World Bank Document

Document of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 10322-CHA

STAFF APPRAISAL REPORT Public Disclosure Authorized

CHINA

SICHUANAGRICULTURAL DEVELOPMENT PROJECT

MAY 29, 1992 Public Disclosure Authorized

MICROEFICHE COPY

Report No. 10322-CHA Type: (SAR) KItM, ff. / X84053 / A7 035/ RA2AG Public Disclosure Authorized

AgriculturalOperations Division Country Department II East Asia and Pacific Regional Office

IThis documenthas a restlcteddistuibution and may be usedby redpients only in theperfonnance of their officlid duties. Its contentsmay not othenrisebe discosedwthout World Bank authorization. CURRENCYEOUIVALENT (As of February 5, 1992)

Currency Unit - Yuan (Y) $1.00 - Y 5.38 Y 1.00 - $0.186

FISCAL YEAR

January 1 to December 31

WEIGHTS AND MEASURES

1 meter (m) - 3.28 feet (ft) 1 kilometer (km) - 0.62 miles 1 hectare (ha) - 15 mu 1 ton (t) - 1,000 KG - 2,205 pounds 1 kilogram (kg) - 2.2 pounds

PRINCIPALABBREVIATIONS AND ACRONYMS USED

ABC - AgriculturalBank of China ACWF - All China Women's Federation BA - Bureau of Agriculture BOF - Bureau of Finance BFO - Bureau of Forestry CAAS - Chinese Academy of AgriculturalSciences CATEC - County AgrotechnicalExtension Center CMIEC - China National Machinery Import & Export Corporation CNSIEC - China National Silk Import and Export Corporation EIA - EnvironmentalImpact Assessment EMP - EnvironmentalManagement Plan GOC - Government of China GVAO - Gross Value of AgriculturalOutput ICB - InternationalCompetitive Bidding ImO - IrrigationManagement Office IPM - Integrated Pest Management LCB - Local CompetitiveBidding LG - Leading Group MOF - Ministry of Finance MWR - Ministry of Water Resources NEPA - National EnvironmentalProtection Agency O&M - Operation and Maintenance PMO - Provincial Project Management Office PO - Project Office at Prefecture/CountyLevel POM - Plan of Operation and Maintenance RCC - Rural Credit Cooperatives SAAS - Sichuan Academy of AgriculturalSciences SOE - Statement of Expenditure SPC - State Planning Commission SPSC - Sichuan Provincial Silk Corporation SRIEP - Sichuan Research Institute of EnvironmentalProtection WCB - Water Conservancy Bureau FOROMCIAL USE ONLY CHINA SICHUANAGRICULTURAL DEVELOPMENT PROJECT

Credit and Prolect Summary

Borrower: People'sRepublic of China Beneficiarvy SichuanProvince

Amount: SDR 107.7million ($147million equivalent) Terms: Standard,with 35 years maturity QnlendingTerms: Onlending ratesto final borrowers(productive entities and individuals)will be no less than the Agricultural Bank of China chargesfor loans for similarpurposes and terms. Obiectivesand Description: The project'smain objectivesare to: (a) increaseand intensifyproductivity of existingcrops by providinga reliable water supply; (b) provide a complementary package of integratedagricultural inputs, support services, adaptive research,training and technicalassistance; (c) reduce soil and water lossesto preventlong-term siltation problems and maintainsoil fertility;(d) expandagroprocessing activities to utilize locally available raw materials; and (e) increase incomes in poor and remote areas where farmers earn less than 50 percent of the national average, with particularemphasis on helpingpoor women. The project,to be carried out over six years, provides funds for: improvement and expansion of irrigation to 135,200 ha; establishment of two soil conservation demonstration areas and economic forestry; expansion of mulberry and cocoon production with expansion of supportingservices; rehabilitation of tea gardens and establishmentof livestockproduction bases combinedwith plantingpastures; and rehabilitationand expansionof two papermills and facilities for rabbit hair spinning,gallnut, goat and geese processing.

Benefitsand Risks: At full development, the project is expected to increase annualgrain production by 440,000tons, cash crops by 66,800tons, 2.2 millionm' of timber,455,200 tons of fuelwood, 205,200tons of mulberryleaves for productionof 1,116tons of cocoons,and 1.9 millionhead of goats,rabbits and geese. The agroprocessingcomponent would produce 20,400tons of paper,254 tons of angorawool, about 2,800 tons of processedmeat, 40 tons of down, 7,000 piecesof hide and 500 tons of tannicacids. The pr^jectwould benefit over 4 millionpeople, and createabout 600,000full-

I Thisdocument has a restricteddistribution and may be used by recipientsonly in theperformance | of theirofficial duties. Ius contents may not otherwisebe disclosed without World Bank authorization. - ii -

time equivalentjobs with significantcontributions toward. povertyallviation in Sichuan'spoorest counties. rhe economicrate of returnfor the overallproject is estimated to be about 26 percent. No major risks are foreseen. EstimatedCosts Local Foreian Total ------($ million)------Irrigation 119.3 47.2 166.5 Soil Conserv&tion 12.6 2.8 15.4 IncomeGeneration 16.8 5.3 22.1 Agroprocessing 17.6 19.9 37.5 Base Cost 166.3 75.2 241.5 PhysicalContingencies 12.2 6.1 18.3 Price Contingencies 23.7 4.1 27.8 Total ProiectCost 202.1 85.5 287.6

FinancinatPlan: Local Foreian Total ------($ million)------CentralGovernment 17.0 0.0 17.0 Provincial/PrefectureGovts. 45.5 0.0 45.5 CouwtyGovernment 19.0 0.0 19.0 Local Banks 9.0 0.0 9.0 SpecialPoverty Alleviation Funds 10.0 0.0 10.0 Enterprisesand Farmers 40.1 0.0 40.1 IDA 61.5 85.5 147.0

Total 202.1 85.5 287.6

EstimatedIDA Disbursements IDA FiscalYear 1993 1994 1995 1996 1997 1998 1999

Annual 20 32 36 26 18 12 3 Cumulative 20 52 88 114 132 144 147

EconomicRate of Return: 26 percent - lli -

SICHUANAGRICULTURAL DEVELOPMENT PROJECT

Table of Contents PstesNg.

I. BACKGROUND...... 1

A. Introduction ...... a...... 1 B. The Agriculture Sector ...... a ...... a . . 1 C. Irrigation Subsector ...... 2 D. Soil Cor.iorvationEfforts in China ...... 4 E. Sectoral Objectives and Bank Lending ...... 4 P. Agriculture in Sichuan 5 G. Rural Poverty in Sick &a . 7 H. Rationale for IDA Involvement ...... 8

II. THEPROJECT AREAS ...... 9

As*Location . . . . a . a ...... 9 S. Climate, Topography and Soils ...... 9 C. Water Resources and Irrigation ...... 10 D. Population, Farm Size and Land Use ...... 11 S. Rural Incomes and Poverty...... 11 F. Present AgriculturalDevelopment ...... 12 G. Support Services 13 H* Infrastructure 14

III. THE PROJECT # ...... o...... 16

A. ProjectObjectives ...... 16 B. Project Description ...... 17 C. Detaled Features . .r...... 17 D. Status of Preparation ...... o ...... 28 S. ImplementationSchedule ...... 28 Fe Cost Estimates ...... 29 G. Financing ...... 30 HN Procurement ...... 31 I* Disbursements ...... 33 J. Accounts and Audts ...... 34 K. EnvironmentalImpact ...... 34

This report is based on the findings of an appraisal mission In November/ December 1991. Members of the appraisal team iziluded H. Kim (mission leader), J. Stemp, and W. Price (IDA), J. Smyle. C. Cronberg, 0. Hong (consultants). Others involved in the preparation and preappralsalwere B. Albinson, J. Post, R. Dayal %IDA), P. Gilchrist, H. Lea, 0. Knowless M. Bi (consultants) and A. Nameed (FAO/CP). Peer reviewers comprised H. Froderikeen, E. Chobanian, K. Yeow, N. Jones (ASTAG), H. Plusquellec,J. Srivastava and H. lisa (AGRPS). The division chief is J. Goldberg and the department direc- tor is Shahid Javed Burki. - iv -

a6seN.

IV. ORGAI O ANDMt ENT ...... 36

A. Project Coordinationand Management...... 36 B. Execution of Project Works ...... a 37 C. Mnagement of Production Activities . . . 37 D. Vinancial Neagoement ...... 38 R. Irrigation System Operation and Maintenance ...... 39 F. Project Launch Workshop .... *..*.*...... 40 G. Monitoring, Evaluation and Reporting ...... 41

V. PRDoUCTNtonMA T8 . PRICES ...... 42

A* Production * o 9 oe 99 oo o9 9o* 9o 42 B. Markets and Marketing Channels ...... 43 C* Prices ...... *..* . .*.. 45

VI. BENEFITS.JUSTIFICATION AND RISKS ...... 47

A* Benefits *...... *...... * .. 47 B. Employmentand Incomes ...... 47 C. Women in Development ...... 47 D. Rent nd Cost Recovery ...... 48 e. Financialand Economic Analysis 48 F* Risks o oo 9* oooov * o** *v * * 49

VII. AGREEMENTSREACHED AND RECOMMENDATION...... 50

TABLESIN TEXT

3.1 Irrigation Component: Summary of Works ...... 19 3.2 SoilConservation: Summary of Works ...... 21 3.3 Sericulture: Summary of Works ...... 22 3.4 Livestock: Summary of Works ...... 24 3.5 Project Cost Summary ...... 30 3.6 Project FinancingPlan 30 3.7 ProcurementProfile . 31 5.1 Irrigation Component: Summary of Output ...... 42 5.2 Other Components: Summary of Outputs ...... 44 - v -

1. Basi4 Data 1. Provincial and Project Area Statistics 2. Climate 3. Project Locations 4. Responsibilityfor Project Design and Implementation S. Counterpart Funding: Amount and Sources 6. Research and Training Program 7. Summary of Agroprocessing

2. Pro1ect Cost Summary 1. Project Cost Summary by Component 2. Project Cost Summary by Category

3. Procurement 1. Procurement of Machinery, Equipment, Materials and Vehicles 2. Procurement Schedules

4. Estimated DisbursementSchedule

5. Farm Models and Croi Budgets 1. Cropped Area, Yield, and Production 2. Crop Budgets 3. Cropping Calendar of Main Annual Crops 4. Farm Models 5. Rent and Cost Recovery

6. Econwomicand Financial Analysis 1. Summary of Economic anu FinancialAnalysis 2. Main Conversion Factors 3. Border Prices for Principal Products and Prices 4. Historical Financial Prices of Main Products

7. Monitorint and Sunervision 1. Key Monitoring Indicators 2. Supervision Plans

8. Summary of Dam Safety Review

9. Summary of EnvironmentalAssessment and Management Plan

10. Selected Documents and Data Available in the Pro1ect Files

Chart 1 ImplementationSchedule Chart 2 Organization Chart MAn Irrigations IBRD 23092 and 23094 Project Components and Sites: IBRD 23480 CRIN

SICHUANAGRlI(ULTURAL DEVELOPMENT PROJECT

I. BACRGROUND

A. Introduction

1.1 The Government of China (GOC) has requested IDA assistance in financing an integrated agriculturaland irrigation development project in Sichuan Province. The project'. main objectives are to: (a) increase and intensify productivityof existing crops by increasing the land under irrigation and diversifyinginto more economic cropping patternos (b) provide a complementary package of integrated agricultural inputs., support services, adaptive research, training and technical assistance; (c) reduce soil and water losses, maintain soil fertility, and Improve productivityof already eroded areas; (d) expand agroprocessingactivities to utilize locally available raw materials; and (e) increase incomes in poor and remote areas vhere farmers' incomes are substantiallyless than the national average, with particular emphasis on helping poor women.

B. The Amriculture Sector

1.2 Agriculture in China--includingcrops, livestock, forestry and fisheries--providessustenance for over 1.16 billion peoplet it is an important source of income for some 190 million farm families and accounts for about 30 percent of the country's gross domestic product (GDP). Only about 137 million ha of China's land area of 960 million ha are arable. Farming systems intensivelyutilize small machinery, heavy inputs of labor, fertilizer,and where possible water. Nearly half of the cropped area is irrigated. Food grains occupy about 70 percent of total cropland and account for about one- third of the value of agriculturaloutput. Intensive farming has allowed China to meet the basic food requirementsof its population, about 22 percent of the world's total, and to produce an increasinglysophisticated mix of cash and commercial crops, from less than 11 percent of the world's arable land. China's rural reform program, initiated in 1978, also has stimulated the agricultural sector. This program produced impressive growth and structural change by introducingthe production responsibilitysystem, increasing producer prices, and expanding the role of the market.

1.3 The gross value of agriculturaloutput (GVAO) increased by 83 percent in real terms during the 1978-90 period (6 percent per annum), substan- tially Zaster than during the previous 25-year period (3 percent per annum). While significant growth in grain production was achieved in the early part of the period (peaking at 407 million tons in 1984), stagnating grain production has been the Government'scentral concern in later years, with production ranging between 379 and 402 million tons during the 1985-88 period as farmers substituted other crops for grain. Recently, however, grain production appears to have risen to a new plateau, with 446 million tons in 1990 (an excellentweather year) and 435 million tons on 1991, a year of extremely severe floods in the Yangtze River Basin and quite serious flooding also in northeastChina. One major factorin this successhas been China'sadmirable achievementsin plant breeding--Chinawas the first countryto achievethe hybridizationof rice--backedup by the vast networkof local seed production, extension,and distributionunits requiredto put new seeds and technology into the hands of the massesof peasantfarmers. Due to this effort,nearly 40 percentof the rice now plantedin China is hybrid,as well as virtually all of the corn, while most of the wheatshave high geneticperformance potential for the variousagroclimatic regions in which they are grown. The Gov- ernment'sstrategy to increasegrain productionalso includesconsistently increasingsupplies *f chemicalfertilizers, increased state investmentin agriculture,mainly in irrigationrehabilitation and expansion,and introduction of partialreforms in grainprocurement, distributi"n, prices and subsidies. These reformshave recentlyincluded: the generalfixing of provincial grain procurementquotas at substantiallyreduced levels, with ever-increasing productionincrements priced at market-basednegotiated prices; already announcedincreased wheat quota procurementprices for 1992, so that wheat and corn farm-gateprices now approachworld levels;the conversionof most official interprovincialgrain shipmentsfrom quota to negotiatedprices; in 1991, the first substantialincreases (from 55 percentto 160 percent)in urban rationgrain and edibleoil pricesin 30 years;and the establishmentof fledglinggrain commodityexchanges for all major grainsin variousChinese cities (e.g.,Zhengzhou, Changchun, Wuhan, Harbin, and Changsha). In the contextof preparinga proposedGrain Distributionand MarketingProject, IDA iS discussingwith the GOC a futurereform program involving the furthersub- stantialelimination of grain consumptionsubsidies, the openingof the inter- nal grain trade to all interestedunits and individuals,the thoroughcommer- cializationof grainwholesaling and retailingenterprises, establishment of a futuresmarket in grain,and eventualmarket-determined pricing of virtually all grain in China. C. IrrigationSubsector 1.4 Water ResourcesDevelooment. China's water resourcesare limited and unevenlydistributed. About 45 percentof China'stotal land area is locatedin regionswith less than 400 mm annualrainfall. A rapid expansion of irrigatedfarmland took place betweenthe early 1950sand the mid-1980s which more than doubledthe effectivelyirrigated area in the countryfrom about 20 millionha in 1952 to 48 millionha in 1990. This growthin irrigated area reflectedthe high priorityattached to irrigationand agriculture in the earlierdecades and the widespreadintroduction of tubewelltechnology for exploitinggroundwater in the early 1970s. Today,about 82 percentof the nationalirrigated area is fed by surfacewater and about 18 percentis fed by groundwater. 1.5 The productivityof China'sirrigated land is about twice that of its rainfedland. Irrigatedagriculture accounts for about two thirdsof total grain productionand three quartersof commercialcrop production.The expansionof irrigationfacilities has been a major factorin the increasein grainproduction from about 164 milliontons in 1952 to presentlevels. How- ever, lack of adequatecontrol structures and the poor conditionsof many on- farm warks limit irrigationefficiency. Inadequate investment in construction and maittenanceof drainagesystems has acted as a furtherconstraint to pro- ductivil.yover much of the existingirrigated area. -3-

1.6 Water ResourceAsencies. As the principaldepartment for water administrationunder the State Council,the centralMlinstry of Water Resources(MWR) is responsiblefor overallwater resourcesmanagement-- improvementand developmentof major rivers,planning of water resourcesfor major city water supply, basic constructionof irrigatior,facilities, waterl soil conservancy,rural hydroelectricitysupply, and constructionand management of large-and medium-sizereservoirs used primarilyfor flood control, irrigation,water supplyand rural hydroelectricity.The MWR employsabout 1,337,000workers nationwide, approximately 7.5 percentof whom work directly under the MWR and 92.5 percentof whom work under provincialand local governments. The MWR also directlysupervises the Water Resourcesand Hydroelectric Power ConstructionCorporation, and administers13 institutionsof higher edu- cationand seven regionalriver basin commissions.Each provincemaintains a Water ConservancyBureau (WCB),responsible for the planning,survey, design, construction,operation and maintenanceof irrigation,drainage, flood control works and ruralhydroelectricity. Designs of major projectsare preparedby designinstitutes of the WCBst projectscovering areas largerthan 20,000ha must be approvedby MWR. WCBs at the prefectureand countylevels are directlyresponsible for the constructionani maintenanceof most canals, associatedirrigation and flood controlstructures and medium-sizereservoirs. 1.7 Water Resourcelinancing. Projectsfor water resourcedevelopment involving major river diversion or control with central government funding must be approved by the State Planning Co-ission (SPC). This approval is made in accordance with annual and five-year plans and then is channeled through the MWR to the provincesinvolved. In 1980,when state investmentin vater resourceswas reduced,emphasis shifted away from new irrigationdevel- opmentsto the rehabilitationof existingprojects. At the same time, provincial and local governmentsbegan to assumemore responsibilityfor initiating and fundinginvestments and operatingand maintainingwater resourceprojects. Since1980, risingproducer prices and incomesled the MWR to encouragethe WCBs to experimentwith increasingwater charges. In 1985, the GOC prescribed a policyrequiring all industrial,municipal and agriculturalend-users to pay vater chargesbased on full recoveryof operationand maintenanceexpenses, major repaircosts, and depreciation.The new water chargesystems have several drawbacks,however. First,the provinciallymandated water chargesare set below nationallevels and are not revisedregularly. As a result,infla- tion has rapidlyeroded their real value. Second,prefectures and counties continueto enjoy considerableflexibility in settingwater charges. This variationled to inconsistentstandards of maintenanceand repair. The MWR estimatesthat assessedagricultural water chargelevels in 1988 were only 40 percentof nationalstandards, excluding projects managed by collectivesor individualsbelow the townshiplevel. Third,collecting water chargescontin- ues to be a problem. 1.8 CurrentConstraints in Irr1iatedAgriculture. Despite past suc- cesses,China now facesnumerous problems in the irrigationsector. Many of the large schemesconstructed in the 19509and 1960snow requiremajor upgrading or rehabilitation.Many still lack drainageand irrigationnetworks at the tertiaryand farm level--networkswhich were to have been constructedby local governments.Because improvement works must be plannedand implemented in an integratedmanner for large contiguousblocks of land, large investments are needed. The uncontrolledconstruction of tubewells,prompted by govern- -4-

ment subsidies,the low capitalcost of constructionand equipment,and low electricitycharges for pumpinghas led to overexploitationof groundwater, excessivedrawdown of the water level and land subsidence.Operation and maintenancehave been inadequatein many areas. Resourcesallocated by the centraland provincialgovernments frequently have not been matchedadequately by fundingfrom the countiesand townships.Measures to alleviatesome of these problemswere curtailedby cuts In the governmentbudget for irrigation beginningin 1980. Statecapital investment In irrigationhas reboundedsome- what since 1985 but still falls short of pre-1980levdls. "he developmentof new water resourceshas not kept pace with the growthin - demandfrom agriculture,industry, and urban centers. 1.9 China has achievednotable success in its supportservices eector, but there is also much room for improvement.A major programis underwry to upgradeand strengthenthe extensionservices in the country,but so far, only about one third of the 2,300counties nationwide have establishedformal agrotechnicalextension centers and 20 percentof the countieshave no formal extensionprogram at all. Extensionservices need to move towardsa client- supplierrelationship, and offer a better-qualityservice to producers. Link- ages among research,training and extensionremain weak. Seed productionand agromachineryservices also need improving.Quality control for seed production is inadequateand Improvementsare stillrequired in maintainingvarietal purityin some areasand in the extensionand demonstrationof qualityseeds. Agromachineryservice centers are becomingincreasingly important in helping to maintain small tractors, the type most commonly owned by farm households. There aro some 37,000 collectivelyoperated mechanization centers providing service to individual farmers. The centers also provide training to operators of medium and large machinery used for land improvement. But most of the centers still function with weak management, outdated facilities, and inadequate tools and equipment. D. Soil ConservationEfforts in China 1.10 The totalland area in China subjectto acceleratederosion is estimated to be 147 millionhectares (16 percentof the total land area);an estimated 5 billiontons of topsoilare erodedannually. The Chineseestimate that the lossesof key nutrientsfrom this processare nearlyequivalent to the nation'stotal annualfertilizer production. Historically, soil erosion problemshave been most seve-,along the upper-middleYellow River, with roughlyone-third of the nat a's total erosiontaking place along the Yellow River alone. Despiteefforts to counteractsoil erosionsince the 1950s, erosionproblems have intensified,with an estimated30 percentmore land affectedby erosiontoday than In 1949. Areas of particularconcern are (i) along the YangtzeRiver, in which erosionis estimatedto have doubled since the 1950s,and (11) in SichuanProvince, in which erosionis estimated to have more than quadrupledsince the 1950s. In southChina, where soils are generallythinner, susceptibility to erosion-causedproductivity losses is much higher. E. SectoralObiectives and Bank Lending

1.11 The Government'slong-term objectives for the agriculturalsector are to Increaseproduction to meet the requirementscreated by populationand - 5 -

incomegrowth and to increaseincome and employmentin rural areas. Given China'sshortage of arableland, tevelopmentplanners have focusedon the need to increasethe productivityof presentlycropped areas and to developeffi- cientlythe few remainingareas of unutilizedlands. A major objectiveis to stabilizeper capitagrain output. Per capitaand totalvalue added In the crop subsectorare to be raisedprimarily by increasingthe yield and quality of food, feed, orchard,and industrialcrops and also by Increasingthe volume of agroprocessing.Although investment in agriculture(including irrigation) declinedmarkedly during the initialreforms of 1980-85,due to the enhanced profitabilityof nonagriculturalinvestments to subnationallevels of government and their freedomto make these investments,agricultural investment has since reboundedat all levelsdue to firm nationaland proVincialcommitment to increasingproduction. 1.12 Bank Group agriculturallending to date has comprised29 operations amountingto $3.45billion and has covereda wide spectrumof goographicareas and subsectors,with overallfocuses on land development,irrigation and drainage(seven projects), upgrading of agriculturalsupport services including agriculturalresearch, education, credit and seed Improvement(seven projects),development of specializedsubsectors including rubber, forestry, fruit and fisheries(eight projects), and area development(seven projects). In recentyear., the Bank/IDAhas supporteda seriesof p-ovincialdevelopment projectsin which an area developmentapproach has been applied. In these project.,the responsibilityfor proposing,preparing and implementingthe projectsand repayingproject funds restswith provincialand lower-levelgovernments. A major objectiveof severalrecent Bank projectshas been to assistin the Government'songoing reform process. The Rural SectorAdjust- ment Loan (Credit1932-CHA/Loan 2967-CHA), which was approvedduring 1988, contributedto the articulationof the overallreform process. Severalproj- ects approvedsince 1989,notably the NationalAfforestation (Credit 2145- CUA), Mid-YangtzeAgricultural Development (Credit 2172-CHA), Fourth Rural Credit (Loan3265-CHA/Credit 2182-CHA), and GuangdongAgricultural Development (Credit2307-CHA) projects contain significant subsectoral reform elements.

1.13 Implementationof most ongoingBank/IDA-financed projects in the agriculturesector is on schedule. Experiencein previousBank agricultural projectdin China is that physicalworks have been completedon time or ahead of schedule. Disbursementsfor agriculturalprojects, in fact,usually out- pace those in other sectors. Notablefeatures of all the projectsare the high standard of project management, the active participation of farmers and the effective collaboration of government authorities at all levels. Seven agriculture projects have been completedt North China Plain, Beilongjiang Land Reclamation,First and SecondRural Credit,Seeds, Rubber Development, and Rural SectorAdjustment. The proje'.tcompletion reports for theseproj- ects indicatethat implementationWas generallysuccessful, that economic rates of returnreached or exceededappraisal estimates, and that the technologies used were sound and appropriatefor wider application. P. AgricultureIn Sichuan

1.14 SichuanProvince, located in the southwestof China,is the most populous province in China with over 108 millionpeople, 92 million of whom are in agriculture. It is a land-locked province which shares its border with - 6 -

eight provinces--Qinghai,Gansu and Shaanxito the north,Hubei and Hunan to the east,Guizhou and Yunnanto the southand Xizang (Tibet)to its west. Of the totalarea of 57 millionha, 10.9 millionha (19 percent)are arable. A total of 6.6 millionha (12 percent)were cultivatedin 1990,of which about 42 percentwas under irrigation.Ths provinceis conventionallydivided into three major naturalregions. The first,the SichuanBasin, which occupie3 29 percentof the total area of the province,is a rich and fertilegrain belt. The secondarea, the West Plateau,occupies 45 percentof the total area and is importantfor cattleand fruit production.The third area, the southwestregion, occupying 26 percentof the province,comprises a river basin area suitablefor grains,sugarcane and oil seed crops and a mountainous area which supportscorn, potatoand cattleproduction. The proposedproject is locatedin the ChengduPlain, a part of the SichuanBasin, which, with only 16 percentof the province'stotal landsproduces more than 90 percentof the province'sgrain. Of over 33,000irrigation schemes in the province,most of which are small-scale,the most effectiveis the famousDujiangyan irrigation systembuilt over 2,200 years ago which is still operatingand at present servesover 570,000ha. 1.15 The major grain crops in the provinceare rice,wheat, corn, sweet potatoesand other tubers,and rapeseed. Sichuan,with one tenth of the nation'spopulation to feed on one sixteenthof the land, half of which is mountainous,had to developirrigation systems from ancienttimes to intensify its grain production.In 1990,the provinceproduced about 43 milliontons of grain (52 percentrice, 15 percentwheat) or 10 percentof the nation'sgrain output. It is also the largestproducer of rapeseedwith over one fifth of the nationaloutput. Sichuan'sproduction of Chinesegall, raw lacquer,wax and tung oil rank first in the country. About one third of Chinesemedicine comes from Sichuan. The provinceaccounts for 11 percentof China'stotal tea production. 1.16 China is the world'slargest producer and exporterof silk and silk products,with 60 percentof globalproduction and 90 percentof total exports in the world market. Sichuan, with a long tradition of mulberry planting and silkworm rearing, is the largest producer of mulberry cocoon and raw silk in China. In 1990, Sichuan Province produced over 134,000 tons and 11,000 tons of fresh cocoonand raw silk, respectively,accounting for nearlyone third of nationaland about one fifth of globalproduction. About 30 millionpeople in Sichuanare engagedIn sericulture,involving about 7 millionhouseholds in 130 c'unties. China'sshare in the globalmarket is expectedto increase since,being extremelylabor intensive,mulberry production and silkwormrearing activitiesare being phasedout in previouslyactive countries such as Japan and Korea. These countriesincreasingly rely on importsof raw silk from China for furtherprocessing. 1.17 Sichuanis the largestmeat producerin Chinawith the largestnum- ber of pigs and cattle. In 1990, the provincehad over 56 millionpigs and 11 millioncattle with an annualoutput of pork and beef of more than 4 million tons and 70 thousandtons, respectively.Pork accountsfor 70 percentof total provinciallivestock production. Poultry in Sichuanincludes chickens, ducks and geese plus quail and pigeon. Livestockproduction also included 445,000tons of eggs, 264,000tons of milk and 2,720 tons of wool. The prov- - 7 -

imce has about 20 millionha of pastureand grasslandwhich are suitablefor livestockgrazing. 1.18 In 1990,GVAO was Y 60 billion,which accountedfor about 33 percent of the total provincialoutput value. The relativeshare of agriculturehas been on the decline--46percent in 1970, 40 percentin 1980 and 33 percentin 1990. Nevertheless,agriculture remains the wost importantsource of income for more than 85 percentof the populationin the province. Livestockproduc- tion value accountsfor 35 percentof the totalGVAO. 1.19 An estimated44 percentof the area of Sichuanis subjectto acceleratederosion, with 2 millionhectares of cultivatedland on slopeslosing an averageof 110 tons of soil/ha/yr.equivalent to almost 1 cm of topsoil). Traditionally,most soil conservationefforts have been directedat the high productivity,irrigated lowlands and those areasof the uplandswhere terracing was physicallypossible and revegetationwas economic. Recognizingthe inadequacyof these traditionalapproaches in the uplands,the Chinesegovern- ment has the statedgoal withinthe currentFive-Year Plan of consolidating researchand experienceto formulateimproved practice in soil conservation and conservationfarming for steeplysloping agricultural lands Sichuanis activelyinvolved in these efforts. G. Rural Povertyin Sichuan 1.20 Alleviationof rural povertyremains a major developmentpolicy objective of the Government. Poverty programs were initially directed towards provision of relief but later evolvedinto a combinationof reliefand production supportin order to enablefarmers to developsustainable economic means of production.Since 1986,concerted effort was made to systematicallyiden- tify the specificcounties requiring governmental support for eradicationof rural poverty. Since then, the Governmenthas been allocating,in additionto subsidiesand relief,special funds to promoteincome generation opportunities for the rural poor in these areas as part of an overalldevelopment effort. Specialinstitutional arrangements have also been made at variouslevels of the Governmentto design and implementpolicies and projectsaimed at the economic development of poor counties. The same focus is continuing during the Eighth Five-Year Plan period (1991-95). 1.21 With limitedagricultural land,/ Sichuanis one of the poorest provincesin China. Farmers'annual per capitaincome is Y 558 ($103equiva- lent),around 88 percentof the nationalrural averageof Y 630 ($117). Nearly26 percentof Sichuan'spopulation is reportedto be poor. Of 214 countiesin the province,65 countiesare eitherprovincial or nationally classifiedpoverty counties. The criteriaused in 1986 for the nationalclas- sificationare based on the level of per capitaincome (less than Y 150 in 1985 prices)and the natureand significanceof the areas,including remote and backwardareas and localitiesinhabited by minorities. The Sichuanpro- vincialcriteria were targetedto areaswith less than Y 200 per capita incomes,barely equivalent to 200 kg of grain at marketprices.

I/ The averagerural householdin Sichuanhas 0.08 ha per capitaof cultivated land, about 60 percentof the nationalaverage. 1.22 The proposedproject focuses on four relativelypoor prefectures-- Mianyang,Guangyuan and Nanchongin north zentral Sichuan, and Qianjiangpre- fecturein the southeastcorner of the province. Qianjiang is one of the poorestregions in the provincewith a largepopulation of ethnicminorities. The averageincomes of the projectprefectures are all lower than the provincial average. They range from Y 201 ($37)to Y 422 ($78),which amountsto only 32 percentand 67 percentof the nationalaverage, respectively. The projectincludes 27 counties,of which 11 are nationallyclassified poverty counties. In QianjiangPrefecture, where all five countiesare nationally classifiedpoverty counties, of 634,000total households,about 24 percent have per capitaincome below Y 200, 42 percenthave incomebetween Y 200 and Y 300, 28 percenthave Y 300-500,and only 6 percenthave incomesabove Y 500.

H. Rationalefor IDA Involvement 1.23 The proposedproject is designedto addressthe key constraints limitingagricultural productivity in Sichuan'spoorest areas. Among them, the most pressingare the shortageand irregularavailability of irrigation water,high water and soil lossesdue to erosion,inadequate and weak linkages betweenproduction, processing and marketingactivities, and limitedtechnical and extensionservices to farmers. TDA involvementin the projectwould make possiblea large increasein farmers'income in these areas. Projectdesign draws on the Bank'sextensive experience in integratedagricultural development projectsin China to addressmajor constraintsto increasingagricultural productivityand rural incomes. IDA involvementwould promotethe efficient use of limitedresources, help developtechnologies for soil and water conservation,and promoteenvironmentally sound agriculturaldevelopment. The project would improvethe technicalefficiency of productionby extendingirriga- tion canalsfrom alreadycompleted reservoirs and main canalsfor relatively quick returnsto investment.The projectwould also reducesoil and water lossesby plantingsuitable trees, grass and legumes. The incomegeneration componentis designedto providealternative income options to subsistence farmers. Subprojectsfor livestockraising, mulberry and cocoonproduction, and tea rehabilitationwould be carriedout by individualhouseholds, selected among the poorest,with prioritygiven to female-headedhouseholds to enable women to becomeeconomically active. Povertyamong female-headedhouseholds is generallygreater than amongmale-headed households as women with limited assetsfor collateral,traditionally have less accessto credit,inputs and otherproduction means. The processingcomponent of the projectwould allow the provinceto improvethe linkagebetween raw materialproduction and processing,capture additional value added,and permitlower productioncosts and higherproduct values by improvingprocessing facilities and productquali- ties. Finally,the projectwould enhanceenvironmentally appropriate development of agriculturethrough Improvement of currentpractices and introduction of proven environmental protection measures. - 9 -

II. THE PROJECTAREAS

A. Location 2.1 The projectareas are locatedin 26 countiesof Nanchong,Mianyang and GuangyuanPrefectures in the north and QiaujiangPrefecture at the south- east cornerof the province. The projectwould build irrigationworks in 11 countiesof the threenorthern prefectures. The irrigsationcomponent has three subprojects--Shengzhong(SP), Wudu (WP) and Yangjiaba(YP). SP lies betweenthe Jialingand Fujiangrivers dividing ridge and the JialingRiver in five countiesand a city in NanchongPrefecture. WP is boundedby the Fujiang,Zijiang and Xihe riversand is locatedin five countiesin Hianyang Prefecture,and YP is locatedin JiangeCounty in GuangyuanPrefecture. Two soil conservationdemonstration areas would be locatedin Guangyuanand Qianjiangprefectures, while forestrysubprojects would be locatedin seven countiesof Qianjiangand Guangyuanprefectures. All of the livestocksub- projectsand most of the agroprocessingwith the exceptionof one paper mill would be locatedin Qianjiangprefecture. Sericulture activities would be scatteredin 16 countiesin threeof the four projectprefectures. Detailed irrigationsites and projectlocations are shown on IBRD Maps No. 23092,23094 and 23480 and Annex 1, Table 3. Backgroundprovincial and projectarea sta- tisticsare given in Annex 1, Table 1. B. Climate.ToDoaraphy and Soils 2.2 Climate. The projectarea has a continentalmonsoon climate. Monthly average temperatures range from a low of about 4°C in Januaryto a high of 27°C in July. Minimumtemperatures may reach -10°C in more mountainous areas,and there are between280 and 330 frost-freedays, dependingon elevation.Cloudy weather and fog occur frequentlyand limit sunshinehours to between1,200 and 1,500hours per year. Averageannual rainfall is 950- 1,250mm, of which 60-75 percentoccurs in the periodJune to September. How- ever, rainfalldistribution is extremelyvariable seasonally and year to year. Frequentdroughts occur in spring,summer and earlyautumn. The average annualevaporation in the projectarea rangesfrom 1,100 to 1,500mm and exceedsrainfall for nine monthsof the year. Climatologicaldata are presentedin Annex 1, Table 2. 2.3 ToDoaraDhyand Soils. The irrigationdevelopment areas are situated in the valleysand lower terracedslopes In hilly terrainon the easternand northeasternborder of the Sichuancentral basin. The prominentslopes along the sides of the ridgesand the steep streamchannels in the commandarea provideexcellent natural drainage. The averageelevation is from 100 to 300 m above sea level and the generalslope of drainageis from north to south. Due to the relativelysteep gradientsof the river systems,there are no extensiveflood plainsand drainageis not a problemin these areas. Soils are predominantlyclay loamsderived from red sandstonewith pH 6.5 to 7.5 and with relativelygood structure,but low fertility.With adequatefertilizer and water, thesesoils are well suitedto a wide range of crops. The project areas focusingon soil conservationand povertyalleviation are situatedin mountainousparts of Guangyuanand Qianjiaig at elevationsbetween 600 and 2,000m. These areas are intersectedby narrowsteep-sided valleys with - 10 -

slopesover 50 percent. The soils are mainlyacid loam (pH 5.5-6.5)with low nutrientstatus due to continuousleaching and much of the mountainousarea is moderatelyto seriouslyeroded. C. Water Resourcesand Irrigation 2.4 SichuanProvincial Government has proposalsto expandthe irrigation capabilityover an area of about 280,000ha in the north-centralregion of the province. The projectarea includespart of a multiphasedregional irrigation developmentprogram extending to the year 2000. This regionhas suffered seriouscrop lossesfrom droughtswhich occur nearlyevery year at some location. In the northernpart of the region,the droughtperiods are more preva- lent in the springand summer,while in the south,the most dominanttime for droughtis in the peak of summer. With over 60 percentof the local runoff occurringin the periodof June to Septemberand often as a resultof intensive storms,there is also a seasonalshortage of moisturein the early spring growingseason. It is commonfor the droughtperiods to occur in areas for two or three years in successionwhich impoverishesthe farmersfor a number of followingyears and never allowsthe regionto reach its productionpoten- tial. Withouta firm water supply,the farmershave been reluctantto invest in costlyon-farm inputs, thus furtherconstraining production. 2.5 Sichuanhas a long historyof exploitationof water resourcesfor irrigationand withinthe projectarea there are existingirrigation supply facilitiesconsisting of three mediumreservoirs, 38 small reservoirs,2,860 block ponds and about 37,000farm ponds. Many of these small storagesystems are ancientbut still operational,but becauseof their small capacity,they cannotdependably supply timely irrigation water. In some rice-growingareas where water supplyis particularlyunreliable, farmers cultivate a singlecrop of rice each year, leavingthe land fallowto storewater in the winterbefore transplantingrice in the spring.

