INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Public Disclosure Copy Report No.: ISDSC2413 Date ISDS Prepared/Updated: 08-Mar-2013 Date ISDS Approved/Disclosed: 08-Mar-2013 I. BASIC INFORMATION A. Basic Project Data Country: Armenia Project ID: P133705 Project Name: Second Second Community Agriculture Resource Management and Competitiveness Project (P133705) Task Team Nicolas Ahouissoussi Leader: Estimated 05-Dec-2013 Estimated 30-Apr-2014 Appraisal Date: Board Date: Managing Unit: ECSAR Lending Specific Investment Loan Instrument: Sector(s): Animal production (40%), General agriculture, fishing and forestry sector (30%), Agro-industry, marketing, and trade (15%), Agricult ural extension and research (10%), Public administration- Agriculture, fishing and forestry (5%) Theme(s): Other rural development (45%), Rural services and infrastructure (45%), Rural markets (10%) Public Disclosure Copy Financing (In USD Million) Total Project Cost: 30.00 Total Bank Financing: 30.00 Total Cofinancing: Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 0.00 International Bank for Reconstruction and Development 14.00 International Development Association (IDA) 16.00 Total 30.00 Environmental B - Partial Assessment Category: Is this a No Repeater project? B. Project Objectives The proposed Project Development Objective (PDO) is to (i) further improve productivity and sustainability of pasture and livestock systems in targeted communities and (ii) increase the marketed production of selected livestock and high value agri-food value chains. This will be achieved through: (i) developing and implementing participatory management plans to improve productivity and sustainability of pasture and livestock systems in targeted communities in upland areas; (ii) Public Disclosure Copy linking producers and processors to markets, focusing on selected livestock production (milk and meat ) and high value produce (fruit and vegetables); and (iii) supporting development of specific public sector institutions that are essential to increase the marketed production from these products. C. Project Description The proposed project would consist of four components with World Bank funding of US$30 million over five years. The design incorporates lessons based on experiences under the on-going CARMAC project and recommendations from the Bank’s 2012 Policy Note. The project’s geographical coverage would focus on similar areas as defined in the CARMAC project, namely selected communities where livestock is a main source of livelihood, and would use a demand-driven approach and similar criteria for selection of specific sites. The project would also address the government’s major areas of concern and key issues and constraints in the agriculture sector. First, the project would extend the coverage of the pasture-based livestock system component by including more communities, primarily those adjacent to the villages already included in CARMAC, and would fine-tune the CARMAC program based on lessons learned and to emphasize community participation and decision-making. Second, the project would support the development of selected value chains by strengthening links between producers and processors, promoting food safety and supporting producers’ associations, including provision of matching grants. Third, the project would provide support to public sector institutions and development of regulatory frameworks in support of improved market access. In this way, the project will support the overall goals of increasing competitiveness and market access of Armenian produce. Although the first component of this project is an extension/expansion of activities under the ongoing CARMAC project, it is not listed as a repeater project because the other components will support new activities including: TA, training/facilitation and matching grant funding to support increased productivity and quality of agricultural produce following a value chain approach (Component 2) and Public Disclosure Copy development of public sector institutions and regulatory frameworks needed to facilitate marketing of agricultural produce organic produce (Component 3). Component 1: Community/Pasture Livestock Management System. In line with the government request to expand and strengthen similar activities of CARMAC, the objective of this component would be to continue the implementation of an efficient and sustainable community managed pasture/fodder based livestock production system in selected communities where livestock is a primary source for livelihood and where communities have a strong interest to improve their pasture production. The component would be strengthened based on lessons learned during the on-going CARMAC project including increased emphasis on community participation and decision-making. The component would fund two main activities: a) Development of Sustainable Pasture/ Livestock Management Plans. Pasture User Associations (PUAs), comprising all community pasture users, would be mobilized at the village level. The PUAs would be responsible for developing and implementing the pasture/livestock management plans (PLMP), with the participatory process being supported by Marz Support Teams (MSTs) and technical experts. Comprehensive pasture and fodder assessments would be carried out including soil tests, plant assessments, evaluations of productivity and quality, and assessments of feed/fodder balances. The participatory plan would define: a) measures to improve pasture productivity, such as rotational grazing, protecting areas for regeneration, pasture rehabilitation, improving access to remote pastures, and needs for supplementary fodder production; b) grazing utilization levels; c) animal health requirements and breed improvement measures; d) investment needs; and e) and responsibilities for implementation of the planned activities, targets and indicators. Public Disclosure Copy b) Community Fund for Implementation of Pl ans. Grants would then be provided for each PUA to implement their planPLMP; grant amounts would depend on pasture