Documentof The World Bank Public Disclosure Authorized
Report No. 16390-CHA
STAFF APPRAISAL REPORT Public Disclosure Authorized
CHINA
QINBA MOUNTAINS POVERTY REDUCTION PROJECT Public Disclosure Authorized
May 15, 1997
Public Disclosure Authorized Rural and Social Development Operations Division China and Mongolia Department East Asia and Pacific Regional Office CURRENCY EQUIVALENTS (As of March 1997)
Currency Unit = Yuan (Y) $1.00 = Y 8.30 Y 1.00 = $0.12
FISCAL YEAR
January I - December 31
WEIGHTS AND MEASURES
I meter (m) = 3.28 feet I kilometer (km) = 0.62 miles I hectare (ha) = 15 mu I ton (t) = 1,000kg = 2,205 pounds
ACRONYMS AND ABBREVIATIONS
8-7 Plan - National Seven-Year Plan for LGPR - Leading Group for Poverty Reduction Poverty Reduction (1994-2000) MCH - Maternal and Child Health AATP - Applied Agricultural Technology MOA - Ministry of Agriculture Program MOF - Ministry of Finance ABC - Agricultural Bank of China MOL - Ministry of Labor ACWF - All-China Women's Federation NCB - National Competitive Bidding ADBC - Agricultural Development Bank of NER - Net Enrollment Ratio China OGR - On-time Graduation Ratio CAS - Chinese Academy of Sciences PADO - Provincial Poor Area Development CWHRDC - China Western Human Resources Office Development Center PLG - Project Leading Group EPB - Environmental Protection Bureau PMO - Project Management Office ERR - Economic Rate of Return QEP - Qinba Education Program FCPMC - Foreign Capital Project Management QHP - Qinba Health Program Center RAP - Resettlement Action Plan FRR - Financial Rate of Return RCRD - Research Center for Rural Development IBRD - International Bank for Reconstruction SOE - Statement of Expenditures and Development SPC - State Planning Commission ICB - International Competitive Bidding SSB - State Statistical Bureau IDA - International Development SWPRP - Southwest Poverty Reduction Project Association TAG - Technical Advisory Group IMR - Infant Mortality Rate TVE - Township and Village Enterprise ITF - Interim Trust Fund UBE - Universal Basic Education
Vice President Jean-Michel Severino, EAP Director Nicholas C. Hope, EA2 Division Chief Joseph Goldberg, EA2RS Staff Member Alan Piazza, Senior Economist, EA2RS CHINA QINBA MOUNTAINS POVERTY REDUCTION PROJECT
LOAN/INTERIMTRUST FUND CREDITAND PROJECTSUMMARY
Borrower: People's Republic of China
Beneficiaries: Sichuan and Shaanxi Provinces, and Ningxia Hui Autonomous Region
Poverty: Program of Targeted Interventions
Amount: Loan: $30.0 million ITF Credit: SDR 108.5 million ($150 million equivalent)
Terms: Loan: 20 years, including 5 years of grace, at the Bank's standard variable interest rate for LIBOR-based US dollar single currency loans ITF Credit: IDA standard terms with 35 years' maturity
Commitment Fee: Loan: 0.75 percent on undisbursed loan balances, beginning 60 days after signing, less any waiver ITF Credit: 0.50 percent on undisbursed loan balances, beginning 60 days after signing, less any waiver
Onlending Terms: Microfinance Cooperatives: 15 years, including 5 years of grace, at 2.88 percent annual interest rate or more TVEs: Agricultural Bank of China's standard terms Foreign Exchange Risk: borne by the project provincial governments
Financing Plan: See para. 3.44
Economic Rate of Return: 40 percent overall
Map: IBRD 27815
Project ID Number: CN-PE-3590
CONTENTS
1. ABSOLUTE POVERTY IN CHINA ...... l1 A. Introduction ...... 1 B. Rural Absolute Poverty ...... 1 C. The Government's Poverty Reduction Program ...... 5 D. Origin of the Project ...... 7 E. Rationale for Bank Group Involvement ...... 7 F. Bank Group Sector Work and Lending Operations ...... 8 G. Lessons Learned from Previous Bank Group Operations ...... 9
2. THE PROJECT AREA ...... 12 A. Natural Resources, Land Use and Poverty...... 12 B. Social Services ...... 16 C. Rural Infrastructure ...... 18 D. Employment, TVE Development, and Microfinance ...... 19 E. Poverty Monitoring ...... 22 F. Selection of Project Counties, Townships and Villages ...... 22
3. THE PROJECT ...... 25 A. Objectives and Scope...... 25 B. Description ...... 25 C. Detailed Features ...... 27 D. Status of Preparation ...... 37 E. Implementation Schedule ...... 37 F. Project Costs and Financing...... 38 G. Procurement ...... 39 H. Disbursements ...... 42 I. Accounts and Audit ...... 44
This report is based on the findings of a preappraisal mission in September 1996 and an appraisal mission in January 1997, comprising M/M A. Piazza, M. Goldberg, J. Fritz, M. Judd, M. Young, P. Aklilu, N. DeWitt, Z. Zhu (IBRD/IDA), C.L. Cheong, S. Holcombe, J. Li, E. Liang, Z. Lin, S. Liu, C. Saint-Pierre, P. Sun, and B. Trangmar (Consultants). Peer reviewers are M. Ravallion (PRDPH), M. Young (HDD), and R. Grimshaw (Consultant). The preparation team gratefully acknowledges the strong support of a Japan: Policy and Human Resources Development Fund grant, without which the preparation of this complex and innovative project would have been extremely difficult. - ii -
J. Environmental and Social Impact ...... 44
4. PROJECT ORGANIZATION AND MANAGEMENT...... 46 A. Project Organization and Management ...... 46 B. Financial Management ...... 49 C. Execution of Project Works ...... 50 D. Project Launch Workshop...... 50 E. Monitoring, Evaluation, and Reporting...... 51
5. PRODUCTION AND MARKETS ...... 52 A. Production ...... 52 B. Markets and Prices ...... 54
6. BENEFITS AND RISKS...... 57 A. Benefits ...... 57 B. Cost and Rent Recovery ...... 58 C. Financial and Economic Analysis ...... 58 D. Risks ...... 60
7. AGREEMENTS REACHED AND RECOMMENDATION ...... 62
ANNEXES
Annex 1: Project Area Statistics .65 Annex 2: Rural Infrastructure Component.69 Annex 3: Land and Farmer Development Component .80 Annex 4: Microfinance Component.100 Annex 5: Cost Estimates .105 Annex 6: Procurement and Disbursement by Expenditure .117 Annex 7: Implementation Schedules .135 Annex 8: Disbursements .137 Annex 9: Financial and Economic Analysis .138 Annex 10: Proposed Bank Group Supervision Input ...... 159 Annex 1 1: Selected Documents and Data Available in the Project Files ...... 164 Annex 12: Project Counties and Townships ...... 166
TABLES IN TEXT
Table 1.1: Rural Economic Growth and Incidence of Absolute Poverty ...... 2 Table 1.2: Rural Economic Growth Rates ...... 4 Table 2.1: 1995 Rural Poverty Incidence, Income and Grain Production .23 - iii -
Table 3.1: Project Cost Summary ...... 39 Table 3.2: Project Financing ...... 39 Table 3.3: Summary of Proposed Procurement Arrangements...... 40 Table 3.4: Disbursement Arrangements...... 43 Table 5.1: Annual Production at Full Development ...... 53
BOXES
Box 2.1: Project Area Selection-the Poorest of the Poor ...... 24
CHARTS
Chart 1: Project Management Structure...... 167
PHOTOGRAPHS
Ningxia Hui Project Area...... 168
MAPS
IBRD No. 27815: Project Counties IBRD No. 28214: Zhenan County Project Townships
- 1 -
1. ABSOLUTE POVERTY IN CHINA
A. INTRODUCTION
1.1 China is widely recognized for its achievements in reducing absolute poverty since the adoption of a broad program of rural economic reforms beginning in 1978. It is estimated that, since that year, some 184 million Chinese escaped absolute poverty and that the share of total population living in absolute poverty declined to less than 10 percent. The form of poverty also changed over this period, from large numbers of poor spread widely across the countryside to pockets of poverty in remote resource-deficient areas. This change in the form of poverty required a change in the Government's approach to reducing poverty, and the Bank Group has been an active participant in the design of the Government's new national strategy for reducing absolute poverty in the 1990s. As one of several means of operationalizing that new strategy, the Government of China has requested Bank Group assistance in financing a poverty reduction project in the poorest upland counties of the Qinba mountains area of Sichuan and Shaanxi and the Loess Plateau area of southern Ningxia.
B. RURAL ABSOLUTE POVERTY
1.2 Background. Rural economic reforms, including the adoption of the production responsibility system, the dismantling of the commune system, agricultural product price increases and market liberalization, were associated with dramatic rural economic growth during 1978-85. The 1992 Bank Group study, China: Strategies for Reducing Poverty in the 1990s (hereafter, Strategies),' concluded that broad participation in that reform-driven rural economic growth brought about the tremendous reduction in absolute poverty from roughly 270 million poor in 1978 to about 100 million in 1985, or from one third to about one tenth of total rural population. Average rural per capita income grew at an average annual rate of 13 percent in real terms during this period, and increased a total of more than 140 percent. The gross value of agricultural output increased by a total of 60 percent in real terms, at an average annual rate of 7 percent, or more than double the total growth and rate of the previous decade. Perhaps most impressive was the increase in township and village enterprise (TVE) output and employment levels. TVE output values appear to have increased fivefold in real terms during 1978-85 (though part of this increase is explained by a broadening of the definition of TVE beginning in 1984), and employment more than doubled from 28 to 70 million jobs. These trends in rural economic growth and absolute poverty are summarized in Table 1.1.
The report, China: Strategies for Reducing Poverty in the 1990s (Washington, DC: The World Bank, 1992)is availableto the public. - 2 -
TABLE 1.1: RURAL ECONOMIC GROWTH AND INCIDENCE OF ABSOLUTE POVERTY
1978 1985 1990 1995 Population (million) Total 963 1,059 1,143 1,211 Rural 790 808 841 859 Incidence of Rural Absolute Poverty Million people 260 96 97 70 Percent of rural population 33% 12% 12% 8% Average Real Per Capita Income Rural (1978 Yuan) /a 134 324 339 441 Real Sectoral Output Values Agriculture (1978=100) 100 162 203 290 TVE (1978=100) Lb 100 506 1,184 6,834 Total Rural Laborers Million 306 371 420 450 TVE Employment Million people 28 70 93 129
La Nominal rural average per capita income deflated by the rural retail consumer price index. L Nominal TVE output value deflated by the implied deflator for gross industrial output. Source: Chinese Statistical Yearbook 1996 and Strategies.
1.3 Correlates of Poverty. Absolute poverty in China is now concentrated in resource-constrained remote upland areas. Since virtually all of China's rural population received land use rights as part of the implementation of the production responsibility system during the early 1980s, there are few if any landless laborers. Instead, the majority of the rural poor are now concentrated in resource-deficient areas, and comprise entire communities located mostly in upland sections of the interior provinces of northern, northwestern and southwestern China. Although these poor have land use rights, in most cases the land itself is of such low quality that it is not possible to achieve subsistence levels of crop production. Consequently, most poor consume grain and other subsistence foods beyond their own production levels, and are negatively affected by price increases for these products. The poorest households are typically those further disadvantaged by high dependency ratios, ill health and other difficulties. Minority peoples are known to represent a highly disproportionate share of the rural poor. Available evidence does not suggest that women are greatly overrepresented among the poor, though poverty certainly does exacerbate societywide problems of lower rates of female participation in education, higher relative female infant mortality rates, and higher rates of maternal mortality. - 3 -
1.4 The educational and health status of China's remaining absolute poor is deplorable. At least 50 percent of the boys in some of China's poorest natural villages and, particularly in some minority areas, nearly 100 percent of the girls do not attend school and will not achieve literacy. The infant mortality rate and maternal mortality ratio in very poor counties-which exceed 10 percent and 0.3 percent, respectively-are at least 50 to 100 percent greater than the national average, and are much greater yet in the poorest townships and villages. Incidence of several infectious and endemic diseases, including tuberculosis and iodine deficiency disorders, is concentrated in poor and remote areas. Roughly 50 percent of children in households at or below the absolute poverty line are at least mildly malnourished (stunted), and iron, vitamin A, and other micronutrient deficiencies remain a severe problem among the poor. As many as 90 percent of poor children suffer chronic worm infections. 1.5 Recent Trends. A number of macroeconomic developments stymied concerted government efforts to reduce poverty during the second half of the 1980s: (a) sharply increased prices for grain and other subsistence goods adversely affected the real incomes of the majority of the rural poor; (b) rapid growth of the working-age population exceeded the expansion of employment opportunities, contributing to a temporary worsening of rural underemployment (during 1989-90); (c) economic growth was greater in the higher-income coastal provinces than in the lower-income inland northwestern and southwestern provinces; and (d) rural income levels stagnated during the second half of the 1980s (the average annual growth rate of real per capita rural income declined to only 1 percent during 1985-90). In addition, given the limited revenues of poor-area governments and in the absence of adequate levels of appropriately earmarked funding from higher levels of government, poor-area local governments are unable to support adequate social services. 1.6 The key obstacle to reducing poverty during 1985-90, however, was the absence of meaningful levels of agricultural growth and rural enterprise development in the upland areas. Many of the rural poor in 1978 resided in less remote and less hilly areas, where increased application of fertilizer, irrigation, better seed and other modern inputs could bring about rapid productivity gains, and so were able to participate in the rapid agricultural growth of 1978-84. However, the quick reductions of poverty through agricultural growth were largely exhausted by end-1984. Most of the residual poor have remained trapped in more remote upland areas where agricultural productivity gains have proven far more problematic. Measured on a per capita basis, output of grain and subsistence foods in such areas failed to sustain any significant increase during the 1980s. Although the agriculture sector did expand in real terms during 1985-89, increased output of nongrain crops and animal and aquatic products, products that few of the poor either produce or consume in significant quantities, accounted for virtually all of the modest growth that did occur. By comparison, the very strong annual growth during 1978-84 of per capita production of grain and oilseeds-which are the subsistence crops of most immediate importance to the poor-tumed negative during 1985-89. 1.7 TVEs, an important source of employment in the rural economy as a whole, have developed very slowly in China's poorest areas. In the early 1980s, TVE employment actually decreased in poor areas as the commune system was dismantled and workers could no longer be paid in work points instead of cash. Employment rose only after a 1984 policy initiative supporting private rural enterprise opened opportunities for small, family firms particularly suited to the small market niches available in poor areas. However, by 1990 only 4 percent of the rural labor force in China's 120 poorest counties had found employment in rural enterprises, in contrast to the 22 percent finding such employment in the nation as a whole. Restraints on labor mobility were relaxed during the 1980s, enabling an increasing number of the rural poor to share in national TVE growth by migrating to employment opportunities where they occur. Unfortunately, after tremendous growth during 1978-88, TVE employment declined in 1989 and 1990 in response to the Government's strong deflationary measures implemented in those two years. It is believed that the absolute poor were among the first to lose their jobs during the temporary decline in TVE employment. 1.8 Current Status. Official government estimates indicate that the number of absolute poor declined to about 65 million, or about 5 percent of total population, by 1995. Very strong overall economic growth, coupled with a resurgence of rural income growth and TVE employment during 1990-95, support the Government's reports of continued declines in absolute poverty during the 1990s.? As shown in Table 1.2, the growth rate of real rural income recovered from only 1 percent during 1985-90 to more than 5 percent during 1990-95. TVE employment, having declined in 1989 and in 1990, also increased sharply during 1990-95, expanding by more than 7 million jobs each year on average. Grain production also increased strongly during 1990-95, leading to a temporary decline in the market price of grain with consequential benefits for the absolute poor. TABLE 1.2: RURAL ECONOMIC GROWTH RATES
Average per capita Agricultural Incremental annual Period rural income output value TVE employment (%) (%) (million jobs) 1978-85 13 7 6.0 1985-90 1 5 4.6 1990-95 5 7 7.2
Source: Table 1.1.
2 Strategies estimatedthe incidenceof absolute poverty for each year 1978 and 1980-90. A simple extension of Strategies' methodology-viz., inflating the 1990 rural absolute poverty line (after adjustmentto account for changes in the State StatisticalBureau's (SSB) calculationof rural income beginningin 1990) by the rural consumerprice index-suggests that rural absolutepoverty declinedto about70 millionin 1995. The BankGroup's Policy Research Departnent (Poverty and HumanResources Division; PRDPH) has initiatedwork with SSB to establishan updated methodologyfor estimating povertyin the 1990s. - 5 -
C. THE GOVERNMENT'SPOVERTY REDUCTION PROGRAM
1.9 Institutions. The Chinese Government has a strong commitment to poverty reduction, and most government ministries and agencies have special poverty reduction responsibilities and projects. The Ministry of Civil Affairs provides disaster relief and income maintenance support, and coordinates the distribution of relief grain through the Ministry of Internal Trade's Grain Bureau system. The State Education Commission and the Ministry of Public Health administer some special programs to improve the education and health status of the poor. The recently established Agricultural Development Bank of China (ADBC) offers subsidized loans for poor-area development through a variety of funds administered by provincial bank branches and their networks of county- and lower- level banks (until mid-1994, these funds were administered by the Agricultural Bank of China and several other banks). The Regional Office of the State Planning Commission administers a Food-for-Work Program, which assists with the building of roads and riverine transport, drinking water systems, irrigation works and other capital construction in poor areas. In addition, each of 27 central ministries and agencies has its own special poor-area project and every province has its own specially-fundedprograms.
1.10 The State Council's Leading Group for Poverty Reduction (LGPR) was established in 1986 in part to provide greater coherence to these many poverty reduction initiatives and, in particular, to expedite economic development in the poor areas. Since its establishment, LGPR and its executive agency, the Poor Area Development Office (PADO), has emerged as the principal advocate of China's rural poor and is now the key agency responsible for coordinating the nation's more than $1 billion in annual funding for poverty reduction programs. The State Council funds another four poverty reduction units that operate within the LGPR orbit: the China Development Foundation for Poor Areas, the Cadre Training Center, the Training Center Office, and the Economic Development Service Center. Provinces, prefectures, and counties have all established Leading Groups and PADOs after the central model, and many townships have a "designated person" to handle poverty reduction work.
1.11 Strategy. While continuing preexisting rural social and relief services, the poverty reduction strategy adopted during the Seventh Five Year Plan (1986-90) introduced a new emphasis on economic development programs in the poor areas. The Government's commitment to sustained efforts to eradicate poverty also figured prominently in the Eighth Five-Year Plan (1991-95). The Eighth Five-Year Plan reconfirmed and extended LGPR's central role as the coordinating body responsible for poverty measurement and research, project planning and monitoring, and management not only of domestic funding but of bilateral and multilateral assistance for poverty reduction. The poverty reduction strategy announced in the Eighth Five-Year Plan highlighted (a) a continued emphasis on developing the productive capacity of poor-area agriculture and rural enterprise through subsidized loans, (b) better targeting of assistance to reach the poorest of the poor, and (c) improved management and coordination of poverty reduction activities. - 6 -
1.12 The Government's poverty reduction strategy has been further defined and substantially updated through the newly issued National Seven-Year (1994-2000) Plan for Poverty Reduction (8-7 Plan). The 8-7 Plan recognizes that the significant reduction and change in nature of absolute poverty (para. 1.1) makes it more practical and fiscally less burdensome to target increased development and social services assistance to China's remaining absolute poor. In near complete agreement with Strategies' recommendations for reducing poverty in the 1990s, the 8-7 Plan calls for:
(a) institution building and policy reform, including a strengthening of the institutions responsible for implementing explicit poverty reduction projects and programs, the establishment of an independent and objective poverty monitoring system, the concentration of available funding in the poorest counties (a number of relatively well-off counties and provinces have been "graduated" from the new poverty reduction program), and improved access of the poor to employment opportunities outside the poor areas;
(b) greater investment in the development of human capital, including more central government funding for health, education, and relief services in the poorest areas; and,
(c) continued investment in poor-area agricultural, rural enterprise, road and other rural infrastructure development projects.
1.13 Officially Designated Poor Counties. In 1986, using Ministry of Agriculture (MOA) county-level rural income data, LGPR developed a national roster of 331 poor counties eligible for development assistance. A county was identified as poor if its 1985 average rural per capita income fell below poverty lines of Y 300, Y 200, or Y 150, depending on other locational or political factors. Average per capita grain production of less than 200 kg was also adopted as a second key indicator of poverty. In addition to the national roster, 368 provincially designated poor counties, eligible for provincial funding, were selected on the basis of poverty lines determined by the provinces. Province- specific poverty lines used during the Seventh Five-Year Plan period ranged from Y 150 in Yunnan to Y 400 in Jiangsu. In addition to drawing up a roster of poor counties, most provinces have identified townships in otherwise well-off counties as eligible for special assistance. As evidenced by the wide difference in qualifying income levels (Y 150 to Y 400), the provincial rosters include a number of counties that are relatively poor by provincial standards but that would not qualify as absolutely poor by the national minimum standard. That provinces created their own special programs testifies to a concern with relative poverty and, in many instances, to provincial budgetary strength. On the other hand, the provincial roster does, in some cases, compensate for the incorrect exclusion of counties with average per capita income levels below the national minimum standard. The Yunnan provincial roster, for example, includes all the counties that should have received central government support for absolute poverty reduction (that is, 15 counties with average per capita income of between Y 120 and Y 150 in 1985). - 7 -
1.14 While a very large proportion of the rural population within the officially designated poor counties must have been poor, this definition of poverty failed to capture the poor in otherwise well-off counties.3 Based solely on 1985 income data, furthermore, the method did not adequately correct for single-year aberrations in county rural income levels. Strategies also observed that the regionalization of poverty evidenced by the MOA county-level rural income data is significantly different from that indicated by the State Statistical Bureau's (SSB) provincial rural income distribution data. Notwithstanding these important issues, it is certain that the combined list of officially designated poor counties captures at least half of the most severe remaining absolute poverty in China. Furthermore, under the new 8-7 Plan, the list of officially designated poor counties has been reduced from 699 to 592, and a number of relatively well-off counties and provinces have "graduated" from the new poverty reduction program (para. 1.12).
D. ORIGIN OF THE PROJECT
1.15 Through the preparation of Strategies and its public release at the "International Conference on Poverty Issues in China" (held in Beijing in October 1992), close collaboration with the Chinese Government has been established and the Bank Group has played an active role in the development of the new national strategy for reducing absolute poverty in the 1990s (para. 1.12). At the conclusion of the conference, State Councilor Chen Junsheng (the Government of China's senior policymaker for agriculture, rural development, and poverty reduction) and senior Bank Group staff announced a proposal to operationalize Strategies' recommendations for reducing poverty in the 1990s through the Bank Group-assisted Southwest Poverty Reduction Project (SWPRP). Consistent with SWPRP, the proposed Qinba Mountains Poverty Reduction Project (QBPRP) would take a multisectoral approach to reducing absolute poverty in the worst- affected upland counties of the Qinba mountains and Loess Plateau areas of Sichuan, Shaanxi and Ningxia. Both projects strongly encourage community participation during preparation and implementation. Supported by two generous Japan: Policy and Human Resources Development Fund grants, preparation of the two projects has included local and international consultants and more than 10 missions to China since July 1993.
E. RATIONALE FOR BANK GROUP INVOLVEMENT
1.16 The project is consistent with the Country Assistance Strategy in that it directly addresses two of the Bank's top operational priorities in China, namely poverty reduction and environmental protection. Bank Group participation in the project will greatly assist
3 Based on three-year(1981-83) average township-level rural per capita incomedata, the ResearchCenter for Rural Development(RCRD) had earlieridentified 50 million absolutepoor residingin about 7,000 townships,situated in 225 countiesin 11 mountainousregions. While a preferredmeans of monitoring poverty,the RCRDtownship-level methodology was not an operationallyviable mechanismfor targeting China's poverty reductionprograms. In 1986,LGPR switchedto the county level for the purposesof povertyreduction programs and monitoring. - 8 - the realization of the Government's 8-7 Plan and it is expected that, if successful, the project will further highlight the potential of the multisectoral approach to the remainder of China's poor areas and the overall poverty reduction program. Bank Group involvement in the project will also play a catalytic function in the establishment of an independent national-level poverty monitoring system. In addition, Bank Group participation is helping to focus the project's rural development component toward the development and provision of an integrated package of environmentally sound and farmer-determined technologies for more productive upland agriculture.
F. BANK GROUP SECTOR WORK AND LENDING OPERATIONS
1.17 During the early and mid-1980s, the first Country Economic Report and the Gansu Provincial Study devoted much analysis to China's income distribution and the physical well-being of the Chinese population and the poor.4 A number of Bank Group- supported projects during these years, including the Gansu Provincial Development Project (Loan 2812-CHA and Credit 1793-CHA) and the Northern Irrigation Project (Credit 1885-CHA), directly helped reduce poverty by providing opportunities for voluntary resettlement to newly irrigated areas for hundreds of thousands of absolute poor residing in rainfed upland areas of the Loess Plateau. The Gansu Provincial Development Project also included a very effective rural education subproject that targeted the absolute poor. More generally, the Bank Group's program of agricultural investments (about 40 projects in all), buttressed by projects supporting agricultural education, rural health care and rural water supply, played a significant role in raising rural incomes and living standards during the 1980s.
1.18 Completion of Strategies contributed to making poverty reduction a more explicit focus of Bank Group lending in China in the early 1990s. Bank Group-supported poverty reduction activities, channeled to areas of concentrated poverty in central and western China, now include poor-area health, education, rural water supply and hygiene, and numerous agricultural projects and agricultural project subcomponents. The Rural Health Workers Development Project (Credit 2539-CHA) aims at better-quality health services, improved health status, and the development of new financing models for health services in the poorest areas. The Comprehensive Maternal and Child Health Project (Credit 2655-CHA) addresses the malnutrition, epidemic disease and high maternal and infant mortality rates that remain widespread among China's absolute poor. The Infectious Diseases Project (Credit 2317-CHA) seeks to reduce the incidence and risk of infection of two severe diseases (tuberculosis and schistosomiasis) that are most prevalent in poor areas. The Disease Prevention Project (Credit 2794-CHA) will provide immunization coverage and greater accessibility to health care in 10 poor provinces. The Education Development in Poor Provinces (Credit 2339-CHA), Basic Education in Poor and Minority Areas (Credit 2651-CHA), and Third Basic Education (Credit 2831-CHA)
4 China: Long-Term Development Issues and Options (Baltimnore:Johns Hopkins University Press, 1985) and China: Growth and Development in Gansu Province (Washington,DC: The World Bank, 1988). - 9 - projects are helping to improve primary and lower secondary education and schools in a large number of poor counties and villages. By increasing coverage of safe water supply and sanitation, health and hygiene services, the Rural Water and Sanitation Project (Credit 2336-CHA) improves health and productivity of some of the poorest and most needy inhabitants of rural China. The Loess Plateau Watershed Rehabilitation Project (Credit 2616-CHA) seeks to double real income levels for the 1.2 million rural poor in the targeted watersheds by increasing agricultural productivity. The Gansu Hexi Corridor Project (Loan 4028-CHA and Credit 2870-CHA) will reduce poverty by providing opportunities for voluntary resettlement to newly irrigated lands for about 200,000 upland poor in Gansu. The Shanxi Poverty Alleviation Project (Credit 2834-CHA) will raise incomes for about 3 million poor through rehabilitation of an existing irrigation system, terrace agriculture, smallholder livestock, and other activities. The Shaanxi Agricultural Development (Credit 1997-CHA), Henan Agricultural Development (Credit 2242-CHA), Tarim Basin (Credit 2294), Guangdong Agricultural Development (Credit 2307-CHA) and Sichuan Agricultural Development (Credit 241 1-CHA) projects include poverty reduction subprojects in several extremely poor counties. Attacking poverty through single-sector programs, these projects and project components have made a real and sustainable contribution to poverty reduction. SWPRP (Loan 3906-CHA and Credit 2744-CHA) is the first Bank Group-supported project in China to use a focused, multisectoral rural development approach to attack absolute poverty in a severely resource-deficient area where single-sector programs cannot achieve sustained poverty reduction.
G. LESSONS LEARNED FROM PREvIOuS BANK GROUP OPERATIONS
1.19 The Bank Group's experience with a large number of multisectoral rural- development-cum-poverty-reduction projects has not been entirely successful in terms of impact or sustainability. An extensive Operations Evaluation Department (OED) review of two decades of Bank Group experience with rural development projects documents that the complexity of project design and implementation and problems with institutional coordination have been the principal causes of mixed results.5 This confirms the warning of the Bank Group's 1975 Rural Development Sector Policy Paper that such projects tend to suffer from a program design that is too ambitious and complex, calling for exceptional leadership that cannot always be made available on a sustained basis. Recognizing that these institutional difficulties are inherent to multisectoral projects, the OED analysis favors the approach of "implementing separate project components in different ministries as though they were separate projects, but with a coordinating unit located in a nonsector ministry such as Planning or the President's Office" and emphasizes the importance of long-term institution building. The OED report also highlights the importance of (a) strong government commitment to the project and a favorable macroeconomic environment, (b) relying primarily on locally proven technical innovations (the results of research and trials were often not available in time to have an impact on concurrent
5 World Bank Experience with Rural Development, 1965-1986 (The World Bank, 1987). - 10- projects), (c) retaining flexibility in program design during implementation (i.e., after the time of appraisal), and (d) supplementing the Bank Group's own inputs, during design and supervision, to cover the full range of skills required by a multisectoral project. A more recent OED review of the Aga Khan Rural Support Program (AKRSP), on the other hand, concludes that "rural development can be made to work" with proper project design and implementation.6 Additional key lessons from the successful AKRSP experience are the importance of (e) a comprehensive monitoring and evaluation process and (f) full community participation.
1.20 The OED analysis of the Bank Group's rural development projects confirms that the proposed project's two principal issues are its above-average complexity and its requirement for above-average institutional capacity for project design and implementation. Project design and plans for organization and management directly address these two concerns. First, although the proposed project comprises a number of diverse sectors, the project activities within each of these sectors together represent an integrated package of proven technologies. Second, as recommended by the OED report, the project will not be implemented by a sectoral agency. Instead, LGPR, which is a nonsectoral office of the State Council, is responsible for coordinating project design and, through the provincial and county Project Management Offices (PMO) and Leading Groups (LG), for monitoring implementation. Per OED's recommendation, each component has been designed at each operational level by the relevant specialized sectoral agency as a "separate project." LGPR's Foreign Capital Project Management Center (FCPMC) was established, with bureau-level status, for the preparation and implementation of SWPRP. FCPMC is now staffed at levels sufficient for satisfactory implementation of SWPRP and the preparation of the proposed Qinba Mountains Poverty Reduction Project. In addition, the project enjoys strong government support and a favorable macroeconomic environment, relies primarily on an integrated package of proven technologies, and would establish a comprehensive monitoring and evaluation process. It is believed that current Bank Group procedures provide adequate allowance for changes to project design during the course of implementation. Lastly, the project encourages community participation by enabling households to make key decisions during project design and implementation.
1.21 The proposed project also builds on lessons from recent Bank Group loans to China in the health, education, agriculture and rural infrastructure sectors. For social services, specific lessons include the importance of increasing access to existing rural facilities, improving teacher and health service worker technical skills, establishing reliable financing mechanisms, and upgrading bilingual education in minority areas. In agriculture, the experience of earlier Bank Group-supported projects suggests the need for greater emphasis on crop diversification and marketing in order to avoid the risk of oversupply, and to enhance sustainability by assigning responsibility for project management to existing institutions (suitably strengthened). Since the Bank Group has
6 The Aga Khan Rural Support Program in Pakistan (The World Bank, 1990). - 11 - very little experience with labor mobility projects, the project builds on the early experience of SWPRP's labor mobility component, and on lessons from the Ministry of Labor's (MOL) recent experience in this area and ongoing rural research work.
1.22 SWPRP Poverty Reduction Model. SWPRP has been under implementation for two years and, while careful review and evaluation of the project's individual components can only begin in the latter years of project implementation, enough evidence is already available to support some preliminary lessons. First, the successful implementation of SWPRP during 1995-96 has confirmed that the project's unique organizational and management structure can satisfy its above-average complexity and implementation capacity requirements. Second, the SWPRP model of poverty reduction represents a significant advance over previous poverty reduction mechanisms in China and is worthy of widespread adoption. Third, it is now clear which components have been most successful. During intensive supervision work during the second half of 1996, an organized exchange between SWPRP county PMO staff in Guangxi confirmed the growing consensus that: the education and health subcomponents and the rural infrastructure component are the activities that are most warmly received by the project's primary beneficiaries; the labor mobility component provides the quickest means of overcoming poverty; the agriculture component's activities require an enormous amount of preparatory work by county- and lower-level project staff; and project supervision and poverty monitoring are the most difficult tasks to complete. The success of the education, health and rural infrastructure activities is closely associated with the fact that project villagers actively plan and implement, and directly and immediately benefit from, these undertakings. Bank Group supervision of the project has confirmed the county PMO staffs views that the project's primary beneficiaries are extremely enthusiastic about the education, health, drinking water, and other rural infrastructure activities, and that labor mobility can quickly lift migrant workers and (through remittances) their families above the poverty line. Supervision missions have also observed the payoff to some successful upland agriculture activities and to effective project supervision and poverty monitoring, but have noted the heavy demands these activities place on county- and lower-level project implementation staff. TVE development is the only SWPRP component that is performing poorly. Measures were taken during the second half of 1996 to overcome the key obstacles of (a) poor prospects for enterprise financial viability and (b) lack of counterpart financing, and it is hoped that the component will move forward quickly during 1997. - 12 -
2. THE PROJECT AREA
A. NATURAL RESOURCES, LAND USE AND POVERTY
2.1 Location and Population. The project would take place in 26 mountainous and remote poor counties of Sichuan (12 counties), Shaanxi (10 counties) and Ningxia (4 counties), all of which are nationally designated poor counties under the 8-7 Plan (para. 1.14). The project area comprises two distinct regions: 22 counties in northeast Sichuan and southern Shaanxi, stretching east-to-west over 350 km along the Qinling and Daba mountain ranges; and four counties in southern Ningxia in the Loess Plateau. Project locations and area statistics are given in IBRD Map No. 27815 and Annex 1. Within the 26 project counties, the project area comprises the poorest 2,941 administrative villages (or about a quarter of the total number of administrative villages in the project counties) with a total rural population of 2.3 million people. The Sichuan and Shaanxi project area has 2.08 million beneficiaries, of which less than 1 percent are ethnic minorities. The Ningxia project area has about 0.24 million people, nearly 80 percent of whom are Hui people, distinguished from Hans chiefly by their religion (Islam). The Hui comprise 7 percent of the total nurnber of project beneficiaries.
2.2 Topography, Soils and Climate. The mountainous part of the Sichuan and Shaanxi project area lies within 500 to 2,950 meters of elevation. It is deeply dissected into narrow, steep-sided valleys, with many rock outcrops and shallow soils that originate from parent materials ranging from limestone to granite. Arable land comprises less than 10 percent of the total land area. The seven southern counties of the Sichuan project area comprise hilly terrain, at elevations ranging from 200 to 600 meters, with purple soils developed on sandstone parent material. In both the mountainous and hilly project areas, soil fertility is generally low, with limited organic matter, phosphorus and potassium. The climate is subtropical with warm, moist summers, and cold winters with low rainfall. Spring and autumn droughts are common, while high-intensity summer rainfall often causes flooding and waterlogging of soils. All result in unstable yields and severe crop losses on nonterraced land. The number of frost-free days declines from 280 in the Sichuan hills, to 220 in Shaanxi valleys, to only 170 days at elevations of 1,200 meters and above. Households residing above 1,200 meters of elevation comprise a limited portion of the project beneficiaries in Sichuan, but account for at least 30 percent of project beneficiaries in Shaanxi.
2.3 The Ningxia project area lies within 1,500 to 2,950 meters of elevation and contains a mix of landforms, including loess-mantled granitic hills and mountains in the southern Liupan mountains, steep and heavily gullied loess hills in the central part of the project area, and loess hills and sandy rolling terrain with dunes in the northern part. Soils are mainly derived from loess, and have moderate fertility with thin eroded topsoil. - 13 -
Mean annual rainfall decreases from south to north from 650 to 250 millimeters (mm), while annual evaporation increases from 1,200 to 2,300 mm. The climate becomes semiarid in the lower-elevation northern project area, and in valleys throughout the project area. Drinking water is severely constrained in these areas, and has to be stored throughout the winter season. Moisture deficits for rainfed crops occur everywhere in the project area. Moreover, spring drought-such as in 1992 and 1995-causes failure of the wheat crop (the area's staple food). The frost-free period is only 130 to 180 days.
2.4 Land Use and Farming Systems. Current farming systems in all the project villages strive to achieve basic food security and minimize income shocks through the close integration of field crops (both subsistence and cash), animal husbandry and tree crops. In Sichuan and Shaanxi, land use is dominated by forestry. In the mountainous area, some 60 percent of the land area is covered by oak and coniferous forests. However, with population densities of 400 inhabitants per square kilometer (krn2 ) in the hills and 100 inhabitants per km2 in the mountains, such forestry can only provide a limited source of income. Arable land per capita ranges from only 0.06 hectares (ha) in Sichuan to 0.12 ha in Shaanxi. Application of cash inputs is very limited, and although one third of existing arable land is terraced, average yields for the principal crops of corn and wheat are only 1.5 to 2.5 tons per ha. Corn cultivation (on bush-fallowed hillsides) has severely encroached upon the forest area in the mountains. A variety of relay- cropping patterns-which include corn, wheat, potato, sweet potato, pulses, rice and rapeseed-are employed on the arable land to increase production and reduce the impact of climatic risks. The arable land area is also extensively interplanted with tree crops, including mulberry (for silk production), tung and citrus at lower elevations, and nuts, lacquer, paulownia, and tea at higher elevations. Most households raise pigs, which are fed on local grasses, tuber crops, and bran. Pigs are the major source of cash income. Fewer than half of project households raise a cow (used primarily for draft purposes). At lower elevations, secondary sources of cash income include silk cocoons, edible fungi, and occasional sales of cows, poultry, vegetables, fruit and nuts. At higher elevations, the gathering of wild medicinal plants provides a limited source of cash income. Commercial cattle and goat raising is being developed, using palatable shrubs and native grasses as grazing resources.
2.5 In the Ningxia project area, livestock is the primary source of cash income for farmers, with products including meat, leather and wool. Livestock sales are also the primary means of buffering grain crop failures. Rangeland in much of the project area is extensively grazed by herds of sheep, goat and cattle. Straw and alfalfa are also important fodder sources. The long cold season and the variability of straw output cause severe feed deficits during winter, and there is a consequent deterioration of animal health and survival rates. With growing animal numbers, and a decreasing rangeland area due to the extension of wheat, rangeland overgrazing has become common at lower elevations and adds to fodder shortages. The cropping pattern is predominantly rainfed, and includes mostly spring crops of wheat (rotated with peas) or summer crops of potatoes, linseed, oats, millet and buckwheat. Until recently, corn has been only a minor crop in the project villages. Arable land holdings average 0.6 ha per capita, but yields are limited - 14- and highly variable. Wheat only yields an average 0.6 ton/ha. Terracing has created distinctly higher fertility in areas with annual rainfall above 400 mm. Trees are hardly present in the land use system. Despite previous plantation programs of fuelwood bushes, there is a continued shortage of fuelwood. Available straw is also often used for fuel, contributing to the shortage of animal feed. Fruit production is being developed on a very limited basis.
2.6 Resource Constraints and Poverty. Topography, soil, and climate all pose serious limitations to agricultural development in the project areas. Population densities, which are well in excess of the carrying capacity of the agricultural resource base, are a major factor in the ongoing environmental degradation. In the Sichuan and Shaanxi project area, highly variable grain yields and cash crop production on unterraced land are the major agricultural constraints faced by households. Households residing above 1,200 meters of elevation have limited options to improve food crop production. In addition, settlements are scattered and remote from roads, and the majority of households consequently have very limited access to markets, agricultural extension and other services. The Ningxia project area faces a complex set of resource limitations. Water resources are inadequate and unreliable for both crop production and human and animal consumption. Insufficient biomass production results in fuel and feed deficits. Animal numbers are too low to allow households to withstand drought years, but too high for the declining rangeland resource.
2.7 These severe resource constraints in the Qinba project area are associated with levels of grain production that are both below basic subsistence requirements and highly variable, very limited cash income, and extreme poverty. In the Sichuan and Shaanxi project area, annual per capita grain production during 1993-95 averaged about 300 kilograms (kg). Average annual per capita income during 1993-95 was about Y 525 (in 1995 prices), or just one third of national average rural per capita income. The resource constraints and consequent poverty are most extreme in the Ningxia project area, where annual per capita grain production averaged only 150 kg during 1993-95, and annual per capita income averaged Y 470 (in 1995 prices) during 1993-95. Most of the project villages suffer significant grain deficits, and on average between 10 to 70 kg per capita of relief grain are brought into project counties annually. Even these quantities of relief grain are not sufficient to raise per capita grain availability to the level necessary for basic subsistence, and food shortages and malnutrition are common, particularly during the end of winter and early spring. Since much of household income is in-kind and consumed on-farm, entire households typically have cash incomes of only Y 150 to Y 300 ($15 to $35) per year. Some farm households also obtain irregular off-farm income from activities such as local mining, construction, and migrant labor in urban areas. Households with very limited land area, with a high proportion of dependents, few livestock, or adversely affected by natural disaster have significantly lower grain production and incomes than the average figures given above.
2.8 Development Strategies. Despite these resource constraints, there are opportunities to increase agricultural productivity and income through synergistic investments in fully - 15 - integrated farming systems. Most importantly, investments in land development (such as terracing) and water resource development (such as microirrigation systems) will directly boost production of grain and cash crops, and will also provide additional crop residues for the expansion of livestock production and cash income for the purchase of fertilizer, better seed, and other yield-increasing inputs. Expanded animal production augments cash incomes over the short term, and provides more organic fertilizer for field crop production. Over the longer term, expanded tree crop production and fodder resource development will help to reduce upland environmental destruction, augment cash income, and provide feed for expanded animal production and fuelwood for household cooking and heating. The effectiveness of all of these investments should be augmented through increased and improved support services at the village level-including training and extension, and veterinary services-undertaken on the basis of full community participation. While no one of these investment activities would lead to a major sustained increase in farm productivity and incomes, together they should be sufficient to achieve a significant sustainable impact. And while investments in upland agriculture alone cannot bring most of Qinba's poor above the poverty line, together they comprise a key component of the package of multisectoral investments that can lead to a sustainable reduction in absolute poverty.
2.9 In the Sichuan and Shaanxi project area, an appropriate integrated strategy would be to help households enhance their land use systems through investments in terracing, animal husbandry, and tree crops. Terraces nearby farmers' homes, which support grain and cash crops, feed production, interplanted trees, and pig and poultry production, would be expanded. Together with appropriate technology (such as basic tools and better seeds), terracing would allow a sustained increase in soil fertility, and increased and more stable crop yields. As a result, bush-fallow cultivation on steeper hill and mountainside slopes would decline, allowing the development of tree crops and animal grazing on these lands. Households would not only undertake tree crop plantations on their own wasteland area, which is limited and often less fertile, but also on contracted government- managed forestry land. Substantial investments in tree crop development-which would include provision of improved fruit and economic tree variety root stock, and soil improvement, and be supported by tree crop management technical advice-would balance households' short- and long-term benefits. Related marketing risks and long-term technical risks would be minimized through the provision of appropriate technology, farmer training, and improved market access.
2.10 In the loess hills project area, the strategy would emphasize increasing biomass production. The development of water-harvesting microirrigation systems and the expansion of terraces would allow a gradual shift from wheat to crops with increased biomass output, such as potatoes and corn, on part of the arable land. Increased biomass would contribute to the reduction of animal losses during droughts and during winter and early spring, and also help reduce households' cooking and heating fuel deficit. A comprehensive improvement of feed resources, including corn and alfalfa, and the use of rotational grazing and other improved rangeland management practices, would further contribute to the resolution of existing feed deficits. The Ningxia government has established and already initiated plans for these core investments in upland agriculture. - 16 -
These plans call for a massive buildup of water-harvesting and microirrigation systems, terracing, afforestation, and fodder resource development. The effectiveness of these plans will be greatly enhanced through a large-scale poverty-reduction-through-voluntary- resettlement program, which will provide one third of the population of the project upland counties with the opportunity to relocate to lower-elevation newly irrigated areas. These government programs should be further complemented with support for soil improvement on the newly terraced land, improved agricultural practices on lands serviced by new microirrigation systems, and expanded animal production.
B. SOCIAL SERVICES
2.11 Education. In its 1995 " Education Law," the State Education Commission (SEdC) established national implementation plans for achieving universal basic education (UBE) by 2000. Since local governments and communities are primarily responsible for financing primary education, different targets and timetables have been determined for achieving UBE in accordance with different regions' abilities and resources. Urban and better-off rural areas, which comprise about 80 percent of the country's population, have already achieved six-year UBE and expect to meet nine-year targets before or by 2000. Less developed areas, on the other hand, have more modest UBE targets. The national plans specify that, for the poorest 20 percent of China's population, 5 percent will achieve nine- year UBE by 2000, another 10 percent will strive for five- or six-year UBE, and the remaining 5 percent in poverty-stricken areas will seek three- to four-year UBE.
2.12 Despite impressive achievements at the national level, primary schooling in the project areas is still marked by poor attendance and very low on-time graduation. Official figures indicate a significant disparity between the national average and project county average. For example, the net enrollment ratios (NER) for the nation and for the project counties for the primary school-age cohort are 98 and 85 percent, respectively. Special household surveys, undertaken during project preparation, document even greater disparities at the project village level. For example, the special household surveys show that the three representative villages in Zhenan County (Shaanxi) have an average NER of 79 percent and on-time graduation ratio (OGR)7 of 40 percent. The low OGR is mainly due to the high dropout rate-an average of 35 percent for the three villages in 1995. Gender disparity is even more severe at the project village level. The household surveys show that girls comprise 60 percent of school dropouts and, consequently, that only 20 percent of the 15-year-old female cohort graduated from primary school. It is no surprise that many adults, particularly women, do not achieve literacy.
2.13 Low educational status in the project areas is the result of the poor's limited access to education and the inferior quality of primary education services in the poor areas. While the central government provides financial transfers to the poor areas of China, these
7 OGR is the percentage of primary school graduates among the 15-year-oldpopulation. Higher repetition and dropout rates usually result in a lower OGR. - 17- resources are not adequate to meet all primary education needs, and financing of education is mainly the responsibility of local governments and communities. As part of their cost- recovery process, these local entities require that families pay for children to attend school. The annual school fee per child, about Y 80 to Y 100, represents nearly 25 percent of average per capita income in the project areas, and is therefore a major hindrance to many poor children's access to school. Parents often have to pay additional boarding and transportation for children in grades four and above, since these schools are usually located far from home. This heavy financial burden is also often exacerbated by the perceived- opportunity cost of forgone household labor, especially for girls. Limited government and community financing has also contributed to a lack of primary schools, dilapidated school buildings, and highly inadequate schooling materials such as books and instructional equipment.
2.14 Along with limited access, inadequately planned and managed teacher training programs, at both the preservice and inservice level, also hinder the quality of primary education and the progress toward universalization in the project areas. Official statistics show that, while 83 percent of primary school teachers meet the State-prescribed qualifications at the national level, this percentage at the project county level ranges from only 60 percent in Shaanxi to 74 percent in Sichuan. Current training courses focus on content and pedagogical techniques appropriate for large urban schools, but few programs offer teachers instructional methods and skills needed for the curriculum suited to small and sometimes ethnically mixed rural schools. In addition, the lack of both management personnel training and accurate education statistics and reporting has lowered the effectiveness of education management.
2.15 Health. China has made considerable progress in enhancing the health of its general population, but regional disparities in health status are in many cases extreme. Infant mortality, maternal mortality, and nutritional status are far worse in project areas compared to the national average and better-off rural areas (para. 1.4). The poor health status of those in the project areas stems from a combination of limited access to health services and the low quality of services provided.
2.16 In combination with inadequate government support and severe poverty, access to health care in the project areas is hindered by the dilapidated condition and insufficient number of health clinics, an inadequate quantity and flow of supplies and pharmaceuticals, and the fee-for-service provision of most health services. Village health clinics exist in only 20 to 30 percent of project areas in Shaanxi and Ningxia. Village clinics do exist in 70 percent of the project areas in Sichuan, but nearly all are dilapidated. Most of the existing village health clinics do not have an adequate operating budget for the pharmaceuticals, syringes, needles, and sterilization equipment necessary to provide even basic health care. Due to the lack of health facilities, most villagers in the project area must walk at least 4 km to reach a village clinic or (in some cases) a township hospital. Following the elimination of the cooperative health system during the 1980s, many rural families do not have health insurance and must obtain care on a fee-for-service basis. The special household surveys (para. 2.12) indicate that as many as 87 percent of the project population suffer from one or - 18- more of the following illnesses: acute respiratory infections, diarrheal diseases, severe colds, and neonatal tetanus, and annual treatments for such illnesses could cost a family as much as Y 40. This amount is prohibitive for many poor families, and at present less than 20 percent of those suffering significant illness actually visit clinics.
2.17 The quality of the health services that reach the poor population greatly suffers because of inadequate training on the part of providers, insufficient monetary incentives to provide quality care, and poor planning and management. The care practices and skills of health staff at all, but particularly at lower levels, is problematic. Compensation for health workers is insufficient, resulting in low retention rates and in health workers splitting their time between health tasks and other income-earning activities. (Since most project farm families cannot afford to pay for clinical visits, village health workers rely on selling pharmaceuticals-at an average retail markup of 30 percent-for much or all of their income from practicing medicine.) Furthermore, reliable data on mortality, morbidity, and nutritional status, which are important for designing and evaluating health and nutrition interventions, are lacking.
C. RURAL INFRASTRUCTURE
2.18 The Government's Food-for-Work Program (para. 1.9) was established in 1985 as a means to improve basic infrastructure in rural China's poorest areas. The Program's achievements have been significant, and by end-1995 a total of Y 19.8 billion in cash and in-kind had been provided for the construction of rural water supply facilities, roads, electrification, small-scale irrigation, drainage, soil conservation, terracing and other infrastructure. However, despite these large expenditures, by end-1995 there were still some 30 million inhabitants in the officially designated 592 poor counties without access to potable water, some 214 townships without road access, and about 20,000 villages without any form of electricity supply.
2.19 Despite the overall success of the Food-for-Work Program, environmental degradation and the continuing lack of basic rural infrastructure in the poorest villages in the project area make living conditions harsh and arduous. Inhabitants in these regions often have to cover long distances by foot through steep terrain to reach the nearest source of drinking water, and even there the water source may be contaminated or contain dangerous levels of natural fluoride. The expansion of water-saving techniques is particularly urgent in the loess hills project counties where 83 percent of project villages face seasonal drinking water shortages and only a very small proportion of project area cultivated land is irrigated. Although paved roads reach all project county seats and dirt roads reach almost all project townships in the project area, more than half of the administrative villages in the Sichuan and Shaanxi project area, and about one third of the project administrative villages in Ningxia, have no road access. For most project beneficiaries, the nearest dirt roads are reached only after some kilometers of steep climb and descent over dirt foot trail, and considerable labor power is expended by villagers in bringing their small amounts of agricultural and forest products to the nearest farners' market. Half of the project administrative villages in Sichuan, and about one third of those - 19- in Shaanxi have no access to electricity. Overall, the limited access to safe water supply, roads, electricity and telecommunications constitutes a severe constraint to the increased productivity and improved health and well-being of the poorest communities in these remote areas.
D. EMPLOYMENT, TVE DEVELOPMENT, AND MICROFINANCE
2.20 Labor Markets. Rural underemployment is a major challenge for the Chinese Government, and agricultural job creation, which is expected to increase only marginally in the 1990s (less than 1 percent per year at best), cannot solve the problem. For much of rural China, the tremendous growth of employment opportunities in TVEs, coupled with large- scale migration to emerging job opportunities in rural and urban areas, has provided a solution to this underemployment. However, in the upland counties of Sichuan, Shaanxi, Ningxia, and other western provinces, TVE development has been relatively slow, and access to off-farm employment opportunities has been very limited. There are large pools of surplus laborers in the western provinces, and more than one third of the rural population in the project areas are chronically underemployed (i.e., classified as "surplus workers"). A profile of the underemployed in project areas has identified a large pool of potentially productive workers, provided they are offered rudimentary training. At least half of these underemployed are illiterate or have only completed primary school education, and three quarters are between the ages of 16 to 35.
