China - Third Irrigated Agriculture Intensification Loan Project

Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 05/04/2005 Report No.: AC1245 1. Project Statistics Country: China Project ID: P084742 Project Name: Irrigated Agriculture Intensification Loan III Task Team Leader: Qun Li Estimated Appraisal Date: April 5, 2005 Estimated Board Date: July 19, 2005 Managing Unit: EASRD Lending Instrument: Specific Investment Loan Sector: Irrigation and drainage (75%);Agricultural extension and research (19%);Forestry (6%) Theme: Other rural development (P) IBRD Amount (US$m.): 200.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER 266.00 266.00 Environmental Category: B - Partial Assessment Simplified Processing Simple [] Repeater [X] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] 2. Project Objectives The principle development objectives of the project would be to increase water and agricultural productivity in low and medium farm land areas, raise farmers? income and reduce poverty, improve competitive capability of farmers under post-WTO conditions, and promote water saving and sustainable and participatory water resource management and agro-ecological environmental management in the Huang-Huai-Hai (3-H) Basin/North China Plain, which produces about 50% of China's grain. 3. Project Description The proposed Irrigated Agricultural Intensification Loan III Project (IAIL3) is the third in a series of Bank-financed irrigated agricultural intensification operations in China. It is designed as a ?repeater project? to continue and strengthen the successful activities started under IAIL2, but in addition includes substantial support for new activities and innovations which will enhance poverty impacts, water saving, non-polluting food production, farmer participation, market access for farmers, agro-ecological protection, and agricultural competitive capacity in the post-WTO environment. IAIL3 would finance sustainable development of modern irrigated agriculture in 107 counties in 32 prefectures/cities in five provinces in the 3-H Basin -- Anhui, Hebei, Page 2 Henan, Jiangsu, and Shandong -- with a total project estimated cost of about US$454 million (comprising an IBRD loan of US$200 million and counterpart funds of US$254 million). The Bank loan would finance about 42 percent of project costs, covering the Central Government's contribution. Local governments would provide counterpart funds or 30 percent of costs to cover the remaining costs, in conjunction with farmers? own labor and cash contributions totaling 28 percent of costs. Project components are designed to enable an integrated approach to rural agricultural development, with combined economic, environmental and socio-institutional development outcomes. Although the project is not specifically poverty-targeted, it would benefit low income rural areas which suffer from low yield land, lack of water or partial irrigation, by providing facilities for full irrigation and improved agriculture support services, which will raise incomes substantially. The overall project benefits of increased farm income, increased production quality and output, and environmental sustainability would positively impact farmers in the project area as primary beneficiaries. Project provinces and proposed project scope and contents would be similar to those of IAIL2, but with several innovations and improvements added, including water-saving and productivity measures, pilot non-polluting/green food production, pilot specialized farmer associations/co-operatives and pilot farmer dragon-head enterprises to improve competitive capacity in the post WTO environment. The five components of the project are summarized below: (i) Water-saving Irrigation and Drainage (USD 310.03 million). The main activities of the component would be: (i) rehabilitation and upgrading of local irrigation and drainage systems at the tertiary level and on-farm, application of improved irrigation methods and technologies, and land improvement for about 500,000 ha of low-and medium-yield land; (ii) construction of water-saving irrigation facilities to demonstrate real water savings and increased agriculture production per unit of water through integrated irrigation engineering, agronomic and management methods for about 300,000 ha; (iii) development and expansion of SIDD/Water User Associations (WUAs) in the five provinces; (iv) establishment of demonstration WUAs following a program approach in selected CAD areas outside the five provinces; and (v) implementation of water resource management plans in the 22 project counties in water-short Hebei province. This component would aim in particular to improve the efficiency and economic value of water used in irrigated agriculture. (ii) Agriculture Modernization and Support (USD 64.20 million). Activities to be financed would include: (i) strengthening and modernization of extension and support services; (ii) improvement in quality of agricultural products (e.g., high quality seed development and green food techniques); (iii) balanced fertilizer use; (iv) integrated pest management (IPM); ) (v) cropping pattern adjustment to build on local comparative advantages; (vi) improved farmer access to technical and market information; (vii) support for establishment of specialized Farmers Associations or Cooperatives (FAs) and improved ?non-polluting/green (organic) food? production, processing, certification and Page 3 marketing; and (viii) establishment of about 10 pilot demonstration sites for vertically- integrated Farmer Dragon-head Enterprise Demonstration Bases (FDDBs) based on farmer participation in ownership and management through FAs, combined with vertical integration from production to market, to improve the farmers? share of the market revenues. The component would aim to increase agriculture production, quality and value, and the farmers? share of the market value of production. (iii) Agro-ecological Environmental Protection and Management (USD 23.99 million). The main activities financed would include: (i) establishment of shelterbelt forest networks around farmlands; (ii) windbreaks for soil conservation and protection; (iii) tree nurseries; (iv) soil, water and other environmental monitoring to track and manage ecological conditions; and (v) implementation of environmental management plans. Forest coverage of farmland, mainly in shelterbelts around fields and along canals, would be increased but limited by the balance between their benefits in saving crop e-t and producing timber and fuel wood, compared to their own water use. This component would provide ecological shelter for agricultural production, in order to reduce crop damage and evaporation due to wind, and would monitor the environmental and ecological impacts to help ensure sustainable agriculture. (iv) Institutional Development and Support (USD 33.13 million). This would support institutional development and capacity building in SOCAD, POCADs and COCADS and would include: (i) training related to project implementation and management; (ii) local and overseas study tours; (iii) mobile expert teams and expert panels to provide expert technical guidance at all levels; (iv) monitoring and evaluation on project impacts and issues (e.g. groundwater) and operational research on scientific topics to enhance agricultural productivity and value; and (v) development and implementation of an upgraded computerized integrated project Management Information System (MIS) and M&E System (MES). (v) Project Survey, Design and Management (USD 22.87 million). Primary activities would include (i) implementation and engineering supervision; (ii) engineering surveys and design and surveys of geological and hydro-geological conditions as needed for design and construction; (iii) field surveys, preliminary design and construction mapping; and (iv) management of core activities such as disbursement, procurement and M&E. These activities are essential to ensure smooth project implementation. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The Huang-Huai-Hai river plain (or 3H basin), the location of the project, comprises portions of the provinces of Hebei, Henan, Shandong, Jiangsu, and Anhui and is China's major grain basket. IAIL3 would finance sustainable development of modern irrigated agriculture in about 107 counties in 32 prefectures/cities in the above five provinces. Groundwater has been falling rapidly in specific areas of the 3H Basin (also known as the North China Plain) due to both surface water scarcity and over-extraction of available groundwater resources. A thorough water balance analysis has been carried out for all Page 4 provinces, which vary in their respective situations: Jiangsu and Anhui provinces have overall surplus water resources, both surface and groundwater due to more abundant annual rainfall. Both provinces have large reservoirs, major rivers flowing through the provinces, and large lakes. Henan and Shandong Provinces have moderate surplus of surface and groundwater resources with seasonal shortages during the dry spell. Henan and Shandong also have Yellow River diversion water (3.5 billion cu. m. in Henan and 7.0 billion cu. m. in Shandong). Hebei Province has less surface water, and its shallow aquifer groundwater has been over-exploited in the past resulting in falling groundwater levels. 5. Environmental and Social Specialists on the Team Mr Zong-Cheng Lin (EASSD) Mr Qingtao Xie (EASEG) 6. Safeguard Policies Triggered 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 Cultural Property (OPN 11.03) X Indigenous Peoples (OD 4.20) 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 II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The IAIL3 project is focused on rehabilitation of existing sites, with limited construction and no major civil works. The environmental and social impacts of activities would be minor and it has therefore been classified as a category B project. Environmental assessment: As per Environmental Safeguard requirements (OP4.01), IAIL2 had a complete Environmental Impact review in its latter stages, based on the extensive project environmental monitoring database and analysis. No adverse environmental impacts were found in implementation. The proposed IAIL3 activities are very similar to IAIL2, with rehabilitation of existing works programmed, rather than new construction. Therefore, at PCN review stage, it was agreed that a full EIA for IAIL3 would not be necessary and that simplified ?repeater project? procedures would be followed. The borrower and task team reviewed lessons from the preceding IAIL2, evaluated and reported on new sites to be included and developed