area and existing number of livestock units with beneficiaries contributing a percentage of the costs . Investments could include: a) infrastructure to access and use remote pastures, such as spot road improvements, stock watering points, shelters and stock-pens, and milk cooling equipment; b) machinery to produce and harvest fodder; c) costs of rehabilitation measures for degraded areas such as fencing, weed and shrub control, and re-seeding; d) inputs for supplementary fodder production such as seeds; e) community- based disease control programs including for market-limiting diseases, zoonoses and parasite control; f) artificial insemination; (g) training and advisory services supplied by both public and/or private service providers; (h) veterinary support through community veterinarians; and (h) PUA support, such as office equipment and furnishings. Component 2: Value Chain Development. The objective of this component would be to increase quantity and quality of Armenian agricultural produce to meet domestic and international demand by developing enhanced linkages between producers and processors, creating new and improving existing business opportunities, and raising product quality and food safety practices along the entire chain of production and consumption. This would encompass on-farm quality assurance and good agricultural practices, good management practices and Hazard Analysis and Critical Control Points (HACCP) or other certification for food business operators (FBO) to comply with market standards and expectations. The component would finance activities aimed at improving productivity and market integration along selected supply chains and promoting linkages among stakeholders including processors, traders, cooperatives, associations and rural enterprises. The component would fund two main activities: a) Facilitation and Training. Activities would include: (i) Strengthening and establishment of Public Disclosure Copy producers’ associations and cooperatives; (ii) Provision of business management advice and training to stakeholders along the value chain; (iii) Promotion of food safety and quality improvements through training and technical assistance aligned with appropriate national or international standards and the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union; and (iv) Market facilitation such as exchange visits, trade fairs, test marketing and promotion of products for both export and domestic markets. b) Matching Grant funding for sub-projects along the value chain that would: (i) introduce and test technology innovations; (ii) add value such as improved storage, processing, marketing, and quality improvements, (iii) develop business linkages and partnerships between producers and processors; and (iv) incorporate food safety practices and compliance (such as introduction of HACCP) by registered businesses, cooperatives and associations. Grants would be provided in response to proposals from various rural business enterprises, and thus would be market-led and demand-driven. Applicants will need to demonstrate that the sub-projects address critical constraints in the value chain and will be required to contribute at least 30% of the investment cost. Component 3: Enhancing Agricultural Regulatory and Institutional Framework. The objective of the component would be to help modernize the agricultural sector through support to public sector institutions and development of regulatory frameworks that are important requirements to increase the marketed production from the selected products. Examples are: (i) Introduction of a Code of Good Agricultural Practice; (ii) Regulatory and Institutional Framework for Certification and Labeling of Organic Produce; (iii) Development of a legal framework for cooperatives and producer associations; (iv) Support to Food Safety Institutions to enhance their capacity for inspection and Public Disclosure Copy regulation of food safety requirements through training and technical assistance. Component 4: Project Coordination and Management. The project would continue to be coordinated by the existing Agriculture Projects Implementation Unit State Agency (APIU) of the Ministry of Agriculture. The project would use the present CARMAC structure for financial management, procurement, monitoring and evaluation, and environmental safeguards. The project would provide incremental project management costs in these areas, additional technical specialists as identified during project preparation, costs of transport and field visits, and consulting for impact assessments including baseline survey, interim and final project evaluations; and audit. D. Project location and salient physical characteristics relevant to the safeguard analysis (if known) Component 1 of the project will be implemented the selected mountainous communities in Armenia where livestock is a main source of livelihood, and which are dependent on grassland and pasture ecosystems. Other activities supported by the project will be implemented at the national level, with no geographic predetermination. E. Borrowers Institutional Capacity for Safeguard Policies Ministry of Agriculture of the Republic of Armenia will be the implementing agency for the project, while its day-to-day management will be provided by PIU under this Ministry. This arrangement is similar to the one applied to the implementation of the ongoing CARMAC project. The PIU has extensive experience gained through the implementation of the World Bank financed RESCAD (completed) and CARMAC (ongoing) projects, including management of the environmental safeguards. PIU produces site-specific EMPs for civil works to be undertaken on the pastures as part of the pasture management plans. To date the Bank has reviewed and approved thirty such EMPs. Field visits to randomly selected sites revealed no environmental damage from works on the Public Disclosure Copy pastures. Most of the pasture infrastructure is currently under construction. Once the new watering points for cattle are operational, communities should adopt