China - Shandong Agricultural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 15308 IMPLEMENTATION COMPLETION REPORT CHINA SHANDONG AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 2017-CHA) JANUARY 26, 1996 Rural and Social Development Operations Division China and Mongolia Department East Asia and Pacific Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Yuan (Y) Y 1.00 = $0.1 15 1988 (appraisal) $1 = Y 3.71 1990 $1 = Y 4.72 1991 $1 = Y 5.22 1992 $1=Y5.38 1993 $1 = Y 5.45 1994 (onwards) $1 = Y 8.70 FISCAL YEAR January I - December 3 1 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS ABC - Agricultural Bank of China CAAS - Chinese Academy of Agricultural Sciences CAS - Chinese Academy of Sciences HECH - Haihe Engineering Command Headquarters ICB - International Competitive Bidding IDA - International Development Corporation ITC, CNTIC - International Tendering Company, China National Technical Import Corporation MOA - Ministry of Agriculture MOF - Ministry of Finance PLG - Project Leading Group PMO - Project Management Office PO - Project Office PREDIC - Provincial Rural Economic Development and Investment Corporation  FOR OFFICIAL USE ONLY CONTENTS PREFACE ...................................................... iii EVALUATION SUMMARY ..................................................... iv PART I. IMPLEMENTATION ASSESSMENT ......................................................1 A. Project Objectives .......................................................1 B. Implementation Experience And Results .....................................................2 C. Project Impact ......................................................4 D. Major Factors Affecting The Project ....................................................4 E. Project Sustainabilitv ......................................................6 F. IDA Performance .......................................................6 G. Borrower Performance .......................................................7 H. Assessment Of Outcome .......................................................8 I. Future Operation ......................................................8 J. Key Lessons Learned ......................................................8 PART II. STATISTICAL TABLES ...................................................... 10 Table 1: Summary of Assessment ...................................................... 10 Table 2: Related Bank Loans/Credits ...................................................... 11 Table 3: Project Timetable ....................................................... 12 Table 4: Credit Disbursements: Cumulative Estimated and Actual ..................... 12 Table 5: Key Indicators of Project Implementation .............................................. 13 Table 6: Key Indicators for Project Operations .................................................... 19 Table 7: Studies Included in Project ...................................................... 20 Table 8A: Project Costs ...................................................... 20 Table 8B: Project Financing ...................................................... 21 Table 9: Economic Costs And Benefits ...................................................... 21 Table 10: Status of Legal Covenants ...................................................... 22 Table 11: Compliance with Operational Manual Statements ............................... 24 Table 12: Bank Resources: Staff Inputs ...................................................... 24 Table 13: Bank Resources: Missions ...................................................... 25 Table 14: Role of Women in Project ...................................................... 26 ANNEX A: MISSION AIDE-MEMOIRE ..................................................... 27 ANNEX B: BORROWER'S CONTRIBUTION TO THE ICR ................................. 29 is docu ent has a resuicted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.   - iii - IMPLEMENTATION COMPLETION REPORT CHINA SHANDONG AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 2017-CHA) PREFACE This is the Implementation Completion Report (ICR) for the Shandong Agricultural Development Project in China, for which an IDA Credit (Credit 2017-CHA) in the amount of SDR 82.5 million was approved on May 16, 1989 and made effective on January 29, 1990. The credit was closed on December 31, 1994. It was fully disbursed, and the last disbursement took place on December 12, 1994. The ICR was prepared by Qun Li (Consultant) and W.P. Ting (Agriculturalist). The ICR was reviewed by J. Goldberg, Chief, EA2RS and Y. Kimura, Project Advisor, EA2DR. The borrower provided comments that are included as an annex to the ICR. Preparation of this ICR was begun during the Bank's final supervision mission in September 1994. It is based on the material in the project file and meetings with project staff in the field. The borrower contributed to the preparation of the ICR by contributing views and data requested, its own evaluation of the project's execution, and comments on the draft ICR.   - lv - IMPLEMENTATION COMPLETION REPORT CHINA SHANDONG AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 2017-CHA) EVALUATION SUMMARY Project Objectives 1. The main objective of the project was to assist the Shandong Provincial Government to: accelerate the development of agriculturally unproductive coastal lowlands for culture fisheries; intensify crop production in existing low yielding areas; increase the value of livestock production and processing in the Tuhai River Basin; and help alleviate poverty and provide productive employment for women through upgrading of production and processing of small livestock in the poverty-stricken Yi Meng mountain area. The main features of the project were as follows: (a) a coastal development component, including the cultivation of shrimp and specialty seafood; construction of hatcheries, feedmills, cold-storage, processing facilities and service centers; and strengthening research and development; (b) the Tuhai River Basin component including improvement and expansion of five irrigation areas; provision of agricultural input and support services; development of Chinese dates intercropped with food grain and fast-growing trees, processing of dates, feed and meat; improvement of grassland areas; and rearing and breeding of beef, cattle, sheep and broilers; (c) the Yi Meng livestock component, including rearing and breeding of rabbits, pigs, chickens, and geese; processing of livestock feed, meat, goosedown, rabbit-wool; and veterinary services; and (d) a project management component including the provision of technical assistance and training; and applied research. 2. The objectives were generally well designed, spelled out in the project documentation, and supported by project staff and beneficiaries. Similarly, they appropriately reflected the Government's implementation capacity and were consistent with both the Government's development strategy and the Bank's Country Assistance Strategy at the time of preparation. Implementation Results and Experience 3. The project substantially achieved the objectives of agricultural growth in the coastal areas of Shandong. As a result of the strong performance of most subcomponents of the mariculture component, the agriculture, livestock, and most agroprocessing components, the overall economic return of the project is reestimated at 31 percent, slightly above the appraisal estimate of 29 percent.  - v - 4. IDA's performance in identification, preparation, and appraisal of the project is viewed as satisfactory to highly satisfactory. IDA's performance in supervision is also considered satisfactory, although the project would have benefited from more frequent supervision visits. The borrower's performance in project preparation and implementation was generally satisfactory, though some aspects were deficient: several project units would have benefited from more regular visits by the provincial Project Management Office (PMO) and county Project Office (PO) staff. Some project units faced serious problems with counterpart fund availability, which affected timely completion of civil works and commissioning of agroprocessing plants. Summary of Findings, Future Operations, and Key Lessons Learned 5. Overall Finding. The project's outcome is viewed as satisfactory, since the most important objective of agricultural growth and development in Shandong's coastal areas was achieved with a relatively high degree of sustainability. The overall economic rate of return of 31 percent is particularly impressive in view of the difficulties facing the shrimp and cotton subsectors not only in the project area but throughout China during implementation. Overall, the project had a fairly strong developmental impact through the provision of scarce investment funds for the expansion of agricultural production and value-added processing in a relatively poor part of Shandong province. The project is not viewed as highly satisfactory because of the limited achievements of the shrimp production component, the delay in some of the agroprocessing plants' commissioning and some shortfalls in the training component. 6. Project Impact. Apart from a strong impact on poverty alleviation in the project area, the project generated productive job opportunities, mainly geared to women in the poor Yi Meng mountain area. Particularly, the raising of small livestock, which is traditionally done by women, had a significant impact on poor households. In addition, the project provided access to new productive work opportunities for women not only at home but also as workers in the breeding farms. Incremental employment was created in new processing activities such as meat-packing, goose feather and down processing, rabbit wool spinning, knitting, date processing, and packaging of mariculture products. The project provided additional employment to about 123,700 women, which amounts to 56 percent of the total jobs created. Emphasis was given to the training of women, with about 50 percent of the trainees who attended training courses organized under the project being women. The project also provided women with access to small credits for the construction of rabbit cages, purchasing of fine breeds of rabbits and other activities related to this component. 7. Sustainability. The benefits generated by the irrigation and livestock activities are likely to be sustained throughout the life of the project, as the project beneficiaries have strong financial incentives to operate their investments profitably, the macroeconomic framework is expected to remain relatively stable, and commodity price forecasts indicate no substantial changes in world supply/demand conditions for project production. Therefore, for these components the project implementing agencies will not  - vi - be required to provide any significant technical or financial assistance in the future except for routine supervision of project activities. However, the Government will continue to need to provide investment funds and recurrent budgetary support to complete the remaining on-farm works and to ensure proper implementation of the proposed water charges, which will have a direct impact on the operation and maintenance of the completed works. 8. Overall, the agroprocessing component is also likely to be sustainable. The plants will need to continually improve product quality, closely monitor changing supply and demand conditions in the marketplace, and be given sufficient autonomy in marketing, pricing, and personnel management. In addition, they should ensure that all required wastewater treatment systems are fully operational by the end of the production testing period. 9. Future Operation. The future operation of the project will require some additional assistance from the provincial PMO. Its main responsibilities will be (a) continued supervision of the irrigation, livestock, and agriculture activities; (b) provision of recurrent budgetary support as necessary to complete some of the on- farm works, and the agroprocessing program; (c) guarantee of adequate provision of incremental working capital as agroprocessing plants reach full production; (d) close monitoring of the financial profitability of the agroprocessing plants, and development of restructuring plans as required; and (e) preparation of an action plan to ensure that water charges meet the full annual operation and maintenance costs. IDA will continue to monitor progress of the actions to be taken by the PMO during supervision of other projects in the province. 