand;
-  Coordinate with coop and marketing division and obtain the
market prospects of various agricultural commodities in order
to make the necessary changes in the farming system;
-  Establish forestry nursery and undertake afforestation activities
-  Coordinate with Forestry Resources Development Department of the
Ministry       of       Agriculture       and       undertake       investigation       for       forestry development;
-  Make efficient managerent of the farm machinery pool.
CHART 7.3
AGRICULTURAL DEVELOPMENT DIVISION
•vestock production IDn Branch
staffing of the branches                are given in the annex 11 on organization and manaqcme72
7.2.7 r.nnn. Training. andJjarkeHMJ’l,lsl°
The coop ano ®7ketin  Division would be headed by a per
9
Mll
"’XXsX in the chart 7.4. The functions of the di,isloo
are as follows:
. Establish settlers' cooperatives in order to transfer the managerial functions to the settlers;
. provide training to the settlers and the employees of the
project;
.
. Maintain proper records of all credits given and ensure repayments;
-  Study and provide marketing outlets of the farm products;
-  Coordinate with the Ministry of Education in the con struction of school buildings, recruitment of teachers and the management of school;
-  Coordinate with the Ministry of Health in the establishment of Health Stations and Management of health programmes.
CHART 7.4 COOPERATIVE AND MARKETING DIVISION
-Detail staffing of each branch is               given tn the annex 11 on organization             and mana?6'’
r‘ ' ——
r    -473
7 2,8 Administration Division
There would be one Chief Project Administrator to head the Administration Division. He shall be a senior administrator
with extensive experience in the.management of large, multidisci- pilinary operation. The type and number of staff in the branches 
is shown in Chart 7.5. and the functions of the division would be
as follows:
-  Recruits project staff and maintains progress reports of
the employees;
-  Coordinates personnel and clerical matters and assess that the proper administrative support is rendered to the various departments.
-  Selects and transport settlers and operates motor pool;
-  Purchase of all items including the settlers food; kitchen utensils etc.;
-   Issues administrative policies and regulations and makes sure that these are implemented.
CHART 7.5 ADMINISTRATION DIVISION
is given in        the annex 11 on organization and management.74
7.2.9
. ,s eS5ential in order to provide central^
A Finance Divisi accounting using mo er implementation. The
wi th several year5 of„ .p Chart 7 6
for al1 elements of program^
headed by g CMef accoun^
The two branches of the division
..
and the nature of staff
n f the division would be as follows:
and supervise the various financial and nurchasing activities of the project.
. Asserts that funds are receipted appropriate.,
A thorites the issuance of payments to tndwduals and for
’ organizations upon presentation of va.id and genuine receipts 
. Asserts that proper auditing and supervision is made on payments and receipts.
CHART 7.6 FINANCE DIVISION
1   Chief Accountant
2   Secretary typists
Payroll and Allowances Branch
_____ ____________
♦Accounts
Branch
-T
♦Detail staffing is given in the annex 11 on organization
and management.75
7j       PARTICIPATION of settlers IN THE SETTLC/tENT activities
The participation of settlers in all activities of the settlement
program is considered very vital and becomes even more so as settlers are expected to take over the ■anagement of the project after the fifth year. Prospective settlers would be given taining beginning from the first year in areas like tractor and pump operation, simple bookeeping and recording methods, home economics, health and other relevant subjects. Government employees would also m^ke sure that settlers are given the necessary and adequate training over the years so as to enable settlers to take over
when Government staff is gradually withdrawn from the settlement sites while every effort would be made to train settlers inrrelevant fields, each
settlement un^t would also be made to form a producer's cooperative beginning from the fir^st year of settlement in line with the Amharic 
'Producers Cooperative  Directive.
1
,/r
7.4 PRODUCERS’ COOPERATIVES
' 
.7
7.4.1    Organizational structure of a producers* cooperative is shown in the chart 7.7
CHART 7.7 ORGANIZATION STRUCTURE OF A PRODUCER'S COOP
development 1-----------------------------------------------------
Conwi ttee
Admi n 1 s t rd 11 Ort dnd Services Section
i76
7.4.2   Detail functions of General Assembly, different conmittees and
teams are given in the annex 10 on organization,management and . xte
e       nsi
Remarkable features of a producers' cooperative can be listed as follows:
-  The General Assently of the Coop, members determines the equivalent amount of different types of work and the work points.
-  The General Assembly divides the total work of the Coop. ... by forming teams and assigning the necessary manpower to each team.
-  The General Assembly decides on the amount (from the net income)to be shared by coop, members.
-  After deducting the amount to be shared by members, a pro ducers coop administrati on shall allocate 60% for future
w
investment in production and implements, 20% for contingency, 13% for social services like health, education, kindergarten etc., and 2% as prize money to be given for individuals for their outstanding performances in the team.
7.4.3     Mode of remunerating the members of a producers' cooperative is illustrated in the annex 10 using the proposed farm model in annex 3.77
CHAPTER - 8 r PRODUCTION, MARKETING AND PRICES
8 j PRODUCTION f .
8; 1.1 General
“ 8.1.1.1
One of the major objectives of the Project is to
produce new drops and livestocks in an area that has 
• ...»*••• ’ ■ ■
hitherto been utilized only for shifting cultivation.
bee-keeping, hunting and fruit picking. As the
project area is very sparsely populated, the pro
duction in the area before project implementation
should be considered as negligible; consequently,
all outputs of the project farms are considered as 
incremental outputs.
8.1.1.2
The settlement programme of the thirty units
supported by the Project would produce:
-     on cooperative coop land: maize, sorghum,
peppers and beans;
-     on cooperative grazing land: milk and meat;
-     on homesteads: green maize, vegetables,
fruit and eggs.
8.1.2 Yields
Assumed yields of the crops on the cooperative been discussed in Annex - 3 and shown in Table 8.1. Expected yields of milk and meat (cattle component) and of green maize, vegetables, fruit and eggs (homestead component) have also been given in Chapter 6 and Annex-3. The afforestation component is expected to yield 2,040 m  of wood per Unit from year 9 onwards (Table 84 ).
3
8.1.3     Production
8.1.3.1        Annual
Production of maize, sorghum, peppers and beans 
are shown in Table 8.2„sa the third year, each unit- 78
would produce a total of 2,187 tons of these crops. Stabilized production from the whole project (fron,
year - 7) would be 65,610 tons.
g132
Annual production of milk and meat is shown ip
Table 8.3; in full production, they would amount to
75 tons of milk and 6.5 tons of meat (net weight).
From the year-2, total project production would be
2,287 tons and 161 tons milk and meat respectively.
8.1,3.3 Annual production of the homesteads is shown in Tabl
8.5-8,5 from year 3 onwards they would permit, amount
to 22 tons of green maize, 188 tons of vegetables,
160 tons of fruit and 600,000 eggs and the project
production from year-7 would be 645 tons of green
maize, 5,625 tons of vegetables, 4,800 tons of fruits 
and 18,000,000 eggs.
8.2
HOME CONSUMPTION
An appreciable part of the production would be consumed by the
settlers. Grain, milk and meat produced on the cooperative farms 
would be supplied to the settlers through the cooperative shop as 
advance payments on their share of profits. The following estimate
of the settler own consumption has been made.
Consumption
per caput per
annum
Total consumption from year 1 ,,
onwards ' per unit
Total prduction per unit
maize/sorghum
milk
meat
Vegetables
fruit
green maize
eggs
wood
240 kg
34 "
3 kg
4.3 kg
41 kg
10 kg
114
0.8 m3
528 tons
875 tons
6.5 tons
94 tons
90 tons
22 tons
250,000
50,000 m3
37 %
100 %
100 %
50 %
50 i
100 %
33 %
100 %
’’ Used on 500 x 4.4 = 2200 persons per unit79
8.3  MARKETING
8.3.1    Marketing Requirement
From the tables 8.2 - 8.7 and the section 8.2, it follows that the following quantities would require marketing:
------------------------------■
Unit
23
4
5
6
7
onwards
maize/sorghum peppers
beans
vegetables
fruit
eggs  ]
'000 tons
II
II
II
II
mi 11 ion
0.20 0.20
-
-
0.5
2.57
0.80
1.08
-
1.0
7.83
2.46
3.60 Q. 27
015
4.5
24.70 4.53
6.81
2.02
1.75
11.5
32.18
7.06
11.08
2.55
2.10
11.5
27.00
8.79
13.98
. 2.81
2.10
11.5
8.3.2     Marketing Situation
8.3.2.1               Adequate information is not available to enable the construction of realistic demand models for different crops proposed for the Project; but considering the existing grain deficits, along with population growth and income elasticity, it could be anticipated that crops like maize, sorghum and peppers will have a favourable domestic demand. Haricot beans will find a convenient export market in view of the continued reduction of Ethiopian exports from 1974 while the world market situation has improved.
8-3.2.2 Peppers
Although it is envisaged that part of the peppers would be sold to the Ethiopian Spice Extraction Factory (which has a 5,000-ton excess capacity) the bulk is expected to be sold on local markets for home processing and consumption; at a later stage, possible export markets would be investigated.- 80
8.3.3 Marketing Channels
All produce from the cooperative farms would be sold to the Agricultural Marketing Corporation (AMC) which has a branch in Nekemte. It is envisaged that the project lorries would transport the processed crop to Headquarters or Nekemte.
8.4.1   Farm Gate Prices
8.4.1.1    Maize, Sorghum and Haricot Beans
The Agricultural Marketing Corporation is purchas ing the above commodities in the project region at fixed prices. Hence with the assumption that these commodities will be sold to the AMC within 100 km from the project area, the wholesale price range list, given in Annex 9 Section 8 for Gimbi (the same for Nekemte), is used as the basis and the farmgate prices were determined by subtracting the transport and handling cost therefrom.
The resulting farmgate prices in Ethiopian Birr are as follows;
Cro£
Maize
Sorghum
Haricot beans
Birr/ton
237
347
482
8.4.1.2
Peppers
Though the free market price of pepper is not available over a period of years, the Ethiopian Spice Extracting Factory at Addis Ababa is accepting pepper at the wholesale price of 1,882 Birr per ton. Hence,
assumin9 a transport distance of 400 km, the farm gate price is estimated at 1,839 Birr per ton. There81
is,    however,    evidence    that    free    market    prices    are    con siderably higher than this price.
8.4.1.3      Milk, Meat, Wood, Vegetables and other Annual Crops
For   the   above   commodities   produced   on   the   co operative    farms    and    homesteads,    the    following    farm gate prices have been assumed:
Commodities
Price in Birr
Milk
600 per tdri
Meat
3000 per ton
Wood
25 per m3
Eggs
0.08 per egg
Banana fruits (fresh) Pawpaw fruits (fresh)
Cabbage
300 per ton
350 per ton
200 per ton
Onions
500 per ton
Green beans
300 per ton
Green maize
400 per ton
Potato
300 per ton
8.4.2   Economic Prices
8.4.2.1      Maize and Sorghum
Project productions of maize and sorghum are assumed to substitute import due to the existing grain deficits in the country. Hence the border prices (c.i.f. Assab) were increased by 150 Birr per ton for handling (30 Birr) and inland transportation (120 Birr, from Assab to Anger Gutin) to obtain the economic prices. Border prices were estimated using
World Bank FOB GULF commodity listing (from January to June, 1980) and the shipping rates. Following economic prices were obtained.- 82
c.i.f Assab
Handling and             Economic 
Crops
(in Birr/ton)
Transportation (in Birr/ton)
Prices 
(in Birr/ton
maize
sorghum
262
274
150
150
412
424
8.4.2.2     Haricot Bean
Haricot bean would be cultivated mainly for export and hence the border price (FOB Assab, Birr 1,180 per ton) was reduced by Birr 150 for handling and inland transportation (from Anger Gutin in Wollega to Assab, 1,200 km) to obtain the economic price, Birr 1,030
per ton.
J%
8.4.2.3     Pepper
Ethiopian Spice Extracting Factory Imports quality red pepper (whole chilli) while lower grades pepper (whole chilli) being exported. Hence the average of
FOB and CIF prices was taken as economic price of pepper which is Birr 2,930 per ton.
8.4.2.4     Milk, Meat, Wood, Fruits and other Annual Crops
Since the international prices are considerably higher than domestic prices, financial farm gate prices were increased by 25% to reflect the border prices as listed below;
Commod
ity
Price in Birr
Milk
Meat
750 per ton
3750 per ton
Wood Eggs Banana
31.25 per m3
0.10   per   egg
fruits 
(fresh)
375 per ton
Pawpaw f
ruits (fr
esh)
438 per ton83
>•••-; ^-CHAPTER - 9
‘  * • i - FINANCIAL RESULTS
* -1.
5 j COOPERATIVE FARM
9.1.1    Gross Revenue
Gross revenues for maize, sorghum, pepper and beans are per cooperative farm and the project are shown in Table 9.1; those for milk and meat in Table 9<2. The value of the wood harvested per cooperative from the ninth year onward would be 51,000 Birr^(table 9.3). Revenue from a cooperative mill,
