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| Loan Name | Shanxi Integrated Agricultural Development Project | |||
| Country | China,People'sRep.of | |||
| Project Number | 38662- 01 | |||
| Fund Source/Amount[Proposed] |
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| Thematic Classification |
Environmental Sustainability
Economic growth Private Sector Development |
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| Project Rationale | Shanxi has only about 1 million hectares (ha) of dependable arable land-of modest quality and productivity-for its 23 million farmers. Low rainfall, high evaporation, frequent natural disasters, and soil erosion lead to instability in agricultural production. After about 30 years of reforms, agricultural service system, farmer's technical capacity, and women's economic participation have improved. However, the nature of extensive and scattered small-scale agriculture in Shanxi has not changed significantly. The majority of farmers continue to practice traditional agriculture mostly growing wheat and maize that generate low income and require extensive use of water and agrochemicals. Similarly, the patterns of free-range livestock grazing and untreated disposal of animal waste adds to soil and water pollution. This agricultural system is largely unsustainable, damaging to the environment, and keeps most farmers in the poverty trap. Most farmers also remain largely unorganized and cannot take full advantage of market and rural finance opportunities. In addition, women's participation remains marginal, and their social and economic rights are usually ignored.
One of the main constraints to converting from traditional farming to high-value farming is access to credit. The agricultural lending institutions have (i) a limited range of products, (ii) inadequate experience with long-term lending, and (iii) weak capacity to assess credit risk. These constraints, coupled with the absence of market-led interest rates, lead to market failure, and the inability of AEs and farmers to access formal financial services. The proposed Project will address these constraints and provide financing for high-value farming, agro-processing, product quality and safety, environmentally-sustainable farm practices by adopting water-saving irrigation techniques, microfinance to poor women, and improved capacity of farmers and TSAs. These initiatives are consistent with the Government's 11th Five-Year Plan (2006-2010) and ADB's PRC Country Partnership Strategy, 2008-2010. |
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| Impact | The anticipated impact of the Project is development of a sustainable agriculture sector in Shanxi. | |||
| Outcome | The outcome of the Project will be increased farm productivity and household income resulting from high-value agricultural production by adopting appropriate and environmentally sound technologies and practices, value addition through processing, efficient market access, and improved food quality and safety in the project counties. | |||
| Outputs | The Project will directly benefit over 66,000 farm households-by providing credit for investment capital-and indirectly benefit another 16,000 in 26 counties of 5 municipalities in central and southern Shanxi, where the per capita land area is less than 0.17 ha. Of these, 11 are poverty counties and 12 are on the priority list for treatment of accelerated soil erosion in the PRC. The Project comprises four components: (i) transition to high-value production by adopting technologies and practices that ensure environmental sustainability and increase farmers' incomes; (ii) strengthening farm-market linkages by supporting on-farm and industrial agro-processing and marketing of high-value products; (iii) capacity-building and training of farmers, farmer associations, and TSAs to support high-value production and processing of farm products; and (iv) project management to support efficient implementation of the Project. Of the three activities in the first component-perennial crops, annual crops, and livestock-each participating county will take up any two to keep the project implementation more manageable. | |||
| Geographical Location | Changzhi, Jinzhong, Linfen, Luliang, and Yuncheng Municipalities in Central and Southern Shanxi Province | |||
Safeguard Categories
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| Environment | B | |||
| Resettlement | C | |||
| Indigenous People | C | |||
| Summary of Environmental and Social Issues | ||||
| Social Aspects | to be determined | |||
| Stakeholder Participation and Consultation | ||||
| During Project Design | The Project will ensure stakeholder C&P (consultation and participation) in its activities through a series of workshops and meetings throughout its implementation. Farmers and farmer associations will receive training on group mobilization, organization, management, and marketing skills to enhance their capacity to participate in project implementation. | |||
| Procurement | ||||
| Consulting Services | The Project will provide 120 person-months (p-m) of national consulting services for project management and training. Five individual consultants will be financed and engaged by the Government to (i) introduce China good agriculture practices (ChinaGAP) to promote product quality and safety; (ii) build capacity of farmers and their associations to adopt improved production and marketing practices; (iii) train TSAs in gender development, monitoring soil and water quality, safe disposal of animal waste, and environmental impact assessment; and (iv) support PMO/PIUs to prepare and implement project monitoring and supervision, bidding and procurement documents, midterm review, and project completion report. To implement WFPF activities, three individual consultants will be engaged for 25 p-m-one international (water resources specialist, 5 p-m) and two national (irrigation specialist and hydrogeologist, 12 p-m and 8 p-m, respectively). To implement GDCF activities, a local nongovernment organization will be engaged following single-source selection procedure. A national individual consultant will be engaged for 2.5 p-m for monitoring and evaluation of GDCF activities. All recruitment financed under WFPF and GDCF grants will be carried out in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time). | |||
| Civil Works/Goods | All procurement of goods and works shall be carried out in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). Contracts for goods estimated to exceed or equal to $1.0 million and those for works estimated to exceed or equal to $10.0 million shall be procured using international competitive bidding (ICB) procedures. Contracts for works/goods estimated to cost equal or less than the above ICB values but more than $200,000/$100,000 shall be procured through national competitive bidding procedures in accordance with the PRC Tendering and Bidding Law (1999), subject to modifications agreed with ADB. Contracts for works/goods estimated to cost less than or equal to $200,000/$100,000 shall be procured using shopping procedures. For farm inputs, procurement will be undertaken through shopping by the respective borrowers in accordance with the established private sector or commercial practices which are acceptable to ADB. The relevant sections of ADB's Anticorruption Policy (1998, as amended to date) will be included in all procurement documents and contracts. | |||
| Responsible ADB Officer |
Akmal Siddiq |
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| Responsible ADB Department |
East Asia Department |
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| Responsible ADB Division |
Agriculture, Environment, and Natural Resources Div, EARD |
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| Executing Agencies |
Shaanxi Provincial Government |
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| Timetable | ||||
| Concept Clearance | 16 Apr 2008 | |||
| Fact-finding | 18 Apr 2008 to 25 Apr 2008 | |||
| Appraisal | 16 Jun 2009 to 22 Jun 2009 | |||
| Board Approval | II Dec 2009 | |||
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