China - Growth and development in Gansu province (Vol. 2 of 4) : Annex A : an agricultural development program for Dingxi and Hexi

Report No. 6064-CHIA China 'Growth and Development'in Gansu'Prov'in'ce Annex A: An Agricultural Development Program for Dingxi and Hexi November 26 1966 East Asia and Pacific Regional Office FOR OFFICIAL UJSE ONLY 46ft~~~~~~~~~~~~~~~~~~~~ b1it~oda iAi~tetiutib an, tmay eS dtyrepk1 ~~~~~~ t~fW i4b s conitentsrnmay no tfierwise  CURRENCY EQUIVALENTS The Chinese currency is called Renminbi (RMB) It is denominated in Yuan (Y). Each Yuan is 1 Yuan 10 jiao = 100 fen Calendar 1985 October 1986 US$1.00 = Y 2.94 US$1.00 = Y 3.69 Y 1.00 = US$0.34 Y 1.00 = US$0.27 WEIGHTS AND MEASURES hinese statistics.are usually in metric units; in addition, mu and Jin are aften used: 1 mu = 0.607 hectares (ha) 1 jin = 0.5 kg FISCAL YEAR January 1 - December 31 TRANSLITERATION The Pinyin system is used in this report. ABBREVIATIONS ADC - Agricultural Development Company ERR - Economic Rate of Return FRR - Financial Rate of Return PRS - Production Responsibility System PWRB - Provincial Water Resources Bureau TXC - Two Xis Commission YDRQ - Yindaruqin  FOR OFFCIWL USE ONLY Preface As preliminary background for World Bank assistance to the province of Gansu, it was agreed in February 1985 that the Bank would undertake a review of development issues and options in the key sectors of agriculture, industry and human development. To this end, three missions visited Ganau in April/May, May/June and October/November 1985. Each mission traveled extensively in Gansu an4 saw agricultural projects, industrial enterprises, schools and health facilities. The missions also had numerous-discussions and received helpful suggestions and much valuable information from government officials at central, provincial, prefectural and county levels. The support and contribution of all these people made possible the preparation of this report. The first mission covered issues in education and health. It was led by G.B. Baldwin and included I. Porter (senior economist), R. Drysdale (senior education economist), B. Searle (general educator), N. Prescott (health economist), S. Scheyer (public health specialist), J.C. Wang (consul- tant on education management), and W. P. Chang (consultant on public health). The second mission studied agricultural development. It was led by D.C. Pickering and included T. J. Goering (senior agricultural economist), J.B. Doolette (agriculturalist), R. Ng (agricultural institutions specialist), A. Piazza (agricultural economics consultant), C. Pereira (consultant on land management) and P. Shallow (consultant on irrigation). The third mission conducted further work in agriculture and human development and covered issues in industry and public finance. It was led by I. Porter and included R. Drysdale, J.B. Doolette, A. Piazza, C. Pohl (senior economist), J. Brown (agroindustries adviser), J. Chanmugam (senior industrial engineer), M. Byrd (economist), A. Kumar (economist) and U. Sae-lau (research assistant). The following also-contributed to the study: -K. Hill (consultant on demography), Cai Jinyong (researcher), T. Bassler (editor), M. Cassidy (secretary). The report includes three Annexes (agriculture, industry and education) as well as a main report which summarizes the findings on specific sectors and highlights some of the development options facing Gansu. The report is selective in its coverage of sectors and topics and a number of issues of potentially major importance to Gansu (e.g., interprovincial trans- port) have not been addressed. The report should therefore be viewed prima- rily as input into the central and provincial government's thinking about future policies and programs for Gansu. Drafts of the main report and the annexes were discussed with the central and provincial governments in April/May 1986 and have been revised to take account of their comments. This document has a restricted distribution and may be use' by n -ipients only in the performance of their ocis duties. Its contents. may not otherwise bo dis.'. without World Bank authorization.  