10. Lessons Learned. The key lessons learned from the project include the following: (a) stronger measures should have been taken early in the implementation of the project to ensure that on-farm works were completed on schedule, and that funds were allocated specifically for on-farm works; (b) the Association should have ensured the early installation of wastewater treatment systems for agroprocessing plants by building appropriate conditions into project implementation, which should have been covenanted in the legal documents; (c) in addition to written assurances obtained at negotiations from provincial and local governments that adequate funds would be made available to the project units in a timely fashion for the execution and operation of the project, the estimated annual amount of counterpart funds necessary for the project (together with the assumptions from which these figures are derived) should have been identified and discussed at appraisal with the Borrower, in order to ensure that proper attention was paid to the financing of the Project; (d) more supervision missions should have been budgeted and planned to resolve issues/problems as they developed; and (e) advice from technical experts should have been solicited in the selection of appropriate agroprocessing equipment for a number of the plants, and a local unit should have been established to carry out market investigation/analysis.   - 1 - IMPLEMENTATION COMPLETION REPORT CHINA SHANDONG AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 2017-CHA) PART I. IMPLEMENTATION ASSESSMENT A. PROJECT OnJEcrIVEs 1. The main objective of the project was to assist the Shandong Provincial Government to: accelerate the development of agriculturally unproductive coastal lowlands for culture fisheries; intensify crop production in existing low-yielding areas and increase the value of livestock production and processing in the Tuhai River Basin; and help alleviate poverty and provide productive employment for women through upgrading of production and processing of small livestock in the poverty-stricken Yi Meng mountain area. The main features of the project were as follows: (a) A coastal development component, including the cultivation of shrimp and specialty seafood; construction of hatcheries, feedmills, cold-storage, processing facilities and service centers; and strengthening research and development; (b) The Tuhai River Basin component including improvement and expansion of five irrigation areas; provision of agricultural input and support services; development of Chinese dates intercropped with food grain and fast-growing trees; processing of dates, feed and meat; improvement of grassland areas; and rearing and breeding of beef, cattle, sheep and broilers; (c) The Yi Meng livestock component, including rearing and breeding of rabbits, pigs, chickens, and geese; processing of livestock feed, meat, goosedown, rabbit-wool; and veterinary services; and (d) A project management component including the provision of technical assistance and training; and applied research. 2. The objectives were generally well designed, spelled out in the project documentation, and supported by project staff and beneficiaries. Similarly, they appropriately reflected the Government's implementation capacity and were consistent  - 2 - with both the Government's development strategy and the Bank's Country Assistance Strategy at the time of preparation. B. IMPLEMENTATION EXPERIENCE AND RESULTS 3. The project substantially achieved the objectives of agricultural growth in the coastal areas of Shandong. As a result of the strong performance of most subcomponents of the mariculture component, the agriculture, livestock, and most agroprocessing components, the overall economic return of the project is re-estimated at 31 percent, slightly above the appraisal estimate of 29 percent. 4. Physical Results. In terms of physical targets, the project has generally achieved, and in many cases exceeded, the targets set out in the project documents. Total irrigation rehabilitation and expansion amounted to 284,200 ha, in excess of the original target of 271,600 ha. Chinese dates and other fruits intercropped with food grains were established on 56,540 ha, against an appraisal target of 50,000 ha. Fast-growing trees were established on an area of 3,000 ha (100 percent of SAR estimate). Breeding farms for cattle, sheep, meat rabbits, hair rabbit, pigs, geese, and chickens were established and produced the expected output. Thirty-eight agroprocessing plants were constructed, against an initial plan of 42 factories. In the coastal area, 4,333 ha of shrimp ponds were established, against an initial target of 5,350 ha. Special seafood ponds including 533 ha of scallops, 200 ha of sea cucumbers, and 66 ha of abalone were rehabilitated as planned. The livestock development component in the Yi Meng mountainous area exceeded appraisal estimates substantially for breeding geese (250 percent of SAR estimates), chicken (145 percent) and pigs (325 percent), but showed a shortfall in rabbit production (75 percent the SAR estimate) as a result of declining interest by township farms in rabbit breeding. 5. Agricultural Benefits. The irrigation and drainage component was successful in rehabilitating and expanding five irrigation schemes in the Tuhai River Basin. The total cost of the irrigation component was $55.62 million or 23 percent of total project costs, compared to an SAR estimate of $66.7 million. The project included the construction and expansion of irrigation works on 284,200 ha of land for wheat, corn, soybean, cotton, peanuts and vegetables. In terms of agricultural output, yields and production levels for crops were well above the "with project" case assumed at appraisal. However, for cotton the yields were below appraisal targets (81 percent of SAR) as a result of the serious pest and disease problems. The total annual crop output increased during the project period by 269,500 tons for wheat, 220,450 tons for corn, 27,420 tons for soybeans, 2,580 tons for cotton, 19,200 tons for peanuts, and 931,000 for fodder. Fruit tree yields and outputs increased substantially by 137,000 tons for dates, 37,880 tons for other fruits and 134,000 m3 for lumber. Preliminary data for 1995 show a further increase in yields and production for all crops as farmers diversified crop production and increased inputs in response to higher market prices. The crop yields currently achieved in the project area are higher than anticipated during appraisal. The quality of most of the completed works was good, and complied with national standards for safety, health and the environment.  - 3 - 6. The increased outputs from crop and forestry production resulted in higher incomes for participating farm households. The annual gross value of incremental production was about Y 412 million for the food crops, Y 330 million for the commercial crops, and Y 267 million for dates, fruit and forestry products. 7. Mariculture and Animal Husbandry Benefits. The project developed shrimp ponds on 4,333 ha and 800 ha of shallow water ponds for the cultivation of scallops, abalone, and sea cucumbers. The cost of the mariculture component amounted to $99.5 million or 41 percent of the total project costs, compared to the SAR estimate of $110.3 million. The production of scallops, sea cucumbers, and abalone was satisfactory, generally exceeding appraisal estimates. The yield and production levels for shrimp were lower than appraisal estimates because of a serious shrimp virus infestation in 1993. The financial impact of the shrimp disease problem has been substantial, but the high returns on specialty seafood production have compensated for the losses, at least in economic terms. 8. The introduction of new, improved breeds of animals under the project has led to productivity gains in the sector. ERRs were recalculated for each category of livestock production, using production input costs and output prices provided by the project management office. The consolidated ERR for the livestock component amounted to 27 percent, lower than the estimated 35 percent at appraisal, mainly as a result of cost increases for inputs. 9. Agroprocessing Benefits. The project financed the development of 38 processing plants, including 5 food processing plants for dates, apples and other fruit, 8 feedmills, 11 meat processing plants, 2 wool processing mills, 2 tannery plants, and 1 eider down factory. The total cost of this component is $46.9 million or 19 percent of the total project cost. This compares to an appraisal estimate of 42 plants for a total cost of $40.2 million. The high rate of domestic inflation prevailing during the second half of the project, particularly for local building materials and equipment, increased local counterpart funding requirements and affected the time of completion of some of the project investments. All agroprocessing facilities were constructed as designed and approved by the Bank Group. 10. Overall, the plants have performed well and have met their expected production targets and rates of return, however some of the factories experienced significant initial problems with raw material availability, changing market conditions, and inadequate working capital. This has led to delays in commissioning, and some plants have yet to reach their designed output levels. To date, all but three agroprocessing plants have been commissioned and are fully operational. Their economic rates of return were recalculated and range from 20.8 percent for fruit processing to 58 percent for rabbit slaughter plants. The remaining three plants, two cattle slaughter lines in Tuhai and a pig slaughterhouse in Yineng are expected to become operational in early 1996. The agroprocessing component has resulted in the incremental production of 160,000 pieces of down  - 4 - products, 4.2 million pieces of leather or fur products, 38,500 tons of processed meat. 450 tons of knitting products, 2,700 tons of food products, and 44,000 tons of feed. C. PROJECT IMPACT 11. Apart from a strong impact on poverty alleviation in the project area, the project generated productive job opportunities, mainly geared to women in the poor Yi Meng mountain area. Particularly, the raising of small livestock that is traditionally done by women had a significant impact on poor households. The rabbit raising program has transformed the traditional outdoor system into a more intensive, individually managed system, and has helped a large number of women in the project area to increase their incomes. In addition, the project provided access to new productive work opportunities for women not only at home but also as workers in the breeding farms. Incremental employment was created in new processing activities such as meat-packing, goose feather and down processing, rabbit wool spinning, knitting, date processing, and packaging of mariculture products. The project provided additional employment to about 123,700 women, which amounts to 56 percent of the total jobs created. Emphasis was given to the training of women, with about 50 percent of the trainees who attended training courses organized under the project being women. The project also provided women with access to small credits for the construction of rabbit cages, purchasing of fine breeds of rabbits and other activities related to this component. D. MAJOR FACTORS AFFECTING THE PROJECT 12. Implementation Schedule. The project was scheduled for completion in December 1994, five years after signing. The major civil works program, the largest single expenditure category accounting for 54 percent of total base costs, was implemented on schedule. There were, however, some delays in the construction of on- farm works due to a shortage of local counterpart funds, partly as a result of exchange rate changes and increased cost of building materials. In retrospect, it would have been better to schedule these works earlier in the project life and strictly reserve funds allocated to them. Overall, there was a major change in counterpart financing arrangements, with the Provincial Government providing about $40 million more than planned and the local governments giving only a third of the amount expected. While this did not seriously affect the overall project outcome, it led to some implementation delays at the local level. The equipment procured by International Competitive Bidding was delivered more or less on schedule, with most of the deliveries taking place between 1993 and mid-1994. Slight delays were experienced with the supply of agroprocessing equipment. The construction of some agroprocessing plants was delayed as a result of additional requirements from equipment manufacturers, such as the provision of detailed floor plans. 