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Document of
The World Bank
FOR OFFICIAL USE ONLY Report No: PAD156
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN
IN THE AMOUNT OF US$200 MILLION
TO THE
PEOPLE’S REPUBLIC OF CHINA
FOR A
INTEGRATED MODERN AGRICULTURE DEVELOPMENT PROJECT
November 20, 2013
China and Mongolia Sustainable Development Unit Sustainable Development Department East Asia and Pacific Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective September 1, 2012)
Currency Unit = Yuan/Y RMB
Y 6.3 = US$1
US$0.16 = RMB 1
FISCAL YEAR January 1- December 31
ABBREVIATIONS AND ACRONYMS ASC
Audit Service Center- China National Audit Office for Foreign Loan Assistance Projects
CAD Comprehensive Agricultural Development COCAD County Office for Comprehensive Agriculture Development CPMO County Project Management Office CPS Country Partnership Strategy DA Designated Account DUC Dam Under Construction EA Environmental Assessment ECOP Environmental Code of Practice EMDP Ethnic Minority Development Plan EIA Environmental Impact Assessment EMP Environmental Management Plan ERR Economic Rate of Return ET Evapotranspiration FA Farmer Association FC Farmer Cooperative FMM Financial Management Manual FRR Financial Rate of Return FYP Five Year Plan GoC Government of China GEF Global Environment Facility GIS Geographic Information System IAIL Irrigated Agriculture Intensification Loan IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding IFR Interim Financial Report IMAD IPF
Integrated Modern Agriculture Development Investment Project Financing
IPM Integrated Pest Management ISDS Integrated Safeguard Data Sheet ISP M&E
Implementation Support Plan Monitoring and Evaluation
MOF Ministry of Finance MWR Ministry of Water Resources NPMO National Project Management Office NPV Net Present Value NSC New Socialist Countryside O &M Operation and Maintenance
OP Operational Policy ORAF Operational Risk Assessment Framework PAD Project Appraisal Document PCN Project Concept Note PDO Project Development Objective PIM Participatory Irrigation Management PLG Project Leading Group PM Procurement Manual PMO Project Management Office PMP Pest Management Plan POCAD Provincial Office for Comprehensive Agriculture Development PPMO Provincial Project Management Office PRC People’s Republic of China QBS Quality-Based Selection QCBS Quality-and-Cost-Based Selection RAPs Resettlement Action Plans RFP Request for Proposals RMB Renminbi RP Resettlement Plan SA Social Assessment SBD Standard Bidding Document SOCAD State Office for Comprehensive Agriculture Development TA Technical Assistance WB World Bank WUA Water Users’ Association Yr Year
Regional Vice President: Axel van Trotsenburg, EAPVP Country Director: Klaus Rohland, EACCF
Sector Director: John Roome, EASSD Sector Manager: Mark Lundell, EASCS
Task Team Leader: Rabih Karaky, EASER
CHINA Integrated Modern Agriculture Development Project
CONTENTS
Page
I. STRATEGIC CONTEXT .................................................................................................1
A. Country Context ............................................................................................................ 1
B. Sectoral and Institutional Context ................................................................................. 1
C. Rationale for Bank Involvement ................................................................................... 3
D. Higher Level Objectives to which the Project Contributes .......................................... 4
II. PROJECT DEVELOPMENT OBJECTIVE ..................................................................4
A. PDO............................................................................................................................... 4
B. Project Beneficiaries ..................................................................................................... 4
C. PDO Level Results Indicators ....................................................................................... 5
III. PROJECT DESCRIPTION ..............................................................................................5
A. Project Components ...................................................................................................... 5
B. Project Financing .......................................................................................................... 7
Lending Instrument ............................................................................................................. 7
Project Cost and Financing ................................................................................................. 7
C. Lessons Learned and Reflected in the Project Design .................................................. 7
IV. IMPLEMENTATION .......................................................................................................8
A. Institutional and Implementation Arrangements .......................................................... 8
B. Results Monitoring and Evaluation ............................................................................ 10
C. Sustainability............................................................................................................... 10
V. KEY RISKS AND MITIGATION MEASURES ..........................................................11
A. Risk Ratings Summary Table ..................................................................................... 11
B. Overall Risk Rating Explanation ................................................................................ 11
VI. APPRAISAL SUMMARY ..............................................................................................13
A. Economic and Financial Analyses .............................................................................. 13
B. Technical ..................................................................................................................... 14
C. Financial Management ................................................................................................ 16
D. Procurement ................................................................................................................ 16
E. Social (including Safeguards) ..................................................................................... 17
F. Environment (including Safeguards) .......................................................................... 19
Annex 1: Results Framework and Monitoring .........................................................................21
Annex 2: Detailed Project Description .......................................................................................24
Annex 3: Implementation Arrangements ..................................................................................31
Annex 4: Operational Risk Assessment Framework (ORAF) .................................................47
Annex 5: Implementation Support Plan ....................................................................................51
MAP... ...........................................................................................................................................55
PAD DATA SHEET
China
Integrated Modern Agriculture Development Project (P125496) PROJECT APPRAISAL DOCUMENT
.
EAST ASIA AND PACIFIC
EASCS
Report No.: PAD156 .
Basic Information
Project ID EA Category Team Leader
P125496 B - Partial Assessment Rabih H. Karaky
Lending Instrument Fragile and/or Capacity Constraints [ ]
Investment Project Financing Financial Intermediaries [ ]
Series of Projects [ ]
Project Implementation Start Date Project Implementation End Date
27-Dec-2013 31-Dec-2018
Expected Effectiveness Date Expected Closing Date
15-May-2014 31-Dec-2019
Joint IFC
No
Sector Manager Sector Director Country Director Regional Vice President
Mark R. Lundell John A. Roome Klaus Rohland Axel van Trotsenburg .
Borrower: People’s Republic of China
Responsible Agency: State Office of Comprehensive Agriculture Development
Contact: Ms. Wang Lanying Title: Division Chief
Telephone No.:
86-10-6855-3312 Email: [email protected]
.
Project Financing Data(in USD Million)
[ X ] Loan [ ] Grant [ ] Guarantee
[ ] Credit [ ] IDA Grant [ ] Other
Total Project Cost: 313.14 Total Bank Financing: 200.00
Financing Gap: 0.00 .
Financing Source Amount
Borrower 0.00
International Bank for Reconstruction and Development
200.00
Local Govts. (Prov., District, City) of Borrowing Country
93.24
Sub-borrower(s) 19.90
Total 313.14 .
Expected Disbursements (in USD Million)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 0000 0000
Annual 9.56 16.31 47.43 57.67 58.56 10.47 0.00 0.00 0.00
Cumulative
9.56 25.86 73.30 130.97 189.53 200.00 200.00 0.00 0.00
.
Proposed Development Objective(s)
The project development objective is to develop sustainable and climate resilient agricultural production systems in selected areas of Gansu, Hunan, Jiangxi, and Liaoning provinces; Xinjiang Uygur Autonomous region; and Chonqging municipality. .
Components
Component Name Cost (USD Millions)
Irrigated Agriculture Infrastructure Improvement 174.47
Enhanced Climate-Smart Agricultural Practices 62.18
Institutional Strengthening and Capacity Building 28.52
Project Management Support 15.29 .
Institutional Data
Sector Board
Agriculture and Rural Development .
Sectors / Climate Change
Sector (Maximum 5 and total % must equal 100)
Major Sector Sector % Adaptation Co-benefits %
Mitigation Co-benefits %
Agriculture, fishing, and forestry Irrigation and drainage 60 25
Agriculture, fishing, and forestry Crops 25 40
Agriculture, fishing, and forestry Forestry 5 15
Agriculture, fishing, and forestry Agricultural extension and research
5 20
Industry and trade Agro-industry, marketing, and trade
5
Total 100
I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. .
Themes
Theme (Maximum 5 and total % must equal 100)
Major theme Theme %
Environment and natural resources management
Climate change 40
Rural development Rural services and infrastructure 25
Environment and natural resources management
Water resource management 15
Rural development Other rural development 10
Rural development Rural policies and institutions 10
Total 100 .
Compliance
Policy
Does the project depart from the CAS in content or in other significant respects?
Yes [ ] No [ X ]
.
Does the project require any waivers of Bank policies? Yes [ ] No [ X ]
Have these been approved by Bank management? Yes [ ] No [ X ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]
Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] .
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment OP/BP 4.01 X
Natural Habitats OP/BP 4.04 X
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
Projects on International Waterways OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X .
Legal Covenants
Name Recurrent Due Date Frequency
Groundwater X Yearly
Description of Covenant
No new tube wells shall be financed under the project. In addition: investment in existing tube-well shall not result in net increase in volume of ground water extracted for irrigation use or in evapotranspiration,
Name Recurrent Due Date Frequency
Dam Safety X Yearly
Description of Covenant
Jiangxi, Hunan, Gansu, & Chongqing shall employ at least one independent specialist each under terms and conditions acceptable to the Bank to inspect, evaluate the safety status of dams, their appurtenances and performance history; review and evaluate the effectiveness of O&M procedures; and furnish to the Bank written reports on findings & recommendations for remedial or safety related measures.
Name Recurrent Due Date Frequency
Mobile Expert Teams (METs) X Yearly
Description of Covenant
Each province, municipality, autonomous regions shall maintain METs at the provincial and county level including experts with adequate qualifications and experience in CC adaptation, water resources, agric., and env. with TORs, compositions, and resources acceptable to the WB, to be responsible for advising PMOs & farmer groups on technical & institutional matters related to project implementation .
Team Composition
Bank Staff
Name Title Specialization Unit
Minhnguyet Le Khorami Program Assistant Program Assistant EASER
Minneh Mary Kane Lead Counsel Lead Counsel LEGES
Zong-Cheng Lin Social Development EASCS
Yi Dong Sr Financial Management Specialist
Financial Management EASFM
Lourdes L. Anducta Program Assistant Program Assistant EASER
Ximing Zhang Sr Water Resources Spec.
Dams Safety EASCS
Rabih H. Karaky Senior Economist Team Leader EASER
Jun Zhao Rural Development Specialist
Rural Development EASCS
Feng Ji Senior Environmental Environment EASCS
Specialist
Zijing Niu Program Assistant Program Assistant EACCF
Yunqing Tian Team Assistant Team Assistant EACCF
Guoping Yu Procurement Specialist Procurement EASR2
Meixiang Zhou Social Development Specialist
Social Safeguards EASCS
Non Bank Staff
Name Title Office Phone City
Weiguo Zhou Cost/Financing Specialist
Gaithersburg, MD, USA
Jin Jiyun Agriculture-Soil Specialist
Beijing
Lin Wanlong Economist Beijing
Trangmar Bruce Agriculture/Institutions Specialist
ChristChurch
Chen Zhijun Water Resources Specialist
Rome
.
Locations
Country First Administrative Division
Location Planned Actual Comments
China Xinjiang Uygur Zizhiqu
Xinjiang Uygur Zizhiqu
X
China Jiangxi Sheng Jiangxi Sheng X
China Hunan Hunan Sheng X
China Gansu Sheng Gansu Sheng X
China Chongqing Shi Chongqing Shi X
China Liaoning Liaoning Sheng X
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I. STRATEGIC CONTEXT
A. Country Context
1. Since it embarked on a series of economic reforms starting in 1978, China has gradually shifted from a centrally-planned to a market-led economy. During this period, the economy has grown at a remarkable annual rate of about 10 percent and more than 500 million people have been lifted out of poverty. To sustain this rapid pace of development, China still has to address a number of challenges, including (a) maintaining high growth rates in the face of a complex external environment of weak economic growth, (b) managing the resource demands and the environmental consequences of rapid domestic growth; and (c) reducing inequalities in incomes and opportunities.
2. With rapid industrialization and increased urbanization, the share of the agriculture sector in total GDP declined from 30% in 1980 to 10% in 2010. However the role of the agricultural sector remains essential to the country’s rural economic growth, rural employment, and poverty reduction. More than 36 percent (279 million people) of the total labor force is employed in the agricultural sector which feeds about 20% of the world population, with less than 11% of the world’s agricultural land. Maintaining an acceptable level of food self-sufficiency, raising farmers’ incomes, and constructing the “New Socialist Countryside” are top priorities on the government’s development agenda, as articulated in the 12th Five Year Plan (FYP 2011-2015).
3. The 12th FYP also outlines China’s commitment to reduce greenhouse gas emissions, and “actively cope with” and “increase adaptability to” climate change. It describes China’s plans to accelerate research, development, and application of low carbon technologies in a number of sectors including agriculture. It calls for improving the levels of adaptation to climate change of certain key sectors “such as agriculture, forestry and water resources”, and for enhancing the monitoring, reporting, and prevention of extreme climatic events.
B. Sectoral and Institutional Context
4. China’s rapid agricultural productivity growth has been widely credited with initiating industrialization, inducing rapid reduction in poverty, and improving food security. Effective institutional reforms, especially the rural household contract responsibility system for farm land, coupled with market liberalization and rapid technological adoption has helped promote a significant expansion in agricultural output. China’s agricultural output grew at the rate of 4.6 percent per annum over the last three decades, more than four times its population growth rate. Grain crops are the most important in terms of area harvested (50% of total cultivated area), and value of output (40% of total value of agriculture output). Grain production increased from 325 mmt to 547 mmt over the last thirty years. The total land allocated to grain production however declined from 117 million ha to 109 million ha, indicating that the increase in production was driven by productivity gains.
5. Investment in irrigation, coupled with land saving technological change (improved seed varieties and fertilizers), and aided by market reforms played a key role in generating output growth. Total irrigated area increased from about 45 million ha in 1978 to nearly 60 million ha in 2009, now covering more than half of the total cultivated area. Irrigation expansion also enabled
2
a significant increase in the production of cotton, oilseeds, fruits and vegetables, and forage crops. As the economy grew and incomes rose, the demand for more quantity and quality, greater variety, higher value, and safer food has been going up. Meeting this rising demand for a more diversified and grain intensive diet will continue to be a priority for Chinese policy makers. Maintaining food availability, however, will have to be balanced with addressing environmental and resources sustainability, limited land and water resources, and increased climatic variability.
6. Despite past success, the Chinese agricultural sector is facing renewed development challenges today. These include the following:
(a) Vulnerability to Climate Change. The effects of a changing and variable climate are already visible in China and are expected to accelerate in the future. Average annual surface temperature increased by 1.2˚C over the last 50 years, and the increase was much faster in the north and northeastern provinces. Regional variations in precipitation have become more pronounced, with average precipitation levels dropping in the north, northeast, and northwest parts of the county while increasing in the south and southeast. Though the overall average precipitation may increase, there is a growing concern that in some regions, rain is no longer available or is reduced at the critical stages of crop development. Extreme climatic events are also becoming more severe, with longer droughts occurring in the north and more severe floods affecting the southern part of the country. Coping with the significant variability of future climatic impacts will require geographic shifts in agricultural production and more flexible and efficient water resources management. It also requires building the capacity of agricultural support institutions and related stakeholders (e.g. research, extension, agro-meteorology, etc.), and improving the services delivery mechanisms to provide sound and real time advice to farmers.
(b) Overexploitation of Water Resources and Low Water Productivity. Overall, China ranks in the bottom 25 percent of countries in water availability per capita. The share in total water use by agriculture is 64 percent. Overexploitation of water resources, including withdrawals from rivers, and overdraft of ground water resources causing a drop in water tables, is a common problem particularly in the dry northern regions of the country. Raising irrigation system efficiencies and improving water productivity are key to better managing water resources in agriculture. Average water productivity for grains is reported to be around 0.7-0.8 kg/m3, which is much lower than the levels of 2.0-2.5 kg/m3 recorded in the industrialized countries. Efficient and productive water use may be achieved through the rehabilitation and improvement of outdated, dilapidated and old irrigation and drainage infrastructure, ensuring adequate operation and maintenance of irrigation systems, promoting water saving irrigation technologies, adopting enhanced agricultural water management practices, and strengthening the capacity of farmers, water user associations (WUAs), and other stakeholders involved.
(c) Overuse of Chemical Inputs. China has one of the highest rates of fertilizer and pesticide use in the world. The intensive use of chemical inputs has led to (i) degradation of soil fertility; (ii) pollution of water systems; (iii) higher emissions of greenhouse gases (GHG); (iv) lower profits to farmers; and (v) increasing concerns about food safety. Field evidence suggests that fertilizer use in some areas may be cut by 30-60% with little or no loss of crop yields. An integrated nutrient management approach that incorporates technical measures (precise fertilizer application through soil and water testing, improved soil and crop management, dissemination of
3
organic fertilizers, nonpoint source pollution monitoring), capacity building (extension and training to farmers), policy aspects (promoting the development of organic, green, and non-polluting products, revisiting the subsidies for fertilizer manufacturers), and institutional interventions (role of farmer groups in knowledge transfer) are required to address this problem.
(d) Weak Farmer Organizations. WUAs fill an organizational and institutional gap in the irrigation management system and provide significant benefits such as improving irrigation systems operation and maintenance, contributing to water savings, reducing water conflicts, and ensuring better water fee collection rates. Despite early progress driven by government and donors’ collaboration, WUAs coverage remains limited in China and many existing WUAs continue to face financial, legal, and institutional challenges threatening their sustainability.
