RRP Resettlement Plan

Resettlement Due Diligence Report

February 2020

PRC: Henan Sustainable Livestock Farming and Product Safety Demonstration Project

Prepared by Henan Provincial Government for the Asian Development Bank.

This resettlement due diligence report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section of this website.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Loan 3296-PRC: Henan Sustainable Livestock Farming and Product Safety Demonstration Project

Due Diligence Report of Land Acquisition and Land use-right transfer

Feb 2020

CURRENCY EQUIVALENTS (As of 28 Feb 2020) Currency unit – Yuan (CNY) CNY 1.00 =$0.143 $ 1.00 = CNY 7.007

ABBREVIATION AAOV Average Annual Output Value AH Affected Household AP Affected Person DDR Due Diligence Review FSR Feasibility Study Report GRM Grievance Redress Mechanism HH Household LAR Land Acquisition and Resettlement M&E Monitoring and Evaluation PMO Municipal Project Management Office NGO Non-Government Organization PAP Project Affected Persons PDRC Provincial Development and Reform Commission PCG Project Coordinating Group PIU Project Implementing Unit PMO Project Management Office PPEs Project Participating Enterprises PRC People’s Republic of China RP Resettlement Plan RIB Resettlement Information Booklet SOE State Owned Enterprise SPS Safeguard Policy Statement

NOTES

(i) The fiscal year of the Government of the People’s Republic of China and its agencies ends on 31 December. (ii) In this report, " $ " refers to US dollars and “¥” refers to CNY or Yuan (iii) 1 hectare=15 mu

Contents

1 Background ...... 5

A. Overview of the Project ...... 5

B. Overview of the Project Progress ...... 5

C. Socio-economic Background ...... 6

2 Due Diligence Review of the Land Acquisition of Muyuan Meat Food ...... 8

A. Purpose of this Due Diligence...... 8

B. Methodology ...... 8

C. resettlement impacts ...... 8

D. Land acquisition process ...... 10

E. Resettlement policy and Resettlement measures for the APs ...... 11

F. Information disclosure, participation and Grievance Redress Mechanism ...... 13

G. Follow up survey and interview ...... 13

H. Conclusions for Land Acquisition of Muyuan Meat Food ...... 15

3 Due Diligence Review of the Land use-right transfer of Sheqi Muyuan and Yongxin ...... 16

A. Purpose of this Due Diligence...... 16

B. Method ...... 16

C. Legal Basis and ADB Policy ...... 16

Rental and its Payment Period ...... 20 Sublease Right ...... 20 The Attribution of the State's Subsidy Income ...... 21 Ownership of Compensation for Land Acquisition when the Land is Expropriated ...... 21 D. Construction Contents of Newly Added Subprojects ...... 21

Project Construction Content ...... 21 Project Construction Site ...... 21 Construction Scope and Approval of the Project ...... 21 E. Review of signed Land use right transfer Agreement ...... 23

F. Implementation Status of the newly added Subprojects Land Lease Agreement 30

G. Suggestions on the Implementation of the newly added Subprojects and Matters Need to be paid Attention to ...... 31

H. Conclusions ...... 33

Appendix 1 Decision of Neixiang County People's Government on acquisition of collective land in Guanzhang and Tuandong Townships ...... 34

Appendix 2 Certificate of motionless property rights of Henan Muyuan Meat Food Co., Ltd...... 38

Appendix 3 Land acquisition notice for Muyuan Meat Food...... 44

Appendix 4 Three parties signed land leasing agreement Sheqi Muyuan ...... 46

Appendix 5 Land Document of Zhoukou Yongxin Co. ltd...... 57

Appendix 6 payment record of land rental of Sheqi Muyuan ...... 63

Appendix 7 payment record of land rental of Zhoukou Yongxin ...... 65

1 Background A. Overview of the Project 1. Henan Animal Husbandry and Product Safety Demonstration Project (hereinafter referred to as "the project") is aimed at establishing a demonstrative and environmentally sustainable husbandry and animal products processing to ensure food security. The project is expected to facilitate: (i)optimization of animal products quality and safety inspection system for Henan provincial government; and (ii) improvement of food safety management and implementation of environmentally sustainable husbandry and animal products processing for nine large and medium-sized private-owned husbandry and animal products processing enterprises, i.e., PPEs. The project will establish a demonstrative husbandry and animal products processing by strengthening good practices of environmentally sustainable food security.

2. The main outputs of the project include: (i) The animal products quality and safety inspection system upgraded; (ii) Environmentally sustainable livestock production facilities established; (iii) Capacity building and project management. According to the project design, the PPEs are expected to construct breeding, processing and testing facilities to their own needs.

B. Overview of the Project Progress 3. A total of nine subproject enterprises participated in the project at the beginning of the Loan Agreement signed with the ADB in January 2016, they are Muyuan Meat Food Co., Ltd. (referred to as "Muyuan Meat Food"), Henan Fenghua Seed Industry Co., Ltd. (referred to as "Fenghua"), Henan Hengtianran Agriculture and Animal Husbandry Co., Ltd. (referred to as "Hengtianran"), Henan Sangao Agriculture and Animal Husbandry Co., Ltd. (referred to as "Sangao"), Henan Dadi Animal Husbandry Co., Ltd. (referred to as "Dadi"), Henan Avanti Food Co., Ltd. (referred to as "Avanti"), Luoyang Donghan Poultry Co., Ltd. (referred to as "Donghan "), Kerchin Cattle Industry Co. Ltd (referred to as "Kerchin"), and Henan Niuniu Animal Husbandry Co., Ltd. (referred to as "Niuniu").

4. Due to changes in the market, poor performance of some enterprises and changes of national policy, the Overall Implementation Plan of the Project is directly affected in the process of project implementation and management. Four subproject enterprises, namely Avanti, Donghan, Kerchin and Niuniu cannot promote their subprojects subject to various reasons or voluntary withdrawal from the implementation of the Project, involving ADB loan funds of US $26 million.

5. By the end of 2019, the original five subproject enterprises (Muyuan Meat Food, Fenghua, Sangao, Hengtianran and the Dadi) had completed the Implementation Agreement and the reverse guarantee procedure of the Loan Transfer Agreement, and six subproject units, including 5

Henan Provincial Animal Husbandry Bureau, were ready for bidding. Among them, Muyuan Meat Food, Sangao, Fenghua and Hengtianran have completed the anti-guarantee mortgage to the financial department, and signed the implementation and transfer agreement with the government and financial departments respectively. As for Dadi, the implement agreement has been completed, and the anti-guarantee procedures are being improved for the loan transfer agreement. Henan Animal Husbandry Bureau has also completed the related project work and entered the stage of bidding and purchasing.

