Safeguards Monitoring Report

Project Number: 47046-002 February 2020

PRC: Gansu Featured Agriculture and Financial Services System Development Project– Safeguards Monitoring Report (January 1 June 30, 2019) −

Prepared by the Project Management Office of Gansu Featured Agriculture and Financial Services System Development Project for the Asian Development Bank.

This safeguards monitoring 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.

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.

Gansu Featured Agriculture and Financial Service System Development Project

Loan Number: 3312-PRC

Safeguard Monitoring Report

Reporting Period January 1 to June 30, 2019

Prepared by the Project Management Office of Gansu Featured Agriculture and Financial Service System Development Project

Date: August 23, 2019

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

TABLE OF CONTENTS

ABREVIATIONS AND ACRONMYS ...... 4 I. INTRODUCTION ...... 5 II. IMPORTANT ACTION AND SAFEGUARD ...... 6 A. Major actions ...... 6 B. Safeguard ...... 9 i. Progress of the establishment and implementation of ESMS by FIs: Environment Safeguards ...... 9 ii. Good practices of environment management ...... 20 C. Social safeguard ...... 22 D. Information disclosure...... 25 E. Progress of implementing grievance redressing mechanism ...... 25 F. Preparation of the simplified ESMS ...... 27 G. Skillful use of MIS ...... 27 III. ISSUES IN CARRYING OUT ESMS ACTIVITIES AND SOLUTIONS ...... 28 A. Issues ...... 28 B. Solution ...... 29 IV. LESSONS LEARNT ...... 30 V. NEXT STEPS ...... 31

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

APPENDIX

APPENDIX 1: SOCIAL AND GENDER ACTION PLAN MONITORING 30 APPENDIX 2: ETHNIC MINORITY DEVELOPMENT MONITORING 33 APPENDIX 3: RECORDS OF COMPLAINTS 34 APPENDIX 4: QUARTERLY CREDIT MONITORING 35 APPENDIX 5: CAPACITY BUILDING ACTIVITIES 38 APPENDIX 6: FURTHER SUBLOANS OF THE PROJECT 42 APPENDIX 7: SNAPSHOTS OF MIS 45

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

ABREVIATIONS AND ACRONYMS

ADB Asian Development Bank BARA County Agriculture and Rural Affairs Bureau BOF County Bureau of Finance BOG Bank of Gansu BOL Bank of Lanzhou CNY Chinese Yuan CPMO County Project Management Office DARA Provincial Department of Agriculture and Rural Affairs DOF Provincial Department of Finance EES Expenditure Statement EMDF Ethnic Minority Development Framework EMDP Ethnic Minority Development Plan ESMS Environment and Social Management System EUR European Dollar IEE Initial Environment Evaluation FI Financial Intermediary GOC Government of China JRCB Jingning Rural Commercial Bank LRCB Lintao Rural Commercial Bank MARA Ministry of Agriculture and Rural Affairs M&E Monitoring and Evaluation MIS Management Information System MOU Memorandum of Understanding PMO Project Management Office PPMO Provincial Project Management Office RFSP Rural Financial Service Provider SGAP Social and Gender Action Plan USD United States Dollar WHO World Health Organization ZRCB Zhuanglang Rural Commercial Bank

4 Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

I. INTRODUCTION 1. Asian Development Bank (hereafter refers to as ADB) approved the Gansu Featured Agriculture and Financial Service System Development Project (hereafter refers to as the Project) on November 12, 2015. ADB and the Chinese Government signed the Loan Agreement on December 8, 2015 and the project became effective on March 29, 2016. The planned total investment of the project is USD 200 million, including USD 100 million of ADB loan, USD 68.58 million input from Financial Intermediary (hereafter refers to as FI), USD 24.67 million contribution of beneficiaries and USD 6.75 million input of Gansu Provincial Government. The implementation period of the loan project is five years, completion on set on December 31, 2020 and the project closure is June 30, 2021. The maturity of the loan is 15 years including 9 years of grace period. The maturity date of the loan is November 1, 2030. 2. Project resources will be used to support the achievement of four outputs as (i) inclusive and environmentally-friendly featured agricultural production bases developed; (ii) farmer cooperatives and agricultural enterprises financed and strengthened; (iii) rural financial service system developed and enhanced; and (iv) capacity for project implementation and management strengthened. The objective of the project is to enhance the participation of farmers in more productive and market-oriented agricultural activities to achieve income growth. The Implementation Kick-off Workshop convened in Lanzhou of Gansu on June 2, 2016 symbolized the official start of project implementation. 3. As an innovative project of “agriculture + financing”, the most striking difference comparing this project with other projects operated through traditional models is the incorporation of financial intermediaries (FI). Through screening intermediary banks with the required qualifications, about 90% of project loan proceeds is on-lent to the FIs. Through close cooperation between the government and FIs, the FIs via market operation will use project resources to support local featured agriculture and the development of new rural financial institutions. In this process, the government fully plays the role of macro regulation and capacity building at all levels while the banks put their advantages in fund management and operation into full play to enable recycled use of limited funds serving the development of featured agriculture maximize its effects. Meanwhile, the project is meant to explore a sustainable model for financing in support of agriculture. The project also attaches great attention to capacity building of FIs as well as support to new rural financial service providers including rural banks, micro credit companies and mutual cooperatives to enhance the capacity of rural financing services and the development of diversified rural financing system. 4. With FI model, Bank of Gansu (BOG), Bank of Lanzhou (BOL) and Yuzhong SPD Rural Bank established Environmental and Social Management System (ESMS) in June 2016 to assess and manage the potential environment and social impacts of their lending activities, which is an important instrument to implement the environment and social safeguard policies of ABD, and also an important practice of applying ADB’s environment and social safeguard policies in credit activities of banks in China after Industrial Bank‘s adoption of Equator Principles, and this is highly aligned with the green development principles promoted by GOC. It is expected that the outcome generated through project implementation will be replicated and scaled-up in broader areas of China, which would contribute to the integrated, balanced and sustainable development of rural economy, the environment and the human society. 5

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

5. During the first half of 2019, investment delivered was USD 79.98 million, accounting for 52.67% of the 2019 plan, of which, the use of ABD loan was USD 40.63 million or 51.49% of the annual plan, and the counterpart investment was USD 39.35 million, accounting for 53.94% of the annual plan. By June 30 2019, the accumulative investment of the project delivered was USD 94.35 million, accounting for 52.97% of the base cost of the project, of which, the use of ADB loan was USD 53.47 million, accounting for 57.91%, and counterpart funding investment was USD 40.88 million, accounting for 47.32% of the overall target. 6. During the reporting period, the mid-term review of the project was conducted from 25 to 27 June 2019. The mid-term review mission through attending briefing, discussions, field visits and desk reviews assessed the overall progress of implementation, financial progress, performance, procurement, the financial performance of FIs, the compliance with project covenants, and safeguard policy of the project. It further exchanged views with the PMOs on the implementation of loans to RFSPs, ADB loan proceeds reallocation and the change of currency of the loan, with consensus reached. Project management, environment and social specialists provided constructive advices to the project in order to further improve the performance of project implementation. II. IMPORTANT ACTION AND SAFEGUARD A. Major actions 7. With the joint efforts of the PPMO, national consultant team, FIs and the 11 CPMOs, important activities implemented in the first half of 2019 related to ESME are as follows:  Project（ESMS）training. During field work of ABD in Lanzhou from December 12-13, 2018, DOF and PPMO reached consensus on the addition of three new FIs and 2 project counties. From the end of December 2018 to the beginning of January 2019, the PPMO convened project management meeting and training respectively in Lintao, Zhuanglang and Jingning, focusing on the basics and features of ADB loan project, as well as the establishment and implementation of ESMS, the preparation of due diligence report of land use right transfer, IEE and EES. These activities provided clear pathway and support to the three new FIs in the preparation of materials for prior review of their first Subloans, formulation of WA plans, implementation commitment letters and ESMS.  The consultant team strengthened technical support to the FIs, particularly to the three new FIs. The team helped the new FIs establish localized ESMS and the preparation of materials for prior review of their first Subloans and the establishment of grievance redressing mechanism in two new project counties.  The establishment of localized ESMS. In January 2019, with the guidance of the PPMO and the consultant, LRCB, ZRCB and JRCB established localized ESMS and issued presidents’ directive to their service outlets on the integration of ADB’s ESMS in their routing business operations. The directive requires that the implementation of ESMS is one of the policies of the FIs in conducting businesses in project counties. And steps A-F are the necessary procedures of FIs for assessing and approving all Subloans of ADB project.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

 The official addition of three new FIs and two project counties. On January 30, 2019, the project management of ADB via email informed the PPMO that ADB approved the project changes mentioned in the MOU of ADB supervision mission of December 12-13, 2018, i.e. ADB agreed to incorporate the three new FIs and two new counties in project implementation.  Implementation of ESMS. During the reporting period, with the assistance of the consultant team, the client representatives and the environment managers of FIs followed the requirements of the Screening and Categorization of sub-projects as stipulated in the ESMS and carried out screening and categorization of all sub-projects. In total, 1,434 Subloans (including first Subloans) were issued, with ESMS prepared for 123 agro-enterprises/cooperatives/production bases. Since project activities supported by the recycled project funds did not change, the existing ESMS for 2 agro-enterprises/cooperatives/production bases (for recycled funds) were also used. The above activities involved 90 production bases, 19 enterprises, 6 farmer cooperatives and 1,409 farmer households. ESMS has been prepared for all 1,434 Subloans. Since only one ESMS is required for a production base that normally includes more than one Subloans, the number of ESMS prepared cannot match with the number of Subloans issued.  All ESMS are prepared strictly following the stipulated requirements and steps. In order to ensure objectiveness and accuracy of environment impact assessment and social impact assessment of each ESMS, the consultant team hired by the PPMO participated in the entire process of ESMS preparation with the aim of helping the FIs through such hands-on technical support nurture a team of frontline client representatives who can skillfully use ESMS, laying solid foundation for the integration of ESMS with credit business operations of FIs.  FIs carried out field supervision to all selected sub-projects and additional ad hoc visits were implemented. During the reporting period, all Subloans were issued by LRCB, ZRCB and JRCB that are newly incorporated in project implementation, as such, consultant team participated in the entire process of the preparation of the ESMS of all sub-projects, meaning that the inspection was carried out for 100% of the sub-projects. Since the beginning of this year, pushing for implementation progress of the project has been one of the top priorities of the PPMO, as a result, supervision of the project implementation by the PMOs has also been strengthened. During the reporting period, the PPMO fielded 20 supervision visits to project counties, involving a workforce of 72 persons for 51 working days in total, with field inspection covering over 50% of the sub-projects. In the process of supervision, the PMOs have been consistently upholding the principle of being problem-oriented in order to address practical issues. The PMOs have made all possible efforts to strengthen comprehension and understanding of all stakeholders including client representatives of FIs, borrowing enterprises/cooperatives/farmer households, farmer households in the neighborhood of sub-projects, agricultural technical extension agents of county and townships and CPMO staffers about ADB project and its ESMS. On-site field training is a commonly adopted practice.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

 Supervision. The PPMO together with multiple agencies carried out 18 on-site supervisions and ESMS inspections in the 7 project counties to see the operation of ESMS. With the supervision of FIs, CPMOs and relevant bureaus and in association with the increasingly stringent requirements of technical agencies of environment protection, disease control and market supervision, ESMS is well applied to the existing Subloans. Through the application and popularization of ESMS in the project, ESMS will be gradually integrated into the daily business operations of FIs and become a part of the green financing of such FIs, providing necessary conditions for the sustainable development of ESMS.  Optimization of MIS. The project specifically developed MIS for project management, planning, M&E and financial management. With the addition of three new FIs and two counties, the PPMO has urged the software developer to incorporate the new FIs and the counties into MIS. During the reporting period, the PPMO continues to optimize the monitoring mechanism of ESMS indicators and the recording mechanism of grievances in the MIS. 8. Prior review of the first Subloans: In January 2019, the PPMO together with the consultants and the new FIs prepared the prior review materials for the first Subloans and submitted to ADB in a timely manner. In February, the prior review of the first Subloans of the new FIs successfully went through ADB’s scrutiny, leading the disbursement of the first Subloans before May, including CNY 300,000 released by Lintao Rural Commercial Bank (LRCB), CNY 450,000 by Zhuanglang Rural Commercial Bank (ZRCB) and CNY 5 million by Jingning Rural Commercial Bank (JRCB). In April, 2019, BOL Minxian Branch restarted the disbursement of its first Subloan, which was granted “no objection” by ADB on April 22, 2019, leading to the disbursement of its first Subloans of CNY 100,000 on April 26. 9. Progress of further Subloans: During the reporting period, FIs in total disbursed 1,430 Subloans (details are given in table 1), with the amount of USD 65.65 million (equivalent to CNY 403.17 million), including 1,414 transactions in Lintao with value of USD 52.22 million (equivalent to CNY 179.87million); Zhuanglang 9 Subloans with value of USD 9.82 million (equivalent to CNY 60.3 million); Jingning 3 Subloans with value of USD 3.34 million (equivalent to CNY 20.5 million); Minxian 2 Subloans with value of USD 146,600 (equivalent to CNY 900,000), 2 subloans were based on recycled funds, BOL released two Subloans in Jishishan and Hezheng, with value of USD 130,300 (equivalent to CNY 800,000). In total, further Subloans amounted to USD 65.65 million (equivalent to CNY 431.67 million). Table 1: Further Subloans (as of June 30, 2019) Exchange rate: USD 1 = CNY 6.1412 Project Disbursed Disbursed Number of Bank Source of Fund County (CNY 10,000) (USD 10,000) Subloans Lintao Rural 17987.29 2928.95 1195 ADB Lintao Commercial Bank 14079.4 2292.61 219 Counterpart Zhuanglang Rural ADB Zhuanglang 6030 981.89 9 Commercial Bank Jingning Rural ADB Jingning 2050 333.81 3 Commercial Bank Minxian 90 14.66 2 ADB BOL Recycled ADB Jishishan 30 4.89 1 loan Recycled ADB Hezheng 50 8.14 1 loan Total 40316.69 6564.96 1430 8