(e) Similar concerns have emerged about the development, governance, and performance of farmer cooperatives. Most of the cooperatives are organized along the “company + household” model, with a disproportional influence by companies (or by larger households) in the ownership, management, and decision-making. This structure also appears to be favored by local governments who tend to extend services and support to such cooperatives. Farmers’ cooperatives have an important role to play, particularly given the small and fragmented nature of Chinese farms, in facilitating access to markets for small producers and integrating them into higher value commodity chains. They are also a major conduit of knowledge and services to their members. The development of both WUAs and farmer cooperatives needs to be supported and monitored to ensure that farmer-led organizations are well equipped to operate and manage their assets, make their own decisions, and promote benefits that accrue to all members equitably.
C. Rationale for Bank Involvement
7. The Bank has had a long and successful engagement with China on the development of irrigated agriculture and the support of ecosystems restoration and resilience to extreme weather events. Between 1990 and 2010, the Bank supported the Loess Plateau Project series (I and II) and the Irrigated Agricultural Intensification Loan projects series (I, II and III). The impact of these projects was large and positive in terms of productivity gains, resilience to climate change, and improved farmers’ income. Most recently, the Bank, through a GEF-funded grant project, has been supporting the “Mainstreaming Climate Change Adaptation in Irrigated Agriculture Project” which integrates climate change related activities into a large Bank-financed project. The Bank has also supported a number of provincial-based operations in Sichuan, Jiangxi, Xinjiang and other provinces on agriculture modernization, irrigation development, and water resources conservation. 8. China’s agriculture sector is facing a period of modernization and severe resource constraints and climate change challenges. The proposed project provides an opportunity to help catalyze efforts by the Government of China (GOC) to address these challenges in a comprehensive manner. There is a need to demonstrate an approach that integrates infrastructure improvement with the promotion of climate smart agriculture practices and the strengthening of the involved institutions and their sustainability.
4
D. Higher Level Objectives to which the Project Contributes
9. The project directly addresses a key strategic theme of the Bank’s Country Partnership Strategy for China (2013-2016) namely to support greener growth by promoting sustainable agricultural practices that improve water and farm productivity, produce quality and safe products, and expand China’s ability to adapt to climate change in agriculture.
10. The project also contributes to maintaining sustainable food self-sufficiency, raising farmers’ incomes, and constructing the “New Socialist Countryside” in line with the objectives of the Government’s 12th FYP.
II. PROJECT DEVELOPMENT OBJECTIVE
A. PDO
11. The project development objective (PDO) is to develop sustainable and climate resilient agricultural production systems in selected areas of Gansu, Hunan, Jiangxi, and Liaoning provinces; Xinjiang Uygur Autonomous region; and Chonqging municipality. This will be achieved by investing in (i) irrigated agriculture infrastructure improvement, (ii) enhanced climate smart agricultural practices, and (iii) institutional strengthening and capacity building.
B. Project Beneficiaries
12. The project participating provinces, autonomous region, and municipality represent a varying range of economic development and agro-climatic conditions. Liaoning had the highest per capita GDP in 2011 (CNY 50,760), followed by Chongqing (CNY 34,500), Xinjiang (CNY 30,087), Hunan (CNY 29,880), Jiangxi (CNY 26,150), and Gansu (CNY 19,595). At the same time, the share of the primary sector in total GDP was highest in Xinjiang (17.2%), followed by Hunan (14.1%), Gansu (13.5%). Jiangxi (11.9%), Liaoning (8.6%), and Chongqing (8.44 %).
13. Direct beneficiaries of the project will be around 380,000 farm households in 33 counties/districts who will benefit directly from sustainable and climate resilient agriculture production systems. Among the project counties, four are classified as national poverty counties and five as provincial poverty counties.
14. Water saving irrigation and reduction of agricultural non-point source pollution will also benefit other populations and the local environment of these 33 counties/districts and in communities downstream. Local farmer organizations, including WUAs, farmer associations (FAs), and farmer cooperatives (FCs) will also benefit through capacity building, including training, equipment provision and financial support for operational activities.
15. Government departments at provincial and county level, including Provincial Offices for Comprehensive Agriculture Development (POCADs), County Offices for Comprehensive Agriculture Development (COCADs), Agriculture, Water Resources, Meteorology, and Environment bureaus; local and national technical institutions including the Chinese Academy of Agricultural Sciences; and private sector organizations will benefit from the project through capacity building and knowledge transfer including training, equipment, technical assistance, and support for applied research activities.
5
C. PDO Level Results Indicators
16. Achievement of the PDO will be measured by a number of key indicators including:
• Farm land area served with improved irrigation and drainage services (ha) • Increase in water productivity for major crops in project area by province (Kg/m3) • Increase in agriculture productivity of indicator crops in project areas by province
(Kg/ha) • Number of farmers who are members of Farmer organizations (Water User Associations,
Farmer Associations, and Farmer Cooperatives) (No.)
17. The project is expected to generate public benefits that would consist of: (a) more efficient use of scarce water resources; (b) improved irrigation and drainage infrastructure to support food production; (c) reduced environmental impact of agriculture production; and (d) strengthened capacity of farmer organizations and government agencies. Private benefits would mainly consist of increased agricultural productivity, increased incomes and resilience of farm enterprises to climate change through improved irrigation infrastructure, adaptive crop varieties, soil and crop management practices, and farmer training.
III. PROJECT DESCRIPTION
A. Project Components
18. The project would finance investments in 33 counties/districts in Gansu, Hunan, Jiangxi, and Liaoning provinces, Xinjiang Uygur Autonomous Region, and Chongqing Municipality. Interventions are tailored to the local conditions and determined in consultation with line bureau staff, technical institutions, farmer groups, local private sector representatives and local government. Project areas are selected based on specified criteria such as clustered arable land with adequate water resources, but with infrastructure and technology gaps, vulnerability to climate shocks, potential for agricultural modernization with demonstrative impacts, access to markets, etc. The project will comprise the following four components.
Component 1: Irrigated Agriculture Infrastructure Improvement (US$202.68 million. IBRD: US$155.33 million)
19. This component seeks to improve farmland infrastructure and the reliability and efficiency of irrigation and drainage systems. It aims at stimulating irrigated agriculture and water productivity by improving water use efficiency and the adoption of water saving techniques. Activities financed under this component include: (a) improvement of irrigation and drainage infrastructure (dredging and cleaning of irrigation canals and drainage channels, canal lining, improving canal structures, pumping stations, irrigation wells and small water storage systems); (b) development of high-efficiency irrigation systems, including low pressure pipeline water delivery systems, sprinkler, micro, and drip irrigation systems; (c) water monitoring, measurement, and management, including construction and installation of water measurement structures and facilities for the improved irrigation and drainage systems, monitoring of the
6
annual amount of groundwater pumped for irrigation within the project area in the three northern provinces, preparation and implementation of groundwater management plans for six counties in the northern provinces, and piloting crop evapotranspiration (ET) monitoring in three selected counties; and (d) rehabilitation of farm access roads and on-farm rural power transmission lines.
Component 2: Enhanced Climate-Smart Agricultural Practices (US$66.04 million. IBRD: US$23.69 million)
20. This component will build on the improved irrigation infrastructure and water delivery activities to improve the productivity of irrigated agriculture, increase farmers’ incomes, and reduce their vulnerability to adverse climatic events. Activities financed under this component include:
(a) Carrying out, or promotion, of soil conservation and improved land management
practices including, but not limited to: (i) land leveling, improved tillage practices, use of crop residues; (ii) improved soil fertility management (soil testing, precise/formula fertilizer application, organic fertilizers application, soil fertility monitoring); and (iii) development of multi-purpose agro ecological activities (e.g. shelterbelts, greenbelts, and windbreaks) and environmental monitoring;
(b) Promotion of climate-adaptation oriented agronomic techniques, including: (i) integrated
pest management; (ii) green and non-polluting production systems; (iii) farm-based demonstrations and extension of improved varieties and technologies, and green/plastic houses; and (iv) applied research on technical or policy-related measures to adaptation for climate change in agriculture.
Component 3: Institutional Strengthening and Capacity Building (US$28.63 million. IBRD: US$19.59 million)
21. This component seeks to improve the capacity of farmers, farmer organizations, and institutions at various levels for conducting and promoting sustainable and climate resilient agriculture. Activities under this component include: (a) development and transfer of technical knowledge through training and study tours; (b) awareness building, education and communication on climate smart agriculture to the wider range of stakeholders; (c) establishing and strengthening of water users associations for better operation and maintenance of on-farm irrigation infrastructure and improved water management for climate change resilience; (d) promotion and support to FCs and FAs to enhance collective action for services delivery, access to markets, and farmers based adaptation to climate change; (e) provision of technical assistance, through Mobile Expert Teams, and relevant equipment to farmers, farmer groups, and Project institutions in order to give them specialist and multidisciplinary expertise on various features of climate resilient agriculture (e.g. integrated and better water resources management, mitigation and adaptation to climate change in agriculture, environmental, social and economic aspects); and (f) project management capacity building for PMO staff at central, provincial, and county levels including provision of office equipment, training materials, and vehicles.
Component 4: Project Management Support (US$15.29 million. IBRD: US$0.89 million)
7
22. The purpose of this component is to provide support for project implementing agencies at each level to manage, implement, supervise and monitor project activities and progress. Activities to be financed under this component include: (a) projects surveys, design, and construction supervision; and (b) project management including management information systems, establishment of an effective monitoring and evaluation system to monitor physical and financial, outcomes and impact indicators; and the recruitment of any related consultancies.
B. Project Financing
23. The total estimated project cost, including contingencies is about US$313.14 million, comprised of an IBRD loan of US$200 million and counterpart funding of about US$113.14 million equivalent. MOF will be the responsible agency for repayment of the loan which will be passed on to the provinces and onward without interest or repayment requirements. Counterpart funding will consist of allocations made by the project provinces and counties/districts, and by contributions from local farmers.
Lending Instrument
24. The project proposes to use the instrument of Investment Project Financing (IPF) to support GoC’s efforts to modernize irrigated agriculture and improve its resilience to climate change within the selected project provinces. It will be on standard IBRD terms, with LIBOR-based US dollar denominated Variable Spread Loan (VSL) with all conversion options, level repayment of principal following a schedule linked to commitments and a repayment of 25 years, including a 5 year grace period.
Project Cost and Financing 25. Project costs and financing by component are given in Table below.
Project Components Project Cost (US$ Million)
IBRD Financing % Financing
1. Irrigated Agriculture Infrastructure Improvement 2. Enhanced Climate-Smart Agricultural Practices 3. Institutional Strengthening and Capacity Building 4. Project Management Support Total Baseline Costs Physical contingencies Price contingencies
174.47 62.18 28.52 15.29
280.46 14.16 18.02
155.33 23.69 19.59 0.89
199.50
89.0 38.1 68.7 5.8
71.1
Total Project Costs Front-End Fees Total Financing Required
312.64 0.50
313.14
199.50 0.50
200.00
63.8 100 63.9
C. Lessons Learned and Reflected in the Project Design
26. The project design has benefited from a number of lessons from past and on-going projects in China and elsewhere on irrigated agricultural development within the context of adapting to climate change. Key lessons include:
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27. Attempts to retrofit existing irrigated agriculture investments to include activities aimed at mitigation/adaptation to climate change often lead to sub-optimal outcomes. Both aspects should be tackled simultaneously early on, and irrigated agriculture investments should be tailored to the local agro-climatic conditions taking into consideration past trends and future climatic projections. Experience from the blended GEF grant funded project on Mainstreaming Climate Change Adaptation in Irrigated Agriculture with the IAIL 3 project has shown that while good results were achieved, it was a challenge to retrofit the project design to include activities aimed at promoting adaptation to climate change. 28. The packaging of integrated investments in irrigation and drainage, agricultural modernization and agro-ecological management, combined with associated rural infrastructure and institutional development at the water user level has proven to be a highly successful model under previous investments. Projects that focused on a single dimension such as irrigation service delivery alone for example may be easier to implement, however they often fall short of significantly improving farmer incomes without the complementary investments in agriculture, on-farm technologies, and institutional support. 29. Participation and ownership of stakeholders including famer organizations, technical line departments, and academic and research institutes is essential particularly for tackling the new concept of climate smart agriculture. SOCAD has had a successful record in past projects in drawing on the various agencies, and getting them involved in project design, preparation, implementation, and supervision. This ensured a high level of buy-in from all stakeholders and designing interventions that addressed and responded directly to the local needs. Experience from previous Bank-financed projects (e.g. IAIL2, IAIL 3, and the GEF-Mainstreaming Climate Change Adaptation in Irrigated Agriculture Project) that were implemented by SOCAD has generated many successful lessons of collaboration and buy–in from all project stakeholders.
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
30. The project will be implemented over a period of five years, across 33 counties/districts within four provinces, one municipality, and one autonomous region. SOCAD, a department within the MOF, and with offices at the provincial (POCADs) and county levels (COCADs) throughout the country, is the lead responsible agency for project management and coordination. 31. A National PMO (NPMO) has been set up within SOCAD. It will be responsible for project coordination, management support, monitoring and reporting, ensuring adherence to agreed standards, guidelines, and procedures, providing overall guidance on operational aspects to the various implementing units, and facilitating intra-knowledge transfer among project provinces and with external domestic and international agencies. 32. PMOs have also been established at provincial (PPMOs) and county (CPMO) levels within the POCADs and COCADs offices of the participating provinces. PMOs are staffed with officers who have experience in project management, financial management, procurement, and
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monitoring and evaluation. They will also be assisted by officers from the technical line bureaus of Water Resources, Agriculture, Forestry, and Finance at the corresponding level. PPMOs and CPMOs will be in charge of day to day management of project activities, overseeing project designs, implementing and supervising project activities, arranging for counterpart-funding and local labor contribution, preparing annual work plans, financial plans, procurement plans, monitoring and reporting on project progress, outputs, and outcomes.
33. Project Leading Groups (PLG) comprising representatives from local government and line bureaus including Finance, Water Resources, Agriculture, Forestry, Environmental Protection, Weather, have been established at the provincial/municipal/autonomous region and county levels to provide leadership, policy guidance, and strategic directions to the PMOs within their respective jurisdiction.
34. Mobile Expert Teams (MET) will be established under the PPMOs and CPMOs to provide expert advisory services, technical assistance, and review of design plans. METs will advise the PMOs within the province, and project stakeholders on technical and institutional matters to facilitate project implementation. METs would be comprised of leading experts in water conservation, engineering, agronomy, horticulture, agro forestry, climate change, research and extension, meteorology, and environmental sciences.
35. Technical Agencies including Water Resources, Agriculture, Forestry, Environment, and Finance will be involved in project planning and implementation. These departments will designate staff to help the project PMOs in project implementation and coordination. Secondly, these technical agencies will help provide materials and technical guidance at the provincial, municipal and county level to facilitate project implementation. For example, Finance departments will be responsible for the allocation of counterpart funds, reimbursement and disbursement, financial management, and participating in procurement. The Water Resources Agencies will assist in the planning and design for irrigation and drainage infrastructure works. The Agricultural Agencies will help provide extension and technical services to farmer groups including training and implementation of climate smart agriculture activities, as well as guide the development of farmer associations and cooperatives.
36. Farmer organizations including WUAs, FAs, and FCs will also participate in the implementation and supervision of project activities. WUAs will participate in system planning and design, construction supervision, as well as training. WUAs will gradually take over the responsibility of operation & maintenance (O&M) for improved irrigation and drainage systems under the project. Similarly farmer cooperatives/farmer associations will be involved in monitoring the implementation of the demonstration activities, identifying their training needs and facilitating services delivery. Women are expected to play a key role within the different farmer groups, by contributing to and benefiting from project investments.
37. A Project Implementation Plan (PIP) has been prepared to guide project implementation. The PIP describes the project rationale and objectives, components, project investment, benefits, financial and economic analysis, risk and sensitivity analysis, safeguards and fiduciary aspects, monitoring, supervision, and evaluation plans, and cost recovery and loan repayment. It
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describes implementation arrangements, including project management institutions and the roles of various stakeholders.
B. Results Monitoring and Evaluation
38. Systematic monitoring and evaluation (M&E) will be carried out to monitor progress, outputs, and outcomes of project activities. The results framework (Annex I) identifies the project outcome indicators that the project PMOs in collaboration with the line bureaus and the organizations involved in project implementation will collect data on. CPMOs will prepare regular M&E reports which will be sent to the PPMOs for compiling and verification. These reports would then be forwarded to the NPMO for review, consolidation, and reporting. Similarly, physical and financial progress will be tracked through the Management Information System that will be set up under the project. 39. Using the M&E collected information, the NPMO and the PPMOs will produce semi-annual reports to monitor project progress. Consolidated reports produced by the NPMO for the entire project will be shared with the Bank annually. In addition, a mid-term review will be conducted half way through project implementation for a comprehensive assessment of project progress and results. Reports of physical and financial progress of activity implementation will be prepared semi-annually and would constitute a key document for review by regular Bank supervision missions.