2.21 TVE Development. The TVE sector has been one of the most dynamic elements of the economic boom in China over the past 15 years. Nationally, TVE gross output value amounted to Y 6.9 trillion in 1995, corresponding to a real increase of more than fourfold since 1990. TVEs are a promising source of employment for the rural underemployed, providing jobs to more than 129 million workers, or some 29 percent of the national rural labor force, in 1995.
2.22 Measured by gross revenue, TVE development in China's western region has kept pace with the national average during the 1990s. The growth of gross revenue of Sichuan's TVEs has outpaced the national average during the 1990s. Measured by employment growth rates, TVE development in China's western region has outstripped that of the nation as a whole since 1990. Average annual TVE employment growth in Sichuan and Ningxia was particularly strong during 1990-95, reaching 10.3 and 16.3 percent, respectively. Shaanxi, at 5.3 percent, lagged the national average of 6.8 percent.
2.23 Unfortunately, TVE development has been relatively weak in the poor upland project areas where significant barriers block the development of agroprocessing, mineral processing, handicraft and other industries. Project county TVE and Labor Bureau staff attribute slow TVE development to the lack of investment credit and working capital and poorly developed infrastructure. While TVE managers may be attracted by relatively low wage costs and the availability of agricultural and mineral raw materials, these advantages are often not sufficient to overcome the lack of financing, roads, reliable electricity supply and other basic requirements. Despite these obstacles and previous experience of slow - 20 -
development, the production and employment potential of selected enterprises in poor counties should not be overlooked. The Zhenan County Nasha Embroidery Station in Shaanxi is a good example. For the past 10 years, the Station has established marketing channels with more developed provinces and now subcontracts embroidery orders to more than 500 upland village women. These women, who first receive training by Station staff, complete these work orders at home. Village women earn an average income of about Y 300 per month from this activity, which alone is often sufficient to bring their entire family above the absolute poverty line. The Station has large numbers of orders for their products, but has been unable to fully satisfy demand and expand its business due to insufficient investment credit and working capital. Other TVEs throughout the project area, such as carpet weaving and silk reeling factories, have significant job creation potential but remain underfunded.
2.24 The Government's "East-West Cooperation Program" was recently established as a means of expediting rural enterprise development in western China by linking poor counties with existing firms in China's coastal and other more developed regions. A strategic alliance between poor counties and China's more developed areas offers the possibility of more effectively matching the poor areas' surplus labor and often abundant supplies of raw materials with more developed areas' advanced technology, better management skills, greater market access, and available investment funds.
2.25 Labor Mobility. Local TVEs cannot create sufficient numbers of jobs for the large number of rural surplus laborers in upland counties, and many unemployed people turn to labor mobility as an alternative. However, poor households in upland counties suffer from serious labor market barriers, which raise the risks of labor mobility and lower the returns. Faced with limited local employment opportunities and little information about jobs in distant markets, tens of thousands of surplus laborers from upland households use informal labor mobility channels to find work. Households report having to liquidate assets or take on additional debt from local sources to finance frequently unsuccessful job searches. While Sichuan is recognized as China's leader in labor mobility, having developed a large network of informal employment connections, the very poor in the project areas rarely get employment opportunities from these networks.
2.26 Both government-organized and spontaneous labor mobility channels now exist. However, existing government-organizedchannels have not focused on helping the millions of underemployed poor upland migrants eager to find jobs in urban markets. (Until recently, the priority of provincial Labor Bureaus has instead been the redeployment of unemployed workers from urban state-owned enterprises.) Consequently, most rural migrant laborers-and nearly all poor-area migrant laborers-use the riskier spontaneous labor mobility channels. In Sichuan, for example, between 8 and 9 million people have migrated to other provinces over the last decade in search of jobs. Government channels facilitated the flow of about 2 million of these migrant laborers, but very few if any of these were from the poorest and more remote Qinba mountains area. In Shaanxi, an estimated 1.5 million people migrated interprovincially to find jobs, with only 175,000 served by Labor Bureau channels and another 74,000 using other employment agencies. Most of the --2121 - spontaneous labor migrants headed for Guangdong, Shanghai, Beijing, Hainan and Xinjiang.
2.27 One reason for large-scale spontaneous labor mobility is that wage rate differences between poor rural areas and prosperous urban and rural areas have grown, from a 300 percent difference in 1982 to about 600 percent at present. The large wage rate gap holds the promise of large remittances as a source of cash income for upland poor households and the local economy. MOL estimates that 37 million rural migrants in 23 large cities remitted Y 75 billion to their farnilies in 1994, and the Sichuan Labor Bureau reports that that province's six million migrant workers send home remittances of more than Y 16 billion each year. Per capita remittances of Y 2,000 are far greater than per capita income for poor households in upland counties (viz., Y 530 or less in 1995), and would alone be more than sufficient to achieve the 8-7 Plan target for per capita income (of Y 500 in 1992 constant yuan) for such families. Village interviews have revealed that, even without remittances from migrants, the upland household benefits significantly from just the decreased demand on its meager food supply.
2.28 The potential gains from labor mobility hide significant risks, which present special challenges to certain groups of migrants from the project areas (such as women and poorly educated migrants). Rural workers migrating through spontaneous channels often work in coal mines, construction sites and assembly lines, and are increasingly vulnerable to illness, accidents, sexual abuse, wages below legal minimums, and other forms of exploitation. Accident rates, arbitrary payroll deductions and labor disputes are more likely, since workers do not have the proper documentation and are poorly informed about their legal rights. Growing urban labor markets in the Yangtze and Pearl River Deltas do need large numbers of low-skilled labor for new and expanding plants, but the presence of millions of migrants also increases the already severe strains on urban housing, water, sewer, communications, transportation and other services in these areas. While they recognize the economic benefits of migrant workers, municipal authorities in many cities are concerned with the risk of large and expanding slums in urban and periurban areas.
2.29 Microfmance. Despite the restructuring of the financial sector in the early 1990s, China's mainstream rural financial institutions remain completely state-owned and offer a narrow range of basic financial services to state agencies for mandatory crop programs, rural collectives, and state-owned enterprises. Rural credit cooperatives collect savings, but do not provide a significant amount of working capital, investment credit or consumption loans. Informal financial arrangements are growing rapidly, but they remain expensive, localized, and seasonally limited. Generally, due to their lack of collateral, low literacy, and physical isolation, very poor households cannot obtain loans from formal providers. Informal providers do offer loans to poor households, but at very high cost. In practical terms, two elements of rural finance stand out: (a) the formal financial sector does not have sustainable institutions serving rural areas, and (b) most rural low-income households and microenterprises are (i) excluded from the formal financial system and (ii) inadequately served by the informal financial system. -22-
E. POVERTY MONITORING
2.30 An independent and effective poverty monitoring system is vital to obtaining an accurate identification of the poor, in analyzing the accuracy of targeting benefits, and in assessing the impact of poverty reduction activities. Unfortunately, much work has yet to be done to establish reliable and comprehensive estimates of poverty. Strategies found that, depending on the data source for per capita income, estimates of poverty incidence at the provincial level can vary as much as 50 percent. While SSB administers a comprehensive rural household survey that gathers data on provincial averages, it does not provide infornation at the county level-an absolute necessity in identifying the poor and for evaluating changes in poverty. It also does not include sufficient information on important correlates of poverty such as household expenditures, education, health, labor mobility and credit experience. While other sources of data exist that could augment information obtained through the SSB rural household survey, some of that information is not collected on a systematic basis and very little data exist on the characteristics of the bottom 5 to 10 percent of the income distribution.
F. SELECTION OF PROJECT COUNTIES, TOWNSHIPS AND VILLAGES
2.31 Selection Process. In order to be able to target meaningful levels of assistance to the very poorest households in the project area, it was necessary during project preparation to select only a limited number of project counties and a subset of townships and administrative villages within those counties. All of the project counties are among the nationally designated 8-7 Plan poor counties. Significant income disparities exist within these counties, and a key activity during project preparation was to select the poorest townships within the project counties for assistance under the project. The principal criteria for the selection of project townships and administrative villages were below average per capita income levels and grain production. As illustrated in IBRD Map No. 28214, an effort was also made to select townships and administrative villages in continuous project area blocks in order to improve ease of project implementation. Through this selection process, the project will be able to concentrate an average investment of Y 1,300 per person on the poorest fifth of the project counties' population.
2.32 Counties. About 6 million, or about one tenth, of China's remaining absolute poor reside in Sichuan, Shaanxi and Ningxia. The 26 project counties are among the poorest of the 8-7 Plan counties, with 1995 average rural per capita income levels ranging between Y 586 and Y 634, and per capita grain production ranging between 206 kg to 365 kg in that year. Poverty incidence, income levels and grain production for the project counties and townships, the three project provinces, and China are shown in Table 2.1. These data show that between one third to three quarters of the rural population of the project counties are absolutely poor. This level of poverty is 6 to 10 times greater than the incidence of rural poverty at the national level, and several times greater than the respective provincial incidences. Average rural per capita income and grain production in the project counties are also substantially less than the provincial and national averages. - 23 -
TABLE 2.1: 1995 RURAL POVERTY INCIDENCE, INCOME AND GRAIN PRODUCTION
Incidence of Rural per capita Rural per capita rural poverty income grain production (%) (1995 Yuan) (kg)
National Average 7.6 1,578 543 Sichuan Average 8.9 1,158 465 Sichuan Project Counties 36.9 634 365 Sichuan Project Townships 85.8 551 293 Shaanxi Average 25.8 963 332 Shaanxi Project Counties 31.2 604 252 Shaanxi Project Townships 74.7 498 237 Ningxia Average 27.8 999 558 Ningxia Project Counties 72.5 586 206 Ningxia Project Townships 87.9 471 149
Source: Chinese Statistical Yearbook, 1996 and project area statistics.
2.33 Townships and Villages. The 26 project counties comprise a total of 1,285 townships and about 12,670 administrative villages. The project area includes the poorest quarter, or some 361, of these townships, and about 90 percent, or some 2,941, of the administrative villages in the project townships. (All natural villages in the project administrative villages are included in the project.) The exclusion of nearly three quarters of the townships in the project counties allows for the targeting of an adequate level of investment to the very poorest villages (Box 2.1). The incidence of poverty in the project townships ranges between 75 percent in Shaanxi and 88 percent in Ningxia, or between 9 and 12 times greater than the national average rate. The incidence of poverty within the project townships is also several times greater than the respective provincial rates, and significantly greater than the respective project county rates. Similarly, average rural per capita income and grain production in these project townships are also substantially less than the provincial and national averages. - 24 -
Box 2.1: PROJECT AREA SELECTION-THE POOREST OF THE POOR
Similar to the other nationally designated poor counties in Shaanxi, Zhenan County's average rural per capita net income in 1995 was Y 686, and average rural per capita grain production was 275 kg. This level of income was less than half the national rural average (Y 1,578) for that year, and about 70 percent of the provincial rural average (Y 963). Conditions are even less favorable in the Zhenan County project townships, which are located in the more remote upland areas of the county and have only three quarters of the county average rural per capita income (see Map IBRD No. 28214).
Yuquan is a particularly poor project township in Zhenan. Located about 90 km away from the county seat, the township's four administrative villages comprise 361 households scattered in a mountainous area with elevations ranging from 600 to more than 1,800 meters. The arable land area is extremely limited, and the township average rural per capita net income was only Y 429 in 1995-or about one quarter of the national average- and average per capita grain production was about 253 kg. Some 80 percent of the population lives below the poverty line, and 75 tons of relief grain-or 60 kg per capita- are brought into the area annually. The township seat can be reached by a rough dirt road, but the township's villages are accessible by foot only. One small hydropower station supplies electricity to a quarter of the households.
One of the villages without road access or electricity is Qianjin Village. Nearly all of Qianjin's population are absolutely poor, and the extreme scarcity of flatland has forced villagers to extend grain cultivation to higher elevations and steeply sloped hillsides. Despite having extended grain cultivation to environmentally fragile hillsides, the villagers still depend on relief grain for their survival. Due to Qianjin's isolation, poor infrastructure, and limited resources, off-farm income-generating activities are extremely limited. Villagers derive their meager cash incomes, which are generally less than Y 100 per capita, from raising silkworm cocoons, collecting forest products, and small-scale livestock sales. The lack of healthcare workers and adequate medical supplies has resulted in a hygienic delivery rate of only 25 percent and an infant and child mortality rate of 18 percent. The 1995 village survey showed that among the village's 15-year-olds, only one quarter graduated from primary school. Not surprisingly, the adult illiteracy rate is close to 80 percent, and there is no agricultural or other technician in the village and few training or extension activities. The village population stood at 1,317 people in 1994. Following 12 births, 10 deaths, and 9 out-migrations, the village population declined by 7 in 1995. Due to the extreme poverty, few women are willing to marry village men and, as a result, the adult male to female ratio is at present 2 to 1. - 25 -
3. THE PROJECT
A. OBJECTIVES AND SCOPE
3.1 The principal objectives of the project are to: (a) demonstrate the effectiveness of a focused multisectoral rural development project approach to poverty reduction, (b) facilitate a "market-friendly" increase in labor mobility from the poor areas to better-off rural and rapidly growing urban areas, (c) upgrade poverty monitoring at the national and local levels, and (d) significantly reduce absolute poverty in 26 of the very poorest counties in the Qinba mountains region. The project would also stabilize or even reverse upland environmental destruction through land and pasture improvement and soil conservation works, and encourage greater local community participation by enabling households to make key decisions during project design and implementation.
3.2 At present, the LGPR system at the central, provincial and local levels (a) administers a large program of official development assistance (grants, credit and standard loans) through the national banking system and (b) coordinates a very wide variety of special poor-area projects and specially funded programs supported by each of 27 central ministries and agencies (paras. 1.9 and 1.10). These existing poverty reduction programs include nearly all sectors and known approaches to poverty reduction. However, the various approaches have rarely been integrated at the local level, and the effectiveness of an integrated multisectoral package of poverty reduction initiatives has only been tested on a large scale in the very poorest upland areas of China through SWPRP. Though much smaller in scale and more limited in content than the proposed project, a small number of integrated multisectoral rural development projects have also been supported in China by several international agencies including UNDP, IFAD, WFP and FAO. The successful implementation and favorable impact of SWPRP and these smaller projects strongly suggest that the proposed project's integrated multisectoral approach will, particularly for the most severely affected resource-deficient areas, prove far more effective in achieving a sustainable reduction of China's remaining absolute poverty than have most existing unintegrated poverty reduction programs. The Bank Group-supported multisector rural development project approach is now becoming the model for extension to China's other poor areas and to the overall poverty reduction program.
B. DESCRIPTION
3.3 The project would comprise the following six components:
(a) labor mobility, through a voluntary system of enhanced rural labor mobility for the upland absolute poor, supported by skill training through an enterprise reimbursement system, a computerized demand-driven job - 26 -
placement system emphasizing local markets, monitoring of worker safety and living conditions, and reporting of abuses and grievances; (b) rural infrastructure, including the labor-intensive construction of rural roads, water supply systems, small-scale irrigation, agricultural drainage works, biogas digesters, and rural electrification; (c) land and farmer development, using menus of crop and livestock activities to increase upland agricultural productivity and reverse the trend of environmental degradation through (i) extension of improved agriculture and smallholder livestock management techniques and inputs, (ii) establish- ment of tree crop nurseries and provision of saplings and tree crop management extension, (iii) intensification of staple crop production on the modest amount of available flatland, (iv) terracing for improved water and soil conservation, and (v) the support of provincial and regional research; (d) TVE development, through support for TVEs consisting of investment credit for labor-intensive commercially viable agroprocessing, mineral, service and handicraft industries that have strong backward linkages to poor households and meet environmental safeguards;
(e) microfinance, through a cooperative structure organizing members into five-member voluntary joint liability groups, to provide credit services to poor households for production activities; and, (f) institution building and poverty monitoring, through (i) improving FCPMC and PMOs' capabilities in project design and implementation, procurement, accounting, and monitoring and evaluation, and (ii) strengthening the poverty monitoring system for the project areas by using improved SSB survey instruments to provide a credible and comprehensive poverty profile, analyze the accuracy of the targeting of benefits to the absolute poor, and measure and evaluate the impact of the project's individual components.
In addition, two social services programs would be undertaken in parallel with the project. The Qinba Education Program (QEP), supported under the Fourth Basic Education Project (CN-PE-36952) that was presented to the Board in May 1997, would increase the access and quality of primary education provided to the poor through facilities construction, tuition payments, teacher and management training, and the provision of textbooks and instructional equipment. The Qinba Health Program (QHP), to be supported under the Eighth Basic Health Services Project (CN-PE-3566) that is scheduled for Board presentation in FY98, would enhance the availability and delivery of primary and curative health care to the poor through health clinic and township hospital renovation and construction, the establishment of a village health cooperative fund, the strengthening of public health programs in disease prevention and control and for improved maternal and child health, and the enhancement of the management capabilities of health administrators at the county and provincial level. - 27 -
C. DETAILED FEATURES
Enhanced Rural Labor Mobility
3.4 The project would establish a voluntary labor mobility system to provide employment to about 155,000 upland surplus laborers over six years, and provide an important testing ground for assisting the organized flow of rural laborers into China's fast- growing cities. Project activities build on existing institutional arrangements and systems of the provincial Labor Bureaus, with adjustments to target upland poor surplus laborers. The four elements of the labor mobility system are (a) village orientation, (b) on-the-job training by enterprises on a cost reimbursement basis, (c) job placement, and (d) monitoring worker rights, job safety and living conditions. County Labor Bureaus would target project-area poor households with the most surplus labor. The county Labor Bureaus would be encouraged to provide a representative share ofjob opportunities to women.
3.5 Special care would be taken to minimize the risks inherent to labor mobility (para. 2.28). Safety records and work conditions of joint ventures with fewer than 100 employees would be reviewed before workers are placed, since these enterprises have the most frequently reported cases of worker abuse and accidents. The provincial and county offices of the All-China Women's Federation (ACWF) would provide the project's female migrant laborers with a special orientation on the risks of labor mobility, including sexual exploitation. The China Western Human Resource Development Center (CWHRDC), which has already established a highly effective monitoring system focusing on fair treatment of workers and workplace safety under SWPRP, would work with LGPR, provincial Labor Bureaus and ACWF to monitor and evaluate labor mobility activities. Monitoring indicators would include (a) wage and remittance levels, (b) job safety records, (c) dormitory conditions, (d) conditions faced by women workers, (e) resolution of labor disputes involving migrants, (f) cost per job created, (g) contract completion rates, and (h) cost recovery rates. Assurances were obtained at negotiations that (a) labor mobility would be strictly voluntary and undertaken on the basis of a program acceptable to the Bank Group, (b) a monitoring and reporting system satisfactory to the Bank Group (such as that established by CWHRDC for SWPRP, focusing on fair treatment of workers and workplace safety) would be finalized and implemented at the provincial and national levels no later than September 15, 1997, and (c) the Borrower, as part of its overall project monitoring (para. 4.17), would prepare and submit a detailed labor mobility component monitoring report to the Bank Group by March 15 and September 15 of each year.
3.6 Cost recovery through payroll deductions and remittances would contribute to a sustainable labor mobility system. The project would conduct village visits to ensure that these mechanisms do not cause undue hardship on upland households. Provincial and county Labor Bureaus estimate that costs will range from Y 1,100 per job for intraprovincial placement to Y 2,000 for distant markets with slightly greater skill training requirements. Fixed-cost investments would amount to only Y 100 per migrant for the first six years. - 28 -
3.7 The project would establish a computerized management information system to match surplus laborers with job opportunities. This information system would enable FCPMC and MOL to spearhead labor migration from the poor project counties to fast- growing, highly competitive markets such as Shanghai and Guangzhou. County Labor Bureaus and TVE Bureaus would ensure that TVEs supported by the project would hire low-skilled workers through the labor mobility system. CWHRDC would be responsible for developing a job placement system for interprovincial labor mobility, and would provide semiannual analytical reports with statistical summaries, patterned after the SWPRP labor mobility component's monitoring reports. Based on existing systems already tested during implementation of SWPRP, CWHRDC would train project county labor bureau staff in all necessary activities (from village promotion, with targeting of poor households with the greatest number of surplus laborers, to data collection, orientation, staff training and village-level household monitoring). The county labor bureaus would be responsible for labor mobility placement and monitoring for surplus workers sent to enterprises within the province, using the same standards and systems as CWHRDC. The project would also provide for construction and equipping of office and training facilities for this program. 3.8 A one-year pilot phase would test labor mobility strategies in provincial and distant markets before large-scale operations are undertaken. The project would evaluate the use of groups, alternative remittance channels to ensure the safe transfer of remittances, payroll deductions to cover costs, and the effectiveness of monitoring techniques and remedies. Rural Infrastructure 3.9 The project would support the construction of rural roads, water supply systems, small-scale irrigation, rural electrification and biogas digesters. 3.10 Roads. The project would construct about 892 km of all-weather gravel roads in order to link 780 administrative villages in remote mountainous areas to the existing network of county and township roads. These roads would be constructed to Class IV road standards, with a minimum formation width of 4.5 m and a 3.5 m wide carriageway designed for 10-ton vehicular loading on bridges and culverts. 3.11 Water Supply. Low-cost water supply facilities would be provided to about 466,000 people in 1,680 villages. The facilities would tap from springs, utilize groundwater, and divert or pump from streams, and would include piped systems with public hydrants, rain collectors serving individual households or several households, and shallow wells. Water storages would sustain supply for up to 60 to 70 days in Sichuan and Shaanxi and for up to 100 days in Ningxia during the dry seasons. Facilities would be designed to supply 15 to 35 liters of water per capita per day, and would meet current water quality standards for rural water supply in China. Drinking water for animals would also be provided in areas where water sources are sufficient and marginal construction costs are reasonable. 3.12 Irrigation. The project would also construct and improve small-scale irrigation works for 8,900 ha of existing and new rice paddy and upland grain crops in Sichuan and - 29 -
Shaanxi. The irrigation works would include 1 small reservoir storage scheme, 530 irrigation ponds, 7 small pumping stations, 965 on-farm water cisterns, 43 diversion weirs, and 640 km of lined canal. An assurance was obtained at negotiations that all dams rehabilitated under the project would be maintained and inspected annually in accordance with sound engineering practices, under arrangements satisfactory to the Bank Group. In the semiarid areas of Ningxia, the project would construct individually operated microirrigation systems with water supplies drawn from shallow wells and small cisterns. About 15 tube wells, 2,000 shallow wells, and 21,600 cisterns for rain harvesting would be constructed to serve about 5,355 ha of cropland. Some 650 ha of river beach land would also be reclaimed in Ningxia for crop production.
3.13 Rural Energy. The project would also address the power needs of the project area by increasing access to electricity and alternative forms of energy. To satisfy power requirements for agroprocessing, other light industry, mining, and some household use, 75 km of 35 kilovolts (kV) and 669 km of 10 kV overhead power transmission and distribution lines would be installed. Eight minihydro plants with a total installed capacity of 2.2 megawatts (MW) would also be constructed. About 1,830 biogas digesters for cooking and lighting would be provided to reduce dependence on scarce fuelwood in some project counties in Sichuan.
Land and Farmer Development
3.14 Strategy and Farmer Participation. The primary objective of the land and farmer development component is to create a substantial and sustainable increase in the agricultural productivity and incomes of the 574,000 project households. This objective would be reached through the improvement of, and investment in, integrated land use systems specific to the Qinba mountains in Shaanxi and Sichuan and to the loess hills in Ningxia. In Shaanxi and Sichuan, households would improve grain crop, cash crop and feed production on their terraced land, and expand forestry and animal-raising activities on their steeply sloped land. In Ningxia, project farmers would construct new terraces, establish microirrigation facilities, and adopt appropriate water-saving technologies. These and other investments would significantly reduce the adverse impact of spring drought on wheat yields, and substantially increase grain and fodder resources for livestock. In the context of these improved integrated land use systems, the project would offer households in all three project provinces (a) the capacity to intensify production on the terraced portion of their cultivated land, (b) a variety of alternative income-generating activities in animal, crop and tree production, and (c) increased access to training, extension and other agricultural support services.
3.15 Beneficiary villages and households have participated in the determination of a "menu" of alternative land and farmer development component activities, and they will play the key role in the actual selection of these activities during implementation. This menu includes 62 different agricultural activities, 25 of which are adapted to more difficult environments with higher elevation. The development of several activities by a single household or in a single village would promote the improvement of households' - 30 -
integrated land use systems. The menu of activities includes both short-term and longer- term investments, such as animal production and tree crop development (respectively), and will help to better integrate animal production with crop production. The project merges these activities into individual village development plans, and the design of these village plans has reached an advanced stage of preparation. The average investment per household is sufficient to give each household in each of the 2,941 project villages the opportunity to take part in the component activities. An upper limit to the investment per household has been established to further ensure access to project benefits by all households.
3.16 Land Development and Microirrigation. Land development activities would target all villages and most households, and would increase the proportion of arable flatland from 28 percent at present to 47 percent at full development. The project would build about 65,080 ha of new terraces, including 26,755 ha of stonewall terraces and 2,760 ha of earthwall terraces in the Sichuan and Shaanxi mountains, 15,580 ha of earthwall terraces in the Sichuan hills, and 20,000 ha of mechanically built loess terraces in Ningxia. In addition, the project would construct and improve small-scale irrigation and drainage works for 8,300 ha of waterlogged paddy fields in the Sichuan hills. First- year applications of phosphate and nitrogen fertilizer (and potassium in Sichuan) would be provided on newly developed land.
3.17 Food and Cash Crops. The project would promote improved technology packages for the 73,390 ha of newly built terraces in the three provinces and the newly drained paddy fields in Sichuan. These packages would support hybrid corn in Sichuan and Shaanxi, microirrigated corn in Ningxia, and improved varieties and technologies for the other major grain and oilseed crops. The project would supply households with one year of quality inputs (seeds, plastic mulch, and pesticides) for corn (33,300 ha), wheat (14,300 ha), potatoes (14,800 ha), linseed in Ningxia (1,800 ha), and rapeseed in Sichuan (150 ha). Sets of basic tools, including hoes, sickles and manual cornstalk choppers, would also be provided. The project packages would combine these external inputs with the extension of improved practices to enhance long-term soil fertility and water efficiency. Such practices include sowing along contour lines, and balanced applications of organic manure and chemical fertilizers. Five species of medicinal plants and tubers would be introduced in project villages on 8,630 ha (mostly in Shaanxi), and 1,500 ha of commercial vegetables would be developed. Among these cash crops species, Shaanxi plans to develop 5,500 ha of peltate yam, a tuber used by the pharmaceutical industry. It is expected that 20 percent of project households would take part in the development of these cash crops.
3.18 Animal Production. Nearly half of project households in Sichuan and Shaanxi, and about 90 percent of project households in Ningxia, would invest in raising additional goat and sheep (345,500 head), pigs and sows (312,500 head), cattle (62,100 head), poultry and other animals. The investment would include young animals, simple upgrading of animal housing, and feed additives for the first year. The expansion of animal numbers would increase current animal feed requirements by about one third. - 31 -
Project-supported fodder development activities would focus on improving winter fodder resources and feeding practices. In Ningxia, an increase of 2,800 ha in the area of cut- and-carry alfalfa, and the introduction of corn on 7,100 ha, would provide 40 percent of the requirements of additional animal numbers. The remaining 60 percent would be provided by natural rangeland at higher elevations and by resources made available by the expected out-migration of about one third of project-area households. In Sichuan and Shaanxi, fodder development would comprise the introduction of cut-and-carry fodder species, such as ryegrass and clover, on 6,500 ha, and the extension of hay technology and cornstalk manual chopping. In the three provinces, a total of 60,400 ammoniated straw tanks would help improve the efficiency of feeding systems based on straw and cut- and-carry fodder. Incremental pig feed requirements would be met by increases in the yields of sweet potatoes, potatoes and rice bran on newly developed land, and the extension of arrowroot.
3.19 Perennial Crops. In Sichuan and Shaanxi, about 15 percent of households would initiate the production of silkworm cocoons or expand their current production. They would plant the equivalent of 4,100 ha of mulberry, and rehabilitate 800 ha through the grafting of existing plantations. Most mulberry trees would be interplanted on terrace edges. Some 5,200 ha of cultivated land, mainly lower-yielding land, would be converted into plantations of tea (1,900 ha) and seven fruit tree species. About one third of project households would develop nontimber forest product species on 19,200 ha. The 10 species to be developed are mainly chestnuts and walnuts (10,000 ha), and species yielding medicinal products including Eucommia (3,800 ha) and gingko (2,500 ha). Some 1,800 ha of timber (regeneration of oak, and plantation of timber species) would also be developed. In Ningxia, some 700 ha of microirrigated orchard would be developed by individual households. The equivalent of 1,200 ha of antierosion belts would be planted along terrace edges. The main species would be Caragana microphylla, a leguminous bush yielding both fodder and fuelwood. Technical packages for each perennial crop variety comprising varieties, interplanting schemes, pruning, fertilizer application rates, pesticides, on-farm storage and packaging have been designed in each county (with provincial support) in accordance with local environmental conditions and long-term market needs and risks. The project would closely supervise the provision of certified quality seedlings, and provide annual requirements of quality chemical fertilizers and pesticides until the first year of production (that is, for a period of 2 to 5 years).
3.20 Land Use Rights. Assurances were obtained at negotiations that the project provinces would ensure that project households would receive individual land use rights for a term of not less than 30 years for the land they terrace, irrigate, drain, or plant to perennial crops under the project. Land development would be a household-based activity and would take place in locations that individual households consider to best fit their land use systems. Plantations of perennial crops would be established and managed by individual households. Households would retain the right to plant perennial crops developed under the project either in their homeplots, on field edges, in their individual forest and wasteland areas, or on forestland under the control of Forestry Bureaus. In - 32 - townships under the Yangtze watershed forestry program in Sichuan and Shaanxi, the project would facilitate the implementation of this program on a household basis.
3.21 Training, Extension and Support Services. During the first years of the project, more than 355,000 farmers would attend an average of four days of training. Training contents would comprise a wide range of technical and economic management skills. Activities would be specifically focused on illiterate women farmers in Ningxia. The project would provide 166 small pickups, 182 motorcycles and 300 sets of extension equipment to enable township technicians to increase their visits to project villages. Township veterinary services would be strengthened, and a total of 130 sets of small equipment would be provided for township and village veterinarians. A budget equivalent to one year of vaccination costs for all additional animals would be made available to township veterinary stations. In Ningxia, township artificial insemination services for cows would also be strengthened.
3.22 The project would promote greater household participation in agricultural extension and support services. About 2,900 village farmer-technicians would join annual five-day training sessions. In Sichuan and Shaanxi, farmer-technician training would focus on training lead farmers, both young farmers and women farm heads. In Ningxia, the project would build a network of demonstration sites located along countryside roads, with two demonstration farmers in each project village. Other skilled households would become suppliers of tree seedlings and grow a total of 237 ha of nurseries (Sichuan and Shaanxi), provide services for pesticide spraying and portable pumps (Sichuan hills), mechanized cornstalk shredding and husking (Sichuan and Ningxia), potato starch extraction (Ningxia), crossbreeding of local pigs and goats with improved breeds (Sichuan), and cash crop seed production (Shaanxi). In addition, seed companies would expand their multiplication area of virus-free potatoes, corn, hybrid rice and wheat seeds by 2,800 ha.
3.23 Applied Agricultural Technology Program (AATP). The project would employ provincial research institutions to initiate applied agricultural research tailored to the project area needs. Priority research needs have been selected by the provincial PMOs (a list is provided in Annex 3) and research contracts are being drafted. The transfer of research and technical assistance outcomes to extension agents and farmers would take place during project implementation.
TVE Development
3.24 TVEs are a cost-effective means of creating stable jobs for unskilled workers and spurring economic development in small towns and rural areas. All TVE investments provisionally accepted for inclusion in this project were proposed, and are sponsored by, local governments in the project provinces, counties, townships, and villages. They were subjected to five selection criteria to maximize benefits to the poor: (a) cost per job created, (b) commercial feasibility, (c) worker safety and environmental risks, (d) skills training, and (e) backward linkages to products produced by project households. Selected TVEs would - 33 - add significant local value to existing and planned agriculture and mineral production. Commercial feasibility has been analyzed by reviewing trends in demand and prices in local, regional and national markets. A number of proposed TVEs did not meet the five criteria and were rejected, and others were modified during project preparation. TVE subprojects to be implemented by enterprises (as opposed to government units) would be financed under subloans made by the project provinces on ABC's standard interest terms for similar activities. Assurances were obtained at negotiations that (a) the project provinces would be required to complete appraisal of the TVE activities in accordance with guidelines acceptable to the Bank Group, (b) these activities would be included in the project subject to the Bank Group's final approval, and (c) for TVE subprojects implemented by enterprises, the enterprise would have to demonstrate its creditworthiness and Bank Group funds would be onlent on terms and conditions acceptable to the Bank Group.
3.25 TVE Portfolio Composition. The TVE component is expected to support 171 enterprises, including the expansion or creation of 125 agroprocessing firms, 16 mining and construction materials operations, 9 handicrafts manufacturers, and 21 farmers' markets, creating about 33, 850 low-skill jobs in local towns. Agroprocessing activities include forest products, tea, fruits and vegetables, animals, and a wide range of local food and medicinal products. The average TVE investment would be Y 3.2 million, and would provide employment for 225 upland migrants, at a cost of Y 15,000 ($1,800) per job. Women would make up at least 80 percent of the labor force in some sectors, such as carpet weaving, embroidery and fruit processing.
3.26 The farmers' markets would be established to provide poor farmers in project areas with affordable access to inputs and profitable outlets for products. The location of farmers' markets would be linked to rural road construction. Each province has selected three farmers' markets for the one-year pilot phase, which would be evaluated based on the following: (a) access to affordable inputs by poor households, (b) market prices for products made by poor farmers, and (c) market occupancy rates and financial sustainability. Based on an evaluation of the nine pilot farmers' markets, adjustments would be made to the design, number and location of the remaining markets in latter years of the project.
3.27 Worker Safety and Environmental Risks. All TVEs would meet existing national environmental standards for water, soil, and air quality and noise pollution. The TVE feasibility studies include assessment of environmental risks and risk abatement measures. The studies will be reviewed by the provincial and county Environmental Protection Bureaus (EPBs), which must approve new and expanded TVE facilities under national regulations. Assurances were obtained at negotiations that, as a prerequisite to inclusion of a TVE activity, the provincial EPBs would (a) determine whether the TVE would require effluent treatment facilities, (b) review and approve the final designs of the necessary effluent treatment facilities prior to beginning construction, and (c) supervise the plant's implementation and maintenance of effluent monitoring and treatment systems. Key monitoring indicators include wage and remittance levels, enterprise profitability and worker safety records. In addition, in cases in which land acquisition is required for TVE - 34 -
development, the payment of timely and adequate compensation will be monitored, based on Chinese regulations and Bank Group policy. Food processing TVEs would be subject to regular sanitary inspections by local health authorities.
Microfinance
3.28 The microfinance component would establish a sustainable financial system to provide working capital loans to microenterprises run by poor households in project areas. After initial support from the Qinba project, the loan portfolio would be largely financed by loan installment repayments, available local funds (such as poverty alleviation funds), fees and savings generated by poor households. The component would finance loans made by two autonomous cooperatives in Langzhong County (Sichuan) and Ankang City (Shaanxi), and provide technical assistance to these entities. Over a six-year period, 16,000 households would receive working capital loans and establish savings accounts.
3.29 Methodology and Organization. The cooperatives would apply an adaptation of the Grameen Bank model, which uses a joint liability group lending methodology. The branches would be profit centers, and loan officers would receive incentives based on the performance of their individual and the branch loan portfolio. By the end of the sixth year, the average loan officer would serve 300 clients. Loan officers would help the group to obtain technical assistance from relevant county bureaus. The cooperative would use "portfolio-at-risk" to track portfolio quality, classifying each loan with one installment more than one day late as an overdue loan. There would be regular internal and annual external audits.
3.30 The cooperative would encourage poor households to form voluntary groups of five members, who provide a joint guarantee for working capital loans as an alternative to physical collateral. Participating households that receive loans would already have experience in at least one productive activity, be self-sufficient in grain production, and be deemed creditworthy by other members in the group. The majority of group members would be women. Groups would approve the loan application by individual members, select the order in which members receive loans, maintain financial records on loans, savings, and repayment, participate in production training sessions, and would be jointly responsible for on-time repayment of loan installments. Average loan processing time (from application to disbursement) would be less than two weeks. Larger loans would be offered once all members have repaid every installment on time.
3.31 Financial Services. The cooperative would offer working capital loans based on the cashflow generated by an activity, and the initial loan would be between Y 400 to Y 700. Loans would be one year in duration, including a two-week grace period and 34 equal 10-day installments of principal, interest and compulsory savings. Borrowers would select their investments based on a wide menu of technically viable productive activities, such as agricultural processing (including oilseed and fodder), animal husbandry (such as pigs, sheep, oxen), cash crops (such as traditional medicines and tea), - 35 - small stores, trade, and small service businesses (such as food preparation, and electrical and agricultural appliance repair). Group members would approve the application before it is submitted to the loan officer. The loan officer would review the proposed activity to ensure that it can generate adequate cashflow to cover the loan installments.
3.32 Based on local demand, up to 10 percent of a branch's outstanding loan portfolio could be used for larger loans to established microenterprises in Langzhong and Ankang project areas that need to purchase equipment. These would be individual loans with a physical collateral guarantee, and would not exceed Y 8,000. Approval criteria for these loans would include the generation of cashflow to cover loan installments, commercial viability and jobs creation for surplus laborers from project-area poor households.
3.33 For both types of loans, the effective interest rate and application and other fees charged would be sufficient to cover all operational costs and the unsubsidized cost of funds. Poverty-related research expenses and social welfare services would not be carried out directly by the loan staff of the cooperative and would not be included in the calculation of the interest rate. Assurances were obtained that Bank Group proceeds would be onlent to the cooperatives (a) by the project provinces for 15 years, including 5 years of grace, at an annual interest rate of at least 2.88 percent, and (b) on conditions acceptable to the Bank Group, including that the cooperatives have adopted an acceptable operating manual governing their lending operations.
Institution Building and Poverty Monitoring
3.34 Institution Building. With the exception of SWPRP, the LGPR system has only limited experience with the detailed design and implementation of large multisectoral projects. There is a need, therefore, to enhance the capacities of the LGPR system, including the three project provincial PADOs and the county- and lower-level PMOs, in project planning, design, management and monitoring. The institution-building component will better equip the provinces and counties to meet the formidable challenge of integrated upland area development. The institution building component would include: (a) institutional design, including the design of organizational setup, definition of functions and establishment of project implementation and management procedures; (b) human resource development, including training and technical assistance; (c) provision of facilities, including office space, office furniture and equipment, and vehicles; and (d) development of a computer-based information system to facilitate project management and monitoring. Due to the program-lending nature of the project, special attention would be paid to upgrading the PMOs' abilities in development planning, project selection and appraisal, and monitoring and evaluation of project implementation.
3.35 Research, Training and Technical Assistance. The project would fund research, local and overseas training, study tours and technical assistance comprising both foreign and local consultants. Each project component (except for rural infrastructure and TVE development) includes research, training and technical assistance. An assurance was obtained at negotiations that FCPMC would provide an annual plan to the Bank Group by - 36 -
December I of each year that would include a list of proposed research, training, study tours and technical assistance under the projectfor the coming year.
3.36 Poverty Monitoring. The establishment of an objective poverty monitoring system is essential to achieving the project's principal objective of demonstrating the effectiveness of a focused multisectoral rural development project approach to poverty reduction. In collaboration with ongoing Bank work with SSB (para 1.8), the project would develop such a system for the project area using improved survey instruments based upon similar activities under SWPRP. The system would provide a credible and comprehensive poverty profile for the project areas, analyze the accuracy of targeting benefits to the absolute poor, and measure and evaluate the impact of the project's individual components. It would provide an important testing ground for assisting the establishment of a national poverty monitoring system that would, in turn, serve as an important underpinning of the Government's overall poverty reduction program.
3.37 The four main elements of this project component would be to (a) upgrade the existing poverty monitoring system developed under SWPRP in order to adapt it to the conditions of the Qinba mountains region and more fully exploit the potential of the survey instruments for project evaluation, (b) undertake baseline and annual follow-up surveys, (c) process and analyze the collected survey data, and (d) disseminate findings and information. The project poverty monitoring system has been built upon SSB's existing rural household survey instruments, with appropriate adjustments to cover the project area, decrease the number of questions, and improve the individual and community modules to incorporate important questions on household expenditure, education, health, labor mobility and credit experience. For the baseline and annual follow-up surveys, SSB would design, test and modify questionnaires during the first half of 1997. The baseline survey would be undertaken in December 1997 and follow-up surveys would be carried out annually in December for the duration of project implementation. FCPMC and SSB would collaborate on data processing and analysis, and the publication of an annual summary report.
Social Services
3.38 In addition to the six project components, two social services programs would be undertaken in parallel with the project (para. 3.3). QEP and QHP would facilitate the development of locally funded and managed education and health systems for the absolute poor at the village level. The education and health programs concentrate investment in village-level basic infrastructure, upgrading the quality and reliability of services, and the development of mechanisms to ensure access to social services by the absolute poor. QEP and QHP include mechanisms to ensure sustainability.
3.39 Education Program. Consistent with national plans for six-year UBE by 2000 in China's poor areas (para. 2.11), QEP would address low educational attainment among the poor in the project areas by enhancing the delivery of primary education through (a) renovation and construction of school buildings and facilities, (b) provision of tuition assistance for poor students, (c) provision of textbooks, instructional equipment and - 37 - furniture, and (d) teacher and management training. Due to the disproportionately low levels of female enrollment and retention (para 2.12) in the project area, the project's target of six-year UBE strongly favors girls' education. In addition, a special effort would be made, over both the short and long term, to attract qualified female teachers who would serve as role models to encourage the education of girls. The education program would be funded and implemented under the Fourth Basic Education Project (CN-PE-36952). An assurance was obtained at negotiations that each project province would implement an education program acceptable to the Bank Group.
3.40 Health Program. QHP would strengthen the health network by increasing the accessibility and enhancing the quality of health services provided to the poor at the village and township level. This would occur primarily through (a) construction of health facilities, (b) establishing a village cooperative medical fund, (c) upgrading and provision of essential equipment, (d) enhancing the stability and quality of the rural health work force through training and salary assistance, (e) strengthening public health programs in disease prevention and control and maternal and child health care (MCH), and (f) increasing the management capabilities of health administrators at the county and provincial level. The health program is expected to be funded and implemented under the Eighth Basic Health Services project (CN-PE-3566). An assurance was obtained at negotiations that each project province would implement a health program acceptable to the Bank Group, and to this end, they would furnish to the Bank Group by December 1 in each year (commencing December 1, 1998) its annual plan for health activities for the following year (including a budget and financing plan) and carry out such plan as would be agreed with the Bank Group.
D. STATUS OF PREPARATION
3.41 Feasibility studies have been completed for the three provinces and all 26 project counties, including representative designs for all the subprojects, and comprehensive development plans for selected administrative villages. The three provincial studies and 26 county studies have been thoroughly reviewed by the Bank (6 counties) and by FCPMC and the provincial PMOs (all counties) prior to and during appraisal. Extensive revisions have been made in accordance with the recommendations of these reviews. Implementation of (a) pilot programs for the labor mobility, microfinance, and social services components, (b) several of the comprehensive village development programs in each county, (c) the full range of project components in Wangcang, Xuanhan, Zhenan, Ankang, Xiji and Tongxin counties, and (d) institution building at the provincial and county levels began in January 1997. During the early stages of implementation, and in accordance with the Government's basic investment project review and approval process and Bank Group requirements, detailed implementation plans and engineering designs for each project component would be carefully reviewed by the PMOs at all levels and concerned technical departments.
E. IMPLEMENTATION SCHEDULE
3.42 The project would be implemented during a period of six years beginning in August 1997, with completion in July 2003. All components would take the full span of six years - 38 - to implement. For the labor mobility component, orientation training would precede the placement of workers in new jobs. Operations would be modest in scale in the first year, but would increase in the second and following years. For the land and farmer development component, due to the comparatively long growth period before maturation, fruit crops would be established during the first four years of the project. Terracing would be followed by crop establishment on newly terraced land. Farmers' training would also be concentrated in the first three years. Implementation of cash crop and livestock activities would be undertaken over the full six-year period. For the rural infrastructure component, rural energy in Sichuan and microirrigation systems in Ningxia would be completed in the four years beginning 1997. All other subcomponents would scheduled over the full six-year period. For the TVE development component, the farmers' markets subcomponent would be implemented through a phased approach (para. 3.26). Other TVE subcomponents, including agroprocessing and various light industrial development projects, would be scheduled over a five-year period due to the flexibility needed to respond to the changing market situation. The microfinance component will be implemented in several credit cycles over five years.
F. PROJECT COSTS AND FINANCING
3.43 Costs. The total project cost, including physical and price contingencies, is estimated at Y 2.99 billion ($360 million). The foreign exchange costs are estimated to be Y 896 million ($108 million), or 30 percent of the total. Taxes and duties are not included in the estimated costs. The cost estimates are based on unit prices currently prevailing in the project area and derived from typical designs. Base cost is expressed in late 1996 prices. Physical contingencies average about 5 percent of base cost. Price contingency estimates average 25 percent of base cost, and have been calculated for both foreign and local costs using the Bank Group's estimated annual escalation factors. Physical and price contingencies amount to Y 683 million ($82 million). Estimated project costs are summarized in Table 3.1 and detailed in Annex 5.
3.44 Financing. The proposed IDA (ITF) Credit of SDR 108.5 million ($150 million equivalent), which would be funded under the Interim Trust Fund (ITF) as administered by IDA, and IBRD Loan of $30 million would cover 50 percent of total project costs and all of the foreign exchange component. The remaining project costs would be financed by central and local governments and the beneficiaries as detailed in Table 3.2. - 39 -
TABLE 3.1: PROJECT COST SUMMARY
Percent Y million $ million Share of Foreign Local Foreign Total Local Foreign Total Base Cost Exchange
Labor Mobility 214.7 92.0 306.8 25.9 11.1 37.0 13.3 30 Rural Infrastructure 178.6 76.6 255.2 21.5 9.2 30.7 11.1 30 Land & Fanner Development 869.3 372.5 1,241.8 104.7 44.9 149.6 53.9 30 TVE Development 274.8 117.8 392.6 33.1 14.2 47.3 17.0 30 Microfinance 18.7 8.0 26.7 2.2 1.0 3.2 1.2 30 Institution Building & Project Management 45.4 19.5 64.9 5.5 2.3 7.8 2.8 30 Poverty Monitoring 11.3 4.9 16.2 1.4 0.6 2.0 0.7 30
Total Base Cost 1,612.9 691.2 2,304.1 194.3 83.3 277.6 100.0 30 Physical Contingency 79.8 34.2 114.0 9.6 4.1 13.7 4.9 30 Price Contingency 398.9 171.0 569.9 48.1 20.6 68.7 24.7 30 Total Project Cost 2,091.6 896.4 2,988.0 252.0 108.0 360.0 129.7 30
Note: Totals may not add up due to rounding.
TABLE 3.2: PROJECT FINANCING
$ million Percent IDA (ITF) 150 41.7 IBRD 30 8.3 Provincial Governments 142 39.5 Prefectural and Local Governments 17 4.7 Beneficiaries 21 5.8 Total 360 100.0
G. PROCUREMENT
3.45 Procurement arrangements are summarized in Table 3.3.
3.46 The Bank's Procurement Guidelines, dated January 1995 and revised in January and August 1996, will be applied to all Bank-financed procurement of goods and works. The Model Documents that have been agreed between the Ministry of Finance (MOF) and the Bank Group in July 1996 would be adopted for all international competitive bidding (ICB) and national competitive bidding (NCB) for civil works and goods, and the Standard Bid Evaluation Form would be used. Procurement of items to be financed out of the proceeds of the ITF Credit would be subject to the special eligibility requirements applicable to ITF Credits. - 40 -
TABLE 3.3: SUMMARY OF PROPOSED PROCUREMENT ARRANGEMENTS La ($ million)
Procurement Method ICB NCB Others /b NBGF L Total
Civil Works - 27.7 84.9 - 112.6 (9.7) (29.1) (38.8) Crop Establishment - - 37.7 - 37.7 (13.2) (13.2) Livestock Maintenance - - 46.2 - 46.2 (16.2) (16.2) Equipment 2.8 23.9 2.0 0.1 28.6 (2.8) (17.9) (1.5) (0.1) (22.2) Vehicles 5.3 0.3 0.1 - 5.6 (5.3) (0.2) (0.1) (5.5) Construction Materials - - 3.6 - 3.6 (2.7) (2.7) Agricultural Inputs 31.9 - 6.6 - 38.5 (31.9) (5.7) (37.7) Labor Placement - - 43.4 - 43.4 (21.7) (21.7) Microfinance Subloans - - 3.6 - 3.6 (1.8) (1.8) TA, Research & Training - - 11.0 - 11.0 (1 1.0) (1 1.0) Management & Supervision - - 10.7 - 10.7 (5.4) (5.4) Other - - 4.3 14.1 18.4 (3.9) (0.0) (3.9)
Total 40.0 51.8 254.1 14.1 360.0 (40.0) (27.8) (112.2) (0.0) (180.0)
La Figures in parentheses are the respective amounts financed by the Bank Group. Lb Includes force account, limited international bidding, national shopping, direct purchase, etc. LQ Not financed by the Bank Group.
3.47 Works. Civil works worth about $197 million would be required for the project including earth and stone work, structures for irrigation and rural water supply systems, roads and rural energy, buildings, crop establishment and livestock maintenance. These works would be scattered over 26 counties and carried out over five years, and would be too dispersed to be of interest to international construction companies. As a result, no procurement of works through ICB is planned. Instead, about $27.7 million of civil works would be procured through NCB procedures acceptable to the Bank Group for rural electricity, larger structures and buildings, and farmers' markets. The maximum size of contract to be let through NCB would be no more than $2.5 million. Other civil works, not - 41 - exceeding $100,000 each in value and with an aggregate value of about $84.9 million, comprising land development, minor structures and buildings, and village roads, would be too small, widely scattered and labor-intensive to be suitable for competitive contracting, and would be undertaken with the Bank's prior consent through force account by local labor forces (mostly farmers) mobilized by counties and townships. Crop establishment ($37.7 million) and livestock maintenance ($46.2 million) works would be undertaken through force account by participating farmers.
3.48 Goods. Goods worth about $76.3 million would be required for the project. ICB procedures would be used for fertilizer, plastic sheeting, vehicles, computers and office equipment amounting to about $40.0 million, or more than half of all goods. Qualified domestic bidders competing under ICB will be eligible for a 15 percent preference in bid evaluation, or customs duties and import tax payable by a nonexempt importer, whichever is less. ICB contracts would be grouped into packages of $200,000 or more. Pesticides amounting to $3.2 million would be procured through limited international bidding as there are only a limited number of suppliers of such specialized items who could offer competitive prices.
3.49 NCB procedures acceptable to the Bank Group, in which foreign suppliers may participate, would be used to procure contracts under $200,000 totaling about $24.2 million worth of goods including office equipment, small agricultural and agroprocessing machinery, equipment, and motorcycles. All contracts under $50,000 for goods would be procured through national shopping in accordance with procedures acceptable to the Bank Group. National shopping would total $8.9 million and would cover small irrigation pumps and pipes, and small quantities of equipment, instruments and miscellaneous goods.
3.50 Other Procurement. Labor training and placement ($43.4 million), and research, training, and technical assistance ($11.0 million) would be carried out based on programs agreed with the Bank Group. Goods and works required for microfinance subloans, which would not be expected to cost more than $1,000 per subproject and total $3.6 million in aggregate, would be procured by farm households at reasonable price and taking account of quality and reliability. Certain incremental recurrent operating costs of project management would be paid against an agreed schedule of costs. Consultants would be employed in accordance with the Bank Group Guidelines for the Use of Consultants.8 All consultants required for the project are expected to be individuals who would be employed in accordance with the procedures applicable to individual consultants. In the unlikely event that a firm were to be hired, Quality- and Cost-Based Selection (QCBS) procedures would be followed.