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

10. As of the end of the reporting period, in addition to the first Subloans, FIs disbursed 1,517 further Subloans in total, including 3 by BOL in Hezheng, 57 by BOL in Jishishan, 3 by BOL in Yongjing, 12 by BOL in Lintao and 2 by BOL in Minxian; BOG disbursed 10 Subloans in Lintai, 2 in Jingchuan, 1 in Huanxian; SPD Rural Bank disbursed 1 in Yuzhong; LRCB disbursed 1,414 Subloans in Lintao; ZRCB disbursed 9 Subloans in Zhuanglang; JRCB disbursed 3 Subloans in Jingning. The sum of the above is USD 76.991 million (equivalent to CNY 474.0669 million) (details are given in annex 6). B. Safeguard i. Progress of the establishment and implementation of ESMS by FIs: Environment Safeguards 11. Lintao Rural Commercial Bank, Zhuanglang Rural Commercial Bank and Jingning Rural Commercial Bank and BOL disbursed 1,434 Subloans including 4 first Subloans and 1,430 further Subloans. In terms of production supported, 556 Subloans were used for vegetable, medicinal herbs, lily, and tuber production, 503 Subloans were used for the production of cattle, sheep, pig and chicken, 95 Subloans for fruit and vegetable processing, wholesale and marketing, and 59 Subloans for tree nursery development. In total, 1,434 Subloans (including first Subloans) were issued with 123 sets of ESMS completed. Since the project activities supported by the recycled project funds did not change, the existing 2 sets of ESMS (for recycled funds) were also used. The above activities involved 90 production bases, 19 enterprises, 6 farmer cooperatives and 1,409 farmer households. i-1 LRCB 12. During the reporting period, LRCB disbursed 1,414 Subloans (including first Subloan) in Lintao in support of crop and animal production, purchase and storage of agricultural products. In line with different activities and with the assistance of the consultant team, LRCB completed 110 sets of ESMS, involving 90 production bases, 9 enterprises, 3 cooperatives and 1,402 farmer households. 13. Farmer households of the Subloans of LRCB are the mainstream borrowers, including 1,248 farmer households engaged in household production activities in the production bases that feature on open field vegetable production, greenhouse vegetable production, other cash crops production bases, cattle production bases, sheep production bases, pig production bases, chicken production bases, tree crop nursery bases. According to the scope of the production base of cropping, average land area per household, and the scope of animal production base and the number of animal kept per household, 90 sets of ESMS were carried out, including 35 for open field crops, 5 for greenhouse vegetables, 3 for other cash crops, 11 for cattle production bases, 9 for sheep production bases, 10 for pig production bases, 9 for chicken production bases and 8 for tree crop nurseries. Cropping Activities: 14. Open field production bases include 12 bases of medicinal herbs, 17 bases of potato and 6 bases of lily, with ESMS prepared for 35 agro-enterprises/ cooperatives/ production bases. The involved 438 farmer households are loosely distributed in the 12 production bases.  In open field potato production, the smallest area is 15 mu and the largest is 200 mu and the average area per household is 40 mu; the smallest area of medicinal herb production is 5 mu, the largest is 120 mu and the average area 9

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

per household is 25 mu; the smallest area for lily production base is 6 mu and the largest is 20 mu and the average area per household is 7.5 mu.  Open field crop production base belongs to the same category of operations, during the production process of potato, medicinal herbs, lily, suitable amounts of pesticides and chemical fertilizers are used, but no pesticides published in the List of Banned and Restricted Pesticides (66 type) are used, including Dimethoate and Methamidophos. Chemical fertilizers used are selected from the National Implementation Standards of Fertilizers. Water use: lily production is largely distributed in the valley areas irrigated by surface water (Taohe River) and the water consumption of production is 100 m3/year/mu; potato and medicinal herb production are mainly located in upland area of Lintao, which is completely rain-fed. Therefore, the production of lily, medicinal herbs and potato do not constitute any water use conflict with other cropping activities, it do not affect the sustainable use of local water resources, and it do not generate any waste water. According to the average cropping area per household, the application of chemical fertilizers and pesticides and water use, open field crop production is assessed as Category C in general for environment impact.  Mitigation measures adopted by farmer households of open field crop production bases: (i) farm manure as the main source of fertilizer is used, pesticides that meet the national scientific and safety regulations for pest control is used to minimize potential damage to soil and water sources; (ii) surface water is rationally used for irrigation with water-saving measures, upland farming technologies are adopted to increase the efficiency of water use of natural precipitation; (iii) FIs in cooperation with county agriculture and rural affairs bureaus and CPMOs carried out multiple sample checks for the application of fertilizer and pesticides during production of medicinal herbs, potato and lily. 15. There are five greenhouse vegetable production bases, the smallest planting area is 2 mu and the largest area is 20 mu, and the average planting area is 3 mu per household. In total 5 sets of ESMS are completed involving 199 farmer households loosely distributed in 5 production bases.  Major crops produced in greenhouses are pepper, tomato, cucumber and carrots with similar planting season and methods. In the process of vegetable production, suitable amounts of pesticides and chemical fertilizers are used, but no pesticides published in the List of Banned and Restricted Pesticides (66 type) are used. Chemical fertilizers used are selected from the National Implementation Standards of Fertilizers. Water use: vegetable production bases are located in the valley of Lintao where irrigation is based on surface water (Taohe River), and dripping irrigation is adopted. Water Conservancy Bureau uses GPS devices to measure water consumption, which is 100 m3/year/mu. There is no other consumption and no waste water generated. According to the average cropping area per household, the application of chemical fertilizers and pesticides and water use, greenhouse vegetable production is assessed as Category C in general for environment impact.  Mitigation measures adopted by farmer households of greenhouse vegetable production bases: (i) farm manure is used as the main source of fertilizer, use of chemical fertilizer and pesticides are strictly controlled and standardized, pesticides that meet the national scientific and safety regulations are used for 10

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

pest control to minimize potential damage to soil and water sources; (ii) surface water is rationally used for irrigation with water-saving measures such as dripping and sprinklers; (iii) FIs in cooperation with county agriculture and rural affairs bureaus and CPMOs carried out multiple sample checks for the application of fertilizer and pesticides during production of greenhouse vegetables. 16. There are 3 production bases for other cash crops such as corn, paddy rice and horse beans, and each base has the same area of 20 mu. Three sets of ESMS are completed involving 12 farmer households loosely distributed in the three bases.  During the production process of corn, rice and horse beans, suitable amounts of pesticides and chemical fertilizers are used, but no pesticides gazetted in the List of Banned and Restricted Pesticides (66 type) are used, including Dimethoate and Methamidophos. Chemical fertilizers used are selected from the National Implementation Standards of Fertilizers. Water use: paddy rice production is largely distributed in the valley areas irrigated by surface water (Taohe River) and the water consumption measured by water conservancy bureau using GPS devices is 120 m3/year/mu; corn and horse beans are drought tolerant crops and their water use is less than rice. Therefore, the production of corn, rice and horse beans does not constitute any water use conflict with other cropping activities, it does not affect the sustainable use of local water resources, it does not generate any waste water. According to the average cropping area per household, the application of chemical fertilizers and pesticides and water use, the production of corn, rice and horse beans is assessed as Category C in general for environment impact.  Mitigation measures adopted by farmer households of other cash crops production bases: (i) farm manure is used as the main source of fertilizer, use of chemical fertilizer and pesticides are strictly controlled and standardized, pesticides that meet the national scientific and safety regulations are used for pest control to minimize potential damage to soil and water sources; (ii) surface water is rationally used for irrigation with water-saving measures such as dripping and sprinklers; (iii) FIs in cooperation with county agriculture and rural affairs bureaus and CPMOs carried out multiple sample checks for the application of fertilizer and pesticides during production of greenhouse vegetables. 17. There are 8 tree crop nurseries involved. The smallest area of farmer households in the production base is 3 mu, the largest is 80 mu and the average area of nursery per household is 20 mu. In total, 8 sets of ESMS are completed, involving 52 farmer households loosely distributed in the 8 nursery production bases. 18. There are 8 enterprises and 3 cooperatives used ADB loan proceeds for the implementation of nursery production activities, with 11 sets of ESMS completed. The entities are namely: Lintao Dingda Nursery Company Ltd.; Lintao Taohuadao Tourism Culture Integrated Development Company Ltd., Gansu Yongqing Property Company Ltd., Lintao Luyuandao Agriculture Development Company Ltd., Gansu Lintao Senyuan Nursery Engineering Company Ltd., Lintao Tianyuan Nursery Production and Marketing Company Ltd., Lintao Haifeng Tourism Service Company Ltd., Gansu Shenguiyuan Landscape Engineering Company Ltd., Lintao Hongxing Vegetable Production Cooperative, Lintao Wolongfutou Crop Production Cooperative and Lintao Jingxiu Nursery Production Cooperatives.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

 Impact of tree crop nursery production on the environment: (i) suitable amounts of chemical fertilizers and pesticides are used in nursery production; (ii) water use: tree crop nursery production is largely located in the valley areas of Lintao with irrigation from surface water (Taohe River). The water consumption measured by water conservancy bureau using GPS devices is 90 m3/year/mu; which does not constitute any water use conflict with other cropping activities, it does not affect the sustainable use of local water resources, it does not generate any waste water. In line with the requirements of nursery production of tree crops, the impact to the environment and water, the overall environment assessment is categorized as C for tree crop nursery production.  Mitigation measures adopted in tree crop nursey production: (i) farm manure is used as the main source of fertilizer, the use of chemical fertilizer and pesticides are strictly controlled and standardized, pesticides that meet the national scientific and safety regulations are used for pest control to minimize potential damage to soil and water sources; (ii) surface water is rationally used for irrigation with water-saving measures such as dripping and sprinklers; (iii) herbicides banned and restricted by the state and WHO are not be used; and (iv) FIs in cooperation with county agriculture and rural affairs bureaus and CPMOs carried out multiple sample checks for the application of fertilizer and pesticides during production of tree crop nursery. Breeding Activities: 19. There are 11 cattle production bases, farmer households of the production bases keep 2 cattle as the lowest and 20 as the highest number, and the average cattle holding per household is 10. A total number of 11 ESMS were completed, involving 256 farmer households loosely distributed in the 11 production bases.  Cattle raising area does not involve environmentally sensitive area and the construction activities comply with domestic environment assessment requirements of the Classified Administration Catalogue of Environmental Impact Assessments for Construction Projects. The base is far away from residential area and water course. The treatment of manure, urine and odor comply with the requirements of agricultural production and environment protect. Manure and urines are collected as much as possible for fermentation treatment before releasing as organic fertilizer for crop farming. Disease control of cattle strictly follows the Regulation of Animal Disease Control of Gansu Province. The method and the amount of chemicals (disinfectants) used are standardized. According to the strict environment and disease control requirements implemented at cattle production base as well as the number cattle kept by average farmer household, the overall environment assessment of cattle production base is categorized as C.  Mitigation measures adopted by farmer households of cattle production base: (i) low noise equipment and process is adopted, feedstuff processing are carried out in insulated workshops and the time of work is strictly controlled; (ii) cattle manure is timely removed for centralized fermentation as organic fertilizer or sales to fertilizer manufacturer as raw material; (iii) sanitation of the farming surroundings is well maintained, cattle manure is timely treated to avoid from over piling. The structure of feedstuff has been improved, feedstuff with environment protection features are selected to reduce odor of manure; (iv) disease control are carried out strictly following the Local Standard of 12

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Animal Disease Control of Gansu Province; (v) isolation is established among function zones on the livestock farm. At the same time, FIs in cooperation with county agriculture and rural affairs bureau, county environment protection and CPMOs carried out regular and ad hoc supervision over noise control and manure treatment. The frequency of regular supervision is at least 3-4 times/year. In line with the production cycle, ad hoc sample supervision will be implemented for multiple times. 20. There are 9 sheep production base, farmer households of the production bases keep 20 sheep as the lowest and 200 as the highest number, and the average sheep holding per household is 52. A total number of 11 ESMS were completed, involving 165 farmer households.  The sheep raising area does not involve environmentally sensitive area and the construction activities comply with domestic environment assessment requirements of the Classified Administration Catalogue of Environmental Impact Assessments for Construction Projects. The base is far away from residential area and water course. The treatment of manure, urine and odor comply with the requirements of agricultural production and environment protect. Manure and urines are collected as much as possible for fermentation before releasing as organic fertilizer for crop farming. Disease control of sheep strictly follows the Regulation of Animal Disease Control of Gansu Province. The method and the amount of chemicals (disinfectants) used are standardized. According to the strict environment and disease control requirements implemented at sheep production base as well as the number sheep kept by average farmer household, the overall environment assessment of sheep production base is categorized as C.  Mitigation measures adopted by farmer households of sheep production base: (i) low noise equipment and process are adopted, timing of construction is strictly controlled, and no noisy equipment is allowed at night time; (ii) sheep manure is timely removed for centralized fermentation as organic fertilizer; (iii) the sanitation of sheep sheds is well maintained, sheep manure is timely treated to reduce the possibilities of odor; (iv) disease control is carried out strictly following the Local Standard of Animal Disease Control of Gansu Province; and (v) isolation is established among function zones on the livestock farm. At the same time, FIs in cooperation with county agriculture and rural affairs bureau, county environment protection and CPMOs carry out regular and ad hoc supervision on the noise control and manure treatment. The frequency of regular supervision is at least 3-4 times/year. In line with the production cycle, ad hoc sample supervision will be implemented for multiple times. 21. There are 10 pig production bases, farmer households of the production bases keep 5 pigs as the lowest and 400 as the highest number, and the average pig holding per household is 105. A total number of 10 ESMS were completed, involving 93 farmer households.  The pig raising area does not involve environmentally sensitive area and the construction activities comply with domestic environment assessment requirements of the Classified Administration Catalogue of Environmental Impact Assessments for Construction Projects. The base is far away from residential area and water course. The treatment of manure, urine and odor comply with the requirements of agricultural production and environment 13