based on a milling charge of 0.02 Birr/kg and an annual throughout of 600 tons, would be 12,000 Birr. Gross profit of one cooperative shop has been assumed to be 5,000 Birr. Details of revenues per cooperative are shown in Table 9.4; total revenue per cooperative would increase from 290,400 Birr in the second year to 1,345,000 Birr in the twelfth year.
9.1.-2 Cash Flow
— 
...
• •               ■ • - I
9.1.2.1 A cash flow statement for an individual Unit is shown in Table 9.5. After debt servicing, (year 3 r 8), net balance is shown to increase from 290,400 Birr in the secondyear to 687,000 Birr in the eighth year; since from, the ninth year onward no debts would be outstan- ing, net balance would jump to 788,600 Birr and in crease to 808,600 Birr in the twelfth year.
^Note that all revenue calculations are based on total production including the parts 'bought* by the settlers.
’1 2/ ■
Settler labour is not included in operating costs since settlers are not paid but renumerated from the share in net profits,. Since direct rural taxation is not currently enforced in settlement schemes, no rural taxes have been taken into account in the cash flow.. 84 -
. , , , Tn Orter to secure a reasonable far. rncone and adequate remuneration for ^°“r by the settlers,
ft is assumed that up to the eighth year the total net balance is shared out among the settlers in pro portion to the 'work points1 earned by each family (see Annex 10). From year 9 onwards, 100,000 Birr is transferred to reserve funds. (Note that such funds would not be needed to replace capital goods such as tractors, vehicles and tools since allowance for this has already been included in the out flow). The average share paid to the settlers constitutes a renumeration of his labour; it increases from 4.1 Birr per manday in the fourth year to 5.5 Birr per manday in the tenth year.
9.1.3    Financial Rate of Return
This rate has been calculated after adding the labour cost of the settlers (one manday valued at 2 Birr including the labour on water supply, health promotions and school building. Calculation of Internal financial rate of a coopera tive was done using the cooperative physical costs given table 9.6, the labour costs estimated in table 9.7 and the gross revenue given in table 9.4. Table 9.8 shows in positive balance from the third year onwards. Rate of return is 33.6%; a sensitivity analysis gave the following results:
at 102 increase in costs 
(table 9.9 ) =
at 102 reduction in revenue (table 9.10) = at 102 reduction in revenue
and 10% increase in costs ( table 9.Il) INDIVIDUAL SETTLERS
9.2.1   Gross Revenue
27.2 26.6
= 23.3
Gross revenue of one single homestead from farming is shown in Tables 9.12; it is 352 Birr from the fourth year onwards,
176,100 Birr per Unit.^ Aggregated revenue from homesteads different years are given in table 9.13 and 9.14.
/Total production, including own consumption, is considere revenue calculation... -
develop      off-farm      activities      which      would      provide      the      settler      families with additional income.
9.2.3    Cash Income
The net settler income discussed above includes that part of the value of all products produced on the cooperative farm and homestead which is assumed to be consumed by the settlers. Table 9.17 presents details on the value of own consumed goods and services; the total has been transferred to the cash flow (Table 9.16) and deducted from the net farm income to give the
available cash per family. This shows that between 50-60% of the net income would be in the form of food, wood and services produced in the cooperative and homesteads, leaving a cash balance of Birr 405 (year 2) to Birr 1085 (year 12).
Annual Financial Revenue of the Project
Annual gross incomes from cooperative farm and homestead were aggregated to obtain the annual financial revenues as depicted in
table 9.18 .
85
g.2.2 Cash Flow
The cash flow for one settler is shown in Table 9.16. In flow would consist of revenue from homestead (table 9-12)share in net profit of cooperative (transferred from table 9.5' and the various credits and costs given in table 9.16. Irt the out flow, own labour cost is not considered. After debt, servicing (2nd to
5th year), settlers income would gradually increase from 9.38
3irr in the second year to 1880 Birr in the twelfth year. This 
is considerably higher than average farm incomes in the country;
it would constitute a per caput income rising from US$103 in year 2 to US$ 146 in year 5 and US$206 in year 12. Furthermore, total available labour would an average be occupied for around 50% in the farm and homesteads, and cooperatives would be encouraged to_ 86 •
•> . *
r
»k
s* •
.1. A • .C’
.<■...!
»                   • ei •
Repayments of Cooperative and Settlers Credits
•".7
9.4
fn . the Cas cMperatives
in the table . P
complete on year 8 wnne
. during different years from year 2 were estimated RePTnL “navsis Si«" tab,es 9’5 a"d 9'17 as ”,e"
begin to repay fro. year 3 and hfflneStead on repayment would extend
from year 2 to year
5.
« - -
«V-
■ •.
..  •
-Of
r.
•; ■■■•■'
/
‘X*:
K
• • • <• 
. t :-r .
•<
»
- ’■
> *‘iiS .
/
-7J
'F
■
' ■ bs'juha :
K
A
'?■ V
'.r*5 f
;.v$
•. ...
k
•’• r
■ r r.- '
,v
.!<
I fill .87
CHAPTER - 10 BENEFITS AND JUSTIFICATION
]O j benefits
.
(
10.1.1                  The project would assist in reducing the over-popu lation in the drought stricken highlands by moving 15,000 families. ... .
jO. 1.2                 The project would develop around 71 ,760 ha of presently unused land in the Lower Didessa Valley, arrange for proper soil conservation methods, bring 30,000 ha into crop pro duction, develop 6,600 ha for grazing land and reforestate
4000 ha.
./
10.1.3                  The project would ensure a net farm income for 15,000 families of a level considerably above that in the area of
their origin. In addition, it would provide gainful employ
ment for around 700 salaried staff in managerial and technical capacity.
10.1.4                  The project, in full development would produce a large annual marketable surplus of food (42,810 tons of grain, 8790 tons of peppers, 15,000 tons of beans, 188 tons of vegetables, 180 tons of fruits, 750,000 eggs etc.). This surplus would partly assist in alleviating food shortages 
in the country, partly be exported and thus earn foreign exchange, at 15.5 million Birr per annum.
10.1.5                  The project would develop an area of 71,760 ha by providing infrastructure, health and educational facilities 
for its 66,000 inhabitants.
10.1.6                   The project would assist GOE in its policy to organize viable cooperatives for food production and other activities.
10.1.7                   The project would provide a model for further settle ments which are expected to be developed to settle an average of 10,000 families annually.88
10.2 ECONOMIC ANALYSIS:
10.2.1      Adjustments:
For an economic analysis, the following
adjustments have been made in the financial me*,  mses and benefit streams of the project:
(a)    Water Supply, Health and Education components were considered as social benefits and have
been excluded from the costs. Financial costs excluding social components (by expenditure catagories) are shown in the table lo-l.
(b)    Foreign exchange components of all the expenditure catagories in table 8.1 were considered as 
reflecting the border prices, since taxes, duties 
and subsidies were excluded in the financial costs. Total foreign exchange costs during different
years are shown in table 10..2
(d)    Unskill labour costs of all the economic components have been multiplied by 0.5 ( shadow wage rate)
to obtain the economic costs.
(e)    Local costs excluding unskill labour have been multiplied by the standard conversion factor
0.75 and converted to border prices (Table 1Q.3)
(f)     Economic prices for all crop and livestock produces as discussed in the section 8.4.2 have been used to derive the economic revenue as shown in the tables 10.5 -10.12.
1/ Guidelines to Project Planning in Ethiopia, 1979.89
10.2.2      Cost and Benefit Streams
Costs shown in Tablel0.4 and benefit streams given in Tablel0 12 were used for the economic analysis as depicted in Tableio,13. The estimated
economic rate of return was greater than 50%. Parameters considered in the sensitivity analysis and the corresponding Internal Rates of Return obtained were as fol lows:-
Sensitivity Analysis
(a) Economic costs and benefit stream based on financial farm-gate prices (TablelO-14)
(b) 20% increase in the economic costs and the benefit stream estimated using economic prices. (TableiO-15)
(c) 20% reduction in the economic revenue and with economic costs (Table 10.16)
(d) 20% increase in the economic costs and 20% reduction in the economic revenue (Table 10.17)
Internal     Rate of Return
32.29%
44.92%
42.87%
.
34.18%
Based on the above results it could be easily concluded that the project is economically justifiable. ”■
T90
TABLE - 5.1
(!) SUMMARY OF LAND CLEARING (ha]
Proiect Year
1
2
3
4
5
b
7-11
Total Years
Total
...
1-5
Whole
Project
Cooperative farm land
2000
5000
7000
10000
6000
-
-
30,000
30,000
Conservation areas
150
350
500
700
400
-
-
2,100
2,100
Village areas
150
150
300
300
-
-
-
900
900
-
-
-
-
-
-
-
-
-
Sub Total Component 1
23QQ
===^29===
___ Z8QQ_
_    11QQQ-.
540Q
-
.    _^3*Q0Q_      _
33^Q00
Forestry Component         5
85
170
340
510
510
510
1955
1,615
4,080
Cattle Component             6
-
1000
1000
2000
2000
-
4,000
6,000
Homestead Component 7
250
250
500
500
-
-
-
1 ,500
1,500
-
-
-
-
-
-
-
Grand Total
.2*535 _
.5*220
2*54Q
_ 13*010
_ 8*210 .
=2*51Q====
L=U955 „
=
= 44*580_J*. I
91
TABLE - 5.2
0) LAND clearing for coop, crop land component
Yr.   1   :   400   +   30   conservation   works   +   30   village   area   =   460   ha
Yr. 2 : 600 + 40 conservation works
Cost        per        ha:        -        70        md        =        140        Birr _______________ - 2 tractor hours - 22 Birr/ha__________________ - extra for first ploughing; 18 Birr/ha
Cost per unit ( ‘OOP  Birr-) Year l Ygar 2
- 640 ha
1
Tractor use
extra 1st ploughing
10.1
:=Zd
14.1
1L5
________________ Total
Settler labour
17.8
64.4
1
25.6
89.6
2
3
4
Credit Tractor + ist.plxi
89
217
306
434
-256
Settler labour:
322
. 770
1092
1540
896
--- -------- ----------------------------------------------------
Total component 411
1152
A
I
»
f
only for co-operative crop land ano soil
- conservation grass strip area.
592
TABLE - 5.3
(2) MECHANIZATION COMPONENT - INVESTMENT COSTS
Unit
Year
1
Year
2
Year
3
Year
4
Year
----------------------- 5
Cost
No.
Cost
No.
Cost
No.
Cost
No.
Cost
No.
Cost
Unijs:
Tractor
39
20
780
35
1365
55
2145
70
2730
30
1170
Chisel plough
4
20
80
35
140
55
220
70
280
30
120
Disc plough
3
20
60
20
60
40
120
40
120
-
-
Disc harrow
4
20
80
35
140
55
220
70
280
30
120
Trailer
4
20
80
35
140
55
220
70
280
30
120
Sub-Total
1080
1845
2925
'3690
1530
Unit Workshop
24
5
120
5
120
10
240
10
240
Unit Tools and fuel tank
4
5
120
5
120
10
240
10
240
Costs Coops (on credit)
1320
2085
3405
4170
1530
Headquarters-.
4x4 pickup                6
35
2
70
2
70
1
35
1
35
Station Wagon         2
35
1
35
1
35
Fuel Tanker              1
45
1
45
5 ton truck                1
' 80
1
80
Main Workshop
300
1
300
Workshop tools
200
i
100
i
100
Houses
282
214
240
190
fnsts to Government
912
419
275
225
tai Capital Costs
_________  L 2232.
-.—2504.-=-
„
.. 3*80-J .
» . u.            ,
1*30. .       ,- 33’
table - 5.4
(2) MECHANIZATION COMPONENT - PERSONNEL COSTS IN 'OOP  BIRR
1
Personnels 
tachinery Manager
Pzf
Tear'
1---- TO
Year TfOnwards)
f
TO
I orkshop Superint. P7
■ 1.- _ -tot—n-------- r-—--------------------------- -t
I■
'roject     Machinery     Superv.P/L     12.0
7770               12.0            TO
TO        T270----- TO
24.0
. enior Mecnanics ----------------- - ' 
___ > umcr hechamcs
(raftsmen
I rivers____________
bl1  TO TO
s      070 sz
THTO
Year-
“7--- TO 770 TO- 7770 ’
TO        42.0       TO
370 TO
T
II
>
76.0 ~~i           33 To “TO
: .tore Keeper __________________IE
O
73
2-0 / ,s s 1 s t a nt Store deeper S3
;
T 4.0
o
O
2.0’
O o—r
O■
I
I
ractor Op' e‘ra^2to8rs 0.b0g 80.0
,
80.0
I nit Machinery Supervs. S] 35.0
.
70.0
I
f
4.
Sub-Total ' 
ZQ5.0—
T
Repl a£eiD£nt_by_Settle£S
■
Gmt Machinery Supervs. -
'
t
~~ T.’ffictor Operators_______________ 2_________ *370 A s ST stant Store Keepers________-___________ 2_
z Sjoia Keeper
' ' "Drivers
T3
T3        370“      >
O W
O
—--------Z3--------’-------- O
s
73
O--------- 33------- TO
Traftsment
-
“----- rrr
O-------- 377------- r
J-
Junior Mechanics ~~______________- Senior Mechanics
Project Machinery Supervr. “ Workshop SuperintIDirecOost_) - Machinery Manager(Direct CostjS
O’
O
T3
O
O
O-------- T33" O“~TV3 j TO ~ O-------- 63 O  TT   ~ s 93.
———~             ro “TO
TO “TO
TO
TO
ZO
TZ3 t------- 123““
Sub-Total
'
Total Personnel Cost 205.0--.T 
TO
360.0
170.0 "03
383,7“ '" 4053 ' “03 
522.2                 bzz.z ' ~
606.0 !
808.0            727.0          686.5          605.5        522.2            .          522.2 —TABLE-
(2) MECHANIZATION COMPONENT - OPERATING COSTS
Project Year-
Year
------Year
Year
Year
Year
Year
Year      i Year           1         Year
Detail
------- 1
“2“
3
“V
5
7
8
l  9()0nwards
Costs to Cooperations
Running costs of Machinery
on credit
----- 90---------
365
800“
1420
1KB5
1380
690
-
-
Direct
-
-
-
-
346
690
1380
2070
2070 J
Settlers labour
60
120
240
384
406
450
498
498
Salaries (Direct)
-
-
-
-
-
-
-
“24“
“24“
Running costs of Workshops
Direct
-
-
-
2U
40
60
60-------
Running costs of vehicles
Direct
-
-
-
-
“2T“
' 47 '
