China - Mainstreaming Adaptation to Climate Change into Water Resources Management and Rural Development Project : environmental assessment (Vol. 4 of 6) : Environment report for Shandong Province

E1705 v 4 China Research Academy of Environmental Sciences  January 2005  1.1. Purpose and Contents of Report............................................................................... 1 1.2. Background................................................................................................................... 1 2.1. EnvironmentalIssues of IAIL2 Project ..................................................................2 2.2. Assessment of Actual EnvironmentalImpacts of IAIL2 Project ......................3 2.3. Summary Conclusions of IAIL2 Environmental ImpactsAssessment ............9 2.4. Recommendationsfor Improvement of IAIL3 EnvironmentalManagement.9 3. COMPARISON ENVIRONMENTALCONDITIONS OF AND ENVIRONMENTALIMPACTS BETWEENIAIL3 AND IAIL2 ............................................................................................ 10 3.1. Comparisonof Project Counties (Cities).............................................................. 10 3.2. Comparisonof Environmental Conditions...........................................................12 3.3. Comparison of Project Contents ............................................................................ 15 3.4. Main Conclusions...................................................................................................... 17  I.Introduction 1.1. Purpose and Contents of Report This EnvironmentReport (the Report) for ShandongProvince is prepared for the appraisalof the proposed World Bank loan-financed Irrigated Agriculture Intensification Project 111(IAIL3,the Project). The World Bank preparation mission of November 2004 proposed that the environment categoryof the Project remains to be type B due to the similaritiesbetween the Project and IrrigatedAgriculture IntensificationProject I1(IAIL2) in terms of project areas and basic contents. In order to simplifyprocedures the Bank no longer requires to review a full environmentalassessmentreport for the Project, but requires to 1) assess the actual environmentalimpacts of the IAIL2 Project; 2) comparethe environmental conditions of IAIL3 and IAIL2; and 3) prepare environmental management plan by Project provinces. In compliancewith the above requirementsthe main contents of the Report include: 1) Overviewof the actual environmentalimpact assessment of the IAIL2 Project ShandongComponent; 2) Comparisonof environmentalconditionsand contentsbetween IAIL3 and IAIL2 in Shandong; 3) Clarificationon the preparation of Environmental Management Plan for IAIL3 in Shandong; 4) ShandongProject Area Environmental Management Plan (attached to the Report). 1.2. Background Since 1998the IAIL2 Project had been implemented in 25 cities and counties of Shandong's six municipalities,includingJinan, Zaozhuang, Jining, Taian, Dezhou and Heze and project implementationwas completed as scheduled in end 2002. Project implementationhas improved local agriculturalproductive conditions,promoted agriculturalrestructuring, increasedfarmers' income and improved the level of agriculturaltechnologies,thus achieving remarkable economic, social and ecological benefits. To this end, the State Office for Comprehensive AgriculturalDevelopment (SOCAD) has decided to continueto implementthe IAIL3 Project in the above five provinces.  Entrusted by SOCAD the China Research Academy of Environmental Scienceshas undertaken to conduct environmental impact assessment (EIA) for the Project and prepared the Report according to the requirements of the Bank preparation mission. 2. Overall Assessment of EnvironmentalImpacts of IAIL2 Project In June 2004 SOCAD prepared the "Environmental Management Reportfor the Irrigated Agriculture Intensfication Project 11" to be as one of the IAIL2 ICR supporting documents (Reference Document 1).The report summarizes and evaluates the environmentalmanagement work, status of implementation of relevant environmental covenants in the Loan Agreement and the actual environmental impacts followingproject implementation. The Report only outlines the actual environmentalimpacts of IAIL2. 