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

protect. Manure and urines are collected as much as possible for fermentation before releasing as organic fertilizer for crop farming. Disease control of cattle strictly follows the Regulation of Animal Disease Control of Gansu Province. The method and the amount of chemicals (disinfectants) used are standardized. According to the strict environment and disease control requirements implemented at pig production base as well as the number pig kept by average farmer household, the overall environment assessment of cattle production base is categorized as C.  Mitigation measures adopted by farmer households of pig production base: (i) low noise equipment and process are adopted, timing of construction is strictly controlled, and no noisy equipment is allowed at night time; (ii) pig manure is timely removed for centralized fermentation as organic fertilizer or sale to fertilizer manufacturer as raw materials; (iii) the sanitation of pig sheds is well maintained, ventilation and air blowers are installed to regularly exchange air to reduce the possibilities of odor; (iv) disease control is carried out strictly following the Local Standard of Animal Disease Control of Gansu Province; and (v) isolation is established among function zones on the livestock farm. At the same time, FIs in cooperation with county agriculture and rural affairs bureau, county environment protection and CPMOs carry out regular and ad hoc supervision on noise control and manure treatment. The frequency of regular supervision is at least 3-4 times/year. In line with the production cycle, ad hoc sample supervision will be implemented for multiple times. 22. There are 8 chicken production bases, farmer households of the production bases keep 200 chickens as the lowest and 5100 as the highest number, and the average chicken holding per household is 2644. A total number of 9 sets of ESMS were completed, involving 33 farmer households.  Chicken production bases features on the scattered rearing in economic forest for the purpose of utilizing the space of forest. Chicken droppings become fertilisers to the trees and those from chicken sheds are also transported to crop field as organic fertilizer after treatment. Regardless it is centralized or decentralized chicken farming, disease control and disinfection are strictly implemented in line with the Regulation of Animal Disease Control. In accordance with the strict environment and disease control implemented in the production base and the average holding of chickens per farmer household, the overall environment assessment of chicken production base is category C.  Mitigation measures adopted by farmer households of pig production base to minimize impact on the environment: (i) all types of ventilation and feed processing equipment are housed and mufflers are stalled on noisy equipment powered by air; (ii) chicken droppings are timely removed for treatment as organic fertilizer for crop farming; (iii) chicken sheds are well ventilated, chicken droppings are timely removed to reduce the possibilities of odor; (iv) disease control is carried out strictly following the Local Standard of Animal Disease Control of Gansu Province; and (v) insulations are established among function zones on the livestock farm. At the same time, FIs in cooperation with county agriculture and rural affairs bureau, county environment protection and CPMOs carry out regular and ad hoc supervision on noise control and manure treatment. The frequency of regular supervision is at least 3-4 times/year. In line with the production cycle, ad hoc sample

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

supervision will be implemented for multiple times. Purchase Wholesale and Processing Storage Activities: 23. Activities related to purchase, wholesale, processing, storage and transportation. Under Output 2, activities supported by industrialization development fund involved 9 sets of ESMS, including 8 sets of ESMS for medicinal herb purchase and wholesale, fruits and vegetable wholesale and retail, lily processing, tuber produce processing with 154 farmer households. Lintao Hongxing Vegetable Wholesale Company Ltd. completed one ESMS for wholesale, storage and transportation of vegetables.  This category of activities involves purchase and processing of vegetables, medicinal herbs, lily and other agro-products, and its impact on the environment is primarily noise and some wastes, which are neglectable, therefore, it is Category C in environment assessment.  Mitigation measure: (i) low noise equipment and process are adopted, timing of construction is strictly controlled, and no noisy equipment is allowed at night time; (ii) wastes resulted from processing and purchase activities are timely removed and treated in centralized manner according to categorization of wastes; (iii) during transportation, all goods are well packed according to the requirements of the regulations of road transportation. i-2：ZRCB 24. ZRCB uses ADB loan proceeds for 9 Subloans in Zhuanglang (including the first Subloan) in support of potato and apple production, animal rearing, storage, processing and transportation. In line with different activities and with the assistance of the consultant team, ZRCM completed 9 sets of ESMS involving 7 enterprises and 2 cooperatives. Cropping Activities: 25. Crop production. Zhuanglang Jiaxing Potato Cooperative used ADB loan for potato production with one set of ESMS completed.  Potato production needs suitable amounts of pesticides and chemical fertilizers, but no pesticides gazetted in the List of Banned and Restricted Pesticides (66 type) are used, including Dimethoate and Methamidophos. Chemical fertilizers used are selected from the National Implementation Standards of Fertilizers. Potato production in Zhuanglang primarily relies on precipitation with supplementary irrigation by surface water, therefore, potato does not constitute any water use conflict with other cropping activities, it does not affect the sustainable use of local water resources, it does not generate any waste water. Potato production of Zhuanglang Jiaxing Potato Cooperative is assessed as Category C in general for environment impact.  Mitigation measures adopted in potato production to minimize environment impacts: (i) farm manure as the main source of fertilizer is used, pesticides that meet the national scientific and safety regulations for pest control are used to minimize potential damage to soil and water sources; (ii) surface water for irrigation with water-saving irrigation measures are rationally adopted; (iii) FIs in cooperation with county agriculture and rural affairs bureaus and CPMOs carry out multiple sample checks for the application of fertilizer and pesticides during production of potato.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

26. Gansu Honghe Foodstuff Company Ltd., Zhuanglang Jingyuan Fruit and Vegetable Trading Company Ltd. Zhuanglang Wanlong Cardboard Box Company Ltd., Zhuanglang Yinyuanheng Fruit Company Ltd., used ADB loan for apple production with 4 sets of ESMS completed.  The above four entities undertake the same category of operations with similar impact on the environment. Apple production needs suitable amounts of pesticides and chemical fertilizers, but no pesticides gazetted in the List of Banned and Restricted Pesticides (66 type) are used, including Dimethoate and Methamidophos. Chemical fertilizers used are selected from the National Implementation Standards of Fertilizers. Apple production in Zhuanglang primarily relies on precipitation with supplementary irrigation by surface water, therefore, apple does not constitute any water use conflict with other cropping activities, it does not affect the sustainable use of local water resources, it does not generate any waste water. Apple production of the entities is assessed as Category C in general for environment impact.  Mitigation measures adopted in apple production to minimize environment impacts: (i) the amounts of pesticides and chemical fertilizer application are rationally controlled. In order to ensure that pesticides banned and restricted by the state and WHO will not be used, the county agriculture and rural affairs bureau, quality inspection bureau, industry and commerce administration and public security bureau implement monthly inspection in spring and fall. Therefore, it can be assured that pesticides in the List of Pesticides Banned and Restricted by the State (66 pesticides) could not enter the market, including Dimethoate and Methamidophos. In the end, pesticides farmers can buy from the market are those comply with relevant regulations, which can minimize potential damage to soil and water source; (ii) surface water for irrigation with water-saving measures are rationally adopted; and (iii) FIs in cooperation with county agriculture and rural affairs bureaus and CPMOs carry out multiple sample checks for the application of fertilizer and pesticides during production of potato. Breeding Activities : 27. Zhuanglang Huifeng Pig Production Cooperative uses ABD loan for pig production with a holding of 165 pigs at present. The loan is used to expand the operation with one ESMS completed.  The pig raising area of Zhuanglang Huifeng Pig Production Cooperative does not involve environmentally sensitive area and the construction activities comply with domestic environment assessment requirements of the Classified Administration Catalogue of Environmental Impact Assessments for Construction Projects. The production base is far away from residential area and water course. The treatment of manure, urine and odor comply with the requirements of agricultural production and environment project. Manure and urines are collected as much as possible for fermentation before releasing as organic fertilizer for crop farming. Disease control of pig strictly follows the Regulation of Animal Disease Control of Gansu Province. The method and the amount of chemicals (disinfectants) used are standardized. According to the strict environment and disease control requirements implemented at pig production base as well as pig holding of the cooperative, the overall environment assessment of pig production of Zhuanglang Huifeng Pig Production Cooperative is categorized as C. 16

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

 Mitigation measures adopted to minimize impact on the environment: (i) low noise equipment and process are adopted, timing of construction is strictly controlled, and no noisy equipment is allowed at night time; (ii) pig manure is timely removed for centralized fermentation as organic fertilizer or sale to fertilizer manufacturer as raw materials; (iii) sanitation of pig sheds is maintained, ventilation and air blowers are installed to regularly exchange air to reduce the possibilities of odor; (iv) disease control is carried out strictly following the Local Standard of Animal Disease Control of Gansu Province; and (v) isolation is established among function zones on the livestock farm. At the same time, FIs in cooperation with county agriculture and rural affairs bureau, county environment protection and CPMOs carry out regular and ad hoc supervision on noise control and manure treatment. The frequency of regular supervision is at least 3-4 times/year. In line with the production cycle, ad hoc sample supervision will be implemented for multiple times. 28. Zhuanglang Xianghong Animal Production Company Ltd. uses ADB loan for layer production with stocking of 10,000 layers. The loan is used for purchase of feed and chicks with one set of ESMS completed.  Zhuanglang Xianghong Animal Production Company Ltd. features layer production in sheds. Chicken droppings are transported to crop field as organic fertilizer after treatment. Regardless it is centralized or decentralized chicken farming, disease control and disinfection are strictly implemented in line with the Regulation of Animal Disease Control. In the process of production, the company strictly implements Pollutants Discharge Standard of Livestock and Poultry Production (GB 18596-2001) and the Regulation of Pollution Control of Livestock and Poultry Production (2014). In accordance with the holding of layers, the overall environment assessment is category C.  Mitigation measures adopted in layer production to minimize impact on the environment: (i) all types of ventilation and feed processing equipment are housed and mufflers are installed on noisy equipment powered by air; (ii) chicken droppings are timely removed for treatment as organic fertilizer for crop farming; (iii) chicken sheds are well ventilated, chicken droppings are timely removed to reduce the possibilities of odor; (iv) disease control is carried out strictly following the Local Standard of Animal Disease Control of Gansu Province; and (v) isolations are established among function zones on the livestock farm. At the same time, FIs in cooperation with county agriculture and rural affairs bureau, county environment protection and CPMOs carry out regular and ad hoc supervision on noise control and manure treatment. The frequency of regular supervision is at least 3-4 times/year. In line with the production cycle, ad hoc sample supervision will be implemented for multiple times. 29. Zhuanglang Xinshengyuan Cattle Industry Company Ltd. uses ADB loan for dairy cattle production. Its holding at present is 386 dairy cows. It rents 500 mu of land and plans to increase the number of cows by 114 heads. At present, the company has established four cow sheds, 1 calve shed, two silage pits with 10,000 m3 each, one set of parallel milking hall, one hey pit, 1 concentrate feed storage. The infrastructure is well established, but there might be some environment pollution issues during its operation, belonging to category B in environment assessment. In line with the requirement of ADB and with the assistance of consultants, the project has prepared IEE and completed one ESMS. During the operation of the project, the

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

potential impacts include manure, dead cows because of sickness, noise, odor and waste water.  Manure and mitigation measures: the project area has established a biogas digester of 2,000 m3 for treating cow manure that will produce biogas and the sludge of the fermentation process is used as fertilizer for crop production.  Dead cows because of sickness and mitigation measures: there has been no case of cow death due to sickness in the project area. The handling process of dead cow will be dealt with by the Zhuanglang County Environment Protection Bureau and Livestock and Veterinary Bureau, whereby, the dead animal will be disinfected and buried in line with state laws and regulations. The burial pit is concrete structure.  Noise and mitigation measures: since the project area is far away (over 1,000 m) from residential area, the noise of the project will not have much impact on residents. Insolation zones have been set up in the surroundings of the farm and between function zones. Low noise equipment and process are adopted, mufflers are installed on ventilators and blowers to reduce noise and vibrations from the sources. The operational procedures are strictly followed whereby man-made noise is reduced. Materials that absorb noise and insolation are used.  Odor and mitigation measures: the odor of the project is primarily from decay and decomposition of manure, waste water, bedding materials and feedstuff, gas of fresh manure and from the digestive system of cows, extractants of glands as well as dirt attached to the bodies of cows. Through maintaining sanitation of the dairy farm, timely treatment of manures, the possibilities of odor are reduced. Waste water and mitigation measures: waste water during production includes those from production and daily life of workers. Since workers of the project are all local villagers, they will not live on the farm, therefore, there is no waste water from daily life. Waste water from production includes urine and flush water for cleaning cow shed. Pipeline is used to transport the waste water to the manure treatment zone. With filter that removes large parts of the solids, fluid is discharged to the sedimentation tank for fermentation, after which, the fluid is used as organic fertilizer for crop production. Processing and Marketing Activities. 30. Zhuanglang Zhaoyuan Vinegar Company Ltd. uses ADB loan for processing and marketing of vinegar and soy source.  In the process of producing vinegar and soy source in Zhuanglang Zhaoyuan Vinegar Company Ltd., noise, waste water and solids are produced, but it will not use pesticides and chemical fertilizer that might result in negative impact on the environment, it does not cause water pollution nor water use conflict. Its impact on the environment is neglectable, therefore, the overall environment assessment is category C.  Mitigation measures: (i) low noise equipment and process are adopted, timing of construction is strictly controlled, and no noisy equipment is allowed at night time; and (ii) waste water and solids of vinegar and soy source production are timely collected for fermentation, and the sludge is used as fertilizer in crop production. 18