40. Finally, each province will commission an external agency/institute to design and undertake an impact evaluation assessment of project interventions on project beneficiaries based on representative surveys to be conducted at three stages of project implementation: a baseline at the onset of the project, a follow-up prior to mid-term, and a final round at project completion.
C. Sustainability 41. Sustainability is a key objective of the project. It will depend on a number of factors including the sound technical design of the planned interventions, the effectiveness of project management and implementation, well-functioning project institutions including farmer organizations put in place, and continued government commitment to climate smart agriculture.
42. To ensure the sustainability of project interventions, key aspects have been considered in project design including: (a) projections of climate change scenarios on water availability, demand and extreme weather events included in water assessment and engineering designs; (b) groundwater monitoring and management; and (c) establishing and training WUAs for sustainable O&M of improved water infrastructure; 43. The main project components namely irrigated agriculture infrastructure improvement, enhanced climate-smart agricultural practices and institutional strengthening and capacity building, were designed to directly contribute to the national objectives of sustained agricultural production to ensure self-sufficiency, raise farmers’ income, improve water and fertilizer use efficiency, reduce pesticide use and mitigate the environmental externalities from agriculture.
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44. SOCAD, the lead implementing agency, has demonstrated a high level of managerial capacity and commitment to implement effective and highly satisfactory World Bank projects in the past. It often did so by (i) engaging multiple stakeholders such as line bureaus, research institutes and farmer groups in project planning, design, implementation, and supervision; and (ii) by paying particular attention to good implementation quality including construction quality and institutional development with particular focus on farmer organizations. WUAs, Farmer Cooperatives/Associations will play a key role in sustaining project interventions by taking the lead role in the operation and maintenance of irrigation canals, managing their productive assets, and facilitating agricultural services delivery to their members respectively.
45. The 12th FYP clearly outlines the government commitment to actively cope with, and increase the adaptability to climate change in key sectors such as agriculture, water resources, and forestry. The GOC is committed to promoting climate resilient agricultural water management and sustainable water-saving irrigation development. The central government has stipulated the execution of a strict water sources management policy. The MWR has also issued regulations on irrigation management reform and the development of WUAs.
V. KEY RISKS AND MITIGATION MEASURES
A. Risk Ratings Summary Table
Risk Rating
Stakeholder Risk Low
Implementing Agency Risk
- Capacity Moderate
- Governance Moderate
Project Risk
- Design Substantial
- Social and Environmental Moderate
- Program and Donor Low
- Delivery Monitoring and Sustainability Moderate
- Exchange Rate Appreciation Moderate
Overall Implementation Risk Moderate
B. Overall Risk Rating Explanation
46. The main risks arise from the project’s potentially wide geographical coverage, multiplicity of institutions involved, weak understanding of the climate problems at project locations and/or the necessary ability to deal with it, and external shocks associated with spikes in commodity prices or increased climatic variability. The PDO, project components and implementation arrangements are designed to mitigate these risks. Based on the ORAF, the overall risk rating for the project is moderate.
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47. Implementation Risks. SOCAD, the lead implementing agency, is an experienced and resourceful agency that has implemented a number of Bank projects with a similar scale and scope and with satisfactory ratings and outcomes. Nonetheless, the project’s wide geographical coverage and the multiplicity of implementing agencies, may pose a risk of institutional capacity for effective implementation, particularly for some PMOs at provincial/county levels who are not familiar with Bank projects. There may also be a financial risk associated with the counterpart funding availability in some project counties due to their increased fiscal burden, and low level of farmer contributions due to high rural-urban migration.
48. A number of mitigating measures have been put in place to address the above implementation risks. First, the presence of a strong central coordinating agency with SOCAD will ensure that all PMOs receive timely guidance and share experiences and lessons to overcome implementation challenges and achieve a high level of implementation performance. Second, during project preparation a number of workshops have been organized by SOCAD to train the project PMOs on project management and familiarize them with World Bank policies and procedures. These training activities have been built into the project design and will continue over the course of project implementation. Third, counterpart funds have been confirmed with all project counties and provinces to ensure that all of them allocate funds into their annual budgets. Project counties have committed to ensure that the annual beneficiaries’ contributions are secured.
49. Project Risks. These risks are primarily attributed to project design and are rated substantial. There is still considerable uncertainty around the projections of climate change impacts and their magnitudes, particularly at the local level. This uncertainty gets reflected in future resources supply and demand projections, in the estimation of the frequency and severity of climatic extreme events, and in the cropping decisions that farmers would need to make. The uncertainty may generate difficulty in designing the right interventions for the right location, integrating them in regular agricultural development programs, and convincing farmers to adopt them.
50. This risk has been identified very early in project preparation, and the project design has promoted no-regret productivity enhancement and water conservation climate smart agricultural measures to better manage the resources and improve their productivity and sustainability. The project designs also benefited from extensive consultations with various technical line departments in each province (weather, water, agriculture, and forestry), research institutes and local farmers, to identify and design project interventions particular to the specific locations. Direct consultations were also held with the Chinese Academy of Agricultural Sciences (CAAS) to draw on their extensive and country-wide work on adaptation to climate change in agriculture. Finally, useful lessons were drawn from the GEF-financed project on Mainstreaming Climate Change in Irrigated Agriculture which was implemented in six provinces. A high level workshop was organized by SOCAD and attended by all provincial PMOs, where examples of successful interventions from the GEF project were shared.
51. During project implementation, these efforts will continue through the extensive technical knowledge transfer activities that have been designed to raise awareness and train farmers and multiple stakeholders on climate change resilient agriculture. A TA sub-component
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has also been designed to provide capacity building on the various features of climate smart agriculture through MET that will be involved to provide technical expertise and knowledge.
52. The risk of draw down on ground water resources, particularly in the physically water scarce counties of Gansu, Liaoning, and Xinjiang has been mitigated by (a) substantially reducing the scale of groundwater investments in these provinces in favor of surface water; (b) incorporating the MWR’s projections in the calculation of water balances and designing investments accordingly; and (c) preparing and implementing ground water management plans that will be strictly implemented and monitored.
53. The risk of monitoring and delivery is moderate given the high government commitment, strong project implementing agencies, active role of line departments, and full buy-in from farmer organizations which will be trained to assist in the implementation and supervision of project activities.
VI. APPRAISAL SUMMARY
A. Economic and Financial Analyses
54. Supporting climate change resilience of agricultural production systems through infrastructure improvement, sustainable agricultural practices, and strengthening the capacity of the institutions involved to operate, maintain, and manage the assets are proposed to promote and sustain agriculture and water productivity in the project areas. Physical infrastructure investments are expected to improve the delivery, conveyance and water use efficiency of irrigation and drainage systems in the project areas and thus stimulate crop yields, diversification and multi-cropping. Enhanced climate-smart agricultural practices such as balanced fertilization, improved tillage practices, crop residue shredding, organic fertilizer use, new seeds extension and biological pest control measures, coupled with institutional strengthening activities are expected to reduce the use of chemical fertilizer and pesticide and contribute to productivity increases.
55. To carry out the economic and financial analysis, crop models were built representing the major crops in the project area for each of the project counties and aggregated upwards. Quantifiable benefits include (a) increase in yields between the “with” and “without” scenarios (b) an increase in the multiple cropping index for the southern provinces of Jiangxi, Hunan, and Chongqing municipality, and (c) a partial shift in the area away from wheat and maize in favor of higher value crops (fruits and vegetables) in the northern provinces of Gansu and Liaoning, and Xinjiang Uygur Autonomous Region. The analysis does not quantify the benefits resulting from reduced water losses, or environmental benefits generated by the reduced non-point source pollution due to the decline in fertilizer and pesticide use. The incremental benefits from better resources utilization and improved services delivery due to institutional strengthening have also not been quantified. To this extent, the analysis underestimates the likely benefits of the project.
56. The Economic Rate of Return is estimated at 18.6% for the project. For individual provinces, the ERR varies from 15.5% to 23.3%. The financial rate of return (FRR) is calculated at 16.7% and varies from 13.4% to 20.6% among project provinces. The reports documenting this analysis are available in the project files.
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FRR and ERR
Province/Autonomous Region/Municipality FRR (percentage) ERR (percentage)
Xinjiang 15.9 17.8
Gansu 16.3 17.8
Hunan 13.4 15.5
Jiangxi 20.6 23.3
Chongqing 16.4 18.9
Liaoning 17.4 19.0
Project 16.7 18.6
57. Fiscal Impact. The central government will be responsible for the loan repayment and will pass it on to the project provinces as grants. Counterpart funds will be provided by the provincial and county governments and through farmer contributions. Fiscal analysis was undertaken to determine the impact of the project on the provinces and counties financial situation. It was found that for project provinces and counties, counterpart funding over the project implementation period represents less than 0.1% of their average fiscal expenditures over the past three years. Counterpart funding are expected to be within the fiscal capacities of project provinces and counties. Because of the abolishment of agricultural taxations, the project is not expected to have a direct contribution to fiscal revenues. Nonetheless, farmer incomes are expected to rise with the increase in productivity and the efficient use of water resources, and the projected reduction in pesticide and fertilizer application.
Sources of funds (US$ million) Province/Autonomous Region/Municipality
WB Loan Province
Counties/Districts Beneficiaries Total
Liaoning 34.0 16.1 1.8 3.4 55.2 Jiangxi 34.0 12.8 1.4 3.4 51.6 Hunan 34.0 11.5 2.7 3.4 51.6
Chongqing 30.0 18.2 0.7 3.0 51.9 Xinjiang 34.0 11.4 2.8 3.4 51.6 Gansu 33.0 11.6 2.3 3.3 50.1
SOCAD 1.0 0.0 0.0 0.0 1.0 Total 200.0 81.6 11.7 19.9 313.1
B. Technical
58. Mainstreaming Climate Change. Building on relevant government initiatives and a WB implemented GEF project, expected impacts of climate change on agriculture systems in each of the project counties and suitable adaptation options were summarized, analyzed and incorporated into the project design, especially in identification of project development objective, assessment of water resources, and project interventions proposed. Each project county followed a comprehensive approach, involving options on infrastructure improvement, technology
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dissemination and institutional strengthening, to develop climate-smart agriculture and capture the synergies among climate change adaptation, mitigation, food security and sustainable development. Priority was given to no-regret options in water resources management and agricultural development aimed at improving productivity while managing scarce resources and reducing the use of chemical inputs. For water infrastructure improvement and water management, the southern three provinces focused on integrated drought and flood management while the northern three provinces focused on high efficiency water use and water saving irrigation. 59. Water Resources Assessment. Water resources assessments were conducted for each of the project counties, following the technical guidelines issued by the Ministry of Water Resources. The impacts of climate change on future water availability and water demands were quantified in the assessments. Applying good lessons from previous WB water conservation project in China, the concept of real water-saving and Evapotranspiration (ET)-based water management were introduced to assess the effectiveness of proposed water saving interventions in the project areas. The assessment reports enabled informed decision making in system planning and engineering design of the project interventions in each of the project counties. 60. Groundwater Management. The two Northern provinces and the Autonomous region involve activities on groundwater irrigation in six of the selected project counties. Although proposed water interventions focus on rehabilitation of existing wells and development of high efficiency irrigation systems, proper groundwater monitoring and management is highlighted as a key issue for those areas. It was agreed during the project preparation that each of the three provinces/Autonomous region concerned (Gansu, Liaoning, Xinjiang) will monitor the annual groundwater pumping amount for irrigation within the project area as a project result indicator. Furthermore, groundwater management plans will be formulated for each of six selected counties during the first year of project implementation, strictly implemented, and closely monitored thereafter. This would include the provision for groundwater monitoring facilities and technical services from relevant professional agencies. 61. Agricultural Technologies. The main agricultural technology approaches include a) on-farm water saving technologies, such as land leveling, need-based irrigation, crop residues mulching; b) adaptation-oriented agronomic practices such as improved seeding technologies, demonstration of low carbon and conservation agriculture measures, crop rotations, soil fertility management, etc.; c) promotion of integrated pest management, integrated nutrient management, green, and non-polluting production techniques/practices, and obtaining certification for non-polluting and green production; d) improved access to farm equipment, technology, and extension services; e) enhanced post-harvest measures to add value to agricultural products and mitigate against climate and market risks; f) agro ecological activities to improve the resilience of the farm landscape and increase carbon sequestration; and g) adaptive research on technical and policy issues related to climate change adaptation and mitigation.
62. Relevant Technologies for Local Conditions. All technical approaches and main activities in each province are designed based on local conditions and main constrains, so that main issues and limiting factors in the project areas are addressed. For example, land leveling has been emphasized in hilly regions such as in Gansu and Chongqing, and in Jiangxi as well, while water saving technologies have been strengthened in regions with water shortage, such as
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in Xinjiang, Gansu and Liaoning. Deep loosening of the soil is more important in dry land cropping systems than rice based cropping systems and it has been emphasized in dry land cropping provinces such as in Liaoning and Gansu. Most soils in the project areas are low in soil organic matter, so return of crop straw and other organic materials to the soil has been emphasized for all project provinces. Some technologies that are important universally, such as improved seeding, low carbon and conservation agriculture measures, crop rotations, soil fertility management, integrated pest and nutrient managements, etc. will be conducted in all project areas. With this design and approach, project implementation will help to improve agricultural productivity, increase farmers’ income, achieve positive environmental outcomes and efficient use of natural resources, and contribute to sustainable development of agriculture in project areas.
63. Water User Associations. Functional WUAs are recognized as the most relevant organization to manage end-canal irrigation systems, and will therefore be established and supported to ensure sustainable operation and maintenance of the water infrastructure that will be improved under the project. WUAs will be established following hydraulic instead of administrative units, and will be involved in engineering design, construction supervision, and completion inspection. Improved irrigation infrastructure will be handed over to WUAs after completion of construction. WUAs will be trained and supported to ensure that they have adequate resources and capacity to operate and manage the irrigation systems. An operations manual has been prepared by SOCAD with the help of technical agencies to guide the WUA activity under the project. This manual, which will be annexed to the PIP, includes roles and responsibilities of WUAs, procedures for WUAs formation, training programs, etc.
C. Financial Management
64. The Bank loan proceeds, including overseeing the Designated Account, will be managed by SOCAD. A financial management capacity assessment has been conducted by the Bank and actions to strengthen the project’s financial management capacity have been agreed to with the relevant implementing units. The financial management assessment has concluded that with the implementation of the proposed actions, the financial management arrangements will satisfy the Bank’s minimum requirements under OP/BP 10.00. Annex 3 provides additional information on financial management.
D. Procurement
65. The NPMO will lead and coordinate the procurement activity for the whole project, and provide guidance to the PPMOs on all procurement related aspects. PPMOs will coordinate the procurement activity within their respective provinces, provide guidance to the CPMO on procurement and contract management, review procurement documents prepared by CPMOs and supervise and monitor procurement activities carried out by the CPMOs. A capacity assessment of the different PMOs has been conducted by reviewing the project organization structure and functions, past experience of implementing agencies, staff skills, quality and adequacy of supporting and control systems, and the legal and regulatory aspects. All PMOs have been legally established with at least one designated procurement staff in each PMO. While the NPMO and most of the PPMOs have rich experience with Bank-financed projects, CPMOs staff do not have adequate experience with Bank procurement procedures.
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66. To build the capacity of all PMO staff, the NPMO has organized a number of training workshops during project preparation. This training is expected to continue over the course of project implementations. Project procurement staff will also attend procurement training courses organized by the Bank periodically. Furthermore, the procurement activity under the project will be guided by the project procurement manual which was completed during project preparation.
67. The initial 18-month procurement plan describing procurement activities to be undertaken based on the first year’s annual program has been prepared by the NPMO, with input from the PPMOs and the CPMOs, and submitted by the NPMO to the Bank for review and no objection. The procurement plan has been reviewed and agreed to by the Bank during project negotiations. The procurement plan will be updated annually, or as required to reflect actual project implementation needs and submitted to the Bank for review.
E. Social (including Safeguards)
68. The project will have positive social impact on local rural communities and farmers. Agricultural productivity and resilience to climate variability and extreme weather events are expected to increase with the improvement of water conservation infrastructure, the promotion of enhanced climate smart agricultural practices, and the building of stakeholder capacity. An estimated 380,000 farm households across the 33 project counties would benefit directly from project activities. 69. Ethnic Minorities. The project activities in Xinjiang Uygur Autonomous Region and Liaoning Province will take place in some areas populated with ethnic minorities (such as Yanqi, Bohu and Fukang counties in Xinjiang and Lingyuan and Zhangwu counties in Liaoning). The ethnic minorities are mostly Uygur, Kazak and Mongol who were identified to fall within the definition of Indigenous Peoples (IP) as per OP4.10. Hence, the latter policy is triggered under the project.