2.6 The Sichuan Provincial Government plans to further tap the resourcesof the largerregional rivers, to createlarge storagereservoirs and water distributionsystems to providesupplemental irrigation supplies. The governmenthas spent the last two decadesinvestigating and planninga regional water resourcessystem and has developeda masterplan which includes three irrigationschemes. Some of the featuresof this plan have alreadybeen constructedbut additionalfinancial assistance is requiredfor continuation of the system. 2.7 The supplementalirrigation supplies for the three projectirriga- tion schemesare suppliedby tributariesto two large rivers,the Fujiangand JialingRivers, which drain from the northwestportion of the provinceto the south and empty into the YangtzeRiver. The Zihe River,tributary to the JialingRiver, supplies the water resourcesfor the YP and SP irrigationareas while the WP area would be servedby diversionsfrom the PujiangRiver (see Map IBRD 23092). 2.8 The ShengzhongReservoir which provides1,340 million cubic meters of storage for the ultimate full scale SP irrigation is completed and has remainednearly full in the last few years. The YP would be servedby the 24 - 11 -

millioncubic meters of storageupstream of the YangjiabaDam now under construction.

2.9 A recentlycompleted diversion dam and intakecanal are in position to divertwater from the largebase flows of the FujiangRiver. Futureplans includea numberof upstreamdams for storage,hydroelectric power production and operationalregulation of the FujiangRiver to provideadequate water supplyfor full developmentof the WP. D. Po2ulation.Farm Size and Land Use 2.10 The total populationof the projectarea is about 8.2 million (8 percentof the province),of which 7.3 millionor 89 percentare engagedin agriculture.An estimated2 millionfarm householdslive in the projectarea with an averageof 4 membersin each family. The averageland holdingis about 0.27 ha per family. Out of total projectland area of about 3.6 million ha, some 0.5 millionha are cultivatedon a permanentbasis to rice,wheat, corn, sweet potato,rapeseed, cotton, and other cash crops and about 0.7 million ha are commercialforest. E. Rural Incomesand Povertv 2.11 Poor householdsin the rural areas have been classifiedinto three categoriess (a) "Wu Bao Hu" or householdsthat are entirelydependent on gov- ernmentrelief, i.e., Bureauof Civil Administrationand local government (BCA);(b) "Ts Kuen Hu" or very poor who "do not have enoughto eat and wear" and whose incomesare less than Y 200 per capita. These householdsreceive reliefsupport from BCA; and (c) "PingKuen Hu" or poor householdswho "have enoughto eat and wear" but whose incomesare less than Y 200 per capita. Many of these householdsare well motivated,better educated and willingto adopt new technologies.They are not eligiblefor grantsor reliefgiven to householdsin the (a) and (b) categories,but they receiveassistance mostly in the form of loans from povertyalleviation funds. The householdswhose per capita incomes are just above Y 200 are considered to be above the threshold of "survival" line ("Shen Kun Xiasn") but not above the poverty line ("Pin Kun Xian"). The poverty line is deemed to have been crossed by a household if it achieves an income level of Y 500 per capita in 1990 prices. The project would directlybenefit 883,000 households, two thirdsof whom are livingbelow the povertyline. 2.12 The prevailingpoverty in many of the projectareas is due to a numberof factorsincluding poor agriculturalresource base, remoteness,lack of off-farmemployment opportunities, vulnerability to frequentnatural disas- ters and limitedinfrastructure such as roads,communications, electricity and water supply systems. Despite relief programs, lack of explicit programs to develop these areas has aggravated the situation. The minority groups traditionally living in poor areas have been mainly engaged in low-income occupa- tions,primarily subsistence agriculture. Over the years,increase in their grain productionhas also been marginaldue to limitedavailability of inputs and lack of technicalsupport services in these remoteareas. Floods, droughts,hailatorms and severewinter weather conditions also contributeto their poverty. The projectis designedto overcomethese constraintswhile supplementingongoing government programs to alleviatepoverty. It would pro- - 12 -

vide funds for specificproductive activities combined with necessarytechni- cal, trainingand marketingsupport. All of the projectbeneficiaries would be individualhouseholds with particularemphasis on selectingfemale-headed households(about 10 percentof total)as the top prioritytarget group. Activitiesselected are those alreadyadopted by more innovativefarmers in the areas and provento be successful.Familiarity with these activitiesfrom neighbors'experience often createsconfidence for farmerswho have limited experiencein noncropproduction. F. PresentArlicultural Development 2.13 The area proposedfor irrigationdevelopment comprises a net cultivated area of 135,200ha (70,000ha in SP, 61,500ha in WP and 3,700 ha in YP) with a total croppedarea (multiplecropping) of 250,000ha, givingan overall croppingintensity of 185 percent. Rice,wheat, corn and rapeseedare the major cropswhich togetheraccount for about 75 percentof the total cropped area. Other crops grown includesweet potatoes,beans and peas, cotton,and vegetables.About 45 percentof the croppedarea is rainfedand 55 percentis irrigatedfrom small reservoirsand ponds,but limitedstorage provides reliable irrigationfor only about half of the irrigatedarea. 2.14 Most of the irrigatedland is found along the river valleysand on the terracedlower slopes,which accountfor about 48 percentof the project areas. Rice is the dominantcrop here, but only one rice crop a year is grown. Farmers either grow rice in rotationwith winterwheat or rapeseed,or grow rice after a winter fallowdepending on the availabilityof water. At higherelevations winter sown wheat or rapeseedis followedby corn or beans, peas, sweetpotatoes (often intercropped with corn),cotton, other fiber crops or vegetables. Farmers adopt complex, but flexible cropping patterns aimed at maximizingcropping intensity within the constraintsof frequentlyoccurring droughtand limitedwater storagefor irrigation.Plowing and cultivationis carriedout eitherby hand or with draughtanimals (oxen or water buffalo), and hand labor using simple tools and equipment is used for all other farming operations.Crop husbandrystandards are generallyhigh and yieldsof major crops are in linewith the provincialaverage but significantlylower than in adjacentareas with fully developedirrigation systems and betteragricultural supportservices. 2.15 In the soil conservationareas, the major agriculturalcrops are paddy,wheat, corn and rapeseed;crop yieldsgenerally are below the provincial average. Presentfarming systems in Qianjiangand Guangyuanare based on annualcropping primarily for subsistence,with some small areas of cash cropping (for example,sweet potatoesor rapeseed)where possible. In 1990,about 0.37 millionha were under cultivationat an averagecropping intensity of 2.0. Grain crops (paddy,wheat and corn) accountfor about 80 percentof the cropped area, with dryland farming (corn and wheat) accounting for 65 percent by area and 55 percent by production. The area planted to grains has decreasedby 12 percentbetween 1980 and 1990,though total productiongains of about 25 percenthave more than offsetthe decrease;gains can be attrib- uted to increasedcropping intensity and yields. Duringthe same periodthe area plantedto rapeseedincreased from 19,500ha to 61,900ha. - 13 -

2.16 Fertilizer.Organic manures composed primarily of straw,pig manure and night soil togetherwith plant ash and crop by-products(e.g., rapeseed cake) are widelyused and supplyabout one third of the major nutrientsfarm- ers apply to the soil. However,to sustainhigh crop yieldsfarmers must rely heavilyon chemicalfertilizer. The annualconsumption of fertilizerin the projectarea is about 300,000tons of which two thirdsis nitrogenousand one thirdphosphate. While small amountsof compoundfertilizer are puichased, there is virtuallyno potashfertilizer available in the province. Most fer- tilizeris low analysisand poor quality. 2.17 Seeds. Host of the projectcounties have seed companiesestablished for processingand distributingrice, wheat, corn and rapeseed,but most county seed companies have inadequate seed processing equipment and lack suf- ficientstorage facilities and transport.The projectarea is self-sufficient in hybridrice seed, and hybridcorn seed requirementsare met from local production supplemented by importation from outside the province. The area seed companies can only supply 20 percent of the wheat seed and 40 percent of the rapeseed that is required annually. The shortage of replacementseed for wheat in particularhas resultedin a deteriorationin seed quality. 2.18 Livestock. The entirelivestock component is locatedin Qianjiang Prefecturein four state-classifiedpoverty counties--goat projects in Youyang and Pengshuicounties, a rabbitproject in Shizhucounty and a goose project in Ziushancounty. The livestockpopulation in the prefectureis estimatedto include 1.7 million pigs, 370,000 cattle,200,000 goats, 1.8 millionlong-hair (angorawool) rabbits,in additionto a largenumber of geese and other poultry. Most householdshave one or two pigs for fattening,a draft cattleor buffalo. Crop residuesare used as feed for these animals. Most ruminants are being raisedon naturalpasture areas and shrubson the mountainslopes supplementedby crop by-products.Geese and rabbitsare fed with cut grass and variouslegumes. The livestockpopulation In QianjiangPrefecture increasedrapidly during the 1980s,particularly in the areaswith scarce arable land where cropping options are limited. The project areas here are mountainous with limited land below 25 degrees of slope. Farmers have been cultivating on land steeper than 25 degrees with consequent soil erosion. Cropping on such steep lands is prohibited, and the farmers are in need of alternative income sources, which the livestock component of the project is designed to offer, by planting steep land vith grass and providing a small holding of livestock per household. There is also a large area of natural grasslandwhich is currentlyunderutilized. These grasslandswould be suitable for controlledgrazing and cut-and-carryharvesting for raisingbeef cattle,sheep, and goats (formeat, wool, hides and milk),as well as for goese and rabbits. Pigs could also utilizegrassland if supplementedwith sufficientgrain and foddercrops. G. SunnortServices

2.19 AtriculturalResearch. The SichuanAcademy of AgriculturalSciences (SAAS)is the major agriculturalresearch institute in the province.It has a staff of 1,100 including700 graduatesworking In 14 specializedcommodity institutes.SAAS is engagedin major breedingprograms for rice,wheat, corn, sweet potato,rapeseed and cottonin cooperationwith 21 smallerresearch institutes at prefecture and county level. In addition,SAAS has a comprehen- - 14 _

sive research program covering agronomy, soil fertility, and plant protection including rodent control and integrated pest management. The Mianyang and Nanchong Agricultural ResearchInstitutes are locatedwithin the projectarea. The M±anyanginstitute undertakes breeding and agronomicresearch on rice, wheat,corn, rapeseedand cottonwith particularemphasis on wheat where it has enjoyedconsiderable success in developinghigh yieldingpest and disease resistantvarieties. At Nanchong,emphasis is given to researchon sweet potato,peanuts and cotton,and plant breedersat the institutehave been suc- cessfulin developingnew strainsof these cropswith higheryields and improvedresistance to pests and disease. These major researchcenters as well as the smallerresearch stations at countylevel all sufferfrom a shortage of operatingfunds, facilities and equipment. Furthermore,information on new promisingresearch is not reachingthe field,and more evaluationof researchfindings under field conditionsio neededin order to promotenew technologyamong farmers. In most cases,formal linkages between research, education,and extensionare inadequate,and systemsfor communicatingto researchersthe problemsencountered by farmersalso need to be strengthened. While these needs would be partlyaddressed under the proposedproject, IDA is currentlypreparing an AgricultureSupport Services Project to addressseveral of the aboveconstraints on a systemicbasis. 2.20 Extension. Extensionservices in the projectarea are provided throughthe Bureauof Agriculture.There are agrotechnicalcenters at provincial, prefecturallmunicipaland countylevels and agrotechnicalstations at the townshiplevel. The frontlineextension worker at the villagelevel is the farmertechnician who normallyworks closelywith 5-10 demonstration householdsin each village. %emonstrationplots and farmertechnicians at the villagelevel and short coursetraining are extensivelyused to introducenew technology.Each governmentallevel is responsiblefor fundingsalaries and recurrentoperating costs. Extensionservices at the countylevel and below are frequentlyunderstaffed and underfunded.Some 60 percentof township agrotechnicalstations in the provinceare ill-equipped.The projectwould financetraining and procurementof necessaryfacilities to strengthenexten- sion in the projectarea. 2.21 AgriculturalCredit. The AgriculturalBank of China (ABC) is the largestprovider of institutionalcredit to the agriculturalsector. Credit is providedto largeragricultural borrowers through ABC's wide networkof branchesthroughout China extendingto countyand townshiplevels, and to smallerborrowers (including households) through some 59,000Rural Credit Cooperatives(RCCs) at townshiplevel and below. SichuanABC has its provincial officein Chengdu,a branchoffice in each of Sichuan's29 prefectures and 214 counties,and 1,650offices at townshiplevel. ABC providesshort and medium-termfunds for commercialactivities such as agriculturalproduction and agroprocessing. Small farms are largelyserviced through the networkof RCCs which providecredit to membersand townshipand villageenterprises (TVEs). The ABC trainsRCC staff,provides credit and supervisesoperations. In the projectareas, there are 64 ABC branchesand 590 RCC offices. H. Infrastructure 2.22 The projectarea, with exceptionof QianjiangPrefecture, has good transportationlinks. The main railwayand major interprovincialhighways - 15 -

connect most of the major towns and cities. A good road networklinks coun- tieo, townshipsand villages,while the riversthrough about 8,000 km of their navigable routes serve as an Important transport system for the movement of bulk cargo. Qianjiang Prefecture is located at the mountainous southeastern cornerof the province. The neseastairport is about 300 km away in the neighboringprefecture, but a new airportis now under considerationin liushancounty. Road connectionto the rest of the province is available but difficult. Navigationon the Yangtzeand Wu Riversprovides easier transpor- tation. Remotenessof QianjiangPrefecture from the rest of the province has been one of the main reasonsfor the prefecture'srelatively low level of development.On the otherhand, road systemsin neighboringcounties of Nunan, Hubei and Guizhou provinces are relatively well developed and serve as the main external links for the people and goods of Qianjiang. - 16 -

III. THE PROJECT

A. ProiectCblectives 3.1 The project'smain objectivesare: (a) To increaseproductivity of existingcrops, especially rice, by increasingthe land under irrigationand by providinga more relia. ble water supply for drought protection; (b) To provide a complementary package of integrated agricultural inputs, support services, adaptive research, training and technical assistance; (c) To developoperation and maintenanceplans and establishpolicies for the proposedirrigation systems, including the collectingof water chargesfor full recoveryof operationand maintenancecosti (d) To expandsoil conservationmeasures and reducesoil and water lossesto reducelong-term siltation of major rivers,maintain soil fertility,and improveproductivity of alreadyeroded areas; (e) To expandagroprocessing activities utilizing locally available raw materials;and (f) To increasefarmers' incomes in selectedpoor and remoteareas where they are less than 50 percentof the nationalaverage, with particular emphasison helpingpoor women.

3.2 SnecialEmDhasis on AlleviatingPoverty and AssistingWomen. The proposedproject includes some of the poorestareas of the province. Of 26 countiesincluded in the project,11 are nationallyclassified poverty counties including5 in Qianjiangprefecture, with a large populationof ethnic minorities. The project would help local farmers out of absolute poverty with special emphasis on helping poor women in some of the poorest and most remote areas of China. While povertyis widespreadamong the generalpopulation, povertyamong women is more severe. Female-headedhouseholds constitute about 10 percentof the total householdsin the projectarea. These single-income householdshave limitedassets for collateral,hence less accessto credit, inputsand other productionmeans, and are generallypoorer than male-headed households.The projectwould targetthese female-headedhouseholds as prior- ity beneficiariesand would supportestablishment of smallholdinglivestock, sericulture,and hand-knittedclothing production activities. Groups of women would organizetheir activitiesand coordinatesales and marketingefforts. These activitiesare far less physicallydemanding than heavy field cultivation work and would yield higherfinancial returns. Extensionservices would focus on trainingof women farmers,especially in sericultureand rabbitraising. Femaleextension agents would be an integralpart of the regularexten- sion staff,and trainingprograms to be supportedunder the projectwould emphasizetraining of femaleextension agents and technicians,who in turn, would train more femaleworkers. NGOs, e.g., the All China Women'sFederation (ACWF),would participatein these endeavorsto organizewomen's groups as - 17 -

well as using media and femalevillage leaders to promotewomen's participation in profitableactivities. B. ProjectDescription 3.3 The proposedproject has the followingcomponents: (a) Irrigation.Design, construction and initiationof operationsof the irrigationconveyance systems for the intermediatedevelopment phasesof three irrigationschemes; the ShengzhongProject (SP), the Wudu Project(WP) and the YangjiabaProject (YP) and provisionof agriculturalsupport services within the areas served. (b) Soil Conservation.Establishment of two soil conservationdemon- strationareas and plantingpaulownia, Chinese toon, other fast- growingtrees, gall, Chinesealpine rush, and medicinalplants. (c) IncomeGeneration. Production of mulberryand silk cocoonwith expansionof supportingservices, rehabilitation of tea gardensand establishmentof livestockproduction bases for goat, geese and rabbitcombined with plantingpastures. (d) Processing.Rehabilitation and expansionof two paper mills and establishmentof a rabbithair spinningmill as well as gallnut, goat, and geese processingplants. C. DetailedFeatures IrrisationComponent 3.4 The proposedproject would providesupplemental irrigation to increasecrop productionby constructingirrigation water conveyancefacili- ties--arterial canals, branch canals and trunk and farm level ditches--which would provide additional water to a total net command area of 135,200 ha. The projectwould supportthe establishmentof the operationand maintenanceorga- nizationand provisionof associatedphysical plant and equipment. 3.5 The extremevariability of the rainfalland the localizednature of existingirrigation features in the projectarea are the primaryconstraints to agriculturalproduction. By bringing reliable external water supplies from nearbysources and distributingthem withinthe region,the damagespreviously suffereddue to shortagesof rainfalland irrigationwater would be minimized. The firmerirrigation supply would also allow crop intensificationin areas where lands are fallowed in the winter season to accumulate soil moisture for spring and summer cropping. The civil works in each subproject would consist of a combination of main, branch, secondary and tertiary conveyance systems with associated hydraulic control structures. The conveyance system would be made up of lined canals,tunnels, aqueducts and invertedsiphons. In some instancesin-line pump stationswould be required as part of the main system and in other locations small pumps would bring service to areas located above the canals. These systems would also be capable of delivering and replenish- ing suppliesto existingponds and small reservoirswithin the projectarea. - 18 -

The good naturaldrainage of the regionwould allow returnflows to be reused in downelopeportions of the servicearea. No specialdrainage works are requiredother than assuringthat naturalside streamscan safelypass under or over the canals. 3.6 The ShengzhongProject (SP) would be expandedto bring supplemental irrigationto approximately70,000 ha. The ShengzhongReservoir and head reachesof the main canal servingabout 18,300ha have alreadybeen con- structedand are in operation. Completionof small secondarycanals in the upstreamportion of the serviceareas would allow expansionof the irrigated area early in the projectimplementation period. The fully completedSP is plannedto serve approximately138,700 ha. 3.7 The constructionof the Wudu Project(WP) has also been startedwith the recentcompletion of the diversiondam, initialstretch of the main canal and a hydropowerstation which returnsa portionof the divertedflow back to the river. The main canal and irrigationsystem to be constructedunder the projectwould irrigate61,500 ha. Ultimately,the WP would bring supplemental irrigationto approximately136,800 ha. 3.8 The YangjiabaProject (YP) would consistof the conveyanceand dis- tributionsystem to serve 3,700 ha. The completionof theseworks would coin- cide with the completionof the upstreamstorage dam and would allow delivery of water in approximately2.5 years from start of the project. The project also includesa 25 km pipelinefrom the YangjiabaReservoir to Jiangecity for deliveryof a reliablemunicipal water supply. 3.9 The irrigationsupplies for the SP and YP dependon dams and storage reservoirsnot includedin the proposedproject. Shengzhongdam, completedin 1984, is fully filledand operational.The 53 meter high Yangjiabadam is under construction.Both dams have undergonea dam safetyreview by an inde- pendentinternational panel. Wudu has a diversionweir with low head and does not involvea dam or storagereservoir. In September,1991, a group of five Chinese and foreign experts visited the sites to review designs, construction standard,safety systems and geologicaland hydrologicaldata. The panel's assessmentwas satisfactory.An assurancewas obtainedthat Sichuanwould carrv out maintenanceand geriodicsafety insDections of existingdams under arraniementssatisfactorv to IDA. The main findingsand recommendationsof the panel are summarizedin Annex 8.1/ 3.10 The projectwould includeprocurement of light constructionequip- ment to supportthe force account construction units at the county and township level,equipment for operationand maintenanceof the three irrigation subprojects.The O&M equipmentwould includetransport vehicles, material handling equipment, communication equipment and basic computer systems. Table 3.1 below summarizes the variouscivil works to be constructedunder the project for the three irrigationsubprojects. 3.11 AariculturalSuDgortina Services. The proposedproject would strengthenagricultural supporting services provided to farmersin the 12

,l A full Dam SafetyReview Panel reportis availablein the projectfile. - 19 -

Table 3.1i IRRIGATIONCOMPONENTs SUMMARY OF WORKS

Capacity Aqueducts Categoryof range in Totals Canals Tunnels and siphons conveyancesystem mlosec (km) (kA) (km) (km)

SHENOZHONG BranchArterial Canal 6.4 to 8.6 108.7 85.0 21.4 2.3 BranchCanal 3.5 to 4.1 28.6 22.9 5.7 0.0 SubbranchCanal 1.9 to 2.6 65.5 46.3 17.2 2.5 Trunk Ditch 0.5 TO 1.8 284.7 233.7 43.9 7.1 Farm Ditch 1,327.2 1,126.7 190.0 11.5 SubfarmDitch 1,298.0 1,298.0 0.0 0.0

1WUDU GeneralArterial Canal 60 12.2 10.2 1.1 0.9 ArterialCanal 27.3 69.6 57.5 8.8 3.3 BranchArterial Canal 9.5 to 10.5 40.0 34.8 3.4 1.8 BranchCanal 3.8 to 4.9 75.8 65.3 8.7 1.8 SubbranchCanal 1.8 to 4.2 103.4 92.4 2.5 8.5 Trunk Ditch 0.3 to 1.8 397.8 371.6 20.2 6.0 Farm Ditch 1,163.1 1,110.1 44.5 8.5 SubfarmDitch 713.7 711.9 0.0 1.8 YANGJIA SubbranchCanal 2.9 15.0 12.8 2.2 0.0 Trunk Ditch 0.9 to 1.4 36.0 34.2 1.3 0.5 Farm Ditch 108.0 108.0 0.0 0.0 SubfarmDitch 72.0 72.0 0.0 0.0 Water SupplyPipe 25.0 0.0 0.0 25.0 irrigationsubproject counties to complementthe improvementin irrigation facilities.Agricultural support would cover extensionservices, research, seeds,fertilizer and pesticides. (a) Extension. The projectwould upgradefacilities at 1 CountyAgro- technicalExtension Center (CATEC) and 225 TownshipAgrotechnical ExtensionStations (TATESs), by financingconstruction of offices, livingaccommodation (TATESs only), stores and classrooms.The projectwould also financeaudiovisual, laboratory, office and pest controlequipment for all 12 CATECsand 225 TATESsin the project area to upgradetheir capacityfor water, soil and plant analysis, adaptiveresearch, extension, and technicianand farmertraining. In addition,each CATECwould be providedwith a pickuptruck. (b) Seeds. The projectwould strengthenthe capacityof countyseed companies in the project area to produce, process and market good qualityseeds. Fundswould bo providedfor constructionof addi- tionalseed stores,including cold storage,processing areas and - 20 -

seed testinglaboratories totaling 5,780 en. The projectwould financeseed grading,drying and testingequipment and vehicles, including5 pickuptrucks and 10 trucks(5-ton) for transporting seed. (c) Fertilizersand Pesticides.The projectwould providefor procurement of 28,000tons of potassiumsulfate sufficient to meet the estimatedincremental demand for potassiumfertilizer at full development. About 240 tons of pesticideswould be providedmainly for controlof insectposts and fungaldiseases of rice,wheat, corn, rapeseedand cotton. An assurancewas obtainedthat fertilizersand nestleidesprovided under the vrolectwould be sold to farmersat nriceswhich cover the costs of procurement.trans2ortation and distribution. SichuanProvincial Government would establishand maintain a revolvingfund with proceedsfrom the sale of inputs(par.. 4.12). Soil ConservationComnonent 3.12 Soil ConservationDemonstration Areas. This componentincludes two demonstrationareas--one in QianjiangCounty, Qianjiang prefecture and the other in ChaotianCounty, Guangyuan prefecture. Both areas lie in hilly to mountainousterrain and are representative(physically and in land use types) of the majorityof the rainfed,upland agricultural areas in the project's regions. Total projectarea is 199 km',of which almost85 percentis classified as "ErosionArea"; a combinationof biologicaland structuralinterven- tions would be used to treat the erosionareas in their entirety. The focus of the demonstrationswould be on the verificationand disseminationof land use practicesand technologieswhich provideeconomic alternatives to present nonsustainableannual cropping practices. At completionit is expectedthat the demonstrationswould providean expandedmenu of technologicaloptions for land managementin the uplandsand a trainedcadre of technicalstaff to disseminatethe technologiesand approachesto other priorityareas of the province. 3.13 The projectwould providefor procurementof tools,construction materialsand off-farmlabor to constructthe works summarizedin Table 3.2. Additionally,IDA would financeprocurement of inputsfor nurseriesand estab- lishingforestry and Lorticulturalspecies (seed, seedlings, fertilizers and pesticides);adaptive trials/demonstrations for forestry,pasture and hill- slope conservationfarming; training of technicalextension personnel and farmers;a monitoringsystem to estimateproject impacts on surfacerunoff and sedimentloads; and technicalassistance for design/supervisionof trials, demonstrations and training, including construction materials for training centers and experiment stations,office, laboratory, training, research and survey equipment, research and trial expenses and domestic and foreign training and study tours. The project would establish a revolving fund from loan repayment for soil conservation activities to expand the effort to wider areas (par..4.12).

3.14 Other ForestrySubnroiects. The projectwould include(a) 8,700 ha of high-qualitytimber trees (Paulowniaand Chinesetoon); (b) 6,700 ha of fast-growing/highyielding plantations to Chinesefir, cryptomeria,pine - 21 -

(masson,slash and loblolly)and aldertreeqs (c) 6,000 ha of Sumac (two species) for gallnutproduction; (d) 2,677ha of Philodendronand Eucommiafor processingof bark into traditionalherbal medicines; and (e) 1,800ha of Chinesealpine rush (Eulalloplsu blnats) as a raw materialfor paper-making. These speciesare selecteddue to their marketability,suitability for the climaticand ecologicalconditions, and the technicalexperience available in the projectarea. IDA creditwould financeseedling., fertilizer, some off- farm labor, and tools and equipment. The project would also providetraining, agricultural support services, nurserying, marketing support and tending for the first three years. All plantings would be done on the contour. Vetiver would be testedfor its abilityto surviveover winter (at higherelevations around1,300 meters the minimumtemperatures drop below freezingpoint) and if feasible,Vetiver grass contourbarriers would be established.An assurance was obtainedthat all plantationswould conformto environmentalguidelines satisfactoryto IDA. Such guidelineswere establishedby the Ministryof Forestry(UFO) under the NationalAfforestation Project (Cr. 2145-CHA). Table 3.2: SOIL CONSERVATIONDEMONSTRATIONS: SUMMARY OF WORKS

Area Activity (ha)

BiologicalTreatments TimberPlantings 2,180 (e.g.,pine, china fir, toon,cryptomeria) FuelwoodPlantings 4,610 (e.g.,oak, locust,alder, coriaria) Tree Crops 2,830 (e.g.,walnut, tung, mulberry,mandarin) Land Closure 4,000 (for fodderand fuelwoodproduction) Pasture 2,210 ConservationFarming 1,450 (e.g.,vetiver hedgerows, contour cultivation cover cropping,intercropping)

Structural Treatments Terracing 580 Other 18,860sites (e.g., check dams, water ponds, riverbank protectiondike, silt traps,contour and infiltrationditches)

IncomeGeneration ComDonent 3.15 The incomegeneration component is targetedat extremelypoor sub- sistencefarmers with presentlylimited options to expandIncomes. Sichuan Provinceis relativelypoor and the projectareas includesome of the poorest areas in the province. While other projectcomponents, i.e., irrigationand - 22 -

soil conservation,would also help poor farmersby Increasingcrop yields in general,this componentis designedto help individualfarmers who have limited cultivatedland and presentlylive at subsistencelevel. Intensification of crop cultivationalone would not alleviatepoverty in the long term, and thus viablealternative Income generating activities are neededto achieve sustainablepoverty alleviation. The nationaland provincialgovernments have designatedpoor countieswhere specialassistance is provided. The project would supplementthese effortsby supportingcommercially viable activities designedto exploitlocal comparativeadvantages while providingnecessary supportingservices in training,technical assistance, and expansionof mar- ketingchannels and means. The projectwould establisha revolvingfund for povertyalleviation in Qianjiangfrom loan repaymentsof the incomegeneration componentwhich would be used for similaractivities (para. 4.12). 3.16 Mulberryand CocoonProduction. Investment in mulberryplanting and silk cocoonproduction would promoteincome-generating activities of individual households.The projectwould directlyhelp 115,000households in 16 counties--3counties in Guangyuan,10 in Nanchongand 3 in Qianjiangprefec- tures. Table 3.3 summarizesthe component'swork. Table 3.3: SERICULTURE:SUMMARY OF WORKS

Component Guangyuan Nanchong Qianjiang Total

Sericulture-individual households 55,000 40,000 20,000 115,000 Silkworm Egg Breedintg Stations - 6 1 7 Incubation Rooms 4 2 3 9 Cooperative Rearing Rooms 1,000 1,000 450 2,450 Tech/ServStations 49 20 30 99 Research/TrainingCenters 1 6 1 8 Cocoon Collection Centers 9 - 9 18

3.17 Developmentof sericulturewould involveeach householdplanting 500 mulberrytrees on about 0.07 ha, and constructinga silkwormrearing room (12 m' each);equipment would also be provided(40 rearingtrays, 80 rearing nets and 6 plastic cocooning frames each). Total area of mulberry planting would be 7,600 ha. Two silkworm egg productionstations (annual capacity of 60,000 boxes each) would be established and five would be expanded (incremental capacityof 60,000boxes each). Total annualincremental egg production capacitywould be 420,000boxes. IDA creditwould financequality planting materialsfor mulberryand tools and equipmentfor silkwormrearing to improve productivity and quality, and vehicles. Uniform and improved sericulture standards would be adopted in all project areas.

3.18 In addition, the project would provide supporting facilities-- incubators,cooperative rearing rooms and cocoon collection centers--and strengthentraining and adaptiveresearch. Cooperativerearing rooms would be managedby 2,450 householdsspecially selected to cooperativelyrear young silkworms during the early larval period of just-hatched to second day of the - 23 -

third instar(about 11-14 days). Each cooperativerearing household would receive200 graftedsaplings of a specialmulberry variety for young silkworm to increaseyields. The silkwormswould then be distributedto 40 to 60 householdsfor commercialrearing. Cocoonproduction is sensitiveto level of technologyand workers'skill. The projectwould emphasizeexpansion and establishmentof trainingfacilities to disseminatethe existingscience and technologyto farmers. Technicalservice stations would provideextension and trainingservices to farmers,while providinginputs for mulberryand cocoon production. Technicalstaff would providetechnical assistance at the field level and manage disinfectionof rearingrooms and cooperativerearing. The proposedresearch and trainingcenter would providelinkage between adaptive researchand field operation,train farmersand extensionworkers, and also functionas a pest and diseaseprediction center. Eighteennew cocooncollection centerswith a total capacityof 60-80 tons to enhancethe distribution network,and adequatedrying facilities to minimizelosses and retainhigh productquality, would be established. 3.19 There is virtuallyno minimumlimit of economicscale in cocoon production.An averagesilkworm rearing household in the projectareas con- sists of 4-5 memberswith about 0.07 ha of cultivatedland per person. A familymay start cocoonproduction with as littleas one fifth of a box of silkwormeggs, with about 100 border-plantedmulberry trees. Withinthree weeks,about 5-6 kg of cocoonscould be harvestedwith currentmarket value of Y 50. With Iftitedcultivated land, cocoon production is one of the most viablelabor-intensive activities, as mulberrytrees can be plantedalong fieldborders. Currently,30-40 percentof borderland of the projectareas is unused and is available for mulberryplanting.

3.20 Livestock. The four livestocksubprojects are locatedin four counties of QianjiangPrefecture. This componentwould establishintegrated livestockproduction bases to benefit36,100 individual poverty households by utilizingcurrently underused pasture resources. To avoid excessivepressure on the naturalgrassland, the projectwould also plant grass for grazingor cut and carry feeding. IDA creditwould financeprocurement of breedingand commercial stock,seeds, fertilizer, small equipmentand tools and vehicles. The project would also provide funds for training and grassland monitoring equipment (Table 3.4). 3.21 Each goat-raisinghousehold would get on average8 goats,5 adult and 2 young femalesand 1 adultmale, 20 m2 of shed and about 0.27 ha of grassland. Each householdwould retainsome breedingfemale goats to build up to a maximumof 10 femalesand an estimatedoutput of 16 slaughtdrgoats and 1 cull adult femaleper year. Goat breeding farms would start with 85 female and 15 male pure line goatswhich would supply180 progenyfor sale each year; artificial insemination services would also be supplied. A feedmill of 3,000 ton annualcapacity would be establishedin Youyangcounty to providesupple- mentaryfeed duringwinter seasons. Two trainingcenters would be established to furtherstrengthen technical extension and trainingservices, and 5 veterinary stationswould providepreventive and treatmentservices to the livestock.

3.22 Each goose-raisinghousehold would startwith 50 geese and 0.07 ha of grassland,and would eventuallyhave an annualproduction of 50 geese for - 24 -

Table 3.4: LIVESTOCK: SUMMARYOF WORKS

Goat- Goat- Goose- Rabbit- Item Unit Youyang Pongshui Xiushan Shizhu Total

Households no 15,000 6,100 10,000 5,000 36,100 Breoding households no - - 1,250 500 1,750 Grassland ha 4,000 1,627 1,000 367 6,994 Trainingcenter no 1 1 1 1 4 Vet. Station no 5 5 20 20 50 Feedmill t/yr 3,000 - 2,000 2,000 7,000 Feed stations no 5 - - - 5

sale. Specializedbreeding households would startwith 20 breedinggeese and 0.13 ha of grassland,with an estimatedannual output of 1,200 fertileeggs per household. About 20 householdswould specializein grassmealproduction and operationof goose hatcherieswith annualcapacity of 400 tpa of grassmeal and 36,000goolings per household. One centralgoose breedingfarm would be expandedfrom the present1,000 birds capacityto produce2,500 femaleand 500 male breedersper year to supplyto the goose-breedinghouseholds. The project would also establisha 2,000 tpa capacityfeedmill to providesupplemen- tary feed and improve a trainingcenter and 20 veterinarystations for better services to households. 3.23 Each rabbit-raisinghousehold would be providedwith 10 rabbitsand 50 hutcheswhich would expandto about 50 rabbitsand 50 hutchesby year 3. Each householdwould also plant 0.07 ha of grasslandfor feed. Five hundred specializedhouseholds would be establishedfor breedingrabbits. These householdswould be chosenfrom experiencedrabbit-raising households with a minimumof 50 rabbits.Each would startwith 20 rabbitsand 40 hutchesand 0.07 ha of grassland. These householdswould providerabbits to commercial rabbit-raisinghouseholds. The projectwould also expandan existingcentral rabbitbreeding station which would produce1,000 pure bred rabbitswith a nucleusgroup and a grandparentgroup to supplyto the specializedbreeding households.The project would also upgrade a feedmill by providing improved grinding, mixing and feed analysis equipment. A trainins center and 20 veterinary stations would also be improved. 3.24 The project would introduce a comprehensive grassland monitoring system(GHS) to prevent overgrazing and overexploitationof naturalgrassland while maintainingsustainable stocking rates of livestockto tap maximumbene- fits from the currentlyunderutilized natural resources. A similarsystem has been testedin the Rural CreditIV projectin InnerMongolia with successful results. The GMS would be developedbased on alreadyexisting regulations on grasslandmanagement in SichuanProvince with some modificationto fit local conditions.The systemwould facilitatecontinuous and systematicmonitoring of grasslandutilization and take timelycountermeasures as necessary.A assurancewas obtainedthat Sichuanwould establisha OHS for OianiiantPre- fecturesatisfactory to IDA by June 30, 1993. - 25 -

3.25 Tea Rehabilitation.About 2,333ha of low-yieldingtea gardens would be rehabilitatedby removingnonproductive bushes, replanting and gap- fillingwith improvedvarieties and increasingplant densitiee. The project would involve3,500 tea productionhouseholdo living at the subsistencelevel. Trainingof farmersin Improved tea garden management and In primary processing to retainquality would be emphasized.The project would also Include agriculturalsupport services, rehabilitation of tea terracesand drainage ways, a vetivergrass demonstrationcomponent and marketingsupport and infrastructure. IDA fundswould be used for procurementof constructionmaterial, seedlings,fertilizer, pesticides, some off-farmlabor and trainingfor techniciansand farmers. AaronrocesseinComoonent 3.26 The projectwould includesix agro-industrysubprojects, not including the small feed mills under the livestockcomponent. Five of the subprojects are locatedin Qianjiangprefecture which would be directlyintegrated with raw materialssupply production bases, l.e.,gost, rabbithair and geese, and utilizethe outputof farmersassisted by the project. The subprojects would providebuildings, equipment, wastewater and effluenttreatment, vehicles, trainingand technicalassistance to upgrademanagement skills. The projectwould also provideincremental working capital for each agroprocessing subproject.All agroprocessingsubprojects are designedto producevalue- added benefitsand increaseemployment for the projectareas. An assurance was obtainedthat the relevan-t2refectural Environmental Prgotction Bureau (EPB)under the mtuidanceof the Sichuan2rovincial EPB would anorovefinal deeimnsof effluenttreatment facilities of each arcorocessineenterorise opriorto beitinninatconstruction. and thesegegteriprisee would, under EPB supervision.imolement and maintaineffluent monitorint and treatmentsystems accordingto the final desiansapproved by the 2rovincialEPB. More details of each agroprocessing subproject are provided in Annex 1. 3.27 Most agroprocessingplants are state-owned in China with the excep- tion of collectivelyor privatelyowned small-scaletownship and village enterprises(Tm s). In this environment,the project'sobjective is to ensure that all agroprocessingplants included in the projectwould operateas inde- pendentand commercialentities and would be viable. None of the productsis governmentcontrolled, and all would be traded at free market prices. Each plant would have an Independent account with responsibility for their own profits and losses and all have registered charters. An assurance was obtainedthat Sichuanwould ensurethat for the two papermills and the rabbit bair DrocessinR2lant. each enterorisewould imolementan enterDrisereform olan satisfactoryto IDA. which would enablethe enterorisesto be managed indeoendentl_from the local suoervisorybureau. under an enterprisemanater selectedby an enterDriseboard of directors.

