China, People's Republic of: Inclusive and Sustainable Livestock Farming Project

Nonsovereign (Private) Project | 49323-001

The project will promote a livestock farming business model that includes smallholder farmers in a sustainable production process. ADB will support Lihua' s $183 million investment plan during 2017 to 2019, including (i) breeder farm expansion, (ii) contract farming expansion, (iii) environmental capital expenditure, and (iv) animal health and food safety capital expenditure.

Project Details

  • Project Officer
    Wong, Yee To
    Private Sector Operations Department
    Request for information
  • Approval Date
    13 December 2016
  • Country
    China, People's Republic of
  • Sector
    • Agriculture, natural resources and rural development
Project Name Inclusive and Sustainable Livestock Farming Project
Project Number 49323-001
Borrower/Company Jiangsu Lihua Animal Husbandry Stock Company
Country China, People's Republic of
Location Anhui, Guangdong, Hunan, Jiangsu, Shandong, Sichuan, Zhejiang
Type or Modality of Assistance
3507 B-Loan Local Commercial Banks USD 32.50 million Approved
81 Loan Ordinary capital resources USD 62.50 million Approved
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Livestock

Gender Equity and Mainstreaming Some gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Office of the Director General, PSOD
Responsible ADB Officer Wong, Yee To
Project Sponsor(s)
Description The project will promote a livestock farming business model that includes smallholder farmers in a sustainable production process. ADB will support Lihua' s $183 million investment plan during 2017 to 2019, including (i) breeder farm expansion, (ii) contract farming expansion, (iii) environmental capital expenditure, and (iv) animal health and food safety capital expenditure.
Objectives and Scope The project will set a benchmark in terms of smallholder farmer inclusion, environmental and social sustainability, animal health, and food safety practices for the livestock industry in the PRC.
Status of Operation/Construction First disbursement of CNY60MM from ADB A Loan has been executed on 4 Jan 2019 to fund the constructions of Huankou and Liangzhai pig farms, and another CNY130MM from A Loan has been disbursed on 30 Sep 2020 to fund the Liyang pig farm.
Linkage to Country/Regional Strategy

The project is aligned with ADB's Midterm Review of Strategy 2020, which emphasizes the need to contribute to food security and agricultural productivity, promote food safety and quality standards, and support inclusive businesses such as agribusinesses that connect farmers to food markets. The project is also consistent with ADB's country partnership strategy, 2016 to 2020, for the PRC. To support rural development for inclusive economic growth, ADB will help the PRC develop suitable methods to (i) modernize agriculture, (ii) promote circular agriculture, and (iii) improve food safety. Through its private operations, ADB will support agribusiness projects that enhance productivity, the inclusion of smallholder farmers in value chains, and food safety.

The project fully aligns with ADB's Operational Plan for Agriculture and Natural Resources, which stresses that ADB's private agribusiness investments have the potential to benefit millions of smallholder farmers directly and contribute to public goods, such as food security, food safety, and reduced soil and water pollution. The project builds on lessons from ADB's long history in the PRC's livestock sector, particularly the need to achieve development impact through private agri-enterprises with sufficient scale and direct linkages with farmers.

Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The company has established an Environmental and Social Management System (ESMS) which is used to guide the development of subprojects utilizing ADB's funds to ensure compliance with ADB requirements are met. The location of livestock farms (the subprojects) will be coordinated with the local government to conform with: (i) local land use plans, (ii) the designated buffer zone and (iii) avoid legally protected areas and environmentally sensitive receptors. The Company is required to undertake environmental and social due diligence for new and expanded or acquired facilities through environmental assessments and /or environmental compliance audits. Potential risks and impacts during construction are mostly site-specific and short-term such increase in noise level, emission of fugitive dust, soil erosion, etc. that can be mitigated through good engineering construction and housekeeping practices. During operation, animal waste treatment facilities will mitigate concerns as to solid waste, wastewater, odor, nuisance, etc. The project will require ongoing monitoring and reporting of environmental, health and safety performance of the company's subprojects. Company ensures full compliance with the animal epidemic prevention law and other applicable environment, health and safety laws and regulations during its operation.
Involuntary Resettlement Lihua will either lease unused or abandoned lands on a willing lessor-willing lessee basis, or procure state-owned land from the local government. The ESMS provides guidance on requirements for different types of land acquisition. In case of unavoidable displacement, such as relocation related to a sanitation buffer zone set by local regulations, Lihua will discuss and coordinate measures with the government to address any identified gaps between national and ADB requirements. Where land is acquired through negotiated acquisition, as in willing lessor / willing lessee, the Company will be required to ensure that negotiations are free from coercion, both parties are aware of the terms of the settlement, compensation is at replacement value, and that the process is documented and verified by a third party. To date Lihua has provided necessary due diligence reports for all land acquisition for subprojects financed by ADB. Investment transactions supporting Lihua's projects entailing significant involuntary resettlement impacts are excluded from ADB financing.
Indigenous Peoples The farms have been developed in non-ethnic minority-concentrated provinces. Social due diligence has determined that no farms have affected directly or indirectly ethnic minorities.
Stakeholder Communication, Participation, and Consultation Lihua's ESMS, contains guidance on satisfying ADB's requirements for meaningful consultation. IEEs and environmental and social compliance audits have been undertaken with consultation with affected stakeholders and their comments taken into consideration in project development. Land acquisition through negotiated means has entailed consultation with numerous groups. All consultations are documented. Stakeholders have also been made aware of Lihua's grievance mechanism.
Timetable for assistance design, processing and implementation
Concept Clearance 10 Nov 2015
Credit Committee Meeting 04 Nov 2016
Approval 13 Dec 2016
Last PDS Update 04 Jun 2021

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.


Evaluation Documents See also: Independent Evaluation

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