“83“
125
T25
Upkeep of houses
-
-
Direct
Direct
Settler labour
Cost to Government
Running costs of Workshop                   20
“Salaries
Vehicles
Upkeep of"'houses
Government                                                                   446               665
-
Total on Credit
50
“T“
355
3
6
800
9
1420
1586
1380
-
9
-
-
-
-
-
377
755----
690
-
60
1509
“120
2288
Total Operating costs to
240
384
406
450-----
2288
478
■478
Co-operatives
QD
425
l c.cir\
2346
2541
2649
2786
------- 7^------------ —
2786
^0
“ 205
60
Soo
486
---------568-----
““60
“50“
----- 343----
------- 4U-----
-
70
103
114
------ 28T-----
125
155-----
-
”3“
TO4----
83-----
47
—Total Operating costs to
“5
7~—
--------- 8-----
_
--r—
• • • •
295
“750f-
505
4T0-----
“270 "
-
—
-•
TotaT Operating costs
385
“ 871
1 585
“2470
2851-----
2551-----
“7869--------
2786
-----2786---------95
TABLE - 5.6
(2) MECHANIZATION COMPONENT (SUMMARY OF COSTS 'OOP1
Detail
Year
Year
Year
Year
Year
Year
Year
Year
Year
’a'
r -
£osts to Co-operatives
~T"
~T~
3
“4“
------ 5----------
~5------------
”7................
’ "3
9(Onwards)
on Credit:
Capital costs
1320
“7085
“3505
“5170
“T530
-
-
-
•
Operating costs
98
365
“800
“T520
1585
—
390--------
Direct
. ..... _
Capital costs
-
*
-
-
143'V
“38TV
“762V ■■
1238V
" T2BCV
Operating costs
-
-
-
-
"377”
755
1509
~72SE—
“2288
Sub-Total (Co-operativesy
1410
' 2450
"7205
5590
3635
2516
"7951
” 3b76“
=
3553
Cost to Government
-■
Capital costs
912
4T9
“275“
“275“
-■
-
-
-
Operating costs
295"
"446“
665
760
505”
"4T0"
“720“
Sub-Total (Government
■ T707 ■
-
■
940 ’
985”
505”
410
220“
Settlers labour
-
“6CT
“T20”
“240”
384
406
450
498 "
’ COMWNT TOTAL
■ 26rr;
—
5265
6848      1     4524
7007“
[ 3631
4024“
498
■ —/I aa A ------
4066
Replacement funds.TABLE - 5.7
(3) FARM DEVELOPMENT COMPONENT
(Capital and recurrent physical input costs)
Year of Project: Capital costs eer unit
2 stores
Mill houses
Shop
Sheller
Threshers
Grinding mill
Water tank
Farm handtools
Bags
1
2
--------- J’S-----------
------ a--------
—5---------
□
"T-------------
-------7------
-------- 5------- ~1—5----
10(Onwards)
40
—
20
T----------
1
r
TO
T4
Total
Aggregatei Credyt
Coops (Direct)
Recurrent costs per unit
Fertiliser
Seed
Agrochemicals Running cost sheller Running cost thresher
nz:
----- T5--------
■40
~T2~
— 35“
—103..........
r llQ0
-
2l*           21*
585„„
J-Z85-
153.8
22.9
33.6
2.2
-
23Q0.
-
4*
1230
20
17*
-2QQ
105
TT*
2
230
------- --------------
420         '590              1    630
62.0
150.6
8.4
11.9
J—I
TT.3
i—
j
29.3
0.9
Running cost mi 11         '/ « - Upkeep buildings
Credit Tor working
Capital at co-ops ^nop
____
4.4
0.7
-h«r-nn-------
^-9
" 4.4
0.7
—
Total
' 92.3        ! 206.1 TI492.Q
i
221.8
3062.5
153.8
T79
33.6
1.1
~5TB
4.4
0.7
-
222.3 5704.5
'
•
Ii
i
on n A/i/ii r.
Direct
-
1111.5    2223.0
--------------
4446.0 6669.0 |6( 569.0 6669.0
------ * Funds for replacement of machineries and farm tools.97
TABLE - 5.8
1
(3) FARM DEVELOPMENT COMPONENT - SETTLERS LABOUR
Detail
Year
Year
Year
Year
Year
Year
Year
Year
Year
1
2
3
4
5
6
7
8
—         -           %
9(0nwards)
JI , ~
Per Unit
Mill Operator(at Birr
800/yr)
-
0.8
0.8
0.8
Shopkeeper(at Birr •
1500/yr)
1.5
1.5
1.5
1.5
Farm Labour(at
B.2/day)
24.5
...
Total
2$X-
.22Qx5
.-Z^u
• •
*•
I
! AGGREGATE
136-
1 1233-
-I25S9--------
L 4919
. Z113„
: Z362„
Z362 -
,„Z3§2------------- -• 
-    98
. TABLE - 5.9
(3) FARM DEVELOPMENT COMPONENT (SUMMARY OF COSTS)
-------------------------
1
Details
Year
Year
Year
Year
Year
Year
Year
Year
Year
l;— ................. ~~t
Year of Project:
Year
1
2
3
4
5
6
7
8
9
10(Onwards)
Total Credit
1046.5
2592.0
4847.5
7504.5
6620.0
4641.0
2223.0
-
Total Direct Costs
-
-
-
1131.0
2328.0
4676.0
7089.0
7259.0 |
7299.0
Settlers* labour
130^Q
,1233JL
l 259OxO
.4919.Q
Z113.Q
Z362xQ„
Z3G2xQ
7362.0
--
1
1
1
1
ii
----7--3-6--2--.-0--j- -♦—73a6--2-=.0b-- i
f
1
•   '• V
'       Component Total
1176.5
3825.0
7437.5
12423.5
14331.0
14331..0
14261.0
.144-510
14621.0     14661.0-      99       -
TABLE - 5.IO
(4) CONSERVATION COMPONFNT
Year of Project
9(Onwards)
-Caeit»i.c
g5 £
t
4x4
houses
all other costs,includin
temporary staff & labour
■ Sub-total
133
194
85
148
148
173
173
--,_BQCyrrent^£o§ts
Cons. Tech. S]
Assist." S2
7
4
• 7
4
7
4
Mise.,expenses(upkeep
of
houses etc.)_________________ running     cost     of     vehicle Total - cost to Government
3 3*
208
3 3*
102
3
3*
3 190
__ MalntenancetcecurreDt-CQstjQ-CQzQBgEaUitgsl
________Per Unit:
2.2
2.8
2.8
2,8
2.8
2.8
Aggregate (credit:)
25
50
64
56 J
1 28
________   (direct )
11
*
56
28___
56
Total component
208
190
240
1    149
| 104
104
Nnfp-                 Annex 4 (Table 8.1, Discrepancies due to rounding^ ----------------------------- ♦ P»rt°of the vehicle running cost u JncluJetl m lhc cap tai"
♦* Taken over by the line agency (Ministry of Agriculture)
S3100
TABLE - 5.11
(5) FORESTRY COMPONENT ( AREAS PLANTED, HA )
Project Year
First 5 units 5 x 17
Second 5 units 5 x 17
Third 10 units 10 x 17
Fourth 10 units 10 x 17
Total
Seedling requirement
.1
85
2
85
85
3
85
85
170
340
680,000
4
85
85
170
170
510
5
85
85
170
170
510
6
85
85
170
170
510
7
85
85
170
170
510
8
85
85
170
170
510
9
-
85
170
170
425
10
-
11
s -     <
-  :, •
-
85
170
: 170
170     ..
340
170,000
340,000
1020,000
1020.000
1020,000
1020,000
1020,000
850.00Q-
680,000 :■
-
170
-170
340', 000
1
K
L
r
••
•
•
•
••
-•
-•
i
• •
.
.. ■
--
i
•
•
• ■'
... .
!i 1
— J
- ..../
rr.T----
(5) FORESTRY COMPONENT (IN ‘OOQ- birr)
broiect Year
*~CaBltal£o'$ts Buildin
quipmen Tlouses
7 ton 1o Total
* Bgcurrgn
Bi Idina maintenance
 Total.fQr.GgYerprpeot BecurrgnLCQSt^chargeable
tQ.CQzQBeratiyes
nursery labour
12 rr-
~T~
77“ 34^
“T“
12
T~
”T—
"ZT"
“FT
7T
24
W
~T2~
Seeds, pots, fertilizers,
pestisides ’
'
”3“
T”
”7
T7
T7“
77”
57”
“17
~7F
IB
running cost of vehicles ~
HZ
30“
70”
TT~
TT~
( Settlers labours
Aggregate         V         (credit) (direct)
For wood 1Qt esta
For harvesting
COMPONENT TOTAL
* Would be taken over by the line agency ( Ministry of Agriculture)
• ‘ ’ > • •'
*...
• .... ■ ■ -(6) CATTLE COMPONENT
Pmiprt Year
1
2
3
4
5
6
7
8
9
10 1
11
TF -
Cam* tai cost Der unit
<
• --
2 x 50 cows at 300 Birr
—
•-
-
15
"15
-
i
—~
r
-
••
5 bulls at 1000 Birr
-
i
J
2
1
-
-
-
••
Building
-
18
-
-
-•
-
-
fencing trench silo
-
20
-
-
-
!
-
-•
. • • r,v.; ‘
equipment
•
-
-
0.5
•
-
J
0.6
. ..
•
clearing 200 ha tractor.cost
-
-
4.4
-
-
-|
-
-
Sub-Total
-
-
24t4„
.3§ 5
x
—-1Z,
—,Qx6
-
recurrent cost
miscellaneous costs
-
-
1
2.7
4.3
3.6
3.6
4.0
4.2
4.4
4.8
5-2 ■
Total
-
-
39.2
-21,3,
L36
.3.6
4.6
.-..4-2-
4-4
Aggregate: (credit)
4-8
52
.
-
-
122
318
440
636
392
(direct)
-
•-
-
-
107
125
249
290
116
125
134
136
Settler.labour per unit
construction of building
and fences, 2000 md
-
-
4.0
4.0
clearing 200 ha
-
-
28.0
-
operating labour cost
-
-
-
1.8
3.9
6.3
6.9
6.9
7.7
8.0
8.9
9.8
Total per unit
-
-
32.0
5.8
3.9
6.3
6.9
6.9
7.7
8.0
8.9
9.8
-
3 Aqqreqated
- *■■■■ —-----------------
-
-
160
189
369
429
163
1 171
205
217
231
251
Component total____
-
-
.282-..
^.5QZ.
Also
.891=-^
.1 461.
3?1,
342
_ 365_______
,387- 103 -
TABLE - 5.14
(7) HOMESTEAD COMPONENT ('000 BIRR)
Project Year
1
2
3
4
5
6
7
8
9(0nwardsj
Inye$tmgr)t ggstg ger Upil
Chicken at 3 Birr
15
Fruit tree seedlings
20
Total
35
Aggregate (credit)
175
175
.350
350
-
-
•
-
-
Barren t cQ£t per~Unit
Seed
9.9
9.9
9.9 etc.
-•
fertilizer
3.7
3.7
3.7 etc.
chemicals
1.2
1.0
1.0 etc.
poultry feeds
10.0
30.0
30.0 etc.
Total per unit
24t§
—44^„.
-,44.6
Aggregate: (credit)
124
347
694
1140
1115
892
446
(direct
■-
-
-
-
223
446
892
1338
1338
Total (credit)
299
522
1044
1490
1115
892
Pettier labour
446
Per unit
labour for land clear-
ing etc.
farm labour
•
22
in
—4
TotaA per unit
kqqregate
A___ 32-_
\ Aeo
1
48 etc.
48 etc.
£^§SS_---------------- 1
—1
1 PRO
14<1O
1 440
T 440                        '
—-J:
1104 - TABLE - 5.15
(8) ROAD COMPONENT
Capital Cost
plant and Machinery
.
4. x (4x4)pickup
- ers, etc.
’
Tractob/irailer7FueT~tank houses, (IB)
' ——
-_BgCyrrg,Dt_CQs7“ ~— Salaries 
Sub-Total
I x P4
9 x S] ~
nun
nnn
TO
TO
r^r
'
137732
10 x SJ-------------- Sub-Total•
TTO 770“ TOT
“TO ZOTF
77 37 bO
TO
733
TO
TO
TO
T33
7^
-TO
TTO
T^T
TOT
TTO
77
37
3u
TTZ1IZ
7n
~s^r
TO
“TO
TTO
“TO
TTO
TO
TO
tto
TO
Operating costs  machinery and vehicles__________________ Drainage structure
Bai ley bridges 
Hi sc. costs(i ncluding upkeep or (houses )
Total cost to Government
Settler 7 abou'r
Assn stance’^          guards
459
“33 TO
459 TO
W
459 TO TOO
130}              1301
130L
1301
(30)
(30)
50              50                  50
(0,5)4/-
3573
TO
727
T3
327
TOT
10;  5J4/. 71
(0.5)4/ ri
(O;5)4/ II
(0.5)4/ 11
Construction labour
TO
33
37
Maintenance labour
7
T3TO
53
TO
COMPONENT TOTAL
TTO
TO
77
TO
TO
72
77
37
77 77 33
expected to cover the
72
72
the replacement costs of
. -vr "
77
77
37
N.B
A/
Road construction works would be completed at the end of year 3 and for the subsequent m^^^je^tr^eof t^e and hand tools would be kept. Salvage value of the other mechineries and
initial purchase value. Estimated salvage value of Birr 910,000
roAAer and tractor and the operating costs of these two. machi nes. In addition the upkeep
Fund for ttVxe replacement. of roller tractor and hand tools.- 105 -
TABLE - 5.16
(9) WATER SUPPLY COMPONENT
Project Year
Capital Costs
Croup •B“1
Group B 11”
Group B Hl + BIV
Group B V”
Sub-Total
Houses (1A? and 'll C)
1   5 ton lorry
2 pickup 4x4
““5 motorcycles
too! s
Sub-Total
TOTAL CAPITAL COST
Operating costs
water treatment
pumps
running costs vehicles upkeep houses           1%
Sub-Total salaries of Govt.employees
n--------
—2~~
----- 3-----------
”3885---------
----- 4
------5--------
------C7T
zzzzz    .. 9(0nwarpls).
-
2808"
2167
"2T57--------
•■
2553
'2608-----
----------------------- oaV-------------------------------- -------
'“75—
------ 35-------
-
------ 35-------
--------
-
68
2235
“5T~
3580“
------ 35-----
561/
841/'
8417
-*
“"‘BO’—
"~35-------
2553
----------------
-
■■ -'
“T~
-
-------- TT~-
-
141/ “
281/
~T~
15
-
-
36
— '39T6----------
______
-----------------------
32L/
2BTT"
"7968
——
’ 20
"TOO----------
294
—rr^—
"79"
709
294
—48-------------
"78------------
322/
"775-----------
---------------- rrs—
1
25
52
799-----------
"294----------
"759-----------
35
“88
"725
48
T~
365
nra—
294
48------
“T
462------
294
—48-----------
---------------- rc9 •.—‘—
----------------294--------------- 7-
78----------
------ 1---------
"78------------
"7"
"762-------------
“T~
------- j---------
ll2
452
7S2-----------
T x F>4
11 x S2
*‘
12
A----
100
.41
1
201
------ T2------ T6------
6■ 34
-------- T2------- OC
--------
------- T2---- ------- 44
—T2----------
7TA
~T2-------------
' A A
"72------------
"762-------------
--------
' ----------------------------------------------- Sub-Total
.
------- 5--------
50
----- 44 --------- ’T------------
62
44
------ 6---------
44
----- 6--------
--------- 48-----------------------
—T“
--------------- 482----------- -----------
------------------ T2-------------*--------
44
5---------------------
62
62
62
44
~E~~
52 L
62106 -
TABLE - 5.16 (Cont..)
(9) WATER SUPPLY COMPONENT
Project Year
Settler labour
Pump Assistants Maintenance
» laoour (luu MO/Unit) — -
.,ub-T6tal
;
---------r—~ ------- -2
—~z------------
"3
‘           3------ b
~’4~ —£—
------- 5--------
------- 5-------
—5----------- ----- B—
=^=4
-------5-------
5
— —r
5
— —r
5(Onwards
5-------------------
—'   —
1
'' "4             ■
—u~-
------ 5--------
~5---------
Gt
TOTAL RT'.uRrENi COST
TOTAF COSTS
4
S------
------- f7--------
------- R
--------- 5----------1
—R------------
-------R-------- -
------- R-----------
1                R----------------------
138
239 "
------ 473------
526
“578----------
~578----------
528
------------- 57S~--------------------
to Go''jrnment
“7547              ’
“7470-----------
~TO1
~3080---------
479
343
—V72------
■        --
1
_ __ Iota’-Costs to Co-operative
------ Ftep* ^cement -Operation cos-t
.
. ( H n r*nr 4* 1 *
-
—
~~
ior3/
?in3/
4?n3/
6.3Q3/. —
1&J03/----------------------------------
i .hour cost
2
4
8
12
14
14
14
14
14
■4—---------------FKA ’ ■ ~----
'osts to Co-op.
--------- r—
--------- 4--------
8“
-------T7-------
—FT9---------
“774
'■ TO-
644
644
components otal--------
r7474
4339
3092
—548
“557---------
60S
644
----------
644
V     ^und for the replacements of pumps etc. connected with the water supply system
2/
3/
• :und for the replacement of lorry, pickups, motorcycles and tools.
Replacement and maintenance costs which should be charged to the settlers so that all
water -supply system from the Year-7 onward could be covered by  ®
per year would be Birr 42. Hence the Water Rate is Birr 3.50 per family per Month OR Birr u.ou per neau P
family
th
0R Birr ^80 per head per month.
IC. I i \3
O:Y 1TABLE - 5.17
<•0 VETERINARY COMPONENT
—i----------------- -------- ----- -------------------- ~~
'__ Project Year:_______________
—Capital_Cost:________________ Health Centre______________ 5 Clinics
Houses (28, 2C)
1 x (4 x 4) Pickup
2 motorcycles ,
Equipment Centre + Clinii
Sub-Total
Recurrent costs:
Salaries 1            2 x Si
2xS?
lx St-
Vaccinator . .’7,:/'
• ; Sub-Total
Vet.CliDie(Supplies) Running cost vehicles Vnkeep buildings
Sub-Total
COMPONENT "OTAL
ct tn Go/ernment
:lers -tour
1 28.3
2
32.0
•>-* ••
35.0
:s 6.3
101.6
14.Q,.
. 2.0
1.5
17.5
2.0
ll.b
30.5
132.1
130
6.0
10.0
' .3.0
6.3
25.3
14.0
4.0
2.0
3.0 -
23.0
3-Q-
12.0
l.o-
39.0
64.3
61
,3,., ,-j ..12.0 •
10.0
-
3.0
2.0
27.0.
14.0
8.0
•2.0
"j6.0 .
30.0
6.0
12.0
1.0
49.0
76.0
70
~~
■4
5
6
------ --------------- 7
—i~.o-
, ...
’           —■
- ■ ■ ■ • .
—
**■—
•
• r -
-
-
-
.12.0
•*
14.0
8.0
2.0
9.0
33.0.
17.0
12.0
1.0
63.0
75.0
. 10]/
14.0