70. A Social Assessment (SA) was carried out to facilitate free, prior and informed consultations among the ethnic minority communities. A total of 24 ethnic minority communities concentrated with Uygur, Kazak, and Mongolia populations are involved in the project. Through the SA exercise in 11 villages of 3 counties in Xinjiang and Liaoning provinces, the Uygur, Kazak, Hui, and Mongol communities expressed great enthusiasm and support to the project through which their agricultural production would be enhanced and modernized. The SA has recommended a number of measures to be taken to ensure that minorities’ needs are culturally appropriate and integrated in the project design and implementation. The SA identified the main local development needs including rehabilitation of irrigating canals, hardening of field access roads, leveling of farm land, upgrading of agricultural production facilities, and strengthening of farmers’ organizations such as WUAs, farmers associations and cooperatives. A range of measures to have been incorporated in the project investment. They include agricultural activities for income generation, especially for poor and ethnic minorities in the project areas, increasing soil fertility, rehabilitating irrigating facilities, providing technical and pest management training to farmers, and enhancing farmers’ organization. The SA also confirmed that the project design adequately addresses the needs of the ethnic areas and will have positive impacts on the IP people’s communities with modern agricultural technologies and facilities, farmers associations, income generation and other tangible support. Based on the findings and recommendations, the
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Ethnic Minority Development Plan (EMDP) was developed to steer project design and implementation for equitable opportunities for participation of the ethnic minority communities and adequate benefits to be shared with them as compatible to their local cultures.
71. Land Acquisition. Most of the project activities on infrastructure improvement would rehabilitate existing facilities on their original land base. In the case of any new facilities to be established, these will be done at the village level, and the land would be provided by the village as agreed at the selection of participating villages during project preparation. All the facilities supported by the project belong to village communities, and no land ownership or related property rights would change hands. However, because irrigation infrastructure facilities may extend beyond village boundaries and in the event of any case of land taking that was not foreseen at appraisal, a resettlement policy framework (RPF) was prepared by each of the six project provinces, as per Bank policy OP/BP4.12, to guide project activities under those circumstances.
72. Linkage possibility with ongoing or previous activities was also assessed. In the Xinjiang project area, Baiyanghe reservoir in Fukang County was under construction and was seen as a linked project to supply water to an irrigation district under this project support. Construction of Baiyanghe reservoir required about 2454 mu of state-owned grassland, mainly affecting 137 Kazak herdsmen in 24 households. A due diligence review of land acquisition for the reservoir was prepared. It found that land acquired was actually barren and dry land in remote and poor environment. It was acquired between 2009 and 2010 for affected households and 2009-2011 for relocated institutions. Land acquisition and compensation went through different rounds of consultations with all relevant stakeholders (agencies and people) at various levels. The due diligence report confirmed that the involuntary resettlement process and the standards for compensation and restoration were designed, planned and implemented in line with relevant Chinese laws and regulations as well as the Bank policy OP/BP4.12, and that all affected people and herders were satisfied with the resettlement measures taken and the results they experienced. Since the livelihoods restoration of the affected people needs to be monitored over a longer period of time, the due diligence review made recommendations for monitoring and evaluation at least twice for the first two years of project implementation. The PMO will monitor the follow ups of the recommendations of the due diligence review livelihood restoration during project implementation and, as necessary, remedial action will be taken.
73. An environmental due diligence investigation for Baiyanghe Reservoir was also conducted by Research Center for Eco-Environmental Science, Chinese Academy of Science, confirming that the reservoir was managed in compliance with Chinese EA laws and regulations which are broadly consistent with the Bank policy; and that there was no outstanding environmental issue.
74. Gender Aspects. Social and gender equality will continue to be promoted through wide and equal participation of, and consultation with, the local people in project areas throughout project implementation. Special attention is given to the participation of vulnerable people, men and women, with a good degree of gender sensitivity. Equal participation and gender responsiveness is reflected in project activities such as training, water user associations, farmer’s cooperatives and associations, as well as other capacity building activities.
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F. Environment (including Safeguards)
75. This is a Category B project. Applicable environmental safeguard policies for the project include: Environmental Assessment (OP4.01), Pest Management (OP4.09) and Safety of Dams (OP/BP 4.37). Based on the specified criteria, project areas are limited to the existing farmlands which have been heavily influenced by human activities. No ecologically sensitive site (e.g. natural habitat, nature reserves, etc.) has been found in the project influence area. The principal negative environmental impacts are construction-related, which are associated with the rehabilitation and improvement of existing on-farm irrigation and drainage infrastructure. The project will not have the potential to cause significant conversion (loss) or degradation of natural habitats. Therefore, Natural Habitats (OP4.04) is not triggered.
76. Environmental Assessment (OP4.01). Environmental impacts of the proposed project are overall positive. The selection criteria require that project activities be in compliance with relevant water resources management plans. The project would generate real water saving in project areas each year through the improvement of water conservation infrastructure, and would reduce the use of pesticides and fertilizers through balanced fertilization application and integrated pest management. Negative impacts are related mainly to construction activities which are limited to the rehabilitation and improvement of existing on-farm irrigation and drainage infrastructure. These impacts (e.g. noise, wastewater, waste, and disturbance to local communities) will be temporary, limited and local in nature. An Environmental Management Plan has been prepared for the investments in accordance with Environmental Assessment Policy OP4.01.
77. Pest Management (OP4.09). The project will include promotion of integrated pest management (IPM) and production systems that meet green and non-polluting certification standards. The improved irrigation facilities and diversification of crop systems may induce some pesticide use, but the environmental and health risks are minor. A Pest Management Plan (PMP) has been developed for each province addressing pest management issues. The PMP incorporates the existing good pest management practices from the project provinces and proposes a number of activities such as: (i) promoting IPM to reduce the use of toxic pesticides, e.g. improvement of pest forecasting, bait lamps, crop rotation, pest resistant varieties, and balanced fertilization; (ii) training and capacity building for local farmers and governmental agencies; (iii) introducing and promoting biological and botanical pesticides; (iv) strengthening monitoring; and (v) reinforcing regulatory aspects. Implementation of the PMP will be undertaken by the County PMOs, and farmer communities, with assistance of consultants, County Plant Protection Stations and County Agricultural Technology Extension Services Stations.
78. Dam Safety (OP 4.37). The Project does not finance construction of dams, but the irrigation systems financed by the Project would draw water directly from reservoirs formed by 43 existing dams and one dam under construction (DUC), and they could not function if the dams failed. A number of upstream existing dams also provide flood protection to the water diversion works being constructed under the Project; failure of these dams could cause extensive damage to, or failure of, the new Bank-funded structures. In addition, based on the requirements of OP4.37, the project provinces hired one or more independent dam specialists to (a) inspect and evaluate the safety status of the existing dam, their appurtenances, and their performance
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history; (b) review and evaluate the owner's operation and maintenance procedures; and (c) provide written reports of findings and recommendations for any remedial work or safety-related measures necessary to upgrade the existing dams to an acceptable safety standard. Dam safety plans and emergency preparedness plans have been prepared for the 43 existing dams and for the dam under construction. The Bank dam safety expert will work together with the client and dam safety experts to ensure the project is in compliance with OP4.37.
79. Public Consultation and Disclosure. In accordance with the Bank Safeguard policies and Chinese regulations, public consultations have been conducted with project-affected persons and relevant stakeholders, including public consultation meetings and questionnaire surveys. Their opinions and concerns have been taken into account in the safeguard documents and the project design. The Ethnic Minority Development Plan and the Resettlement Policy Framework were disclosed locally on August 27, 2012. They were subsequently disclosed on the Bank’s Infoshop on September 3 and September 4, 2012 respectively. The due diligence report on resettlement was disclosed locally on September 20, 2012 and by the Bank Infoshop on October 18, 2012. The Pest Management Plans (PMPs) and the Environment Management Plan (EMP) were locally disclosed on September 5 and September 6, 2012 respectively. They were subsequently disclosed by the Bank Infoshop on October 17, 2012.
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Annex 1: Results Framework and Monitoring
CHINA: Integrated Modern Agriculture Development Project
Project Development Objective (PDO): Develop sustainable and climate resilient agricultural production systems in selected areas of Gansu, Hunan, Jiangxi, and Liaoning provinces; Xinjiang Uygur Autonomous region; and Chongqing municipality. .
PDO Level Results Indicators* C
ore Unit of
Measure Baseline
Cumulative Target Values** Frequency
Data Source/ Methodology
Responsibility for Data
Collection
Description (indicator
definition etc.) YR 1 YR 2 YR3 YR 4 YR5 Indicator One:
Total Farmland area served with improved irrigation and drainage
services Ha 0 12,000 37,000 62,000 84,000 94,000 Annual
Field survey,
Project MIS
CPMO M&E
Consultant
Indicator Two: Increase in water productivity
for major crop by province LN: Maize GS: Maize XJ: Wheat JX: Rice HN: Rice
CHQ: Rice
Kg/m3
LN: 1.56 GS: 1.32 XJ: 1.25 JX: 1.14 HN:1.18
CHQ: 1.05
1.57 1.36 1.32 1.17 1.20 1.08
1.66 1.40 1.39 1.22 1.23 1.13
1.76 1.46 1.47 1.26 1.25 1.18
1.86 1.52 1.52 1.30 1.27 1.23
1.90 1.56 1.56 1.33 1.30 1.27
Annual Field survey CPMO M&E
Consultant
Indicator Three : Increase in Agriculture Productivity by
Province: LN: Maize crop GS: Maize crop XJ: Wheat crop JX: Rice crop HN: Rice crop
CHQ: Rice crop
Kg/ha
LN: 8300 GS: 7500 XJ: 5300 JX: 5850 HN:5900
CHQ: 6700
8328 7560 5310 5970 6000 6780
8693 7744 5451 6150 6100 6960
9014 7933 5595 6300 6300 7145
9303 8127 5743 6475 6420 7335
9591 8325 5899 6558 6505 7530
Annual Field Survey CPMO M&E
Consultant
Indicator Four: Number of farmers who are members of
Farmer organizations (WUA/FA/FC)
No 29,000 32,000 37,000 41,000 44,000 46,000 Annual Project MIS FO records
CPMO
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INTERMEDIATE RESULTS
Intermediate Result (Component One): Irrigated Agriculture Infrastructure Improvement
Intermediate Result indicator One: Overall irrigation water
use efficiency
%
LN: 56 GS: 46 XJ:53 JX: 52 HN: 52
CHQ: 45
59 48 54 56 55 47
62 51 57 58 57 50
64 53 60 61 60 52
67 55 63 64 62 54
70 58 64 66 65 56
Annual Field
monitoring
CPMO M&E
Consultant
Intermediate Result indicator Two: New area under water
saving irrigation ha 0 9,000 26,000 43,000 59,000 65,000 Annual
Field survey,
Project MIS CPMO
Intermediate Result indicator Three : Volume of Groundwater
extracted
10,000 M3
LN:6188 GS: 2818 XJ: 4282
6100 2780 4259
5900 2745 4234
5700 2713 4202
5500 2680 4181
5380 2636 4178
Annual Field
monitoring
PPMO CPMO,
M&E teams
Intermediate Result Four: Farm roads constructed and
rehabilitated
km 0 336 972 1,550 2,125 2,262 Annual Project MIS CPMO,
M&E teams
Intermediate Result (Component Two): Enhanced climate-smart agricultural practices
Intermediate Result indicator One: Increase in area of leveled land and improved soil physical
conditions (tillage practices)
ha 0 6,405 16,076 25,839 35,648 38,537 Annual Project MIS Field survey
CPMO, M&E teams
Intermediate Result indicator Two: Increase in area adopting balanced fertilization (include
crop residues returned and organic fertilizer)
ha 0 3,616 16,084 33,103 48,314 62,340 Annual Project MIS Field survey
CPMO, M&E teams
Intermediate Result indicator Three: Increase in area under
IPM/green/non-polluted production
ha 0 11,000 29,000 47.000 64,500 72,000 Annual Project MIS Field survey
CPMO, M&E teams
Intermediate Result indicator Four: Increase in area under
shelter- and agro-forest plantation
ha 0 450 1,150 1,750 2,350 2,420 Annual Project MIS Field survey
CPMO, M&E teams
Intermediate Result indicator Five: Number of new varieties
and new technologies No 0 73 121 165 185 208 Annual
Project MIS Field survey
CPMO, M&E teams
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Intermediate Result (Component Three): Institutional strengthening and capacity building.
Intermediate Result indicator One: Improved irrigated area devolved to WUA for O&M
ha 0 6,000 16,000 26,000 33,000 36,000 Annual Field survey
WUA records
CPMO WUAs
Intermediate Result indicator Two: Number of
WUAs/FAs/FCs supported and delivering services to their
members
No WUA:0 FAs:0 FCs:0
42 15 34
101 31 89
150 41
126
180 46
146
183 47
149 Annual
Project MIS, FO records
CPMO WUAs/FAs/F
Cs
Intermediate Result indicator Three: Women members of farmer organizations formed
No. 7,600 9,000 11,000 12,500 13,600 14,600 Annual Field
Surveys FO records
CPMO WUAs/FAs/F
Cs
Intermediate Result indicator Four: Farmers training
In which women In which ethnic minorities
Person Month
FarmersWomenEthnic:
2,090 690 112
4,900 1,670 280
7,710 2,670 447
10,300 3,590 544
12,000 4,200 595
Annual Project MIS
Field Surveys
CPMO
Intermediate Result indicator Five: PMO staff training
Person Month
0 292 552 805 1,042 1,205 Annual Project MIS PPMO CPMO
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Annex 2: Detailed Project Description
CHINA: Integrated Modern Agriculture Development Project I. Introduction and Summary 1. The project development objective (PDO) is to develop sustainable and climate resilient agricultural production systems in selected areas of Gansu, Hunan, Jiangxi, and Liaoning provinces; Xinjiang Uygur Autonomous region; and Chonqging municipality. This will be achieved by investing in (i) irrigated agriculture infrastructure improvement, (ii) enhanced climate smart agricultural practices, and (iii) institutional strengthening and capacity building.
2. Achievement of the PDO will be assessed through key indicators measuring increases in the project area (a) farm land area served with improved irrigation and drainage services, (b) water productivity, (c) agricultural productivity and (d) number of farmers who are members of producers associations and cooperatives.
3. The project is expected to generate public benefits that would consist of (a) more efficient use of scarce water resources, (b) improved irrigation infrastructure to support food production; (c) reduced environmental impact of agriculture production; and (d) strengthened capacity of farmer organizations and government agencies. Private benefits will consist mainly of increased agricultural productivity, increased incomes and resilience of farm enterprises to climate change through improved irrigation infrastructure, adaptive crop varieties, soil and crop management practices, and farmer training.
4. The project will be implemented over five years in 33 counties/districts in Gansu, Hunan, Jiangxi, and Liaoning provinces, Xinjiang Uygur Autonomous Region, and Chongqing Municipality. Interventions will be tailored to the local conditions and will be determined in consultation with line bureau staff, technical institutions, farmer groups, local private sector representatives and local government. Project areas are selected based on specified criteria such as clustered arable land with adequate water resources, but with infrastructure and technology gaps, vulnerability to climate shocks, potential for agricultural modernization with demonstrative impacts, and access to markets.
5. The total estimated project cost, including contingencies is about US$313.14 million, comprising an IBRD loan of US$200 million and counterpart funding of about US$113.14 million equivalent. Counterpart funds would comprise allocations from the six provinces/regions/municipalities, participating counties, and farmers contribution. The government of China would be responsible for loan repayment and will pass on the loan to the provinces as grants.
II. Project Components 6. Component 1: Irrigated Agriculture Infrastructure Improvement (US$202.68 million). This component aims to enhance agriculture and water productivity and climate resilience through improving farmland infrastructure, especially irrigation and drainage systems, and adopting water saving irrigation. Activities will be customized for each scheme based on
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analysis of the stakeholders input related to constraints and opportunities. Activities financed under this component include: (a) improvement of around 94,000 ha of irrigation and drainage area; (b) development of approximately 66,000 ha of high-efficiency irrigation systems; (c) water monitoring, measurement and management, including construction and installation of various water measurement structures and facilities for the irrigation and drainage systems improved under the project, monitoring of annual groundwater pumping amount for agriculture irrigation within the project areas in the three northern provinces, preparation and implementation of groundwater management plans for six selected counties, and piloting crop evapo-transpiration (ET) monitoring in three selected counties; and (d) rehabilitation of rural electricity and on-farm access road networks. Climate change considerations will be incorporated into water assessment, system planning and engineering designs, especially in selecting canal structures and pumping sets. In cases where local climate change impacts are uncertain, no-regret options will be adopted. Specific activities under this component include:
(a) Improvement of Irrigation and Drainage Area (US$137.03 million). The specific measures and activities include:
(i) Excavation and desilting of 4,480 km of branch, tertiary and quaternary irrigation and canals.
(ii) Lining of 2,736 km of branch, tertiary and quaternary irrigation and drainage canals.
(iii) Construction of canal structures, including 3,402 bridges, 12,692 culverts, 5,174 gates, 197 aqueducts, 1,592 water drops, and 10,196 outlets.
(iv) Rehabilitation and construction of 188 pumping stations.
(v) Rehabilitation of 828 existing wells, including tube wells and dug wells.
(vi) Construction of small water storage facilities, including 30 ha of water storage paddy fields, 482 cisterns, 127 small weirs, and 377 sedimentation ponds.