6. Three enterprises are identified as newly-added subprojects after coordination with the Asian Development Bank and various departments of the province, cities and counties coordinated by the Henan Provincial Project Office, together with lots of research and field investigation. These subproject units are Ecological Recycling Breeding Project at the Industrial Park of Zhoukou Yongxin Feed Co., Ltd. (referred to as "Yongxin" for short), Sheiqi Qichang Pig Breeding and Manure Treatment Project of Sheqi Muyuan Animal Husbandry Co., Ltd. (referred to as "Sheqi Muyuan" for short), Live Pig Slaughtering Project with 2 million pigs annual of Henan Muyuan Meat Food Co., Ltd. (referred to as "Muyuan Meat Food" for short).

C. Socio-economic Background 7. Henan is a landlocked province of the People's Republic of China, located in the central part of the country. Henan is often referred to as Zhongyuan or Zhongzhou, which literally means "central plain" or "midland", although the name is also applied to the entirety of China proper. Henan is a birthplace of Chinese civilization, with over 3,000 years of recorded history, and remained China's cultural, economical and political center until approximately 1,000 years ago.

8. Henan is the 5th largest provincial economy of China and the largest among inland provinces. However, per capita GDP is low compared to other eastern and central provinces.

9. Henan is considered to be one of the less developed areas in China economically. The economy continues to grow based on aluminum and coal prices, as well as agriculture, heavy industry, tourism, and retail. High-tech industries and service sector is underdeveloped and is concentrated around Zhengzhou and Luoyang.

10. Nanyang is a prefecture-level city in the southwest of Henan province. The city with the largest administrative area in Henan, Nanyang borders Xinyang to the southeast, Zhumadian to the east, Pingdingshan to the northeast, Luoyang to the north, Sanmenxia to the northwest, the province of Shaanxi to the west, and the province of Hubei to the south. It had 10,263,660 inhabitants at the 2010 census, ranking eleventh in China. However, 1,811,812 residents live in

the built-up area made of three urban districts (High-Tech Industrial Development Zone, Wolong and Wancheng). Dinosaur egg fossils have been discovered in the Nanyang Basin.

11. The latest Socio-economic data of Henan province and Nanyang city are as follows. Table 1-1 Socio-economic data of Henan province and Nanyang city in 20181

Index Unit Henan Nanyang 1. Population Registered Household population at the end of the year ‘000 persons 109,060 11,980.7 Female population ‘000 persons 47,310 5643 Minority population ‘000 persons 2,399.32 Urban population ‘000 persons 49670 4629.3 Rural population ‘000 persons 46380 5384.3 2.Area Km2 167,000 26,509 Among which：cultivated land area mu 0.12227 billion 3.GDP Billion yuan 4805.586 356.677 People's living conditions Per capita disposable income of urban residents yuan 31874.19 31313 Per capita disposable income of rural residents yuan 13830.74 13837 Data source: 2019 yearbooks of Henan province and Nanyang city

1 The statistics data of Henan province and Nanyang city in 2019 have not issued yet.

2 Due Diligence Review of the Land Acquisition of Muyuan Meat

Food A. Purpose of this Due Diligence 12. For Muyuan Meat Food, the land to be used for this project is a part of Muyuan Food Industrial Park which land has been required in 2019. The purpose of the due diligence review for the land acquisition is to check if the land acquisition and resettlement of the affected people are in compliance with the laws and regulations of the State, Henan Province and Nanyang City, and whether they conform to the social safeguard policies of ADB, and to review the resettlement process, resettlement cost management, income restoration and satisfaction of APs, female APs’ participation and if their rights were protected during the process of land acquisition, the situation of vulnerable groups and supporting policies; public participation, information disclosure and capacity building, GRM status; identify outstanding issues arising from resettlement, and propose feasible suggestions.

B. Methodology 13. The information used in this report is from 3 sources: a) Literature review: collecting and compiling subproject information and survey data from local authorities and subproject agencies  Collected literatures: subproject approval document, land use right certificate, land acquisition policy, agreements, compensation record and related supporting measures related to resettlement, etc.  Public participation information related to resettlement, land acquisition notice etc. b) Information and data have been further verified through fieldwork and direct communication with stakeholders. c) Sampling survey, including the source of livelihood of affected people in the project area, the changes of APs’ production and living standards, etc.

C. Resettlement Impacts 14. The production scale of Muyuan Meat Food is slaughtering of 2 million live pigs per year, to realize the processing capacity of 2 million pigs per year, and to effectively meet the needs of fixed-point slaughtering and processing of live pigs in county areas. The main construction contents of the project using the ADB loan include three parts: construction of quality safety system, slaughtering production line and sewage treatment plants.

15. The construction site of the Project is in the northeast corner of Muyuan Food Industrial Park, of which, 31.3426 ha, including 30.303 has cultivated land, was acquired in 2019. The land

acquisition of this land affects 6 villages in 3 towns or townships, namely, Dongfuying Village Committee, Xiahe village, Penyao Village, Longyuan village of Tuandong Town, Qianwan village in Guanzhen Town, Gangdi Village in Zhaodian Township.

Table 2-1 land acquisition situation of Muyuan Food Industrial Park conducted in 2019 Unit: ha

Town/Township village Village Land Among which, farming land Unutilized group area (ha) land Total Cultivated Drying Garden Other Water land land land agricultural surface land Total 31.3426 30.9189 30.303 30.303 0.0453 0.5706 0.4237 Guanzhen Town 9.1553 9.1553 9.0597 9.0597 0.0956 Qianwan Village 9.1553 9.1553 9.0597 9.0597 0.0956 Subtotal group 2 0.9018 0.9018 0.9018 0.9018 group 6 0.0788 0.0788 0.0737 0.0737 0.0051 group 3 2.7508 2.7508 2.6972 2.6972 0.0536 group 4 0.927 0.927 0.9135 0.9135 0.0135 group 1 4.4969 4.4969 4.4735 4.4735 0.0234 Zhaodian Township 0.5228 0.5228 0.5027 0.5027 0.0201 Gangdi Village 0.5228 0.5228 0.5027 0.5027 0.0201 Datangou 0.5228 0.5228 0.5027 0.5027 0.0201 group Dongdong Town Total of 21.6645 21.2408 20.7406 20.7406 0.0453 0.4549 0.4237 Dongdong Town Dongfuying Village 14.9496 14.7514 14.604 14.604 0.1474 0.1982 group 7 9.1299 9.0698 9.0077 9.0077 0.0621 0.0601 group 10 2.5143 2.4728 2.4215 2.4215 0.0513 0.0415 group 5 3.3054 3.2088 3.1748 3.1748 0.034 0.0966 Longyuan Subtotal 0.3115 0.3115 0.0453 0.2662 Village Fuling 0.3115 0.3115 0.0453 0.2662 group Penyao Village 2.6428 2.5997 2.5875 2.5875 0.0122 0.0431 group 2 0.9998 0.9774 0.9774 0.9774 0.0224 group 1 1.643 1.6223 1.6101 1.6101 0.0122 0.0207 Xiahe Village 3.7606 3.5782 3.5491 3.5491 0.0291 0.1824 group 2 0.6691 0.5964 0.5928 0.5928 0.0036 0.0727 group 6 0.2949 0.2627 0.2627 0.2627 0.0322 group 3 0.6277 0.5917 0.581 0.581 0.0107 0.036 group 4 1.9389 1.9215 1.9093 1.9093 0.0122 0.0174 group 5 0.0162 0.0142 0.0142 0.0142 0.002 group 1 0.2138 0.1917 0.1891 0.1891 0.0026 0.0221

16. The land acquisition of 31.3426 ha land affect 468 persons within 102 HHs, including 281 rural labours and 229 females.