8.0
2.0
9.0
33.0
32.0
12.0
1.0
.78.0
10IZ
14.0
8.0
2.0
9.0
33.0
32.0
1.2.0
1.0
O
101Z
14.0
2.0
9.0
33.0
32.0
.. 12.0,
1.0
78.0.
88.0
etc.
etc.
etc.
etc. >.
etc.
etc.
etc.
etc..
etc.
J
88.0
78.0
88.0
66
79
79
79
1.5
»
V"’"
_
9.0
9.0
9.0_
.. etc.
etc.
etc.
etc. _____- 108 -
TABLE - 5.18
1
(11) HEALTH COMPONENT ('OOP BIRR
Project Year
Capital costs per Unit
1i
-------- 2---------
~T“
4------
5------
—7—T
'9 (Onwards)
□u a < ng
Equipment
10 ----- 172—
—-------------
1
—
Furniture
1.0
------------------- -7°V e (
s
Total
c type)
tct
V—
“45.2
Aggregate:
Capital cost at Headquarters
‘137      —
—zn—
“422
477
Building
--1
T44
-
-•
-
Equipment
’ 2'5
-
-
-
Kurni ture
13
-
-
-
Houses (1A? 38,5C)
1TET”
-
------- TO—
-
1 Ambulance
““3B------------
-
-
-
Sub-Total
“315-----------
-
10
-
1    k-^17
----- xnl /
/
Total Capital costs
520
—zn—~
“432“
------ 432“
- ------
elL.
IB17
78’z
28V
...................
Recurrent cost at Units fAqqreqates]
1i
Vaccines
IT
--------- TB—
-------35
-------- 47“
“T7“
~T7“
17
|      17“
1/
Supplies
------5---------
--------- TO-----
• 20
-------- 30“
30
30
30
■ '         Upkeep houses Salary health Assistants (S>>
Sub-Total
~T5----------- 37---------
----------- ]— “35“
“-------- 50-----
30
1' 
------- 7T” “T3J“
---------- 2“ ------ TT5“
--------- W~
-------- “3—
- TiT““
------ 155-----
“3“
116 ------ 155“
------ TTT“" ------ T55
*7T“ TTT6 yrs?
3 ------ TT5 ~“T55
T/ Funds for the replacements of furnitures, equipments and ambulance.- 109 -
TABLE - 5.18 (Cont...)
t.
(11) HEALTH COMPONENT (*000* BIRR)
Project Year:
1.
,
, .2
3
4
5
6
7
8
9(Onwards
Recurrent costs at Headquarters
Salaries             1 x P4
12 ■
' 12
12
12
12
12
12
12
• - li
3 x S-,
21 ‘ ‘
21
21
21
21
21
21
21
21
5- x S>2
20
20
20
20
20
20
20
20
20
1 X S3
2
2
2
2
2
2
2
2
2    -T+—
Supplies
5
10
20
30
30
30
30
30
30
Upkeep buildings 1%
-
3
3
3
3
3
3
3
3
Running-costs cars 30%
11
11
11
11
11
11
11
11
11
Sub-Total
71 • •
79
89
99
99
99
99
99
99
4 Total cost for Government
' ———-------------- ——---------------- -
628
.355
654
711
270
273
283
293
293
Settler labour '
15
30
60
90
90
'90
90
90
90
COMPONENT TOTAL
~~--------------------------—
543
385
714
801
360
363
373
383
383
Health Promotors, 2 per unit at 1500 Birr
•<no
TABLE- 5.19
(12f EDUCATION COMPONENT ( 000* BIRR)
1
Project Year
—1
T~
------ T~
----------------  -------------------
5
-------- 5------
------ 7---------
-------- 8----------
9(Onwards
Capital Costs:
-•
f>er Unit:
ScFooT Building
TO—“’
Furnitures + equipment
—5---------
5 C type houses
To
...
Total
T5----------
Aqqreqated:
425
425
850
850
House A? type at Head quarters
30
212
Total Capital Costs:
T--------------
T75
850
850
□/—
---------
Pl
30Z/
2J
30J/
Recurrent Costs
Per Dnit:
-
T“
20
“7“
■ ....
Upkeep buildings
Salaries ] 5 x S2
Books and supplies
. Aqqreqated:
—■ ■ 1---------------------- 1----- -r-R.—. Salary Headquarters (Pa)
Total Recurrent
Total cost to Government Settlers’ labour’/
22
5b
165
330
55o
~660 ’
6b0
----- 560-------
1
12
~12
T
------ 550---------
T2
12
12
12
------------- 660-------------------------
“67
177
---------T2----- T
“142
562
672
T2
522
■”672 ’
602
577-------
1192
T4T2 '
^72
672—f
572-------------------------
bO
50
672
672
loo’
“TOO
“672
-
•
-
---------- ...672--------------------------
-.1
-
Direct Cost to Co-op.
.-
-
5
10
20
30
- * 3d
Component Total
J 572
r 652
1292
1512
677
682
692
702
702
For school building, 5000 md/unit in year - 1.
Fund for the replacement of school furnitures and equipments and this would be the direct cost to Co-operatives.111
TABLE - 5.20
MANAGEMENT & EXTENSION COMPONENTS: (BUILDINGS VEHICLES *000* BIRR)
L                       Project Year
1
2
3
4
5
6
7
j                       Buildings:
at units: 3 B houses
240
240
480
480
Office
150
150
300
300
at Headquarters office
37
Store
20
Training Building
40
Houses
796
20
70
Total
1283
■410
850
780
•v •
• -------- Vehicles
"Headquarters Lorries
(2) 200
(2)200
(3)300
(2)200
• 1 Bus (32 5eater)
(1)      70
••
.*•<
% r.
*     4x4 pickup
(3) 105
(3)105 \
-- ......
..
'i i
.i
•    " Car
(2)      70
Unit 4x4 pickup
(5) 175
(5)175
(10)350
(10)350
I - r* -
Unit motorcycles
(5)      15
(5) 15
(10) 30
(10) 30
-
Sub-Total
635
495
680
580
i,
i
’’(■
.
>
*>- 112 -
TABLE- 5.21
(13) MANAGEMENT & EXTENSION COMPONENTS (SALARIES, ‘OOP' BIRR)
Project Year:
2        S?
Settler (Driver
Total in Government
Total for Co.ops.
* Aggregated for Government
Aggregated for Co.ops 17“
Per Unit JSi
----------1------
2
------- 3—
•• 4
----------- 5--------
------- 5--------
21
------ 7-----------
—B------------
9(Onwards)
~21
21
8
~s
~21
5—
P75F‘
------C775T'
----- (775}--------
(7.5)
------      7 5p
—W ’
-
(4)
(4)
w
-------     H <
. (1-5)
29
“ d-5)
77
---------cnrr
---------- dPr
(.5)
—oTSy—’
■■(i ir '
.
—
--------- (T75}----------
745
5
(l- )~
290
~T775T
(5.5)
------ (775}------
540
700"
pry
---------CSTTT
(5‘S)
----------(575}----------
470"^
—ZTir—
(Direct)
' 7.5
15.0
50.0
85.0
---------- TT2T57
240.0
315.0
at Headquarters                P]
—390.0 '
T 24"
"~(T 24
—
---------- 39070----------
7) "24
"UT~24—
1774------------
T~74
7]-74-------------
-
i P2
TT —21
~0)~71---------
7)27
(1) 21
T 21
CT ~ Zl —
CT—21
-
P.i
< 5)      85
(5     85
T^T5—
p~ 85—
T------- 05-----
(5      55
p—55
-
'       '■P4
7T)      172
'(Tl'T32 p
hr 732—
err 132 .
dr 132 ■•(
Tf 132         (
TT 132
-
S]
f5       35
p—35^
-
’       <• s, .
77)
35
^75' ”35 '
P"35—
p
"77^^"fl
*T#4-
i'26)     104    (
p—
26) .104
2T 104
-
(t
T'131 26
KF32—
M' 35—
8      36
Total (Government)
—
437
437^
P 36 L
437
■ "437"'
■”* 80””
*so
Total Personnel Cost
53775~
------ ”704.0 ’
•102370"
------- T3T770"
------ 170475
"—T09770”
952.0”
390.0
390.0
....................
Settler labour would replace S] Staff in 5th year at 2500 Birr and Sg in the 3rd year at 2000 Birr.
Note: Numbers in parantheses indicate Settlers' labour wages.
* Ministry of Agriculture would take over the Extension activities113 -
TABLE - 5.22
1
(13) MANAGEMENT & EXTENSION COMPONENTS ('OOP BIRR)
Project Year
Capital Costs 
T7
nr
5
5
/
' 9(Onwards)
Buildings "
1790
“53b
W
77b
w
w
TO ’
Vehicles_________________
TO
TV
T52V
TV
Radio Equipment
Headquarters office Eq.&
TunT TT~
Teachi ng TH ds
T
Units office Equi.& Fun.. .T
TO
T5"
70
30
—77
TgV
77V
W
Headquarters generator -Mines 10
Running cost vehicles Running cost generators-
Salaries Units
Unit generator + lines
20 V
281/ ~
Total Capital costs
25
7OZT
"7b
54b
50
TW
TV
ToV
92V
iW
2bOlz
Recurrent costs ~
BuiTdTng",Maintenance
~
“17
"7b-
T— 
33
53““
33
]■ Salaries Headquarters
WTO
77770 “T4- 875.0
“71770"
2?
“75775“
Office expenses Headquarters             20
43/.0             40770
. "Office expenses Units 
T5
"71770 '     24’”
660.0 437.0 "TO-
Material    costs    for    demonstration    4
3 38. ft 24.0
390.0 TO
5070
' Total Recurrent Costs 
768.0
Total costs for Government             278375 Total costs for Coops(Direct.)
339.0 .
T--------- 30370 35570 “TO- TO
““8 TIT2TO W
~50’ “74 2212.0 355770
“70 50- 7F“
50
74
Settler labour
Component Total
[£
I 2791.0
770
O
2057.0
50.0 3306.0
5b70 3552.0
2112.5 V7070 T26 2 “1T 6528.575
2005.0 TbOTO T
'    740.0 2097.0
717.0 “74-------- 525.0
73777
70
““50      '' “74 1870.1T 173570
“T04““ 3lb7O
2054.0
T TOjO
740 “350.0 1790.0
338.4 24.0
390.0 *“SO
30 ^'TT-
■7030 ~
TOO ' 390.0 ”775070"
\
F? ,
n s tor Co°Perative Vehicles and Equipments.
the cost to the mn^Vr/^s\ltim terby t Snrtwo Wor:dr:re^
a
h
s
a
ter
7 andIt
TABLE - 5.23
(14) TECHNICAL ASSISTANCE COMPONENT (’000* BIRR)
Project Year:
1
2
3
4
5
6
7
:.. .
3
u<Houses (2 x A]) /
104
-
—
-
-
-
-
Upkeep houses
-
1
1
1
1
-
-
Experts / Consultants
240
240
240
240
240
• -
-
Overseas Training 2/
40
40
40
40
40
-
-
Total
---------- j:------------------------------------------------
384
281
281
281
281
./
■I
->• : ■ ' ■■ ■'.. J
Based on 24 man months per year at USS 6000 per man month
2/ Based on 12 man months per year at USS 1650 per man month (including fares ) 3/ One house to be used as guest - house when not required otherwise.-^gregale...     Coits,     ;;-j     Goven-ient,     Cooperatives     and     Individual     Settlers \in OGO Birr; excluding settlers labour) by component.
Project year
Components
1. Land clearing
Government
Credit to coop.
Credit to settlers -
Direct to coop
.1
2
3
4
5
6
7
8
9
10
11
Table 5.25 12/25
-
89
217
-
-
•
—
... •
-
-
-
306
-
-
-
940
4205
•
a.
434
-
-1
-
985
5590
•
256
-
-
-
505
3115
-
520
a.
—
-
a.
-
-
Olrect to settler            *s -
-
-
-
-
-
—
2. Mechanization
Government
Credit to coop
Credit to settler
Direct to coop
1207
1410
865
2450
*s *
-
-
—
a.
Direct to settlers
a.
410
1380
•
1136
—
-
•
2209
690
-
2271
-
-
•
-
3526
-
-
•
-
3568
-
•
-
-
3568
-
-
-
-
3568
-
-
-
-
3568
-
3. Farm Development
Government
Credit to coop Credit to settlei
Direct to coop
•
-
1047
2592
4848
7505
a.
6620
1132
.. .
4641
2328
-
-
-
-
-
-
-
w•
rs -
2223
a.
4676
-
7089
-
•
7259       7299       7299
rs -
-1
,
1-
-
-
-
7299
-
A. Soil Conservation 1
1
!
Qrwornmant
1 2 OR
102
165
190
50
71
64
20
28
-J
/         -- 1
rrorlit Vex C'fxrxrx
~xzr—j----------------------------------------------------- -------------------
T^—
— -\ Z—.
25
20
56
-
-I        ■/
/
■»
—
-1
/
£
JU]     n-d        J       *<L*_ Z.
-z
rrzr   / /
-7
----------------- M117 -
Table 5.25 (contd,..)
3
—
4____
5
6
7
8
9
10
11
12/25___________
Project year___________ Components
5 Afforestation
1
2
Government
216
20
34
24
24
154
24
24
24
24
24
-
Credit to coop.
14
28
56
84
70
56
28
•
-
-
-
-
"        " settler
—
•
•
-
-
-
-
-
Direct to coop.
—
14
28
56
84
70
56
28
"      " settler
—
—
-
—
-
-
-
6. Cattle
*
: ■. _____ _
Government
-
-
-
-
—
—
-
-
-
Credit to coop
-
-
122
318
440
636
392
-
•
—
—
"        " settlers
-
-
-
-
—
Direct to coop.
-
-
-
-
107
125
249
290
116
125
134
136
"        " settlers
-
•
-
-
•
-
Homestead
Government
-
-
-
-
-
Credit to coop
settlers              299
Direct to coop
“ settlers
522
1044
1490
1115
223
892
446 |
446
. 892
1338
1338
1338
1333           £
7 338118
Tabic 5.25 (contd...)
Project Year
"I •         — 1
2
3
4
5
6
7
8
9
10
11
2/25
Components
1
1
8. Roads
Government
3540
824
824
11
11
11
11
11
11
11
11
11
Credit to coop
-
-
I
-
-
-
-
-
-
-
—
" settlers
-
-
-
-
-
-
•
-
-
-
Direct to coop.
-
-
-
-
-
-
-
-
-
-
-
"           " settlers
-
-
-
-
-
-
-
-
-
-
-
9. Water Supply
Government
2947
2470
4331
3080
429
343
172
-
-
-
-
•
Credit to coop
-
-
-
•
-
-
-
-
-
-
"         " settlers
-
-
—
-
-
-
-
-
■
-
Direct to coop
-
105
210
420
630
630
630 ’
630
630
"         " settlers
-
-
.-
-
•
-
-
-
-
-
-
10. Veterinary Services
... Government
130
61
70
66
79
79
79
79
79
79
79
79
Credit to coop
■»
—
•
-
-
-
-
-
“         " settlers •.
-
-
-
-
-
-■
-
Direct to coop
i
-
-
-
--------------
-
-        L—
-
”       " settlers
—
-
-
-
-         L,
-
11 Heal th
.
p
Government
\ 628
355
; 654
711
270
273
283        1 293
293
—             ________ 293      /  293
293
Credit “to coop
t-
- |    -|
-
:         r    - /         . -          / Z . /              —L Z J ~                                -
/
____ IDAvCCV. y,o c.oop                                   _          \
A-T
_ -- -------
1
// <119
Table 5.25. (co.itd. >
Proiect vear
1
2
3
4
5
6
7
8
9
10
11
12/25
Cnninonpntc                         ■*
12 Education
Government
522
602
1192
1412
672
672
672
672
672
672
672
672
Credit to coop.
•-
-
-
-
-
-
"          " settlers
.
-
-
■-
-
Direct to coop
5
10
20
30
30
30
30
30
"          " settlers
—
-
-
-
-
-
13 Management&Extension
Government
2784
2052
3256
3567
1870
1605
1235
160
160
160
-
-
Credit to coop
-
-
—
-
•
•
-
-
"      " settlers
-
-
-
-
-
-
—
*
-
-
-
Direct to coop
-
-
-
126
252
504
740
740
740
740
740
"          " settlers
-
-
-
•
-
...
14. Technical Assistance
Government
384
281
281
281
281
•
Credit to coop
-
-
-
-
-
_
“        11 settlers
-
■
-
-
-
•
Direct to coop
“   settlers 
w
-•
-
-
\            15. First Vear Subsistence 1                     Cox/ernment
■
iI
\ 700
•
-
1250
l ocn
1 dbOU
■\
Credit to coop
"         '* settAers
__ _ to cuop
1100
\ 500
y soo
y tooo
3 1OOO
1
/
=------
n
1, ' <
I
\ \_________ -120
Project year
1
2
3
4
5
6
7
8
11
12/25
9
Total to Government
13,266
8,882
13,697
12,827
5,312
3567
2,716
1239
1239
1239
1239
1239
Total Credit to Coop
2,560
5,298
9,562
13,981
10,565
6769
3,361
-
-
-
-
-•
Total Credit to Settlers
799
1 ,022
2,044
2,490
1,115
892
446
-
-
-
-
1
•Total Direct Cost to Coop
-
-
-
-
2,023
4117
8,252
12473
12497
12532
12513
12487
--------------- -—------ -—----------------------------
Total Direct Cost to Settlers -
-
-
-
223
446
892
1338
1338
1338
1338
1338
1
Total Yearly Cost
16,625
15,202
25,303
29,298
19,238
15,791
15,667
15050
15074
15109
15090
15040Settlers* Labour Costs jy Component
(In *000*of Birr)
Table 5
Project Year
1
2
3
4
5
6
7
8
9
10
11
12/25
Component
l.Land Clearing
322
770
1092
1540
896
-
-
-
-
2.Mecha n i zat i on
-
----------- ZTOA-----------
“ ^0“
Tzn—
—334--------
406’'
450
498
498
498
498
3.Farm Development
130
1233
2590
4919
7113
7362
7362
7362
7362
7362
7362
7362
4:Soil Conservation
-
-
-
-
-
-
-
-
-
-
-
-
5.Afforestation
12
24
48
72
72
72
72
72
80
88
104
120
6.Cattle
•
-
160
189
369
429
163
171
205
217
231
251
7.Homestead
160
400
800
1280
1440
1440
1440
1440
1440
1440
1440
1440
8.Roads
65
72
79
42
42
42
42
42
42
42
42
42
9.Water Supply
2
4
8
12
14
14
14
14
14
14
14
14
10.Veterinary Services
2
3.0
6.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
11.Health
9.0
15
30
60
90
90
90
90
12. Education
90
90
90
90
90
50
50           100
100
-
13.Management&Extens ion
14. Technical Assistance
15. First'^ear Subsisten
7.5
15.0     i 50.0
85.0
162.0
240.0
315.0
390.0
390 0
.
390 0
.
390 0
.
390 0
ce -                            u