2.1. EnvironmentalIssues of IAIL2 Project The main objectives of the project were to increase agriculturalproduction and farmers' income through improvement and rehabilitation of the existing irrigation facilities in the project areas. Main project components include canal lining, constructing on-farm works, rehabilitating existing and building new pumping stations and tube wells, land leveling, improving field passageways and building field drainagenetwork and windbreak shelter belts. The project does not involve the construction of new reservoirs and new main and branch canals. In March 1997the Bank preparation mission rated the project as Category B in terms of its environmental impacts. Based on the EIA report of MIL2 the Project Appraisal Document (PAD) specifiedthat there were no significant environmental issues under the project and, the important environmental issues included likely groundwater overdraft and likely over-quota diversion from the Yellow River, and other environmentalissues included soil salinization, likely impacts of irrigation run-off on eutrophicationof Nansi and Dongping lakes, environmental impacts of construction activities and control over the application of pesticides and chemical fertilizers, etc. These issues are shown in Table 2-1. Table 2-1: Bank PAD-specified EnvironmentalIssues for IAIL2 Environmental Significant Important Other Environmental Issues Issues Environmental Environmental Issues Issues Likely groundwater Soil salinization;lake eutrophication; overdraft; Mahe dam safety in Tengzhou; Likely excessive impacts of constructionactivities; Main Contents None Yellow River control over applicationof pesticides diversion; and chemical fertilizers  2.2. Assessment ofActual EnvironmentalImpacts of IAIL2 Project 2.2.1. Significant EnvironmentalIssues Evidencesof project implementationin ShandongProvince have verified the conclusion in the Bank's PAD of "the Project doesn't involve any significantenvironmental issues". The project did not see any of them during its implementation and will unlikely see any either in the future. 2.2.2. Important EnvironmentalIssues I) GroundwaterResources Protection During project implementationShandongProvince had hlfilled the requirementsof the Bank Loan Agreement, including: 1) No new wells were built in groundwater overdraft areas; 2) Permits were obtained for driven well for use of groundwater; 3) Depth of all newly drilled wells did not exceed 50 meters; 4) Groundwatermonitoring was conducted. In addition,the significanceof comprehensivewater saving ("real" water saving)was stressed duringproject implementationthrough implementing a series of measures including engineering,agronomicaland intensifiedwater savingmeasures,which has produced remarkablewater savingbenefits with improved water use. Estimationsshow that after constructionof anti-seepagecanals water use rate rose from the original43% to 70% while the rate for anti-seepagepipes and sprinklersreached over 95%. Project implementationhas to some extent relieved the trend of groundwater overdraft and declining groundwatertable due to a series of water saving measures taken. However, project implementation in Shandong coincided with the drought cycle, when precipitation was much less than normal for consecutive four years 1999-2002).Annual rainfall was about 20-40% less than the multi-yearaverage, as shown Table 2-2. Table 2-2: Statistics of Precipitation in Project Areas During 1998 to 2002 Annual average precipitation (mm) Difference (mm) 1998 1999 2000 2001 2002 5YA MYA (mm) 766.9 503.2 643.1 538.5 368.9 564.1 664.8 -100.7 5YA= five-year average; MYA=multi-year average  Due to less precipitation more irrigation water was used but such use was within the range of water resources balance. Table 2-3 shows groundwater extraction for Shandong during 1998and 2002. Table 2-3: GroundwaterExtraction in Shandong (1998-2002) Annual Extraction (10000 m3) Multi-year Annual Average Five-year Resources Difference 1998 1999 2000 2001 2002 Average (l0000rn3) (l0000rn3) 46,102 53,822 65,295 85,776 100,141 70,227 92,837 -22,560 The above table indicates that groundwater overdraft occurred in the province project areas in 2002, however, the five-year average extraction was 225.6 million m3 less than the multi-year available groundwaterresources. This explains that although there was less rainfall project implementation had not produced negative impacts on groundwater resources balance. However, less precipitation had reduced groundwater replenishment, which resulted in declined groundwater table in the project areas. Compared with 1998, groundwater table in Shandongproject areas dropped an average of 2.09 m in 2002. Analysis on multi-year average groundwater depth indicates drop of groundwatertable in the project areas of Shandongremained within the normal range. In wet years groundwater can be replenished and the table will rise. The year 2003 was a wet year for Shandong,when annual precipitation reached 1,033.8mm and average groundwater depth rose by 3.36 m from 8.19m to 4.83 m, as recorded in Table 2-4. Table 2-4: Statistics of Annual Precipitation (1998-2003) and GroundwaterTable -- Multi-year 1998 1999 2000 2001 2002 2003 Item Average Precipitation 766. 