D. Land Acquisition Process and State-owned Land Use Right Transfer Process 17. On November 1, 2018, Neixiang County People's Government issued 4 batches of land acquisition notices separately for land acquisition of 470.139 mu for the construction of Muyuan Food Industrial Park.

18. On November 30, 2018, the Neixiang County People's Government held an office meeting of county governors to discuss matters related to the construction land for the Muyuan Food industry park project, and formed the "minutes of the office meeting of County Governor held by Neixiang County People's Government 2018 (60)." Through the "one matter, one discussion" of the Neixiang County people's Government, it is proposed to acquire the rural collective land and then provide the requisitioned land for the Muyuan Food Industrial Park Project. And the Land Documents of "reply on the acquisition of land for the eighth Township Construction in Neixiang County in 2018" by the people's Government of Henan Province and Nanyang City were received on March 18, 2019 and April 15, 2019.

19. According to the "Decision on acquisition of the collective land of 16 villagers' groups in 4 villages of Guanzhang and Tuandong township" from the People's Government of Neixiang County on May 29,2019, the collective cultivated land, garden land, other agricultural land and unused land with a total area of 31.3426 hectares (of which 30.3030 hectares are cultivated land) were expropriated from the rural collective economic communities in July 2019.

20. After land acquisition, 31.3426 ha land has become into state-owned construction land.

21. As an ADB loan subproject, Muyuan Meat Food Co. Ltd. is the first project within the Muyuan Food Industrial Park, which covers an area of 74.194 mu within the acquisitioned 31.3426 ha land area. After payed 16,000,000 yuan to the Neixiang County Government, Muyuan Meat Food Co. Ltd. has obtained the state-owned land use certificate by biding from Neixiang County People's Government in Sep 2019, and the real estate certificate has issued by the Natural

Resources Bureau of the Neixiang County on September 29,2019, the certificate number is No：

D41000942372. (See appendix 1).

Figure 2-1 State-owned land transfer fee paid by Muyuan Meat Food Co. Ltd. E. Resettlement Policy and Resettlement Measures for The Aps 22. Since there is no updates for policy and compensation rate at the time of compensation payment, according to the "Notice of Henan Provincial People's Government on Adjusting the Comprehensive Land Price Standard for Land Requisitioned in Henan Province" No. 48 [2016] issued in 2016, the compensation rate for land acquisition of 31.3426 ha is 800998 yuan per ha, including the compensation fee for green crops is 22,500yuan per ha (or 1500 yuan/mu).

23. The total resettlement cost is 25,105,357 yuan, including 681,818 yuan for crops compensation and 1,880,556 yuan of pension insurance fee for land-loss farmers. The compensation rate for land acquisition is based on the integrated location-based price, separately 69-85.5 yuan/m2, namely 46000-57000 yuan/mu, about 33-41 times of the annual net crop plantation net income. And the compensation fee for green crops is higher than the annual net crop plantation net income. The compensation rate comply with ADB’s replacement principle. Table 2-2 the Input-output analysis of original land usage of Muyuan Food Industrial Park in 2019

Input per mu Output per mu Net Type Seed Fertiliz Pestic Water Electri Other Subtot Yield Marke Gross income 11

er ide city al (kg) t Price Income per mu (yuan (yuan) (yuan) / kg) Whea 70 200 50 120 440 400 2.9 1160 720 t maize 60 200 50 120 430 500 2.2 1100 670 Total 130 400 100 0 0 240 870 900 5.1 2260 1390

24. The land acquisition mainly adopts cash compensation manner to resettle the Aps. The compensation fund has been paid to the Aps before land acquisition. All resettlement costs have been paid to the Aps.

25. Besides, the endowment insurance for land-loss farmers is under processing for 281 Aps. Besides, the government will provide targeted employment support training for the Aps and after this project is completed, priority will be given to Aps as factory workers.

26. Meanwhile, to help the Aps to learn new technologies to assess their new alternative livelihood, 3 free trainings were held for the Aps in 2019. See table 2-3 for more details.

Table 2-3 Free trainings were held for the Aps in 2019

Among Which, Training Number of Fund Fund Sn Time Location Topic Sponsor Number of Objectives Participants (Yuan) Source Female Participants The second- Aquaculture Neixiang Neixiang floor office of technology County County Neixiang training Animal Animal County Animal Husbandry Husbandry all APs can 2019- Husbandry Bureau and Bureau 1 participate 200 130 4000 05-07 Bureau Human and at free Social Muyuan Affairs Bureau

Neixiang Vegetable Neixiang Human County China- cultivation County Resources Israel technology Agriculture and Social Agricultural training Bureau and Affairs all APs can 2019- Demonstration Human Bureau 2 participate 150 80 3000 06-19 Park Resources at free and Social Affairs Bureau

Nanyang Livestock Neixiang Muyuan Agricultural machinery County Company Machinery training Agricultural and Bureau Machinery Neixiang Bureau, all APs can County 2019- 3 Nanyang participate 250 60 5000 Agricultural 12-06 Agricultural at free Machinery Machinery Bureau Bureau

Total 600 270 12000

Figure 2-2 trainings for APs F. Information Disclosure, Participation and Grievance Redress Mechanism 27. According to China’s regulation, the land acquisition notice and the resettlement measures was disclosed to the Aps before land acquisition. See appendix 3 for details.

28. On Dec 3, a mobilization meeting was held in Neixiang County Land Resource Bureau, a total of 35 staffs from 3 towns/townships and village leaders participated the meeting.

29. The impact survey results have confirmed by the Aps. According to the survey, there is no complains about the land acquisition.

G. Follow-up Survey and Interview 30. Based on the further identification, the land acquisition of the 74.194 mu land of Muyuan Meat Food Co. Ltd located mainly affects Dongfuying Village and Penyao Village of Tuandong Town and there is no house demolition within the project area. The land acquisition affects 15 rural households with 72 persons, and the number of affected 43 women, accounting for 59.72% of the total. According to the survey, there is no vulnerable groups among the Aps. All are Han people. To follow the latest situation of these APs, a follow-up survey was conducted on the 2 villages, and 15 households with 72 persons in Jan 2020, accounting for the 100% of the APs.

