Reporl No. 8047.EGT * Arab Republic of Egypt Land Reclamation Subsector Review February 1,1990 Europe, Middle East and North Africa Region Country Department IlIl Agriculture Operations Division FOR OFFICIAL USE ONLY -~~~~~~~~~~~~~~~~~~~~~~~~~~~~I- .~~~~~~~~~~~~~~~~~~~~~~~ .,~~~~~~~~~~~~~~~~~~~~9 .~~~~~~~~~~ . 5~ ~ ~ ~~~~~~~~~~ ~ ~~~~~~~~~~~~~~~~~ .3 . (, ., ' C' /; .W Ž5 ,(5.t (')'. J * fE~~~~~~~~~~~~~~~~~'0 ; DocumnentoftheWorldBank PThis document has a restricted'distribution and may be used jy ,recipients l -'. ' . ' only in the performance of their official dities. Its contents nay ihot otherwise . '. , -: r sd w1thtout Work Btank authorization. 9' O . , f - ss ~ ~ ~ ~ N . -, '.9o 5f ot < C,~~~~~~~~~~~~~a a (- ' '., \;, o ' '~~~~~. >9t I Currency Eguivalents Currency Unit - Egyptian Pound (LE) LE 1.00 - US$ 0.408 US$1.00 - LE 2.45 Weifhts and Measures 1 feddan (fed) - 1.038 acres 1 feddan (fed) - 0.420 hectares (ha) 1 hectare (ha) - 2.380 feddans (fed) m3 - cubic meters Mm3 - million cubic meters Bm3 - billion cubic meters Principal Abbreviations and Acronyms Used ARC Agricultural Research Center BDAC Bank for Development and Agricultu:al Credit DRI Drainage Research Institute EARIS Egyptian American Rural Improvement Service EAUDRL Egyptian Authority for the Utilization and Development of Reclaimed Land ' EEA Electricity and Energy Authority FAO Food and Agriculture Organization GADD General Authority for Desert Development GARPAD General Authority for Rehabilitation Projects and Agricultural Development HAD High Aswan Dam HDSS High Dam Soil Survey ISD Irrigation Sector Department LMP Land Master Plan M&I Municipal and Industrial MALR Ministry of Agriculture and Land Reclamation MED Mechanical and Electrical Department MPWWR Ministry of Public Works and Water Resources O&M Operation and Maintenance T&V Training and Visit TDS Total Disolved Salts WMP Water Master Plan WPG Water Planning Group VEW Village Extension Worker FOR OMCLAL USE ONLY ARAB REPUbLIC OF EGYPT LAND RECLANATIOR SUBSECTOR REVIEW Table of Contents Chapter Page No. PREFACE EXECUTIVE SUMKARY .... . . . . . . . . . . . . . . I. INTRODUCTION .1 A. Objectives and Scope . . . . . . . . . . . . . . . 1 B. Historical Background . . . . . . . . . . . . . . 1 1. Modern History . . . . . . . . 1 . . . . . . . 2. Post-;952 History . . . . . . . . . . . . . . 2 C. Land Reclamation Institutions. . . . . . . . . . . 3 D. Literature Review. . . . . . . . . . . . . . . . 4 II. RECENT RECLAMATION EXPERIENCES--THE NEW LANDS . . . . 4 A. Program Implementation . . . . . . . . . . . . . . 4 1. Gross Reclamation and Net Agricultural Areas . 4 2. Planning and Coordination . . . . . . . . . . 8 3. Further Development . . . . . . . . . . . . . 12 4. Role of Private Sector . . . . . . . . . . . . 17 5. Settlement .... . . . . . . . . . . . . . . 18 B. Factors Contributing to Implementation Success . . 19 1. Physical Facters . . . . . . . . . . . . . . . 19 2. Infrastructure/Institutions . . . . . . . . . 22 C. Economic Feasibility . . . . . . . . . . . . . . . 25 III. FUTURE PROGRAM ........... . 30 A. Potential Supply and Demand . . . . . . . . . . . 30 1. Supply Factors .... . . . . . . . . . . . . 30 2. Demand for Land . . . . . . . . . . . . . . . 35 B. Investment Planning . . . . . . . . . . . . . . . 37 1. Priorities and Investment . . . . . . . . . . 37 2. Project Composition ... . . . . . . . . . . 39 3. Environmental Issues . . . . . . . . . . . . 40 C. Policy Issues .... . . . . . . . . . . . . . . 41 D. Recommendations .... . . . . . . . . . . . . . 42 ANNEXES ANNEX 1: History of Land Reclamation and Development in the Post-Independence Period . . . . . 47 ANNEX 2: Land Reclamation Planning . . . . . . . . 51 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - 2 - ANNEX 3: Supplemental Tables . . . . . . . . . . . 57 ANNEX 4: Economic Analysis. . . . . . . . . . . . . 67 ANNEX 5: Literature Review. . . . . . . . . . . . . 71 MAP IBRD 21614 - Reclaimed "Old-New" Lands Nile Delta and Environs MAP IBRD 21615 - Reclaimed "Old-bew" Lands Nile Valley and Environs MAP IBRD 21616 - Agricultural Reclaimable Land i This report was prepared by a World Bank mission consisting of Messrs. A. Nyberg (mission leader and economist), S. Barghouti (agriculturalist), and S. Rehman (irrigation engineer - consultant). The mission visited Egypt in March/April 1989. LMAD Developing water resources and reclaiming land have long been important components of Egypt's agricultural strategy. Since the 1952 revolution, over LE 3.0 billion (nominal) have been expended on land reclamation, and some 1.6 million feddans of land have been reclaimed for agricultural use. Land reclamation continues to receive the largest share, about 401, of the sectoral investment budget. Agricultural success on reclaimed land has, however, been checkered, making continued investment in land reclamation a controversial issue. Many of the early small projects, designed for smallholder settlement, were highly successful. But agricultural output on the land reclaimed under the large projects of the 1960s was inconsistent with the investments. Serious problems were encountered in both the engineering and agricultural facets of this program; agricultural production was managed by public sector companies which were too inflexible to adjust to the vagaries of agricultural production. The 1980s marked a substantial change in land reclamation and land settlement policies, as the private sector became more involved in the reclamation phase and production-management was completely removed from the public sector. To expand the agricultural sector, Egypt must, to a large extent, rely upon expanding its land base. Productivity (yields and cropping intensity) is relatively high on the traditional agricultural lands of the Nile Valley and Delta, thereby limiting the possibility for growth in these areas. Furthermore, agricultural land loss is substantial. 'While 1.6 million feddans have been reclaimed for agriculture, about 1.0 million feddans have been lost to urbanization. Consequently, expanding the land basQ and improving the productivity on these newly reclaimed lands is perceived by the Government to be the major avenue for sectoral growth. In addition, rapid population growth combined with a relatively small cultivated area has resulted in one of the world's smallest arable land:man ratios. Adding to the land base is seen as a way to alleviate some of the social pressures of urbanization and high population density. A primary objective of this study was to evaluate past land reclamation experiences and identify factors that contributed to agriculturally successful, and unsuccessful, land reclamation projects. The review's results would provide direction for future land reclamation activities. EXECUTIVE SUNNARY 1. This study was undertaken to gain a better knowledge of the current land reclamation program, its implementation including intersectoral linkages, and its impect on agricultural production. The review assessed previous reclamation experiences to identify factors contributing to success (failure) which could be strengthened (discontinued) in future programs. An evaluation of individual projects was not within the scope of this work. The fundamental objective was to improve the efficiency of future investments in agricultural land reclamation. Introduction 2. Land reclamation in Egypt is of ancient origin, which for several millennia focused on the alluvial soils of the Nile Valley and Delta. Since the 1952 revolution efforts have increasingly focused on the reclamation of desert sands, as most of the remaining areas of undeveloped alluvial soils are relatively small and/or have particularly difficult reclamation problems. Some 912,000 feddans (gross) were reclaimed between 1952 and 1978 (the old-new lands) and since then, 577,700 feddans have been reclaimed (the new-new lands). Concurrrently agricultural land was been lost to urbanization; the net increase in cultivated area between 1950 and 1988 was only a million feddans.l/ 3. Land reclamation is a controversial issue, primarily because of the large investments in, and poor performance of, parastatal farms during the 1970s. Several reasons combined to limit the success of reclamation efforts (1952-1978) on the old-new lands. These included: (i) the lack of planning and project implementation and inadequate knowledge of the soils; (ii) the need for a different construction technology for sandy soils; (iii) the lack of a production technology adapted to the peculiarities of the desert environment; (iv) weak post-implementation assistance in extension, training, credit and input supplies, etc.; and (v) budgetary constraints from implementing too many projects concurrently. Thus, lands which were not fully reclaimed/developed were cultivated; drainage and waterlogging problems occurred; and,an inappropriate deltaic soil technology was applied to the desert soils. 4. Concurrent with these highly visible, but poor performing, investments were a number of successful projects, and project components, involving smallholder settlers. Smallholders on the new lands consistently achieved yields superior to those obtained on parastatal farms, and, after brief learning periods, they achieved yields near the national average. The realization that productivity is higher in the private sector underlies the current policies regarding settlement and divestiture (by parastatal companies). 5. A number of the problems which adversely impacted on earlier land reclamation have been resolved. The implementation of physical land 1/ Agricultural census of 1950 and the General Survey Authority report of 1988. SJJJAM - ii- reclamation has become a relativrely straightforward, trouble-free technical exercise. However, obtaining optimum benefits from reclaimed land will largely depend upon the provision of agricultural services -- research, extension, training, credit and production packages, water management! allocation, etc. If these services are adequately addressed, land reclamation can be economically viable since the cost of reclaiming land in Egypt is among the lowest in the region. Specific comments follow. Conclusions and Recommendations 6. The Rlinning process has improved considerably. The Land Master Plan (LMP-1986) identified 2.88 million feddans located in 90 project areas as potentially reclaimable and irrigable from Nile water sources. The LMP proposed that 1.38 million feddans be considered for priority reclamation in the near- to medium-term. It has estimated the relative merits of each project area and provides an excellent base for program planning. However, additional soil survey work would permit improved prefeasibility studies of these areas:. Parallel work has been undertaken in water planning. The Wat-sr Planning Group (WPG) has prepared a water master plan which is being continuously updated and refined. Using data supplied primarily by WPG, this review has concluded that water releases to the sea can be reduced sufficiently to allocate an additional 6.5-8.5 billion cubic meters of water to agziculturej/. This would be sufficient to irrigate 800,000 feddans, minimally. If the new areas expands beyond this, new water sources or savings will need to be identified. 7. The design and construction of physical structures have incorporated past lessons learned, but water and energy are still wasted. Pumping stations are designed for 24-hours per day operations, even though farmers do not practice continuous irrigation (pressure systems excepted). Furthermore, the canals are designed to maintain water levels rather than control discharges. This results in water wastage, as in the new-lands tail escapes do not flow back into the Nile system. Where water is pumped, it also results in excess energy use. To eliminate this water and energy wastage, a system of night storage is needed. Where new canals are to be constructed, in-channel storage could be designed. Otherwise, provision for on-farm storage is recommended. 8. As higher elevation soils (primarily sands) are irrigated, drainage of these soils is unlikely to be a problem. However, the possibility that irrigating land at higLer elevations could cause waterlogging in nearby lowlands should be assessed. The planning of physical infrastructure is now on a regional basis. Main conveyances and drains are planned with future development needs in mind, even though implementation may be deferred until needed. 9. Improved coordination is needed to ensure that land reclamation, irrigation/drainage and social infrastructure are all completed concurrently. The completion of irrigation/drainage investments sti'l occasionally leads or lags the completion of land reclamation investments, thus delaying the generation of benefits. I/ The above statistics refer to aggregates; the spatial consistency between land and water is uncertain and must be reviewed on a project-by- project basis. UQIANd - iii - 10. Budlgta. Until recently (1987/88), land reclamation was constrained by both limited financial resources and implementation capacity. However, budgetary allocations during the first two years of the 1987/88-1991/92 plan period have exceeded plan proposals, amounting to about four percent of the investment budget. The annual implementation target for both public and private sectors is 150,000 feddans, which is to be implemented in a ratio of about two-thirds to one-third. The financial budget is now more consistent with the implementation capacity of the public sector companies, which is about 90,000 - 100,000 feddans annually. Currently, about LE 315 million is allocated to land reclamation, which is sufficient to reclaim about 90,000 feddans While current budgets and targets are consistent, there is concern for the medium-term future. Egypc is now experiencing budget constraints, and maintaining the allocations for land reclamation in real terms, may be difficult. Even if the real budget is maintained, the physical area implemented will decline as future projects will incur higher unit costs. (Future projects will be more distant from water sources and implementation will be more complex.) 11. Consistent with component coordination, mentioned above, is the importance of completing projects as rapidly as possible, once initiated, to permit the early generation of benefits. Recently budget appropriations have followed the principle of maximizing project completions rather than project initiations. 12. New Technologies. Improved production and irrigation technology including tissue culture propagation, dwarf varieties, plastic mulch, plasticulture, fertigation and pressure irrigation systems have permitted rapid change in the new lands. Many earlier reports assumed a static technology base, but an exceptionally dynamic technology has permitted the suaccessful cultivation of what was previously considered less favorable soil. These technologies which are widely but not intensively employed are rapidly bringing the land to positive marginal productivity. They have been developed externally and promoted by the private sector. But further adaptation of these technologies to the vagaries of the desert environment is needed. 13. Production Infrastructure Suom2rt. Research and extersion provide the dynamics of agriculture and are crucially important in generating benefits in the post-implementation phase of land reclamation. Research continues to focus primarily on the deltaic soils and is in urgent need of refocusing, given the fact that desert sands are becoming an increasingly larger portion of the agricultural land base. Desert agriculture is relatively new and employs unfamiliar technologies; thus, this subsector requires more support than old-land agriculture if the full benefits of land reclamation are to be enjoyed. There is a continued need for traditional research in: (i) irrigation methodologies; (ii) crop water requirements; (iii) fertilizer requirements; and (iv) cropping systems, particularly as they apply to the desert soils. 14. Much high technology/biotechno.ogy development will remain the domain of more developed countries, due to its high cost. But institutionalizing a biotechnologic capacity in the agricultural research center is an important institutional issue. Research to adapt new technologies to the local environment is necessary to fully exploit productivity potentials. u*M/AM - iv - 15. Training and visit extension methodologie3 are employed in some development projccts, but extension is generally weak, particularly in the new lands. To a certain extent, the private sector has usurped the extension function as it applies to technology transfer (fertigation, etc.). Possibly, the private sector can perform this function more efficiently, but extension services should be revived to better perform their traditional role of assisting farmers to adopt/implement improved fertilization regimes, irrigation management, etc. This support is vital because without it land reclamation may be an engineering success but an agricultural failure. 16. Agricultural InDits. The lack of adequate and proper fertilizer application is potentially a serious constraint to a dynamic new-land agriculture. Fertilizer recommendations rematn fixed, applying to the country at large, with no consideration of specific soil requirements. This is particularly detrimental in the new land with its low inherent fertility. The fertilizer recommendation is translated into a credit package, which may or may not allow farmers to obtain additional fertilizers -- even at unsubsidized prices. The lack of fertilizer has long been noted as a constraint, but only recently (1988) have incremental fertilizers been available in some locations. Research and input marketing staff need to address this issue on a priority basis. 17. Less urgent, but also very important, is the need to ensure that adequate soluble fertilizers are available. Given its improved efficiency, fertigation will likely gain widespread use, if it is not supply constrained, 18. Water Mauagement. In addition to improved system management (para. 7) improved farm level management is needed to fully exploit the productive capacity of reclaimed lands. Many farmers use modern pressurized irrigation systems and optimize water application, but many others do not. Additional farmer trainirg and farm investments are needed as increased water demands require more efficient use. Water shortages are not uncommon and seriously affect production, as desert sands have a low water retention capacity. Inadequate water control permits localized shortages to occur, particularly near the tail-end of canals. Improved control and/or storage would partially resolve this issue. Electrical outages also contribute to water shor...age. Main pumping stations are rarely affected, but the local grid, w'iich supplies energy for on-farm pumps and pressurized systems, is frequently subject to supply interruptions. 19. Economic Efficiency. Based on standard norms the economic rate of return (ERR) on desert land reclamation would exceed 14Z, producing a mix of cereals, pulses, vegetables, fodder, and small animals. (If tree crops are included, the ERR would be greater.) The rate of return is quite robust with respect to changes in cost. Changes in the benefit stream -- e.g., accelerated or delayed benefits and yield responses -- had appreciable impact on the ERR. 20. Water lift was identified in other studies as the major factor influencing the economic viability of land reclamation. This analysis concluded that lift was only one of many recurrent costs which contributes to the generation of benefits. Given current economic costs, increasing AW/AME water lift by 10 meters reduced the ERR by 0.5 percfntage points. Thus, it is all important variable, but not the major one. 21. This review has found that some basic determinants are favorable to a successful program of land reclamation in Egypt, including the reclamation of desert soils. This does not mean that success (adequate return) is a foregone conclusion -- many demanding criteria of success must be met in actual implementation It does mean, however, that if the basic elements are present -- with good planning, design, implementation, adequate financing and good agricultural services -- adequate returns on investments are possible. LIjAM ARB REPUBLIC OF EGYPT LAND RECLA)ATION SUBSECTOR STUDY I. INEQ.U.CTION A. Oblectives end Scope of Review 1.01 An important thrust of Egypt's development program is the expansion of the agricultural land base. Some 40X of the development budget for the agriculture/irrigation sector in the 1982/87 Five-Year Plan was budgeted for land reclamation. During the Plan period, 261,000 feddans were reclaimed and brought under cultivation with a budgetary expenditure of LE 1.0 billion. Despite the cost and project evaluations indicating mixed success, the Government continues to pursue an ambitious reclamation program which it will finance from domestic resources if external assistance is unavailable. The economic efficiency of land reclamation investments has been a controversial issue, particularly among external donor agencies. The controversy is caused, in part, by generalizations from atomistic project evaluations rather than an assessment of the program. A principal purpose of this review is to examine recent land reclamation activities and the program generally to identify factors which contributed to successful (or poor) performance and consider their incorporation (or discontinuance) in future projects, to improve investment eff'ciency. 1.02 Government is concerned with a number of soc'.al, political, and welfare issues in addition to the technical and economic factors of land reclamation. These include geographic equity, settlement of displaced families, and security issues which only the government can appropriately address, This review addresses only budgetary, technical and economic factors associated with reclamation benefits and costs. The report does not propose to address issues of optimum budget allocation, neither Letween sectors nor withi. the agricultural sector, but assumes that government priorities dictate that land reclamation receive about four percent of the public investment budget. B. Historical Background 1. Modern History 1.03 Land reclamation in Egypt has its origin in antiquity, having been practiced for several millennia. Modern land reclamation (perennial irrigation with drainage) encompasses the last two centuries. In the early 19th century, the total cultivated area was reported as two million feddans of which only 250,000 feddans could be summer cultivated. The assum?tion of power by Nohammad Ali marked the beginning of a rapid increase in cultivated land expansion as he embarked upon large scale reclamation works and canal construction/expansion. By 1830, some 600,000 feddans could be summer cultivated and the total cultivated area increased to 2.6 million feddans by the end of his reign (1848). Much of the reclamation efforts were directed toward the saline clay soils of the Northern Delta between the two branches of the Nile. Conscripted labor constructed most of the irrigation canal works but drainage was left primarily to private initiatives. -2 - In the third quarter of the century land reclAmation and large irrigatfon works continued in the northern Delta and expanded into middle Egypt. By 1880 the cultivated area had increased to 4.7 million feddans. Additional investments, particularly construction of the Delta barrages, increased the cultivated area to 5.2 million feddans by the end of the century. 