3.28 Paper and Pulp Mills. The project would expand paper-making capacity of two existing paper and pulp mills by 10,200 tpa each. Pengshui paper mill would utilize kenaf as raw material while the Mianyang mill would use wheat straw and kenaf. These plants are considered to be medium scale which allows for economic installation of sods recovery systems. With expansion of these two mills, soda recovery system would be Installed for both new and existing plants. Old plants have been operating without appropriate waste - 26 -

treatmentor soda recoverysystems. In addition,Sichuan provincial government has agreedto close down two smallpaper mills currentlyoperating without any wastewatertreatment--one in Gauguwith capacityof 300 tpa and anotherone in Yushanwith 500 tpa in PengshuiCounty. Purthermore,Mianyang bleachedpaper mill locatedin the centerof the city would be closedbefore December31, 1994 when the new mill becomesoperational and the recycled paperboard-makingunit would be closedbefore December 31, 1997. This "mini" restructuringof the local paper industrywould not only increasepaper pro- ductionbut also achievebetter environmental control of a highlypolluting industry. An assurancewas obtainedthat Sichuanwould close these three gaper mills in accordancewith timingand Proceduresacceptable to IDA. 3.29 LivestockProcessing. The componentincludes (a) establishmentof a geeseprocessing plant (processingcapacity of 800,000birds per annum)to produceprocessed meat, featherand goose down; (b) establishmentof a rabbit hair spinningmill (400 tpa rabbithair to produce254 tpa of angorawool blendedyarns); and (c) rehabilitationand expansionof an existinggoat and cattleprocessing plant (60,000goats and 7,000 cattleper annum). The project would substantiallyimprove low levelsof hygieneand productquality. All the livestockprocessing plants are designedto providemarketing outlets for individualhouseholds in the areas. The rabbithair processingplant in Shishucity would also establisha knittingplant with 20 semimanualknitting machinesto increasevalue added and also to createemployment for women. Individualhouseholds, particularly women in the area,would participatein rabbithair preselectionand gradingwhich needs to be done manuallyand also participateon a voluntarybasis in hand-knittingof sweatersand other garments. About 100 individualhouseholds would receivesemiautomatic knitting machinesunder the project. Most of the angorawool would be gearedtowards exportmarkets. The exact blend of angorawool to wool, syntheticfibers and silk would dependon exportmarket demand. 3.30 GallnutProcessine. The projectwould upgradeand expandan existing gallnutprocessing plant. The proposalis to produceannually 500 tons of tannicacids. Gallnutswould be procuredfrom farmerswho are alreadyproduc- ing gallnutsas well as thosewho would plant gall trees and producegall- nuts 2/ under a project-supportedcomponent. Tannic acid is often used to tan leathers. With increasingenvironmental concern worldwide, natural- substancebased tannicacid is again gainingpopularity compared to synthe- tics. The projectwould includean adequatewastewater treatment facility and also take precautionarymeasures in workingareas to preventpotential inhala- tion of intermediarypowder by workers.

Training.Research and TechnicalAssistance

3.31 Research. Under the irrigationcomponent, the projectwould support adaptiveresearch, field trialsand technicalworkshops aimed at strengthening linkagesbetween research and extensionand increasingand sustainingproduc-

21 Gallnutsare producedby introducingspecific aphid speciesto parasitize Sumac trees. This inducesswellings on the leavesof the Sumac (i.e., gallnuts),which are harvestedfor extractionof tannin. - 27 -

tion under fully irrigatedconditions. Research topics would includecrop rotationand cultivationtechniques for paddy and nonpaddyland with emphasis on high yieldingvarieties of rice,wheat, corn and rapeseed;soil fertility improvementiucluding optimal economic fertilizer application rates; and pest and diseasecontrol including integrated pest management(IPM) for rice, wheat, corn, rapeseedand cotton. Researchprograms would be under the direction of the Mianyangand NanchongAgriculture .esearch Institutes in coopera- tion with the Plant ProtectionStation of the SichuanProvincial Department of Agricultureand CATEC staff. Technicalworkshops for CATEC staffwould be conductedat the two researchinstitutes twice a year. Furtherdetails on researchare listedin Annex 1, Table 6.2. 3.32 Other researchprograms include: (a) for soil conservation,trial of new tree and grass species, experiments with new forestrytechnologies, vege- tative barriers,monitoring of soil conservationtreatment impact, and grassland improvement;(b) for sericulture,genetic improvement of silkworms, diseaseand pest control;(c) for livestock,breeding and diseasecontrol, optimalfeed formulation,and improvementin grasslandmonitoring and feeding practices. Full detailsof specificresearch topics to be supportedunder the projectare in Annex 1, Table 6.2. In general,the researchactivities would supportthe province'sbroader research goals by augmentingongoing efforts. Sichuanwould establisha TechnicalAdvisory Group (TAG),headed by a member of the ProjectManagement Office (PMO) and consistingof representativesfrom the provinciallevel bureausof Forestry,Agriculture, Animal Husbandry, Soil and Water Conservancy,and relevantresearch institutes to provideintersec- toral technicaladvice and also to reviewresearch proposals. The M.O would reviewand approveproposals in consultationwith TAG and managethe research funds. IDA fundswould financetechnical services, materials and eqLipment for research. 3.33 The projectwould providetraining for (a) 1,065persons in hydrolo- gic analysis,irrigation system design, canal O&M, and irrigationmanagement and constructionsupervision; (b) 1,400technicians in all projectcomponents; and (c) over 9,400 farmertechnicians and 320,000farmers in productionand betterinput utilization,including training in integratedpest managementand fertilizerapplication for about 1,000 technicians,4,500 farmertechnicians and 200,000farmers. Durationof trainingwould vary from three days for a short course for farmers to a year for a long-term course at university. The total trainees of the project would be over 330,000 persons with total training exceeding1.7 millionperson-days. In addition,about 430 personswould participatein domesticstudy tours for on-sitetraining and 45 personswould tour overseasfor management,technical and marketingtraining. The IDA creditwould financeper diem tr"ainingexpenses for trainees. The project would also providefunds for additionalclassrooms, dormitories and audiovi- sual equipment. The projectwould also provide210 person-daysequivalent of foreigntechnical assistance for the agroprocessingcomponent in designing, engineering,plant layout,initial start-up and marketing. Consultantswould be selectedunder terms of referenceagreed with IDA and in accordancewith the Guidelinesfor the Use of Consultantsby World Bank Borrowersand by the World Bank as ExecutingAgency. A summaryof training,study tours and technical assistanceis in Annex 1, Table 6.1. Assuranceswore obtainedthat la) Sichuanwould ensurethat all trainint.including study tours.and researchunder tb.eiroject would be carriedout in accordancewith trainint - 28 -

and research2rograms agreed with IDA and (b) ths PM0 would providean annual Jlanto IDA for ap,rovalby November1. each year which would includea list of uXroosedresearch. training and study tours for the commnayoar. 3.34 Trainingwould primarilybe conductedin Sichuanwhich has facilities with the capacityto handlemost of the proposedtraining program. How- ever, some strengtheningof agriculturaltraining facilities would be provided under the project. Furthermore,the Sichuanchapter of ACWF which is already activein trainingand fightingilliteracy among women, would play a major role in organizingand trainingwomen farmersand entrepreneursin the project area. To overcomea traditionalbias againstwomen in receivingtraining, the projectwould pay specialemphasis to trainingwomen; a minimumof 50 percent of farmersand 20 percentof techniciansto be trainedunder the projectwould be women (para.6.4). D. Statusof Preparation

3.35 The projectis at an advancedstage of preparation.Preliminary designwork on the three irrigationsubprojects has been completedand field surveysof canal and tunnelalignments have been made. Detaileddesigns for the SP are 90 percentcomplete. For the WP and YP, designswith drawings sufficientto cover approximatelytwo years constructionhave been completed. Feasibilitystudies have been preparedfor all subprojects,and designsare generallyat an advancedstage. For agroprocessing,detailed plant and con- structiondrawings would be producedand reviewedby the provincialBureau of Light Industryand the EPB. Design institutesalready involved in designand preparationof the feasibilitystudies would also write the technicalspecifi- cationsfor the tenderingagencies, and would discussthem with IDA during supervision.Preliminary designs for livestockfacilities, e.g., sheds, breeding farms, and training and support service facilities, have been completed and the selection criteria for beneficiary households finalized. Site selectionand preliminarydesign, and preparationof the technicalassistance programhave been completedfor the soil conservation,forestry and sericulture components, with relevanttechnical bureaus and the SichuanProvincial Silk Corporation as the main coordinators.

E. Imulementation Schedule 3.36 The project would be implemented over a period of six years beginning mid-1992 with completion in December 1998. A detailed implementation schedule for all components is given in Chart 1. For the irrigation component, the civil works of the three irrigation subprojects are scheduled to be completed and go into operation within a six-year period. For each irrigation system, construction would proceed in a downstream direction with concurrent work on main canals and smaller canals in the upper reaches of the subproject areas. The construction sequencing has been carefully selected to bring lands into the service area as early as possible and to maintain a rather uniform rate of additional lands being served each year. Some areas would benefit from the supplemental supplies as early as the first year. 3.37 In all three irrigation areas, there are civil works under active construction which are vital for providing water to the project-financed com- - 29 -

ponents. This ongoingconstruction is locallyfunded by Sichuan,respective prefecturaland countygovernments. Sichuan would ensureadequate funding, high-qualitycontrol and timelycompletion of thesework. so as not to impede water deliveryto the downstreamcanals financed under the project. 3.38 The soil conservationcomponent would be implementedover five years with the exceptionof the medicinalplants, alpine rush and tea rehabilitation which would be completedin three to four years. Designand preparationwork for all subprojectsshould be sufficientlycomplete for start-upby July 1, 1992. The livestockand sericulturesubprojects would be implementedover three years while establishmentof supportingand trainingservices for sericulturewould be phasedover four years. Constructionand commissioningof all processingplants would be implementedover three years,and timingof the three livestockprocessing plants would be coordinatedwith implementationof the livestockproduction subprojects. The proposedschedule is feasibleand conservative. P. Cost Estimates

3.39 The total projectcost is estimatedat $287.6million with a foreign exchangecomponent of $85.5million, for which an IDA creditof $147 million is proposed. These costs includeno significanttax elementwith the excep- tion of a constructiontax for selectedcivil works; importedmaterials or equipmentare exemptfrom dutiesfor Bank projects. Cost estimatesare based on detailedpreliminary designs and unit pricescurrently prevailing for similar construction work and materialsin the province along with machinery and equipment price lists from local and internationalsources. Physicalcontin- genciesare 10 percentfor irrigationsystem civil works, 5 percent for equipment, materialsand machinery. Price contingenciesfor both foreignand local costs,when expressedin US dollars,are based on annual internationalprice escalationrates for all goods and servicesof 3.9 percentfor 1991-2000,and when expressedin Yuan are based on price escalationrates of 6 percentfor 1992,5 percentfor 1993-98. Estimatedcosts are summarizedin Table 3.5 below and detailedin Annex 2. - 30 -

Table 3.5s PROJECTCOST SUDMARY

Local Foreign Total Local Foreign Total 1 Foreign S Base ----- C( mllllon) ----- .--- S mllio) ---- ocbhange cost

Irrination SP 228.7 77.2 305.9 42.5 14.3 56.9 25 24 VP 370.7 136.1 506.8 68.9 25.3 94.2 27 39 YP 20.5 5.5 26.0 3.8 1.0 4.8 i5 2 Agric. Support 22.2 35.4 57.7 4.1 6.6 10.7 61 4 Boll ConservatIon Soil Dgmoantration 21.2 5.4 26.6 3.9 1.0 4.9 20 2 Forestry 46.4 9.8 56.2 8.6 1.8 10.4 18 4 Income Generatlon Sericulture 62.5 19.9 82.4 11.6 3.7 15.3 24 6 Tea Rehab. 3.9 1.7 5.6 0.7 0.3 1.0 30 0 Livestock 23.8 7.0 30.7 4.4 1.3 5.7 23 2 Aarourocgesina 94.6 106.9 201.5 17.6 19.9 37.5 53 16

Total Base Cost 894.5 404.9 1.299.4 166.3 S.2 24.5J 31 1 physical Contingencies 65.5 33.0 98.5 12.2 6.1 18.3 33 8 Price Contingecies 127.3 22.3 149.6 23.7 4.1 27.8 15 12 Total Pro1ect Cost 1.087.3 460.l 1.547.4 202.1 85.5 287.6 30 119

G. Financint

3.40 The proposedIDA Creditof SDR 107.7million ($147 million equivalent)would cover 51 percentof the projectcost. The remaining49 percentis to be financedby local sourcesas summarizedin Table 3.6.

Ta le 3 6: PROJECTFINANCING PLAN $ Mlillion)

Sources Total 2 of Total

IDA 147.0 51.1 CentralGovernment 17.0 5.9 Provincial/PrefectureGovts. 45.5 15.8 CountyGovernments 19.0 6.6 Local Banks 9.0 3.1 SpecialPoverty Alleviation Funds 10.0 3.5 Enterprisesand Farmers 40.1 13.9 Total 287.6 100.0

3.41 The governmentsat each levelwould be responsibleto providecoun- terpartfunding for the activitiesin their jurisdiction.These fundswould come from budgetaryallocations from the central,provincial, prefecture and county governments, special poverty alleviation funds (both grants and loans), - 31 -

local bank loan.,and self-contributionby enterprisesand farmersthemselves. The informationon sourcesand amountsfor counterpartfunding is given in Anne3 1, Table 5. H. Procurement 3.42 Procurementarrangements are summarizedin Table 3.7.

Zible3.7: PROCUREHENTPROFILE ($ million)

ProjectElement ICB LCB Other NIP Total

Land - - 12.8 12.8 (0.0) (0.0) CivilWorks 39.4 82.8 52.2LS - 174.4 (19.3) (40.6) (15.3) (75.2) Materials 12.7 1.6 10.1 - 24.4 (12.7) (1.6) (8.1) (22.4) Machinery& Equipment 25.0 7.0 11.8 - 43.7 (25.0) (6.8) (9.4) (41.2) Vehicles 4.5 - - 0.1 4.5 (4.5) (0.0) (4.5) Training - - 3.1 _ 3.1 (3.1) (3.1) TechnicalAssistance lb - - 0.3 _ 0.3 (0.3) (0.3) Research - - 0.4 - 0.4 (0.3) (0.3) Design,Engineering - - - 8.0 8.0 and Management (0.0) (0.0) FarmLabor - - - 9.5 9.5 (0.0) (0.0) WorkingCapital - - - 5.6 5.6 (0.0) (0.0) ConstructionTax - - - 1.0 1.0 (0.0) (0.0) Tot&l 81.6 91.3 77.9 36.8 287.6 (61.5) {(49.0) (36.5) (0.0) (147.0)

La By force account. lb Services would be procured in accordance with World Bank Guidelines. Notes FiguresIn parenthesisare the respectiveamounts financed by IDA. NIP: Not IDA financed.

3.43 Whoks. Civilwork. contractswith estimatedcosts of $10 millionor more will be procured through international competitive bidding (ICB) procedures. Two packagesfor the Fusi ArterialCanal (totaling$39.4 million) meet - 32 -

that criterionand are scheduledfor ICB. Qualifieddomestic contractors would be eligiblefor a 7.5 percentpreference in bid evaluation.The major works for the diversion,storage and a portionof the main canalsin the upstreamof the projectareas have been completedand constructionis already under way in the segmentsof the main canalsjust ahead of the works included in the project. Works includedin the projectare dispersedamong three irrigationsystems and their designincorporates the maximumutilization of local materials (e.g., sandstone blocks for canal lining) and inexpensive but skilledlocal labor. The technology,though labor-intensive and traditional, has been proveneffective for the area. Due to use of localmaterials, labor- intensiveconstruction methods and remoteand scatteredconstruction sites, most of this work would not be of interestto foreignconstruction companies. As a result,about $82.8million of civilworks would be procuredthrough local competitivebidding (LCB) procedures acceptable to IDA for construction of the majorityof the buildings,pumping stations, canals, tunnels and conveyanceand controlstructures. Even thoughforeign competition is not anti- cipated,foreign firms would be allowedto participatein LCB. About one third of total civilworks, i.e, irrigationsystem laterals and sublateral canals,rural roads,afforestation and other on-farmworks, would be carried out by local labor forces(generally farmers) mobilized by countiesand townships. Theseworks are too small and widely scatteredto be suitablefor competitivecontracting. Force accountprocurement for these categoriesof works would not exceed$52.2 million. 3.44 Goods. Equipment,materials and vehiclesto be procuredunder the projectare estimatedto cost $72.6million. Packageslarger than $200,000 would be procuredthrough ICB. Steel,fertilizer, vehicles, turbines, and major agroprocessingequipment (total value of $42.2million or 58 percentof all goods)would be procuredthrough ICB. Passengervehicles would be financedby local funds. Domesticmanufacturers would receivea marginof preferenceequal to 15 percentof the c.i.f.price of importedgoods, or the actualimport duties, whichever is the lesserin the evaluationof ICB bids. 3.45 Small agriculturalmachinery, pumps, utility and trainingequipment, and spare parts (total$7 million)would be procuredthrough LCB procedures acceptableto IDA in which foreignsuppliers may participate.Cement and phosphate(total of $1.5 millionor 2 percentof the goods)would also be procuredthrough LCB. Due to the need to supplysmall batchesof cementto numerousscattered force accountsites over the entireimplementation period and the limited handling and storagecapacity in the projectarea, the PHO would annuallyplace blanketorders from cementsuppliers and manufacturers with indefinitequantity and deliveryterms.

3.46 The remainderof the goods (about$21.9 million)will be procured throughlimited internrtional bidding (LIB) or shopping. LIB will be used to procurepesticides, cowr:ters, and other officeequipment (total of $4.5mil- lion). There are only a limitednumber of suppliersof these specialized itemswho could offer competitiveprices, therefore ICB would not be the most economicand efficientmethod of procurement.Small quantitiesof equipment, instruments,miscellaneous goods, planting materials and breedingstock for livestock(total of $17.4million) would be procuredthrough domestic shopping under contractsnot exceeding$50,000. - 33 -

3.47 Trainina.Technical Assistance. and Research. Training,technical assistanceand research(about $3.8 million)would be carriedout based on programsto be agreedwith IDA. Consultantsfor trainingand technicalassis- tancewould be employedin accordancewith Bank Group Guidelinesfor Use of Consultants. 3.48 IDA Review. Biddingdocuments for goods packagesin excessof $200,000and works packagesin excessof $2,000,000would be subjectto prior reviewby IDA. This reviewwould cover approximately13 works contracts (53 percentof totalworks by value)and 14 goods packages(about 70 percent of total goods by value)over the six-yearimplementation period. Standard biddingdocmaents agreed between the GOC and IDA would be used in preparing bid documents. All reimbursabletraining and technicalassistance programs would be subjectto prior IDA review. Other contractswould be subjectto selectivereview after bid awards. Sichuanhas appointedChina National MachineryImport and ExportCorporation to assistthem in ICB procurement; this corporationhas procurementexperience in Bank Group projectsand is acceptableto IDA. I. Disbursements 3.49 Disbursementsfor machinery,equipment, vehicles and materialswould be made against100 percentof the foreignexpenditures of directlyimported items,100 percentof the ex-factorypric, of locallymanufactured items, and against75 percentof expendituresfor other itemsprocured locally. Dis- bursementfor civil works would be against50 percentof total expenditures exceptthose on force account,e.g., local civilworks for irrigationlaterals and sublaterals,rural roads,afforestation and on-farmworks, would be made against30 percentof total expenditures.Civil works contactson force accouztwould excludethe cost of separatelyprocured cement and steel and otherswould excludethe cost of steel. Disbursementsfor trainingand con- sultantservices would be made against100 percentof total expenditures.To take advantageof labor availabilityduring the slack periodof farmingactiv- ities in the 1991/92winter season, retroactive financing (up to a limit of $14 millionequivalent) for upstreamcanal contracts,on-farm works, minor structures,rural roads,land improvement,afforestation work, plantingmate- rials,and trainingwould be permittedfor expendituresincurred after Janu- ary 1, 1992 and beforesigning of the CreditAgreement. 3.50 Statementsof expenditures(SOEs) would be requiredfor disbursement to be made againsttraining, study tours,contracts for goods and works cost- ing less than $200,000,and force accountwork. SOEs for civilworks carried out by force accounton irrigationand drainage,,on-farm works, rural roads, land improvementand afforestationare to be supportedby progressreports showingphysical quantities and unit prices,the latterupdated annually and reviewedby IDA. 3.51 To facilitatedisbursements, IDA would providefunds to Sichuan Provinceto establisha SpecialAccount in a bank acceptableto IDA. This Special Account would be maintained in US dollars and operated by the Provin- cial PMO. The authorized allocation to the Special Account would be $7 million. The Provincial PHOwould prepare and submit applications for replenish- ment of the Special Account monthly or whenever the account has been drawn - 34 -

down to half of its initialdeposit amount, whichever comes first. The project is expectedto be completedby December31, 1998 and to close on December 31, 1999. Disbursementsfor agriculturalprojects in China have been better than averagefor the Bank and the Asia Region. The disbursementof the project would be slightlyslower than the averagedisbursement profile for the agriculturalsector in China since the projectinvolves large scale construction and would be implementedover six years. The estimatedschedule of dis- bursementsis given in Annex 4. J. Accountsand Audits 3.52 CountyProject Offices (POs) would maintainrecords of all project expenditures.These recordswould be forwardedregularly to the provincial PMO, who would consolidatethe accountsof expendituresand submitthem to IDA. At negotiations,assurances were obtainedfrom SichuanProvincial Gov- ernmentthat the PMO would maintainconsolidated project accounts which would be auditedby an independentauditor. The ProvincialAudit Bureauwould be acceptablefor this purpose. An assurancewas obtainedthat the audited accountswould be submittedto IDA within six monthsof the close of each fiscalYear. The auditedaccounts a.e to includedetails on withdrawalsfrom the Creditaccount made on the basis of SOEs, and the auditors'opinion as to whethersuch withdrawalswere made againstexpenditures eligible for reim- bursementby IDA.

K. EnvironmentalImpact 3.53 A detailedand comprehensiveenvironmental impact assessment (EIA) of the projecthas been carriedout by the SichuanResearch Institute of Envi- ronmentalProtection (SRIEP). The reportwas reviewedby IDA and revisedby SRIEPbased on IDA's commentsand recommendations.A proposedplan and budget for the monitoringand mitigationof project(potential) impacts has been submittedto IDA for review,and agreementwas reachedat negotiationsas to its fundingand implementation.The tentativebudget for the Environmental ManagementPlan (EIP)is Y 1.5 million. These fundswould be utilizedto hire expertconsultants to reviewdesigns and mitigatingmeasures, to providetechnical trainingto countyand prefectural-levelmonitoring station staff, and to providecontinuing support for monitoringof projectimpacts. An assurance was obtainedthat Sichuanwould imolementthe EMP as atreedwith IDA and ensurethat all urolectactivities would conformto environmentalstandards and auidelines.includint the environmentalreaulations and auidelinesissued bv the NationalEnvironmental Protection Agency and its ProvincialEnvironmen- tal ProtectionBureau. accentable to IDA. 3.54 The ETA concludedthat the overallimpact of the projectwould be positive. The soil conservation,forestry and livestocksubcomponents would establishsustainable resource management systems and reversesome of the negativetrends and impactsassociated with soil loss and inappropriate exploitationof uplandresources. The main, potentialsources of the project's negativeimpacts have been identifiedas the effluentthat would be generatedby the agroprocessingsubcomponents and the increaseduse of agro- chemicalsassociated with intensificationof agriculturein the irrigation areas. - 35 -

3.55 The measuresto be taken to avoid or mitigatenegative impacts from the project'smain sourcesof concernare:

(a) Agronrocessint and Paper Mill Subcomyonents.Adequate budgetary provisionhas been made withineach subcomponentto constructwaste treatmentfacilities at each location. Under the EMP, funds are provided for expert review of waste treatmentfacility design, to monitorthe operationof the treatment facilities, to monitor effluent from the plants,and to monitorwater qualitydownstream of the plants. In addition,Sichuan provincial government agreed to close down two smallpaper mills currentlyoperating without any wastewater treatmentin Pengshuias well as a bleachedpaper mill and a recycled paperboard making unit in Mianyang city when the new mill comes into operation(para. 3.28); and (b) IncreasedUsaae of ARrochemicals.The projectwould strengthen agriculturalsupport services including training of techniciansand farmersin establishedtechniques of IPM and properhandling/use of pesticides, procurement of pesticides with lesser environmental Impacts, support to agronomic researchin IPM, and fertilizertrials to rationalizeapplication rates. An assurancewas obtainedthat 2esticidesto be nrovidedunder the nroiectwould be anprovedbv IDA and that Bank Groun atuidelineson storage,handlina., distribution and use would be followed. 3.56 A total of 132 households(564 persons) from two villageswould be involuntarilyresettled as a consequenceof the Yangjiabadam construction. Althoughthe dam is not part of the proposedproject, IDA has agreedwith the SichuanProvincial Government that the resettlementbe carriedout according to the provincialresettlement standards already in place and that these peoplewould receiveadequate compensation acceptable to IDA. An assurance was obtainedthat Sichuanwould ensurethat the resettlementof 2ersons affectedby the constructionof the dam connectedwith the Yanaliabairrila- tion schemewould be carriedout in accordancewith a resettlementPlan aareed with IDA. 3.57 A more detaileddiscussion of the LIA and the proposedEMP are found in Annex 9. A full EIA reportis availablein the projectfile. - 36 -

IV. ORGANIZATIONAND MANAGEMENT

A. ProiectCoordination and Manatement 4.1 The Sichuan Provincial Government (SPG)has overall responsibility for the project. The managementstructure would replicatethat used for other Bank-Group-financedprovincial agricultural development projects, i.e., a LeadingGroup (LO) and ProjectManagement Office (PMO)at the provinciallevel and projectoffices (POs) at the prefectureand countylevels. 4.2 LeadinaGrouns. The SPG has establisheda provincialleading group (PLO),chaired by the Vice-Governorin chargeof agricultureand assistedby representativesfrom the provincialWater Conservancy,Agriculture, Animal Husbandry, Light Industry, and FinanceBureaus, the provincialPlanning Com- mission, Department of Textiles,Sichuan Provincial Silk Corporation,Sichuan chapterof the All China Women'sFederation, Agricultural Bank of China,and Peoples'Construction Bank of China. The main responsibilitiesof the PLG would be to organizecounterpart funding, formulate project-related policies and plane,review and resolvemajor issuesrelated to the projectand enlist supportof other relevantagencies. The PLC would make policydecisions on mattersrelated to the project,monitor progress on projectimplementation and financingand resolveany policyissues which may arise. The PLG would coor- dinatethe activitiesof other agencies,approve annual work programsand budget,and provideguidance to the provincial-level PMO. It would also keep the provincialgovernment apprised of the overallprogress of implementation. At the prefectureand countylevels, similar leading groups would be established. An assurancewas obtainedthat a orolectleading aroun at each of the Provincial.vrefecture and countslevels included in the nroiectwould be maintainedwith compositionand resoonsibilitiesacceptable to IDA. 4.3 ProiectManatement Office<. The ProvincialProject Management Office has been establishedwith overallresponsibility for projectimplementation while coordinatingactivities with relevanttechnical bureaus. The P1O has presently20 staff (16 full-timeand 4 part-timestaff) recruited from the Water ConservancyBureau, Water ConservancyDesign Institute, and Agriculture, AnimalHusbandry, Forestry, Light Industry,Textile and FinanceBureaus and SichuanSilk Corporation,and plans and supervises the implementation of all the components.Project offices have alreadybeen establishedat the prefecture and county levels to plan and implement the on-farm development, land allocation and agriculture development program and to monitor and evaluate progress. There are a total of 31 POs which would ultimately have a staff of 240. Projectmanagement staff would interactwith staff from relevanttechnical bureausduring project Implementation for technicaladvice. An assurance was obtainedat negotiationsthat a nroiectmanatement office at the 2rovin- clal levelwith functionsand responsibilitiesacceotable to IDA would be maintainedand staffedwith comnetentstaff in adeauatenumbers. 4.4 The Sichuanchapter of ACWF would be representedIn the Provincial LO and In projectmanagement offices (provincial, prefectural and county levels)for IncreasedInvolvement of women in project management, beneficiary householdselection and trainingof women. ACWF, which Is alreadyactive in trainingand educatingwomen, would play a significant role in organizing and - 37 -

trainingwomen farmersand entrepreneurs in the project area. For example, ACWF would help organizecooperatives of women for rabbit hair processing (carding,sorting and cleaning,and knitting)and marketing,and organizeand train female-headedhouseholds in small holdinglivestock production and mulberry and cocoonproduction. A representativeof the Sichuanchapter of ACWF would be includedin the ProvincialLeading Group and in projectmanagement officesfor increasedinvolvement in projectmanagement, beneficiary household selectionand to organizetraining of women farmersand entrepreneurs. B. Executionof ProiectWorks 4.5 The ProvincialPM0 would have overallresponsibility for planning, coordinatingand supervisingthe constructionof projectcivil works and establishingthe operationand maintenancesystem. The ProvincialWater Con- servancyBureau (WCB)would play the key role in design,preparation of bid documents,construction supervision and trainingof operationsand maintenance staff. The ProvincialBureau of AnimalHusbandry would be responsiblefor designand supervisionof the livestocksubcomponent. 4.6 Major LCB contractsfor civilworks for irrigation,soil conservation and agroprocessingplants would be signedbetween construction companies and the PM0, which would be responsiblefor coordinatingconstruction supervision. Countygovernments would organizelocal farmersfor carryingout earth works,building small structures,land levelling,land developmentand tree planting. The countyproject offices assisted and supervisedby the PM0 and ProvincialWCB would be responsiblefor survey,design, preparation of bid documents,procurement of materialsand constructionsupervision of on-farm developmentworks. They would work closely with county and township governments to ensurethat land allocationhad been completedwell beforeon-farm developmentwork commenced. This would ensurethat existing land holders and contractorscould contributeto final designto suit the proposedcropping patternand contributelabor. At the countylevel, the water conservancyand agriculturebureaus would be responsiblefor survey,design and supervising implementationof the on-farmdevelopment and soil improvementprogram. The materialsand equipmentsections of these countybureaus would be responsible for procurement,preparation of bid documentsand award of contractsfor on- farm development works, soil improvementand agriculturecomponents. An assurance was obtained that Sichuanwould. by December15 of each year. pre- vare and furnish to IDA for review an annual detailed work plan and report of the scheduleand financingarranpements. includint a statementof proposed annualcounter2art fundina. for proiectimplementation for the followinayear. C. Manatementof ProductionActivities

4.7 Crops and Livestock. The provincialbureau of agricultureis responsiblefor formulating agricultural policy, planning and administering provincial production programs and providing technical supportand training. Bureaustaff at prefecture/municipalityand countylevels would be responsible for implementationof projectproduction activities under the overalldirec- tion of the P10. The countyseed companieswhich operateas autonomousunits under the countyagricultural bureaus would be responsiblefor projectarea seed requirements.Fertilizers and pesticideswould be sold primarilythrough - 38 -

the prefectureand countybranches of the Supplyand MarketingCorporation (SMC). 4.8 Soil Conservation.The departmentof Soil Conservancyunder WCB vould be responsiblefor providingall technicalinputs related to soil conservation. Countylevel soil conservationoffices would carry out project design,construction supervision, training, extension and contractingof technical assistance,preparation of annualbudgets, and projectmonitoring and reporting. Townshiptechnical stations would implementall projectactivities and providetechnical assistance and supervisionat the farm level. All works carriedout, both on and off-farm,would be done under contractswith the participatingproject households and the townshiptechnical stations.

4.9 Sericulture.Sichuan Provincial Silk Corporation(SPSC), under the jurisdictionof China NationalSilk Importand ExportCorporation (CNSIEC), would overseeall activitiesrelated to cocoonand silk productionand trade in Sichuan. SPSC would be responsiblefor projectdesign, selection of sites and beneficiaries,management of subprojectimplementation at prefectureand countylevels through its branchoffices and for technicalsupport including provisionof technicaland productioninputs, training, and marketingof cocoons. On research,SPSC would coordinatewith the SericultureInstitute of SichuanAgriculture Academy of Science,Department of SericultureSciences, SouthwestAgricultural University and NanchongSilk School. 4.10 Agro2rocessinx.The SichuanLight IndustryBureau would be responsible for technicaldesigns and layoutplans for the agroprocessingplants. Under the guidanceof the FrovincialEPB, the relevantprefecture EPB would also reviewthe environmentalwaste systemto be includedin the project. Each plant would be owned by county or township governments, but independently operated with responsibility for its own profits and losses. D. Financial Manaaement

4.11 Flow of Funds. In conformitywith ChineseGovernment practice, proceedsof the IDA creditwould be onlentto SichuanProvince at an interest rate of 5 percentwith a repaymentperiod of 15 years,including a five-year grace period. The foreignexchange risk wouid be borne by the province. The SichuanBureau of Finance(BOF), representing the provincialgovernment, would channelthese funds to prefecturalgovernments. The prefecturalBOF would pass on part of the projectfunds to POs at prefectureait countylevels for publicworks, research,training and extensionworks and onlendthe other part throughfiscal or fliancialentities to enterprisesand farmers. The Agricul- tural Bank of China (ABC)and People'sConstruction Bank of China (PCBC)would act as financialagents for onlendingpurposes and would not bear any credit risk. Onlendingto farmersand enterpriseswould be only for activitiesthat havy been appraisedand approvedby the PMO. An assurancewas obtainedthat the proceedsof the Creditwould be made availableto farmersand enterprises under the orolectby ABC or PCBC under arrantementssatisfactorv to IDA in the form of loans bearinginterest at rates no less than the urevailintrate chartedby ABC for limilarloans for similarnurDoses. For the subprojects locatedin povertycounties, the actual grace periods of loans would be lengthenedas necessaryto reducefinancial burdens based on projectedcash flows for each final beneficiary.A ProjectAgreement incorporating all proj- - 39 -

ect terms and conditionswould be signedbetween IDA and SichuanProvince. State Councilapproval of the DevelopmentCredit Agreement would be a condi- tion of effectivenessof the Credit. 4.12 The projectwould also establishthree revolvingfund.: (a) a working capitalrevolving fund for procurementof fertilizer,pesticides and agriculturalinputs (para. 3.11(c)]; (b) a soil conservationrevolving fund (para. 3.13);and (c) a povertyalleviation fund (para.3.15). The source,sustaina- bilityand managementof the funds and selectioncriteria of beneficiaries were confirmedat negotiations.An assurancewas obtainedthat Sichuanwould establishand operatethese revolvinafunds in accordancewith grocedures satisfactoryto IDA. 4.13 Cost Recovery. Full recoveryof the IDA portionof total project fundingwould be the responsibilityof the Bureausof Finance(BOFs) at the prefecturaland countylevels. Countieswould repay prefectures,which would repay the province,which in returnwould repay MOF for the use of the IDA credit. All investmentcosts exceptgrants (e.g., poverty alleviation grant, etc.)would be repaidby projectparticipants. For recoveryof irrigation investments,present policies and regulationsfor water chargesvary from one prefectureand countyto another. The water chargesare designedto cover at least 100 percentof the O&M costs and possiblypart of the capitalinvestment over the projectperiod of 30 years. In most cases,the chargesare set for paymentin kind, usuallyrice. Due to the wide variationin water volumetric deliveryfrom year to year, the water chargesare structuredinto two components--abase chargeassessed by unit of land area servedand a volumetric rate for actualwater used above a basic allocation.At present,the base chargerate is 180 kg of paddy per ha and variouslesser charges for other crops. In addition,there are revenuesfrom power generationand aquaculture productionin reservoirs,which would also contributetowards cost recovery. An assurancewas obtainedthat Sichuanwould collectwater charaesat rates to be revisedDeriodicallv as necessarYto meet at least the full annualonera- tion and maintenancecosts of the comipletedirriaation schemes. E. IrriaationSystem ODeration and Maintenance 4.14 Each irrigationsubproject would have an independentirrigation managementoffice (DMO) which would set up O&M organizationsand facilities including: establishmentof O&M offices,operations and maintenancecenters, equipmentservice centers, and maintenancematerials yards; selection, assign- ment and trainingof personnel;and procurementof the necessaryO&M equipment for each of the three irrigationsubprojects. SP and WP each have their own IMO alreadyin operationand a new one would be establishedfor the YP subproject. Each IMO would be responsiblefor budgeting,revenue collection (fromwater chargesas well as other operationalincomes, e.g., power, fish- ery, etc.),and coordinatingthe work programof all OM officesin each irrigationscheme. OM of the irrigationsystem down to the trunk ditch level would be handledby these TMOs, and those of the trunk ditch systesmand below would be the responsibilityof the respectivecounties, townships and villages. - 40 -

4.15 Ooeration. The new distributionsystems for the WP, YP, and SP sub- projectswould be fully integratedwith all existingreservoirs and ponds. However,due to the high variabilityof the water sources,these systemswould requirecareful operation to achievethe plannedbenefits. Advantagewould be taken of advancedsimulation techniques to assistwith planningand training for operation. Such modelswould provide,as theirmain use, assistancewith long-termoperational planning, yet they can also assistwith day-to-dayoper- ating decisions. Statisticalforecasting, in conjunctionwith model operation,would assistin planningthe range of croppingoptions at the start of each year. The organizationand communicationscapability of the operations personnelwould be tailoredto providerapid responseto localizedwater shortagesand quicklychanging water supplyand demandover the subproject areas. The trainingprograms would be directedtoward upgrading the capability of canal operators. The operationsstaff would also be involvedin water measurementand record-keepingto supportcost recoveryactivities. Most of the actualcollection of commoditiesfor paymentwould be carriedout by the local Grain Bureauswho would convertthe receiptsto monetarypayments. 4.16 Maintenance.The most criticalperiod of maintainingan irrigation systemis duringthe first five years of operation. The maintenancecenter under each DMO would carefullymonitor the initialperformance of the canals and devise regular programs for the first line maintenance activities. The maintenance centers would be constructed and the basic equipment procured under the projectaccording to the phasingof the irrigationsubprojects. 4.17 A Plan of Olerationand Maintenance(POM) would be preparedas part of the projectfor each irrigationscheme which would outlinethe long-term O&Mprogram. The POMwould document more detailed organization charts of operations, maintenance and administrativestaff for each subproject.The POM would give the responsibilitiesfor each post and the portionof the project facilitiesand areas to be assignedto variousO&M offices. The rules and regulationsfor operationand proceduresfor respondingto requestsfor water supply would be outlined. Of particular importancewould be the policies that governoperations and allocationsof limitedsupplies in an extremedrought situation.As the constructionis completedand turnedover to the O&M centers, therewould be a companionsupplying of a completeset of "as built" drawingsof the completedworks from the designunits. The equipmentand officesrequired for the completesubproject would be outlinedin the PON, some of which would be providedunder the project. The annualscheduled main- tenancerequirements in detail,together with cost estimatingand budgeting procedures,would be presentedto guide in the annualprocess of allocating funds for system O&M. An assurance was obtained that the POMewould be com- nileted and furnished to IDA for its apgroval by Ausust 1. 1993. F. Proiect Launch Workshoo

4.18 To organize and initiate project implementation,IDA and local staff would conducta ProjectLaunch Workshop in Chengduno later than threemonths after Board approvalof the IDA creditfor staffof the provincial,prefecturaland countyproject offices. The purposeof the workshopwould be to reviewthe total programfor implementationand to clarifytasks and responsi- bilitiesat each level. Topicswould includeIDA procurementand disbursement - 41 -

guidelinesand procedures,financial management, supervision, and monitoring and evaluation.