503. 643. 538. 368.9 1,033. 664.8 9 2 1 5 8 (mm) Groundwater Depth 5.73 6.23 5.94 6.44 8.19 4.83 6.1 11) Control ofYellow River Diversion by Shandong During the implementation of the project, the ShandongPOCAD took no-increase of irrigation water from the Yellow River as one of the project management objectives. Main measures to hlfill the objective include the followings:  1) Reducing irrigation demand through integrated water saving measures; 2) In areas where groundwater level was high and have bigger exploitationpotential more tube wells were built to increase groundwatersupplyto substitute water from the Yellow River; 3) Combined use of surface water and groundwater,which reduced diversion fiom the Yellow River, ensured irrigation, increased crop yield and achieved comprehensive drought, waterlogging and salinization control at the same time. Over the past several years of project implementation Shandonghad not increased its Yellow River diversion while it was actually decreasing year by year. On the other hand, starting from spring 1998the diversion volume for the province was controlledby the Bureau of Yellow River Affairs, making it impossible for Shandongto divert over-quota water from the Yellow River. Table 2-5 is the statistics of diversion by the province. Table 2-5: Volume of Yellow River Diversion by ShandongProvince (1998-2002) Year 1998 1999 2000 2001 2002 Average Diversion(1o8m3) 81.0 85.2 65.0 64.6 61.0 71.5 The table indicates that during the implementation of the project, Shandong Province diverted an annual average of 7.15 billion m3of water from the Yellow River, which was close to the state allocated quota of 7.0 billion m3for the province. This indicates that the implementation of the project has not caused negative impacts on the volume of diversion from the Yellow River by ShandongProvince. 2.2.3. Other Environmental Issues I) Soil Salinization In the North China Plain (Huang-Huai-HaiPlain), where the project is located, large quantities of groundwater have been exploited for agricultural irrigation since the 1970s, which has caused a general decline of groundwatertable. In general, conditions of critical groundwater depth (CR.0 meters) for soil salinizationhave disappeared. ContinuousFresh water irrigation in the project areas has continuouslydesalted soil. Therefore, secondary salinization could appear only a few low-lying land along the rivers, lakes and coasts as well as few project areas where slightly salty water with the mineralization level 1-2glL and salty water with the mineralization level of greater than 2g/L were used for irrigation.  Project implementationcoincided with drought. Groundwaterin the project areas was far deeper than the critical depth for soil salinization,which could not lead to new soil salinization. Accordingto project design, in areas where groundwater depth was fairly shallow, such as Yucheng City, Pingyuan, Chengwu and Yuncheng Counties,the project appropriately developed tube well irrigation and adopted rotationalwell-canal irrigationto prevent soil salinization. In addition,the project completed excavation and dredging of irrigation and drainage canals lateral canals, providing a relatively complete drainage system in the project areas. A timely drainage of excessiverain and irrigationrun-off was thus guaranteed. During the implementationof the project, Shandong conducted continuous monitoring on soil salinityin its project areas. The monitoring results show that since project implementationno soil salinizationproblem had occurred in the project areas. 11) Impacts of ConstructionActivities Most of the works under this project were excavationand constructionof laterals, structuresand pumping stations. These works were small and relatively simple and scattered.Most of the activitieswere undertaken in already developed farmland areas and the constructionperiod was short (generallywithin half a year). Therefore, environmental problems related to project constructionwere minor and the impacts were tiny. In addition, duringproject implementation,for constructionof relatively important projects the contractorswere required in the contractsto complywith relevant national and local laws, regulations and standards on environmentalprotection, sanitationand epidemicscontrol and the Engineers were entrusted to supervisethe contractors. Therefore, constructionof all civil works caused neither major environmental problems nor significantpublic health problems or public complaints. 