China, People's Republic of: Agricultural Infrastructure Comprehensive Development Project

Sovereign Project | 43049-012

Summary

The People's Republic of China's (PRC) gross domestic product (GDP) growth averaged 9% from 1978 to 2008, lifting about 250 million people out of poverty. Throughout the period, the agriculture sector made impressive advances in land and labor productivity, and food production. In 2006, agriculture accounted for 11.7% of the PRC's GDP, and agricultural crop land reached 157 million hectares (ha). Growth in agricultural production has enabled the country to feed more than a fifth of the world?s population from an eighth of the world?s arable land.

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Project Name Agricultural Infrastructure Comprehensive Development Project
Project Number 43049-012
Country China, People's Republic of
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7311-PRC: Agricultural Infrastructure Comprehensive Development Project
Technical Assistance Special Fund US$ 800,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Agriculture, natural resources and rural development - Agricultural policy, institutional and capacity development - Agricultural production - Irrigation
Gender Equity and Mainstreaming No gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy

The People's Republic of China's (PRC) gross domestic product (GDP) growth averaged 9% from 1978 to 2008, lifting about 250 million people out of poverty. Throughout the period, the agriculture sector made impressive advances in land and labor productivity, and food production. In 2006, agriculture accounted for 11.7% of the PRC's GDP, and agricultural crop land reached 157 million hectares (ha). Growth in agricultural production has enabled the country to feed more than a fifth of the world?s population from an eighth of the world?s arable land.

Despite the rapid economic growth, more than 200 million people in the PRC still live on an income of less than $1.25 per day, of whom more than 30 million people still live below the Government's rural poverty line of CNY625 ($77 equivalent) per annum. Rural and urban inequalities are increasing and threatening social stability. Farmers, in particular, have not experienced proportionate benefits from economic growth, and their standard of living is not improving at the same rates as the nonfarm population. Millions of households will still derive a livelihood from agriculture for decades to come. If rural environmental concerns and natural resources constraints are not adequately addressed, the opportunities for rural households to improve their livelihoods will gradually decrease. Rural poverty is also exacerbated by water scarcity because without adequate irrigation supplies, rural areas are often most affected by poverty. The situation is further aggravated as more than 20 million rural migrant workers have lost their jobs in the urban areas during the 2008?2009 financial crisis, and are returning to the rural areas. Raising rural incomes through sustainable rural development is one of the most pressing economic and social challenges facing the PRC.

There is also a strategic issue of food security and safety. National grain production peaked at 512 million tons in 1998, reached only 430 million tons in 2003, and crossed 500 million tons again in 2007. Although weather has played a part in the erratic grain production in recent years, other fundamental constraints exist especially related to land and water. Farm land is lost annually to urban sprawl and desertification. The country has more than 66 million ha of average- and low-yielding farmland, about 3.3 million ha of wasteland, 400 million ha of plains and grass-covered hillsides, 5.33 million ha of usable fresh water areas, and 2 million ha of coastal tidal-flat areas. The potentials of these lands are not yet fully explored for agricultural development. At the same time, the production efficiency and capability of farmers must be enhanced to meet market demands and international competition. This will require investments to modernize agricultural production through improved agricultural support services, crop diversification, adoption of better-quality and higher-yielding varieties, and better techniques for environmental management such as reforestation, integrated pest management (IPM), and production of 'nonpolluting/green food' with reduced chemical and pesticide use.

Water scarcity threatens both rural income growth and food security. Overall, the PRC is relatively water-deficient, ranking in the bottom (25%) of countries in terms of average annual water runoff per capita. The situation is worsened by uneven geographical distribution of the water resources, and irrigated agriculture is becoming important against this background. However, the efficiency and management of irrigation systems in the PRC have to be further strengthened. Both national and provincial governments have implemented numerous large irrigation and drainage projects between 1949 and 1978, and expanded the irrigated area from 16 million to 45 million ha. But weaknesses in irrigation system design, construction, operation, and maintenance have lowered their efficiency and many are in need of rehabilitation. Most irrigation systems are over 30 years old and in poor condition. Many were not designed to high standards for effective on-farm water distribution. In their present condition, these facilities are thus inefficient, water-wasting, and incapable of supporting high-productivity and market-oriented agriculture. There is an urgent need for rehabilitation and improvement. Other major problems faced by irrigation and drainage systems in the PRC include inadequate operation and maintenance (O&M) resulting from insufficient annual government budget, low water charges and collection rates, poor service delivery, unwillingness of users to pay, and lack of direct farmer participation and ownership. Acknowledging these challenges and the strategic importance of agriculture and rural development to the PRC's food security and sustainable economic development, the Government has set out to modernize its agriculture. The national comprehensive agricultural development (CAD) program was initiated in 1988 under the State Office for Comprehensive Agricultural Development (SOCAD) of the Ministry of Finance (MOF). One of the core responsibilities of SOCAD is to improve the productivities of low- and average-yielding farmlands through agricultural infrastructure development. SOCAD has been active in collaborating with international development partners such as the World Bank, the United Kingdom's Department for International Development, and the Global Environmental Facility (GEF).

During the Country Programming Mission in December 2008, SOCAD proposed to ADB a technical assistance (TA) for the Agricultural Infrastructure Development Project and it was included in the 2009 TA pipeline.

Impact Increased agricultural production and farmers' income in the project area.
Project Outcome
Description of Outcome Project design and feasibility study that respond to the clients' needs for improving farm productivity and are acceptable to Government and ADB.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Situation analysis and technical assessments completed and project rationale, approach, and strategy proposed and agreed on.

Project components which meet Government and ADB requirements and are owned by EA and IAs.

Status of Implementation Progress (Outputs, Activities, and Issues) The majority outputs of the PPTA have been completed with the submission of final report by the PPTA Consultant.
Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Potential initial stakeholders of the project are MOF, provincial executing agencies, implementing agencies, villages, farmers' associations, local agencies, and farmers. During the implementation of the TA, extensive consultations were conducted to help improve the project design.
During Project Implementation
Business Opportunities
Consulting Services

A team of international and national consultants will be recruited. The TA will require 16.5 person-months of international and 29.5 person-months of national consulting services.

The indicative international and national consultants include (i) Agricultural Economist (Team Leader), (ii) Irrigation Engineer (Deputy Team Leader), (iii) Agriculture and Agro-forestry Specialist, (iv) Environment Specialist , (v) Financial Management Specialist, (vi) Feasibility Study Specialists, (vii) Social Development Specilist, (viii) Resettlement Specialist, (ix) Poverty, Participation, Ethnic Minority and Gender Specialist, and (x) Project Performance Monitoring System Specialist

Responsible ADB Officer Zhou Yaozhou
Responsible ADB Department East Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, EARD
Executing Agencies
State Office for Comprehensive Agricultural Devt3# Nan San Xiang, Sanli He
Xi Cheng District, Beijing 100820
PRC
Ministry of FinanceLuo Luyongluoluyong@126.com3# Nan San Xiang, Sanli He, Xi Cheng District, Beijing 100820, PRC
Timetable
Concept Clearance 04 Jun 2009
Fact Finding 27 Apr 2009 to 30 Apr 2009
MRM -
Approval 14 Jul 2009
Last Review Mission -
PDS Creation Date 05 Oct 2009
Last PDS Update 28 Jul 2011

TA 7311-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Jul 2009 10 Aug 2009 10 Aug 2009 31 Mar 2010 30 Jun 2011 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
800,000.00 0.00 350,000.00 0.00 0.00 0.00 1,150,000.00 14 Jul 2009 790,755.34

Safeguard Documents

See also: Safeguards

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Evaluation Documents

See also: Independent Evaluation

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