1.04 In the early twentieth century, construction of a barrage and feeder canals in middle Egypt and completion of the Aswan dam (including two subsequent increases in height) modestly expanded the cultivated areas but primarily permitted the conversion of additional areas from basin to perennial irrigation resulting in increased cropping intensity. However, the provision of additional water was not accompanied by a similar expansion of drainage works; this lack of adequate drainage contributed to waterlogging, saline conditions and reduced productivity. Only an estimated 125,000 feddans were added to the cultivated area in the twentieth century prior to the 1952 revolution. Much of this increment was reclaimed by the private sector. But, a large scale drainage program was implemented in the Delta during the 1930s, increasing the artificially drained l-nds from 980,000 to 2.2. million feddans. 2. Post-i,52 History 1.05 The dearth of agricultural land and the rapid population growth made land reclamation a high priority activity in post-revolutionary Egypt. The exceptionally low arable land to man ratio made expansion of the land base an attractive objective, often emphasizing physical reclamation over the ultimate objective of increased production. The emergence of food deficits in the late 1960s, which increased rapidly though the following two decades, resulting in massive agricultural trade deficits, also were significant in focussing and maintaining attention on land reclamation. 1.06 The definition of reclamation has changed over time. The complete reclamation package included full production infrastructure development, construction of social and physical village infrastructure and crop production to the point of positive marginal productivity.1/ But at various times reclamation comprised less than the complete package. Similarly, the philosophy and rationale of land cultivation passed through various stages. During the 1950s land and livelihood for the expanding population of landless peasants was more important than expanding production. Initially cooperatives were expected to be the principal mode of production in the new settlements. Expectations were high and an ambitious large-scale program was launched to reclaim a million feddans. Only 80,000 feddans were actually reclaimed, of which 40X was in small scale projects. Cooperatives were formed to distribute land and to assist in input/output marketing but cooperative production was / Positive marginal productivity (or marginal productivity), is a term used in Egypt to describe reclaimed land that has bein developed - levelled, leached, fertility improved, etc. - to the point wheri gross returns exceed (equal) variable production costs. LAD/AJN not practiced. Reclamation during the 1960s (prior to the 1967 war) proceeded rapidly, coinciding with construction of the High Aswan Dam (HAD), but with over-emphasis on reclamation and under-emphasis on cultivation and production. Much of the reclaimed land was retained as state farms employing large numbers of agricultural workers, although provision was retained to lease five feddan plots to tenants. It was perceived that state farms could exploit scale economies, were better suited to mechanization and could earn foreign exchange by producing horticultural products for export. This change in philosophy impacted not only on new projects but on much of the earlier reclaimed, but undistributed land. This marked a fundamental change in the rationale of land reclamation/allocation/cultivation, away from providing farms for the landless, toward expanding agricultural production and marketable surpluses, and increasing government revenue and foreign exchange. 1.07 Other than the completion of some previously commenced projects land reclamation in the 1970s was minimal. But, the 1970s marked another change in the philosophy on land distribution and the production mode. Low productivity on public sector farms indicated scale economies were not being achieved and state farms were retained only in some West Delta areas for the production of high value fresh and processing crops. The more intensive efforts of small farmers resulted in higher yields, thus most land reclamation and distribution outside the West Delta area was for smallholder settlement. A policy of distributing land to graduates was initiated, with mixed success, in the mid-1970s. A more complete discussion of the rationale and objectives of land reclamation is contained in Annex 1 (also see Annex 3, Table 1). C. Land Reclamation Institutions 1.08 Responsibility for investments in land reclamation lies primarily with the General Authority for Rehabilitation Projects and Agricultural Development (GARPAD) in the Ministry of Agriculture and Land Reclamation (MALR) and the former Irrigation Ministry which has been combined to form the Ministry of Public Works and Water Resources (MPWWR). The irrigation sections of MPWWR are responsible for the construction of the major irrigation and drainage conveyors. GARPAD is responsible for the construction/implementation of the irrigation/drainage distribution and other physical infrastructure. However, GARPAD often subcontracts with the parent ministries to implement certain infrastructure (electrical transmission lines, etc.). The MALR, though its public sector companies, is responsible for land development and until recently for bringing the land to marginal productivity. An UnderSecretariat for Settlement, in the MALR, is responsible for selecting and placing settlers on farms and for coordinating with the service ministries (health, education, etc.). Other MALR entities are responsible for providing production services (extension, research, credit, etc.). LAND/AJN D. Literature Review 1.09 Several land reclamation project have been evaluated, reflecting varying degrees of success. A selection of literature, representing studies of both successes and failures, are briefly reviewed. The results of these studies have affected reclamation efforts in two ways: (i) some of the conclusions/recommendation have been incorporated into the land reclamation program; and (ii) studies containing negative conclusions have influenced donor agencies and limited the availability of external finance for land reclamation. 1.10 Consistent conclusions reached in the various studies include: (i) smallholder settlers rapidly achieved cropping intensities and productivity levels approximating national averages but yields on state farms were typically only 50X of the national average after a decade of production; (ii) water shortages were ubiquitous; and (iii) fertilizer supplies were often inade4uate. Other conclusions were project specific and are summarized in Annex 5. One conclusion, with wide program application, pertaining to maximum pumping lifts, stated any project requiring water lifts in excess of 20 meters would be uneconomic (see para. 2.71). II. RECENT RECLAMATION EXPERIENCE--THE NEW LAND A. Program Implementation 1. Gross Reclamation and Net Agricultural Areas Old-New Lands 2.01 Although Government initiated minimal land reclamation during the 1950s, it accelerated sharply in the 1960s; a gross area of 912,000 fed was reclaimed/under reclamation when reclamation efforts were interrupted and priorities re-focused on defense issues in the early 1970s. Annex 3, Table 1 contains a time series and geographic distribution of the land reclaimed and is summarized below: LAND/AJN -5- Table 2.1: OLD-NEW LANDS (1,000 fd) Eastern Delta 90.5 Middle Delta 0.5 Western Delta 379.6 Middle Egypt 75.7 Upper Egypt 79.9 Sinai 11.3 Other a/ 125.0 Total 912.0 Soil TpMe Heavy Deltaic 270 Calcareous 200 Sandy 42 Total 912 a/ High Dam Lake Shores, New Valley, N.W. Coast and Western Desert. Over 40% of the area reclaimed was in the Western Delta, generally areas contiguous to cultivated areas and where infrastructure could more easily be provided. Pre-revolution reclamation efforts were primarily on familiar deltaic soils; however, post-1952 efforts included calcareous and sandy soils, with only 30% being on deltaic soils (also see Annex 1, Figure 1). 2.02 The responsibility for implementing land reclamation schemes fell to three major institutions; the Land Development Authority, the Desert Development Authority, and the Agrarian Development Authority. The first of these authorities was the most important and accounted for about 75% of the old-new lands reclaimed. The Desert Development Authority was responsible for groundwater development -- plus the N.W. Coast using surface water. The Agrarian Development Authority was short lived and responsible for reclaiming only 77,200 fed. Table 2.2 illustrates land reclamation by authority and time period. LAND/AJN - 6 - Table 2.2: LAND RECLAMATION BY DEVELOPMENT AUTHORITY Land Desert Agrarian Development Development Development Period Authority Authority Authority Total -----------------(1000 feddans)------------------------- 1952-60 74.4 4.3 - 78.7 1960-65 391.2 83.5 61.7 536.4 1965-70 195.5 64.9 15.5 275.9 1970-75 21.0 - -21.0 682.1 152.7 77.2 912.0 2.03 The 912,000 feddans represent the gross area contained in the reclamation program/projects. Net agricultural areas are not precisely de.lned but rule-of-thumb estimates place the net area at about 85X of the gross area. The status of this reclaimed land, as of 1977, is indicated ir. the following table. Anecdotal evidence suggests chat waterlogging may have caused the suspension of cultivation on some additional lands. But additional drainage works undertaken (and which continue) in the 1980s have brought much of this land back to productive levels. There are no data available on the current status of these lands, but various estimates/ suggest that about 75% (685,000 feddans) are now productive, and about 90,000 feddans remain under rehabilitation. J See for example: Nagmoush, Samir; History of Land Reclamation in Egypt, 1988. LkND/AJN - 7 - Table 2.3: RECLAIMED LAND UTILIZATION (Old-New Lands) 1977Ia Total Reclaimed 912 Occupied by Utilities 139 Agricultural 773 Cultivated 696 achieved marginal productivity 586 below marginal productivity 110 Cultivation delayed 77 La The Five-Year Plan 1978-1982, August 1977 New-New Lands 2.04 Land reclamation accelerated during the 1980s and the philosophy evolved to more private sector (both large- and small-scale) involvement. Public sector farms continue to be transferred to private ownership either though investor purchase or small farmer settlement. Public sector reclamation is proposed to continue in two parallel efforts. Land reclamation for settlement by family farmers will be undertaken with full infrastructure and social service development, and the land will be distributed soon after the infrastructi.i-" is in place. The settler has the responsibility for soil development anclachieving positive marginal productivity while certain settler subsidies are provided (see para 3.19). Reclamation of land for sale to investors will involve only the major civil works and a minimum of infrastructure. Also, private investors are encouraged to undertake the full reclamation effort in areas where underground water resources are available. 2.05 A data consistency problem exists regarding the land reclaimed after reclamation efforts resumed in 1978/79. Although GARPAD is the basic data source, the imprecise definition of land reclamation (initiated, completed, cultivated, etc.), results in conflicting statistics. This study assumes the term applies to the land on which reclamation was completed (Annex 3, Table 1) arnd totals 577,700 fed for the 1978/79-1987/88 decade. The Western Delta continued to be the region where reclamation was concentrated, accounting for about 501 of the total area. 2.06 Since 1982/83, additional statistics are available which provide a better indication of reclaimed and cultivated land. Thus, of the 261,700 fed LMND/AJN - 8 - reclaimed in 1982/83-1986/87, only 189,800 feddans were allocated water. (This suggests a serious gap in the planning and implementation of land reclamation and irrigation projects -- see following section.) For 1987/88, the entire amount reclaimed, 153,600 fed, was allocated water. 2. Planning and Coordination Planning. 2.07 The institutions responsible for land reclamation have undergone several reorganizations/restructurings which have affected the planning, management and implementation capacity of the various entities. Soon after the 1952 revolution, private land reclamation companies were nationalized and became state enterprises. Subsequently, land reclamation has been the domain of four different ministries, including being a separate ministry. Seven major institutional reorganizations have occurred. 2.08 The responsibility for the land reclamation program composition currently resides with the Undersecretary of State for Land Reclamation in the MALR (although it must be approved by the Ministry of Planning and Cabinet). GARPAD has the major planning and design role in land reclamation and coordinates infrastructure work with other appropriate entities, particularly the MPWWR. Irrigation and drainage canals are designed to incorporate future development although immediate plans may call for only partial construction. The construction of major canals and drains is the joint responsibility of MPWWR and GARPAD as the budgetary resources may accrue to either institution, although actual implementation is normally by the MPWWR. The MPWR has the overall responsibility for irrigation water management and distribution, and for planning, design and construction of the principal water conveyors (e.g., Nubariya, El Salaam, and Ismailia Canals) and drains. Several other agencies are involved directly, indirectly, or peripherally in land reclamation and others are involved in providing postreclamation services. 2.09 Project design and implementation through the first two decades following independence was based mainly on social and political objectives with minimal consideration of economic issues. The preparation of the 1978- 1982 Five-Year Plan marked a change to a more systematic approach to planning. The ongoing studies of the Water Planning Group (WPG), water policy modelling and the preparation of a continuously updated Water Master Plan (WMP), plus the completion of the Land Master Plan (LMP) has provided an objectire data base permitting more rational water and land resource planning. Sociopolitical objectives rightly continue to be important determinants in project selection but these decisions are now made with improved economic information. 2.10 Reclamation requires substantial forward planning as the investments in major irrigation and drainage conveyors and reclamation infrastructure are large. This requires budget coordination with the Ministries of Planning and Finance and the Irrigation Section Depa'tment (ISD) in the MPWWR. The lack of effective planning and budgeting has adversely LAND/AN affected the efficiency of reclamation projects. Firstly, construction of irrigation/drainage infrastructure should proceed in parallel but in practice many examples exist where the construction and completion of one proceeded the other by a year or more. Secondly, until 1987/88, budgets and implementation capacity were poorly coordinated, but financial and physical planning have become better integrated in the 1987/88 - 1991/92 Plan period. Once a project is initiated its speed of implementation should be dictated by physical factors not budgetary constraints. The process of initiating several projects simultaneously but implementing them slowly is less efficient than implementing fewer projects and concentrating on their early completion, which will permit benefits to be generated earlier. From an economic perspective a project should be initiated only when a budget consistent with the implementation schedule can be reasonably assured. 2.11 Soil Manping. Detailed soil information has been a weak component of project planning. The High Dam Soil Survey (HDSS) undertaken in 1960-65 by FAO/UNDP was the first comprehensive soil and land classification study undertaken on potentially reclaimable lands that could be serviced from the Nile. Mapping was based primarily upon reconnaissance survey scale of 1:200,000. Mapping on this scale is sufficient for program planning but inadequate for project definition. Nevertheless, a considerable amount of reclamation was initiated prior to the completion of even these broad scale studies. This contributed to slow implementation and postimplementation problems as many problem soils were included in the projects. The LMP expanded the area studied with improved mapping definition; four million feddans were mapped in semi-detailed scale. Detailed land and soil mapping is undertaken at the project feasibility stage. 2.12 Implementation Capacity. GARPAD plans individual projects and implements them through six public sector companies. Implementation capacity waned during the reclamation hiatus of the early and mid-1970s. The resumption of reclamation activities required a period of time to re- established that capacity. This involved the acquisition of new equipment as well as rebuilding the organizational and technical expertise. Re- establishment was gradual as investments were also fiscally const~ained. In the beginning of this period, reclamation was faced with the dilemma of limited capacity to implement and limited allocations to improve capacity. This paradox appears now to have been resolved as allocations/expenditures in the initial two years of the 1987/88-1991/92 Plan slightly exceeded the allocation proposed in the Five-Year Plan (Annex 3, Table 5). Furtherm're, initial indications suggest that land physically reclaimed exceeds plan targets. In 1987/88, the public sector companies reclaimed about 90,000 fed. Given this recent experience and the reduced infrastructure required on lands destined for investor farmers, reclamation capacity should approximate 100,000 fed annually (see Annex 3, Table 7). Budsets 2.13 By 1975, LE 485 million had been spent reclaiming the 912,000 fed of old-new lands, the bulk of which was spent on Agriculture (i.e. some land LAID/AJN - 10 - leveling but primarily the cost of bringing the land to positive marginal productivity). However, it was estimated that a further LE 238 million would be required to complete the effort. The expenditures by activity and time period are contained in Annex 3, Table 4. The level of expenditures are difficult to interpret as they are in nominal, not constant terms, and they cannot be related to fully reclaimed areas. However, the relative expenditures between components is instructive. The following lists the proportion of expenditures between 1960 and 1975 by activity. Activigtr ExRenditures (percent) Agriculture 57.1 Irrigation & Drainage 23.7 Housing & Utilities 9.0 Transport & Communications 3.4 Electricity 1.7 Other 5.1 100 .0 Source: Annex 3, Table 4. The implication of current policy which leaves agricultural development to the settlers is that government investment costs should decline by 50X. Where reclamation is undertaken for sale to investor farmers and social infrastructure is excluded, costs should decline a further 20X. This is consistent with actual and proposed e.penditures under the 1982/83-1986/87 and 1987/88-1991/92 Five-Year Plans, in which agricultural expenditures represent only about 5Z of the land development budgets. Further, social infrastructure costs are budgeted at 121 of the development costs of the 1987/88-1991/92 Plan (see Annex 3, Table 5). 2.14 Since 1978, land reclamation has been a favored activity in the Five-Year Investment Plans. Consistently about 40 percent of the agricultural investment resources have been budgeted for land reclamation activities (Table 2.4). However, as financial constraints have arisen, budget allocations/expenditures have fallen short of the budget target. Actual expenditures during the 1982/83-1986/87 period were about 501 of the planned allocations. LAND/AJN - 11 - Table 2.4: FIVE-YEAR PLAN BUDGETS FOR LAND RECLAMATION 1978- 1982- 1987/88- 1982 1986/87 1991/92 -----------(LE million)---------- I. Ministry of Agriculture 129.1 885.2 886.9 Land Reclamation Activities - 20.5 39.7 Other 129.1 864.7 847.2 II. Ministry of Irrigation 453.5 1,882.3 1,124.4 Land Reclamation Support 60.0 194.0 126.8 Other 393.5 1,688.3 997.6 III. Ministry of Land Reclamation 307.4 1,552.5 1,084.7 Percent budgeted for land Reclamation 41Z 41Z 40X Source: Ministry of Planning; Five-Year Plans 2.15 The IMP indicates that project investment costs vary widely (LE 3,000-8,000/fed), depending upon its complexity/difficulty, but has an average investment cost of about LE 5000/feddanl/ for the recommended program (Annex 3, Table 9). This is consistent with the estimated LE 4,500/fed required for reclaiming the Tina Plain2/. It is also consistent with recent contracts let for about LE 2,500 and LE 2,000 per feddan for infrastructure and internal development, respectively. The increased use of sprinkler and drip irrigation systems has reduced the leveling and other internal development costs. (In addition, housing and social services cost approximately LE 10,000 per unit.) Using these statistics as guidelines 1/ The LMP estimated costs in 1990/95 prices (the period when most implementation was expected) but applied 1986 currency values. The mission recalculated the foreign exchange component, estimated to be 75X of total costs, at the 1988 exchange rate (LE 2.20 - US$1.00) to make it comparable with other data. Inflation of the local cost component was adjusted consistent with the exchange rate devaluatior. The costs include the investment needed to generate and transmit incremental electric'ty needs. Also, it includes a 151 design, engineering and supervision fee. 2/ GARPAD-PPU, Tina Plain Development Project, Feasibility Study, June 1988. LAND/AJN - 12 - suggests a budget of about LE 430-440 million (1988 currency values) is required to reclaim 100,000 fed; the private sector would pay for additional reclamation, even if implementation was undertaken by Government. The budget would be adjusted downward depending upon the extent internal development was left to the private sector. These reclamation costs are exceptionally low, perhaps because the water source investments (the High Aswan Dam) are sunk costs. Land reclamation costs in Egypt are among the region's lowest. 2.16 Coordination and implementation issues impact primarily on the cost side of the equation although they affect the early generation of benefits. However, postimplementation coordination of support agencies and the generation of benefits that has been more elusive. Thirteen parastatal agricultural companies were formed to manage the reclaimed lands; but, low productivity altered their objective to bringing the land to marginal productivity prior to distributing it to smallholders. More recently the objective has changed to land divestiture through sales to investors and distributing it to smallholders. The downstream coordination and impact of research, extension training, credit and production packages, fertilizer supplies, water management/allocation, etc. are discussed below. The economic gotential of the newly reclaimed lands cannot be fully exploited until these services are improved. 