Introduction to WB Loess Plateau Watershed Rehabilitation and Management Project

103546 China Country Office Project Summary Note Introduction to WB Loess Plateau Watershed Rehabilitation and Management Project National Context: Key Issues and Challenges China is considered one of the most seriously eroded countries in the world. According to the Ministry of Water Resources (MWR) about 38.2 % of China’s total land area orf 9.6 million km2 is eroded of low degree or above. The biggest problems are water (almost 50%) and wind erosion. There are many causes of the current watershed degradation, which can be divided into natural, human-induced factors and root causes. The seasonal rains of high intensity, steep slopes, erodible soils, semi-arid/arid climates, strong winds, geological instability, and other factors, which are closely related to the country’s ecological environment, are increasing the risk of land degradation. Unsuitable land uses and inappropriate land management practices constitute the direct human causes of land degradation. This includes poor farming or grazing practices, inadequate soil conservation measures, overgrazing, over-exploitation of forest resources, poor water resource management and extensive land conversion to unsuitable uses. Watershed degradation in China has major implications on the socio-economic circumstances of the rural land users, i.e. farmers, foresters and herders, and the social, cultural, economic and policy environment. These are the underlying reasons for the inappropriate land use and management practices and might be called the root causes of watershed degradation. The consequences of watershed degradation are severe and go even beyond the country’s boundaries. Watershed degradation has caused the loss of millions of mu of farmland, declining soil productivity and loss of vegetative cover and biodiversity. It has also caused billions of tons of sediment annually clogging up downstream reservoirs, reduces the hydraulic capacity of important river systems, and posed a serious flood risk in the lower reaches. Watershed degradation has also severe economic consequences as it leads to declining yields from croplands, grasslands and forests/woodlands and, consequently, reduced farm income. Watershed degradation has also profound social consequences. It threatens the livelihood of millions of people in fragile catchment areas. It has reduced food security and increased health problems due to malnutrition, polluted water and poor air quality. It increases the threat to personal safety and security from increased risk of natural disasters (floods, land slides, mud flows) and accelerates forced migration, in the search for new land or alternative livelihoods. The Loess Plateau Located in the upper & middle reaches of the Yellow River, the Loess Plateau stretches over parts of 7 Chinese provinces/regions: Qinghai,Gansu, Ningxia, Inner Mongolia, Shaanxi, Shanxi and Henan, with an area of about 640,000km2 and rural population 70 million. It has the highest erosion rates anywhere in the world. Several billion tons of sediment annually still clog up the Yellow River (now the most silt laden river in the world) and pose a Page 1 of 3  China Country Office Project Summary Note serious flood risk in the lower reaches; large reservoirs such as Xiaolangdi and Sanmenxia lose their storage capacity quickly and huge economic losses occur. The Loess Plateau area is still home to about 30 million poor farmers. Traditional farming practices are still ongoing, posing huge threats for land and the environment. Bank’s Involvement: Loess Plateau Project From 1994 – 2005, two phases of a Loess Plateau Watershed Rehabilitation Project have been successfully implemented in 48 counties in Shanxi, Shaanxi, and Gansu Provinces, and the Autonomous Region of Inner Mongolia, with area of 30,000 km2 in total. Total investment costs amounted to US$ 550 million of which IBRD and IDA resources made up US$ 300 million. The Project has dual objectives: to help achieve sustainable development in the Loess Plateau by increasing agricultural production and incomes, and improve ecological conditions through: (a) the introduction of more efficient and sustainable uses of land and water resources; and (b) reducing erosion and sediment flow into the Yellow River. The Project had three main components: (1) crop land improvement; (2) slope land protection; and (3) support services & training. The first component was further divided into the sub-components of: (a) terracing, (b) bank land protection/development; (c) sediment control dams and gully control structures, and (d) irrigation. The second component included: (a) afforestration and vegetative cover, (b) grass and livestock development, and (c) horticulture. And the third component included training, monitoring and evaluation and other project management activities. The Project has increased agricultural production and incomes of 2.5 million people on 35,080 km2 of land in the Loess Plateau in 1223 small watersheds of the Yellow River and reduced sediment inflows to the Yellow River. The Project is one of the largest and most successful erosion control programs in the world with a long-term and sustainable development impact. • Physical: 920,000 ha rehabilitated; 190,000 ha terraced; much diversified agriculture; beneficiaries reached 2.5 million; Rural infrastructure reinforced; • Financial: Grain production went up from 428 kg to 630 kg per capital, 100kg higher than non project, per capita increased from US$ 45 to US$ 203 (US$ 44 more than non project area) ; • Social: 2.5 million people out of poverty; women’s social status and children school enrollment rate raised; • Environmental: rationalized land use; vegetation cover increased from 17% to 33%, bio-diversity substantially increased and micro-climate improved; annual soil erosion reduction of over 107 million tons. The project’s key contributions have had far reaching strategic impact on both policy and operations, which are far beyond the funding and physical benefits per se. The project has Page 2 of 3  China Country Office Project Summary Note contributed to the profound changes in policies and similar programs of the Chinese government and other donors. The key policy implications include: • Land tenure: farmers receive contracts with 30-50 years use rights. • Ban free range grazing of sheep and goats • Ban planting on steep slopes • Ban tree cutting The key reasons for the success lie in: • the holistic and integrated watershed planning approach; • its focus on people through a participatory learning and action approach; • strict supervision of physical and financial progress and rigorous M&E; • improved grazing management; multi-sectoral and inter-agency collaboration and capacity building. The Loess Plateau concept and practice is an economically viable and environmentally sustainable integrated watershed management model that is being replicated in China and beyond. Lessons Learned The following lessons can be drawn for the similar projects: (1) Focus of project design on development objectives facilitates outcome oriented project implementation. The project implementers were facing many attempts to address additional objectives in such areas as marketing, farmers’ organizations, agricultural extension services, targeted poverty programs and more. Without neglecting the importance of these issues the Project kept a focus on the development objective and avoided overburdening this Project, which was complex already through the dual objective based on environment and income. (2) Project supervision strategy should be clear and transparent and should strongly be based on Borrower’s internal project supervision. Despite its large scale and scattered nature this Project remained well managed and supervised. The supervision strategy was built on: (i) using the borrower’s internal capacity and institutions, (ii) applying simple but strict and transparent rules for procurement and disbursement with a high degree of beneficiaries self-control, and (iii) imposing a strong and transparent monitoring system, which allowed efficient and cost-effective internal and external control like the system of ‘maps and tables’ introduced in this Project. The Bank team should support and control the supervision process e.g. by random spot checks, but should not take over responsibility from the Borrower. (3) Building strong Bank-Borrower partnership needs consistency in the task management and in the composition of task team. The mutual trust and shared responsibility in the implementation and supervision of the Project was possible through a consistent task team throughout the implementation of the Project. The fact that the task manager was located in the field office facilitated Bank-Borrower cooperation and partnership. Page 3 of 3