111) Lake Eutrophication The lakes involved in Shandongmainly include the Nansi Lake and the Dongping Lake, but project areas with irrigationrun-off to these lakes accounted for only small share of their respective catchment area. Take SihuiLake as an example. Its catchment area is 3.17 million ha while the project area with run-off to the lake is 27,000 ha, which is only 0.85% of the lake's catchment area. In fact, the mainpollutingsourcesin the project area were industrialwastewater and municipal domestic sewage, which accounted for 80-90% of the lake's total pollution load. In addition,duringproject implementationthe province adopted a series of measures to reduce chemical fertilizerrun-off, such as balanced  fertilizer application to reduce nitrogen and increase potassium, conserving soil moisture and fertility by land leveling, and other integrated water saving measures. After project implementation, compared with the existing load of nitrogen and phosphate of these lakes the actual increase of nitrogen and phosphate in downstream lakes due to irrigationrun- off from the project areas was minor. Therefore, the negative impacts due to project implementation on lake eutrophication are negligible. IV) Dam Safety Among the reservoirs involved under the project, Mahe Reservoir was unsafe and needed to be strengthened. So far, the work has been completed, as shown in Table 2-6. Table 2-6: Statistics of Dam Strengtheningin the Project Area Total Approved Inception Completion Investment I"".+--j+i (loo Reservoir During project implementation there had been no dam safety problems or environmental problems related to dam safety. V) Control of Fertilizer and Pesticide Application During project implementation, IPM technologies were widely adopted in the project areas. The integration of disease-resistantvarieties promotion with applicationof pesticides with high efficiency, low toxicity and low residue and bio-pesticides replacing original highly toxic pesticides had effectively improved farmland eco-environmentin the project areas. Table 2-7 compares the use of pesticides and chemical fertilizers during and before the project. Table 2-7: Changes in Application of Pesticides and Their Residues in Soil and Water in Project Areas of Shandong (%) In response to the deficit of phosphate and potassium, particularlypotassium, the project provinces carried out a number of measures during the implementation of the project to  balance soil fertility, i.e. control of nitrogen (reducing nitrogen application in some project areas), stabilizing phosphate (increasingphosphate application in some areas) and supplementingpotassium. Changes in soil fertility in project areas between 1998and 2002 are summarized in Table 2-8. Table 2-8: Changes of Soil Fertility in Project Areas between 1998 and 2002 Without Project With Project N P205 K20 N p205 K20 1 0.34 0.68 1 0.49 0.66 In addition, advanced fertilizing techniques were disseminatedin project areas, such as deep application, mixed application, etc., thus increasing the efficiency of fertilizers, lowering loss of chemical fertilizers and reducing the negative impacts of irrigation run- off on receiving water bodies. Based on the environmentalmonitoring results during five years' project implementation,Table 2-9 summarizesbasic environmentalmonitoring conclusions. Table 2-9: Basic Conclusions of EnvironmentalMonitoring Items Evaluation Conclusion 1. Environment Quality 1) Surface irrigation In general, the quality was good and improved year by year. water quality Water met irrigation requirements. 2) Irrigation run-off The quality met the requirement of irrigation with quality comprehensivepollution index decreasing year by year, no significantnegative impacts on receiving water bodies. 3) Groundwater Quality was good and stable. Secondarymineralization found quality only in a few spots. 4) Soil pollution Soil quality was good with single and comprehensivepollution indices decreasing. 5) Farm produce Good quality farm produce, which met relevant national quality contamination standards. 2. Groundwater Table 1)Groundwater table Groundwatertable in three provinces generally decreasedby 1-2 m but still within the normal fluctuationrange. 2) Exploitation volume Exploitation volume of Shandongand Henan lower than multi- year average availablewater resources while that of Hebei was slightlyhigher. 3. Soil Fertility Soil fertility increased with more rational composition of nitrogen, phosphate and potassium The above results indicate that due to effective implementation of various environmental protection measures, overall environmentquality was rather good and improved year by year. Project implementation has not imposed any significantnegative impacts on the  environment.Therefore, the project is environmentallysustainable. 