3.51 Review of Bid Documents and Contracts. Bidding documents for works contracts estimated to exceed $2.5 million in value and goods packages in excess of $200,000 would be subject to prior review by the Bank Group. This would cover
8 "Guidelines for Selection and Employment of Consultants by World Bank Borrowers," January 1997 and the Model Contract Documents for Consultant Services. -42 - approximately 20 goods packages over the six-year implementation period. Consistent with the relatively small size and diverse nature of the goods, this would represent about 30 percent of total goods in value. Bidding documents for the first three works and the first three goods contracts to be let through NCB in each province, and consultants' contracts estimated to exceed $100,000 in the case of firms and $50,000 in the case of individual consultants, would also be subject to prior review by the Bank Group. Other contracts would be subject to ex-post review by supervision missions. During the first year of implementation, the ex-post review target would be 1 in 20 contracts. Based on experience in the first year, the target ratio would be adjusted. Standard bidding documents approved by the Bank Group would be used.9 Other contracts would be subject to selective review after bid awards. MIN-METALS International Tendering Company and the CNCCC International Tendering Company have been appointed procurement agents for the project.
H. DISBURSEMENTS
3.52 Proceeds of the IDA (ITF) credit would be disbursed as summarized in Table 3.4. Disbursement for vehicles, computers, equipment for agroprocessing and other TVEs, fertilizer, pesticides, and plastic sheeting would be at 100 percent of the foreign exchange costs of imported items and 100 percent of the ex-factory price of locally manufactured items. Disbursement for other goods procured locally would be 75 percent of local expenditure. Disbursement for overseas and domestic training and study tours, technical assistance, international and domestic consultants services, and applied agricultural research would also be at 100 percent of total costs. Disbursement for labor training and placement under the labor mobility component, and operating costs for project management and supervision would be 50 percent of total costs. Disbursement for crop establishment, livestock maintenance, terracing, rural roads, water supply, irrigation works and energy, and other works would be at 35 percent of total expenditures. Disbursement for subloans under the microfinance component would be 50 percent of amounts paid by the cooperative.
3.53 Disbursement for the first three contracts for goods and works under NCB for each province, for works contracts of $2.5 million equivalent or more, for goods contracts of $200,000 equivalent or more, and for consultancy contracts of $100,000 equivalent for firms and $50,000 equivalent or more for individuals, would be made on the basis of full documentation. Disbursement for contracts for works, goods, and consultant contracts below those amounts, and all training would be on the basis of Statements of Expenditures (SOEs). Disbursements would also be made against SOEs in the case of labor training and placement, subloans under the microfinance component, and research, study tours, and works carried out by force account. SOEs would be supported by progress reports showing physical quantities and unit prices (the latter would be updated annually by FCPMC and the provincial PMOs and reviewed by the Bank Group). Supporting documentation would be
9 Includes prequalification, notice of invitation to bid, bid documents, bid evaluation forms, and contracts. - 43 - retained by the PMOs and made available to local audit bureaus and to Bank Group supervision missions, which would both randomly field check such physical records from time to time.
TABLE 3.4: DISBURSEMENT ARRANGEMENTS
Amount Disbursable Category ($ million) Percentage Disbursable
Works, Crop Establishment, and 68.1 35% of total expenditure Livestock Maintenance
Goods 68.1 100% of foreign expenditure, 100% of local expenditure (ex-factory); 75% for other goods procured locally Labor Training and Placement 21.7 50% of total expenditure
Microfinance Subloans 1.8 50% of amounts paid under subloans Consultant Services & Training 13.0 100% of total expenditure Operating Costs 3.4 50% of total expenditure Unallocated 3.9 Total 180.0
3.54 The project is expected to be completed by July 31, 2003 and the closing date would be January 31, 2004. China enjoys a favorable record in project implementation and disbursement that is superior to Bank Group and Asia averages. The project disbursement profile is consistent with other rural development projects in China. The estimated disbursement schedule is given in Annex 8.
3.55 Special Account. To facilitate disbursement, a Special Account will be established in a bank acceptable to the Bank Group. The Special Account will have an authorized allocation of $10 million, which is equal to its estimated four-month average disbursement. Applications for replenishment of the Special Account would be submitted monthly or whenever the Special Account is drawn down to 50 percent of its initial deposit, whichever comes first.
3.56 Retroactive Financing. Due to the need to establish implementation and coordination procedures for this complex project in advance of full implementation, retroactive financing is recommended for expenditures incurred for (a) initiating the labor mobility, microfinance, and institution building components, (b) establishing tree nurseries and terracing, and (c) commencing the full range of activities in selected "prototype" - 44 - counties (para. 3.8) and the village comprehensive development programs in all counties. Retroactive financing would be for expenditures incurred after February 1, 1997 and before the date of signing of the Loan and ITF Credit Agreements. The total disbursable amount would be up to SDR 13 million equivalent.
I. ACCOUNTS AND AUDIT
3.57 The provincial and county PMOs would maintain records of all project component expenditures. These records would be forwarded regularly to FCPMC for consolidation, review, and audit. Assurances were obtained at negotiations that consolidated accounts would be maintainedfor annual auditing by auditors acceptable to the Bank Group and that the audited accounts, including the Special Account, together with the auditor's report would be submitted to the Bank Group within six months of the close of each fiscal year. Audited accounts would include details on the use of the Special Account, withdrawals from the Loan and Credit account made on the basis of SOEs, including actual physical completion of claimed works to agreed standards, and the auditors' opinion as to whether such withdrawals were made against expenditures eligible for Bank Group disbursement.
J. ENVIRONMENTAL AND SOCIAL IMPACT
3.58 Overall, the project is expected to have a favorable environmental impact. The land and farmer development component would make significant contributions to the mitigation of the existing environmental problems in the project areas of severe soil erosion and degraded vegetative cover (AnnexI3). To limit any potential negative environmental impacts of project activities, assurances were obtained at negotiations that (a) pesticides to be provided under the project would be approved by the Bank Group and would be stored and handled in accordance with guidelines satisfactory to the Bank Group, and (b) all project activities would comply with sound environmental standards, and necessary mitigation actions to fulfill the recommendations contained in the Environmental Assessment Report would be included in the annual work programs forwarded to the Bank Group.
3.59 Other components would take all necessary actions to minimize negative effects on the environment. One of the five TVE selection criteria is the likely environmental impact, and several proposed enterprises were eliminated on this basis. Project TVEs would address environmental issues during the design stage, and would submit plans to the provincial and county EPBs in conformance with national pollution control requirements. During this review process, special attention has been and would be given to controlling emissions and effluents, which are by-products of production processes. Food processing TVEs would also be subject to regular sanitary inspections by local health authorities.
3.60 TVE establishment and expansion, road construction, and other project activities would require acquisition of less than 130 ha of cultivated land. Under current land acquisition plans, about 2,570 persons would be affected, though none would lose their homes. Resettlement planning principles and policies, and a resettlement action plan (RAP) acceptable to the Bank Group, have been prepared. Assurances were obtained at - 45 - negotiations that (a) resettlement required under the project would be carried out in accordance with this RAP, and (b) any currently unanticipated resettlement would be carried out in accordance with a RAP developed on the basis of these principles and policies and approved by the Bank Group.
3.61 Social Aspects. The project components directly address the fundamental social problems in the project area of grossly inadequate educational attainment, excessive morbidity and mortality, severe underemployment, and the lack of access to roads, safe drinking water and electricity. During project preparation, there has been careful targeting of the poorest upland counties, townships and villages (paras. 2.31 to 2.33). The education program includes the recruitment of women teachers and administrators and strongly favors girls' primary education, and the health program would reduce maternal and child morbidity and mortality.
3.62 The most significant social risks are related to the participation of large numbers of women in the innovative labor mobility component. Special attention has been given to the enterprise selection process and orientation of voluntary migrants, and an important role has been defined for the ACWF in this process. In coordination with local Labor Bureaus, all new low-skilled jobs created by project would be filled in large part with women. This affirmative action approach would not have negative effects since many sectors, such as handicrafts and agroprocessing, tend to have 60 to 80 percent female staff. - 46 -
4. PROJECT ORGANIZATION AND MANAGEMENT
A. PROJECT ORGANIZATION AND MANAGEMENT
4.1 Summary. LGPR and its Foreign Capital Project Management Center (FCPMC) would have principal responsibility for overall project implementation. At the provincial level, Project Leading Groups (PLG) have been set up to (a) mobilize institutional, technical and financial resources and support for the preparation and implementation of the project, and (b) provide a critical coordination and monitoring function. In addition, Project Management Offices (PMO) have been established to ensure effective and timely implementation of the project. The complexity of the project requires that FCPMC and the provincial PMOs be greatly strengthened. An institutional development program to strengthen FCPMC and the provincial PMOs would be implemented as an integral part of the project (para. 3.34). At the county level, PLGs and PMOs have also been set up. The several county-level technical bureaus directly involved in the project would, in close cooperation with the participating township governments and their offices at the administrative village level, play a key role in the day-to-day implementation of the project. At both the central and provincial levels, Technical Advisory Groups have been set up to provide technical support for project implementation. The general organization of the project is shown in Chart 1.
4.2 Central Level. The project is an integral part of the Government's 8-7 Plan, and LGPR would be the decision-making body for the project with full responsibility for coordinating the various government agencies involved in project implementation.
4.3 FCPMC would serve as the secretariat for LGPR on all project-related matters, and would be responsible for the management of overall project implementation. FCPMC would provide guidance and assistance to the PMOs at lower levels in subproject selection and appraisal, and would have responsibility for overall project monitoring and evaluation. It would also be directly responsible for the implementation of the interprovincial part of the labor mobility component and part of the institutional development component of the project. FCPMC's other responsibilities would include: arranging combined procurement under ICB and international shopping; reviewing applications for withdrawals from the credit and loan proceeds; preparing consolidated accounting, auditing and progress reports, including the implementation completion report; coordinating institutional development aspects, particularly overseas training, study tours and technical assistance; and providing liaison with the Bank Group. During the course of SWPRP project preparation, FCPMC was established with bureau-level status and approved for 30 professional-level staff positions. An assurance was obtained at negotiations that FCPMC would be staffed at levels, and maintained with functions and responsibilities, acceptable to the Bank Group. - 47 -
4.4 Two Technical Advisory Groups (TAG) have been set up at the national level to provide technical support to LGPR and FCPMC. Comprised of senior staff of the Chinese Academy of Sciences, one TAG provides support on key technical issues for project preparation and implementation. The other TAG, which is primarily staffed with senior consultants with a great deal of experience in the preparation and implementation of the Bank Group's projects in China, provides support on detailed technical issues and issues related to the organization of project implementation. In addition, at least one staff member of a provincial scientific research institution, university or college has been sent to each of the 26 project counties to advise on project technical issues. In addition, in close collaboration with FCPMC, SSB is directly involved in the design and implementation of the project's poverty monitoring subcomponent (paras. 3.36 and 3.37). Lastly, FCPMC's existing environmental assessment and monitoring unit (EU) would orchestrate the work of the EUs to be established within the provincial PMOs. Prior to the provision of funding for individual project TVEs, the provincial EUs would confirm that the appropriate EPB has issued full environmental clearances for the proposed enterprise.
4.5 CWHRDC and the provincial PMOs and related Labor Bureaus would manage the labor mobility component. CWHRDC would (a) establish a job placement system for interprovincial labor mobility, (b) provide provincial and county Labor Bureau staff with management training, and (c) have responsibility for completing semiannual labor mobility monitoring reports (para. 3.7). A separate consultative body, consisting of representatives of the ACWF, the Public Security Bureau, the Ministry of Light Industry, and external consultants, would be established to provide independent review of the labor mobility component.
4.6 Provincial Level. PLGs have been established in each of the three project provinces. The provincial PLGs are headed by a vice governor in charge of poverty reduction and assisted by representatives from the provincial PADO, Planning Commission and Finance Bureau, the several technical Bureaus directly involved in the project (including the Agriculture, Forestry, Health, Education, Labor and Statistical Bureaus), ACWF, and ADBC. The main responsibilities of the PLGs are to formulate project-related policies and plans, approve subproject designs, and mobilize institutional, technical and financial resources and support for the implementation of the project. The PLGs would also provide a critical coordination function.
4.7 Similar to FCPMC at the central level, PMOs have been set up at the provincial level. Under the leadership of the provincial PADOs, the provincial PMOs would manage the implementation of the project in their corresponding provinces. The provincial PMOs would (a) review feasibility studies prepared by the project counties, (b) draw up annual work programs and budgets, (c) review and approve lower-level PMO work plans, (d) review and forward disbursement of Bank Group and government funds to local government accounts, (e) prepare and submit to the central project office detailed project accounts, audits, withdrawal applications and progress reports, (f) arrange common procurement, and (g) undertake project monitoring of physical and financial - 48 - progress and evaluations of project impact. The provincial PMOs would also directly implement the provincial part of the institutional development component and coordinate the research program of the land and farmer development component (para. 3.23). Assurances were obtained at negotiations that the provincial PMOs would (a) be staffed at levels, and maintained with functions and responsibilities, acceptable to the Bank Group, and (b) prepare and furnish a detailed annual budget and work plan, including training, acceptable to the Bank Group, by December I of each year, for project implementation the followingyear.
4.8 In order to take full advantage of MOL's existing information network and nationwide hierarchy of Labor Bureaus, the provincial Labor Bureaus would assist the PMOs with the final preparation and the implementation of the labor mobility component. Similarly, the provincial Health and Educational Bureaus would also take a leading role in the preparation and implementation of the social services programs. For the project's other components, the chain of command would directly link the provincial PMOs with county-level organizations (instead of going through provincial bureaus) in order to ensure adequate coordination at the county level and below. Support from all provincial agencies would be secured through the function of the provincial PLGs. To provide technical support to the provincial PLGs and PMOs, TAGs comprising experts and senior consultants in various fields have also been set up at the provincial level.
4.9 County Level and Below. PLGs have also been established at both the county and township levels in order to fully mobilize existing institutional resources and guarantee coordination among various agencies and units. Chaired by the county magistrate, the county PLGs would take full responsibility for project implementation in their respective county. County PMOs, chaired by deputy county magistrates responsible for poverty reduction, have also been set up. The county PMOs function as the secretariat for the county PLGs, and serve as the contact with project organizations at higher levels. The county PMOs would also be responsible for project monitoring and evaluation, financial management, arrangement of common procurement and distribution of goods and services procured, and common training components in conjunction with line agencies at the county level.
4.10 County technical bureaus directly involved in the project would, in close cooperation with Township Project Work Stations (TPWS) and Village Project Execution Groups (VPEG), be responsible for the day-to-day execution of the project in their corresponding area. Township Extension Stations would be comprehensive technical units integrating crop production, animal husbandry, forestry and other technicians. In addition to members of the village committee and the ACWF representative, VPEGs would also include at least one household representative. Under the leadership of the county PLG and PMO, the Health and Education Bureaus would be responsible for the social services programs; the Labor Bureaus for the labor mobility component; the Agriculture, Water Resources, Animal Husbandry and Forestry Bureaus for the land and farmers development component; and the Power, Transportation, and Industry and Commerce Administration Bureaus for the rural infrastructure component. Execution of - 49 -
the TVE development component would be the responsibility of the county TVE Bureau and several other bureaus with responsibility for rural industry. These implementing agencies' responsibilities include planning, financial management, procurement, disbursement, quality control, monitoring and evaluation, and encouraging farmers to participate in the project. Local nongovernmental organizations, such as ACWF, would also be involved in the implementation of the project in activities such as farmers' training and monitoring and evaluation. The project would provide the TPWSs and VPEGs with a yearly budget of Y 3,600 and Y 480, respectively, to allow project staff to carry out frequent follow-up activities for individual village development plans.
4.11 Various economic entities would be engaged in the implementation of the project. In addition to individual project farm households, joint household entities with various forms of ownership would be engaged in more commercially oriented agriculture and forestry activities, e.g., fruit production. Joint ventures, between farmers and local businesses, would also engage in conmmercially oriented production. For project activities in mining, manufacturing, processing and service industries, TVEs with various forms of ownership would play a dominant role.
B. FINANCIAL MANAGEMENT
4.12 Flow of Funds. MOF would make the proceeds of the IBRD Loan and IDA (ITF) Credit available to the governments of the three project provinces. Assurances were obtained at negotiations that (a) MOF would make the proceeds of the IBRD Loan and IDA (ITF) Credit available to the three project provinces at 2 percent interest rate per year with a repayment period of 17 years, including a 5 year grace period, and (b) the foreign exchange risk would be borne by the provincial governments. A portion of the Bank Group funds made available to the provinces would be used directly by the provinces to cover the costs of institutional development, research, technical assistance, training, equipment, management expenses and labor mobility activities. The provincial Finance Departments, representing the provincial governments, would channel the remaining funds successively to prefecture, municipal, county and township governments through their internal financial system. Onlending to farmers and enterprises would be only for activities that have been appraised and approved by the project implementing agencies.
4.13 Reimbursement Procedures. MOF, FCPMC, and the PMO and technical bureau staff at all levels would be involved in the preparation and review of reimbursement applications. Reimbursement documentation would be prepared by the county PMO and, with the review and signature of the county Finance Bureau, be sent to the provincial PMO. At the provincial level, the documentation would be reviewed and approved by the provincial PMO. With the review and signature of the provincial Finance Bureau, the docunentation would then be sent simultaneously to MOF and FCPMC. FCPMC would have a five-day review period to comment on, or object to, the documentation (except for reimbursement documentation for labor mobility, which could take more than five days). MOF would not process the reimbursement application until any FCPMC comments or - 50- objections were resolved. However, MOF would process the application if it does not receive comments from FCPMC within the seven-day review period.
C. EXECUTION OF PROJECT WORKS
4.14 Construction of minor works would be undertaken by participating poor farmers or contracted out to construction enterprises depending on the component and local circumstances. Land development and crop establishment would also be carried out by the farmers participating in the project. Work teams from participating villages would be organized to carry out labor-intensive works such as terracing and some road construction. Larger works, such as large structures for rural infrastructure and larger buildings, would be contracted to construction companies. For the labor mobility component, employment agencies of various kinds would carry out activities such as collection of employment information, market promotion, and training and placement of the laborers. Provision of initial training and monitoring of the employment conditions would be the responsibilities of CWHRDC, FCPMC, the provincial and county PMOs and Labor Bureaus, and ACWF at various levels. The institutional development component and the centralized training and technical assistance (TA) activities would be carried out by FCPMC and the provincial PMOs.
4.15 Prior to implementation, the provincial PMOs would further evaluate all the county- level project feasibility studies (including representative designs for various types of subprojects) to ensure that they are consistent with overall project objectives. Criteria designed during appraisal would be followed in the evaluation. Provincial line agencies and the TAGs would be mobilized to provide technical inputs in the reviewing process. FCPMC would (a) provide overall guidance and undertake a final quality check as part of the evaluation, and (b) present a summary of the outcome of the review process to the Bank Group before September 1997. Detailed planning and design of subprojects would be carried out by the respective implementing agencies and qualified design institutes at various levels and reviewed according to domestic procedures. The provincial PMOs would review at least two designs for each subproject in each project county. Annual work programs and budgets would be prepared based on the detailed designs and sent to the Bank Group for review before December 1 of each year. To achieve the necessary flexibility in project design and implementation, an assurance was obtained at negotiations that the Borrower, through FCPMC, and the project provinces, through their provincial PMOs, would prepare for the Bank Group a mid-term report of the project by June 30, 1999.
D. PROJECT LAUNCH WORKSHOP
4.16 To organize and initiate project implementation, the Bank Group and FCPMC would conduct a Project Launch Workshop in China for staff of the provincial and county PMOs and related Bureaus. The purpose of the workshop would be to review the total program for implementation and to clarify tasks and responsibilities at each level. Topics would include Bank Group guidelines and procedures for procurement and disbursement, financial management, supervision, monitoring and evaluation, computerized project - 51 - planning and management, and inspection and acceptance procedures ("yanshou") for project works.
E. MONITORING, EVALUATION, AND REPORTING
4.17 FCPMC and the provincial and county PMOs would monitor the project's overall progress and impact, and evaluate the economic and financial benefits from each component. Current accounts of physical and financial process for each component would be kept to allow comparisons with management projections. The project's impact on the incomes and physical well-being of project farmers would be systematically monitored under the project's poverty monitoring component. Special attention would be given to the effects of project activities on women. A vision of what a project community would look like after project completion, a list of key monitoring indicators for physical progress and project expenditures, and a plan for Bank Group supervision are given in Annex 10. Reporting information would be submitted by county PMOs to the provincial PMOs, and then to FCPMC, which would prepare consolidated semiannual progress reports for submission to the Bank Group. In addition to routine reporting, FCPMC and the PMOs would undertake on-site supervision at least twice a year. Findings of this on-site supervision, including problems identified and corrective actions required, would be presented in the semiannual progress reports. Project completion reports would be prepared for each component as they are completed. FCPMC would prepare, and submit to the Bank Group no later than three months following the closing date, a final implementation completion report for the whole project based on the county and provincial completion reports.
4.18 Performance Monitoring. Performance monitoring would include a detailed baseline sample survey with annual follow-up surveys, and monitoring by FCPMC and the three provincial PMOs of a detailed listing of performance indicators. SWPRP has established models for both the survey work and the listing of performance indicators. Throughout implementation, the Bank will focus on a subset of about 15 indicators, including: inputs-counterpart funding, and staffing of the provincial and lower-level PMOs; outputs-elementary school attendance rates, number of treatments provided by village level health care funds, number of upland poor placed in off-farm jobs, kilometers of rural roads built, land area adopting project agricultural activities, and jobs created in project rural enterprises; outcomes-completion rate at sixth-grade level, migrant laborers' income levels and remittances, and number of project beneficiaries with improved access to safe drinking water; and impact-infant mortality rate, incidence of absolute poverty in the project areas, knowledge of and access to off-farm employment, and adoption of a focused rural development project approach to poverty reduction in nonproject counties. The full list of key monitoring indicators is provided in Annex 10. - 52 -
5. PRODUCTION AND MARKETS
A. PRODUCTION
5.1 Incremental production under the project (Table 5.1) would derive from (a) more intensive cropping with increased use of modem inputs (such as quality seeds and fertilizers) on newly or improved terraced, irrigated and drained land, resulting in more stable and increased yields and increased cropping indexes, (b) the introduction of new cash crops, (c) the expansion of tree crops planted on underutilized lands and intercropped on cultivated land, (d) greater livestock production through an increase in fodder resources, (e) the design and extension of appropriate technology packages and the delivery to farmers of training, veterinary and processing services, (f) increased labor productivity allowed by the construction of rural roads and other infrastructure and the development and provision to farmers of small tools, and (g) increased availability of financial resources and improved technologies for TVEs.
5.2 Food and Cash Crops. The project would significantly increase yields and output of grain, fodder, and cash crops. Terracing, supplementary irrigation, improved seeds, fertilizers, and other inputs, and training and extension programs would be the main contributors to the expected yield increases of 35 percent for corn, 40 percent for wheat, 20 percent for potato, 35 percent for cornstalk fodder, and 90 percent for cut-and-carry fodder. These yield increases would more than offset a modest reduction in the area sown to grain crops and, at full development, annual incremental output would comprise more than 70,000 tons of corn, 70,000 tons of wheat, and 190,000 tons of potatoes and sweet potatoes. Increased corn production would also bring about a 40 percent increase in cornstalk for fodder use-from about 260,000 to 365,000 tons. The project would also support the development of more than 25,000 ha of annual cash crops, including medicinal tubers and herbs, vegetables and oilseeds.
5.3 Economic Tree Crops. The project would assist about 16,200 households to plant new or rehabilitate existing mulberry on 4,900 ha. Under the project, the quality of silk cocoon would be improved and yields would triple-from 300 kg to 1 ton per ha. This would be achieved by using improved mulberry graftings, improving household-level management and silkworm-raising facilities and tools, and supporting sericulture training for farmers. Most project households would take part in the development of a wide variety of tree and bush crops on about 24,500 ha of sloped terrain. The introduction of higher- quality seedlings, balanced fertilizer applications, supplementary irrigation, and improved postharvest practices under the project would greatly increase yields of marketable medicinal tree crop products, fruits, and nuts. At full development, annual incremental production would include about 12,700 tons of medicinal tree products and resins, 44,000 - 53 - tons of walnuts and chestnuts, and about 65,400 tons of kiwifruit, pomelo, apple, pear, and other fruits.
TABLE 5.1: ANNUAL PRODUCTION AT FULL DEVELOPMENT
Without Project With Project Incremental Production and Yields Area! Area/ Area/ Production Activities Number Yield Total Number Yield Total Number Yield Total
Grain and Fodder (ha) (tons/ha) (tons) (ha) (tons/ha) (tons) (ha) (tons/ha) (tons) Wheat 98,000 1.30 127,800 107,760 1.84 197,882 9,760 0.53 70,082 Com 92,000 1.87 171,860 95,835 2.53 242,882 3,835 0.67 71,022 Potato/Sweet Potato 84,000 8.66 727,500 88,802 10.34 918,641 4,802 1.68 191,141 Rice 37,000 4.80 119,400 37,000 5.09 188,374 0 0.24 8,974 Other grain/legumes 19,000 1.41 26,700 19,000 1.49 28,300 0 0.08 1,600 Com stalk as fodder 92,000 2.82 259,070 95,835 3.80 364,323 3,835 0.99 105,253 Cut-and-carry fodder 4,700 5.96 28,000 13,982 11.52 161,038 9,282 5.56 133,038
Cash Crops (ha) (tons/ha) (tons) (ha) (tons/ha) (tons) (ha) (tons/ha) (tons) Medicinal tubers 8,317 10.00 83,170 8,317 10.00 83,170 Medicinal plants 3,270 1.15 3,571 3,270 1.15 3,571 Vegetables 16,800 16.43 276,000 25,651 17.06 437,515 8,851 0.63 161,515 Oil crops 35,100 1.02 35,740 39,936 1.12 44,739 4,836 0.10 8,999
Tree Crops (ha) (tons/ha) (tons) (ha) (tons/ha) (tons) (ha) (tons/ha) (tons) Mulberry (silk cocoon) 6,900 0.30 2,070 11,814 1.00 11,825 4,914 0.70 9,755 Tea 1,600 0.40 640 3,046 0.89 2,696 1,446 0.49 2,056 Fruit 3,400 2.71 9,200 7,462 10.00 74,620 4,062 7.29 65,420 Walnut/Chestnut 20,000 1.09 21,250 30,027 2.18 65,562 10,027 1.12 44,312 Medicinal tree crops 20,650 0.3043 6,195 27,930 0.35 9,776 7,280 0.05 3,581 Resins and other trees 20,650 0 8,895 22,750 0.79 17,976 2,100 0 36 9,0§1 (ba) (m /ha) (m ) (ha) (m'/ha) (n ) (ha) (m3/ha) (m ) Timberforest 1,139,500 0.99 1,130,000 1,141,914 1.00 1,141,914 2,414 0.01 11,914 Fuelwood forest 210,500 0.48 100,500 213,703 0.49 104,176 3,203 0.01 3,676
Livestock (head) (tons/head) (tons) (head) (tons/head) (tons) (head) (tons/head) (tons) Cattle (beef) 64,080 0.25 16,020 95,154 0.30 28,546 31,074 0.05 12,526 Pig (pork) 611,150 0.07 42,781 1,033,324 0.08 82,666 422,174 0.01 39,885 Goat and sheep (meat) 320,810 0.03 8,020 650,768 0.03 20,754 329,958 0.01 12,734 Sheep (wool) 100,000 0.0005 50 199,257 0.0005 100 99,257 50 Chicken (meat) 4,450,600 0.0010 4,451 5,428,534 0.0010 5,429 977,934 978 Chicken (eggs) 18,570 0.0040 74 18,570 74 Rabbit (hair) 12,258 0.0005 6 12,258 6 Total grain (tons) La 651,260 841,166 189,906 Grain production per capita 250 323 73 (kg)
LA Grain comprises wheat, com, rice, other grains and legumes, and potato/sweet potato. Potato and sweet potato are expressed as dry grain equivalent (one fifth their wet weight).
5.4 Forestry and Fodder Development. Household-based timber afforestation would take place on underutilized land with an estimated incremental output of about 12,000 cubic meters (mi3 ) of timber. In Ningxia, fuelwood afforestation would help overcome the serious shortage of fuel for heating and cooking, and protect the newly terraced land from erosion. The newly developed cut-and-carry fodder area of 9,300 ha would yield about 133,000 tons of forage annually.
5.5 Animal Husbandry. The project would support smallholder activities in breeding or fattening of an incremental 62,000 cattle, 336,000 goats and sheep, and 312,400 pigs to provide income, and organic fertilizer for crops, for nearly two thirds of project households. About 70 percent of forage resources are to be produced on farm, including a wide range of both local and introduced forage species, and more efficient use of crop residues (para. 3.18). Improving animal feeding practices-and reducing the winter deficit of feed resources in particular-and using improved breeds and feeds, the incremental production of beef, pork and mutton would reach about 12,500, 40,000, and 12,750 tons, respectively. - 54 -
In addition, the project would support the annual incremental production of 50 tons of sheep wool or angora wool, nearly 1,000 tons of chicken and duck meat, and 74 tons of eggs.
5.6 Township and Village Enterprises. Under the project, agroprocessing plants would produce about 32,500 tons per year of starch, wheat flour, dried mushrooms and amorphophallus, and canned beans. Sixteen upgraded tea factories would process about 2,200 tons of high-grade teas, and 12 fruit processing plants would produce about 6,400 tons per year of canned fruit and juices, and dried or processed walnuts and chestnuts. Another 35 TVEs would also process or produce 110,000 tons of ginkgo leaves, bamboo, galinut and wood, 158,000 square meters of carpets, tapestry, and other products, and 70 tons of raw silk. Livestock processing plants would produce about 56,000 tons of meat products, and feed processing plants would produce 600 tons of feed. In addition, 16 TVEs would produce marble, granite, bricks and other construction materials for local sale. The 21 farmers' markets would provide improved market access to farmers in the project areas.
B. MARKETSAND PRICES
5.7 During the past decade, government reforms have greatly liberalized most marketing channels. As a result, nearly all agricultural commodities produced under the project are now largely deregulated and, at least in part, traded via relatively free markets. Project farmers would be able to sell their products to (a) vendors and households at local farmers' markets, (b) private traders, (c) agents from government marketing enterprises, and (d) local agroprocessing industries. The reforms have also freed many agricultural commodity prices from State control, and increased the procurement prices of those goods still subject to State marketing channels. Currently, most agricultural commodity prices in the project area reflect market supply and demand and are broadly consistent with world market prices.
5.8 The project would produce a large range of crops across a widely dispersed geographic area, and the project's total incremental production of each crop would account for only a fraction of total provincial production. Consequently, local demand is expected to absorb all of the project's grain, fodder, and timber production, and most of the orchard, livestock, and sericulture production. A small balance would be exported to other parts of China.
5.9 Grain and Other Staple Crops. The project area is chronically deficient in the production and availability of most basic food crops and products, including grain, vegetable oil, and meat, and critically depends on continued government supplies of relief grain (para. 2.7). Previous policies have emphasized food self-sufficiency, but have largely failed to achieve the desired effect in poor upland counties where farmers attempt to produce grain on unsuitably steep and rocky land. Therefore, local demand (for direct consumption and for use as animal feed) will more than match the project's incremental grain production of about 190,000 tons (or 73 kg per capita in the project area).
5.10 Cash Crops, Economic Tree Crops and Forest Products. The market prospects for project cash crops, economic trees, fuelwood and timber are also favorable since (a) fruit - 55 -
and nuts have very high income elasticities of demand, (b) national shifts in the location of orchard crops and mulberry favor production in the project areas (since urbanization and industrialization continue to increase factor prices for production in coastal areas), (c) the project area's climate and soil are well suited to temperate zone nuts, fruits, and medicinal herbs and trees, and farmers are skilled in their cultivation as sideline crops, and (d) there is a chronic shortage of fodder, timber, and fuelwood in the project area.
5.11 China produced 776,900 tons of silk cocoon in 1994, and is moving from heavy reliance on raw silk exports to processed goods that capture additional value added from domestic manufacturing. At present, China's total silk cocoon production accounts for about two thirds of the world production, and Sichuan alone, about one fifth. As land and labor are becoming more expensive in coastal areas, the increased market shares of silk cocoon for inland provinces are consistent with their significant comparative advantage in land and labor, and their long tradition of mulberry cocoon production and silk reeling (particularly in Sichuan and Shaanxi). Project incremental production, which would amount to less than 2 percent of China's current production, would be sold primarily to the prefecture- and county-level branch offices of the China National Silk Import and Export Corporation (CNSIEC), which in turn would sell most of the product to local silk reeling factories.
5.12 China's chestnut accounted for about 22 percent of the estimated world production, about 450,000 tons, in 1995. About 30 to 40 percent of China's production has been exported mainly to Japan and other Asian countries. Due to rising domestic demand, the average market price for dried chestnuts increased by more than 20 percent annually during 1986-96. Similarly, walnut has also enjoyed strong market demand. Its oil and fruit are nutritious and can be processed into a variety of products, and its wood is highly valued for furniture and other uses. Most walnut production would be sold on the domestic market for processing, though a small share would be exported. At present, Sichuan and Shaanxi produce about 4 percent of China's total chestnut and walnut output, and project production would double current output in the two provinces. Although international and domestic demand is increasing for both products, further market analysis should be carried out. Tea production in the project area would target the high quality and specialty brands end of the domestic market. No market difficulties are anticipated for these preferred teas, which are currently in short supply. At present, annual world production of ginkgo nuts amounts to 6,000 tons, of which about 80 percent is produced in China. Given the estimated domestic demand of 50,000 tons, all ginkgo nuts produced under the project would be sold on the domestic market for fresh consumption and processing. Gingko leaves would be sold on the domestic market for medicinal compound extraction, which would in turn be sold in both domestic and export markets. Gingko wood, used for high-quality furniture and art works, would be sold domestically. Incremental Eucommia production under the project would amount to less than 17 percent of the total current production in the two provinces. Although total supply is projected to increase quickly enough to reduce real prices over time, it would still provide a reasonable margin for local growers. - 56 -
5.13 A variety of project medicinal or nutritional cash crops would exploit market niches. Extracts of Peltate yam-which is best grown in southern Shaanxi-are in high demand as key ingredients for many pharmaceuticals. Due to increased export opportunities, the domestic market price rose from Y 270,000 per ton in 1992 to Y 480,000 in 1995. Chinese goldthread and Gastrodia are widely used traditional Chinese medicines. Project output of these products would comprise a very small fraction of the total market. The starch from Amorphophallus-used traditionally as a food supplement-has been exploited by both domestic and other Asian markets for its nutritional value. Its price climbed from Y 8,000 per ton in 1992 to Y 13,000 in 1995. About half the project output would be marketed domestically, and the other half would be exported to established markets overseas. Shaanxi has a long tradition in cultivating edible fungi, which are highly preferred for their nutritional and medicinal values. Under the project, farmers would also produce a wide range of other cash crops (such as assorted medicinal herbs and vegetables) and tree crops (including a wide variety offruits). The incremental production of these products would be small, and mainly targeted at local markets. The incremental production of fodder, fuelwood, and timber would be marketed within the project areas or consumed on-farm.
5.14 Livestock Products. Increasing demand for livestock products has accompanied rising incomes, and China's livestock subsector has undergone rapid growth during the past 18 years. By world standards, however, current output levels remain modest when assessed on a per capita basis. In the project areas, furthermore, current per capita production of meat and eggs is only about half of the national average. Local demand is therefore expected to more than match project incremental production of meats and eggs.
5.15 TVE Outputs. All agroprocessing feasibility studies would include a review of commercial viability, and it is expected that incremental production would be absorbed without difficulties through existing domestic and export markets. Given the high income elasticity of demand for processed fruit, vegetables and meat, expected growth in per capita income would lead to increased sales of processed goods from local TVEs. While most TVE production will meet local demand, small amounts of fruit, silk and medicinal herbs would be exported through existing channels. Construction materials would be largely absorbed by strong local demand from the construction industry. - 57 -
6. BENEFITS AND RISKS
A. BENEFITS
6.1 The project would improve the income levels and well-being of about 2.3 million absolute poor. The main project benefits would be (a) increased income levels by improving upland agricultural productivity, (b) better access to off-farm employment opportunities through the development of TVEs and labor mobility, (c) improved access to social and other basic services by increasing access to markets, safe drinking water, electric power, education, health and other social services, (d) stabilization and reversal of upland environmental destruction through land improvement and natural resource conservation works, and (e) improved (i) poverty project design and implementation capacity and (ii) poverty monitoring at the project and national levels.
6.2 Increased Income and Employment. The project would directly increase beneficiaries' incomes through (a) increasing production of grain, cash and tree crops and livestock, and (b) providing greater opportunity for off-farm employment in local TVEs and more distant job markets. Farm productivity increases would derive from the combined effect of a variety of specific investments and improved technologies implemented through integrated village development programs. Off-farm employment opportunities would be provided to about 188,500 upland poor in rural enterprise within their counties (33,850 jobs) through the TVE development component, and within (36,000 jobs) and outside their provinces (118,700 jobs) through the labor mobility component. These jobs would provide annual net incomes per worker of at least Y 900, Y 1200, and Y 1800, respectively. In combination with expected increases in on-farm family income, it is estimated that average annual per capita income in the project areas would double in real terms at full development.
6.3 Improved Social and Other Basic Services. QEP would directly improve primary education for most of the 330,000 school-age children in the project areas. Tuition assistance would enable about 34,000 absolutely poor children per year to enroll in schools and complete their primary education, leaving about 30,000 children without access. Similarly, village health care funds under QHP would greatly augment the delivery of basic health services to project area children and adults. It is expected that infant mortality rates would be reduced from more than 10 percent at present to less than 4 percent at full development, and maternal mortality would be reduced by more than 50 percent. The incidence of endemic diseases, such as iodine deficiency and fluorosis, would also be significantly reduced. Gravel roads would link 780 project villages to the existing network of county roads. In addition to providing job opportunities to local inhabitants, the construction of these rural roads would provide isolated villages much improved access to markets, which will encourage and support higher levels of - 58 - agricultural production and marketing. Provision of safe drinking water to some 466,000 project beneficiaries would reduce the incidence of diarrheal and other water-related diseases, and would reduce the time and labor women are required to spend supplying water for their families and livestock.
6.4 Enhanced Beneficiary and Community Participation. From the outset of preparation, the project adopted a participatory strategy in which upland farmers helped design a menu of options to address their development needs. By emphasizing integrated village development and household training, the project would demonstrate and strengthen the capacity of village organizations to manage their own resources and development activities. The integrated village production system, once established, should become a key factor in sustaining land and farmer development. Particular attention has also been given to ensuring that women are actively involved in the project and derive positive benefits.
6.5 Environmental Protection. The project would have a positive effect on the environment through subproject investments in land terracing works, water storage, agroforestry, and other on-farm soil conservation works. Most importantly, project households would take part in planting and maintenance of tree, bush and pasture species on more than 40,000 ha of steeply sloped hillsides and wastelands. Together, these investments would reverse further degradation of the fragile ecosystem, reduce runoff and soil loss, and contribute to the rehabilitation of degraded grassland and forest areas.
B. COST AND RENT RECOVERY
6.6 Cost recovery for the land and farmer development component would involve several elements. The cost of chemical fertilizer, seeds, agrochemicals, animals, feed and other agricultural and livestock inputs would be recovered by payments from beneficiaries. Some of the costs of research and training would be recovered either by fees levied directly on beneficiaries or through taxes paid on project production. Services provided by veterinary and other agricultural services support staff would be recovered through service fees. The costs for the labor mobility component would be recovered through wage deductibles paid by those laborers successfully placed under the project. The cost recovery analysis of the representative villages shows that, at present tax rates, project charges would be sufficient to cover project costs with a recovery index of 100 percent. Rent recovery averages 42 percent at full development and 78 percent discounted over the life of the project (Annex9).
C. FINANCIAL AND ECONOMIC ANALYSIS
6.7 Financial and economic analysis for the project was undertaken on the basis of an analysis of a representative village program (including labor mobility activities) and selected representative TVE subprojects. The village program is representative of the mountainous project area of Sichuan and Shaanxi. Financial and economic rates of return were estimated for the village program and for individual project activities under the program. Farm model analysis was also carried out to assess the financial impact of the - 59 - program on the farm households. The selected TVE investments include tea, potato, taro and mineral processing subprojects.
6.8 Financial Analysis. The analysis indicates that the financial rate of return (FRR) for the village program is about 38 percent, with FRRs for various activities ranging from 12 to 67 percent (Ann=.2). The financial return of the village program would provide adequate incentives for farmers to adopt the strategies proposed by the project. Farm model analysis for the program illustrates that with an average investment of about Y 500 per person, farmers' per capita annual grain production would increase to about 360 kg at full development. During the same period, it is expected that farmers' annual per capita net income would double in real terms. The farm model analysis also illustrates that the project's village programs would be financially sustainable since, even in the early years of the project, net cash income generated by the labor mobility, livestock and cash crop activities would be more than enough to meet cash requirements of intensified grain production.
6.9 The financial analysis indicates that the FRR for the labor mobility component is about 34 percent, even after assuming a full year postponement of the revenue stream, very conservative estimates of the job retention rate (viz., 60 percent by the fourth year of employment), and generous living expenses (50 percent of the total wage income). The strong FRR is consistent with the extreme wage rate differentials between poor rural areas and more prosperous urban and rural areas (para. 2.27). For the TVE component, enterprise FRRs range between 22 and 30 percent. These returns would be adequate to meet interest and loan repayment obligations and guarantee attractive rates of return to equity investors. Sensitivity analysis shows that most FRRs are relatively robust to wide changes in input and output prices (Annex9).
6.10 Economic Analysis. Economic farm-gate prices are calculated for tradable commodities and inputs using border prices as reported in the Bank Group's commodity price forecasts, adjusted for transportation and marketing margins. For nontradable items, financial farm-gate prices were assumed to represent economic prices where markets are not regulated. The shadow wage rate for unskilled labor has been estimated at Y 6 per day, reflecting high unemployment in the project area. Investment costs are expressed in economic values through the application of conversion factors. All economic values are converted to local currency at the prevailing official exchange rate of Y 8.3.
6.11 The projectwide economic analysis excludes the education, health, rural infrastructure, institution building and poverty monitoring activities because it is impractical to quantify their benefits. However, these activities are essential to the long- term success and sustainability of the project and no doubt have very high economic and social returns. Estimated economic rates of return (ERRs) for the project's other activities are about 43 percent for the village program, 43 percent for the labor mobility component, and 47 to 71 percent for the subprojects under the TVE development component. For the project as a whole, the ERR is estimated to be at least 40 percent. - 60 -
Sensitivity analysis indicates that the ERRs are relatively robust to wide changes in input and output prices (Arn&2).
D. RisKs
6.12 Complexity. The project addresses problems of chronic absolute poverty and natural resource degradation in an area where previous single-sector interventions have not led to sustainable reductions in poverty. The greatest strength of the project-its focused multisectoral rural development approach-comes at the inherent cost of greater than average complexity and greater difficulties in implementation. This risk was acknowledged prior to the outset of project preparation, and has been effectively countered by (a) the project's unique organizational and management structure, (b) a strong institution and implementation capacity building program, and (c) the full involvement of the beneficiaries and village communities in the design and implementation of the project. In addition, the project relies on an integrated package of proven technologies and interventions. County-level governments, where leadership required for effective implementation is more sustainable due to the local importance of the project, have extensive experience with these technologies and interventions. Successful implementation of SWPRP during 1995-96 appears to have confirmed that this unique organizational and management structure can overcome the concerns of above average complexity and implementation capacity requirements.
6.13 Component-Specific Risks. The individual project components also have specific associated risks. For the land and farmer development component, there is a risk of slower-than-expected adoption of improved farming practices, resulting in slower realization of economic and environmental benefits. However, the improved techniques would (a) be integrated with existing local farming practices, (b) require limited material inputs, and (c) be introduced, in some cases, on a pilot basis. The project's emphasis on strengthening the extension service through technical assistance and provision of required subject-matter specialists, and training of farmer-technicians and demonstration households is also designed to minimize these risks. The project's participatory approach is designed to gain the trust and involvement of beneficiaries and to generate a sense of ownership in project activities. There are significant market risks for several of the cash and economic tree crops, but these risks are considered to be acceptable (paras. 5.10- 5.13). Several activities (such as terracing, etc.) under the land and farmer development component would directly mitigate the risks of drought.
6.14 The labor mobility and TVE components face the risks of weak monitoring of worker conditions and sudden changes in market conditions. CWHRDC, which has already established a highly effective monitoring system, would work with LGPR, the provincial Labor Bureaus and ACWF to monitor and evaluate labor mobility activities. A pilot-phase evaluation would also identify operational issues, and make necessary adjustments. The diversified portfolio of small-scale TVEs has been developed with attention to commercial viability. While specific TVEs face higher demand and price - 61 - fluctuations (notably silk reeling and tea processing), the majority of products are intended for use in growing local and provincial markets.
6.15 Sustainability. The conception and preparation of this project have benefited from a high degree of Government commitment and from LGPR's experience with the Government's poverty reduction efforts since 1985. Project planning and implementation capacity of FCPMC and the PADOs in the project areas would be strengthened through the institution-building component, which would also attach great importance to project monitoring and evaluation. The sustainability of the project would depend heavily on the full participation of rural communities, including the integration of women in project activities. By promoting and strengthening village-level organizations, putting more emphasis on grassroots participation, and building local PADOs' project implementation capacity, the project is expected to ensure sustainability. To assess progress toward implementation, not only information from project monitoring and evaluation would be used, but also the comprehensive poverty monitoring reviews organized by SSB using annual surveys. - 62 -
7. AGREEMENTS REACHED AND RECOMMENDATION
7.1 At negotiations, assurances were obtained from the Borrower that:
(a) (i) labor mobility would be strictly voluntary and undertaken on the basis of a program acceptable to the Bank Group, (ii) a monitoring and reporting system satisfactory to the Bank Group (such as that established by CWHRDC for SWPRP, focusing on fair treatment of workers and workplace safety) would be finalized and implemented at the county, provincial and national levels no later than September 15, 1997, and (iii) the Borrower, as part of its overall project monitoring (para. 4.17), would prepare and submit a detailed labor mobility component monitoring report to the Bank Group by March 15 and September 15 of each year (para. 3.5);
(b) all dams rehabilitated under the project would be maintained and inspected annually in accordance with sound engineering practices, under arrangements satisfactory to the Bank Group (para. 3.12);
(c) the project provinces would ensure that project households would receive individual land use rights for a term of not less than 30 years for the land they terrace, irrigate, drain, or plant to perennial crops under the project (para. 3.20);
(d) (i) the project provinces would be required to complete appraisal of the TVE activities in accordance with guidelines acceptable to the Bank Group, (ii) these activities would be included in the project subject to the Bank Group's final approval, and (iii) for TVE subprojects implemented by enterprises, the enterprise would have to demonstrate its creditworthiness and Bank Group funds would be onlent on terms and conditions acceptable to the Bank Group (para. 3.24);
(e) as a prerequisite to inclusion of a TVE activity, the provincial EPBs would (i) determine whether the TVE would require effluent treatrnent facilities, (ii) review and approve the final designs of the necessary effluent treatment facilities prior to beginning construction, and (iii) supervise the plant's implementation and maintenance of effluent monitoring and treatment systems (para. 3.27);
(f) Bank Group proceeds would be onlent to the microfinance cooperatives (i) by the project provinces for 15 years (including 5 years of grace) at an annual interest rate of at least 2.88 percent, and (ii) on conditions acceptable - 63 -
to the Bank, including that the cooperatives have adopted an acceptable operating manual governing their lending operations (para. 3.33);
(g) FCPMC would provide an annual plan to the Bank Group by December 1 of each year that would include a list of proposed research, training, study tours and technical assistance under the project for the coming year (para. 3.35);
(h) each project province would implement an education and a health program acceptable to the Bank Group (paras. 3.39 and 3.40);
(i) consolidated accounts of all components would be maintained for annual auditing by auditors acceptable to the Bank Group and the audited accounts, including the Special Account, together with the auditor's report, would be submitted to the Bank Group within six months of the close of each financial year (para. 3.57);
(j) pesticides to be provided under the project would be approved by the Bank Group and would be stored and handled in accordance with guidelines satisfactory to the Bank Group (para. 3.58);
(k) all project activities would comply with sound environmental standards, and necessary mitigation actions to fulfill the recommendations contained in the Environmental Assessment Report would be included in the annual work programs forwarded to the Bank Group (para. 3.58);
(1) (i) resettlement required under the project would be carried out in accordance with the RAP, and (ii) any currently unanticipated resettlement would be carried out in accordance with a RAP developed on the basis of the principles and policies established in the RAP and approved by the Bank Group (para. 3.60);
(m) FCPMC would be staffed at levels, and maintained with functions and responsibilities, acceptable to the Bank Group (para. 4.3);
(n) the provincial PMOs would (i) be staffed at levels, and maintained with functions and responsibilities, acceptable to the Bank Group, and (ii) prepare and furnish a detailed annual budget and work plan, including training, acceptable to the Bank Group, by December 1 of each year, for project implementation the following year (para. 4.7);
(o) (i) MOF would make the proceeds of the IBRD Loan and IDA (ITF) Credit available to the three project provinces at 2 percent interest rate per year with a repayment period of 17 years, including a 5 year grace period, and (ii) the foreign exchange risk would be borne by the provincial governments (para. 4.12); and, - 64 -
(ii) the foreign exchange risk would be borne by the provincial governments (para. 4.12); and,
(p) the Borrower, through FCPMC, and the project provinces, through their provincial PMOs, would prepare for the Bank Group a mid-term report of the project by June 30, 1999 (para. 4.15).