31. According to the survey, the average annual disposable income of 2 villages in 2019 is 15609 yuan. the basic situations of the affected villages are as table 2-4. Table 2-4 basic situations of the affected villages in 2019

Index unit Penyao Village Dongfuying Village cultivated land area mu 2134 3580 Total population Person 5580 7580 Female population Person 3470 4878 Labors Person 1874 2274 vulnerable groups Person 10 16 Female vulnerable groups Person 6 9 Annual output value of cultivated land yuan/year 880 880 per capita disposable income of farmers yuan/year 15609 15609 32. A total of 15 HHs with 72 persons were affected by land acquisition. All of them are Han people. Among the APs, 43 persons are the females, accounting for the 59.72% of the total. The basic situation of APs is as table 2-5. Table 2-5 Basic situation of APs

Village Ahs Aps Female Aps Han People Vulnerable Groups Dongfuying 9 43 26 43 0 Penyao 6 29 17 29 0 Total 15 72 43 72 0

33. The average land loss ratio is 1.3%. For details, please see table 2-6. Table 2-6 Land Loss Ratio

Village Total cultivated land of the village Acquisitioned cultivated land area Land-loss ratio Dongfuying 3580 47.89 1.34% Penyao 2134 26.30 1.23% Total 5714 74.19 1.30%

34. Before land acquisition, the annual net income per capita of APs in 2018 is about 6276.03 yuan. See table 2-7. Table 2-7 Annual Net Income Per Capita of APs in 2018

Producti Net Total Stock Other Total Living Other Net Plantat on Incom Village Inco breedi By work Incom Expendit Expendit Expendit Inco ion Expendit e Per me ng e ure ure ure me ure Capita Dongfu 71486 152865 0 560000 2000 418719 91719 204000 123000 2961 6887.1 ying 5 46 2 Penyao 44322 105820 0 335000 2400 287492 63492 162000 62000 1557 5369.9 0 28 3 Total 11580 258685 0 895000 4400 706211 155211 366000 185000 4518 6276.0 85 74 3

35. After land acquisition, the annual net income per capita of APs in 2019 is about 5561.15 yuan, averagely 714 yuan less than that of 2018. Table 2-8 Annual net income per capita of APs in 2019

Othe Producti Net Chan Total Total Living Other Net Planta Stockbre By r on Inco ges of Village Inco Expendi Expendi Expendi Inco tion eding work Inco Expendi me Net me ture ture ture me me ture Per Incom 14

Capit e Per a Capit a Dongfu 8293 10534 0 5600 1640 570231 63231 204000 303000 2591 6025. - ying 40 0 00 00 09 79 861.3 3 Penyao 5271 79742 0 3350 1124 385848 47848 162000 176000 1412 4872. - 42 00 00 94 21 497.7 2 Total 1356 18508 0 8950 2764 956079 111079 366000 479000 4004 5561. - 482 2 00 00 03 15 714.8 8

H. Conclusions for Land Acquisition of Muyuan Meat Food • The land Muyuan Meat Food used was acquired by Muyuan Food industry park project conducted in 2019, not by Muyuan Meat Food component directly. • The land acquisition process was well conducted in compensation, public participation and information disclosure. • The livelihood restoration issue has been paid to attention in some extent, but according to the survey, after the land acquisition, the annual net income of APs reduced in 2019. More attention should be paid to their livelihood restoration and income recovery • The state-owned land use right certificate has been obtained • The project will continue to process the endowment insurance and implement the training support as stated in para 25 to ensure their livelihood restoration and income recovery. The status of these activities will be closely monitored and reported every Q2 and Q4.

3 Due Diligence Review of The Land Use-Right Transfer of Sheqi Muyuan And Yongxin

A. Purpose of This Due Diligence 36. For Sheqi Muyuan and Yongxin, the land to be utilized needs not acquire. The land use- right of them have been transferred separately in 2016 and 2017. The purpose of the due diligence review for them is to check if the land use right transfer processes are in compliance with the laws and regulations of the State, Henan Province and Nanyang City, and whether they conform to the social safeguard policies of ADB, and to review the land use right transfer process, public participation, information disclosure, willingness of farmers, payment situation of land transfer fee, capacity building, GRM status; identify outstanding issues arising from land use right transfer, and propose feasible suggestions.

B. Method 37. The DDR was prepared by implementation consultation company with supports from local enterprises and local governments. A survey team comprising PMO staff and consultants conducted a number of surveys/interviews in project counties during June 2019 to Feb 2020 to gather information for the DDR. The team organized a number of consultation meetings and interviews with county level government agencies, townships, villages, enterprises, and farmers involved in land use rights transfer, specifically including 2 county-level government agency consultation meetings, 5 village group discussions and consultations, and extensive consultations with individual households. Other supporting documents included social survey questionnaires; desk review of state-level, provincial-level, project municipal-level, project county-level related laws, regulations and government guidance; all collected contracts (including land transfer contract, cooperation agreements and land certificates); resolutions and minutes of meeting of village committee representatives; signature of villagers; and project design reports

C. Legal Basis and ADB Policy a) The Legal Basis of Land Lease in China General Situation of Land Leasing Law in China 38. The laws stipulate that rural land system in China includes the Constitution, Property Rights Law (2007), Land Administration Law (2019), Law on Land Contract in Rural Area (2002), Law on the Mediation and Arbitration of Rural Land Contract Disputes (2009), Contract Law (1999), as well as some administrative regulations related to rural land system are under effective, such as Regulation on the implementation of the Land Administration Law, Regulation on the Protection of Basic Farmland. Furthermore, some Ministerial Regulations are also enforcing to stipulate the rural land, for instance, Measures for the Administration of the Certificated of the Right to

Contractual Management of Rural Land, Measures for the Administration of the Transfer of the Land to Contractual Management of Rural Land, as well as the Judicial interpretation of applicable law issues on rural land contract by the Supreme People’s Court.

39. Land ownership and nature of land use should not be changed after land is leased, and the interests of collectives and farmers should not be infringed upon. Land leasing is one of the contractual relationships, which should in comply with the provisions of the PRC Contract Law and other related laws.

40. According to the latest Land Administration Law issued in 2019), the rural construction land can directly enter the market, instead of having been requisitioned as state-owned land, which can directly increase property income for farmers. At the same time, when collective constructive land is entered into the market, the law requires the consent of villagers 'congresses or villagers' conferences to be approved by more than two-thirds of members.

Land ownership 41. The Constitution clearly stipulates that the PRC has a socialist public ownership of land, i.e., an ownership by the whole people and ownerships by collectives. According to the Constitution and Land Administrative Law, urban land is owned by the State, excluding those belonging to the state prescribed by law, whereas rural land (including suburban land) is owned by the collectives. State land requisition is the way to change the collective-owned land to state- owned land, whereby the State may requisition land owned by the collectives according to Land Administrative Law and justification of public interest.

