Uzbekistan: Land Improvement

Sovereign Project | 37536-013

Summary

The Land degradation is a serious economic,social, and environmental problem in Uzbekistan and the rest Central Asia. It directly affects the livelihoods of the rural population by reducing land productivity, and by causing africultural production losses estimated at $2 billion a year for the region.

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Procurement Documents

Title Document Date
Land Improvement Project Nov 2012

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Project Name Land Improvement
Project Number 37536-013
Country Uzbekistan
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Loan 2245-UZB: Land Improvement
Ordinary capital resources US$ 32.60 million
Loan 2246-UZB: Land Improvement
Asian Development Fund US$ 27.60 million
TA 4820-UZB: Implementation and Monitoring of Policy Reforms in Agriculture Sector
Technical Assistance Special Fund US$ 200,000.00
Poverty Reduction Fund US$ 600,000.00
Grant 0080-UZB: Land Improvement Project
Global Environment Facility US$ 3.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Agriculture, natural resources and rural development - Agricultural drainage - Agriculture research and application - Agro-industry, marketing, and trade - Rural water policy, institutional and capacity development

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The Land degradation is a serious economic,social, and environmental problem in Uzbekistan and the rest Central Asia. It directly affects the livelihoods of the rural population by reducing land productivity, and by causing africultural production losses estimated at $2 billion a year for the region.

The project will address the rapidly worsening and expanding land degradation in nine districts in Bukhara, Kashkadarya and Navoi provinces. The project area,covering 162,300 hectares (ha) of irrigated land, suffers from increased soil salinity and shallow groundwater table the most serious forms of land degradation. Crop yields in these areas are reportedly have declined by 30% since 1991. These problems are caused by (i) poor water management, (ii) deteriorating irrigation and drainage infrastructure(I&D), and (iii) a policy environment that constrains production growth and reduces incentives to invest in land improvement. Worsening land degradation directly affects a rural population of 1.4 million in the project districts.

To help the Government halt and reverse land degradation, the Project will (i) develop and disseminate improved land reclamation practices adapted to local conditions; (ii) strengthen institutions to address land degradation issues at central, provincial and community levels; and (iii) improve land and water management infrastructure to enhance water control and efficiency. Through agreed policy reforms, the Project also will help to increase farmers' incentives to raise land productivity and invest in land, as well as improve rural governance.

Project Rationale and Linkage to Country/Regional Strategy

Agriculture remains the major source of livelihood for rural communities, which are home to 60% of the population, and is critical to attaining inclusive and sustainable growth for the economy. The Government has prioritized improving agricultural productivity, particularly maximizing export revenues and achieving food security. However, rapidly worsening land degradation is threatening the performance of the agriculture sector.

The proposed Project would target areas that experience the most severe land degradation in Uzbekistan. The Project design harnesses the experience of the Asian Development Bank (ADB) and lessons gained from relevant land management and agriculture projects in Uzbekistan, the subregion, and elsewhere.

The Project is based on the premise, derived from ADB experience and supported by the Government, that an enabling policy environment that promotes and encourages farmers incentives is needed to support sustainable land management. This is the principle behind the ongoing agriculture sector reform initiative, spearheaded by ADB and the World Bank, which focuses on (i) reducing the mandatory state procurement quota on cotton and wheat; (ii) improving pricing; (iii) ensuring timely payments to farmers; and (iv) liberalizing marketing of these commodities, thereby ensuring greater freedom and improved profitability of producers. This approach will be extended and deepened in the project districts, enabling farmers to benefit directly from increased crop production and to develop the financial capacity to invest in land improvement. The Project also recognizes that incentives to look after their farmland must go hand in hand with improved and more secure access to land. Additionally, institutions responsible for land management must be strengthened and their capacity developed, including their knowledge and skills to implement custom solutions to the worsening land degradation. Land and water management infrastructure, which has deteriorated seriously since independence in 1991, also must be improved through cost-effective investments, taking into account the need for sustained operation and management in the future.

The Project builds on the agriculture sector reform initiatives that ADB has maintained in Uzbekistan since its first project in 2002. It will help Uzbekistan address its land degradation problems in a multipronged manner, covering incentives, institutions, and infrastructure. Through cofinancing with the Global Environment Facility (GEF), the Project also aims to allow long-term planning and implementation of corrective interventions to prevent and control land degradation beyond the project area.

Impact Increased incomes of farmers in 9 districts of Uzbekistan
Project Outcome
Description of Outcome Farmers in the project area use improved land productivity
Progress Toward Outcome

Three demonstration farms established, rehabilitated and equipped with agricultural machinery to promote innovative on-farm technologies and demonstrate enhanced agronomic practices.