(vii) Construction of 1,155 water measurement structures and installation of 1,948 water measurement facilities for the irrigation and drainage systems improved under the project.
(viii) Monitoring of annual groundwater pumping amount for agriculture irrigation within the project areas in three provinces (Xinjiang, Gansu and Liaoning)
(ix) Preparation and implementation of groundwater management plans for six counties (Dunhuang, Lingtai, Gaotai, Fukang, Lingyuan and Zhangwu)
(x) Piloting crop evapo-transpiration (ET) monitoring in three counties (Denghuang, Fukang and Lingyuan).
(b) Development of High-Efficiency Irrigation Systems (US$26.93 million). The specific measures and activities include:
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(i) Development of 748 km of low pressure pipeline water delivery systems, covering around 7,727 ha of farmland area.
(ii) Installation of 405 sprinkler systems, covering 3,186 ha of farmland area.
(iii) Installation of around 1,608 micro and drip irrigation systems, covering approximately 8,180 ha of farmland area.
(iv) Development of 198 km of movable hoses, covering 3,930 ha of farmland area.
(c) Rehabilitation of Rural Electricity and On-Farm Access Road Networks (US$38.72 million). The measures and activities include:
(i) Installation of 274 km rural electricity lines and 438 transformers.
(ii) Construction of 2,262 km of on-farm access roads, including 241 km of concrete roads under four-meter width, 1,389 km of gravel roads, and 632 km of earth roads.
7. Component 2: Enhanced Climate-Smart Agricultural Practices (US$66.04 million). This component will build on the improved irrigation infrastructure and water delivery activities in Component 1 to improve the productivity of agriculture, increase farmers’ incomes, and reduce their vulnerability to adverse climatic events. Specific activities include two subcomponents:
(a) Soil Conservation and Land Management Practices (US$38.69 million). The project will support soil/land conservation and management practices that contribute to climate change adaptation through improved soil-water management, soil moisture retention, soil fertility, and improved management of the agro-ecological environment. Activities and measures under the subcomponent will be implemented together as an integrated package of investments for each project area. The specific activities and measures include:
(i) Land leveling (11,460 ha). Land in crop production areas with uneven land surfaces will be leveled using precision land leveling techniques and machinery to enable more even application of irrigation water, and consistent water depth in rice paddy fields. Field boundaries will also be shaped into more rectangular forms for ease and efficiency of tractor-based tillage. In Chongqing, land leveling will include leveling of terrace surfaces and some terrace reshaping into rectangular fields.
(ii) Improved tillage practices. Tillage practices to improve soil moisture retention and increase effective plant rooting depth will be implemented in all provinces except Hunan (total 27,098 ha). Tillage practices used will vary among provinces and local soil/crop cultivation needs but will include soil loosening, deep plowing, conservation tillage, double furrow cultivation, ridging, and straw return to the soil during tillage.
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(iii) Use of crop residues. Various types of crop residue management will be applied in all provinces to improve soil organic matter content, soil moisture and nutrient retention. Crop residue management will include mulching, spreading of crop residues on the soil surface to reduce evaporation, mechanical crushing and chopping of crop residues and incorporating them into the soil through tillage, and application of a biological agent prior to soil incorporation to speed up crop residue decomposition. These practices will be applied over a total area of 33,462 hectares.
(iv) Improved soil fertility management. Soil sampling and soil fertility testing for approximately 11,200 sites (58,800 ha) will be undertaken so that chemical fertilizer is applied according to fertilizer recommendations based on soil test results. This will result in more efficient application of chemical fertilizers. The use of organic fertilizers (32,816 ha) will be promoted through provision of financial support in line with current Chinese government practice. Improvement of 377 ha of saline alkaline soil in Liaoning will also be supported to ameliorate soil salinity. All provinces will undertake regular monitoring of selected soil fertility properties at standard sites throughout the project period to evaluate the impact of soil and land management practices on soil fertility status. Provinces will also monitor non-point pollution through sampling and testing of indicators such as irrigation water quality and soils for heavy metal content.
(v) Organic fertilizer field tanks. An estimated 1577 field tanks for storing, mixing and applying organic manures as fertilizers will be constructed in Chongqing and Gansu.
(vi) Farm shelter belts and economic trees. The project will support purchase and planting of approximately 3.93 million tree seedlings (2470 ha) for establishment of farm shelter belts and windbreaks to reduce wind speed, evaporation and crop lodging. Where possible, tree species will be used that also have an economic benefit. Liaoning, Hunan, Chongqing and Gansu will also support purchase and planting of seedlings for economic tree crops, including Sichuan pepper, citrus, and for soil conservation purposes on sloping land.
(b) Adaptation Oriented Agronomic Techniques (US$27.35 million). Adaptation-oriented agronomic measures include integrated pest management, promotion of agriculture production systems that comply with green or non-polluting certification standards, large-area demonstration and extension of new integrated technology packages on farmer’s fields, and applied research. Specific activities include:
(i) Integrated pest management (IPM). Project investment in IPM will complement existing IPM approaches through purchase of trap lights and bio-control agents in each province. The IPM techniques are expected to be applied over a total area of 58,655 hectares. These investments will not be single investments on their own, but part of a wider IPM package, including
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agricultural practices for pest and disease control, use of low toxicity pesticides, biological and physical control measures. Training in all relevant methods of integrated pest management will be included in farmer training activities (Component C), and the full range of IPM practices will be used in all project cropping areas, demonstration and extension activities.
(ii) Certification of green and non-polluted production systems. The project will support farm enterprises and cooperatives to standardize their production systems and environmental compliance by providing subsidies for registration to achieve green (58 farms or products in Liaoning and Chongqing, with an area of around 2,630 ha), or non-polluting certification (69 farms or products in Liaoning, Gansu and Xinjiang with a total area of 14545 ha). The amount and application process will follow China’s domestic rules and will be provided after certification has been obtained.
(iii) Demonstration and extension. All provinces will implement large-scale demonstration areas and extension of new integrated agricultural technology packages on farmer’s fields that will increase their resilience to climate change. Such integrated packages will be comprised of relevant technologies that have proven to be successful in climate change adaptation in China, but are not widely known in project areas to date. Packages may include diversification to new cultivars, improved seeding technologies, crop rotations, drought/heat/frost/pest resistant varieties depending on the local conditions, systems and techniques of rice intensification, and supplemental irrigation, with all farm management and technology demonstrations applied as integrated packages. These may also be used to demonstrate and extend successful outcomes of the applied research activities. About 754,500 m2 of greenhouse development in Jiangxi and Chongqing will be also supported by providing financial support to assist with greenhouse construction.
(iv) Applied research. Each province will undertake two practical applied research (Liaoning will do three) projects on technical and policy-related issues to resolve specific problems or bottlenecks to agricultural production or water management as a result of climate change. The applied research projects will be implemented during the first two years of project implementation so that research results can be applied during the last three years of implementation.
8. Component 3: Institutional Strengthening and Capacity Building (US$28.63 million). This component seeks to improve the capacity of farmers, farmer groups and institutions at various levels for conducting and promoting sustainable and climate resilient irrigated agriculture. The component will fully integrate with and add value to the irrigation infrastructure and agriculture investments. It will support (a) development and transfer of technical knowledge through training, study tours, information dissemination to help farmers adapt to, or cope with, climate risks; (b) establishing and strengthening of participatory farmer organizations including improved water users associations for improved operation and maintenance of on-farm irrigation infrastructure, improved water management for climate change resilience; and promotion and support to farmer associations and farmer cooperatives, including the provision of equipment, to
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enhance collective action for services delivery, access to markets, and farmers based adaptation to climate change; and (c) project management training for PMO staff at central, provincial, and county levels including provision of office equipment, training materials, and vehicles.
9. This component would also finance technical assistance required to provide specialist and multidisciplinary expertise to farmer organizations, and project institutions on various aspects of climate resilient agriculture (e.g. integrated and better water resources management, mitigation and adaptation to climate change in agriculture, environmental, social and economic aspects, and environmental monitoring).
(a) Technical Knowledge Transfer (US$10.70 million). The following items will be supported:
(i) Farmer training. Approximately 12,480 person-months of farmer training will be provided in agricultural production and climate change adaptation practices.
(ii) Information dissemination. The activity will also finance awareness building/education and communication on climate smart agriculture to the wider range of stakeholders. This will include information awareness campaigns through professionally produced multi-media, including radio, television, websites, technical training materials, brochures, and other hardcopy promotional and extension materials.
(iii) Technical assistance. Technical assistance (around 825 person-months) will be financed to provide farmers, farmer groups, and project institutions with specialist and multidisciplinary expertise (Mobile Expert Teams) on various features of climate resilient agriculture. Such expertise may include, but not be restricted to, integrated water resources management, mitigation and adaptation to climate change in agriculture, environmental, social and economic aspects).
(b) Farmer Organizations Strengthening (US$9.08 million). The following items will be supported:
(i) Farmer organization strengthening. The project will provide financing to support the establishment and strengthening of farmer organizations. This will include 183 water user associations (and their water user groups) for operation and maintenance of on-farm irrigation infrastructure; promotion and support to 159 farmer cooperatives and 47 farmer associations to enhance services delivery, access to markets, and farmer-based adaptation to climate change. Specific investment items will include financial support to organizational establishment and registration expenses, staff and member training, and specific equipment and civil works items to augment the function and role of the farmer organization.
(ii) Infrastructure operation and maintenance. Support will be provided to WUAs for water infrastructure operation and maintenance on irrigation schemes improved under the project.
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(c) Project Management Capacity Building (US$8.85 million). The following items will be supported:
(i) Training for Project Management Offices. Project management training to strengthen PMO capacity will be conducted for PMO staff at central, provincial, and county levels, including domestic training within the PRC (1,149 person-months) and overseas (56 person-months). Training will include World Bank procedures in financial management, procurement, safeguards and project monitoring and evaluation.
(ii) Study tours. The project will support domestic (934.5 person-months) and overseas (19 person-months) study tours to expose project and technical staff to new technologies and practices for climate change adaptation in agriculture production.
(iii) Office equipment. The project will finance office equipment to support project management at provincial and county levels, including about 600 sets of office equipment and stationary, including computers, printers, photocopiers, digital cameras, video cameras, fax machines, LCD projectors, scanners, and data recording pens. Thirty three units of vehicles will also be procured.
10. Component 4: Project Management Support (US$15.29 million). The purpose of this component is to strengthen capacity at each level to design, manage, implement and monitor project activities; to establish, implement and operate an effective project Management Information System (MIS), and to effectively monitor and evaluate project results and outcomes. Activities to be funded under this component will include:
(a) Project Surveys, Design, and Construction Supervision (US$9.58 million). This would comprise project surveys, design and management including field surveys for engineering design, preparation of preliminary designs and construction drawings, and for third party construction quality supervision.
(b) Project Management, Monitoring and Evaluation (US$5.71 million). This would comprise costs of management, supervision, monitoring and evaluation of core project implementation related to activity completion checking and acceptance, financial management, reimbursement, procurement, reporting, and monitoring and evaluation. An effective Management Information system (MIS) would be established to track the physical and financial progress. Similarly, project results and outcome indicators will be monitored and measured. .
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Annex 3: Implementation Arrangements
CHINA: Integrated Modern Agriculture Development Project Project Institutional and Implementation Arrangements
1. The project will be implemented over a period of five years in 33 counties/cities/prefectures across six provinces/municipality/autonomous region. The implementing agencies are SOCAD at the national level, POCADs at the provincial level, and COCADs at the county/city level. The CAD system is under the administrative jurisdiction of the Ministry of Finance. 2. The institutional and implementation arrangement for the project will follow similar arrangements to those adopted under previous World Bank projects implemented by SOCAD in China including most recently the IAIL3-GEF project and IAIL 2. 3. Project Leading Groups (PLGs) comprising of government leaders and senior officials from various related line agencies (Finance, Water Resources, Weather, Agriculture and Forestry) have been established in all project provinces and counties. Senior scientists from the local institutes could also be members of the PLGs. The PLGs act as steering committees that oversee project implementation and provide strategic direction and guidance to the implementing agencies on policy matters, and project planning and implementation. They periodically evaluate implementation progress, facilitate inter-departmental coordination, and resolve any conflict. 4. Day to day implementation of the project is the responsibility of the Project Management offices (PMOs) which have been established at the county (CPMO), province (PPMO) and national level (NPMO) within the corresponding CAD offices. PMOs are comprised of CAD staff who are experienced in project management, procurement and financial management. Water resources engineers, agronomists, and forestry specialists will assist the PMOs in project implementation and supervision. 5. The NPMO oversees overall project implementation, and provides leadership management support and coordination. Its main responsibilities include: • Preparing the Feasibility Study for the entire project and the Project Implementation Plan • Reviewing and compiling annual implementation plans, procurement plans, and financing plans received from the provinces. • Approving and issuing annual investment plans and following up closely with the provinces on their implementation. • Monitoring and tracking project progress, disbursement of World Bank loan and counterpart funds. • Checking and urging timely allocation of counterpart funds. • Contacting the Bank on behalf of the provinces. • Guiding the work of provincial PMOs. • Reviewing progress, quality, and fund allocation during project implementation.
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• Reviewing and processing requests for reimbursement. • Ensuring proper use of loans. • Facilitating knowledge exchange among the project provinces and together with other domestic/international institutes. • Reviewing and recommending overseas training and study tour plans, and organizing training. 6. The Provincial and County PMOs shall be responsible for project implementation within their provinces/counties respectively and will be accountable to their respective PLGs. The main responsibilities of the PPMOs and CPMOs are to: • Prepare the Feasibility Study and Project Implementation Plan at the provincial/county levels • Prepare, implement, and update the annual work plans and financing plans • Prepare, implement, and update the annual procurement plan • Ensure financial management arrangements are put in place • Establish and operate the management information system, and submit progress reports, financial statements and audit statements to the NPMO. • Prepare funds withdrawal applications for World Bank loans and submit them to provincial and national levels • Ensure timely mobilization, allocation and disbursement of project funds. • Supervise, monitor and report on project physical, financial, output and outcomes progress. • Collaborate with corresponding line bureaus such as Water Resources, Agriculture, Forestry, and with Mobile Expert Teams to support the various technical, and operational aspects of project activity preparation and implementation. Associated line agencies at the county level (Agriculture, Water, and Forestry) are expected to take part in implementing project activities under the leadership of the CPMO. • Mobilize Expert Teams as needed to develop technical specifications, training activities, cost estimates. • Follow-up with relative government departments and famer groups to secure counterpart funding • Work closely with farmer organizations (WUAs, Farmer Cooperatives/Associations) to provide them with management support, resources, and involve them in project preparation implementation, and supervision. • Carry out check and acceptance of completed works and disburse funds accordingly • Collect data and report periodically on the monitoring and evaluation indicators. 7. Mobile Expert Teams (MET) will be established under the provincial and county PMOs to provide expert advisory services, technical consultation, and review of design plans. METs will advise the PMOs and project stakeholders on technical and institutional matters to facilitate project implementation. METs will be comprised of leading experts in water conservation, engineering, agronomy, horticulture, agro forestry, climate change, research and extension, meteorology, and environmental sciences.
8. Farmer organizations including WUAs and FCs/FAs will also participate in the implementation of project activities. WUAs will participate directly in system planning and design, construction and supervision, as well as training. WUAs will take over the responsibility
33
of O&M for improved irrigation and drainage systems under the project. WUA members will also participate in groundwater monitoring and management. Similarly farmer cooperatives/farmer associations will be involved in monitoring the implementation of the demonstration activities, such as green and organic certification demonstration, identifying their training needs and facilitating services delivery.
9. The implementation of the Irrigated Agriculture Infrastructure improvement activities will be guided by the Water Resources Bureaus at provincial and county level. They will assist in the planning and design of irrigation and drainage works, supervision of the implementation of the construction of water conservancy works, and guide the management and maintenance of such works. Construction works will be contracted to qualified contractors following WB procurement procedures. Technical agencies or individual consultants will be selected to provide technical services in engineering survey, design, construction supervision, groundwater monitoring and management, and capacity building. Water expert on the county MET will assist in improving technical quality of the project activities. Line agencies at county level will provide policy guidance, technical supervision and needed government clearances for relevant activities within their mandate areas under the leadership of the respective PLG. The Electricity and Transport bureaus will play a similar role for rehabilitation of rural electricity networks and on-farm road networks respectively. The PPMOs and CPMOs will coordinate the inputs and work of all bureaus in relation to overall project implementation. Farmers will participate in construction and maintenance of works through provision of labor. 10. Activities under the Enhanced Climate Smart Agricultural practices component will be implemented through a combination of government-assisted and farmer implemented interventions. Land leveling may require a combination of machinery leveling and farmer labor, the proportion of which varies among provinces. Tillage will be largely organized by farmers, but with CPMOs coordinating mechanized tillage inputs from county Agricultural Machinery Stations or approved contractors where farmers/cooperatives do not have their own tillage machinery. Farmers will contribute their own crop residues with tilling of residues into the soil being done by the farmers where they have their own tillage equipment or by county Agricultural Machinery Stations or approved contractors for those farms that don’t have such equipment.