Land contract right 42. The right to contract, emphasizes the maintenance of the rights and interests of the contracted farmers to use and transfer the contracted land. No organization or individual can replace the land contracting status of the peasant family, and no organization or individual can force or restrict the transfer of land. At the same time, according to the needs of the development of the situation, the contracted farmers were given more adequate land power in terms of mortgage guarantees.

Land management right 43. gives new business entities the right to own, cultivate, and obtain corresponding income on the transferred land, to stabilize business expectations, to allow them to invest with confidence, improve fertility, and improve agricultural infrastructure, so as to promote the development of modern agriculture.

Control System on the Usage of Land 44. The key point of the control system on land usage is to prevent the conversion of agricultural land into non-agricultural land. In case the purpose of land use needs to be altered, the approval of the relevant administrative department shall be obtained according to laws.

45. The key point for control on land usage is to prevent cultivated land been converted into non-cultivated land. If the project site belongs to basic farmland, according to laws, more strict conversion conditions, procedures and requirements should be followed compared with general farmland.

Transfer Principle of Land Contractual Management Right 46. According to Article 33 of the Rural Land Contract Law, if the leased land had been contracted by rural households, the right of land contractual management shall be transferred in adherence to the following existing legal principles: (i) Consultation with equality, voluntariness and compensation, and no organizations or individuals may compel the contractor to transfer his right of land contractual management or prevent him for doing so; (ii) The nature of land ownership and the agricultural usage of land shall not be changed; (iii) The circulation period shall not exceed the remaining time of the contract period; (iv) Transferee must have agricultural management capacity; (v) Under the same conditions, the members of the collective economic organization shall enjoy priority in accordance with the law.

ADB's Special Concern on Land Leases 47. Based on Its Safeguard Policy Statement, ADB is particularly concerned with the following issues in this project: Ensure that land transfer does not bring harm to the original rights’ subject, especially the interests of the farmers 48. Most of the land leased in the Project is owned by farmers’ collectives, while such land has been contracted by households within thirty-year-term. Therefore, to make sure the contract households are being treated fairly in the contract they have made with the enterprise, and also protected during the implementation period of the land lease contract. 49. The fairness mentioned here above includes if the land lease contract can reflect the voluntariness of households when they sign the contract, if it meets the principles of good faith, if the rent is fair and reasonable, if adequate compensation and relief can be provided when any disputes happen. Meanwhile, ADB also concerns if those households have good livelihoods after they lease out the land, and if the households can share with the enterprises the added value from the leased land. The Interest Protection Mechanism for Vulnerable Groups 18

50. The implementation of the Project should not undermine the basic interests of women, low- income farmers and persons with disabilities and ensure that their livelihood conditions can be improved.

Environmental Protection 51. The utilization of the leased land should follow with environmental protection objectives. The main purpose of the leased land in the Project is mainly for developing animal husbandry, so the leased land for the construction of livestock farms or feed processing plants should not be located in the concerned distance from water resource protection zone, residential area or any other areas that are not allowed to have livestock raising activities according to the laws and regulations (i.e., within 500 meters).

Key Legal Issues of Land Leasing of this Project 52. PRC national laws and regulations, as well as ADB policy requirements concerning involuntary resettlement (including negotiated settlements) should be complied accordingly in this Project. From the aspect of land lease relationship identification procedure, the following basic legal issues may exist:

The Main Body of the Land Lease Contract 53. In this Project, the land to be leased is mainly the collective ownership of farmers. As mentioned before, collective owned cultivated land, forestland and unused land has been contracted by households or individuals according to the Law on Land Contract in Rural Areas. Therefore, the most prominent issue of the land lease contract in this Project is to make sure whom that the enterprises should sign contract with, either the collective organization, or the actual land contracted people.

54. Currently, all the enterprises that need to lease land have signed a contract with the respective village committee(s) directly. Some of the contracts attached the signatures of farmer representatives. However, the voluntariness between parties involved in the contract cannot be demonstrated. In other words, the interests of the land contracted farmers could have been influenced by the village leaders; however, this project should ensure that all agreements are signed on the basis of voluntary principles.

55. In order to ensure that the contract reflects the will of the farmers, all the enterprises that signed contract directly with the concerned village committees were requested to revise the subjects of the land lease contract. Two methods have been suggested, one is to re-sign contract directly with land contracted farmers, the other one is to sign contact with village committee who is acting as agent, together with the Letter of Authorization from the land contracted farmers.

56. For some subprojects, the leased land belongs to unused land without contractual relation between the collective economic organization and households, so they can actually sign the land lease contract directly with the concerned village committee.

Due Time of the Contract 57. Two factors mainly restrict the period of the land lease contract: one is that the term of land lease contract should not exceed 20 years according to the PRC Contract Law; the other one is that the term of the transference may not exceed the remaining period of the term of the household land use contract. According to the status in the Project areas, the identification of land contractual relationship has been mostly conducted in 1996-1997. According to the laws, the contractual term of cultivated land shall be 30 years, which means the remaining term is about 7 year. Therefore, the due time of land lease contract in the Project should not be more than 7 years.

58. Two accompanied legal issues may be induced by above mentioned situation. First, the construction cycle of the subproject is long, and the shorter lease period cannot guarantee the reasonable income of the project unit. Second, there may be conflicts with the repayment period established by the ADB. Therefore, according to the suggestions from PPTA Land Lease Specialist, the enterprises added clauses in the revised contract to make sure that they will have the priority to continuously lease the land from the leaser under equal conditions.

Use of the Land 59. Based on the land use control system identified in the laws, it is committed that, the enterprises who are acting as lessee in the signed land lease contract, should not change the agricultural land use purpose, should not destroy the plow layer of the agricultural land and clearly willing to take on reclamation obligation once its contract expires. 60. The management system indicates that the project implementing enterprises must comply with the land use set out in the Overall Land Use Plan when using the leased land.

Rental and its Payment Period 61. Fair and reasonable rent payment is to ensure that the basic requirement of the rural household contractor’s interest shall not be violated. In all the land lease contracts in this Project, the rent will be paid annually based on fixed amount of cash or equivalent payment of fixed number of agricultural products as specified in the Contract.

Sublease Right 62. In the land lease contract signed in this Project, there is no agreement that the lessee can sublease the leased land to others, that is to say, the lessee does not have the right to sublease. 20

The Attribution of the State's Subsidy Income 63. The state financial subsidy based on land is determined in accordance with the state subsidy policy after the land is leased. The interest may not be agreed upon in the contract.

Ownership of Compensation for Land Acquisition when the Land is Expropriated 64. According to the provisions of the Land Management Law, when land is expropriated in accordance with the law, the compensation available includes land compensation fee, green seedling compensation fee and ground building, structure compensation fee, as well as resettlement subsidy fee. Different compensation fee has different objectives and the ownership belongs to different subjects. Therefore, this item is not necessarily to be involved in the contract.