Water management institutions staff trained in efficient operation and maintenance of irrigation and drainage infrastructure; and integrated water and land management.

The inter-farm drainage infrastructure rehabilitated to improve the land quality and prevent its degradation.

Implementation Progress
Description of Project Outputs

1. Government implements agricultural policy reforms

2. Water and land management institutions applies improved institutional capacity

3. Rehabilitated land and water infrastructure is operational

4. EA staff use effective project management and monitoring systems.

Status of Implementation Progress (Outputs, Activities, and Issues)

The Government issued Resolution No PP-698 of 26 Sep 2007 to reduce the quota to 25% for cotton and wheat. Criterion for assessment of land productivity is soil bonitet point, identified by 100-point scale within certain land plot in a farm. It is based on soil texture, soil humus content, degree of soil salinity, soil density, stone and gypsum content, gravel layer and groundwater table depth and other indices of soil conditions. Soil bonitet points are identified by departments of the State land cadastre committee (Goskomzemgeodezkadastr) based on results of soil survey, which in turn are the basis for estimation of cadastral crop yields. Cadastral cotton and wheat yields are calculated on the basis of 0.4 and 0.6 center/ha for one soil bonitet point.

By the end of 2014, difference between domestic listed price for cotton and international one was decreased by 15.3% as compared with prices in 2007. Thus, if in 2007, difference in prices was 41.4%, in 2014, it was decreased to 26.1%.

Difference between domestic price for wheat and international one was also decreased by 26.5% as compared with prices in 2007. Thus, if in 2007, difference in prices was 63.4%, in 2014, it was decreased to 36.9%.

Government interests in state order production create certain conditions for producers. Amongst them are financial conditions, including preferential financing, tax and customs privileges for procurement of goods, material resources and services associated with state order production. Difference between world and domestic procurement prices acts as Financial interest of the Government. Difference between domestic and world procurement prices for grain enables the Government to provide population with grain processing products on more affordable prices. Government's Financial interest from cotton, gained in years with favorable market trends, is spent to support agricultural producers during unfavorable market years, creating a kind of security fund. Hence, stability of production is ensured. It is very important for agriculture. Stability provided by such security fund, decreases the side effects of market mechanism significantly.

Crop husbandry technologies for sustainable land and water resources management were introduced on land area of 245.4 ha. This work was commenced in 2013. Around 3-4 years will be required to achieve general results in agriculture.

Based on efficiency of these measures and interest from private farms these crop husbandry technologies will be introduced on a larger scale.

In total 55 training sessions on various topics have been conducted under the Project. Total number of participants is 1 498 persons.

29 training sessions with the total number of participants of 559 persons have been conducted under GEF component.

RRA has conducted 16 trainings with the total number of participants of 939 persons.

Introduction of crop rotation in Project area allowed increasing land area under alternative crops up to 11,869 ha. including 3,744 ha in Bukhara province, 3,147 ha in Navoi province and 4,78 ha in Kashkadarya province.

The MAWR management and O&M capacity is being upgraded through trainings and workshops.

Planned volumes of water supply to the Project area was 3,060.2 mln. m3. Limit of water supply was 2,495.9 mln. m3. Actual delivered water volume was 2,370.0 mln. m3, or 95%.

Planned volume of water supply to the Project districts in Bukhara province was 962.9 mln. m3. Limit of water supply was 850.1 mln. m3. Actual delivered water volume was 875.4 mln. m3, or 103%.

Planned volume of water supply to the Project districts in Kashkadarya province was 1.517.9 mln. m3. Limit of water supply was 1,131.0 mln. m3. Actual delivered water volume was 993.9 mln. m3, or 87.9%.

Planned volume of water supply to the Project districts in Navoi province was 579.4 mln. m3. Limit of water supply was 514.8 mln. m3. Actual delivered water volume was 500.6 mln. m3, or 97.2%.

Currently there are 47 WUAs within the Project area with total land area of 98,672 ha.

This includes:

17 WUAs in Bukhara province with the total land area of 27,291ha, 9 WUAs in Kashkadarya province with the total land area of 25,081ha, and 21 WUAs in Navoi province with the total land area of 46,300ha.

Currently WUA as a new institution still has its problems and shortcomings. The main shortcomings are: turnover of employees, lack of material and technical base, weak financial position due to poor collection of WUA service fees. There is a formal attitude to preparation of business plan and its approval on general assembly. However, there are some positive trends; for example, gradual improvement of WUA creditability amongst farmers. Farmers are beginning to understand that WUA is a key organization not only in water distribution but also in ensuring proper operation of on-farm I&D systems.