3. Further Development ReguirementdRehabilitation Needs 2.17 Drainage, waterlogging, and salinity have been problems, particularly in the cultivation of heavy clay deltaic soils on the old-new lands, but also on the calcareous soils. Prior to reclamation groundwater levels ranged from one to twenty or more meters below the surface. Where high groundwater tables existed drainage systems were part of the reclamation process. However, such systems were not provided where groundwater tables were low. But prolonged irrigation from unlined canals (and frequently, over- irrigation) caused the water table to rise in many areas. As much of the lower aquifer is heavily saline, the rising groundwater caused a rapid decline in yields and the abandonment of some land. The yield decline in Tahrir due to waterlogging/salinity problems is illustrated below, where within a four year period, cereal yields declined 40 percent. LAND/AJU - 13 - Yesr Wheat Aarley --------- (ardebs/fd) ----------- 1972/73 4.10 3.10 1973/74 4.22 1.92 1974/75 2.68 2.30 1975/76 2.42 1.88 Source: The National Council for Production and Economic Affairs, Section of Agrarian Production; A Report on Land Reclamation, April 1986. 2.18 To a large extent the drainage problem reflects the lack of planning, including soil mapping, prior to reclamation, (para. 2.11). In many of the old-new lands open surface drains were installed but their size and spacings were not based on detailed soil investigations including soil texture, depth, presence/absence of subsurface barriers, pribable cropping patterns, aquifer conditions and infall/outfall conditions. Incomplete and poorly designed drainage systems have corntributed to lengthy periods of leaching and delays in achieving marginal productivity. In much of the low lying heavy soils open drains are being replaced by underground PVC pipe and tile drain installations. 2.19 Drainage conditions in the newer sandy areas differ substantiaily from those in lower lying heavy soils. In these areas canals are lined and sprinkler/drip irrigation systems are being used. These measures will reduce and delay the onset of drainage problems but will not necessarily eliminate them. Except in some coastal areas, these soils are at high elevations with water tables at a depth, of 20 meters or more. Unless a clay or impermeable layer exists at a shallow depth, permitting a pe' hed water table to develop, drainage/waterlogging problems are unlikely to become significant for several years. In these instances drainage networks could be added as the need arises. However, the impact of irrigating land at higher elevations on gossible waterlogging in nearby lowlands should be assessed. 2.20 The planning of a drainage network or planning for subsequent drainage should be an integral component of reclamation planning, even if its construction is deferred. Drainage, like irrigation should be planned in parallel with land reclamation and on a regional basis although much of the construction/implementation may be deferred until the problem arises. Detailed soil investigations are needed to identify and model potential problem areas. Greater coordination/interaction is needed between G'RPAD and the Drainage Research Institute (DRI) to assess and address drainage problems. 2.21 Research and extension services for farmers on new lands are poor, particularly on desert soils. Research remains heavily focussed on the Valley/Delta soils and crops. Although two desert research centers have been established (West Nubariya and Salhiya), substantive new technologies remain to be generated. The lack of an appropriate desert technology has constrained LMND/AJN - 14 - egricultural development on the new lands. The disappointing agricultural performance that marked many of the reclamation projects was because the technology employed in the old lands was mechanically transferred to the new lands without adequate consideration of the unique features of the desert environment. Modifications in crop rotations were marginal, traditional crops such as wheat and corn were managed and treated similarly in the old and new lands; and the introduction of new and high value crops received little attention. Much of the modern irrigation technology and variety selection employed in the new lands was imported by the private sector; but research to adapt the technology to local conditions is still required. 2.22 Financial resources for desert research appears to be readily available. But, within the research community the incentive and reward system generally favors research applicable to the old lands. Given the importance of desert soils in the agricultural land base and the proposals for future development, a refocussing of research is urgently needed. 2.23 Extension and Training. GARPAD has assumed much of the responsibility of supplying extension services to farmers in new lands. Previously (Presidential decree No. 264 of 1978) extension responsibility was transferred to the extension staff of the ARC, once the reclaimed land reached marginal productivitv. In practice, extension staff were provided as available through the Governorate extension services (paid from GARPAD resources). 2.24 Each village has a village extension worker (VEW) who is supervised from the district and supported (at least in concept) by subject matter specialists (SMS). The VEWs suffer from either no experience or experience in the Valley/Delta; in either event their training and orientation is tcward lowland deltaic soils. Neither the VEWs nor their supervisors have formal links with the research staff, therefore, VEWs function more as purveyors of administrative information rather than techlnical information. Farmers have generally been left to their own devises for obtaining technical information and new technology. 2.25 For the past three years, extension and multi-disciplinary training assistance in the Western Delta area has been provided by an FAO project. The project team ia. staffed with seven subject matter specialists including, fruit production, vegetable production, small animal livestock production, mechanization, irrigation, agricultural economics and an extension specialist. Project staff manage two extension training plots working with staff of the West Nubariya research station and backstopped by national consultants who visit weekly. Project management has been requested to form more teams and duplicate this effort in the new lands of the Eastern Delta. This project has generated ne.w information and technology applicable to desert soils and distributed information on seedling availability. It provides effective technical support to the VEWs and assists in farmer training; a major task is to reorient their focus from "old land" to "new land" agriculture. As farmers are now settled prior to bringing the land to marginal productivity, a project objective is to assist farmers achieve LAND/AJN - 15 - marginal productivity quickly. By introducing early cash crops (horticultural items) and small animals (ducks and rabbits) smallholder farms are becoming profitable within the second year of production. 2.26 The Mariut Ceiter is a residential facility for training extension staff and farners and investigation of technical, social and economic aspects of new land development. The staff are largely inexperienced but the training function has enjoyed mixed success. A recent reorganization has resulted in more relevant training which is provided to all settlers prior to settlement. 2.27 InDut Packages. The low inherent soil fertility of the desert combined with a fertilizer package designed for the delta was inadequate to support crop yields at levels equivalent to those in the old lands. With time, farmers in new lands gained experience with soil fertility management, suitable crop selection, and alternative crop rotations and yields improved. This improvement in yield of selected crops is illustrated below. 1975/76 1985/86 Research CrOD NewLand Oldiand Net Oldiand Trials Wheat 0.84 1.25 1.22 2.10 3.00 Barley 0.92 1.80 1.60 2.30 3.20 Beans 0.42 0.85 1.20 1.60 2.35 Corn 0.66 1.e) 1.62 2.20 3.50 Soybear 0.58 0.95 0.85 0.95 1.50 Ground'uls 0.60 1.15 0.84 1.20 2.00 Source: Agricultural Research Center Without significant research/extension support, yields in 1985/86 on the new lands reached levels achieved a decade earlier on the old lands. (This is an excessively long period that research attention could shorten.) In the meantime, yields on old lands have increased and yield potential has increased further due to additional research in the old lands. A priority initiative of research/extension should be development of fertilizer packages suited to the sandy soils and different irrigation technologies employed for various crops. 2.28 The lack of adequate fertilizer supplies has reduced the benefits generated on reclaimed land. Only recently (1988) has incremental fertilizer quotas been made available for new lands. The following list indicates the additional fertilizer quota which is now available in the credit package for field crops. (Mote important is an incremental quota for horticultural crops, which was not made available). LAND/AJN - 16 - C; &All Land New Land Increment N 15.5X | P205 15X K20 481 N 15.51 | P205 0151 | K20 48X ------------(kg/feddai) - ----- ------------kg/feddan------- Wheat 450 100 - 50 100 50 Barley 300 - - 1.00 100 50 Onions 1000 300 - - 100 50 Clover 100 300 - 100 - Maize 600 200 - 50 100 - Peanuts 200 200 - 150 100 50 Source: Beheira Governorate 2.29. Agricultural Marketing. The marketing infrastructure for most crops is well developed in Egypt, although it is underdeveloped in the new lands. The private sector handles the marketing of crops proposed for new land production (except sugarbeets), although the public sector is also involved in marketing wheat and food legumes along with the private sector. 2.30 Marketing infrastructure has been and inevitably will remain underdeveloped in the newly reclaimed areas during the initial settlement years. However, there is no indication that the marketing of non- horticultural crops will be problematic. There is a ready market for both &ereals and food legumes, all of which are imported. Domestic procurement prices are close to their border price equivalent, providing adequate incentives for traders to engage in local procurement. The onion export market is relatively robust which also provides an incentive for exporters to procure supplies in the new lands. Similarly, there is a high forage demand by livestock producers as well as for on-farm use and marketing diff.culties are minimal; as is the subsequent marketing of live animals/meat. 2.31 The underdeveloped marketing infrastructure will continue to be a constraint for perishable horticultural products, particularly for those commodities in seasonal surplus (e.g. tomatoes). Therefore, production needs to be tailored to the marketing capacity. The local market in the project area have limited population and demand. Where the project areas are relatively near population centers (and better developed marketing infrastructure - Alexandria, Ismailia, etc.) the market potential is much improved as they may service an export market as well as the urban population. However, the marketing of perishable horticulturel items will be difficult and the near-term solution remains to produce within the contraints of the market. Substantively, this will require the production of a diverse group of fruits and vegetables rather than concentrating on the more commonly produced vegetables. Also, it will involve off-season production; as protected cultivation (plastic houses and tunnels) becomes more prevalent, this option becomes more viable - and also increases productivity, often of a two- to three-fold nature. LAND/AJN - 17 - 2.32 Water Management. As water supplies become more scarce, their efficient use becomes more important. In aggregate, farm level management of irrigation water has been, and remains, inefficient resulting in inefficient land use. Farmers are increasingly using modern pressurized systems and optimize water application but many farmers continue to use traditional systems. Where pressurized systems are not in use, nighttime supplies are wasted as there is no provision for storage. Abundant water supplies have led to over-irrigation contrLbuting to rising water tables and waterlogging. Further, excess abstractions in the upper reaches of canals have led to water shortages in the lower reaches. More training is needed to educate farmers on optimum water application. Water shortages are also affected by factors exogenous to the system, particularly electrical outages preventing pump operation (para. 2.50). 2.33 Agricultural Cooperatives. When settlers receive land they are encouraged to form cooperatives and are assisted by the Settlement Undersecretariat to do so. There are incentives to form cooperatives as the Settlement Director assists them not only in the organization of an input supply cooperative but also provides three sets of tractors and Implements. In addition to offering machinery services, at cost, the cooperative has become the center of agricultural information as the agricultural department and extension staff are located at the cooperative center. The cooperatives distributes quota fertilizer, seed and pesticides but does not provide credit which must be obtained separately from BDAC branches. Also, the cooperative collects land payment premiums. The cooperative supervisor is the liaison for forwarding complaints to the appropriate authorities, i.e. inadequate irrigation water. Each cooperative serves 200-400 farmers, covering 1000-2000 fed. 2.34 Credit facilities for farmers in the new lands are poorly developed and require urgent attention to meet both seasonal and investment needs. The newest settlers are most handicapped as their liquidity is the most precarious. Seasonal credit is conceptually av;ilable for the first crop year, but in practice is often unavailable. Investment credit is unavailable until a settler has proved himself a capable farmer; and its lack may prevent proving himself. Credit agencies are unlikely to issue unsecured investment loans, therefore, a mechanism is needed which will immediately provide a tentative land title that can be used as collateral. Further, in the new lands where distances to the BDAC branches are relatively great, a one-stop shop is needed, where both credit and inputs can be obtained. In this regard, the Cooperatives should be permitted to process credit applications on behalf of their members. 4. Role of the Private Sector 2.35 For 25 years following independence, land reclamation was the responsibility of the state. However, throughout that period a certain amount of reclamation occurred by "squatters", "homesteaders" and other smallholders who developed land alongside canals, reclaimed portions of shallow lakes by LAND/AJU - 18 - in-filli;l, and developed land using groundwater resources. Quickej/ estimated that homesteaders had reclaimed 130,000 fed through 1981/82 (most of which were "homesteaded" after 1978/79). 2.36 Public Law No. 143 of 1981 removed the legal monopoly the public sector had previously enjoyed, and private sector reclamation became actively encouraged. Private investors and land reclamation cooperatives have become quite active. The following table indica as the areas reclaimed by the private sector in recent years. In 1987/88, 43X of the land reclamation completions was by individuals and cooperatives (Table 2.5). Table 2.5: LAND RECLAMATION BY RECLAIMING AGENCY Public Non-Public Year Companies Entities Total Reclaimed Land (feddans) 1982/83 32,743 10,377 43,120 1983/84 30,167 15,463 45,630 1984/85 42,397 8,233 50,630 1985/86 30,632 25,874 56,506 1986/87 34,755 31,152 65,907 First Five Year Plan 170,694 91,099 261,793 1987/88 87,600 66,000 153,600 2.37 Also, the private sector is completing much of the reclamation work initiated by public companies. This applies not only to private investors and cooperative entities that do all reclamation work beyond main canals and roads, but to smallholder settlers as well. After land is fully reclaimed it is distributed to settlers who are now responsible for land development, bringing it into cultivation, etc. 5. Settlement 2.38 The current disposition of the old-new lands is uncertain. The 1978-82 Five-Year Plan indicates that by 1975 the agricultural Companies were in the process of disposing of some areas of land, although they continued to farm large areas. By 1978 some 56,000 farm families had been settled; if each family received 6 fed this would represent the disposal of 336,000 fed. In 1988, 240,000 fed still remained under company ownership, about one-half of which was located in the Western Delta. New-new lands are allocated to smallholders (landless farmers and graduates) as they become available. Data 1/ Quicke, E., et al; Arab Republic of Egypt, Five-Year Investment Plan Review, Land Reclamation, October 21, 1984. LMND/AJN - 19 - on the number of recipients and the area of new-new lands distributed are unavailable, however, some 17,000 smallholders were allocated land in 1988. Current policy is to allocate land to smallholders and investors in a ratio range of 40:60 to 60:40, which varies by project. Table 2.6: DISPOSITION OF AGRICULTURAL COMPANY LANDS. 1975 Total Areas Areas Item Area Disposed Under Disposal - -('000 fd)--------- Owned Owned LandsLs 54.8 26.5 28.3 Leased lands to be sold 153.0 153.0 - Subtotal 207.8 179.5 28.3 Lands for-SAle Involving 5-10 fed 53.2 10.0 43.2 For sale after Improvements 67.4 - 67.4 Subtotal 120.6 10.0 110.6 Caompan Retained Lands For agriculture 200.0 200.0 - For agroindustry 67.8 - 67.8 Subtotal 267.8 200.0 67.8 TOTAL 596.2 389.5 206.7 Source: 1978-82 Five-Year Plan, Vol.4, 1977 ja Includes Nubians, military retirees, settlers, etc. B. Factors AffectingZ Implementation Success 1. Phvsical Factors 2.39 Soils and Topography. A distinction between reclamation of the old-new lands and the new-new lands is the soil type and extent of reclamation efforts. Previously the reclamation of deltaic soils was emphasized. These were characterized by high clay context, high salinity and high water tables, but only minimal water lifts were necessary. As basin irrigation was the common mode, intensive land leveling was required These characteristics meant high development costs for leveling, leaching salts, and drainage. Further, these soils were difficult to leach requiring several years to reduce the salt to levels acceptable for non-tolerant crops. Where drainage was installed at LMND/AJN - 20 - waterlogging often led to a rapid reduction in yields. Thus, not only were costs increased, but benefits were reduced or delayed, contributing to the poor reclamation record. 2.40 Recent reclamation has focused on desert soils whose characteristics are the antithesis of deltaic soil3. These are high elevation, sandy soils with low water tables, often do not require drainage installations, and are less saline but generally have higher water lifts. As basin irrigation is not practiced on these soils, only minimal (if any) leveling is required. Further, the high permeability of these soils facilitates rapid leaching of salts. These characteristics combine to reduce the reclamation investment cost, only partially offset by increased recurrent costs. The management of desert soils is somewhat more sophisticated than the management of Deltaic soils. But with good management, benefits can be accelerated and increased. When combined with reduced investment, these factors make desert land reclamation more efficient. 2.41 Infrastructure Design. Open canals are the prevailing water delivery system in Egypt except for the recent pressure pipe systems installed for on-farm delivery on the sandy soils. They are designed to maintain canal water levels rather than control canal discharges. This design feature is a direct transplant from the old lands where the heavy clay soils combined with canal water levels typically about 0.5 m below ground level permitted high irrigation efficiency. In the new lands, this design results in gross wastage of water because water levels are controlled by tail escapes which do not flow back into the Nile system. Other design features also contribute to water wastage and increased cost, particularly the sizing of main pump stations on continuous 24 hours per day operation; an irrigation mode practiced by only the most sophisticated farm managers. Continuous pumping combined with the lack of canal or on-farm storage wastes both water and energy. A canal system designed for 24 hour use but used only during daylight hours results in excess aggregate demand during those hours and water shortages for farmers located at the tail end of the canals. This operational characteristic results in actual irrigation efficiencies about 20% less than the designed efficiency. 2.42 Irrigation schemes in Egypt have never applied night storage practices, neither in-channel storage nor on-farm storage. Storage in farm ponds appears to be more cost efficient and provides more individual farmer flexibility in their water application system and improves uniformity in water distribution. Also, it would solve some of the water shortage problems now incurred. On-farm storage ponds consist of a small excavation lined with polyethylene film; the cost is estimated to range from LE 6.00 to LE 6.50 (depending upon capacity) per cubic meter per day. It would have the negative impact of reducing the arable land area by about one percent. 2.43 Canal Construction. In the sandy soils, canals are generally concrete-lined to reduce the seepage of expensive water (water that has been lifted). In the past, canals have suffered deterioration due to poor design, deficiencies in construction and inadequate maintenance. Linings have disintegrated, causing increased seepage, exposing the banks to erosion, and LAND/AJN - 21 - constraining the water carrying capacity. Lessons have been learned from these lining failures; new construction specifications include improved compaction of earthen banks, use of draining materials in deep cut sections, installation of vertical pipes with non-return valves to relieve artesian pressure underneath linings, and mechanical lining of canals. An additional lesson to be applied is to increase the number of technical supervisory staff and introduce a system of checklists of items to be monitored during construction of canals and structures. 2.43 0&M of Irrigation and Drainage Systems. The public and private contractors who construct irrigation and drainage infrastructure, under GARPAD and MPWWR supervision, are responsible for O&H of the contracted works for one year postcompletion. However, once the new land is transferred to settlers, this infrastructure is transferred to MPWWR for O&M. In the old-new lands (as in the old lands), MPWWR is obliged to provide water up to the point of delivery to the farm header canal and to manage drainage flows from collector systems to outlets. In the new-rnew lands where pressurized on-farm irrigation systems require booster pumps, MPWWR has the responsibility to operate and maintain the pressure pumping system. As these systems are quite view, some confusion exists among the farmers as to where the responsibilities lie; this should be clarified. 2.45 As the MPWWR is structured along functional lines, the O&M of new land infrastructure can be considered under four functional categories -- Nile irrigation system, main canals and distribution system, drainage system, and mechanical and electrical. The first three functions are managed by the Irrigation Sector Department (ISD) and the latter function is managed by the Mechanical and Electrical Department (MED). The organization and budgetary process are adequately structured but the allocation of funds generally is oriented more to traditional modes of maintenance rather than to changing requirements of the old lands and emerging needs of the new lands. 