13. Shrimp Disease. China experienced a serious viral shrimp infestation in 1993. This disease affected P. orientalis, which is the native white shrimp variety generally cultivated in northeast China. The virus is currently known as HHNBV, and is  commonly called Chinese Shrimp Virus. The disease outbreak affected the livelihood of thousands of shrimp farmers, and feed mills and cold stores operators. In 1994, in spite of extensive changes to the culturing practices, the virus again had a serious impact on production in Zhanhua county and Hanting district. Potential contributing factors include overly high stocking rates, deteriorating water quality, changes in pH, inappropriate feed and feed management, infected broodstock, etc. So far, measures taken to minimize the problem include the adoption of closed water systems, lowering the stocking density of shrimp Post Larvae, use of compound feed, and experimentation with polyculture systems. Although improved management methods were gradually introduced during project implementation, the project shrimp growers were unable to avoid serious losses. To date, none of these measures has proven successful. Recently, diversification into alternative species such as crab and clams and polyculture with other crustacea, as encouraged by IDA during the last few supervision missions, have been piloted and are showing promising results. 14. Training and Technical Assistance. The training program covered a wide range of topics. A total of about 2 1 0 different local and foreign training classes and study tours were organized for project staff at different levels. Some 12,880 person-months of training were taken, covering topics such as fertilizer application; seed testing, processing and multiplication; date/apples intercropping with grain; fruit processing; livestock management, production, disease control; and aquatic products production, management, and breeding. Local universities and academies provided support in feed formulation and brood-stock management and technical guidance in mariculture production and processing. The research topics undertaken covered soil/water studies, micro-irrigation, effective use of water resources, etc. and were commissioned by Qinghua University, Hehai University and Shandong Industrial University. Experts from the Chinese Academy of Agricultural Sciences were also invited to assist in the monitoring and evaluation of the project. A total of Y 8.0 million was spent to carry out the above research. 15. Procurement. Preparation of bid documents, bid invitation, evaluation and award were carried out by the Provincial Rural Economic Development and Investment Corporation in cooperation with the Provincial Project Management Office (PMO) and county Project Offices (POs). The bulk of the equipment purchased overseas was procured through International Competitive Bidding (ICB) procedures, which presented few administrative problems. By the end of 1994, some 43 contracts, valued at $52.42 million, were procured under ICB. The balance of the equipment purchased was procured under national competitive bidding (NCB) and shopping procedures because the size of the contracts was too small to justify ICB. Overall, ICB procedures resulted in satisfactory supply of equipment. However, some problems were experienced with the NCB supply of certain equipment that failed to meet technical specifications. 16. Disbursement. The pattern of disbursements was fairly close to the appraisal estimates. The IDA Credit was fully disbursed on December 12, 1994, before the closing date. Project expenditures were estimated to be about $240.4 million. The total amount  - 6 - disbursed was $114.04 million equivalent, which was higher than the original credit amount of $109 million equivalent, due to the depreciation of the US dollar against the SDR 17. Credit Allocation. The actual allocation of funds by expenditure category was, by and large, as anticipated, with a modest reallocation of consultants' services and training funds to accommodate an increase in civil works costs, including an increase in the percentage of expenditures to be financed for civil works under Category (I) from 30 percent to 45 percent. E. PROJECT SUSTAINABILITY 18. The benefits generated by the irrigation and livestock activities are likely to be sustained throughout the life of the project, as the project beneficiaries have strong financial incentives to operate their investments profitably, the macroeconomic framework is expected to remain relatively stable, and commodity price forecasts indicate no substantial changes in world supply/demand conditions for project production. Therefore, for these components the project implementing agencies will not be required to provide any significant technical or financial assistance in the future except for routine supervision of project activities. However, the government will need to provide the remaining investment funds and recurrent budgetary support to complete the on-farm works and to ensure proper implementation of the proposed water charges, which will have a direct impact on the operation and maintenance of the completed works. 19. The agroprocessing component is also likely to be sustainable overall, though the status of two plants remains uncertain at this point. The plants will need to continually improve product quality, closely monitor changing supply and demand conditions in the marketplace, and be given sufficient autonomy in marketing, pricing, and personnel management. In addition, they should ensure that all required wastewater treatment systems are fully operational by the end of the production testing period. All subprojects will require close supervision by project staff and restructuring plans will have to be developed for any of the plants that fail to become profitable after two or three years following commissioning. The firms should also be encouraged to implement enterprise reform measures in line with the transition to a market economy, including the transformation of state-owned enterprises into shareholding companies or joint ventures with foreign companies. 20. The sustainability of the shrimp component is uncertain in view of the serious viral disease problems facing the shrimp industry in the project area. An action plan should be prepared for further diversification of the industry away from shrimps to alternative crustacea or polyculture with crab, fishing or clams. F. IDA PERFORMANCE 21. IDA's performance in identification, preparation, and appraisal of the project is viewed as satisfactory to highly satisfactory. This work was directly based on the  - 7 - government's development strategy, the Bank's Country Assistance Program, the implementation of earlier projects such as the Seeds Project and the Irrigated Agricultural Intensification Project, and detailed field work in Shandong province. As a result, there was a fairly strong consensus between IDA and the government about the overall objectives and design of the operation as well as the conditions necessary to ensure satisfactory project implementation. During preparation and appraisal, IDA made a number of useful suggestions regarding equipment specification, training needs, technical assistance, and marketing that strengthened the technology transfer elements of the project. 22. IDA's performance in supervision is considered satisfactory. The six supervision missions, which took place on a regular basis, on average once a year over the period 1989-94, were adequate and considered useful by the PMO staff. The missions accurately reported implementation progress, identified key operational problems and provided useful interventions and recommendations, paid close attention to the overall development impact of the project, and showed a high degree of flexibility in modifying project arrangements in response to changing implementation conditions. Supervision missions made significant contributions in the following areas: (a) improving the technical design and operating efficiency of many agroprocessing subprojects, (b) educating PMO staff on the need for more rigorous analysis of market conditions, (c) emphasizing the importance of training and technical assistance in the dissemination of new technologies, and (d) requiring adequate provision of counterpart funding and working capital for project activities. The missions were also successful in promoting the establishment of cooperatives for apple growers in the project area, an initiative that is now being extended to vegetable and aquatic product producers. The missions were, however, less successful in assisting the PMO in recruiting overseas technical assistance. The project would, nevertheless, have benefited from more frequent supervision visits, which was not possible as a result of limited IDA resources available for supervision. G. BORROWER PERFORMANCE 23. The project implementing agencies' performance in project preparation was satisfactory, as it prepared a comprehensive feasibility study for the project that adequately covered technical, financial, economic and institutional factors. The overall performance during implementation was satisfactory. The PMO coordinated project activities well between the participating technical departments and was competently staffed throughout implementation. Project staff at all levels were generally committed to the project objectives, implemented the project components generally in line wAith the agreed implementation arrangements, and took appropriate action to redress problems as they occurred. Nonetheless, several project units would have benefited from more regular visits by PMO and PO staff. Some project units faced serious problems with counterpart fund availability and closer internal supervision might have been able to resolve these issues. Audit reports were generally produced and received on time.  - 8 - H. ASSESSMENT OF OUTCOME 24. The project's outcome is viewed as satisfactory, since the most important objective of agricultural growth and development in Shandong's coastal areas was achieved with a relatively high degree of sustainability. The overall economic rate of return of 31 percent is particularly impressive in view of the difficulties facing the shrimp and cotton subsectors, not only in the project area but throughout China, during implementation. Overall, the project had a fairly strong developmental impact through the provision of scarce investment funds for the expansion of agricultural production and value added processing in a relatively poor part of Shandong province. The project is not viewed as highly satisfactory because of the limited achievements of the shrimp production component, the delay in some of the agroprocessing plants commissioning and some shortfalls in the training component. I. FUTURE OPERATION 25. The future operation of the project will require some additional assistance from the provincial PMO. Its main responsibilities will be (a) continued supervision of the irrigation, livestock, and agriculture activities; (b) provision of recurrent budgetary support as necessary to complete some of the on-farm works, and the agroprocessing program; (c) guarantee of adequate provision of incremental working capital as agroprocessing plants reach full production; (d) close monitoring of the financial profitability of the agroprocessing plants, and development of restructuring plans as required; and (e) preparation of an action plan to ensure that water charges meet the full annual operation and maintenance costs. The managers of the agroprocessing plants will need to continually improve product quality, closely monitor changing supply and demand conditions in the marketplace, and be given sufficient autonomy in marketing, pricing, and personnel management. In addition, they should be encouraged to implement enterprise reform measures in line with the transition to a market economy. IDA will continue to monitor progress of the actions to be taken by the PMO during supervision of other projects in the province. J. KEY LESSONS LEARNED 26. The key lessons learned from the project are summarized below: (a) Stronger measures should have been taken early in the implementation of the project to ensure that on-farm works were completed on schedule and that funds were allocated specifically for on-farm works. (b) The Association should have ensured the early installations of wastewater treatment systems for agroprocessing plants by building appropriate conditions into project implementation, which should have been covenanted in the legal documents.  - 9 - (c) In addition to written assurances obtained at negotiations from provincial and local governments that adequate funds would be made available to the project units in a timely fashion for the execution and operation of the project, the estimated annual amount of counterpart funds necessary for the project (together with the assumptions from which these figures are derived) should have been identified and discussed at appraisal with the Borrower in order to ensure that proper attention was paid to the financing of the Project. (d) More supervision missions should have been budgeted and planned to resolve issues/problems as they developed. (e) Advice from technical experts should have been solicited in the selection of appropriate agroprocessing equipment for a number of the plants, and a local unit should have been established to carry out market investigation/ analysis.  - 10- PART II. STATISTICAL TABLES TABLE 1: SUMMARY OF ASSESSMENT A. Achievement of Objectives Substantial Partial Negligible Not Applicable Macroeconomic Policies X Sector Policies X Financial Objectives X Institutional Development X Physical Objectives X Poverty Reduction X Gender Issues X Other Social Objectives X Environmental Objectives X Public Sector Management X Private Sector Development X Other (Specify) B. Project Sustainability Likely Unlikely Uncertain x C. Bank Performance Highly Satisfactory Satisfactory Deficient Identification X Preparation Assistance X Appraisal X Supervision X D. Borrower Performance Preparation X Implementation X Covenant Compliance X E. Assessment of Outcome X  - I1 - TABLE 2: RELATED BANK LOANS/CREDITS Loan/Credit No. Year of Title Purpose Approval Status Preceding Operations Seeds Project To develop the seed industry by mod- FY85 Completed (Cr. 1577-CHA) ernizing facilities at 18 seed production, processing and distribution centers, including the strengthening of the National Seed Corporation's seed testing and certification services. The project would also serve as a model for the planned construction of over 300 seed centers. Following Operations Irrigated Agriculture Improve and expand irrigation and FY91 Ongoing Intensification Project drainage on about 1.14 million ha of (closing (Ln. 2256/Cr. 3337-CHA) low- and medium-yield land and sup- 06/97) ported by a package of agricultural support services  - 12 - TABLE 3: PROJECT TIMETABLE Steps in Project Cycle Date Planned Date Actual/Latest Estimate Identification (Executive January 22, 1988 January 12, 1988 Project Summary) Preparation March 1, 1988 March 14, 1988 Appraisal September 1,2 1988 September 17, 1988 Negotiations March 6, 1989 March 20, 1989 Board Presentation April 27, 1989 May 16, 1989 Signing September 14, 1989 Effectiveness September 1989 January 29, 1990 Mid-term review September 24, 1992 Project Completion December 31, 1993 December 31, 1993 Credit Closing December 31, 1994 December 31, 1994 TABLE 4: CREDIT DISBURSEMENTS: CUMULATIVE ESTIMATED AND ACTUAL ($ million) FY90 FY91 FY92 FY93 FY94 FY95 Appraisal estimate 22.0 54.0 90.0 104.0 109.0 Actual 17.2 49.6 70.7 92.9 113.0 114.0La Actual as % of estimate 78.0 92.0 79.0 85.0 104.0 Date of final disbursement December 12, 1994 Za Higher actual disbursement in US dollar terms than estimated at appraisal was possible due to depreciation of the US dollar against the SDR.  - 13 - TABLE 5: KEY INDICATORS OF PROJECT IMPLEMENTATION Key implementation indicators in SARI President's Report Estimated Actual I. Tuhai Irrigation Irrigation and Drainage: Earth works Conveyance canal (000m3) 971.3 1,496 Silt retention basin (000m3) 5,276.1 5,769.5 Main canal (000m3) 10,724.5 11,915.8 Branch canal (000m3) 10,695.9 11,007.3 Drainage canal (000m3) 14,738 8,141 On-farm works (OOOm3) 20,629 19,812.1 Storage basin (000m3) 16,100 5,084 Structures Flumes-conveyance/main canals (No.) 27 17 Flumes-branch (No.) 25 16 Controls-conveyance/main canals (No.) 118 192 Controls-others (No.) 491 204 Bridges-conveyance (No.) 18 22 Bridges-culverts-main/branch (No.) 878 575 Bridges-culverts-others (No.) 85 97 Offtakes-Main/branch (No.) - 202 On-farm structures (No.) 8,033 5,208 Pumping stations (No.) 20 12 Tubewells fielded (No.) 3,440 1,408 Land acquisition (ha) 1,091 4,050 Buildings (m2) 26,250 5,900 O&M Machinery Procured Hydraulic excavators (No.) 5 5 Dredgers (No.) 2 Bulldozers (No.) I Tractors (No.) Utility vehicles (No.) 4 3 Area Influences Improved irrigated area (ha) 81,400 106,000 Expanded irrigated area (ha) 190,200 178,200 Anrnual O&M costs Total (Y) 43,340,000 42,600,000 Per hectare (Y/ha) 153 150 Total water charges collected (Y) 45,000,000 46,900,000 II. Agriculture and Forestry Fertilizer imported (tons) 45,000 50,000 Seed center upgraded (No.) 12 12 Forest trees established (ha) 2,934 3,000 Dates intercropped (ha) 50,000 47,540 Fertilizer consumption Total (tons) 81,066 107,484 DAP (tons) - 26,871 Total per hectare (t/ha) 177 212  - 14- Key itnplementation indicators in SARI President's Report Estimated Actual huproved Seed Produced Wheat (tons) 9,000 9,837 Maize (tons) 3,200 12,067 Cotton (tons) 6,500 5,101 Others (tons) - 216 Seed Production Costs Wheat (Y/ton) - 291 Maize (Y/ton) - 349 Cotton (Y/ton) - 1,503 Average Irrigated Yields Wheat (t/ha) 3.5 4.0 Maize (t/ha) 3.8 4.0 Soybean (t/ha) 1.6 1.9 Cotton (tlha) 0.8 0.7 Average Rainfed Yields Wheat (t/ha) 2.5 3.3 Maize (t/ha) 2.7 3.2 Soybean (tlha) 1.6 2.6 Cotton (t/ha) 0.6 0.5 Intercropped Date Yields Small dates (t/ha) Large dates (t/ha) 1.3 2.9 IlL Livatock Tuhai Area: Breeding Fanm Established Chicken (No.) - I Sheep (No.) -I Breedine Stock Procured Cattle (No.) 50 155 Sheep (No.) 3,030 3,030 Chicken (No.) 10,000 10,000 Credit Disbursed Total amount (Y) 4,780,000 3,380,000 No. of households (No.) 8,250 1,546 Grassland/Pasture Developed (ha) 5,333 3,333 A.I. facilities in operation (No.) - 7 Technical centers (No.) 4 4 Yi Meng Areas: Rabbit-county farm (No.) 6 6 Rabbit-township farm (No.) 56 13 Hair rabbit-county (No.) - - Pig I I Goose (No.) I I Chicken demonstration farm (No.) I I Breeding chicken farm (No.) 1 2 Credit Disbursed Total amount (Y) 14,960,000 14,320,000 No. of households (No.) 30,000 29,410  - 15 - Key implementation indicators in SAR/ President's Report Estimated Actual Miscellaneous A.I. facilities in operation (No.) - 42 Technical/veterinary centers (No.) 7 7 Women technician trained (No.) 19,845 21,421 Performance Indicators Cattle (No.) - 4,295 Sheep (No.) 2,400 4,450 Meat rabbit (No.) 254,800 152,000 Hair rabbit (No.) 99,800 107,000 Pig (No.) 800 3,000 Goose (No.) 25,000 62,500 Chicken (No.) 3,800,000 5,520,000 No. of Households Supplied Specialized households (No.) 38,250 30,956 Demonstration households (No.) - 18,324 Other households (No.) - 924,720 A.1, performed (No.) 4,000 40,000 Credit recovered Total amount (Y) - 87,483,000 % of amount due(%) - 100 IV. Agroprocessing Physical Progress Units under Construction: Abattoir (No.) - 3 Units in Operation: Abattoir (No.) 10 7 Cold stores (No.) 11 10 Tannery (No.) 3 2 Wool/textile plants (No.) 3 2 Goose down mill (No.) I I Feedmills (No.) 11 8 Fruit processing plants (No.) 5 5 Performance Indicators Abattoi Total production (tons) 18,100 Total sales-domestic (tons) 7,841 -export (tons) 9,276 Amount in stock (tons) 983 Capacity utilization % 65 Sales price-domestic (Y/t) 12,699 -export (Y/t) 17,171 Op2erating Costs Total (Y) 203,504,000 Per unit output (Y/t) 11,243 Total costs-including overheads (Y) 219,473,000 Net Income (Y) 39,384,000  - 16- Key implementation indicators in SAR/ President's Report Estimated Actual Leather/Fu Total production (pieces) 4,200,000 Total sales-domestic (pieces) 2,355,000 -export (pieces) 1,845,000 Amount in stock (pieces) 82,000 Capacity utilization % 98 Sales price-domestic (Y/piece) 5,700 -export (Y/t) 7,450 Qpeatng Cam Total (Y) 19,385,000 Per unit output (Y/t) 4.6 Total costs-including overheads (Y) 19,740,000 Net income (Y) 5,170,000 Rpinnin MUIl Total production (tons) 450 Total sales-domestic (tons) 185 -export (tons) 124 Amount in stock (tons) 141 Capacity utilization % 69 Sales price-domestic (Y/t) 85,000 -export (Y/t) 105,000 Operating Cost Total (Y) 30,450,000 Per unit output (Y/t) 67,667 Total costs-including overheads (Y) 31,000,000 Net income (Y) 12,980,000 D)own Products Total production (pieces) 162,000 Total sales-domestic (pieces) 104,000 -export (tons) 50,000 Amount in stock (tons) 8,000 Capacity utilization % 97 Sales price-domestic (Y/piece) 91 -export (Y/piece) 91 Operating Cost Total (Y) 11,602,700 Per unit output (Y/piece) 71.6 Total costs-including overheads (Y) 11,947,200 Net income (Y) 4,710,800 Feed Mill Total production (tons) 44,000 Total sales-domestic (tons) 35,860 -export (tons) Amount in stock (tons) 8,140 Capacity utilization % 82 Sales price-domestic (Y/t) 1,900 -export (Y/t)  - 17- Key implementation indicators in SARI President's Report Estimated Actual Operating Cost Total (Y) 61,451,400 Per unit output (Y/t) 1,396 Total costs-including overheads (Y) 62,911,400 Net income (Y) 16,150,600 Fruit Processing Total production (tons) 2,668 Total sales-domestic (tons) 2,054 -export (tons) 452 Amount in stock (tons) 162 Capacity utilization % 100 Sales price-domestic (Y/t) 5,600 -export (Y/t) 9,600 Operating Costs Total (Y) 11,531,600 Per unit output (Y/t) 2,113 Total costs-including overheads (Y) 13,375,600 Net income (Y) 9,936,400 V. Mariculture Pvsical Progrss i) Prawn Subcomp2onent Sea dikes constructed (km) 32.7 32.7 Canal earthworks, etc. ('OOOm3) 8,704 7,886 Main sluice gates (No.) 16 16 Bridges and culverts (No.) 3,290 2,857 Shrimp Ponds Earthworks/stonework ('OOOm3) 28,250 29,448 Sluice gates (No.) 74 43 Feeder Roads (kum) 58.5 59.5 Facilities in Operation Shrimp ponds (No.) 1,600 1,300 Substations (No.) 3 3 Pumping stations (No.) 3 3 Hatchery (No.) 3 3 Feedmills (No.) 3 3 Cold stores (No.) 3 3 Technical centers (No.) 4 4 Vehicles procured (No.) - - Sampans procured (No.) - - ii) Special Seafood Subcorponen Area under Production Abalone (ha) 66 66 Scallop (ha) 533 533 Sea cucumber (ha) 200 200 Vehicles procured (No.) - - Boats procured (No.) 7 10  - 18 - Key implementation indicators in SAR/ President's Report Estimated Actual Performance Indicators Total Production Shrimps (tons) 8,800 5,200 Abalone (tons) 248 30 Scallops (tons) 15,900 24,000 Sea cucumber (tons) 224 25 Yield per Hecta Shrimps (t/ha) 1.65 1.2 Abalone (t/ha) - 0.45 Scallops (t/ha) 30 45 Sea cucumber (t/ha) 0.112 0.115 iii) Shrimp Subcomponent Shrimp feed consumed (tons) 35,200 18,045 Feed conversion rate (%) 25 25 Shrimp stocking rate (No./ha) 300,000 180,000 Shrimp sales-domestic (tons) 4,400 2,482 -export (tons) 4,400 1,650 Sales price-domestic (Y/t) 15,000 60,000 -export (Y/t) 14,050 80,000 Total operating costs (Y) 64,200,000 71,829,600 Operating costs per hectare (Y) 12,000 16,577 Net income (Y) 57,780,000 109,970,000 Net income per hectare (Y/ha) 10,800 25,379 iv) Shrimp Hatchery Total capacity ('000m3) 12 12 Total production ('000 units) 160,000 120,000 Sale price (Y/t) 7.6 Cold Store Total capacity (tons) 2,500 2,500 Amount purchased: - 8,000 - Shrimp (tons) - 3,560 - Other commodities (tons) - 4,440 Average in store per day (t/day) - 2,000 Capacity utilization % - 80  - 19- TABLE 6: KEY INDICATORS FOR PROJECT OPERATIONS Key operating indicators in SAR/ Estimated Actual President's Report 1. Tuhai irrigation & drainage FRR/ERR N.A. / 33.6% 29.5% / 35% Yield (t/ha) Wheat 3.5 3.7 Corn 3.8 3.0 Soybean 1.65 1.34 Cotton 0.8 0.61 2. Mariculture Shrimp FRR/ERR 18.3-18.7%/22.4% 15.2%/18.1% Yield (t/ha) 1.65 1.2 Specialty seafood FRR/ERR 21.9-39.8%/ 27.7% 26.9% / 43.2% Yield (t/ha) Scallops (shell-on) 45.0 45.0 Abalone (shell-on) - 42.9 Sea cucumber (dried) 0.112 0.125 3. Livestock Rabbit FRR/ERR 28-44% /25.9% 14-19% / 18.4-23% Yield (kg/animal) 2.3 2.5 Poultry FRR/ERR 61%/44.8% 15-17%/25.3-27.1% Yield 2.1/chicken, 4.5/goose Pig FRR/ERR 77-78%/45.5% 10.2% /21.7r/ Yield Cattle/Sheep FRR/ERR 15% Cattle /51.7% 12.9%/o / 39.2% 57% Sheep 11.2% / 39.2% Yield 45l/cattle, 20/sheep 4. Date interplanting FRR/ERR 27% / 27% 33.3% 37.8% Yield (tlha) 1.3 2.9 5. Tree planting FRR/ERR 40% / 42% 23.2% / 27.4% Yield (m3) 70 66  - 20 - TABLE 7: STUDIES INCLUDED IN PROJECT Not applicable TABLE 8A: PROJECT COSTS Appraisal estimate Actual/latest estimate Local Foreign Local Foreign Item costs costs Total costs costs Total Tuhai River Basin Irrigation & drainage 47.6 19.1 66.7 37.2 18.4 55.6 Agriculture & forestry 5.5 14.3 19.8 7.0 14.1 21.1 Livestock production 2.0 1.4 3.4 2.5 1.9 4.4 Agroprocessing 7.5 5.3 12.8 9.1 11.0 20.1 Subtotal 62.6 40.1 102.7 55.9 45.4 101.3 Coastal Area Shrimp produ.tion 61.2 30.6 91.8 48.5 28.7 77.3 Special seafood production 5.4 13.1 18.5 7.3 14.9 22.2 Subtotal 66.6 43.7 110.3 55.9 43.6 99.5 Vi A ountain Livest" . production 6.5 3.4 9.9 6.0 5.3 11.3 A"-oprocessing 14.4 13.0 27.4 7.3 19.4 26.8 Subtotal 20.9 16.4 37.3 13.3 24.7 38.0 Institutional Support 0.3 0.6 0.9 1.3 0.3 1.6 Base Cost 150.4 100.8 251.2 126.4 114.0 240.4 Physical contingencies 5.0 3.0 8.0 - - - Price contingencies 8.1 5.0 13.1 - - - Total 163.5 108.8 272.3 126.4 114.0 240.4  - 21 - TABLE 8B: PROJECT FINANCING ($ million) Appraisal estimate Actual estimate Source Local Foreign Local Foreign costs costs Total costs costs Total IDA 0.2 108.8 109.0 0.0 114.0 114.0 Central Government 10.8 0.0 10.8 0.0 0.0 0.0 Shandong Government 7.0 0.0 7.0 47.3 0.0 47.3 Prefecture/County Govern. 113.2 0.0 113.2 37.9 0.0 37.9 Agricultural Bank of China 32.3 0.0 32.3 41.2 0.0 41.2 TOTAL 163.5 108.8 272.3 126.4 114.0 240.4 TABLE 9: ECONOMIC COSTS AND BENEFITS Economic Rate of Return Appraisal estimate (%) ICR estimate (%) Project as a whole 29.0 31.3 Irrigation 33.6 35.0 Mariculture 24.0 23.7 Livestock 34.6 26.7 Date planting 27.0 37.8 Tree planting 42.0 27.4  Table 10: STATUS OF LEGAL COVENANTS Covenant Present Original ful- Revised ful- Description Agreement Section type status fillment date fillment date of Covenant Comments Credit 3.01(a) 5 C - The Borrower declares its commit- Province performed in ment to the objectives of the accordance with provisions project ... shall cause the Province to of Project Agreement. perform in accordance with the provisions of the Project Agreement... 3.01(b) 3 C - Borrower shall make the proceeds of Satisfactory arrangements the Credit Available to the Province were made for proceeds of in accordance with the arrangements the Credit available to the satisfactory to the Association. Province. Project 2.05 3 C 11/01 - Province shall prepare and furnish to Detailed budget, work Association for review by Nov. 1 of program and O&M each year, a detailed budget and submitted regularly to IDA. work program and O&M of existing facilities for the following year. 3.01 1 C 06/30 - Have accounts referred to in para. (a) Audit reports received for of this Section, including the Spcial each calendar year. Account for each fiscal year audited, in accordance with. 3.0lb(ii) I C 06/30 - Furnish to the Association audited As above. accounts not later than 6 months after the end of year.... 3.02 2 NC 12/31/94 12/31/96 Water charges be set, adjusted and Recommendations collected, as necessary to covcr the forwarded to Provincial full O&M costs and 200/o of the Govt. for approval. capital construction cost.  Covenant Present Original ful- Revised ful- Description Agreement Section type status fillment date fillment date of Covenant Comments Project 1 6 C - - Project activities conform to Project activities approved Schedule 2: Provincial guidelines on by local EPA. environmental control. 2 2 C - - Agroprocessing activities operate as Most plants management independent financial entities and generally satisfactory. managed by competent staff. 3 5 C - - Staff training would be carried out in Some delays encountered accordance with program agreed with in the training program. H the Association. 4 9 C 01/07 - Semiannual report to be furnished to Reports always sent on O the Association within 30 days of the time to IDA. I end of each 6-month period. 5 5 C 11/01 - A plan for the provision of chemical Fowarded yearly to IDA fertilizer requirements for the for review. following year. 0 Covenant types: Present status: I= Accounts/audit 8 = Indigenous people C = covenant complied with o 2 Financial performance/generate revenue from beneficiaries 9 = Monitoring, review, and reporting CD = complied with after delay 3=cFlow and utioization of project funds 10i= Project implementation not covered in categories 1-9 CP = complied with partially 4 = Counterpart funding II - Sectoral or cross-sectoral budgetary or other NC = not complied with 5 Management aspects of the executing agency 12 = Sectoral or cross-sectoral policy/regulatory/ 6 = Environmental covenants institutional action 7 = Involuntary resettlement resource allocation 13 = Other  - 24- TABLE 1 1: COMPLIANCE WITH OPERATIONAL MANUAL STATEMENTS Not Applicable Table 12: BANK RESOURCES: STAFF INPUTS Stage of Project Planned Revised Actal cycle__ _ _ _ __ _ _ _ ___ _ _ _ __ _ _ _ ________ Weeks US$ Weeks US$ Weeks US$ Preparation to - 172.9 - appraisal Appraisal - - 25.8 - Negotiations - - 7.8 - through Board approval Supervision - - 85.6 - Completion - - 4.6 - TOTAL  Table 13: BANK RESOURCES: MISSIONS Specialized Performance ratings 2/ Stage of project Month/year Number of Days in the staff skill Types of cycle persons field represented 1/ Implementa- Development problems tion status objectives Through 12/87 to 17 49 A,AP,E,IE, appraisal 07/88 LS,F, w Appraisal 09/88 to 11 10 A,E,IE. - through Board 05/89 approval 3/ _ Supervision 1 09/89 1 6 A. 1 1 Supervision 2 04/90 2 10 A,IE. 1 1 Supervision 3 06/91 6 7 A,AP,E,F,IE. 2 1 Counterpart ___________ _____________ ~~~~~~~~~~~~~~~funding C Supervision 4 10/92 7 9 A,AP,E,F, 2 1 Funding and M IE,I,LS. management Supervision 5 11/93 4 12 A,F,IE,LS. I I Funding Supervision 6 08/94 3 8 A,AP,F. 1 1 Funding Completion A,E. X 1/ Key to specialized skills: A = Agriculturalist, AP = Agroprocessing specialist, E = Economist, F = Fishery specialist I = Institution specialist, IE = Irrigation engineer, LS = Livestock specialist. 2/ Performance ratings: I = problem free or minor problems, 2 = moderate problems, 3 = major problems. 3/ Includes Negotiations.  - 26 - TABLE 14: ROLE OF WOMEN IN PROJECT Name of Component: Tuhai River Basin Component (including agriculture, forestry/fruits, animal husbandry, and agroprocessing sub-components) Irrigation areas Percentage women Percentage women Women access to credit engaged in project participating in training ('000 persons) l _______________________ activity Tuhai project area 55 30 a/ 2.75 a! Taochengpu 17 Guokou 16 Xingjiadu 13 Boqili 18 Handun 12 a/ NO breakdown given tor irrigation areas. Name of Component: Yimeng Livestock Component (separate table for agroprocessing) Total households in Percentage women Percentage women Women access to credit project county engaged in project participating in training ('000 persons) activity Yimeng project areas 76 49 29.4 a/ Feixian 80 50 Laiwu 78 48 Mengyin 69 44 Pingyi 73 52 l Tengxian 66 55 Yinan 85 51 Yishui 82 44 Yiyuan pj 77 a 38 a/ No brekdo-wn given tor project areas. Name of Component: Coastal Development Component (including agroprocessing) Total households in Percentage women Percentage women Women access to credit project county engaged in participating in training ('000 persons) _ _ _ __ I project activity _ _l__ _ Coastal project areas 26 5 Wudi 25 7 Zhanhua 27 6 Hanting 24 4 Penglai 28 5 l  -27 - ANNEX A ANNEX A: MISSION AIDE-MEMOIRE April 13, 1995 1. A Bank Mission comprising of Messrs. El-Hanbali, Ting, and Ms. Li visited Shandong Province from April 11 to 13, 1995, to review the preparation of the Implementation Completion Report (ICR) for the above captioned projects. The mission was unable to undertake a full ICR mission for the two projects and instead took the opportunity during the supervision of the Irrigated Agriculture Intensification Project to meet with staff from Shandong and Xinjiang in Jinan, Shandong, for three days to review the preparation completed by the two provinces. Initially, the mission briefed the project staff from SADP and XADP on the new requirements for the ICR. The mission was briefed by project staff from the Shandong Project Management Office (PPMO), and Xinjiang Foreign Investment Office (XFIMO), on the preparations they have already made for the ICR. The mission was impressed with the efforts made in preparing the ICRs and the completion of the tables forwarded to the two provinces prior to the arrival of the mission. The mission would like to thank the Shandong PPMO, for the excellent arrangements, courtesy, and hospitality extended to the mission during their stay in Jinan. 2. Representatives from the three provinces of the Irrigated Agricultural Intensification Project (IAIP) also participated in the above meetings to familiarize themselves with the requirements for the preparation of their respective ICRs. A subsequent separate follow-up session was organized to deal specifically with the requirements for the preparation of the ICR for the IAIP. 3. The main points and actions which were discussed and agreements reached during the three days deliberations are summarized below: a. the mission stressed the importance of preparing a good completion report to highlight the excellent achievements and experiences gained under the project; the Bank ICR guideline should be used only as a reference in the preparation of the ICRs, the ICR should be succinct and where appropriate supported by annexes/tables and an evaluation summary. The mission stressed the importance of highlighting the positive as well as negative aspects of the project; b. the report should comment on the technical assistance provided to  -28 - ANNEX A XADP by the Australian International Development Assistance Bureau (AIDAB) the Danish International Development Assistance (DANIDA), and FAO/CP in the preparation of SADP; c. the mission suggested the following areas which need to be strengthened and/or where supplemental information is required: i) project sustainability; ii) key lessons learned; iii) factors affecting implementation; iv) future plans; v) role of women and minorities; vi) poverty alleviation; vii) environmental issues; viii) introduction of new technologies; ix) operation and maintenance plans; X) other social benefits; and xi) details regarding irrigation development. d. draft ICR prepared by the Bank is expected to be completed before July 1, 1i995, and will be forwarded to both project offices for their comments in late June and comments back to the Bank by August 1, 1995; e. XFIMO and PPMO will finalize the preparation of their own completion reports and forward the reports to the Bank by June 30, 1995.  - 29 - ANNEX B ANNEX B: BORROWER'S CONTRIBUTION TO THE ICR IMPLMENTATION COMPLETION REPORT CHINA SHANDONG AGRICULLURAL DEVELOPMENT PROJECr (CREDIT 2017-CHA) JULY, 1995 Project Management Office Shandong Planning Commission People's Republic of China  30 - ANNEX B WEIGHIS AND MEASURES 1 meter(m)=3.28 feet(ft) I kilometer=0.62 miles 1 hectare(ha)=2.47 acres 1 muuO.067 ha 1 tornt)-1,000 kg =2,205 pounds(lbs) 1 kg-2.2 pounds( lbs) FISCAL YEAR Jamnary 1-December 31 A.EEVIATIOCS AND ACRNMr ABC Agricultural Bank of China CAS Chinese Academy of Sciences CAAS Chinese Academy of Agricultural Sciences HBC[f Haihe Engineering Command Headquarters MIlC CNIIC International Tendering Ccompany, China National Technical Import Corporation ICB International Ccmpetitive Bidding I&D International Development Association 1P04 Ministry of Agriculture MOF Ministry of Finance PLO Project Leading Group FMD Project Management Office PO Project Office PREDIC Provincial Rural Economic Development and Investment Corporation  -31- ANNEX B Part I Eackground of the Project 1 Part II Project Implementation 1 1. Negotiation , Signing of the Agreements and Effectiveness 1 2. Changes Taking Place after the Appraisal 1 3. Progress of the Project Implementation 2 4. Local Check of the Project Ccmiletion 2 Part III Achievement of the Project Objectives - 3 Part IV Evaluation of the Project 4 1. Project Sustainability 4 2. Environmental Effects 5 3. Economic Evaluation of the Project 5 Part V Borrower Performance 6 1. Duties of the Departments 6 2. Monitoring and Evaluation of the Project 7 3. Assistant Service 7 4. Performance of the Project Offices and the Government Departments- 8 Part VI Performance of the World Bank 8 Part VII Future Operations 9 Part VIII Key Lessons Learned 10 Attached TAble 1 Attached TAble 2 Attached TAble 3 Attached TAble 4 Attached TAble 5 Attached TAble 6  - 32 - ANNEXB IMPEENTATION COMPLErION REPQRT CHINA SHANDONG AGRICULTURAL DEVELOPMENr PROJECr 1. Bacground of the Project 1.1 The project proposal was put forward on the basis of the irrvestigation report of the World Bank on the Tuhai River Basin and Shandong Provincial strategy on the agricultural development and it is continuity of the China Plain Agriculture Project financed by the World bank and the first large-scale integrated agricultural development project in Shandong Province 1.2 The project consists of three components , namely , culture of shrimp and speciality seafood in the coastal areas , transforma- tion of the medium and lower yielding croplands in the Tuhai River Basin , and systematic livestock development in the Yimeng Mountain area ; the project covers 22 counties and districts in the 9 cities and prefectures , with integrated development of irrigation , plant- ing , aquaculture , livestock , forestry , and processing of the agricultural products and by-products . 1.3 The project mission with officers mainly from FAO of the United Nations reviewed the project in March , 1988 . The mission was briefed by the departments involved , and had field visits , collected a lot of data , and had discussions with project staff in Shandong Province about the project feasibility . Finally both sides reached agreements , which laid foundation for project appraisal . In the July of that year , the World Bank mission undertook project preappraisal ; in the September of the same year , general appraisal was undertaken by the World Bank mis- sion , and construction program was defined . Total cost of the project was estimated at 273 million USD with 82.5 million SDRs financed by the Bank and lent to Shandong Province Government through the Ministry of Finance . Yearly interest of the credit is 5.5% with repayment period of 20 years -including five years of grace ; in addition , the Bank mission reached agreements with the province on procurement , accounting statements , retroactive investment , and monitoring of the environment , etc. 2. Project Implementation Neotiation , Sjning of the Agreements and Effectiveness 2.1 In the March of 1989 delegations of the International Development Association and the Chinese government negotiated over the project in Washington . Both sides-signed Agreement of the Project Credit and Agreement of the Project in the mid-September of the same year . The credit became effective on January 29 , 1990 Changes Taking Place after the Appraisal 2.2 Major factors affecting the project As a result of some changes taking place in the market and local situation , it is not necessary to build some subcomponents defined at the appraisal i cost overruns have taken place in the project construction due to revisions of the exchange rate and rise of costs of the building materials , equipment and labour , etc. ; too much time has been taken in some purchases , making the procurement unable completely keep up with progress of the project construction . 2.3 In the September of 1992 , the Bank mission and the province  -33- ANNEXB reached agreements on the mid-term revision program of the project Some revisions of contents of the project constuction were made in livestock component , mariculture component and Chinese date inter- cropped with grains ( see attached Table 1 ) i some necessary revi- sions were made on the procurement ( see attached Table 2 ) X some revisions were also made on the expenditure categories and percen- tage of the foreign exchange with a reallocation of 600,000 SDRs of Category 3 to be used in Category 2 and an increase in the percentage of expendatures to be financed for civil works under Category 1 from 30% to 45% 2.4 Change on the On-lending Arrangements . At the appraisal the World bank decided that Shandong Province Rural Economic Development and Investment Corporation would receive , on-lend , recover and repay the loan . Because of the rarious reasons ( which have been reported to the Bank ) Slundong Province Government proposed through the Ministry of Finance to the Bank that the above-mentioned on- lending arrangement be changed , with Shandong Province Finance Bureau in charge of receiving , on-lending , recovering and repaying the loan through the Ministry of Finance on behalf of the Provincial Government , which was approved by the Bank Prqj ss of the PreSect Iml ementation 2.5 The project implementaion was started in January , 1990 and closed on December 31 , 1994 . Through the five-year construction , main contents of the project construction had been completed by the end of 1994 , and implementation of the components under the project is good ( See attached Table 1 ) . 2.6 Procurement . The PPO entrusted Shandong Rural Economic Development and Investment Corporation to be in charge of the tech- nical operations of procurement and International Bidding Corpo- ration of China Technical Import and Export Company to be in charge of the business operations . Procurement consisted of 33 packages with total value of 53.76 million SDRs ( See attached Table 2 2.7 Training and Technical Assistance . Based on the project implementation it covered a wide range of topics - engineering production , rearing , processing , procurement , and institutional management , etc under components of agriculture , forestry , live- stock , mariculture and irrigation . A total of over 200 different training courses/classes was offered and over 12,140 person-months of training were provided to the project staff under the project . 6 local study tours with a total of 30 person-months were arranged and 7 overseas study tours with a total of 23 person-months were organized ( See attached Table 3 ) . Local specialists were invited to undertake research on saving-water irrigation , effective use of water resources , treatment of sediments , and shrimp diseases con- trol , etc , resulting in good results . In total 8 million Yuan from the Province Government was invested for the training and technical assistance . 2.8 Total Investment Cost . Overall actual project investment is 1,175.41 million Yuan ( 110% of SAR estimate ) , with 114 million USD , equivalent to 557.47 million Yuan , from the World Bank 231.51 million Yuan from the province , 184.8 million Yuan from the cities , prefectures and counties , and 201.63 million Yuan from labour contribution . Local Check of the Project Completion 2.9 The local check was undertaken according to the procedures  -34- ANNEX B and methods stipulated by the PPO . At first , the county project offices organized designing and construction units and users to undertake preliminary check of the completed subcomponents and work out completion check reports X then , the Province Agricuture Bureau , Forestry Bureau , Haihe Engineering Command Headquaters and Aquaculture Bureau would respectively check the subcomponents in the project counties and work out the reports in their own industries , .nd based on the above-mentioned reports the PPO would organized the technical deparments and units involved to undertake general check 2.10 The local check of the project completion was completed at the end of 1994 . According to the check , by and large , the project implementation had exceeded the basic SAR targets , and over 92% of the completed subcomponents are excellent , with the remaining ones coming up to the standards 3. Achievement of the Proiect ObLectives 3.1 Remarkable economic , social and ecological benefits have been achieved within a short time after the project operation . Under the project yields of the agricultural products , by-products and processed products have increased substantially ( See attached Table 4 ) . If we calculate based on comprehensive average prices there have been 5,367-million Yuan of output value and 724 million Yuan of profit and taxes generated from the project , of which there is 663 million Yuan of profit . The farmers in the project area have benefitted from the project , with their net income has been remarkably increased on a per capita basis ( See attached Table 5 ) . 3.2 The project has also provided productive employment for the farmers , especially the women , and the project has directly provided employment for 218,700 people , of which there are 123,700 women ( 56X of the total ) , resulting in raising social status of the women . In addition , the women have played an important role in the breeding , rearing and processing under the components of livestock , poultry and aquaculture ( See attached Table 6 ) . 3.3 The project has also actively introduced and extentively extended fine breeds and advanced technology . By the end of 1994 in total through .the project the follwing fine breeds of animals were made available to the farmers : 536,700 rabbits , 8.835 million chickens , 196,500 geese , 9,220 pigs , 6,430 sheep , and 285 cattle Ratio of coverage of the fine breeds in the project area has increased from 82% before the project to over 95% at present ; the advanced technologies like water-saving irrigation , formula appli- cation of fertilizer , mulching , genetic engineering , microelec- tronics , and.nuclear radiation , etc have been extended or started to be used . In 1994 unit outputs of wheat , corn and cotton in the irrigation project area were 52.5% , 43.6% and 6.5% respectively more than in 1988 , with quality and benefits of the products also improved . It should be specially pointed out that role of demon- stration and radiation of the project area has become more and more important , for example , in the 10 water-saving demonstration areas , on the average , water can be saved by 20% per hectare which practice has been extended to 932,000 hectares of the province . 3.4 The project has improved irrigation on 106,000 ha ( 130% of  -35- ANNEX B SAR estimate ) , expanded irrigation on 178,200 ha ( 94% of SAR esti- mate ) , transformed 21,300 ha of saline land , reclaimed 21,500 ha of wasteland , and solved the drinking problem of 480,000 people and 220,000 heads of stocks., which have substantially improved production and living conditions of the farmers in the project area . In addition , as a result of irrigation construction and development of Chinese date ( fruits ) intercropped with the grains and fast growing trees , on-farm wind speed has been slowed down by over 25% and the microclimate has been improved , resulting in achieving good ecological benefit . 