2.3. Summary Conclusions of IAIL2 EnvironmentalImpactsAssessment Table 2-10summarizes the actual assessmenton the environmentalimpacts of IAIL2. Table 2-10: Summary Conclusions of EnvironmentalAssessment Items Status of Completion/AssessmentConclusion 1 Significant Environmental No significant environmentalissues occurred. Issues Important Environmental Issues 1)Groundwater overdraft Comprehensivemeasures were taken to prevent excessive exploitation. Groundwaterresources within balanced range. 2) Yellow River diversion for Diversion from the Yellow River was reduced throu h irrigation in Shandong comprehensivemeasures. Diversion volume was wit in 5 the quota. 1 3) Soil salinization No soil salinizationwas found. 4) Lake eutrophication IMinor impacts were found and could be ignored I I Environmental Monitoring / 1 / 1)Groundwater table Results from continuousmonitoring show a drop of groundwatertable due to serious drought. It was recovered in 2003 and close to multi-year average value. 2) Soil fertility Monitoring results show improved soil fertility and composition of N, P and K. 1 1 Other Environmental Issues 1 1 1)Environment management Relevant laws and rules were observed during during construction construction.No important environmentalproblems emerged. 2 Control of esticides and IPM and balanced fertilizing reduced pesticide residue c emical fertiyizers h and loss of chemical fertilizers. 2.4. Recommendations for Improvementof IAIL3 EnvironmentalManagement Based on the lessons learned from IAIL2 in terms of environmental management practices improvements should be made in the following aspects: 1) IAIL2 EMP was not so specific and IAIL3 EMP should be more targeted and applicable;  2) IAIL2 didn't focus on water saving and water saving objectives shouldbe clearly set for IAIL3; 3) Accordingto the environmental practices of IAIL2 methodologies and contents of environmentalmonitoring for MIL3 shouldbe adjusted as appropriate. 3. Comparisonof EnvironmentalConditions and Environmental Impacts Between IAIL3 and IAIL2 3.1. Comparison of Project Counties (Cities) 3.1.1 Comparison by AdministrativeDivision Table 3-1 lists the project cities and counties of IAIL2 and MIL3 and Figure 3-1 gives the location of IAIL2 and IAIL3 project cities and counties. Table 3-1: Comparison of IAIL2 and IAIL ProjectAreas in Shandong (by AdministrativeDivision) IAIL2 Project Areas IAIL3 Project Areas Municipality( County (City, District) ianrrhe, Tianaiao V u anzhou, Zoucheng, Jining $ezs'zn Yanzhou, Quh, Zoucheng, Jining Jinx~ang,iaxiang, Liangshan 9W~ahang,Yutai, Laingshan Tai'an alwe, elc eng, Nlngyang, Tai'an gongpi&, Tkshan Daiyue, Feicheng, Ningyang Dezhou Yucheng, Lingxian, Qihe, Pingyuan, Dezhou Yucheng, Qihe, Pingyuan Wucheng udan Juanchen Yupcheng, Eye, dhengwu, &anxian Heze Yuncheng, Dingdao Weifang Weifang Zhucheng, Gaomi, Linyi Linyi Junan, Yishui Note: Bold ones refer to new project cities and counties. Table 3-1 indicates that among the IAIL3 Project spreads in 22 counties/cities from eight municipalities, of which 17countieslcities of Jinan, Zaozhuang, Jining, Taian, Dezhou and Heze are former IAIL2 project areas and only Dingtao County of Heze and two each from Weifang and Linyi are new ones.  Figure 3-1 Locations of IAIL3lIAIL2 Subprojectsin Shandong Province  3.1.2 Comparison by Irrigation Districts Table 3-2 lists the irrigation districtsunder IAIL2 and IAIL3. Table 3-2: Comparison of IAIL2 and IAILProjectAreas in Shandong (by Irrigation District) Irrigation County (City, District) Irrigation County (City, District) District District Licheng, Jiyang, Shanghe,Qihe, Yellow Qihe, Yucheng, Pingyuan, Yellow River Yucheng,Pingyuan,Lingxian, River Yuncheng, Shanghe, Diversion ID Wucheng, Heze, Chengwu, Shanxian, Diversion ID Dingtao, Zhangqiu Juye, Yuncheng, Juancheng,Liangshan Diversion ID iXuecheng,Yicheng, Lake Tengzhou / lxuecheng DivgEn ID River River Taierzhuang Junan, Yishui, Gaomi Diversion ID Diversion ID Zhangqiu,Licheng, Changqing, Quh, Zoucheng, Yanzhou, Tengzhou,Xuecheng, Yicheng, Daiyue, Liangshan,Tengzhou, Taishan, Ningyang, Feicheng, Feicheng, Ningyang, ID ID Dongping, Qihe, Wenshang, Weishan, Xuecheng, Daiyue, Zoucheng, Qufu, Yanzhou, Jiaxiang, Changqing, Licheng, Jinxiang, Liangshan Yishui, Gaomi ReservoirID Tengzhou,Daiyue, Taishan,Feicheng ReservoirID Zhucheng Note: Bold ones refer to new project cities and counties. Table 3-2 indicatesthat among the five new project counties and cities, Zhucheng City mainly relies its irrigation on reservoirs and ponds in its project area, Junan Couty, Yishui County and Gaomi City rely on rivers in the project areas and Dingtao Countymainly relies on groundwater and surfacewater within the project area as well as water diverted from the Yellow River. 