2.46 Controlled operations on the Nile system start with releases at HAD. Seven barrages on the river and its two branches divert about 80% of the water into 14 main canals by gravity; the remaining 20% is diverted by pumping. The ISD releases and distributes water according to an agreed schedule with MALR consistent with demand estimates. The extent of new land development is determined by MALR in consultation with MPWWR and their concurrence implies a commitment to supply adequate quantities of water. 2.47 Water diversion and distribution operations are being converted from traditional to more modern technical systems. The WPG undertakes system operation studies, including development of models for flow forecasting, strategies of operating Lake Nasser storage, and more efficient water distribution. New telemetry systems instantly transmit outlying canal water level data to control centers. The Nile water supply is becoming increasingly committed and potential conflict in intersectoral use is becoming .increasingly probable. LAND/AJN - 22 - 2.48 Pumping is usually required to lift water into the main canal systems serving the newly reclaimed areas. Water is often delivered on a rotational basis (every seven days) to those few farms in the new-new lands where surface irrigation is practiced. Where pressurized irrigation systems are used, water is supplied continuously. Pumping on the main and subsidiary irrigation canals and drains is MED responsibility. Electricity comprises the principal operational cost; in 1987/88, electricity costs of LE 22 million (for 1.1 billion kwh) were 40Z of the total LE 54 million spent for pump station O&M. 2.49 Efficiency considerations dictate that a water operation plan be developed for each reclamation scheme and/or canal serving multiple schemes. It should develop operational criteria which ensures a timely and reliable water supply -- the provision of on-farm storage would conserve both water and electricity. Preventive maintenance to reduce the probability of breakdown and restorative maintenance, in accordance with manufacturers' recommendations, to prolong the economic life of equipment should be emphasized. These measures can only be effective if O&K budget allocations are adequate and timely. The design life of mechanical and electrical equipment is generally assumed to be 15 years and their annual maintenance costs about St of the capital cost -- suitably escalated for inflation. 2.50 A critical factor in the success of an operation plan is the reliability of the electricity supply. Mission enquiries in the Western delta concluded that except for the five main pumping stations of the El Nasr canal, the electricity supply is subject to frequent, and occasionally long, interruptions and contributes to the localized water shortage problem. This is particularly serious for areas serviced by pressurized irrigation systems. The low water retention capacity of the sands requires frequent, if not continuous, irrigation to avert crop failure making an assured electricity supply a priority requirement for successful cultivation. 2. Infrastructure/Institutions 2.51 Much of the technology employed in the old-new lands was transferred from the old lands without consideration of the unique features of the new lands. Some of this te 'inology was inappropriate and contributed to the poor performance. However, X new generation of technology has developed over the past few years which is widely, but not intensively, employed in the new lands and which makes the use of other inputs more efficient. This applies to both irrigation and production technologies, some of which are discussed below. 2.52 Changes in Irrigation Technolonv. Over the last three decades, several lessons have been learned in crop production for various soil types in the new lands. These soils range from fine textured and saline deltaic soils to very coarse textured desert land. Traditional basin irrigation and related crop husbandry for cereals were suitable only for fine textured soils. Modern crop selection and irrigation technology have increased the flexibility of the farming system in the new lands. Modern on-farm irrigation methods and LAND/AJN - 23 - advanced levels of farm management permits farmers to cultivate cereals, legumes, vegetables, fruits, industrial crops, etc. in the desert soils using pressurized irrigation systems, including solid set systems, mobile machines and automated systems, which can maintain nearly optimal soil moisture conditions. Irrigation technology change has been rapid in the new lands -- an event unanticipated in earlier critical reports on land reclamation -- permitting the successful cultivation of less favorable soil types (Categories III, IV and V). Properly designed and efficiently managed pressurized irrigation systems can overcome many soil constraints. 2.53 In the new-new lands about 90X of the cultivated areas benefit from pressurized irrigation systems. These systems reduce the labor demand, improve the efficiency of water delivery, reduce water wastage, reduce seepage, retard further rises in the water table and permit more flexible farming systems. Also, they increase the need for improved management. 2.54 The technical efficiency of different irrigation methods and pressure required is illustrated below. Method Efficiency Pressure (Percent) (Atmospheres) Surface 40-60 Sprinklers 70-75 4.0-6.0 Drip-Trickle 85-90 0.2-3.0 These data illustrate the superior efficiency of the modern pressure irrigation systems, particularly drip systems which require only minimal pressurization (and energy costs). 2.55 The private sector has been successful in promoting sprinkler and drip systems, so much so that an overabundance of types and brands of systems are in operation. Unnecessary variations will likely increase cost, complicate maintenance and reduce flexibility of the system. The farming community would benefit from a specialized public service that could provide updated information on the suitability and advantages of different types and models of irrigation. For example, in the new-new lands citrus yields under sprinkler irrigation are greater than those under drip systems. Whereas vegetable crops produce higher yields under drip irrigation. This points to the need for a special applied research unit which would deal with the suitability of irrigation methods for selected crops. 2.56 Limited comparative yield information is available for crops using alternative irrigation methods under Egyptian conditions. The following data indicate the superior water and land efficiency of some management systems using drip systems where yields are 3-4 times greater than in the old lands LAND/AJN - 24- using traditional irrigation and indicate the potentially higher yields in the new lands using these systems. DXri Sprinkler Gravity -----------(tons/feddan)----------- Tomato 27 12.1 8 Cucumber 25 - 4 Melon 20 12 6 Sweet Corn 5 3 Source: Agricultural Research Center, farm level data. Improved CFOO Production and Biotechnol2gZ 2.57 Biotechnological breakthroughs in plant types and new varieties are benefitting crop production in the new lands. These breakthroughs have increased the potential for the development of plant types which require less water, tolerate more salt, and better adapt to the growing conditions of Egypt's new lands. Large areas of new land in the eastern and western delta are under improved fruit and vegetable production propagated by tissue culture, a practice uncommon a decade ago. Small quantities of planting materials for strawberries, asparagus, etc. are annually imported from Europe and propagated in local laboratories and nurseries for distribution to participating farmers. This process has three advantages: (i) the cultivation of varieties selected from Europe for whfch there is an European demand; (ii) the renewal of planting materials on a'seasonal basis allowing farmers to maintain up-to-date clear stocks of planting materials; (iii) wide spread of modern varieties within a short period caused by aggressive marketing and extension strategies developed by the private sector. 2.58 Further research work in biotechnology is needed to adopt new methods and ensure that applied results are available to the farming communities in the new lands. Due to its high cost, basic research in biotechnology will remain in the developed countries. Applied and adaptive research with a special emphasis on the new lands needs greater support. The relatively large numbers of scientists working at the National Agricultural Research Center and Agricultural Faculties of Universities, provide a promising base. Investment in research and modern production technology is an attractive option to improve the return on the high investment already made to develop the new lands. 2.59 There is no doubt that the new lands can accommodate sophisticated technology for the production of high value crops already developed and commercially adopted over the last decade. The number of plastic houses has increased from less than 200 in 1976 to more than 12,000 in 1987. The new technology of plastic houses and plastic mulch, has been adapted including LlND/AJN - 25 - winter heating, automatic water supply and fertigation and recycling of drainage water into the fertilization network. The cost and benefits of production under plastic houses have not been well documented. Yields, however, are about double those obtained under open-field cultivation. 2.60 Further research should be carried out for the development and improvement of oilseeds, fruits and vegetables employing genetic engineering techniques in parallel with traditional plant breeding methods. Z.xis would reduce the time required to develop new commercial varieties and facilitate more efficient use of resources. Dwarf fruit varieties, for example, require less space, water and nutrients, and permits rapid changes to new varieties as they are developed. This principle is already employed in Egypt, the issue, however, is to develop and institutionalize a genetic engineering capacity within the Ministry of Agriculture and integrate activities with the Agricultural Research Center. C. Economic Feasibility 2.61 Successful agriculture on sandy soils requires more inputs and sophisticated management than the heavier deltaic soils, but given the inputs and management, can be very profitable. New irrigation technologies and new cultural practices have made soil type a less influential variable on the economic efficiency of land reclamation/cultivation. The reclamation of sandy soils is easier, faster and less costly than the reclamation of clay soils. A number of lessons have been learned and applied in attempting to resolve the technical reclamation problems enumerated above, all of which affect the economic efficiency in varying degrees. The principal problem remaining co,acerns the postimplementation phase in generating benefits. Although rapidly changing, Egyptian farmers, in general, still lack an understanding of the management of desert soils. Supporting infrastructure and institutions must continue to be developed in parallel to ensure efficient agricultural production on reclaimed desert lands. 2.62 Recent feasibility studiesj/ indicate that orchards planted on reclaimed sands provide attractive financial and economic benefits, with an IRR of about 30X. The use of dwarf varieties would result in the generation of more rapid benefits, greater yield, and have a lower overall water requirement. Improved fertigation and pest control would improve the rate of return even more. Further, some growers have identified export markets and are producing fruits solely for that market and enjoy a high farmgate price. 2.63 The production of fruits is profitable under many management structures, however, it is infeasible to plant all the reclaimed land to horticultural perennials. Farm models incorporating field crops, vegetables and small animal livestock (including and excluding tree crops) have been developed by the FAO Technical Support Project and MALR research staff which, when implemented, achieve positive marginal prodct4tivity by the second year. 1/ GARPAD PPU, Tina Plain Development Project, Feasibility Study, 1988. LAD/AJN - 26 - The management levels of the farms/farmers benefitting from the project are higher than that of the average farmer but represents farmer achievement when adequately supported and a norm that can be widely achieved. The following then is a normative rather than a posite approach to agricultural production on reclaimed lands. 2.64 Yields obtained from widespread planting on farmer fields and from project training plots indicate that the yield build-up period can be rapidly accelerated compared to previous estimates; e.g., 6,000 fed of wheat on settler farms averaged 1.5T/fed in 1988/89, the second year following reclamation -- only marginally below the national average. Earlier feasibility studies assumed a yield build-up period from 6 to 8 years was required to reach 1.5 t/fed. Economic Rate of Return 2.65 Factors which influence the economic rate of return are numerous; however, the most influential factor is the benefit stream. Changes in investment costs and implementation rates obviously affect the ERR but are less important factors than yields, production costs, etc. Further, investments and/or recurrent expenditures which accelerate or increase benefits are very likely to be efficient resource allocations. The following analysis and discussior, is based upon a normative reclamation and production model. It does not represent any particular project, although many of the coefficients were derived from the GARPAD-PPU feasibility study of Tina Plain. A normative approach to estimating the economic efficiency of land reclamation is superior to positive approaches as current and proposed reclamation and production modes on new-new lands are only marginally related to those of the past on old-new lands. The new technologies include: drip and sprinkler irrigation, fertigation, tissue culture propagation, plasticulture, and plastic mulching. These technologies make other input usage more efficient than was possible under the technologies employed in the 1960s and 1970s. The yield impact of these technologies is substantial, particularly on the winter crops. Many of these new technologies will be employed as a matter of design in new projects, others will be employed spontaneously due to the economic efficiency they bring. 2.66 The problems of consistent water supplies and electricity, adequate fertilizer access, agricultural research and extension, etc. must be addressed virtually as a precondition to land reclamation. Without adequate institutional and infrastructural support, productivity on newly reclaimed land will remain below its potential. 2.67 The following analyses assume constant 1988 costs and prices, a five-feddan farm (4.5 fed net agricultural area) and old and static technology coefficients as a base case. The base case assigns a capital development cost of LE 4,500 per feddan and assumes it will require five years to develop, i.e. agricultural production will first occur in year 6. The farm model includes the following crops. LAND/AJN - 27 - Winter Suer CrLoD2 AM 9Cop AM (feddans) (feddans) Wheat 1.5 Groundnuts 1.5 Berseem 1.5 Sudangrass 1.0 Broadbean 0.5 Cowpea 0.5 Chickpea 0.2 Maize 1.0 Dry Peas 0.2 Tomatoes 0.2 Lentils 0.1 Cucumbers 0.3 Onions 0.3 Tomatoes 0.2 Assuming a water lift uf 4' meters, a 14.2% economic rate of return is achieved. The model is relatively robust as changes in the various components impact only modestly on the rate of return, except yield and production costs which created substantial shifts in the ERR. The results of a sensitivity analysis are indicated in the list below. Sensitivity Analysis ERR (Percent) Base Case 14.2 10 year implementation period 11.9 25% increase in investment cost 11.8 25X increase in investment cost and 8 year implementation period 9.8 101 decline in yields 12.1 201 declina in yields 9.8 25X increase in production costs 11.7 Double fertilizer input, increase yield 101, 201, and 301 in crop years 1, 2, and 3 onward 18.2 Several examples from both the FAO-supported project and other progressive farmers indicate that fertilizer applications, beyond the quota allocation, accelerates yield build-up. Anecdotal evidence suggests the yield response estimates of 10, 20, and 301 (in years 1, 2, and 3) to doubled fertilizer application, is conservative. Thus, with superior management (and supportive infrastructure/institutions) productivity should be even greater. 2.68 The cost of water delivery (OM) was included in the analysis butt since the HAD represents sunk costs, water deve1-Pment costs were excluded. Future incremental water supplies will most likely come from efficiencies and savings in the existing system rather than developing new supplies, although small increased Nile flows are possible (para.3.07). Some works are underway (Esna barrage) which would conserve a portion of the water now flowing to the LAND/AJN - 28 - sea but the cost of most conservation works and more efficient systems and the marginal cost of additional supplies is unknown. Therefore, the analysis addressed the issue of water costs by determining the development cost at which agricultural use would no longer be economically efficient. At a 12Z discount rate, water development for agriculture generally would become unattractive when the development costs reached LE 42/1000 m3. The costs at alternative discount rates are indicated below. discount rate water cost X (LE/1000 me) 14 4.00 13 23.00 12 42.00 11 60.00 10 77.50 2.69 The other water issue relates to incremental availability for agriculture in the medium- to long-term. Although some efficiencies can be gained in the distribution and use of water (para. 3.10), future non- agricultural demands could reduce water availability for agriculture in the longer run. Thns, a project with a 20-25 year stream of benefits may have an attractive ERR, but if the project life was truncated by lack of water the investment may be uneconomic. The sensitivity of the rate of return to project life was tested and is presented below. Fourteen years of agricultural production, or 19 years from commencing the project, would be required to yield an ERR of 121. Length of Project and Expected Economic Rate of Return Agricultural Production Economic Rate of Return (years) (percent) 12 10.3 13 11.3 14 12.0 15 12.6 16 13.0 20 14.1 25 14.8 2.70 These analyses indicate the general economic viability of the land reclamation program. Projects must, of course, be examined individually to determine their economic viability. It is probable that small projects distant from existing water conveyors would incur capital costs sufficiently high to render any investment inefficient. Similarly other peculiarities, such as unique drainage problems, adverse soils, distant markets, etc., ma) LWD/AJN - 29 - combine to make a particular project economically unviable. However, these results do provide optimism for a near- to medium-term reclamation program. 2.71 In several previous reviews the issue of watgr lift was identified as the major constraint to the economic viability of land reclamation. The relatively high cost of the energy required to lift water, in one study, was perceived to limit water lifts to less than 20 metersl/ if reclamation was to remain economically viable. It is inappropriate to consider water lift in isolation of other relevant factors; furthermore, policy and technical changes have made water lift a less influential criterion in determining economic viability. The changes include, inter_ai, the following: vi) a decline in the economic price of energy; (ii) increased crop yields; (iii) more efficient water use; and (iv) increased potential for high value crops, including non- horticultural crops. Items (i) and (iii) contribute to a lower cost of water lift and items (ii) and (iv) contribute to increased benefits. 2.72 Given the considerable attentior previous studies directed to water lift, this study also analyzed water left. Figure 2.1 illustrates the effect of water lift under the base case, whtee the ERR would be about 14.7% with no water left. The analysis indicates that the rate of return declines by 0.5 percentage points for each 10 meters of lift. Thus, for example if lifts increased from 40 to 60 meters the ERR would decline from 12.7 percent to 11.7 percent. This conclusion is consistent with the sensitivity analysis for pumping heights contained in the LMP. That analysis, using a different methodology, concluded that annual benefits would decline by LE 7.00/fed (2%) with a li}t increase from 40 to 60 meters. This does not imply that water lift (and attendant energy costs) is an unimportant variable. It is important, but is only one of many important variables and must be considered in the context of the benefits it generates. As is true for any set of projects, from an economic perspective the least costly projects should be developed first, meaning in this case, those projects with minimum water lifts, ceteris paribus. 1/ Pacific Consultants, New Lands Productivity in Egyit. Technical and Economic Feasibility, January, 1980. LAND/AJN - 30 - ERR SESITIVITY to WATER LIFT ,,.- ERR 16.7 2- .053 (water lift) R2 . .998 l to X6 zO *O 0 so -m so to no no III. FUTURE PROGRAM A. Potential Suppl and Demand 1.- Suipply Factors 10 - Tho Land Base 3.01 Egypt has a total area of about one million square kilometers, or 238 million feddans, of which only a small portion is agriculturally productive. The not area of cultivated agricultural land can only be estimated aS the last agricultural census was in 1961 (the next census is planned for 1991). the planti-igs of some crops are Judiciously surveyed (e.g. cotton) but the total irrigated area is an uncertain parameter. Two factors make the estimation process imprecise. Firstly, land reclamation statistics refer to gross areas; and net irrigable areas must be estimated. However, no estimates are made of unproductive, not f4lly reclaimed areas and/or abandonedl land. Secondly, there is no statistical series on land losses due to LAI/AJN - 31 urbanization. Various reports suggest agricultural land lost to urbanization averages 20,000-30,000 Leddans annuallyl/, and as much as 60,0002/ feddans for some years. 3.02 There are two recent studies which provide partial answers to the land loss question. A study by the Institut Geographique National (1987)2/ using satellite imagery, concluded that the cultivated area surrounding Cairo (Governorates of Cairo, Giza and Qalyubia) declined by 6,000 ha (14,000 feddans) between 1976 and 1985 -- an average of about 1,550 feddans annually. This statistic seems particularly small and conflicts with the other estimate. 