-
-
-
-
-
Total
““SkllT--------------------
I 765
T £2
H-
\ 2661
\5113
T8578 492
10591 713
10104 O1J
9957
T U6             y is?
10088
10130
10150
10180
10276
~ hcn-«>V.ill------
\ 7\3 A 2515
. A . _____ __
" 8           T 987TT-
9291
932
9075
1 055
903^
~T355
1055
r~1055
- TITS /
r— ■ /055
^77^7-------n-a*
>
• \
Summary of Financial Costs
Project Year Detail
PROJECT COST?
Government-
TT.T^
8,382
Ty,'697
9,562
1T7B27
. 7cj;seit
5,312
Credit to Co-op
Credit to Settlers
77557
799
57293
I ,022
Sub-total
16,625
15,202
2,044 25,303
13,981
2,490 29,298
7~,~7T5 16,992
Additional costs Government Credit to Co-op. Credit to Settlers
Sub-total
■fflYSICAL COSTS
37567 67753
"892
11,228
77776
3,361
“446
TT739
77573        7,733       17733         77733
TT23^
77233
1 ,2^5
“T7?15'
Co-operatives 
Settlers
77077
87252“ ““1 892
9,144
2747T “3 2 1,338
I3,81l’
7337
7
~
223
77737
12;513'
“77337
1 2 ,487 ' 77T37
Sub-total
-4
-2,246
4,563
13,835
13,870
13,851
13,825
SETTLERS’ LABOUR
765
5,113
8,578
10,591
10,104
GRAND TOTAL
J 17,390
9,957
25,624'
10,088
~25,138
10,130
10,150
10,180
10,216
37,876
25,895
25,204
25,259
25,270
25,256
V,
iFunctional Building Construction Schedule and the Annual Cost Estimates Project
At Units^
Office
Shop
School2/
Health Station
Workshop
Mill house
Components
150
T20”
120"
~30
100
Tso"
15o’
720
Fertiliser store                                                                                     100                                      200
Grain store
Vet.Clinic (1 for 5)
100
200
Sub-total                                                                                    870                                     1812 At Headquarter Offi ce
Store
Health Centre
Veterinary Centre
Meeh.Workshop
Training Building
Forestry Building
Sub-total
Grand total functional Bull
144
6 .OOP>T•Schedule By Lnmponcni (‘DOO' Birr)
Project Year
Component Type 2 4x4 pickups
station Wagon Fuel Tanker
5 ton lorry
44x4 pickups
5   5 ton lorry
Car
8   4x4 pickups
9   5 ton lorry
4x4      pickups Motorcycijs
10 4 x 4 pickups Motorcycles
n     Ambulance 13   10 ton lorry
TOTAL
(1)     45 (1) 60 (1)     35 (1) 80 (1)     20 (4) 140
(1) 80
(1)     35
(1)    38
(2) 200
(3) 105
(2) 200
"(3) 105
(3) 300
4x4 pickups ; HQ
Car
Motorcycles
900
21?
(2)    70
(5)    15
Bus (32 Seater)
( (5)
(10) 30
(10)
(1)    70
Unit 4x4 pickups
TOT kt COST
(51175
1331
(10)350
(10)     350 | 1 Q5Q
3,314Un i t
SCALE
/r.
'000'
Yr
,
?
'000'
Yr
’000*
■
J YLrI
»
* non1
—U-UaJ
Bi rr
i
r.
5
1 dU 1 tJ   U . □ 1 noni
Grade          '000’Birr
LJL 4
JUAZW
nnn
1
rersonnei
Unit Manager/Farm Supervisor
Admlnistrative/Accountant casmer/Clerk
L
Birr
per year
Birr
3
Birr
U 11.1-
II A —
7
} i rr
L-si
7
1
7
1
7
1
7
1
7
S
-
Cooperative Organizer
S
S
s
.
7
1
7
1
7
1
7
1
7
S
-
S
-
S
si
7
1
7
1
7
1
7
1
7
s
-
s
-
s
-
S2
4
1
4
s
-
s
-
s
-
s
-
s
-
s
-
Keeper
S2
4
1
4
s
-
s
-
s
-
s
-
s
-
s
-
Unit Machinery Supervisor
S1
7
1
7
1
7
1
7
1
7
s
-
s
-
s
-
Tractor Operators
---1------------------------------------- -----------
S2
4
4
16
s
-
s
-
s
-
s
s
-
s
Teachers
S2
4
5
20
5
20
5
20
5
20
5
20
M
-
M
-
Health Assistant
*2
4
1
4
1
4
1
4
1
4
1
4
1
4
1
4
Total
6
76
10
52
10
52
10
52
6
24
1
4
1
4
Aggregate
30
380
30
640       260
1280
360
1800
280
1420
235
1180
180
800
•
S - Replacement by settl
?rs
M - Replacement bv Minis
tries of E
ucation a
id Health
LL
1/------------------ /
---------i-Project Centre Staff (Government)
’          127 X
Administration Division
Civil Engineering Div.
Agric.Development Div.
290
.148
uj[
235
Table
Total
670
1033
1432
Coop,  Training  &  Mkg.  Di                                                                                                                             160                 160               768
Finance Division
Monitoring & Evaluation
Unit
Total
306
165
4374129
TABLE 8.1
ESTIMATED YIELD PER HECTARE OF DIFFERENT CROP DURING DIFFERENT YtARS IN QUINTALS
Crops
Unit Year
2
3
4
5
6
Maize
Sorghum
Pepper
Haricot bean
25
18
8
8
30
22
12
11
35
25
18
14
35
25
18
14
35
25
18
14130
Production
from Cooperative
Crop
Lands
Table 8.2
PRODUCTION IN ’/
2
3
4
EAR
5
6
7-25
A. Production        from one  settlement unit (tons)
maize
500
1200
595
595
595
595
sorghum
180
746
833
833
833
833
pepper
40
120
293
293
293
293
beans
39
176
466
466
466
466
B. Production      from the whole      project    (tons)
maize
2500
8500
13975
22950
23900
sorghum
17850
900
4630
9695
17590
pepper
24120
200
24990
800
2465
beans
4530
7060
195
8790
i
1
1075
3600
6810
11080
13980-    131   - Annual Production of Milk and Meat, per Settlement Unit
Table 8.3
Age of Unit
Nature of Produces
A. Production Per Unit(tons)
Milk
■£.
29.7Q
.42.40
z-lujo.
Meat
-0.-80
17.30
L^Z.Q
3.20
32.90
-5.J3D.
47.40
5.10
R RD
. 6.50
Total
36.35
53.70
70.10
75.8Q
81.50
B.Production for the whole project (tons)
Milk
Meat
TOTAL
82.50           2.55.75        486.75.           872.00            1Z64.5Q        1636.00       1884.00        .2287 .OH
4.00             12.50           32.50
66.00               98.50
132.00
153.50           161.00
86.50           268.25
519.25
942.00
1363.00           268.00
2037^50
2448.00TABLE - 8.4
3. PRODUCTION FROM CO-OPERATIVE WOOD LOT
3
PRODUCTION IN YEAR (m )
9
10
11
12-25
A.          Production per  settlement Unit
2040
2040
2040
2040
B- Production for the whole project133
Production per Homestead
PRODUCTION IN YEAR (Kgs).
2
3
4
5
Table 8.5
6 -25
A. Vegetables
cabbages 75 88 100 100 100 Irish potato 75 88 100 100 100 green beans 60 75 90 90 90
onions                          50                       63                       75                    75                    75 pepper                             9                       10                       10                    10                    10
B. Fruits
banana 100 120 120 120 120 pawpaw 150 200 200 200 200
C. Food crop
green mai^e                 38                      43                      43                    43                    43
0. Poultry
eggs (units)
1200
1200
1200
1200
7200134
TABLE - 8.6
5. PRODUCTION FROM 500 HOMESTEADS (ONE SETTLEMENT UNIT)
PRODUCTION IN YEAR (tons)
j
2
3
4
5
6-25
i
A. Vegetables
Cabbages
Irish potatees
Green beans
onions
pepper
B. Fruits
Banana
Pawpaw
i
C. Food
Greeu maire
0. Poultry
37.5
37.5
30.0
25.0
4.)5
50.0
75.0
I.•.*
19.0
\ €00,000
44.0
44.0
37.5
31.5
5.0
60.0
100.0 ;
1
,      21.4
50.0
50.0
45.0
37.5
5.0
60.0
100.0
n.5
50.0
50.0
45.0
37.5
5.0
60.0
100.0
21.5
50.0
50.0
45.0
37.0
5.0
60.0
100.0
J
21.5                1
\ 600.000
1 ■
| 600.000
600.000
600.000 /135
TABLE- 8.7
6- PRODUCTION FROM HOMESTEADS FOR THE WHOLE PROJECT
PRODUCTION IN YEAR (tons)
2
3
4
5
6 1                  7-25
A. Vegetables
Cabbages
I. potatoes
Green beans
Onions
Pepper
Sub-Total
B. Fruits
Banana
Pawpaw
Sub-Total
C. Food Crop
187.5
187.5
150.0
125.0
22.5
407.5
407.5
337.5
282.5
47.5
845.0
845.0
' 712.5
595.0
95.0
1315.0
1315.0
1125.0
940.0
145.0
1440.0
1500.0
1275.0
1065.0
150.0
1500.0
1500.0
1350.0
1125.0
150.0
672.5
1482.5
3092.0
4840.0
5370.0
5625.0
250.0
375.0
550.0
875.0
1100.0
1/50.0
1700.0
2750.0
1800.0
3000.0
1800.0
3000.0
625.0
1425.0
2850.0
4450.0
4800.0
4800.0
1
Green maize
0. Poultry
eggs
95.0
3.000,000
202.5
6,000,000
392.5 .. 12,000.000
607.5
18,000,000
645.0
18,000,000
645.0
18,000,000 /-
Revenue from Cooper
136    -
ative Crop Lands
Table 9.1
REVENUE IN YEAR
2
3
45
6
7-25
1
A. Revenue from one settlement unit ('OOP Birr)
maize
118.5
284.4
141.0
141.0
141.0
141 i0
sorghum
62.5
258.9
289.1
289.1
289.1
289.1
pepper
. 73.6
■> 220.7
538.8
538.8
538.8
538.8
beans
18.8
84.8
224.6
224.6
224.6
224.6
Total
273.4
848.8
1193.5
1193.5
1193.5
1193.5
B. Revenue from the whole project ('000* Birr)
maize
592.5
2014.5
3312.1
5439.2
5664.3
4230.5
sorghum
312.3
1606.6
3364.2
6103.7
8369.6
8671.5
pepper
367.8
1471.2
4533.1
8330.7
12983.3
bean
16164.8
94.0
518.2
1540.8
2914.7
Total
4742.2
5983.4
1366.6
5610.5
12750.2
22788.3
31759.4
35050.2137
Revenue at Financial Prices
from Livest
ock Product
ion
Table 9.2
1
. Revenue per settlement unit ('OOP Birr
milk
9.9
21.4
17.8
25.4
29.3
39.0
42.0
45.0
meat
2.4
5.1
9.9
15.0
14.7
15.3
17.4
19.5
total
12.3
26.5
27.7
40.4
44.0
54.3
59.4
64.5
1
. Revenue for the whole project ('OOP Birr)
297.0
622.8
534.6
763.2
878.4
1170.0
1260.0
1350.0
72.0
153.0
288.0
450.0
441.0
459.0
522.0
585.0
total
369.0
755.8
822.6
1213.2
1319.4
1629.0
1782.0
1935.0138 TABLE -9.3
REVENUE IN YEAR ('OOP* BIRR)
12-25
A.         Revenue per settlement unit
51.0
51.0
51.0
51.0
B.         Revenue for the whole project
255.0
510.0
1020.0
1530.0
J-     139 -
Gross Revenue at Financial Prices for One Settlement Unit
X
—3-----
4'
r-6
K            33
193.5        1193.5 40.4            44.0
nr
Cooperative farm
Livestock production
Cooperative woodlot
Mill
Coop shop
2
273.4
-
848.8
-
1193.5
-
1
193.5
12.3
12.0
5.0
1193.5
26.5            27.7
1193.5
54.3
51.0            51.0
12.0
5.0
12.0
5.0
12.0
5.0
12.0
12.0
12.0            12.0
12.0
Table 9.4
TT
1193.5
59.4
51.0
12.0
5.0               5.0
5.0
5.0
5.0              5.0
1193.5 64.5
51.0
12.0
5.0
Grand Total
290.4
865.8
1210.5
1222.8
:
1237.0
1238.2       p250.9
^1305.5
1315.8
1320.9
1326.0
=Cooperative Cash iiow ('000' Birr)
Age of cooperative 1
Cash flow detail
INFLOW______________
Gross revenue
290.4
865.8
1210.5
39.3
297.0
1222.8
1237.0
1238.2
1250.9
1305.5
_Cfgdit (capital)
401.6
283.8
-Credit (operation]
47.2
293.8
____ Total inflow
110.6
512.2
264.1
838.3
1206.8
1546.8
1222.8
1237.0
1238.2
1250.9
1305.5
OUTFLOW
Capital costs
401.6
110.6
512.2
283,8
264.1
47.2
80.7
—Operation costs
339.5
293.8
Total outflow
66.6
338.0
404.6
76.7
337.4
414.1
337.4
418.1
81.3
338.3
419.6
77.9
338.5
416.4
77.9
338.7
416.6
77.9
339.1
417.0
547.9
341.0
39.3
297.0
336.3
ffilANCE BEFORE
w servttt
W
865.8
*26.5
400.0
ITTO?
Interest 5%
Principal____________
50.1
600.0
36.9
200.0
26.9
200.0
16.9
200.0
6.9
137.4
To reserve fund
100.0
100.0
100.0
BALANCE FOR
MwmurioN- - - - - - - - - - - - - - -
T-
5607T
65177
770377
687.0
78876
77877
AVERAGE INCOME PER
TTK'.'BIRR) ~~
SUTLER FAMILY- - - - - - - - - -
BBT-
U7y
TT97
7205
NUMBER OF MANDAYS
"CONIRlBUTEb BY- - - - - - - -
"SETTLERS----------------- 60000
153000
Remuneration per
Nanday-     141    - Cost to cooperative (per unit ) in '000‘ Birr
Age of cooperative Components
1. Land clearing : Capital : Recurrent
2. Mechanization : Capital
1________2________3 ( CREDIT
17.8          25.6
4_______ 5
6
J L
IaMe 9Ji—
7              88              9              1100            11 DIRECT
12/25 )
264.0         153.0               ________ 28,6
42.7          42.7          42.7          42.7          42,7          4422..77           42.7
: Recurrent
18.3
55.2
69.2
69.2
75,6
75.7
75.7
76.2
76.2
76.2
76.2
76.2
Farm
1 9 V/
•
Recurrent
92.3
206.1
221.8
222.3
222.3
222.3
222.3
222.3
222.3
222.3
222.3
222.3
4.      Soil Conse. •’•tion:
Capital
-
-
-
-
-
-
-
-
-
-
-
Pecurrent
-
2.2
2.8
2.8
2.8
2.8
2.8
2.8
2.8
2.8
2.8
2.8
5.      Forestry 
:
Lo? -tai
2.8
2.8
2.8
2.8
2.8
2.8
2.8
2.8
-
-
-
-
Recurrent
—
-
-
-
-
-
6.      Cattle
;
Capital
24.4
36.5
17.0
-
0.6
-
-
■"$ -
•• -f ■
-
Recurrent
*?
2.7
4.3
3.6
3.6
4.0
4.2
4.4
4.8
5.2
7.      Homestead
8.       Road
9. Water supply 
;   Capital
•   Recurrent
:   Capital
Mai ntenance
:   Capi tai
Maintenance
1*
.— - ■ -
-
-
-
-
-f
-
-
•
-.
-
-
-
-
-
-
—-
.-
-
’ < ” *        ------ .’        -■
-
-
—
4.0            4.0             4.0            4.0            4.0 '           4.0            4.0             4.0
17.0 17.0 17.0 17.0 17.0 17.0 17.0 17.0
TO
^eterinacy 
:
Capi tai
_
■
.-
-
-
-
-
-
Recurrent.
-
-
-
-
-
-
j
" r142
Components
11. Health
12.'Education
13. M & E
14. Technical Assist : Capital
15. Subsistence
Total capital Total operation
: Capital
: Recurrent
: Ca
: Recurrent
: Recurrent
; Recurrent : Recurrent .
1.0 _      _ l.Q-
9.2
16.0
16.0
16.0
401.6
110.6        264.1 512 2547.9
76.7 80.7 BJ.3 77^9
337.4 337.4 318.3 338.5
339.1       339.5
r
*
Total credit per cooperative farm = Birr 1,737,400
=====X=«”= = B
-x-     143     -
Settler Labour Cost
pe
r Cooperativ
e Farm by Component
(in '000'
Birr)
Table 9.7
Age of Unit
12
3
4
5
6
7
8
9
10
11
12/25
'
Components
’1
64.4
89.6
-
-
- -t
•
-
-
-
-
-
-
2
-
12.0
12.0
12.6
16.5
16.5
16.5
16.6'
16.6
16.6 ..
16.6
16.6 .
3*
26.0
220.5
>2
45.4; n
245.4
245.4
245.4
245.4
245.4
,245.4
245.4
245.4
245.4
. .. -
.. 1 •
?• f “
, • 
;
-
•
-
—
-
-“
•
-
-
5
2.4
2.4
2.4
2.4
2.4
2.4
2.4
2.4
4.0
4.0
4.0
4.0
6
-
-
32.0
5.8
3.9
* 6.3
6.9
6.9
7.7
8.0
8.9
'
9.8
7
-
-
-
-
—
-
-
-
-
-
-
t.
8*
7
13
7.2
4.0
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
.9
0.5
0.5
0.5
‘O'5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.6..
V 10
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
' 11
3:0 ■
3.0
3.0
3.0
3.C
v 3.0
3.0
3.0
3.0
3.0
3.0
3.0
‘
•i.
12
•
10.0
• * ’ .*
i
• ••
..
-
-
-
-
-
13*
1.5
1.5 '
5.5
5.5
13.0
13.0
13.0
13.0
13.0
13.0
13.0
13.0
14
-
-
-
-
-
15
-
-
•
-
-
Total
121.3          337.0           305.1           276.3           286.4           288.8           289.4           289.4           290.2           290.5          291.4              292.3144
Table 9.8
Internal Rate of Returner Co^gerative Fann
** '• Project Year
i
1
2
3
4
5
6
7
Detail
Financial Revenue
-
290.4
865.8
1210.5
1222.8
1237.0
1238.2
8
1250.0 709.0
1320.9 708.4
Financial Costs
633.3
884.9
646.1
612.6
691.0
702.9
707.5
+530.7
+541.9
+ 66.65
9
1305.5
706.6
+598.9
10____
1315.8 707.1
4-608 • 7
Net Benefit
-633.3
-594.5
+219.7
+597.9
+531.8
+534.1
+110.56
r 84•38
56.30
Discounted at 30%
-487.01
-351.94
+ 99.96
*209.27
+143.05
•1
Discounted at
35%
469.28
326.38
89.20
179.97
118.5S
88.13
64.75
Internal Rate of Return
= 30 + 5
= lUi!
(120.97) x 100 170.27145 -