Based on data from interim certification of completed works, efficiency of irrigation systems is 54%.

Based on data from interim certification of completed works, land area with medium salinity has decreased to 13,170 h0.

Based on data from interim certification of completed works, land area with poor drainage has decreased to 60,680 ha.

International Consultant and Project Management Office monitor Project implementation, as well as Project impact indicators, such as:

- progress with completion of construction works (length of rehabilitated collectors, number of rehabilitated/constructed structures, completed earthwork quantities);

- Change in crop yields in Project area;

- Change in land salinity degree in Project area;

- Implementation of Gender Actions Plan

Geographical Location The project area covers 162,300 ha in nine districts: Kamashi, Guzar, and Kasan in Kashkadarya province; Kyzyltepa, Khatirchi, and Navbakhor in Navoi province; and Jandor, Bukhara, and Romitan in Bukhara province.
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

An initial environmental examination (IEE), conducted during project preparation, confirms that the Project will have considerable positive environmental impacts. The rehabilitation of main drains will have a direct and positive impact on groundwater tables. In addition, the rehabilitation of on-farm I&D infrastructure for 33,890 ha will increase irrigation efficiency, decrease water losses, and reduce groundwater levels. These improvements will reduce waterlogging and soil salinity significantly, and improve soil quality. The Project will not increase the use of river water. Instead, it will improve water use efficiency, thereby benefiting downstream users by increasing stream flows. Better agriculture and land management practices also will improve stream flow quality.

The project area does not include any national parks, or environmental or cultural monuments. The flora and fauna in the area, which has been cultivated for more than 25 years, have been impacted by human activity. As no species are registered on the Species Survival Commission's Red List,37 none is recognized as endangered. The current flora and fauna appear to be adapted to the irrigated agricultural environment. Since the Project will not extend to new areas, negative impacts on flora and fauna are not expected. The only potential negative impacts identified in the IEE are due to rehabilitation works, though these are considered insignificant. Mitigation measures, environmental management, and monitoring have been integrated into the project design and costs. These include (i) stockpiling of spoil from drains; (ii) disposal of waste material from repairs; and (iii) provision of suitable locations for contractors camps, which will meet national health, safety, and hygiene requirements.

Involuntary Resettlement All rehabilitation works for the main system will be within the boundaries of existing structures, or along existing canals and drains, which are within the Government's right-of-way. Results from field surveys and public consultations indicate that involuntary resettlement will not be required for the main system works. The on-farm works include rehabilitation of minor on-farm structures and drains on leasehold agricultural land. Participation in these works is voluntary. Farmers and WUAs will be involved in the design, construction quality control, and related activities of the on-farm rehabilitation program. On-farm construction will start only after individual farmers have signed construction contracts.
Indigenous Peoples Based on the poverty and social assessment, no ethnic minority issues are anticipated in the project areas. The ethnic composition is homogeneous, with Uzbeks accounting for 97.3% of the population in Kashkadarya and Navoi, and 99.5% in Bukhara. Project beneficiaries will be treated equally, and the Project will reduce rural poverty and improve incomes of all stakeholders. Therefore, the Project will not have any adverse impacts on indigenous peoples or ethnic minorities, and will not activate ADB's policy on indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design During preparatory technical assistance (PPTA) consultations and loan fact-finding, a broad range of stakeholders were identified and consulted at central and local government levels, including grassroots consultations with local communities in the project area. During the preparation of the Poverty, Social and Gender Analysis (May 2005), a sample survey was carried out with 1,800 households. This provided an opportunity to inform the stakeholders about the Project's outcome and impact. In addition, 40 in-depth interviews were organized with experts, private farmers, and local self-governance bodies. Four rural participatory rapid assessments were carried out, and included group discussions with the general public and experts to identify key social problems and discuss issues related to living standards, employment, and income generation. When the data was collected and analyzed, the specific needs and constraints faced by women and other vulnerable groups were emphasized. The agro-economic study in the project area provided additional performance analyses and needs assessments of 80 private farms, 80 dehkan farms, and 10 shirkat farms. Key project stakeholders are poor and non-poor agricultural operators, women, agricultural workers, agricultural input suppliers, agricultural service providers, financial institutions for agriculture, construction companies, central and local authorities, and land and water resource management institutions. Key vulnerable groups in the project area include women, the unemployed (mostly people who lost their jobs as a result of the restructuring of shirkats into private farms), and families with household land plots.
During Project Implementation A consultation process will continue with all stakeholders during the course of project implementation to ensure WUA members/farmers involvement in the planning of rehabilitation works.
Business Opportunities
Consulting Services The Project will provide 131 person-months (pm) of international and 857 pm of domestic consultants in the following areas: (i) institutional capacity building; (ii) land and water management technologies; (iii) design, procurement, and construction supervision; and (iv) project management, monitoring, and evaluation. The consulting services will be provided by an international consulting firm, in association with domestic consultants, or domestic consulting firm. The EA will engage the consultants in accordance with ADB's Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers using quality- and cost-based selection method under full technical proposals, and arrangements acceptable to ADB for the engagement of the domestic consultants.
Procurement Goods and services will be procured in accordance with ADB's Guidelines for Procurement. Major contracts for equipment costing $1,000,000 equivalent or more will be awarded thorugh ADB's international competitive bidding procedures, while contracts costing $1,000,000 and below will be awarded on the basis of international shopping procedures or local competitive bidding procedures. Direct purchase will be allowed for contracts valued at $100,000 equivalent or less. Civil works contracts estimated to cost more than $1.0 million will be carried out using the international competitive bidding procedures, while those valued at $1.0 million equivalent or less will be carried out using local competitive bidding procedures acceptable to ADB.
Responsible ADB Officer Tal'at Nasirov
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Uzbekistan Resident Mission
Executing Agencies
Ministry of Agriculture and Water ResourcesShavkat Khamraevlip@sks.uz4, Navoi street, Tashkent, 100004, Uzbekistan
Timetable
Concept Clearance 16 Mar 2006
Fact Finding 29 Jun 2005 to 19 Jul 2005
MRM 07 Mar 2006
Approval 24 Jul 2006
Last Review Mission -
PDS Creation Date 21 Feb 2006
Last PDS Update 23 Mar 2015