3.03 Recently the Egyptian General Survey Authority (1988)_/ reported an agricultural land area of 7.2 million feddar.s based on various surveys and maps. Although this statistic is net of river channels, main canals, cities and main towns it includes branch cana's, drains, farm houses, farm roads, etc. The latter components have been estimated to comprise 7-8% of the total area. This results in a net irrigated agricultural area of 6.6-6.7 million feddans and implies an annual loss to urbanization of about 30,000 feddans. This statistic avoids the issue of net agricultural area reclaimed and lost since the last census and provides a base estimate of all additions and subtractions as of 1987/88. It also indicates that despite the large land loss to urbanization, land reclamation efforts have expanded the agricultural resource base, albeit modestly. 3.04 Historically, only a narrow strip of land along the Nile and portions of the Delta were considered agricultural land. Now, with advanced agricultural and irrigation technologies, the sandy desert soils are potentially as productive as the alluvial soils. Sandy soils require a more sophisticated irrigation system and an improved management system but does not require the intensity of land leveling needed for clay soils and basin irrigation. In addition, sandy soils are much easier to drain or may not even require drainage while leaching the salts. 3.05 The land master plan identified an area of 2.88 million feddans (gross) that could be agriculturally productive and are irrigable with Nile water at pumping lifts not exceeding 150 meters. (In addition, some 562,000 1/ Parker, John B. and James R. Coyle; Urbanization and Agricultural Policy in Eg Mt, USDA, ERS, FAER No. 169, 1981. / Weidemann, Wesley, The Agricultural Resource Base: Status and Expectations, Working Paper December 198_, National Urban Policy Study. The paper does not contain an analysis of land losses, but makes an "educated guess" of 60,000 feddans annually. i_ France, Institut Geographique National, 1987. i/ Egyptian General Survey Authority, MPWWR, the National Agricultural Land Classification Project 1988. LAWD/AJN - 32 - feddans were identified as irrigable from groundwater resources in the New Valley and Sinai. Groundwater resources are not discussed in this report). These areas encompass a range of land capability classes and land management categories, with a preponderance of the area falling into the categories defined as more difficult to manage and are summarized in the table below. Description of the various categories can be found in Annex 2. Table 3.1: RECLAIMABLE LAND BY MANAGEMENT CATEGORY AND REGION Region Class I Class 11 Class III Class IV Class V Total -------------------------------(thousand feddans)-------------------- Eastern Delta 268 - 135 44 352 799 Hiddle Delta 59 - - - - 59 Western Delta 685 171 49 65 358 685 Niddle Egypt - - 32 6 186 224 Upper Egypt - 4 161 342 2'S f82 Sinai 102 - - 111 70 283 High Dun Lake Shores - 9 - - 41 50 Total 471 184 377 568 1.282 2,882 Source: GARPAD, Euroconsult Pacer; Land Master Plan, Final Report, November 1986 The LMP is an excellent planning document and provides a good starting point foiL identifying land suitable for reclamation. However, it is but one planning tool and should not substitute for further land investigations based on newer technologies. Modern irrigation can facilitate high yields on soils categorized as less favorable (para. 2.52). New technologies have to a certain extent invalidated the above land management classification. Disregarding the land management categories, the 2.88 million feddans identified as reclaimable exceeds the water which is available for irrigation (see following section). Water Balance 3.06 With the construction of the HAD, the Nile's average annual flow of 84 Bm3 was captured and water was assumed to be in plentiful supply. Average annual evaporation and other losses in Lake Nasser are about 10 Bn3, which leaves a net utilizable flow of 74 Be3/yr. The water treaty between Eggypt and Sudan allocated the water in proportion to their 1959 population giving Egypt 55.5 Be3. Powever, Sudan has been unable to use its complete share, the balance of which is available for Egypt's use. 3.07 There is modest potential for increasing the usable supplies at Aswan by canalization of the river channel in the Sudd region of Sudan; thereby reducing the evapotranspiration losses. Agreement on the construction of Jonglei Canal phase I, the first stage in the canalization, LAND/AJN - 33 - was reached in 1976 and funding was included in the 1978-82 Five-Year Plan. It was expected to increase water supplies by 4 Bm3 at Aswan, to be equally shared by the two riparians. Political instability in Southern Sudan has prevented project implementation for several years, and it is uncertain whether construction will be completed before the end of the century. 3.08 Based on data supplied by the Water Planning Group water balances for the Nile Basin below Aswan have been constructed for the period 1980-1986, 1987/88 (a critical dry year) and 2000, and is summarized below: Table 3.2: NILE WATER BALANCE Period 1980-86 1987/88 2000 Average Projected (billion cubic meters) INFLOW Releases at Aswan 57.41 52.88 55.5 OUTFLOW & USE 1. At Edfina and Nubariya 5.22 2.66 0.6 2. Other canal tails 1.47 1.47 0.1 3. Drainage to the Sea 13.50 11.50 6.5-8.5 4. Municipal & Industrial (Gross) 2.25 2.90 4.8 5. Evaporation from system 2.00 2.00 2.0 6. Present crop-consumptive use 32.971 32.35' 33.0 7. Available for further use -- 8.5-6.5 57.41 52.88 55.5 1/ Present crop-consumptive use for irrigation has been derived as the difference between releases at Aswan and other outflows and usages (this includes any "unaccounted for" over and above the calculated consumptive use). 3.09 The water balance for the year 2000 is a "best estimate" and subsequent study may result in substantial change. The following assumptions apply to the water balance statistics: (i) outflows to the sea at Edfina and at the tail end of the Nubariya Canal and other canal tails will be reduced drastically. These reductions will involve considerable changes in system operation, which may in turn require additional infrastructure such as, facilities for winter storage; (ii) drainage outflows would be reduced between 6.5 and 8.5 Be3. This is a tentative estimate as the ongoing water and salt balance studies by the Drainage Research Institute have not yet been completed. The first schemes for reusing 3.0 Bm3/year of drainage LAND/AJN - 34 - water are scheduled for completion during the current Five-Year Plan period. Consequently, the average salinity of the remaining drainage water will increase. Also, more efficient operation of the system to curtail outflows to the sea (as occurred in 1987/88 and 1988/89) will further increase salinities. Potential savings from improved water management and drainage reuse are, therefore, not independent variables. For planning drainage water reuse a cautious approach with respect to quality is recommended; and (iii) The estimate for net incremental M&I consumption is only 1.4 BLw3, however a gross statistic of 4.8 Bi3 is applied to cover the considerable discharge of waste water directly to the seal/. 3.10 On the basis of the above it was tentatively concluded that if outflows to the sea can be substantially reduced through improved system operations (probably requiring infrastructural investments) and additional drainage reuse, some 6.5 to 8.5 Bem3 may be available for additional land reclamation by the year 2000. The gross incremental supply of 6.5 - 8.5 Be3 is estimated to be sufficient for irrigating 800,000 to 1.0 million feddans (approximately). The water balance will need to be continuously refined all.I updated consistent with new developments and new data which might impact upon incremental water availability. Water availability would increase as a result of completion of the Jonglei Caiul, more effective on-farm irrigation in the old lands through increased use of sprinkler and drip systmes, loss of agricultural land due to urbanization and implementation of waste water treatment plants. Alternatively, water availability would decrease as a result of continuing industrial pollution, increased use of water in Ethiopia and higher water use in old lands due to more widespread triple cropping. 3.11 Given an economic life of 30 or more years for land reclamation projects the time horizon for estimating the water balance should be beyond year 2000. However, due to many mncertainties and lack of reliable data, estimates of water balances in outer years are quite tenuous. If no new supplies were identified (completion of Jonglei canal) and the aggregate availability remained 55.5 Bi3, the water available for agriculture would diminish from 40 - 42 Bsn in the year 2000 to perhaps 34 - 36 Bn3 in the year 2030; assuming some 10 Bm3 would be required for N&I uses and discharges to the sea remained constant. This does not necessarily mean that agricultural land would be abandoned as new technology may reduce crop consumptive uses (per feddan), especially on the old lands. However, without the application of those or other technologies (M&I effluent reuse, etc.) the land under cultivation would decline. More reliable data will be generated through the proposed Water Security Project (para. 3.12). 3.12 The UNDP is expected to approve firancing for a water security project shortly; the World Bank would act as executing agency. The project would address the issues mentioned above as it is designed to develop 1/ Water Master Plan, Water Demands, Technical Report 2, March 1981. LAND/AJN - 35 - projections of water availability and demands for the next 25 year period as well as identify and schedule infrastructural development or other measures to capture water to meet these demands. Demand segments to be studied, include; irrigation supply for old lands, water for development of new lands, as well as requirements for M&I uses, navigation, hydropower, salt balance and fisheries. The study is scheduled to commence in late 1989 and be completed in mid-1992. 3.13 Water Allocation. The program for land reclamation in the current Five Year Plan (1987/88-1991/92) anticipates the reclamation of some 500,000 feddans. With the addition of the proposed Northern Sinai Irrigation Project (250,000 feddans) Government appears committed to a total area of some 750,000 feddans gross (about 600,000 feddans net), which would require some 4.5 Bn3 of water annually. Other incremental water requirements include (i) irrigation water for projects that have been previously completed but not fully developed and cultivated, and (ii) the needs for M&I water beyond the year 2000. The total of these requirements could equal the 6.5 - 8.5 Bi3 that can be extracted from the system leaving limited scope for land reclamation beyond the 750,000 feddans mentioned above. It is therefore recommended that no further land reclamation projects be implemented until the necessary water supply is assured. 3.14 Crop irrigation requirements are a contentious issue; consumptive use planning is based on WMP Technical Report No. 17 rather than the more widely used FAO Irrigation and Drainage Paper No. 24. the former assumes lower consumptive requirements. However, irrigation requirements in the latest planning guide, the Land Master Plan, are based on estimation criteria taken from the FAO publication. This review does not propose to resolve this issue but notes the following criteria which may contribute to this discrepancy. The WMP parameters are based on factors derived experimentally in the old lands which may have been biased due to; (i) high groundwater tables reducing the surface irrigation requirement by providing subsurface supplies, and (ii) production under suboptimal conditions. 2. Demand for Land 3.15 The limited availability of land suitable for agriculture and habitation coupled with a large and rapidly increasing population results in an exceptionally low arable land:man ratio and a high demand for agricultural land. [Historically, habitable land and agricultural land coincided, creating conflicting demands for a limited resource. With the creation of some new desert cities this conflict has subsided but urban encroachment on agricultural land in the valley and delta still results in important agricultural land losses -- para. 3.01]. 3.16 This demand is demonstrated by several phenomena including: (i) the development of some 130,000 feddans by homesteaders (para. 2.35); (ii) large numbers of illegal squatters who settle alongside new canals and clandestinely pump water; (iii) the large numbers of landless farmers who have joined the queue to receive reclaimed land (para. 3.18); and (iv) the high LAND/AJN - 36 - prices received for auctioned land (para. 3.21). Land policy has created two distinct demands for agricultural land. There is a demand by investors (large, small, private, cooperative, corporate, joint ventures, etc.) who are able and willing to pay the full cost of reclaiming and developing land. Large areas of agricultural company land have been sold to investor farmers by auction. Government currently allocates 40 - 60X of the reclaimed land to investors. The genesis of this demand was Law No. 143/1981 concerning desert land, and was further stimulated by the Agricultural Reform Program initiated in 1986. 3.17 The other demand for agricultural land is by individuals with limited capital for which the settler schemes cater. This group is comprised of landless farmers, graduates (both secondary school and university) and civil/military service retirees and agricultural company workers. As agricultural company lands are privatized, company workers have settler preference. Although civil/military service retirees are technically eligible for settler status, very few have actually participated. The criteria for inclusion into the settler groulp are stringent, precluding several groups of citizens who would like to participate. The criteria for eligibility in the settler schemes include the following: Graduate Small Farmers 1. age; between 21 and 30 1. age; maximum of 40 2. without job & no government 2. no military obligation commitment to hiring 3. occupation is ag. worker 3. willing to undertake ag. 4. landless activities (not speculate) 5. literate 4. preference for ag. graduates 6. prefer rural background 5. prefer rural background An interview/investigation by a social worker is part of the selection process. 3.18 Land allocations for graduates and smallholder farmer have previously varied from as much as 20 feddans for a graduate farmer settler to 6 feddans for a smallholder farmer settler. This has now been standardized at 5 feddans per farmer settler -- an amount which is estimated to provide an income triple that of a lower echelon civil servant. Land is to be distributed equally and in parallel between graduate and smallholder settlers. In 1987/88 land was distributed to some 8,500 settler farmers. The settler demand for land is demonstrated by the 50,000 graduate applications for land in 1988/89, but constrained land availability will limit the distribution to only 11,000 applicants. 3.19 Previously, agricultural development companies brought reclaimed land to marginal productivity before transferring it to settlers. However, current policy dictates that it be distributed immediately after on-farm development is complete and infrastructure is in place. The assumption underlying this policy is that settlers are more efficient than agricultural LUD/AJN - 37 - companies in improving productivity. However, to assist, each settler receives a monthly stipend (subsidy) of LE 50/month for one year following settlement; in addition, world food program (WFP) assistance is provided for three years. Conditions which apply to settlers on distributed land include: (i) settlers must live in the village; (ii) settlers have one year to prove themselves capable of farming, i.e. they must cultivate the land (About five percent of the graduates have been dismissed for non-cultivation or absenteeism.); (iii) if proved capable, the settler receives a contract which can be used as collateral with the bank for investment credit; (iv) each graduate settler must receive training on farming sandy soils; and (v) the land cannot be sold until the mortgage is fully paid. 3.20 The land is sold to settlers at LE 1,000/feddan, thus a farm, including a house, costs LE 5,000 The purchase terms are 30 years with 4 years grace period at zero interest. At a 15% discount rate, (the minimum interest for long-term agricultural loans -- per Central Bank memo 908/89), the terms for mortgage payments result in a net present repayment value of LE 713/feddan. Given the excess settler demand for reclaimed land under these favorable terms, an increase it. the transfer price should be considered. However, a price increase would have limited impact on GARPAD's budget and cash flow given the lengthy pay-back period. 3.21 Land transfers to investors takes two forms depending upon whether the Government or the investor develops infrastructure. Usually the Government would assume the responsibility for constructing basic infrastructure consisting of main canals and drains and roads. On-farm works and provision for other socioeconomic services are often left to the investor. These semi-reclaimed lands are then sold to investor farmers at cost recovery prices. Alternatively, the government may do some additional on-farm or infrastructure work for small investors and include the cost in the selling price or may auction the land. Prices then vary depending upon interested buyers, location and desirability. Auction prices typically start within a range of LE 4000-7000/feddan but may sell for as much as LE 10,000/feddan. Auction sales could provide a "revolving fund" for GARPAD and reduce dependence on budget allocations for reclamation financing (para. 3.28). The terms of sale include; one-third down payment, 10-year repayment with 4 years grace at 5% interest. B. INVESTMENT PLANNING 1. Priorities and Investment 3.22 The LMP lists separately all projects that could be developed. From this list a recommended option was developed for the medium-term. It included all the areas with a pumping lift of less than 40 meters plus the on- going Sugar Beet project (maximum pumping lift of 50 meters). The projects included are based on economic criteria including investment costs, energy and other recurrent costs, and benefits, all on a feddan basis. The recommended option covers about 1.4 million feddans gross and 1.1 million feddans net (Annex Table 3, Table 2). LAND/AJN - 38 - 3.23 Projects contained in the 1987/88 - 1991/92 Five Year Plan are considered tentative until project implementation is initiated. It is improbable that all 40 projects in the Five-Year Plan will be implemented in toto, as priorities will change; for example, the Northern Sinai project (not included in the Five Year Plan) is now being considered for early implementation. While the Plan proposed work on some 40 different projects, actual work has concentrated on the completion of projects underway. Thus implementation is focused on only 10-12 projects. 3.24 The IMP includes priority ranking for the 90 land development units (projects) that were identified. The rankings were based upon prefeasibility level economic evaluations. Only investment costs, recurrent costs, and agriculturally related benefits are estimated; other social costs and benefits were excluded as the social services would be provided to the economy at large with or without land reclamation. The priority ranking in some instances is hypothetical as the project area could not be reclaimed in isolation; scheduling project implementation depends upon the completion of main canals/drains which are shared with otlher projects. 3.25 These data provide an excellent basis for further planning. The economic evaluations are approximations and the priority rankings provide indicators for more detailed feasibility studies. The rankings are not an implementation blueprint or timetable, however. Implementation sequencing will require more analyses and depend upon sociopolitical factors as well as the available financial resources, implementation capacity, and the spatial availability of water. 3.26 The investments required to implement the recommended option amounts to some LE 6.9 billion to reclaim 1.38 million feddans gross (1.1 million feddans net agricultural area) for an average cost of LE 5,010/feddan. The estimated investment cost per feddan varied widely from LE 3,000 to LE 8,000 for the highest and lowest priority project, respectively. 3.27 A program for physically reclaiming an area of this extent is feasible. A ten-year program would require the reclamation of an average of 138,000 feddans annually. If the public and private sectors shared reclamation responsibility on a two-thirds, one-thirds ratio, an aggregate Government budget of LE 4.6 billion would be required for the decade, or LE 460 million annually to fully reclaim an average of 92,000 feddans. The capacity to reclaim 92,000 feddans exists, but the necessary budget, LE 460 million, exceeds the 1989/90 project development budget by about 50%, implying a real budget growth rate of seven percent annually (assuming LE 315 million in 1989/90 as the base). 3.28 This represents very rapid budget growth which probably could not be sustained in a period of large budget deficits and fiscal constraint. To achieve such rapid growth would require substantial readjustment of intersectoral priorities which would allocate the agricultural sector a much LAND/AJN - 39 - larger share of investment resources. Given the existing financial constraints, the program must be selective, including those projects which are at the lower end of the cost spectrum, or decrease the infrastructure investment. Further, the budget could be adjusted downward depending upon the extent internal development was left to the private sector. If land banks or other financial intermediaries were created GARPAD could sell the 10 and 30 year mortgages and use the proceeds as a revolving fund for additional reclamation. 3.29 These statistics help in global planning, but project planning must consider individual project sizes and implementation rates. For example, Salhiya North Project investment requirements are estimated to be LE 870 million and the Northern Sinai project (currently in feasibility stage) investment estimates are LE 1.5 billion. Either of these projects would command a major sbare of the budget if it was to be implemented in a reasonable period.. Thus, these projects may need to be phased or scheduled when only a few small projects are being implemented in parallel. 2. Project Comoosition 3.30 The current policy of selling a portion of the land to investors after the irrigation and road networks are constructed has relieved Government of much of,the on-farm development and provision of social infrastructure. However, those portions of projects destined for smallholder settlement will need to continue the provision of some on-farm development, housing, and social infrastructure. At issue is how much of the productive and/or social infrastructure needs to be provided. Reducing these investments is an alternative to increasing the transfer price of land to settlers. Given the excess settler demand noted above, it is probable that all reclaimed land would be taken up with reduced infrastructure. Thus from the perspective of supply-demand equilibrium th.e investments could be reduced, requiring settlers, like investors, to assume more development responsibility. However, the settler program has other socio-political objectives and a decrease in infrastructure investment is likely to be less acceptable than an increase in the transfer price. It was earlier mentioned that smallholder farmers needed early access to investment credit. If collateral were available, financial institutions would provide credit for on-farm development (drip systems, etc.) relieving government of a significant financial burden. 