Internal Rate of Return per Co-operative Farm at 10% Increase in Costs (in '000' Birr).
•Table 9.9
Project Year
1
2
3
4
5
6
7
8
9
10
11
12/25
Deta i 1
Financial Revenue
290.4
865.8
1210.5
1222.8
1237.0
1238.2
1250.9
1305.5
1315.8
1320.9
Financial Costs 
(l0%increase)
696.63
973.39
710.71
673.86
760.10
773.19
778.25
779.90
777.26
777.81
779.24
Net Benefit
-696.63
-682.99
+155.09
+536.64
+462.70
+463.81
+459.95
+471.00
+528.54
+537.99
1+541.66 1 Jk
Discounted at
26%
-551.12
-430.28
+ 77.55
+213.05
+145.75
+115.95
+ 91.07
+ 73.95
+66.07
I +53.26
-
42.79 1 124.3
Discounted at
28%
-544.07
-416.62
+ 73.98
+200.17
134.65
105.28
81.87
65.47
57.08
45.73
35.75 1            96.5
Internal Rate of Return = 26 + 2 (56.74) x 100
92.74
= 27.22%f II
II
146
I
Internal_Rate of Return
-£rojec£Jfear__^ Detail
Financial Revenue
Mn «nciaT^?tr~ ( % decrease)
’iet Benefit
Discounted
2
3
4
5
6
7
8>
-10 — - i
1-1
12/25
261.36
779.22
1089.45
1100.52
1113.30
1114.38-'
1125.81
1174.95
1184.22
1188.81
l0
633
633
502
494
.3
884.9
646.1
612.6
691.0
702.9
.707.5
709.0
70M
707.1
708.4
.3
623.54
133.12
476.85
409.52
410.40
406.88
416.81
4^8.35
477.12
480.41
• ;
.84
392.83
66.56
189.31
129.00
102.60
80.56
65.44
58.54
47.23
37.95
110.3
.61
380.36
.63.50
177.87
119.17
93.16
72.42
57.94
50.58
40.56
31 .71
85.6
Internal Rate of Return =26+2
(22.26)
---------- x       100
79.53
=
26.56%
——====E- 147 -
Internal Rate of Return per Cooperative Farm at 10% Decrease in Revenue and 10% Increase in Costs (in '000' Birr
Table 9-
Project year
1
2
3
4
5
6
7
8
9
10
11
12/25_____
Detail
. ..
•
__ —
Financial Revenue (10% decrease)
Financial costs (10% increase
Net benefit
696.6
261.4           779.2         1089.5         1100.5         1113.3         1114.4        1125.8         1174.9        1184.2         1188.8                  1193.4       ___ l
973.4           710.7           673.9           760.1           773.2          778.3           779.9           777.3           771.8           779.2                   780.7
-696.6        -712.0          + 68.5           +415.6         +340.4        +340.1         +336.1         +345.9         +397.7          406.4           409.6
412.7
Discounted
• • .
V
at 2)%
-580.3
-494.2
+ 39.7
+200.3
+1364
+113.9
+ 93.8
+ 80.6
+ 77.2
+ 65.8
+ 55.3
+256.3*
••'
Discounted
A
+126.0
I
at 22%
-571.2
-478.5
+.37.8
+187.4
+103.1
+ 83.7
+ 70.57
+ 66.4
+ 55.7
+ 48.9
+197.7*
Net Present Worth at     20%                    +44.9
Net Present Worth at     22%
-75.6
. Internal Rate of Return = 20 + 2 (44.9) x 100 = 20.7%
120 ."S
Represents the totai discounted values for years 12 - 25.148
Revenue per Homestead
Table 9.12
REVENUE IN YEAR (Birr> 3 __________ 4
• 5
A.
Vegetables
cabbages
15.0
17.6
20.0
20.0
20.0
Irish potato
22.5
26.4
30.0
30.0
green beans 
30.0
18.0
22.5
onions 
Pepper
27.0
27.0
27.0
25.0
31.5
37.5
, 37.5
37.5
16.6
18.4
18.4 •
18-4
18.4
B
-           Fruits 
banana
pawpaw
30.0
52.5
36.0
70.0
36.0
70.0
36.0
70.0
36.0
70.0
9 een maize
r
15.2                17.2                  17.2                17.2
17.2
0.        Poultry149
TABLE - 9.13 .v-
REVENUE FROM 500 HOMESTEADS (ONE SETTLEMENT UNIT} REVENUE IN YEAR (IpOQ BIRR)
2
3
4
5
' 6 - 25
|
A. Vegetables
Cabbages
Irish potatoes
Green beans
Onions
Pepper
B. Fruits
Banana
Pawpaw
C. Food Crbp
Green maize
D. Poultry
Eggs
TOTAL
7.5
11.3‘
9.0
12.5.
8.3
15.0
26.3
■ f.
7.6
- — \
48>e
8.8
13.2
11.3
15.8
9.2
18.0
35.0
10.0
15.0
13.5
18.8
9.2
18.0
35.0
10.0 10.0 1
15.0                       15.0
,13.5                        13.5
18.8 18.8 1
9.2                           9.2
18.0                         18.0
35.0                         35.0
1
1
8.6
8.6
8.6
8.6
■48.0
48.0
48.0                         48.0
145.5
167.9
======
!
176.1
176.1
176.i
t — ————— — /
=
1- ‘150 - TABLE - 9.1<
revenue from homesteads for the whole project
REVENUE IN YEAR ('000' BIRR)
A.
Vegetables
2
37.5
56.3
♦5.0
62.5
___ 41.4
3
81.5
122.3
101.3
141.3
87.4
4
169.0
253.5
213.8
297.5-
174.7
5
263.0
394.5
337.5
470.0
266.7
6
288.0
432.0
382.5
532.5
275.9
7-25
300.0
450.0
405.0
562.5
275.9
242.7
533.8
1108.5
1731.7
1910.9
2092.4
B.
Cabbages
Irish potatoes Green beans
Onions
Pepper
Sub-Total
Fruits
Banana
Pawpaw
Sub-Total
Food £rop
Green maize
Poultry
Eggs
Total
75.0
131.3
165.0
306.3
330.0
612.5
206.3
510.0
962.5
540.0 1050 0
540.0 1050 0
471.3
942.5
C.
1472 5
.
. 1590 0
.
. 1590 n
38.0
81.0
■240.&
727 n
480,0.
151.(7
960.0
243.0
258.0
D.
258.0
1440.0
1440 0
l dan n
-21&9.U
Ci§2Z 2
£   ===
.
□l2§ 9
a   ===Costs To a
Homeste
ad
(in "Birr)
Table 9.15
Age of homestead
1
2
3
4
5
6
7
8
9
10
11
12/24
Components
(
)
(.
■ I-
I
)
•i1
1
b.
■r
7. Homestead:
.• ■
• * • 
i
capital
■ 70
-
I
i
I
<
-
-
-i
1
-
-
-
Recurrent
50
>. . j'-'
89
89
• • *r
89
J>
89
89
'
89
89
89
89
89
89
•? V 1
8. Subsistence:
subsidy
280
220
... 1
-
-
*r-
-
-
-
.V
credit
200
-
i
-
-
y. -
-
-
(
Total
600
309
89 ' •!
f 89
89
89
89
89
89
89
89
89Cash Flow of one
Age of unit
Cash     flow     detail
INFLOW
Value of produce
Credit subsistence                200
Credit homestead                 120
Food subsidy 
280
Share in coop                                                                          1121 Total inflow                                                        1304         1562
OUTFLOW Capital costs
1163
1515
1192
1544
1206
1558
1374
1726
1577
1929
1598
1950
1608
1960
1617
1969
r~89
(89]
~~89
89
Operation costs
■ Total outflow BALANCE BEFORE DEBT SERVICING
Interest 5%
Principal;
Subsi stence+Capi tai
50
120
480
89       1     89       (
89
89
1840      [786?"   (187?”          1880?
Operation_____________
-Balance after
DEBT SERVICE
480
938
Own consumption
783
CASH BALANCE
280
200
533
405
1469
621
1637
645
1840
753
1861
769
1871
1880 795
1087
1092
1088
1085
418
/ips. —
_42 7
423
^er caput Income
109
213153
ip v i u r i l* y d
emers (b‘
Per settler (Birr)
Maize V
9
144
Sorghum 2/
i—
Milk & Meat 3/
Wood 3/
Veqetables^/
.Fruit*/
Green maize3/
Eggs 5/
Milling charge_____________
2
144
210
-
-
47
43
15
40
24
Profit margin coop shoo
Total
10
533
3
144
210
-
-
56
56
16
40
24
10
556
1 V I VI I | 1
4
144
210
-
64
56
17
40
24
10
565
5
144
210
24
-
64
56
17
40
24
10
589
6
144
210
52
-
64
56
17
40
24
10
617
7
-144
—rra—
56
64
56
17
40
24
10
621
8
144
—rro—
80
-
64
56
17
40
24
10
645 '
88
100
64
56
17
40
24
10
753
10
144
210
104
100
64
56
17
40
24
10
769’
11
144
“ 210"“
118
100
64
56
17
40
24
10
783’
12
144
210
130
100
64
56
17
40
24
10
795
per setth
per settl
3/
1,Z120 kg per capita x 5 = 600
Z,/ 120 kq per capita x 5 = 600
Total production of this c
imponent i
r at 0.24
r at 0.35
assumed
{ion is se
Birr/kg
Birr/kg
o be cons
med by se
1 tiers
"Z7----------------------------------------------------- Assumed that 50% of homest
:ad produc
f consume
5/           11
” 33% 11
11
It
II
i------------------- j------------------
—J
4------------------ i—
t—
zzzj----------------- -
-1
-
I
I—X
/
/—
A-Table
9.18
8. Gross Revenue
Enterprice*
1. Cooperative Crops
2. Livestoc k Production
3. Cooperative Woodlot
4.   Housestead Plots
Sub Total
5.   Mill_________________
6.   Co-operative Shop Sub Total
Grand Total
154 Financial
IVENUE (MILLION.
Rt£j(ENLj
5
22.79 0.37
4.89
R—   31.76
1.53
5.28
5.28
5.28
43.13_
43.80,
0.73
0.03
0.09
2.19
1.57 2.10 I 7.18
0.06 | 0j7~ 0.05
. 0.17
7.35
3.17
15.92 I 28.05- -
0.24
0.10
0.34
16.26
0.36
0.15
0.51
28.56
.37.72 0.36 0.15 0.51
38.23
5.20 I 5-gl 41.15
0.36
0.15
0.51
41.66
41.54 0.36 0.15 0,51
42.05
41 -91~ 0.36 0.15.
2 0.36 oTl?
o; si.
42.42
0.36 0.15 0.51.
42.98
43.64
0.36 —~oj?
~     0.51~ ,     44.31- ,1.55 -
Credit Repayments ('000' Birr)
T
•
.■•
Table 9.19
Project year
2             3L
. 5                1 6                   7                  81                     9. ...           10             11 12/25
-r
Detail
1
r
PER UNIT
•             •
j
••
Cooperatives:                                                                                                                                                      --------- -----
♦
Interest
AQ.l—
b-36.9            •-26.9             16.9              6.9            •                - - . -
Principal
-          400.0       600.0
200UX—-200.0                200.0          137.4
--_
Sub total
-          426.5        650.1
236.9           226-.^       -216.9             144.3
Homesteads (500)
1
Interest
.2.0
6.5
4.0
I 2.5
—
-
--
Principal
75.0
L-94.5L
79.5
44.5
—
-
-
• *.
Sub total
77. o'
101.0
83.5
47.0
-
-
-
-
-
TOTAL PER UNIT
77.0
527.5
733.6
283.9
226.9
216.9
144.3
AGGREGATED
385
3,023
7,076
11,134
15,167
12,396
6,917
5,162
3,610
1,440
REPAYMENT
DURING THE
I
. ..
PROJECT IMPLEMENTATION PERIOD                 =               21a§18 iProject year
Category
1. Civil works
Functional buildincis                              1056           606        1212         1212
Houses
. Bridges and drainage
________ Sub total____________ 2. Machineries.Vehicles,
Equipments,        Tools tures etc
Road construction mach
Farm Machineries
V ehi cl es Farm     tooTT Generators Furnitures
1598
3514
534
160
1300
910
2282
770
1982
1730
1213 603
Equipments                                               429           27!
312
Sub total                                           4611 3. Running costs of Machineries,
Vehicles etc,
Road construction Mach Tractors———— 
.........
Generators
Workshops
Mehicles
Sub total
3184         4665
3T3
5663
ns
~24
342 ~24“~ 3344
w “ST
“uy
3053
342
T37
3033
I157
Table iO.l- (cop^k
Project year
Category
4. Personnel costs
Unskill labour
Skill lanour
Expatriates
. Overseas training
.. Sub total
5. Farm supplies
Seeds/plants
Ferti1izers
Agro-chemicals
Bags
Livestocks
Livestock feeds
Seedling pots
Sub total
6. Other supplies
Drugs
Office supplies
-rr Food
Clothing etc.
Coop shop
Sub total
1
2
3
4
5
6
7
8
9
10
11.
v: -Tcr-
’• • )
12/25
677
9066
'1119
9118
995
9136
UTT
9158
'TTT9 “
240
40
-
1952
193
329
834
9324
W
-
*
11246
992
4726
1039
265
967
5
7994
32
9058
170S
•
10763
992
4726
1039
-
350
1006
5
8118
32
9102
"Til9 ’
-
-
10221
991
4726
1039
-
-
1013
4
7773
1119 ’
-
66
120
75
50
1
2484
"1314
240
40
4078
340
1101
217
300
75
200
2
2235
3
50
1250
500-
100
4751
1917
240
40
6948
697
2217
456
420
150
400
3
4343
6
80
1950
■ 1000
8034
T273-
240
40
10587
1010
3776
781
600
240
714
5
7126
17
110
2500 -.
1000
9916
240
40
12272
956
4694
996
360
175
935
5
8121
32
110
•ii oq
-
10185
992
4726
1039
-
170
1017
5
7949
32
L..14A.-
-
10237
991
4726
1039
-
-
1019
3
7778
-
-
10255
989
4725
1038
-
-
1028
2
pzz
7782
-
10277
987
4725
1038
-
-
1036
-
7786
2
—
1 32
35
no
no ....
32
HO.-':
r: no
32        Luo
no
700
t-rw-
-
-
UJ
ZU
500
-1      -•
-
-/    L
50
200
200
•        L
i
/
.-1
\ 1287          j 1903
3236
3827
1242
142               142        /      742      /        J42        1      742        /      142        /     J42.1 (contd
Category__________________________ J
7.     Upkeep of Buildings_____________
8.     Replacement of Machinery 
and equipments and vehicles 9.     Material supplies 
Temporary housing Training materials
Cattle shed
Fencing
Trench silos
Sub total {1,8 and 9) 10. Miscellaneous
Total
180
180
1140 I 1346 277 1        356
1774 | 1816          1819           1819
480
649
13348 114402
24370
28274      24340       24069       23583        23649*-7""
687 23706
686 23717159
.ign Exchange Costs at Border Prices (in *000* Birr)
Table 10.2
Project year
12
34
5
6
7
8
9
10
11
12/25
Catego*”
1
1
1
1. Civil works
functional buildings
*58.4
8
90.9
181.8
181.8
-
houses
53.4
91 .0
77.0
-
-
•
bridges & drainage
60'
112.0
112.0
-
-
-
Sub total
•
256.3
384.8
258.8
-
-
-
-
•
-
2. Machinery, vehicles, tools,
equipments, furniture,..etc
road construction mach. 1557.0
-
-
-
-
-
-
-
-
-
farm machinery
972.0
1962.0
3024.0
4014.0
2160.0
180.0
-
-
-
-
-
vehicles
1091.7
C1 2.7
646.2
553.5
-
-
-
-
-
-
farm tools
55.0
50.0
100.0
100.0
-
-
-
-
J
-
-
generators
31.5
22.5
45.0
45.0
-
-
-
-
-
-
-
furniture
1.4
0.5
0.5
0.5
-
-
-
-
-
-
equipment
386.1
243.9
298.8
299.7
-
-
-
-
-
-
-
Sub total
4094.7
2821.6
4114.5
5012.7
-2160.0
180.0
-
-
-
-
-
3. Running costs of machi-
f
nery,vehi cles,          ..etc.
road, construction mach
291.9
291.9
291.9
•
-
-
-
-
-
-
-
tractors
125.3
407.4
789.6
1313.2
1561.0
1479.8
1449.0
1449.0
1449.0
1449.0
1449.0
1449.0
S+T+M1Z
21.7
59.5
121.1
198.8
235.2
239.4
239.4
239.4
239.4
239.4
239.4
generators
3.5
6.3
11.2
16.8
16.8
16.8
16.8
16.8
16.8
16.8
16.8
16.8
workshops
14.0
28.0
42.0
42.0
42.0
42.0        42.0        42.0        42.0        42.0         42.0 ,
42.0
—n--------
vehicles
’ 17T.S-
’ 285’.'5”
435.7T
538.3 ”
550.2
564.9
593.6
389.9   1 386.4
382.9        375.9 /   joo. y
Sub total
1 612.5
1040.9
1632.2
2031.4
2368.8
2338.7
2340.8
2137.1 ,  2133.6 ]  2130.1 /   2123.0 A  >116.1
sheAAers» threshers and mill.Project i,y ear Category :y<‘.                ~ 4. Personnel costs 
unskilled labour skilled labour expatriates overseas training
Sub., total
5. Farm-supplies
216.0        216.0
1216.0        216.0
36.0
36.0 I,. 3(6l .0 U 36.0
252.0        252.0 V 252.0           252.0-
36.0
252.0
seeds./pl    ants
fertilizers
4
agro-chemicals
59.4 I 195.3
410.4
702.9 I 896.4
935^1
253.4
935.1
4253.a
935.1.
r*
... * I . '.J
■
'■
bags
----- *----------Tt------ -
36.oM 90.0
426.0
180.0 108.0
livestock
livestock feeds 
seedling pots 
0.3
391.8
0.9
1.5
1.5
1.
1.5
Sub total
2532.6
4282.8 1523
0.5 151
90.0 \5190
.0
^__1A
’,5190.0
5188.5
6. Ots^r supplies
I
I
*
—,-------:-----, i-
i
28.8
office supplies
4
t—
1 •“                 1 „
--
food
-
-
I
i”
------------
1-
•
1
I                      1 «,
—
-
-
clothing ... -etc.
1-
-      ------ ----------------- L-       1 -
-
-               1                     1-
-                        1-
coop shop Sub totel
I
r
1.8
28-8________161 <
Table 10.2 (Wntd.)
Project
1
2
3
4
5.
6
7