G. Monitorina. Evaluationand Renorting 4.19 The provincial,prefectural and countyoffices and theirMonitoring and Evaluation(M&E) units would be responsiblefor monitoringproject progress, and would evaluatethe project'seconomic and financialbenefits for each componentand the project'soverall impact. They would keep a current accountof the physicaland financialprogress of each of the projectcomponents to comparewith managementprojections. Physical indicators would include: the kilometersof irrigationand drainagesystem andservice roads completed;the area of on-farmworks and soil improvementcompleted; the impactof projectinterventions on soil loss, runoffand crop yield as mea- sured by monitoringstations in the soil conservationdemonstration areas; the area (in m2) of constructioncompleted for projectbuildings; the procurement of constructionmaterials, vehicles and equipment;the procurementand distri- butionof fertilizers,agrochemicals and plantingmaterial; the area under irrigatedcropping and the plantedarea and averageyield of projectarea crops. Financialmonitoring would track actualexpenditures against projected expendituresand claimsfor disbursementagainst credit proceeds for each projectcomponent. They would also check collectionof land and production taxes and water charges to compare with planned collection. The county POs would submit the information to prefecture POs, who would submit the information to the Provincial PMOin Decemberand June of each year. Duringthe first two years of implementation,the projectoffice with the assistanceof county agroeconomic and cost of production survey units would conduct a baseline surveyon a randomsample of existingvillage households both withinand outsidethe projectareas to check farm size, croppingpatterns, use of labor and inputs,yield of major crops and other importantfarm activities,and total farm householdincomes and expenditureto measurethe project'sImpact. Repeatsurveys in 1995 and 1998 on the same sampleplus any new households would providea soundbasis for assessingthe Impactof the projecton farm productionand income. The aboveM&E systemwould providethe basis to prepare a projectcompletion report by the PMO, for submissionto IDA no later than six monthsfollowing the closingdate. A list of key monitoringindica- tors for physicalprogress and projectexpenditures and a plan for IDA supervision are given in Annex 7. - 42 -

V. PRODUCTION.MARKETS AND PRICES

A. Production 5.1 Under the project,crop outputwould increasesubstantially through significantlyhigher crop yieldsand a moderateincrease in plantedarea. At full development,production would increaseby 311,000tons of paddy, 129,000 tons of wheat, 21,300tons of beans and peas, 30,500tons of rapeseed,and about 15,000tons of other cash crops. The annualsown area would increaseby 34,000ha and croppingintensity would increasefrom 185 percentto 210 percent. The area plantedto rice,wheat and rapeseedwould increasewhile that of corn and sweet potatoeswould decrease. Improvementsin water availability and irrigationdelivery systems would enablea highercropping intensity and would be the main factorcontributing to highercrop yields. Increasedprovi- sion of inputsand strengthenedresearch, extension and trainingprograms would also contributeto raisingyields. As a resultof the project,yields of major crops are projectedto increaseas follows: rice 20 percent,wheat 33 percent,rapeseed 47 percentand corn 50 percent. Productionand yieldsof the main crops grown under the irrigationcomponent are summarizedin Table 5.1. These yieldsare consideredachievable since they are in line with yieldsalready being achievedunder similarconditions on large areas of fully irrigatedland adjacentto the project. Rice yieldsare for lowlandpaddy rice where hybridvarieties are grown exclusivelyas a summercrop in rotation with wheat or rapeseed. Under these conditions,rice yieldsin Sichuanare among the highestin China. Full developmentwould be achievedfive years followingcompletion of projectworks.

Table5.1 IRRIGCATIONCONFORt. t 07*OFP T1vWelopuent Output With ed VithoutProject)

Ithout Pro1ect Protect lentelIith cre- x 1W9QuQro 3cVucou area x s&c 8rmonUoO LECraLree a roaiaroii ('000 ha) (tlba) ('000 to"s) ('000 ha) (tlha) ('000 tons) (0000 ha) (tlb&) ('000 tone)

Paddy 56.3 6.9 367.8 63.5 8.3 698.4 27.2 1.5 310.6 Ubeat 58.9~~~~S 3. 7.6 7. 40 339 1I.9 1. 119. Coro 33.2 3.0 105. 9 22 .8 4.5 103.7 .12.4 1.5 -2.2 Sweetpotato 2339 29 9. 16.1 3.7 60. .17.8 :0.8 .394 Beane &Pe" 12.1 1. 17.4 1864 2.1 38.7 6 0.7 21 3 Rapeseed 31.5 1.5 46.7 34.9 2.2 77.2 3.4 n.7 30.5 PRaet. 2.7 1.5 4.1 3.0 2.2 6.6 0.3 0.7 2.5 Cotton 8.1 0.5 4.6 8.3 0.8 6.7 0.3 0.3 2.1 Other cash crops 12.1 21.7 9.6 Total crop area 250.7 264.5 33.8 Total cuivated are 135.2 135.2 Naaltlcropp2agindes 183Z 2101 notes Other cash crops ncludeka"f, vegetables.etc. 5.2 Under the soil conservationcomponent, an additional164 ha of annualcrop land would be broughtinto productionthrough increased cropping intensity,and an additional11,769 ha of timber,fuelwood, tree crops,and pasturewould be established.The projectedyield increasesfor annualcrops would be readilyachievable; projected yields from tree and grass plantingare based on currentyields in the projectareas and are likelyto be exceeded given the improvedpractices to be introducedunder the project. At full development,the forestrysubproject would producea total of 2.2 millionm' - 43 -

of timberand 455,200tons of fuelwood,l/alleviating a shortageof commercial timberin the projectarea and providingincreased Income to farmers. At full development,annual production of gallnutwould be about 1,440 tons, woody medicine2,000 tons and alpinerush 8,100 tons. 5.3 The projectwould also assist115,000 households to plant mulberry on 7,600 ha, which at full developmentwould produceover 205,000tons of mulberry leavessufficient to produce1,116 tons of fresh cocoons. About 36,100 individualhouseholds would establishsmall livestockraising enterprises which would produceabout 1.9 millionhead of rabbits,goats, and geese,which would be eithersold live or to neighboringprocessing plants. Six agroprocessingplants supported by the projectwould produce2,800 tons of processed meat, 7,000 piecesof hide, 40 tons of goose down, 254 tons of angorawool yarn, 500 tons of tannicacid and 20,400tons of varioustypes of paper. In addition,the knittinglines of the rabbithair spinningmill and about 100 individualhouseholds with semiautomaticknitting machines would produce 153,000pieces of knittedgarments, of which about one thirdwould be exported. 5.4 Table 5.2 summarizesproject output levels of all projectcommodi- ties from noncropcomponents at full development.

B. Marketsand MarketintChannels 5.5 SichuanProvince is presentlyself-sufficient in food grains. How- ever, with more than 10 percentof China'spopulation, with annualpopulation growthof I million,and an annualdecline of arableland of 20,000ha, sus- tainingfood securityis one of the most importantobjectives of the provincial government.Local demandwould readilyabsorb the incrementalproduction of grain and other food crops that are expectedto be producedunder the project. All grain producedunder the projectwould be sold on the free market and marketedby privatetraders who are alreadyactive in the province. Out- put of beans and peas would more than doublein the projectarea, but would not createany marketingdifficulty given the establishedactive trade with neighboringprovinces and the strongdemand. 5.6 The incrementalproduction of timberwould be absorbedby the local provincialmarket, and also throughshipments elsewhere in China. There is a large marketfor good-qualitypaper and pulp in China,which would readily absorbthe 20,400tons of paper that would be producedunder the project. Papermills locatedaround Chongqing have alreadyexpressed interest in pro- curingpulp from Pengshuipaper mill. Incrementallivestock production would be absorbedby the domesticmarket and also throughexports of angorayarn, goose meat, liver and goose down to foreigncountries, with possibilitiesfor furtherexpansion of productionand exporttrade in the futureif favorable resultsare obtained. At full development,about half of the processedgeese, rabbits and a small quantity of tannic acid and paper would be exported, with estimated total annual export value of agroprocessing products of about Y 180 million. Goats,rabbits and geesewould be sold both live and processed. Interprovincial trade of live animals has been activein QianjiangPrefecture.

1/ On the basis of a single harvest. - 44 -

Table 5.2a OTHERCOPONENTSa StUMfRYOF PROJECTOUTPUTS (WithProject at Full Development)

Area No. of Production No. of animals (ha) households (tons) ('000head)

Soil Conservation 7,700 Crops 1,434 Timber 25,903 m Puelvood 26,600 EconomicTrees 17,972 Fodder 31,000 Fish 14 Forestry 163,700 Paulownia 6,000 809,114 ChineseToons 2,700 770,486 ChineseFir 2,300 419,357 Cryptomeria 700 139,100 MassonPine 2,300 451,842 Slash Pine 700 141,100 Alder 700 128,486 all Trees 6,000 17,000 1,440 Woody Medicine 2,667 8,000 2,000 AlpineRush 1,800 6,700 8,100 Tea Rehab. 2,333 3,500 11,725 Sericulture MulberryPlanting 7,600 115,000 205,020 Fresh Cocoons 115,000 1,116 Livestock Goats 21,100 629 Rabbits 5,000 750 of vhich rabbithair 250 Geese 10,000 500 Agroprocess$ng Goat (meat) 680 Cattle(meat) 580 Hides (pieces) 7,000 Geese (meat) 1,404 Geese (down) 40 Geese (liver) 112 RabbitHair (yarn) 254 TannicAcid 500 Paper 20,400

A livestockauction market was establishedin Dungshi,Youyang county in 1987, and is now open five days a week. On an averageday, about 1,000 to 1,400 goats are sold locallyas well as to tradersfrom other provincessuch as Hubei and Guizhou. A similarauction market also existsfor rabbitwool in Shishu,where the projectwould expandrabbit production and establisha rabbit hair processing plant. Over 3,000 traders from all over the province and - 45 -

neighboringprovinces engage in rabbitwool procurement.So far, rabbitwool is sold unprocessedto tha wholesalersand ginnersfrom Hubsi,Hunan and Anhui provinces. 5.7 Chineseexports of raw silk and silk productsin 1989 reached$1.84 billionand the targetfor the year 2000 is $2.7 billion. China traditionally exportedraw silk but is shiftingtowards more processedgoods such as yarn, dyed fabricas well as garments. The shareof raw silk in total silk export value has been steadilydsclining from 49 percentin 1980, to 40 percentin 1985 and to 25 percentin 1989 as value added is far greaterfor more pro- cessedproducts. Nevertheless,with limiteddesigning and dyeingskills, Chinawould continueto exportraw silk which can readilyfind marketsin Japan,Korea and Europeanand North Americancountries. In China,silk marketing is fully controlledby the China NationalSilk Importand ExportCorpo- ration(CNSIEC) and its provincialbranches. The SichuanProviucial Silk Corporation(SPSC), a branchof CNSIEC,has a mandateto exportsilk directly and is currentlyengaged in foreigntrade with over 40 countries. Prefectural and countylevel branchoffices of SPSC would procurealmost all cocoonspro- duced in the projectthrough well establishednetworks of cocooncollection and dryingcenters. At townshipand villagelevels, SPSC has set up collection pointsvhere farmerstake their fresh cocoonsto sell. Fresh cocoonsare then classified,inspected,ava crops--andbuy fertilizer,agrochemicals and

other farm inputsat free marketprices. An assurancewas obtainedthat 2rain quotaswould not be increasedin any of the countiesunder the 2roiect. In general,farmers are requiredto sell a portionof their food grain (rice)to the State,at a contractprice that is set by national authoritieswhich currentlyamounts to Y 0.54/kgfor paddy of averagequality as comparedto a free marketprice of about Y 0.80/kg. In return,they receivefertilizer at a subsidizedcontract price at plantingtime. The quantityof rice to be deliv- ered by farmers to the Gr.iin Bureau at the contract price amounts to about 405 kg per ha of paddy fielld, in addition to a duty quota or tax (deliverod without payment) of about 150-165 kg per ha. The quantityof fertilizer received by farmers at contract price in exchange for quota deliveriesvaries according to availability.Apart from contractprices set at the provincial level, negotiated prices for crops and fertilizerare set by county authori- - 46 -

ties within a range set by higher-levelgovernments In order tobiA sale of these crops to publicinstitutions.

5.9 Generally,larger goats (above30 kg live weight)command a premium price which at presentis about Y 2.7 per kg versusY 2 fc.rgoats weighing 20-25 kg. Goats under 20 kg are sold for as low as Y 0.81kg. Rabbithair pricesvary accordingto grades. An averagefarn-gate price in 1991was Y 60/kg,while averageauction prices at the wholesalemarket varied from Y 65/kg for the lowestgrade III, Y 80/kg for grade II and Y 100/kgfor the highestgrade I. All silk cocoonsmust be sold to the local governmentat a fixed procurementprice that dependson the qualityof the product. The average price receivedby farmersfor cocoonshas increasedfrom Y 1/kg in 1978 to Y 3.4/kgin 1980,to Y 9.1/kgin 1990 in currentprices. Rapid increasein procurementprices fueled by increasingdemand both in domesticand export marketshas been the main force behindrapid growthof this industryand this price trendwould likelycontinue. 5.10 Input and outputprices used in crop budgetsfor financialanalysis are presentedin Annex 6. For economicanalyse., the farm-gatevalue of fer- tilizershas been calculatedon the basis of World Bank internationalprice projections(import parity value), with appropriateadjustments for nutrient contents,domestic and internationaltransport and handlingcosts. The economic value of most other farm inputs such as agrochemicals and organic manure has been consideredequivalent to the financialprice. For farm outputs, border prices based on World Bank price projections have been calculated for paddy,corn, and wheat, and actualexport price data for livestockproducts andraw silk have been taken into accountin order to estimatethe export parityvalues. - 47 -

VI. BENEFITS, JUSTIFICATION AND RISRS

A. Benefits 6.1 The major benefitsfrom the projectwould derivefrom incremental crop production,which would be the resultof investmentsmade in irrigation facilitiestogether with an improvedextension service, adoption of improved technologieso, improved input availability and farm management. The estimated net presentvalue (at 12 percent discount rate) of incremental on-farm net benefitsamounts to Y 571 millionover the 30-yeareconomic life of the project. Other productionbenefits which are describedearlier include increased productionof livestock,silk cocoon,timber, fuelwood and other cash crops. In addition,the projectwould improvesocioeconomic conditions of some of the poorestand the most remoteareas of the provinceby helpingpoor farmersand women, improvingthe environment,better managing natural pastureland, and preventingsoil erosion. B. Emplovmentand Incomes 6.2 Employmentopportunities generated by the projectwould help reduce seasonal underemployment among the rural labor force in and around the project area. At full development, farming activities in the irrigatedareas would create an annual Incremental demand for labor of about 179 millionperson-days per year, equivalent to about 600,000 new jobs. In total,the projectwould directlyincrease incomes for about 883,000households. If householdswho would indirectlybenefit from supplyingraw materialsto agroprocessingplants are included,the total numberof beneficiaryhouseholds would be over I million. The farm model analysisshows that, at full development, the annual incomeof a representativevillage household would increasefrom Y 359 to Y 595 for crop cultivatinghouseholdo, Y 385 to Y 860 for sericulturehouse- holds,and Y 320 to Y 1,122for livestockraising households. Incomefrom the gallnutsubproject would raise 17,000households (66,000 persons) above the povertyline, with incremental incomes of Y 152 per capita. At full development, Chinesemedicine production would providean incrementalincome of Y 141 per capita.

C. Women In Develonment

6.3 While it would provide additional incomes and employment opportunities for poor farmersat large,the projectwould particularlyhelp improve livingstandards of poor women in some of the poorestand most remoteareas of China. In the projectareas, there is considerable evidence that female- headed households disproportionately suffer poverty due to limited access to credit. The project would provide women with equal access to credit. Sichuan would select female-headed households as the top prioritybeneficiary group to correct, at least partially, the existing bias. Planting of mulberry trees and production of silk cocoons are traditionallydone by women as is tending of small livestock,such as rabbitsand geese. Hand processingand clothes knittingactivities would createsmall household-based female-run enterprises. Rabbithair spinningmills, also financedunder the project,would supply high-qualityyarn to, and also procuresweaters from, thesewomen for export. The variousactivities designed to help women would generateadditional - 48 -

employmentof about 100,000jobs for femaleworkers. Silkwormraising, rabbit raising,rabbit hair spinningand knittingactivities would generateannual incrementalincome somewhere between Y 240 to Y 460 for each woman. Basic extensionservices would focus on trainingwomen farmers,especially in sericultureand rabbitraising. 6.4 The PHO would extendlonger grace periodsfor repaymentof loans to reducecash flow burdensduring the initialyears, provide adequate access to creditand input supply,and train femaleworkers and farmers. An assurance was obtainedthat a minimumof 50 percentof farmersand 20 oercentof techniciansto be trainedwould be women. The trainingprograms to be supported under the projectwould emphasizetraining of femaleextension workers and technicians,who in turn,would trainmore femaleworkers. Activeroles for NGOs, e.g., ACWF, would also be enlistedin these endeavors. The project would be one of the first substantialefforts to help establisheconomically viableincome generating activities in the more remoteproject areas. D. Rent and Cost Recovery 6.5 The proposedlevel of water chargecollection would raise adequate funds to providefull recoveryof operationand maintenancecosts. Incremen- tal tax receiptsgenerated by the projectwould give a cost and rent recovery index of about 20 and 35 percent,respectively. Substantial incremental tax revenues would accrue to government as a result of the project. At full development, it is expected that incrementaltax revenues would exceed Y 36 million per year derived from the taxes paid by silk companies, from the farmers on the basis of their paddy field aria, and from the production taxes they pay when sellingtheir products. E. Financialand EconomicAnalysis 6.6 The financialand economicanalyses are based on detailedcrop budgets preparedfor all the annualand perennialcrops. The farm model analysis shows a substantialincrease in farmers'income, indicating the financial strength of the project. The analysesof soil conservationdemonstration were carriedout based on representativefarm modelswith the averagejoint investment cost allocatedto each household. The total economicinvestment costs includephysical contingencies but excludeprice contingencies,subsidies, povertygrants and taxme. Local financialprices have been adjustedfor the purposeof economicanalysis by distinguishingoutputs and inputs as tradeable and nontradeable.World Bank price projectionsor averageexport prices actu- ally realized in China were used to estimate the farm-gate economic prices in 1992 constantterms for tradedinputs and outputs. Conversion factors for nontradeableinputs were ostimatedand appliedto convert financial values to economic costs. Incremental on-farm labor has been valued at Y 4 per person- day. Based on these assumptionsand an assumedproject life of 30 years, the base case economic rates of return (ERRe) for selected subprojects range between 16 percent (for YP irrigation) to 45 percent (for silk), vith an overall projectERn of 26 percentwith a net presentvalue of about Y 856 million. The project components have the following ERRs: irrigation 24 percent; soil conservation25 percentsincome generation 42 percent;and agroprocessing 21 percent. A summaryof the economic and financial analysis and the results of the sensitivity analysis are presented In AUeL 6, Table 1. - 49 -

6.7 The analysis of the three irrigation subprojects is based only on the incrementalbenefits from this portionof the multiphasedinvestment program and has takenall costs of dams and headworksalready constructed as sunk costs. With these assumptions,the overallirrigation component has an ERR of 24 percent. However,a full analysisfor the entireirrigation system has also been made which shows lower ERRs (i.e.,SP down from 32 to 18 percent,WF down from 19 to 15 percentand YP down from 16 to 13 percent).l/ These lower EREs illustrate diseconomies of this type of discontinuousinvestment program where the bulk of costs are incurred up front (for dams, reservoirs and main headwork), but realization of benefitsis deferredfor many years due to delayed construction of downstream distribution canls and on-farm works. The economic and financial rates of return are likely to increase if other indirect benefits are includedt, eg *, waiter available for municipal and industrial use, which would reducethe currentfrequent shutdown of plantsdue to lack of water. F. Risks

6 8 The projectfaces no unusual technical or organizational risks. Under the project, management of project entities would be strengthened, and farmers, who already have experience and basic knowledge, would be further trained. The potentialrisk of fluctuatingmarkets for silk and angorawool products would be mitigated by provision of technical assistance in marketing and Improved processing technology and product designs.

1/ Sunk costs for works already completed or under construction are Y 333 millionfor Shengshong,Y 80 millionfor Wudu and Y 15.8 millionfor Yangjiaba, all converted to 1991 prices. - 50 -

VII. AGREEMENTSREACHED ANp RECOMMENDATION

7.1 Assuranceswere obtainedat negotiationsfrom SichuanProvince that: (a) maintenanceand periodicsafety Inspections of existingdams would be carriedout under arrangementssatisfactory to IDA (para.3.9); (b) fertilizersand pesticidesprovided under the projectwould be sold to farmersat priceswhich cover the costs of procurement,transpor- tationand distribution(para. 3.11);

(c) a GrasslandMonitoring System for QianjiangPrefecture satisfactory to IDA would be establishedby June 30, 1993 (para.3.24); (d) for large agroprocessingsubprojects, e.g., paper mills and rabbit hair processing,each enterprisewould Implementan enterprise reformplan satisfactoryto IDA, which would enablethe enterprises to be managedindependently from the local supervisorybureau, under en enterprisemanager selected by en enterpriseboard of directors (para.3.27); Ce) three paper mills would be closedin accordancewith timingand proceduresacceptable to IDA (para.3.28)S (f) all projectactivities would be carriedout to environmentalstandards acceptable to IDA and an Environmental Management Plan would be Implemented to monitor the environmental impact of all components (para. 3.53), and in particular, (i) the relevantprefectural Envi- ronmentalProtection Bureau (EPB)under the guidanceof the Sichuan provincialEPB would approvefinal designsof effluenttreatment facilitiesof each agroprocessingenterprise prior to beginning construction,and these enterpriseswould under SPB supervision implement and maintain effluent monitoring and treatmentsystems accordingto the final designsapproved by the PEPB (para.3.26); (ii) pesticides to be provided under the project would be approved by IDA, and that Bank Group guidelines on storage, handling, distribution and use would be followed(para. 3.55); end (iii)all plantationswould conformto environmentalguidelines satisfactory to IDA (para.3.14); (g) (i) all training,including study tours,and researchunder the projectwould be carriedout in accordancewith trainingand researchprograms agreed with IDA (para.3.33); (iL) the PHO would provide n annualplan to IDA for approvalby November1, each year which would includea list of proposedresearch, training and study tours for the coming year (para. 3.33);and (iii)at least 50 percent of farmertrainees and 20 percentof techniciansto be trained under the technicalassistance programs would be women (par..6.4); (h) the PX0 would (i) maintainconsolidated accounts of all components for audititgannually by independentauditors acceptable to IDA, and that the auditedaccounts would be submittedto IDA within siz - 51 -

months of the close of each fiscalyear (para.3.52); (ii) by Decem- ber 15 of each year, prepare and furnish to IDA for review an annual detailed work plan and report of the scheduleand financing arrangements, including a statement of proposed annual counterpart funding, for projectImplementation for the following year (para. 4.6); (4) the resettlementof personsaffected by the constructionof the dam connectedwith the Ysangjiabairrigation scheme would be carried out in accordance with a plan agreed with IDA (para. 3.56); (j) Sichuan would establish (i) project leading groups at the provincial,prefecture and countylevels included in the project,with compositionand responsibilitiesacceptable to IDA (para.4.2) and (Ci) a project management office at the provincial level with func- tions and responsibilitiesacceptable to IDA, staffedby competent staff in adequatenumbers (para. 4.3); (k) threerevolving funds--one each for agriculturalinputs, soil conservation,and povertyalleviation (paras. 3.11(c), 3.13, and 3.151- -wouldbe establishedand operatedin accordancewith procedures satisfactoryto IDA (pare.4.12);

(1) the proceedsof the Creditwould be made availableto farmersand enterprises under the project by ABC or PCBCunder arrangements satisfactory to IDA in the form of loans bearing interest at rates no less than the prevailing rate charged by ABC for similar loans for similar purposes (para. 4.11);

(m) (i) water chargeswould be collectedat ratesto be revisedperiodi- cally as necessary to meet at least the full annual operation and maintenancecosts of the completedirrigation schemes (para. 4.13); and (it) a Plan of OWM would be preparedfor each irrigationsub- projectfor IDA's approvalby August 1, 1993 (para.4.17); and (n) grainquotas would not be increasedin any of the countiesunder the project(para. 5.8).

'.2 Proceedsof the IDA creditwould be onlentto SichuanProvince at an interestrate of 5 percent,with a repaymentperiod of 15 years,including a 5-yeargrace period (para.4.11).

7.3 A conditionof effectivenesswould be State Councilapproval of the Development Credit Agreement (para. 4 11). 7.4 Subject to the above conditions, the proposed projectwould constitute a suitablebasis for an IDA Creditof SDR 107.7 million ($147 million equivalent)on standardIDA termswith 35 yearsmaturity to the People's Republicof China. Sid_a AgricultureODvelop_nt Project bole Proulne and Project Are Statistics

Si_c_ _ °_anyuan 1ianyang Nncheng- Qi nj3i Smgshong wdu Yangjiaba item19B9 tk 1990 198S 1990 1989 1990 1990 1990 1989 19C0 19E0 1990 1960 lW0 1980 1990

Ttabl Population 1.000 96.196 10B.1S4 2 4S4 2.606 8.112 4.091 8.966 9.782 2.345 2 654 1 99e 1.8S5 1.001 1,073 45 47 Rural poulation 1,000 86.171 95.386 2,216 2 S81 8.417 622 8'457 9'066 Rurs I br Fore 1,000 2,245 2'469 1'400 1,482 953 980 44 46 87,2a0 48.906 908 1206 1.SS2 1'785 8,784 4,172 6878 1281 459 G681 87 Rural Hahld 1,000 19.670 25.488 475 604 490 20 21 Towahpfren 972 1,002 1.996 2.600 576 658 mS 486 266 281 11 12 8547 86,50 264 265 801 88 688 66 804 804 124 mintwatiwe Ville 76 0 76 6 20 2299 2,640 124 76 76 8 8 2,060 7,967 7,990 2,901 2,806 1.460 1,460 701 701 50 80 Land Area 1,000 b 7,000 57,000 1,892 1,891 887 857 1,649 1.649 1,694 CultivcaW Land 1,000 ha 6,604 1.694 2aS 288 258 258 22 28 6.299 169 162 274 260 M15 497 22S 207 102 97 79 75 Sawn Are 1.000 h 12 078 12 475 272 297 469 511 994 5 S Paddy FIeld ha 1,017 372 452 199 182 103 112 9 9 1000 3,288 8.228 78 75 118 119 261 275 79 79 61 58 Dry Land 1,000 rh 8,821 8 076 94 87 80 81 8 S 161 142 235 222 292 400 41 89 S4 80 2 2 Erf etivly Irrigeated AP ,000 ha 2614 2 806 6S 68 127 180 165 189 36 Paddy F;eld 1 000 ha 2.167 89 18 14 21 21 1 1 2,S8B 56 60 99 116 147 167 38 89 11 12 16 Cry Land 1 000 hn 447 418 7 6 17 1 1 29 14 19 22 0 0 2 2 5 4 0 0 Total o miillion 82,208 114,896 667 2,822 2,262 7,585 2,010 6.394 Industrial Output v 404 1.487 462 12661 511 1,546 9 22 million 27,SS6 122.295 848 1,565 1,029 2.190 828 4,192 111 908 461 griculture Output Y million 18,127 6a.707 451 1,748 1 484 205 402 10 18 742 1,411 1,778 6,158 426 1.605 504 1077 264 459 9 17 Crp Preduction Or,in Area 1.000 ha 10,54 9,828 251 288 894 367 847 789 346 847 158 156 87 84 Grain Production 1000 ton 343885 42.668 80S 1.118 1,S55 1.982 2.9S4 5 5 PaddyArea 1.OOO ha 8.862 687 1,016 506 620 812 844 1S 18 8.068 8.120 59 68 104 114 229 247 79 769 84 Pdd Production 1,000 ton 1s 490 22,511 841 84 22 24 1 1 L 558 687 925 1.222 1.992 254 407 213 242 116 165 8 Wheat Area 1,000 ha 2,879 2221 82 77 119 115 281 10 Wheat Production 1,000 ton 216 40 68 40 42 24 24 2 2 5206 7,017 14 263 249 472 514 677 59 116 96 113 86 Corn Area 1 000 ha 1Z8e1 1,711 66 60 54 80 3 6 Corn Production E0 1N8 127 a8 76 20 22 20 16 1 1 1,000 ton 6 12D 6,786 196 199 252 268 544 588 171 245 56 Rapeeed Aren 1.000 h 482 889 68 76 51 a 4 9 28 22 5S 86 69 7 S4 6 14 10 16 0 Repased Production 1.000 ton 647 1,279 11 41 31 106 44 1 Cotten Area 1,000 90 9 34 7 17 11 27 4 2 ha 252 120 5 2 29 14 36 20 0 0 12 Cotton ProductIon 1,000 ton 95 11S 2 7 5 S 1 0 Forat Are 1 1S6 91 17 19 0 0 7 4 2 1 0 1,000 he 6,811 10,872 80S S80 137 201 14 6S 145 0 Wood Production 1,000 .S 8,896 8,709 247 6 28 39 66 7 8 1S 18 11 S 81 82 30 35 24 11 8 2 Rulberry Area 1,000 he 210 298 4 8 21 28 1 1 Cocoon Production ton 41 57 1 2 10 14 5 6 0 0 92,000 148,000 1.721 2,748 9,106 U3,890 18200 28.000 168 458 4.279 6,509 Sill Production tomn 6,818 14,571 88 288 2.294 8,88 21 45 62 984 2,200 8.600 0 85 714 998 0 0 0 0 Livestok Production Pig* 1,000 heads 51,480 65,86S 1.160 1.817 2,120 2,528 8.766 Pork ton S.480 1.120 1,609 711 1,221 519 612 19 28 1.000 1,64S 8,967 51 100 60 142 147 875 82 67 82 She"p/nto 1,000 heads 7.010 5.986 101 68 87 15 30 1 2 Hutton 82 21 106 8S 221 219 2 S 4 2 ton 87 000 87.900 828 a8s 188 l88 875 818 7 8 Cattle 1,000 heds 280 1 11 28 22 26 1 1 9.170 10,060 514 840 222 254 466 847 299 876 8S Bef ton 85.500 69,000 250 1,285 554 66 55 62 5 6 Caic&mn 918 6.140 8,760 110 250 142 496 129 222 4 1.000 heads 62,848 122,480 1,126 2,287 2,994 56001 8,664 8,822 5 Chicken meat ton 87.769 78,488 1,134 2.070 554 2.498 691 1,180 30 50 526 1 864 2.091 8.500 6.990 14.050 808 1.765 525 2 6S0 488 Egs ton 168,000 471,000 3O000 000 8a8 224 850 6,000 25 18.000 S1100085.000 8,800 7.700 50 6.400 4.000 8.000 100 200 Urban Per Capita Income Y 86O 1,834 858 1,840 892 Rural Per Capita om 1,248 406 1.517 315 1,267 865 887 814 998 855 1.300 nce V 188 505 84 418 204 875 1E8 496 90 299 Poverty Level 'Y 120 800 150 449 188 512 95 450 120 800 120 20 300 120 800 120 00 12D 800 120 Percent of Rural Population S 22 8 80 10 86 4 800 40 Llnder Poverty Lavel 25 7 72 62 25 8 32 5 50 7

auangyurn. NIncon end 4isnjiang are prefecture figures. Hianyang cer ony the five project countims and the city district. Shengzhna. Wudu and Yanji ba cover the project townships only. ga Sic_m Awricuitwe D.veloonetProiect Cl latotogical Data For ShenghomaIrrnhatlon Aret (Averame

l______Jan Feb Napr AY Jun Jul A" -S Oct Nov Doc Year Rainfall (m) 15.6 15.9 31.3 71.0 119.5 119.3 186.1 140.6 169.5 82.8 34.7 16.7 1002.9 (1ff9-1989) Evporation(m) 30.1 48.1 78.6 113.6 138.4 139.0 158.7 171.8 91.3 60.5 40.4 28.8 1099.3

Tewperature(*C) 6.2 7.4 12.5 17.6 21.8 24.8 27.5 27.3 22.1 17.5 12.3 7.7 17.0 (1959-1989) -

SunshineXhours) 61.0 58.6 101.4 133.7 147.8 140.2 187.6 211.5 102.9 79.0 61.9 54.7 1340.3 (1959-1989) Relative Iumidity(z) 82.7 79.5 75.3 74.5 75.3 77.7 78.5 74.2 81.9 84.1 83.5 84.4 79.3 (1959-1989) l

Source: Slchuan DP Feasibility Report, Irrigation Component,Novesber, 1991.

IC'I gliM Sichuan fariculture Oeveloatiut Project Clfmatotooicat Data For Vudu Irrinatlon Area (Average)

Jan Feb ar _ Jun Jul Aug Oct Nov Dee Year Rainfaltl(m) 7.6 10.0 21.2 48.4 84.0 105.1 237.4 183.6 170.9 50.4 21.2 5.9 945.7 (1959-1982)

Evaqoration(m) 4.7 54.7 87.2 123.3 161.9 166.6 144.5 155.0 101.2 70.6 56.7 44.5 1210.9 (1952-1982)III

Temperature(CC) 5.5 7.4 12.3 17.4 21.5 24.5 26.3 26.0 21.6 17.0 11.8 7.3 16.5 (1959-1982)

SunshineChours) 79.2 69.3 94.6 118.4 131.2 139.0 169.4 180.9 91.1 75.5 74.0 76.0 1298.1 (1954-1980) - Relative Humidity(X) (1954-1970) 76.0 76.0 74.0 74.0 72.0 77.0 83.0 84.0 82.0 83.0 79.0 80.0 78.0 Tl_2 ____ 0___ en_83_0_9

Source: Sichuan ADPFeasibilIty Report, Irrigation Coq3onent,Novber, 1991.

F M r.J0 l Sichuan arlculture DeveloamentProLeet

C(lmatotogeoal Data For Yanml"aba irrifation Area (Averane)

I______Jan Feb Mar Apr Jun Jul Aug sep Oct yow Dec Year Rainfall(nm) 9.1 11.3 24.4 56.9 106.8 121.9 270.2 203.1 183.9 60.9 27.9 7.2 1083.3 (19571989) - - - -

EvaporationCm) 64.9 71.7 117.6 160.4 191.3 191.8 172.0 184.1 116.4 (1957 1989) 91.6 74.4 64.6 1501.0 TemperaturefC) 4.2 5.9 10.6 15.6 19.7 22.7 24.5 24.3 19.7 15.2 10.1 5.8 14.9 (1957-1989) - Sunsbfnswhours) 81.0 68.7 92.6 123.2 148.2 140.2 156.S 170.6 91.3 80.7 72.9 80.9 1306.8 (19f71989) - - Relative NumidIty(X) 68.0 70.0 68.0 68.5 71.1 75.0 81.7 80.4 82.0 80.3 74.6 72.2 74.3 01957 1989) .- .------

Source: Sichuan ADP feasibility Report, Irrigation Conponent,Novucber. 1991.

It 'a' CHINA Sichuan Agricultural 9evelopmentProject Project Locations ...... --...... - -...... ------Irrigationr-- Soil Conservation IncomeCeneration Agraprocessing Location SP UP VP Ag.Sqpport ...... _in Prefecture ...... Guuw.g Sericulture LWtpMv X X Sericulture Marbu X X Sericulture kanchong county X X Sericutture lanch city X x Pengan X X Sericulture makhng Sericulture Xichong X X Sericulture vi lont Sericulture Vuchi Sericulture Nianyang Prefecture

.i...... x Jianyo K X Santai X X Shhahong X X paper m Ill Vanting X X Zitong X X IL Guangyua Prefecture

Canpi Sericulture Chaotian Soil Cons.dno/medc.plant Jiange X X Sericulture Shizong fast growing trees VanGCang Alpine rush Vuabai Sericulture Oianjiang Prefecture ...... ,..... Pengsui Pawlonia-toon goat/Tea Rehab. papermill Oianjiang Soil cons.demo/Pawlonia-toon Sericulture Shizhu gall planting seric/rabbit raising rabbit Xiushan hair Process. Tea rehab/Pawlonia-toon geese raising Vouyang Geese process. gall planting sericul/goat raising gallnut/goat/process. Total No. counties 6 5 1 12 8 21 5 (26) ...... Source: Sichaun Project Nanegement Office C:%Sichsun%sar%Location.wkl SICNMIAAUIONIiURADIWLOIFIN U"C1 SNSPMIUILIITEo KSIW AS ...... INPIEEATIIO I...... ------Cntnrectlain go. Itm _atlmu onion Deign Review Contruction s54rlse'n _Nm mt maaaip_ ...... 1. Irriation #,, ......