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

i-3：JRCB 31. JRCB uses ADB loan for disbursement of 4 Subloans (including the first Subloan) in Jingning in support of potato and apple, as well as other agro-products purchase and marketing, with 4 sets of ESMS completed. The activities involve 2 enterprises, 1 cooperative and 1 family farm. Cropping Activities: 32. Jingning Hongxing Family Farm uses ADB loan for potato production, with one set of ESMS completed.  Potato production needs suitable amounts of pesticides and chemical fertilizers, but no pesticides gazetted in the List of Banned and Restricted Pesticides (66 type) are used, including Dimethoate and Methamidophos. Chemical fertilizers used are selected from the National Implementation Standards of Fertilizers. Potato production in Jingning primarily relies on precipitation with supplementary irrigation by surface water, therefore, potato production does not constitute any water use conflict with other cropping activities, it does not affect the sustainable use of local water resources, it does not generate any waste water. Potato production of Jingning Hongxing Family Farm is assessed as Category C in general for environment impact.  Mitigation measures adopted in potato production to minimize environment impacts: (i) farm manure as the main source of fertilizer is used, pesticides that meet the national scientific and safety regulations for pest control are used to minimize potential damage to soil and water sources; (ii) surface water for irrigation with water-saving measures are rationally adopted; (iii) FIs in cooperation with county agriculture and rural affairs bureaus and CPMOs carried out multiple sample checks for the application of fertilizer and pesticides during production of potato. Purchase and Storage and Transportation Activities. 33. Jingning Zhunong Fruit Company Ltd., Gansu Shunyuan Fruit Development Company Ltd. use ADB loan for purchasing, storage and transportation. Jingning Zhiqi Agro-product Purchase Cooperative uses ADB loan for purchasing, storage and transportation, with 3 sets of ESMS completed.  This category of activities involves purchase, storage and transportation of apple and other agro-products, and its impact on the environment is primarily noise and some wastes, which are neglectable, therefore, it is Category C in environment assessment.  Mitigation measure: (i) low noise equipment and process are adopted, timing of construction is strictly controlled, and no noisy equipment is allowed at night time; (ii) wastes resulted from processing and purchase activities are timely removed and treated in centralized manner according to categorization of wastes; (iii) during transportation, all goods are well packed according to the requirements of the regulations of road transportation. i-4:BOL 34. Minxian: BOL uses ADB loan for the disbursement of 3 Subloans (including the firs Subloan) in Minxian. The three farmer households use ADB loan for purchase, storage and transportation of medicinal herbs that belong to the same category of operations, with one set of ESMS completed. 19

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

 The three Subloans in Minxian are used for the purchase, storage and transportation of medicinal herbs, and its impact on the environment is primarily noise and some wastes, which are neglectable, therefore, it is Category C in environment assessment.  Mitigation measure: (i) low noise equipment and process are adopted, timing of construction is strictly controlled, and no noisy equipment is allowed at night time; (ii) wastes resulted from processing and purchase activities are timely removed and treated in centralized manner according categorization of wastes; (iii) during transportation, all goods are well packed according to the requirements of the regulations of road transportation. 35. Hezheng and Jishishan. BOL’s Linxia Branch uses the recycled ADB loan for disbursing CNY 500,000 to a farmer household in Hezheng for purchase, storage and transportation of Pite fruit, and disbursing CNY 300,000 to one farmer household in Jishishan for purchase, storage and transportation of Sichuan Pepper. Both farmer households use the recycled ADB loan to carry out the same activities of their first loan from ADB, it is therefore decided that the existing ESMS can be used for the recycled loans. ii. Good practices of environment management 36. During the reporting period, there were 1,434 Subloans (of which, 1,213 Subloans were financed by ADB loan proceeds and 2 were financed by recycled project funds, 219 were financed by FIs’ funds) involved in the establishment or development of agricultural production bases. Extension agents of county agriculture and animal husbandry bureau and the environment managers of the FIs together with the borrowers of the Subloans screened sub-projects one by one in accordance with Step B of ESMS and based on sustainable and climate smart crop and animal production technologies, appropriate techniques for sub-projects are identified. During the process, the environment officials of CPMOs and environment consultants provided necessary services. Good practices of environment management include: (i) adoption of dripping irrigation technologies for effective use of water resources; (ii) controlled application of chemicals in quantity and no application of chemicals banned or restricted by the state; (iii) use of organic fertilizers; (iv) adoption of IPM; and (v) maintaining consistency of project livestock production with the standards of livestock farms of Gansu Province.

 Sustainable agricultural development measures: “soil conservation (shallow plough and disc plough) in land leveling”, “IPM” and the “use of organic manure” will reduce the application of chemicals, increase the safety of crops and maintain long-term fertility and sustainability of soil. For animal production activities, the construction of sheep and cattle sheds and feed storage facilities are consistent with the standards of livestock and poultry production parks of Gansu Province. Procurement of livestock and feed from local farmer households brings about economic benefit to local communities. Power saving device is installed on power supply equipment, surroundings of production bases are utilized for cooling. Waste water and gas are collected for biogas production or organic fertilizer production. Disease control is carried out in line with domestic disease control schemes.  Water and water pollution: all 1,413 subprojects comply with the stipulations of the Management Method of Water Withdrawal Permit and Water Resource Levy of Gansu Province. There is no water pollution. 20

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

 Mitigation measures to cope with potential environment impact: the construction and operation of the subprojects supported during the reporting period involve the use of chemicals (including chemical fertilizers, pesticides and diesel), noise and dust during transportation, processing and storage. Mitigation measures are: (i) chemicals (including chemical fertilizers, pesticides and diesel): pesticides and chemical fertilizers banned or restricted by the state will not be used; low residue and low toxic chemicals will be used for chemical control; supervision will be strengthened for the application of chemicals; entities will be supervised by PMO and other relevant agencies for the application of chemicals in the production base; (ii) noise, dust and pollution during transportation, processing and storage: raw materials will be covered during transportation and piling to reduce dust, construction waste will be used to fill in low-lying areas of farm as foundation of other structures, construction wastes will be properly treated. Hazardous wastes will be collected for centralized treatment and will not be discarded at wish; timely clean on-site droppings of dirt and spray water to eliminate dust; construction site will be fenced by solid panels to reduce noise and dust pollution. 37. The CPMOs, FIs, County Agriculture and Animal Husbandry Bureau and Environment Protection Bureau of project counties implement monitoring and evaluation of sustainable agricultural practices and environment impact mitigation measures.  Sustainable agricultural development measures: CPMO, FI and the Animal Epidemic Disease Surveillance Station of the Animal Husbandry Bureau affiliated to the County Agriculture and Animal Husbandry Bureau supervise manure treatment measures of enterprises through regular and ad hoc inspection in general. The frequency of inspection for crop production sub-projects is twice a year and it is once a quarter for animal production sub-projects. Ad hoc inspection bases on sampling at any time. These missions aim to provide technical and skill guidance and training to rectify the noncompliant measures.  Water and water pollution: CPMO, FI and the county Environment Protection Bureau supervise the amount of water use, waste water discharge and water pollution in general, which is implemented twice a year. Any noncompliance will be pointed out and rectification opinions will be offered. Once the supervision is completed, a monitoring report will be developed for submission to the PPMO and relevant leadership at county level.  Mitigation measures to possible environment impact: CPMO, FI and the Inspection Station of the county Agriculture and Animal Husbandry Bureau supervise the entities twice a year in general, which is both regular and ad hoc, and regular supervision is scheduled at spring and fall while ad hoc supervision is based sampling at any time. Technical and skill guidance and training will be provided to rectify the noncompliant measures. 38. During June 25-27, 2019, ADB carried out mid-term review to the project. After attending the briefings of project implementation, particularly about the specific practices adopted in environment safeguarding under the project, the environment specialist of the mid-term review mission confirmed the safeguard practices including the implementation of ESMS, and stated that all ESMS reports provided by the PPMO 21

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

during the years of project implementation objectively and comprehensively reflected project implementation. The new categorization can be adopted in the implementation of ESMS in the future. When reviewing the outcomes of ESMS implementation, what is important is how to genuinely integrate ESMS with lending activities of FIs, how the frontline client representatives of FIs can master the principles and use ESMS skillfully even beyond the exit of the project. The stakeholders of the borrowing parties will implement the mitigation measures as tabled in the ESMS, which will help scale up ABD’s safeguard rationales and practices to a new level. C. Social safeguard 39. In line with ESMS requirements, assessment and inspection should be carried out to find out the social impact of sub-projects on the neighboring communities and the public, including land acquisition, involuntary settlement, ethnic minority and land use right transfer. Land acquisition and involuntary settlement 40. During the reporting period, all sub-projects supported by all Subloans do not involve issues of land acquisition and involuntary settlement as defined in ADB’s Safeguard Policy Statement and the ESMS of the project, it is therefore Category C for involuntary settlement. Ethnic Minority 41. In line with the Ethnic Minority Development Framework, the assessment of the impact on minorities needs to consider the impacts the project bring about to them and the vulnerability of the minority communities. During the reporting period, Siguo Village Pite Fruit Production Base of Xinying Township in Hezheng borrowed CNY 500,000 (recycled loans) for purchasing Pite fruit in Siguo Village, which involves 47 Hui families of 243 villagers. The farmer households in the Pite Fruit Production base use CNY 500,000 recycled loans for the purchase of Pite fruits from Hui villagers, which directly increases the income the ethnic minority, promotes the development of ethnic minority, therefore, the ethnic families are direct beneficiaries of the activity. In accordance with the Safeguard Policy Statement of ADB and the stipulations of ESMS, this Subloan belongs to Category C of ethnic minority (needs monitoring), while the rest 1,433 Subloans do not involve ethnic minorities, and the supported sub-products belong to Category C of ethnic minority (no need for monitoring). 42. Against the monitoring indicators of EMDP and SGAP, project implementation not only pays sufficient attention to ethnic minorities, women and the poor through its Subloans, but also focuses on capacity building of these groups. During the reporting period, subloans involve 243 ethnic minority population (needs monitoring), 3,540 women and 855 poor. Through project support, ethnic minority residents established 25 farmer cooperatives and 4 agricultural production bases. Jishishan, Hezheng, Yongjing and Kongtong delivered capacity building training to management of agro-enterprises, farmer households of production base, large households, disease control workers, technicians of crop and animal production, particular efforts are given to capacity building of ethnic minorities and women. During the reporting period, the four counties trained 121 ethnic minority women, accounting for 11.2% of a total number of 555 ethnic population. During the construction and production of production bases, agro-enterprise and cooperatives, 1,165 women and 426 ethnic minority women participated in activities, accounting respectively for 48.8% and 36.6% of the total number of labor force of 2,389. Training is provided to 227 ethnic minority

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

women, accounting for 32.6% of 696 ethnic minority workforce trained. Land use right transfer 43. During the reporting period, among the 1,434 Subloans, 3 enterprises, 1 cooperative, 1 farmer household of open field production base, and 1 farmer household of forest, fruit and fodder production base involve land use right transfer of 1,825.79 mu, which triggered the requirement of land use right transfer framework agreed upon by ADB and the government. With the assistance of social officials of the PMOs and consultants, JRCB, ZRCB and LRCB carried out due diligence studies for land use right transfer, including the process of land use right transfer, contents and implementation of land use right transfer contracts, the scope of impact of land use right transfer and the number of people affected, verification of price and payment and the way of payment effected for land use right transfer, as well as measures for protecting the rights of the affected. Studies revealed that land use right transfer involved in the project comply with land use right transfer framework, of which, 4 contracts were signed between enterprise (cooperative) and villagers’ committees, which did not involve the signature of women. Land use right transfer contracts involved in production base were also signed by women, meeting the requirements that at least 79% of the land use right transfers are signed by husband and wife. And it conforms with the requirements of ADB that at least 70% of land use right transfer agreements should be signed by women. 44. Through on-site studies and desk review of relevant materials, it was found that: (i) land use right transfer procedures were standardized and lawful with complete formalities attended, complying with Land Use Right Transfer Framework as well as relevant laws, regulations and stipulations of the state, province, municipality and county. In the process of land use right transfer, the rights of both sides were fully considered and policies for protecting the rights and appeal mechanisms were all given; (ii) the circulated land was with signed Land Use Right Transfer Contract and the contents of the contracts complied with Land Use Right Transfer Framework as well as relevant laws, regulations and stipulations of the state, province, municipality and county. There are also provisions to address possible disputes; (iii) land use right transfer has positive impacts on both side. On the basis of protecting the interests of the affected, win-win results have been achieved; and (iv) the transferred land does not have any pending and remaining issues to be addressed. 45. The due diligence report of land use right transfer protected the interests of the affected farmer households in the process of land use right transfer, hence it minimized the negative impact on the public of the project area, and provided good momentum for smooth project implementation. Social and gender 46. During the reporting period, the PPMO and CPMOs implemented over 11 sessions of capacity building activities targeting at PMO staffers, responsible persons and staffers of FIs, responsible officials of BOF and Environment Protection Bureau, the management of cooperatives and agricultural enterprises, farmer households of production bases, large households of crop and animal production, disease control workers and technicians of agriculture and animal husbandry administration. Contents of capacity building included interpretation of ADB policies, basics of the project, ESMS related knowledge, standardized management of cooperatives, agricultural industrialization technologies, farm input marketing and management, skills for women, introduction and demonstration of new varieties, medicinal herb