---- ----- S-¥ 8
10
11
Category
—**
k-.-.
7. Upkeep of Buildings
-
2.3
3.3
5.1
6.8
G8
6.8
6.8
6.8
6.8
6.8
$.8
8. Replacement of machinery,
i*
equipment, vehicles, ..etc.
-
-
-
-
212.4
'6 22'. 8
“58872"
783874"
1573.2
1575.9
1575.9
157$.9
9. Material supplies
temporayry housing
2.75
0.15
0.25
0.2
0.15
•
-T
..
-
-
t
training materials
1.50
-
-
-
-
-
-
-
-
cattle shed
-
-
4.5
4.50
9.0
9.0
-
-
-
-
fencing
-
45.0
45.0
90.0
90.0
-
-
-
r.
trench silos
-
-
2.5
2.5
5.0
5.0
5.0
-
-
-♦
Sub total
4.3
0.15
47.8
52.2
99.7
104.0
14.0
-
-
-
10.Miscellaneous
108.5
94.5
213.0
122.5
129.0
138.5
178.0
240.0
324.5
343.5
343.0
327.0
Total
6277.3
5747.3
9185.6
12032.8
10488.0
8609.6
8746.6
9138.1
9256.6
9274.5
9266.7 •
9243.1
>162
Local Costs at Border Prices ('000' Birr)
Project Year Categor
1. Civil works
Machinery,vehicles
tools 
equipment
furniture
, etc.'
271.8
W.T
T80
3.     Running costs of__________
machinery, vehicles,etc 4. Personnel costs
5.     Farm supplies
WHO
3T4T6—
7TB7T
653.0
76T7T
767.3     1006.5         1458.8       1725.8       1578.0
~T5477 83.9
83.9
<•
331.7       718.7 963.9     1425.2
15.5
1356.2      2132.4       2167.9      2103.0      2196.0      2069.3      1937.5      1941.5       1946.0    1949.5
75T7T
144.2
752.4'
127.9
83.9
83.9
600.7 83.9
6.     Other supplies
7. Upkeep buildings
8. Replacement of machi-
2423.0       2858.8 22.3           34.4
909.9 45.9
84.9
45.9
84.9
45.9
84.9
45.9
84.9 45.9 .
84.9
45.9
84.9
45.9
84.9
45.9
■ nery.equipment,_________
vehicle ..etc.
7TT
TZETTT
T3T7T
nn
nn
TTT7T-
9.     Material supplies
2.2
10. Miscel1aneous
40.4
81.4
70.9
43.0
159.8
106.4
91.9
145.1
96.8
207.0
103.9
128.3
133.5
180.0
243.4
257.6
257.0
245.3
Total
444QxZ
Z91Zx6
2323±3==
§2Q2xZ
asQZxS.
3551x3
U2Z8x2
3212*5
3g31 4
a=
|322l Q
4=I
-     163
Summary Of Economic Costs (in 'OOP Birr)
1
Table 10.4
Project Year
----------------- --
1
2
3
4
5
6
7
8
9
10
12/25
Detail
-
1 .Foreign Exchange Costs at border
prices
6,277.3
5,747.3
9,185.6
12,032.8
10,488.0
8,609.6
8,746.6
9,138.1
9,256.6
9,274.5
9,266.7
9,243.1
2.Unskill labour Costs at border
prices
388.5
1,242.0
2,375.5
4,017.0
4,958.0
4,662.0
4,529.0
4,533.0
4,551.0
4,559.0
4,568.0
4,579.0
3.Local costs at border prices
4,440.7
4,458.0
7,917.6
9,323.3
5,902.7
3,507.5
3,551.3
3,278.9
3,212.5
3,229.8
3,231.4
s ••••:* *
.3,221.0
ToYa) Economic
Costs
11,106.5
11,447.3
19,478.7
25,373.1
21348.7
16,779.1
16,826.9
16,950.0
17,020.1
|17,063.3
17,066.1
17,043.1X
«
164 -
1. Production and Revenue (at economic prices) from Co-operative Farms ..
Table 10,5
♦
PRODUCTION IN YEAR 2            3.4
A. Production from one Settlement Unit (tons)
5            6           7-25
2
REVENUE IN YEAR
3               4.5
6
7 -25
A.Revenue from one Settlement Unit t’OOO* Birr)
Maize Sorghum Pepper Bea-ns .... ..
500 1200
180 746
595
833
595        595        595               206.0          494.4
833       833        833                 76.3          316.3
40          120          293
293        293       293               117.2
351.6
245.1
353.2
858.5
245.1
353.2
858.5
• * •
39
176          466
466        466        466                 40.2          181.3
480.0 -        480.0
245.1
353.2
858.5
480.0
245.1
353.2
858.5.
.480.0
j
Total 439.7
1343.6        1936,8        1936.8        193678" I ffiJ*
B. Production from the
Maize Sorghum Sorghum
I —A. Revenue from the whole Project (‘OOP  Birr)
1
..
2500      8500            13975      22950 239J3Q    17850 900      4630            9695        17590    24120    24990
1030.0 .       3502.0._   5757.7 ■     9455JL.        9846.8.     7354.2
381.6        1963.1        4110.7        7458.2
10226.9'“TU595.8
Pepper                        200        800            2465          4530      7060      8790
Beans
195 i^’^10.75            3600          6810    11080    13980
586.0 2344.0 7222.5 13272.9 -20685.8 25754.5
200.9 1107.3 3708.6 7014.3 •11412.4 14399.4
%
r*
Total:2198.5        8916.4      20798.9      37200.8        52171.9    58103.9ociuciion and Revenue e~' itxi-.oir.ic Prices from Livestock Production
Table 10.6
YEAR
5
6
A. Production per Settlement Unit (tons)
i— 
Milk
__
16.5
34.6
Meat
0.8
1.7
B. Production from the whol e Project ( tons)
Milk
495.0
1038.0
Meat
24.0
51.0
C. Revenue per Settlement Unit ('000' Birr)
Milk
Meat
12.4
3.0
25.9
6.4
TOTAL
15.4
32.3
D. Revenue from the whole Project ('000' Birr) |
Milk
Meat
TOTAL
371.3
90.0
’ 461.3
778.5
191.3
969.8
7
29.7
3.2
891.0
96.0
22.3
12.0
34.3
668.3
360.0
1028.3
8
42.4
5.0
1272.0
150.0
31.8
18.7
50.5
954.0
562.5
1516.5
9
48.8
4.9
1464.0
147.0
36.6
18.4
55.0
1098.0
551.3
1649.3
10
65.0
5.1
1950.0
153.0
48.8
19.1
67.9
1462.5
573.8
2036.3
11
70.0
5.8
2100.0
174.0
52.5
21.8
74.3
1575.0
652.5
2227.5
12/25
75.0
6.5
2250.0
195.0
56.3
24.4
80.7
1687.5
731.3
2418.8
*
'•
i
i
Bl
4
I
__ /
*
I.          .
I
/
7
J166 -
3. Production and Revenue (at Economic Prices) from Co-operative Woodlots.
Table ,1Q>7
PRODUCTION IN
YEAR (MS)
9                  10                11            12-25•
9                 10               11      ' 12-25-
•
z •
A. Production per. Settlement Unit
2040            2040            2040            2040
B. Production for the whole Project
10200          20400          40800          61200
63.8 63.8 63.8 63.8
•
318.8 637.5 1275.0 1912.5
z
• ■
‘%
1
i
i-    16E -
5. Production and Revenue (at Economic Prices) from Homestead Plots f'" one Settlement Unit
Table 10.5
• 1
r-
PR0DU
CTI0N
IN Y E /
R (tons)
REVET
U E IN
Y E A RL!
[lOO'BirH
2
3
4
5
6-25
2
3
4
5
6-25
A. Vegetables
Cabbages
37.5
44.0
50 0
50 0
50 0
94
11.0
12,5
12,5
12.5 .
Irish Potatoes
37.5
44.0
, 50 0
. 50 0
. 50 0
. 14.1
16.5
18.8 .
18.8
18.8-
Green beans
30.0
37.5
. 45.0
. 45.0
. 45 0
11.3
14.1
16.9
16.9
16.2
Onions
25.0
31.5
37.5
37.5
.
37.5
15 6
19.7
23.4
23.4
23.4
Pepper
4.5
5.0
5.0
5.0
5.0
. 13.2
14.7
14.7
1.4^Z
.. 14 J-
B. Fruits
• 1
___ —
Banana
50.0
60.0
60.0
60.0
60 0
18.8
22.5
22.5
’ 22.5
22.5_
Pawpaw
75.0
100.0
100.0
100.0
.
100.0
32.8
43.8
43.8
43 .a----
'43.a_
C. Food Crop
Green Maize
19.0
21.5
21.5
21.5
21.5
9.5
10.8
10.8
10.8
10.8
0. Poultry
Eggs.
6x10b
6x105
6x105
6x105
6X1O5-
60.0
-60.0
60,0
60.0
6£J2.
TOTAL:
184.7
213.1
223.4
223.4
223.4
- ~ ' ■
--- ---------
-------------- ------------------ :—
•K. Vegetables
Cabbages I pi h
187.5         407.5           845.0        1315.0         1440.0      1500.0
Potatoes          187.5         437.5           845.0        1315.0         1440.0
Green beans    150.0         ■37.5           712.0        1125.0         1275.0
Onions             125.0         182.0          595.0        940.0           1065.0
Pepper
22.5           17.5             95.0        145.0           150.0
1500.00
1350.0
1125.0
150.0
1
B. Fruits
Banana 250.0 ‘£0.0 1100.0 1700.0 1800.0 Pawpaw 375.0 875.0 1750.0 2750.0 3000.0
C. Food Crop
Green Maize       95.0         2C2.5           392.5           607.5           645.0 0. Poultry
1800.0
3000.0
645.5
Eggs
3x106              6x106
1.2xl07       1.8X107             1.8xl07         1.8xl07
46.9      101.9         211.3      328.8    360.0      375.0 70.3      152.8         316.9      493.1     540.0      562.5 56.3       126.6        267.2      421.8    478.1       506.3 78.1       176.6        371.9      587.5    665.6      703.1 65.9       139.2        278.4      424.9     439.5      439.5
93.8       206.3         412.5       637.5     675.0      675.0
164.1       382.8        765.6     1203.1   1312.5     1312.5
47.5       101.3         196.3       303.8     322.5       322.5
300.0       600.0       1200.0    1800.0   1800.0    1800.0
TOTAL 922.9 1987.5          4020.1     6200.5 6593.2 6696.47 ' Gross_Revenue(at Economi
Enterprises
1Cooperati Crop
2. Cooperative Livestock
3. Cooperative Woodlots
4. Homestead Plots
1343.6       1936.8
1936.8
12/25 1936.8                     1936.8
55.0          67.9
80.7
63.8          63.8          63.8    r,. 63 -8
Sub Total
5. Mill*
1 184.7_____ [ 624^T~
|       9.0
3.8 ■ "
213.1
1 ■ —
1    223.4
|     223.4   1 223,4         1 223.4
1556 7  LsloU.Z
223.4
223.4        223.4
2175.6  [2192.5
9.0
9.0
9.0
9.0
6. Shop*
Sub Total Grand Total
12194.5 9.0 i
2210.7 2279.0 2291.9
9.0            9.0 3.8
9.0
223.4 2304.7 '
9.0’
3.8 i          3.8                3.8 ,        3.8         -•    3.8
12.8
M7: 9' ’
3.8          3.8
12.8 |        12.8             12.8        12.8              12.8
12.8
12.8
12.8
12.8
2223.5      2291.8
2311.1    2317.5
*!*
Ur
'
-----------------------— ■----------------------- gr
'
Annual Financial Revenue was multiplied by 0.75.r
i
L171
8. Gross Revenue for the Project (at Economic Prices)
Table
Enterprises
GROSS REVENUE IN YEAR ( Million Birr)
2
3
4
5
6
7
8
9‘
10
11
12-25
1. Cooperative
Farm
2.20
8.92
20.80
37.20
52.17
58.10
58.10
58.10
58.10
58.10
58.10                .. .
2. Livestock
Production
-
-
-
0.46
0.97
1.03
1.52
1.65
2.04
2.23
2.42
3. Cooperative
Woodlots
-
-
•
—
•
•
0.32
0.64
1.28
1.91
4. Homestead
Plots
•
0.92
1.99
4.02
6.20
6.59
6.70
6.70
6.70
6.70
6.70
6.70
Sub Total
3.12
10.91
24.82
43.86
59.73
65.83
66.32
66.77
67.48
68.31
69.13*
5. Mill*
%
0.05
0.09
0. la
0.27
0.27
0.27
0.27
0.27
O.?7
0.27
0.27
6. Co-op.Shop*
0.02
1 0.D4-
0.08
0.11
0.11
0.11
0.11
0.11
0.11
0.11
0.11
1
Sub "Total
| 0.07
J 0.13
0.25
0.38
0.38
0.38
0.38
0.38
0.38
0.38
0.38
GROSS REVENUE
\    3.19
\ 11.04
25.08
k 44.24
60;ll
66.21
66.70
67.15*'
67:86
68.69
1 69.51
* KnnuaA FAnanciaA Revenue was multiplied by 0.75.172
Economic Analysis 
Table 10.13
Project Year
1
2
3
4
5
6
r7
r
8
9
10
11
12/25
Details
Benefits in Birr
Million
3.19
11.04
25.08
44.24
60.11
66.21
66.70
67.15
67.86
68.69
69.51
Costs in Birr
Million
11.11
11.45
17.34
25.37
21.35
16.78
16.83
16.95
17.02
17.06
17.07
17.04
Net Benefit in Birr
Million
-11.11
-8.26
-6.30
-0.29
+22.89
+43.33
+49.38
+49.75
+50.13
+50.8
+51.62
+52.47
Discounted at
50%
-7.41
-3.67
-1.86
-0.06
+ 3.02
+ 3.81
+ 2.91
+ 1.94
+ 1.30
+ 0.86
+ 0.61
(+ 1.21?
Net present worth at 50% = + 10.07 Birr Million Internal Economic Rate of Retun is greater than 50%
* Total -rom year 12 to 25.-     173   - Sensitivity Analysi_s
Revenue at Financial Prices and Economic Costs.
Table 10-1_4
Project Year
1
2
3
4
5
6
7
8
9
10
11
12/25
'. ..
Details
Revenue in Birr
Million
-
2.19
7.35
16.26
28.56
38.23
41 .66
42.05
42.42
42.98
43.64
44.31
Costs in Birr
Million
11.11
11.45
17.34
25.37
21.35
16.78
16.83
16.95
17.02
17.06
17.07
17.04 \
Net return in Birr
Million
-11.11
-9.26
-9.99
- 9.11
+7.21
+21.45
+24.83
+25.10
+25.40
+ 25.92
+26.57
+27.27:
Discounted at
30%
- 8.54
-5.48
-4.55
- 3.19
+1.94
+ 4.44
+ 3.95
+ 3.09
+ 2.39
+ 1.89
+ 1.49
(+4.96)*
Discount at
35%
- 8.23
-5.08
-4.06
- 2.74
+ 1.61
+ 3.54
+ 3.03
+ 2.28
+ 1.70
+ 1.30
+ 0.98
(+2.84)*
Net present worth at 30%              = + 2.39         Birr Million Net present worth at 35%             =        2.83 Birr Million
Internal Rate of Return               =    30 + 5 ( 2.39)
30 + 2.29 '2_.29_
I1/4 -
Sensitivity Analysis
Table 1(L 15
20% inc. ease in economic costs and benefit stream estimated using economic prices
Project Year
Detail
Revenue    in    Birr Million
Cost     in     Birr
Million
3.19         11,04         25.08
13.33 13.74 . 20.34 30.44
44.24 60.11 66.21 66.70 67.15 67.86 68.69 69.51.
25.62 20.14 20,20 20.34 20.42 20.47 20.48 20.45
Net     benefit
in
Birr - Million
-13.33
-10.55
-9.30
-5.36
+18,62
-t-39.97
+46.01
+46.36
+46.73
+47.39
+48.21
+49-06
Discounted at
45% ■
-   9.20
- 5,02
-3.05
-1.21
+ 2.90
+ 4.32
+ 3.40
+ 2.36
+ 1.64
+ 1.14
+ 0.82
(+ 1-82)
Discounted
at 40%
-   9.52
- 5.38
-3.39
-1.39
+3.46
+5.32
+4.37
+3.15
+2.24
+1.66
+1.21
(+2.99}
Net present worth at 45% = -0.08 Birr million
Net present worth at              40%       =     +4.72       "
Internal Rate of Return
=
40+5
(4.72)
=
40 + 4.92
«
44.92
3BEEZ
Total from year 12 to 25.20% P;d;ction in -c^rteraic Revenue :..J with
Zcor.amic Costs
Tsble 10.16
Project Yesr 1                                                                                                                                            8               9
detail
evenue in Birr
n i.i
12/25
III 1          1   1 VII
illion
- 2.55
11.11 11.45
sj3*.3O3 v
17.34
L2U0..0U6U      35.39      48.09         52.97        53.36 25.37         21.35       16.78        16.83         16.95
r5• 1 w.9Z5 w             55.6,1
Costs in Birr Million
V53V.7«2F 54.29
17.00 17.06
17.07
17.04
Net benefit in Birr Million
-11.11        - 8.90        - 8.51           - 5.31;.      +14.04    +31.31       +36.14      +36.41       +36.72      +37.23      +37.88               +38.57
(Discounted at 40%- 7.93
Discounted at 45%- 7.67
- 4.54 - 3.10 - 1.38 +2.61 +4.16 +3.43 + 2.48 + 1.76 + 1.30 + 0.95 - 4.24 - 2.79 - 1.20 + 2.19 + 3.38 + 2.67 + 1.86 + 1.29 + 0.89 + 0.64
Net  present worth at 40%                =        2.09               Birr million
(+ 2’.
(+ 1.
Net  present worth at 45%                =        1.55
II
II
•  Internal Rate of Return = 40+5 (2.09)
• •
3.64 =     40+2.87 =     42.87%Project fear
Detai 1__________
Revenue    in    Birr Million
Costs     in     Birr Million
Net Benefit in Birr Million Discounted at
35% Discounted at
ReductionJnjEconon1c Revenue and 20% Increase in Economic
4
5
6
7
8
9
10
11
12/25
2.55 13.74
-11.19
20.06
35.39
48.09
52.97
53.36
53.72
54.29
54.95
55.61
30.44
25.62
20.14
20.20
20.34
20.42
20.47
20.48
20.45
-10.38
+ 9.77
+27.95
+32.77
+33.02
+33.30
+33.82
+34.47 h
H35.16
- 3.12
+ 2.18
+ 4.61
+ 4.00
+ 3.00
+ 2.23
<■1.69
h 1.28 (
+3.66)*
-3.63
+ 2.63
+ 5.79
+ 5.21
+ 4.06
+ 3.13      +
2.47
+ 1.93
L-
(+6.40)*
Net   present   worth   at   35% Net present worth at 30% Internal Rate of Return
=*1.16 Birr Million = + 5.88 Birr Million = 30 + 5 (5.88)
=     30 + 4.18 =  3fJ8£
=
* Total for year 12 to 25.