1. Sbwln whrg Sicbun IIIoolectric Dsign State Plnming Coission Cepitat ContructIon Sichuan qydre-olectric U Project SPaamll t Swrnu _uiagunt Suree Institute 1wib.M Nydreo Ninistry of Watcr Con wrvunVDlviion of Sidl_ MM; Oallty onitoring Center Collectlve slectrlc design Instltute 5 Sichuan McI SP NeedqLrter reolvent county dnlgn tor 1a 1ig Prefecture IC5

2. lUhi Slhdan llprooloctric Design State Pluming Comlssion W Contruction Divilson Sicmn dro electric Project Institute; 1H11_n lnst. Ninistry of Wtwr Conservancy of Sl_camnWCI; VP Qualtty Nmitering Center IIP IIegmnt Surbe wnd relevant HNegaunt Sureu coeuntydesign Slcmn WC11,md Nra_yangMM Nangmnt Swam iCollective tells 3. ranglla Sickum lydrolectric Design Project Instituto Desion Termof Sichia Plaing Conisslon VPHeadqurter VYP _ngmt sureeu Jian MM Sichn wIe and Cun n MCM 4. AgfIculture Comty Oaign Office Sicbun Pluming Colsslon Tedmolog Extenslon CoeuntyAgriculture Sueu Serlce Tehnology Eutenslan Slchuan Agriculture an Station Station Ftilen Statln stem Animal Hbandry Sureu TeditnotWe Extesulon

S. sawd 5 Factory 0 Factory factories factry It. Soil ConstetIon *-...... i... 1. ikaangyuan theotian Prefecture P Sichulm Soil conservation 0 eotisn Prefecture Seoil ua uan Soil Cosrtion Touisbip Government kneficlwrles Office Consrvation Project Office village, grsp leadquarter

2. Olanjlug Mlanileug INS Ol nilang Soil olhaniag Soil Conervation Conservation Project Office Headquater C 3. Padeumle a anilwa Prefecture Sic n Plaming Cmission lletant Coemyssfomt OlanJI Prefecture Project loon genicreries Powltbipe' Slivicultural Desln Toem Skid m Fosest Sueau Stem Forest Sureau forest station 4. Uestgroueing OLGun mnicipality aud hl*- ailvicultmral pluming nd Yielding designing tam Shlhg district Cuanan munlclpellty sa ln rloe1 forest tere.t 1wa fuest buro...... - --- ..... -.*-@*...... * CHINA SICH AGRICULTUIRALE IIET PIOJECt RESPONSIBILIIIFOR SESIm ANDIPlmENETATION ...... _ Cntruction OIperation No. Item Design Design Review Construction Ss.ervision Manaemnt Oumership ...... ,,,.. , ,,,,,, ..... ,, ...... 5. Callwut Qlaniang prefecture S Relevant cowitys forest Qianjian prefecture Boeneficiaries liviculttural design tern buraus forest bureau

6. Wooc GuawwyanmmicipalIty Guaen Medicine Gua qyuanChines Suagyuan Medicine ledicine project office Adhinistration Bureau Nedicine Copany Administration Bureau Chaotian District Beneficliries

7. Chinse WaRgess County PMl Sichuan Soil Conservatien w'Jugcag county's Guang"yunAgricultural Cma Alpine Rush Office Agrluciturat bureau Bureau

11.I rm Ceneratton

1. (a). Mulberry Prefectureicity silk SlcmJn Plaming Commission Relevt nt Counties' Sfik Prefecture/city silk *eleant counties' Benflciarles Siltkworm co_pnies SichumnSilk Companles Cowlnes cOMpanies silk cwpenies

(b) Silkwo Retevat Counties Design Slkwm Egg Statlen county's Silk Comlanies Sliworm Egg Statien Sltlkom Egg egg station Deprtmnt Station 2. Tea Rehabi- Qlaniang Prefecture's Tea Slquan Plueing Comission Penghul County's Tea litetion Comny an Qlonjing Plaming C ny 3. Goat lianjiang Prefecturels Sichuan Pluming Comission County6sAnimal Prelecture's AISB Cunty's ASB llene1lories Raising Animl Nusndry ureau and Sicdan Animl Husbdry Bureau (AID) HusbadryBureaus 4. Geese aising *

S. Rabbit Raising * IV. Agroprocessing 1. Nianan ChangdeEngineering Consul- SPC, Slcbuan Pluming lianyg Pepr Hill City's light Industry 111rig Pqaer Mill Mill Paper Nill tative companyof light Comeission, Ministry of Light bureau and quality industy ministry of China Bureau of Light Industry onitoring station

2. Peng i PengshulPaper Nill Pnghul Paper Hill Hill Paper Mill 3. Galtiut SbhgaI Datog Phermcsut. SlcmuanPluming Cmmlssion allaiut Processing Plant County's Quality Monitorlng Galion Processing Plant Processing fctory,Touyan, County%s Station Plant Design Department

4. Rabbit lair SichuanTextile Olesign Slielwn Pluming Commission Rabbit Hair Spiming County's Quality Monitoring Rabbit Hair Spuming Hillt Spiming Institute Kil Staton 11

5. Goat Sldan tight Industry * Goat Processing Plant * Goat Processing Plant Plant c Processing institute 6. Geesem GeeseProcessing Plant GeeseProcssng Plant Processing ...... Sidchn Agricultural Dvelofent Project Counterpwrt Fwnd wourceswd Aut (IY'OD)

...... total DWa/IDA Goverment Local Prowrty Ernirked Project Cost -- . - ove.ruent 6sel C. FMncut ---- ank A-lleviation fund Contribution (T000) (1O0O)Sub-total Central Provincial Prefecture ...... Courty toan fund other 1. IrrigationVAriculture A. irtription 1. SP 376,270 1S8.979 143.256 133,256 10.000 2. Up 639,721 303,S93 284,740 74.035 100,000 132.740 12.000 40,000 51,388 3. VP 30.658 17.324 7,0W0 7,000 B. Agro-support 67.606 47,021 6,370 6.334 Ssb-total 3,822 2,548 14,215 1.114.25S 526,917 441.366 100,000 272,996 25.822 ...... 42.548 0 0 0 131,757 14,215 ...... II. Soil Co rvatlion A. Sol coervatlen Oem. as Chiotin 20.231 9,953 2.309 2.309 alaniatn 140 500 1,902 5.42? 11,S19 5,30 1.137 1.137 o. forestry 1.528 3.474 1. fast-growing Tree 15.9S 9,41S 1,000 1.000 1,000 2. Paulosmina Chinese too 14.242 7.855 750 4.S80 3. GCllnut 750 400 5.237 - lS5451 7.424 500 SDO 4. medicine Plants 10.97 900 6.627 S.S41 0 400 2.000 S. Alphine rush 3.457 2.152 0 3.016 Sth-total 1.305 91.852 47.720 5.696 0 0 0 ...... 5.696 S40 4,028 4,202 29.666 0 Ill. incmm Generation ...... A. Iulberry 4 Cocoon Product 91,207 so,s72 0 B. lea RehabilitatIon 6,357 7.000 21.1S3 12,482 2.744 0 1.500 C. klvestock 0 2.113 1. CGot Rulsing 0 louv 12,606 6,456 1,600 Pengabul 1.600 SS5 4.000 5,346 2,690 Soo 800 2. Geese raising 11,417 S40 1.316 S.703 250 250 1,500 3. Rbbit raising 4,677 2.690 150 3,964 Sub-total 150 120 1.717 131.610 70,855 2.800 0 0 2.800 ...... 0 11,210 21,1S3 25.S92 0 ...... VI. Agra-processing ...... 1. Pengshui paper mill 73,046 37,680 12,000 2. Fulaig paer mill 12,000 17,366 6,000 67.650 40,350 4,000 4,000 18.000 3. Cattle/Goat processing 5,490 S.300 2.690 1.000 1,000 1,000 S00 4. CeeseProcessing 12,641 5.111 1,800 800 1.000 4,230 1.SOO S. Callnut processing 10,551 5,757 0 3.462 332 1,000 6. Rabbit lairProcessing 31,868 16,140 3.000 3.000 9.028 2.700 1.000 Sub-total 201,246 107.728 21.800 0 .. ,__...... 0 4,800 17.000 53,086 11.332 1.000 1.000 5,300 Total Project Cost 1.538,963753,220 471,662 100,000 ...... --..--...... ----.....--...... -272,996 30,622 68,044 S3,626 26,570 26,355 180.015 19,515 CPFJID Vl v. Annex L 60 - able 6-1 C"tR~~~~~Tb CHINA SICHUANAGRICVLTURAL OEWLOPItET PROJECT TRAINING, STUSYTOURS AND TECHNICALASSSTANCE ...... Totat NO. Ouratfon Total Ave. cost Total Traflinf aress/trafnees Traines (days) Days CY/Day) Cost (TOGO) ...... A. TRAINING ...... 1. Irrigation ProJect manasement 514 30 15,420 30 463 Hydrollcx Emxptlora andOesign 204 90 18,360 30 551 Irrigation Nanagme nt & 05& 312 J0 9,360 30 281 Contructfon Quality Nonftorfng 35 90 3,150 30 95 1t389

2. Agri. Tech. & Extension Training Cownty Staff at Agrf. Resarch ln tftute I 020 15 15.300 14 214 * Township Staff at Coumty Ag. Tech. Center 4.553 7 31.871 12 382 Farmers at Township Ag.Te:h.Center 2044173 3 613.419 5 3,067 3,664

3. Integrated Pest Nangagmnt, FertilftarApplfcatfon County Staff at Agric.ResearchInstitute 270 10 2.700 14 38 TownshipStaff at Couty Ag. Tech. Canter 802 7 5,614 12 67 Farmrs at TownshfpAg.Tech.Center 35t100 3 105,300 5 527 632 2. Soft Conservatlon -Demonstration Areas County Staff 25 20 S00 30 1S TownshipStaff 80 10 800 20 i6 Frmers 1O,n70 5 53.600 10 536 567 -Forestry Engineerfng 18 i5 270 30 8 Courty Staff 20 53 1.050 30 32 TownshipStaff 1,492 30 44.760 20 895 Ptant Protection 20 15 300 20- 6 Proiectmargmnt 5 15 75 20 2 942

3. IncomeGeneration -Serifutture Farmers 24,273 20 483,450 5 2,427 TownshipStaff 2,090 1S 31,350 20 627 Cowmty Staff 22 10 224 80 18 LT UniversityTrainfng 2 350 700 10 3,079 -Livestock Farmers 37,450 5 187,250 5 936 TownshipStaff 422 20 8.440 20 169 Coumty Staff 75 30 2,250 40 90 1,195 -Tea rehabilatatfon Agronomfst 6 36 216 100 22 Farmers 7,800 3 23,400 5 117 County Staff 80. 20 1,600 13 24 163 4. Agroprocesfnai DomesticTrainfng 1,425 30 42.750 40 1t710 ForeignTA (Consultants) 6 210 1t260 2,000 2.520 4,230

Subtotal Trafnes 333,308 987 1,70S,47? 13,340 Foreign Consultant 6 210 1,260 2.520

B. Study Tours 1. Irrigatfon -DomestfcTours 200 1s 3,000 100 300 -ForeignStudy Tours 20 i5 300 400 120 420 2. Solt Conservation -DomesticTours 120 25 3.000 80 240 -ForeignStudy Tours 10 60 600 500 300 540 3. IncomeGeration -DomestfcTours 110 15 1.6S0 100 165 -Foreign Study Tours 15 20 300 500 1S0 315 Subtotal 475 1S0 8,850 1,275 Totat Trainingand Study Tour 333,783 1,137 1,715,589 17,135 ......

…~~~~~~~~~~~~~~~~~~~~~~~~~~~ -61 - Annex1 Table 6-2

CHINA Sichuan Agrecultural DevelopmentProject Suamry of Research Topics ...... Topfes ResponsIble Ouration Total Organizatfon (year) Cost (TOOG) ...... Agricutture ...... 1. Comparativeexperfments of the new varfetal M1anyang/NanchongAgrfcultural 3 trials--rice,corn, wheat, sweet potato, rapeseed ResearchInstituto and peanuts 2. FertiLizerTrfals MNanyang/NanchongAgrfeultural ResearchInstitute 3 3. Micro-nutrientsexperiment I 3 4. ImprovedCultivation techniques i 3 5. IntegratedPost Management Prov. Post ControlStation 3 Subtotal 900 Sericulture ...... 1. Geneticimprovement of silkworms ProvincfalSericulture Institute 3 300 2. Breedingof silkwormfor springrearing SouthwetAgrfcultural University 1 25 3. Broedingof silkwormfor summer/fallrearing SouthwetAgricultural University 1. 25 4. Integratedrearing techniques for fmproving Sichuan SIlk Corporation I 25 cocoonquatity (Nanbu,Langzhong, Santai & Nelijang) 5. Insectand diseasecontrol ProvincIalSericulture Institute 3 300 6. Improvementof cocoontools SichuanSilk CorporationClocal) 3 SO 7. Improvementof rearingtechniques SichuanSilk Corporation(local) 3 So S. Establishmentof data base for production SichuanSilk Corporation 3 72 mnagement and Information dissemination 9. Improvementof cocoon drying techniques Sichuan Silk CorporationClocal) 3 SO Subtotal 897 Livestock 1. Gosifngbreeding SlchuanAgronomy Un versity 4 30 2. GrasslandImprovenent SichuanAg. Unversitynd AN bureau 3 20 3. Diseas control--goats AnimmlHusbandry Bureau (Local) 3 45 4. Goat raisingefficiency AnimelHusbandry Bureau (Local) 3 26 S. RabbitBreeding AnimelHusbandry Bureau CLocal) 3 25 6. Optimalfeed formulation AnimmlHusbandry Bureau (Local) 1 10 7. Disease control--rabbits Anml HusbandryBureau CLocal) 3 15 Subtotal 171

Solt Conservation ...... 1. Alternatives to timber species Sichuan Academyof Forestry/8f 4 for production of short-term benefits 2. Sillvpasture with fuelwood hedgerows Solt Cons.8ureeuWIMDE 4 3. Grassland Improvement Sichuan Ag. Unversity and A bureau 4 4. Improved tree planting techniques to enhance Slchuan Academyof Forestry/PfO 4 productivity and solt conservation S. Monitoringof Impactsof treatmentson Prov.SoIlCon/INDE 4 erosion,runoff and crop yiolds Subtotat 191 ...... e/ Institutoof MountainODsaster and Envirorgent(INDE) -62- Annex Table 7

Page 1 of 3

Sichuan Agricltural Development Prolect Summary of AaroUrocessingComponent

The project includes 6 agroprocessingprojects as follows:

I. PULP AND PAPER PLANT XN PENGSHUI COUNTY

1. The Project would construct a new pulp and paper plant with a capacity to produce 10,200 tons of different types of printing paper. The project would use Kenaf, an annual hibiscus grown by local farmers as raw material. The new plant would be built next to the existing paper mill which has a capacity of 7,000 tons of paper per year and would be located along the Wu Jiang river, a tributaries of the Yangtze River. The old plant has no alkali recovery or waste water treatment system, but a new soda recovery and waste treatment system would serve both the new and old plants and would reduce existing pollution considerably. Also, as a result of the project two other pulp and paper mills, without pollution control systems, would be closed down. A soda recovery system for treatment of the black liquor, would be used which would concentrate and burn the lignin dissolved from the fibers and recover and reuse the soda. With the use of a counter current washing system (made in China under license from Valmet of Finland) up to 95 percent of the black liquor can be processed. Part of the white liquor from the bleaching section would be recycled and added to the digestors and burned through the soda recovery system. the remaining part will go to the waste water treatment system. The waste water treatment system would consist of a number of ponds, where flocculantswould be used to reduce suspended particles and biological treatment would reduce the BOD level. The plant would not produce highly bleached paper (printingpaper in China has a low degree of whiteness). The amount of different chlorine-compoundsreleased from the bleaching system would be limited by using a relatively low amount of chlorine in the process. The Chinese environmentalstandard accepts up to 250 mg/liter chlorine-compoundsin all categories of surface water. The emission of unused chlorine from the relatively small pulp bleaching sections into the two large rivers passing by tho two sites, has been calculated by the Sichuan Research Institute of Environmental Protection (SRIEP) to have limited impact. Air pollution would be controlled by dust collection in cyclones an SO(2) reduction by water sprays in front of the chimneys. SRIEP has calculated that the remaining emission of pollutants would be low.

II. PULP AND PAPER PLANT IN TANGKUN. MIANYANG MUNICIPALITY

2. The Project would construct a new pulp and paper processing plant at an existing site some 30 kilometers outside the city next to the Pu Jiang river. The objective of the project is to expand the production of paper made from wheat straw and kenaf as well as to relocate the existing paper processing plant from the center of Mianyang City. The processirn plant would have a capacity to process some 24,500 tons of kenaf bast and wheat straw into 10,200 tons of off-set and typing paper. Soda reco7ery, waste water and air pollution control systems similar to those described above for Pengshui, would be installed. When the new project becomes operational, the existing white paper plant located in the city center would be closed. The paper board plant using recycled paper at the same location, would stop operation before end of the year 1997 with production transferred to the new site. -63_ Annex Table 7 Page 2 of 3

3. The technology would be the same as for the Pengshui plant. The Chengdu Consulting and Engineering Corporation of the Bureau of Light Industry has designed the two plants and this would produce some savings in both design and procurement during implementation. III. RABIXT lAIR SPINNING PIANT IN SHIZNUCOUNTY

4. The Project would construct a carding, mixing, and spinning plant in Shizhu City. Semi-manual knitting equipment would be included to further increase added value. The objective of the Project is to create a stable market to produce rabbit hair in the county of Shizhu.. A total of 1.2 million angora rabbits would be raised to produce 400 tons of rabbit hair per year. Knitting would be done by women farmers organized in small groups and working in their homes. The capacity of the spinning plant would be about 160 ton angora rabbit hair, 100 tons wool, and 66 tons of synthetic fibers in different mixtures. Final yarn products would be 300 tons. Part of the yarn would be used for the production of knitted sweaters, with an estimated 150,000 units made by semi-manual knitting machines, and approximately 3,000 handmade sweaters.

5. Training of the staff and technicians would focus on the technical operation of the spinning machines and on market development. Efforts would be made to find partners abroad to assist in the marketing. The market for angora wool, and mixtures of angora wool with other fibers is expanding in China. The spinning plant would have the flexibility to handle a large range of fibers according to the market demand, both domestic and abroad. This spinning plant with modern equipment would be mainly geared for export. 6. The main concern with regard to pollution is the noise coming from the spinning mill. Chinese spinning machines have a high noise level. Two mitigating measures would be undertaken: (i) the investor would import equipment with advanced spinning technology, which gives better quality yarn and makes considerably less noise; (ii) the building would be constructed with solid walls and roof to avoid remainingnoise to disturb the neighborhood. Dust would be separated in a filter to be placed in the air systems. Waste water would be treated by ths municipal waste water treatment system.

IV. CALLUT PROCESSINGPLINT IN YOUYANCOUNMY

7. The Project would extend an existing processing plant which at present process about 450 tons of gallnuts into tannic acid. The objective of the Project is to develop and to process gallnuts grown in the surrounding counties. The additional processing capacity added under the project would handle an additional 800 tons of gallnuts. Tannic acid is used as a chemical compound for a number of complex substances in tanning and chemical industries. The new extension would extract the tannic acid from the gallnuts with water and then concentrate and spray dry the solution into powder. A separate line would be constructed for low temperature extraction in order to obtain tannic acid for pharmaceutical use. The plant would produce at full development about 400 tons of technical tarnic acid and 100 tons of pharmaceutlcal quality. Present management, which has operated the existing plant for several years, is fully conversant with the technology. The process includes a warm water counter current extraction of the tannic acid from the gallnuts. All the water is then evaporated and the remainlng tannic acid is packed in bags. The gallnut shells after the extraction are used mainly as fuel in the boilers. The level of pollution is low, no waste water is generated (due to the high price of _64 - Annex I Table 7

Page 3 of 3

tannic acid all water is evaporated),solid waste (shell) is burned. The existing plant has a small line (150 tons per year) for the production of trimethoxybenzhydrazine. The waste water treatment system includes ponds and addition of chemicals to reduce the emission of any harmful components. The mission has requested, and the Sichuan governmenthas agreed, that SRIEP and the Bureau of Environmental Protection will review the present treatment system, and if necessary recommend it be improved. Additional funds have been allocated to finance such investment if needed (budgeted to RMB 200,000).

8. The market for tannic acid is expanding both inside and outside China. Although the use of tannic acid in the leather industry has diminished, it has been found to be a suitable raw material for chemical synthesis in making pharmaceutical products.

V. GOAT AND CATTLE SLAUGHTERHOUSE IN YOUYANGCOUNTY

9. Youyang county has an outdated cattle slaughter house and cold storage of 300 tons, but some of the basic infrastructureand the cold storage would continue to be used. The now slaughter house would process 7,000 head of cattle and 60,000 goats. It would also have two slaughter lines for the do-skinning of cattle and and the chilling of carcasses. Cattle carcasses would be de-boned and de-skinned while the goats would be sold with the skin on, which makes handling easier and commands a better price. The slaughter houses would include a waste water treatment system includng fat traps and biological treatment systems. The plants will also be constructed to collect as much byproducts inside the slaughterhouseas possible, such as blood and meat/fat parts.

10. The proposed slaughter house would create a market to absorb and process the goats which would be produced under the project. The slaughter house has been designed by the Design Department of the Research Institute of the Bureau of Light Industry in Chengdu and would be constructed according to national standards.

VI. GEESE PROCESSING PLANT IN XIUSHANCOUNTY

11. The Project would construct a new geese slaughter house to process feathers/down and to produce frozen and deboned goose meat and liver. The plant would have cold storage with a nominal capacity of 300 tons. Equipment for the slaughter and processing of geese would be imported. The plant would have a waste water treatment system to handle the effluent before the water is released into the nearby river.

12. The geese processing plant is expected to slaughter about 800,00 geese per year, an equivalent to about 500 head per hour. The objective of the project is to process and pack most of the geese produced by the project and to market the processed geese to domestic and export markets. Geese by-products,such as down and liver, would also be exported when feasible. - 65- Annex 2 'able T-1

China SichuanAgriculture Development Project ProjectCost Summary Yuan usS ...... Local Foreign Total Local Foreign Total ...... A. Irrigation 1. SP Irrig. 228733 77173 305906 42515 14344 56860 2. UP Irrig. 370672 136099 506771 68898 25297 94195 3. YP Irrig. 20539 5481 26020 3818 1019 4836 4. SP Agr. Support 12535 19661 32196 2330 3654 5984 5. UP Agr. Support 8839 14411 23250 1643 2679 4322 6. VP Agr. Support 862 1345 2207 160 250 410 ...... Sub-Total 642181 254170 896351 119364 47244 166608 B. Soil Conservation 1. GY Demo Area 13300 3557 16857 2472 661 3133 2. QJ Demo Area 7858 1841 9699 1461 342 1803 3. Paul.& Toon 11628 2041 13669 2161 379 2541 4. Gall Planting 10515 2765 13280 1954 514 2468 S. ChinmseMedicine 7171 1666 8836 1333 310 1642 6. AlphineRush 2191 1542 3733 407 287 694 7. Fast Gr. Trees 14880 1790 16669 2766 333 3098 ...... Sub-Total 67542 15202 82744 12554 2826 15380 C. Income Generating Proj. 1. Mulberry & Coccon 62529 19885 82414 11623 3696 15319 2. Tea Rehab. 3903 1708 5611 725 317 1043 3. YY Goat Raising 8662 2714 11376 1610 505 2115 4. PS Goat Raising 3572 1267 4840 664 236 900 S. GeeseRaising 8293 2030 10322 1541 377 1919 6. RabbitRaising 3234 977 4211 601 182 783 ...... Sub-Total 90193 28581 118774 16764 5313 22077 D. Agroprocessing 1. Paper Mitl(MY) 33375 41455 74830 6204 7705 13909 2. PaperMitt(PS) 34276 35836 70112 6371 6661 13032 3. RabbitHair Proc. 13498 14766 28264 2509 2745 5254 4. GallnutProc. 5945 5815 11760 1105 1081 2186 5. Goat Proc. 2544 2884 5428 473 536 1009 6. GeeseProc. 4977 6163 11140 925 1146 2071 ...... Sub-Total 94616 106919 201535 17587 19873 37460 ...... TotalBASELINE COSTS 894531 404872 1299404 166270 75255 241525 PhysicalContingencies 65497 32968 98465 12174 6128 18302 PriceContingencies 127268 22284 149552 23656 4142 27798 ...... TotalPROJECTS COSTS 1087296 460124 1547420 202100 85525 287625 ==uc::aBa:zgu-===::z:r=:U s:s: :===s:===:==z=====u======:== ...... Vatues Scaled by 1000.0 - 4/19/1992 16:41 -66- Annex 2

China Sichuan Agriculture OevelopmentProject Project Cost Suwmary X Total X Foreign ease Exchange Costs A. Irrigation 1. SP Irrig. 25 24 2. WP Irrig. 27 39 3. YP Irrig. 21 2 4. SP Agr. Support 61 2 S. UP Agr. Support 62 2 6. YP Agr. Support 61 0 Sub-Total 29 69 S. Soil Conservation 1. GY DemoArea 21 1 2. OJ DemoArea 19 1 3. Paul. & Toon 15 1 4. Gall Planting 21 1 5. Chinese Medicine 1Q 1 6. Alphine Rush 41 0 7. Fast Gr. Trees 11 I ...... Sub-Total 18 6 C. Income Generating ProJ. 1. Mulberry & Coccon 24 6 2. Tea Rehab. 30 0 3. YY Goat Raising 24 1 4. PS Goat Raising 26 0 S. Geese Raising 20 1 6. Rabbit Raising 23 0 ...... Sub-Total 24 9 0. Agroprocessing 1. Paper Mitt(CY) 55 6 2. Paper Mili(PS) 51 5 3. Rabbit Hair Proc. 52 2 4. Gallnut Proc. 49 1 5. Goat Proc. 53 0 6. GeeseProc. 55 1 ...... Sub-Total 53 16 ...... TotaL BASELINECOSTS 31 100 Physical Contingencies 33 8 Price Contingencies iS 12 ,.._...... i;...... Total PROJECTSCOSTS 30 119

Values.Scaed.b..100.0..... 1./1992... 16:4...... 1 - 67 - Annex 2

China Table M SichuanAgricuLture Development Project Yuan ProjectComponents by Year Base Costs Total ...... 1992 1993 1994 1995 1996 1997 Yuan USS A. Irrigation 1. SP Irrig. 73474 71477 68416 52430 40109 0 305906 56860 2. WP Irrig. 77428 104386 93248 101037 84082 46591 506771 94195 3. YP Irrig. 9014 11376 5630 0 0 0 26020 4836 4. SP Agr. Support 13008 8132 9956 573 526 0 32196 5984 5. WP Agr. Support 9347 5903 7025 513 463 0 23250 4322 6. YP Agr. Support 285 565 1295 63 0 0 2207 410 ...... Sub-total 182556 201839 185570 154616 125180 46591 896351 166608 B. SoilConservation 1. GY Demo Area 2997 4744 4537 3077 1502 0 16857 3133 2. QJ Demo Area 2818 1791 2169 2041 880 0 9699 1803 3. Paul.g Toon 2192 5389 5103 691 293 0 13669 2541 4. Gall Planting 2228 6115 4029 690 218 0 13280 2468 5. ChineseMedicine 3239 3674 1924 0 0 0 8036 1642 6. AtphineRush 1190 1453 907 182 0 0 3733 694 7. FastGr. Trees 5000 5000 4100 1619 950 0 16669 3098 ...... Sub-total 19664 28165 22769 8301 3844 0 82744 15380 C. IncomeGenerating Proj. 1. Mulberry& Coccon 28765 37088 14349 2212 0 0 82414 15319 2. Tea Rehab. 2798 2403 410 0 0 0 5611 1043 3. YY Goat Raising 4936 3772 2621 47 0 0 11376 2115 4. PS Goat Raising 2496 1564 685 95 0 0 4840 900 5. GeeseRaising 3995 3500 1895 931 0 0 10322 1919 6. RabbitRaising 1830 1864 438 79 0 0 4211 783 ...... Sub-total 44820 50191 20398 3364 0 0 118774 22077 0. Agroprocessing 1. PaperMiIt(MY) 16194 32744 21692 4200 -0 -0 74830 13909 2. Paper fill(PS) 16790 28357 18765 4200 -0 -0 70112 13032 3. RabbitHair Proc. 5548 13544 6172 3000 0 0 28264 5254 4. GallnutProc. 2672 5041 2547 1500 -0 -0 11760 2186 5. Goat Proc. 1244 1826 1958 400 0 0 5428 1009 6. GeeseProc. 3441 3161 3888 650 0 0 11140 2071 Sub-total 47888 84674 55023 13950 -0 -0 201535 37460 ...... Total BASELINECOSTS 294928 364870 283760 180232 129024 46591 1299404 241525 Physical Contingencies 20622 27449 20976 14196 11242 3980 98465 18302 Price Contingencies 7205 25312 34693 34570 . 32852 14919 149552 27798 ...... Total PROJECTCOSTS 322754 417631 339429 228997 173118 65490 1547420 287625 Taxes 0 0 0 0 0 0 0 0 ForeignExchange 108667 150636 104433 45990 36866 13532 460124 85525 ...... Vatues Seated by 1000.0 4719/1992 16:43 -68- Annex 2 Table 1-4 China SichuanAgriculture Development Project ProjectsComponents by Year TotalsIncluding Contingencies Yuan ...... 1992 1993 1994 1995 1996 1997 Total :unuuuuuu:-au:c====:su==:::=3======-=g3 -uE3uuinmuea3us.:c::::g_ A. Irrigation 1. SP Irrig. 81606 82880 83506 67667 54442 0 370100 2. WP Irrig. 85985 121057 113248 128887 112487 65490 627155 3. YP Irrig. 10039 13333 6954 0 0 0 30326 4. SP Agr. Support 14042 9293 11393 662 635 0 36025 5. UP Agr. Support 10082 6713 8037 593 558 0 25984 6. YP Agr. Support 321 644 1470 73 0 0 2508 ,...... Sub-Total 202075 233920 224609 197881 168122 65490 1092098 B. Soil Conservation 1. GY Demo Area 3189 5344 5346 3800 1948 0 19628 2. QJ DemoArea 3002 2023 2567 2540 1147 0 11278 3. Paul. & Toon 2336 6071 6019 855 381 0 15662 4. Call Planting 2380 6863 4742 866 284 0 15135 5. Chinesemedicine 3476 4143 2243 0 0 0 9862 6. Alphine Rush 1270 1614 1049 220 0 0 4153 7. Fast Cr. Trees 5373 5664 4867 2000 1236 0 19140 ...... Sub-Total 21027 31721 26832 10282 4996 0 94856 C. Income Generating Proj. 1. Mulberry & Coccon 30803 41647 16857 2702 0 0 92010 2. Tea Rehab. 3001 2685 480 0 0 0 6166 3. YY Goat Raising 5276 4217 3086 56 0 0 12635 4. PS Goat Raising 2671 1748 801 113 0 0 5333 5. G e e Raising 4290 3932 2229 1159 0 0 11610 6. Rabbit Raising 1967 2071 519 94 0 0 4652 ...... Sub-Total 48009 56300 23972 4124 0 0 132405 D. Agroprocessing 1. Paper Mitt(MY) 17451 36996 25325 5031 -0 -0 84803 2. Paper Mill(PS) 20322 32016 21856 5031 -0 -0 79225 3. Rabbit Hair Proc. 5999 15382 7143 3594 0 0 32118 4. Gallnut Proc. 2869 5687 2941 1797 -0 -0 13293 5. Goat Proc. 1324 2055 2249 479 0 0 6107 6. GeeseProc. 3679 3555 4502 779 0 0 12515 ...... Sub-Total 51644 95690 64017 16710 -0 -0 228061

...... Total PROJECTSCOSTS 322754 417631 339429 228997 173118 65490 1547420

...... Vatues Seated by 1000.0 4/19/1992 16:43 - 69 - Annex 2 China Table 1-5 SichuanAgriculture Devalopment Project ProjectsComponents by Year TotalsIncluding Contingencies USS 1992 1993 1994 1995 1996 1997 Total A. Irrigation 1. SP Irrig. 15168 15405 15521 12577 10119 0 68792 2. UP Irrig. 15982 22501 21050 23957 20908 12173 116571 3. YP Irrig. 1866 2478 1293 0 0 0 5637 4. SP Agr.Support 2610 1727 2118 123 118 0 6696 S. UP Agr. Support 1874 1248 1494 110 104 0 4830 6. YP Agr. Support 60 120 273 14 0 0 466 Sub-Total 37560 43480 41749 36781 31249 12173 202992 S. Soil Conservation 1. GY Demo Area 593 93 994 706 362 0 3648 2. OJ Deo Area 558 376 477 472 213 0 2096 3. Paul.& Toon 434 1128 1119 159 71 0 2911 4. Gall Planting 442 1276 881 161 53 0 2813 5. Chinese Medicine 646 770 417 0 0 0 1833 6. Alphine Rush 236 300 195 41 0 0 772 T. Fast Or. Trees 999 1053 905 372 230 0 3558 Sub-Total 3908 5896 4987 1911 929 0 17631 C. Income Cenerating Proj. 1. Mulberry & Coccon 526 7741 3133 502 0 0 17102 2. Teo Rehab. 558 499 89 0 0 0 1146 3. YT Goat Raising 981 784 574 10 0 0 2349 4. PS Goat Raising 496 325 149 21 0 0 991 S. GeeseRaIsing 797 731 414 215 0 0 2158 6. Rabbit RaIsing 366 385 97 17 0 0 865 Sub-Total 8924 10465 4456 767 0 0 24611 D. Agroprocessing 1. Paper NfIt(CY) 3244 6877 4707 935 -0 .0 15763 2 Paper Nill(PS) 377 5951 4063 935 -O -0 14726 3. RabbitHair Proc. 1115 2859 1328 668 0 0 5970 4. CalinutProc. 533 1057 547 334 -0 -0 2471 S. Coat Proc. 246 382 418 89 0 0 1135 6. Geese Proc. 684 661 837 145 0 0 2326 Sub-Total 9599 17786 11899 3106 .0 .0 42391

Total PROJECTSCOSTS 59992 77627 63091 42565 32178 12173 287625 ...... Values Seated by 1000.0 4/19/1992 16:43 _ 70 - Annex 2 Sichwnl AUmfrf.UIttuCOevetcp.snt oable Proj.ct T4r1cult2-1 Sury AccountsCost SuLry Yuan .USS XTotal ...... ,,,,,,,,.,...... --%-Foreo so" Local Forelin Total Local Foregn Total Exchnge Costs ...... I......

...... A. Lwi Acqfisotfian 60758 0 60758 11293 0 lim 0 5 B. Civft Works 1. Irrigation Vorks 418043 142253 560296 77703 26441 104144 25 43 2. On-FarmWorks 9802 10993 109016 18220 2043 20243 10 8 3. Sufldfng. an Plant 58356 17459 75815 10847 3245 14092 23 6 4. Rural Roed 13047 3399 16446 2425 d2 3057 21 1 *-;; . -_...... ;* ...... " -Total 87469 174104 76173 10915 32361 141556 23 55 C. Frm Labors 43867 0 43867 8154 0 8154 0 3 D. Naterfals I *Construction Naterfals 9366 23693 33059 1741 4404 6145 n 3 2. BreedngStock 9s 1s15 9073 1349 337 1687 20 1 3. Fertilizers 11594 2728 38883 2155 son 72Z7 70 3 4. Pestfefdis 2906 11625 14531 540 2161 2701 S0 1 5. S , Egms 15433 0 15433 2869 0 2869 0 1 6. OtherNterfal 3626 36 3662 674 7 681 1 0 ...... SubTotal so5ss 64456 114641 9325 1196 21309 51 14 E. Machinry andEquipent 1 Comntruction 3142 12568 11o s54 2336 2920 80 1 2. Irrigation OaN 1178 4711 5888 219 876 1094 80 0 3. Offfce 4926 6396 11322 916 1189 2104 56 1 4. Processng 2703 96399 124053 5140 17918 23058 78 10 5. PM" aN Motors 3710 s637 12367 690 1609 2299 70 1 6. Furnftures 910 0 910 169 0 169 0 0 7. Lab Equfpmmnt 853 3287 4140 159 611 77 79 0 8. FormToos 2846 712 3558 529 132 661 20 0 9. Other ProduetiveEqufp 23782 5946 29728 4421 1105 5526 20 2 ...... tub-Total 69001 13867 207676 1826 25776 38602 66 15 F. Vehicles 1.Passengr 108 432 540 20 80 100 s0 0 2. Trucs 2466 9864 12330 458 1833 292 80 1 3.ON Vehfles 0 0 0 0 0 0 0 0 4. Utitity Vehicles 1906 7624 9530 354 1417 lm 80 1 ...... MabTotal 4480 17920 22400 33 3331 4164 80 2 G. Instftutfonal DevY *S 1. Training 8034 7689 157 149n 1429 29 49 1 2. Technical Assistance 462 1132 1594 86 210 296 71 0 3. Resrch 1166 896 2062 217 166 383 43 0 ...... Sub-Total 9662 9n7 19378 1796 1806 3602 50 1 N. Design, Enginering 9 SW 25662 0 25662 4770 0 4770 0 2 t.Acsinistration & Npt 12492 0 12492 5232 0 2m 0 1 J. WorkfngCapital 25776 0 25776 4791 0 471 0 2 K. Construction Tax 5180 0 5180 963 0 93 0 0

Total NSELIKECOSTS 894531 4048n 1299404 166270 75255 241525 31 100 Physical Contingences 65497 32968 98465 12174 6128 1802 33 a Price Contingenies 127268 22284 149552 3656 4142 277" 15 12 ...... Total PROJECTSCOSm 1087296 460124 1547420 202100 5525 287625 30 119 ...... Vtues Seated by 1000.0 - 5/1210IM 12:49 Annex 2 - 71- T81;- China Sichuan Agriculture DevelopmentProject SumnuryAccount by Project Cwponent Yuan

SP WP YP SP Agr. WPAgr. YPAgr. GYDemo QJ Demo Irrig. Irrig. Irrig. Support Support Support Area Area 1. INVESTMENTCOSTS ...... A. Land Acquisition 15000 35158 1175 0 0 0 16 15 B. Civit Works 1. Irrigation Works 180002 362316 17978 0 0 0 0 0 2. On-Farm Works 58502 37854 4754 0 0 0 4855 2136 3. Buildings and Plant 0 0 0 7817 5425 563 330 340 4. Rural Roads 9264 0 0 0 0 0 0 0 ...... Sub-total 247768 400170 22732 7817 5425 563 5185 2476 C. Farm Labors 0 0 0 0 0 0 4803 3714 0. Materials 1. ConstructIon Haterials 12259 19805 417 0 0 0 566 0 2. Breeding Stock 0 0 0 0 0 0 0 0 3. Fertilizers 0 0 0 10500 8400 700 751 542 4. Pesticides 0 0 0 6300 3360 420 1768 663 5. Seeds, Eggs 0 0 0 0 0 0 1898 1189 6. OtherMaterial 0 0 0 0 0 0 0 0 ...... sub-total 12259 19805 417 16800 11760 1120 4983 2395 E. Nachinery and Equipment 1. Construction 8461 7148 102 0 0 0 0 0 2. Irrigation OUI 3513 2218 157 0 0 0 0 0 3. Office 2582 4687 78 367 287 74 235 262 4. Processing 0 0 0 :396 216 63 0 0 5. Puwpsand Motors 564 11650 153 0 0 0 0 0 6. Furnitures 0 0 0 0 0 0 0 0 7. Lab Equipment 0 0 0 1411 1611 43 0 0 8. Farm Tools 0 0 0 424 402 36 137 7 9. Other Productive Equlp 0 0 0 0 0 0 0 O ...... Sub-total 15120 25702 490 3598 2516 216 372 269 F. Vehicles 1. Passenger 0 0 0 0 0 0 90 90 2. Trucks 3150 0 105 735 525 0 100 100 3. ON Vehicles 0 0 0 0 0 0 0 0 4. Utility Vehicles 4252 3223 168 300 480 120 0 0 ...... Sub-total 7402 3223 273 1035 1005 120 190 190 G. institutional Dev & Supp 1. Training 1890 1376 66 2181 1865 166 373 309 2. Technical Assistance 0 0 0 0 0 0 0 0 3. Research 0 0 0 450 450 0 130 61 ...... ;...... Sub-total 1d90 1376 66 2631 2315 166 503 370 H. Design, Engineering & Sup 4089 17328 658 0 0 0 110 160 1. Adminfstration & Hgmt 2377 4009 208 315 230 22 695 110 J. Working Capital 0 0 0 0 0 0 0 0 KL Construction Tax 0 0 0 0 0 0 0 0

Total BASELINECOSTS 305906 506771 26020 32196 23250 2207 16857 9699 Physical Contingencies 27129 43444 2353 2033 1432 140 77m 452 Price ContIngencies 37065 76940 1953 1796 1301 160 1994 1128 ...... Total PROJECTCOSTS 370100 627155 30326 36025 25984 2508 19628 11278 Taxes 0 0 0 0 0 0 0 0 Foreign Exchange 88106 160176 6146 21477 15738 1492 3918 2005 Values Scaled by 1000.0 4/1911992 16:41 - 72 - China Amnex 2 SichuanAgriculture Oveltpmmnt Project Tsble 2-3 Sumury Account by Project Conponent Yuen

Paut. , G tl Chinese Alphin FPastor. Nultbrry To rY Goat PSGoat Toon Ptantifng Medicine Rush Trees 4 Coccon Remb. Raising Raising 1. INVESTMENTCOSTS ...... A. Land Acquisition 1376 750 250 202 0 3120 10 0 0 B. Civil Uocks 1.Irrigption Vorks 0 0 0 0 0 0 0 0 0 2. On-Frm Works 0 0 0 0 0 0 915 0 0 3. Buildingsand Plant 0 0 953 0 360 22782 233 1976 80S 4. Rural Ros 0. 0 0 0 1980 0 65 0 0 ...... ;i...... Sub-totat 0 0 0 2340 278 14 1976 805 C. FPrmLabors 8600 mo 2539 1245 9095 3795 940 300 123 0. Materiats 1. Construction Materisls 0 0 0 0 0 0 12 0 0 2 Broeding Stock 0 0 0 0 0 0 0 5060 2060 I. Fertfilers 1193 239 2314 1336 1042 5577 2188 625 372 4. Pesticides 526 255 129 425 73 460 10S 46 0 5 Seeds,Eggs 220 250 1878 270 2478 S750 600 480 196 6. Other Naterial 0 0 0 0 0 1165 0 S01 80 ...... ;;...... Sub-total 1939 2884 4321 2031 3594 12952 2904 6912 2709 E. Machiner ardEquipment 1. Construction 0 0 0 0 0 0 0 0 0 2. IrrigatflnalM 0 0 0 0 0 0 0 0 0 3. Office 343 232 71 14 135 959 4S 271 223 4. Proessing 0 0 0 0 0 1915 0 110 0 5. Pups and lotors 0 0 0 0 0 0 0 0 0 6. Furnitures 0 0 0 0 1 682 1 37 0 7. Lab Equipment 0 0 0 0 0 0 0 139 99 8. Form Toots 573 833 73 2S 219 747 82 0 0 9. OtherProductiv Equlp 0 0 0 0 5 29723 0 0 0 ,...... z...... Sub-total 916 1065 144 39 360 34026 128 557 322 F. Vehicles 1. Pssenger 0 0 0 0 0 0 0 0 0 2. Trucks 0 0 240 60 200 2660 120 260 200 3. OB Vehictls 0 0 0 0 0 0 0 0 0 4. UtilityVehicles 300 300 0 0 0 0 0 0 0 ...... Sub-totat 300 300 240 60 200 2660 120 260 200 0. Institutional Supp 1ev0 1. Training 102 232 154 17 3So 2175 I" 485 300 2. Technicat Assistance 215 141 0 108 0 0 38 181 41 3. Research 0 0 0 0 120 400 0 103 80 ...... ii...... i...... i;...... Sub-totat 318 3 154 125 476 2S75 184 769 421 H. ODsfln,Enfineern9l S p 20 18 15 0 300 0 45 206 112 1. AdafnfstrationS Mgut 200 170 200 31 305 503 67 395 147 J UorkingCapital 0 0 0 0 0 0 0 0 0 K ConstructionTax 0 0 0 0 0 0 0 0 0 ......