7.2 Subject to the above agreements and conditions, the proposed project would be suitable for a Bank loan of $30.0 million for 20 years, including 5 years of grace, at the Bank's standard variable interest rate for LIBOR-based US dollar single currency loans, and an IDA (ITF) Credit of SDR 108.5 million ($150 million equivalent) on standard terms, with 35 years maturity, to the People's Republic of China. China: Qinba Mountains Poverty ReductionProject Provincial, County,and ProjectArea Statistics Table 1: DemographicStatistics
Project Counties \A Project Townships \_ Project Villages \_ PROVINCE Total Administrative Natural Rural Rural Total Administrative Natural Rural Rural Administrative Natural Rural Rural County Townships villages villages households Population Townships villages villages households Population villages villages households Population 1 2 3 4 5 6 7 8 9 10 11 12 13 14
SICHUAN 701 7.934 29.004 2.653.885 9.067.726 129 1.213 4.743 305.317 1.133.317 1.194 4.608 295.905 1.117.664 Xuanhan 74 769 769 281,795 1,003,896 15 121 121 29,561 110,027 121 121 28,263 110,027 Cangxi 56 734 4,982 215,622 697,879 10 100 703 26,312 93,343 100 703 26,312 93,343 Chaotian 25 214 214 50,460 189,290 10 81 81 14,664 57,963 81 81 14,655 57,963 Tongjiang 77 424 524 169,795 609,789 9 80 80 22,617 92,121 80 80 22,617 92,121 Wangcang 35 954 862 93,290 342,941 13 116 862 23,232 89,035 116 862 23,232 89,035 Guangan 45 358 858 311,262 1,020,767 6 81 81 24,636 86,773 81 81 24,323 86,773 Yilong 60 844 844 257,310 912,800 9 114 114 28,356 102,392 114 114 27,895 102,392 Quxian 86 694 6,605 330,851 1,163,555 11 86 780 31,173 115,975 86 780 30,974 115,975 Langzhong 59 772 6,268 258,102 759,870 8 106 731 31,167 103,158 92 640 26,571 88,405 Nanjiang 74 526 526 147,229 524,900 24 116 116 23,250 88,300 116 116 22,188 88,300 Jialing 37 557 5,464 180,343 664,039 7 98 960 26,936 100,197 93 916 25,940 99,297 Nanbu 73 1,088 1,088 357,826 1,178,000 7 114 114 23,413 94,033 114 114 22,935 94,033
SHAANXI 516 3.913 23.856 800.885 2.842.873 201 1.547 242.839 966.62 1.547 233.441 966,620 1 Ziyang 61 551 75,200 306,532 22 205 27,710 109,566 205 27,710 109,566 @ Ningshan 28 144 19,500 63,046 12 56 7,613 28,441 56 6,852 28,441 1 Hanyin 41 263 76,500 259,530 12 73 13,345 51,133 73 13,139 51,133 Ankang 101 879 229,930 749,163 39 319 52,928 217,709 319 51,983 217,709 Zhengba 48 474 70,910 252,608 22 247 34,490 131,917 247 33,180 131,917 Xixiang 48 350 89,502 358,036 18 136 24,686 99,383 136 24,686 99,383 Lueyang 41 260 48,375 150,144 15 105 12,292 54,201 105 11,139 54,201 Ningqiang 54 366 81,590 295,494 20 132 28,309 107,933 132 25,881 107,933 Zhenan 58 421 68,721 266,333 24 176 27,145 110,454 176 25,787 110,454 Zhashui 36 205 40,657 141,987 17 98 14,321 55,883 98 13,084 55,883
NINGXIA 77 812 4.202 212.780 1094.f801 31 335 1.636 74.875 402394 2_ 96 44.814 235.597 Jingyuan 9 105 421 21,000 95,000 5 47 214 9,090 45,123 41 180 7,674 37,593 Tongxin 18 238 867 56,438 279,615 8 124 403 26,113 133,228 61 235 13,450 67,167 Haiyuan 24 166 1,104 57,062 316,727 9 65 349 16,926 93,109 50 249 12,804 67,977 Xiji 26 303 1,810 78,280 403,459 9 99 670 22,746 130,934 48 302 10,886 62,860
TOTAL 1,294 12,659 57,062 3,667,550 13,005,400 361 3,095 6,379 623,031 2,502,331 2,941 5,574 574,160 2,319,881 . > 0Q P
\l Total numberof townships,administrative villages, natural villages, households,and populationin theproiectcounties. \_ Total numberof proiecttownashi and the total numberofadministrative villages,natural villages, households,and population in theseprojeettownshins. \_ Total numberof Drojct administrative villages,and the total numberof natural villages, households,and population in theseDroiect administrative villaises. China: Qinba Mountains Poverty ReductionProject Provincial, County. and Project Area Statistics Table 2: Accessto Social Servicesand Rural Infrastructure
ProvinciadAvr. Psimay Education Adult Maternal Underfive Florosis Iodine Clean Per capita No. of villages No. of villages No. of villages Proi county avg. NER Drop-out OTGR illiteracy mortality mortality incidence deficiency deliveiy medical ex,p.\ with accessto with accessto with accessto Project fship\a (/) rate(%) (/6) ratel(.) (li/e) (el.s) (eal) ('(in) (/.) (yuan) roads drinkingwater electticity (1) (2) 3.0 (4) (5) (6) 7.0 (8) (9) 10.00 (I1) (12) (13)
SICHUIAN 9.4 1.4 92.L 5.0 l21 76.07 1A 60.1S 65.2 5.78 61H698 61.819 6S29 Proj. counties avg. 91.6 6.0 S6.3 12.2 11.0 3.17 5,S81 4,897 7,414 ProieeT'shibi NA. 101 77.1 15J9 R.R, 81. 16.4 18. 2.16 643 497 i Xuanhan 67.4 6.8 87.4 14.2 2.60 80.10 0.0 92.00 60.0 0.41 52 27 90 Cangxi 81.1 5.1 77.0 21.4 1.42 7200 0.0 60.00 85.0 1.07 94 49 100 Chaotian 80.6 10.5 76.4 23.5 2.50 88.00 21.1 43.00 53.0 3.50 26 16 75 Tongiiang 84.6 14.1 689 14.7 1.81 65.50 0.0 32.60 450 1.40 55 3 49 Wangcang 90.9 7.4 84.9 14.0 3.14 8435 4.7 56.00 78.1 196 62 60 58 Guangan 88.1 68 88.3 9.8 1.31 68.53 0.0 61.0 0.64 35 25 81 Yilong 87.8 15.9 84.1 17.8 1.43 73.40 0.0 73.30 80.5 3.55 55 26 114 Quxian 74.0 10.7 68.0 14.5 151 57.20 0.0 95.00 65.0 2.16 35 50 62 Langzhong 83.8 128 82.2 22.7 1.30 50.00 0.0 44.00 60.0 0.46 34 39 99 Nanjiang 86.0 7.3 77.0 12.1 2.15 56.00 0.0 67.00 58.0 0.61 76 73 94 Jirding 76.0 9.5 74.0 15.8 1.56 76.00 0.0 80.00 61.7 1.05 45 28 93 Nanbu 85.3 15.2 81.2 9.8 1.53 72.00 69.0 79.30 75.3 9.00 74 101 107
SHAANXI 4SS0 4.5 231 90.0 Proj. counties avg. a% Proiet T'hi 84.4 74 tl71 Ziyang 90.0 55.50 6.6 1.84 43.7 81 105 Ningshan 81.3 65.80 2.00 63.7 24 30 Hanyin S0.4 52.00 2.9 1.15 67.4 45 35 Ankang 89.0 71.80 39 1.65 45.0 132 187 Zhengba 89.9 84.60 6.2 210 60.3 97 97 Xixiang 85.7 79.20 1.75 65.1 69 21 Lueyang 88.0 99.60 1.56 62.2 33 58 Ningqiang 86.5 67A10 180 65.5 92 76 Zhenun 83.4 7210 1.70 61.7 94 139 Zhashui 80.2 68.80 1.65 50.4 67 69
NINGXIA 2 3.0 L00 23.60 2.310 21 2A6 Proj. counties avg. 89.8 5.8 19.7 0.1 7.48 7." 650 890 812 Proict T'shi "A 3 7. 21.20a.2 S 00 L9g0 U 231 165 335 Jingyuan 905 7.2 28.6 5460 0.0 14.00 63.5 3.16 39 30 47 Tongxin 85.1 6.2 25.3 45.90 0.0 2.40 29.6 1.88 79 52 124 Haiyuan 83.5 5.6 14.3 58.53 0.0 6.80 429 1.33 47 45 65 Xiji 86.0 8.2 24.5 59.56 0.8 9.60 49.0 1.62 66 38 99
Note: \_ Project townships,unless indicated otherwise, always includeall the projectadministrative villages. \b NER (net enrollment rate) is the proportion of school-agechildren (ages7-13) enrolled in school. ID ) OTGR (on-time graduationrate) is the proportion the age 15children graduatedfrom primaty school X Drop-out rate is theproportion of schoolchildren thatdropped out during the past year. \_ Percapita medical expenditureis the averagerural per capitagovemment expenditure on healthcare calculatedat the county level. o t-h .ls China:Qinba MountainsPoverty ReductionProject Provincial, County, and Project TownshipsStatistics Table 3: Proiect Area Basic Productionand Income Statistics
1. Cultivated Land 2. 3. Forestry Sown Area PROVINCE Total Basic of which: Grassland Forested of which: Grain Grain Livestock/ % pop % pop. Proj. Counties land area Subtotal Farm land Paddy area Subtotal Area Tree crops Subtoal sownarea production Meat prod. with grain with net income p.T'AhiV ('000 ha.) ('000 ha.) ('000 ha.) ('000 ha.) ('000 ha.) ('000 ha.) ('000 ha.) ('000 ha.) ('000 ha.) ('000 ha.) ('000 ton) (ton) \a <160kg SICHUAN Proj. counties 2,949 525 233 255 506 1,031 742 n.a. 1,087 867 3,448 494,441 12.7 28.3 Proiect T'shi 574 i7 26 _ 108 25 157 21 1u 105 341 35.73 29 84.8 Xuanhan 83.51 7.12 2.24 3.16 15.75 43.35 32.37 2.92 11.81 9.13 30.57 3,200 48.6 71.0 Cangxi 35.64 5.02 2.46 2.48 5.41 17.85 6.60 0.63 8.63 7.18 28.98 3,317 22.8 98.7 Chaotian 51.22 5.34 1.55 0.23 23.44 16.35 9.52 2.87 8.55 7.46 16.81 1,391 30.0 90.0 Tongjiang 69.87 6.19 1.53 3.01 10.12 39.33 28.54 5.11 11.90 9.52 26.42 2,873 58.8 84.0 Wangeang 116.04 6.76 2.77 1.20 23.03 62.29 28.91 2.65 9.09 8.69 26.87 4,363 17.2 78.5 Guangan 16.38 4.79 1.71 2.75 0.24 3.10 2.33 0.71 8.45 8.45 28.59 2,676 50.4 63.5 Yilong 23.35 5.45 2.62 2.83 2.66 8.57 6.13 1.21 8.02 7.91 29.65 2,321 27.7 75.4 Quxian 24.79 7.33 4.08 5.83 0.63 2.97 1.41 0.37 21.04 10.55 39.43 4,365 26.4 92.1 Langzhong 23.68 5.32 0.38 1.86 1.00 11.33 6.94 0.01 8.69 8.55 31.15 1,973 32.3 84.0 Nanjiang 90.73 6.76 1.20 2.60 24.80 41.70 25.20 3.00 10.70 8.67 25.86 3,058 8.8 94.1 Jialing 20.63 7.73 2.36 2.68 0.52 2.03 2.98 0.49 14.50 11.54 29.73 4,217 10.4 88.5 Nanbu 17.69 5.37 2.68 0.84 0.13 4.93 6.40 1.38 10.21 7.68 26.99 1,984 9.0 80.0 SHAANXI Proj. counties 2,952 284 n.L S. 324 1,789 1,222 n.a. 491 423 830 90,554 21.9 36.0 Proiect T'shii 121 115 47 .. 163 767 399 ns. 198 lo 4 23,070 60.9 74.7 Ziyang 97.79 15.40 6.44 36.50 23.66 11.96 30.79 24.02 34.89 2,736 39.2 72.7 Ningshan 133.28 3.20 1.25 5.14 117.27 91.47 6.94 6.37 7.71 733 40.0 67.0 Hanyin 44.85 6.60 2.63 6.26 29.19 10.01 9.70 8.49 15.84 1,017 30.8 73.2 Ankang 183.56 19.75 10.21 42.58 97.36 43.64 36.50 33.23 55.67 4,434 79.3 74.2 Zhengba 157.65 25.17 7.50 22.72 89.03 22.72 28.49 25.48 40.11 3.350 38.1 71.0 Xixiang 139.80 8.28 4.87 10.34 93.78 17.83 21.26 13.57 31.41 2,450 64.6 78.0 Lueyang 91.42 8.39 2.28 13.26 45.33 27.85 13.20 12.69 17.74 1,350 41.5 81.0 Ningqiang 116.35 11.04 1.89 9.86 70.34 57.18 19.07 17.04 29.33 2,600 45.6 38.2 Zhenan 148.11 10.16 6.54 10.97 100.57 62.34 23.90 19.93 31.23 2,950 65.8 80.1 Zhashui 118.44 6.92 3.33 5.43 100.16 53.51 8.10 7.23 10.30 1,450 88.1 73.8 NINGXIA Proj. counties 1,782 300 102 785 125 85 4 308 253 226.26 36,038 64.8 68.0 ProjiectT'ship 711 1i1 34 301 33 Z 0.6 121 99 60 14.887 80.3 87.9 Jingyuan 41.82 9.97 0.52 16.46 3.52 3.95 0.00 10.61 7.89 12.30 1,050 52.8 92.0 '> Tongxin 285.20 50.39 17.00 160.87 1.13 0.91 0.48 44.87 36.04 14.37 5,646 88.0 93.8 Haiyuan 259.60 30.30 3.63 100.01 1.23 1.05 0.01 25.13 20.16 12.09 3,248 83.0 81.6 tD (D Xiji 124.03 40.65 13.20 23.70 26.77 16.06 0.09 40.36 34.72 21.04 4,943 80.0 86.0 0 \a Beef, pork, mutton, chicken. China:Qinba Mountains Poverty Reduction Project Provincial,County, and Project Area Statistics Table4: ProjectArea Averaee Climatological Data Temperature(°C) Elevation Frost-free PROVINCE Absolute Absolute Rainfall Evaporation Average Min. Max. days County Mean Max. Min. (mm) (mm) (m) (m) (m) (day) SICHLUAN 16.7 41.7 8.5 L9 1J.15 892 207 2-507 286 Chaotian 15.2 40.2 -8.5 1,000 985 1,232 475 1,988 230 Wangcang 16.1 39.8 -7.9 1,172 1,378 1,378 380 2,281 276 Cangxi 16.8 39.6 -4.6 1,039 1,455 867 357 1,378 288 Tongjiang 16.7 40.4 -6.2 1,108 1,165 1,199 308 2,089 281 Nanjiang 16.1 40.3 -7.1 1,188 1,276 1,438 370 2,507 259 Xuanhan 16.6 39.2 -4.3 1,215 1,084 950 278 2,458 292 Quxian 17.7 41.7 -3.2 1,171 1,206 704 212 1,196 327 Yilong 15.6 37.1 -5.7 1,140 1,202 550 309 793 299 Langzhong 17.1 38.6 -4.1 1,013 1,175 608 328 888 287 Nanbu 17.2 39.9 -5.0 976 994 562 298 826 285 Jialing 17.4 41.2 -2.8 1,070 1,129 364 248 480 299 1 Guangan 17.6 41.0 -1.5 1,000 1,050 852 207 1,495 310 Os co SHAANXI 13.8 41,7 -17.5 944 1.876 1.074 6 2.965 218 Ankang 15.7 41.7 -9.5 846 853 750 216 2,141 252 Hanyin 15.1 40.1 -10.1 892 1,030 550 296 2,128 258 Ningshan 12.3 36.2 -13.1 925 802 899 540 2,965 215 Ziyang 15.1 41.3 -7.6 1,128 630 1,261 277 2,522 268 Zhengba 13.8 38.0 -10.0 1,786 1,053 1,231 425 2,534 239 Ningqiang 12.9 36.7 -11.6 1,178 823 858 502 2,104 200 Xixiang 14.5 39.7 -10.6 958 910 916 410 2,413 245 Lucyang 13.2 37.7 -11.2 860 909 1,148 587 2,425 236 Zhenan 13.3 39.6 -13.7 804 1,301 1,473 344 2,602 231 Zhashui 12.2 38.4 -17.5 646 1,465 1,656 541 2,802 209 NINGXIA 7_0 38.0 -32.0 434 1.84 1.88 1.260 2.955 150 Xiji 5.3 32.6 -32.0 417 1,504 2,160 1,688 2,633 130 Haiyuan 7.1 34.2 -25.8 389 2,269 1,773 1,336 2,955 165 Tongxin 8.4 37.9 -27.3 278 2,326 1,344 1,260 2,625 151 Jingyuan 6.2 31.6 -26.3 651 1,440 2,275 1,608 2,942 132 (D M 0 Annex 2 - 69 - Annex 2 Rural Infrastructure Component Background 1. The Qinba Mountains and the Loess Plateau are two of the regions in which the present 58 million absolute poor in China are distributed. The former includes the two roughly parallel mountain ranges of Qinling and Dabashan within which are located the 12 project counties in Sichuan and 10 project counties in Shaanxi, while the four project counties in Ningxia are situated in the western part of the Loess Plateau. 2. Lofty mountains, with frequent rock outcrops and dissected by numerous deep valleys, characterize the Qinba Mountains project area, and the rugged terrain is one of considerable precipitousness. Arable land is scarce. A large part of the annual moderate to high rainfall (700-1,600 mm) is concentrated in the months of June-September, and gives rise to severe soil erosion. The Loess Plateau, on the other hand, is characterized by low annual rainfall, low temperature and a short frost-free period, which all adversely affect crop yields. In this ecologically degraded and resource-deficient environment, grain production often fails to reach the level of subsistence requirements. This situation is exacerbated by inadequate or complete absence of rural infrastructure such as water supply, road, electricity, and irrigation facilities, as is the case for many remote and isolated villages in the project area: about 47% of administrative villages are still not connected to the existing network of roads, 16% of administrative villages are still not served by any form of electricity supply, and 30% of the population have no access to safe drinking water. Less than 10% of cultivated land is irrigated for stabilized grain production. The absence of basic facilities makes living conditions harsh and arduous. To reach the nearest water source the villagers have to cover long distances by foot and labour through steep terrains, and the nearest dirt roads are reached only after some kilometers of steep climb and descent by jungle tracks. Considerable labor and effort are thus expended by villagers to bring what small amount of forest or agricultural products they produce to the nearest farmers' market. Furthermore, there are only very limited means of obtaining help from the outside world in the event of an emergency. Component Description 3. The rural infrastructure component forms an integral part of the multisectoral developmental approach to attacking rural poverty and is formulated with the view to ameliorating living conditions in the hitherto remote and isolated villages. Annex 2 - 70 - Targets 4. The specific targets for the rural infrastructure component would be to increase the rural road coverage at the administrative village level to 80%; to extend potable water facilities to cover about 90% of the population in the project area; to provide rural electricity to meet the requirements of agroprocessing, mining and other industries in the project area; and to construct irrigation and land reclamation works for about 13,900 ha of paddy and upland crops. Rural Roads 5. To extend the coverage of rural roads in the project area, 892 km of all- weather gravel roads would be provided, linking 780 administrative villages to the existing network of county roads. Selection criteria would include: (i) roads which would serve a number of villages with a sizable population, and (ii) roads which would serve areas with farmers' markets, rural enterprises, and a concentration of project activities where sufficient generation of traffic volume is expected. The roads would be constructed to Class IV road standards, with the following minimum technical requirements:- Design speed 20 km/hr Width of formation 4.5 m Width of carriageway 3.5 m Radius of road 15 m Stopping sight distance 20 m Maximum grade 11% Minimum depth of roadside drain 0.6 m Design Load for bridges/culverts 10 t Rural Water Supply 6. The rural water supply subcomponent would provide safe drinking water to 466,000 persons in 1,680 villages. Selection criteria would include: (i) villages suffering from seasonal water shortages exceeding 60 days in duration, (ii) villages where the water source is more than one km away or where the elevation difference between the water source and the place where the inhabitants reside is more than 100 m; and (iii) villages where the existing water source is unacceptable, such as water sources containing a high level of fluoride and villages susceptible to epidemic and endemic diseases. 7. Water supply systems would be low-cost. Systems would be designed for daily consumption of 15 to 35 liters per person and would meet current water quality standards for rural water supply in China. Facilities would tap from springs, utilize ground water, divert or pump from streams and would include piped systems with public hydrants, rain collectors Annex 2 - 71 - serving individual households or several households, and shallow wells. Water storages would be provided to sustain supply up to 60-70 days in Sichuan and Shaanxi and 100 days in Ningxia in the dry seasons. Shallow wells would be equipped with hand pumps to prevent contamination. Where sources of supply are adequate and marginal cost within reasonable limits, the facilities would also allow for drinking water for animals. Rural Energy 8. Seventy five km of 35 kV and 669 km of 10 kV overhead transmission and distribution lines and eight mini-hydro power plants with an aggregate installed capacity of 2.2 MW would be installed to increase power supply to the project area. Power facilities would meet primarily the requirements of agroprocessing plant and light industries financed under the project, the needs of other non-project enterprises in the project area, and the domestic requirements in villages located in the vicinity of power lines. About 116,000 households in 786 villages would be served by the project rural electrification schemes. Technical criteria for selection of mini-hydro schemes would include (i) good hydraulic head and dependable run-of-river flow; (ii) short distribution lines from plant to demand centres; (iii) for stand-alone plants (that is, plants not connected to the power grid), compatibility of characteristics of demand load and power generated. Electrical works would conform to national technical standards currently in force. 9. In some areas of Sichuan Province where there is a chronic shortage of fuelwood due to land degradation and progressive depletion of vegetation and where forest is closed to further exploitation, biogas digesters as a practical means of providing an alternate source of energy would be provided. The rural energy subcomponent would include the installation of 1,828 units of biogas digesters. Water Conservancy Works 10. A variety of small-scale irrigation works would be constructed in Sichuan and Shaanxi to provide supplemental irrigation for about 8,900 ha of existing and new paddy and upland crops. The proposed works would include one small reservoir storage scheme, 530 irrigation ponds, seven pumping stations, 965 on- farm water cisterns, 43 diversion weirs and 640 km of lined canals. In addition, the project would provide, in the semi-arid area in Ningxia, individual household operated microirrigation systems with supplies drawn from wells and small cisterns. 15 tube wells, 2,000 shallow wells and 21,600 cisterns for rain harvesting would be constructed to serve about 4,300 ha. Some 650 ha river beach land would also be reclaimed in Ningxia for crop production. 11. Schemes would be designed to meet irrigation requirements in three out of four years. For storage schemes, runoff coefficients used for computing inflow should be based on reliable data. Availability of ground water for shallow well and tube well microirrigation Annex2 - 72 - should be confirmed, and care taken to prevent over-exploitation. In canal schemes, offtakes with simple flow measuring devices such as the "V-notch" would be provided for proper water control and delivery at the farm level. Preparation and Review of Schemes 12. Proposals for the rural infrastructure schemes have been compiled by the three provincial PMOs on the basis of submissions by county Water Conservancy and Electric Power Bureaus (for water conservancy, rural water supply and rural electrification schemes), county Electricity Supply Bureaus (for rural electricity schemes in Shaanxi) and county Communication Bureaus for rural road schemes). The great majority of the schemes proposed require further preparation and review prior to implementation. In order to insure that each scheme proposed for implementation under the project is technically feasible and economically viable, and that engineering designs for these are prepared to a uniformly high standard, provincial PMOs should ensure that schemes prepared by county technical bureaus are reviewed and approved for implementation. Project schemes should conform to the selection criteria and technical standards. Rural road, rural electrification and water conservancy schemes should have a minimum estimated economic rate of return of 10%, and unit investment costs for individual rural water supply schemes should not exceed RMB Y350 per capita including contingencies. All dams rehabilitated under the project would be maintained and inspected annually in accordance with sound engineering practices, under arrangements satisfactory to the Bank Group. Operation and Maintenance 13. Adequate arrangements would be made for the operation and maintenance of rural infrastructure schemes completed under the project to ensure that the facilities remain in good serviceable conditions during the project implementation period and thereafter. 14. Rural roads constructed to Class IV road standards and certified as such by Communication Bureaus would either be included in the county annual road maintenance programmes or be placed under the charge of township Communication Stations concerned. In the latter case an annual routine maintenance subsidy would be granted by Communication Bureaus with beneficiary villagers providing duty labour for periodical or major repair work. 15. Village committees would be responsible for organizing operation and maintenance of rural water supply systems with full village participation. Normal upkeep and major repair of the completed facilities, operation for daily water supply and water rationing in times of shortage would be discussed by beneficiary villagers prior to implementation. Management committees would be formed and persons appointed to be responsible for looking after the facilities. A water fee would be collected either in cash or in kind to cover full operation and maintenance costs. Villagers would contribute duty labour for major repair work. Annex 2 - 73 - 16. Rural electrification schemes, completed according to technical standards and specifications, would be turned over to county Electric Power Companies. These electric power companies operate as independent enterprises and would recover full costs including costs of operation and maintenance, major repair and capital recovery through tariffs for electricity supply. 17. Operation and maintenance of the water conservancy works completed under the project would be arranged by county Water Conservancy Bureaus. A water fee would be progressively increased to recover full operation and maintenance cost. ANNEX 2 TABLE 1: RURAL ROAD PROGRAMME (Cost figuresshown arebase costs) County Scheme Quantity Unit Rate (Y) Amount (Y) Township Village Population Cost/Person (Y) Sichuan New Roads Cangxi 6 47.4 km 84,330 3,997,242 5 18 16,977 235 Chaotian 5 30.0 km 102,539 3,076,165 5 15 16,075 191 Guangan 10 48.6 km 84,125 4,089,310 6 23 86,773 47 Jialing 7 51.3 km 87,504 4,488,950 7 29 62,744 72 Langzhong 6 25.0 km 95,067 2,376,666 8 22 18,463 129 Nanbu 3 41.7 km 93,508 3,899,299 5 29 37,523 104 Nanjiang 2 29.5 km 95,054 2,804,092 6 18 7,660 366 Quxian 7 34.1 km 91,747 3,127,090 8 36 40,752 77 Tongjiang 4 27.1 km 95,109 2,579,365 4 16 13,868 186 Wangcang 2 40.0 km 103,443 4,137,704 3 14 9,008 459 Xuanhan It 40.0 km 95,132 3,805,299 10 26 21,980 173 Yilong 7 34.0 km 92,308 3,138,472 7 30 29,132 108 SicuhunTotal 70 44.7 km 92S30 41.519.654 74 276 360.955 115 4.4 Shaanxi New Roads Ankang 7 76.0 km 96,771 7,354,596 7 69 34,066 216 Hanming 4 37.0 km 96,771 3,580,527 9 35 25,228 142 Lucyang 2 23.0 km 96,771 2,225.733 7 57 25,590 87 Ningqiang 5 74.0 km 96,771 7,161,054 5 16 9,600 746 Ningshaan 2 15.0 km 96,771 1,451,565 2 9 3,741 388 Zengan 3 36.0 km 96,771 3,483.756 4 9 4,378 796 Zhashui 1 22.0 km 96,771 2,128,962 4 24 11,270 189 Zhiyang 6 41.0 km 96.771 3,967,611 6 25 14,526 273 Jmpred Xixiang 6 36.0 km 54,647 1,967,292 9 114 44,413 44 Roads Zengba 2 83.0 km 54,647 4,535.701 13 146 80,081 57 ShaanxiTotal L 443. km 85.456 37 S56.797 _ 5e4 252.893 Project tobl 108 891.7 km 89,016 79376.451 140 780 613848 129 ANNEX 2 TABLE 2: RURALWATER SUPPLY PROGRAMME (Cost figures shown are base costs) Service County Quantity Unit Rate (Y) Amount (Y Township Village Coverage 1 Sichuan Cangxi 28,810 person 144 4,153,492 10 100 100 % Chaotian 18,353 person 164 3,017,810 10 81 96 % Guangan 15,200 person 137 2,081,487 6 81 80 % Jialing 23,472 person 145 3,401,683 7 35 87 % Langzhong 16,977 person 140 2,376,664 8 69 81 % Nanbu 8,648 person 144 1,245,410 6 62 85 % Nanjiang 29,810 person 168 5,009,473 17 83 83 % Quxian 28,000 person 123 3,431,793 11 86 95 % Tongjiang 24,490 person 172 4,203,612 9 76 100 % Wangcang 15,350 person 164 2,516,105 13 61 83 % Xuanhan 29,310 person 144 4,222,072 15 121 81 % Yilong 24,987 person 157 3,929,197 9 114 100 % Sichuan Total 263.407 person 150 39.588.798 121 969 92 ! Shaanxi Ankang 33,938 person 162 5,485,289 39 121 95 % Hanming 4,724 person 220 1,039,490 12 37 97 % Lucyang 17,400 person 122 2,121,724 15 73 90 % Ningqiang 3,224 person 237 764,915 7 18 98 % Ningshaan 2,677 person 103 274,803 3 6 81 % Xixiang 27,890 person 172 4,784,566 15 80 95 % Zengan 36,052 person 163 5,860,509 24 119 89 % Zengba 37,100 person 101 3,748,182 22 120 93 % Zhashui 14,850 person 103 1,536,575 14 38 82 % Zhiyang 14,793 person 153 2,267,386 21 87 95 % ShaanxiTotal 192.648 person 145 27.883.440 172 699 22 No Ningxia Jinyuan 3,667 person 248 909,400 3 3 100 % Xiji 6,185 person 126 780,547 3 10 100 % NingxiaTotal 9.5 person 172 1.689.947 6 13 100 A Project Toal 465.907 person 148 69.162.185 299 1.681 1/ Coverage as a result of project ANNEX 2 TABLE 3: RURAL ELECTRIFICATION AND RtURALENERGY PROGRAMME (Cost figures shown are base costs) County Quantity Unit Rate (Y) Amount (Y) Townshi Village Population Cost/Pers A. Rural Electrification Sichuan Mini-hydro station Nanbu 320 kW 3,697 1,183,024 2 21 7,173 165 Nanjiang 520 kW 2,623 1,364,154 2 19 5,861 233 S840 kW I=2 2.547.178 4 40 13.034 35 kV Transformer station Quxian 2000 kVA 469 938.400 24 31.570 2 35 kV transmission line Quxian 13 km 59,048 767,622 8 24 n.a n.a Yilong 12 km 57,908 694,899 6 77 72,439 10 Sub-total X22 km 58.501 1.462.521 IA 101 10 kV distribution line Quxian 10 km 25,817 258,172 8 24 n.a n.a Tonjiang 109 km 25,309 2,770,614 6 22 25,555 108 Yilong 85 km 25,318 2,140,091 9 144 102,392 21 Sub-total 204 km 25.338 5.168.877 23 190 0.4 kV distribution line Quxian _ km 15300 306000 _ 24 Sichuan Total 10,422.976 Q 2X 244.990 43 * Includes costs of all transmission and distribution lines for Quxian x ANNEX 2 TABLE 3: RURAL ELECTRIFICATION AND RURAL ENERGY PROGRAMME (Cost figures shown are base costs) County Quantity Unit Rate (Y) Amount (Y) Townshi Village Population Cost/Pers (Continued...) Shaanxi Mini-hydro station Ningqiang - Shiyang 75 kW 5,000 375,000 1 2 2,200 170 Zengan - Xiangyuan 20 kW 5,000 100,000 1 1 500 200 Zengan - Dayan 20 kW 5,000 100,000 I 1 500 200 Zengan - Yuchuan 20 kW 5,000 100,000 1 2 600 167 Zengba - Yuchuan 400 kW 5,000 2,000,000 1 10 10,800 185 Zhiyang - Baihokou 800 kW 5,000 4,000,000 2 15 16,000 250 Sub-total I.335 kW 5.000 6.675.000 7 31 30.600 1172 35 kV transmission line Xixiang 50 km 50.411 2.520.550 6 50 30.000 84 10 kV distribution line Ankang 110 km 26,000 2,860,000 13 98 49,021 58 Hanming 26 kmn 26,000 676,000 3 14 9,370 72 Lueyang 31 km 26,000 806,000 4 35 17,140 47 Ningqiang 45 km 26,000 1,170,000 14 88 82,811 14 Ningshaan 33 km 26,000 858,000 2 9 4,388 196 Xixiang 10 km 26,000 260,000 3 25 17,920 15 Zengba 100 km 26,000 2,600,000 8 52 48,176 54 Zengan 50 km 26,000 1,300,000 8 12 7,743 168 Zhashui 31 km 26,000 806,000 5 14 1,583 509 Zhiyang 29 km 26,000 754,000 6 51 35,156 21 Sub-total 465 km 26.000 12.090.000 66 398 273,308 44 Shaanxi Total 21,285.550 79 479 333 64 B. Rural Energy - Biogas Digester Sichuan Cangxi 1.828 no 799 1.460.572 1 6.44 ANNEX 2 TABLE 4: WATER CONSERVANCY PROGRAMME (Cost figures shownare base costs) Cost/ County Quantity Unit Rate (Y) Amount (Y Township Village Population Person(Y Sichuan (a) Pumping Station Yilong 100 ha 5.289 528.930 5 5 2.500 212 (b) Irrigation Pond Guangan 85 ha 7,342 622,616 3 36 38,391 16 Jialing 234 ha 10,129 2,370,108 7 73 65,000 36 Langzhong 184 ha 6,048 1,112,855 8 54 3,892 286 Quxian 134 ha 9,113 1,224,843 11 86 4,277 286 Xuanhan 234 ha 3,970 928,871 12 74 53,280 17 Subltotal 871 ha 7.185 6.259.293 41 323 164.840 38 (c) Diversion Weir Guangan 15 ha 3,125 45,940 3 15 12,742 4 Jialing 715 ha 1,171 837,438 7 18 9,003 93 Quxian 29 ha 1,715 49,023 6 15 861 57 Subtotal 758 ha 1.230 932.401 16 48 22.606 41] (d) Cistemn Langzhong 105 ha 14,911 1,565,662 8 60 4,864 322 Nanbu 795 ha 1,907 1,515,726 5 30 11,780 129 Quxian 5 ha 15,819 75,933 10 36 578 131 Sub-total 905 ha 3.490 3.157.321 23 126 17.222 183 (e) Canal Guangan 1,044 ha 1,607 1,676,766 3 19 30,290 55 Langzhong 327 ha 1,500 490,369 8 29 9,775 50 Nanbu 643 ha 3,009 1,934,968 1 16 7,565 256 Wangcang 639 ha 4,531 2,893,520 12 22 11,201 258 Quxian 633 ha 2,659 1,682,433 8 86 20,246 83 Xuanhan 980 ha 3,182 3,118,049 9 48 33,600 93 Sub-total 4.265 ha 2.766 11.796.105 41 220 112.677 105 (ft Small Reservoir Guangan 107 ha 2428 259.788 1 4 3.328 78 SichuanTotal 7,006 ha 3.273 22.933.838 127 726 323.173 71 N' ANNEX 2 TABLE 4: WATER CONSERVANCY PROGRAMME (Cost figures shownare basecosts) Cost/ County Quantity Unit Rate (Y) Amount (Y Township Village Population Person (Y (Continued...) Shaanxi (a)Canal Ankang 979 ha 4,520 4,425,100 34 180 114,330 39 Ningqiang 252 ha 4,520 1,139,000 8 20 10,040 113 Zengba 503 ha 4,520 2,273,600 2 10 3,230 704 Zhashui 151 ha 4,520 682,500 6 8 21,290 32 Shaanxi Total 1.885 ha 4.520 8.520.200 50 248 148.890 57 Ningxia (a) Micro-irrigation Haiyuan 1,200 ha 8,708 10,449,000 6 46 44,713 234 (cistern) Tongxin 1,675 ha 8,708 14,589,126 8 61 61,249 238 Suilkotal 2.875 ha 8.708 25.038.126 14 107 105 962 236 (b) Micro-inigation Xiji 1 333 ha 1.977 2.636.000 4 19 27410 96 (shallow well) (c)Micro-irrigation Haiyuan 125 ha 10i404 1.300.51S 5 12 5.413 240 (tube well) (d) RiverBeach Land Jinyuan 654 ha 9.338 6.102.424 _ 13.828 441 Reclamnation Nngxia Total 4.987 ha 7.033 35.077.065 27: 151 152.613 2 Proiecttotal 13.879 ha 4.794 66.531.103 204 1.12 624.676 107 CD Annex 3 -80- Annex 3 Land and Farmer Development Component Introduction 1. Land and Farmer Development. The common name of the agricultural components of the Qinba and Southwest Poverty Reduction Projects underlines their common overall objective. The project helps households in the project villages to create and maintain a substantial increase in their agricultural incomes, through integrated improvements in land use systems. The approach in both projects is (a) to ensure the targeting of the poor by geographically concentrating the agricultural investment in project villages, (b) to integrate at the administrative village level various development activities which government agencies are experienced in, and (c) to improve poor farmers' access to markets and services. 2. New Features in the Oinba Design. For the Qinba project, the SWPRP component design has been refined in three areas: (a) a strategy for land use improvement has been defined for Sichuan and Shaanxi mountains, and for Ningxia (paragraphs 2.8-2.10 in the main report), (b) the component would be implemented in the form of individual village development plans; these plans are not only planning tools which improve household targeting, but also a set of community activities to support the agricultural development process, and (c) an action plan has been set up to improve the design and delivery of agricultural technology packages. Improvement of Land Use Systems 3. Strategy. The Qinba land use strategy for poor mountain households is based on three principles. First, the project does not design improved land use systems, but helps households improve their own systems. Agricultural land use throughout the project area is already centered around intensively managed terraces. As a result, the project's strategy is based on expanding terraces. The investment includes terracing costs and one year of crop production inputs. The integration of crops, trees and animals is also an existing feature in land use. The project aims at enhancing current integration patterns. Second, small-scale schemes, whether terracing, fodder development or tree plantations, would make better use of soil and climate micro-level diversity, and generally increase the efficiency of household labor. Households would be the main decision-makers for the location of these works, and large scale ones would be avoided. Third, the strategy aims at reversing environmental degradation trends on slopes. 4. Expansion of Terraces in Sichuan and Shaanxi Mountains. Building stone-walled terraces has long been recognized in project villages as a labor-intensive but low external- input intensification means. With labor and soil fertility concentrated on terraces close to houses, the productivity of both land and labor is boosted. Grain crop yields become more Annex 3 - 81 - stable. Two or three crops are relayed-cropped every year instead of a single crop on slopes. In addition, trees are interplanted on terrace edges, while more fodder is obtained from crop residues. However, households need financial support to pay for skilled local workers for the stone works, dynamite, cement and tools. Government organizational support is also useful, since the amount of manual labor (more than 800 days per hectare) is often supplied through large-scale labor exchange among farmers. 5. Expansion of Terraces in Ningxia. In areas with more than 400 mm of annual rainfall, terrace expansion is key to the proposed increase of corn in cropping patterns (and of other high biomass-producing crops such as sorghum). Since it takes about 5 years for the organic matter content to build up, corn would at first replace potatoes and other summer crops on older terraces, while summer crops less demanding than corn would be grown on new terraces. Water-harvesting cisterns will be built on part of the terraces. This will ensure a more stable corn output, and may allow some farmers to shift to micro-irrigated cash crops. During the last two decades, few terraces had been built in the project villages due to insufficient labor (manual terracing can only take place after harvest and before the beginning of in-depth soil frost). Mechanization now offers a new opportunity to expand terraces. Actual construction works will be carried out in accordance with the precise specifications of the Three "Xi" Commission (that is, the Sanxi Commission). Terraces would be completely leveled. The more fertile topsoil would be preserved and put back into place. In the semi- arid areas below 400 mm of rainfall, land development consists of building microirrigation cisterns and wells. Small areas of flatland will be mechanically leveled and plowed. 6. Slope Land Use in Sichuan and Shaanxi Mountains. The expansion of terraces would reduce corn cultivation on steep slopes (which is often done by bush fallowing). Bush fallowing is a non sustainable practice at 330 of North latitude, because of slow vegetation growth during fallow, which farmers only retain when they have no other option for food production. The reduction of cultivation on steeply sloped land would release a substantial amount of household labor for more productive activities, and have a substantial positive impact on the environment. The erosion hazards created by cultivation of steeply sloped fields would be reduced. Encroachment on the forested area would be halted in a region where timber has an important economic potential, and where current encroachment particularly impacts the valuable spontaneous oak forest. Moreover, the project area in the Qinling mountains surrounds several national protected forest areas (supported under World Bank's Forestry Resource Development and Protection Project). As a result, some 30 hectares of abandoned fallows will grow on average in each project village, and form a mixed grass and bush vegetation cover adequate for goat and cow grazing. This is equivalent to 10- 15% of the present grazing area. As far as tree crop development is concerned, the project would develop an average 12 ha per administrative village. Two to four ha would consist in mulberry and fruit trees in Sichuan, mostly planted on terrace edges. The remaining 8-10 ha is a small area compared to the 150-200 ha of forest land awaiting afforestation and the 20-40 ha of barren individual wasteland. It would be planted on slopes on either type of land. Finally, the development of cash crops on steep slopes (particularly those previously planted Annex-3 - 82 - to food crops) would be avoided. Tuber crops such as yam would be specifically located on mild slopes. No processing facilities for commercial corn are funded under the project. 7. Slope Land Use in Ningxia. Project area sloped land bears the combined pressure of population increase which leads to the expansion of the wheat area, and of the rapid increase of the goat and sheep population. Goat and sheep numbers have doubled since 1980, while wheat has increased from one third to some 40% of the cropped area. The resulting overgrazing is a factor triggering gully erosion in watershed heads, and creates annual feed deficits in early spring. It will be difficult to reduce the current pressure on grasslands. First, the expansion of terraces would not directly reduce slope cultivation. Intensive cash and fodder crops would be developed on terraces, but the extensive cultivation of wheat would only decline very gradually. Second, a 90% increase in goats and sheep raised by project households is planned under the project. This is necessary to create herds of adequate size, so that households derive cash income from animal sales on years of wheat crop failure while retaining breeding animals for reproduction. A large-scale accompanying resettlement program would partly compensate this expansion of animal numbers (the resettlement program is not supported by the project). One third of the population of project villages is planned to resettle between 1998 and 2001 to the Hongshibao irrigated area which is currently under construction. Nevertheless, the overall animal pressure on grasslands would still increase, whereas the reduction of grazing intensity is a prerequisite to improved grassland management. Neither the allocation of grassland use rights to individual villages in 1986, nor the support of rotational grazing and other improvement measures by county grassland stations have shown substantial impact on grassland rehabilitation in the current context of excessive animal pressure. Reducing the grazing pressure would only be achieved after households, in addition to devoting more fertile land to alfalfa, have adopted both corn cultivation and in-shed feeding of sheep and goats. 8. Fodder Development. Fodder resource balances have been carefully reviewed during preparation in order to (a) prioritize fodder development actions, and (b) locate fodder deficit problems. At full project development, pigs will consume 55% of overall fodder resources in Sichuan, while cows will be the larger consumers in Shaanxi and even in Ningxia, where they will consume some 50% of the resource. Fifty to 75 percent of the incremental fodder needs would be fulfilled by straw and other grain by-products, 10 to 20% being brought by straw ammoniation. In Ningxia, the key to maintaining fodder balance is, again, the sustained adoption of corn production, and of corn stalk ammoniation. Expanded and improved cultivation of alfalfa is expected to contribute equally with improved grassland management, but these would altogether provide only 25% of incremental needs. In Sichuan and Shaanxi, the increased use of straw (based on improved storage and simple chopping tools) would make the main contribution to fodder resource development, followed by the yield increases resulting from the adoption of hybrid corn varieties and of virus-free potato seed. Both provinces would also need to extend cut-and-carry artificial pasture, and related hay storage. Such technology has already been successfully developed but has remained on a small scale. Through these various actions, the fodder resource surplus at full project Annex 3 - 83 - development would remain stable compared to the present situation in Shaanxi, and decrease but remain positive in Sichuan and Ningxia. However, current surplus margins in fodder balances at the provincial level are assessed to be only 30%, 20% and less than 5%, respectively in Shaanxi, Sichuan and Ningxia. This calls for careful implementation of fodder development plans, and for activities focused on deficit areas. Neighboring villages have highly variable fodder resources, and carrying out village resource surveys to assess the fodder balance is not feasible since the fodder systems are too complex. These systems include a range of by-products, and plots are scattered in a mountainous environment. As a result, village conmmunitiesthemselves might be in the best position to assess the optimum numbers of animals they could raise (paragraph 13). 9. Tree Crop Development. In Ningxia, an agroforestry design (tested by Beijing Forestry University in Xiji county) would be extended. Terrace walls would be milder gradient slopes, and would be planted with 2 rows of bushes and 1 row of trees. Households would manage personally the perennials planted on the side of their individual terraces. This would help solve the problem of non-sustainable collective management of fuelwood plantations. In the semi-arid areas in Ningxia, newly micro-irrigated areas would be surrounded by a network of mixed bush and tree hedges to create an oasis effect. Orchard development would be limited to Haiyuan county which is getting involved in the fruit market. In the Sichuan and Shaanxi mountains, the direct increase of tree crops in land use would be modest, but significant indirect improvements might result from the village-based nurseries, household training in practical skills, and township training in participatory forestry planning supported by the project. In the present situation, households tend to concentrate tree planting on fertile terraces even for forestry species, putting their food crop balance at risk over the medium term. The project would both extend interplanting schemes with reasonably low densities, and give households increased confidence to plant trees on slopes. During the project, close collaboration with the on-going Yangtze watershed reforestation program would be sought. Village development plans would carefully balance forestry with animal husbandry development. Village consultation would be a prerequisite to any operation of forestry aerial sowing. Poor households would be given equal opportunity in contract awards of new timber plantations. Village Development Plans 10. Targeting Tools. The project will allocate a total agriculture investment budget to each administrative village. The average agriculture investment per capita is consistent with the provincial average of Y 490, 430 and 790 respectively in Sichuan, Shaanxi and Ningxia (in base cost, minus training, extension and services). The plan format is basic, with one table for numbers of households and scale of activities, one map showing natural villages and the location of activities, and one page of description of activities. This simple format has several advantages. First, it draws attention to numbers of beneficiary households, and to equity in the distribution of activities among natural villages, an important factor due to income differentials between neighboring natural villages. Second, in most townships, Annex 3 - 84 - project staff have been able to master this planning tool after initial training, and have taken part in the design of plans (there are 5 to 10 administrative villages per township). Third, maps and tables of on-going activities are openly posted at township project office, allowing some public control. Finally, counties can easily assemble all planned and completed village-level data. As a result, administrative village data is accessible to counties and upper levels. This is an improvement compared to the traditional pyramidal reporting structure in which each administrative level only obtains data from the immediate lower level. 11. Investment Distribution to Individual Households. There is an investment ceiling of twice the average investment for the total investment of participating households. All households may take part in the agricultural investment if they are willing to, within this ceiling and within the framework of the development plan. The actual investment of individual households is best determined by their demand. 12. Participatory Agricultural Development. Past government programs have advocated a trickle-down approach, in which support is concentrated on a small number of focus villages and farmers, often better-off ones. In contrast, village development plans will be implemented in each of the 2,941 project villages. They address the entire village population in its social and gender diversity, both at collective and individual level. This should create a positive dynamic and trigger farmers' capacity to take initiatives in their farming activities. A variety of actions have been taken to enhance this positive dynamic. In addition, agricultural extension workers would pay regular visits to each village during project implementation, and more than half of households would take part in the agriculture component's training activities. Finally, the potential for initiative taking of the few better-off, better-educated households would be tapped. This category of farmers is a distinctive feature of Sichuan and Shaanxi mountain villages. These farmers will have access to loans to develop service activities within the village. Various types services have been identified so far, ranging from tree nurseries to animal breeding or feed grinding. 