3.2. Comparison of EnvironmentalConditions Compared with IAIL2, IAIL3 will add Weifang and Linyi municipalities.Location of their project counties and cities are the same as IAIL2, thereforethere are no remarkable environmentaldifferences. Table 3-3 compares the agriculturalnatural conditionsin the project areas of IAIL2 and IAIL3. Except for Weifang and Linyi the others are all IAIL2 project municipalities.  Table 3-3: Comparison of Natural Conditions of Some Project Areas I I Munici- County1 Hydrological, Meteorological and Water Resources Conditions pality City Warm temperate zone subhumid monsoonclimate, annual average temperature 12.60, 2,763 sunshine hours, frost-free period 193 days, multi-year average precipitation573.2 Jinan Shanghe mm. Project area water sources include local surface water, groundwater and water diverted from Yellow River. Multi-year average surface water storage 2.6 mil m3,exploitable shallow groundwater 9,83 mil m3,annual allocated Yellow River diversion volume 55 mil m3. Warm temperate zone subhumid monsoonclimate, annual average temperature 120, 2,558 sunshine hours, frost-free period 198 days, multi-yearaverage precipitation656 mm. Gaomi Usablewater sources for the project include local surface water, groundwater and transit water. Available surface water supply 25.22 mil m3,shallow groundwater resources 4.64 mil Weifang m3. Warm temperate zone monsoonclimate, annual average temperature 120, 2,578 sunshine hours, frost-free period 188 days, multi-yearaverage precipitation778 mm. Water sources Zhucheng include local surfacewater, part of the Qiangkuang Reservoir.Multi-yearaverage allocated usable water 32.99 mil m3. Warm temperate zone subhumid monsoonclimate, annual average temperature 13.40, 2,678.9 sunshine hours, frost-free period 217 days, multi-yearaverage precipitation622 Dezhou Qihe mm. Project area belongsto NanfanYellow River Diversion Irrigation District. Main water sources include local surfacewater and groundwater.Total annual usablewater resources 31.783 mil m3. Warm temperate zone subhumid continental monsoonclimate, annual average temperature 13.50, 2,264.6 sunshine hours, frost-free period 208 days, multi-year average precipitation Yuncheng 670.5 mm. Projectarea water sources include local surface water, groundwater and water r diverted from Yellow River. Surfacewater resources4.7 mil m3,groundwater resources 11.55 mil m3.Yellow River diversion volume 41 mil m3. Warm temperate zone subhumid continental monsoonclimate, annual average temperature 13.80, 2,479 sunshine hours, frost-free period 207 days, multi-yearaverage precipitation 655.7 mm. Projectarea water sources include local surfacewater, groundwater and water Dingtao diverted from Yellow River. Multi-yearaverage surface water resources6.81 mil m3, groundwater resources 13.815mil m3,and current Yellow River diversion volume 6.2mil m3 and designed normal year diversion volume 6.5 mil m3. Warm temperate zone continental monsoonclimate, annual averagetemperature 13.850, 2,423.5 sunshine hours, frost-free period 210 days, multi-year average precipitation685.8 mm. Projectarea water sources include localsurface water, groundwaterand transit water. Jining Available surfacewater 2.03 mil m3,available groundwater resources 28.64 mil m3. Warm temperate zone subhumid continental monsoonclimate, annual average temperature 15.40, 2,416.6 sunshine hours, frost-free period 202 days, multi-year average precipitation Zoucheng 684.7 mm. Projectarea water sources include local surfacewater, groundwater and water diverted from Weishan Lake. Total available water 49.34 mil m3. Warm temperate zone continental monsoonclimate, annual average temperature 14.3U, 2,165 sunshine hours, frost-free period 201 days, multi-year average precipitation814 mm. Project area water sources include local surfacewater, groundwaterand water diverted Zaozhuang Xuecheng from Weishan Lake. Multi-yearaverage runoff in well-irrigated plain areas in the west 68 mil m3,groundwater resources 19.9 mil m3,groundwater resources in southern canal irrigated areas with lake diversionwater 13.5 mil m3,annual allocated lake diversionwater 2.36 mil m3. Warm temperate zone continental monsoonclimate, annual average temperature 12.40, 2,458.9 sunshine hours, frost-free period around 200 days, multi-yearaverage precipitation Linyi Junan 843.1 mm. Project area water sources include local surfacewater and groundwater. Available surface water 49.05 mil m3,exploitable groundwater resources34.9 mil m3.  Warm temperate zone monsoon climate, annualaverage temperature 12.30, 2,420.5 sunshine hours, frost-free periodaround 191days, multi-year average precipitation799.0 Yishui mm. Project area water sources include localsurface water and groundwater. Available surfacewater 5.19 mil m3,exploitable groundwater resources 10.03 mil m3.  