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The World Bank Public Disclosure Authorized Document of The World Bank Public Disclosure Authorized Report No: 30270 IMPLEMENTATION COMPLETION REPORT (SCL-41610 TF-29388) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF US$ 120 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR A HEILONGJIANG AGRICULTURAL DEVELOPMENT PROJECT Public Disclosure Authorized November 17, 2004 Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective ) Currency Unit = Renmimbi (RMB) Yuan (Y) Y1.0 = US$ 0.12 US$ 1.0 = Y 8.3 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS AM Aide Memories DHIP Dairy Herd Improvement Program EIRR Economic Internal Rate of Return FIRR Financial Internal Rate of Return GMP Good Management Practice HABC Heilongjiang Animal Breeding Center HACCP Hazard Analysis and Critical Control Point HADP Heilongjiang Agricultural Development Project HAHB Heilongjiang Animal Husbandry Bureau HDP Heilongjiang Dairy Project HGSI Heilongjiang Grassland Science Institute HLIC Heilongjiang Livestock Information Center IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report IT Information Technology NGO Non Government Organization NPV Net Present Value PDRC Provincial Development and Reform Commission PMO Project Management Office PPMO Provincial Project Management Office PSR Project Status Report QS Quality Safety RCC Rural Credit Cooperative SAR Staff Appraisal Report SARS Severe Acute Respiratory Syndrome SOE State Owned Enterprise TA Technical Assistance TV Television WTO World Trade Organization Vice President: Jemal-ud din Kassum Country Director David Dollar Sector Manager Mark Wilson Task Team Leader/Task Manager: Zhengxuan Zhu CHINA Heilongjiang Agricultural Development CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 8 6. Sustainability 9 7. Bank and Borrower Performance 10 8. Lessons Learned 12 9. Partner Comments 13 10. Additional Information 13 Annex 1. Key Performance Indicators/Log Frame Matrix 14 Annex 2. Project Costs and Financing 16 Annex 3. Economic Costs and Benefits 19 Annex 4. Bank Inputs 21 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 23 Annex 6. Ratings of Bank and Borrower Performance 24 Annex 7. List of Supporting Documents 25 Annex 8. Borrower's Contribution 26 Project ID: P038988 Project Name: Heilongjiang Agricultural Development Team Leader: Zhengxuan Zhu TL Unit: EASRD ICR Type: Core ICR Report Date: December 17, 2004 1. Project Data Name: Heilongjiang Agricultural Development L/C/TF Number: SCL-41610; TF-29388 Country/Department: CHINA Region: East Asia and Pacific Region Sector/subsector: Animal production (41%); Agro-industry (40%); General public administration sector (10%); General agriculture, fishing and forestry sector (7%); Agricultural extension and research (2%) Theme: Rural services and infrastructure (P); Rural non-farm income generation (P); Other rural development (S); Pollution management and environmental health (S) KEY DATES Original Revised/Actual PCD: 1995-09-01 Effective: 1997-09-24 1997-09-24 Appraisal: 1996-11-15 MTR: 2000-09-05 2000-09-05 Approval: 1997-05-13 Closing: 2003-06-30 2004-06-30 Borrower/Implementing Agency: PRC/HEILONGJIANG PR Other Partners: STAFF Current At Appraisal Vice President: Jemal-ud-din Kassum Jean-Michel Severino Country Director: David Dollar Nicholas C. Hope Sector Manager: Mark D. Wilson Joseph R. Goldberg Team Leader at ICR: Zhengxuan Zhu John Stemp ICR Primary Author: Zhengxuan Zhu; Weiguo Zhou 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The primary objectives of the project were to raise incomes and living standards, stimulate market oriented enterprise development in rural Heilongjiang industries, and expand rural employment by increasing livestock and aquaculture production, and expanding or improving crop and livestock processing. The project aimed at introducing new production and processing technologies, and promoting better planning and management to respond to market demands. It also aimed at enhancing environmental standards in the design of crop and livestock processing plants, developing monitoring systems and promoting sound environmental protection practices. 3.2 Revised Objective: The original project objectives remained unchanged. 3.3 Original Components: The main features of the project are: (a) to support development of beef cattle fattening, dairy cow raising, pig breeding and fattening, goose breeding and fattening, and fox breeding; (b) to expand fish production through the construction of 584 new ponds, the rehabilitation of 237 existing ponds and the restocking of a 12,000 ha natural lake; (c) construction of new and expansion/improvement of existing facilities for processing milk, beef, pig and geese, cereals, oilseeds, beans and fruit; and (d) institutional development, including the strengthening of livestock and crop supporting services, technical assistance, training and studies. These components were well designed to achieve the project objectives. Both the central and provincial governments supported the project and mobilized support down to the county and township levels. There was a high degree of support and interest on the part of project beneficiaries and stakeholders. 3.4 Revised Components: The original component remained unchanged throughout the implementation period. However the scale of the livestock production, aquaculture and the agroprocessing components was adjusted during the process of project implementation, to reflect the market demands and the implementation capacity of the project areas. Component Cost Rating Livestock Production US$100.3 million S Aquaculture US$ 4.8 million S Agroprocessing US$ 92 million S Institutional Development US$ 11.7 million S Total US$208.8 million 3.5 Quality at Entry: The quality at entry is rated as satisfactory. The project objectives were consistent with the Bank's CAS in China; and the government's long term policies focusing on increased production, income generation and employment creation in rural areas. The design incorporated a range of technical innovation - 2 - in livestock production including breed improvement, improved livestock housing to incorporate solar heating, and greater attention to animal nutrition including the introduction of maize silage and new varieties and direct seeding technology for pasture renovation. These innovations proved to be broadly successful, raising productivity, reducing cost and improving animal welfare. With the agro-industry component, much of the equipment was purchased internationally, thus accelerating technical innovation. The strategy of vertical integration between local agroprocessing and production is a proper approach, as at project design, Heilongjiang’s low level of value adding to its agricultural commodities was seen as a major opportunity to improve farm gate prices and raise rural employment when the provinces traditional heavy industries were in decline. Project evaluation indicates that this strategy was successful on both counts. Compared with the Songliao Agriculture Development Project , a similar stream of investments was financed in the mid 1990s and similar results were generated. The project design also incorporated valuable experiences and lessons learned from other Bank-financed projects, especially in wastewater treatment, which were included in the project design and cost estimates for all agroprocessing facilities. The project objectives were relevant and linked to measurable output indicators. During the process of project preparation, a participatory approach was adopted: numerous meetings were held at township and village levels to identify candidate villages and households for participation in livestock and aquaculture development activities. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: 4.1.1. The project was closed after a one-year extension and the outcome of the project is rated as satisfactory. The main achievements/outcome are as follows: 4.1.2 Income and living standard of the local farmers improved through more employment opportunities generated under the project. About 45,800 households directly participated in the livestock and aquaculture production programs. This has brought the farm family labor utilization rate up from 41% at the baseline year to 87%, higher than the appraisal estimate of 69%. On top of that, over 70% of the beneficiaries are women. This has contributed significantly to women's empowerment. In addition, the project financed enterprises are expected to generate about 9,000 full-time job opportunities for local people at the full development of the project. As a result, the rural per capita income of the project counties is expected to reach RMB 3,369 yuan, RMB 1,904 yuan more than the baseline year of only RMB 1,465 yuan, or representing 125.7% that of the appraisal estimate. 4.1.3 Stimulating market-oriented enterprise development
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