D. Construction Contents of Newly Added Subprojects a) Sheiqi Qichang Pig Breeding and Manure Treatment Project of Sheqi Muyuan Animal Husbandry Co., Ltd. Project Construction Content 65. The engineering design scale of this project is one set of 10-thousand-head fattening pig farm annually, and matched with improved animal products’ quality & safety control system and construction of sewage treatment facilities.

Project Construction Site 66. The construction site of the project is located in Guizhang Village of Xinglong Town, Sheqi County, Nanyang City, with Dayanliu Village lies 506.6 meters away in the east, Guizhang Village lies 509.2 away meters in the west, Zhuyuan Village lies 733 meters away in the north and Huizhuang Village stands 1087 meters away in the south, the construction site is surrounded by no drinking water source protection area, cultural relics protection area, etc., the geographical location is good, the transportation is convenient, which is suitable for the construction of the project.

Construction Scope and Approval of the Project 67. The total construction area of the project is 433.50 mu, of which an area of 289.95 mu involving the projects with ADB loans.

68. On April 19,2016, Sheqi Muyuan Agro-Pastoral Company signed the "The Transfer Contract of the Rural Land Contracting Right" with Guizhang Village Committee of Xinglong Town, Sheqi County, and the land area of the contract is 433.50 mu. 6 farmer representatives also signed their names on the contract, but not all farmers involved signed the contract.

69. In June, 2016, the project land with an area of 289.95 mu which related to the ADB loan was filed as facility agricultural land by Sheqi Muyuan Agro-Pastoral Company after the approval of the People's Government of Xinglong Township and agreed by the Agricultural Bureau and the Land and Resources Bureau of Sheqi County. (see Appendix 4).

b) Ecological Recycling Breeding Project at the Industrial Park of Zhoukou Yongxin Feed Co., Ltd. Project Construction Content 70. The construction content of this project is to build a brand-new farm with 3000-head- seedingpig, and at the same time, improve the quality and safety system of livestock products and construct fecal treatment facilities.

Project Construction Site 71. The project construction site is located at the northwest of Zhouzhuang Natural Village, Wangzhuang Administrative Village, Lianhe Town, Shenqiu County, Zhoukou City, and of all the natural villages around the site are more than 500 meters away. The project area is plain, the geographical location is good, all around are farmland, and there is no drinking water source protection area, cultural relic protection area and industrial and mining enterprise, etc. around, and is suitable for the construction of the project.

Construction Scope and Approval of the Project 72. The total construction area of the project is 200 mu, of which 165 mu is involved in the use of ADB loans.

73. On May 4, 2017, Zhoukou Yongxin Feed Co., Ltd. signed a contract for the transfer of rural land contractual management rights with Ye Zhengyi and other 32 villagers of Xiwangzhuang, Lianchi Town, Shenqiu County in accordance with the law, the total land area covered by the contract is 200.6 mu.

74. On 15 December, 2017, the project land with an area of 200.6 mu which related to the ADB loan was filed as facility agricultural land by Zhoukou Yongxin Feed Co., Ltd. after the approval of the People's Government of Lianchi Town, Shenqiu County and agreed by the Shenqiu Animal Husbandry Bureau and Shenqiu Land and Resources Bureau. (appendix 5).

E. Review of signed Land use right transfer Agreement a) Basic Information of the Signed Contract 75. Sheqi Muyuan has signed one contract and one supplementary agreement on rural land contractual management right with the villagers' committee which was deemed as agent entrusted by the farmers involved; Zhoukou Yongxin signed a contract for rural land contractual management right circulation with 33 households involved.

76. According to the legal attribution of the land, Sheqi Muyuan project land’s attribute is facility agriculture land, and so does the construction land of Zhoukou Yongxin.

77. From the term of land lease, the lease period of land management right of Sheqi Muyuan is 12.4 years (April 20, 2016-September 30, 2028). If the Land Law or the Rural Land Contract Law is amended and changed, the contract will be extended to the legal contract period. The lease term of Zhoukou Yongxin's land management right is 15 years (June 1,2017- May 31,2032), and the contract will be automatically extended for 10 years after the expiration of the contract.

78. According to the law, the contract period of the cultivated land is 30 years, and the lease period of the land management right shall not exceed the remaining period of the land contract period. Among the newly-added subprojects of the Project, the contracts for transfer of land contracted management right of the two subprojects i.e. Sheqi Muyuan and Zhoukou Yongxin are in accordance with the lease contract stipulated in the Contract Law for a period of not more than 20 years; however, the periods of both transfer contracts are beyond the provisions of the Rural Land Contract Law and exceed the remaining period of the contract.

79. The construction land area involved in the land transfer documents of the Sheqi Muyuan and Zhoukou Yongxin is 634.1 mu, of which 529.144 mu construction land is related to the projects with the ADB loan. The amount of the land transfer fee for each mu is RMB 500, 000.00 Yuan (including the occupation tax of the cultivated land, excluding the deed tax), and the total amount is RMB 3.7097 million Yuan, which has been paid in full to the Finance Bureau of the local country. The construction land area of Sheqi Muyuan is 289.950 mu, and the land attribution is facility agricultural land, and there is an issue of circulation of rural land contractual management right with the farmers. The construction land area of Zhoukou Yongxin is 165.000 mu, and the land belongs to facility agricultural land. There is also an issue of circulation of rural land contractual management right with the farmers.

80. The basic information of the land lease contract of 2 newly added subproject enterprises which involve land use right transfer is detailed in table 3-1.

Table 3-1 The basic information of the land lease contract of the newly added subproject enterprises

Land Area of Number Contract Signing Land Area S. Subproject Term of the Transfer Project Area Lessor Land Nature of Period Date of the Involving the ADB N Enterprise Contract Contract Farmers (Year) Contract Loan Project (mu) (mu) 社旗县兴隆镇珪璋农业用地（设施社旗牧原农牧村 Village 农业用地）有限公司 Guizhang Village, Committee Agricultural 2016/4/20- 1 Sheqi Muyan 0 12.4 2016/4/19 433.500 289.950 Xinglong and involved Land(Facility 2028/9/30 Agro-Pastoral Township, Sheqi farmers Agricultural Co., Ltd. County Land) 沈丘县莲池镇西王农业用地（设施周口永欣饲料庄村 Village 农业用地）有限公司 Xiwangzhuang Committee Agricultural 2017/6/1- 2 Zhoukou 0 15 2017/5/4 200.600 165.000 village, Lianchi and involved Land(Facility 2032/5/31 Yongxin Feed Town, Shenqiu farmers Agricultural Co., Ltd. Country Land) Two Village Committees, one Total 634.1 454.95 District Government

b) Farmer's Land Lease Willingness 81. As for Sheqi Muyuan, Guizhang Village Committee of Xinlong Town, Sheqi County, acted as the lessor (party A) and signed a contract for the circulation of contracted management rights of rural land with Sheqi Muyuan agro-pastoral company (party B). The land circulation contract was signed and pressed handprints by six representatives of the occupied villagers' groups of Guizhang village. The village committee and the representatives of the occupied villagers' groups of Guizhang Village represented their willingness to transfer the land contract management right.