As seen from the above comparisonof someproject areas, natural conditionsunder the IAIL3 Project are very similar to IAIL2, especiallythe natural conditions of two new municipalitiesof Weifang and Linyi are very comparable to those of Jinan and Zaozhuangmunicipalitiesunder the IAIL2 Project and therefore NIL3 doesn't have new environmentalissues. 3.3. Comparison of Project Contents Table 3-4 compares the main contents of IAIL2 and IAIL3. Table 3-4: Comparison of IAIL2 and IAIL3 Project Contents IAIL2 Contents IAIL3 Contents Canal excavation, bridges, culverts & other Canal and ditch excavation & dredging, structures, structures, constructingnew and renovating drainage & irrigation pumping stations,agricultural- Water existing pumping stations, agricultural-use use power cable, rural roads, O&M equipment, Infrastructure power cable, rural roads, O&M equipment, 1,879 tube wells to be repaired & maintained and Construction repairingand maintaining2,511 tubewells, renovated, 4,673 new tube wells to be drilled, drilling 13,397new tube wells 1,072 storage ponds to be built Canal lining, underground pipeline, Engineering Anti-seepage canals, low-pressure pipes, sprinkler sprinkler and drip irrigationand mobile Water Saving and micro-(drip)irrigationand mobile surface hoses surface hoses Land leveling, deep ploughinglsoil Land leveling, deep ploughing/soilloosening, Agronomical loosening,returnof straw to field, balanced returnof straw to field, balanced fertilization, Water Saving fertilization, training trainingand dissemination Management I WUA, SlDD WUA. SlDD Water Saving Improved-variety breeding and processing, Improved-variety breeding and processing, IMP, IMP, township agriculturalextension countyagriculturalextension centers, township centers, townshipstations for stations for comprehensive agricultural services, comprehensive agricultural services, agriculturalmachinery, agricultural training and Agriculture agriculturalmachinery and service stations, agriculturaldissemination and extension, green agriculturaltraining and agricultural produce disseminationand extension, disseminationand extension, barn and specializedfarmer associations,pilot sunning ground renovation, fertilizer cooperativeoperationsamong farmers and batching plants dragon-heads Constructionof farmland windbreak shelter Constructionof farmland windbreak shelter belts, Forestry belts, nurseries, forestrv pest control nurseries. forestrv ~ e scontrol t Training, study tour, technical assistance, scientific Institutional Training, study tour, technical assistance, researchand dissemination, office equipment and Development scientific research, MIS, SlDD MIS system, farmers' associations (including and Support establishment and WUA development WUA) .-~ Note: Bold parts refer to new additionalcontents. The comparisonreveals that while im roving, strengtheningand rehabilitatingthe original irrigated agriculturalregions, t e main contents of the two projects are basically 1 the same, includingcanal lining, constructin on-farm works, rehabilitatingexistingand building new pum ing stations and tube we1 land levelin improving field fs, passageways and uilding field drainagenetwork and wind reak shelterbelts. $ 8.  New additional contentsunder the Project include: 1)"greenw(Non-polluted)farm produce; 2) specialized farmer associations;and 3) pilot farmer-dragon head cooperative operations.In terms of componentselection,those with livestockbreeding, high water consumption,heavy pollutions and use of wild resources are ruled out. Table 3-5 provides the proposed key pilot bases of Shandongfor "green" farm produce and Table 3-6 gives the sites for pilot farmer-dragonhead cooperativeoperations.Table 3-7 lists the proposed specialized farmers associationsto be established in the project areas. Table 3-5: Green Farm Produce Production Bases and Products of Shandong Production Base Products 39 Melons and vegetables Green Farm 13 Fruits Produce 4 Peanut Table 3-6: Farmer-Dragonhead Cooperative Operations Pilots in Shandong Category Municipality County Name Products I Pilot I I Wande Foodstuff Linyi Peanut Farmer- Yishui Cooperative Operations dragonhead Jihuai Healthcare Products Zaozhuang Xuecheng Pomegranate Company Table 3-7 Farmers' Associations to be EstablishedIUpdated 1No 1 Associations County 1No 1 Associations ] County 1 IOJinan 32 Zoucheng Grape Zoucheng -- 1 Guide Vegetable Changqin 33 Hanhe Asparagus Liangshan g 2 Xiaoli Vegetable Changqin 34 Corn seeds Liangshan V. Tai-an 4 Zhoonggong Licheng 35 Zoujiazhuang Tomato Daiyue Vegetable 5 Liubu Fruits Licheng 36 LiangzhuangMarcket Daiyue 6 Xingjiacun Walnut Licheng 37 Wenkou Seeds Daiyue 7 Liubu Flowers Licheng 38 Ludian Green Food Feicheng )I Zhangqiu /39 / Qianyicun Vegetable I Feicheng I melon 9 Huanghe Date Zhangqiu 40 Tuntou Wheat Feicheng 10 GaoguanzhaiWheat Zhangqiu 41 Huibei Garlic Feicheng I 1 Huanghe Rice Zhangqiu 42 , Dongcun Stach Feicheng  As shown in Tables 3-5, 3-6 and 3-7, the IAIL3 Project aims at supportingthe planting, processing and marketing of green farm produce, farmer-dragonheadcooperative operational organizations and specialized farmers' associations. There are no activities involving livestock breeding, high water consumption, heavy pollutions and use of wild resources and therefore, there will be no relevant environmentalissues. 