TotalBASELINE COSTS 13669 13280 8836 3733 16669 82414 5611 11376 4840 PhysicalContingencaes 588 598 411 169 779 3811 265 5OO 208 PriceContinencies 1405 1256 614 250 1691 5785 289 759 285 ...... TotalPROJECT COSTS 15662 15135 9862 4153 19140 92010 6166 12635 5333 Taxes 0 0 0 0 0 0 0 0 0 PoreignExchange 2213 2986 1806 1670 1959 21398 1829 2908 1351 ...... Values Scaledby 1000.0 4/19/1992 17:09 _ 73 -

Annex 2 ChinaTO 4 SichuanAgriculture Oevelopment Project Suutary Account by Project Component Yuan

Rabbit Geese Rabbit Paper Paper Hair Galtnut Goat Geese Raising Raising Mitt(MY) MiltCPS) Proc. Proc. Proc. Proe. *-uauaan.uuuuuunuuuu.auuaUflUuufuuuuUuUuUUuuUsuUu-"------auUnuaUUUs-- _*uUUaUu 1. INVESTMENTCOSTS ...... A Land Acquisition 0 0 980 1820 300 200 65 320 8. Civil Works 1. Irrigation Works 0 0 0 0 0 0 0 0 2. On-farm Works 0 0 0 0 0 0 0 0 3. 8uildings and Plant 2275 1455 12408 11594 1862 1924 915 1797 4. Rural Roads 0 0 1350 3500 227 60 0 0 ...... Sub-total 2275 1455 13758 15094 2089 1984 915 1797 C. Farm Labors 867 105 0 0 0 0 0 0 0. Materials 1. ConstructionHaterials 0 0 0 0 0 0 0 0 2. Broeding Stock 954 1000 0 0 0 0 0 0 3. Fertilizers 653 110 0 0 0 0 0 0 4. Pesticides 0 0 0 0 0 0 0 0 5 Seeds. Eggs 196 28 0 0 0 0 0 0 6. Other Material 1557 359 0 0 0 0 0 0 ...... Sub-total 3359 1496 0 0 0 0 0 0 E. Machinery and Equipment 1. Construction 0 0 0 0 0 0 0 0 2. Irrigatfon OSH 0 0 0 0 0 0 0 0 3. Office 288 169 0 0 0 0 0 0 4. Processing 1980 120 47586 39744 17145 5630 2464 5683 5 Puops and Motors 0 0 0 0 0 0 0 0 6- Furnitures 96 93 0 0 0 0 0 0 7. Lab Equipment 266 71 200 200 30 0 50 20 8. Farm Tools 0 0 0 0 0 0 0 0 9. Other Productive Equip 0 0 0 0 0 0 0 0 ...... Sub-total 2630 453 47786 39944 17175 5630 2514 5703 F. Vehicles 1. Passenger 180 180 0 0 0 0 0 0 2. Trucks 120 0 630 840 315 630 595 745 3. OSH Vehfcles 0 0 0 0 0 0 0 0 4. UtilIty Vehicles 60 0 150 0 0 176 0 0 ...... i;...... Sub-total 360 180 780 840 315 806 595 745 G. Institutional Oev 8 Supp 1. Training 489 230 no 900 626 340 144 79 2. Technical Assistance 23 7 0 0 0 0 120 720 3. Research 70 198 0 0 0 0 0 0 ,...... ;...... Sub-total 582 435 720 900 626 340 264 799 H. Design, Engineering & Sup 44 32 932 783 391 144 70 205 1. Administration & NMmt 204 5S 750 ?47 354 156 105 137 J Working Capital 0 0 7044 8042 6140 2500 800 1250 K. ConstructionTax 0 0 2080 1942 874 0 100 184 ......

Total BASELINE COSTS 10322 4211 74830 70112 28264 11760 5428 11140 Physical ContInsencies 475 184 4961 4376 1781 658 295 645 Prfie Contingencies 813 256 5012 4737 2072 875 384 730 ...... i...... Total PROJECTCOSTS 11610 4652 84803 79225 32118 13293 6107 12315

Taxes 0 0 0 0 0 0 0 0 Foreign Exchange 2183 1042 46527 40071 16584 6475 3210 6853 ...... Values Scaled by 1000.0 4/19/1992 16:42 _ 74 -

China ATnez 2 SichuanAgricuiture Oevetopment Project TAblre2w-; Suffary Account by Project Component Yuan

Physical Price Contingencies Contingencies ...... ;...... Total X Amount X Amount I. INVESTMENTCOSTS ...... A Land AcquisItion 60758 0 0 13 7888 B. CivilWorks 1. IrrigationWorks 560296 10 56030 14 76770 2. On-FarmWorks 109016 10 10506 19 20198 3. Buildingsand Plant 75815 6 4455 7 5084 4. Rural Roads 16446 8 1286 12 1937 ...... Sub-total 761573 9 72277 14 103988 C. Farm Labors 43867 5 2193 11 5000 0. Materials 1. ConstructionMaterials 33059 10 3277 10 3158 2. BreedingStock 9073 5 454 7 651 3. Fertilizers 38883 5 1944 5 2074 4. Pesticides 14531 5 727 6 800 5. Seeds,Eggs 15433 5 m 9 1400 6. Other Material 3662 5 183 12 425 ...... ;'...... Sub-total 114641 6 7356 7 8507 E. Machineryand Equipment 1. Construction 15710 5 786 4 692 2 IrrigationOM 5888 5 294 11 655 3. Office 11322 5 602 4 413 4. Processing 124053 9 11145 5 5869 S. Pumps and Motors 12367 5 618 13 1551 6. Furnitures 910 5 45 7 62 7. Lab Equipment 4140 9 360 4 162 S. Farm Tools 3558 6 221 7 240 9. Other ProductiveEquip 29728 5 1486 8 2336 ...... Sub-total 207676 7 15559 6 11979 F. Vehicles 1. Passenger 540 5 27 2 12 2. Trucks 12330 5 576 3 427 3. O8M Vehicles 0 0 0 0 0 4. UtilityVehicles 9530 5 476 5 431 ...... Sub-total 22400 5 1079 4 871 C. InstitutionalDev 8 Supp 1. Training 15723 0 0 7 1118 2. TechnicalAssistance 1594 0 0 5 73 3. Research 2062 0 0 9 190 ...... Sub-total 19378 0 0 7 1381 H. Design, Engineering & Sup 25662 0 0 14 3511 1. Administratfon & Mgmt 12492 0 0 13 1565 J Working CapitaL 25776 0 0 17 4403 K. Construction Tax 5180 0 0 9 458 ......

Total BASELINECOSTS 1299404 8 98465 12 149552 PhysicalContIngencies 98465 Price Contingencies 149552 7 10797 ...... Total PROJECTCOSTS 1547420 7 109262 10 149552 Taxes 0 0 0 Foreign Exchange 460124 8 34734 ...... Values Seated by 1000.0 4/19/1992 16:42 - 75 - Annex 2 China sable 2-6 SichuanAgriculture Development Project Yuan

SummaryAccounts by Year

Base Costs ...... 1992 1993 1994 1995 1996 1997 Total uanalanuuaauu1uauuuuuuauauuuuuuuumuuumuuauaaw-JuDu-----u------amu.uu.wuu 1. INVESTMENTCOSTS ...... A. Land Acquisition 16407 13694. 11519 9067 6906 3164 60758 B. CivilWorks 1. IrrigationWorks 106499 124525 117720 108748 80333 22471 560296 2. On-FarmWorks 13782 18165 18698 20779 23586 14006 109016 3. Buildings and Plant 32314 28354 13432 1665 50 0 75815 4. Rural Roads 3803 4582 3734 2195 2132 0 16446 Sub-total 156399 175625 153584 133387 106101 36477 761573 C. FarmLabors 8121 17228 12825 4105 1588 0 43867 0. Materials 1. ConstructionMaterials 7062 8467 6747 4900 4099 1784 33059 2. BreedingStock 3752 3052 2022 248 0 0 9073 3. Fertilizers 13884 9023 15305 536 135 0 38883 4. Pesticides 5412 1527 6563 712 316 0 14531 5. Seeds.Eggs 5146 6303 3041 636 307 0 15433 6. OtherMaterial 518 1351 1396 396 0 0 3662 Sub-total 35774 29723 35074 7429 4857 1784 114641 E. Machineryand Equipment 1. Construction 4957 6399 4092 164 100 0 15710 2. IrrigationO0M 1012 1659 905 94 758 1459 5888 3. Office 6695 4041 585 0 0 0 11322 4. Processing 27006 66700 29946 400 -0 *0 124053 S. PuTPsand Motors 509 2354 2417 3764 2424 898 12367 6. Furnitures 431 416 .35 28 0 0 910 7. Lab Equipment 659 3419 62 0 0 0 4140 8. Farm Tools 1494 1552 413 68 31 0 3558 9. Other Productive Equip 7582 14836 7086 223 0 0 29728 Sub-total 50345 10137' 45542 4742 3313 2357 207676 F. Vehicles 1. Passenger 360 180 0 0 0 0 540 2. Trucks 5132 5542 1655 0 0 0 12330 3. O8v VehicLes 0 0 0 0 0 0 0 4. UtilityVehicles 4204 4364 238 0 0 724 9530 Sub-total 9696 10086 1893 0 0 724 22400 G. InstitutionalDev & Supp 1. Training 5820 5117 2078 1496 1047 165 1572 2. TechnicalAssistance 558 5(. 452 12 10 0 1594 3. Research 498 630 331 388 215 0 2062 Sub-total 6876 6209 2861 1896 1271 165 19378 N. Design, Engineering & Sup 7325 4;79 4216 4272 3711 1559 25662 1. Administration& Mgmt 2891 3491 2690 1783 1277 360 12492 J. WorkingCapital 0 0 12226 13550 0 0 25776 K. ConstructionTax 1094 2757 1329 *0 -0 -0 5180 ...... TotalBASELINE COSTS 294928 364870 283760 180232 129024 46591 1299404 PhysicalContingencies 20622 27449 20976 14196 11242 3980 98465 PriceContingencies 7205 25312 34693 34570 32852 14919 149552 ...... TotalPROJECT COSTS 322754 417631 339429 228997 173118 65490 1547420 Taxes 0 0 0 0 0 0 0 Foreign Exchange 108667 150636 104433 45990 36866 13532 460124 ...... Vatues Scated by 1000.0 4/19/1992 16:42 -76-

China Annex 2 SichuanAgricultute Development Project Table T- Yuan SurmmaryAccounts by Year ForeignExchange % Amount 1. INVESTMENTCOSTS ...... A. LandAcquisition 0 0 B. CivilWorks 1. IrrigationWorks 25 142253 2. On-FarmWorks 10 10993 3. SuildIngsand Plant 23 17459 4. RuralRoads 21 3399 Sub-total 23 174104 C. Farm Labors 0 0 0. Materials 1. ConstructionHaterials 72 23693 2. BreedingStock 20 1815 3. Fortilizers 70 27288 4. Pesticides 80 1162S 5. Seeds,Eggs 0 0 6. OtherMaterial 1 36 Sub-total 56 64456 E. Machineryand Equipment 1. ConstructIon 80 12568 2. IrrigationOSM 80 4711 3. Office 56 6396 4. Processing 78 96399 5. PUiTSand Motors 70 8657 6. Furnitures 0 0 7. Lab Equipment 79 3287 8. Farm Tools 20 712 9. OtherProductive Equip 20 S946 Sub-total 67 138675 F. Vehicles 1. Passenger 80 432 2. Trucks 80 98"6 3. OCW Vehicles 0 0 4. UtilityVehicles 80 7624 Sub-total 80 17920 G. InstitutionalDev & Supp 1. Trainlr.g 49 7689 2. TechnicalAssistance 71 1132 3. Research 43 896 Sub-total 50 9t17 H. Design,Engineering & Sup 0 0 1. Administration& Mgmt 0 0 J. WorkingCapital 0 0 K. ConstructionTax 0 0 TotalBASELINE COSTS 31 404872 PhysicalContingencies 33 32968 PriceContingencies 15 22284 ...... TotalPROJECT COSTS 30 460124 *asaauauumauuu Taxes 0 0 ForoignExchange 100 460124 V...... Vatues Scalod by 1000.0 4/19/1992 16:42 - 77 -

Annex 2 China 'Table -2- SichuanAgriculture Development Project SummaryAccounts by Year TotalsIncluding Contingencies Yuan ...... 1992 1993 1994 1995 1996 1997 Total UU3UUUinUUUU*UUUUUUS.USUUUUUU3SU.UU3UUUUUU3UUU.UUUSUUUUUUUZUUSUUUUU-w 1. INVESTMENTCOSTS ...... A Land Acquisition 16900 14878 13142 10861 8686 4179 68645 B. Civil Works 1. IrrigatfonWorks 120023 146737 144998 140508 108842 31989 693096 2. On-FarmWorks 15513 21459 23175 27079 32324 20169 139720 3. Buildingsand Plant 35110 32168 15959 2053 6S 0 85355 4. Rural Roads 4193 5279 4516 2816 2864 0 19669 Sub-TataL 174839 205643 188648 172456 144095 52157 937839 C. Farm Labors 8783 19654 15363 5163 2097 0 51060 0. materials 1. ConstructionMaterials 7875 9706 8020 6111 5355 2426 39493 2. BreedingStock 4041 3444 2386 307 0 0 10178 3. Fortilizers 14792 9965 17345 633 167 0 42901 4. Pesticides 57S7 1667 7403 840 390 0 16057 S. Seeds, Eggs 5565 7191 3643 800 406 0 17604 6. Other Material 561 1540 1671 498 0 0 4270 manUUUEUU3UUlUUUU2=fUu3canonsUfflaUUUfnaU8UUS Sub-Total 38591 33513 40468 9189 6317 2426 130504 E. Machinery and Equipment 1. Construction 523 6984 4615 193 123 0 17t88 2. irrigation O01 1077 1811 1021 111 935 1882 6837 3. Office 7157 4510 671 0 0 0 12338 4. Processing 29684 75711 35193 479 *0 *0 141067 5. PLps and Motors 543 2584 2748 447S 3018 1169 14536 6. Furnitures 466 475 42 35 0 0 1018 7. Lab Equipmfent 701 3891 70 0 0 0 4662 8. Farm Tools 1609 1798 488 84 40 0 4018 9. Other Productive Equip 8166 16743 8365 276 0 0 33550 Sub-Total 54677 114504 53211 5655 4116 3051 235215 F. Vehicles 1. Passenger 383 196 0 0 0 0 579 2. Trucks 5455 6044 1834 0 0 0 13333 3. O&M Vehicles 0 0 0 0 0 0 0 4. Utility Vehicles 4472 4763 268 0 0 934 10438 * -...------UU-UU8UU3EUUW33UUUUUUU3U3UUUUUUS33U3UUUU33UUUUUUUUUE5UUU Sub-Total 10310 11003 2103 0 0 934 24350 G. InstitutionalOev & Supp 1. Training 5930 541S 2298 1n6 1262 208 16840 2. TechnicalAssistanee 567 587 488 14 11 0 166? 3. Research 508 669 366 449 259 0 2252 .. u..u.uUUUSUU----UO--SaSmUUUUUUmUUUUUUUUUUSUUUUUuUB*"SUUUUmuUUUUUU*m33 Sub-Total 7005 6672 3152 2189 1533 208 20759 H. Oesign,Engineering & Sup 7545 4975 4810 5117 4668 2059 29173 1. Adiinistration & Mgmt 2978 393 30c9 2136 1606 475 14057 J. WorkingCapital 0 0 13948 16231 0 0 30179 C. Construction Tax 1126 2996 1516 *0 -0 -0 5638 Total PROJECTCOSTS 322?54 417631 339429 22897 173118 65490 1547420

...... 0...... Values Scated by 1000.0 4/19/IMw 16:42 - 78 -

Annex 2 China Table 2-9 Sichuan AgricultureDevelopment Project Summary Accounts by Year

Totals IncludingContingencies usS ...... 1992 1993 1994 1995 1996 1997 Total

1. INVESTMENTCOSTS ...... A. Land Acquisition 3141 2765 2443 2019 1615 777 12759 B. Civil Works 1. IrrigationWorks 22309 27275 26951 26117 20231 5946 128828 2. On-Farm Works 2883 3989 4308 5033 6008 3749 25970 3. Buildings andiPlant 6S26 5979 2966 382 12 0 15865 4. Rural Roads 779 981 839 523 532 0 3656

Sub-Total 32498 38224 35065 32055 26784 9695 174319

C. Farm Labors 1633 3653 2856 960 390 0 9491 0. Materials 1. ConstructionMaterials 1464 1804 1491 1136 995 451 7341 2. Breeding Stock 751 640 444 57 0 0 1892 3. FertiltIers 2749 1852 3224 118 31 0 7974 4. Pesticides 1070 310 1376 156 72 0 298S 5. Seeds, Eggs 1034 1337 677 149 75 0 3272 6. Other MaterIal 104 286 311 93 0 0 794

Sub-Total 7173 6229 7522 1708 1174 451 24257

E. Machinery and Equlpment 1. Construction 980 1298 858 36 23 0 3195 2. IrrigationO&H 200 337 190 21 174 350 1271 3. Office 1330 838 125 0 0 0 2293 4. Processing 5518 14073 6541 89 -0 -0 26221 5. Puips and Motors 101 480 511 832 561 217 2702 6. Furnitures 87 88 8 7 0 0 189 7. Lab Equipment 130 723 13 0 0 0 867 8. Farm Tools 299 334 91 16 7 0 747 9. Other Productive Equip 1518 3112 15S5 51 0 0 6236 *UUUSU33*333UUUUUUU3UUU35CUUU3US*3S8UUUZ3SU5U533*uBS3U*3Um3XzUU3UU Sub-Total 10163 21283 9891 1051 765 567 43720

F. Vehicles 1. Passenger 71 37 0 0 0 0 108 2. Trucks 1014 1123 341 0 0 0 2478 3. O&i Vehicles 0 0 0 0 0 0 0 4. UtIlity Vehicles 831 885 50 0 0 174 1940

Sub-Total 1916 2045 391 0 0 174 4526

G. Institutional Dev & Supp 1. Training 1102 1007 427 321 235 39 3130 2. TechnicalAssistance 105 109 91 3 2 0 310 3. Research 94 124 68 83 48 0 419 Sub-Total 1302 1240 586 407 285 39 3859

N. Design, Engineering & Sup 1402 925 894 951 868 383 5423 1. Administration & Mgmt 553 705 570 397 299 88 2613 J. Working Capital 0 0 2593 3017 0 0 5609 K. ConstructionTax 209 557 282 -0 -0 -0 1048 auuuau.aa---uuus.u.Ua.samuuuuummuu*s-asauumuuuma*azuu-buuuuggsmu-uU-.m Total PROJECTCOSTS 59992 77627 63091 4256S 32178 12173 28762S

...... ------...... -...... VatusScatedby4 1 .9 .. 1.6...... u...z . Values Scaledby 1000.0 U/19/1992 16:42 -79- Anne 3 Table 1-1 CHINA Sdium Agricultural O velopmnt Project Procuremtof Equipment (T'0oe) ...... _. ua ntity unit ICB LCB/a Others NIF Total (IUMt) Price(y) ......

A. Corntruction Equipment 1S,192 S91 98 14,681 Generation Units 36 280 0 200 Concrete Eq1P nt 2 391 391 Crane 200 200 Earthwork Equlipnt W9 rw Conatiaution Equip nt 16 12,912 12,912 B. OWN Equipant 0 2,092 3,246 5,338 RepairEquipnt 115 1,564 1,679 NessureIrntnumnt 1,410 1,410 FireEquipment 5 S C_me N/Vidrotilt 13 1.95 I.m PackingEquipmnt 1 27 27 other 56 56 Niec.acessories 211 211 C. IrriatfonEquipnt 4,807 6,767 210 11,784 PUPing Eqpnt 127 6,5o6 6,566 Trnfoworr 34 210 210 Diesel EngineUnits 52 201 201 HydrsuLicTurbine 45 4.80? 4,807

0. Procsing Equipment 9f,396 21,442 116,838 PawprEqfipmnt U 7144T 14,284 85,731 abbit air 13 14.301 t,IOS 15,931 Beef& coat net 17 2.070 40 2,110 Ge 32 3.080 1,650 4n730 Galtnut 26 3,918 894 4,812 geed 13 3,016 3,016 Fodr 2 S08 S08 E. Othr Produation Eqdpant a. AgriculturalNehfnery 2.949 2.949 Spra 1,151 1.151 AgricultturTool 1,649 1,649 Other 149 149 b. Sericulture Equlpmnt 30,009 30,009 Slkmb EogsProdwetion 115,00aets 1.052 1,052 Raising SISlubu 115,l0eto 27.362 27,362 oter 1,95 1,595 C. LivestockEqUipmt 550 1,267 1,817 osinhold-ming 1,228 1,228 Breeing 550 550 Greland Nitoring 39 39 d. Other 786 786 F. OfficeA LaborstorVEquip. a. Office 9,311 9.311 NicroCsteWr 30 1,300 1,300 Coptw Statfon 3 1,720 1,720 Tnultet 41 710 710 Comication 26 t,1lll! 1,082 Digser 38 2,022 2,022 alt Printing Units 13 691 691 Fed lo 2 44 ohe 1,742 1,742 b. Loratory WIpmnt 1,751 1,751 inetr nt 1,563 1W563 App&ion_ 188 188 B. Other Minor quiEpnt 2,141 2,141 H. Othe 354 354 3. P3m' Equipit ts14 m S8 Niero-Csqute 5 300 300 UacdsiulI 4 s a8 ODatlcater 5 180 18O Total 113,395 31,442 53.490 18,327 ...... INOTLtlh coat of Ps' Equpipit Is I.nltded In thecast of ProjectNansomment. f Someeipm nt _ds US 0,000 in agrgte. Wt thneeIt_ muld be pcured owr iiy yers inkig sub indlidualpdacge Il than U5200,000. opt, *at n5 IfirM.w -80- Annex 3 Table 1-2 CHIrn SlchbunAgricultural Developent Project Procuruamnt of Nateraels CY000) ...... Qumity Unit ICB LCD Others NIF Total CT) Priee(d) A. ConstructionMaterials 34,115 5,284 39,399 Steel 21,322 1,600 34,115 34,11' Cement 33,232 159 5,284 5,26.

B. Agrfculturtlorputs a. Fertiltier 43,664 2,050 29,176 2,131 31,307 Urea 9,576 1,000 9,576 9,576 Phosphate 6,088 350 2,131 2,131 Potessful 28,000 700 19,600 19,600 b. Pesticide 301 14,545 14,545 C. Se dings 11,952 11,952 Saplfng(1000 tree) 124,880 9,960 7,960 Sapling(ton) 6,028 344 344 Seed 117 1,648 1,648 d. Others 4,929 4,929

C. Livestock a. BreadingStock 8,879 8,879 Rabbit 60,200 1,000 1.000 Geese 337,000 811 611 Goat 148,400 7,068 7,068 b. Fodder 2,452 2,452 D. Other Nfnor Naterfal 7,629 7,629 Total 63,291 7,415 50,386 121,092

Procurement of Vehicles CYr000) ...... Quanity Unit ICe LC8 Others IF Total CT) PriceCl) ...... A. IRRIGATION 156 15,205 15,205 HesvyTrucks C20T) 30 164,700 4,941 4,941 TrucksCOT) 17 90,000 1,530 1,530 Duip Truck 4 30,000 1,380 1,380 UtilityTrucks 61 114,000 6,954 6,954 Utility Cars 2 200,000 400 400 B. SOIL CONSMEVATION 18 1,548 1,548 Trucks(ST) 6 S8,000 348 348 UtilityTrucks 12 100,000 1,200 1,200

C. SERICULTURE 27 2,658 2,658 Trucks(ST) 1 56,000 S5 58 Utility Trucks 26 100.000 2,600 2,600

D. LIVESTOCK a 954 954 Trucks(5T) 3 58,000 174 174 UtilityTruck 5 156,000 780 760 E. AGROPROCESSING 40 2,986 2,986 Trucks(5T) 30 5S,000 1,740 1,740 FirsEngino 1 130,000 130 130 RefrigeratedTruck COT) 2 250,000 500 500 Utilitytrucks 5 100,000 500 500 Folk Lift 2 58,000 116 116 F. PUGo Utility Vehicle 5 200,000 1,000 1,000 Total 254 24,351 24,351 ...... NIF8 Not IDA fin nced - 81

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CHINA

SICHNANAGRICULTURAL DEVELOPMENT PROJECT

Estimated DisbursementSchedule -.---.------....-..-.-..----.-----...... ---.-.-. ….- ...--.--.... .--.-----.. Disbursement Disbursement Profile a/ IDA ------...... Fiscal year/ Semestral CumulativeCumulative Year/Semester % Semester ---(US$ million)--- % ....-----.------..-.---.---.------.---..----..----…..-----..-..- 1993 b/ Year 1 First (Jul-Dec,92) 10 10 7% First 0 Second (Jan-June,93) 10 20 14% second 30

1994 Year 2 First (Jul-Dec,93) 12 32 22% First 38 Second (Jan-June,94) 20 52 35% second 50

1995 Year 3 First (Jul-Dec,94) 20 72 49% First 58 Second (Jan-June, 95) 16 88 60% second 66

1996 Year 4 First (Jul-Dec, 95) 14 102 69% First i4 Second (Jan-June, 96) 12 114 78% second 82

1997 Year 5 First (Jul-Dec, 96) 10 124 84% First 94 Second (Jan-June, 97) 8 132 90% second 98

1998 Year 6 First (Jul-Dec, 97) 8 140 95% First 100 Second (Jan-June, 98) 4 144 98% second

1999 Year 7 First (Jul-Dec,98) 3 147 100% First

Total 147 147 …...... -..--..------.------.-----...... -.------...... a/ Disbursementprofile for China - AgriculturalSector b/ Include retroactive financing of US$ 14 million, to cover expenditures incurred since January 1, 1992.

Completion date: December 31, 1998 Closing date: December 31, 1999.

Note: The project disbursementis expected to be slower than the average profile of the agriculturalsector since the project contains large scale constructionand would be implementedover six years. Annex 5 Table 1-1

SichuanAgrelture Project Crop Area, Yield, and Production of Irrigation Component

ExistingSituation Full Development Changes Area Yield Output Area Yield Output Area Yield Output ('000 ha) (ton/he) ('000 ton) ('000 ha) (ton/ha)('000 ton) ('000he) (ton/ha)('000 ton) ShenzhpngIrrigation Ar e Paddy 80.86 7.00 210.02 44.86 s.50 877.00 13.49 1.50 160.9" Wheat 88.87 2.70 90.11 47.67 8.76 178.76 14.80 1.06 86.67 Corn 16.11 2.06 61.62 14.51 4.50 65.26 -8.61 1.65 18.06 SWet Potato 20.58 8.00 61.68 9.85 8.76 85.06 -11.17 0.75 -26.50 B"ns A Poea 4.69 1.65 7.58 7.17 2.10 16.06 2.26 0.65 7.46 Rrpesed 14.05 1.26 17.56 14.60 2.00 29.20 0.65 0.75 11.64 Cotton 5.41 0.59 8.17 5.67 0.80 4.58 0.26 0.21 1.87 OtherCash Crope 4.40 4.40 0.00 Total CroppedArea 18l.6 147.78 16.10 TotalCultivated Area 70.01 70.01 CroppingIntensity (M) 16s6 211X uda Irrigation Area Paddy 24.05 0.60 168.67 87.12 8.25 806.23 18.07 1.46 142.71 Wheat 28.66 S. U 79.98 26.86 4.50 118.59 2.48 1.15 86.61 Corn 10.06 8.15 50.00 7.27 4.065 8.61 -8.81 1.50 -16.86 SweetPotato 18.09 2.86 87.82 6.46 8.75 24.22 -6.64 0.90 -18.10 Beans A Pe 6.98 1.85 9.42 10.98 2.10 28.06 4.00 0.75 18.64 Rapesed 16.04 1.70 27.27 18.74 2.40 44.97 2.70 0.70 17.70 P"enuts 2.52 1.66 8.91 2.68 2.25 6.86 0.70 2.46 Cotton 2.67 0.54 1.44 2.07 0.80 2.18 V.,0 0.20 0.69 Othr Cash Crops 6.69 16.24 9.65 TotalCroppd Are 112.00 128.60 16.66 TotalCultivated Area 61.47 01.47 CroppingIntenity (X) 162 209% YangJisabIrrigation Ara Paddy 1.89 .90 8.18 2.01 7.S0 15.10 0.68 1.60 6.92 Whet 1.66 2.70 4.46 1.81 3.60 6.65 0.16 0.90 2.06 Corn 0.97 8.75 8.65 1.00 4.65 4.66 0.08 0.90 1.00 8teet Potato 0.27 2.15 0.57 0.27 8.00 0.60 0.00 0.86 0.23 80n- * Peas 0.27 1.80 0.86 0.27 2.00 0.58 0.00 0.70 0-19 Rapesed 1.87 1.85 1.85 1.57 1.95 8.06 0.19 0.60 1.20 Peanuts 0.18 1.20 0.16 0.18 1.75 0.28 0.00 0.6s 0.07 OtherCash Crop 1.01 1.08 0.02 TotalCropped Area 7.07 8.09 1.08 TotalCultivated Area 8.75 8.76 Cropping Intensity(X) 169x 216X Total IrrigationComponent Area Paddy 56.80 6.9 867.77 68.49 6.86 696.8s 27.19 1.48 810.61 Wheat 56.90 2.96 174.55 75.64 4.01 808.69 16.94 1.04 129.84 Corn 85.17 8.01 106.98 22.78 4.55 108.74 -12.89 1.64 -2.19 Sweet Potato 88.69 2.94 99.47 16.06 8.74 60.09 -17.61 0.90 -89.38 Bene A Pea 12.14 1.48 17.85 18.42 2.10 88.65 6.26 0.67 21.81 Ropesed 81.46 1.46 46.66 84.91 2.21 77.28 8.44 0.78 80.54 Peanuts 2.66 1.65 4.07 2.96 2.28 6.59 0. 0 0.70 2.62 Cotton 6.06 0.67 4.01 8.88 0.80 6.67 0.26 0.28 2.06 OtherCash Crops 12.10 21.67 9.57 TotalCropped Area 250.69 294.46 38.7s Total CultlvatedArea 186.28 186.28 Cropping Intensity(X) 1s65 210X Notes Other cash crops Includekenof, vgetbles, etc.. Annex 5 - 89 - Table 1-2

China SichuanAgriculture Development Project ------IrrigationComponent ('000ha) IrrigationCondition In ProjectAreas

Fully Partially Irrigated Irrigated Rainfed Total …------__------ShenzhongArea Present 0.00 36.58 33.43 70.01 Full Development 65.58 4.43 0.00 70.01 Wudu Area Present 0.00 35.60 25.87 61.47 Full Development 58.77 2.70 0.00 61.47 Yangjiaba Area Present 0.00 1.47 2.28 3.75 Full Development 3.75 0.00 0.00 3.75 Total IrrigationComponent Present 0.00 73.65 61.58 135.23 Full Development 128.10 7.13 0.00 135.23 …------__------Chils Sichuan Agriculture Project Irription Component Phasing of Crop Area and Yield

Area ('000 ha) Yield (toonh 1m 2 199 1994 1995 1996 1997 1998 1999 Prest 1 2 a 4 6 ShonahongArea

Paddy 80.86 83.26 35.62 37.07 40.81 44.85 7.00 7.60 7.97 8.27 8.42 9.50 What 88.87 86.92 30.42 40.80 43.92 47.67 2.70 3.12 8.88 a.69 8.70 8.75 Corn 18.11 17.47 16.84 16.24 16.46 14.51 2.86 8.51 8.92 4.25 4.42 4.50 SweetPotato 20.68 18.64 16.58 14.72 12.29 9.85 8.00 8.80 8.49 3.84 3.71 8.76 Bens A Peas 4.89 6.80 6.70 6.08 6.67 7.17 1.65 1.77 1.91 2.02 2.0? 2.10 Rapeseed 14.05 14.15 14.24 14.88 14.46 14.60 1.26 1.66 1.74 1.89 1.98 2.00 Cotton 6.41 6.46 6.60 6.64 6.60 6.67 0.69 0.67 0.72 0.77 0.79 0.60 Other CashCrops 4.40 4.40 4.40 4.40 4.40 4.40 Subbtal 181.68 184.49 187.81 189.99 148.60 147.78 WuduArea

Paddy 24.06 24.15 26.22 26.11 28.60 80.76 84.31 87.12 6.80 7.B 7.74 8.03 8.18 8.25 Whet 28.88 23.90 24.10 24.27 24.74 26.16 26.82 26.86 8.86 3.81 4.10 4.33 4.44 4.60 Corn 16.06 16.01 16.29 14.89 13.01 11.56 9.17 7.27 8.16 8.76 4.13 4.43 4.67 4.66 SweetPotato 18.09 18.04 12.60 12.06 10.78 9.69 7.89 6.46 2.86 3.21 8.44 8.62 3.71 8.76 Beansa Peas 6.9n 7.01 7.84 7.61 0.37 9.08 10.12 10.96 1.86 1.66 1.84 1.9 2.06 2.10 Rapeseed 16.04 16.06 16.26 16.47 16.98 17.42 18.16 l8.74 1.70 1.96 2.16 2.29 2.36 2.40 Peanus 2.62 2.62 2.66 2.67 2.63 2.68 2.76 2.983 1.66 1.83 2.00 2.1' 2.21 2.26 Cotton 2.67 2.67 2.67 2.67 2.67 2.67 2.67 2.67 0.64 0.64 0.71 0.76 0.79 0.90 OtherCash Crops 6.69 6.76 7.64 0.19 10.02 11.59 14.18 16.24 Subotal 112.00 112.18 118.49 114.62 117.60 120.66 126.07 129.66 Yonjiaba Area

Paddy 1.89 1.89 1.99 1.61 2.01 2.01 5.90 8.54 6.94 7.26 7.42 7.60 Wheat 1.66 1.66 1.65 1.71 1.81 1.81 2.70 3.06 8.29 8.47 3.5B 3.60 Corn 0.97 0.97 0.97 0.98 1.00 1.00 8.76 4.11 4.84 4.62 4.61 4.65 . SweatPotato 0.27 0.27 0.27 0.27 0.27 0.27 2.16 2.49 2.70 2.87 2.96 8.00 lb Bans a P"s 0.27 0.27 0.27 0.27 0.27 0.27 1.80 1.56 1.75 1.89 1.96 2.00 F Rapseed 1.87 1.87 1.87 1.44 1.67 1.67 1.85 1.69 1.74 1.86 1.92 1.96 * Peanuts 0.18 0.18 0.18 0.18 0.18 0.18 1.20 1.42 1.6e 1.67 1.72 1.75 La Othor Cash Crops 1.01 1.01 1.01 1.02 1.03 1.08 Subotal 7.07 7.07 7.07 7.48 8.09 8.09 CHDh Sichuan Agriculture Develop4mnt Proj et Sherbhong Irrigation Area Crop eudget

Paddy Wheat Corn Econ Conv Swet Ptato Rrp ed De cttn - - -___ Unit Factor Price Quant. Amnt Quant. Amunt Quant. ------Amunt Quant. Amunt Ount. Amunt Quant. Amount Oant. Amount Withot Project Yield kg 7 000 2 700 2,850 3.000 Price Y/kg 6.76 1,250 1,5E0 ses Product Value 6.74 0.72 0.9 1.61 1.4 6.98 V 5.820 1.90 2.052 Sp-product kg 0.1 5.600 2.70D 2.013 2.170 4.083 560 2.160 216 2.280 282 2.400 240 1.000 100 Total Value Y 5,880 2,214 1,240 124 3.000 300 2,280 2,940 2.113 2.294 4.38S Zitautl coat See" PrCIet.5 See" 1.2 2.2 0.3S5 2.6 1.9 kg 24 132 120 144 25 3.6 N f*rti I izr kg 1.2 6S 50 175 2 5 75 143 40 152 2.19 12o 263 110 241 115 252 30 66 150 P fortilIier kg 1.2 2.92 30 88 60 328 0 0 165 361 hnure 175 60 175 60 175 60 175 45 131 75 ton 0.98 2D 12 240 15 300 12 240 21Q Chmicaln Y 1.2 1 7.5 1S0 18 360 0 0 1S 3S0 Aninlr/Nehine 67.5 68 25 25 10 10 15 15 0o 30 day 0.98 7.5 30 225 15 113 6 0 0 225 225 Watar Y 46 10 75 t5 113 9 6 7 58 I 1 20 20 0 0 0 0 0 Other la V 0.98 1 128 0 0 0 0 0 0 0 in 115 115 100 100 90 90 100 100 Subtotal Y 1.163 1,112 26 26 20P 208 878 746 1,111 367 l.S17 Not Value Y 4.718 1.102 1,402 2,194 1,002 1.927 2.8SS Labor mndey 0.98 a 400 1,200 300 900 380 990 240 720 330 990 195 S85 49' 1.485 Return per moday V 11.79 a.67 4.25 9.14 3.04 9.88 5.79 Not Incom V 8.618 202 412 1.474 12 1,342 1.381 With Project Vield kg 8.E00 3.750 4,S00 8,750 2.000 P-ice Y/kg 0.76 0.74 2,100 60o Product Value 0.72 0.9 1.61 1.4 6.C3 V 6.480 295 3S240 Wjy-product kgs 0.1 6,80 3.37 1 3,220 2,940 5S.584 Total 680 3.000 800 3.600 3860 3.000 800 1,600 Value Y 7.140 8,075 160 1.680 168 4.0O0 400 3,600 3.675 3.380 3,108 5.984 Irut Coat Se;ed Price S.5 1.2 2.2 Seede kg 0.85 2.6 1.9 3.8 24 132 120 144 25 55 500 175 N fortili ir kg 1.2 2.19 1S0 328 140 2 5 75 143 40 152 P fortil er 306 .10 328 sO lO 185 405 S0 66 kg 1.2 2.92 40 117 75 219 75 219 180 394 K fertilizr kg 1.2 1.40 30 42 60 175 90 268 60 175 75 219 mnure a8 SS 60 84 45 63 60 84 ton 0.98 20 12 240 iS s8o 12 45 63 75 1OS Caemical. Y 240 7.6 150 18 360 0 0 iS 800 1.2 1 67.5 68 25 25 10 10 iS 1S Animal/hichine dae 0.90 7.5 30 225 30 80 0 0 225 225 Watar 15 113 6 48 10 75 15 118 9 68 18M 183 72 72 72 72 72 7 SS Other /a V 0.98 1 72 72 72 72 72 72 72 128 128 1U8 115 1o 100 90 90 100 100 Subtotal Y 1.412 1,347 26 26 206 206 1.154 924 1.431 612 1.727 Not Value Y 5.728 1.728 2.446 2,751 1.949 2.496 4.257 Labor mnday 0.98 a 485 1.305 $15 945 845 1.085 255 765 845 1,065 210 680 525 1.57S Return per manday Y 18.17 6.49 7.09 10.79 5.65 11.89 8.11 et Incolm F3 i Y 4.423 788 1.411 1.966 914 1.866 2.682 S /n Other Includes tools, plastic shoet. babo, tc.