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

cultivation, vegetable production technologies, potato high-yielding cultivation, fruit tree pruning, pest management, animal disease control, standardized scale production of animals, safe application of pesticides, new pesticides and biological fertilizers, safety of agricultural products, recycled use of plastic mulch, harmless treatment of waste and its use as resource, and the development of e-commerce platform. In addition, in order to broaden the vision of project implementers and learn the experiences of developed areas in developing featured agriculture and rural financing, PMOs organized study tours to other provinces to learn the development of featured agriculture and promotion of agricultural products of the project (Refer to details in Appendix 5 of Capacity Building Statistics). 47. In line with the objectives of “establishing inclusive and environment friendly featured agricultural production bases”, the PPMO and CPMOs, during the reporting period, provided training to 4736 farmers, of which, poverty population made up 2,387, accounting for 50.4%. Based on the objective of “supporting the development of farmer cooperatives and agricultural enterprises”, the PPMO and CPMOs have provided training to 3,107 farmers, of which, poverty population made up 710, accounting for 22.9%. 48. During the reporting period, in line with the objectives of “establishing inclusive and environment friendly featured agricultural production bases”, the PPMO and CPMOs have provided training to 4,736 farmers, of which, women made up 1,461 accounting for 36.19%; trained 1,597 technicians including 578 women, accounting for 36.19%. Based on the objective of “supporting the development of farmer cooperatives and agricultural enterprises”, the PPMO and CPMOs have provided training to 3,107 farmers, of which, women made up 1,163 accounting for 37.4%. 49. Such training enabled more and more poor and women to access training and education, hence helped poor women build up their own capacity for development and for resisting risks, and mobilize their enthusiasm and initiative to participate in project and poverty reduction activities. In the end, it will promote their participation in social and economic activities. 50. There are all together 1,682 farmer households obtained loans during the reporting period under outputs 1 and 2, of which, 1,670 loans were also signed by women, accounting for 99.29%. Participation in loan activities enabled rural women to due respect and equality. They also realize their rights and value through credit activities and project implementation. 51. During the reporting period, 410 staffers of the new FIs participated in training organized by the PPMO, including 178 women staffers, accounting for 43.41%. Training focused on the basics, important practices and features of the project, priority work in the coming months, the establishment and implementation of ESMS, due diligence report of land use right transfer, the preparation of IEE and EES, as well as the implementation of project plan, the preparation of prior review of the first Subloans, commitment letter, fund use plan and ESMS. 52. The PPMO and CPMOs in staffing also attached attention to gender and increased the number of women staff. For instance, the PPMO has 9 staffers, women accounted for 4 or 44%; the total number of staffers of CPMOs are 104 including 46 women or 44.23%; both of which are higher than ADB’s requirement that “women staffers should be no less than 35%.” 53. Meanwhile, the PPMO and CPMOs in training related to project management and implementation and ESMS also aim at meeting the requirements of increasing 24

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

women’s participation. During the reporting period, the PPMO trained 9 staffers including 4 women staffers or 44%; among the 107 CPMO staffers received training, women were 45 or 42.06%, which are higher than ADB’s benchmark that “the participation of women PMO staffers in training in project management, financial management and the implementation of ESMS/EMDP/ SGAP/M&E should be no less than 35%.” Prohibited investment activities 54. During the reporting period, all funds of all Subloans including working capital and counterpart funding were not used to support any prohibited activities listed in annex 5 of ADB’s Safeguard Policy Statement. D. Information disclosure 55. FIs disclosed the basic information at the implementation site for each sub-project supported by each Subloan, including the location, activity, potential impact, end borrower and FI as well as the contact details of the environment and social officials of the CPMOs, and grievance redressing mechanism. Such disclosure is for 10 days to ensure that the public has adequate time to provide writing or oral feedback to the CPMOs. E. Progress of implementing grievance redressing mechanism 56. In line with the circular “On Establishing Grievance Redressing Mechanism of Gansu Featured Agriculture and Financial Service System Development Project Co-Financed by ADB” (GWZBH [2016] No. 15) issued by the PPMO as well as the stipulations of ADB on grievance redressing, all 11 project counties have set up their own grievance redressing mechanisms, FIs in support of the counties also established grievance redressing channels to ensure that the population that might be affected by the project can at any time file complaints on issues related to the environment and social aspects during project implementation. This also enabled timely handling of grievances and appeals of the affected groups to effectively protect the rights and interests of the residents of the project area. The mechanism has been disclosed at prominent locations in project counties, townships and villages in a way that the affected groups and other stakeholders particularly minorities, women, the poor and those who cannot read can understand. Such efforts are meant to make sure that the affected and stakeholders know and are familiar with the contents of grievance redressing mechanism and file their grievances through the ways prescribed in the mechanism. With specific steps given below: 57. If appeals or complaints are related to the environment, the following two steps will be adopted to timely handle the complaints or grievance of the affected:  Step 1 (within 10 days): the affected individual or group can file oral or written complaints to any project agency and any other agency the complainer (s) chooses. The project agencies will directly interact with the complainer to resolve the issues. Within five days upon receipt of the complaint, the project agency will propose explicit suggestions to the affected, including the correctional measures to address the problem(s) with given time limit. If the affected person(s) accepts the correctional measures, such measures will be implemented within five days.  Step 2 (within 10 days): when the issue is not resolved through step 1, CPMO within five days upon receipt of the complaint will convene

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

stakeholder meeting (participants will be determined in accordance with the actual situation, but normally include FI, RFSP, end borrower, environment protection bureau, agriculture and rural affairs bureau and the affected group), which will focus on the correctional measures and the associated timetable for implementation. Such correctional measures shall be implemented within five days. 58. If appeals or complaints are related to the land use right transfer, the following four steps will be adopted to timely handle the complaints or grievance of the affected:

 Step 1 (within 15 days): hand the grievance to the villagers’ committee. If it is oral grievance, the villagers’ committee will make written records and the committee will make a decision and well handle the issue within 15 days.  Step 2 (within 15 days): if the affected is not content with the result of Step 1, the complainer(s) can appeal to the township agricultural economic management station (or township government). The agricultural economic management station or township government will make a decision and resolve the issue within 15 days.  Step 3 (within 15 days): if the affected is not content with the results of Step 2, the complainer(s) can appeal to the county agriculture and rural affairs bureau and CPMO, the later will make a decision and resolve the issue within 15 days.  Step 4 (no time limit): if the affected is not content with the results of Step 3, the complainer(s) can appeal to the arbitration court of rural land disputes. 59. If appeals or complaints are related to ethnic minority, the following four steps will be adopted to timely handle the complaints or grievances of the affected:  Step 1: if the affected is not content with the EMDP or this project, he/she or they can log oral or written grievance to the villagers’ commitment or cultural leader. If it is oral grievance, the villagers’ committee or cultural leaders shall handle the case and make corresponding records, and the issue should be resolved within 15 days.  Step 2: if the affected is not content with the result of Step 1, the complainer(2) can appeal to the township government, and the later will make a decision and resolve the issue within 15 days.  Step 3: if the affected is not content with the results of Step 2, the complainer(s) can appeal to the CPMO, the later will make a decision and resolve the issue within 30 days.  Step: if the affected is not content with the results of the above steps, the complainer(s) can appeal to relevant government bureaus applying for administrative reconsideration. 60. The PPMO has never ignored the use of new technologies to uplift project management and service. In order to ensure the timeliness and effectiveness of receiving complaints, discovering issues and handling grievances, the PPMO in its MIS established grievance redressing mechanism, the CPMOs and the branches of the FIs would record writing and oral complaints to the project as well as the results of handling, while the PPMO would track and monitor the process and visit the 26

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

complaint filers. From manual recording to on-line sharing platform recording, it not only realized data sharing through the net, but also improved the timeliness of grievance redressing, which resulted higher efficiency, standardization, transparency and smoother management of the process. 61. By the end of the reporting period, the 11 project counties and the HQs and branches of FIs had not received any forms of appeals or complaints. F. Preparation of the simplified ESMS 62. In line with the FIs’ ESMS approved by ADB and the objectives and requirements of the project, national consultants in consideration of organizational features and business process of rural financial service providers developed simplified ESMS template, which is the foundation for adoption by all RFSPs. The PPMO submitted the template to ADB on July 26, 2017. On the basis of feedback from ADB’s environment and social specialist, the PPMO improved the template and obtained no-objection from ADB on September 1, 2017. G. Skillful use of MIS 63. PPMO established ESMS recording function, appeal recording mechanism and automated report generation and output functions in its MIS. The environment and social impact indicators of sub-project are all incorporated in the credit contract information, including the assessment results of environment category, land acquisition, involuntary settlement, land use right transfer and the impact on ethnic minorities. Based on the keyed in information in the credit contract, MIS can automatically calculate relevant monitoring indicators, which greatly enhanced tracking, management, monitoring and report of sub-projects. 64. MIS includes two sub-systems, i.e. project management and financial management subsystems. Under project management, select “document” in the main menu, then select “implementation progress/ESMS report”, add to the list of the progress/ESMS report template will jump up; select unit, year as well as the starting and ending point of time. Click on add report template and then confirm. The system will then automatically extract relevant data from credit contract on environment, land use right transfer, ethnic minority, water-saving measures and smart agriculture to the ESMS report. Details are given appendix 7. 65. During the reporting period, PMOs at all levels and branches of FIs can skilfully use the information platform to record and manage sub-project activities. When difficulties encountered in practice, real-time QQ group chat renders a helping hand to discuss and share experiences and the software engineers are ready to respond to issues in a timely fashion. Meanwhile, improvement of the MIS is a continuous process. With the active participation and collaboration of PMOs and FIs, monitoring indicators of ESMS and the extraction of data source have been further optimized; also, the output of appendixes of the safeguard monitoring report and the reporting template have been improved. The project has incorporated new FIs with the approval of ADB in December 2018, and PPMO has added new clients to MIS and plans to provide related training to new users to ensure the effectiveness and consistence of MIS data inputs. 66. The roll out of MIS has greatly enhanced the tracking, management, monitoring and reporting procedures of sub-projects, it not only standardized project management process and increased efficiency, but also lower energy consumption of offices and promote green office work. The interactive and convenient QQ group chat 27

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

for MIS complies with the requirement of information age, it not only can respond to various difficulties and problems encountered in operation, but also pool together good ideas and thoughts for further improving the system and solutions. It helps timely exchange and cooperation between project management and implementers, enhances communication among staffers of PMOs and FIs, indirectly achieves training effects and furthers the understanding of project staffers to issues related to environment and social safeguard of the project. 67. MIS as a project management system, the end users do not have the authority to browse the loan information, and users are limited to the project management and financial management staffers of the PPMO, CPMO and FIs. III. ISSUES IN CARRYING OUT ESMS ACTIVITIES AND SOLUTIONS A. Issues 68. In the first half of 2019, with the driving force of LRCB, ZRCB and JRCB, the project achieved breakthrough progress. As of June 30, 2019, the achievement of the overall project targets has been 61.23%. However, the project still has the following issues:  As an innovative agriculture project in China implemented by ADB, there are tremendous challenges for the project management and implementer. The consultant team also faced challenges in assisting FIs implement ESMS, particularly in screening and categorization of sub-projects, as well as mitigation measures to minimize impact on environment.  Even with efforts of multiple parties, it is still not possible to carry out the activity under Output 3 – disbursement of loan to RFSPs within two years after the project became effective, i.e. no eligible RFSP has been identified before July 31, 2019. Consequently, the simplified ESMS approved by ADB on September 1, 2016 has not been put into use.  It is the first time for the three FIs to take part in the implementation of foreign capital financed project, hence it takes some time to get familiarized with various requirements of the project, particularly for the integration of ESMS in the routine businesses of FIs, which to some extent affected the progress. 69. During the reporting period, major challenges faced by the FIs in implementation are largely: (i) external: most of the end borrowers of Subloans have deviated understanding about the ADB loan project that is perceived as government loan with low interest rate; (ii) internal: it is the first time for the FI environment and social managers to implement ADB project and their capacity and inner ability need further improvement. 70. Major problems FIs encountered in implementing ESMS include: (i) even though FIs have embedded ESMS into its credit business, but the integration of the two is yet to be fully achieved. On one hand, FIs have inadequate understanding about environment and social risks, and the grassroots credit officials need to further improve knowledge, experience and capacity on ESMS. On the other hand, grassroots client managers of FIs in the real world perceive the assessment and monitoring of ESMS as an extra layer of work that prolongs the assessment of credit business; (ii) the turnover of staffers of FI branches is significant, even though timely training has been provided, it still imposes challenges to the continuity and stability of implementing ESMS; (iii) the project requires end borrowers to provide large amount 28