3.4. Main Conclusions Based on the comparison of IAIL2 and IAIL3 projects the following conclusions can be drawn: 1) IAIL3 project counties/cities of Jinan, Zaozhuang, Jining, Taian, Dezhou and Yucheng county of Heze are all under former IAIL2 Project and the irrigation districts are also the same as IAIL2. Therefore,the environmentalissues of IAIL3 are similar to MIL2 and there are no new environmentalissues;  2) The new county of Dingtaounder IAIL3 is same as or similarto other six IAIL project countriesin terms of environmental conditionsand the environmentalissues involved are also the same; 3) The new project area of Zhucheng City belongs to a reservoir irrigation district and its water resources can be ensured. Other environmental conditions are similarto IAIL2 project counties; 4) The new project areas of Gaomi City, Yishui and Junan countiesunder Jinan Municipalityare very similarto the municipality's otherproject counties and there are similar in terms of natural conditions,and thus having no new environmental issues; 5) IAIL3 Project no longer includesWuling County and Ling Countywhere groundwaterresources are short. Therefore, IAIL3 Shandongdoesn't include groundwater overdraft areas any longer; 6) IAIL3 project doesn't include former IAIL2 Chengwu County and Shan County where exist soil salinizationpossibilities.Therewill be no salinizationpossibilities for new countiesunder the IAIL3 Project. Therefore, soil salinizationwill not an issue in Shandong; 7) The new contents of "green" farmproduce, farmer-dragonhead cooperative operationalorganizationsand specialized farmer associationsare to plant, process and market their respective local dominantagricultural products and there will be no components involvinglivestockbreeding,high water and wild bio-resources consumptionand heavy pollutions. Therefore, new contentswill not lead to negative environmental impacts. 4. Clarification on Preparationof IAIL3 Environmental ManagementPlan 1) Accordingto World Bank requirements the province has prepared a complete and separateIAIL3 EnvironmentalManagement Plan to be the attachment of the Report; 2) Since the five provinces under the MIL3 Project vary greatlyin natural conditions and differ in focuseson environmentalissues, according to the requirements of the Bank preparation mission separateEMPs by province will be prepared to make the plans more targeted at environmental issues and facilitatetheir implementation by each of the provinces; 3) In view of the successfulimplementationof MIL2 and that the natural conditionsof the project areas and contents of IAIL3 are basically the same as IAIL2, NIL3 EMP is prepared based on the experienceand lessons learned from IAIL2, which will further improve the EMP for the Project. 4) Compared with IAIL2 EMP, IAIL3 ShandongEMP has got the following features: am Emphasizingwater resources protection as the priority of environmental management work in the project areas; sa Confirmingabove everythingelse environmental issues involvedin the Project, based on which the objectivesand contents of environmental management are decided,making the EMP more targeted and applicable;  XI Emphasizing analysis, evaluation and application of environmentalmonitoring results; w Clarifying environmentalmanagement agencies, their respective responsibilities and costs and sources of funding for EMP implementation; w Making necessary adjustments to the items, parameters, venue and frequency of environmental monitoring; w In light of the current model for construction management of physical projects in China, the environmentalprotection measures to be implementedby the Contractor are summarized and incorporatedinto the contract in the form of "Rules for Construction EnvironmentalProtection, with its implementationbeing supervised by the site Engineer entrustedby the Project Management Office (PMO). Environmentalprotection measures for construction activities will not be detailed in the EMP. Attachment 1: IAIL3 Shandong EnvironmentalManagementPlan wb160053 N:\CHINA\IAILIInlAIL3 Environment Report Shandong-kjh.doc 02/22/2005 4:44:00 PM