13. Community Resource Management. The component's land use strategy would require a resource management approach, in which project staff would help village communities improve the spatial distribution and balance of terraces, trees, fodder production and water resources. Unfortunately, this approach would necessitate a level of outside technical support incompatible with the large number of project villages, particularly in the complex mountain environments in Sichuan and Shaanxi. The approach would be only tested in a few villages under the AATP. Except for these villages, village communities would be the main designers of their land use improvements (the only exceptions will be mechanized terracing in Ningxia, and larger-scale paddy drainage works in the Sichuan hills). Project staff would give villages some support to help prevent conflicts on resource use among households, and avoid technically inadequate choices. For example, Ningxia villages would be asked to hold annual meetings to decide how many animals their current fodder resources allow them to purchase. AnneO - 85 - 14. Quality of Implementation. The implementation of village development plans will be monitored by county and province project staff. Monitoring will consist of identifying and addressing problems not only in household targeting (as is being done in SWPRP), but also in the various aspects of village-level project work described above. Two monitoring tools have been prepared. One county table shows completed total investment, subproject scale and number of beneficiaries for each village, and sets of minimum quality requirements would be used as checklists (see Attachment Lto this Annex). Agricultural Technology 15. Selection of Technical Packages. The identification of best-practice agricultural technology faces important problems which reflect the lack of focus of research and extension on mountain areas. First, basic data is often lacking. For exarnple, soils in the Daba mountains are considered to be deficient in potassium in Sichuan but not in Shaanxi. Interactions between traditional farming practices and the use of external agricultural inputs are not well understood. In particular, crop and tree cultivars adapted to higher elevations need to be further identified. Second, counties do design some appropriate technology, but little exchange takes place between counties. The land and farmer development component would use the following approach to address these problems: (a) all technical activities under the component would focus on key technical issues; these issues are key ones both for the technical viability of the investment and for the overall improvement of farming practices; (b) counties' technical bureaus have designed their own technical specifications with the support of provincial technical groups; (c) the component supports household-based agricultural extension and on-farm applied research; extension agents and researchers would not only provide technical back-up to villages, but also transfer back to the extension system information useful to refine the technical recommnendations;(d) the adjustment of the initial technical specifications would be organized regularly during the project, on the basis of implementation results and of applied research outcomes. Provinces are preparing implementation quality requirements regarding each of these steps, as well as the quality of works and agricultural inputs. (Attachment 1). 16. Key Technical Issues. Five technical issues need further consideration for the three provinces: * increasing and sustaining soil fertilita on newly developed land. Only one year of agricultural inputs is provided for new terraces. Successful development will depend on a range of interventions, including organic fertilizer use or crop rotations, during several years. Besides, improved seeds can only be used on the first year after terrace construction if soil fertility is rapidly enhanced. * developing winter fodder resources. Solving the winter fodder gap would not only improve the condition of the reproductive and draft animals, but also develop the more profitable winter and spring animal sales. The technical support system Annex 3 - 86- would shift its focus from veterinary and breeding to animal feeding, and from a single innovation, straw ammoniation, to a range of improvements. improving the quality of seeds, seedlings and animals. This includes strengthening quality control of the inputs supplied by the project, refining recommendations on varieties and breeds, and improving the quality of the seed production, tree nursery and animal breeding services funded under the project. * ensuring successful tree establishment. Technical packages from soil preparation to post-planting management would not aim at shortening the number of years before first harvest, but would ensure successful establishment and long-term sustainability of yields. * ensuring the marketing viability of cash and tree crop products. Varieties need to be selected and updated in accordance to market needs. Technical support services would be extended to post-harvest, including on-farm storage, packaging, and primary processing for some products as tea. 17. Unit Cost Table. One unit cost table has been prepared jointly with each provincial PMOs for each of its subprojects. The tables detail annual quantities of inputs and specify purchased inputs and on-farm produced ones. These tables outline several important recommendations: (a) inputs would be always provided in the form of complete technical packages, (b) nitrogen and phosphate (and potassium in Sichuan) fertilizers would be applied in balanced quantities; fertilizers would be supplied every year until the first year of harvest; more would be applied at planting time than during pre-harvest years for tree crops; organic fertilizer applications should not decrease following the increased use of chemical fertilizer; (c) tree densities would be reduced, but additional plantings would take place on the second year to actually reach these densities; (d) pesticides would be made available, but their use would remain carefully limited, (e) balanced animal feed would be recommended, including grain-by product, protein feed and minerals; the first three products would be primarily self- produced, (f) animal sheds would be built by households using simple material, or existing sheds would be used, and (g) each unit cost sets aside a small portion of the investment for basic farn tools. 18. Small Farming Tools. The investment in tools is very small, but it could play an important role in the improvement of farming practices. First, households do lack tools. In Ningxia, harrows are still made of woven branches, and no yoke is used to harness pairs of draft cattle. In the Sichuan mountains, a household may possess as little as one hoe and one knife for all farm operations. Second, awareness about the importance of tools as a production factor would increase among government technical agencies. This could lead to recommend improvements in the use of these tools, or in tool design. 19. Training and Extension Network. The project primarily funds extension activities carried out in project villages. County and township-level activities would be limited to training the technicians which take part in village activities. Four types of extension channels would be supported, because there are existing and potential human resources in each of Annex 3 - 87- these channels: (a) county and township technicians paying scheduled visits to villages, (b) fanner-technicians within project villages, (c) demonstration households, and (d) household training. Technicians, from the village to the county level, would both carry out the daily tasks of project implementation and provide technical back-up. A variety of extension methods would be used in each of the three provinces. In Ningxia, with lower education levels, but comparatively easier communication, and more technical recommendations generated by the extension system, the core technical follow-up activities would be in the form of frequent visits by township specialized technicians to a network of village demonstration households. Seasonal advice would be adjusted to annual climatic circumstances. The seasonal visits of demonstration sites by township technicians would also be the main media in household training. In Sichuan and Shaanxi, literacy levels in the adult population are comparatively higher, but most villages are only accessed by walking, and few mountain-specific technical recommendations are readily available for extension. Technicians in township project stations would evolve into project staff with comprehensive basic technical knowledge. The logistics of township staff undertaking work in project villages, which is key to both the component's physical implementation and to successful technical extension, would be carefully organized (paragraph 24 of this Annex). Sichuan has larger villages (250 households per village or 2,300 per township, versus 150 per village and 1,200 per township in Shaanxi). In Sichuan, one demonstration household and two farmer- technicians on average would be active in each village. In Shaanxi, three demonstration households on average would operate in each township, and township technicians would be the key technical staff. In both Sichuan and Shaanxi, household training methods would combine field days and specific written material. Training would be prepared with domestic technical assistance in adult training methods. 20. Applied Agricultural Technology Program (AATP). The AATP research investment aims to initiate applied on-farm research in the project area, and to support innovations into project implementation. Priority research needs have been carefully analyzed, through discussions involving project staff from the national and county levels, and with provincial researchers (see Attachment 2 to this Annex). Following project appraisal, the provincial PMOs have started to identify research teams interested in each topic. The contracts set up would include several conditions, such as carrying out all field research on project household farms and only undertaking short-term research. Research budgets would include the costs of extending outcomes to at least one project county. The three provinces face different problems in linking up with researchers. Research on rainfed agriculture relevant to southern Ningxia is mainly carried out in neighboring provinces, or is limited to adaptive trials undertaken by individual counties. The Sichuan project areas are and will remain marginal in the provincial research system. The Sichuan mountain area would develop linkages with Shaanxi (e.g., for potato varieties), while technologies primarily developed for the Sichuan lowlands would be systematically screened in the project area. In Shaanxi, the program would aim to involve provincial researchers in specific research for high-elevation areas, which are not marginal in the province. One fifth of the AATP budget would be set aside for technical exchanges between researchers of different provinces, for the larger extension of Annex-3 - 88- research outcomes, and for domestic technical assistance. The domestic technical assistance program would be finalized during the first year of the project. Foreign technical assistance would be extremely useful to the AATP in two fields: introduction of genetic material adapted to mountain environments, and farming system research and extension. The latter field includes economic and marketing analysis as well as appropriate technology design. The establishment of direct links with foreign research teams would be sought. 21. Technical Facilitation. Provincial project staff in charge of the component would divide their time into first, planning, supervision and monitoring and, second, technical facilitation. The latter would consist in (a) monitoring technical implementation through regular field visits, (b) working with the project's province and county technical groups to identify and address technical problems during implementation, and (c) facilitating information flow on new technology, and coordinating extension and training activities. Major Risks and Preventive Steps Taken 22. Ningxia. Climatic risks, resource base imbalances and current poverty levels create several major risks: (a) should a major drought year occur during the early years of the project, households would have to sell the animals provided under the project for lack of water and fodder, and in order to buy wheat, (b) any delay in the voluntary resettlement program would slow down implementation of the animal husbandry investment, (c) the project area is one of the last regions in northern China having retained a millet-based summer cropping pattern despite 10 years of government-sponsored corn production programs, so it is anticipated that the adoption of corn cultivation may be slow, (d) if wheat is not readily available in remote markets, households will not transfer part of their wheat area into summer crops, and (e) Hui indigenous farming practices may not be fully compatible with some of the technology packages to be extended (e.g., intercropping). All these problems have been thoroughly discussed during preparation. The provision of animals to individual project villages would take place in spring, and be conditioned by both the progress of the voluntary resettlement program, the amount of fodder stored at the end of winter and the success of fodder development activities. Food crop improvement activities have been balanced, with less corn, and more potatoes, wheat and linseed. Corn production training would help households plan the yearly purchase of seed, fertilizer and plastic mulch. Wheat prices on local markets would be monitored. The network of demonstration farmers will operate at village level and be composed of Hui farmers in Hui villages. Finally, women farmers will attend a specific number training days. 23. Marketing. Marketing systems are underdeveloped in the project area, and the awareness of market opportunities and risks for mountain agriculture is limited at all levels from households to government agencies. A variety of steps have been taken to moderate price and other marketing risks. Productions developed under the project will add diversity to the existing production systems. The major tree crops to be developed, such as chestnut and eucommia, are multipurpose trees, so that their secondary uses can buffer price problems Annex 3 - 89- for the main product. Several of the productions bearing higher risks, such as silk cocoon, tea and peltate yam, are promoted by private sector entities, which will provide inputs and technical support, process the products and market them. Farmers' specialized associations, which play a facilitating role in marketing for productions ranging from nuts to medicinal plants, would be encouraged to become active in the project area. Enhancing the marketing quality of tree and cash crop products has been made one of the key technical topics, and would be addressed by several applied research topics. Technician and household training contents would include market access and risks. 24. Village Access in Sichuan and Shaanxi. Access from the road to natural villages is difficult in both the Sichuan mountain area and hills. Managing village development plans and providing technical services will be difficult to organize and costly. In order to overcome this problem, township and village-level technicians and farmer-technicians are being specifically trained, and will spend a substantial part of their time in village visits. Village-level work schedules including project management, household training and technical follow-up are being carefully organized with the help of provinces and counties. The cost of intervention at natural village level has been fully taken into account in the component budget. Pick-up cars based in township stations will reduce the use of human force in transporting agricultural inputs. Full-scale implementation of village development plans in several administrative villages in each county during the Retroactive Financing Program will provide additional experience on how to organize project logistics. Finally, the relatively better-off households developing private services are expected to take part in the project's support service network. Annex 3 Attachment I - 90 - Annex 3 Land and Farmer Development Component Attachment 1 GUIDELINES FOR ENHANCING IMPLEMENTATION QUALITY A. QUALITY IN THE IMPLEMENTATION OF VILLAGE DEVELOPMENT PLANS A.1 Household Investment. >The investment received by any beneficiary household for the overall component and for the entire duration of the project should not exceed twice the provincial average household investment (the county average investment is the component base cost minus extension, training and services). >Remote natural villages within an administrative village should take equal part in the project. >Each household in the village should have equal opportunity to take part in the component (Shaanxi: the project's priority target consists in the 70% poorer households in project villages). No household should be excluded from participating in tree crop or animal raising activities because of insufficient education level, or of insufficient assets. No female-headed household should be excluded due to insufficient labor. >Households participate in the project to undertake agricultural activities by themselves. No subcontracting other than technical management contracts occurs between households. Any contract must be consistent with standard contracts prepared by provincial PMOs. A.2 Project Activities. >All project activities are consistent with the administrative village development plan: types of activities are consistent with the village plan, and the scale should not exceed the village plan. >The village project team organizes annual consultation of households on requests for adjustment of activities and transmits these requests to township project station. There is full flexibility in implementation to take into account agricultural time schedules. For example, in case of delay in planting time, one crop may be replaced by another one. When adjustments in project activities occur, the village total investment is maintained to its initial level. Annex3 Attachment I - 91 - >Reporting tables for village plan implementation should note the 6-year target and completed scale, both for scale of activities and for numbers of beneficiary households. They are (a) collected by township project stations and transmitted to county PMOs, (b) posted in township project stations, and (c) updated twice a year. >Only direct beneficiaries should take part in land development and tree planting works. No labor contribution should be requested from non-beneficiary households. Work plans are organized in order to minimize disturbance of farmers' seasonal off-farm migration. A.3 Village Land and Resource Management. >PMOs at all levels are responsible for ensuring the implementation of county policies on stable long-term land use rights for all land developed under the project (50 years). Households have the right to request a formal contract title from the PMO. >The selection of optimum location within a village of newly developed land, of tree plantations, of artificial pasture, and of water resource development involves both the households, the village project team and the technicians in charge. Terraces are built on more fertile land close to villages. Consensus on the management of animal grazing to prevent damage to crops or trees should also be sought. Households should decide to include their plots in land development or tree plantation activities on a voluntary basis. >The development of drinking or irrigation water facilities should be planned at the village level. Infrastructure development for individual households should not have any negative impact on the water resources of neighboring households. >Shaanxi: in villages under the Yangtze watershed reforestation program, tree crop development by poor households should take place not only on wasteland and individual land but also on forestry land. Animal grazing is regulated but not forbidden. >The township project station should undertake (before year 3 of the project) an assessment of the carrying capacity for grazing animals and of fodder development needs during the project (Ningxia: during year 1). >Ningxia: at the end of each year, the village project team should decide -- in consultation with households -- the maximum number of animals to be purchased during the year on the basis of fodder storage levels. B. QUALITY OF AGRICULTURAL TECHNOLOGY B.1 Focus Technical Issues. >County technical specifications, provincial PMO technical support as well as training, demonstration and extension activities should focus on the following five issues: (1) Annex 3 Attachment 1 - 92 - increasing and sustaining soil fertility on newly developed land, (2) winter fodder resources, (3) the quality of seeds, seedlings and animals, (4) successful tree establishment, and (5) the marketing viability of cash and tree crop products. B.2 County Technical Specifications. B.2.1 Review and Updating. >The component's unit cost tables describe average technical packages across the project area in each province. Any substantial difference between county technical specifications and these tables should be identified and reviewed by the provincial PMOs. >Annual updating of recommended technology should take place through technical wrap- ups, which should include exchanges between counties, and dissemination to counties of the results of on-going activities under the Applied Agricultural Technology Program. Technical specifications will be updated at project mid-term review. B.2.2 Contents of Technical Specifications. >Land Development. After terracing, the maximum slope of the planting area should be 1% in Ningxia and 5° in Sichuan and Shaanxi. Key points in terrace design to insure long-term viability (maximum height of wall, angle of wall, use of concrete in walled terraces, drainage system) should be detailed. Ningxia: varieties and planting patterns of erosion control tree and bush belts to be planted on the edge of all terraces should be listed. Yearly application rates of organic and balanced chemical fertilizer, including N and P (and K in Sichuan) after terracing should be specified. Contour-line planting when using plastic mulch is recommended. >Food Crops. Corn, potato and wheat varieties should be listed with their respective optimum sowing time. Varieties should be adapted to the project area and to households' needs. (These varieties are those recommended in current extension plans.) >Cash Crops. Varieties (cultivars) should be carefully selected for their commercial viability. There should not be any negative impact of cash crop development on the environment. Tuber crops should be planted on mild slopes. Neither planting material nor harvested product should be collected from wild resources. >Tree Crops. Tree varieties, both rootstock and graftings, should be quality varieties adapted to local soil and climate conditions, and to market needs. The proportion of pollinating trees should be specified for relevant species. In order to minimize the risk of erosion, the area of vegetation cover disturbed at planting should be as limited as possible, provided that sufficient space around seedlings is maintained free of weeds. Seedlings should be planted in alternate rows, and contour-line trenches should be dug when necessary to improve drainage. Both organic and chemical fertilizer should be applied in the planting pit. Fertilizer application rates at the time of planting will be substantially greater than for subsequent Annex 3 Attachment 1 - 93 - years. Two intercropping patterns should be described, one with normal tree density, and the other with low density. Tree management from planting to first harvest should be described, including one pruning method for each species and recommended micronutrient applications. Types of trees or sites not suitable for rehabilitation of mulberry or tea should be excluded. On-farm storage conditions should be specified. Primary processing of tea should be done by the households in villages which are too distant from the tea processing plant. >Animal Raising. Households investing in animal raising must adequately develop their winter fodder resources. A range of fodder resources (in addition to ammoniated straw) should be recommended for each county. Species, harvesting calendars and yearly fertilizer requirements of artificial pasture should be indicated. Balanced combinations of on-farm feed resources, protein feed and purchased minerals and additives should also be quantified. Sichuan and Shaanxi: the design of newly built animal sheds should allow for easy handling of fodder. A design with earth ground floor and wooden upper floor is recommended. Vaccination and preventive treatment schedules should be specified. B.3 Timely Provision of Quality Inputs. >All Inputs. Provision of inputs to villages should be done in a timely manner based on sufficient storage of the inputs at the township. Households have the right to have and express reservations when they doubt the quality of the inputs or their timely delivery. >Fertilizer. The types of chemical fertilizers provided to households should be urea and DAP (and potassium sulfate in Sichuan). Fertilizers should remain in their original bags which should mention the certified nutrient content. Fertilizer quantities delivered to households should be consistent with county technical specifications. Farmers should be provided with fertilizer for tree crops for every year from plantation until: year 2 for Ningxia timber and bushes; year 3 for mulberry and for Ningxia fruit trees; year 4 for other species except nuts; and year 5 for chestnut and walnut. >Seeds and Seedlings. Varieties should be those mentioned in the county technical specifications, and seeds and seedlings should have received certification through pre-harvest inspection in accordance with national quality standards (class I and class II). All potato seed should be virus-free (except Sichuan, for which all potato seed will be virus-free beginning in year 4). In Ningxia, all corn seed will be pesticide-coated. Seed companies receiving project investments should make annual plans to supply their best varieties to several project counties. For grafted tree species (fruit, mulberry, and nuts), only grafted seedlings will be provided (except for chestnut which is partially grafted after plantation, and for which special grafting teams will be organized by the project). Nurseries receiving project investments must arrange technical support contracts with a specialized technician. Nursery managers and workers should undergo specific training. Seedlings will be sold primarily within the project area, with careful organization of rapid transportation from nursery to the project village. Project households may come to the nursery themselves to obtain seedlings. Annex-3 Attachment 1 - 94 - >Pesticides. Pesticides should be provided in their original containers, and must be covered under the list approved by the World Bank. >Plastic Mulch. Plastic mulch provided to project households should be of standard quality. >Animals. In Sichuan, all pigs provided by the project should be Fl hybrids except in the most remote (20%) mountain villages. For cows and goats, all animals provided to households should be improved local breeds. For the pig and goat breeding service and for Ningxia sheep/goats, male animals should be of pure improved breed. In Ningxia, artificial insemination services should reach 80% of the number of cows provided by the project on an annual basis. In Sichuan, animal breeders receiving project investments should primarily sell their production to project households. Project animals should have been vaccinated at the time of purchase. Lastly, the contents of mineral and feed additives and protein feed should be specified on the bags provided to the households. >Tools. Farmers should select the small tools they wish to purchase through the project. County PMOs should maintain a record of the types of tools needed by households and recommended providers of adequate quality tools. Small mechanized tools should be operated by private households and service project villages. Fees charged to project households for mechanized tool services should be reviewed by the county PMOs. B.4. Quality of Works B.4.1 Land Development. >Paddy drainage should follow the standards of the county soil and fertilizer station. The station should prepare a detailed design map, and a copy of that map will be kept at the township project station. >Terracing works should be overseen by one village cadre and one farmer technician in each village. These two staff should have undergone specific project training. Stone works should be carried out by skilled workers. In Sichuan, hilly area land terracing operations should always include some stone works for drainage. In Ningxia, works should follow the standards specified by the Sanxi Commission. The detailed design map should specify the area where top soil has to be set aside (in order to be put back after terracing). Works should be overseen during operation by the 'design representative'. B.4.2 Tree Planting. >The adequacy of site (elevation, pH, drainage) should be checked by a township technician. For each 50 to 100 hectares of plantations, at least one soil analysis should be made, and one farmer technician should be trained in seedling handling and planting skills. The farmer technician should take part in the planting operations. Annex3 Attachment 1 -95- >Adequate transport capacity for fertilizer should be organized for planting sites which are distant from the village or the nearest road. >Pit digging and planting schedules should be organized independently from inspection-and- acceptance. >All seedlings which have not survived should be replaced in the following year. >For mulberry rehabilitation in Sichuan, grafting should only be done by skilled workers. A township technician should designate trees fit for grafting. For tea rehabilitation in Sichuan, a village situation map demarcating areas where rehabilitation is feasible should be prepared by the county tea rehabilitation specialist. C. QUALITY OF TRAINING AND EXTENSION C.A Household Training. >Training activities should be organized to cover a large audience in each village. Plans to train a minimum of 30% of the households in each village and an optimum of 60% are progressing on schedule (Ningxia: a minimum of 50% and an optimum of 100%). >Trainers should be trained township technicians or county technicians. One training day lasts at least 5 hours, and no more than 50 people at a time should attend a training day. Each trainee attends on average 4 training days. Training activities include both in-door sessions and seasonal visits of demonstration sites. >Trainees should be provided with training materials. The training materials compiled by the provincial PMO should be adapted to a semi-illiterate audience in its concepts, language and sketch drawings. They should updated once at the project mid-term review. >In Sichuan and Shaanxi, at least 33% of trainees should be women. In Ningxia, women will be encouraged to take part in technical training sessions, and specific additional sessions will be provided for women in each county. >The county PMOs will keep records of training session attendance. These records will include the time, duration, trainer, number of trainees, topics, training materials delivered, and numbers of women trained. C.2 Demonstration Households. >Demonstration households will be selected on a voluntary basis in each administrative village, and a substantial number should be the project area's poorest households. Households should organize informal extension activities in the village during each year of the project. In 'Sichuan and Shaanxi, women farmers and young farmers should be encouraged to become demonstration farmers. Technology packages used by demonstration Annex-3 Attachment I - 96 - households should be similar to that of their neighbors, and demonstration fields should include new terraces. >Township technicians should visit demonstration households at least twice a year every year. >The county PMO should keep a list indicating village and demonstration household names. C.3 Extension. >Food crop, tree crop and animal raising extension activities funded by the project should include: field visits of township and county technicians to villages and to households other than demonstration households; preparation of and undertaking of visits by households to demonstration sites (other than during household training days); soil analysis fees; and printed materials distributed to households (other than training materials). >County PMOs should organize work plans for the township technicians. The work plans should specify the numbers of days spent in village visits and the numbers of visits per year to each project village. In Sichuan and Shaanxi, crop, animal husbandry or tree crop township technicians should spend a total of at least 9 days (other than household training days) in each project village every year. In Ningxia, seasonal extension field days (4 days for food crops and 4 days for animal raising) should take place in each project village each year. In all three project provinces, one county technician will pay at least one visit to each project village during the project. In Sichuan, the silk production support service should provide project villages with services equivalent to those in lowland areas. >Project vehicles will be small pick-ups for transportation of people and agricultural supplies, and are to be used primarily for activities in the project villages. Individual items for extension equipment remain below Y 1,000 (except refrigerators). No soil analysis equipment will be procured (except simple pH measuring devices). Annex3 Attachment 2 - 97 - Annex 3 Land and Farmer Development Component Attachment 2 Applied Agricultural Technology Program: Priority Research Needs Land Development. - Soil fertility on newlv developed land (Sichuan mountains and hills). Counties' technology packages for newly-built terraces (in terms of soil tillage, chemical and organic fertilizer applications, cropping patterns, types of varieties) need to be compared and improved to ensure successful use of modern food crop varieties right after terrace construction. - Micro-irrigation (Ningxia). The extension of micro-irrigation in the project area is just starting. Water-saving irrigation practices, related crop technology packages and cropping patterns need to be refined. Winter Fodder Resources. - Cows and goats (Shaanxi, and Sichuan mountains). Processing and storage methods other than straw ammoniation need to be improved and extended. In Shaanxi, optimum species for artificial pasture need to be identified. Animal feeding calendars would be studied in Sichuan, fodder storage in both provinces. - Non-grain pig diets (Sichuan hills). Sweet potato leaves and tubers account for an important share of pig diets in Sichuan. Alternative sources of non-grain fodder would diversify and increase feed resources. A range of such sources have been identified among which arrow-root, and enzymatic fermentation of paddy straw, but they need to be combined with existing feed sources into balanced diets. - Forage species (Ningxia). Artificial cut-and-carry pasture mainly consists in alfalfa and fodder grain species (sorghum and oats) grown on fertile plots. Improved cultivars within these species need to be identified. In addition, land is available to grow additional forage, particularly on salinized soils around small gully checkdams, but tolerant varieties from both China and abroad need to be introduced and screened. Grain Crop Varieties. - Corn and rice (Sichuan mountains and hills). Hybrid varieties are outdated, particularly in terms of grain quality. The area is too marginal to justify specific variety selection. A network of multilocal variety screening trials in the project area needs to be set up to regularly test upcoming varieties. - Com (Shaanxi). Available hybrids are too late-maturing for high elevations. A range of existing commercial hybrids needs to be introduced and screened. Annex3 Attachment 2 - 98 - - Wheat (Sichuan mountains and hills). Modem varieties have not been adopted. Little is known about the potential of modem varieties versus indigenous ones under the specifically cold, damp but drought-prone local climate. Local and introduced varieties need to be screened, and interactions between varieties, seed processing and fanning practices need to be studied. - Potatoes (Sichuan mountains). No virus-free seed multiplication network has been set up in the province. Seeds could be supplied from neighboring Shaanxi. There is a need to link up with southern Shaanxi potato seed system, and to screen available varieties. Tree Crops. - Gingko (Sichuan mountains). Yields are lower than in China's main production area. There is a need to understand the relative impact on yield of site selection (soil and microclimate) and of planting technology, and to identify optimum practice. This would require a comparative survey of existing sites, locally and in main production area, and an assessment of the impact of improved technology at planting time on early development (including nursery quality, planting pattern, soil preparation and seedling handling). - Chestnut (Sichuan mountains and Shaanxi) and walnut (Sichuan mountains). Existing planting material has been selected for lower-elevation areas. In addition, there is no established network for the selection and maintenance of quality planting material. There is a need for introduction and early screening of material, and for technical assistance to set up a parent material maintenance system. - Eucommia (Sichuan and Shaanxi). Current bark peeling methods, as well as excessive interplanting densities, reduce tree longevity. On-farm trials of short-term rotation and regeneration are proposed Sichuan, while strip peeling would be tested in Shaanxi. There is a need to design improved interplanting patterns. Marketing Viability of Cash and Tree Crop Products. - Peltate yam (Shaanxi). The economic viability of this crop is highly dependent on tuber hormone contents. Interactions between these contents, parent material and crop technology need to be better understood. - On-farm fruit storage (Sichuan mountains or hills). The lapse of time between harvest and delivery to purchaser justifies improved storage means. - Silkworm production system (Shaanxi). The supply of healthy silkworms of improved strains is essential to improve the quality of cocoons. This requires the introduction of adequate parent material, and a multiplication support service adapted to mountain villages. Annex 3 Attachment 2 - 99 - Farming systems. - Comparative assessment of technical recommendations (Sichuan mountain and hills). Past extension programs have faced very low adoption rates by farmers. There is a need first to compare yields obtained with recommended technology packages and those obtained with farmers' traditional practices, then to identify other obstacles in the adoption of innovations. This would require comparative on-farm trials, and household surveys. - Appropriate technology for high-elevation villages (Shaanxi). Poor villages in high- elevation areas feature specific farming systems, face specific and harder constraints, but have not attracted attention from research programs. A comprehensive program of survey and trials in one or a few villages would both provide benchmark information and allow identification of a range of improvements. This would require a village-level research program combining a comprehensive survey of present farming practices, and introduction, design and test of improved technology. - Reducing labor requirements of silkworm raising (Sichuan mountain and hills). Silkworm raising is based on high inputs of female labor. Women's labor is limiting in poor households, particularly as men increasingly outmigrate for off-farm work. Small tools and other technology reducing labor requirements need to be researched (Sichuan mountains or hills). - Corn planting pattern (Ningxia). Plastic-mulch hybrid corn is the only technically feasible package for corn with current varieties in the project area. The strategy in variety selection has consisted in introducing later-maturing, low-density varieties. With these varieties, plastic costs have become too high. There is a need to design lower-cost packages for adoption by farmers. This includes intercropping corn under plastic mulch with another crop. However, since intercropping may not be adapted to Hui farmers, other cost-reducing options also need to be studied. Other. - Grain crop pests and diseases (Sichuan mountains). A few pests and diseases are specific to the Daba mountains and have not been researched before despite their impact on yields. - Potential cash crop and animal species (Shaanxi). Few agricultural income generating options are available to high-elevation areas. Mushrooms and other wild plants, and wild animals, are collected for sale, but resources are declining. The domestication of several species would deserve research. - Cultivation of edible mushroom (Shaanxi). Edible mushroom production is shifting from the non-sustainable use of oak timber as substratum to substitute cultivation substratum. Related technology needs to be refined. Annex 4 -100 - Annex 4 Qinba Microfinance Component 1. This annex presents the following information concerning the microfinance component: (i) background, (ii) objectives and legal status, (iii) methodology and training, (iv) loan processing, interest rates and fees, (v) branch operations, (vi) financial sustainability, and (vii) supervision. These represent the central elements of the operational manual provided by the cooperatives and the central project management office in chinese to the Bank during appraisal. This operational manual includes policies and procedures concerning provision of loans to groups of clients for specific types of productive activities. Background 2. Low income households in China's rural areas lack access to credit. The formal financial system provides only basic credit and savings services to well-connected households in county seats and nearby rural areas. Most credit is provided through state agencies (for mandatory crop programs), rural collectives, and state-owned enterprises. A small proportion is lent to better-off families with physical assets to use as collateral. While the formal sector is unresponsive to the credit needs of low income and poor rural households, informal arrangements are growing. However, they are expensive, often seasonally limited, and tend to miss poor areas. This credit shortage is one feature of the local economy which keeps the majority of poor households with potentially profitable economic activities below the poverty line. 3. The Chinese government views microfinance as a promising solution to this problem, and has encouraged several donor-supported microfinance experiments to contribute to poverty reduction. The largest experiment is the action research initiative in Hebei and Henan Province operated by the Chinese Academy of Social Sciences Rural Development Institute and supported by the Ford Foundation. The pilot in the Qinba project will make an important contribution to these lessons, particularly through demonstration of practices necessary to ensure financial sustainability of microfinance institutions. The Consultative Group to Assist the Poorest (CGAP) has contributed to the pilot design. Other microfinance pilots in nationally designated poor counties are supported by the United Nations Development Program, GTZ, Canadian CIDA and AusAid. Objectives and Legal Status 4. The pilot's primary objective is to provide credit and savings services to low- income households with potentially profitable economic activities through two financially sustainable cooperatives. The cooperatives have already been established in Ankang City Annex 4 - 101 - (Shaanxi Province) and Langzhong County (Sichuan Province) and are registered with the County Bureau of Civil Affairs. Like other microfinance pilots, the cooperatives are registered as "social organizations." 5. Given the high minimum equity requirements and other regulations governing the development of new Chinese financial institutions, the cooperatives would not become full-fledged commercial banking institutions during the life of the project. However, it is anticipated that the cooperatives could become trust and investment companies. The cooperatives and the central project management office plan to actively pursue this change in legal status. This change would subject them to formal regulation under rules recently developed for non-bank financial institutions. Over a six year period, over 16,000 households would receive working capital loans and establish savings accounts. Methodology and Targeting 6. Methodolovgy. The cooperatives would be based on an adaptation of the Grameen Bank (Bangladesh) model, which currently provides one-year working capital loans to 2 million poor borrowers using a joint liability group methodology. Joint liability groups mutually insure the working capital loans of members, covering the payments of those members who face unexpected repayment problems. This has proven to be an effective substitute for physical collateral for low income households in a number of Asian countries. 7. Groups would be formed based on voluntary participation of low income households with potentially profitable productive activities, reflecting microfinance international best practice. Each group would consist of five members, who select a leader. Group members would qualify for loans for productive activities in which they have significant experience, and their creditworthiness would be judged by the group. 8. Targeting. Households facing a chronic grain deficit would not qualify as group members. Microfinance experiences show that placing such households in debt is harmful for the households and endangers sustainability of the program. However, these households would be eligible for other project activities to build assets so that they would eventually qualify for group membership. 9. The cooperatives held detailed discussions with a large sample of poor households in project areas to identify production cycles, household cashflow patterns, and transaction cost preferences. Based on these interviews, group meetings would be held every ten days in the village to collect loan installments, interest and mandatory savings. All requirements (such as the interest rate and fee structure, mandatory savings, and group funds, which are a member-controlled form of collateral) would be presented in a transparent manner to group members during orientation. Annex 4 - 102- 10. Interviews with poor households demonstrated the importance of keeping transaction costs low. Training would be provided to groups in how to review loan applications, conduct regular meetings, collect loan installments and interest, and enforce loan contracts to lower these costs. Average loan processing time (from application to disbursement) would be less than two weeks, thanks to group review of proposed member investments. Significant participation of women in groups would raise the effectiveness of the program. The number of groups is expected to expand slowly during the first two years, providing the cooperatives time to understand clients' needs and group dynamics. Loan Processing, Interest Rates and Fees 11. The project would effectively target low income households by limiting initial one-year loan to at most Y1000 (that is, an amount just less than twice the national per capita poverty line of Y550/year). Subsequent loans would grow by no more than 30% at the end of the one-year loan (that is, second loans would be at most Y1,300, and third loans at most Y1,690). Loans will be repaid in 34 equal ten-day installments of principal, interest and compulsory savings. Only groups with all members paying installments on time and contributing mandatory savings would be eligible for subsequent loans. 12. Productive investments would be decided by the households, based on a wide menu of technically viable productive activities, such as agricultural processing (including oilseed and fodder), animal husbandry (such as pigs, sheep, oxen), cash crops (such as traditional medicines and tea), small stores, trade and small service businesses (such as food preparation). Loan applications would be approved by the group members and reviewed and approved by centers (consisting of 5-6 groups). Loan officers would review the proposed activity to insure that it can generate adequate cashflow to cover the loan installments. 13. The nominal interest rate will be 8% (on the face value of the loan), with a 3% upfront application fee, a mandatory 5% group savings fund, and installments every ten days. This amounts to a real effective interest rate of 14. 1%. The interest rate would be adjusted to reflect changes in the rate of inflation and commercial bank interest rates. While this rate of interest may not be sufficient to cover all expenses during the set-up stage, it would be adequate to insure financial sustainability with increased loan activity in later stages of the project (after adjusting for the subsidized rate of interest set by the ADBC and the Provincial Finance Bureau). 14. Langzhong County will experiment with a specialized line of credit for existing microenterprises, not to exceed 10% of the average annual outstanding loan portfolio (with initial average loan size of Y1500 to Y2000). These microenterprises could provide physical assets as collateral, and would be able to borrow individually or through joint liability groups. Investment would be likely to include small scale transportation, service and agricultural or mineral processing activities. Approval criteria for these loans would include adequate cashflow to cover loan installments, demonstrated commercial viability, Annex 4 - 103 - and the potential for jobs creation for surplus laborers from project area poor households. The interest rate structure would be the same as the group-based loan system. Branch Operations 15. Mature branch offices would be staffed by a manager, an accountant, an internal auditor, a cashier and six loan officers. Centers (consisting of 5-6 groups) would be headed by a director elected by the groups. All directors, managers, accountants and auditors would have formal banking experience. Loan officers should have experience working with poor farmers, some knowledge of agriculture and animal husbandry, and basic financial analysis skills. 16. One of the strengths of a group-based system is the number of borrowers that a loan officer can serve, which contributes to low operating costs. For Ankang and Langzhong, an experienced loan officer is expected to provide financial services to 300 to 360 group members. This is consistent with loan officer to client ratios in Grameen Bank and other group-based models in Asia. Financial Sustainability 17. After initial support from the Qinba project, the loan portfolio would be largely financed by loan installment repayments, available local funds (such as government poverty alleviation funds channeled through the ADBC), fees and savings generated by poor households. Based on conservative average loan size and loan portfolio projections, the cooperatives should be financially sustainable by the end of the project, and able to turn to commercially priced sources of capital for expansion into new communities. However, there are broader financial sector policy issues which could affect the long term sustainability of the cooperatives. 18. In the start-up phase, both cooperatives need sufficient grant funding to ensure the demand for new loans can be met. The Langzhong credit cooperative has mobilized grant funds from Sichuan Province to begin operations. The Ankang cooperative has only been able to mobilize loans from ADBC and the Provincial Finance Bureau. In the long term, the Ankang cooperative is considering selling internally tradeable shares to members to bolster the equity side of its balance sheet. 19. In accordance with microfinance best practices, the loan portfolio will comprise 55% to 70% of total assets. The loan loss reserve is set initially at 5% of the average outstanding loan portfolio, but could decrease substantially as groups prove their ability to enforce loan contracts. The portfolio at risk method of calculating overdue loan balances will be used, classifying each loan with one installment more than one day late as an overdue loan. Partial payments by groups to the cooperative would be discouraged in order to encourage group members to enforce the loan agreement as problems arise. Annex 4 - 104 - 20. Key financial performance ratios to be used to monitor the cooperatives would include the following: (i) adjusted rate of return on average annual assets, (ii) portfolio at risk, (iii) cost per yuan lent, and (iv) average initial loan size (to insure appropriate targeting). The cooperatives would be trained in the CAMEL system, which includes indicators on capital adequacy, asset quality, management and staff systems, earnings (profitability), and liquidity management. Liquidity management would play an especially important role, given the reimbursement system employed by the Bank (at 50% disbursement based on the standard statement of expenses system) and the expectations of clients that larger loans would be available within two weeks of the on- time repayment of the final loan installment. The CAMEL system is used by a number of successful microfinance institutions. 21. During project preparation, the project management team enhanced its knowledge of microfinance best practices. The Sichuan and Shaanxi project management offices visited Chinese pilot microfinance projects and reviewed technical materials on Grameen Bank and AIM (the Malaysian replication of the Grameen model). The staff also participated in a one-week Microfinance Conference sponsored by CGAP, the Ford Foundation and UNDP, and have been advised by a number of microfinance specialists. Cooperative managers and loan officers staff received extensive financial training from the central project management office Supervision 22. Supervision will take place on various levels including periodic reviews by (i) an external management team (representing county and provincial PMOs, the municipal government, and ADBC), (ii) an internal auditor, (iii) audits by the Provincial Audit Administration and (iv) an independent auditor with experience in banking operations. 23. The Bank would regularly review the progress of the component, based on site visits (to insure accurate targeting of poor households and the effective use of groups as a means of delivering financial services) and a review of key financial indicators (along the lines of the CAMEL system, described above) and the reports issued by internal and independent external auditors. China: QINBA MountainsPoverty Reduction Project DetailedProject Costs by Provinceand Component(Yuan) Annex5 - Table 1: Total ProjectCost % of Sichuan Shaanxi Ningxia Total Total 1. Labor Mobility Total Base 177,183,415 129,586,677 306,770,092 13.5]% Total Cost 230,454.030 168,547.445 399.001.475 13.35% 2. Infrastructure Total Base 117,666,773 96,979,192 40,567,359 255,213,324 11.24% Total Cost 152.963.632 126.072.930 52.737.567 331.774.129 11.10% 3. Land and Farmer Development Total Base 607,171,130 460,576,648 160,755,398 1,228,503,176 54.09% Total Cost 790.083.329 600.649588 209.387.,906 1.600.120.823 53.55% 4. TVEs Total Base 193,386,923 180,786,194 18,429,407 392,602,524 17.29% Total Cost 251.402.998 235,022.052 23.958.229 510.383.279 17.08% 5. Institution Building, Project Management& Supervision Total Base 23,421,935 20,935,435 7,153,385 51,510,755 2.27% Total Cost 32.154.432 29,029.305 9.684.457 70.868.194 2.37% 6. Microfinance Total Base 13,297,383 13,359,359 26,656,742 1.17% Total Cost 16.600.000 16.600.000 33.200.000 1.11% 7. Poverty Monitoring Total Base 5.395.000 4,1509000 415 000 9,960,000 0.44% Total Cost 5.395.000 4J150.000 415.000 9.960.000 0.33% Total BaseCost 1.137522.559 906373.505 227.320549 2271216.613 100.00% Unallocated 14.946579 15.128.680 2.616.841 32.692.100 Total IncludingContingencies 1494.000.000 1.195200.000 298.800.000 2.988,000.000 100.00% X Table 1: I of I China: Qinba MountainsPoverty Reduction Project DetailedProject Base Colst by Provinceand Component(Yuan) Annex 5 - Table 2: Labor Mobility Component ------Sichuan------Shaanxi------Project Total ------UNIT Quant. Rate Amt. Quant. Rate Amt, Quant. Rate Amt. I. Building S.740.000 5.400.000 14.140.000 Province m2 1,800 2,500 4,500,000 1,200 2,500 3,000,000 3,000 2,500 7,500,000 County m2 5,300 800 4,240,000 4,000 600 2,400,000 9,300 714 6,640,000 2. Vehicles(pick-up tnuck) 1.300.000 1.100.0 2.400.000 Province no 1 100,000 100,000 I 100,000 100,000 2 100,000 200,000 County no 12 100,000 1,200,000 10 100.000 1,000,000 22 100,000 2,200,000 3. Equipmentand Fumiture 1.7S5.500 R1129,500 2.915,000 3 1 Center 2980000 298,000 Computer/printer no 5 25.000 125,000 5 25,000 125,000 Photocopier no 1 30,000 30,000 1 30,000 30,000 Fax machine no 3 8,000 24,000 3 8,000 24,000 Telephone no 3 5,000 15,000 3 5,000 15,000 a Computersoftware no 12 2,000 24,000 12 2,000 24,000 Overheadprojector no I 8,000 8,000 1 8.000 8,000 Office fumiture set 18 4,000 72.000 18 4,000 72,000 3.2 Province& County 1.487.500 1.129.50 2617. Computer/printer no 16 25,000 400,000 14 25,000 350,000 30 25,000 750,000 Computersoftware Province set 2 2,000 4.000 2 2,000 4,000 4 2.000 8,000 County set 12 1,000 12,000 10 1,000 10,000 22 1.000 22,000 Photocopier no 1 25,000 25.000 1 25,000 25,000 2 25,000 50,000 Fax machine Province no 1 5,000 5,000 1 5,000 5,000 2 5,000 10,000 County no 12 5,000 60.000 10 5,000 50,000 22 5,000 11 ,000 Telephone Province no 2 3,000 6,000 2 3,000 6,000 4 3.000 12,000 County no 12 3.000 36,000 10 3,000 30,000 22 3,000 66,000 TV and videoplayer Province net 2 6,000 12,000 1 6,000 6,000 3 6.000 18,000 County set 12 6,000 72,000 10 6,000 60,000 22 6.000 132,000 Sewing machine no 240 600 144,000 200 600 120.000 440 600 264,000 Filing cabinet no 58 350 20,300 50 350 17,500 108 350 37,800 x t-J1 Table2: I of 2 Anne 5 - Table 2: Labor Mobility Compoment _------iha...iha ------Shaanxi------ProjectTotal ------UNIT Quant. Rate Amt Quant Rate Amt. Quant. Rate Amt. Office table andchair Province set 10 600 6,000 10 600 6,000 20 600 12,000 County set 48 400 19,200 40 400 16,000 88 400 35,200 Training desk& chair Province set 140 400 56,000 100 400 40,000 240 400 96,000 County set 660 200 132,000 500 200 100.000 1,160 200 232,000 Double-deckbed Province set 100 300 30,000 50 300 15,000 150 300 45,000 County set 400 200 80,000 250 200 50,000 650 200 130,000 Mattressand luggage Province set 250 300 75,000 100 300 30,000 350 300 105,000 County set 800 300 240,000 500 300 150,000 1,300 300 390,000 Thertnos Province no 200 25 5,000 100 25 2,500 300 25 7,500 County no 800 25 20,000 500 25 12,500 1.300 25 32,500 Kitchenutensil set 14 2,000 28,000 12 2,000 24,000 26 2,000 52,000 4. TrainingandPlacement(RevolvingFund) 159.800.000 117.200,tP 154.700 277.000.000 0 4 1 Interprovincial pson 71,100 2,000 142.200000 47,600 2,000 95.200.000 118700 2.000 237.400 000 Center pson 71,100 850 60,435,000 47,600 850 40,460,000 118,700 850 100,895,000 Province p'son 71,100 300 21.330,000 47,600 300 14,280,000 118,700 300 35,610,000 County p'son 71,100 850 60,435,000 47,600 850 40,460,000 118,700 850 100,895,000 4.2 WithinProvince p'son 16,000 1,100 17.600.000 20,000 1,100 22.000.000 36.000 1,100 39.600,000 Province p'son 16,000 300 4,800,000 20,000 300 6,000,000 36,000 300 10,800,000 County p'son 16,000 800 12,800,000 20,000 800 16,000,000 36,000 800 28,800,000 5 Training andManagement 2.S39.441 2.S42.103 5.781.544 StaffTraining sum 300,000 300,000 600,000 Seminars sum 300,000 300,000 600,000 Technical Assistance sum 500.000 500,000 1.000,000 Provincial Monitoring sum 611,633 562,080 1,173,713 FulianMonitoring sum 400,000 400,000 800,000 IndependentEvaluation sum 400,000 400,000 800,000 IndependentAuditing sum 427,808 380,023 807,831 Direct BaseCost 174,564,941 127,671,603 302,236,544 Administrative fee 0 2,618,474 1,915,074 4.533,548 Total Ban Cost 177.183.415 129.586.677 306.770.092 Contingencies Q 53,270,615 0 38,960,768 Q 92,231,383 Total IncludingContingencies 230,454.030 16S.547.445 399.001.475 x Table 2 2 of 2 Chin: QinbsMomtains Poverty Reduction Froject DetailedProject Rbse Cota by Provine andComponent (Yuan) Annes5 - Table 3: Rural Infrastructure Component ------Siun------ih _- ...... ------Shtnxi ------....------. Ningxia------...... rojed Totil ---- UNIT QUTY RATE AMT. QUTY RATE AMT. QUTY. RATE AMT. QUTY. RATE AMT. 1. RuralElectricity 10.422.980 21.285550 31.70.530 Mini-hydrpowerSttion kW 840 3032.36 2,547,178 1,335 5,000 6,675,000 2,175 4,240 9,222,17g 35 kV Trfornner Staiton kVA 2,000 469.20 93S,400 2,000 469 938,400 35kV tnsnision line km 25 5S501.00 1.462,525 50 50,411 2,520,550 75 53,10S 3,983.075 lOkVdistribution line km 204 25337.63 5,16S,877 465 26,000 12,090,Q00 669 25,798 17,258,877 0.4kV dinribuion line km 20 15300.00 306,000 20 15,300 306,000 2. Rutl Road 41.519.654 37.S56797 79376.A51 NewRoad km 449 92471.39 41,519,654 324 96,771 31,353,804 773 94,274 72,873,45S Roadiapmvwemnt km 119 54.647 6,502,993 119 54,647 6,502,993 3. RuralWaterSypply pson 263,407 150.30 39.590.Q72 193,262 144.28 27.883455 9,852 172 1.689914 466,521 148 69.163,440 j 0 4. lrrition 22.934.57 S520.200 3145.222 0 Pumpedirrni8tion ha 300 5,289 528,900 I00 5,289 52S,9DO Irrigation Pond ha S71 7.1S6 6,259,006 871 7,186 6,259,006 Diversion ha 758 1,230 932,340 758 1,230 932,340 Cistern ha 905 3.4S9 3.157,545 905 3,4S9 3,157.545 Small Resrvoir ha 107 2.428 259,796 107 2,428 259,796 Canal ha 4.265 2.766 11.796.990 1.S85 4.520 8.520.200 6,150 3,304 20,317,190 5. Micmirrition (Ningxia) 5355 38277.928 5355 7,148 38277928 Smallcistnm ha 3,243 8,708 28,239,006 3,243 8,708 2S,239,006 ShallowWell ha 1,333 1,977 2,636,000 1,333 1,977 2,636,000 TubeWell ha 125 10,404 1,300,500 325 10,404 1,300,500 FloodplainLand Redamation ha 654 9,331 6,102,422 654 9,331 6,102,422 6. RuralEnergy 1.460Q572 146.0572 Biogp digesters no 1,828 799Q.00 ,466,572 1,S22 799 1,460,572 DirectBane Cost 115,927,855 95,546,002 39,967,842 251,441,698 MeangementFee(l 5%/6) sum 1,73S,918 1,433,190 599,518 3,771,625 Total BeasCot 1176M6.773 96,979.192 40.567,359 255.2134 Contingencies 30.001% 35,296,259 30.00% 29,093,738 30.80% 12,170,208 76,560,805 > Total Inlading CongCens 15232 12L.072930 27376 331.774.129 Table 3: 1 of I China: QinbsMountains Poverty Reduction Proje DetailedProject Bane Costs by Province and Component (Yuan) Anne,5 - Table4: Landand Fa rmer DevelopmentCompomtne SICHUAN - SHAANXI------..-- _.NINGXIA -----. - PROJECTTOTAL-- Unit Quantity Rate Amount Quantity Rate Amount Quantit) Rate Amount Quantity Rate Amount I Tcnaing & Paddydrainag (linkd directl! 37-316 175.235.836 16.087 96522.0()0 19986 41.970600 73,39 313.728436 tocrp establithtnct) a StoneTerracing ha 10,668 6,642 70,056,856 16.087 6,0(X) 96,522pS0 26,755 6,256 167,378,856 b. EarthTerraceing ha 2,763 4.620 12.765,060 19,986 2,1(X) 41.97(),600 22,749 2,406 54,735,660 c HillaLndTcracing h 15,576 2,792 43,40St,192 15,576 2,792 43,480,192 d. Paddydrainalge ha N,309 5.792 4X,125,728 8,30)9 5,792 4S,125,728 3 GrainProductionImp-vmenct 36717 69.017.8X0 153305 31.39X452 1X,729 3625i 35 70.75 136.674725 Wheat ha 9,173 1,601) 14.685,973 5,1(X) 1,433 7,308,300 14,273 1,541 21,994,273 Plasticmlch t.o ha 16.720 1.946 32,537,120 3,832 2,350 9,(t05,200 7,1(\3 2,105 14,951,815 27,655 2,0)43 56,494,135 Tmnsptantd pringeogw ha 0 2.881 1,636 4,713,316 0 2,01t 1,636 4,713,316 Transplantedsumme co ha o 2,800 1,540 4,312,0XX) 0 2.0tX) 1,541) 4,312,1t00 Vira-fiw potato ha 2,5)5 2.174 5,467,610) 5.792 2,308 13,367,936 6,526 2.145 13,990,270) 14,833 2,214 32,833,816 PaddyRice ha 8,30)9 L.965 16,327,185 0 0 x,3n9 1,965 16,327,185 4. CauhCrop Dcvelupmtnt 797 8.749.603 8.445 7L,883,34 2.797 4.216.991 84.850(608 Fla, ha 1,797 903 1,622,691 1,797 903 1,622,691 Ralpenced ha 150 1,361 204,150 Vagstablcs tD Redonion ha 0 7)( 2,585 1,X09,500 70)t 2,585 1,809,5()0 Wattmeclon ha 0 300 2,616 784,810) 300 2,616 7X4,(00 Fieldvegetablc ha 448 3,429 1,536,192 448 3,429 1,536,192 nsenthotevgetablc ha 0 11 42,X38 471,218 11 42,838 471,218 Pclalcyam ha 0 5,454 6,994 30,145,276 5,454 6,994 38,145,276 Amorphophallus ha 0 2,863 5,780 16,548,140 2,863 3,780 16,548,140 Goldlhned& medicinalherbs ha 167 6,523 1,089,341 167 6,523 1,089,341 Ganrdia Eta ha 32 105,000 5,920,000 29.5 135,000 3,982,500 62 161,016 9,902,500 Edibhifitgi ha 87 146,400 12,736,800 87 146,400 12,736,800 5. Enomnic Tt Ctnp Delopment 16-Zl1 126.965.874 28438 131.232.037 229 7.516.3l 3938 265.714.232 Kiwi fruit ha 354 20,200 7,150,8051 354 20,200 7,150,800 Tea Nesvdevlopment ha 150 13,435 2,015,250 1.296 12,044 15,609,024 1,446 12,188 17,624,274 Rthbilitation ha 436 10,145 4,423,220 436 10,145 4,423,220 Mulbert Newdevelopment ha 1,744 8,427 14,696,6S8 2,346 8,133 19,080,018 4,090 8,258 33,776,706 Rehabilitation ha 824 6,535 5,384,840 0 824 6,535 5,384,84)1 Cocoonraising fihility ha 2,568 6,950 17,147,6(10 2,346 7,200 16,1891,20t) 4,914 7,009 34,738,8051 Citrs ha 1,678 15.5951 26,160,020 157 14,432 2,265,824 1,835 15,491 28,425,844 Pear/Penimmon ha 574 12,828 7,363,272 158 6,603 1.043,274 732 11,484 8,406,546 Apple/Jujuc/apncot ha 425 8,308 3,530,900 716 7,406 5,302,696 1,141 7,742 8,33,596 u Gingko ha 919 9,545 8,771,855 1,624 9,343 15,173,032 2,543 9,416 23,944,807 S Chestnut ha 1.342 5.844 7,842,648 6,690 5,658 37,852,020 8,032 5,689 45,694,6689 Table4: 1 of 3 Annea5 - Table4: Land and FannerDe.dopoent Compoent SICHUAN SHAANXI NINGXIA PROJECTTOTAL Unit Quartity Rate Amount Quantity Rat, Amount Quantity Ratc Amount Quantity Rate Amount Walnut ha 1,666 5,t44 9,736,104 329 5,934 1,952.286 1,995 5,859 11,6S8,390 Euammia ha 1,506 5.934 3,936,604 2.358 5.974 14,0X6,692 3,S64 5,958 23,023.2M Sichaanpgpee ha 97 5,36X 520,696 97 5,368 520,696 Tumber ha 303 2,662 806,586 30(1 1,865 559,500 603 2,265 1,366,086 Laeqaertmee ha 1,516 2,461 3,730,376 1,516 2,461 3,730,876 Tan ha 300 2.266 679.S00 300 2,266 679,S00 GalInut ha 187 2.301 430,207 187 2,301 430,287 Lily Magnolia ha 209.) 2.169 453,321 209 2,169 453,321 "onaokh.. ha t,694 2.04S L57,sst 664 2,045 1,351,SWo Coltofoot ha 0 142 1,762 250,204 142 1,762 250,204 Ok fotet rehabilitation ha 1.S1) 1,190 2,155,090 I,XII 1,190 2,155,090 Anmi-rusionhedc (Ning,eia) ha 1.203 1,375 1,654,125 1,203 1,375 1,654,125 6, Livefttek Development 169.046.166 X2,227.692 5X.678.701 309.952 Cmt&cany fodder ha 3,500 1,6X0 5,830,000 3,000 1.520 4,560)000 2,702 930 2,587,260 9.2S2 1,403 13,027,260 Ammoatatedstamw/isiLp hsld 32,179 296 9,524,9U4 10,430 296 3,087,230 17,797 2X8 5,123,536 60,406 294 17,737,800 Pig Pig fateing head 207,026 300 62,107,S00 37,27S 263 22,954,114 5,970 205 1,223,850 300,274 287 86,285,764 Pig,nrcding head S,36 1,140 10,073,040 1,594 1,190 1,96,060 1,760 328 577,280 12,190 1,029 12,547,1S0 Goal head 147,647 261 33,535,867 93,092 269 25,041,748 14,155 163 2,307,265 254,894 250 65,8X4,880 Sh-p hmatd 81,290 230 18,697,513 X1,290 230 18,697,513 Rnm head 3,786 361 1,366,746 2,307 369 XW0,03 3,1X2 656 2,087,392 9.355 463 4,334,941 0 CO. head 26,499 1,285 34,051,215 17,851 1,317 23,509,767 17,797 1,465 26,072,605 62,147 1,346 33,633,587 DIhk/Lamyr 325,973 13 4,237,714 18,570 16 297.120 344,548 13 4,534,834 Ratbir (hair) head 40,860 80 3,268,S00 40,860 g0 3,26S,800 7. S.pportSemvies 9.927.791 9286.619 2638.696 21.S53.106 SeedProduetion Coe cd ptoductimn ha 954 4,135 3,944,790 276 3,145 868.020 1,230 3,913 4,S12,810 Whcatneed prnducion ha 200 2,327 565,400 200 2,827 565,400 Potato eedpmduntion ha 200 4,213 342,600 744 3,009 2,230,696 944 3,264 3,081,296 Potatosned tultip. greenhouse m2 300 1,033 310,046 300 1,033 310,046 Ritt needprdution ha 214 4,564 976,696 214 4,564 976,696 Yxn nedptedetion ha 211 7,723 1,629,553 211 7,723 1,629,553 Mushroominelumn bging x4 159 20,00W 3,1X0,WW 159 20,000 3,100,00 Gntwdiea ueedproductioa ha 0.5 140,000 70,000 I 140,000 70,000 Trec Nurneny Treneecdliagnursery ha 97 22,105 2,144,185 63 21,805 1,417,325 162 21,985 3,561,510 Tre gtafing nuary ha 75 12,921 969,075 75 12,921 969,075 Li,eetock HILldanmial bsedingservic(goeslep head 40 3,X16 152,640 40 3,X16 152,640 Has animalbreeding werviee (pig/tm) head 40 7.590 303,600 40 7,590 303,600 Pnenningequipment Villageproeeang wneruieaA set 80 5,000 400,000 200 2,000 400,000 200 2,357 800,000 Viltag pe erieiccrg B c 46 13,3W0 615,4t0 46 13,3S0 615,4t0) i Villcgetechnical servic (sprying,pua sat 275 3.180 X25,0t0l 275 3,000 X25.,0t0 LT2 Table4. 2 of3 AnnexS - Table4: Lsnd nd Fneri Dsdtpmeot Comavonent SICHUAN SHAANXI NINGXIA - PROJECTTOTAL Unit Quantity Rd,c Amomt Quantity Rate Amount Quantity Rrtc Amoent Quantity Rrtc Amount . Extenionand Taining 36.869599 29.155142 6.5495S0 72574.291 Demonsiraton(i(ld hsId 1,194 6(0 716,400 591 600 354,600 400 4n0 16(1,000 2,1S5 563 1,231,101 Trainingoftochncian md 60,600 30 1,I18,000 17,580 30 527,400 4,120 30 123,60t0 S2,300 30 2,469,000 Trainingofhouchold nd 671S,068 Is 10,171,020 532,152 15 7,92,280 180,10(K 15 2,700,0(00 1,39(),220 15 20.853,30) Ebsnioni,ivn(tcc) (mId 135,593 15 2,03S,395 119,640 I5 1.794,600 9,215 3 120,575 264,09 I5 3,953,570 Ectusion visits(food ctps) hsid 277,799 I 277,799 69,070 1 69,070 32,464 4 129,856 379,333 1 476,725 E0tcnsionvisits (anima husband,,) hsid X1,037 10 810,370 1()1,156 6 606,936 35,996 0 207,904 218,191 X 1,705,290 Small xtnoion Eqnipmenl sot 65 S,000 325,0t)0 2011 5,(X)0 1,I105,0(10 31 5,10( 155,0(J0 297 SOX() 1,4S5,000 Vottonarvand Benxding Staeionn Equipmont oct 66 5.000 330,000 65 5,000 325,000 131 5,000 655,000 Se,viecs Cow head 26,499 10 264,990 17,851 2() 357,020 17,797 10 177,970 62,147 13 799,980 Shccp/goat hcad 151,433 5 757,165 95,479 4 381,916 14,155 5 70,775 261,067 5 1,209,856 1 pigos' head 233,534 10 2,335,340 88,72 5 444,360 11,250 5 56,25() 333,656 6 2,35,950 t- Atificial insemination(cow) head 17,797 21) 355.940 17,797 20 355,940 Vehicles Pick.uptnck no 108 100.000 10,800,000 50 100,000 5,000,000 8 100,000 000,000 166 1()op00 16,60()000 Motorcycle n 151 10,000 (,510,00() 31 10,000 31(),0()0 12 10,0(J0 1,820,000 TonsvhipProject Management fshipAr 774 3,600 2,786,400 1,206 3,600 4.341,6()0 186 3,6(1o 669,600 2,166 3,600 7.797,6(00 Villog Projct Management vill/yr 7,164 48(0 3,438,720 9.2S2 480 4,455,360 1,20() 360 432,110(1 17,646 472 8,326,080 9. AppliedRescarch itnm 2.385.321 2.064.220 550,459 5,00o0.0 Dircal BascCost 598S198X158 453.770.096 158.379.703 1.210.347957 AdministrativeFcc (I.5/) 8,972,972 6,806,551 2,375,696 18,155,219 Tttl BnemCost 607.171.130 460576.64t 160,75539 1.22503.176 Contingcncics 30.13% 182,912,199 30)41% 140,(072,940 30.25% 48,632,508 371,617,647 T -A. C5tinfvn .l1d94i6A 19v,.O3319 6.6495 1037.906 1.60,12Uo23 In Table4: 3 of 3 China: Qinba MountainsPoverty ReductionProject Detailed Project BaseCostg by Provinceand Component(Yuan) Annex 5 - Tble 5: Rural EnterpriseDevelopment Component Sicuan Shaanxi ------Ningxia ------ProjectTotal ------Numbers AMOUNT Numbers AMOUNT Numbers AMOUNT Numbers AMOUNT I Mining andmineral processing 3 7,206,133 5 21,704,449 8 28,910,582 2. Constructionmaterials 5 12,787,041 3 11,427,758 8 24,214,799 3. Agroprocessing 15 36,470,545 36 66,282,243 2 11.967,109 53 114.719,897 4. Feedprocessing 1 3,789,315 1 3,7S9,315 5. Tea processing 3 5,615,764 13 18,544,889 16 24,160,653 6. Dry & freshfruit processing 5 11,861,518 7 13,775,825 12 25,637,343 1 7. Livestock productprocessing 10 42,465,714 4 9,620,515 1 3,552,487 15 55,638,716 ti 9. Forestproduct processing 7 21,678,171 7 6,669,185 14 28,347,356 10. Handicrafts 5 16,196,932 3 5,268,850 1 2,637,455 9 24,103,237 11. Silk reeling 1 7,578,628 1 7,578,628 12. Otherproduct processing 8 23.905,640 5 7,432,365 13 31,338,005 13. Farmers'market 6 8,552,215 28 9,809,770 34 18,361,985 DirectBase Cost 68 190,528,988 112 178,114,477 4 18,157,051 184 386,800,516 Managementfee (1.5%) 2,857,935 2,671,717 272,356 5,802,008 Total Base Cost 193386923 112 1I76.194 4 1&429407 184 392.602.524 Contingencies 300/, 58,016,075 30% 54,235,858 300/ 5,528,822 117,780,755 Total Cost 251.402.9 235.022.052 2 .229 519S21 Tx Table 5: 1 of 1 -113- Annex 5 t ° °o1 *1 I°v° Vcr -D , A~~~ Z d {> ------i - C - s e | rl < ¢- > j >I e R R, e7 = C .C<0~ c IZ |= |888 o S= 8 l8oo|8oa.oe 1oo15 8 1 - 8 x,1°oSSg. < I I 8 I,§ :cg,O>o 8§ 8§=8 -~~~. P ->m. _ C>s oRe_ro _ s_r__oN- o H & °S= e88asX5 -8sf5 °s5 - | =f f eoeEX= Anne.S - Tabt 6: Institution Building and Project Managemnent Conmponent SICHUAN SHAANXI NINGXIA - -- -- P,,jct Totli UNIT Qoantity Raul Amount Qauntity Rate Amount Quantity Rotc Amount Qnantity Rose Amount 3. Vehicls 3.550.0(KK 2.8501000 1,350,000 7.750(000 Jccp no 30 101,667 3.050.000 23 102,174 2.350.000 9 105,556 950.0K0 62 1()2,419 630 0(00 Pravinc. no ) 0 150,000 15(,00( 1 150,0KK) 15(),(0) I 15(0,)0 150,00() 3 150,00() 45(),000 Psefcctuns/County no 29 I(Ko,(K)o 2,90(K).100 22 I 0100,(0) 2,2(K),0()(0 0 1O,(K() $(KO,(KO(0 59 10,()(KO 5,900,(K)() Mini-bus (22 seats) no1 4(0,000 400.(K000 I 4(X),(KKo 4110000(1 I 400,(00 400.(0(K1 3 400.(NK) 1.2010(00 P-ovince no I 400),(00() 40),()0( 400() 40),000 1 400,()(00 4(00,(00)( 3 4()(),()(K0 1,2()0,0K)() Van (l()scas) no I 1()O,(00) 100.00() I I(N),O(K) Io0((0 - O 2 I ()O.((NO 2()0.(o00 Provin.c no I I 01(1(01( 100,0()O I 1()()()()) ( I()(,()()o11(0),(1O( O 2 1()0(N) 20(,1(0o II.P'ROJECTMANACEMENT & SUPERVISION II.241.900 10,0919,990 2,847.300 24.189.100 I Pmjct Supervision 7101000 71KO.0()1 1#0,(1(1 I71.1O,(1o1 Prsixne sum 6 116.1,67 7()(),0()() 6 116,667 7()0,(000 6 301,(1(1(1 18(),()() 1,5N0,O()() 2 Lool Consultaonts p'son 201 36,0()(' 7201(101) 12 36,0()0 432.10(1 5 36,0110 10hO()(11 37 36,(000 1.332.()00) Provin-c p5on 21) 36.11)(0 7201.111111 12 36,tXN) 432,(0NN 5 36,(010 IRO.(NN) 37 36,0KN) 1,332,1011 3. Stofffrising - Domestic p'son 511.028 57 20N31,400 65,112 55 3.551.4(0 9,166 63 5O.N0)0 124,222 56 60963,601 Provinc. p'so 6101 310 13011011 600) 3001 10,000 250 3110 75,1)(N) 1,4510 310 435,00No Counly pnso 1,NOO 151) 27(),()(K) 1,51)0 150 225,000 6101 150 9N),1010 3,9011 150 5X5,0)00 T'ship & Village p.n- 47,620 51( 2,301,4100 62,920 50 3,146,400 11,316 50 415,800 11,11372 50 5,943,6()() 4. Staffruining - Overseas puso 12 35,0K0) 4220.00 10 35,0o01 35101110 7 35,(NK) 245.100 29 35,)000 1(151(101 Province pson 12 35,0110 42(),000 10 35,000 350,000 7 35,000 245,000 29 35,(000 1,015,000 5. Studs Tu . Domestic pnso 12N 4,0(N) 512.0(01 N0 4,10)0 321).000 15 4,0010 611000 223 4,(0K 092,0(1 Provntce pnso 2() 4,000 S0,00 20 4,(K0 hO,00 II 4,(KK0 44,0NK0 5I 4,(K00 2()4,000 Counyt &Tship pson 108 4,0tN) 432,000 60 4,(K00 240),10(0 4 4,000 16,000 172 4,(010 6NN,000 6 Studv Tours - Ovrscas pson 4N 5(),0KKo 24(0o(000 34 50,0tN) 1.700.000 14 50,000 700000 6 50,000 4.8)010K00 Ptnvinec pson 12 50,0(K 601,000 1() 50,1050 500,000 6 50,000 300,00(0 28 50,00() 1,400,000( County pnso 36 50,000 1,800,000 24 50,OOO 1,200,000 8 50,0(0 400,000 6S 50,000 3,400,K)O 7. Technicalusistonc - Pv. pson 107 11,075 1185.00(1 57 12,095 735000 16 12,188 195.0(8 100 11,750 2.115300(K Domestic puso 105 9,000 945,000 55 9,000 495,000 15 5,(0K0 75,(NK0 175 8,657 1,515,1000 Overseas puon 2 120,00(1 240,000 2 120,000 240.1000 1 120,000K 120,00(0 5 120,000 600,000) 0 Con6enece pson 78 26,154 2.040000 66 27,273 1800000 15 36,000 540.000 159 27,547 4.380(1105 Pmvince p'on 6 IOKI,000 600,000 6 100,000 6K00,000 3 100,000 300,000 15 100,00( 1,500,000 County pun 72 20,1000 1,440,000 60 20,o0(K 1,200,000 12 20,000 240,000 144 20,0(0) 2,880,000 9. Booksand joumaJs Sum 426 1,018 433500 636 804 51L.500 108 1,542 166.500 1,170 950 1.111500 Province sum 3 20,000 60,0010 3 20,000 60,0(00 3 20,000 60,000 9 20,000 180,(N15 County sum 36 5,000 180,000 301 5,0(N) 150,N000 12 5,000 60,(100 78 5,000 3901,0OKN 1'rhip sum 307 50K) 193,500 603 5(N0 301,508) 93 500 46,500 1,083 500 541,50N) Total Ban Cost sunm 23,421,935 20,935,435 7,153,385 51,S10.755 Conlingncis suns 37.28% 0,732.497 38.66% 8,093,870 35.38% 2,531.072 19,357,439 Totsdimid. contingncis Sum 32154432 29.029.305 9.6U4A57 ZOMLA UPt Table6: 2 of 2 China: Qinba Mountains Poverty Reduction Project Detailed Project BaseCosts by Province and Component (Yuan) Annex 5 - Table 7: Poverty Monitoring Component ------SICHUAN ------SHAANXI ------NINGXIA ------Project Total ------UNIT Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount I- 1. Poverty Monitoring sum 1.660,000 1.660,000 415 3.735,000 2. CWHRC Independent Labor Mob. Monitoring sum 3.735,000 2.490.000 6,225.000 Total Project Cost sum 5.395,000 4,150,000 415,000 9,960,000 Table 7: 1 of I China: Qinba Mountains Poverty Reduction Project DetailedProject Base Costs by Provinceand Component (Yuan) Annex 5 - Table 8: MicrofinanceComponent ------Sichuan------Shaanxi------Project Total ------UNIT Quant. Rate Amt. Quant. Rate Amt. Quant. Rate Amt. 1. Vehicles 40.000 50.000 90,000 Motorcycles no 4 10,000 40,000 5 10,000 50,000 9 10,000 90,000 2. Equipmentand Fumiture 87.850 87.850 175,700 3. Training andTA 501.600 501.600 1.003.200 3.1 Training 433.800 433.800 867.600 Center day 180 210 37,800 180 210 37,800 75,600 Province day 150 440 66,000 150 440 66,000 132,000 County day 600 200 120,000 600 200 120,000 240,000 Overseasstudy tour p'son 3 50,000 150,000 3 50,000 150,000 300,000 Domesticstudy tour p'son 15 4,000 60,000 15 4,000 60,000 120,000 3.2 TA 67.800 67.800 135.600 Consultant year 6 11,300 67,800 6 11,300 67,800 135,600 4. Subloans 12.124.620 12.175.680 24.300.300 5. CenterMonitoring year 6 25,200 151.200 6 25,200 151.200 6. Indep.auditing & evaluation 195.600 195.600 391.200 Indep.auditing year 6 16,300 97,800 6 16,300 97,800 Indep.evaluation year 6 16,300 97,800 6 16,300 97,800 7. Administrative fee(1.5%) 196.513 197.429 393,942 Total BaseCost 13.297,383 13,359.359 26.656.742 Contingencies 24.84% 3,302,617 24.26% 3,240,641 6,543,258 4 Total Cost 16.600000 16.600.000 33.200.000 Ln Table 8: 1 of I CHINA:Qinba MountainsPoverty Reduction Project Detailed Project Procurement and Disbursement by Province and Category (Yusn) Annex 6 - Table 1: Procurement by Province and Category SICHUAN SHAANXI NINGXIA PROJECTTOTAL- Unit Qurnity Ratc Amount Quatity Rate AmoQunt uantity Rat Amount Quatity Rate Amont L 23tl.772110 1YY.741 55.981t7 4a6.1n2.a9 EOI£IPMEU H627M 0t7f0f54 14.2.905 ISI 470174 Comami = _EmmMKFA _c 2.9t3035 2500.535 1102.005 6 152655 Comogftdi _2 432 25.0D0 1.075.000 30 2500 750.000 12 25D000 300.000 tt5 25.0co 2.125 Labor Mobility n 21 25,000 525,000 14 23,000 350,000 35 25,000 275,000 Institution Building w 22 25,000 550,000 16 25,000 400,000 12 25,000 300,000 50 25,000 1,250,000 Ndebook C _2 a a_ 000 56.000 , 7SOD0 56.000 2a 22o000 56.000 6 22o000 16R000 Institution Building w 2 23,000 56,000 2 2S.000 56,000 2 23,000 56,000 6 23,000 163,000 CompultrSoftmuc 112_ 6 1-667 60.000 22 1.4 340 L 2.000 ,20C000 6S 1.676 114000 Labor Mobility w 26 1,538 40,000 12 1,167 14,000 3t 1,421 54,000 InsoitutionBuilding n 10 2,000 20,000 30 2.000 20,000 10 2,000 20,000 30 2,000 60,000 _J F 11r _2 22_ 25I.50 510.0C [ 25-357 355C _ 3DODO 150.00 3. 26026 1015000 LaborMobility n 2 27,500 55,000 I 25,000 25.0C0 3 26,667 S0,000 tnotitutionBuilding n la 25,272 455,000 13 25,3X5 330,30 5 30,000 150,00D 36 25,972 935,000 Fax Maciu a 34 £.265 179.0C0 24 5.00 120.0C0 5 5.0 25)0M0 63 5143 324.00 Labo Mobility w 16 5,563 29,000 II 5,0C0 55,0l00 27 5,333 144,000 Institution Building n IS 5,0O0 90,000 13 5,00 65,000 5 5,000 23,000 36 5,000 I330,00 Ovnadi Pn20 2 1L33! 23.0 1 15.0C0 15.0CI 1 t.I000 15.000 _4 13.25 Il LAbrWMobility n I 2a,00 2,000 0 1 2,000 2,000 bntitutionBuilding n I 15,000 35,000 1 15,0C0 15,000 I 15,000 15,000 3 35,000 45,000 Art_d.io0 2 a 17.-00 35D000 2 17.50 35.000 2 172500 35.000 t 37500 030500 InstitAio Building n 2 17,500 35,0U0 2 17,5C0 35,000 2 17,500 35,000 6 17,500 105,000 High _d _2 1 74.0 72-000 1 73-000 782000 1 7Z000 73-000 a 79 0000 234,0 btitution Building n I 73,00 72,000 1 7C,000 72,000 1 72,000 73,000 3 73,000 234,000 00 1 50O 50.000 I 5.0000 50.000 I 50000 5.000 1 50 350.000 InstitutionBuilding n I 50,000 50,000 1 50,000 50,000 I 50,000 50,000 3 50,000 150,000 Vidy nnoam 1 300 300000 1 30C000 3000,0 I 300000 300000 a 3OO.0 300000 Institution Building n I 300,000 300,000 3I 300,020 00,000 3I 300,3OC 100,000 3 100,000 300,3000 Qffliaurntur 00 147 (."2 747.035 24 U.41 W907535 t2 725st 273-OS5 397 4.256 1.927.i55 Institution Building st 147 5,002 747,035 214 4,241 907,535 36 7,526 273,035 397 4,256 1,927,655 0 08 Annex 6 - Table 1: Procurement by Province and Category --. SICHUAN - SHAANXI NINGXIA - PROJECT TOTAL- Unit Quantity Rate Amount Quantity Rate Amount Quantity Rtte Amount Quantity Rate Amount (2) OthcrCommonEnuinmcnt 330 _ 31)21 444.021 Ttomfxtea 2 72S00 54.600 16 7s800 127.682 23 7 800 12.2182 Rurl infiastnueturr(irigation) no 7 7,800 54,600 0 7 7,800 54,600 Rund hinturucture(Mic.inig.) 16 7,800 127,682 16 7,800 127,682 EIcitricMotor &Pump 1.1200 78400 16 1120 183.33S 23 11.200 261.73# Rurl Int'rastruttunc(iigation) net 7 11,200 78,400 0 7 11,200 78,400 Ruralnlftasttuctut(Micoiyigation) 16 11,200 183,338 16 11,200 183,338 a) Labor Mobility 101150 649.5(10 1.661.000 Office fumiture ret I t 4,000 72,000 0 18 4,0)00 72,000 TV & vidn platycr rt 14 6,000 84,000 II 6,01)0 66,000 25 6,01K1) 150,000 Sewingmacbinc no 240 600 144,000 200 600 120,000 440 600 264,000 Filingcabinct no 50 350 20,300 5() 350 17,500 108 350 37,800 Officctable & chair set 58 434 25,200 50 440 22,000 10 437 47,200 Trainingdesk & chair set S00 235 188,000 600 233 140,000 1,400 234 320,000 DoubIc-dcckbed Set 500 220 110,000 300 217 65,000 000 219 1753000 I Mattss & luggage ret 1,050 300 315,000 600 300 100,000 1,650 300 495,000 Thermos no 1,000 25 25,000 600 25 15,000 1,600 25 40,000 X Kitchenutensil Set 14 2,1000 28,000 12 2,000 24,000 26 2,000 52,000 (4) Rutdlnfraltucturo 2.S63.500 1.091.00 3.9548o00 RuralWater Sutoly no 2.863.500 263.500 Triulbssner no 105 6,300 661,500 105 6,300 661,500 Elecuticmotor&pump ret 105 3,000 315,000 105 3,000 315,000 Handpump st 6,290 300 1,887,000 6,290 300 1,887,000 Mikmiraa)i Submersibiepump 2,183 500 1,091,300 2,183 500 1,091,300 (4) Land& FarmerDMyclonment 2.495480 1.330.000 5550 4.380.4S SupportSCevicS Villagc prceing equipmentA ret 80 5,000 4(10,000 200 2,000 400,000 280 2,857 800,000 Villagepmccuing eqaipsent B rt 46 13,380 615,4t0 46 13,3K0 615,4S0 Villagc technicaler,vice equipment set 275 3,000 825,000 275 3,000 825,000 Extension& Tmining set Small cxtnsion Equipmemt Set 65 5,000 325,000 201 5,000 1,005,000 31 3,000 155,000 297 5,000 1,485,000 Vct. A Breding Stun equip. set 66 5,000 330,000 65 5,000 325,000 0 0 0 131 5,000 655,000 0s 0o Annex 6 - Table 1: Procurement by Province and Category - SICHUAN SHAANXI NINGXIA PROJECTTOTAL Unit Qumtiry Rawe Amount Quantity Rat, Amount Quantity Rate Amount Quantity Rate Amount L6, RuralEntemnse tcvloumnon 77.066.320 76.102t699 11,169.499 1.33S.5 Mining & minmrmlpowsing st 3 967,472 S 12,346,055 13,313,527 Constructionmaterials nI 5 5,SX3,R41 3 4,521,650 10,405,541 Ag-pro-ssing et IS 18,723.232 36 32,300,442 7,771,535 5S,795,209 Feedprossing net I 1,515,725 1,515,725 Tenprocsuing ct 3 1,991,911 4 6,888,296 S.,S0,207 Dry&fireshfruiltprmceusing tet S 3,699,646 9 1,613,217 5,312,863 Livestockpmduct processing st 10 15,475,645 6 4,643,410 2,133,000 22,252,055 Fornt peductprcessing set 7 11,953,120 13 6,735,302 18,6SS,502 Handiceftls se 5 6,654,8S4 I 509,720 1,264,964 S,509,560 Silk nccling sc 3 1,876,400 1,876,400 Otberproductprocessing set 10,200,794 4 4,588,127 14,7SS,921 La7 Mimfi Wasum S7S50 S7S50 175700 I VEHICLE 19J743 130920 ZAN, 350606 W CommonVchidc Pick-upTnck _ 121 100.00 12.100.000 61 100.00 6.100.0tl I_ 2OSO1100.000 £1 Im1 19.000.000 LaborMobility w 13 200,000 1,30,000 11 200,000 1,100,000 24 100,000 2,400,000 Land& FPamcrDewlop no l(11 100,000 0.00,00,OO 50 100,000 5,(000,000 0 100,000 SOO,000 166 100,000 16,600,000 motocycly no 4 10-000 40000 156 10.000 1.560.000 31 IIIOO 310.000 191 10.000 1.910000 Land&FaroerDevelop no 151 10,000 1.510,000 31 10,0(10 310,000 102 10,000 1,020,000 Microfinanoc so 4 10,000 40,000 5 10,000 5(),()00 9 10,000 90,00t) W2 Institution Buildiri km ns 30 101.66 3050.000 L3 102174 2350000 _ IOS.S6 950.000 _2 102.419 63.3S.000 Bum(22 saLul Be 1 4000000 400-EX,O I 4W. 400.000 1 400000 400-000 1 400.0 1.200.000 Van( I1 100.000100 1010I0DO I ImU 100L 2 0 200.0 .' RuedEsterane mcveloomcnt TrudMIO) D2 2.1 150 3.150.000 _ 150.000 600. 21 ISO. 3,750,000 TnIck (500 12 77000 24 16 7.0 o 1.232.000 2 00000 200000 30 73 2.356.000 Truck(2.5T) 00 55.000 110000 I5 50.000 750.000 17 50.S 60000 x Annex6 - Table 1: Procurementby Provinceand Category _ SICH VUAN SHAANXI NINGXIA _ PROJECT TOTAL Unit Quantity Rat, Amrount Quantity Ratc Amount Quantity Raft Amonlt Quantity Rat. Amount 1.3 MATERIALS&TOOLS 124i3 105.577.157 39D9t963 269,006f715 W1 Maoriais&Tooll 9.067.100 7404.000 6.560. 23.031.700 Rual Infianjm 9.067 100 7.404.000 6.560.600 23.031.700 Walcr Supply G3aNvaniz=dirn pip tlon 557 4,300 2,395,100 2 4,300 8,600 559 4,300 2,403,700 Cast in pip. ton 390 2,800 1,092,000 390 2,800 1,092,000 PVC pipe ton 465 12,0(0 5,500,000 617 12,(00 7,404,000 10 12,000 120,000 1,092 12,000 13,104,000 Micoinigation R.bbtr hosw 000m 432 6,000 2,592,000 432 6,000o 2,592,0(oo Plastic howc'0m 1,280 3,000 3,840,000 1,280 3,(14) 3,040,)000 LLand &FamnrtuDwcloDmcnt 115.263.495 98.173.157 32.538.363 245.975.015 T221A NJ 40S9,0S0 9,403.520 2 006 2S0 210370.S00 Food Cop 5tc 36,717 120 4,406,040 15,305 S0 1,224,400 18,729 40 749,160 70,751 9K 6,379,600 CashCrp stc 765 120 91,S0K) 5,564 00 445,120 2,797 40 111,880 9,126 71 648,8010 Tr Crop t 33,729 00 2,698,320 46,690 00 3,735,210 3,728 65 372,320 86,147 79 6,005,040 0 Cult-w-Canry Fodder set 3,500 40 140,000 9,000 40 360,00(K 2,782 40 111,280 15,282 40 611,2S0 Anmoniation set 32,179 40 1,287,160 10,430 40 417,20(K 17,797 40 711,880 60,406 40 2,416,24() Scud Production nlt 1,568 120 188,160 0 g0 0 744 40 29,760 2,312 94 217,920 Mush-ro inoculuo bagging ha 159 20,000 3,18),000 159 20,)000 3,180,(1K) Tt Nurnety tot 970 00 77,600) 520 go( 41,6010 1,490 8() 119,2K0O So01oo _9 12.278 4 491.12 18348 40 733.920 30.66 40 1.225.040 Cash Crop no 2,973 40 118,920 2,973 40 118,920 Troc Crop no 11,308 40 452,320 14,958 40 590,320 26,266 40 1,050,640) Seed Production no 277 40) 11,000 277 40 11,080 Tro Nurry) nO 970 40 38,800 140 40 5,6(0 1,110 40 44,401) via -120 17189 2.2(10 37,815,591 17021 2200 37,445,758 4.654 22(10 10.239.526 38864 22100 85500.875 Food Cp ton 8,727 2,200 19,199,103 3,249 2,201) 7,140,141 3,520 2,200 7,743,230 15,496 2,201) 34,090,474 CashCrop ton 303 2,2011 665,654 4,526 2,201) 9,956,265 415 2,200 913,30)8 5,243 2,200 11,535,227 Tro Crp ton 6,605 2,200 14,530,538 8,363 2,21)0 18,398,930 215 2,200 472,560 15,183 2,200 33,402,028 Cut-and-Carr) Fodder Mon 525 2.201) 1,155,10(K 450 2,2101 990,000 0 2,20K) () 975 2,200) 2,145,(KK) Armoroniation ton 644 2,214) 1,415,876 2()9 2,2(00 458,92(0 356 2,200 783,068 1,2()8 2,201) 2,657,064 Ssod Production ton 320 2,2(K 721,380( 144 2.20)0 316,952 149 2,200 327,360 621 2,201) 1,365,692 Tr Nursr ton 58 2,2()1 128,0)4() 80 2,200 176,550 138 2,210) 304,590 Annex 6 - Table 1: Procurement by Province and Category SICHUAN SHAANXI NINGXIA- PROJECTTOTAL- Unit Quantity Ratc Amount Quantity Rate Amou Quantity Rate Amount Quantity Rate Amount DAj 11.636 2650 30 836.46Y 14293 2.650 37.875.888 4.559 2.650 12.081.801 30.488 2.650 80.794.158 FoodCrop ton 5.508 2,650 14.595,008 2.296 2,651) 6,083,738 3,(0)5 2,650 7,963,595 )0,808 2,650 28,642,340 CashCrop ton 106 2.650 280.105 2.888 2,650) 7,652,140 405 2,650 1,072,455 3,398 2,650 9,004,700 TnxeCrop ton 5.050 2,650 13,381,847 8,372 2.650 22.185.316 437 2,65) 1,157,255 13,858 2,650 36,724,417 Cut-and-CarryFodder ton 700 2,650 1,855.()00 600 2,650 1.590,00 556 2,650 1,474,460 1,856 2,650 4,919,460 Amm,oniation ton 0 2,650 0 0 2,630 0 0 2,650 0 0 0 SeedProduction ton 215 2,650 570,210 S4 2.650 223,583 156 2,650 414,036 456 2,650 1,207,899 Trw Nursery tan 58 2,650 154,230 53 2,650 141,113 II 2,650 295,343 PtausiumSulfte 2 8jIS0 2.100 17.177,448 8.180 2.1(N 17.177.448 FoodCrp ton 2,702 2,100 5,673,276 2,702 2,100 5,673,276 CmahCrop ton 122 2,100 236,956 122 2,100 256,956 TreeCrp ton 4,263 2,100 8,952,651 4,263 2,100 8,952,651 Cut-and-CanyFodder ton 700 2,100 1,470,000 700 2,100 1,470000 Amnmrotiation ton 0 2,100 0 0 0 SeedProduction ton 349 2,100 732,900 349 2,100 732,900 Twe Nursery ton 44 2,100 91,665 44 2,100 91,663 8 PlasticMulch a 864 12W0 10.366.512 387 .ILO00 4.649.976 462 1200 5S43.724 171 1.0L 20-560212 FoodCrop ton 744 12,000 8,922.972 253 12,000 3,035,616 426 12,000 5,114,160 1,423 12,000 17,072,748 CuhCrop toa 34 12,000 402,720 118 12,000 1,411,200 I1 12,000 216,000 169 12,000 2,029,920 Tn e Crop ton Cut-and-CarryFodder ton Ammoniation ton 32 12,000 386,140 10 12,000 125,160 18 12,000 213,564 60 724,872 SeedProduction ton 45 12,0100 538,272 0 12,000 /) 0 (2,000 0 45 12,000 538,272 Tee Nuirt ton I)0 12,000 116,400 7 12,0M) 78,80K) 16 12,0(0 194,4W IticiddA lj( 149.035 63 9.687.275 124.063 65 8.064.095 390 65 2587.033312.899 65 20.338.403 FoodCrop unit 45,026 63 2,926,690 15,305 63 994,825 25,544 63 1,660,32 85,t875 65 5,581,843 CashCrop unit 2,724 63 177.060 19,335 65 1.256,775 6,097 65 396,305 28,156 65 1,830,140 Tnx Crop unit 97,379 65 6,342.635 86,760 65 5,639,40() 7,044 65 457,860 191,383 65 12,439,895 Cut-and-CattyFodder unit Arnmoniation unit SeedPodution unit 2,736 65 177.840 1,163 65 75,595 1,116 65 72,540 5,()15 65 325,975 Te Nurery unit 970 65 63,050 1,500 65 97,500 2,470 65 (60,550 mEi x Annex 6 - Table 1: Procurementby Provinceand Category _- - SICHUAN - SHAANXI NINGXIA --- - PROJECT TOTAL Unit Qoantity Rat, Amount Qu;mtity Ratu Amount Quantity Rat, Amount Quantity Rate Amount H. WORKS 619.957,611 477,594.259 156.S48.319 1,254.3S6.1S9 2.1 BUILDING 91.966.933 8116SS0 6.43W067 179S91.S0 (1H LalborMobilitr _ 7 100 1231 9,740000 5200 I 03t 5.40KI.0(K1 12.300 1.U 14.140.00 (2) Land& FannerDevwlorment m2 Cocoon asingfacility p 2,569 6,950 17,947,6(K1 2.346 7.200 169891-2(X 4.914 7.069 34,738,(80 in Rurn EntwnriscDsevlonment m2 62.979.333 56.495.680 S949,067 125,323,01810 M InstitutionBuildinr & Proict Management(Countyl m2 390o 9110 21400000 3,000 900 2400W00 1.610 369 590, 7.600 709 5.390.(1X) La Telmhosn9Conntion 591.00 765000 640 1.4W, LaborMobility no 17 3,353 57,00 12 3,000 36,000 29 3,207 93,009 InstitutionBuilding no 170 3,141 534,(X10 235 3,102 729,00 16 4,0KXI 64,0KK0 421 3,152 1,327,0(KO 2.3 STRUCTURE,EARTH. & STONE WORKS 279.100.091 14.664i002 73,975,521 537.739.614 (1 Rurallnfrannuctum 103.S64.255 SS.142002 32.(K14.921 224,011.178 RuralElectricity sum 10,422,9N0 21,285,550 31,708,530 RuralRoads um 41,519,654 37,856,797 79,376,451 WaterSupply sum 27,659,472 20,479,455 1,561,314 49,700,240 Irrigation Sum 22,901,577 9,520,200 I 31,321,777 Mic,oirrigation ha 5,355 5.6S5 30,443,607 30,443,607 RuralEnergy sum 1,460,572 1) 1,460,572 121 Land& FarmierD6clorment 175.235.S36 96.522000 41.970.6W 313.729S436 Tenacing& PaddyDraina.g Stoncterracing ha 10,668 6,642 70,956,956 16,0S7 h,000 96,522,1610 167,379,356 Earthterracing ha 2,763 4,620 12,765,00 19,996 2,100 41,970,600 54,735,660 Hill landterracing ha 15,576 2,792 43,4SS,192 43,488,192 Paddydrainag; ha 9,309 5,792 49,125,729 48,125,72S L CROPESTABLISHMENT S6.f2,6 132.677. W0.996.2SZ 240.626.852 FoodCwp ha 36,717 362 13,294.8(X) 15,305 944 12,911,733 (9,729 696 13,027,913 70,751 555 39,234.445 CashCrp ha 797 9,627 6,975,366 S,445 6,145 51,043,514 2,797 539 1,307,043 12,039 4,936 59,425,945 Trn CCp ha 13,713 4,577 62,759,964 1,0(92 3.526 63,793,672 2,219 2,279 5,056,326 34,024 3,869 131,599,961 SeedPrduction ha 1(368 (,9701 2,559,054 999 3,132 3,093,010 744 1,S75 1,395,0(1) 3,100 2,273 7,046,064 TrueNurs ha 97 15,210X 1,474,40W 140 13.186 1,846,038 0 237 14,010 3,320,439 x CT% Annex6 - Table 1: Procurementby Provinceand Category ____ SICHUAN SHAANXI NINGXIA PROJECTTOTAL Unit Quantity Rat, Amount Quantity Rat" Amount Quantity Ratc Amount Quantity Ratc Amount 2.5 LIVESTOCK ESTABLISHMENT 161.336.932 78.ZB6.412 55.34.449 195.007.S43 (I) Cut-and-CanyFodder ha 3,500 360 1,260,000 3,000 540 1,620,t()0 2,752 360 1,001,520 9,282 410 3,S81,520 (2) Ammoniationtank hsid 32,179 2)00 6,435,18tl 10,43() 200 2,006,000 17,797 192 3,417,024 60,406 198 11,93S,024 (3) Pig Pig fiatening head 207,026 300 62,107,000 37,278 263 22,954,114 5,970 205 1,223,850 300,274 287 86,2S5,764 Pig broeding hoad 0,836 1,140 10,073,040 1,594 1,190 1,896,860 1,760 328 577,280 12,190 1,029 12,547,1801 (4) Goat hnad 147,647 261 30,535,067 93,092 269 25,041,740 14,155 163 2,307,265 254,894 250 65,884,880 (5) Shc-p hoad 0 0 0 0 0 0 81,290 230 18,697,513 01,290 230 18,697,513 (6) Ram/ho-goat hoad 3,786 361 1,366.746 2,387 369 880,803 3,182 656 2,087,392 9,355 463 4,334,941 (7) Co% hoad 26.499 1.253 34,051,215 17,851 1,317 23,509,767 17,797 1,465 26,072,605 62,147 1,346 53,633,587 (8) Duok/Layer 325,978 13 4,237.714 18,370 16 297,120 0 0 0 344,548 13 4,534,534 (9) Rabbit(hair) hcad 40,860 S0 3,268,800 40,860 80 3,265,800 UtL TA TRAINING A RESEARCH 37.0.6W0 27A22.402 7.109209 71.27.651 Li TECHNICAL ASSISTANCE 7.S67 51J4 0 7900145426 (W LaborMobiilt 500.000 500.000 1.0(00.00 TA sum 500,000 500,000 1,000,000 1) Inst Building& Pmi Mananeo 1.90S.00 1.167.000 37S.0 34470 LocalConsultants pson 20 36,000 720,000 12 36,000 432,000 3 36,000 10,000 37 36,000 1,332,000 TA pson 107 11,075 1,1S5,000 57 12,895 735,000 16 12,188 195,000 180 11,750 2,115,000 (31 IndeocndcntMonitorin 5.395000 4.150.000 415000 9.960000 SSBSur.ev sum 1,660,000 1,660,000 415,000 3,735,000 CWIHRCLabor Monitoring sum 3,733,000 2,490,000 0 6,225,000 hi Mienfinanee 67 800 675800 13S.600 LorsdConsultant year 6 11,300 67,800 6 11,300 67,500 135,600 12 TRANING 19,9DZ.620 15S19.4S0 44D2091S W LaborMobilit 600.000 600300 t.200.000 StaffTraining sum 300,000 300,000 6(X),000 Sorminarn nutn 300,000 300,1000 600,00(0 (B Land& FarmerDecelooment 12.705.420 S.S64.2S 2.983.600 24.553.300 DemonuatmunField hsld 1,194 600 716,400 591 600 354,600 400 400 160,000 2,185 563 1,231,000 TechnicianTraining man/day 60,600 30 1,I18,000 17,580 30 527,400 4,120 30 123,600 02,300 30 2,469,000 Houshold Training man/day 678,060 IS 10,171,020 532,152 IS 7,982,200 1S0,00(0 IS 2,700,000 1,390,220 IS 20,053,300 lbr Annex 6 - Table 1: Procurementby Provinceand Category SICHUAN SRAANXI NINGXIA - PROJECTTOTAL- Unit Quandty Rate Amount Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount (a) Inst Buildina&Pni. Managnmcnt 6 163.400 5921.4010 1.585.81 13-670.60( StaffTraining Domestic pson 50,02S 57 2,831,4011 65,028 55 3,551,400 9,166 63 5S0,8S(0 124,222 56 6,963,60(1 Oversras pson 12 35,10 420,0KKI 10 35,(KW 350,0(1) 7 35,000 245,0101 29 35,K11 1,0115,.0 StudyTour Domestic pson 12 4,0011 512,000 S1 4,W00 320,0KK1 15 4,0(K0 6WM0,) 223 4,000 SY2,0200 Ovcrscas pson 48 5(1,000 2,400W100 34 50,()00 1,700,0K 14 50,(KK1 7110.000 96 50,001) 4,0(10,K1 ( Micnofinomce 433.80 433.0(1067.600 Center day IS0 210 37,800 100 210 37,0(0 75,6(K0 Provritc day 150 440 66,000 150 440 66,000 132,W0 Comnty day 600 200 120,000 600 20 120,000 240,00W DomesticTraining pson 3 50,000 150,000 3 50,000 150,000 300,000 Overseus pso I5 4,000 60,000 15 4,000 60,000 120,000 3.3 EXTENSION& TRAINING 6.940.299 3,653,902 1.199.350 11.793.551 Land& Fser Develoment 6.940.299 3.653.902 1.199.350 11.793.551 LivestockBreeding Goat/sheep head 40 3,816 152,640 40 3,816 152,640 Pig/sow head 40 7,590 303,600 40 7,590 303,600 Extension Trees hsld 135,893 15 2,038,395 119,640 15 1,794,600 9,275 13 120,575 264,800 15 3,953,570 Foodrrops hsld 277.799 1 277,799 69,070 1 69,070 32,464 4 129,856 379,333 1 476,725 Animl husbandry hsid 81,037 III 8110,370 1()1,156 6 606,936 35,990 0 207,984 21S,191 8 1,705,290 Veterinary& Bneding ervice Cow hcad 26,4Y9 10 264,990 17,v51 20 357,020 17,797 10 177,970 62.147 13 799,98o Sheep/goat head 151,433 5 757,165 95,479 4 381,916 14,155 5 70,775 261,067 5 1,209,856 Pig/sew head 233,534 10 2,335,340 88,872 5 444,360 11,250 5 56,250 333.656 8 2,835,950 Atifici Insemination(Cow) head 0 0 0 0 0 0 17,797 20 355,940 17,797 20 355,940 3.4 APPLIEDRESEARCH 2,3S5.321 2.064l220 550.4559 S0000 Land& Famr Develomeot sum 2.3S5.321 2.064,220 5501459 5.W00(K0 IV. LABOR PLACEMENT 159800,01t0 117,200.00 277,000.000 LaborMobility 159.S(K.0 117.20K)0. 277.K00.(K)0 Iusr-psv. PlI-ement paon 71,100 2,00 142,200,000 47,600 2,W0 95,200,0K0) 11S,7(K) 2,000 237,400,01K) Within prvine Placement pnso 16,tKW 1,100 17,600,000 20,01 1,100 22,000,00 36,1000 1,100 39,60(KW,00 1tx ON Annex 6 - Table 1: Procurement by Province and Category SICHUAN ------SHAANXI------NINGXIA ------PROJECT TOTAL--- Unit Qantity Ratw Amount Quntity Rate Amount Quantity Rate Anount Quant.ty Rate Amount V. MICROFINANCESUBLOAN 12,124.620 12,175, 24.30300 Mic,ofinane, 12.124.621) 12.175,680 24 3(00300 Subloans sum 12,124,620 12,175,680 24,300,300N VI. MANAGEMENT& SUPERVISION 31.469,673 29,72132 6,435.669 67,626667 Li) LaborMobility 4.457915 3.657.177 X.115(092 Internd Monioin.g sun 611,633 562,(00 1,173,713 FulianMonitonig sum 4(H),001 4(NO,O0O (00,0(0 Evaluation s.. 4(0,)0NX 4(N,000 800,(010 IndependentAuditing s.. 427,808 380,023 807,831 AdministrativcFee sun 2.618.474 1,915,074 4,533,548 Ql RuralInfrasructun 1.730.910 1,433.190 599,51S 3.771,625 Administrativ-Fee sun 1,73S,918 1,433,190 599,51S 3,771,625 13) Land& FannerDe..lown-t 15196X092 15.603.511 3.477296 34.278.99 Tship Prj. Management t'ship/yr 774 3,600 2,706,4()() 1,206 3,600 4,341,600 106 3,600 669,600 2.166 3,600 7,797,600 Vill. Pwj. Management vill/yr 7,164 460 3,439,720 9.282 480 4,455,360 1,2)0) 360 432,000) 17,646 472 8,326,010 AdministrativeFe sum X,972,972 6,.06,551 2,375,696 1,155,219 (41 RuralEnterorinos Development 20857,935 2.671.717 272.356 5,802.006 AdministrativcFec sum 2,657,935 2,671,717 272,356 5,802,(X)8 (5) Inst.Building & ProLMananemen 66735)0) 5X11.50() 2.006550) 14.571550() Pwj Supcrision pwv /yr 6 116,667 7(K),0010 6 116,667 700,()0) 6 30,0)0) 160,1()) 10 87,778 1,5X(),)(1(1 Office SpaceRental sum 6 583,333 3,500,000 6 466,667 2,800(1,(00 6 200,000 1,20(1,000 IS 416,667 7,501,000 Books & Joumals sum 426 1,01S 433,5(10 636 604 511,500 10X 1,542 166,500 1,17)) 950 1,111,500 Confien&,ces pson 76 26,154 2,040,001) 66 27,273 1,X0(),000 15 36,0N)) 540.000 159 27,547 4,360,010 (61 Miuwfinasne 5433'3 544229 1,0)7.542 Cutur Monitonng yuar 6 25,200 '51,200 6 25,200 151,200 302,4(00 IndependentAuditing yua 6 16,300 97,800 6 16,300 97,800 195,h60< IndcpundentEvalnation yean 6 16,300 97,800 6 16,300 97,600 Ad.niistravuc Fuc sum 196,513 197,429 393,942 VDI. OTHERS 46299,335 42.934.098 939.485 90,172.91g TVEWorkingCapital sum 46,299,335 42,934,01)9 939,485 90,172,918 VIII. LNALLOCATED 14,946,579 15.128.6S0 26161 32692,100 Total Ban Cot 1.152.469.13S 921.012.1S5 229.937.390 2.303.908.713 Total In.sudi.g Contingencies m1, CHINA: QinbaMountains Poverty Reduction Project DetailedProjed Procurementand Disbursement by Provinceand Category (Yuan) Annes6 - Table2: Disbursementby Provinceand Category -Total IncludingContingencies-- P,oouomeotMethod ud DisbuoromentPrcenotag (I%) TOTAL BANK DISBURSEMENT(Iold. Contingencies) Uoit Sirhon Sha.o.i Niognia Total ICB LIB IS NCB NS FA OT' NBF SICHtJAN SHAANXI NINGXIA TOTAL GOODS 300,582.52 25997,46 73002.579 633,582,560 267,604,02 232,320, 65,727,22 565,651,247 Ll EOUIPMENT 112.701.474 105.051,035 18,558,301 236.310.809 85,733.714 83,592,836 14,195.440 183.521.991 (I) CommonOffie Eauiomcot 3.947.36( 3.429.10S 1.492.034 10820.037 3,935,952 3,445,791 1,395,740 0.777.43 Computnr/pnitcr to 1.437.901 1(009.873 406.149 2.053.923 1,437,90)1 1,009,873 406,149 2,853,923 Labor Mobilith no 682,842 453,229 0 1,13S,071 l(O( 602,042 455,229 () 1,138,071 Institution Buildiog no 755,059 354,644 406,149 1.715,852 10( 755,059 554,644 406,149 1,715,052 Notebook Cotooutcr no 76079 77650 75014 2350343 76079 77,650 75,814 230,343 InstitutionBuilding no 76,79 77,650 75,814 230,343 I((0 76,879 77,650) 75,814 230,343 CompuwirSot,=are n 79.403 45941 27.077 152.501 79,483 45,941 27,077 152.50) Labor Mobility 5o02,026 1,20)9 70,235 1(S) 52,026 18,209 0 70.235 Institulion Building no 27,457 27,732 27,()77 02,265 1()() 27,457 27,732 27,077 82,265 PhotocoDior no 696,175 4901,098 2035074 1.389,340 696,175 490.098 203,074 1.309.348 LaborMobilitr no 71,536 32,516 104,0)52 1(0 71,536 32,516 0 10)4,0)52 InstitutionBuilding no 624,640 457,582 203,0)74 1,285,295 1()0 624,640 457,582 20)3,0)74 1,285,295 Fa Machine n1o 239,313 161,666 330846 434,825 239.313 1616,66 33.846 434.825 Labor Mobility no 115,758 71.536 187,294 100 115,758 71,536 0 187,294 InstitutionBuilding no 123,555 90,130 33,046 247,531 100 123,555 90),130 33,846 247,531 Overhead Pmicctor 9 30.998 20.799 20307 72,104 30998 20.799 20.307 72.)04 Labor Mobility no 10,40)5 0 10,405 lO() 1(),40)5 0 0 10),40)5 Institution Building no 20,593 20,799 20,30)7 61,699 loo 20,593 20,799 20),307 61,699 Laser/eolorPinicr no 40.049 48531 47.384 143,965 48049 48531 47384 143.965 InstitutionBuilding so 48,049 48,531 47,384 143,965 1()0 48,049 48,531 47,384 143,965 Highspeodphotocopier Ito 107.081 108156 105.599 320.S35 107,(01 108S156 1(5,599 320.835 InstitutionBuilding no 107,081 100,156 105,599 320,035 100 107,00S1 I(08,156 105,599 320,835 Scannor no 6S,642 69,331 67.691 205.664 68,642 69,331 67.691 205.664 InstitutionBuilding no 60,642 69,331 67,691 20)5,664 1((1 68,642 69,331 67,691 2)5,664 Vide9Camera 80 137.283 I3S.66I 135.383 4 11.327 102.963 103.996 101537 308.496 Institution Building no 137,203 130,661 135,303 411,327 75 102,963 10)3,996 101,537 308,496 Officebunitur no- 1 (025552 1 253,398 369.710 2,653,663 769.166 943.799 277.283 1.990.248 Institution Building n 1,025,555 1,25S,390 369,71() 2,653,663 75 769,166 943,799 277,203 1,990.243 CY% Anmoe6- Tabk 2: Disb.ornesntby Provincend Category -Total InduadingContingences- PI'mcunmentMethod and Disbumiment Percentage (b) TOTAL BANK DISBURSEMENT(Indd. Comtingendc) Unit Sidhumn Shasnoi Ningxia Total ICB LIB IS NCB NS FA Or NBF SICHIUAN SHAANXI NINGXIA TOTAL (Z) OthfrCOmmoDnuiDnMt 172S96 0 404-327 577223 129.672 0 303-245 432917 Twtosfbmto 70.979 Y 165.97 236,965 53.234 0 124,490 177,724 Rural nfrastmaturc(inigation) n 70,979 0 0 70,979 75 53,234 0 t 53,234 RuraInfrastmatun(Mienoimig) 0 0 165,987 165,987 75 o 124,490 124,490 ElectricMotor& PumD 101.91X 0 238.340 340.258 76.430 _ 17S.753 2553193 Ruotdnftrutsactun:(irigation) ste 101,91X 0 0 101,91N 75 76,438 0 0 76,43S Randtnfrautnteur (Mienoirigation) 0 238,340 230,340 75 0 0 178,755 178,755 L( aborMobility 1.315.610 844775 0 2160,385 98670)7 633.581 _ 1.620,289 Officefutnitun; ste 93.647 0 93,647 75 70,235 0 0 70,235 TV & vido plaver set 109.255 05,043 195,098 75 81,941 64,382 0 146,323 Ses-ingmehie no 087,294 156,078 343,372 75 140,470 117,059 0 257,529 Filingeabi-t no 26,403 22,761 49,165 75 19,802 17,071 0 36,074 Officetable & chair xt 32,776 2S,614 61,391 75 24,502 21,461 0 46,043 Trainingdsk & chair t 244,523 12,092 426,614 75 13,392 136,569 0 319,961 Doablc-dkbed set 143,072 04,543 227,614 75 107,304 63,407 0 170,711 Mattns & luggage set 409.705 234,110 643,823 75 307,279 175,500 0 402,067 Them-os no 32.516 19,510 52,026 75 24,387 14,632 0 39,020 Kitchenutensil st 36,418 31,216 67,634 75 27,314 23,412 () 50,725 (4 RudoInfrastnutunc 3.722.473 _ 141.690 5.141.163 2.791.855 0 1.164.01B 3.N55.S72 RuralWater Sundy no 3.722.473 0 0 3722.473 2.791.S55 0 0 2.791L55 Trnnsfonner no 859,932 0 0 059,932 75 644,949 0 0 644,949 Eleeic motor& pmp ste 409,492 0 0 409,492 75 307,119 0 11 307,119 Handpump sa 2,453,049 0 0 2,453,049 75 1,839,787 () 0 1,839,787 Micrnirimts4ion Submeniblepomp 0 0 1,418,690 1,418,690 75 0 (t 1,064,018 1,064,018 LandLd&Fua-nerDavclonment 3.247.251 1.734.486 722901 5.704.639 2.435.438 1300X65 542.176 4.270479 SappontSetvices )0 VillageproceseingequipmentA set 520,501 0 521,010 1,041.511 75 390,376 0 390,757 7SI,133 Villagepmccassing equipment B siet 800,95 0 0 000,095 75 600,671 0 0 600.671 Villageteehnical servie equipment set 1,073,534 0 () 1,073.534 75 S05,15() 0 0 S05,150 Estension& Training set SmallextensionEquipment set 422.907 1.310,646 201,091 1.935.444 75 317,1S() 9S2,9X4 151,419 1,451,503 Vet & BncdingSlutice equip st 429.414 423,S41 8IS53,254 75 322,060 317,SS1 10 639,941 x a' Anon 6 - Table2: Di.bursementby Province and Catepry -Totdl Induding Cautinoen in Proc;tumactMethod and Diaherseoscnt P,cnentage (%) TOTAL BANK DISBURSEMENT(Incid. Contingnds) Unit Sich.an Sb6amai Ningxis Total ICB LIB IS NCB NS FA OTr NBF SICHUAN SHAANXI NINGXIA TOTAL 78.212599 10.S90.262 164,556,951 16 RandEn:mrisc Drelonmo_t 100.16.215 9st933,5 14.520349 213.640.073 75,454- IJ 17.307,5X5 Mining & minralpmcesing net 1,257,714 16,049,871 (I 17,307,58S 100 1,257,714 16,049,871 0 10,145,402 Cosuctiom makrials net 7,649,058 5,71t7,145 0 13,527,203 75 5.736,794 4,408,609 7,577,247 57,325,329 Agup-rssing set 24,340,201 41,990,575 10,102,995 76,433,771 75 IN,255,151 31,492,931 0 1,477,832 Feedprmcssing 0t 1,970,442 0 0 1,970,442 75 1,477,832 II 0) 0,650,202 Teaprocssing $et 2,569,484 n,954.7n5 () 11,544,269 75 1,942,113 6,716,1)89 0 5.180,041 Dr) & feh fit prmssing set 4,#09,5401 2.197,192 0 6,906,722 75 3,60)7,155 1.572,007 2,079,675 21,695,754 Livsock pmdet prce5sing set 20.118.338 6,036,433 2.772.900 28,927.671 75 15,0S#,754 4,527,325 0 11,221,2S9 Forctpdoetpp-cpssing WeI 15.539.056 0,755,997 0 24.295,052 75 11,654,292 6,566,997 1,233,34(1 a,296,829 Handicrafts wct 8,651.349 766,636 1,644,453 11,062,438 75 6,400,512 574,977 (I 1,n29,490 Silk reling WIt 2,439,320 0 2,439,320 75 0 1,029,490 0 14,419,198 Otherprodct processin at 13,261,032 5,964,565 0 19,225,597 75 9,945,774 4,473,424 O _ 1 LU Miomfi am 106109.66 199160 218829 100 0 o 3.432 4i.310.44 LI VEHICLE 26.107.078 17.291.144 35A3.471 46.931.693 26.094.594 16.783.05 U CommMoVchicc 7951-345 1042,020 24.737.747 Pick-up.Tn1k n2 15744.32 7.951345 .W42.020 24.737.747 15,744.382 0 3,121,560 LaborMobility no 1,690,848 1,430,720 3,121,568 100 1,690,848 1,430,720 1,042,()2() 21,616,179 Land& Fanc,rDISlop. no 14,053,534 6,520,626 1,042,02() 21,616,179 1(1)0 14,053,534 6,520,626 1523,51D 30)237 108630806 Motocvcl 12n. 49.935 2.031.358 403.783 2.405.075 37451 3()2,)37 1,779,759 Land& Fancr Dcvclop no 0 1,969,229 403,703 2,373,012 75 0 1,476,922 () S4,048 Micmfinaret no 49,935 62,129 112,063 75 37,451 46,597 (U InsitutionBuildioe 3,250,536 1,286,137 8.731817 Jo oQ 4 187-144 3.2511536 1.206.137 8.7318,17 ,°Q 4,107,144 01 1645309 Bgi0lL2J0a6) no 549.134 554.644 341.531 1.645.309 IQQ) 549,134 554,644 541,531 0 275.945 VWM(olOtl) 72 137.283 138.661 Q 275.945 IQQ 137,283 138,661 L RuralEnlerrisc Dcvclo,ownt 780,00() 0 4.875.000 Tmck(IOT)l * 4.095.0(10 7n0.000 Q 4,8750.()0 1Q 4,095,0010 260,0100 3,062.noo Truck(5 no 1.201.20Q 1.6160t0 260.000 3.062.0t)M 1J 1,201.200 1,6(1,6()0 0 1,18QQQ5 Truck (25 Be 143.052) 975.000 Q I1I I1101 1110 143.00X) 975,10) 0 Annes6. Table2: Disbursementby Province and Catqory -Totdl IncludingCnningenri --- Proceunsnt Mdthod and Disbursmnemt Peeentage (%) TOTAL BANKDISBURSEMENT (Incd. Contingenries) Unit Si,h.an Shasnni Ningsis Total ICB LIB IS NCB NS FA OT NBF SICHUAN SHAANXI NINGXIA TOTAL 1.3 MATERIALS& TOOLS 161.773.968 137,655,281 50.910.S07 350.340.057 155.775.718 131.943.859 4S.099,255 335S1SS32 (jj Marials &Tools 11.71t6.9S6 9625.199 8.528780 29.940.964 X,N40.239 7121S.99 6.396.585 22.455.723 RuralInfiasttuncL t11.7S6.996 9,625.199 5.52S750 2994.90964 N,540.239 7.2185.99 6,396.555 22.455.723 Watlr Supply Galvaniedion pipc ton 3,113,565 () 11,I0 3,124,745 75 2,335,174 S,3858I 2,343,559 Castirmnpip. ton 1.419,571 Il 0 1,419,571 75 1,064,678 0 1,064,67S PVCpipe ton 7,253,550 9,625,199 156,0100 17,0135,Q4S 75 5,440,387 7.218.S99 117,0(0 12,776,2N6 Micminigatien Robberhosw O(Xn, 3,369,600 3,369,600 75 0 0 2,527,200 2,527,2(K) Plastichoaw (XKtm 4,992.000 4.992,000 75 0 0 3,744,X000 3,744,0(1X (2) Land& Farcr Dmvlomcnt 149.)9S6.9S3 128030 053 42.352.027 320,399.0193 146,935.479 124.724.960 41-70267( 313.363.109 Tls _sct 11,566,943 12.263367 2.717432 26547.742 0675.207 9197525 2.035.074 19.9108(16 FoodCrop set 5,733,373 1,596,771 975,800 I,305,944 75 4,300,030 1,197,578 731,850 6,229,458 CashCop set 119.455 590,492 145,726 545,674 75 89,591 435,369 109,295 634,255 Tn Crop set 3,511,197 4,871,16S 484,956 8,S67,322 75 2,633,395 3,653,376 363,717 6,650,491 Cut-and-Carr)Fodder set 182,175 469,455 144,945 796,605 75 136,632 352,114 108I,709 597,454 Amnnoniation set 1.674.921 544,0S1 927,241 3,146,243 75 1,256,191 408,061 695,431 2,359,653 SeedProduction set 244.544 II 38.763 293,607 75 183,633 ° 29,072 212,7(15 Msshnon i.oculum bagging ha 0 4,147,11S 11 4,147,11S 75 0 3,110,338 0 3,110,338 TmeNursery net 100.977 54,252 0 155,229 75 75,733 40,689 0 116,422 So1aw3 no 639.071 957.124 Q 1.596.195 479.304 717.S43 0 1.197.146 CashCrop no 0 155,087 0 155,087 75 0 116,315 0 116,315 Tr- Crop no 558,593 780,284 0 1,368.867 75 441,437 585,213 0 1,026,650 SeedPmduction no 0 14,450 0 14,450 75 0 10,837 0 10,837 Tn c Nursery no 50,489 7,303 0 57,792 75 37,66 5,477 0 43,344 Urc;t ton 49.207656 4S.833.955 13.337.237 111,375848 492117.656 4S.33,955 13.337237 111.378.S4S FeodCmp toe 24,982,593 9,322,070 10,0S5,750 44,390,713 100 24,952,593 9,322,0701 10,085,750 44,390,713 CashCrop ton 866,184 12,984,216 1,19,6(6 15,040,006 100 866,184 12,984,216 1,189,606 15,0401,X06 TteCrop ton 18,907,908 23,994,507 615,521 43,517,936 100 1S,907,908 23,994,507 615,521 43,517,936 Cut-and-CarryFoddcr ton 1,502,947 1,291,0S4 0 2,794,031 I1 1,502,947 1,291,084 0 2,794,031 Anmmoniation ton 1,842,413 598,459 1,019,966 3,460,565 100 1,842,413 598,489 1,019,966 3,460,865 SeedProduction ton 935,695 413,345 426,395 1,77g,438 100 938,695 413,345 426,395 1,778,438 TeeNurN r) ton 166,612 230,243 0 396,556 100 166,612 230,243 0 396,856 Ane, 6 . Table2: Diabaf,atent by Pmince andCategory -Total Induding Cotingmcdne ProcunmetMcthod and Disbursement Percentagc (-) TOTAL BANK DISBURSEMENT(Incid. Contingecies) Unit Sichusn Shaanxi Ninpis Total ICB LIB IS NCB NS FA Or NBF SICHUAN SHAANXI NINGXIA TOTAL DAVP 1gtIa 40.126.052 49,394.898 15.736.S46 105,257795 40.126.052 49.394.9S 15736.S46 I05.257.795 FoodCrop ton 18,991,799 7,933,955 10,372.780 37,298,534 100 18,991,799 7,933,955 10,372,780 37,298,534 CeshCrop ton 364,48S 9,979,348 1,396,899 11,740,735 100 364,4X# 9,979,348 1,396,899 11,74(1,735 Tn Crop ton 17,413,170 28,932,428 1,507,353 47,852,951 100 17,413,170 20,932,428 1,507,353 47,852,951 Cut-and-CaffyFodder ton 2,413,S25 2,073,559 1,920.521 6,407.904 100 2,413,S25 2,073,559 1,920,521 6,40(7,904 Ammomatiadn ton 0 0 0 0 100 0 0 0 0 SecdProductiom ton 742,079 291,5S0 539,292 1,572,950 110 742,079 291,5S0 539,292 1,572,950 TreeNursery ton 200,692 14,028 0 3U4,721 100 200,692 184,028 0 3S4,721 Potassium Sulfatc to 22.352,20S 0 9 225352.20S 22t352.208 0I 0 22.352.20X FoodCmp to 7,32,368 0 7,302,360 l(HI 7,382,368 0 0 7,322,362 CashCrop too 334,365 0 0 334,365 I110 334,365 o 0 334,365 Tre Crop ton 11,649,665 0 0 11,649,665 100 11,649,665 0 0 11,649,665 Cut-and-Cser,Fodder ton 1,912.U42 0 0 1,912,S42 1110 1,912,842 0 0 1,912,U42 Ammrniatian ton 0 0 0 0 100 II 0 0 0 SeedProduction too 953,608 0 0 953,688 100e 953,620 0 0 953,682 (8 TrueNumy ton 119,279 0 0 119,279 100 119,279 0 0 119,279 PlasticMulch ton 13.489.456 6.064.151 72202l32 26.774.445 13.489.456 6(064.151 7.2202S32 26.774.445 FoodCmp ton 11,611,045 3,958,S23 6,661,321 22,231,189 100 11,611,045 3,952,223 6,661,321 22,231,189 CashCmp too 524,041 1,240,321 281,345 2,645,767 100 524,041 1,S40,3X21 281,345 2,645,767 Tro Crop ton 0 0 0 0 100 0 0 o 0 Cut-aod-CGuyFoddcr ton 0 0 0 0 100 0 0 0 0 Ammoniatirm ton 502,476 163,224 278,172 943,73 100 502,476 163,224 27S,172 943,873 SeedPoducti-n ton 700,422 0 0 700,428 100 700,420 o 0 700,422 TreeNurscry ton 151,466 101,722 0 2533,18 100 151,466 101,722 II 253,1S8 Pe,tticid unit 12.605.597 10.516.529 35369.674 26.491.60 12.605,597 10.516.59 3.369.674 26.491.860 FoodCrp unit 3,02,364 1,297,376 2,162,61S 7,262,359 100 3,20S,364 1,297,376 2,162,618 7,268,359 CeshCrop unit 230,4101 1,63S,992 516,197 2,325,5S9 I(HI 2301,400 1,638,992 516,197 2,325,589 Tre Cmp unit S.253,374 7,354,423 596,374 16,204,231 I(H 8,253,374 7,354,423 596,374 16,204,231 Cut-and-Ca,nyFodder unit 0 0 0 (I 1I(0 0 0 0 0 Ammomiation unit n0 0o1 0 o0 SeedPmducti-n unit 231,415 92,525 94,425 424,485 101 231,415 92,5S5 94,425 424,425 TreeNuriery unit 82,044 127,152 0 209,196 100 82,044 127,152 0 209,196 Ii0. Annen6 - Tablo2: Disbaroementby Proinct andCatqory -Total IncludingContingencis-- PrncincitcntMcthod and Dishbrment Persentage(-/.) TOTAL BANK DISBURSEMENT(Incid. Cantingonciks) Unit Sichuan Shianui Ninpis Total ICB LIB IS NCB NS FA Or NBF SICHL'AN SHAANXI NINGXIA TOTAL i. WORKS 8f6.714.634 622.466,985 20426J.816 1,633,418,436 279.123.263 215.373,577 70.665.938 565.162.779 B.UBLILDING 119.759.881 105.824.021 8.401,246 233.985.148 41.436.919 36.615.111 2.906.831 80.958.861 IL.abo,rMobilit m2 11.367.702 7.023.532 1IS391234 35 3.933.225 2.430(142 0 6.363.367 D) Land& FoacmrDMveloomnta 2 Cocoonraising facility n2 23.224.245 22.028.239 0 4S.252.484 35 8035589 7.621.771 0 15.657.359 ) RuralEatenaris Devloymcnt m2 81073.132 73444.3S4 7.602.487 162.92().003 35 2S.32S.104 25411.757 2.630.461 56.370321 l nstitutonBuilding, a ProicmManaoemtnt(Countyl o2 3.294.S02 3.327.S66 790.759 7.421.427 35 11401001 1.151.442 276.371 2,5670814 L2 T4elboneConnection 807231 1.057.663 6,645 .9i.539 279.302 365.951 29.979 675X2 LaborMobility no 74,137 46,S24 120,961 35 25,651 16,201 0 41,852 InstiuationBuilding no 733,093 1,010,839 S6,645 1,830,57S 35 253,630 349,730 29,979 633,380 23 STRUCTVRE.EARTH. & STONEWORKS 363.046.910 0461352 96.274148 699.782.410 125.614U231 83.199.628 33.310.855 242.1U4.714 W RuralInfastmetur 135020.731 114.584.SSS 41.606397 291.21.1713 46.717.173 39.646.266 14.395.13 100.759253 RuralElectricit, sum 13,549,593 27,671,211 0 41,22(),S0(3 35 4,600,159 9,574,239 0 14,262,39Y RuralRoads sum 53,974,431 49,213,829 () 103,1SS,259 35 18,675,153 17,027,905 0 35.703,130 WatcrSupply sum 35,956,560 26,623,287 2,029,700 64,609,563 35 12,440,973 9,211,657 702,279 22,354,909 Irigation sum 29,641,435 11,076,25 0 40,717,694 35 10,255,937 3,S32,305 0 14,0SS,322 Microirrgazio ha 39,576,69t) 39,576,690 35 0 () 13,693,535 13,693,535 RuralEncrgy aum 1,89S,7014 () 0 1,S9S,704 35 656,952 0 0 656,952 (U Land& FarnerDvelootment 228.026,179 125.876.767 54.667.751 408570.697 7S.S97.050 43.553.362 18S915.042 141.365461 Tcrracing& PaddyDrainagD 0 0 D0 0 o0 0 Stotctencing ha 92,2()2,705 125,876,767 II 218,079,472 35 31,902,136 43,553,362 0 75,455,497 Earthtctacing ha 16,610,574 ( 54,667,751 71,278,325 35 5,747,259 0 18,915,042 24,662,300 Hillland trriciag ha 56,589,146 () 0 56,509,146 35 19,579,S44 0 0 19,579,844 Paddydrainagc ha 62,623,754 () 0 62,623,754 35 21,667,819 0 0 21,667,819 Z_4 CROP ESTABLISHMENT 113.160361 173.028.671 27335.154 313.524.1- 39153.485 59J67.920 9.457.963 10A79-W FoodCrop ha 17,299,899 16,838,515 16,969,101 51,107,595 35 5,985,765 5,S26,126 5,S71,337 17,683,228 CashCrop ha S,946,620 66,567,130 1,962,961 77,476,711 35 3,095,531 23,032,227 679,1S5 26,006,942 Tc Crop ha 81,666,598 S3,1S1,890 6,505,990 171,434,479 35 20,256,643 20,700,934 2,270,753 59,316,330 ScodPrnduction ha 3,328,676 4,033,671 1,817,022 9,179,369 35 1,151,722 1,395,650 620,690 3,176,062 Trc Nutroy ha 1,918,560 2,407,464 0 4,326,032 35 663,024 032,903 0 1,496,807 Annex6 - Table2: Disbursment by P,ovinnoand Category -Total IncludingContingencie- ProcutementMcthod and Disbuhmennt Peteontage (%/.) TOTAL BANK DISBURSEMENT(Indd. Conting-ncis) Unit Sichuan Shaunsi Ningnia Total ICB LIB IS NCB NS FA oT NBF SICHUAN SHAANXI NINGXIA TOTAL 2.5 LIVESTOCK ESTABLISHMENT 209.940.251 102,095.279 72.139.623 384.175.153 72.639327 35.324.966 24.90 309 132.924603 (I) Cut-and-CarryFodder ha 1.639,579 2,112,683 1.304,5015 5,056,766 35 567,294 730,968 451,359 1,749,641 (2) Ammoniationtmk hsid 8,374,605 2,720,405 4,450,759 15,545,769 35 2,897,613 941,26(0 1,539,963 5,378,836 (3) Pig Pig fttning hoad 8),817,969 29,935,037 1,594,095 112.347,1011 35 27,963,017 10,357,523 551,557 38,872,097 Pig brecding head 13,107,575 2,473,743 751,922 16,333,239 35 4,535,221 S55,915 260,165 5,651,301 (4) Goat head 50,144,917 32,657,573 3,005,27() X5,907,761 35 17,350,141 11,299,520 1,039,823 29,699,4X5 (5) Sheep head 0 0 24,353,976 24,353,976 35 II 8)9,426,476 8,426,476 (6) Ramn/ce-goat head 1,778,492 1,148,677 2,719,890 5,646,040 35 615,355 397,442 940,732 1,953,530 (7) Co. head 44,309,250 30,659,679 33,960,217 109,929,145 35 15,331,0X0 10,608,249 11,750,235 37,689,484 (8) Duck/Ltyer 5,514,339 387,482 0 5,901,820 35 1.907,961 134,069 II 2,042,030 (9) Robbit(hai,) head 4,253,536 0 0 4,253,536 35 1,471,724 0 0 1,471,724 Ill. TA. TRAINING, & RESEARCH 47.1%.433 35,050,126 9.234,970 91.48152N 47.196.433 35,050.126 9.234.970 91,481.52N 3.1 TECHNICAL ASSISTANCE 8,745.214 6.502,749 922.686 16170049 8745.214 6,502.749 922,66 16170.649 3 LaborMobility 650326 650)327 0 1.300.653 650.326 650).327 o 1,3030653 TA sun 650,326 650,327 1,300,653 I(X 650,326 650,327 0 1,300,653 loInst. Building & Proi. Mana, 2.615.249 161_8175 507696 4741,110 2615)249 1618.175 507.686 4,74).110 Locl Consult..tm pson 998,441 599,016 243,689 1,831,146 1)01 988,441 599,016 243,609 1,831,146 TA pson 1.626,S(18 1,019,159 263,997 2,909,964 101 1,626,8108 1(,119,159 263,997 2,919,964 (3) Indje=ndentMonitonn 53951(03 4.150o000 455001 9.960.000 5395,000 4 1500 4)5.)001 99610)0) SSBSurcvy sum 1,660,000 1.660,00)0 415,000 3,735,000 100 1,660,000 1,660,10)0 415,000 3,735,000 CWHRCLabor Monitonig sum 3,735,0)11 2,490,000 0 6,225,0190 1°° 3,735,000 2,490,000 0 6,225,000 Micmfinan 84.639 84.247 0 16S886 94.639 84247 0 168886 LocalConsultant yoeu 84,639 84,247 0 168,886 100 84,639 54,247 0 168,886 1 TRAINING 26.316.226 21.002 6.033,115 53.439.571 26.316.226 21,090.230 6.033,115 53.439.571 W LaborMobilin 780.391 780392 1.560.784 780.391 780.392 0 1.560,784 StaffTraining sum 390,196 390,196 780,392 100 390,196 390,196 0 780,392 Semints sum 390,196 390,196 780,392 10X) 39)1. 390,195 0 780,392 (1 Land&FarmerD,velonment 163532.97 11.560.130 3.886.213 31979311 16.532.967 11.560130 3.886.213 31979.311 DemonstrationField hsid 932,218 462,443 208,404 1,603,064 (00 932,218 462,443 209,404 1,6013,064 TechnicimTraining man/day 2,365,679 657,796 160,992 3,214,466 100 2,365,678 657,796 160,992 3,214,466 HouseholdTraining man/day 13,235,1072 10,409,892 3,516,917 27,161,7) 1(N) 13,235,072 10,409,892 3,516,917 27,161,791 xID OXi Annts6. Tabl 2: DisburuemnwtbyPrinco, andCategry -Total Induding Contnligeniei- Iro'mcunent Methodand Disbornement Pecnentage (Y) TOTAL BANK DISBURSEMENT(lucid. Contingncies) Unit Sichuan Shaanni Niapais Total ICB LIB IS NCB NS FA oT NBF SICHtUAN SHAANXI NINGXIA TOTAL tInst Buildint & Ptoi. ManagemeSt #.461.326 8210,679 2.146.901 1.X1906 #,461.326 8.210.679 2.146,901 IS.IX906 Staff Training Domestic pnon 3,987,043 4,924,410 7#6.304 9,597,757 10t 3,887,043 4,924,411) 786,304 9,597,757 Overseas pno 576,590 4#5,314 331,689 1,393,592 100 576,5901 485,314 331,6t9 1,393,592 StudyTonr Domestic pson 702,#91 443,716 #1,231 1,227,936 00 702,891 443,716 S1,23(1 1,227,936 Overscas pron 3,294,962 2.357,239 947,680 6.599,721 I0). 3,294,902 2,357,239 947,690 6,599,721 ( Micnfirum 541.541 539.029 9 080.570 541.S41 539.029 0 1.0#0570 Center day 47,189 46,969 94,158 l0o 47,18# 46,969 0 94,15X Provinee day 82,392 92.010 164,402 100 92,392 92,)1))) (J 164,402 County day 149,804 149,109 298,913 100 149,#04 149,109 I) 299,913 DomnrticTraining pson 187,255 186,386 373,641 1(1 187,255 186,386 () 373.641 Overseas pson 74,902 74,554 149,456 loo 74.902 74.554 () 149,456 3.3 EXTENSION& TRAINING 9.031l6 4.765.145 1.562,1S3 15,359.414 9,031,086 4.765,145 1.562.183 15358.414 Land&FarmnerDevelopment 9031.086 4.765.145 1.562.183 15.358.414 9.031.086 4.765.145 1,562.183 15.35#.414 UvestockBrooding GoaVlsheep hcad 198.623 0 0 198,623 )00 199.623 0 0 198,623 Pig/sow head 395,060 0 0 395,060 100 395.0/60 /1 /1 395,060 Extension Trees hod 2,652,469 2,340,393 157,052 5.149,903 l0(1 2.652,46# 2.340,393 157,052 5,149,903 Foodcrops hsid 361,497 90,076 169,141 620.703 10( 361,4#7 90,076 169,141 620,703 Animalhosbandry hid 1,054,496 791,520 375,106 2,221.123 100 1,/54,496 791,520 375,106 2,221,123 Veterinary& Brmedingscrvice Cov head 344,919 465,599 231,810 ,(142,229 1(8) 344,819 465,599 231,810 1,042,228 Sheep/goat head 995,263 498,066 92,1#6 1,575,516 100 995,263 499,066 92,186 1,575,516 Pig/sow head 3,039,96# 579,501 73,267 3,691,637 1100 3,039,#6# 579,501 73,267 3,691,637 Artificial Inerination (Co,) hcad 0 0 463,621 463,621 100 0 0 463,621 463,621 3.4 APPLIED RESEARCH 3.103.97 2692.001 716.986 6.51294 3.1v3. Z.692.t01 716 6.512J9 Land& FarmerD3volonmonot am 3,103,907 2,692,001 716,996 6,512,994 100 3)103.907 2.692.001 7l6.996 6,512,894 IV. LABORPLACEMENT 2 152,436,663 0 360,211.912 103.922.125 76.218331 _ IS040,456 LaborMobil*tv 207.944.250 152.436.663 5 360.2S0.912 103922125 76-218)331 19 ,456 lnter-prnv.Placcrnntr pVon 194,952,768 123,822,272 309,775,040 50 92,476,394 61,911,136 0 154,387,520 Withinprovince Plcement paon 22,891,4S2 28,614,391 51,505,872 50 11,445,741 14,307,195 0 25,752,936 0F xD Anne. 6 - Table2: DiBburementby Pr-vin-e andCategory -Total IncludingContingencies-- Pnuemcnt M.thodand Disbursement Pcnwntagc (.) TOTAL BANK DISBURSEMENT(Indd. Contingencies) Unit Sichson Shaanxi Ningoia Total ICB LIB tS NCB NS FA or NBF SICHUAN SHAANXI NINGXIA TOTAL V. MICROFINANCESUBLOAN 15.135,963 15.129.191 0 30.265.153 73567,981 7.56 5 0 15.132.577 Micrufinance 15.135-963 15.129.191 30.265.153 7.567.981 7.564.595 15.132577 Subloams sas 15,135,963 15,129,191 30,265,153 50 7,567,981 7,564,595 0 15,132,577 VI. MANAGEMENT& SUPERVISION 41,399.487 39 176.565 8.487.463 89.054.518 20,695.243 19.5.24 4.243.731 44.527.259 WI) Lbo?Mobility 5.798198 4.756,722 10.554920 2.899099 2.378.361 5.277.4 IntemalMonitoring sum 795,522 731,072 1,526,594 50 397,761 365,536 0 763,297 Ftlian Monitonng snm 520,261 520,262 1,(40,523 50 260,130 260,131 0 520,261 Ev&aation sum 520,261 520,262 1,0)40,523 50 260,130 260,131 () 520,261 IndTendentAditing snm 556,429 494,27X 1,0501,70S 50 278,215 247,139 (I 525,354 AdministrativeFw sot 3,4015,725 2,490,849 5,896,574 5() 1,702,862 1,245,424 0 2,948,287 121 RurllnfaBucturc 2.260.546 1.863,147 779373 4,98066 1.130.273 931.573 3809686 2.451.533 Adtinisative F s.. 2,260,546 1,863,147 779,373 4,903,(t66 50 1,130,273 931,573 389,686 2,451,533 3LA & FarmterDevelontment 19.776.565 203489,32 4.529.264 44,4,761 9888.283 10,[74-466 2.264632 22.327.380 rship Poj. Managemcnt tship/yr 3,625,812 5,661,990 872,171 10,159,972 50 1,812,906 2,830,995 436,085 5,079,986 Vill. Proj.Management villfvr 4,474,645 5,810,347 562,691 10,047,683 50 2,237,323 2,905,174 281,345 5,423,U41 Ad.inisitrativ-Fm sum 11,676,108 8,876,595 3,094,403 23,647,106 50 5,838,054 4,438,297 1,547,201 11,823,553 141 Rura EntetpnseDeveloemt nt 3.715.315 3.473.232 354.062 7542610 1.857.658 1736.616 177.031 3.771.305 AdminisativePee stum 3,715,315 3,473,232 354,062 7,542,610 50 1,857,658 1,736,616 177,031 3,771,305 () Inst Buildine& Poi. Mannaesmmt 9.161609 8058260 20824.763 20.044.662 4,580804 4.029.145 1.412.382 10.022.331 Pmj. Superision prov/yr 960,984 970,628 243,689 2,175,301 50 480,492 485,314 121,845 1,087,650 OfficeSpace Rental sut 4,804,919 3,882,511 1,624,594 10,312,025 50 2,402,460 1.941,255 812,297 5,156,012 Books&Journals snm 595,124 799,252 225,412 1,529,788 50 297,562 354,626 112,706 764,894 Conhferenes psn 2,800,582 2,495,900 731,067 6,027,549 50 1,400,291 1,247,95() 365,534 3,013,774 to) Mierofintnc 678254 676.245 1.354.499 339.127 338.123 677.249 CenterMenitoring year 188,753 117,877 376,630 50 94,376 93,939 0 188.315 IndependentAuditing yam 122,090 121,524 243,614 50 61,045 60,762 0 121,807 IndepenentEvalnation ear 122,090 121,524 243,614 50 61,045 60,762 0 121,807 AdministrativeFee sum 245,320 245,320 490,640 50 122,660 122,660 0 245,320 YJ OTHERS 60.1e9.135 55,14.327 1,221339 117,224.793 2 2 2 2 T'VEWorking Capital sno 60,189.135 55,814,327 1,221,330 117,224,793 100 0 0 0 0 Vill, UNALLOCATED 14.946.579 15128, 2.61641 32.692.180 14.946.579 15.12.480 2.616J,41 32.691J00 Total BaseCost TotalIncluding Contigenties 1.494 1.19 29B40 2.9. 7411,055,ti1 612435 94 12488701 1.494,787.94S 0o - Otheen(cnsultant enn°. uWnitg and mierolinancesubloams). - 135 - Annex 7 Page 1 of 2 ANNEX 7 PROJECT IMPLEMENTATION SCHEDULE Bank Fiscal Year 992002 1 2004 Calender Year 1997 1998 1999 2000 2001 1 2002 2003 2004 Ql Q2 Q31 3 12 Q3Q4 1. LOAN PROCESSING WON 1.1 Bank Pre-negotiation Mission m 1.2 Negotiations _ mm 1 3 Final SAR issued _ mm 1.4 Board Approval 1.5 Credit Signing 1.6 Credit Effectiveness 1.7 Retroactive Financing 1.8 Credit Closing 11. START UP ACTIVITIES 2.1 TORs developed *UEU 2.2 Staff training plan finalized 2.3 PMO staff hired 2.4 PMO ManagementInfo. System _r *UUU 2.5 PMO domestic staff training W _ l tnj * u u m ** 2.6 PMO staffoverseas study tours Z L Z > T I 2.7 Project Launch Workshop Hl. PROCUREMENT OF GOODS & SERVICES 3.1 Procurement of Goods 3.1 .a Bidpreparation 3 L.b Invitation forbhidsI 3 OFi M = 3 I.c Contract awards and delivery __ _7' 3.2 Agricultural Inputs and Materials 3 2.a Bid preparation 3.2.b Invitation for bids 3.2.c Contract awards and delivery 3.3 Services and Other Goods 3.2.a Bid preparation 3.2.b Invitation for bids 3.2.c Contract awards and delivery T_ I IV. EDUCATION SUBCOMPONENT 4.1 Student assistance (SA) criteria established | MOEN 4.2 SA selection and delivery *um= 4.3 Teacher & management training _ ; == 4.4 School construction V. HEALTH SUBCOMPONENT 51 Village health fund initiated 5.2 MCH system eatablished *I _ I L 5.3 Health worker/birth auendant training 5.5 Clinic construction VL LABOR MOBILITY COMPONENT 6.1 Study tours to SWPRP project areas __ 1 1 6.2 Monitoring plan finalized _444 6.3 Village/candidate orient. syst. reviewed ___ _ -L-I-i--I 6.4 Safty/dorm conditions supervised - - - - 6.5 ACWF monitoring reports submitted - _==- 6.6 PMO monitoring reportssubmitted == =_M 6.7 Cost recovery design finalized NOUN 6.8 Research/dissertination . ,r VI] RURAL INFRASTRUCTURE COMPONENT 7.1 Ensgineeringinvestigations, survey and design _ |_, ,1 7.2 Construction -136 - Annex Page 2 of2 Bank Fiscal Year 1998 2000 2002 12004 CalenderYear 1997 1 1991 1999 2000 1 2001 1 2002 2003 2004 _ Q l Q2 Q3 Q,1_ _Ql Q2 Q3 Q4_ Ql Q2 Q3 Q4Ql Q2 Q3 Vii LAND AND FARMER DEVELOPMENT CO MIPONENT______8.1 Village developmentplans 8.2 Sendprod./nurseries established______8.3 Terracing 8.4 Cropestablishment 8.5 Grasslandand livestockestablishment h 8.6 Training andextension 8 7 Technicalsupport services & appliedresearch iX TOWNSHIP AND VILLAGE ENTERPRISES DEVELOPMENT COMPONENT 9.1 Marsketstudy & selection/confiefnatinof enterpri _ _ 9.2 Environmentclearance and engineering design 9.3 Construction,equip. installation, & commission. 9.4 Worker employment& safty monitor. X. MICROFINANCE COMPONENT 10.1 Leglestablishmentofthecooperatives 10.2 MIS instaliled_ 10.3 Loan officer training 10.4 Independentexteranl audit 10.5 Feasibility studyTIC status Xi. INSTITUTION BUILDING and PROJECT MANAGEMENT COMPONENT I I Instition Building 11l1. Renting/Constructionofofficebuildings E_ _ ; _ 4 _4 ii i Staff recruitment Ill1 Trainingandstudytours -nii I11 11.1 Technicalassistance 11.2 ProjectManagement 11.2. Preparationofimplementation,coordinaftion andManagement procedures I T ILI lI II 11.2.b Annual work plans 11.2.e Routine supervision& vunshort 11.2.d Quatnerlyand annual reports XII POVERTY MONiTORiNG 12 1 CWF.ORC ao oiitvmNGtnf 12.1. CWHRCtmonitor.planfinalized 12.1. Monitoringdatabaueestablished 12.1. Routine monitor. activities 12.1. Monitoring Teports _ _ _. . I I * 2 PovenytMonitrinz 12.2. SSBsurvey instrum.finalized 12.2. Annual field surveyconducted 12.2. Summaryrepoftu sub.to Bank XI] PROJECT EVALUATION 13 Pilot phase evaluation ______13.2 Midterm evaluation U13. Projeatfinalevaluation 13.4 OED evaluation 13.5 AuditReportsDue 13.6 ProjectCompletion Report - 137- Annex8 CHINA Qinba Mountains Poverty Reduction Project Estimated DisbursementSchedule and Profile IBRD Estimated Disbursement DisbursementProfile \a/ Fiscal Year Semester Cumulative Cumulative Year/ Cumulative Semester ($ million) ($ million) (%) Semester (%) 1998 Year 1 1st (Jul-Dec, 1997) \b/ 12.6 12.6 7 First 0 2nd (Jan-June,1998) 14.4 27.0 15 Second 30 1999 Year 2 1st (Jul-Dec, 1998) 16.2 43.2 24 First 38 2nd (Jan-June,1999) 19.8 63.0 35 Second 46 2000 Year 3 Ist (Jul-Dec, 1999) 21.6 84.6 47 First 54 2nd (Jan-June,2000) 32.4 117.0 65 Second 66 2001 Year 4 1st (Jul-Dec, 2000) 23.4 140.4 78 First 74 2nd (Jan-June,2001) 14.4 154.8 86 Second 82 2002 Year 5 Ist (Jul-Dec, 2001) 16.2 171.0 95 First 90 2nd (Jan-June,2002) 5.4 176.4 98 Second 94 2003 Year 6 Ist (Jul-Dec, 2002) 1.8 178.2 99 First 98 2nd (Jan-June,2003) 1.8 180.0 100 Second 100 \a/ Banks standard disbursement profile for agriculture in China, compiled by OPRPG, June 30, 1995. \b/ Including retroactivefinancing of US$ 5 million to cover expenditure incurred between Febuary 1, 1997and no more than one year before the signing of the Loan Agreement. Completion date: July 31, 2003 Closing date: January 31, 2004 CHINA Qina M _aim v Rei-a Prje R eprmmtlWVage edel Table 1: _ P f u d g Prosium Raw Com Whea Urea TSP DAP ChObr Silk bt bt Net Trade Stwa M M M M X 2000 Prices WodddMwkettPricesa/ Son 134 166 192 169 219 140 Ocea feilght S/ton 35 35 35 35 CIF orFOB Seaport (USS) Ston 134 166 227 204 254 175 CF or FOB Seaport (Yuan) ct Y/lon 1,109 1,375 1,885 1,693 2,105 1,455 180,000 Port chaa &disbibutors'mntargnd YlAbn (130) (154) 200 182 219 161 (5,430) Trmspont port o wholesale el Yon 250 250 156 156 156 156 (156) Trnspot mill to wholesaleaf 75 75 75 75 75 75 (75) Prie-wanill ht YAMn 1,304 1,546 2,316 2,107 2,556 1,S47 174,339 Procea*g a4t 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Nillag csth& sler'nm Ybon (26) (31) 69 63 77 55 5,230 Teapoefam tomill g/ Y/ton 10 10 10 10 10 10 0 Ercotirprice Yhon 1,288 1,525 2396 2,180 2,643 1,912 179,569 Fmacial pnice h/ Y/ton 1,400 1,200 2,200 1,100 2,650 2,100 170,000 2005 Prices World M et Pricea t S/ion 151 187 217 190 246 158 Oces freight S/on 35 35 35 35 CF or FOB Seaport Shmn 151 187 252 225 281 193 CF or FOB Seaportc/ Y/bn 1,250 1,549 2,088 1,871 2,335 1,602 180,000 Portdcargea&dtoibutorsmargind/ Y/AM (142) 169 21S 198 240 174 (5,430) Transport Ponto whoesale Yt/on 234 234 156 156 156 156 (156) Tr_isort mill to wholesaler 0 75 75 75 75 75 75 (75) Pne.eraall ht Y/lon 1,417 2,028 2,537 2,300 2,807 2,008 174,339 Procesing t 1.0 1.0 L.0 1.0 1.0 1.0 1.0 Miling cmt & asemblersmarg YtAn (28) (41) 76 69 S4 60 5,230 Tusport farm to miftf 8 YAtn 10 10 10 10 10 10 0 Ecoranic price Y/on 1,398 1,997 2,623 2,379 2,901 2,078 179,569 Fimtcal psice i Y/At 1,400 1,200 2,200 1,100 2,650 2,100 170,000 atBased on Wudd Btak CommodityPrice Forcas, Nov.21,1996, c4ustedto 1996 constnt price. Price rav silk is based on Chines esport satiscs. b/Tbe project ae is gn deficit ar Boda commnd whett are iqtorted from North-East Chins ctExchar mteofYS.30 -USSI.00. d/ Port chage of Y30Mtplus 9% (3% for raw tilk) itnibu 'rmari. tatDisuc ftomwholaglssto port is pprosimakdy 1000 km by rail at YO.125lo/m ftDince from mill to wholelas is proxautdy 150 km by road at0.5Ioaakm o S/Distance foomfwm to mill is 20 km on rsvageby road at YO.S5ton/km. ht Government prices for fertilizers, market pces for oha itm. CHINA Qinba Mountains Poverty Reduction Project Table 2: Main Conversion Factors Exchange Rate Y8.3 =US$ 1.0 Standard Conversion Factor 1.0 Unskilled Labor 1.0 General Labor 1.2 Skilled Labor 1.3 Rail Freight 1.25 Electricity 1.5 CoaVWater 1.5 Chemical inputs 1.5 Other inputs Border or market prices 0D CHINA Qinbs Mountkin Poverty Reduction Project Reproetatie Vilae Model TsbIe 3: Conmon Ternced Land FPnancialCrop Budget (RM Yuan) (I huea) AMOUNT QUANTITY Unit Unit Price Yr 0 Yrl Yr2 Yr3 Yr4 Yr Yrl Yr2 Yr3 Yr4 Yield ton 1.6 2.0 4.0 4.5 5.0 Prodactvalue Y 1,400 2,240 2,800 5,600 6,300 7,000 Bym&tctvalue/a Y 40 128 160 240 270 300 3.2 4.0 6.0 6.8 7.5 Total vale Y 2,368 2,960 5,840 6,570 7,300 Iput Coal° Seedsprice yuarlcg 2.0 2.0 8.0 8.0 5.0 1 Seeds kg 120 120 240 240 175 60 60 30 30 35 Ures kg 2.20 220 110 517 517 330 100 50 235 235 150 DAP kg 2.63 0 265 39S 39S 265 0 100 150 150 100 Pobsimsulfite kg 2.10 0 126 126 126 126 0 60 60 60 60 Orgaiucnrnure ton 20.00 300 300 300 300 300 15 15 15 15 15 Peatide time 65.00 0 65 65 65 33 0 1 1 1 0.5 Plaic film kg 12.00 0 0 480 480 240 0 0 40 40 20 Tools dt 12.00 0 12 0 0 0 0 1 0 0 0 Totcoot scmu 640 998 2,126 2,126 1,469 Not incow 1,728 1,962 3,715 4,445 5,832 LabDorRaquired Man-day 6.00 1,080 1,080 1,080 1,080 1,080 100 100 380 IS0 IS0 Netvalue 648 882 2,635 3,365 4,732 Income per labor day 10 11 21 25 32 _ _~~~~~~~~~~~~~~~~~~ CHINA Qinba MountainPovert Redutdon Project Reprenatitve Villgn Modd Table 4: WhAt on Terracd Land FinancialCrop Budget (RMB Yuan) (I hectat) AMOUNT QUANTITY Unit Unit Price YrO YI Yr2 Yr3 Yr4 YrO Yrl Yr2 Yr3 Yr4 Yield ton 1.6 00 2.5 3.0 3.2 Productvalue Y 1,200 1,920 0 3,000 3,600 3,140 By-prosctvalue/a Y 40 76 0 120 144 152 1.9 00 3.0 3.6 3.1 ToWlva Y 1,996 0 3,120 3,744 3,992 InputCoshs Seeds pricm yuan/k 1.5 0.0 2.5 1.5 1.5 Seeds kg 300 0 375 300 300 200 0 150 200 200 Urea kg 2.20 110 0 330 330 330 50 0 150 150 150 DAP kg 2.65 0 0 265 265 265 0 0 100 100 100 Potassiunmsulfhle kg 2.10 0 0 126 126 126 0 0 60 60 60 Orpaiic rrnure ton 20.00 0 0 0 0 0 0 0 0 0 0 Pesicide tine 65.00 0 0 65 65 65 0 0 1 1 1.0 Plasticfilm kg 12.00 0 0 0 0 0 0 0 0 0 0 Toots set 12.00 0 0 12 12 12 0 0 1 1 1 Totl comt asm 410 0 1,173 1,09S 1,091 Netincome 1,586 0 1,947 2,646 2,B94 Labor Rapird Maty 6.00 900 0 900 900 900 150 0 150 150 150 Netvy 686 0 1,047 1,746 1,994 Incomepw laborday II 0 13 18 19 CHU"A Qinbb Mountain Prt Reductin Pjecd Rep eanate Village Modd Tabe 5: Potalo en Terraced Land Finacial Crop Budget (RUB Yu) (I hectae) AMOUNT QUANTITY Unit Unit Price YrO Yrl Yr2 Yr3 Yr4 YrO Yrl Yr2 Yr3 Yr4 Yield ton 7.5 10.0 15.0 15.0 15.0 Prolect value Y 300 2,250 3,000 4,500 4,500 4,500 Dy.podhcttvuie/a y 40 30 40 60 60 60 0.S 1.0 1.5 1.5 1.5 Total vae Y 2,2S0 3,040 4,560 4,560 4,560 Senoapsice yuan 0.3 0.3 1.2 0.3 0.3 Sees kg 600 600 1,080 600 600 2000 2000 900 2000 2000 Urea kg 2.20 110 110 385 385 385 50 50 175 175 175 DAP kg 2.65 0 133 398 398 39S 0 50 150 150 150 P _buaunMM" kg 2.10 0 126 126 126 126 0 60 60 60 60 Ogict_ ton 20.00 300 300 300 300 300 15 15 15 15 15 PY dde time 65.00 0 65 65 65 65 0 1 1 I 1 Platicfilm kg 12.00 0 0 0 0 0 0 0 0 0 0 Tools set 12.00 0 12 12 12 12 0 1 1 1 1 Total co sum 1,010 1,346 2,366 1,86 1,886 Netinme 1,270 1,695 2,195 2,675 2,675 LsborReuied M-ay 6.00 1,080 1,080 1,080 1,080 1.0lO ISO ISO ISO ISO ISO Net value 190 615 1,115 1,595 1,595 Inco perlabo day 7 9 12 15 15 ND CHINA Qinbs Mounttain PovertyReduction Poject Rewentsttve Vdp Mode Tae 6: NowMulberry/Cocoon Production FmancialCrop Budget (RMB Yuan) AMOUNT QUANTrTY Unit Unit Price YtO Yrl Yr2 Yr3 Yr4-20 YrO Yrl Yr2 Yr3 Yr4-20 Productvalue(ooon) ton 12,000 3,600 0 3,600 7,200 14,400 0.30 0.00 0.30 0.60 1.20 Byprodict (F-) to 20 0 0 0 1 2 0.02 0.00 0.02 0.05 010 Byprotd-(brunchs) 30 1 0 I 3 5 0.05 0.00 0.05 0.09 0.10 TOta Value Y 3,602 0 3,602 7,204 14,407 InutCesut seedAing unit 0.3 0 2,250 225 0 0 0 7500 750 0 0 Silkwonnregg table 20.0 300 0 600 600 600 15 0 30 30 30 Urea kg 2.2 220 110 330 660 660 100 50 150 300 300 DAP kg 2.7 0 0 265 265 265 0 0 100 100 100 Pobaiimsulfate kg 2.1 0 420 105 210 210 0 200 50 100 100 Orgpnicnmure ton 20.0 150 300 150 150 150 7.5 15 7.5 7.5 7.5 P etides tino 65.0 0 65 65 65 65 0 1 1 1 1 Toas (naalbetty) sun 80.0 0 240 0 0 0 0 3 0 0 0 Sprayer pc 40.0 0 40 0 0 0 0 I 0 0 0 Pning sham pair 15.0 0 60 0 0 0 0 4 0 0 0 Unm tabe 10.0 0 0 300 300 300 0 0 30 30 30 R"iungfadlmties rl2 100.0 0 0 0 2,000 0 0 0 0 20 0 Raisingtables table 165.0 0 0 0 4,950 0 0 0 0 30 0 Totl uTent cost 670 3,145 2,040 2,250 2,250 Total met 670 3,485 2,040 9,200 2,250 Net inconic 2,932 (3,145) 1,562 4,954 12,157 LaborRequired Mm-day 6.00 360 1,740 4S0 360 360 60 290 SO 60 60 Net val 2,572 (4,885) 1,02 4,594 11,797 hicome per laborday 49 (I1) 20 83 203 CHINA -qen-tVueg Me"d Tab 7: W_ F_lardu Cwp Budgs (RM1 Yuea) AMOUNT Unil ______Unis Price Y YrI Yr2 Yr3 Yr4 YrS Yr6 YVi Yri Yr9.20 Pradodacson ProductVabe YAMn 5,000 5000 0 0 0 0 2500 4000 7500 7500 7500 InPuCoas sedings pc 1.5 ISO 937.5 94.5 0 0 0 0 0 0 0 Urfa k 2.2 220 l10 220 220 330 330 330 330 330 330 1. DAP k4 2.7 0 397.5 79.5 106 106 106 106 106 106 106 POunsumafase 4k 2.1 o 336 U4 U4 U *4 34 U4 34 U4 Mio.sliutkg 3.5 0 0 0 0 0 0 0 0 0 0 Ormic n eion 20.0 0 300 0 0 0 0 0 0 0 0 Pe16ckWs isn 65.0 65 65 65 65 65 65 65 65 65 65 Tools sum 30.0 0 240 0 0 0 0 0 0 0 0 Speyow Pc 40.0 0 40 0 0 0 0 0 0 0 0 Pnidngsln par 15.0 0 90 0 0 0 0 0 0 0 0 ToWacumucost arm 435 2,146 543 475 535 585 535 535 535 555 Totalwos 435 2,516 543 475 585 535 535 585 515 565 No income 4,565 (2,146) (543) (475) (585) 1,915 3,415 6,915 6,915 6,915 Ldso Reaid Mu-day 6.0 600 660 240 240 240 270 270 270 270 270 NeotvA 3,965 (2.306) (733) (715) (825) 1,645 3,145 6.645 6,645 6,645 I_couuper Ii day 46 (20) (14) (12) (15) 43 76 154 154 154 x4(B CHINA Qinba Mountain Poverty ReductionProject Represetatfive Viflage Model TableS: Cattle FinamcialCrop Budget (RMB Yuan) AMOUNT QUANTITY Unit .-.....- Unit Price YrO Yrl Yr2 Yr3-20 YrO Yri Yr2 Yr3-20 incom head 0.2 0 0.5 0.5 Animal Sale live kg 5.4 270.0 00 810.0 810.0 50.0 00 150.0 150.0 Draft Animal Labor day 20.0 400.0 400.0 400.0 400.0 20.0 20.0 20.0 20.0 Total Income sum 670.0 400.0 1,210 0 1,210.0 InputCost Pen natnials m2 40.0 0.0 160.0 0.0 0.0 0.0 4.0 0.0 0.0 Animad head 1000.0 0.0 1,000.0 00 0.0 0.0 1.0 0.0 0.0 Feed grain/by-product kg 0.5 0.0 25.0 25.0 25.0 0.0 50.0 50.0 50.0 U, igh-prottainfeed kg 2.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0 Fed additiveaninerias sm 60 0.0 1.0 IS.0 1I.0 0.0 3.0 3.0 3.0 Breeding cost time 20.0 20.0 20.0 20 0 20.0 1.0 1.0 10 1.0 Vetmisyscsvice ffme 10.0 0.0 10.0 20.0 20.0 0.0 1.0 2.0 2.0 Tools sum 40.0 0.0 40.0 0.0 0.0 0.0 1.0 0.0 0.0 Straw ammoniationtank sum 60.0 234.0 94.0 94.0 Tank cu.m 50.0 0.0 100.0 0.0 0.0 0.0 2.0 0.0 0.0 Straw ton 40.0 60.0 60.0 60.0 60.0 1.5 1.5 1.5 1.5 Urea kg 2.2 0.0 22.0 22.0 22.0 0.0 10.0 10.0 10.0 Plntics kg 12.0 0.0 12.0 12.0 12.0 0.0 1.0 1.0 1.0 Toola set 40.0 0.0 40.0 0.0 0.0 0.0 1.0 0.0 0.0 Total cufent surn 10.0 1,355.0 165.0 165.0 Total cot um 10.0 1,507.D 177.0 177.0 Net income 590.0 (955.0) 1,045.0 1,045.0 LiborRequired man-day 6.0 300.0 3000 300.0 300.0 50.0 50.0 50.0 50.0 Net value 290.0 (1,255.0) 745.0 745.0 Incom per labor day 11.S (19.1) 20.9 20.9 xD CHINA Qinba Mountain Poverty Reduction Project Representative Vilage Model Table 9: Goat Financial Crop Budget (RMB Yuan) AMOUNT QUANTITY Unit ------Unit PFice YrO Yrl Yr2 Yr3-20 YrO Yrl Yr2 YB3-20 Female Animal head I 1 2 1 CulledAnimal head 0.7 0 2 2 Total Income live kg 5 4 97.2 0.0 324.0 324.0 18 0 60 60 Input Cost 2 Ponmatbials m 40.0 4.0 40.0 0.0 0.0 0.1 1.0 0.0 0.0 Animal head 200.0 0.0 200.0 0.0 0.0 0.0 1.0 0.0 0.0 1_ Feed grain/by-product kg 0.5 0.0 5.0 10.0 10.0 0.0 10.0 20.0 20.0 Hlgh.protein feed kg 2.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Feed fdditivelSinerals sum 6.0 0.0 3.0 6.0 6.0 0.0 0.5 1.0 1.0 Breeding cost time 5.0 5.0 5.0 10.0 10.0 1.0 1.0 2.0 2.0 Veternary service time 5.0 0.0 5.0 10.0 10.0 0.0 1.0 2,0 2.0 Twols sum 8.0 0.0 S.0 0.0 0.0 0.0 1.0 0.0 0.0 Straw wanmoniationtank sum 8.0 51.5 24.5 24.5 Tank cu.m 50.0 0.0 25.0 0.0 0.0 0.0 0.5 0.0 0.0 Straw tan 40.0 8.0 N.0 16.0 16.0 0.2 0.2 0.4 0.4 Urea kg 2.2 0.0 3.5 5.5 5.5 0.0 2.5 2.5 2.5 Platics kg 12.0 0.0 3.0 3.0 3.0 0.0 0.3 0.3 0.3 Tools set 40.0 0.0 10.0 0.0 0.0 0.0 0.3 0.0 0.0 Total current sum 17.0 279.5 57.5 57.5 Total coot sum 17.0 317.5 60.5 60.5 Net inonme 10.2 (279.5) 266.5 266.5 LaborRequired man-day 6.0 60.0 60.0 60.0 60.0 10.0 10.0 10.0 10.0 Net value 20.2 (339.5) 206.5 206.5 bnome per laborday *.0 (28.0) 26.7 26.7 -~~~~~~~~ CHINA QinbaMr%unt in PovertyReducfion Project RepreantativeVile Model Table lfr. Pig FunandalCrop Budget (RME Yuan) AMOUNT QUANTITY Unit Unit Price YrO Yrl Yr2-20 YrO Yrl Yr2-20 Product head 0 5 1 1 Total Income live kg 5.6 392.0 448 0 448.0 70 SO 80 Input Cost Penmaterials m2 40 0 8 0 80.0 0.0 0.2 2 0 0.0 Animal head 100.0 100.0 I0O0 OO0 1.0 1.0 1.0 Feed grain/by-product kg 0.5 0.0 25 0 25 0 0.0 50.0 50.0 High-proteinfeed kg 2.0 00 30.0 30.0 0.0 15.0 15.0 Feed additive/minerals sum 6 0 0.0 30.0 30.0 0.0 5 0 5 0 Veterinaryservice lime 10.0 0.0 10.0 10.0 0.0 1.0 1.0 Tools surm 40.0 0.0 40.0 0.0 0.0 1.0 0.0 Total current sum 100 0 195.0 195.0 Total cost sum 108.0 315.0 195.0 Net income 292.0 253.0 253.0 Labor Reqrured man-day 6.0 300.0 180.0 1800 50.0 30.0 30.0 Net value (8 0) 73.0 73.0 Income per labor day 5.8 84 8.4 x4(D CHINA Qinba Mountain Povr ReductionProject ReprrenttisveVill4 Modtel Table II! LaborMobility Fiancial Costand flenefit (RMB Yuan) Project Year Unit------Unit Vadue WOP Yrl Yr2 Yr3 Yr4 YrS Yr6 Yf7 YrS-20 Accumulativelaborrs Out-enovedla -4nterProvince Pson 0 2.8 X2 15.9 25,6 23.3 21J0 19.7 19.7 -Within Province Pson 0 0.9 2.3 4.5 7.2 6.6 5.9 5.S 5.5 Totd a 3.6 10.5 20.4 32.S 29.9 26.9 25.2 25.2 IncremetalBenefit -InterProvince Pru>n/yr 5.000 0 13,923 40,950 79,443 127,764 116,298 104,932 98,2S0 98,280 -Within Province Pson/yr 3,950 0 3,024 8,k94 17,253 27,749 25,258 22,767 21,344 21,344 Totl 4,747 0 16,947 49,944 96,696 155,512 141,556 127,599 119,624 119,624 IncrementalCost Building 76 799 1,595 798 0 0 0 0 0 Vehicles 14 IS[ 303 151 0 0 0 0 0 ENuip.and fumiture 17 179 357 t79 0 0 0 0 0 Staffrain. & TA 35 146 292 438 594 0 0 0 0 Training andplacement Y/lPwon l,924 7,661 15,322 22,982 30,643 0 0 0 0 -interProvince Y/Pson 2,000 6,552 13,104 19.656 26,208 0 0 0 0 -Within Ponvince Yl'son 1,200 1,109 2,219 3,326 4,435 0 0 0 0 RIecturentcost -Management Yuan 28 11S 236 354 472 0 0 0 0 -Uiving ,rp.[(%ofincomne) Yuan 50% 8,473 24,922 48,349 77,756 70,778 63,800 59,812 59,812 Tot cost 17,526 43,026 73,250 109,454 70,778 63,800 59,912 59,812 T"afee ( 2% ) 339 997 1,934 3,ttO 2,831 2,552 2,392 2,392 Incremena ah flow (917.7) 5,920.5 21,512.8 42,947.0 67,946.7 61,247.7 57,419.7 57,419.7 Pay backtothe progenrn( of inwee) 25% 4,236.7 12,460.9 24,174.1 38,877.9 35,38S.9 31,899.9 29,906.1 29,906.1 Frtmets netcash flow -TOta (5,154.4) (6,6403) (2,661.3) 4,069.1 32,557.8 29,347.9 27,513.6 27,513.6 -Incranentl (5,154.4) (6,640.3) (2,661.3) 4,069.t 32,557.8 29,3479 27,513.6 27,5t3.6 IRK 6g% (5,154.4) (6,640.3) (2,6613) 4,0691. 32,557.S 29,347.9 27,513.6 27,513.6 \a job surs,hningrte is assumedto be 85%/S0%, 70f. and60f%, ndstal ied aftetwatds. CHINA Qimmhb Isu~room y Reimmi.. -ri Rqpmtdh vi Mada Table 12: Lame Mebilty EconomicCent md Be,efit (RMB Yumu) Projec Yeaw Unit 4 0 Unit Value WOP Yrl Yr2 Yr3 Yr YrS Yr6 Yr7 Yr6-2 Acwmnulive LuborersOut-mwved Sa -Inter Provln Pson 0 2.2 8.2 I5.9 25.6 233 21,0 19.7 19.7 -WithinProvince Pison 0 0.5 2.3 4.5 7.2 66 5.9 5.5 5.5 TOl 0 3.6 10 5 20.4 32.8 29.3 26.9 25.2 25.2 Inremenal ndefit -Inw Prvince P'tn/yr 5,000 0 13,923 40,950 79,443 127,764 116,298 104.832 98,230 98,280 -Wi,n Proviwn Psnr 3,t50 0 3.024 8,894 17,253 27,74s 25,25% 22,767 21,344 21,344 Total 4.747 0 16.947 49,544 96,696 155.512 141,556 127,599 119,624 119,624 Incrmntenl Cost mwiling 76 7n 1,595 798 0 0 0 0 0 Vehidce 24 151 303 '52 0 0 0 0 0 1qip. NdWfim re 17 179 357 179 0 0 0 0 0 Stafir ain. A TA 35 146 292 438 534 0 0 0 0 TmnigdplacMn YIp'n 1,524 7,661 15,322 22,982 30,643 0 0 0 0 - rPrEvilnce Y/Pson 2,000 6,552 13,104 19,656 26,208 0 0 0 0 -Wid,b Povince Y/P`son 1,200 1,109 2,218 3,326 4,435 0 0 0 0 Recfent ce -Munum Yum 28 228 236 354 472 0 0 0 0 4jvieagp.(%of(n-e) Yuan 50% *,473 24,922 48,348 77,756 70.771 63.800 59,U12 59,812 Totl cet 17,526 43.026 73,250 109,454 70,778 63,00 59,812 59,812 Tmrne ) reinanlca.h flow (571.8) 6,817.4 23,446.7 46,057.2 70,777.8 63,799.7 59,812.2 59,812.2 Pmybhackiniunpbmnm(% oficms) 25% 4,236.7 12,460.9 24,174.1 38,877.9 35,338.9 31,899.6 29,906.1 29,906.12 Fwwe nad cob nowo -TOWd (4,15.5) (5,643.5) (727.4) 7,179.3 35,388.9 31,899.8 29,906.1 29,906.2 tD * 1_acraninuaal (4,815.5) (5,643.5) (727.4) 7,179.3 35,3188.9 31,899. 29,906.1 29,906.1 X IRR U0% (4.815.5) (5,643.5) (727.4) 7,179.3 15,388.9 32,899.8 29,906.1 29,906.1 \aJob _ning atmis _md iD be 85%,80X. 70%md 60Xmd asbizd ahwww&, -150- Annex & Qiaba Metai. Pieet_ fldt PrJt R- Via Midd Tbok 13 Fle.a Cost mdBaedii (R0.43Yin) Poject Yea. 1 2 3 4 5 6 7 0 9-20 IncrementalPMi Vae Com 5,483 16302 2s,473 41.996 52,229 57,063 58,961 59.,t2 59,502 Whil 0 3,145 6,919 10,944 14,963 17,105 17,606 17,706 17.706 Potato 3,065 7,661 12,259 16,355 19,613 20,226 20.226 20,226 20M226 Tre aups Melbey 0 7,204 21,611 46,S24 64,S33 72,037 72o37 72,037 72.037 Walmot 0 0 0 0 5,000 13,000 29.250 40.000 4,750 Lesalocks Conic 4.400 17,710 26,620 26,620 26,620 26.620 26,620 26.620 26,620 (Soat 0 20,736 41.796 41,796 41,796 41,796 41,796 41,796 41,796 Pig 44,800 37,360 07,360 B7,360 07,360 07360 37,360 37,360 7.360 Labeeeobrilty 1,695 0,374 24,722 36,622 94,204 I.403 142,154 130,739 122,14 Tot (l) 59.443 160,492 249,760 329,016 406.623 461,614 496,010 496,036 496,311 inO t Ptond.o COls Tsmdolg 55,300 33,380 53,300 55,308 22,155 0 CutO-mmilarryfodder 3,292 0 0 0 0 0 Mubary/io0,oe 15,309 15,309 7,655 0 0 0 Wahet 777 777 971 0 0 0 cattle 2,033 2,033 0 0 0 0 Cloa 2,957 3,003 0 0 0 0 Pig 12.600 11,970 0 o 0 0 L.eblooblllty ,200 16,575 24,480 32,400 0 0 Total (2) 102,643 105,054 00.501 07,700 22,155 0 2. Ion 00tal Wontk Capital Coal 16e,0t me: (~ 10% ) Coc 24 139 16S 197 197 197 197 197 197 Wbeat 0 45 70 so so s0 so *0 so Po019 30 91 91 91 91 91 91 91 91 Tee aps Mulberry 0 0 144 432 432 432 432 432 432 Walmoo 0 0 0 0 O 0 75 75 75 Lhe6oda camle 0 27 27 27 27 27 27 27 27 otoal 0 11 11 11 11 11 11 11 1I Pis 3 3 3 3 3 3 3 3 3 Labor mobhllty 047 2,492 4,835 7,776 7,070 6,300 5,.91 5.901 5,90 Toa (3) 904 2,0o 5,349 S,617 7,919 7.222 6,9si 6,0s91 6,09 3 inauttti ina6g cowe Crops Cmn 1,544 4,832 S,120 10.392 11.737 11,418 10.402 9."5 9."5 Weat 0 1,402 2,869 4,256 5,643 6,141 6.103 6,103 6.103 peto 1,260 3,474 5,239 7,004 0,014 7.946 7,767 7,767 7,767 Tre aep Mubeny 9.770 14,S10 15.145 12.960 13,050 13.030 13,050 13,050 13,050 Waim 5,612 7,170 10.011 5.030 5,148 3.413 3,550 5,50S 5,550 LivcKcb CodIe 18,205 23,320 10,230 10,230 10.230 10,230 10.230 10,230 10,230 Goat 21,720 29,5010 15,150 15,15 15.153 13,153 15,133 10,153 15,153 Pig 37,500 73,125 73,129 73,125 73,123 73.125 73,125 73.125 73.125 Labor oblllty 2,516 9.902 25.110 47,397 63,4s5 71.266 65,395 61.407 59,812 Total (4) 99.134 167,710 165,007 185,559 205,5313 213,U16 206,706 202,392 200,797 Tess ( 5% ) 2,921 0,173 11.746 14,752 17,503 19,29 20,536 20,17 21,156 abew taa @1 2% Tota Cost 204,602 283,746 270.603 296,716 253,16S 240,327 234,220 230,160 223,051 NetBendo6it (145,160) (115,254) (20,044) 32,301 153.455 221,2S 261,790 2X5s6t 267,960 (6O1-5) ______ NiPV 072,300 iRR 33% -151- Annex 9 QObb M_artad Pm.y Rsduei_doPr.njt ePmt1re VUil*pMoed Tble 14: P, melade ye.Y WOP I 2 3 4 s 6 7 a 9-20 Com 0,512 s3,995 96,814 10n,995 122.508 132,741 137,5S0 139,473 140,014 140,014 Whet 49,909 49,980 53,045 56,gl9 60,944 64,96s 67,005 67,596 67,606 67,606 Potao 57,000 60,065 64,661 69,258 73,055 76,613 77,226 77,226 77.226 77.226 Tre cp Mulberry 14,407 14,407 21,611 36,019 61,231 79,240 96,446 36444 36,44466.444 Walnat 23,000 25,000 25,000 25,000 25,000 30,000 39,000 54,20 65.000 73.750 Lhlodocks Coke 110,590 122.990 136,300 145,210 143,210 145,210 145,210 143,210 145,210 145,210 Goat 51,956 11,956 32,692 53,752 53,752 53,752 53,752 53,752 53.752 53,752 Pig 219,912 264,712 307,272 307,272 307,272 307,272 307,272 307,272 307,272 307,27 Lab.tmobli 0 1,695 9,374 24,722 56,622 94,204 126.40) 142,134 130,789 122,814 Subiceta(1) 577,277 636,720 745,769 827.037 906,293 993,900 1,038,991 1.073,297 1,073,313 1,074,088 bVoa Coat cmos 59,146 60,749 64,17S 67,609 69,971 71374 71.039 69,973 69,544 69U546 Wheat 32.9 32995 34.565 36,040 37,514 3s,9n9 39,521 39,493 39,493 39,493 Powlo 52,495 53,314 56,165 39,052 59,940 61,036 60,996 60,901 60,901 60,301 MWKaqy 4,99 13,979 19.126 19,619 17.539 17,657 17.657 17,657 17,607 17,657 Walno 5,273 10,973 12,591 15,504 10,511 10,646 11,006 11,601 11,091 11,091 CoOl 67.260 5,465 90o,560 77,490 77,490 77,490 77,490 77,490 77,490 77,490 GMa 9,471 31,199 39,059 24,629 24,629 24,629 24,629 24,629 24,629 24,629 Pig 224,400 261,900 297,525 297,523 297,525 297,525 297,325 297,525 297,525 297,525 Labor mybt 0 2,516 9,902 25,110 47,397 63,a48 71,266 65,393 61,407 59,312 Stoa (2) 453,233 553,598 623,690 621,376 642.515 662,330 671,117 664,032 659,618 653,023 TuAeoa 5% 20.064 31,936 37,238 41,332 45,315 49,195 51,945 53,664 53,666 53,704 e Rqmy- 102,643 103,054 30,301 IateeetPayment 0% 0 0 0 0 0 0 0 0 0 Nei iecwtm 93,175 51,295 94,790 I1,109 21S,464 271.37s 315,829 252.949 234,975 273,60 Othot Intomte h/ 59.300 94.000 54,000 94,000 34,000 04,900 94.000 34,000 96,000 94,000 Labordays reqere Corn 6,120 6,120 6,120 6,120 6,120 6,120 6,120 6.120 6,120 6,120 Wheal 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 Potato 4.300 4,300 4,500 4,500 4.0 4,500 4,500 4,500 4,50W 4,500 Tree stops N4balbety 240 320 990 S1o 560 540 540 540 340 540 Waltt 500 720 8O 935 760 770 7s0 793 793 793 Liveoch cat 9,850 9,400 9,950 9,930 9.950 9,950 9,950 9,950 9,950 9,930 Goal 1,230 1,970 2,520 2,520 2.526 2.526 2.526 2,520 2,52D 2.520 Pig 26.050 31,050 33,900 33,900 33,900 33,900 33,900 33,900 33,900 33,900 Total labr 53,240 59,230 62,.20 62,495 62,060 62,050 62,060 62,073 62,073 62,073 PMc1tahicome 131 161 201 295 360 424 476 401 404 426 Pe capeL.pain prdcn 157 140 326 361 337 337 337 317 397 337 RetumstoPer LA.brDay .3 7.4 S.0 9.3 10.3 11.2 11.9 12.6 12.7 12.7 Total bv_ead.porpa (YPra) lrahkl1bo mbOlky 4U E-lude labormobiDly 336 -152- Annex 9 CHINA Qia1b, Mcosta h Pely Redud Prejet RepresessaWr VillF Model Table 13: Rent aed Coi4 Rlct ray (110 yiue) Vililge Al Full Deoelopmet hn_nai Inicm. 339 Less: Imputed Value, Family Labor b 53 lmputed Value, Mamagement Seive d 34 ImptedRean- I OOwCupial d 17 Albweace for RaIkJUcetlOty c/ 34 Slbtotal 130 poject Rain 201 poJect Cihrgeo PebacbkH labor nobl. progamnnad 23 Toa andral V2 1 Tot Chagee 44 kwn Recoray Indxa gI 22% Ding PooJeWs Life l Phjeel Resi Y71 Projec Cla Paybad to lbor mobil. pmgmni dt *9 Taese f/ 13I bloet ad Loan Repaymnt 204 Total CMe%e 423 RoatReoveay loden g/ 49% Ptjneet Comm1V hdnlvoeof fttani' eootrbtiton 1,710 Exhisnve of f tae corlbution 1.197 ComlRtcovay ndaj/ 36% adBtd on dheinarumita inome of thtn fnilieU In Ihe fanm model analysi. before deadcIng p e 4jodiag andd4eb revice bi Based an nre ia lIbor valaed at ntmt wage. efTan pocat of i-rontallacomet. dl Five pemaentof neo incrmuinal iner edTbe bccfdlypIcedllobceri oieldpeybwk the p,eal p in rteyears, 3 Five peran for eop ad liveock am paoet for fEdit produtoiL gi Projct egua a p*canla of prject rem. iVExpend u prese anvt tver 2ZOyeerpnojed le.discoeOd irat V NPV ofl'otali i,von. y Prnject cehieg a paentor of peed eOSL CHINA Qinba Mountains Poverty ReductionProject TVE - Agroprocessing Table 16: Shaanxi Ankang Tea Processing Factory Financial Cash Flow Year Item\Year 1 2 3 4 5 6 7 8 9-20 1. Cash In-flow 1.1 Sales revenue 1,920,000 3,072,000 3,840,000 3,840,000 3,840,000 3,840,000 3,840,000 3,840,000 3,840,000 1.2 Fixed asset residule 1.3 Working capital salvage 2. Cash Out-flow 2.1 Fixed assets investment 1.659.660 Civil works 1,052,160 Equipment 607,500 2.1 Working capital 1-032-000 2.3 Operating expenses 1,230,502 1,664,067 1,953,111 1,953,111 1,953,111 1,953,111 1,953,111 1,953,111 1,953,111 2.4 Value-addedtax and surcharge 110,920 177,472 221,840 221,840 221,840 221,840 221,840 221,840 221,840 (1) Value-added Taxes 100,836 161,338 201,673 201,673 201,673 201,673 201,673 201,673 201,673 Sales (agro. prod.) 7% 138,240 221,184 276,480 276,480 276,480 276,480 276,480 276,480 276,480 Purchase raw material 5% 28,800 46,080 57,600 57,600 57,600 57,600 57,600 57,600 57,600 Purchase indust. material 17% 8,604 13,766 17,207 17,207 17,207 17,207 17,207 17,207 17,207 (2) Education surcharge(3% VAT) 3% 3,025 4,840 6,050 6,050 6,050 6,050 6,050 6,050 6,050 (3) City maintenance & Const. (7% VAT) 7% 7,059 11,294 14,117 14,117 14,117 14,117 14,117 14,117 14,117 2.5 Depreciation 0 82,983 82,983 82,983 82,983 82,983 82,983 82,983 82,983 2.6 Interest expenses(FA)@: 9.18% 152,357 152,357 137,121 121,885 106,650 91,414 76,178 60,943 45,707 2.7 Interest expenses (WC) @: 10% 103,200 103,200 103,200 103,200 103,200 103,200 103,200 103,200 103,200 3. Before Tax Cash Flow (2,368,639) 891,921 1,341,745 1,356,980 1,372,216 1,387,452 1,402,687 1,417,923 1,433,159 4. Income Tax @: 33% 0 294,334 442,776 447,803 452,831 457,859 462,887 467,915 472,942 5. After Tax Cashflow (2,368,639) 597,587 898,969 909,177 919,385 929,593 939,800 950,008 960,216 Principal repaid (@11lOyrsequal install.) 165,966 165,966 165,966 165,966 165,966 165,966 165,966 165,966 t (remaining:) 1,659,660 1,493,694 1,327,728 1,161,762 995,796 829,830 663,864 497,898 331,932 6. Net Cash Flow Without Project 7. Net IncrementalCash Flow (2,368,639) 431,621 733,003 743,211 753,419 763,627 773,834 784,042 794,250 NPV (@ 12%) 3,090,692 IRR 29% CHINA Qinba Mountains Poverty Reduction Project TVE - Agroprocessing Table 17: Shaanxi Ziyang Magic Taro Processing Factory Financial Cash Flow Year 7 8 9-20 Item\Year 1 2 3 4 5 6 1. Cash In-flow 6,000,000 6,000,000 6,000,000 1.1 Sales revenue 0 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 1.2 Fixed asset residule 1.3 Working capital salvage 2. Cash Out-flow 2.1 Fixed assets investment 2,600,000 2.1 Working capital 450,000 0 3,542,200 3,542,200 3,542,200 2.3 Operating expenses 0 3,542,200 3,542,200 3,542,200 3,542,200 3,542,200 289,102 289,102 289,102 2.4 Value-addedtax and surcharge 0 289,102 289,102 289,102 289,102 289,102 262,820 262,820 262,820 (1) Value-addedTaxes 0 262,820 262,820 262,820 262,820 262,820 432,000 432,000 Sales (agro. prod.) 7% 0 432,000 432,000 432,000 432,000 432,000 432,000 166,400 166,400 Purchase raw material (agro. pro 5% 0 166,400 166,400 166,400 166,400 166,400 166,400 2,780 2,780 2,780 Purchase indust. material 17% 0 2,780 2,780 2,780 2,780 2,780 7,885 7,885 7,885 7,885 (2) Educationsurcharge (3% of VAT) 3% 0 7,885 7,885 7,885 7,885 18,397 18,397 18,397 (3) City maintenance & Const. (7% V 7% 0 18,397 18,397 18,397 18,397 18,397 130,000 130,000 130,000 130,000 2.5 Depreciation 0 130,000 130,000 130,000 130,000 119,340 95,472 71,604 2.6 Interestexpenses(FA) 3: 9.18% 238,680 238,680 214,812 190,944 167,076 143,208 45,000 45,000 45,000 2.7 Interest expenses (WC) @: 10% 45,000 45,000 45,000 45,000 45,000 45,000 1,874,358 1,898,226 1,922,094 3. Before Tax Cash Flow (3,333,680) 1,755,018 1,778,886 1,802,754 1,826,622 1,850,490 610,662 618,538 626,415 634,291 4. Income Tax@: 33% 0 579,156 587,032 594,909 602,785 1,255,820 1,271,811 1,287,803 5. After Tax Cashflow (3,333,680) 1,175,862 1,191,854 1,207,845 1,223,837 1,239,828 260,000 260,000 260,000 Principal repaid (@ 10 yrs equal install.) 260,000 260,000 260,000 260,000 260,000 1,040,000 780,000 (remaining:) 2,600,000 2,600,000 2,340,000 2,080,000 1,820,000 1,560,000 1,300,000 6. Net Cash Flow Without Project 979,828 995,820 1,011,811 1,027,803 7. Net IncrementalCash Flow (3,333,680) 915,862 931,854 947,845 963,837 NPV (0 12/) 4,033,579 IRR 29% CHINA Qinba MountainsPoverty ReductionProject TVE - Agroprocessing Table I 8: Ningxia Xiji Potato Starch Processing Factory Financial Cash Flow Year Item\Year 1 2 3 4 5 6 7 8 9-20 1. Cash In-flow 1.1 Sales revenue 0 20,800,000 26,000,000 26,000,000 26,000,000 26,000,000 26,000,000 26,000,000 26,000,000 1.2 Fixed asset residule 1.3 Working capital salvage 2. Cash Out-flow 2.1 Fixed assets investment 11,585,400 2.1 Working capital 500,000 1,130,800 2.3 Operating expenses 14,616,406 17,121,656 16,997,956 16,997,956 16,997,956 16,997,956 16,997,956 16,997,956 2.4 Value-added tax and surcharge 0 930,994 1,163,743 1,163,743 1,163,743 1,163,743 1,163,743 1,163,743 1,163,743 (I) Value-addedTaxes 0 846,358 1,057,948 1,057,948 1,057,948 1,057,948 1,057,948 1,057,948 1,057,948 Sales (agro. prod.) 7% 0 1,497,600 1,872,000 1,872,000 1,872,000 1,872,000 1,872,000 1,872,000 1,872,000 Purchase raw material 5% 0 559,000 698,750 698,750 698,750 698,750 698,750 698,750 698,750 Purchase indust. material 17% 0 92,242 115,302 115,302 115,302 115,302 115,302 115,302 115,302 (2) Education surcharge(3% of VAT) 0 25,391 31,738 31,738 31,738 31,738 31,738 31,738 31,738 (3) City maintenance & Const. (7% VAT) 0 59,245 74,056 74,056 74,056 74,056 74,056 74,056 74,056 2.5 Depreciation 0 579,270 579,270 579,270 579,270 579,270 579,270 579,270 579,270 2.6 Interestexpenses(FA)@: 9.18% 1,063,540 1,063,540 987,573 911,605 835,638 759,671 683,704 607,737 531,770 2.7 Interest expenses(WC) : 10% 50,000 163,080 163,080 163,080 163,080 163,080 163,080 163,080 163,080 3. Before Tax Cash Flow (13,198,940) 2,315,910 5,984,679 6,184,346 6,260,313 6,336,280 6,412,247 6,488,214 6,564,182 4. IncomeTax : 33% 0 764,250 1,974,944 2,040,834 2,065,903 2,090,972 2,116,042 2,141,111 2,166,180 5. After Tax Cashtlow (13,198,940) 1,551,660 4,009,735 4,143,512 4,194,410 4,245,308 4,296,206 4,347,104 4,398,002 Principal repaid (@ 14 yrs equal install.) 827,529 827,529 827,529 827,529 827,529 827,529 827,529 827,529 (Temaining:) 11,585,400 10,757,871 9,930,343 9,102,814 8,275,286 7,447,757 6,620,229 5,792,700 4,965,171 6. Net Cash Flow Without Project 7. Net Incremental Cash Flow (13,198,940) 724,131 3,182,206 3,315,983 3,366,881 3,417,779 3,468,677 3,519,575 3,570,473 NPV (( 12%) 9,904,526 IRR 22%X CHINA Qinba Mountains Poverty Reduction Project TVE - Mining & Processing Table 19: Shaanxi Zhenan SulphuricBarium Processing Factory Financial Cash Flow Year 8 9-10 Item\Year 1 2 3 4 5 6 7 1. Cash In-flow 14,897,663 1.1 Sales revenue 0 4,330,899 10,503,127 14,897,663 14,897,663 14,897,663 14,897.663 14,897,663 1.2 Fixed asset residule 1.3 Working capital salvage 2. Cash Out-flow 2.1 Fixed assets investment 4,500,000 3,731,623 2.1 Working capital 2,743,000 0 5,649,397 2.3 Operating expenses 1,429,400 2,844,251 4,633,790 5,649,397 5,649,397 5,649,397 5,649,397 5,649,397 599,553 2.4 Value-addedtax and surcharge 0 236,778 422,706 599,553 599,553 599,553 599,553 599,553 545,04S (1) Value-added Taxes 0 215,253 384,278 545,048 545,048 545,04S 545,04S 545,048 Sales 7% 0 311,825 756,225 1,072,632 1,072,632 1,072,632 1,072,632 1,072,632 1,072,632 24,036 Purchase raw material (minerals 5% 0 4,926 16,946 24,036 24,036 24,036 24,036 24,036 Purchase indust. material 17% 0 91,646 355,001 503,548 503,548 503,548 503,548 503,548 503,548 16,351 (2) Education surcharge (3%ofVAT) 3% 0 6,458 11,528 16,351 16,351 16,351 16,351 16,351 38,153 (3) City maintenance& Const. (7% VA 7% 0 15,068 26,899 38,153 38,153 38,153 38,153 38,153 411,581 411,581 2.5 Depreciation 0 411,581 411,581 411,581 411,581 411,581 411,581 431,807 2.6 Interestexpenses(FA) : 9.18% 413,100 755,663 755,663 701,687 647,711 593,735 539,759 485,783 2.7 Interest expenses (WC) @: 10% 274,300 274,300 274,300 274,300 274,300 274,300 274,300 274,300 274,300 7,531,024 3. Before Tax Cash Flow (9,359,800) (3,923,297) 4,005,087 7,261,144 7,315,120 7,369,096 7,423,072 7,477,048 2,467,426 2,485,238 4. Income Tax @: 33% 0 0 1,321,679 2,396,178 2,413,990 2,431,802 2,449,614 5,045,786 5. After Tax Cashflow (9,359,800) (3,923,297) 2,683,408 4,864,967 4,901,131 4,937,295 4,973,458 5,009,622 Principal repaid (@ 14 yrs equal install.) 587,973 587,973 587,973 587,973 587,973 587,973 587,973 4,703,785 (remaining:) 4,500,000 8,231,623 8,231,623 7,643,650 7,055,677 6,467,704 5,879,731 5,291,758 z 6. Net Cash Flow Without Project 4,421,649 4,457,813 X 7. Net IncrementalCash Flow (9,359,800) (3,923,297) 2,095,435 4,276,994 4,313,15S 4,349,321 4,385,485 NPV (@ 12%) 13,339,703 IRR 25% CHINA Qinba Mountains Poverty Reduction Project Table 20: Summary of Financial Rate of Return Base Case Investment up Revenue down Operating Cost up 20% 10% 10% Whole Village Program 38% 33% 30% 33% Grain Crops -Corn 47% 39% 40% 45% -Wheat 12% 9% 9% 11% -Potato 16% 12% 12% 14% Tree Crops -Mulberry 49% 45% 44% 46% -Walnut 37% 37% 35% 35% Livestock -Catttle 47% 46% 38% 39% l -Goat 44% 42% 37% 38% ,, -Pig 67% 50% 2% 9% l Labor mobility 34% 31% 26% 29% TVE Development Tea processing 29% 24% 20% 24% Magic taro processing 29% 23% 19% 23% Potato starch processing 22% 17% 9% 15% Sulphuric Barium 25% 21% 20% 22% CHINA Qinba Mountains Poverty Reduction Project Table 21: Summary of Economic Rate of Return Base Case Investment up Revenue down Operating Cost up 20% 10% 10% Whole Village Program 43% 38% 34% 37% Grain Crops -Corn 50% 41% 43% 49% -Wheat 13% 10% 10% 12% -Potato 17% 13% 13% 15% Tree Crops -Mulberry 51% 48% 46% 49% -Walnut 38% 37% 35% 36% Livestock -Catttle 52% 50% 42% 43% l -Goat 47% 46% 40% 42% ,l -Pig 138% 93% 29% 39% l Labor mobility 43% 39% 35% 38% TVE Development Tea processing 58% 50% 41% 48% Magic taro processing 71% 59% 52% 60% Potato starch processing 47% 39% 27% 35% Sulphuric Barium 50% 45% 42% 46% (D - 159 - Annex 10 CHINA: Qinba Mountains Poverty Reduction Project Proposed Bank Group Supervision Input Vision of a Community at Project Full Development 1. After project completion, average annual per capita income in a typical project community would increase to more than the nationally defined absolute poverty line of Y 320 (in constant 1992 prices). At least 10 percent of project villagers would gain access to off-farm employment opportunities through labor mobility programs and TVE development. About 780 administrative villages (or 57 percent of the remaining currently without access to road) would be connected by a basic (Class IV) road to the existing network of county roads. About 116,000 households in 786 administrative villages would benefit by electrification schemes (all administrative villages would be provided with electricity at the end of the project). The village would most likely have access to one of the 34 strategically placed farmers markets which would provide affordable inputs and profitable outlets for products. In four out of five households, one member would master one or two new farming skills. Terracing, irrigation schemes, improvement of low-yield fields, and extension programs would be main factors contributing to expected yield increases of about 40 percent for wheat, 35 percent for corn, 20 percent for potato, and 40 percent increase in corn stalk for fodder use. Most project households would take part in the planting and maintenance of tree and bush species on steeply sloped hillsides and wastelands, and nearly two-thirds of project households would undertake animal breeding and fattening activities. The capacity of village organizations to strategize and to manage their own resources would be strengthened through the development and use of a participatory (including women and minorities) integrated village development planning system. 2. In addition, the health and education programs undertaken in parallel with the project would complement the improvements in employment opportunities, infrastructure and agriculture production techniques. Through the establishment and reconstruction of village teaching points, primary school enrollment and completion rates would approximate the provincial averages of that time. The existing village health care clinic would be strengthened or, if none existed, one would be built. Each clinic would receive at least one new village health aide and salary increments would be provided to qualified health aides. Infant mortality rates would be reduced from more than 10 percent at present to no more than 5 percent at full development, and the maternal mortality ratio would be reduced by more than 30 percent. Safe drinking water would be provided to 60 percent of the 30 percent remaining population currently without safe drinking water, thus reducing diarrheal and water-related diseases and decreasing the time and labor women are required to spend supplying water for their families and livestock. - 160 - Annex 1O Qinba Mountains Poverty Reduction Project Proposed Bank Group Supervision Input Proposed Activities Special |Input date I Skills s/wl 4/97 Prenegotiation Discussion. Review Preliminary Designs and Bidding TM, procuremt, 15 Docs. Review pilot village activities. Review training plan for labor, agriculture, counterpart staff. Review technical assistance plan (all components) TVE, environmt. and research plans for Land and Farmer Development component. 7/97 I st Supervision and Project Launch Workshop for project staff on TM, M&E, 15 procurement, disbursement, financial management, Special Account, procuremt M&E, reporting, etc. Review PMO Terms of Reference for staff education, labor, positions. agric., environmt. 9/97 Review bids for vehicles, equipment, materials and services. Review TM, M&E, 10 analyses plans for labor mobility and poverty monitoring. Interview procuremt labor mobility component parnicipants. 12/97 2nd Supervision Mission: Review staffing progress. Review TM, education, labor, 15 management training plan. Review design of PMO management M&E, agric., information system. Review selection criteria for labor mobility and engineer microcredit candidates. Review progress of village activities and education programs 4/98 3rd Supervision Mission: Review TVE design and construction TM, engineer, labor, 10 progress. Review institutional arrangements and physical progress for economist, agric. each component. Review FCPMC's proposed component activity/procedure adjustments. 7/98 4th Supervision Mission: Review component progress, labor mobility TM, M&E, labor, 10 and poverty monitoring reports. Interview labor mobility component engineer, education, participants. Review progress of the parelle education programs. agric. 3/99 Midterm Review: Review of implementation progress and prospects, TM, financial, 28 including village level impact, effects on women and indigenous procuremt, engin., peoples (all components). Review FCPMC proposal for institutional labor, TVE, arrangement and specific component adjustments. Review audit environmt., agric., results and environmental effects of project activities. Review health livestock., education, and education programs. health 10/98 5th Supervision Mission: Review of component progress, labor TM. education, labor, 10 mobility and poverty monitoring reports, discussions with ministries health, agric., TVE, and bureaus responsible for component implementation. Review of engineer dissemination and marketing strategies for labor mobility and TVE components. l 1/ Staff weeksreflect office and missiontime spent on project supervision. - 161 - Annex IO Proposed Activities Special Input Date Skills S/W2 3/99 6th Supervision Mission: Review of component progress. labor TM, M&E, labor, 10 mobility & poverty monitoring reports, discussions with ministries procuremt, agric., and bureaus responsible for component implementation. Review of TVE, agri. engineer agriculture research results and incorporation into component activities. 10/99 7th Supervision Mission: Review progress of all project components TM, education, labor, 10 and education and health programs. Review labor mobility and health, agric., M&E, poverty monit. reports. Review project audit report. ag. engineer 3/2000 8th Supervision Mission: Review of component progress, monitoring TM, M&E, labor, 10 reports, discussions with ministries and bureaus responsible for procuremt, agric., component implementation. Interview labor mobility component TVE, agri. engineer participants. 10/2000 9th Supervision Mission: Review progress of all components and TM, education, labor, 10 health and education programs; review monitoring reports, health, agric., M&E, discussions with ministries and bureaus responsible for component ag. engineer implementation. l 3/2001 10th Supervision Mission: Review of component progress. TM, M&E, labor, 10 monitoring reports. discussions with ministries and bureaus procuremt, agric., responsible for component implementation. Review of project audit TVE, agri. engineer report. 10/2001 11th Supervision Mission: Review progress of all components and TM, education, labor, 10 health and education programs; review monitoring reports, health, agric., M&E, discussions with ministries and bureaus responsible for component ag. engineer, implementation.. Interview labor mobility component participants. procurement 3/2002 Final Supervision Mission: Final stage review of progress of TM, M&E,edu, hth., 12 individual components, institutional arrangements, progress of health labor, procuremt, and edu. programs, and initial preparation for PCR. agric., TVE, engin. 10/2003 Project Completion Mission: Review and compile project data, TM, selected techn. 15 evaluate results, impacts and benefits. and evalu. specialists 10/2003 Review Project Completion Report results TM, selected techn. 20 and evalu. specialists Total Supervision Input (staff-weeks) | 220 Specialized acronyms: TM = task manager procure = procurement specialist educ = primary education specialist livestock = animal husbandry specialist agric = land and farmer labor = labor mobility specialist development specialist health = public health care specialist anthro = social anthropologist environmt = environmental specialist XI Staffweeks reflectoffice and missiontime spent on project supervision. - 162 - Annex 10 CHINA: Qinba Mountains Poverty Reduction Project Key Monitoring Indicators FULL DEV. REPORT INDICATORS TARGETS DATE Labor Mobility l Number of project area surplus laborers attending orientation sessions 154,700 Reports on Number of placements by market (county, provincial, interprovincial) 154,700 June 30 & Number of monitoring visits to enterprises with surplus laborers Dec. 30 Number of accidents, instances of unsafe working/dormitory conditions each year Rate of first one-year contract completion, rate of renewed contracts 75% Number of surplus laborers who cover costs within 2 years of placement 75% Outcome Indicators Initial Number of households aware of off-farm employment opportunities 574,000 & final Average income levels of surplus laborers placed by the project (related Y4,000-Y6,000 indicators for women and ethnic minorities) per year Average off-farm income increase for participating households Y1,000 per year Land and Farmer Development Number of villages that have started implementation 2,941 Reports on Number of households received partial credit for all selected activities 574,160 June 30 & Land area with completed food/cash crop establishment 82,790 ha. Dec. 30 Land area prepared for tree crop plantation 38,900 ha each year Number of animals purchased by households 1.1 million Number of farmers and person days in training and extention activities 0.2/1.4 million Number of households and villages taking part in demonstration network 2,185/1,000 [OutcomeIndicators Initial Number of farmers who have mastered one new agricultural production skill 143,000 & final Per capita grain production increase for participating households 73 kg./ year Per capita number of livestock (standard conversion) for participating households Per capita net household income increase for participating households Y400/year l Rural Infrastructure Number of rural works constructed (by type of work) Table 3, Annex 5 Reports on Per unit construction costs (for each type of work) June 30 & Dec. 30 |OutcomeIndicators each year Number of villagers in number of villages served with safe water supply 466,000/1680 Initial Number of villages connected to rural road network 780 & fmal Number of families provided with electricity supply 116,000 Number of enterprises provided with electricity supply Command area served by irrigation facilities 13,850 ha. - 163 - Annex 10 Rural Enterprise Development Cost perjob created Y15,000 Reports on Number of low skill jobs (project area surplus laborers) 33,850 June 30 & Average income earned through backward linkages to project households Dec. 30 Standard financial indicators of rural enterprise profitability each year Environmental accidents reported by enterprises, detected by PMO, EPB Number of problems with working conditions and dormitories Number of food processing enterprises meeting relevant national standards 90% Number of farmers markets constructed 34 Outcome Indicators Initial Increased farmer awareness of input and output markets & final Increase in annual off-farm income for participating households Y500/person Microfinance Component Monitoring Indicators Input Indicators Reportson Percentage of new staff trained in extensive techniques and basic financial June 30 & management within three months of being hired 80% Dec. 30 All group leaders trained in leadership techniques before groups receive 90% each year loans Number of households provided with basic information on project financial services 90% Number of group meetings held to review regulations and responsibilities before loans are disbursed 90% Number of field visits by branch manager (on a quarterly basis) Process Indicators Internal audits performed every quarter 90% Mangement information system providing data on financial indicators and client outreach indicators through monthly reports 90% Financial planning system providing projections for loan funds required, savings generated, and costs of delivering loans 90% Outcome Indicators Number of groups holding regular meetings (at least twice a month) > 90% Initial Number of groups with no installment repayment difficulties > 90% & final Number of clients per staff member, number of groups per staff member 30-35/5-6 Annual independent external audit reports provided to branch management, LGPR, and the Bank 100% Number of group members reporting higher household income due to activities supported by project loans 80% -164- Annex 11 China: Qinba Mountains Poverty Reduction Project Selected Documents and Data Available in the Project Files A. REPORTS AND WORKING PAPERS RELATING TO POVERTY ISSUES A. 1. China: Strategies for Reducing Poverty in the 1990s. (World Bank Country Study, 1992) A.2. National 8-7 Poverty Reduction Plan, State Council's Leading Group on Poverty Reduction of the State Council, 1994. B. PROJECT REPORTS AND STUDIES B. 1. "World Bank Preparation Mission's List of Principles and Objectives". Attachment 1 to the Second Preparation Mission Aide-Memoire, March 28, 1994. B.2. Feasibility Study Report: China Qinba Mountains Poverty Reduction World Bank Loan Project, compiled by Foreign Capital Project Management Center (FCPMC), Leading Group for Poverty Reduction (LGPR) of the State Council, January 1997. B.3. Feasibility Study Report - Statistical Tables: China Qinba Mountains Poverty Reduction World Bank Loan Project, compiled by the FCPMC of the LGPR, September 1996. B.4. Technical Criteria & Allocation Criteria for Part of the Construction Project: China Qinba Mountains Poverty Reduction World Bank Project, by FCPMC of the LGPR. B.5. Feasibility Study of the Labor Mobility Sub-Project, by China Western Human Resources Development Centre, January 1997. B.6. Microfinance & Reform of Poverty Alleviation and Development in China, by China Western Human Resources Development Center, October 1996. C. PROVINCIAL REPORTS C.1. Sichuan Province C.1.1. Sichuan Feasibility Study Report, by the World Bank Loan Project Mangement Office (PMO) of the Sichuan Provincial Leading Group for Poverty Reduction, September 16, 1996. C. 1.2. Feasibility Study of Social Services (Education Subcomponent). by the Sichuan PMO, April 16. 1996. C. 1.3. Feasibility Study of Social Services (Health Subcomponent). by the Sichuan PMO, April 16, 1996. C.1.4. Component Feasibility Report of Rural Enterprises & Farmer Markets, by the Sichuan PMO, April 16, 1996. C 1.5. Research Report on Commercial Feasibility & Poverty Reduction Effect of the Sub- project of Sichuan Rural Enterprises & Farmer Products Trading Market, by the Sichuan PMO. -165- Annex 11 C. 1.6. A Complementary Material to the Sub-project of Rural Enterprises & Farmer Products Trading Market in Sichuan. China, by the Sichuan PMO. C. 1.7. Explanations for the Arrangements in Sichuan Project Area's Implementation Program of the First Year. the Retroactive Plan and Implementation of the Counterpart Funds, by the Sichuan PMO. C.1.8. Estimates of Unit Investment, by the Sichuan PMO, January 1997. C.2. Shaanxi Province C.2. 1. Shaanxi Project Area Feasibility Study Report, by the PMO of Shaanxi Province, January 10, 1997. C.2.2. Chart of Feasibility Study Report (One), by the PMO of Shaanxi Province, September 15,1996 C.2.3. Chart of Feasibility Study Report (Two), by the PMO of Shaanxi Province, September 15,1996 C.2.4. Detailed Project Costs by Shaanxi Area and Component, by the PMO of Shaanxi Province, January 10, 1997. C.2.5. Shaanxi Project Area Retroactive Financing Program Plan, by the PMO of Shaanxi Province, January 8, 1997. C.2.6. Shaanxi Project Area Report on the Rural Enterprise Marketing Feasibility Study and Poverty Reduction Effect Analysis, by the PMO of Shaanxi Province, January 8, 1997. C.2.7. Shaanxi Project Area Brief Introduction of Project Adjustment and Completion, by the PMO of Shaanxi Province, January 13, 1997. C.2.8. Shaanxi Project Area Progress of Institution Building and Monitoring, by the PMO of Shaanxi Province, January 8, 1997. C.2.9. Shaanxi Project Area Procurement Plan, by the PMO of Shaanxi Province, January 8, 1997. C.2. 10. Shaanxi Project Area Feasibility Study on Ankang Farmer Microfinance, by the PMO of Shaanxi Province, January 8, 1997. C.3. Ningxia Province C.3.1. Feasibility Study Report of the Project in the Ningxia Hui Autonomous Region, by the PMO of Ningxia Hui Autonomous Region, September 1996. C.3.2. Tables Attached to Feasibility Report of the Project in the Ningxia Hui Autonomous Region, by the PMO of Ningxia, September, 1996. C.3.3. Implementation Program, by the PMO of Ningxia, September, 1996. C.3.4. Feasibility Report on Livestock Project in the Ningxia, by the PMO of Ningxia. March 1996. C.3.5. Report on the Agricultural Development Project in the Ningxia, by the PMO of Ningxia, September 1996. C.3.6. Report on the Crop Cultivation Project in the Ningxia, by the PMO of Ningxia, September 1996. C.3.7. Examine Report of Ningxia Rural Enterprise Project in the Ningxia, by the PMO of Ningxia, September 1996. -166- Annex 12 China: Qinba Mountains Poverty Reduction Project Project County and Township Namelist PROVINCE COUNTY= PROJECT TOWNSHIP SICHtlAN Xuanhan Fankuai Chenghu Sandun Dukou Fengling Nanping Dongsheng Guanshan Sansheng Qibei Qishu Longquan Ziyou Jichang Fengcheng Cangxi Yonghe Xingguan Tianguan Yanfeng Wanan Gaopo Shuangshi Longdong Huangmao Yueshan Chaotian Xiaoan Yudong Shahe Chenjia Baiyang Datan Linxi Wenan Qingling Pujia Tongjiang Qubin Wenfeng Xingchang Banqiao Pingxi Linjiang Kongshan Zhicheng Longfeng Wangcang Wuquan Wanshan Dahe Shuanghui Gaoyang Gucheng Yanhe Guohua Fuqing Maying Yanzi Shuimo Daliang Guangan Hucheng Fangping Guansheng Zhenshan Pulian Suxi Yilong Wazi Bajiao Mopan Daluo Yilu Yimen Dengta Banqiao Sanhe Quxian Sanban Juguang Caihe Baitu Yihe Dayi Baishui Anbei Yingpan Hanbei Yueguang Langzhong Wencheng Boshu Shitan Xishan Longquan Fengzhan Hefeng Sanmiao Nanjiang Qiaoba Zhaipo Guangming Shangliang Yangba Xingmin Ganxi Liuba Guimin Xiqing Huitan Xingli Liuwan Hongxing Qiaoting Shatan Xuguang Hongyan Hongsi Hongwu Houjia Zhuling Tianchi Hongding Jialing Shiyang Datong Daguan Yili Liba Longquan Yanjia Nanbu Huangjin Liuma Qunlong Wannian Xiongshi Hongguan Shiquan SHAANXI Ziyang Yunfeng Changbai Baoshi Wulin Sanguantang Miaohe Shiba Liaoyuan Shangba Bajiao Qiaozhen Shengmo Liuhe Bantao Jieling Wanxing Shuangliu Lianhe Qingjin Wamiao Guangeheng Shenyang Ningshan Fengfu Huangjin Shaping Zushan Guanghuo Shizi Tielu Xinkuang Longwang Xinjian Tongche Simu Hanyin Sanhe Jiudian Yaowang Shuanghekou Shitiaojie Tongqian Taling Shangqi Zilong Liming Shuangping Tianchi Ankang Dinghe Qianjin Baohe Shiti Qingtao Guanjia Kuangshi Tianshan Yanba Xipo Yulan Duba Longquan Shuanglong Dongxiang Xiangshan Wachang Zhengyi Linjiang Xinba Hexin Wulong Weifeng Chaotian Nuti Yuantan Liufang Shaba Jinghe Zhijing Huilong Fenggou Maping Fuxing Qiaoting Songba Cigou Jingjia Dongzhen Zhenba Xiaoyang Jiuzhen Chengjiatan Yangjiahe Jingyang Yudu Yuantan Bashan Guanyin Tianba Dashi Bamiao Diaozhong Xinglong Pingan Juehuang Sanyuan Jianchi Yongle Liangqiao Nianzi Houhe Xixiang Gaojiachi Zhongjiagou Luojiaba Zuoxi Maliu Shanggaochuang Xiagaochuang Bailin Wuliba Xinwa Chazhen Muzuba Baimianxia Luozhen Sishang Shahou Majiawan Yangxi Lueyang Baishi Heye Xiakou Dahuangyuan Guanyinsi Qinhe Yaomuyuan Shuangjiya Washegou Zhongbazi Shijiayuan Baiquesi Guozhen Ganheba Wujiahe Ningqiang Wangjiaping Jinjiaping Shujiaba Dnanzhen Nanping Baiyanglin Daijiaba Xujiaba Zengjiahe Xinchang Taiyangling Cangshe Juting Guangping Zhongba Maopinggou Dazuba Sandaohe Shuitianping Laodaiba Zhenan Gangou Maoping Yuquan Guanpinghe Gaoping Shuanghe Xizhen Gancahe Laoan Xiangyuan Yuche Gaofeng Longsheng Xigou Sanyi Donggua Jiezi Yanwu Longwan Meihua Wuyu Wenjai Hongdong Yungaisi Zhashui Taihe Longtan Lianghe Qiping Xichuan Zaohe Xiaotai Tiefo Ynunmeng Caizuang Zhangjiaping Majiatai Yinwan Chaoping Hongshi Gaojiao Fengbeihe NINGXIA Jingyuan Xinmin Dongxia Yuanzi Huanghua Huitai Tongxin Yuwang Zhangjiaheng Yanglu Yaoshan Tianjialaozhuang Wangtuan Majiagaozhuang Xialiushui Haiyuan Shuanghe Xutao Gaochuan Zhenqi Luochuan Lijun Jiucai Yangming Guanzhuang Xiji Shagou Dashizhai Baicheng Hongyao Tianping Sanhe Xingping Xitan Pingfeng -167- CHART 1 CHINA QINBA MOUNTAINS POVERTY REDUCTION PROJECT Project Management Structure | LGPR SSB F FCPMC 1 Technical Advisory| t . 1 < ~~~~~ ~~Group| Provincial Leading Group Provincial PMO Technical Advi- sory Group Labor Education Health Buureau Bureau I_ Employment Agency County Leading Group Technical Committee County PMO Line Agency Line Agency Line Agency Line Agency Township Work Station |Township||Township| Village Executionr T VEs |School 11Clinic Group,s |Huehold | Joint Household| [Sho C &other Econ. Entities -168- Photogr=b CHINA: Qinba Mountains Poverty Reduction Project Ningxia Hui Project Area Photos The Xihaigu Region of the Ningxia Hui Autonomous Region, which receives less than 400 mm in annual rainfall on average, had sufferred three years of continuous drought at the time these photos were taken. Crop production declined sharply, and the population would not have survived without governrmentassistance and relief grain. ARA I|l 2..S~~~~~~~~~~~~~~~~~~~~~..... 3'~~~~~~~~~4 -169- PhQgraphs EduIation:Only 30 of the 70 school age children in this extremely poor village in Tongxin County (Ningxia) attend elementary school. One of the children in the photo stated that he had walked five kilometers to school at 7:00 a.m. of the morning of the project preparation team's visit to Tongxin County that day. He also stated that he would return home by foot that evening at 5:00 p.m. and have his first and only meal of the day at home that evening. In anothervillage visited by the project preparation team in Tongxin County, none of the 50 school age children had attended school for the four years since the local elementary school collapsed. LSt?bb tb kq.i,. U: tA .t cla- n j t4; * _ * ''~ ' s. 1.~~~~~V r w1L\'-'^2Ftf _S' '' '-j rAt $:~~~~~~~~~~~~~~~~- i - _ - '*. -170- Photographs Beneficiaries: UTNDP ..... Xestimates indicate that the carrying capacity of the Xihaigu Region of the Ningxia Hui Autonomous Region is less than 20 people per square kilometer, or about one tenth of the existing population density of 180 people per kilometer. The local population, which is more than 70 percent Hui minority, is very poor. 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