3.31 Given the desirability to plan central and satellite villages, it would be retrogressive to omit housing (for example) and leave this component solely to the settlers. If housing were excluded from the package, it would encourage non-resident farming which in turn would likely result in reduced productivity. The houses currently constructed are modest with adequate space provided for expansion. However, as housing represents about one-third of the gross investment cost, means should be sought to either reduce it or recover a larger proportion. There are social equity issues to consider, but more modest hous5ug and/or delinking housing from the farm to permit greater cost recovery; separate mortgages and house sales independent of agriculture land sales should also be considered. LAND/AJV - 40 - 3. Environmental Issues 3.32 Two sets of environmental issues are created by land reclamation. The first is direct and contains both positive and negative effects, including; the creation of extensive areas of productive agricultural land, destruction or degradation of fish and wildlife habitat, the creation of new habitats for disease vectors (schistosomiasis), etc. The second set of issues are those resulting from the management of land, water and agricultural systems on the new land. These, too, include both positive and negative effects and to a large extent their existence is a function of management. They include the establishment of windbreaks which reduce wind erosion and dust pollution and provide bird habitat, water quality degradation, waterlogging and salination. Improper pesticide use is a potential ecological problem in the new agricultural areas; a strong extension service providing effective pesticide management advice would alleviate this issue. 3.33 Many of the negative environmental impacts of the past resulted from the narrow focus of tlhe planning effort including inadequate investigations of soil and water conditions, poor operation and maintenance practices and freely available water which encouraged overuse. Some of these negative impacts traditionally associated with water management in land reslamation projects will be reduced with the technology employed in the desert lands. Canals are lined in the sandy soils and water velocity is sufficiently rapid to prevent snails from affixing themselves to the canal linings, this fact plus the use of sprinkler and drip systems limits the risk of increasing schistosomiasis. Further, the sprinkler and drip technologies are conducive to better water management and the prevention of waterlogging. 3.34 The degradation of lake and wetland ecosystems are potential problem where drains flow into the coastal wetlands. Similarly winter storage in coastal lakes would impact upon these ecosystems. These ecosystems are important as a source of income for local fishermen as well as providing a habitat for fish, birds and other wildlife. Portions of these areas are protected under Egyptian law. Their conservation needs to be evaluated when land/water reclamation projects will impact upon their ecology. 3.35 The problems of water quantity and quality will become increasingly serious as water resources become more scarce and allocation issues between uses become more complex. Although aggregate quantiti-s for agriculture can be increased in the near- to medium-term, these quantities will decline in the longer-term. This will require increased water efficiency and reuse which will reduce the quality of the drainage water, impacting upon downstream use. Groundwater quality can be seriously affected if surface water flows/drains to the sea are reduced below some critical point and sea water encroaches on the underground aquifers. This critical point is currently unknown, consequently projects which reduce these flows must carefully assess the impact on groundwater salinity. LAMD/AJN - 41 - 3.36 In some areas of light rainfall along the coast, Bedouin have traditionally grazed livestock. When these areas are reclaimed for cultivated agriculture adequate recognition must be accorded to the informal rights they have traditionally enjoyed. On occasion displacement without compensation has occurred. However, recent projects facing this issue have offered displaced Bedouins settlement on the periphery of the project area to facilitate a transition from nomadic to sedentary agriculture. 3.37 It is recommended that future land reclamation projects proposed be subject to detailed environmental studies as part of the area selection and design phases. Preparation of these studies would include consultation with Egyptian Antiquities Organization (to ensur,- archaeological and historical sites have been adequately surveyed), Egyptian Environmental Authority, and Egyptian Wildlife Service. The proposed Northern Sinai Project will be the first project to make use of a detailed environmental assessment in its planning and design. C. Policy Issues 3.38 Recent price rationalization has led to an improved production environment as most input and output prices are now near their economic values. This leaves water charges as the most distorted input price and reinforces the need to address the cost recovery issue. Cost recovery prices for water would assist in (a) curtailing water ovetuse-which contributes to waterlogging and downstream water shortages; and (b) alleviating budgetary constraints which affects the recurrent as well as the investment budget. 3.39 The private sector has historically enjoyed free irrigation water if provided by the public sector and Nile sources. (Farmers who depend upon ground-water use their own resources for lifting water). Many farmers are obliged to bear the cost of pumping from a distribution canal into their own fields. However, there is reimbursement of neither government's pumping costs nor other O&M costs. The cost incurred by government in pumping and operating the system is significant (para. 2.48). While there would be resistance to the imposition of a water charge, it may be feasible to levy a delivery charge if it accompanied an improved reliability of irrigation supplies, electricity, and production infrastructure generally. 3.40 Given the lack o)f information on O&M costs and the impact of cost recovery water prices on production, a study of these issues is recommended. The study would provide the basis for discussions and policy action on water charges. The study sh.ould address: (i) existing O&M expenditures versus requirements; (ii) alternative vehicles for recovering costs; (iii) the impact of cost recovery on farm incomes; and (iv) methods of assuring receipts are used for O&M purposes. LAND/AJN - 42 - D. &ecommendatlons 3.41 The purpose of this sectirn is to consolidate the conclusions from the preceding discussions, and point toward a national program for land reclamation that will be economically viable and can be supported by external financing agencies. The paper raises several points, related more to postimplementation issues than to the technical issues of land reclamation. One of the more important issues to keep in mind is that dynamic technologies and a different soil environment negates many of the constraints of previous years. Thus, the past is a poor indicator of the future, as they are only marginally related. 3.42 Land. The LMP is an important data source for land reclamation planning. It identified some 90 project areas totaling 2.88 million feddans as potentially reclaimable. Further, it.proposed 1.38 million feddans (1.1 million feddans net agricultural area) as priority reclamation areas. Criteria for developing priorities included; minimal water lifts (predominantly below 40 meters), investment costs, recurrent costs, and benefits, all on a feddan basis. Most of the land available for reclamation are desert sands, which are more easily reclaimed than heavy deltaic soils, although more sophisticated management is required. The priority option provides an appropriate planning horizon, although feasibility studies are required to determine whether a particular project should be implemented. More detailed land and soil studies would assist in project planning. GARPAD has the capacity to supervise such studies; undertaking them prior to project feasibility studies would be cost effective as it would delineate project areas more definitively permitting more focused feasibility work. 3.43 Water Availability. A considerable quantity of water escapes to the sea and, although conceptually, could be allocated to agriculture, in practice, some water must escape to maintain the salt balance. The mission concluded that an additional 6.5 - 8.5 Bme of water could be captured for agriculturel use, which would be sufficient to irrigate an additional 800,000 to 1.0 million feddans (although, over time portions of this would be re- allocated for M&I uses). Irrigating land beyond this amount would depend upon the identification of additional water sources, or additional water savings; additional agricultural land will continue to be lost to urbanization, perhaps making available 132 Mm3 annually (based on net use of 4,400 m3/fed in the existing lands and an annual loss of 30,000 feddans). 3.44 Size of Protram. Given the availability (or potential availability) of land and water resources and an unmet demand for agricultural land, the near-term constraints to reclamation are minimized. The most important factor affecting program size is the financial resources Government is prepared to allocate to this activity. A second constraint is the capacity of GARPAD to organize and implement the reclamation work. However, recent experience plus the significant implementation role performed by the private sector suggests the implementation capacity is likely to be more of a conceptual rather than a practical constraint. LWD/AJN - 43 - 3.45 In the first two years of the 1987/88-1991/92 Five-Year Plan, budgetary allocations were near Plan proposals. However, the allocations are below that necessary to sustain an implementation rate of 150,000 feddans annually -- the current target. Some finances are generated by the sale of land to investors (and smallholders), but the grace period and extended payment terms result in modest annual receipts. If the target is to be maintained, additional financing will need to be identified. Planning and Budaettin 3.46 Planning and implementation of the land reclamation, irrigation/drainage, and social infrastructure has improved, but further improvement is needed. These activities should be planned for simultaneous completion to ensure that completed investments yield benefits as early as possible. In some areas, irrigation/drainage investments still lead/lag land reclamation by more than a cropping season. Consistent with the coordination of components is the importance that, once initiated, a project should be completed as rapidly as physically possible, also to ensure benefits are generated early; implementation should not be budget constrained. The implication is that budgets should be allocated to maximize project completions, not project initiations. 3.47 Phvsical Infrastructure. Infrastructure design and construction have improved with earlier problems of bank erosion and lining collapse having been resolved. The canals and pumping stations are designed for 24-hour operation. Basically, water is uncontrolled and tail-end discharges effectively constitute the control. Some storage mechanism is needed to reduce pumping costs and water wastage. Existing canals are not designed for in-channel storage; however, such designs should be considered for new canals or canal extensions. Alternatively, on-farm storage should be considered. 3.48 The modernization of on-farm production and irrigation systems have not been accompanied by modernization of the pximary water delivery system; except for the pressure pump components for drip and sprinkler systems. Control structures are a very recent addition to the system, and those have been placed only in the Delta. As water becomes more scarce, improved regulption and delivery becomes more important. 3.49 On-Farm Technologz has progressed rapidly for both production and irrigation systems. Propagation through tissue culture, plasticulture and plastic mulching, fertigation and minisprinkler/drip irrigation systems are no longer uncommon. These technologies have overcome many of the earlier production constraints, and the potential benefits far exceed expectations of a decade ago. Although not uncommon, the use of these technologies remain unfamiliar to many farmers, indicating the need for a broad farmer training program. 3.50 On the negative side, is the lack of domestically adapted technologies focused on desert agriculture. Most of the new technology L"D/AJM - 44 - employed has been developed externally and imported for domestic use; however, adapting that technology to the unique Egyptian environment is still needed. Infra!tructure Support 3.51 Research and extension are the underpinnings of a successful agricultural sector and are of paramount importance to the postimplementation phase of land reclamation. Agricultural research on the sandy soils is minimal and in urgent need of redressing. Much of the basic biotechnology research would remain outside Egypt because of its high cost. But applied and adaptive research, with special emphasis on the new lands needs more support. 3.52 A special agenda, with attendant incentives, should be set for supporting research on desert sands, including inter alia: (i) irrigation methods, costs, selection and application to different crops; (ii) crop water requirements under different management systems (especially in areas of high water table or high salt content); (iii) new cropping systems, including fruit trees (olives, dates, guavas, etc.) food legumes and oilseeds; (iv) production technology for new crops (sugarbeets, oilseed, etc.); (v) fodder crop rotations for soil management and improvement of soil fertility; (vi) biotechnology for propagation of high value crops; (vii) market analyses for new crops; and (viii) land tenure issues, especially the interaction between land size, type of cultivator and opportunities for long-term investments. 3.53 The traditional agricultural extension function has been weakly applied in Egypt except in some area-wide development projects where T & V methodologies have been applied. The need for this type of extension remains but with more modern production practices being employed a more modern (and specialized) information and technology transfer system is needed. hne private sector has become the de facto extension service related to the promotion of new irrigation and production technologies (pressure irrigation systems, fertigation, plastic mulch, etc.) because (i) they are closer to the knowledge frontier and (ii) the technology is profitable to them as well as the farmer. Traditional extension services will continue to be important for field crops (new varieties, fertilizer requirements, new crop rotations, etc). LAND/AJN - 45 - But, the private sector is likely to perform some of the modern functions more efficiently; thus, government should not discourage but monitor private extension activities. Agricultural Inputs 3.54 One of the results of the weak research/extension services has been poor soil fertility management. Soil testing is an uncommon practice and area-wide fertilizer recommendations are translated into quotas as part of credit packages. Although incremental fertilizer, beyond the quota, is conceptually available for cash at cost recovery prices, in practice, it is not always available. 3.55 In a number of farm visits, the mission found fertilizer availability to be a frequently enumerated constraint. Several producers of horticultural products stated that is was often necessary to resort to secondary markets for incremental fertilizer and occasionally it was unavailable at approptiate times. Insufficient fertilizer is a long-standing problem in the new lands, being frequently mentioned in evaluation reports. The Pacific Consultantsl/ report noted that insufficient fertilizer was a major factor contributing to low yields. With fertigation becoming more prominent, it is crucial that adequate soluble fertilizer be available to ensure this productivity enhancing practice is not artificially curtailed. 3.56 Water Management. Improvements in the design and management of the irrigation system (para. 3.47) would contribute to improved water utilization and reduce shortages, but improved farm level management is also needed. Farmers are increasingly using modern pressurized systems which apply water more efficiently, but many farmers remain unfamiliar with their use and potential efficiency gains. Major extension and marketing efforts are recommended to ensure that farmers are aware of water and land productivity improvements possible through the use of these systems and that they are accessible to farmers. In some areas excess upstream abstractions contribute to localized waterlogging and downstream water shortages, further illustrating the training need. Canals are designed for 24 hour operation but farmers with non-pressurized systems irrigate only during daylight hours, further contributing to downstream shortages. On-farm storage could reduce this problem at minimal cost and is recommended. 3.57 Regardless of the design capacity of irrigation delivery systems, water shortages long have been a serious production constraint, noted in many evaluation taports. The evaluation report of the first post-revolution land reclamation activity, the EARIS project, stated that "... problems of water management have proved to be the single greatest technical constraint to L/ Pacific Consultants; op. cit. 1980 LAD/AJN - 46 - agricultural productivity ...",J/ noting that inadequate irrigation water was the major factor responsible for undermining the project at two sites. Similarly, this review mission visited several farms/farmers in Middle Egypt and the Delta where inadequate irrigation water deliveries had led to reduced yields and occasional crop failure. In some instances, individual farmers supplemented deliveries by installing private boreholes. In other instances the water shortage was created by electrical outages which prevented water from being pumped to the field. The management of water remains a constraint to the realization of full agricultural benefits from land reclamation. 3.58 With the exception of the major pumping stations, water lifting and water pressure systems are dependent primarily upon the national electricity grid for the energy requirements. This has become less dependable with not infrequent electrical outages. This problem is more severe in the desert sands where soil moisture retention capacity is low necessitating frequent (or continuous) irrigation. As most new reclamation will occur on sandy soils, a more reliable electricity supply becomes imperative. Reclamation feasibility studies meticulously assess incremental electricity supplies, however, improved liaison with the Electricity and Energy Authority is needed to ensure adequate availability and consistent transmission. 3.59 Water Lift has been perceived to be a serious constraint to land reclamation. Water lift is only one of many recurrent costs which contribute to the generation of benefits. Considering water lift costs in isolation is similar to considering fertilizer costs in isolation. neither has any particular meaning. When lift heights reach about 55 meters, the economic cost of water lifting approaches the cost of fertilizers (mixed farm of cereals, pulses, forages and vegetables). Water lift and water use should be viewed in the context of a production variable which should be efficiently used. The impact of incremental water lifts on project ERR is marginal (para. 2.72). Water lift elevations should be only one of the many characteristics that determines project viability; previously, this variable was accorded undue influence. 3.60 An economically viable land reclamation program can be continued, but is dependent upon several factors. Individual project viability is necessary but is insufficient to ensure success. Fundamental to success is an assured water supply- thus specific water resources need to be identified as a component of project preparation. Other necessary criteria include good planning, design, implementation, adequate financing and effective agricultural services in the post-implementation phase. It is a combination of all these elements that lead to successful land reclamation. V USAID, Project Impact Evaluation No. 43, EgX2t: The Egyntian American Rural Im2rovement Service. A Point Four Project. 1952-63, April 1983. LMN/AJN - 47 - ANNEX I Page 1 of 4 A&! REPUBLIC 0F EGYPT History of Land Recla-atlon and Dove1o=nt ln the Post-Revolution Period 1. The type of cultivation and exploitation of reclaimed land has evolved through various phases since the 1952 revolution. This evolution reflected the philosophy and ideology of land reclamation and cultivation at the time. During the 1950s providing land and livelihood to the expanding population was the principal objective of land reclamation. Initial. investments in the 1950s were for smallholder settlers under both cooperative and private production modes. A large scale program/project was launched in Tahrir Governorate to settle 132 villages on 1.2 million feddans of reclaimed land; Cooperatives were expected to be the principal mode of production in the new settlements. Highly mechanized farming of large areas was proposed to enjoy the anticipated benefits of scale economies. The area was serviced by both road and rail, was contiguous with the cultivated lands of the western delta and the soils were arable. By the end of the decade only 17,000 feddans had been reclaimed of which 13,000 feddans were under cultivation and only 389 families had been settled on. 2. Concurrent with the efforts to reclaim large tracts of land was a modest project to reclaim a total of 31,000 feddans in three different locations (Abis, Alexandria; Outa and Kom Oshim, Fayoum) for smallholder settlement and cultivation. The locations of these villages were considered favorable and the soils were fertile. About 21,000 feddans were actually reclaimed and cultivated. Lessons learned in the early stages of development were incorporated into subsequent stages; this include the redesign of villages to incorporate the concept of a central administrative village surrounded by satellite villages for housing. Initial productivity and marketing difficulties indicated the need for extension services and cooperatives. After initial success, unreliable water supplies, poorly maintained infrastructure, and lack of institutional support prevented long-term development in the Fayoum villages. By contrast, the availability of water and the close proximity of Alexandria City (providing institutional services) permitted Abis to develop a more vigorous and diversified economy. Also, it must be recognized that the size of the Abis area was vastly greater than the other two sites, serving a larger population and supporting greater economic and social diversity. 