I SichueanAgriculture gelozpmnt Project (per ha) WuduI rigation Are* Crop bdget Paddy Wheat Sc" Ce -- Corn 5N t potato Rnpoeeed Unit Fetor 8 ne Cotton Penut Price Quant. Am_ut ennt. Amotnt - bent. nt AAemtAzent unt. Waint. Amount Qusnt. Amount Qbnt. Vithout Project Amnt Yield kg 6.800 Price VIkg 3 350 3.1I0 2.8SD Product Value 0.76 6.74 0.72 1.70D 1.350 540 Y .168 0.9 1.61 1.4 1,550 5,-product hg 0.1 2,479 2,268 2,665 6.98 2.2 Total Value 5.440 S44 2.6B0 268 2.520 2.737 1,890 3,769 Y 6,712 252 2.280 228 1.360 136 1,060 3.410 2,747 2.520 2.79M 106 2,250 225 1,240 124 Input Cost 2,878 1.990 3.994 Seed 3.634 Peice 5.5 Sede"k 1.2 2.2 0.38 N fertilizer 24 132 lo0 144 2.6 1.9 kg 1.2 2.19 120 263 26 55 B0o 175 2 3.8 2.6 Pfortillsor k 1.2 110 241 110 241 30 8 75 143 40 152 binure 2.92 45 11 60 175 66 165 361 0 225 6GM ton 0.96 20 66 193 s0 175 60 0 S0 328 3D 6s6 Chemicale 12 240 1S 80 12 240 175 45 181 60 175 v 1.2 1 75 75 7.5 160 I1 360 0 45 2SI Aniemsl$chsne day 0.96 7.5 45 45 10 10 7 0 15 300 7.5 1S0 Water 29 220 3 2S 1 7 so so 0 0 195 1 1 82 82 10 12 90 16 120 195 5 5 Other /a Y 0.98 11 11 8 a 5 6 45 16 120 10 Subtotal 1 186 188 100 5 11 11 11 11 75 Y 100 106 105 100 1o0 11 11 0 0 1.828 1.041 100 l00 2? 2? 146 861 768 1.162 146 OD 60 Nat Value Y 357 1.427 1.117 4,s34 1,706 1.659 Labor 2.025 1,711 1.641 ondny 0.98 3 875 2.567 2.417 1125 SC0 900 SSD 990 240 Retern per manday 720 3D0 990 19S N8S Y 11.69 465 1395 30D 900 5.69 5.03 8.44 Nat leme Y 6.18 8.42 5.5S2 38259 an6 8.06 S69 1.as m With Project 1.056 1,172 1.517 Yield g 82S0 Price V/hkg 4600 4 650 8.750 Prodct Value .867 6.72 2.400 2.100 80o Y 06 270 0-4 0.9 1.61 1.4 2.250 Sy-product Ik 0.1 S0 7 S48 °i375 6.96 2.2 Tofta Value 6. 66 3.600 6C0 8.72 2.940 69 554 V 6930 0 872 3c000 300 1.920 192 1,680 4.90 3.6o 8.72 8.675 168 4.000 400 1.60 10 Input Cost 4066 3.108 5.964 Sede Price 5. O Seed 6.6 1.2 2.2 24 132 0.35 2.6 N fertilizer kg 1.2 2.19 120 144 S0 66 G00 1.9 3.8 2.8 P frtiliur 150 828 140 306 160 175 2 5 75 148 kg 1.2 2.92 75 219 328 So 109 195 427 40 152 225 60 K fertili"er kg 1.2 75 219 75 219 75 40 a8 165 361 45 Denure 1.40 46 63 45 63 219 90 268 75 219 98 ton 0.96 20 12 240 60 84 45 63 75 75 229 60 175 Chemcale Y 15 300 12 240 7.5 106 75 105 75 106 Aniemlftlchmine 1.2 1 75 75 25 150 13 360 0 60 84 day 0.98 7.5 25 10 10 7 0 1S 300 7.5 150 WaterV 29 220 2 90 7 30 S0 0 0 1 1 258 1 10 12 e 20 121 121 S S Other la 258 so so 25 25 1S0 6 45 26 195 V 0.9o 1 18 185 10t0 11 11 so so 22.5 10 75 Subtotl v 100 106 ls 100 10 22.5 150 150 7.5 7.5 1,60 1.297 100 100 27 27 146 Nat 1.087 924 1.489 146 60 s6 Vale 46a 1.748 I.=s 5,240 2.393 2,633 Labor 2.751 2,6U7 2.460 mnday 0.9e 3 406 4.2J5 3.645 U12 818 948 348 1065 255 766 348 1036 210 Return par mnday Y 630 S25 1575 340 I20 12.94 7.60 7.63 Nat Income 1O.79 7.44 Y 11.71 s.07 11.31 4,025 1.448 1.6 /a Other 1.966 1.6S2 includes tool. plastic dhet. beaoo, tc. 1.60 2.661 2,>

X U' I-.. ow" Sicuan Ar.icultute lre_al t Proe; (pr km) Y ny;iste Irrigtion Area Crop Budget Bcoi Conv P ddy brat Corn Sweet Potato Unit Factor Price WQutnt. - - RovPeeeS unt. nt Fehenot. ut. t Qnt. Aount via"% bat. nt avant, Project nt Ouat. A t Vioad Price &. 'f/g 8.900 2. 70 Product Value 0.76 a 76 2.150o By-product V 0774 6.72 1.360 1.300 kg 4,484 1996 0.9 1.61 1.200 Iotel Volue 0.1 4.720 472 To7 1.4 v 2.160 216 8.000 1.965 2.174 2.2 4,956 300 1.720 172 1.620 2.640 Iput Cost 2.214 s,eo0 1.060 106 1.040 2,107 104 960 96 Seed. Price 2,262 1,924 Sed. 2.736 kg 5.5 1.2 N frtiI i,r 24 132 2.2 0.85 P fertillaer g 1.2 2.19 UO 144 80 2.6 kg 120 263 110 66 SO0 U6 1.9 2.0 uwue 1.2 2.92 30 241 115 252 2 5 75 ton 0.96 88 60 175 30 66 ISO 143 225 630 Clueicalm 20 12 240 60 176 60 828 0 0 AnimljMehin V 1.2 1 15 a00 12 175 60 175 15 33 da" 75 76 46 240 7.5 ISO 45 131 60 Vt.r 0.9S 7.8 29 45 10 10 18 360 0 175 Y 1 220 16 120 10 10 30 0 7.5 I50 Othr /a 1 75 75 12 90 12 30 0 0 Subtotal Y 0.98 1 0 0 0 90 17 128 5 5 157 167 12 0 0 0 9 68 17 Y 120 106 105 a 0 0 128 1.249 1,145 100 100 10O O C. 0 Wet Valuo 930 10 25 2! V 766 1.126 C0. 60 S,707 1,069 36G. .180 Labor 2.062 1.341 mnday 0.96 3 1,156 800 1140 sO 1.568 ).56 Return per 9eo 830 990 onday r 220 880 80 9.76 990 195 N6s tb Income 8.86 300 900 Y 6.25 6.10 2.567 3.60 7.99 WVit 19 5.19 Project 1,072 6S1 168 973 Y;eld 6 Price ie YV/e 7.S00 8.6C0 Prodwut Value 0.76 4.650 3.000 BR-product Y 0.74 0.72 1.950 kg 57C0 0.9 2.000 1.750 Total Volue 0.1 6.000 2.6e4 ,848 1 61 1.4 Y 600 2.860 298 2.700 2.2 6,900 3.720 872 2,400 3.140 2.800 2,952 240 1,560 156 3850 Input Cost a,720 2.940 1.600 160 1.400 soods Price 3.296 2,960 140 Seds 3.990 kg 6.5 1.2 N fertiliser 24 2.2 kg 1.2 182 120 144 0.35 2.6 P fortll;8*r 2.19 160 328 So 66 S00 1.9 K kg 1.2 2.92 140 306 160 175 2 5 2.0 fertil IIr 40 U17 75 828 SO 109 75 143 225 "_aes le 1.2 1.40 30 219 75 219 16 894 30 630 top 0.96 42 45 as 60 175 90 66 30 66 ChemicVl. 20 12 240 60 84 26S 60 176 AuimelVaccbine V 1.2 15 SO 12 60 84 60 60 175 d Y 1 76 75 240 7.5 160 84 45 63 wVt.er 0.98 7.5 29 45 48 10 i 360 0 45 63 220 16i 1 10 10 10 0 7.5 1o atgar/a 1 272 12 9 12 30 80 0 V 0.96 225 is75 7 90 17 126 0 5 5 S"btotal I ta7 157 67.6 87.5 60 9 68 1t0 10 105 60 67.6 67.5 17 128 1,566 106 100 100 45 45 52.5 Nat Vrlue 1.192 1.209 10 t00 25 52.5 Y 953 25 60 60 4.764 1.430 564 Labor 1.560 2,511 1.329 monday 0.98 1.967 3 400 10O 1.665 2.376 Saturn S81 945 84 2.661 per moy 1086 235 705 V 845 1085 210 11.91 4.95 890 315 945 MstSca. V 7.20 0 .46 S.664 5.41 11.82 le Othr includes 6SS 1.476 8.45 : 1 . tls, plastic shoot. 1.282 bamboo. -te. 830 . *-l 1,716 X CHINA SichuanAgriculture DevelopmentProject Crop CalendarFor Main Crops

r______| §S | Oct Nov Dec Jan Feb Mar |Apr |May |Jun J| Aug|Sep |Paddy, ___

Wheat _

Corn - - - - SweetPotato

Rapeseed ------

Beans

Cotton

Sowing& NurseryPeriod: MainGrowing Period: Hamvestteriod:

Source:Sichuan Feasibirly Report, Irrigation Component, Oct. 1991. cr X In Annex 5 - 95g FUN

CHINA Sichuan Agriculture Devtlopment Project ...... Farm Model for ShenzhongIrrigation Area (Y) ...... Without Project With Project ...... Land Gra1n Cash Crop Total Grain CashCrop Total ...... I...... Area (mu) 3.33 4.90 1.37 6.Z6 5.51 1.52 7.03 Crop Value 1,026 224 1,250 1,577 358 1,934 By-Product Value 106 13 120 166 21 187 Anfmal Ralsing 475 605 Mulberry/Cocoon 100 500 Total Income 1,133 237 1,944 1,743 378 3,227 OperatingCost Seeds 42.7n 7.04 49.76 48.06 8.19 56.25 N fertilizer 69.92 20.81 90.73 110.75 28.26 139.01 P fertilizer 48.55 15.42 63.97 64.73 22.53 87.25 K fertilizer 0 0 0 19.68 8.09 27.77 Nanure 78.83 21.19 100.02 94.58 22.10 116.68 Chemicals 10.81 5.19 15.99 14.17 5.44 19.61 Animal/Nchine 41.47 7.91 49.38 52.98 8.64 61.61 Water 1.96 0.00 1.96 35.03 7.27 42.30 Other 36.32 8.79 45.10 42.65 9.33 51.98 Anmal Feed 160.0 190.0 Mulberry/Cocoon SO 250 Tax 97.2 161.3

Total Cost 331 86 n4 483 120 1,204 Net Value 802 151 1,220 1,261 258 2,023 other Income

Labor For Crops 105.52 28.95 134 132.20 33.14 165 Labor For Animal Raisfng 50 65 Labor For Multerry/Cocoon 20 40 Total Labor 106 29 204 132 33 270 Returnper Manday 5.97 7.48 Per Capita Income 359 595

An average household has 3.4 family mmcbersand 3.33 mu of land. Assumea household raises 2.5 pigs and 10 chickens without project. Assum one pig weights60 kg at price of 2.5Y/kg,one chfckensells for Y10. Typicalsown area in mu: peddy iheat corn sw potatorapeseed bean cotton other' Total wlo proj. 1.469 1.589 0.863 0.976 0.669 0.233 0.256 0.210 6.264 w/ proj. 2.108 2.268 0.689 0.446 0.696 0.340 0.270 0.210 7.027 Assumesbeans fn this model. Annex 5 - 96 - Table 4-2

CHINA Sichuan Agriculture DevelopmentProject ...... Farm Nodel for Wudu Irrfgation Area CY) *------. - WithoutProject With ProJect ...... Land Grain Cash Crop Total Grain CashCrop Total Area (mu) 3.98 4.99 2.25 7.25 5.00 3.33 8.33 Crop Valuo 1095 424 1.519 1.583 924 2,507 By-ProductValue 114 20 135 167 43 210 Animal Raising 550 729 Mulberry/Cocoon 100 400 Total Income 1,209 444 2303 1.750 967 3,846 Operating Cost Seeds 42.25 31.29 73.54 44.51 60.77 105.28 N fortilizer 72.48 31.3S 103.83 100.81 50.92 151.73 P fertilize 54.93 23.25 78.18 72.94 48.55 121.48 K fertilizer 0 0 0 21.66 21.60 43.27 Manure 80.98 34.30 115.28 84.34 44.92 129.26 Chemicals 13.51 4.50 18.01 15.38 4.22 19.60 Animal/Machine 31.19 14.00 45.19 48.35 22.68 71.03 Water 10.48 1.22 11.70 43.34 7.45 50.79 Other 42.46 11.78 54.24 47.13 15.98 63.11 AnimalFeed 200.0 240.0 Mulberry/Cocoon SO 200 Tax 115.2 192.3

TotalCost 348 152 865 478 277 1,388 Net Value 861 293 1,438 1m272 689 2,458 Other Income

LaborFor Crops 106.34 69.62 176 118.72 71.88 191 LaborFor AnimalRaising 60 75 LaborFor Mulberry/Cocoon 20 40 TotalL abor 106 70 256 119 72 306 Return per Manday 5.62 8.04 Per Capita Income 411 702 An average household has 3.5 family membersand 3.98 mu of land. Assumea household raises 3 pigs and 10 chickens without project. Assumeone pig weights 60 kg at prfce of 2.MY/g one chicken sells for Y10. Typfcalsown area in mu: poiay Iheat corn sw potato rapeseed bean cotton other* total w/o proj. 1.557 1.545 1.043 0.848 1.039 0.450 0.171 0.593 7.247 w/ proj. 2.405 1.708 0.470 0.418 1.214 0.713 0.171 1.234 8.334 * Assumespeanut in thismodel. Annex 5 97 - T ab re,S

CHINA Sichuan Agrfculture Developent Project

(Y) ~~~~~~~......

Without Project With Project Land Grain Cash Crop Total Grain CashCrop Total ...... Area (mu) 5.92 6.76 4.41 11.16 8.04 4.74 12.78

Crop Value 1,333 685 2,018 2,144 1,070 3,214 By-ProductValue 142 30 172 228 47 275 AnimalRaising 550 713 Total Income 1,475 715 2,741 2,372 1,117 4,202

OperatingCost Seeds 55.98 81.03 137.02 67.30 82.38 149.68 N fertilizer 107.80 51.47 159.28 165.59 74.83 240.42 P fertilizer 66.06 50.20 116.26 94.41 69.72 164.13 K fertilifer 32.12 23.37 55.49 Manure 116.03 70.28 186.30 137.59 77.82 215.40 Chemicals 20.08 4.95 25.03 25.81 5.56 31.37 Animal/Machine 64.73 35.79 100.52 81.51 38.60 120.11 Water 10.95 0.00 10.95 70.77 18.85 89.62 Other 57.36 22.44 79.80 70.02 24.57 94.60 Animal Feed 200.0 240.0 Tax 137.0 210.1 Total Cost 499 316 1,152 745 416 1,611 Net Value 976 399 1,588 1,627 702 2,591 Other Income 499 316 1.152 745 416 1,611 Labor For Crops 147.65 89.56 237 187.78 101.53 289 Labor For AnimalRaisfng 60 90 Total Labor 148 90 297 188 102 379 Returnper Nanday 5.34 6.83 Per CapitaIncome 148 90 418 188 102 682

An average household has 3.8 familymembers and 5.92 mu of land. Assumea household raises 3 pigs and 10 chickenswithout project. Assineone pig weights60 kg at priceof 2.5Y/kg,one chickensells for Y10. Typicalsown area in mu: paddy wheat corn sw potatorapeseed bean other Total w/o proj. 2.189 2.609 1.538 0.420 2.171 0.420 1.816 11.165 w/ proj. 3.177 2.864 1.580 0.420 2.473 0.420 1.846 12.780 * Assums peanut in thismodel. Annex S _98_ Table 4 4

CHINA SichuanAgriculture Dovelopment Project ...... Farm Model for Cheotfan Soil Conservation DemosetrationProject CV) ......

WithoutProject With Project Grain Cash Crop Forest Total GraIn Cash Crop Forest Total ...... Area (mu) 6.50 3.42 3.51 13.43 5.36 3.60 19.30 28.26 Main ProductValue 1.108 501 346 1f955 1,261 688 2,139 4,087 By-ProductValue 117 24 141 132 33 166 Animal Raiaing 400 480 Total Income 2,496 4.733 Operating Cost Crop Input 462 255 17 734 524 334 95 953 Anfmal Feed 150 180 Tax 199 696 Total Cost 1,084 1,829 Not Value 1.412 2,904

Other Memo Labor For Crops 128.73 70.46 20.33 220 122.83 76.40 111.81 311 Labor For Animtl Raising 60 90 Total Labor 280 401 Returnnor Nmnday 5.05 7.24 Per Capita Inc. 336 691 An average householdhas 4.2 family meabers, 5.51 mu of annual crop and 3.51 mu of perennial crop land without project, 4.32 mu of annual crop and 19.3 mu of perennial crop land with project. Assumea householdrafess 2 pigs and 10 chickenswithout project. Assumeone pig weights 60 kg at price of 2.5YIkh one chickensells for YIO. Typical sown area fn mu: paddy wheat corn ax potato rapeseed bean other* Total w/o proj. 1.200 1.800 1.500 2.000 2.500 0.420 0.500 9.920 wl proj. 1.860 1.800 1.200 0.500 2.500 0.600 0.500 8.960 * Assumespearut in this model. Annex 5 Table 4-5 _ 99 _

CHINA

SichuanAgriculture Development Project

...... FarmModel for Mulberryand SilkwormComponent

WithoutProject With Project ...... Unit Price Quantity Amount Quantity Amount ...... Product Values Cocoon kg 8.50 12.50 106.2S 73.00 620.50 Mulberrybranch kg 0.02 150.00 3.00 750.00 15.00 Silkwormfaeces kg 0.03 6S.00 2.21 325.00 11.0S

Totalproduction value 111.46 646.5S

Inputcosts Silkwormegg box 15.00 0.50 7.50 2.S0 37.S0 Cooperativeraring fee 1.00 5.00 S.00 2S.00 25.00 Silkwormdrugs kg 1.00 0.S0 0.50 2.50 2.50 Disinfectant ton 1.00 4.00 4.00 20.00 20.00 Farm chemicals 1.00 1.50 1.50 7.50 7.50 Urea kg 0.77 15.00 11.55 75.00 57.75 Dry manure kg 0.04 250.00 10.00 1250.00 50.00 Liquidmanure kg 0.01 1000.00 5.00 5000.00 25.00 Toolsand others 1.00 4.50 4.50 22.50 22.50 Tax 5S 5.57 32.33 Totalcost 55.12 280.08

Net income 56.34 366.47

Labor required Man-day 3.00 11.00 55.00 Disinfectfon a 0.50 2.50 Leaveharvesting a 7.00 35.00 Silkwormrearing a 1.00 5.00 Mulberry tree mangnt a 1.50 7.50 Cocoonharves/merketing a 1.00 5.00

Net Income per laborday 5.12 6.66 ...... Without project, ne household has 0.3 mu of mulberry trees and 0.5 box of silkworm. With project, one household has I mu of mulberry trees and 2.5 box of silkworm. CHINA

Sichuan Agricutture DevelopmentProject ...... Farm Nodel for Goat Raising In Touyang CT) ......

year 1 2 3 4 5 6 7 8 9 10 11-20 ...... INCONE

Adult Cull females 0 93 125 148 170 170 170 170 170 170 ifO Females one to two years 0 22 27 19 19 la 18 18 16 18 18 Females 0 to 12 months 0 137 314 371 453 453 453 453 453 452 452 0 noles to 12months 204 388 486 548 631 631 631 631 631 631 631 Nales, Cull Lorking or Service 9 17 22 24 28 28 28 28 28 28 28 Manure 11 15 18 19 20 20 20 20 20 20 20

TOTALINCOME 224 673 991 1.128 1,320 1,321 1,320 1,320 1.320 1,320 1.320

OPERATINGEXPENSES 0 ......

Livestock Purchase. Ras 8 16 19 22 25 25 25 25 r 25 25 Animal Health 39 53 62 65 69 69 69 69 69 69 69 Artificial Insemination 7 12 16 17 20 20 20 20 20 20 20 Feed Purchase 35 45 49 50 53 53 53 53 53 53 53 Grass inputs costs 0 31 31 31 31 31 31 31 31 31 31 Sundry Expenses 4 8 9 9 10 10 10 10 10 10 10

TOTALOPERATING EXPENSES 93 164 186 194 207 207 207 207 207 207 207

Labor required Nanagement 54 73 85 89 95 95 95 9f 95 94 94 Forage crop 0 10 40 40 40 40 40 40 40 40 40 Labor cost 215 330 499 51S 538 538 538 538 538 538 538

METFARM INCOME 131 S08 806 935 1,113 1,113 1,113 1,113 1,112 1.112 1.112 * hn

Returm per mnaday 2.43 6.15 6.45 7.26 8.27 8.27 8.27 8.27 8.27 8.27 8.27 ...... Annex 5 - 101 - Table 4-7 CHINA

Sichuan AgriculturalDevelopment Project ______- ___ Farm Model for Geese RaLsing ln Xlushan

(Y)

Unlt Price Amt. Value

Goose Y/bird 13.30 50.00 665.00 Manure Y/kg 0.10 1050.00 105.00

Total productlon value 770.00

input costs GoslLng bird 2.00 56.00 112.00 Feed kg 0.60 330 198.00 Veterinary cost 25.00 Grass seed ton 8.00 3 24.00 Urea kg 1.00 30.00 30.00 Super phosphate kg 0.35 10.00 3.50 Tools and others 20.10

Total Lnputs 412.6

Net Lncome 357.4

Labor reVquired Man-day 4.00 19 76.00 Grass productlon 4 Management 15

Net income per laborday 18.81 …------__------CNRIA

Sichuan Agricultural DOevelopentProject ...... FamrNadel for Rabbit Raising in Shizhu ...... (I)

Incremental Value Uni ...... Unit Price Yri Yr2 ...... Yr3 Yr4 YrS r,6 Yr7-20 ......

Rabbit hair kg 22.5 25.0 27.5 32.5 35.0 35.0 35.0 Y/kg 60.00 1,350.0 1,500.0 1,650.0 1,950.0 2,100.0 Baby rabbit 2,100.0 2,100.0 pc. 50.0 80.0 120.0 150.0 160.0 160.0 V/pc 160.0 S.00 250.0 400.0 600.0 750.0 800.0 800.0 800.0 Total production value 1,600.0 1,900.0 2,250.0 2,700.0 2,900.0 2,900.0 2,900.0 0.0 0.0 0.0 0.0 0.0 lIpat costs 0.0 0.0 Breeding rabbit replace pc. 2.0 2.0 2.0 2.0 2.0 2.0 2.0 10.00 20.0 20.0 20.0 20.0 20.0 20.0 20.0 feed kg 1,500.0 1,800.0 2,000.0 2,000.0 2,000.0 2,000.0 2,000.0 1 Y/kg 0.60 900.0 1,080.0 1,200.0 1,200.0 Urea 1,200.0 1,200.0 1,200.0 kg 7.0 7.0 7.0 7.0 7.0 7.0 7.0 Y/kg 1.00 7.0 7.0 7.0 7.0 Swer phosphate 7.0 7.0 7.0 o kg 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Y/kg 0.35 0.0 0.0 0.0 0.0 0.0 Veterinary cost 0.0 0.0 100.0 100.0 100.0 150.0 150.0 1S0.0 Tools and others 150.0 1.00 8.0 8.0 9.0 9.0 9.0 9.0 9.0 Total inputs 1,035.0 1,215.0 1,336.0 1,386.0 1t386.0 1,386.0 1,386.0 Net fncv a 565.0 685.0 914.0 1,314.0 1,514.0 1,514.0 1,514.0 Labor required Man-day 4.00 182 182 182 Grass production 182 182 182 182 2 2 2 2 2 Rabbit m_ngement 2 2 180 180 180 180 180 Labor cost 180 180 728.0 728.0 728.0 728.0 728.0 728.0 728.0 Met inome per laboday 3.1 3.8 5.0 7.2 8.3 8.3 8.3 one household raises 50 rabbits.

O X - 103- Annex 5 Table 5

CHINA SichuanAgricultural Devolopment Project Rent and Cost Recovery (YOOO) ......

Wudu Shengzhong YangJIaba Total

...... , , ......

At Full Developnent a/ IncrementalIncome bl 196.339 191,553 10,124 396.352

Iquted Value, Famtly Labor c/ 26578 29,268 1,489 57r335 Imputed Value, NnagemmntServices d/ 19,634 19 155 1.012 39.092 Iouted Returnto Own Capitals/ 9.817 9.578 506 19.546 Allowancefor Risk/Uhcertaintyf/ 19,634 19,155 1.012 39M092 S"htotal 75.663 77.157 4.020 155,066

Equetsa ProjectRent 120.676 114.396 6,105 235.857

ProJect Charges Water Charges gi 9,480 12,72S 1.063 23.267 Taxes 12,318 11.870 633 24,738 Total Charges 21,798 24,594 1,696 47.734 Rent Recovery Index Cl) hi 18X 21X 28X 20X DuringProject's Life I/ Project Rent 440,116 534.897 25.558 1.000,571 Project Ctarges Vater Chargos 40,633 60,456 5.341 106,430 Taxes 48,306 53.488 2,728 109.522 Total Charges 88,939 118,943 8,069 215,952 Rent Recovery Index (1) 20X 22X 32X 22X Project Costs j/ 444,063 290,061 27,021 761,1U

Cost Recovery Index (1) 20X 41X 30X 28X

aV Year 2005 fncrerental Income expressed in 1992 prfeas. b/ Before water charges. c/ Famfly labor valued at Y3.0/day. d/ Ten percent of incremental Income. O/ Five percent of ncremental Income f/ Ten percent of lncremental income. V/ Average water charge is Y180/ha for paddy and Y50/hafor othercrops. h/ Total charge as percent of project rent. I/ Expressed as present values discounted at 124 over 30 years project life. J/ JPY of total fnvestment and oGN cost. C*IMA

Sichuan Agriculture Development Project ...... Swuary of Economicand Finanfial Analysis ......

Investment Revenue Operation cost Profit a/ Production Base Case up 102 domn10 up 10X down 10X delay I year

ERR FRR ERR FRR ERR FRR ERR FRR ERR FRR ERR FRR Total Project 25.7 - 20.42 24.02 19.0 n '1.8 . 16.82 23.82 18.52 23.82 18.82 22.02 17.72 Irrigation 23.82 20.6X 22.1% 19.12 20.72 17.72 22.62 19.42 22.02 18.92 20.52 17.92 SP 32.12 28.12 29.82 26.12 27.72 24.22 30.32 26.52 29.52 25.92 26.62 23.72 UP 18.72 15.82 17.42 14.62 16.22 13.52 17.72 14.92 17.32 14.52 16.52 14.02 YP 16.22 14.72 15.0 13.62 14.02 12.62 15.3X 13.92 14.92 13.52 14.42 13.12

SoilConservation 24.82 16.42 23.92 15.62 23.52 14.92 24.62 15.92 23.82 15.52 22.02 14.12

IncomeGeneration 42.12 27.62 39.42 25.72 34.82 20.12 38.02 22.52 39.12 25.5X 34.12 23.22 Nulberry& Silkworm 45.02 27.02 42.12 25.02 39.02 20.4% 42.42 22.82 41.82 24.82 36.12 22.72 Youyang Goat Raising 37.42 32.22 35.02 30.22 28.62 23.82 31.42 26.22 34.8% 30.12 30.12 26.32 GeeseRaising 25.52 21.22 23.22 19.22 18.92 14.52 21.52 16.82 23.02 19.02 21.12 17.82 RabbitRaising 36.42 29.42 34.82 28.22 20.22 14.72 22.42 16.62 34.62 28.12 31.92 26.72

Agroprocessing 21.12 17.42 19.42 15.92 14.62 11.52 16.62 13.32 19.32 15.82 18.22 15.12 FujiangPaper Mill 19.02 15.92 17.42 14.52 14.12 11.82 16.02 13.42 17.32 14.42 16.52 13.9X PengshuiPaper Mill 19.72 15.62 18.22 14.32 14.62 11.52 16.52 13.12 18.02 14.12 17.12 13.72 Galinut Processing 30.02 26.42 27.62 24.32 15.52 12.92 18.82 15.92 27.42 24.02 24.72 22.02 Rabbit Nair Spiming 22.92 18.72 21.02 17.12 14.92 10.72 17.12 12.82 20.82 17.02 19.52 16.22 GeeseProcessing 26.02 21.12 24.12 19.52 15.82 10.22 17.82 12.62 24.42 19.32 22.02 18.22 Cattle & GoatProcessing 27.72 23.92 25.72 22.12 14.2% 10.22 16.62 13.02 ...... 25.82 21.92 23.32 20.32 ...... ,...... Total Project: ...... ,, Nm (122) 856 YTil Net Incremental Income 576 Y miL irrigation: PV (122) 571 r mitlMet Increinental Income 302 Yoil a/ Revenueless operation cost. Sichua Agriculture Development Project E1 .nic Analysis of Ssodnmg Irrigation Coepatent (V ae 1992 P ic") ~~

with Project W/o Pro; 1m2 13 1994 1995 1996 99"7 1998 1999 2000 2O01-21 Total Crop Incme 431.713 431.713 456.694 488.738 525.004 570.081 626,G.2 647.836 661.067 667.001 669.103 Crop Ijigut Cost Seeds 15.668 IS6 16.063 16.412 16.755 17.201 I7.741 17.741 17.741 17.741 17.741 K fertilier 28.698 28.598 31.311 33.975 36,516 P fert;l1zlr 39.831 4s.s36 43.838 43.e36 43,636 48.838 20.165 20,165 21,473 22.757 23.962 25.5480 27.511 27 511 27.511 27.511 27.511 K fortsIi &er 1.559 3.090 4.580 6,466 8.757 Mao.m 8.757 8,5 8.757 8.7S? 7. 31.525 31.52s 52.462 33,382 34.260 85,405 36.787 36.787 36,78? 36.767 36.787 Cheb;cls 5.046 5 046 5 248 5447 5637 5.815 Anili/Neuhine 6,184 61 6.184 6.164 6.184 15.562 15.562 16.252 16.928 17 574 18.416 19.433 19,433 19,433 s,9433 19.433 Other 14.219 14.219 14.606 14.966 15.348 15.621 16,392 Labor Cost 127.161 16,392 16.392 16.392 16.392 127.161 132.373 137.489 142.369 148.737 156.429 16.429 156.429 156.429 156.429 Subattl 257.964 257.984 271,337 284.46e 296.990 313,331 333,070 333.070 33s.070 333.070 333.070 Tn.s 5.06 21.586 21.566 22.845 24.437 26.250 28.644 31.315 32.392 33.053 83.350 33.455 leei tion la"aestnt Cost 1r.jTIon4.ODD 4 000 4.000 2.000 1.000 Civil VW*k 59.254 5551O 547.098 44.928 33.615 Nbterials 6.248 9.259 10,618 8.880 7.875 Equipent 4.395 a 006 1,575as 127 Vehicles 8slo6 38e86 TrInti 654 686 150I- aOsioDA:D"ir/Swerv er ~900476 So0 No0 789 800 476 47S 475 475 C

Subtotal 60.012 77.823 74.716 57,347 43.891 Cost of Aeri. Support Services Civil Work 4.707 4,707 Eqwipnt 2,146 Vehicles 1,005 Training 790 790 526 S26 menee/malltair 60 60 60 60 Subtotal 5.557 8,788 60 Sob 26 terrigtion 0O Cost 882 1,76 2,540 3.520 4.900 4.900 4,900 4.900 4.900 4.900 Total Cost 279.560 386.001 Sb2.607 188.221 884.69 391.19al 369.2s5 870,361 371.023 371.32D 871.425 Net lacme 152.163 85.712 74.867 102.517 140.310 179.606 257,017 277.475 290.085 29S.662 297.678 Incree_ntl Mt tcgee (06.451) (.776) (49,646) (11.853) 27.n5 104,864 125.312 13.872 148.561 145.615 fWt 22.28 lNV (t 128: 447.612 -- 32.11 ENV (.t W:)s 543.220

Il Sichuan Agriculture Oevelop.ent Project Ecenoic Analysis For ludu Irrigption Component