Grant 0080-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 Jan 2008 21 Aug 2008 21 Aug 2008 31 Mar 2013 31 Mar 2015 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 3.00 Cumulative Contract Awards
ADB 0.00 09 Jan 2008 0.00 2.62 87%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 3.00 09 Jan 2008 0.00 2.48 83%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Unsatisfactory

Loan 2245-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Jul 2006 27 Sep 2007 09 Nov 2007 31 Mar 2013 31 Mar 2015 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 135.80 Cumulative Contract Awards
ADB 32.60 24 Jul 2006 26.11 0.00 93%
Counterpart 103.20 Cumulative Disbursements
Cofinancing 0.00 24 Jul 2006 25.91 0.00 92%

Loan 2246-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Jul 2006 27 Sep 2007 09 Nov 2007 31 Mar 2013 31 Mar 2015 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 27.60 Cumulative Contract Awards
ADB 27.60 24 Jul 2006 27.25 0.00 97%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 24 Jul 2006 27.01 0.00 97%

TA 4820-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Jul 2006 02 Apr 2007 02 Apr 2007 30 Sep 2008 31 Dec 2008 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
200,000.00 600,000.00 200,000.00 0.00 0.00 0.00 1,000,000.00 24 Jul 2006 677,176.55
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Unsatisfactory
Title Document Type Document Date
Amendment to the Loan Agreements for the Land Improvement Project Agreements Dec 2012
Land Improvement Project Procurement Plans Nov 2012
Amendment to the Loan Agreement for Land Improvement Project between the Republic of Uzbekistan and Asian Development Bank dated 5 November 2009 Loan Agreement (Ordinary Resources) Nov 2009
Amendment to the Loan Agreement for the Land Improvement Project between the Republic of Uzbekistan and Asian Development Bank Dated 5 November 2009 Loan Agreement (Special Operations) Nov 2009
Financing Agreement for Land Improvement Project between Government of Republic of Uzbekistan and Asian Development Bank dated 21 August 2008 Financing Agreement Aug 2008
Land Improvement Project Project/Program Administration Manual Feb 2008
Amendments to Rebate and Surcharge Provisions of Loan Agreement dated 18 February 2008. Loan Agreement (Ordinary Resources) Feb 2008
Land Improvement Project (Global Environment Facility Grant Financing) Reports and Recommendations of the President Nov 2007
Amendment to the Loan Agreement for Land Improvement Project between the Republic of Uzbekistan and Asian Development Bank dated 22 November 2007 Loan Agreement (Ordinary Resources) Nov 2007
Loan Agreement for Land Improvement Project between the Republic of Uzbekistan and ADB dated 27 Sep 2007 Loan Agreement (Ordinary Resources) Sep 2007
Loan Agreement for Land Improvement Project between the Republic of Uzbekistan and ADB dated 27 Sep 2007 Loan Agreement (Special Operations) Sep 2007
Land Improvement Project Reports and Recommendations of the President Jun 2006
Land Improvement Project Design and Monitoring Frameworks Feb 2006

Evaluation Documents

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