3. A third type of project was initiated during the 1950s decade, based on the exploitation of groundwater in the New Valley. This lead to the creation of the General Authority for Desert Development (GADD) in 1957 which subsequently expanded land development under its domain to include desert land along the Northwest coast and Sinai. Despite ambitious plans to reclaim and cultivate 240,000 feddans within five years, only 4,300 feddans were reclaimed by the end of the decade. In addition to these large projects the Permanent Organization for Land Reclamation implemented a few small projects in the eastern delta as extensions of existing cultivated areas, reclaiming about 32,000 feddans. 4. The decade of the 1960s was a marked contrast to the 1950s, both in terms of land area reclaimed and proposed production mode. The rationale LMD/A - 48 - ANNEX 1 Page 2 of 4 for reclamation/cultivation changed from settling landless families to the production of marketable surpluses. Reclaimed land was to be retained under public sector ownership as state farms employing large numbers of agricultural workers. It was perceived that such farms could exploit scale economies, were better suited to mechanization and could earn foreign exchange by producing agricultural products for export. 5. The Five-Year Plan (1960) proposed the reclamation of 521,000 feddans using existing Nile water supplies and 300,000 by GADD using underground water. In addition, the Ministry of Agrarian Reform and Land Reclamation (into which the Land Reclamation authority was absorbed) was to consolidate existing facilities to prepare for more rapid implementation of a long-term program after completion of the High Aswan Dam (HAD). The completion of the HAD was expected to provide water for the irrigation of an additional 1.3 million feddans. 6. By the end of the Five-Year Plan (1965) some 452,800 feddans, with a net agricultural area of 391,000 feddans, were reclaimed. The exact amount of agricultural land that was cultivated is uncertain but the reclamation efforts included the following: Project feddans Completion of EARIS project 14,900 Incremental Tahrir reclamation 122,000 Nubian resettlement Kom Ombo 38,000 Five east delta projects 58,820 Three middle delta projects 98,250 Five west delta projects 47,495 Four middle/upper Egypt projects 38,700 Other 34.635 Total 452,800 The Desert Development Authority reclaimed only 83,500 feddans of its 300,000 feddan target. By the end of the Plan period only 47X of the total land reclaimed was under cultivation. 7. In the next Five Year Plan (1966/70) the Ministry of Agrarian Reform and Land Reclamation was divided into two separate ministries. Within the new Ministry of Land Reclamation, an Egyptian Authority for the Utilizatior. and Development of Reclaimed Land (EAUDRL) was established and given the responsibility for cultivation. The Plan proposed the reclamation of one million feddans, about one-half to be reclaimed by foreign firms and one-half by domestic firms. 8. The 1967 war dramatically reduced reclamation efforts as budgetary priorities focussed elsewhere. Between 1965 and 1967 some 169,000 feddans were reclaimed of which 11,800 were non-agricultural; 90,200 feddans were reclaimed in the Nile Valley and Delta, a further 5,620 feddans were reclaimed in Tahrir and 61,400 feddans were developed by the Desert Development Authority. The latter statistic overstates the land added to the cultivated LADI/AJ - 49 - ANNEX 1 Page 3 of 4 area as the crop water requirements were underestimated and the lands reclaimeJ around each well exceeded the well's irrigable capacity. 9. The change in land cultivation policy, mentioned in paragraph 4, affected not only the land reclaimed during the 1960s, but also impacted on the earlier projects like Tahrir and Abis. Land distribution in the older projects was contingent upon the land reaching marginal productivity and only a small proportion of the reclaimed land had reached that status at the time the policy shifted. Only 8,000 of the 164,000 feddans reclaimed in the Tahrir project was distributed to smallholders. 10. Only one other major project was initiated during the 1960s decade, a 300,000 feddan project west of the Nubariya canal. A major feature of this project, financially assisted by the USSR, was the extent of mechanization proposed in development and subsequent cultivation. The project lapsed when Soviet financing was withdrawn in the early 1970s. Drainage was not included in the reclamation process and the small areas reclaimed rapidly suffered from waterlogging and salinization. It was later divided into two projects, one responsible for reclaiming 200,000 feddans west of the desert road and the other responsible for producing seeds/seedlings on 23,000 feddans. 11. Between 1971 and 1978, the lack of budgetary resources prevented land reclamation. With the diminished reclamation efforts, the Government attempted various consolidation efforts to improve cultivation/production efficiency. In 1968 EAUDRL began distributing land to farmers (5 feddans) and cooperatives who distributed land to members (10 feddans), as it was recognized that smallholder farmers achieved higher yields than the agricultural companies. In 1975 the system of land leasing was abolished. A policy of distributing land to secondary and college graduates in 20-30 feddan farms was initiated in 1976. Also, in 1976 EAUDRL was abolished and is 12 sectors were renamed companies, each to operate independently and commercially, however, they still continued to suffer from administrative restrictions and inertia. 12. The administrative structure of land reclamation has also undergone considerable evolution. The institution for primary implementation responsibility has changed from being a separate ministry to being combined with three different ministries at various times, namely (i) Ministry of Agriculture; (ii) Ministry of Irrigation; and (iii) Ministry of Housing and New Communities. the various organizational changes are itemized below: 1961 - Permanent organization for Land Reclamation became the Ministry of Agrarian Reform and Land Reclamation (MARLR); 1970 - MARLR bcame Ministry of Agriculture And Land Reform (MALR); 1976 - MALR and Ministry of Irrigation (MOI) under a common Minister; early 1977 - Separate Ministers appointed to MALR and MOI; late 1977 - KOM renamed Ministry of Irrigation and Land Reclamation (MILR). Major land reclamation responsibility was in this LMIAJU - 50 - Page 4 of 4 ministry; the responsibility for New Lands and GARPAD were retained in the MWA; 1978 - responsibility for land reclamation was transferred to the Ministry of Housing, New Comaunities and Land Reclamation and GARPAD became responsible to this Ministry; 1986 - the responsibility for land reclamation and GARPAD was transferred back to the Ministry of Agriculture, now MALR. The Ministry of Irrigation was combinid with the Ministry of Public Works to become the Ministry of Public Works and Water Resources (MPWWR). 13. Despite the numerous handicaps about 1.5 million feddans have been reclaimed since 1952, a prepondence (about 45X) of this reclamation has been in the West Delta region -- Figure 1 (below) and Annex Table 3.1 illustrate reclamation by region over the post-independence period. LAND RECLAMED SINCE 1952 13 - I- to f . 0- /H fXB 0.4- CU 0" as a a" a nM n ft'MT4r7r 70 no a a a asr&?a ° ' + 0g A £ii K ,-D/JmIaJ - 51 - ANN= 2 Page 1 of 6 ARAB REPUBLIC OF EGYPT AGRICULTURAL LAND RECLANATION STUDY LAND RECLAMATION PLANNING 1. Land Haster Plans are useful studies for planning long-term reclamation and development of land for agriculture. Such plans require periodic updating and modification to reflect new discoveries, technologies and management practices which make reclamation feasible on lands where it was previously infeasible. The most recent Land Master Plan (WMP) was prepared in November 1986.LL This report indicated some 2.88 million feddans were potentially reclaimable for agricultural use, irrigable from Nile waters. Another 570,000 feddans were identified as reclaimable, irrigable from groundwater. 2. The reclaimable areas were circumscribed in Land Development Units (LDU) or project areas and itemized by region. These project areas, excluding those to be irrigated from groundwater sources, their water lifts and Land Management Categories (LMC) are listed in the following table and illustrated on Map No. 21616. 3. Land capability and management classes are based on USBR classification criteria, modified to meet local conditions. While these criteria permit the land to be grouped into defined categories, this classification system is 35 years old and irrigation technology has overcome some of the limitations which prevailed at the time the systems were developed, thus, may not accurately reflect the ease/difficulty of currently managing the land. 4. Land capability classes range from Class 1 (very good arable) to Class 6 (non-arable) and are defined by a series of objective and subjective factors. Classes 3 through 5 represent the bulk of the land available for future reclamation. These classes are defined as arable and limited arable and comprise sandy soils. Classes 4 and 5 are considered "limited arable" with no clear distinction between the two classes. The following table details the factors used in the classification. 5. The land management categories classify the land into groups which require/allow the same type of land use and management. The proposed irrigation method is a crucial planning criterion as investment costs would vary for each method. Conceptually, moving from Category I to V indicates a more sophisticated irrigation system is needed and cropping options diminish. 1,/ GARPAD,Euroconsult and Pacer, Land Master Plan, November 1986. LUID/ ANNEX 2 -52- Page 2 of 6 Table 1: List of Land Develooment Units (Area to be developed depends on availability of surface water) Gross Area Puoina Lift Unit No.* Name LMC 1000 fed. Elevation Minimum Maxmmum (ED) Eastern Delta 01 Cairo Ismailiya Desert Road V 25.2 30 SO 100 Ahmed Oarobi-Birka 02 Desert Fringes Bilbeis V 11.6 13 10 85 03 Adleya/Tenth of Ramadan City V 13.8 L. 13 25 90 04 Ramses/Tenth of Ramadan III 31.5 L2 9 14 94 05 El Shebab (Youth Province) v 45.0 La 9 13 100 06 Manayib IV 37.5 6 10 79 07 South Cairo-Ismailiya Desert Road III 63.6 12 30 100 08 West of Bitter Lakes V 38.2 6 S 45 09 Khattara Li v 27.3 10 10 20 10 Salhiya North V 146.0 10 1S 25 11 Along Huseiniya Canal/South Hagar V 17.0 1 9 9 12 South of Port Said Plain I 62.5 2-3 S AM 13 East Bahr El Baqr I 11.8 2-3 5 Li 14 South Huseiniya L4 I 7S.8 2-3 5 Li 15 North Huseiniya I 66.0 2-3 5 Li 16 South Port Said I 43.5 2-3 5 Li 17 El Hatariya I 8.9 2-3 s Li 18 Ezbet El Burg IV 6.0 1 0 0 19 West Suez V 20. 4 4 56 Subtotal 798.7 (WO) Westh rn Delta 01 Lake Maryut I 11.0 1 0 0 02 Barseek (Lake Idku) I 27.0 1 3 3 03 Hagar I 3.5 0.5 0 0 04 East Od Desert Road V 58.9 Li 7 40 80 05 South of Wadi Natrun 1 V 52.5 /7 7 60 93 06 South of Wadi Natrun 2 V 16.7 7 iS LA 100 07 Kafr Oawud/Sadad City V 73.0 LI 7 20 SO 08 Bustan I completed 09 Bustan It completed 10 Bustan extension III 49.1 5 35 65 11 West Nuberia IV 55.0 -s -35 -45 12 Sugar beet project II 60.0 S 45 SO 13 Zawyet Sidi Abdel Ati rI 22.0 5 55 LQ 14 El Hamnam II 15.0 .l S 5S Lhl 15 Fookah II 43.0 5 Ss I.Q 16 El Daba/El Alamein II 31.2 5 5s /LQ 17 Shoukry Valley East V 62.0 5 100 135 18 Shoukry Valley West V 9S.0 s 135 140 19 Abu Rawash LU IV 7.5 30 45 100 Subtotal 684.9 (MD) Middle Delta 01 West Surullus/Fowa-Sidi Salem I SS.3 -1 O.S 1.S 02 Baltim & Kashaa I _._ 7 -1 0 0.5 Subtotal s9.0 (ME) Middle EOYvt 01 Upper Wadi Asyut III 20.0 so 90 lOO 02 Lower Wadi Asyut V s.1 so 10 so 03 East of Syut V 36.7 50 10 40 04 West of Manfalut V 19.1 so 1S 45 05 West of Qusiya V 12.3 SO i5 45 06 West of Dairut v 20.5 So 1S 45 07 Abu Sir/West Beni Suef IV 3.7 18 l 30 08 El Saff /4 V 12.0 40 0 SO 09 Ghamasa L4 V 24.0 40 0 SO 10 Wadi El Rayan v 10.S 18 S 25 11 Abu Qurqas IV 2.5 38 1S SO 12 West of Minya V 12.0 29 25 SO 13 West Beni Mazar V 18.0 29 20 45 14 West of El Fashu V 7.0 29 20 45 1S Fringes East Fayoum III 6.5 12 30 SO 16 Northeast Qarun V 9.0 9 10 20 Subtotal 223.9 Footnotes see next page AMN - 53 Page3 of 6 (Cont d) Gross Area Pumina Lift unit No., Name LHC 1000 fed. Elevation Minimum Maximum (UE) Upper EaXot 01 Wadi El Kharit III 16.6 80 60 80 02 Wadi Shait III 4.0 80 50 70 03 Wadi Nokra III 62.0 80 60 90 04 Tributaries Wadi Nokra III 17.0 80 100 120 05 Kom Ombo West IV 150.0 80 65 100 06 Wadi El Kubaniya V 18.8 80 30 70 07 El Sa'ayda II 1.8 75 15 35 08 Wadi El Sa'ayda V 49.5 75 35 65 09 Wadi Seraf V 3.3 65 10 30 10 West Nazim V 8.4 70 40 60 11 Higaza V 3.7 63 17 47 12 Kift V 5.5 60 20 40 13 Wadi Laqeita (partly groundwater) III 48.5 70 70 100 14 Wadi Oena (partly groundwater) V 9.0 70 S 50 iS Marashda V 38.3 70 0 80 isa West Marashda V SO.0 70 0 80 16 west Samhud V 7.7 70 0 20 17 West of Girga V 6.0 55 10 65 18 South of Sohag V 17.5 55 10 95 19 West of Tahta V 24.2 50 15 SO 20 El Ghanayem V 3.5 52 8 38 21 Waled Touk East LI V 22.0 50 1S 100 22 East of Sohag V 4.5 SO 1S 80 23 Wadi Abu Shih V 3.5 50 10 40 24 West of Luxor IV S.O 50 15 80 25 South Isna II 1.8 62 28 38 Subtotal 781.6 (SN) Sinai 01 Tina Plain I 102.5 1.S 10 LU 10 02 North Bitter Lakes LA IV 30.0 0.5 10 LU 70 03 East of Bitter Lakes V 27.5 0.5 10 LU 70 04 East of Suez V 42.5 2 3 58 05 El Qaa Plain See Table 4b, with groundwater LOUs 06 Bardawil 1 IV 60.0 0.5 10 45 07 Bardawil 2 IV 15.0 0.5 10 45 08 West of El Arish IV 6.1 0.5 10 30 09 El Arish See Table_Ab. with groundwater LDUs Subtotal 283.6 (HDL) High Dam Lake Shores 01 Wadi Kurkur V 14.0 160 /14 10 SO 02 Kalabsha V 22.0 160 /14 10 50 03 Wadi Allaqi II 9.0 160 /14 10 50 04 Abu Simbel V 5.0 160 /14 10 SO Subtotal 50.0 Grand Total 2,881.7 Unit number codes conform to legend on Map No. 21616 /1 Of which about 20% within boundaries of Tenth of Ramadan City. La Of which about 70% within boundaries of Tenth of Ramadan City. I3 Of which about 15% within boundaries of Tenth of Ramadan City. LI Partly being reclaimed. LI Lift in Salam canal about S m. Lf Of which about 25% within boundaries of Sadat City. LZ Of which about 20% within boundaries of Sadat City LS Minimum lift may increase to about 30 m to lift water over high ground. L2 Of which about 10% within boundaries of Sadat City. /L0 Supplied by PS S on Nasser Canal. LU Part of it within boundaries of New Ameriyah City. LIZ Water will be lifted from 30 to 75 m by National Infrastructure. LU Lift in Extended Salam Canal about 10 m. /14 Minimum water level of the High Dam Lake. Sourel: Lamd Master Plan, Table 4a. Table 2: Land Capability Classification for Irrigated Agriculture (modified USSR system to fit Egyptian soils) (C) Very good arable Good arable Good arable after Arable Limited arable Non arable after intensive leaching Class I Class 2a Class 2b (*) Class 3 Class 4 Class 5 Class 6 Texture loam to sandy loam clay loamy and inland clay to n.a. clay loam to friable sand coarse sand clay Gravel content (Z) n.a. n.a. n.a. (25 (50 (50 (by volume) Available moisture )>S >o >15 s - >2 <2 (cm/m) Permeability moderate moderate low moderate to low to Impermeable high very high Oepth to gravel(cm) >200 >150 )SO >100 >75 <75 to Impervious none >200 >200 >100 >lOO (100 layer (cm) Salinity: Initial salt content is not considered as a permanent limitation Carbonate content ($)% sandy soil n.a. n.a. n.a. )lO no limitation no limitation loamy to clayey 0 - 10 10 - 40 0 - 10 n.a. no limitation n.a. soil Gypsum content 1$)% ("-*) sandy soil loamy n.a. n.a. n.a. <20 (20 >20 to cleyey soil 0 - 0 O - 5 n.a. n.a. <15 >15 Drainability easy easy to ave. difficult average easy to diff. very difficult or excessive (in coastal areas) Surface: relief flat flat to flat flat to un- flat to rolling hilly gently un- dulating dulating slope ($)% <2 <5 2 (8 <16 >16 Rock outcrops none none none none few common to abundant Erosion hazard none to slight slight to none to slight moderate to slight to high very high moderate high (water and/or wind) Note: Class. 5: Lands requiring further surveys not applicable. 1) Land Capability Calssificaton based on the available profiles descriptions (average depth (150 cm) o (^) Special class for Egyptian Delta soils. (^ ^) Gypsum contents above 20% have no serious agricultural restrictions; J, i (3310C) . - 55 - Page 5 of 6 6. Land Management Category I is divided into subcategories Ia and lb, with the latter applicable to depressions in the Western Desert which are irrigable from groundwater and are not discussed here. Category Ia includes the clayey soils of fluvio-marine origin. They are generally flat, are highly saline and require drainage with pumping as they lie close to the coast and have high water tables. If adequately drained they fall with class 2, good arable, soil capability. 7. Land management category II also contains subcategories a and b. These soils include sandy loams to permeable clays. The weakly calcareous loans form a minor component of this category but where they exist, the soil capability is rated as Class I, very good arable. The strongly calcareous soils, located primarily in the western delta, causes low availability of phosphorus and many micronutrients. They as rated as class 2 soil capability. 8. LNC III includes lands with flat to undulating topography in various desert land forms. The soils are deep with medium sand to loamy sandy textures and has a soil capability rating as arable class 3. Category I- is similar to Category III but is more undulating, requiring more leveling but similarly contains a soil suitability classification of 3. 9. Land Management Category V includes the coarse sandy and gravely soils and comprise 45% of the identified reclaimable land. The soil capability classification is rated as 4, limited arable. It is important to remember, however, that as new technologies develop the management of problem soils becomes easier and many of the more difficult soils may fall into a higher management category in the future. The following table summarizes the categorization factors. LAW/AJN - 56- ANNEX 2 Table 3; Land Management Categories Page 6 of 6 LMC Soil Preferable System Preferable System Drainability Category Type of Irrigation of Farmin&_ Ia Coastal lake Traditional basin Smallholder or family Poor to very bed clays, farms. Commercial poor. Dif- mostly saline farms possible. ficult and with shallow relatively groundwater. costly to drain. Ib Inland clays, Traditional basin Smallholders or Poor to very mostly in the family farms. poor. Very Western Desert. difficult to drain due to lack of outlet. IIa - Sandy loams to Gated pipe. Smallholders or Moderate to clay loams, sprinkler, family farms. good. Easy to slightly to some basin Commercial farms to drain. moderately possible. calcereous. lIb Sandy loams to Gated pipe, As per IIa above. Moderate clay loams, sprinkler Normal to highly drain. calcereous. III, Loamy sands to Sprinklers, Family or commercial Good. Can sands with drip only for farms. Smallholders easily be available fruit trees and possible. drained. moisture vegetables. content of Gated pipe 5-10 cm/m. possible. Flat to gently undulating. IV As per III As per III above Commercial farms Good. Most above with with careful water but family farms are can be easily undulating management. possible. drained. topography including low to medium dunes. V Coarse sand to Automated sprinkler, Commercial farms High. Easy gravelly sands drip. to drain. with available moisture content of less than 5-10 cm/m. Flat to rol- ling topography. Source: LMP, November, 1986. 3310C - 57 - Page 1 of 10 Table 1 ARPB PULELIC IF E;YPT Laid Reclained by Lcxatimv and Year (1000 feddans) East Middle West Middle Upper New Year Sinai Delta Delta Delta Egypt Egypt Valley Other Total 1960 0.1 23.6 2.5 42.9 6.7 - 3.0 - 78.8 1960/61 2.S 1.5 2.0 5.7 - - 7.2 9.3 28.2 1961/62 2.5 10.7 17.7 25.2 3.1 9.6 8.7 11.9 89.4 1962/63 1.2 13.2 23.6 42.9 4.9 13.6 9.5 13.5 122.4 1963/64 4.0 8.0 33.7 53.9 S.S 23.8 8.5 22.0 159.4 1964/65 1.0 8.5 27.0 58.9 12.0 16.7 6.9 S.0 137.0 1965/66 - - 4.0 65.5 22.0 11.1 2.0 15.0 119.6 1966/67 - 4.0 27.5 21.5 2.1 2.0 - 56.1 1967/68 - 2.0 32.0 - - - - 34.0 1968/69 - 7.0 19.0 19.1 - - - - 45.1 1969/70 - 5.0 7.0 6.0 - 3.0 - - 21.0 1970/71 - 13.0 8.0 - - - - - 21.0 1971/72-1977/78 - - - - - - - 1978/79 3.5 1.0 - 14.9 0.8 0.5 1.2 - 21.9 1979/80 - 8.3 8.1 4.6 - 0.8 2.5 - 24.3 1980/81 0.9 3.7 7.0 2.5 - 1.0 1.2 - 16.3 1981/82 2.0 57.3 1.0 32.5 0.3 4.6 2.2 - 99.9 1982/83 3.4 - 3.4 27.9 1.5 1.S 6.0 ai 43.1 1983/84 4.0 13.0 4.4 18.9 5.1 1.2 Lt 45.6 1984/85 3.0 14.7 2.5 22.4 6.6 0.2 1.2 41 50.6 1985/86 - 11.5 2.3 26.4 15.7 0.5 /I 56.5 1986/87 - 3.5 ll.S 36.2 13.0 0.6 1.1 L. 65.9 1987/88 9.8 20.0 2.3 96.2 18.2 7.1 153.6 1988/89 - - - - - 170.0 Five Year Plan 1987/88-1991/92 47.6 175.0 5.0 214.4 41.5 94.5 35.0 137.0 LI 750.0 /1 N.W. Coast LI East Delta (Societies) Sources: 1952-1981/82. General Administrative Office. Ministry of Agriculture and Land Reclamation. Central Administration for Follow up and Evaluation, Indicators of the Achievements of the Five-Year Plan. 1982 1987. Annex Table 2. Oecember 1987 (in Arabic) 1982/83-1986/87. Ibid. Table 3. 1987/88. GARPAD. 3310C - 58 - ANX Page 2 of 10 Table 2 Page 1 of 2 AW FEPIEIC OF EGYPT List of High Priority PMiects Develtcmwt gbtim II Area in Short Final Name -MC to Med-Term Plan Rank 1000 fed Eastern Celta Desert Fringes Bilbeis V 5.1 46 Adleya/Tenth of Ramadan City V 2.4 52 Ramses/Tenth of Ramadan III 8.7 60 El Shebab (Youth Province) V 13.7 58 Hanayib IV 27.4 47 South Cairo-Ismailiya Desert Road III 9.0 79 West of Bitter Lakes V 37.6 20 Khattara V 27.3 11 Salhiya North V 146.0 48 Along Huseiniya Canal'South Hagar V 17.0 22 South of Port Said Plain I 62.5 19 East Bahr El Baqr I 11.8 8 South Huseiniya I 75.8 16 North Huseiniya 1 66.0 13 South Port Said I 43.5 14 El Matariya 1 3.9 5 Ezbet El Burg IV 6.0 4 West Suez V IL& 18 Subtotal 583.7 Western Delta Lake Maryut t 11.0 3 Barseek (Lake Idku) I 27.0 7 Hagar I 3.5 1 South of Wadi Natrun 2 V 5.0 67 Kafr Dawud/Sadad City V 63.0 41 Bustan extension III 20.1 71 West Nuberia IV 40.0 49 Sugar beet project II 60.0 62 Subtotal 229.6 Middle Delta West Burullus/Fowa-Sidi Salem I 55.13 9 Baltim & Kashaa I -.L 2 Subtotal 59.0 Middle Eavat Lower Wadi Asyut V 4.1 40 East of Asyut V 36.7 31 West of Nanfalut V 17.1 23 West of Qusiya V 11.3 21 West of Dairut V 18.5 36 Abu Sir/West Bent Suef IV 3.7 10 El Saff V 9.5 28 Chamasa V 13.0 53 Wadi El Rayan V 10.S 27 Abu Qurqas IV 2.0 24 West of Minya V 10.0 42 West Bent Mazar V 17.0 34 West of El Fashu V 6.5 54 Fringes East Fayoum III 6.0 43 Northeast Qarun V 9.0. 17 Subtotal 174.9 - 59 - Page 3 of 10 Table ,7. Page 2 of 2 (Cant d) Area in Short Final Name LMC to Med-Term Plan Rank 1000 fed Upner Eaynt Wadi El Kubantya V 4.0 72 El Sa'ayda II 1.8 59 West Nazim V 3.3 26 Higaza V 3.0 4S Kift V S.S so Wadi Qena (partly groundwater) V 7.0 Si Marashda V ) 35.0 64 West Marashda V ) West Sanmud V 7.7 6 West of Girga V 3.0 61 South of Sohag V 7.0 75 West of Tahta V 20.0 SS El Ghanayem V 3.5 33 Waled Touk East V 5.0 77 East of Sohag V 3.0 65 Wadi Abu Shih V 3.5 25 West of Luxor IV 4.0 63 South Isna II l.a 56 Subtotal 118.1 Sinai Titj Plain I 102.S 44 !arth Bitter Lakes IV 13.0 35 East of Bitter Lakes V 15.0 37 East of Suez V 30.0 29 Bardawil I IV 5. 32 Subtotal 210.5 TOTAL 1377.8 Source: Land Master Plan, Table 36. 