(_____. 1 Prices)_9______With Project W/o Proj 1m 199 1994 1998 1996 1"97 1996 1999 2000 2001 2D92 2003-21 Income Total Crop Income 83.260 883,260 s84,423 397.244 Hydropower 411.073 445,57 481,599 537,182 589,232 609.976 622.10? 627,536 629.200 430 430 430 480 430 430 430 430 Subtotal 383,260 983,260 384.423 397.244 411.073 446,007 482.029 537.612 589,662 610,406 622.537 627.966 62s,630 Crop Input Cost Seeds 17.068 17.068 17.124 17.722 18.221 19.617 20.822 22.811 24.387 N fertilizer 24.057 24,387 24.387 24.387 24.387 24.057 24.141 25.047 25.802 27,916 29.740 32,752 35.137 35.137 35.137 35.137 35.137 P fertilizer 18,120 18.120 18.196 19.014 19.696 21,606 K fertilizer 23,254 25.975 28.130 28.130 28.130 28.130 28.130 76 895 1.578 8.489 5.139 7.862 10.019 10.019 10.019 10.019 10.019 Manure 26.714 26.714 26.739 27.002 27.221 Chemical* 27.836 28.366 29.242 29.936 29.936 29.936 29.936 29,936 4.179 4.179 4,181 4.211 4.236 4.305 4.364 4.463 4,541 4,541 Animl/Machine 10,476 4,541 4.541 4,541 10,476 10,522 11.010 11.417 12.556 139539 15,162 16.440 16.448 16.448 16.448 16,448 Other 12.569 12.569 12.584 12.752 12.891 123282 Labor Cost 133619 14.175 14.616 14 616 14.616 14.616 14,616 105,860 105,860 106,062 108.235 110,045 115.116 119,492 126.716 132.438 132438 132.438 132.438 132.436 Subtotal 219.042 219.042 219.624 225.869 231,107 246.722 258,335 279.158 295.651 295,651 205.651 295,651 295,651 T7.. 5.06 19.163 19.221 19.163 9,862 20.654 22,300 24.101 26.881 29.483 30.520 31.127 31,398 31.481 IrrigationInvestment Coat Land 8,309 7.137 6.575 7,067 6.906 3.164 Civil Voris 62.644 63,978 77.424 83.030 68 947 37,030 Ibteriel. 6,481 11 403 10.503 11,289 9.436 S,057 Squlpaeu,t 0 2,815 4 897 2.599 S.956 3,325 2,475 *' Vehicle 1,312 1.312 761 Traiin 307 294 276 168 166 165 o. igngle/suPe,v 2,617 3,518 3,240 3.483 2.911 1,559 Adel n/Manage 605 614 750 806 674 360 Subtotal 84.090 113,353 101.366 109.800 91,65 50,571 Cot of Agri. Support Services CivilVoiles 3,383 3s3a Equipent 1,571 Vehicle. 1,065 Training 694 694 463 463 Manage/mn,tor 60 60 60 60 Subtotal 4,137 6.763 60 628 463 Irrigation 01) Cost 840 2,102 8.363 6,726 8,408 8.408 8,408 8.408 6.408 8.408 6,408 8,408 Totsl Coet 238.205 827,273 361,064 350.540 368.709 368,59 841,416 314,446 333,542 334,679 3S5.186 336,457 335,640 NMtInico. 145.055 65,986 23,359 46.704 42,364 77.748 140,614 223,166 256,120 275.827 287.351 292,S09 294.089 Incremental Net Incam (89.067)(121.695) (98.361)(102.691) (67.307) (4.441) 78,111 111,066 130,772 142,296 147.454 149,035 RR ,:16.21 Rnt t 121) 178:86 E 19.06OX EV (t 121) 291,934 _ _ . I-',

.M OOKt Sicon AgrlcuS tur. i4vilopaat PieJect o c Analysis of Ymngjiabs Irrimation Cooponet (_ _1992 _ Prcs) - _._----_-_- With Project V/0 Prej 1992 1993 I994 199 1996 197 199M 1999 20e0 20o01-21

TotalCrop l1_ .. 20,798 20,79 20.798 20,79S 21.S11 24.277 UrbanWater Supply 30,444 31.914 32.739 33.0a8 32.148 BIB 815 SiS315 815 815 815 Sub total 20.796 20.798 20.798 20,790 22,126 24.592 30.M9 32.229 33.064 28,408 33.463 CrT" InputCost Sed I 200 200 1N300 3800 13200 1,800 1,421 1,421 1,421 k f.rtlIter 1,512 1.421 2.421 1.512 1,512 1,512 1606 1,943 2,284 2 284 2.204 2,254 2.204 P f.rti Is.r 1'104 1.104 1,104 1,204 1,206 1,891 1.559 K frtillger 1,569 1,669 1.5L5 1.559 0 0 168 471 52? 627 527 527 527 l~~aurs 1,769I. 1,709 1,769 1,769 1,769 1.769 Cte'ulcaa 2.046 2,046 2,046 2,046 2,046 m236 228 2238 220 20 238 298 290 290 290 298 Ani.al/lacblnw 9s4 94 954 954 Otber 954 954 1,141 1,141 1,141 1,141 1,141 750 758 750 758 758 758 099 099 099 099 Labor CogS 6.76 099 ,7566 6,758 6,7S6 6,077 7,095 0,245 0,245 0,24s 8,245 8,245 Subeotal 14,890 14,890 14.290 14,890 14,904 15,910 18,420 18,420 18,420 10.420 10,420 T. O5.051,040 1,040 1,040 1.040 1,106 1.280 1,538 1,611 1,658 1,670 1,673 irriUea Invet_mat Cost Clvii v.k. ~~~~ ~~~419717 so Ci IrON,s0 8 0,515s 5,167 obt.riaol 1,487 2.763 695 Uqulpmewt a82 90 III, ,. " vehicles 282 56 Tralina 46 16 4 oeIgmzIbriworv 407 160 100 Admin/a aga s0 106 82 Subtolal 9,912 12,413 6,188 0 0 Coat of Aeri. Suppot serviceo CIvIlWarS. 488 458 Eqflp4eat 22 Vehicles 12 TraIning s0 so so Nana;e/Noaltor 20 20 20 20 Sutotal 478 877 70 70 IrrIgetio GM Cost 195 640 40 648 540 548 648 Total Cost 15,430 25,81C 28,720 21,660 16,805 17,690 20,500 20,579 20,620 20,630 20,641 the lcome 5,860 (5,017) (7,922) (070) 56,21 6,096 30,254 11,650 12.484 12,760 12,023 Incremental Nat acose (CO,815) (12.290) (6,228) 452 1,528 4,880 6,202 7,066 7,290 7,455 FAm 15.06 FNV (111 0,01 WUI 16.68 BPV (121) 11,856

Iw - 108 - Annex 6 tNINA Table~ SichumnAgricultural DevelopomntProject ...... Selected Comnersion Factors

...... Unft Financial Economic Conversion Price Price Price Factor, ...... Standard Conversion Factor a/ 0.98 Labor lkuskilled V/day 4.0 3.9 0.98 Skilled Y/day 5.0 4.9 0.98

Enarg Electricity V/kwh 0.2 0.3 1.25 Diesel Y/ton 1.420 644 0.59

Steel Y/ton 1.800 2.282 1.30 Earthworks 0.98 Structure '10 Nachinery/Equfpmsnt 1.02 Trnsportaticn Road Y/ton/k 25.0 37.5 1.50 Rail Y/tonli 20.0 30.0 1.50 Conswution Conversion Factor b/ 1.25 Fertilizer Urea Y/ton 1.000 1.190 1.20 RockPhosphate Y/ton 313 350 1.12 DAP Y/ton 970 1.216 1.25 Pesticides Y/ton 30.000 30.000 1.00 Plestics Y/ton 4 4 1.00 Othor non-traded inputs 0.98 Othertraded goodb 1.02 ...... a/ (SCF) a Cofficealrate/shadow rate) u(5.38/5.5) *0.98 b/ Weighted verage of Econ/Fin prices of iheat, rice and othorgrains plus beef, pork, and other animal products in 1992 price levels. -109- Anne 6 NTabe 3 CHINA SiehumnAgViculturl Oaelopoent Projeet ...... ;w...... Farm Gate Prices o Selected Project Outputs VWdInputs .--....---.--...... ----.. -.------.-----...... --

Urge Phosphate DAP Rice SIlk Ii.et Cornm.t Cotton Steel e/ b/ a/ d/ / f/ 0/ h/ f/ J

TradkStatus N N N X X X X X X X ...... 1992 Prfees ...... EP0 pricevaS constEprice) S/ton 121 28 124 196 N/A 94 71 123 104 EPO prfce( 92 price) S/ton 183 43 190 300 #/A 14" 109 135 159 0 .amlfty discluat X I 1 1 1 N/A I I I I I Ccen Freight S/ton 26 26 26 26 N/A 0 0 0 159 (26) CIF/FOB Guaugthou S S/ton 211 69 216 206 6,065 129 109 135 263 454 CIf/FOS uamgahou Yuen V/ton 1,136 371 1,160 1,108 32,630 696 584 728 1.413 2.442

Port charg I margin Y/ton 57 19 So (55) (1,631) 35 (29) (36) (71) (122) Raft tram. to project V/ton 18 16 16 (18) (18) 18 (1) (16) (18) (18) Road trns. to far Y/ton (20) (20) (20) (20) (20) (20) (20) (20) (20) (20) Prfce ex-,itl V/ton 1.190 387 1.216 1,015 30,960 725 517 654 1,306 2,282

ProcessIngadjustm nt I I I I I I I I I I Niltingo tolessbyprod cY/ton 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EconcmicPrice Y/ton 1,190 387 1,216 812 30,960' 728 517 654 1.306 2,282 FinnciaL Price V/ton 1.000 350 1,000 760 102,500 740 720 450 698 1,800

2000Prices ...... Do price('85pr) S/ton 120 31 143 197 N/A 139 83 150 121 0n pricsC*91 pr) S/ton 163 47 219 301 N/A 212 127 165 18S 505 Quallty diwccmut 1 1 1 1 N/A I I I I I Oceon Frelght S/ton 26 26 26 26 N/A 0 0 0 16S (26) CGF/FOBShanghal S S/ton 210 74 245 207 6.065 191 127 165 306 479 CIF/FOS Shanghairu.,. /ton 1,127 396 1,317 1,113 32,630 1,029 683 M 1,6$6 2,576

Port charges & margin Y/ton 56 20 66 (56) (1,631) (51) (34) (44) (82) (129) Rail trns. to project V/ton 16 18 18 (18) (18) 18 (18) (18) (18) (18) Road trns. to farm Y/ton (20) (20) (20) (20) (20) (20) (20) (20) (20) (20) Prfce exmtll Y/ton 1,182 413 1,380 1,019 30,960 975 611 805 1,526 2,410

Processingadjustmnt X I I I 1 1 1 1 1 1 I Nitlingcost lesusb-produiY/ton 0 0 0 0 0 0 0 0 0 0

EconomicPrice Y/ton 1,182 413 1.380 815 30,960 975 611 805 1,526 2,410 FinancialPrfce Y/ton 1,167 406 1,380 815 30,960 975 611 805 1,526 2,410 ...... a/ Bagged,FOB, N.W. Europe bi Phosphate Rock(No mccn), 72X 0PL, FAS Casablanca c/ (Dfasmonfu Phosphate), butk,spot, FOB US Gutf d/ Rice (Thai), wfite, milled, 5X broken, government standard, FO0 Bengkok */ Silk, China PO *etuel.Novwber 1991. f/ Wheat (Canadian), No.1 Western Red spring 13.5X, In store,St. Laurene, FOB. g/ Corn (US), vo.2, Yeltou,FOB Gutf ports h/ Tee (London auctfon), avennae price receIved for all teas. I/ Cotton (outlook A- findex), Nddlfng (1-3/320),CIF, Europe. J/ Steel coaposite price Index from Japan, Novesder 1991. wmA Sichuan Agriculture_ovolopmet Projoct Pricesof Farm Products at Gov. Contract, Negotiated, and Market Prices

(V/kg_ ___ _ - - _- __ _ _ -

Paddy Rice U..t Corn B"ns Soybean S.Potato Rapesood Cotton a/ Y"r -- S.CCNg Mkt S.C Ng Mkt S.C Neg Mkt O.c Nag Mkt Nog Mkt Neg Mkt Mkt G.C Hbg Ukt C.C

1986 0.88 0.41 0.50 0.47 0.57 0.71 0.41 0.44 0.52 0.85 0.42 0.54 0.52 0.80 0.80 0.9K 0.20 0.94 8.24 1987 0.86 0.51 0.58 0.61 0.71 0.84 0.41 0.54 0.61 0.85 0.50 0.60 0.52 0.85 0.80 1.12 0.22 0.94 1.36 8.38 1988 0.6 0.68 0.81 0.51 0.96 1.16 0.44 0.64 0.78 0.48 0.52 0.72 0.52 1.06 0.80 1.89 0.24 1.07 1.6e 1.70 4.51 1989 0.46 0.90 1.03 0.86 1.25 1.46 0.49 0.64 1.04 0.45 0.86 0.96 0.72 1.10 1.20 1.97 0.25 1.10 1.66 1.70 5.31 1990 0.46 0.68 0.79 0.65 0.95 1.10 .0.47 0.64 0.s8 0.45 0.65 0.76 0.72 1.04 1.20 1.74 0.24 1.58 1.66 1.60 6.98 a/ IOOXgovernment contrat

Ia - inl -

Annex 7 Table 1I

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*-4rlol t % _* * Imegie F.ei ram *1.fe,Siiee lam Pteiedesm Raeeeetrcto amemsielam ee Cemme me. cwt_S." tooll.t. Came_"ur Z .

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als-itelmse Dom A&.. h * UelIieal Tres-sme, Terraeing Other pi-eW 111meo..im Verb *. Flm Flemle & -lmee he c. ell plea"tim he Ci. mee Medi4el pFlee he C.ime" lphime ma i he F. Ps" Groeing Tree P1mmAle he

1. Walbarep a Cogs. Pee. - Helhrin FleeSis he * Ce 11eseheld leC 4IFpeed;.# Soiehlem

2 . te"osireeglesa RaeOmam r; weed -TeehmeeIl /Frahaeim Ceeee .. -i Cses Ibi-irm; h1Wal zee .Tee Fehehi I lead..m he *. Ge. e a,es ifeteWee too 4. _ee Neeleim Ic Fegeal . 5. See.. hi"Reisimgim Blee me 6. mIl fte.ee 4._ SAe. e

I. dAmeetleTeiml pe L. teeleeQ*s*. _met_ heltme PPONO &§Tegim

IL TSiell Camee ac * Tem Pe._ e T"leeme F. _, ehmllem me

iUrePerum..id_ tler_oskd me.insm.

Fe.. Tlml_e m. *Feespoemere Tehlee me. $Tis11*04_ NeheSl*iSedl _. * Umee1eso P.m Ted me.

- *t_ n.me& i

d*_, _.no .o.e.m T_elmimg 1edpWTow m I.S. e.-e de" S.Zadm "eesi G_.ml1.dm - 112- Annex 7 Table 2

CHINA SICHUANAGRICULTURE DEVELOPMENT PROJECT

SANKSUPERVISION INPUT INTO KEYACTIVITIES Aproximate 1/ Dotes Expected Skill Staff Input (month/year) Activity Requiremont

9/92 Supervision Mission Agrofndustries 10.0

Project Launch Workshop. Irrigatfon Engineering Review of draft final Economics designs for agro-industries, Procurement Irrigation nd drainage FinnciaL Nanagement schemes, procurement nd financial management. Reporting and N & E. 12/92 Review of final designs for Agroindustries 2.0 agrondust-ies, livestock, Irrigation Engineer nd irrigation. 6/93 Supervision Mission

Review of irrigation, Agriculturist 8.0 ggriculture, sericulture Sericulturist tee, soil conservation, and SoiL Conservation/ tivestock development. Livestock Specialist 6/94 Supervisfon Mission Economist 8.0 Review of agriculture, Environmentalist tivestock, irrigation Agronomist/Livestock and drainage. Covernment Specialist prepares for Mid-term review. Irrigation Engineer 12/94 Mid-term Review Mission Economist 10.0 Irrigation, agricutture, soil Agriculturist conservation, sericulture, tea, Sericulturist end livestock development, Solt Conservation/ agrofndustries. Livestock/AgroindustrIes Specialist 6/95 Supervfon Mission Governmentand Sichuan Province Government/IDAteams 8.0 to ipletent Recomendatlons of Mid-term Review nd decide on the nature of future supervision missions. (Ffeld trip my be needed to follow-ip mid-term results). 1996-1998 At lest one supervision/year nd (to be determined last mision should discuss with following Mid-term Review) borrower preparation of Coapletion Report.

I/ First two years will be initially devoted to review of desins and construction for agroindustries, Irrigation and drafnage In accordanee with Implementation Schedule Chart 1. Somespecialists my visit the project area uhile undertaking other operations. -113 - Annex 8 Page 1 of 3

SUMMARY0P DAMSAPETY REVIEW PANEL SHENGZHONGAND YANGJIABA DAMS Introduction: In accordance with the World Bank procedures on dam safety the borrower was required to engage an independentDam Safety Review Panel (DSRP) to review the existing Shenshong dam and proposed Qangjiaba dam. in June 1991, a Bank pre-appraisalmission and the Sichuan Water Conservancy Bureau (WCB) agreed on terms of reference and the membership of the DSRP to inspect and evaluate the safety status of the Shengzhong and Yangjiaba Dams. Memberships The DSRP consisted of four Chinese experts and one foreign expert. The members of the panel were: 1.) Prof. Li Guo-ren, Chengdu University of Science and Technology; panel leader; expert in dam structures. 2.) Dr. Sergio Giudici, Hydro Electric Commission, Tasmania, Australia; expert in dam design and instrumentation.3.) Mr. Liang Tian-you, Hydraulic Engineering Consulting Centre, Ministry of Water Resources, P. R. C.; expert in dam construction. 4.) Mr. Yu Ke-li, Hydraulic Engineering Consulting Centre, Ministry of Water Resources, P; R. C.; expert in geology. 5.) Mr. Xu Zhao-cheng, Sichuan Hydrology and Water Resources Bureau; expert in hydrology. Summary Conclusions for Shengzhong Dam: The following summarizes the conclusions, of the Panel: (a) Dam: The dam has been well-designed,carefully monitored and properly constructed. There are no signs of stress and no records of leakage observed, which shows an exceptionallywatertight structure. (b) Spiliway: (i) Structurallythe spillway has performed well, as demonstratedby records of the instrumentation. The inspection revealed several items where, while not causing concern for the safety of the structure, should be attended to by the WCB to ensure long-term integrity of maintenance. (,) The mechanical equipment to open the gates was demonstrated during Lnspection by first opening one of the radial gates while the upstream guard gate was 6losed, and then opening another radial gate and allowing spill to occur. The panel made recommendations to improve maintenance and long-term mechanical reliability. (iii) Flood hydrology and flood events were determined to be correctly computed. Spillway operation plans were found to be adequate. (c) Umptying Structures: The dewatering capability of sc.-ctures is satisfactory. The panel observed the intake mechanism and observed the outlet gate while it was operated The tunnel could not be inspected, but on the basis of the drawings and observationson site, the DSRP made several recommendations to ensure that the tunnel and the mechanical equipment remains ln good order. (d) Nmrgency Plans: warning systems from upstream, of impending flooding events, and for warning the downstream population are satisfactory but need improvement in communications. Recoumendations for Action-Sheagzhong Dam: Overall, the Panel is satisfied that the Shergzhong Dam and its appurtenances are safe. The panel made the following recommendations for ensuring the long-term safe operation of Shengzhong Dam, (none are of immediate concern for the dam safety) the Sichuan WCB attend to these matters and report progress within a year. The panel recommended that an inspection of the dewatering tunnel be made to check on possible cracking of the concrete lining as well as inspection of the bulkhead and tunnel entrance. (i) An emergency plan and procedures are be to prepared for evacuation -114 - Annex 8 Page 2 of 3

of the population downstream of the dam, when large floods are to be passed through normal operation of the spillway. (ii) Communication equipment (radios, installationof power supply, feed lines, etc.) should be improved and maintained in good working order. (iii) A standby generator should be acquired and installed near the dam crest to provide emergency power for the spillway gate operation should the main power supply fail. Summary Conclusion for Yangjiaba Dam: (a) Design Flood and Hydrology: Conforms to class 3 of the PRC rules regulating dam design values and is satisfactory. (b) Goological Conditions: The conglomeraterock of the damsite is sound and provides suitable material for the foundationsof the arch dam. Foundation stability is satisfactory. Treatment of a seam on the left bank is part of the specified design. Some further excavation on the right bank was recommended. (c) Design of the Dam: The design strategy,design data and method of analysis all conform to modern design practice. The stress values calculated are within PRC- specified limits. Because this dam is of sandwich construction, i.e., a concrete layer between masonry faces, some of the design parameters had to be obtained by exercising reasonable judgement based on experience. However, this does not affect the conclusion. (d) Construction of the Dan: The Panel recommendedthat the construction methods be improved, mainly with respect to the quality of the concrete. Since the dam is 47% concrete and 53% masonry blocks, concrete quality and control are important. Overall, the Panel concluded that Yangjiaba Dam is well designed and safe provided that a reasonable increase in construction quality is achieved to meet the design requirements. Recommendations for Action - Yang$iAba Dam: (a) It was recommended that the wingwall or key be built on the end of the thrust block in order to increase the length of waterpath. (b) Removal of some shear zones evident in the excavation, and correct shaping of the excavation plane is necessary plus additional grouting near the elevation of the shear zones is required. (c) Because of the high hydraulic gradient through the concrete membrane between the upstream and downstream masonry, the concrete impermeabilityindex used should be S8 instead of the currently specified S6. Concrete design should be done using correct proportioning between the large and small size aggregates. (d) The variation in masonry size is quite large. Quality control is necessary to ensure that the thickness of the concrete membrane is not reduced by masonry intrusions.(e) Density Tests in the dam should be done in accordance with the specification. (f) Deformation measurements of the top of the dam should be taken as the reservoir fills and at regular intervals thereafter. This will be a good index of dam performance. (g) to help operation of the reservoir, some rain gauges should be placed upstream of the dam in the catchment area. Follow-up Actions: In November 1991, the appraisal mission reviewed the DSRPs detailed recommendation lists with the Sichuan WCBand the engineering staff at the dam site. Modifications of the excavation limits and foundation preparation made by the DSRP were undertaken. Revisions in the concrete aggregate gradation materials handling, mix and quality control measures were being implemented. More senior staff were assigned and additional personnel were brought to monitor construction quality. At Shengzhong Dam the procurement for the emergency generator had been - 115 - Annex 8 Page 3 of 3 initiated. Installationli scheduled for March 1992. Other LnspectLons, emergency plans, and procedures for monitoring were beLng Lmplemented by the OhM unit. The full report of the DSRP is on file in the Bank.

Basic Data

Dam Shengshong Yangliaba

Type Composite Concrete Concrete/Stone Gravity/Earthfill Masonry Arch. Maxlmum Height 79.0 m 53.3 m Crest Length 420 m 110 m Splllway Gated Overflow Separate Channel Ungated Maximum Storage 339 million e 26.4 million m? Spillway Capacity 10,020 m3/esee. 266 e3/sec. Catchment Area 1,756 K.e 23.5 Kme -116- Annaz 9 Pa92 I of 6

SICHUAN AGRICULTURALDEVELOPENT PROJECT

EnvironmentalAssessment/ Monitorinaand Mana@ementPlan

I. EnvironmentalAssessment 1.1 A detailedand comprehensiveenvironmental assessment of the projecthas been carriedout by the SichuanResearch Institute of EnvironmentalProtection (SRIEP). The reportwas reviewedby IDA and revised by SRIEP based on IDA's commentsand recommendations.A copy of the EA is in t%e projectfile. 1.2 Opinionsof both the publicand appropriategovernment agencies were solicitedconcerning the projectspotential social, economic, and environmentalimpacts. A sampleof 254 personswas surveyedin the project area and the resultsshowed generally positive opinions both from the general publicand local governmentagencies. The main concernsof the publicwere health and water qualityimpacts from agroprocessingplants, the le-al of increasedincome/economic development that might be expected,the potential for overallreduction in the areas of annuallycultivated lands, and increased supplyof potablewater. 1.3 An evaluationto identifythe project'spotential environmental impactswas carriedout by a multidisciplinaryteam of 30 expertsfrom Provincialbureaus and institutionsof agriculture,animal husbandry, forestry,fisheries, irrigation, environmental protection, agroprocessing, chemicalengineering and socialsciences. Each projectsubcomponent was reviewedto evaluateits potential(positive and negative)impacts on the naturalenvironment (air, soil, water,natural and domesticplant/animal communities,landscape, and noise),and the socialenvironment (economy, culture,traffic, energy, and publichealth). The main findingsof the evaluationwere: i) overall,the sum of projectimpacts would be positive; ii) the agroprocessingand paper mill subcomponentshave the greatest potentiallynegative impacts; iii) the potentialnegative impacts from the irrigationcomponents consist of those associatedwith increasedpesticide usage and increasedcropping intensityon soil fertility; iv) ti-ssoil conservation,forestry and livestocksubcomponents are uniformallypositive with the exceptionof potentialminor negative impactsfrom animalmanures (health)and loss of annualcrop lands (social/economic). 1.4 Wudu Barrage. The impactof this irrigationcomponent on the currentflow regimesin the contributingrivers would be negligible. The Fu Jiang River has an averageannual flow of about 5000 Mm3 at the Wudu Project headwork,of which about 850 Mm3 would be divertedfor irrigation.An estimated200Mm3 would be returneddownstream via natural drainage. The water quality of the supplyis good, thereforedrainage water would be usablefor -117-

Page 2 of 6 irrigation.The water resourcesoperational plan requiresa minimumflow of 50m0/s,be maintainedbelow the barrageto meet dry seasondemands for M&I, navigsationand environmentalprotection. No watershedmanagement/siltation issuesare associatedwith this component,silt contentof inflowswill be monitoredand a do-siltingbasin constructedif and when warranted. 1.5 YangjiabaReservoir. Closureof the dam will have a slight impacton flows downstream,seasonally dewatering a 2 kilometerstretch of river. As this phenomenonoccurs naturally and on a regularbasis in the dry season,little or no impacton ripariancommunities is expected. To assure drinkingand irrigationwater to the three affectedhouseholds, two wells will be rehabilitatedand a small pond constructed.No water qualityor watershed management/siltationissues are associatedwith the reservoir. A plan for reservoirclearing is in place;population density in the watershedis light and there exist neithertowns nor industrialpollution sources; cultivated area within the wateishedis less than 60 ha; the w-tershedis more than 60% forested;and currentnitrogen and phosphatelevels in the ZengjiaheRiver are negligible. Silt inflowsunder presentconditions are such that the life span of the reservoiris estimatedat over 100 years;a watershedmanagement programis in place and watershedconditions are expectedto improvewith time. The projectwould fund a water qualitymonitoring/management scheme for the reservoir. 1.6 Resettlement. A total of 132 householdsand 564 personsfrom two villageswill be involuntarilyresettled as a consequenceof the Yangjiaba dam construction.Although the dam is not a part of the proposedproject, IDA has agreedwith the SichuanProvincial Government that the resettlementwould be carriedout accordingto the provincialresettlement standards already in place for other large resettlements(e.g. Ertan Hydro dam in Sichuan). The resettlementplan has been submittedto IDA for review. Right-of-wayfor canal construction,reportedly already obtained would requirean estimated400 ha. The majorityof main and sub-maincanals would be laid out along ridge lines and kept at higher elevationsto maximizethe area that can be servedby gravityfed irrigationand very few structuresare locatedin agricultural fields. 1.7 The per capitaloss of cultivatedland (primarilyrainfed, some supplementalirrigation contract system) and forestland is 0.068 ha and 0.04 ha, respectively.Following resettlement the per capitaholding (under the personalresponsibility contract system) will be 0.067 ha of irrigatedland and 0.17 ha of forest land system.Some reductionsin the amountof cultivated lands will occur in the resettlementareas, however, the increased productivityresulting from dependableirrigation will more than offsetthe losses. Duringthe 18 to 24 month periodbetween resettlement and the initiationof irrigationsome compensatoryactions may be requiredto avoid temporaryloss of incomeamongst those in the resettlementareas; an IDA- approvedplan for this transitionwill be availablebefore negotiations.

1.8 Under the resettlementplan, individualhouseholds would be compensatedfor their lossesbased on the replacementvalues. On the average, each householdwill receiveY4,820 over and above replacementvalues, which funds will be utilizedto developtheir agriculturalproduction. The total compensationpackage would meet IDA guidelineswhich specifythat at a minimum those resettledshould be as well off and preferablybetter off than prior to _118 - Annex 9 * ~~~~~~~~~~~~Page3 of 6

their resettlement.An assurancethat implementationof the resettlement adheresto this principlewill be agreedupon at negotiations.

1.9 ShenzhongReservoir. This dam was completedin 1982 and the reservoirhas been filledsince 1984. Water qualityin the reservoirmeets ChineseClass II surfacewater standards,except for totalphosphorus. The erosion/siltationsituation in the watershedis classifiedas "medium"by the Chinese,that is, 50% of the watershedarea is estimatedto be erodingat the averagerate of 32 t/ha/yrof soil. A watershedmanagement program Is ongoing and the watersheditself is consideredto be a key area for controlof soil loss, as a resultall of Nanbu County'sfunds and one-halfof Jiange County's funds for soil conservancyare being utilizedin this watershed. Between1980 and 1990 more than Y6.8 millionwas investedto controlerosion over 470 km2, reducingthe erosionarea by about 25%. Targetsfor the 1990 to 2000 watershedmanagement plan are to reducethe currentarea of accelerated erosionby almost50%. Under the projectedconditions, the life span of the reservoiris estimatedto be over 100 years. The projectwould fund a water qualitymonitoring/management scheme for the reservoir. 1.10 IncreasedAgrochemical Usage. The concernin intensifying agriculturalproduction is increaseduse of chemicalfertilizers and pesticides.An analysisof pesticideusage in the projectareas shows that the total amountof pesticidesused has been in declineover the last ten years. Additionally,the trend has been away from high-toxicity,persistent chemicalstoward more environmentallybenign chemicals. For example,besides the discontinuanceof BHC and DDT, the use of the more hazardousand broad spectrumchemicals (for example,Parathion and Fenvalerate)is steadily declining. Declineis reportedlyattributable to substitutionfor other chemicals (for example, Dimethoate to Nissorun -- a Class IV pesticide -- on citrus)and the increasedusage of IPM practices. Throughoutthe province, and includingthe projectareas, IPM was reportedlybeing practicedon one millionha of paddy land as of 1991, resultingin pesticide-usereductions of one-halfto one-third. To supportthe trend in reducedusage of agrochemicals (both of quantityand of certaintypes) the projectwould fund both training and demonstrationsof IPM, trainingon properuse and handlingof agrochemicalsfor farmersand technicians,and the projectwould also include fundingfor fertilizerfield trialsto rationalizeapplication rates. Additionally,assurances would be obtainedthat pesticidesto be provided under the projectwould be subjectto IDA reviewand approval. 1.11 Agroprocessin. In additionto the previouslymentioned effluent controland treatmentmeasures referred to in the SAR, (paras.3.30 to 3.33) which have been includedin the designand for which adequatebudgetary provisionshave been made in order to meet both nationalEPB and IDA standards,the projectwould also providetechnical assistance for expert reviewof designadequacy and strengthenthe existingmonitoring system for effluentand water quality. The monitoringsystem will be a check to ensure the proper maintenanceand functionof the treatmentfacilities.

1.12 Soil Conservationand Forestrv. The Soil Conservation Demonstrationsubprojects will focus on verificationand disseminationof land use practicesand technologieswhich provideeconomic alternatives to present non-sustainablecropping practices. It is expectedthat the impactsfrom the two demos will extendwell beyond the small areas directlycovered. At -119 - * ~~~~~~~~~~~~Page4 of 6 completionthey will providean expandedmenu of technologyoptions for land managementin the uplandsand a trainedcadre of technicalstaff that can disseminatethe technologiesand approachesto other priorityareas of the province. In addition,the forestry-relatedsubprojects will introducesoil conservationand managementpractices in all revegetationactivities. All plantingwork will be carriedout on the contour,further, demonstration plots utilizingcontour V-ditches and contourtrench plantings and contourhedgerow plantingsfor biomassproduction will be included. Forestplantings will be protectedfrom collectionof tree litterto avoid baringsoil and the plantationswill be thinnedin a timelymanner to avoid shadingout the groundcoveringundergrowth. Also, all plantationswill be requiredto meet the Government'senvironmental guidelines for plantationestablishment; the guidelineshave been reviewedand acceptedby the World Bank. 1.3 Livestock. The livestocksub-component would includea grassland monitoringsystem to identifyareas threatenedwith overgrazingand allow adjustmentof animaldistribution and (if necessary)stocking rates (para. 3.8). All sub-projectswill operateeither under year aroundor seasonalcut- and-carry management, this will contribute significantly to the local farming systemsthrough production of neededmanures.

II. EnvironmentalMonitoring Program 2.1 The projectwould supporta comprehensiveprogram of monitoring environmentalparAmeters associated with projectactivities and which establisheslinkages between monitoring and agenciesresponsible for oversight and compliancewith Chinesenational environmental protection laws and regulations.The estimatedcost over the life of the projectis Y1.5 million and would include funds for : i) technical assistance and hiring of consultants to review designs and programsfor pollutioncontrol/treatment facilities for agroprocessing; ii) monitoringof wastewaterdischarges from treatmentfacilities and water qualityat six agroprocessingsites; iii) monitoringof water qualityand pesticideresidues in irrigationproject areas; iv) technicaltraining of staff from countyand prefecturallevel monitoring stations.

Additionalmonitoring activities would fundedby the projectwithin specific subcomponents.These are the grasslandmonitoring system to be fundedfrom the livestocksubcomponent and the monitoringof soil loss, runoffand crop yields to be fundedunder the Soil ConservationDemonstrations.

2.2 MonitoringProgram. Environmentalmonitoring would be carried out by the PMO, the SichuanEnvironmental Monitoring Center (SEMC), the relevantprefectural (or municipality)and countyEnvironmental Monitoring Stations(EMS), as well as the internalmonitoring units of the relevantline agencies(agriculture, livestock and forestry)at the prefectural(or municipality)level. -120 - pgeo 5 of 6

- The PHO would coordinate the monitoring program and provide reports to both IDA and the Sichuan Environmental Protection Bureau on the programs findings.

- The SEMC would have overall responsibilityfor the implementation of monitoring activities and provides the monitoring data to the PMO. In addition, SEMC would be directly responsible for the monitoring and analysis of samples from the irrigationareas for agrochemical residues or contaminationand for providing technical assistance and training to the prefectural and county-level EMSs.

- The prefectural and county EMSs would be responsible for sample collection as well as being entrusted to carry out some monitoring and analysis of wastewater discharge from the agroprocessing facilities -- analysis that cannot be handled at this level would be carried out at SEMC. The EMSs at these levels would also be responsible to check on the operation of the treatment facilities. All data collected would be provided to the SEMC.

- Monitoring and reporting activities for agriculturalpests and diseases, crop growth and yield, and fertilizer and pesticide use would be carried out by the county-levelagricultural bureaus, with reports to the prefectural PMOs. Monitoring and reporting activities for the grassland monitoring system (stocking, grazing rates, grass yields) would be carried out by the prefectural Livestock Bureau, with reports to the prefectural PM0. Monitoring and reporting activities for forestry and soil conservationwould be the responsibilityof the relevant county-levelforestry and soil conservancy bureaus, with reports to the prefectural PMOs.

2.3 Institutional support would be provided in the form of training, operating funds, technical assistance. The SEMC will require no upgrading under the project. It is a Grade II monitoring station and the center for the Sichuan's overall monitoring program, it has up-to-date laboratory equipment and well-qualified technical staff. SEMC has been in operation for over ten years. Some upgrading of equipment may be required at prefectural and countylevel EKSs, funds for such equipment are being sought by the EMSs from the provincial government.

2.4 Monitoring Activities.

i) hiring of expert consultants to review the designs for the pollution control/wastewatertreatment facilities for agroprocessingsubcomponents - Y60,000;

ii) monitoring of and analysis of samples from agroprocessingplant discharges, downstream water quality, operation of pollution control/wastewatertreatment facilities - Y241,000/yr;

iii) monitoring of and analysis of samples for agrochemicalresidues and contamination - Y55,000/yr;

iv) technical training of EMS staff from one prefectural and seven county stations (4 persons/station x 6 months) - Y108,000; -121 - Annx 9 Page 6 gf 6 2.5 Informationcollected through the monitoringactivities and compiledwithin the provincialPMO wouldprovide the basis to assurethat projectsubcomponents comply with ChineseNational Environmental Protection Laws and Regulationsas well as IDA guidelines.Where noncomplianceexists, it would be the responsibilityof the provincialPMO to provideguidance, with provincialEPB approval,to prefecturalPMOs as to necessaryactions. The prefecturalPMOs, in coordinationwith the prefecturalEPBs, would be responsiblefor designingthe specificinterventions required to achieve compliance.Under the supervisionof the prefecturalPMO and EPB, the county PMO would assureimplementation either by the relevantcounty bureau or constructionunit. - 122 - Annex 10

CHINA

Sichuan Agricultural Development Project

Selected Documents and Data Available in the Project File

A. Reports and Studies Related to the Project

A. 1 The Eighth Five-Year Plan for Sichuan Provincial Agricultural Development by Sichuan Provincial Planning and Economic Commlosson, June 1990

A.2 Sichuan Agrlcultural Development Project, FAO/CP Preparation Report: Poverty Studies and Soll Conservatlon Component (two volumes), May 1992

A.3 Feasibillty StudLes for Irrigation--SP, WP and YP schemes

A.4 Feasibillty Studies for Soil Conservation Demonstratlon Areas (two volumes)

A.5 Feasibility Studies for Forestry (seven volumes)

A.6 Feasibillty Studies for Sericulture

A.7 Feasibility Studies for livestock (three volumes)

A.$ FoaeLbillty Studies for Agroprocesming (sLx volumes)

A.9 Grassland Management Plan, prepared by Slchuan Provincial Animal Husbandry Bureau, January 1992

A.10 Dam Safety Review Report, prepared by International Dam Safety Revlew Panel, September, 1991

A. 11 Environmental impact Aossesment Report, Main Report and revised Chapters S & 6, prepared by Sichuan Research Institute for Environmental Protection, November 1991 and January 1992

S. WorkLng Papers

3.1 Project Costs 3.2 Livestock 3.3 Sericulture 8.4 Agroprocesolng 8.5 Economic and Financial Analysis 8.6 Soil ConservatLon and Forestry 8.7 Agricultural Support Services - 123 - Chart I

CHINA SICHUANAGRICULTUIRAL DEVELOPMENT PROJECT ______IMPLEMENTATION SCHEDULE OALIOCARYEAR [ 992 1993 1994 log5 1996 10g? iig ITUM aQUARTER 12 13 I 4 ti2 3 4 2 3 4I2 3 A 1 '12 3 4 i 2 2 4 I I a IRRIGATIONSYSTEMS I jIili Ii S)4ENGZI4ONSUS.RO.ECT (S.P.) H1 t atanch Aflrai Canal ( 106.7un) Ii ------BranchCanal (28.61ul) I*fm ,Ei E Sujb.SWaChCanal (65.6km)II Trunk Ditch (284.7kM)- Farm Ditrh (1327.2km) Sub-parm Ditch (1296.0kn) ...... WUDUSUS.PROJECT(M.P.) 1 1 I I l* II GeneralAfleria Canal (12.2km) ArtertiaCanal (69.6kmn) *IiIEEI

1Branch Arteriai Canal ( 39.0km) .~ ... .

BrnuwhCanal ( 75.Bkm)-.. .. I Sub.SranchCanal (103.4km) Trunk Ditch (397.8m)T

Farm Ditch (I1163.1km) .. . SubFarm Ditch (713.7km)- ur YANt4GJASASUB-PRO.JECT(Y.P.) T j it t i Sub.SranichCanal (.51.0k)--I ---.--- ::.L 5 Ir T Trunk Ditch (34.2km I:~Iiiu:inur Farm Ditch (108.0m ------

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|Provincial Government

Provincial Leading Groupl

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METERS

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TRUNK DITCH

SUB FARM DITCH

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FARMDITCH

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