Summery

Lower Didessa Settlement Project Summary

Lower Didessa Large-Scale Rainfed Settlement Project

Provisional Military Government of Socialist Ethiopia - November 1980

Project Objective: To establish self-sustaining agricultural settlements through planned resettlement of drought-affected families, improve income distribution, minimize rural poverty, and create a replicable model for other areas.

Key Project Facts

Category	Details
Implementing Agency	Relief and Rehabilitation Commission (RRC)
Location	Lower Didessa Valley, Wollega Administrative Region
Total Area	71,760 hectares
Number of Settlers	15,000 families (66,000 people)
Family Size	4.4 persons
Project Duration	5-year implementation period
Total Project Cost	Birr 113.76 million (US$54.96 million)
Foreign Exchange Component	47.7%

Project Components

Land Clearing: 33,000 ha of savannah and light bush
Mechanization: 210 tractors with implements and workshops
Farm Development: Stores, shops, processing equipment
Soil Conservation: 6,000 km of contour strips, waterways
Afforestation: 1.6 million Eucalyptus trees
Livestock: 750 dairy cows and 40 bulls
Infrastructure: Roads, water supply, health and education facilities

Settlement Structure

The project will establish 30 settlement units, each with:

500 farm families
1,000 ha for cooperative crop production
50 ha for individual homesteads (1000 m² per family)
200 ha for pasture
136 ha for forestry
Essential services (schools, health stations, etc.)

Economic Benefits

Year	Average Family Income (Birr)	Per Capita Income (Birr)
Year 5	1,332	303
Year 7	1,469	333
Year 12	1,880	427

Financial Viability

Internal Financial Rate of Return: 33.6%
Economic Rate of Return: >50%
Project remains viable even with 20% cost increases or revenue reductions

Implementation Schedule

Year	Units Established	Families Settled
1	5	2,500
2	5	2,500
3	10	5,000
4	10	5,000

Conclusion

The Lower Didessa project represents a comprehensive approach to addressing Ethiopia's rural poverty and food security challenges. By establishing self-sustaining agricultural communities with proper infrastructure and services, the project aims to significantly improve settlers' livelihoods while creating a model for future resettlement programs. The strong financial and economic indicators suggest the project is both viable and impactful.