environment management plans for the new project. Results are summarized in the IAIL3 PAD and reflected in a new EMP for each province under the project. Page 5 Pest management: IAIL 3 does not finance the procurement of any pesticides. However, owing to the existing farming methods within the project area, it is expected that the Pest Management (OP4.09) Safeguard policy would apply. Under proposed project components, it is planned that agricultural activities would address the use of pesticides and promote reduction in use, with the widespread adoption of Integrated Pest Management (IPM) techniques and increased ?green food? production. It was agreed with the Borrower that the responsible Bureaus would review the provincial IPM (pesticides) Impact Assessment Report for IAIL2, reflect lessons learned and include mitigation measures as necessary in the design of IAIL3 in their administrative area. A pest management plan, building on IAIL2 experience with IPM, has been prepared for the new project, and reviewed by the task team and Safeguards Secretariat. Safety of dams: IAIL 3 does not include any dam construction works, nor any financing related to dams. However, in line with China?s national dam safety program, the task team has monitored the following issues, owing to the location of 17 existing reservoirs within the project area: Four of the five project provinces (Anhui, Henan, Shandong and Jiangsu) have listed 17 reservoirs serving their sub-project areas. All the reservoirs are reported to be operationally ?safe? with respect to dam safety. Dam safety in China is governed by the State Council Regulation No. 77 for ?Reservoirs and Major Dams Safety Management? and the Ministry Water Resource?s ?Methods of Determining Reservoirs and Major Dams Safety? issued in 1995. These dams are monitored annually by the respective Reservoir Engineering Management Units under the Provincial Water Resources Bureaus for pre- and post-flood events, and special event (unprecedented rainstorm, landslide, earthquake, etc.) for safety based on the various technical parameters prescribed. Safety remedial and strengthening works had been carried out on some of the dams over the years of operation since completion. During project preparation and appraisal, the safety aspects of these reservoirs has been reviewed in accordance with the Bank Safeguard Policy (OP 4.37). Based on the information and documentary evidence provided and discussions held with each province, the task team was satisfied with operational conditions of these dams as reported, except for four dams ? Shizhiliang, Xiaotashen (Jiangsu), Ruanteng and Fengshuiling (Anhui) - whose safety remedial and strengthening works are either still in progress or have been recently completed but not yet inspected and accepted. Specific supplementary information and actions relating to those reservoirs, including provision of final safety inspection and acceptance reports to the Bank, have been agreed and included in the legal covenants. On an annual basis, provinces will also furnish monitoring/status safety reports on pre-flood and post-flood, and special events (unprecedented rainstorm, landslide and earthquake) for all the seventeen reservoirs serving the sub-project areas. Page 6 Involuntary resettlement: No involuntary relocation or land acquisition is envisaged under the project, as project works are generally for replacement of existing irrigation structures in the lower branch/lateral system or construction of small on-farm works. However, the project might affect people through loss of crops on construction sites (though these cases would be few), and landscape leveling and amelioration might require farmland readjustment. Mitigation measures would be taken to minimize any such potential impacts. A Policy Framework for Resettlement and Land Acquisition has been prepared by SOCAD (the borrower?s implementing agency), which describes all these situations and avoidance/mitigation principles to be followed, in accordance with the Bank?s safeguard policy OP4.12. In addition, consultation with farmers would be continued and impacts would be monitored and reported. Indigenous peoples: The IP policy is not triggered by IAIL3, as there are no ethnic minority groups covered by the project area in the 5 3H basin provinces, as confirmed in the social impact review carried out by SOCAD. Additional sites identified for expansion of Water User Associations, under the ?program approach?, outside of the five project provinces would follow Bank policies, including an assessment of any ethnic minority groups potentially affected by the project, and, if identified, develop plans to ensure equitable access to project benefits. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The project is category B in nature, owing to the limited scope of construction and civil works, and the focus on rehabilitation of existing sites through a large number of small scale interventions. It is therefore anticipated that impacts will be limited. This judgment is supported by experience under the preceding IAIL2 project, which utilized similar activities and approach and which, evidence from a detailed review shows, had no negative impacts. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Owing to the scope of IAIL3 and the limited impacts anticipated (see D2), it was not necessary to consider alternative options to address critical impacts. During project preparation, a range of alternative design scenarios were considered. It was felt that expanding coverage and consolidating inputs in existing IAIL2 provinces would enhance impact and build on the capacities developed within administrative units, thereby further strengthening the existing government program. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Following a comprehensive review of IAIL2 and a range of studies in specific technical areas in preparation for IAIL3, the borrower has prepared the following safeguard-related management plans: Environmental Management Plan (for each province) IPM Plan Resettlement Policy Framework Page 7 A legal covenant will be included relating to Dam Safety, to ensure preparation of annual monitoring reports for all 17 dams in the project area, and provision to the Bank of inspection and acceptance documentation, relating to recent rehabilitation works completed on 4 of those dams. Under IAIL2, significant capacity has been developed within SOCAD and its local level implementing bodies. Sustaining and further enhancing such capacity at national level and strengthening the local levels is a priority in IAIL3, with significant training and study options programmed under the component for institutional development. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Preparation for IAIL3 has been led by SOCAD and its supporting POCADs from each province. Many experts and personnel from relevant line agencies, such as the Agricultural and Water Resource Bureaus, universities, etc, have been mobilized and involved in detailed preparation discussions. Key project beneficiaries will be farmers living and working in the project area. During project preparation, extensive consultation with farmers was carried out and a questionnaire survey of 5,070 farm households shows that farmers are anticipating project activities in their area and would like to participate with their voluntary labor input. Among the 107 project counties included, about one third have been chosen from poor areas, and the focus on development of low yield land has enabled more attention to poorer population and vulnerable groups in all project areas, in order to increase poor farmers and women?s share of project benefits. During implementation, it is expected that such consultation will continue through the project?s monitoring and supervision activities, where direct feedback from stakeholder groups will be encouraged and documented. In accordance with the Pelosi amendment, the documentation outlined in D4 has been disclosed and made available in the Bank?s Infoshop (in DC and China), as well as through SOCAD, in line with the 120 day limit. In addition, per the Bank?s internal requirements, this ISDS will also be disclosed in a timely manner. Please see section F for further disclosure details. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Date of receipt by the Bank 02/22/2005 Date of "in-country" disclosure 02/22/2005 Date of submission to InfoShop 02/22/2005 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Date of receipt by the Bank 02/22/2005 Page 8 Date of "in-country" disclosure 02/22/2005 Date of submission to InfoShop 02/22/2005 Pest Management Process: Date of receipt by the Bank 04/14/2005 Date of "in-country" disclosure N/A Date of submission to InfoShop 05/04/2005 Safety of Dams: Date of receipt by the Bank 04/14/2005 Date of "in-country" disclosure N/A Date of submission to InfoShop 05/04/2005 * If the project triggers the Pest Management, Cultural Property and/or the Safety of Dams policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? No If yes, then did the Regional Environment Unit review and approve the EA report? No Are the cost and the accountabilities for the EMP incorporated in the credit/loan? No OP 4.09 - Pest Management Does the EA adequately address the pest management issues? No Is a separate PMP required? No If yes, has the PMP been reviewed and approved by the regional safeguards team? Are PMP requirements included in project design?If yes, does the project team include a Pest Management Specialist? No OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan, abbreviated plan, or process framework (as appropriate) been prepared? No If yes, then did the Regional Social Development Unit review and approve the plan / policy framework / policy process? No OP/BP 4.37 - Safety of Dams Have dam safety plans been prepared? No Have the TORs as well as composition for the independent Panel of Experts (POE) been reviewed and approved by the Bank? No Has an Emergency Preparedness Plan (EPP) been prepared and arrangements been made for public awareness and training? No BP 17.50 - Public Disclosure Have relevant safeguard policies documents been sent to the World Bank's No Page 9 Infoshop? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? No All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? D. Approvals Signed and submitted by: Name Date Task Team Leader: Ms Qun Li 03/17/2005 Environmental Specialist: Mr Qingtao Xie 03/21/2005 Social Development Specialist Mr Zong-Cheng Lin 03/21/2005 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Glenn S. Morgan 03/18/2005 Comments: Sector Manager: Mr Rahul Raturi 03/28/2005 Comments: