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ADB $100 Million Loan to Boost Farmlands, Livelihoods in Rural Fujian

News from Country Offices | 15 November 2016

BEIJING, PEOPLE’S REPUBLIC OF CHINA (15 November 2016) – The Asian Development Bank (ADB) has approved a loan of $100 million to reduce land degradation and boost agricultural productivity in 13 counties of Fujian Province.

“Driven by such factors as inefficient irrigation, overuse of chemical fertilizers and pesticides, and poor land use practices, land degradation is holding back agricultural production in Fujian Province and poses a serious threat to food security and rural livelihoods,” said Suzanne Robertson, an ADB Agriculture and Natural Resources Specialist. “The project will boost farming productivity and profitability, improve the environment and reduce degradation while providing overall resilience to climate change.”

Some 70-80% of croplands, forestlands and grasslands are degraded in the PRC. The cost of this to agricultural productivity was estimated at more than $37 billion or about 1% of gross domestic product in 2007. With its mountainous terrain and poor land use management, land and environment degradation has been particularly widespread in Fujian Province, made worse by changing climate and more frequent instances of extreme weather. 

In Fujian, the land is typically of poor quality and of low productivity, serviced by poor infrastructure such as narrow dirt roads inaccessible in the rainy season and old irrigation systems that are generally dilapidated or clogged. 

Another big issue is the overuse of fertilizers and pesticides, with an application per unit area that is 15% higher than the national average. Such overuse is leading to increased pollution and giving rise to concerns about food safety. 

In line with the National Agricultural Sustainable Development Plan, 2015-2030, the project will tackle the major causes of degradation and promote sustainable land and resource use. Key targets are to reduce chemical fertilizer and pesticide use, improve soil health, control erosion, and promote ecologically based high efficiency agriculture. These activities will directly benefit more than 16,000 households—or 62,500 people—in 122 villages in 51 towns or townships in the 13 counties. 

The project will achieve this through valley floor improvements and development of infrastructure, such as roads suited to tractors and water conserving facilities.  Some 25 kilometers of dikes and embankments will be developed to help prevent floods, together with drainage ditches, irrigation canals and other facilities. 

To rehabilitate sloping land, which is used for growing tea, tea oil and orchards, existing terracing will be repaired general farm infrastructure such as roads and storage ponds will be improved spray or drip irrigation equipment. 

The project will also support farmers and their cooperatives in gaining better access to resources and technology by promoting cooperation with state-owned enterprises and the private sector. The project will provide them with agricultural equipment to carry out sustainable farming techniques such as soil conservation, integrated pest management and improved cropping practices such as intercropping and crop rotation, as well as with equipment to test the quality of soil and water. Training will also be provided to farmers cooperatives on operation, production technology and marketing, good agricultural practices and certification of green and organic products.

The total cost of the project, due for completion in May 2022, is $191.42 million. The government will meet $2.66 million of this, state-owned enterprises almost $70 million and participating private enterprises about $19 million. 

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.