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

of information, and the end borrowers could not accurately understand and elaborate on issues related to ESMS assessment of the sub-project, it needs multiple and repeated confirmation of the environment manager and social manager, with high costs of communication. B. Solution 71. Specific measures to address the above issues include: (i) the PPMO has enhanced the capacity of the consultant team whereby two specialist plus a team of their associates provided technical services to the FIs. During the reporting period, the consultants participated in the entire process of ESMS preparation of the newly added FIs including the establishment of their grievance redressing mechanism as well as the development of ESMS for all Subloans; (ii) the role of the PPMO in supervision, inspection and technical support has been strengthened. During the reporting period, the PPMO fielded 20 supervision missions to project counties, involving 72 persons for 51 working days in total. The director of the PPMO delivered field guidance and training in person; (iii) in consideration of the frequent reshuffle of staffers of FIs, the PPMO has urged the FIs to ensure that staffing for the implementation of the ADB project must be maintained stable. On the other hand, training targeted at client representatives of FIs has been strengthened with training scope expanded, which provided staffers who might be involved in project implementation with opportunities to training. All client representatives of the FIs with substantive progress in project delivery during the reporting period received two rounds of training, which to some extent has offset the negative impact of high turnover of staffers; (iv) the integration of ESMS in the lending business of FIs is an objective that the project is pursuing and an entry point of FIs to green financing, which also presents the direction of efforts of the project management. The logic adopted in the project implementation is that with leading and demonstration role of consultant team, FIs would go through the process of sensitization with rationales and practices of ESMS and gradually accept, understand and master those. In the end, FIs will leap from passive to active adoption of the new rationales and practices, realizing genuine integration of ESMS in the credit business operations of FIs. Based on the experiences of project implementation in past years, it is firmly believed that the objective can and will be achieved. 72. In order to speed up project implementation, based on the proposal of DOF and PPMO, ADB endorsed important changes to the project, including:  In December 2018, important changes endorsed to the project include the addition of Zhuanglang and Jingning as project counties; and three new FIs, namely, ZRCB, JRCB and LRCB are incorporated in project implementation;  The free limit of Subloans for enterprise or cooperative increased from USD 1 million to USD 4 million;  The average size of Subloans made to enterprises and cooperatives in any financial year has increased from USD 500,000 to USD 4,000,000;  The amount of outstanding of FIs at any one time loans has increased from USD 2.5 million to USD 4 million 73. The amount of project Imprest Account was increased from USD 10 million to USD 20 million, in which, FI model is USD 19 million and non-FI model is USD 1 million.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

74. During June 25-27, 2019, ADB carried out mid-term review to the project. DOF, PPMO and ADB exchanged views and reached agreement on RFSP implementation, ADB loan reallocation and loan currency conversions. In line with the requirements of the MOU signed during mid-term review of the project, PPMO and DOF will make all possible efforts to identify prior to July 31, 2019 one RFSP that meets the conditions of project to implement the activity. In the case that no eligible RFSP identified, the amount of USD 8.386 million of ADB loan proceeds under RFSP will be reallocated. Slow implementation progress during 2016-2018 resulted in overestimated commitment fees and interests, leading to large amount of balance. Therefore, it is suggested to reallocate interests and commitment fees in order to maximize the use of ADB loan proceeds. Before November 1, 2019, DOF and PPMO will clear the USD account of the project to enable ADB to handle loan currency conversion before such conversion becomes effective on November 1, 2019. 75. The PPMO will urge the CPMOs and FIs to strengthen and increase the frequency of supervision through regular reporting, regular supervision and monitoring to ensure that various environment and social safeguard measures and policies are implemented and that ESMS plays its due role. Also, efforts should be made to enable stakeholders of the project including agricultural and animal husbandry administration, client managers of FIs and operators of agricultural production and marketing to play more active role in protecting vulnerable groups and the environment. IV. LESSONS LEARNT 76. In the process of project implementation, FIs’ learning and accepting the systematic rationales of ADB’s ESMS for the project is conducive to increased attention to environment and social aspects in handling FIs credit business and to enhanced focus on gender equality, so that FIs will support agricultural development, promote the development of rural financing service system and generate momentum for advancing the development of agriculture, rural areas and farmers. 77. Agricultural technical support should be rendered to assist improve project design. In line with the requirements of step 2 of ESME, agricultural technicians should provide relevant technical backstopping to borrowers of Subloans to better incorporate good environment practices into their proposals to boost environment and social effects of sub-projects. At the same time, the good practices emerged in the second step of promoting the development of sustainable agriculture and climate smart agriculture are of good value for popularization in other agricultural production areas beyond the project. Specifics include water resource use, collection of plastic mulch, construction of livestock shelters and disinfection facilities, manure treatment, soil conservation, pest management, feeding techniques and disease control. 78. Capacity building activities should be implemented to increase the capacity for implementing ESMS. The project management through training, meeting, on-site supervision and workshops has made great efforts to help staffers of CPMOs and FIs accurately understand ESMS operation flow, standards and management and control models to enhance their capacity of green financing business. Also, the management has been assisting FIs further understand environment and social risks and increase their consciousness and capacity of fulfilling environment and social responsibilities. On the other hand, continuous training, information dissemination and technical support will be needed to increase the awareness of agricultural production and marketing operators about environment and social safeguard.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

79. During project implementation, the government will continue to play proactive role in the process of implementing ESMS by the FIs. Through project implementation, efforts will be made to push FIs to incorporate environment and social management into their strategic planning, guide FIs to conduct green financing businesses associated with agricultural production operators. In their investment and financing decision-making, FIs should consider the potential environment and social impact and effect of agriculture-related micro clients, and incorporate the potential return, risks and costs related to environment and social conditions into FIs’ daily business process. At the same time of caring about their own development, FIs should actively shoulder environment and social responsibility and promote green development of agriculture. 80. As for FIs are concerned, ESMS helped address issues such as how to incorporate environment and social elements into their strategic planning and business process, how to carry out environment and social assessment and management in agriculture, and how to balance pursuit of profit and discharging social responsibilities. For the government, ESMS responded to its concern as how to promote financial institutions to gradually establish green evaluation mechanism, how to guide green financing business in agriculture, how to shift roles to allow the market fully play its role in promoting green development of agriculture. 81. ESMS is very practical, experiences accumulated by the project from green financing system arrangement, innovative green financing products and business model to the sustainable development of green financing could be replicated and scaled up in broader area. V. NEXT STEPS 82. Expediting Subloan approval and disbursement and project implementation: FIs will continue to disburse Subloans to eligible agro-enterprises, cooperatives and farmer households in accordance with the changes of lending conditions, the matured loans should be recycled for disbursement of further Subloans to increase the efficiency of fund use. FIs in project counties will follow the implementation steps of their respective ESMS to screen, categorize and assess borrowers of Subloans. In accordance with the requirements of People’s Bank of China and Banking Industry Regulatory Administration as well as relevant credit investigation and approval, FIs will undertake credit investigation and approval of Subloans and follow up with tracking, monitoring and reporting of the Subloans. 83. Strengthening capacity building particularly for environment and social managers and officials: in future project implementation, training should be intensified to stakeholders particularly staffers of CPMOs, FIs and RFSP in applying ESMS steps for screening, identification and post-lending management of sub-projects and ensuring the integration of ESMS in FIs business operations. These efforts will improve their execution capacity of business as well as their understanding and management capacity of ESMS. 84. Strengthening information dissemination and training: efforts will be continued to sensitize staffers of CPMOs, grassroots staffers of the existing FIs and all staffers of the new FIs as well as HURID about the entirety of the project, its ESMS, ADB’s management requirements and annual plan. 85. Increase of the frequency and strength of supervision: PMOs at all levels and FI branches should make extra efforts to increase the frequency and strength of 31

Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

supervision through regular reporting procedures, regular supervision, monitoring and evaluation. Monitoring, supervision and evaluation of ESMS implementation should also be intensified to ensure that all environment and social safeguard policies and measures are genuinely executed. 86. Reallocation of ADB loan proceeds. It will involve the reallocation of large amount of balance of commitment fees and interests as a result of slow implementation progress during 2016-2018. The amount of USD 8.386 million under Output 3 – RRSP will need to be reallocated. 87. Loan currency conversion. In order to smoothly apply for EUR account, clearing of the USD Imprest account will be carried out before November 1, 2019.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Appendix 1: Social and Gender Action Plan Monitoring (Reporting period: Jan 1 - June 30, 2019)

Output Social and gender output activities Accumulative July 1 – December 31, 2018 1a. Training of 14,130 farmers, 50% of participants are women and 30% of participants are poor － total number of farmers trained 15111 4736

－ women farmers trained 3786 1461

－ poor farmers trained 10392 2387

－ proportion of women 25.05% 30.85%

－ proportion of poor 68.77% 50.40% 1b. Training of 450 technicians, 30% are female, 30% of beneficiaries of production base development is poor － Technicians trained 3501 1597

－ women technicians trained 1143 578

－ total number of beneficiaries of base development 29278 18035

Output 1: － number of poor beneficiaries of base development 12530 6599 Inclusive and environmentall － Proportion of women technicians training 32.65% 36.19% y-friendly featured － Proportion of poor beneficiaries 42.80% 36.59% agricultural 1c. Women’s equal access to project sub-loans，50% of loans from the FIs to individual farmer household with women’s signature production bases － HH got Subloans 1753 1682 developed － HH Subloans signed by women 1740 1670

－ Proportion (%) 99.26% 99.29% 1d. Women’s signature on land use rights transfer agreement，70% land use rights transfer agreement signed during the project implementation period with women’s signatures － Total number of land use right transfer contracts 454 15

－ Contracts signed by women 339 12

－ Proportion (%) 74.67% 80.00% 1e. At least 50 staffers participate in soil and water conservation monitoring, of which, women should be no less than 30% － Total participants 138 82

－ Women participants 60 34

－ Proportion (%) 43.5% 41.5% 2a. Training of 6,510 members, 50% of participants are women and 30% for the poor － Farmers trained 3107 2663

－ Women farmers trained 1163 810 Output 2: Farmer － Poor farmers trained 710 556 cooperatives － Women proportion (%) 37.4% 30.4% and agricultural － Poor proportion (%) 22.9% 20.9% enterprises financed and 2b. Training of 868 technicians and managers, 30% are technicians are females strengthened － Total number of technicians trained 1882 1003

－ Women technicians trained 779 366

－ Proportion of women 41.39% 36.49%

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Output Social and gender output activities Accumulative July 1 – December 31, 2018 2c. Priority to women and the poor for new job opportunities in enterprises and farmer cooperatives, 40% for women, 30% for the poor － Total new employees 3234 1662

－ Women new employees 1521 762

－ Poor new employees 1321 617

－ Proportion of women 47.03% 45.85%

— Proportion of poor 40.85% 37.12% 3a. Training of 270 staff of FIs and 35 staff of RFSPs, 30% of females － FI staffer trained 861 410

－ Women staffer trained 341 178

－ Proportion of women 39.61% 43.41%

－ RFSP staffer trained 18 3

Output 3: － Women RFSP staffers trained 12 2 Rural financial service system － Proportion of women staffers (%) 66.67% 66.67% developed and enhanced 3b. Establishment of 29 grassroots financial service units, 30% of female staff, all female staff trained － Service units built 64 59

－ Total employees 626 506

－ Women employees 229 175

－ Female employees trained 341 178

－ Proportion of female employees (%) 36.58% 34.58% 4a. Training on gender and development: (i) concepts and practices of gender and development, (ii) ADB’s gender policies; (iii) ESMS for FIs; and (iv) SGAP, All staff of PPMO and CPMOs, Staff of FIs operating the Project 4b. Gender disaggregated data collection for project documentation, M&E, Assigning responsible persons for documentation and M&E in PPMO, CPMOS and FIs, Establishment of gender disaggregated database 4c. With adequate budget, establish PPMO and 11 CPMOs with women staffers no less than 35% － Total number of staff at PPMO 11 9

－ PPMO women staffers 6 4

－ Proportion of women staffers at PPMO 54.55% 44.44%

Output 4: － Number staffers of CPMOs 104 104 Capacity for project － Women staffers of CPMOs 46 46 implementatio n and － Proportion of women staffers at CPMOs 44.23% 44.23% management 4d. Training provided to 76 PMO staffers in project management, FM and implementation of ESMS/EMDP/SGAP/M&E, women strengthened staffer should be no less than 35% － PPMO staffers trained 10 9

－ Women staffers trained at PPMO 6 4

－ Proportion of women trained at PPMO 60.00% 44.44%

－ CPMO staffers trained 110 107

－ Women staffers trained at CPMOs 49 45

－ Proportion of women staffers trained at CPMOs 44.55% 42.06%

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Appendix 2: Ethnic Minority Development Monitoring

Bank of Gansu, Bank of Lanzhou, Yuzhong SPD Rural Bank, LRCB, ZRCB, JRCB Consolidated by the PPMO Reporting period: January 1 – June 30, 2019

Activity* Project village Involved minority** Number of minority HHs Minority population Positive/negative impact

Sigou Village of Pite Fruit Production Base Xinying Township of Hui 47 243 Positive (Wang Wu) Hezheng

*Title of each loan contract **Ethnic minorities: Dongxiang, Sala, Baoan and Hui

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Appendix 3: Records of Complaints

Consolidated by: PPMO Reporting period: January 1 – June 30, 2019

Date received Handling unit and results

** No. Name Name Scope RFSP FI TWNS CPMO RFSP FI TWNS CPMO Brief descriptionBrief Affected population Affected Type of complaints * of* complaints Type Villagers’ Villagers’ Others*** Others*** Committee Committee Committee