3.5 The project has achieved organic integration of agriculture forestry , livestock and aquaculture with systematic and integrated development of production , processing , sales , and services , resulting in not only strengthening construction of the basic faci- lities , but also comprehensively developing and using the resources and promoting vitalization of agriculture by way of science and technology , which will surely further promote integrated agricul- tural development of Shandong Province . 3.6 The project implementation has built up a lot of backbone enterprises who combine production with processing and sales , and integrate trade and industry and agriculture . By way of using the loan from the World Bank to import the advanced equipment , techno- logy and management methods from the foreign countries , the techno- logy and management of *the enterprises have been improved , and the products have become more competitive in the local and international markets with more foreign exchanges earned . 3.7 Within the economic life of the project over Yuan of financial income will be directly generated from the pro- ject , and 14 million people will benefit from the project , with increased 300 million USD of agricultural output value generated from the project every year . Therefore , remarkable economic and social benefits will be achieved under the project . 3.8 The project implementation has trained a lot of qualified personnels who are open-minded and responsible with managerial know- ledge and operational capacity , and they will continue to.play an active role in their posts . The project will also posively contri- bute to the transformation of Shandong's agriculture from a tradi- tional one to an modern one and the accerleration of integration of market-oriented agriculture and international economy in Shandong Province . 3.9 According to the real situation of Shandong Province and the project area , the organizational system has been established to combine divisions of labour with joint efforts and integrate unified management and management by different levels among the planning commissions , finance bureaus , agriculture bureaus , water resources bureaus , aquaculture bureaus , and forestry bureaus under the leadership of the governments at different levels , which practice has proved not only practical but also effective 4. Evaluation of the Proiect Project Sustainability 4.1 Good benefits have been initially achieved under the pro- ject , and along with the project operation , the project will maximize its benefits , with its facilities kept in good condition which will maily rely on the following facors : a. The products produced and processed under the project have a very extensive  -36- ANNEX B market . China has a large population with small quantity of the agricultural products and by-products on a per capita basis , and according to I the well-off I living standard , demand of the agri- cultural products and by-products will be substantially increased with great potentiality in the local market . Demand of the agricul- tural products and by-products in the international market will also be increasing , and especially shrimp , speciality seafood , chicken meat and Chinese date products will be in great demand . b. The basic facilities like the Yellow River diversion irrigated areas will be managed according to the plan of operation and maitenance and they will be kept in normal operation and maximize their bene- fits . According to calculations , economic life of the irrigation component is 25 years , and that of Chinese date ( fruits ) inter- cropped with the grains is 30 years , while that of the others is 20 years . Environmental Effects 4.2 Based on different raw materials and products the process- ing components under the project can be divided into feeds , meats fruits , woolen spinning , and rabbit hide processing . 4.3 Feeds processing basically does not produce waste water with little air pollutants emitted in the production , and although there is some noise pollution , it is not serious according to the monitoring 4.4 Through comprehensive treatment of the equipment installed for treating sewage and removing dust , the pollutants emitted from the processing plants under the project can be up to the standards stipulated by the national environmental protection departments and will not have harmful effects on the environment 4.5 Expansion of irrigated area under the irrigation component has intensified vertical and horizontal motions of underground water in the project area , resulting in improvement of the land's quality in the meantime , attention has been paid to bringing desertifica- tion under control , with trees and other plants planted at heads of the canals , having controlled disasters caused by wind and sand Economic Evaluation of the Project 4.6 Evaluation of the Basic Targets . The project implementa- tion has brought about great comprehensive benefits for the project area . In 1994 , outputs of wheat , corn , soybean , peanut , pork beef , mutton , chicken and speciality seafood , and income of the farmers exceeded the basic SAR targets estimated at full develop- ment ; output of rabbit meat accounted for 80% of the estimate ; output of shrimp and internal rate of return have not come up to the SAR estimates due to the serious shrimp diseases for the two consecutive years , and output value of the aquatic products was increased by 36.579 million USD , exceeding the SAR estimate by 46.3X ( See attached Table 4 ) . The crops production income of the farmers in the Tuhai project area was increased by 188.5X , exceed- ing the SAR estimate ( 55% ) by 133.5X i income of the farmers in the Yimeng project area increased by 230% , exceeding the SAR estimate ( 115% ) by 115% . 4.7 With and without the project . If without the project the agricultural and rural economy in the project area would also develop , but rate of the development would be much slower than that of the development with the project . The project has not only directly increased unit outputs of the agricultural products  -37- ANNEX B but also promoted improvement of the production structure increase of multiple crop index , and rational use of the agricul- tural resources , resulting in raising the comprehensive production capacity . In 1994 , use of one million tons of forage grass under the livestock component , which opportunity cost was almost equiva- lent to zero , provided employment to 100,000 women who were idle in 70% of a year i particularly the project has played an important role in poverty alleviation of the farmers in the Yimeng Mountain area , resulting in initially alleviating poverty of 200,000 poor farming families . The project has also contributed to increased income of processing enterprises and finrncial income . In the case of the transformation of medium and lower yielding croplands in the Tuhai River Basin , outputs of the crops per hectare are much more than those of 1988 without the project output of wheat has been increased by 1,390 kg , corn by 1,200 kg , soybean by 695 kg , cotton by 40 kg , shelled peanut by 800 kg , and vegetables by 6,000 kg . The aquaculture component has made 5,066.5 ha of the coastal lowlands developed and provided incremental employment to about 10,000 people . Based on calculations about an area without the project , which is similar to the project area , in 1994 income of a farming family in the Yimeng Mountain project area was 1,483 Yuan and 86.3% more than that of a farming family without the project i when the project is at full development in 1997 , income of a farming family under the project can be up to 4,141 Yuan , 128.8% more than that of a farming family without the project . In 1994 income of a farming family in the Tuhai project area coming from the crops production was increased by 980 Yuan and 62.9X more than that of a farming family without the project ; when the project is at full development in 1997 , income of a farming family in the project area coming from crops production will be up to 3,177 Yuan , 92.5% more than that of a farming family without the project . 4.8 Financial Analysis of the Project . Based on calculations with the exception of very few subcomponents , financial return rates of most of the subcompoents have been up to or exceeded the SAR estimates . General financial return rate of the project is 29.5%, with 27.7% in the Yimeng component , 39.5%% in Tuhai component , and 18.8% in aquaculture component(see attached Table 6). 5. Borrower Performance Duties of the Depar tments 5.1 The organizational system has been established under the project to combine unified management with management of the govern- ments at different levels . According to the actual requirements of project construction , the Provincial Government has defined the following official duties for the departments Involved in the pro- ject a. The Province Project Office is in charge of planning management of the project , and examining , approving , issuing and reviewing the project yearly plans ; coordination and service ; foreign affairs X monitoring , evaluation and supervision of the project b. The Province Fnance Bureau should take part in the project management of the PPO , and is in charge of financing management of the project , including receiving , on-lending , recovering and repaying the Bank loan ; raising the counterpart funds of the pro- ject i procurement and supply of goods and materials c. The project offices of the Province Agriculture Bureau , Fore-  -38- ANNEX B stry Bureau , Haihe Engineering Commnnd Headquaters ( ECH ) and Aquaculture Bureau are in charge of planning , examination , report- ing , implementation management and technical instructions of the project in their own industries d. The Province Auditing Bureau is in charge of project auditing e. The Province Environment Protection Bureau is in charge of monitoring and evaluating environmental effects of the project 5.2 The project offices in the project cities and prefectures are in charge of the project management in their areas , and help the provincial departments involved to do the project together with the technical bureaus in their areas 5.3 The county project offices together with the county finance and agriculture bureaus are in charge of project proposals and fea- sibility study X drawing up yearly plans in their own counties X monitoring , evaluation and reporting of the project implementation to the higher leading bodies . 5.4 According to the Staff Appraisal Report of the Bank and the management procedures of the local capital construction , the project construction units would work out documents of the project designs and submit them to the provincial authorities for examina- tion and approval , and then based on them the construction units would work out yearly implementation plans , which would be submitted by the county project offices level by level to the PPO and the province technical departments who would review and submit them to the Bank for approval before November 1 every year , and then the construction plans would be made . 5.5 Investment of each subcomponent is arranged year by year according to its progress . The domestic coounterpart funds of the project are raised and appropriated by the finance bureaus at different levels according to plans , while the loan of the Bank used in bids and procurements was disbursed according to the regula- tions of the Bank . 