3310C - 60 - 4NM 3 Page & of 10 rable 3 AA iEaLC OF EGYPT Prarwam for Currmt Five-Year Plan (1987/8B-1991/92) Total Area in Static Lift Area Plan (ml Name 1000 Fed 1000 Fed Min. May. - Cairo Ismailia Desert Road 30.20 17.00 SO 120 - Elshabab 45.00 16.00 30 100 - South of Port Said & 74.30 40.00 0 6 East Bahr El-Baqar - South Hvsseiniya Plain 75.80 70.00 0 5 - South Port Said 43.50 22.00 0 5 - El Malar'-ya El-Salam 8.90 8.00 0 5 - Ezbet El-Borg 6.00 6.00 0 5 - West Suez 30.00 S.00 4 56 - West Bouralos 55.30 S.00 1 2- - Baltim & Kashaa 3.70 0 1 East of Bitter Lakes 27.50 7.00 10 70 - El-Qaa Plain 2.00 1.00 Ground Water El-Arish 5.20 Ground Water - El-Frafra 31.50 2S.00 Ground Water - El-Bahria 53.50 Ground Water - North Coastal Area - Rainfed Cairo Alexandria 10.00 Ground Water Desert Road - South Karion 6.00 1.S 10.0 20.0 - East Wahby 6.50 1.5 30.0 50.0 - Eges Housa - Ground Water - Bustan Extension 93.60 75.00 20.0 50.0 - Sugar Beet Project 55.00 15.00 45.0 SO.0 - West Noubariya 60.00 2.00 35.0 45.0 - Zawyat Sidi Abdel Ati 30.00 22.00 55.0 75.0 - El-Hammam 10.00 10.00 55.0 55.0 - El-Dabaaa/El Alameln 31.20 30.00 55.0 55.0 - East of Assiut 36.70 1.00 10.0 40.0 - West Beni Suef 3.70 2.50 10.0 30.0 - El Saff & Ghamara 35.10 25.00 1S.0 SO.0 - Wadi El-Rayan 10.50 10.00 S.0 25.0 - Wadi Shalt 9.00 3.50 30.0 60.0 - Wadi Nokra 62.00 15.0 60.0 90.0 - Wadi Wt-Sa'ayda 49.50 28.0 35.0 65.0 - Kift S.SO S.00 20.0 40.0 - Wadi Leqeit 12.00 S.00 Ground Water - Wadi Qena 9.00 5.00 Ground Water - Harashda 88.30 13.50 0.0 S0.0 - West of Girga S,OO 2.00 10.0 65.0 - Awlad Touk 22.00 1.00 1S.0 100.0 - Around ll-Nasseri Canal - 6.40 15.0 50.0 1434C/P1S - .61 -ANNEX 3 Page 5 of 10 Table 4 ARAB REPUBLIC OF EGYPT Investments In Old-Now Lands Prior to 1960/61- 1965/66- 1970/71- Activity 1960 1964/05 1969/70 1974-75 Totat -----------------------------(LE mitlion)--- Agriculture 75.6 102.4 82.5 260.5 Irrigation & Drainage 51.9 45.1 11.1 108.1 Housing & UtilIties 17.3 18.3 5.7 41.3 Transportation & Communications 6.5 6.1 2.8 15.4 Electricity 2.8 4.0 1.0 7.9 othera 0t5 0-1 am 2i_ Total's 29.0Oh 154.5 176.0 125.9 485.' Source: Egypt Ministry of Planning: The Five-Year Plan 1978-82, Vol. 4, Agusut 1977. La Industry, services, interest on loans, etc. /b Totals may not equal su due to rounding. /C Data available only in aggregate. ANNEX 3 - 62 - Page 6 of !0 Table 5 ARAB REPUBLIC-OF EGYPT Investment Program. New-New Lands Five Year Plan Five Year Plan 1987/88 1988/89 1982l83-1986/87 1987/88-1991/92 Actual Preliminary Actual Exrenditure Plarned Investment Expenditure Excenditure ------(LE 000)----- 1. Ministry of AaricultureLl 788 Z996.948 223.262 225 750 1. Agriculture Research Center 202,730 2. PBDAC 104,131 3. Land lprovement 78,000 4. Public Sector Companies 258,559 5. West Beheira Settlement 39,765 6. Otherb 203,763 11. Ministry of Irricatiora 1.011.270 1.124.449 1. El Salam Canal 43,730 24,900 9,685 11,500 2. Pumping Station (1-3) 30,043 8,300 1,656 2,170 3. Ismailia Canal 98,703 28,500 15,750 13,333 4. El Masr Canal 25,350 31,000 - 6,000 5. El Nasseri Canal - 4,500 11,760 8,000 6. Pumping /Stations for Reuse of Drainage Water 13,231 20,635 10,450 7,240 7. Sinai - 9,020 9,134 3,000 Subtotal for Land Rec 210,697 126,855 58,436 51,243 III. Ministry of Land ReclanatioW 781 825 I.0844660 321.566 338.200 1. Land Reclamation: Electrical Supply 82,286 240,000 Roads & Comummication 9,268 38,560 Houses 48,128 15,000 Potable Water & Sewerage 7,623 43,380 Land Rec. Cost 103.185 146.000 Subtotal 250,000 482,940 56,304 105,617 2. Agriculture 36,976 40,400 4,783 21,942 3. Irrigation & Drainage 420 130 436,000 230,850 188,661 4. Social Development 44,229 125,320 29,629 21,980 Source: Ministry of Planning La Although the Ministry of Irrigation and Ministry of Land Reclamation do not currently exist by those titles, these were the Ministry headings in Egypt's Second Five-Year Plan for Socio- Economic Develoammnt 1987/88-1991/92. Lb A balancing statIstic. - 63 - ANNEX 3 Page 7 of 10 Table 6 ARAB REPUBLIC OF EGYPT Areas Reclaimed During 1982/83-1987/87 Five-Year Plan by Executing Agency RecLamation Companies 1982/83 1983/84 1984/85 1985/86 1986/87 TotaL -------(--------------------------------feddans)------------------------- Beheira Company 10,300 7,500 8,810 2,500 5.720 34,830 Akaria Company 6,670 10,187 11,830 9,300 11,688 49,675 Kom Ombo Company 7,958 3,700 12,600 10,000 10,700 44,958 General Company 500 2,530 4,800 4,000 2,000 13,830 Arab Company 6,600 6,250 3,150 3,625 3,440 23,065 Regwa Company 715 0 1,207 1,207 1,207 4,336 Public Companies 32,743 30,167 42,397 30,632 34,755 170,694 Non-public 10,377 15,463 8,233 25,874 31,152 91,099 reclamation TOTAL 43,120 45,630 50,630 56,506 65,907 261,793 = r~~cu=== I;az G== = =_== Source: General acdministrative office, MLR. Central administration for follow-up and evaluation. Indicators of the achievements of the first five-year plan 82/87. - 64 - ANNEX 3 Page 8 of 10 Table 7 ARM REPUULIC OF ECYPT Areas Iectafid For Wih Water eI,A located y Rein ad Executim Aans 1982-87 1987/88 Public Non-Public Public Non-PubLic BReion Convenies Entities Companies Entities - ---------------------(feddans)------------------------------ Sinai 9,800 1,250 9,800 East Delta 12,000 23,333 0 20,000 Middle Delta 7,800 4,975 2,300 0 West Delta 96,500 14,883 67,200 29,000 Upper Egypt 1,000 13,597 1,200 17,000 New Valley 4,670 0 7,100 0 .U. Coast 0 0 0 0 TOTAL 131.770 580=88 7,600 66,000 GRAND TOTAL 189,808 153,600 Source: Area reclaimed under he 1982/87 plan and the first year of the 1987/92 plan, GARPAD. - 65 - Armex 3 Page 9 of 10 Table 8 Land Reclamation Projects and Budgets ProRosed for 1989190 !/ Proiect Budget (LE Million) Eastern Delta Southern Hasseiniya Plan 16.700 M South Port Said 9.150 East Wadi Bahr 27.00 South of Port Said Plain 17.500 West Suez 7.05 El Matariya El Salam 5.100 El Shabab 17.500 Western Delta Bustan Extension 51.000 West Nubariya 12.600 Sugarbeet 13.250 Nasr Canal Repairs 5.400 Middle Delta West Burullus 1.500 Middle Egyot West Beni Suef 2.00 El Saff & Ghamasa 2.500 Wadi El Rayan 6.000 South Qarum 2.50 Upper EgYot El Sa'ayda 19.000 Marashda 2.50 Wady El Nukra (new) 20.973 Sinai East of Bitter Lakes 5.000 Western Desert (groundwater) Parfra 21.000 TOTAL 331.97 Source: GARPAD, Budget Preparation Documents. - 66 - Annex 3 Page 10 of 10 Table 9 Investment Ccsts for Recom 'Id Sho~rt- to fdiua-Term L - ~~~~Reclamatkon Prograoi Total Investment Item Investment cer feddan (LE million) Main irrigation canals 560 Secondary pumping stations 65 Main drainage canals 155 Field irrigation 683 Field drainage 134 Rural infrastructure 3120 Miscellaneous costs 134 Access roads 2 Conveyance system 246 Primary pumping stations 56 Drainage pumping stations 5 Pobwr supply system 843 Sub-total 6003 Design, engineering, and supervision fee (15%X) 900 Total 6903 Gross area (1000 fed) 1,377.9 5010 Net agricultural area (85%) 1,171.1 5894 Sources Arab Republic of Egypt, Land Master Plan Vol. 7, Ainex F, Tables 8 and II.1, Nov. 1996. - 67 - ANNEK 4 Page 1 of 4 Economic Analysis 1. The financial and economic prices (LE/ton) of various crops are indicated in Table 1 along with water and labor requirements per feddan. This table contains most of the field crops grown on new lands; a few vegetable crops are included and serve as proxies for those not included, tree crops have been excluded. The last six columns of the table contain the economic cost of the variable production components (machinery, seed, fertilizer, pesticides and miscellaneous). The economic cost of lifting water was calculated to be LE 0.584/1000m3/m and a 15 meter lift Was assumed. The economic cost of labor was assumed to be LE 4.00/day. 2. In the base case, it was assumed that yields would be built up over a period of eight years at which time they would reach a plateau (Table 2). The plateau is based upon prevailing technology and yields. This is an exceptionally conservative assumption as recent observations have illustrated a rapid build up (3 - 5 years), with subsequent small increases in yield (i.e. yields would not plateau but would continue to increase). Returns from small animal livestock were assumed to contribute to the benefit stream by the seventh crop year (12th year of the project). 3. Capital costs (economic) of development were estimated to be LE 4500/feddan and comprised LE 1000 for main and secondary systems LE 1500 for tertiary irrigation and drainage and LE 2000 for farm level development. Also social infrastructure costs of LE 3000/farm family were included. For small projects distant from Nile water sources, capital cost/fed. would be greater and for large projects near Nile water supplies the capital cost would be less per feddan and would, accordingly, impact upon the economic rate of return. Annual irrigation repairs were assumed to equal 3 percent of the capital cost of the tertiary and farm systems; miscellaneous costs of LE10/fed. were included. The following matrix illustrates the assumed construction phasing on the irrigation and drainage systems. Year 2 3 4 5 6 percent of construction completion Social Infrastructure 25 25 25 25 Main/Sec. System 30 40 30 Tertiary System 20 40 40 Farm System 50 50 Pumping Stations 30 50 20 4. Based upotI these costs, returns, and crop composition proposed (para. 2.64), an economic rate of return of 14.2X would be expected. Altering the composition of high value crops (grain legumes, and vegetables) would not materially affect the ERR. However, shifting the relative composition of field crops and high value crops would impact upon the ERR. For this reason, high value crops were limited to one feddan (of 4.5 feddans cultivated) which represents cropping patterns practiced in much of the new lands of the Western LAo/AJN - 68 - ANNEX 4 Page2 of 4 Delta. Although insensitive to small changes in capital costs, the ERR reacts to large changes in capital costs; for example if capital costs increased by over 40X above the base case (applicable to some of the lower priority projects) and high water lifts were incurred the project would not be economically viable (i.e. fall below 10) unless orchards or additional high value crops were produced. 5. The rate of return sensitivity to water lifts was analyzed using an economic electricity cost of LE 0.15/kw which is equivalent to LE 0.584/1000m3/meter lift. The capital costs estimated for pumping stations were based on two pumps, each with a 2m3/sec. capacity and pumping lift of 10 meters, using 450 kw electric motors and other appropriate equipment -- transformers, switchgears, etc. (Table 3). In reality investment would involve discrete costs for a range of pumping lifts however, this analysis assumes a continuous cost function based on the above pumping station model. The function was applied to various pumping lifts holding other costs and benefits constant; the following ERR function was estimated: ERR - 16.7 - .053 (water lift), RI - .998. Pumping Station Capital Costs Two pumps of 2 m3/sec pumping lift of 10 meters using 450kw electric motors. ComDonent (LE 1,000) Pumps 352.0 Motors 297.0 Transformer 58.5 Gearbox 166.5 Switchgear HV&LV 650.0 Subtotal 1524.0 Pipes, values, etc. 10 1524.4 Installation costs 10% 1524.4 Civil works (LE16,000/m?/mlift 640.0 2468.8 Based on 24 hr/day and 300 da/year pumping such a pumping station could service 12,500 feddans. Source: FAO Investment Centre, ARAB Republic of Egypt and Irrigation Pumping Station Rehabilitation Project II, Preparation Report, August 7, 1989. LADI/AJ - 69 - ANNEX 4 Page 3 of 4 Table 1 Price and Cost Components of Production Yater Labor Req'd Req'd Components of Total Econ Var. Cost Price (LE/t) e3ifed da/fed Rich Sted Fort Post Misc. Total Crop fin econ Barley grain 200 442 926 17 170 15 86 28 14 313 Barley straw 60 60 Bersees 30 30 2498 31 282 12 46 0 17 357 Cowpea grain 800 1100 3240 31 181 42 65 45 14 347 Cowpea straw 20 20 Wheat grain 170 442 926 19 170 19 86 29 14 317 Wheat straw 70 70 Maize, grain 210 343 3298 29 154 11 106 61 14 346 Maize, stover 15 15 Soyabean grain 300 640 3102 28 193 10 49 75 12 329 Soyabean straw 20 20 Fodderbeet 20 20 3177 27 160 12 113 38 14 337 Groundnut grain 750 665 3497 31 147 19 65 75 12 319 Groundnut straw 20 20 Sunflower 275 275 2327 27 191 0 53 28 12 274 Melon, sweat 320 320 2331 43 62 30 63 140 15 310 Melon, water 275 170 2216 42 73 50 63 74 13 273 Sudangrasn 20 20 3492 29 153 24 156 17 17 367 Broadbeans, gr. 320 767 1725 25 190 24 49 55 13 331 "oadbeans, st. 20 20 Chickppa grain 1000 1375 979 24 191 69 65 45 16 376 Chickpea straw 20 20 Drybeans, grain 620 620 2020 24 191 72 65 55 16 399 Orybeans, straw 20 20 Drypeas, grain 540 540 2020 24 186 126 65 45 19 441 Drypeas, straw 20 20 Lentils, grain 780 1356 990 20 176 48 65 0 9 298 Lentils, straw 20 20 Onions, W 125 320 1980 31 159 35 101 182 23 500 Tomatoes, W 450 450 3613 43 119 36 100 270 27 551 CucuSbsr, W 325 325 3613 19 93 21 83 175 19 390 Eggplant, Y 250 250 3613 43 127 8 135 121 24 416 Potato, N 320 320 3613 19 141 170 120 132 29 591 Toa uto, S 350 350 2605 43 119 36 100 270 27 551 Cucumber, S 225 225 2605 43 115 26 103 218 23 485 Eggplant, S 160 180 2605 43 139 9 159 31 22 358 - 70- ANNEX 4 Page 4 of 4 Table 2 Crop Yield Build-up by Crop Year (tons/fed) Crop Year Following Reclamation Crop 1 2 3 4 5 6 7 9 9 10 11 - 25 Barley grain 0.9 1.0 1.1 1.2 1.3 1.4 1.4 1.5 1.5 1.5 1.5 Barley straw 1.0 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.a 1.8 1.8 Bersee 13.8 16.8 18.3 20.0 21.3 22.5 23.8 25.0 25.0 25.0 25.0 Coapia grain 0.4 0.5 0.6 0.6 0.7 0.7 0.9 0.8 0.8 0.8 0.8 Cowpea straw 0.6 0.7 0.7 0.8 0.9 0.9 1.0 1.0 1.0 1.0 1.0 Wheat grain 1.1 1.3 1.5 1.6 1.7 1.8 1.9 2.0 2.0 2.0 2.0 heat strai 1.0 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.9 1.9 Maize, grain 1.0 1.2 1.3 1.4 1.5 1.6 1.7 1.9 1.8 1.9 1.8 Maize, stover 1.2 1.5 1.6 1.8 1.9 2.0 2.1 2.2 2.2 2.2 2.2 Soyabean grain 05 0.6 0.7 0.7 0.9 0.8 0.9 0.9 0.9 0.9 0.9 Soyabean straw 0.6 0.7 0.7 0.8 0.9 0.9 1.0 1.0 1.0 1.0 1.0 Fadderbeet 20.0 22.0 24.0 26.0 27.0 28.0 29.0 30.0 30.0 30.0 30.0 Groundnut grain 0.6 0.7 0.7 0.8 0.9 0.9 1.0 1.0 1.0 1.0 1.0 Groundnut straw 0.4 0.5 0.6 0.6 0.7 0.7 0.9 0.9 0.9 0.8 0.8 Sunflower 0.3 0.4 0.4 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 Meldon, gweet 5.0 5.5 6.0 6.5 7.0 7.5 8.1 8.5 9.5 8.5 8.5 Melon, water 6 6.5 7.0 7.5 9.0 8.5 11.4 12.0 12.0 12.0 12.0 Sudangrass 14.0 16.0 17.0 18.0 19.0 19.0 20.0 20.0 20.0 20.0 20.0 Broadbeans, gr. 0.6 0.7 0.8 0.9 0.9 1.0 1.0 1.1 1.1 1.1 1.1 Broadbeans, st. 0.9 1.0 1.1 1.2 1.3 1.4 1.4 1.5 1.5 1.5 1.5 Chickpea grain 0.4 0.5 0.6 0.6 0.7 0.7 0.9 0.8 0.9 0.8 0.a Chickpea straw 0.6 0.7 0.7 0.8 0.9 0.9 1.0 1.0 1.0 1.0 1.0 Drybeans, grain 0.5 0.6 0.7 0.7 0.8 0.9 0.9 0.9 0.9 0.9 0.9 Drybeann, straw 0.6 0.7 0.7 0.8 0.9 0.9 1.0 1.0 1.0 1.0 1.0 Drypeas, grain 0.4 0.5 0.6 0.6 0.7 0.7 0.8 0.8 0.9 0.9 0.8 Drypeas, straw 0.6 0.7 0.7 0.8 0.9 0.9 1.0 1.0 1.0 1.0 1.0 Lentils, grain 0.2 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4 Lentils, straw 0.5 0.6 0.7 0.7 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Onions, U 12.1 14.7 16.1 17.6 19.7 19.8 20.9 22.0 22.0 22.0 22.0 Tomatoes, V 6.6 8.0 8.9 9.6 10.2 10.8 11.4 12.0 12.0 12.0 12.0 Cucumber, V 11.0 13.4 14.6 16.0 17.0 18.0 19.0 20.0 20.0 20.0 20.0 Eggplant, U 9.9 12.1 13.1 14.4 15.3 16.2 17.1 18.0 18.0 19.0 19.0 Potato, U 13.9 16.9 18.3 20.0 21.3 22.5 23.9 25.0 25.0 25.0 25.0 Tosato, S 6.6 8.0 8.9 9.6 10.2 10.9 11.4 12.0 12.0 12.0 12.0 Cucumber, S 6.6 9.0 9.9 9.6 10.2 10.8 11.4 12.0 12.0 12.0 12.0 Eggplant, S 8.3 10.1 11.0 12.0 12.9 13.5 14.3 15.0 15.0 15.0 15.0 - 71 - ANNEX 5 Page 1 of 3 Literature Review 1. The EARIS groiect '/, was one of the first land reclamation projects after independence. It involved reclamation for smallholder settlement at three sites; 30,000 feddans from Lake Nariut, at Abis only 12 km from Alexandria and two desert sites in Fayoum Governorate, Qoota and Kom Osheim, totalling 7,000 feddans. Reclamation and development were the responsibility of a semi-autonomous, independently funded agency. This autonomy is credited for much of the project's success but subsequently contributed to the "handing over" difficulties; infrastructure built by the project - roads, electricity, potable water systems, health facilities, schools, etc. - deteriorated as the responsible line ministries were inadequately budgeted to meet recurrent O& costs. 2. Development at the Abis site was substantial and self-sustaining. This was achieved, in part, by the relatively large size of the area which fostered economic diversification and the close proximity to a major urban area, which provided a market and urban amentities. Thirty years after .project initiation, net farm incomes (on a feddan basis) were among the highest in Egypt. From inception the Fayoum sites suffered from inadequate irrigation water. Water management has been the single greatest productivity constraint as water del4very to the desert sites has been poor. The delivery system constructed was adequate to provide sufficient supplies but subsequent reclamation at upstream (upeanal) locations claimed supplies destined for those sites. Cropping intensities and yield have remained low and net farm income is insufficient to sustain farm families who rely on family members migrating to urban labor markets. 3. An intensive study of the South Tahrir/Tahaddi2 area involved a- ten member team that undertook extensive interviews. Although the cost elements of the economic equation were available, benefits data were lacking. This applied to both yields prevailing in the area (which were low) and potential yields. Several causes of low productivity were identified including: (i) lack of timely water applications due to poor O& and frequent electrical outages; (ii) insufficient production inputs, particularly fertilizer; (iii) unavailability of agricultural credit; (iv) inadequate * agricultural extension and inappropriate cultural practices; and (v) inability of state farm managers to undertake and implement timely decisions. 4. The study's principal conclusions were: (a) new surface irrigation projects are uneconomic but rehabilitation may be economic if pumping lift were less than 20 meters; (b) sprinkler irrigation is uneconomic 1/ USAID; Egypt: The Emvtian American Rural Improvement Service. A Point Four Proiect 1952-63, AID Impact Evaluation Report No. 43. April, 1983 1./ Pacific Consultants; Egypt:New Lands Productivity Study. January 1980. UULMD/AJN - 72 - AMFEX 5 Page 2 of 3 for smallholder and graduate settlers and marginal for investors; (c) groundwater use by "homesteaders" may be economic if pumping lift was less than 10 meters; and (d) drip irrigation by investors was potentially economic. 5. A four-project evaluation was undertaken -,er the auspices of the Water Planning Group I/ in 1984 covering a range of soil types, irrigation methods and tenure systems, Preject characteristics are listed below: Prolect Sils Irnfaetton Method Tenurg .yito Loc.tfon Culttvatable Ar" Nartut calcareous surface all* N. Delte 41,674 El Nahda clay surface *ll* N. Delte 21,776 El-Nullak gravelly *and sprfnkler state tarm S. Delta 16,697 samallut sand celcareousprnktler/ Oll* Upper Egypt 43,646 surface * includes smt Iholders, graduates nd state farm. Constraints identified and conclusions reached were similar in the four projects. All projects, except El-Nahda suffered from water shortages. This was particularly acute for Samallyut where water shortages limited cultivation to about 50X of the cultivable area. Crop yields on smallholder/graduate farms were near national averages, but yields on state farms were about 50X of the national average, except in Samallut where management was reported as very good and yields were equal to the national average. Labor shortages were cited as constraints on the state farms along with inadequate fertilizer. The relatively good performance of smallholders was achieved despite gonerally weak rural institutions and infrastructure - credit cooperatives, marketing, research and extension. Reestimation of costs and benefits, by smallholders, found the investments to be economically efficient. 6. Spontaneous land reclamation by smallholders has been studies by Gotsch, et al 2/. Reclamtion by this group has been relatively small but has been lone practiced in the Northern Delta lakes. Reclamation has been principally "sand-fill" where the shallow periphery of saline lake bottom soils are simply under sand. In addition, some lake had reclamtion has been undertaken by constructing small dikes at lake edges. Developlng new lands in this manner is both a laborious and lengthy exercise. Winter vegetables often provide some income during development while establishing salt tolerant tree crops - guavas and date palms. The reasons for these continued and successful 1/ Water Master Plan; Detailed Examination of Existing Land Reclamation Projects, November 1984. 1/ See for example: Tonich, T.P. and Carl H. Gotsch, "Private Lend Reclamation in Egypt: Development Policy and Project Design, "Food Research Institute Studies, Vol. XX, Vol. 2, pp. 107-137, 1986. LAD/AJN - 73 - Page 3. of 3 efforts include: (i) - low opportunity cost for labor - only family labor is used; (ii) water supply is assured as it is "on hand"; and (iii) a highly valuable capital asset is created, albeit with substantial capital outlays to establish date palm groves (although some of this nay be a psychic benefit - owning land). . LANDIAJN - 73 - ANNEX 5 Pag 3. of 3 efforts Include: (1) a low opportunity cost for labor * only family labor LS used; (ii) water supply is sasured an Lt is *on hand*; and (LiL) a highly valuable capital asset ia created, albeit with substantial capital outlays to establish date pal. groves (although some of this nay be a psychic beneflt - owning land). LwD/AJN 30- 3? ARAB REPUBLIC OF EGYPT RECLAIMED "OLD NEW" LANDS NILE DELTA AND ENVIRONS Reclaimed Land 1952-1979 in the Nile Delta Numbers Identify Name and Area of Reclaimed Lands -62 on Key in Tex - - -Boundories of Cultivated Land in 1975 Main Roads -,----'-Railroads Rivers Ro3he 2sv AV D 9 Ras Solo' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~Port Said' Abxon ~~~~~~~~~-29 El j-oj Alexandria 0 1 Ka r~~~~~~~~~~~~~~~~~~~~~~~ r a El Monsura 13 37 .9 I G~~~~~~~~~~~~~~~~~~~~lantaro > v v 4° l~~~~~~~~~~~~tya El BO Fru r. nta~asa ecMAe readies aidta er4 *01' K Ee Ca0 flrn J ZBe C /l \ pail za_ 0* fl \mt Bs, and /meid^ bbc_db 44 \ > l | ~~~~~~ ~~~~~~~~~~~~~~~~~rke 1 t_ m~ uwwnawaocrptaflcs* MILES I 20 40 Ho egzl z oa >07ouidamtaae 0E To 20 40rem T n 32 To El O ,6 n _ acrced MltESo | 20 io / 7 K OHelwan O t A Oi~~~~~~~i | _ , rOe/^,n f + roAswon 32 [of/Ouseirs _~~~~I K~m t ^ ,5v,- S os - - * ac , ¾i ; ;lX _4:|i To~.-''' Sa '''o''-' 1 -' .'. .5~ 4 Dtikf IBR 21614; w g 3~~~~QAA GATTAtA 26P ao~~~~~~~~~~~~~~~~~~~~~~~~~~ a.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~lb ARAB REPUBLIC OF EGYPT RECLAIMED "OLD NEW' LANDS NILE DELTA AND ENVIRONS t .tdcinwd Lack 1952-1lS in l. Ni VisyaiD* Nanbe idmiy anc ad WA di cciFnd Lt 62 -nKeyinT.c ----Boandiu cf C~~~~~~~~~~~~~~~~~~~~W ED Aft T,~~~~~~~~~~~~~~~~~~~~~~~~~~~T . 5N 4 QATrARA DEPRESSION !S El t ) FMAin SkEho El CNy=4 E To M E 7 -0 H "hob1 ; MEM 4 j 2 ME ME 13:1~f_ El Mi~~~~~~~~~~~~~~~~ Sh-~~~~~E G,, ME 12UMEE1 1 B 12 1 -26e / UE 24;,^g>2 ME 2) UEm. UE CUE 23 UE25 U? 7 o AI.,. ARAB REPUBLIC OF EGYPT 4B to vE 9 AGRICULTURAL RECLAIMABLE LAND 0 tUE2 AVERAGE FUMPING HEIGHT (IN METERS) UEI 1 AREAS IRRIGATED BY NILE WATER UE 14 0.10 M A.....~~~~~~~~~~~~~~~~~~~U 7b~ElQ. [1111111] 11-20M Sd. ceE 12 21N40 M To. j; _|41-40 M Pa, Sod.. 24 ~ ~~61-100 MHU1 , \ s MORE THAN 100 M 16 HDL2~~~~~U 1 DWA% O-id ~~UE 2J% - ' lil NATIONAL CAPIAL Noo.e - MAIN ROADS N~ =yRIVERS _ f A -G I INTERNATIONAE BOUNDARIES AVERAGE PUMPINGKHLOMETERS H(INM S i~~~~~D- ARA IRIGTDB NIL WATER , . 51 20200 MR 40 20 M 60 .O,ie.o.O PALES z m,, - a~ 2-' 0S MORE THAN MSUDAN