1 None

RFSP= rural financial service provider *1 writing, 2 oral ** 1 environment, 2 social *** if yes, please indicate the name of the agency

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Appendix 4: Quarterly Credit Monitoring

Filed by: BOG, BOL and Yuzhong SPD, LRCB, ZRCB, JRCB Consolidated by: PPMO Reporting period: January 1 – June 30, 2019

Fund source (10,000) Remarks Date of No. Borrower Nature Use Maturity disbursement right use No. of Villages (10,000) Overdue Total Poor population Population Population repayment FI (10,000) Households transfer (mu) No. of Admin Total Women Total Women Total Minority Land ADB Counterpart Poor farmer HH Total population Loan of balance Amount (10,000) Amount (10,000) Total HH Minority

Anji Township Purchase Sichuan CNY 300,00 from 1 Hongming Crop Coop (Lu Retail 30.00 12 month 2019-3-7 30.00 1 26 105 4 20 50 30.00 Pepper recycled loan Yuping Hezheng Xinying Retail Township Siguo Village CNY 500,00 from 2 Purchase Pite Fruit 50.00 12months 2019-5-30 50.00 1 142 683 41 198 328 47 243 50.00 Pite Fruit production base recycled loan (Wang WU) Retail Purchase 3 Che Yuqian 10.00 12months 2019-4-30 10.00 1 1 4 2 10.00 Minxian Medicinal Herbs Retail Purchase 4 An Jiangcheng 30.00 12months 2019-4-30 30.00 1 2 4 2 30.00 Minxian Medicinal Herbs Retail Purchase 5 Wang Yanyun 60.00 24months 2019-6-13 60.00 11 150 600 150 60.00 \Minxian Medicinal Herbs Retail Purchase, storage Jingning County Zhunong 6 and transportation 500.00 24months 2019-3-1 500.00 1 10 46 4 12 4 16 500.00 Jingning Fruit Company Ltd. of apple Jingning Hong Family Retail 7 Potato production 1,100.00 24months 2019-5-10 1,100.00 1 10 45 3 6 3 1,100.00 Jingning Farm 8 Gansu Shunyuan Fruit Retail Purchase, storage Industry Development and transportation 600.00 24months 2019-3-30 600.00 1 6 25 3 7 3 600.00 Jingning Companny Ltd. of apple Jingning County Zhiqi Retail Purchase, storage 9 agro-prodct marketing and transportation 350.00 24months 2019-5-20 350.00 1 2 8 1 2 1 350.00 Jingning Coop of agro-products Zhuanglang Jiaxing Retail 10 Potato production 45.00 2019-5-9 45.00 45.00 Potato Production Coop 18months 1 1 5 1 2 2 Zhuanglang Gansu Gonghe Foodstuff Retail 11 Fruit production 1,500.00 2019-2-25 1,500.00 1,500.00 Zhuanglang Company Ltd. 17months 1 5 31 3 5 10 Zhuanglang Jingyuan Retail 12 Fruit Trading Company Fruit production 800.00 2019-3-29 800.00 800.00 Zhuanglang Ltd. 12months 1 3 18 4 20 9 Zhuanglang Wanlong 13 Carboard Box Company Retail Fruit production 700.00 2019-2-28 700.00 700.00 Zhuanglang Ltd. 18months 1 3 19 2 4 8 Zhuanglang 14 Yingyuanheng Fruit Retail Fruit production 1,000.00 2019-4-8 1,000.00 1,000.00 Zhuanglang Company Ltd. 18months 1 2 11 2 6 6

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Zhuanglang 15 Xinshengyuan Cattle Retail Cattle production 1,000.00 2019-4-30 1,000.00 500 1,000.00 Zhuanglang Industry Company Ltd. 18months 1 10 45 1 5 20 Zhuanglang Huifeng Pig 16 Retail Pig production 150.00 2019-6-21 150.00 150.00 Zhuanglang Production Coop 24months 1 2 10 1 6 4 Zhuanglang Xianghong 17 Animal Production Retail Chicken 200.00 2019-6-28 200.00 200.00 Zhuanglang Company Ltd. 36months 1 1 6 1 5 3 Zhuangling Zhaoyuan Vinegar, soy 18 Retail 600.00 2019-6-21 600.00 600.00 Zhuanglang Vinegar Company Ltd. source 24months 1 3 16 1 5 5 Lintao Jingxiu Nursery 19 Retail Tree nursery 1,000.00 24months 2019-03-07 1,000.00 1 50 82 4 15 25 1,000.00 Lintao Coop Lintao Taohuadao Tourism Culture Retail Tree nursery Lintao 20 1,000.00 24months 2019-03-08 1,000.00 1 26 36 2 5 15 1,000.00 Development Company ltd. Gansu Yongqing 21 Retail Tree nursery 2,000.00 24months 2019-03-13 2,000.00 1 32 56 3 10 20 2,000.00 Lintao Property Co. Ltd. Lintao Wolongfut Crop 22 Retail Tree nursery 2,000.00 24months 2019-04-03 2,000.00 1 18 22 4 15 8 955.22 2,000.00 Lintao Coop Lintao Luyuandao Agro 23 Retail Tree nursery 200.00 12months 2019-04-05 200.00 1 23 32 5 22 12 205 200.00 Lintao Development Co. Ltd. Lintao Hongxing Fruit and 24 Vegetable Wholesale Co. Retail vegetable 850.00 24months 2019-03-26 850.00 1 9 16 4 14 7 850.00 Lintao Ltd. wholesale Lintao Dingda Nursery 25 Retail Tree nursery 1,000.00 24months 2019-05-15 1,000.00 1 1 4 3 14 2 1,000.00 Lintao Co. Ltd. Support Coop and agro 2019-2-6, earliest 26 Retail Agro-products 1,488.00 12months 1,488.00 76 76 340 154 1,488.00 Lintao enterprises Feb Support Coop and agro 2019-2-4, earliest 27 Retail Agro-products 253.00 12months 253.00 11 11 48 20 253.00 Lintao enterprises Feb Fruit production base – 12months-24m 2019-2-6, earliest 28 Retail Tree nursery 911.00 911.00 25 52 210 6 22 112 30.5 911.00 Lintao others onths Feb 12months-24m 2019-2-6, earliest 29 Livestock base sheep Retail Sheep 1,118.00 1,118.00 74 162 805 14 38 325 1,118.00 Lintao – onths Feb 12months-24m 2019-2-6, earliest 30 Livestock base cattle Retail Cattle 1,773.50 1,773.50 99 241 986 33 128 490 1,773.50 Lintao – onths Feb Chicken, duck and 12months-24m 2019-2-6, earliest 31 Livestock base others Retail 1,080.00 1,080.00 71 95 395 4 14 188 1,080.00 Lintao – pig onths Feb Cash crop base – open 12months-24m 2019-2-6, earliest 32 Retail Agro-products 3,313.79 3,313.79 177 551 2805 62 239 1092 119.07 3,313.79 Lintao field onths Feb Gansu Lintao Miaoyuan 33 Retail Tree nursery 900.00 12months 2019-04-25 900.00 1 82 160 5 21 12 900.00 Lintao Mursery Co. Ltd Lintao Tianyun Nursery 34 Retail Tree Nursery 1,800.00 12months 2019-05-22 1,800.00 1 20 25 2 8 6 1,800.00 Lintao Co. ltd. Lintao Haifeng Tourism 35 Retail Tree Nursery 500.00 24months 2019-06-27 500.00 1 125 150 3 13 5 500.00 Lintao Co. Ltd

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Lintao Haifeng Tourism 36 Retail Tree Nursery 500.00 24months 2019-05-22 500.00 1 125 150 3 14 8 500.00 Lintao Co. Ltd Gansu Shenggui 37 Retail Tree Nursery 90.00 12months 2019-04-29 90.00 1 160 235 5 18 13 90.00 Lintao Landscaping Co. Ltd. Lintao Hongxing 38 Retail Spinach 180.00 12months 2019-04-29 180.00 1 6 6 5 17 14 180.00 Lintao Vegetable Coop Support coop and 11months-24m 2019-3-6, earliest 39 Retail Agro-products 3,933.30 3,933.15 60 83 402 168 3,933.30 Lintao agro-enterprises onths March Support coop and 2019-2-4, earliest 40 Retail Agro-products 198.80 12months 194.90 8 12 63 34 198.80 Lintao agro-enterprises Feb Chicken, duck and 2019-2-6, earliest 41 Fruit base - others Retail 1,978.70 12months 1,963.70 35 22 92 46 1,978.70 Lintao pig Feb 6months-12mo 2019-2-6, earliest 42 Cash crop open field Retail Agro-product 1,303.97 1,277.69 78 77 329 168 1,303.97 Lintao – nths Feb 2019-3-6, earliest 43 Livestock base cattle Retail cattle 658.28 12months 654.06 42 15 74 34 658.28 Lintao – March 2019-3-5, earliest 44 Livestock base sheep Retail sheep 938.55 12months 938.55 22 3 13 8 938.55 Lintao – March Chicken, duck and 2019-2-5, earliest 45 Livestock base others Retail 1,097.80 12months 1,092.80 31 5 23 13 1,097.80 Lintao – pig Feb Total 40,871.69 40,817.14 851 2465 9263 3627 47 243 1825.79 26,792.29 14,079.40

* It refers to wholesale or retail loan ** It refers only to the total number of farmer households, registered poverty households, total poor population, total women population and total minority population.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Appendix 5: Capacity Building Activities Reporting period: January 1 – June 30, 2019

No. County Time Days Location Organizer Theme and Contents Participants Trainer

County leaders, CPMO directors, 2019-02-14 1 Lanzhou PPMO Project management training to new FIs and counties officers in charge, FI environment and social managers 1 Province County leaders, CPMO directors, 2019-02-26 2 Lanzhou PPMO Project management training to original FIs and 11 counties officers in charge, FI environment and social managers Tianzheng Hotel of Kongtong Agriculture CPMO staffers, technicians, Kongtong agricultural product quality and safety inspection 2 Kongtong 2019-06-10 5 Kongtong of and Rural Affairs others, members of cooperative competition Pingliang Bureau and enterprises Jingchuan Agriculture CPMO staffers, technicians, Beijing Xiongte Livestock 2019-02-20 4 Jingchuan Hotel and rural affairs Beef cattle production technologies, disease control, etc. farmers, others, members of Co. Ltd. Li Weiliang etc. Bureau cooperative and enterprises 3 Jingchuan County Jingchuan Agriculture CPMO staffers, technicians, Visit to farmer cooperatives (charter, law, financial management, Farm coop specialist: Shi 2019-03-04 3 government and rural affairs others, members of cooperative business development, marketing strategies) Jiulin building Bureau and enterprises Lintao Agricultural Specialists in financial Management Visit to farmer cooperatives (charter, law, financial management, BARA leaders, township leaders, 2019-04-17 5 Lintao PMO management and market Station, business development, marketing strategies) farm coop chairs, coop facilitators supervision 4 Lintao Dangchang County Visit to farmer cooperatives (charter, law, financial management, BARA leaders, professionals, Professors of Northwest 2019-06-21 4 Yangling Lintao PMO business development, marketing strategies) CPMO Agriculture University Specialists in policy, Huanxian Hotel Training for livestock production coops: policies, grain bank, insurance, law 2019-01-25 2 and government Huanxian PMO agricultural inputs, e-commerce, agricultural insurance, branding Coop management enforcement, meeting room of farm products 5 Huanxian e-commerce

Qingyang Product expo at local cultural even: coops, agro-enterprises, Management staffers of 2019-06-03 7 Huanxian CPMO Daminggong BARA, CPMOs enterprises and cooperatives CPMO staffers, technicians, 19 township sin Professors of research 2019-03-18 11 Zhenyuan CPMO Training: Medicinal herb production techniques others, members of cooperative Zhenyuan institutes and enterprises 6 Zhenyuan Zhengyuan, CPMO and others, coop Gansu Agro-technological 2019-04-20 4 Zhenyuan CPMO Training for coops: law, marketing, branding Huining management College: professor

Qingdao, 2019-02-22 4 Zhenyuan CPMO Visit to rabbit industry development in Qingdao, Shandong Coop management Shandong

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No. County Time Days Location Organizer Theme and Contents Participants Trainer

Agro-product quality 2019-05-29 3 Zhenyuan Hotel Zhenyuan CPMO Capacity building for agro-product quality and safety CPMO and other 6 Zhenyuan specialist Specialists in related 2019-1-7 1 Lanzhou Minxian CPMO Green medicinal herb production forums CPMO and others fields Training; medicinal herb and farm land protection, herb disease Minxian Xinhe Specialists in related 2019-2-26 1 Minxian CPMO control, awareness about banned pesticides, good practices of CPMO and technicians Hotel fields fertilizer application

Minxian Taoming Minxian agro-product quality and safety tracking system, CPMO, technicians and enterprise Specialists in related 2019-5-23 2 Minxian CPMO 7 Minxian Hotel e-commerce, standardized production of medicinal herbs etc. and coop management fields

2019-6-6 1 Weiyuan, Longxi Minxian CPMO Visit to Weiyuan and Longxi for mushroom production CPMO and technicians

2019-6-12 2 Liangdang Minxian CPMO Visit to Liangdang for industrialization and coop development CPMO, technicians and others

2019-6-19 6 Beijing Minxian CPMO Gansu product expo and promotion CPMO and coop members MARA and DARA