5.6 In the procurements by way of bids , according to documents of the project designs the construction units would work out the procurement lists to be examined by the PPO and the province tech- nical departments , who then would submit them to the state autho- rities and the Bank for review . When the World Bank approved them bidding ways would be set , and the PPO would handle the procure- ments with goods and materials procured and delivered to the cons- truction units according to plans . Monitorng_Land Evaluation of the Proiect 5.7 The project offices at different levels are in charge of M & E with special persons appointed to be in charge of the opera- tions. According to daily monitoring and evaluation , the project offices in the project cities , prefectures and counties would sub- mit reports of monitoring and evaluation level by level to the PPO and the Province technical departments at the end of a year . Experts from the Chinese Academy of Agricultural Sciences were also invited to assist in the monitoring and evaluation of the project Assistant Service 5.8 The Province Academy of Agricultural Sciences , Sea- water Mariculture Research Institute , Ocean Aquaculture Research Institute , and the colleges and universities involved have provided a lot of research achievements and put forward many rational propo- sals for the project implementation . Agriculture technical exten-  -39- ANNEX B sion services have been extensively set up in the project area which have provided a lot of technical services for the project implementation . Performance of the ProLect Offices and the Government Departments 5.9 The project offices and government departments irrvolved in the project cities , prefectures and counties have played a decisive role in the project implementation . According to contents of the project construction , they have organized the parties con- cerned effectively in implementation of the project , which have provided reliable institutional guarantee for implementation and completion of the project on schedule 5.10 The PPO and the project offices of the province technical departments are centre of the project implementation devising the project progress and coordinating the project implementation , which include organizing the parties concerned to do the project , properly solving the problems in the project implementation without delay by way of holding coordination meetings of the province departments involved , organizing field visits and investigation and study tours by the leaders from the project offices , and reporting the project implementation to the Province Government for making final decisions , etc . Regarding the problems to be solved by the World Bank , the PPO would contact and have discussions with the Bank without delay to solve them as soon as possible , resulting in effec- tively promoting smooth implementation of the project 6. Performance of the World Bank 6.1 The project construction are so extensive and the project investment is so huge that it would be difficult for Shandong Pro- vince to do the project by itself . The World bank has given us strong support in fund , imformation , and technical directions etc , and has played an important role in guaranteeing completion of the project on schedule . The soft loan given to the project by the World Bank shows that the bank has given preferential treat- ment to the project . The mid-term revision program put forward by the FM was approved by the Bank without delay , resulting in promoting smooth implementation of the project 6.2 The FAO of the United Nations has given active support to the project . During the project appraisal , the FAO sent competent officers to undertake comprehensive investigations , and the factual results prove the project proposal is correct . The World Bank has given full , strong and effective support to the project , and sent five supervision missions during the five-year implementation . The PPO and the project staff are impressed with proffessionism severity and efficiency of the missions sent by the Bank and FAO Every time when the Missions came to supervise the project , regard- less of hardship and without any rest they would have field visits of the project sites to review the project implementation , having discussions in detail with the county project offices , construction workers and even farmers to get first-hand data about the project implementation . The missions would undertake careful study and repeatedly have discussions with the project offices and staff of the project units to find best solutions to the problems in imple- mentation of the project . Generally speaking , directions given by the bank missions on the technical , economic and organizational aspects of the implementation are timely , effective and adequate resulting in very good effects .  -40- ANNEXB 6.3 Cooperation between the PPO and the departments involved and the Bank missions is close and friendly . The Bank missions frankly and sincerely put forward proposals to the project offices and helped think of solutions to the problems in the implementation while the PPO also talked frankly to the Bank missions about the problems in the project implementation and coordinated activities of the departments at different levels to make joint efforts , and make comprehensive and careful arrangements about implementation of the project with a lot of fruitful work done . The successful implemen- tation of the project can largely be attributed to close cooperation and friendly relations between both sides during implementation of the project 6.4 As a result of some changes of the missions' officers sent by the Bank to the province for appraisal and supervision of the project , particularly several changes of the livestock experts it was difficult both for them to understand the project implementa- tion and for both sides to understand each other , resulting in some difficulties on the part of the borrower 6.5 From the project negotiations to signing and effective- ness of the credit , the project was on hold for some time X at the beginning percentage of expenditure for the civil works was on the low side , and postponement of revision of the percentage till after the mid-term review has-affected the project implementation to some extent 7. Future Operations 7.1 After the project is in operation the project offices at different levels will be maintained with their official duty changed to paying attention to the project operation and management including giving centralized guidance to the project operation and providing local and international market information ; helping the project units to import advanced production technology and solve problem of availability of working capital i undertaking late stage evaluation and supervision of the project ; urging the departments and units involved to recover and repay the Bank loan ; coordinating to solve the problems in the project operation . 7.2 Production responsibility system , share holding system or operating system of specialized households will be adopted in components of planting and production , with contractor units , shareholders or specialized households to be in charge of the produc- tion activities , and maintenance and management of the production facilities . 7.3 As. independent legal bodies , the agroprocessing plants will be operated autonomously and responsible for their own profits and losses by way of self-development and self-discipline , and will undertake production , processing and sales according to local and international market situation ; in addition , they will use the foreign experiences for reference to establish trades associations 7.4 The PPO will press for the Province Government to issue document on raising charges for water and water resources as soon as possible , and further perfect and strictly carry out the rules and regulations on operation and maitenance of the irrigation facilities to make the project benefits sustainable . The irrigation area bureaus will be in charge of water supply and operation of the canals and branch canals , and collection of water charge and development of the commercial operations . The village commissions or the benefi-  -41- ANNEX B ciary farmers will maintain and manage the on-farm works 8. Key Lessons Learned 8.1 As a result of much time taken in the preliminary pre- paration of the project , with about 3 years taken from the project identification to effectiveness of the credit , great changes had taken place especially like revisions of the foreign exchage , and rise of prices of the raw materials and labour , etc , which have forced the project units to revise the construction programs . 8.2 Much time had been taken in the procurement , particu- larlly in the procurement of the processing equipment due to drawn out procedures . Some procurements like procurement of the meat cattle processing equipment could not keep up with progress of the project construction , having delayed operation of the cattle slaughterhouses . Some problems were experienced in the procurement with the coordination between the commercial and technical units and the project units , resulting in supply of some unsuitable equipment like exavators for irrigation and fruits juice processing equipment 8.3 During the project identification , estimate of working capital was not enough , having influenced normal production and operation of some agroprocessing plants . 8.4 Some problems were experienced with timely availability of the sufficient counterpart funds in some of the project cities , prefectures and counties , resulting in making the on-farm works under the irrigation component unable to be completed on schedule  Table I KEY INDICATORS FOK PROJECT lWl.E)11 rKA'l(01 -I - Key implementation indicators in SAR Rev is,d Actual . QuWn- Total construction Total T*o 0an- 'lull invu:.tw.1 1.1 u. UuK.n- Total investment ToLal Unit tity scope I nvestLtUn i Li.st I Total 106722 ____ _ _ 117541 luhai River Basin 44806 . 4!l I"L 49422 I.Drainage& irrig. 29711 -I 26676 j 26676 ________________ ___ _. _ ____ . _ _ _ _ _ , _ _ _ _ _. _ _ . _ Taochenvpu Scheme I Ijnd improve 7076 1 1 oxpand 523. nd 717 j I N h eanded 7147 wo2wo a ~~~~~~~~improve a injiju _______________ -_ ._ - improved Guokou Scheme I 1 pnd improve 1540 1 I expand I 4lQ0 hg and 1805 I I 14VIe a 1805 WU.5UU ha imprtove I iUU ha 5tnda t2IIJ ne ____ ________ _ .________________ I mproved. Xingjiadu Scheme I I expand and improve 6608 I 1 expand 31, 0 h and 5409 I I i6.0 pro ed anded 5409 75.400 ha _mprove 2.3 sqa 445 18. __0 ha 2.____ improve.d _______ 709 Boqili Scheme I I g%j~ gnd improve 7144 1 I expand 4i,3Qh ad66 I 142.3 3~,egpandc 6176 a improve_ii _ _ _ ,__ . , _ hndin Scheme I I mg gnd improve 6876 o 2 2xpand 38 1h0 eand2 5680 1 1 32f86 h3 e panded 5680 ntrcroppe hr a improve 4o.IIJU and INNiha improved ______ Prsigroe Water and I I construct 4,000 sq.h 467 _ 2 Eonstruct 2.130 sq.m 459 1- l 3,010 sq.. buih ding 459 30iILntre building area building area -area construcLed 2. For-estry 4696_ 7089 7089 Chinese date 1 10 Iyelop 50 OQ ha of 2204 I 10 Develop 22. 276 ha of' 2521 I 10 22 276 hQ) of dlate 2521 int~~rcropped with Lii ines~~ ddt inter- date ini,erCIp iith Inter h~ gr?j n* grains croped with grains 1ra lns and 212. )2 Lnd 22 5 its priLts intercropyc( iiiL!qrx-ropp(xI viLl Lhg HIM e1iai- (k-eIVP meiu . j ' c vLxlI p _ _ ____ ___________ ___ -_ _ h(~~~~~~nkxVie and ov yieldl I Ire h a r Fast growin tees I 2 construct 3,000 ha 515 1 2 construct. :3,-000 ha 1 ,10h osrce 1 Fuits processing 1I ~ rogesse6.800 tons 1977 I 5 ieoKs 6,800 Lon, 15 i I .00te ris 35 piiants rusevery Year ___ - __ [ruits every *yeai I___ 3 i)Ccsed every year  Key implementation indicators in SAR kcvislu I Actual Item _ _____ Unit 0u n- Total c1instruction Total liii IuVr I Thud c I *Ji .'o Ii l luniLlOuq- Iotal construetion Total _________________V_ tity scope i invest _ LILy ! I 'v,' tity scope invest 3. Agriculture 563 I I /ii | j 6776 Seeds processing 1 12 con--tryq,t 22,430 sq. 648 1 12 corriluct '7 . iThi I 12) 27,385 sq. m build- 758 a. uili*Ing area M. bui_ldi, u ;J._J _ area constructed Fertilizer Ion 44500 buy 44,500 T of DAP 4983 Ion 50iO buy 50(,0(J o1' DA OI Ui LtUn 50000 50,000 T DAP bought 6018 4. Livestock 4768 ,881 8881 ____ ____ ___ ____ _ _ __ . - . . . ---- _- r_- ___ ______ ____ Pasture Development I 3 improve 5,333 ha of 129 1 3 improve 3,333 ha of ,144 I 3 ,333 ha, p.tr& 444 Pasture a re , cotruc, I improv' anu IuO wiJponJstv~J~hs~i 1 PQn~)ir storge o green odder |r constructed Ro,nty Bpeeding I I rear 10hicskets of 237 1 I rer 10,000,sets of 294 Ia l0,000 sets bre,ding 294 uhicken ra a br&ed(iln chicKens rx-eedi ng chickens chickens rearea _~ . ____ __ _ __ _.' _. _ 87 ._.._ County Breeding I I raise 50 heads~ of 37 1 1 raise15 hs of 87 1 1 j55 hwai$ of 4reedi- 87 Cattle Farm Ear eing cattle brxing caLttle Ing cattle raised _ Qounty Breeding I I rear 3,030 breeding 212 I 1 rpar 3.030 breeding 204 1 i 3,030 breexling sheep 204 Sheep Farm sneep SlC!p reared Heat Cattle Fatten- I I provide 4 000 fatt- d437 I I provide 4 000 fal.- 482 _ _ 4.000 f