82. As for Zhoukou Yongxin, 33 occupied villagers acted as the lessor (party A) and signed a contract for the circulation of contracted management rights of rural land with Zhoukou Yongxin Feed Co., Ltd. (Party B). The land circulation contract was signed and pressed handprints by these farmers. The Village Committee of the west Wangzhuang Village, Lianchi Town, Shenqiu County, participated in the signing of the land circulation contract as the third party.

83. The matter that needs to be stated is that, according to the rural land contract law, the contract of the rural collective land takes the whole family as a unit, the right inside the family can not be divided, so the signed farmer represents the household and not the individual. 84. From the view of legal relationship, for the contract of circulation of the rural land contractual management right signed with Muyuan Agro-pastoral Company, the village committee and villagers' groups are the agents of the contracted farmers, and the actual subject of the contract should be the farmers who occupy the contracted land, and the farmers should be the beneficiaries of the land rent. The rural land contractual management right circulation contract signed with Zhoukou Yongxin Feed Co., Ltd. is in accordance with the law and meets the legal requirements which grant the farmers as the beneficiaries of land rent (see table 3-2 for details). Table 3-2 Farmers' Willingness to Lease Land

No. Enterprise Name / Lessee Project Area Lessor and involved farmers 社旗县兴隆镇珪璋村委会 Village Committee, 6 个村 Guizhang 社旗牧原农牧有限公司 Sheqi Muyan 村民小组代表签字并摁手印 Six 1 Village, Xinglong Agro-Pastoral Co., Ltd. villagers' group representatives Township, Sheqi signed and pressed handprints County 沈丘县莲池镇西王庄村村民 Villagers, 33 户受占地村民周口永欣饲料有限公司 Zhoukou 2 Xiwangzhuang 签字并摁手印 Yongxin Feed Co., Ltd. village, Lianchi 33 occupied villagers sign and Town, Shenqiu press handprints Country

c) Land Rental, Payment Method, Review Period and Payment Time 85. The determination of the rent should follow the principle of fairness and reasonableness, and the sum of land rent plus farmers' wages that may be earned through work should be higher than their original income from land.

86. The ADB requires that the consultation items with the relevant stakeholders should be added in the land lease agreement. Sheqi Muyuan and Zhoukou Yongxin have been clearly agreed the rent price on the bases of consultation with involved farmers and the village committee

87. Sheqi Muyuan: In the land lease contract signed on April 19, 2016, between the villagers' Committee (Party A) of Xinglong Town and Sheiqi Muyuan Agro-Pastoral Co., Ltd. (party B) agreed with each other clearly the following items: in 2016, the original crops on the land to be leased are wheat and maize. The net income of plantation of wheat and maize is 450 yuan per mu and 290 yuan per mu. See table below for details. Table 3-3 the input-output analysis of original land usage of Sheqi Muyuan in 2016

Input per mu Output per mu Net Marke Gross income Type Fertiliz Pestic Electri Subtot yield t Price Seed Water Other Income per mu er ide city al (kg) (yuan (yuan) (yuan) / kg) Whea 90 150 70 80 40 170 600 500 2.1 1050 450 t maize 50 130 60 100 40 130 510 500 1.6 800 290

88. After consultation and negotiation, the land lease fee is RMB 900 Yuan per mu annually, thigher than that comes from plantation; the time for paying the rent remains the same, Party B shall pay Party A before April 20 of each year, regardless of the operating condition of Party B, and regardless of Party A's condition, and Party B shall not waive the rent; After Party A receives the rent paid by Party B, it shall pay it to the client (the occupied peasant households) in a timely manner. Party B adjusts the rent every three years in the same proportion as the cumulative adjustment degree of the protection price of the third grade mixed wheat as announced by the state, and the ratio will be the same as those of the base period. On March 16, 2017, Party A and Party B signed a supplementary agreement to increase the lease fee of the rented land by Sheqi Muyuan Agro-pastoral Co. Ltd. to 1000 Yuan per mu per year.

89. Zhoukou Yongxin: In the land lease contract signed on May 4, 2017, in between the land- occupied farmer (as Party A), Zhoukou Yongxin Feed Co., Ltd. (as Party B) and the Village Committee of Wangzhuang Village, Lianchi Town, Shenqiu County (as Party C), the following items are clearly agreed. The original crops on the land to be leased are wheat and maize。

According to the calculation, the net income per mu is separately 424 yuan and 470 yuan. Table 3-4 the Input-output analysis of original land usage of Zhoukou Yongxin in 2017

Input per mu Output per mu Net Marke Gross income Type Fertiliz Pestic Electri Subtot Yield t Price Seed Water Other Income per mu er ide city al (kg) (yuan (yuan) (yuan） / kg) Whea 70 200 50 120 440 400 2.16 864 424 t maize 60 200 50 120 430 500 1.8 900 470

90. After consultation and negotiation, the land lease fee for the first six years is 860 Yuan per mu per year. Party B shall pay it to Party C by August 15 of each year, and then Party C shall pay Party A. The rent is adjusted every six years, with each adjustment rising by 6 per cent on the basis of the previous year's rent.

91. In the contract of the transfer of land contract management right, the agreement on the land rent, the payment method, the audit period and the payment time can effectively avoid the infringement of the legitimate rights and interests of the land-occupied farmers, and fully reflect the fair and justice principle of the stakeholders.

d) Other Issues of the Land Lease Contract Priority for Lease Renewal 92. Because of the limitation of the contract law and the contract law of the rural land on the term of the land lease, the lease period stipulated in the contract cannot meet the long-term development needs of the enterprise. Therefore, Sheqi Muyuan and Zhoukou Yongxin, have already agreed to the related matters of the priority for renewal in the contract of the transfer of the right to use the land.

93. In the transfer contract of the contracted management right of land for Sheqi Muyuan, it is agreed that Party A shall renew the land lease contract and continue to lease the land to Party B when the contract expires. If the land law or rural land contract law is amended for extension of contract period, the contract will be extended to the legal contract period.

94. In the circulation contract of land contractual management right of Zhou Kou Yongxin, it was agreed that the contract implementation should not be affected by the adjustment of land contractual management right, the re-contracting of rural land and even the change of policies. After the expiration of the contract, it will be automatically renewed for another 10 years, and no need to sign a new land transfer contract.

95. This kind agreement is of great importance for stability and sustainability of the project implementation and is also in line with the requirements to protect the rights and interests of the farmers (see table 5 below for details).

Table 3-5 Priority for Renewal Rights at the Expiration of the Contract

Whether or not agreed on the Priority for Renewal No. Enterprise Name / Lessee Rights upon the expiration of the contract

社旗牧原农牧有限公司 Sheqi Muyuan 1 Yes Agro-Pastoral Co., Ltd. 周口永欣饲料有限公司 Zhoukou Yongxin Yes 2 Feed Co., Ltd.