Jiang Mingquan 2019-3-9 1 Lintao CPMO Standardized vegetable production Technicians Deputy Director of CPMO Zhang Panfeng, CPMO Wang yongbin, Lily Lintao Shiyuanfu 2019-3-20 3 CPMO Lily processing and package Storage workers and technicians association Hotel Yang Xuezheng, Lily Association Dong Xuefeng, Coop Lintao Taomei Sheep production training: coop+farmer households, micro managers 2019-3-20 1 Taoyan Township Sheep farmers 8 Lintao Livestock Coop storage of feed etc. Du Xuelin, Livestock center Xie Zhongkui, CAS Lintao Zhongfu 2019-6-29 1 CPMO Lily production: problems and solutions Farmers and technicians Li Bin, Qilihe Extension Township Station

Financial managers of township Zhang Ping, CGA 2019-7-9 1 Yinbaisheng Hotel CPMO Financial management for coops agro-economy stations and coops Wan Defu, BOF

2019-03-18 9 Zhejiang, Fujian Yuzhong CPMO Promotion of potato CPMO and coop management

9 Yuzhong 2019-03-31 3 Beijing Yuzhong CPMO Smart agriculture equipment and technologies Technicians Yuzhong Yuzhong CPMO Jin Shengli, County 2019-04-10 51 Kangyuan Modern Vegetable production techniques Farmers agro-extension center Agriculture Co. Ltd.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

No. County Time Days Location Organizer Theme and Contents Participants Trainer

Wang Jianmin, county Yuzhong Longxin Yuzhong CPMO 2019-04-12 1 Capacity building for demonstration coop CPMO and Coop members agricultural economic Hotel management station

2019-04-18 3 Beijing Yuzhong CPMO National digital agriculture and rural forum CPMO, technicians

Qian Xu, County livestock 2019-04-21 1 Yuzhong Yuzhong CPMO Yuzhong Beef cattle industry alliance: technical training CPMO and Coop members center

2019-04-23 6 Chengdu Yuzhong CPMO International Modern Agricultural Expo at Chengdu CPMO, technicians

Yuzhong feature production promotion at 125 China export and 2019-04-28 6 Guangzhou Yuzhong CPMO CPMO, technicians 9 Yuzhong import trade

Yuzhong Hongxin Yuzhong CPMO CPMO, technicians Jin Shengli, County 2019-05-01 31 Yuzhong farmer household technical training Medicinal Coop agro-extension center

Chengdu, Yuzhong CPMO 2019-05-20 11 Liangzhou, China Potato Conference CPMO, technicians Chongqing, Enshi Ji Quanfa, county animal 2019-05-23 1 Yuzhong Yuzhong CPMO Yuzhong CPMO veterinary training CPMO, technicians supervision Beijing, Tianjin, Yuzhong CPMO 2019-06-21 5 Shandong Zibo, Gansu Product promotion in Beijing CPMO and coop members Qingdao Yu Chengqian, Lanzhou Yuzhong Heyi Yuzhong CPMO 2019-06-25 1 Vocational training for ADB project CPMO and coop members agro-broadcast and Hotel television school Beijing Xinfadi International Trade talks, exhibition and promotion of agro-products of poverty 2019-04-21 1 MARA CPMO, technicians and others Agro-product area exhibition center

CPMO, technicians, farmers, 10 Yongjing Yongjing Jinqilin 2019-04-19 1 Yongjing CPMO Training of coop facilitators management of coop and Dip Xiecjemg, GAU Hotel enterprises

CPMO, technicians, farmers, coop 2019-05-06 1 Yongjing BARA Yongjing CPMO Medicinal herb trade talks Tongrentang of Beijing and enterprise management

Cao Zhiqiang, Dingxi 2019-03-07 10 9 townships Yongjing CPMO Honey suckle training CPMO and farmers agro-economy station Si Cailiang, Guanshan of Yongjing CPMO 2019-03-14 2 Organic lily production techniques CPMO and farmers County agro-extension Yongjing center

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

No. County Time Days Location Organizer Theme and Contents Participants Trainer

Dongying of Gansu Commerce E-commerce Shengli Oli Field holds talks with Gansu on local CPMO and coop and enterprise 2019-06-13 3 – Shandong Department feature products management 10 Yongjing Organic Food Nanchang of 2019-03-18 13 Development Center Organic product development and information exchange Technicians Jiangxi of EEM Wang Jianjie, Lawyer, Linxia Longquan Law Firm 2019-1-17 2 Hezheng Hezheng CPMO Land use right transfer: laws and practices Technicians, lecturers and CPMO Qiao Zhixia, GAU 11 Hezheng Yue Hu, Hezheng County Account Nanchuan of 2019-3-24 5 Chongqing, Anji of Hezheng CPMO Visit to rural living environment improvement CPMO and BARA Zhejiang CPMO, others, coop and Deng Liwei, Prefecture 2019-03-07 3 Xinhai Hotel Jishishan CPMO Coop development and management, financial management, etc. enterprise management, coop Vocational College members Beijing Xinfadi International CPMO and coop and enterprise 2019-03-31 6 MARA Trade talks for poverty areas Agro-product management exhibition center 12 Jishishan Xinke Crop and

Animal Coop, Farmer, enterprise and coop Zhongxin Medicinal Herb 2019-04-14 1 Jishishan CPMO Medicinal herb production technical training Qingfeng Medicinal management Coop Technician Herb Coop Tao Haiyun, market 2019-05-10 1 BARA Jishishan CPMO Coop registration, cancellation, business management CPMO and others supervision Chen Chaoyang, BARA

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

APPENDIX 6: FURTHER SUBLOANS OF THE PROJECT

Amount Amount No. County Bank Applicant No. of Loans Source Output CNY 10,000 USD 1000

Xingyue Trade 25 40.7 ADB Output 2: Industrialization development fund

1 Hezheng BOL 3 50 81.4 ADB Output 1: Forest, fruit and fodder production Wang Bin base 50 81.4 Recycled loan

Farmer household of production base 23 640 1042.1 ADB Output 1: Sichuan Pepper production base

Farmer household of production base 3 40 65.1 ADB Output 1: Sichuan Pepper production base

2 Jishishan BOL Jishishan Jianping Sichuan Pepper Coop 12 250 407.1 ADB Output 2: Industrialization development fund

Farmer household of production base 1 50 81.4 Recycled loan Output 1: Sichuan Pepper production base

Jishishan Wansheng Sichuan Pepper Coop 18 520 846.7 Recycled loan Output 1: Sichuan Pepper production base

Yongjing Yidianyuan Ecological Livestock 400 651.3 ADB Output 1: Sheep production base Production Co Ltd.

3 Yongjing BOL Zhang Haijun 3 50 81.4 ADB Output 1: Greenhouse production base

Output 2: Industrialization development fund Yongjing Longteng Landscaping Co. Ltd. 100 162.8 ADB (tree nursery) Output 1: Forest, fruit and fodder production Farmer household 190 309.4 ADB base Output 1: Forest, fruit and fodder production Lintai Hongfu Ecological Agriculture Co. Ltd. 300 488.5 ADB base

Output 1: Forest, fruit and fodder production 4 Lingtai BOG Qixiang Agro S&T Co. Ltd. 10 200 325.7 ADB base

Lintai Kangzhuang Livestock Co. Ltd. 300 48..5 ADB Output 2: Industrialization development fund

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Amount Amount No. County Bank Applicant No. of Loans Source Output CNY 10,000 USD 1000 Counterpart Output 1: Forest, fruit and fodder production Lintai Fuxing Crop and Livestock Farm 100 162.8 funds base Output 1: Forest, fruit and fodder production Yang Baojun 30 48.9 ADB 4 Lingtai BOG base Output 1: Forest, fruit and fodder production Ludi Apple Coop 130 211.7 ADB base

Shengteng Livestock Co. Ltd.司 200 325.7 ADB Output 1: Cattle production base 5 Jingchuan BOG 2 Yukang Livestock Co. Ltd. 200 325.7 ADB Output 1: Cattle production base

Output 1: Forest, fruit and fodder production 6 Huanxian BOG Gansu Huirong Fodder Industry Co. Ltd. 1 300 488.5 ADB base Yuzhong Yuzhong Kangyuan Vegetable Production and Counterpart Output 1: Greenhouse vegetable production 7 Yuzhong 1 170 276.8 SPD Marketing Coop funds base

8 Minxian BOL Farmer household of production base 2 90 146.6 ADB Output 2：Industrialization development fund

200 325.7 ADB Lintao Huajia Livestock S&T Co. Ltd. Output 1: Cattle production base 200 325.7 Recycled loan

100 162.8 ADB

Lintao Yufeng Animal Production Coop Output 1: Sheep production base 9 Lintao BOL 100 162.8 Recycled loan 12 300 488.5 ADB Output 1: Greenhouse vegetable production Lintao Qinghe Crop Production Coop

300 488.5 Recycled loan base

400 651.3 ADB Output 1: Greenhouse vegetable production Gansu Tianfengyuan Agro S&T Co. Ltd. 400 651.3 Recycled loan base

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Amount Amount No. County Bank Applicant No. of Loans Source Output CNY 10,000 USD 1000

Output 1: Greenhouse vegetable production Gansu Tianfengyuan Agro S&T Co. Ltd. 95 154.7 ADB base

Output 1: Greenhouse vegetable production 9 Lintao BOL Lintao Runsheng Agro S&T Service Co. Ltd 100 162.8 ADB base

Lintao Lede Animal Production Coop 490 797.9 ADB Output 1: Sheep production base

Farmer household of production base 361 2062.1 3357.8 ADB

Output 1: Open field crop production base Counterpart Farmer household of production base 77 1303.97 2123.3 funds

Farmer household of production base 177 1139.69 1855.8 ADB Output 1: Greenhouse vegetable production Counterpart base Lintao Hongxiang Vegetable Production Coop 1 180 293.1 funds

Farmer household of production base 12 102 166.1 ADB Output 1: Other cash crop production base

Farmer household of production base 241 1775.5 2891.1 ADB

Output 1: Cattle production base Counterpart Farmer household of production base 15 658.28 1071.9 9 Lintao LRCB funds

Farmer household of production base 162 1118 1820.5 ADB Output 1: Sheep Production base Counterpart Farmer household of production base 3 938.55 1528.3 funds

Farmer household of production base 96 1088 1771.6 ADB Output 1: Other livestock production base Counterpart Farmer household of production base 27 3076.5 5009.6 funds Farmer household of production base 52 911 1483.4 ADB Output 1: Tree nursery

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Amount Amount No. County Bank Applicant No. of Loans Source Output CNY 10,000 USD 1000 Lintao Dingda Nursery Co. Ltd. 1 1000 1628.3 ADB

Lintao Wolongfutou Crop Production Coop 1 2000 3256.7 ADB

Lintao Luyuadao Agro Develoopment Co. Ltd. 1 200 325.7 ADB

Lintao Jingxiu Tree Nursery Coop 1 1000 1628.3 ADB

Lintao Taohuadao Tourism Culture Development 1 1000 1628.3 ADB Co. Ltd.

Gansu Yongqing Property Co. Ltd. 1 2000 3256.7 ADB

Gansu Lingtao Senyuan Nursery Engineering Co. Counterpart 1 900 1465.5 Ltd. funds

Lintao Tianyuan Tree Nursery Production and Counterpart 1 1800 2931.0 Marketing Co. Ltd. funds 9 Lintao LRCB Counterpart Lintao Haifeng Tourism Service Co. Ltd. 1 500 814.2 Output 1: Tree nursery funds

Counterpart

Lintao Haifeng Tourism Service Co. Ltd. 1 500 814.2 funds

Gansu Shengguiyuan Landscaping Engineering Counterpart 1 90 146.6 Co. Ltd. funds

Coop member 87 1731 2818.7 ADB

Lintao Hongxing Vegetable Wholesale Co. Ltd. 1 850 1384.1 ADB Output 2: Industrialization development fund Counterpart Coop member 91 4132.1 6728.5 funds

Gansu Gonghe Foodstufff Co. Ltd. 1 1500 2442.5 ADB Output 1: Apple production base Zhuanglang Jingyuan Fruit and Vegetable Trade 10 Zhuanglang ZRCB 1 800 1302.7 ADB Co. Ltd.

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Amount Amount No. County Bank Applicant No. of Loans Source Output CNY 10,000 USD 1000

Zhuanglang Wanlong Carboard Box Co. Ltd. 1 700 1139.8 ADB

Zhuanglang Yingyuanheng Fruit Co. Ltd. 1 1000 1628.3 ADB

Zhuanglang Xinshengyuan Cattle Industry Co. Ltd. 1 1000 1628.3 ADB Output 1: Cattle Production base

Zhuanglang Huifeng Pig Production Coop 1 150 244.3 ADB Output 1: Other Livestock base 10 Zhuanglang ZRCB

Zhuanglang Xianghong Animal Production Co. Ltd. 1 200 325.7 ADB Output 1: Other Livestock base

Zhuanglang Chaoyuan Vinegar Co. Ltd. 1 600 977.0 ADB Output 2: Industrialization development fund Zhuanglang Xinhong Garment factory 1 80 130.3 ADB

Jingning Hongxing Family Farm 1 1100 1791.2 ADB Output 1: Open field crop production base

11 Jingning JRCB Gansu Shunyuan Fruit Development Co. Ltd 1 600 977.0 ADB Output 2: Industrialization development fund Jingning Zhiqi Agro-product Production and 1 350 569.9 ADB Marketing Coop Total 1517 47406.69 76991.0

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

APPENDIX 7: SNAPSHOTS OF MIS

Figure 1: Templates for progress report and ESMS report

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Figure 2: Subloans for water-saving measures and smart agriculture

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Figure 3: Subloan monitoring information

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Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告

Figure 4: Outputs of repots

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