CHINA GROWTH AMD DEVELOPMENT IU GANSU PROVINCE ANNEX A: An Agricultural Development Program for Dingzix and Heai Table of Contents Page no. I. OVERVIEW OF THE AGRICULTURAL SECTOR IN GANSU .............., I The Natural Resource Base....................... * I Agricultural Production ..................... * . 3 Agricultural Incomes..................................... 4 Intraprovincial Disparities in Agricultural Resources and Incomes .......................... S Agricultural Zones inDingxi........................... 7 Rural Energy in Dingzi .......... 9 II. GOVERNMENT OBJECTIVES AND STRATEGY FOR DEVELOPMENT OF DINGXI AND HEXI....................................... 13 Rainfed Agricultural Investm ents ......................... 13 Irrigation Development................. ....... . .... 14 14 Rationale for Strategy............ ......... . - ..... 1S III. LOESS HILLS REHASILITATIN . ........................ ......... 16 Rehabilitation Measures ..................... O 17 Crops and Cropping Systeus................... ............ 19 Animal Production ................ . .... 22 -Fuelwood Foety.........*23 Rural Household Energy Considerations ...................- 23 Institutional Arrangements...... ...... .......... 26 Financing Arrangements ...................................., 26 Employment and Population Implications ...................o 30 Economic and Financial Analysis ........................... 32 Principal Ise .39  . - 11, - , Page No. IV. IRRIGATION DEVELOPMENT .... . ..... ............ 41 The Irrigation Program .. .. . 606 , * * 41 Types of Development ............*...... ................ 44 Design of Irrigation Systems......................... 45 Irrigated Crop Production Systems ....................... 46 Role of Forestry and Livestock........................... 49 Organization and Management............................ 50 Financing Arrangements.............................* ... 52 Economic and Financial Returns...... 53 Principal Issues*....................... .... 4. 58 V. RESETTLEMENT .. .. 666 #G6@6 , .....& 60 Methodology and Schedule of Resettlement ................ 60 Organization and Management . .........................a.. 63 Financing Arrangements............... ......... .......... 64 Principal sse ............. O 64 VI. AN INTEGRATED DEVELOPMENT PROGRAM FOR THE "TWO XIS"...,... 65 Loess Hills Rehabilitation ............................... 65 Irrigation Development. ...*..e................. .. .. 66 Resettlement ..... .............. 66 Planning and Implementationo..o.......... o 67 Text Tables Table 1.1: Area, Yield and Production of Major Crops s ......... 3 Table 1.2: Intraprovincial Disparities in Agricultural Resources and Incomes......... ..................... 6 Table 1.3: Growth Rates of Agricultural Output, 1980-84o........* 7 Table 1.4: Agricultural Zones in Dingxi........................ 8 Table 3.1: Crop Yields .................. 20 Table 3.2: Payments for Land Rehabilitation and Other Activities ..... ...........................a....... 28 Table 3.3: Public Expenditures on Land Rehabilitation, 1984.... 29 Table 3.4: Land Use in the Dingxi Region by County ............. 31 Table 3.5: Distribution of Land and Population in the Dingxi Region by Zone ................... . 32 Table 3.6: Loess Hills Rehabilitation Investment Costs per Mu.. 34 Table 3.1: Loess Hills Rehabilitation - Crop Budget at Full Development, Economic Values per Mu***.*..**o... . 35 Table 3.8: Farmgate Prices for Major Products and Inputs ....... 36 Table 3.9: Summary of Loess Hlills (Zone II) Economic Analysis.. 38  ^. iii - Page No. Table 4.1: Irrigation Development 1950-95 ...................... -42 Table 4.2: Irrigation - Crop Budget at Full Development, Economic Values per Hectare........................ 54 Table 4.3: Yindaruqin - Summary of Economic Benefits andC08t8....................... 55 Table 4.4: Jingtai - Summary of Economic Benefits and Costs.... 56 Table 4.5: Sensitivity_Analysis ............................... 57 Table 5.1: Current Population, Carrying Capacity and - Resettlement Plans for the Dingxi Region...w...... 61 Table 5.2: Location of Sites and Schedule of Resettlement for the Two-Xis Region.................. .. e, -. 62 Figures Figure 1.1 Competing Demands for Village Biomass Products...... 10 Figure 3.1 Organizational Structure of the Gansu Provincial People's Government and the Agricultural and Two-Xis Commission ...... , 27 Figure 4.1 Crop Calendar.. ............ , 4 Figure 4.2 Organizational Structure of the Gansu Provincial Water Resources Bureau ..................... 51  I. OVERVIEW OF THE AGRICULTURAL SECTOR IN CANSU The Natural Resource Base 1.01 Agriculture in Gansu province is characterized by a natural resource endowment in which the essential elements, namely soils, rainfall and topo- graphy, typically are such that crop and livestock production cannot easily be achieved. Central an" eastern Gansu is dominated by the great Loess Plateau which covers over 630,000 km and extends into northern Shaanxi, southern Ningxia and the western part of Shanxi province. This is a unique land form of windblown soits that has been transformed largely by human intervention into a ragged topography with massive gullies with extremely steep slopes, and dissected hills of comparatively uniform heightt the sunmmits of which repre- sent the leveL of the original plateau. Transecting the province is the fast flowing silt-laden Yellow River. 1.02 Gansu has a surface area of some 45.4 million ha classified roughly as follows (in millions of hectares): Cultivated land : 3.5 Natural or planted forest : 3.6 Grasslaad : 14.3 Mountain meadows : 4.5 Barren land with potential for forest : 6.7 Sand or stony desert : 12.0 Other (classified as unreclaimed) : 0.8 Of the 3.5 million ha of cultivated land some 65% is classified as sloping, of which just over one quarter is terraced. Irrigation systems cover an area of about 900,000 ha but no more than some 600,000 ha of this total receive a fully guaranteed supply of water. 1.03 The population of Gansu province in late 1984 was 20.2 million (2Z of the national population) of whom some 79% or 16.1 million were classified as rural, and 21%, or 4.1 million, were classified as urban with the bulk of the urban population located in the region of the provincial capital at Lanzhou. Ninety eight percent of the agricultural labcr force works in the collective sector, mostly on individual responsibility plots. In per capita terms the rural population has 0.2 ha of cultivated land (1.0-1.2 ha per family) and 2.0 ha of other land (excluding desert). 1.04 Soils and Topography. The soils of Gansu can oe grouped into six categories. Desert soils occur mainly in the west and northeast and are used. only for grazing. Much more significant from an agricultural viewpoint is the category of loess soil. When undisturbed by erosion they are unique in their extremely deep and undifferentiated profiles. Loess soils are generally silty loams typically comprising 60-80% silt, 15-20X clay, and 5-15X sand. Deposi- tion began over one million years ago and loess soils of more recent origin in geological time tend to have a higher clay content and less sand than older deposits. Loess soils are usually alkaline (p.H. 7.5 to 8.5) with a high  -2 (10-20X) calcium tarbonate content which can cause surface capping. Cypsum content increases significantly in the northeast, causing salinity problems when cultivated. 1.05 The topographic features of the loess deposits are closely asaociated with the underlying strata. On ancient rolling terrain the leess appears in the form of elongated or rounded mounds. But where the bedrock is broad and flat, the loess appears as hight flat plains with abrupt edges. Although originally wooded, agricultural activities have caused progressive removal of vegetation# leading to massive erosion and creating a land form heavily dissected with gullies, caused by seasonal rainfall runoff, which have cut through to the underlying bed rock. 1.06 Climatic Factors. There are three principal climatic factors affecting agriculture in Gansu. First, rainfall is low, erratic, and largely confined to a short period of three to four months in the summer. Mean annual rainfall varies from less than 50 mm in the northwest of the province to over 500 mm in the southeast* In central Gansu, the principal geographic area of this annex's focus, means range from 180 - 450 mm. More than 70X of the rain falls in the period June to September although the precise amount varies substantially from one year to the next. 1.07 Second, the provincial climate is characterized each year by a prolonged period of low temperature. Thus, mean air temperatures are at or below 0