Obligation of Reclamation 96. According to the provisions of the Land Administration Law, the construction unit shall, after the expiration of the land usage term, undertake the obligation of reclamation so as to ensure that the returned land is able to maintain its original planting conditions. Sheqi Muyuan and Zhoukou Yongxin involve the lease of cultivated land (including facility agricultural land).

97. It is clearly agreed in Sheqi Muyuan’s transfer contract of the land contracted management right that if Party B no longer uses the land after the expiration of the lease term, Party B shall, under the supervision of the local people's government and the land administration department, carry out the reclamation obligation in accordance with the relevant policies and regulations.

98. The transfer contract of the land contracted management right of Zhoukou Yongxin did not clearly stipulate the reclamation obligation. Since the obligation of reclamation is legal obligation, the performance of the Lessee to the obligation is not affected even if there is no agreement in the Contract (see Table 3-6 for details).

Table 3-6 Land Reclamation Obligations in the Contract

Whether the lessee's obligation to No. Enterprise Name / Lessee reclaim the land is agreed upon or not 社旗牧原农牧有限公司 Sheqi Muyuan Agro-Pastoral 1 Yes Co., Ltd. 周口永欣饲料有限公司 Zhoukou Yongxin Feed Co., Yes 2 Ltd.

F. Implementation Status of the newly added Subprojects Land Lease Agreement 99. Sheqi Muyuan signed the rural land contractual management right circulation contract and supplementary agreement with the villagers' committee (as Party A). The land lease involves a total of 23 households of No.11 village group of Guizhan village. 5 farmer representatives on behalf of the 23 households also signed on the contract. The land lease fee for each year was paid to the Guizhang villagers' committee of Xinglong Town, Sheqi County (Party A) on April 20, 2016, 2017, 2018, 2019, respectively according to the contract and supplementary agreement, and Party A paid the land lease fee to the occupied farmers according to the occupied area. The latest payment was on April 20, 2019, each payment period was one year, and the latest payment was up to April 19, 2020. Due to the most husbands of these households are working in the cities, the land leasing payment were received mostly by their wives. See appendix 6 for the payment records.

100. Zhoukou Yongxin paid the land lease fee to the villagers' committee of West Wangzhuang Village of Lianchi Town, Shenqiu County (Party C) on August 15, 2017, 2018, and 2019 respectively according to the contract for transfer of rural land contracted management right signed with the land-occupied farmers, and the land lease fee is paid to 33 households by Party A according to the occupied area. Due to the most husbands of these households are working in the cities, the land leasing payment were received mostly by their wives.

101. According to the investigation and according the payment records, there is not any dissatisfaction information from the land occupation households was received.

G. Suggestions on the Implementation of the newly added

Subprojects and Matters Need to be paid Attention to 102. In the implementation of the new subprojects, it is necessary on the one hand to consolidate the legal basis of the existing land lease contract, and it is also necessary on the one hand to pay attention to protection of the farmers’ rights and interests and to maintain the fair and justice principle of the land lease contract.

Guarantee the Legality of Land Use 103. Include prompt and monitor subproject implementation units to be aware of the follow items: (i) The use of land must be in strict accordance with the specified uses, shall not create permanent buildings and structures on the leased cultivated land, and shall not destroy the farming layer of the land, and shall, at the expiration of the lease contract, undertake the reclamation obligation in accordance with the contract agreements and policy requirements. (ii) The leased land shall not be subleased without the consent of the Lessor. (iii) Abides by the national laws and regulations on production safety, labor employment, soil and water conservation, environmental protection, etc.

Protection of Farmers' Rights and Interests 104. The enterprise shall ensure that the land rent is paid fully to the village committee in time in accordance with the Contract, and the village committee shall ensure that the rent can be granted in full to the farmers who rent the land according to the Contract.

105. State subsidies to agriculture shall be distributed in accordance with the provisions of laws and policies, as stipulated in the contract, so as to safeguard the interests of rural collective economic organizations as well as that of the farmers whose lands have been expropriated.

106. To provide more employment opportunities for farmers, particularly the vulnerable groups such as women in rural areas, low-income households and disabled farmers.

107. Recommended corrective actions: Sheqi Muyuan:

• According to the latest land administration law, all 23 households involved will sign the contract by the end of 2020. • This project will encourage females' participation in land use right transfer and protect their rights during the whole project process. Female farmers will sign the contract by the end of 2020. • The original contract period will be adjusted and not exceeding to the end of 2027 which is end of second round of rural land contracting. Zhoukou Yongxin • This project will encourage females' participation in land use right transfer and protect their rights during the whole project process. Female farmers will sign the contract by the end of 2020. • The original contract period will be adjusted and not exceeding to the end of 2027 which is end of second round of rural land contracting.

H. Conclusions 108. Sheqi Muyuan: Sheqi Muyuan Agro-pastoral Co., Ltd. has signed the rural land contractual management right circulation contract and supplementary agreement with the agent entrusted by the occupied peasant household, and the lease fee amount, payment date, adjustment mode, the rights and obligations of the stakeholders are clearly agreed upon in accordance with the law. Land area in the signed Contract is 433.50 mu, of which, an area of 289.95 mu land involved with ADB loan project. The land for the ADB loan project has completed the formalities for the record of the agricultural facility land. The attribution of the land is cultivated land before the change, and there is no problem of involuntary resettlement. All the land lease fees for 2016, 2017, 2018, 2019, have been settled.

109. On the whole, Sheqi Muyuan and Zhoukou Yongxin are in accordance with the relevant legal provisions, the procedure is normal and procedures are completed in the process of obtaining the construction land. The signing of the land lease contract is in accordance with the principle of fairness and reasonableness, which basically embodies the wishes of farmers’ collective organization and farmers who contract their lands, and all these conforms to the provisions of existing laws, regulations and policies, and also meet the relevant requirements of ADB.

110. In the implementation course of the land lease contract, the female’s rights on land leasing should be further paid attention to protect.

111. The progress of corrective actions stated in para 107 will be closely monitored and reported every Q2 and Q4

Appendix 1 Decision of Neixiang County People's Government on acquisition of collective land in Guanzhang and Tuandong Townships

Appendix 2 Certificate of property rights of Henan Muyuan Meat Food Co., Ltd.

Appendix 3 Land acquisition notice for Muyuan Meat Food

Appendix 4 Three parties signed land leasing agreement for Sheqi Muyuan

2）Supplemental Agreement

Filing Document of Facility Agricultural Land

Appendix 5 Land Document of Zhoukou Yongxin Co. ltd.

Appendix 6 payment record of land rental of Sheqi Muyuan

Appendix 7 payment record of land rental of Zhoukou Yongxin

Many females’ participation-receive cash payment of land transfer fee This project will encourage females' participation in land use right transfer and protect their rights during the whole project process.