11. Procurement of farm inputs will be organized and managed by county PMOs rather than farmer organizations. Farmers will obtain support to procure organic fertilizer, crop residue decomposition agents, biological control agents and greenhouse materials from a list of CPMO approved suppliers who would submit receipts signed by farmers to the CPMO for reimbursement. The CPMO should also receive a list from the head of the FA, FC or village committee with the names of farmers who have purchased these inputs and applied them to their land and crops.
12. Soil sampling, testing, and fertilizer recommendations will be conducted by county Soil and Fertilizer Stations. Soil fertility and environmental monitoring will be conducted by professional soil and environmental testing organizations mainly at provincial level. The soil fertility monitoring will be combined with national soil fertility monitoring sites. An organic fertilizer subsidy will be provided from counterpart funds, in line with current Chinese government practice to encourage reduction in use of chemical fertilizers. The project support will be for commercial organic fertilizer only without any chemical fertilizer added.
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13. The Bank loan will finance seedlings for farm shelter belts and economic trees to be procured from county and private seedling nurseries, with planting to be a beneficiary contribution. Agricultural equipment will be procured through CPMOs, and then provided to farmer cooperatives (FCs) and farmer associations (FAs) for use by their members. FCs and FAs selected to receive the equipment will need to satisfy a number of eligibility criteria to be listed in the PIP. 14. The project will promote integrated pest management through financing of light traps and bio-control agents, but these will be fully integrated with other agricultural/physical, bio-control and low toxicity chemical pesticides. The light traps will be procured by the CPMOs and IPM approach will be implemented through county Plant Protection Stations working closely with farmer cooperatives, farmer associations and farmers. The project will partly subsidize the cost of bio-control agents, but will not finance any chemical pesticide or chemical product. The methodology and process for monitoring of pesticide and chemical use will be prepared by POCADs in close consultation with provincial and county Plant Protection Stations and Agricultural Technology Stations. Grants for certification of green and hazard-free products will be delivered to farm enterprises after certification has been obtained.
15. CPMOs will coordinate demonstration and extension of integrated packages combining new varieties, new technologies and irrigation. Delivery of such packages will be implemented by suitably qualified technical organizations contracted through the CPMOs. Such organizations may include county Agricultural Technology and Extension Stations, provincial technical institutions, universities and consultants. The budget costs for such demonstration and extension activities would include the cost of training, technical assistance, materials, seed costs, and other items related to the demonstration and extension activities. Appropriate technical organizations will be contracted through PPMOs to conduct applied research projects identified by the POCADs to address bottlenecks in agricultural production in project areas 16. Farmer training will be planned and organized by the County PMOs and Mobile Expert Teams. Training delivery will be undertaken by the county Agricultural Technical extension Station, line bureaus staff, local experts, and farmer technicians. The training will include a mix of delivery methods including practical field training, farmer field schools, lecture training and training of trainers for farmer technicians and leading farmers to develop local training capability. CPMOs will have one staff members whose main job is to coordinate the farmer training activities. 17. PPMOs and CPMOs will prepare Information Dissemination Plans for awareness raising, education and communications on climate smart agriculture to all stakeholders. The plans will include details of the activity, content and delivery methods, responsibilities for organizing and implementing the work, consultant packages for service and content providers, timing, work program and budget breakdown.
18. The Project will finance farmer cooperative development, including (1) start-up and operating funds for newly-established and existing cooperatives respectively (e.g., registration, office equipment); (2) training and capacity building; (3) equipment for agricultural production
35
use by FCs; and (4) civil works (e.g., grain drying pads). All such expenses will be financed by the Bank loan, based on clearly defined eligibility criteria, except the start-up funds for new cooperatives which will be financed from government counterpart funds. Control of the use of such funds will rest with County PMOs. Cooperatives will prepare plans for procurement of equipment, training, and technical assistance and submit such plans to County PMOs for review. The County PMOs will then carry out procurement after reviewing and approving the plans.
19. A Project Implementation Plan (PIP) to guide project implementation has been prepared by each province, and a consolidated PIP for the whole project has been collated from the six provincial PIPs and SOCAD. The consolidated PIP describes the project rationale and objectives, components, safeguard issues addressed, project investment, benefits, financial and economic analysis, risk and sensitivity analysis, cost recovery and loan repayment. It describes implementation arrangements, including project management institutions, and the roles of various stakeholders, such as government departments, line agencies, advisory expert groups, farmers, and the role of the World Bank in project implementation. The PIP also provides details of the project inspection and supervision plan, procurement procedures, loan disbursement, financial management, accounting and audit requirements, as well as monitoring and evaluation functions, indicators and reporting. Appendix tables to the consolidated PIP include detailed cost tables for each province and SOCAD, investment and financing tables, cash flow tables, and details regarding training, demonstration activities and applied research. Annexes to the consolidated PIP include implementation guidelines for various project activities, including operation manuals (Financial Management, Procurement Management, WUAs, FCs), guidelines for agricultural support activities (subsidies) and technical assessment reports (water resources balance, dam safety), and plans (such as the Procurement Plan for the Initial 18 Months, Integrated Pest Management Plan, Ethnic Minority Development Plan, Environmental Management Plan, and Resettlement Policy Framework). Such manuals, reports and plans all form an integral part of the PIP.
20. An operation manual has also been prepared to guide the WUA activity under the project, and is attached to the PIP. The manual covers 12 key areas including: (1) definition and functions of WUA; (2) general conditions for WUAs; (3) the benefits WUA could bring to farmers; (4) step-wise process for WUA formation, especially the procedure for electing the WUA Executive Committee; (5) structure, formulation and operation of WUAs; (6) rules and regulations of WUAs; (7) rights and obligations of WUA members; (8) water management, utilization, pricing and water fee collection; (9) members' participation in and inspection on WUA work; (10) indicative procedure for implementing participatory irrigation management (PIM), especially the WUA's involvement in irrigation planning, design, construction, operation and management; (11) assistances expected from the project on WUA activities; and (12) appendices, including samples of a WUA charter, regulation, water supply service contract, document for handing-over irrigation facilities, and table for transparent water fee management. 21. The project will support an infrastructure operations and maintenance fund for works related to the project, but not for all infrastructure investments in the county. The fund will be financed by counterpart funds. The fund amount will be controlled by the CPMOs and WUAs, or village committees would apply to the county PMO for use of the funds. There will be limited expenditures of this item during project year 1 because infrastructure construction would still be
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at the earliest stages. The operational guidelines for this operations and maintenance fund are laid out in the PIP.
22. Project management training for the NPMO and PPMOs will be organized by SOCAD, and training for CPMOs will be organized by PPMOs. Domestic study tours will be organized by PPMOs. Overseas training will be organized by SOCAD and overseas study trips by POCADs. Office equipment for provincial and county PMOs will be procured by PPMOs.
Financial Management, Disbursements and Procurement Financial Management
23. The financial management capacity assessment identified the following principal risks: (a) most project counties do not have experience with Bank-financed projects, and (b) staff capacity in western provinces is lower than others in this project.
24. Agreed mitigation measures to address the above risks include: (a) financial management training (formal and ad hoc) to be provided to the project financial staff; (b) close monitoring and guidance from SOCAD and POCADs as well as the Bank’s supervision; and (c) more training, guidance, and supervision from SOCAD and the Bank to the western provinces in this project.
25. Overall, the residual financial management risk after mitigating measures for the project is assessed as Moderate.
26. Budgeting. A detailed multi-year budget has been prepared which provides a good basis for annual plan preparation. The annual project implementation plan, including the funding budget and resources, will be prepared by PPMOs and consolidated by NPMO. The budget for counterpart funds committed by local government will be reviewed and approved by the local People’s Congress and will be included in their sectoral budget. Based on the approved budget and implementation progress, the related government will provide government appropriations to the project. Budget variance analysis will be conducted on a semi-annual basis by related PMOs and necessary actions will be taken to make sure the project can be implemented as planned. The Bank will work with the NPMO and PPMOs through supervising the project budgeting system to enhance their budget preparation and execution during project implementation.
27. Funds Flow. The Bank loan proceeds will flow from the Bank into a project Designated Account (DA) to be set up at and managed by SOCAD. SOCAD will be directly responsible for the management, maintenance and reconciliation of the DA activities. Supporting documents required for Bank disbursements will be prepared and submitted by CPMOs through PPMOs for review and verification before sending to NPMO for further disbursement processing. However, in Jiangxi province and Chongqing Municipality, as the POCAD is not within the finance department, the reimbursed funds will be handled by the finance departments at the provincial level and the finance bureaus at the county level. However, the PPMO and county PMOs in Jiangxi province and Chongqing Municipality are responsible for reviewing the disbursement request as well as the supporting documentation.
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28. Accounting and Financial Reporting. The administration, accounting and reporting of the project will be set up in accordance with Circular #13: “Accounting Regulations for World Bank-financed Projects” issued in January 2000 by Ministry of Finance.
29. County PMOs and POCADs will be managing, monitoring and maintaining their project accounting records for the activities they execute. Original supporting documents will be retained by POCAD and county PMOs respectively. SOCAD is responsible for preparing the project consolidated financial statements. The unaudited semi-annual project interim financial reports (IFRs) (format and content) will be prepared in accordance with Circular #13 (agreed with MOF) and furnished to the Bank by SOCAD no later than 45 days following each semester (the due dates will be August 15th and February 15th), in form and substance satisfactory to the Bank.
30. Internal Control. SOCAD has a set of sound internal control systems which have been used to efficiently manage domestic projects. The proposed project will use SOCAD’s existing internal control system.
31. Auditing. The Audit Service Center of the China National Audit Office for Foreign Loan and Assistance Projects (ASC) has been identified as the auditors for the project. An annual audit report will be issued by ASC. The annual audit report of project financial statements will be due to the Bank within 6 months after the end of each calendar year. Following the World Bank’s formal receipt of the audited financial statements from the borrower, the World Bank will make them available to the public in accordance with the World Bank Policy on Access to Information.
Disbursements
32. Four disbursement methods (advance, reimbursement, direct payment and special commitment) are all available for the project. Supporting documents required for Bank disbursement under different disbursement methods will be documented in the Disbursement Letter issued by the Bank.
33. The DA in US dollars will be opened at a commercial bank acceptable to the World Bank and will be managed by SOCAD. The ceiling of the DA will be determined and documented in the Disbursement Letter.
34. The World Bank loan would be disbursed against eligible expenditures (taxes inclusive) as in the following table:
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Table A3.1: Disbursement Categories
Disbursement Categories
IBRD Loan
Allocated amount
Percentage of Eligible
Expenditures to be
financed (US$ Thousands) (percentage) (1) Works Chonqging 22860 70 Gansu 24610 86 Hunan 24390 81 Jiangxi 27780 81 Liaoning 19340 95 Xinjiang 27930 85 (2) Goods, non-consulting services, Consultant Services and Training for PMO 32230 100 (3) Other Consultant Services and Training 18540 70 (4) Sub-grants 1820 100 5) Front-end fee 500 100 Total 200000
35. Consultant Services and Training for PMO referred to in Category 2 of table above correspond to: (i) Technical assistance for the NPMO; (ii) Consulting services for the PMOs (applied research and impact evaluation); and (iii) Training and study trips for all PMOs staff. Other Consulting Services and Training referred to in Category 3 of table above correspond to: (i) Technical assistance for the PPMOs and CPMOs; (ii) the demonstration and extension for new varieties and new technologies, and (iii) farmers training. 36. A separate disbursement category named “sub-grant” will be set up in addition to normal disbursement categories (such as civil works, goods and training, etc.) to streamline project disbursement for those expenditures related to WUA and FA operation. It mainly supports the establishment and operation of WUAs and FAs, such as registration fee, furniture, office suppliers, and training expenses. A ceiling has been set up for WUAs and FAs at RMB 50,000 to control the expenditures incurred. However, the disbursement will be made based on actual expenses requiring that the supporting documents need to be provided when requesting reimbursement from the Bank loan. County PMOs are encouraged to sign an implementing agreement with the WUAs or FAs to standardize the rights and obligations of both sides. Detailed procedures and requirements including how to establish and operate the WUA and FA, the eligible expenditures to be financed by the project funds, the final check (yanshou) carried out by the county PMO, and the required disbursement documents will be clearly stated in the revised Project Implementation Plan (PIP).
Procurement
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37. Mitigation Measures for Procurement Risks. The procurement capacity assessment concluded that the procurement risk is rated as moderate. NPMO and some PPMOs and CPMOs have adequate experience and capacity to carry out procurement. However, some PPMOs and CPMOs lack Bank project experience and may be weak in procurement and in keeping procurement records. Measures to enhance their procurement capacity, further strengthen the NPMO, PPMOs, CPMOs procurement management for the project and to mitigate potential procurement risks have been agreed as follows:
• Procurement agents with procurement experience in projects financed by the Bank or other multilateral financing institutions will be hired by PPMOto assist them in procurement of goods, works and non-consulting services by ICB and NCB.
• NPMO, PPMOs, and CPMOs will send their procurement staff and other key staff to attend workshops on procurement and contract management under Bank-financed projects, including procurement of goods, works and non-consulting services, as well as selection and employment of consultants.
• The Bank procurement specialist has provided procurement training to all the provinces and counties during the identification and preparation missions, and will continue to do so during preparation and implementation of the project.
• A procurement management manual, which is part of the Project Implementation Plan (PIP) has been prepared and reviewed by the Bank. The manual will provide guidance to all implementing agencies on how to carry out procurement under the project.
38. The project will provide financing to support the establishing and strengthening of farmer associations including WUAs for operation and maintenance of on-farm irrigation infrastructure, and farmer associations FAs for enhanced services delivery, access to markets, and farmer-based adaptation to climate change. Each WUA/FA established which meets agreed project requirements and principles set forth for WUA/FA in the PIP and is so certified by the responsible PMO would be eligible for a sub-grant (Y50,000 per WUA/FA). The sub-grants would be used to cover incidental costs, such as record keeping, training, purchasing equipment, furniture or office supplies etc. Each WUA/FA may purchase office equipment or furniture or office supplies in the local market by comparing several quotations to ensure economy and efficiency. However, if the total cost of equipment, furniture, and office supplies exceeds US$10,000, CPMOs would help purchase these goods following shopping or NCB procedure depending on the contract estimated cost. Activities would be carried out in accordance with the PIP. 39. The project will also provide financing for FCs development and strengthening. Eligible FCs will be selected based on established criteria that have been specified in the PIP. The project financing will cover (i) start-up and operating funds for newly-established and existing cooperatives respectively (e.g., registration, office equipment); (ii) training and capacity building; (iii) equipment for agricultural production purposes; and (iv) civil works (e.g., grain drying pads). All such expenses will be financed by the World Bank loan, except the start-up funds for new cooperatives which will be financed from counterpart funds. Control of the use of project funds will rest with CPMOs and will be carried out in accordance with the annual plans. FCs will prepare plans for procurement of equipment, training, and technical assistance with the help of the county PMOs. The CPMOs will then carry out procurement on behalf of the FCs, after reviewing and approving the plans. CPMOs would help purchase goods by following
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shopping or NCB procurement method depending on the contract estimates. Activities would be carried out in accordance with the PIP.
40. Procurement for the project will be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits & Grants” dated January 2011; and “Guidelines: Selection and Employment of Consultants Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011, and the provisions stipulated in the legal agreement. 41. Frequency of Procurement Supervision. In addition to the prior review supervision to be carried out by Bank officers, Bank procurement supervision missions will conduct field visits to carry out semi-annual post review of procurement actions in the first year of the project and annual post reviews thereafter. The post review sampling ratio will be one out of five contracts. 42. Procurement Plan. The NPMO has developed an acceptable Procurement Plan for those activities to be procured by the NPMO, PPMOs, and CPMOs on an annual program basis for the initial 18 months of project implementation following the Bank template. It will be available in the NPMO, and will also be available in the Project’s database and in the Bank’s external website during project implementation. The Procurement Plan will be updated, reviewed and agreed with the Bank annually, or as required, to reflect actual project implementation needs. 43. Procurement and Selection Methods and Prior Review Thresholds. Table A3.2 below indicates the procurement and selection methods and prior review thresholds for goods, non-consulting services, works, and consulting services to be procured by the NPMO, PPMOs, and CPMOs under the project. ICB is not anticipated, and NCB and Shopping will be mainly used for procurement of civil works, goods and non-consulting services.
Table A3. 2: Thresholds for Procurement Methods and Bank Prior Review Expenditure Category
Contract Value (US$)
Procurement Method
Bank Prior Review
Goods and non-consulting services
>=1,000,000 ICB All ICB contracts <1,000,000 NCB All contracts >= US$ 500,000 first two NCB
goods, and first non-consulting services or contract in each province, and any other goods and non-consulting service contract as specified in the procurement plan.
<100,000 Shopping None NA DC All DC contracts
Works
>=20,000,000 ICB All ICB contracts <20,000,000 NCB All contracts >= US$ 5,000,000, first two NCB
works contract in each province, and any other works contract as specified in the procurement plan.
<200,000 Shopping None NA DC All DC contracts
Consultant Services
>=300,000 QCBS, QBS All contracts >= US$ 100,000 for firms; first consulting service contract by CQS in each province, and any other consulting service
<300,000 QCBS, QBS, CQS
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NA SSS contract by CQS as specified in the procurement plan; all contracts >= US$ 50,000 for individuals; and all SSS contracts.
NA IC
Notes: ICB – International Competitive Bidding NCB – National Competitive Bidding DC – Direct Contracting QCBS – Quality- and Cost-Based Selection QBS – Quality-Based Selection CQS – Selection Based on the Consultants’ Qualifications SSS – Single (or Sole) -Source Selection IC – Individual Consultant selection procedure NA – Not Applicable
44. Advance Contracting and Retroactive Financing. Retroactive financing of up to $12.86 million would be available for eligible expenditures incurred on and after May 30, 2013. Retroactive financing will be processed according to the requirements specified in the loan agreement and project agreement. It will cover the following: civil works (US$7.98 million), goods (US$2.19 million), consultant services US$ (1.25 million), and training and study tours (US$1.44 million). Retroactive financing contracts are subject to the Bank’s prior review, as indicated in the procurement plan. Payments will be made only for contracts procured in accordance with applicable Bank procurement procedures. Environmental and Social (including safeguards) Environmental 45. This is a Category B project. It brings positive environmental benefits and supports sustainable and climate resilient agriculture production systems in the project areas. Based on the specified criteria, project areas are limited to the existing farmlands which have been heavily influenced by human activities. No ecologically sensitive site (e.g. natural habitat, nature reserves, etc.) has been found in the project influence area. The principal negative environmental impacts are construction-related, which are associated with the rehabilitation and improvement of existing on-farm irrigation and drainage infrastructure. The project will not have the potential to cause significant conversion (loss) or degradation of natural habitats. Therefore, Natural Habitats (OP4.04) is not triggered. Applicable environmental safeguard policies for the project include: Environmental Assessment (OP4.01), Pest Management (OP4.09) and Safety of Dams (OP/BP 4.37).
46. Environmental Assessment (OP4.01). Environmental impacts of the proposed project are positive overall. Project activities, which have been selected based on the agreed selection criteria, are in compliance with relevant water resources management plans. The project will generate real water saving in project areas each year through the improvement of irrigation and drainage infrastructure, and through the development of high-efficiency irrigation systems. The project will also promote enhanced climate-smart agricultural practices. It will bring multiple environmental benefits, such as soil conservation, reuse of crop resides, reduction in the use of pesticides and fertilizers through balanced fertilizer application and integrated pest management. Negative impacts are related mainly to small scale construction activities which are limited to the
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rehabilitation and improvement of irrigated agriculture infrastructure. These impacts (e.g. noise, wastewater, waste, and disturbance to local communities) will be temporary, limited and local in nature. An Environmental Management Plan has been prepared for the investments in accordance with Environmental Assessment Policy OP4.01. The EMP specified mitigation measures, monitoring plan, institutional arrangement and capacity building activities. As part of the EMP, Environmental Codes of Practice (ECOPs) for a typology of construction activities have been developed, including measures for rehabilitation of irrigation and drainage infrastructure, water-saving irrigation, rehabilitation and electrification of pumping stations and existing tube wells, and farm and field access roads. Those measures will be entered into bidding documents and civil works contracts. 47. Pest Management (OP4.09). The project will include promotion of integrated pest management and production systems that meet green and non-polluting certification standards. No procurement of chemical pesticides is envisaged. The improved irrigation facilities and diversification of crop systems may induce some pesticide use, but the environmental and health risks are minor. Based on the survey and public consultation with local farmers and farmer cooperatives, a Pest Management Plan (PMP) has been developed for each province addressing pest management issues. The PMP incorporates the existing good pest management practices from the project provinces and proposes a number of activities such as: (i) promoting IPM to reduce the use of toxic pesticides, e.g. improvement of pest forecasting, use of bait lamps, crop rotation, pest resistant varieties, and balanced fertilization. Pesticides will be reduced due to green certification for 2,330 ha of green agriculture production farmland and 14,500 ha of non-polluted agriculture production farmland; (ii) training and capacity building for local farmers and governmental agencies; (iii) introducing and promoting biological and botanical pesticides; (iv) strengthening monitoring; and (v) reinforcing regulatory aspects. Implementation of the PMP will be undertaken by the County PMOs, and farmer communities, with assistance of consultants, County Plant Protection Stations and County Agricultural Technology Extension Services Stations. 48. Dam Safety (OP 4.37). The Project does not finance construction of dams, but the irrigation systems financed by the Project would draw water directly from reservoirs formed by 43 existing dams and one dam under construction (DUC), and they could not function if the dams were failed. A number of existing upstream dams also provide flood protection to the water diversion works being constructed under the Project; failure of these dams could cause extensive damage to, or failure of, the new Bank-funded structures.
49. Dam safety plans and emergency preparedness plans have been prepared for the 43 existing dams and the one dam under construction. In addition, based on the requirements of OP4.37, Jiangxi, Hunan, and Gansu provinces, and Chongqing municipality would hire one or more independent dam specialists to (a) inspect and evaluate the safety status of the existing dams, their appurtenances, and their performance history; (b) review and evaluate the owner's operation and maintenance procedures; and (c) provide written reports of findings and recommendations for any remedial work or safety-related measures necessary to upgrade the existing dams to an acceptable safety standard. For Xinjiang and Liaoning Provinces, the Bank dam safety expert will work together with the client to ensure the project is in compliance with OP4.37. The PMOs at all levels would also assign special staff to assist the Bank team to ensure the project is implemented in line with OP4.37.
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50. Public Consultations and Disclosure. The safeguard documents were prepared through consultation with key stakeholders. The documents were in compliance with the Bank safeguards policies. The safeguard documents were locally disclosed through announcements published on the local website. The PMPs for all provinces and the EMP were locally disclosed on September 5 and September 6, 2012 respectively. They were subsequently disclosed by the Bank Infoshop on October 17, 2012. Social (including safeguards) 51. Indigenous Peoples. The project activities in Xinjiang Uygur Autonomous Region and Liaoning Province would take place in some areas populated with ethnic minorities (such as Yanqi, Bohu and Fukang counties in Xinjiang and Lingyuan and Zhangwu counties in Liaoning). The ethnic minorities are mostly Uygur Kazak and Mongol who were identified to fall under the definition of Indigenous Peoples (IP) as per OP4.10. Hence, the Bank’s IP (OP4.10) is triggered. 52. A Social Assessment (SA) was carried by the central PMO who hired an experienced SA expert consultant from the Agricultural University of China to take the lead, in close cooperation with the project entities from Xinjiang and Liaoning provinces. Based on extensive project information dissemination, and local views solicitation campaign throughout the project areas, the SA team conducted an intensive social sampling survey with a focus on the Uygur and the Kazak concentrated project area, and Hui and Mongol project affected villages in Xinjiang Autonomous Region and Mongol communities in Liaoning Province. Free, prior and informed consultation was undertaken in repeated rounds among the ethnic minority groups by the way of qualitative and quantitative methods such as questionnaire surveys, Participatory Rapid Assessment, focus group interviews, group discussions and workshops. The consultant collected baseline information on the demographic, social, cultural and political characteristics of the affected indigenous communities. The Uygur, Kazak, Hui and Mongol communities expressed great enthusiasm and support to the project by which their agricultural production would be enhanced and modernized. Reflecting the findings of this survey and consultation, a social assessment report has been prepared in accordance with the Bank OP4.10. The report has concluded that minorities’ needs are culturally appropriate and integrated in the project design. The report also confirmed that the project will have positive impacts on the IP’s communities with modern agricultural technology and facilities, farmer’s associations, income increase and other tangible support. 53. On account of the broad support from the ethnic minority communities, the project developed the Ethnic Minority Development Plan (EMDP) as required by OP4.10 to steer project design and implementation in the ethnic minority areas, with equitable opportunities for participation of the ethnic minority communities and adequate benefits to be shared by them in compatibility with their local cultures. Based on that detailed SA studies and extensive consultation among the Uygur, Kazak and Mongol ethnic minority communities in the project areas in Xinjiang and Uygur Autonomous Region and Liaoning Province, the EMDP set forth a Participatory Framework for these ethnic minority groups’ continuous consultation and participation in project implementation. In the meantime, closely combined with project activity
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design and fulfillment, it also made a further detailed Action Plan for each of the ethnic minority communities’ irrigation infrastructure development and participatory capacity building.
54. Land Use and Involuntary Resettlement. The project supports the following types of village-level civil works: construction of drainage ditches, canal system rehabilitation, irrigation wells, farm pumping stations for drainage, small farming ponds, small access roads and bridges linking farm fields, and leveling farm land. As designed across all six provinces, most of the project activities on infrastructure construction would rehabilitate existing facilities on their original land bases. The remaining new facilities would be established at the village level and would belong to village communities. In this light, it is confirmed that the property rights of the newly established facilities belong to villages, and the land ownership will also remain in the hands of the villages. In addition, any change or/and readjustment of land use in the villages must go through adequate consultation and decision-making process among the villagers. In case there is any adverse impact brought about by the project activities, proper compensation would be provided to the affected households through village consultation and decision-making. Given this possibility, OP4.12 is triggered. 55. Each project site has confirmed that the project village has promised to guarantee land provision for project needs. All land needed for the project civil works will be provided by project villages through land reallocation and adjustment within the village and amongst villagers concerned. No private structure or ground attachments will be removed for the project civil works without agreement of the affected people, such as graves, contracted pond or other private farming facilities. All the project villages with land provision need to present the related agreements for the land use obtained from the villagers, and the explanation and records/minutes of the adequate consultation and decision-making process in the villages, before the project actually uses the land.
56. In view of the fact that the project components contain irrigation infrastructure construction, civil works conducted beyond the village facilities could not be completely ruled out and exact sites of such activities were not determined by appraisal. Therefore, a resettlement policy framework (RPF) was prepared for the six project provinces. This safeguard instrument was prepared in the unlikely event that any land might be taken involuntarily. In this case, the RPF will guide the activity design and implementation with Resettlement Action Plan (RAP), and mandatory compensation for land acquisition and livelihood restoration required during project implementation.
57. The possibility of linkages with ongoing or previous activities was also assessed. In Xinjiang project area, Baiyanghe reservoir in Fukang County was under construction and was seen as possibly linked to the project. Therefore, due diligence review of land acquisition for the reservoir was prepared and it confirmed that there was no legacy of involuntary resettlement. The review found that land acquisition and compensation went through different rounds of consultations with all relevant stakeholders (agencies and people) at various levels. The land acquired was actually barren and dry land in a remote and poor environment. It was acquired between 2009 and 2010 for affected households and 2009-2011 for relocated institutions. The due diligence review confirmed that the involuntary resettlement process and standards for compensation and restoration were designed and implemented in line with relevant Chinese laws
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and regulations as well as the Bank policy OP/BP4.12, and that all affected people and herders were satisfied with the resettlement measures taken and the results they experienced. Since the livelihood restoration of the affected people still needs to be monitored over a longer period of time, the due diligence review made recommendations for monitoring and evaluation at least twice for the first two years of the project implementation. The PMO will monitor the follow ups on all the recommendations of the due diligence review during project implementation and, as necessary, remedial action will be taken.
58. An environmental due diligence investigation for Baiyanghe Reservoir was also conducted by the Research Center for Eco-Environmental Science, Chinese Academy of Science. It confirmed that the reservoir was managed in compliance with Chinese EA laws and regulations which are broadly consistent with the Bank policy; and that there were no outstanding environmental issues. 59. Promotion of Local Participation and Gender Equality. Wide and equal participation of local people in project sites will be promoted in project implementation. Special attention will be given to the participation of vulnerable people, men and women with good gender sensitivity. Equal participation and gender responsiveness will be reflected in project activities such as training, water user association (WUA), farmer’s cooperatives and associations, as well as other capacity building activities.
Safeguard Documentation Disclosure
60. The Ethnic Minority Development Plan and the Resettlement Policy Framework were disclosed locally on August 27, 2012. They were subsequently disclosed by the Bank Infoshop on September 3 and September 4, 2012 respectively. The due diligence report on resettlement was disclosed locally on September 20, 2012 and by the Bank Infoshop on October 18, 2012. The PMPs and the EMP were locally disclosed on September 5 and September 6, 2012 respectively. They were subsequently disclosed by the Bank Infoshop on October 17, 2012. Monitoring and Evaluation
61. Systematic M&E will be carried to monitor progress, outputs, and outcomes of project activities. The results framework (Annex I) identify the project outcome indicators that the project PMOs in collaboration with the line bureaus and the organizations involved in project implementation will collect data on through regular monitoring and field surveys. CPMOs will prepare regular M&E reports which will be sent to the PPMOs for compiling and verification. These reports would then be forwarded to the NPMO for review, consolidation, and reporting. Physical and financial progress will be tracked through the Management Information System that will be set up under the project. 62. The CAD system, which is a program under the Ministry of Finance, has strong monitoring systems, capacity, and resources in place. SOCAD and the POCADs have implemented previous World Bank projects and are experienced with monitoring and evaluation requirements. SOCAD, POCADs, and the COCADs, consistently report on their own agricultural development
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activities which are much larger in scale and scope than the project. They can easily adapt and adopt the systems they have in place to report on the project indicators.
63. Using the M&E collected information, the NPMO and the PPMOs will produce annual reports to monitor project progress. Consolidated reports produced by the NPMO for the entire project will be shared with the Bank on a semi-annual basis. In addition, a mid-term review will be conducted half way through project implementation for a comprehensive assessment of project progress and results. Reports of physical and financial progress of activities implementation will be prepared semi-annually and would constitute a key document for review by regular Bank supervision missions.
64. Finally, each province will commission an external agency/institute to design and undertake an impact evaluation assessment of project interventions on project beneficiaries based on representative surveys to be conducted at three stages of project implementation: a baseline at the on-set of the project, a follow-up prior to mid-term, and a final round at project completion.
65. Information collected from the M&E reports will be used to assess implementation progress of project activities and the likelihood of the project achieving its development objective. It will also be used to identify any implementation bottlenecks that would necessitate additional efforts and resources, or adjustments through changes or restructuring. The information gathered would also highlight successful examples that may be disseminated and replicated countrywide.
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Annex 4: Operational Risk Assessment Framework (ORAF) CHINA: INTEGRATED MODERN AGRICULTURE DEVELOPMENT PROJECT
Project Stakeholder Risks Rating Low Description : There is little anticipated stakeholder risk. Client- Bank relations are quite strong and expected to remain so in the foreseeable future. Development objectives and targets are aligned between the two as reflected in the 12th FYP and in the China CPS. The level of enthusiasm and participation from all stakeholders is quite high (provincial governments, farmers groups, local institutes) and from implementing entities in all of the six project provinces.
Risk Management: An integrated, comprehensive and consultative project preparation approach has been adopted and will continue during project implementation. The process involves farmers groups, local government line bureaus, local technical and academic institutions, and private sector representatives. SOCAD has a good record of engaging various stakeholders and getting them involved in project preparation and implementation. There is strong commitment and ownership from all project stakeholders. The project’s objective and components speak directly to the overall development targets outlined in key government strategy documents such as the 12th FYP, the number 1 document, and provincial development plans. Wide consultations were held with various stakeholders to ensure their buy-in in project design and investments. Stakeholder risk will continue to be monitored during project implementation.
Resp: Client/Bank Stage: Prep/Imp Due Date: 12/31/2018 Status: Not yet due
Implementing Agency Risks (including fiduciary) Capacity Rating: Moderate
Description: Most county PMOs (CPMOs) are not familiar with the Bank policies, procedures and requirements, particularly relating to safeguards, fiduciary, and monitoring and evaluation. Lack of timely and adequate counterpart funding to be in place may cause delays in project implementation. This is particularly relevant at the county level due to increased fiscal burden, and in the case of farmers’ contribution given the high rate of rural-urban migration.
Risk Management: Project lead implementing agency (SOCAD) is experienced in managing World Bank-financed projects and is familiar with Bank procedures and policies including fiduciary, safeguards, and monitoring and evaluation. All the provinces have ongoing Bank supported projects. SOCAD and POCADs will provide continuous oversight and guidance to the county PMOs during preparation and implementation. Project management training has been provided throughout project preparation for all provinces and will continue during implementation. SOCAD has organized workshops for all provinces and invited Bank fiduciary and safeguards staff to deliver training on Bank guidelines to PMOs staff. Training (formal and ad hoc) will continue to be provided to the PMO staff including on financial management, procurement, and safeguards. Close monitoring and guidance will be provided by SOCAD and POCADs as well through Bank supervision missions The interaction between the Bank task team and the project PMOs during project preparation has increased the familiarity of the PMOs with Bank processes. Counterpart funding plan has been confirmed with the project counties, provinces and SOCAD to ensure that all the funds are allocated into annual budgets.
Resp: Client Stage: Prep/Imp Due Date: 12/31/2018 Status: Not yet due
Governance Rating: Moderate
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Description: Based on previous WB financed projects implemented by SOCAD, the governance structure and decision making process are appropriate. The CAD program was created by a government decree and is implemented by a department within the Ministry of Finance in the center and the finance departments in the provinces. It has clear sets of roles and responsibilities as well as rules and regulations. The CAD program implements a large number of similar domestic programs with hundreds of millions of dollars. The project’s focus and coverage falls within the mandate of the CAD system and is aligned with its objectives and targets. Overall administrative structures at the center are sound. There may be some weaknesses in the administrative structures in some provinces/counties stemming from weak coordination, fragmented structures, or poor human resources management.
Risk Management: Project implementation arrangements are clearly defined and outlined in the project implementation plan to ensure proper coordination between the various implementing entities. Project management offices are staffed with appropriate skills sets particularly on monitoring and evaluation.
Resp: Client Stage: Implementation Due Date:12/31/2018 Status: Not yet due
Risk Management: The project would include all necessary measures to comply with Bank policies for procurement and financial management including public disclosure of contracts, prior and post review, auditing, etc. Building the capacity of stakeholders involved will be key and will be incorporated in project design.
Resp: Client Stage: Implementation Due Date: 12/31/2018
Status: Not yet due
Project Risks Design Rating: Substantial
Description : External risk associated with climate change uncertainty due to multiple projection models. While the general direction of the change is known, there is still a great uncertainty about its magnitude. This will reflect in uncertainty regarding future water availability and demand, as well as droughts, and flood uncertainty, also affecting crop choices decisions. etc. There may be a limited capacity at the provincial/county level in identifying and integrating climate change mitigating/adaptation measures with other proposed investments. Difference in the degree of design preparation between the six provinces which may cause delay in preparation of investment design.
The project design promotes no-regret productivity enhancement and water conservation adaptation measures to better manage water resources and improve efficiency and productivity. The project also draws on lessons learned from the GEF project on Mainstreaming CC in irrigated agriculture project and the work done by the Chinese Academy of Agricultural Sciences and other applied research institutes on CC adaptation in agriculture and water resources sectors in various provinces. Subproject sites with groundwater problems were avoided, while others would be extensively monitored to have positive water balances, along with promotion of real water savings using engineering agriculture and institutional measures. SOCAD also organized workshops in partnership with the Chinese Academy of Agricultural Sciences (CAAS) where PMOs were exposed to the latest research and application of climate smart techniques in agriculture. SOCAD is also organizing field visits to other provinces in China where the Bank GEF project on adaptation to climate change in irrigated agriculture is being implemented. CAAS is actively involved in project design and will be available for further technical advice and training. Technical training will also be included in project design and delivered during project implementation SOCAD would coordinate and closely supervise preparation of the designs in the six provinces to ensure that all the province complete the designs on time.
Resp: Client Stage: prep Due Date: 12/31/2018 Status: Not yet due
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Social & Environmental Rating: Moderate Description: The capacity of provincial PMOs to prepare, manage, and implement the World Bank safeguards policy instruments may need to be strengthened. Environmental risks are limited to infrastructure works related impacts, pest management, and dam safety risks. Social risks mainly related to Ethnic minorities and possible unforeseen land acquisition.
Risk Management : SOCAD has organized training on social and environmental safeguards policies with the participation of the specialists on the team. Social and Environmental Risks were carefully evaluated during an EA and SA process and addressed through the preparation of the appropriate safeguards manuals to mitigate them (EIA, EMDP, EMP, PMP, RPF). Dam safety independent experts will be hired in the relevant provinces. The Bank’s task team will continues to have close interaction with PMOs to improve their capacity, supervise the safeguards activities and ensure that the provisions of the safeguard documents are implemented, when necessary, in order to mitigate any negative social or environmental impacts.
Resp: Client Stage: Implementation Due Date: 12/31/2018 Status: Not yet due
Program & Donor Rating: Low Description: No risks associated with program dependency or donor coordination.
Risk Management : N/A
Resp: N/A Stage: N/A Due Date : N/A Status: N/A
Delivery Monitoring & Sustainability Rating: Moderate Description : The large number of project activities across six provinces will pose a risk for delivery monitoring and supervisions for both the client and the Bank. Low adoption rates/ unsuccessful demonstration of new climate change adaptation measures at selected sites and failure of mainstreaming adaptation into CAD Possible weak local ownership and lack of financial support/ resources availability to WUAs for operations and maintenance of irrigation systems and to cooperatives/ Farmers Associations for agriculture extension and marketing activities
Risk Management : SOCAD has a strong implementation capacity already demonstrated by managing the highly satisfactory rated Irrigated Agriculture Intensification projects (IAIL 3) with six provinces, and the on-going project of the GEF mainstreaming climate change adaptation in irrigated agriculture project, which is also rated satisfactory and with six provinces. Project outputs and outcomes will be monitored and evaluated. This will be supported by a MIS system to closely monitor physical and financial progress, contract management, and other implementation aspects. Strengthening, expansion and integration of agricultural extension services and technical support systems. Adaptation selection based on good scientific practice, and farmers’ and local officials’ participation in decision making. Capacity building for individual rural households, village based rural technicians. County level extension and service stations, and local governments. Pilot activities will be closely monitored and supported. Clear indicators for tracking outcomes and outputs with a focus on implementation milestones and project results and impacts. SOCAD (and MOF) sees climate change adaptation as critical to their own CAD program and strongly supports mainstreaming measures. Use of appropriate extension and dissemination The project design has mitigated for this risk by: (i) targeting project areas where there is active demand for farmer organizations, (ii) devolving the implementation of some project activities directly to farmer groups, (iii) designing training activities to build the capacity of WUAs. FCs, and FAs, and (iv) including monitoring indicators aimed at measuring their performance and effectiveness. A WUA activity implementation manual has also been prepared.
Resp: Client Stage: Imp Due Date: 12/31/2018 Status: Not yet
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due
Other : Exchange Rate Appreciation Risk Rating: Moderate Description : Appreciation of Chinese currency may jeopardize the availability of funds between the time of project appraisal and implementation
Risk Management: SOCAD manages a large portfolio of agriculture development funds each year, and may consider allocating more to this project. POCADs or COCADs could find the possibility to mobilize domestic investment managed by CAD program if the objective is the same as the Bank project. Project can also use any savings resulting from efficient bidding process.
Resp: Client Stage: Prep/Imp Due Date : 12/31/2018 Status: Not due yet
Overall Implementation Risk: Rating: Moderate
Risk Description: Implementation risk is rated as Moderate due to: (a) the mixed Implementation capacity of county PMOs and their lack familiarity with Bank procedures; (b) Large project areas which may put some burden on supervision time and resources; and (c) the project would include some demonstration/adoption of new measures which may require a change in the “business as usual” particularly related to adaptation to climate change in agriculture. Despite stakeholders’ enthusiasm and commitment, issues such as suitability of the measures, and rate of adoption by farmers would require additional efforts and resources. In addition, exogenous risks like extreme weather events or a sudden increase in commodity prices may affect the implementation of some project activities (e.g. diversification).
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Annex 5: Implementation Support Plan
CHINA: Integrated Modern Agriculture Development Project Strategy and Approach for Implementation Support 1. The strategy for implementation support revolves around the objectives of (a) achieving the project development objectives and project outcomes as measured by the results indicators; (b) providing timely and quality support to ensure satisfactory implementation progress covering the various facets of project activities including technical, managerial, institutional, environmental, social, procurement, financial management, risks, monitoring and evaluation; and (c) mitigating the key risks identified in the ORAF.
2. The approach for implementation support focuses on the following:
a. Management Support i. Implementation support for readiness, effectiveness, progress
ii. PMOs staff capacity iii. Review of annual plans iv. Monitoring Implementation progress (physical and financial targets) v. Project changes, restructuring
b. Technical support i. Technical advice on designs for irrigation and drainage works, water
savings irrigation, and groundwater management. ii. Technical guidance for implementation of climate smart agriculture
practices under the various agro-ecological regions. iii. Institutional strengthening and technical assistance (role of technical
institutions - CAAS, CAS, provincial institutes, and Mobile Expert Teams)
iv. Role and activities for Water User Associations v. Role and activities for Farmer Cooperatives/Farmer Associations
vi. Review of training plans and activities vii. Advice on communication and dissemination strategy for climate smart
agriculture c. Procurement
i. Compliance with Bank procurement guidelines ii. Prior and post review
iii. Contract management d. Financial management
i. Compliance with financial management procedures ii. Disbursement
e. Environmental, social, and other safeguards i. Implementation of the relevant safeguards manuals
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f. Delivery, monitoring and sustainability i. Track PDO and Outcomes Results indicators
ii. Monitoring and evaluation iii. Responsibility, quality and availability of data for monitoring and
evaluation g. Help Mitigate other implementation risks h. Alignment of Bank resources, staffing and skills (supervision missions, team
composition, budget). Implementation Support Plan 3. The implementation support plan (ISP) will cover the key areas of project implementation mainly technical, fiduciary, safeguards, monitoring and evaluation, and risks. The ISP will be developed to cover the entire project implementation period, from effectiveness to completion, and support activities will be designed to provide support at the right time to ensure tailored-support. The ISP will be reviewed and updated based on periodic assessment of risks and appropriateness of the mitigation measures implemented.
4. Implementing Agency Capacity. SOCAD and most of the POCADs have strong experience in implementation of Bank projects, but many PMOs at county level lack experience in Bank procedures, particularly those in western provinces. This has been identified as a moderate risk to project implementation. Bank implementation support in project management will initially focus on assisting the client in strengthening implementation capacity at lower levels, particularly in financial management and procurement. Frequent supervision early on during the first half of the implementation period is expected to assist with compliance with Bank financial management and procurement policies and procedures. The Bank team will also support the client in implementation progress and annual plan reviews, project adjustments and any restructuring required. 5. Technical. Specific international and national technical expertise on water resources/irrigation engineering and climate-smart agriculture practices, and farmer organizations will be mobilized during regular semi-annual supervision missions. Support to farmer organization development will be provided through Bank technical expertise. The challenges associated with integrating climate change adaptation measures into existing farming systems under the Enhanced Climate-Smart Agricultural Practices component will be monitored by the Bank’s technical specialists during routine supervision. These specialists would also provide technical support to project implementing agencies and help resolve any potential technical issues that may arise. 6. Procurement. Implementation support will focus on ensuring that (a) the procurement agents are performing effectively; (b) PMO staff are fully familiar with, and adhere to the Procurement Management Manual; and (c) planned procurement training is provided to all procurement staff in a timely manner. The Bank procurement specialist will also carry out prior and post reviews of procurement transactions and monitor the implementation and updates of the procurement plan.
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7. Fiduciary Requirements. The fiduciary supervision strategy is based on its financial management risk rating, which will be evaluated on a regular basis by the financial management specialist in line with the Financial Management Manual, and in consultation with the task team leader. Financial management specialists will join the Bank supervision missions to review the implementation of the Financial Management Manual. These specialists would also provide technical support to project implementing agencies and help provide timely resolution to potential financial management issues. Training will be also provided by the Bank before the commencement of project implementation. 8. Safeguards. The team’s environmental specialist will monitor compliance with environmental safeguards and adherence to the environmental monitoring programs and pest management plans in each province. The social specialist will monitor adherence to the Ethnic Minority Development Plans in Xinjiang and Liaoning required under OP4.10, and the Resettlement Policy Frameworks prepared by each province should any involuntary taking of land be required that was not foreseen at preparation. The Bank’s dam safety specialist will monitor any dam safety reviews required to be undertaken. All members of the Bank’s safeguards team are based in Beijing and will provide timely and on-demand implementation support to the client when needed.
9. Delivery Monitoring and Sustainability. The Bank team will support SOCAD and POCADs in analysis and review of project monitoring information from the project M&E and MIS to address issues arising during implementation. In terms of sustaining the project approach, the Bank team will support SOCAD in identifying successful climate change adaptation measures from the project for mainstreaming into China’s wider Comprehensive Agriculture Development program.
10. Other. Exchange rate appreciation is identified as a moderate risk in the ORAF. The Bank supervision team will closely monitor exchange rate changes, impact on project implementation, and work closely with SOCAD to mitigate such impacts through agreed project measures. 11. Implementation Support Missions. An overview of the focus, timing, skills, and resource estimates is given in Table A5.1 and the required skill mix in Table A5.2.
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Table A5. 1 Supervision Inputs
Time Focus Skills Needed Resource Estimate
Partner Role
First twelve months
• Task and team leadership
• TTL
8
• Technical support • Technical skills 12 Technical support
• FM and procurement
• Bank policies 4
• Safeguards • Bank policies 3 12-60 months • Task and team
leadership • TTL
20
• Technical support • Technical skills 48 • FM and
procurement • Bank policies 12
• Safeguards • Bank policies 8
Table A5.2. Skills Mix Required Skills Needed Number of Staff
Weeks Number of Trips Comments
TTL/Economist 28 10 Bank staff Water resources/irrigation engineering
22 10 International and national consultants
Agriculture 22 10 International and national consultants
Farmer organizations 16 7 Country-office based Bank staff
Bank Safeguard Policy 11 11 Country-office based Bank staff
Bank FM Policy 6 10 Country-office based Bank staff
Bank Procurement Policy 10 10 Country-office based Bank staff
Table A5. 3 Partners Name Institution/Country Role Chinese Academy of Agriculture Sciences (CAAS)
China Technical support
Chinese Academy of Sciences (CAS)
China Technical support
Provincial institutes China Technical support
Qitai
Dunhuang
Fukang
Bohu
Gaotai
Anfu
Changtu
Fuling
Lintao
Zixing
Gao'an
Jinxi
Lingtai
Ningxiang
Dazu
Nanchuan
Yanqi Hui
Jinshi
yongchuan
XINING
HEFEI
LHASA
HOHHOT
Suzhou
Baotou
Xinxiang
Kaifeng
Shantou
Qiqihar
PingdingshanLiaoyang
Liuzhou
Huangshi
Jinzhou
Yinkou
FuxinDandong
Hegang
Handan
Mudanjiang
Baoding
Anyang
Changzhou
Bengbu
Wuhu
Jiamusi
Xiangtan
YINCHUAN
HAIKOU
BEIJING
WUHAN
SHANGHAI
SHENYANG FUSHUN
ANSHAN
DATONG
HARBIN
GUANGZHOU
TIANJIN
XI'AN
CHENGDU
CHANGCHUN JILIN
TAIYUAN
NANJING
JINAN
DALIAN
KOWLOONSHENZHEN
LANZHOU
ZHENGZHOU
HANGZHOU
SHIJIAZHUANG
GUIYANGFUZHOU
URUMQI
Xuzhou
NANNING
KUNMING
Tangshan
Luoyang
Wuxi
N E I M O N G O L
NINGXIA
BEIJING
TIANJIN
SHANGHAI
Q I N G H A I
X I Z A N G
S I C H U A N
SHAANXI S H A N X I
HENAN
G U I Z H O U
Y U N N A N
G U A N G X I
H U B E I
G U A N G D O N G
H E B E I
S H A N D O N G
JIANGSU
A N H U I
Z H E J I A N G
HONG KONG SAR
F U J I A N
TAIWAN
HAINAN
J I L I N
H E I L O N G J I A N G
MACAO SAR
CHONGQING
XINJ IANG
GANSU
LIAONING
M O N G O L I A
KAZAKHSTAN
R U S S I A N F E D E R A T I O N
DEM.PEOPLE'SREP. OFKOREA
REP. OFKOREA
JAPAN
PHILIPPINES
VIETNAM
NEPAL
THAILAND
MYAN
MAR
LAO PEOPLE'SDEM. REP.
KYRGYZREPUBLIC
UZBEKISTAN
TAJIKISTAN
Sea ofJapan
YellowSea
EastChinaSea
Bo Hai
Jinsha
Tongtian
Lancang
Jinsha
Nu
Lancang
Nu
Chang Jiang
Huang
Huang
Huan
g
Xun
Heilong Jiang
20°N
24°N
28°N
32°N
36°N
40°N
44°N
124°120°116°112°108°
CHINA
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Project provinces and counties:
CHONGQING MUNICIPALITY Nanchuan Fuling Tongnan Dazu Yongchuan Kaixian
GANSU PROVINCE Dunhuang Gaotai Yongden Lintao Wushan Lingtai
HUNAN PROVINCE Jinshi Ningxiang Hengdong Datong Hu Zixing
JIANGXI PROVINCE Jinxian Anfu Gaoan Xingguo Yushui Jinxi
LIAONING PROVINCE Sujiatun Changtu Zhangwu Xiaodong Lingyuan Lianshan
XINJIANG UYGURAUTONOMOUS REGION Fukang Qitai Yanqi Bohu
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POPULATION
> 1 MILLION
500,000 - 1 MILLION
ADMINISTRATION
CITIES PROVINCE CAPITALS NATIONAL CAPITAL PROVINCE BOUNDARIES INTERNATIONAL BOUNDARIES
BEIJING or SHANGHAI
Liaoyang or HEFEI
CHINA
PROJECT LOCATIONS
0 100 200 300 400
0 100 200 300 400 500 Miles
500 Kilometers
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.
IBRD 39687
NOVEMBER 2013
PROJECT COUNTIESOR DISTRICTS
PROJECT PROVINCES
GSDPMMap Design Unit