planned restrictions on the most degraded pastures to allow for their natural regeneration. Discussions with project beneficiary communities showed their good mobilization and readiness to go for the selective use of pastures. PIU also follows environmental procedures established for the Competitive Grant Program (CGP). Environmental screening of applications is being carried out and for the activities classified as environmental Category B the site-specific EMPs are being developed. For one of the CGP-financed activities a pest management plan has been prepared in accordance with the Operations Manual and the Environmental Management Framework of CARMAC. Environmental performance of grant recipients is generally satisfactory, one weak point being farm waste management. This is mostly due to absence of relevant regulations, institutional set-up, and infrastructure across the country rather than the behavior of grant recipients. Nonetheless, environmental damage from CGP activities is minimal because of small scale of operations and a widespread on-farm reuse of the main types of the organic waste, while the economic benefit for communities grossly surpasses it. The above described experience of PIU is highly relevant to the proposed second CARMAC project, because the design and implementation plan of this operation is pretty similar to the what is being implemented under the ongoing CARMAC project. Based on the experience from the past activities, PIU shall apply more effort to the field environmental supervision of project activities under taken by rural communities and grant recipients, including awareness raising and education on the good environmental practice. PIU must maintain a full time environmental specialist/consultant throughout the life of the proposed second CARMAC project. F. Environmental and Social Safeguards Specialists on the Team Public Disclosure Copy Darejan Kapanadze (ECSEN) Kosuke Anan (ECSSO) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes The project will support development and BP 4.01 implementation of pasture/livestock management plans, which are likely to imply provision/rehabilitation of light infrastructure for pasture operation such as access roads, shepherd shelters, animal watering points, and other similar elements as the demand may be. Provision of matching grants for value chain sub-projects will be aimed at enhancing storage and processing of agricultural produce through the provision of improved premises and technologies. These activities carry small to medium risks to the natural environment and trigger OP/BP 4.01. The project is classified as environmental Category B. According to the project design it is expected that individual activities to be supported will be multiple in number and will get defined/approved on the rolling basis. The general nature and scope of Public Disclosure Copy the potential impacts of these activities are similar and well predictable. An Environmental Management Framework (EMF) will be developed at the project preparation stage through revision of the EMF currently being used for the purposes of CARMAC project implementation. EMF will to carry environmental screening, assessment, management planning, and monitoring requirements for individual investments. This would include preparation of site-specific Environmental Management Plans (EMPs) for individual activities. EMP Checklist for Small and Medium Construction Activities will be used for lower risk Category B investments, while preparation of more comprehensive EMPs may be required for higher risk Category B sub- projects. EMPs will include methodology and institutional arrangements for monitoring their implementation. Natural Habitats OP/BP 4.04 No Public Disclosure Copy Forests OP/BP 4.36 No Pest Management OP 4.09 Yes Pasture management plans may include enhancement of fodder production, and matching grants to agro-producers may support storage of the primary agricultural products, both of which could imply pesticide application. Therefore, the project triggers OP 4.09. The framework Pest Management Plan (PMP) developed for ongoing CARMAC project will be included into the EMF of proposed second CARMAC project to guide development of sub- project specific PMPs, as required, in the course of the project implementation. The second proposed CARMAC project is expected to provide support to the organic agro-production and product labeling. TA for this activity will include raising awareness of the Integrated Pest Management and dissemination of its techniques. Physical Cultural Resources OP/ No BP 4.11 Indigenous Peoples OP/BP 4.10 No Public Disclosure Copy Involuntary Resettlement OP/BP No The proposed project will not involve land 4.12 acquisition or physical displacement. Restriction of access to natural resources (pasture) is expected as a result of the project, but will only result from community decision- making processes, deemed satisfactory to the Bank, which provides for identification of appropriate measures to mitigate any adverse effects on vulnerable members of the community. The processes have been introduced to the ongoing CARMAC project, in which a balanced representation of the diversity of PUA members and a robust system of grievance redress mechanisms are observed. Safety of Dams OP/BP 4.37 No Projects on International No Waterways OP/BP 7.50 Projects in Disputed Areas OP/BP No 7.60 Public Disclosure Copy III. SAFEGUARD PREPARATION PLAN A. Tentative target date for preparing the PAD Stage ISDS: 17-Oct-2013 B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing1 should be specified in the PAD-stage ISDS: EMF will be drafted, disclosed, and consulted with the project stakeholders by the project appraisal. Site-specific EMPs are likely to become available at the project implementation stage, once the individual activities get suggested, appraised, and approved. In case several sub-projects to be supported under the proposed second CARMAC project are identified and prepared under the umbrella ofthe ongoing CARMAC project, then safeguard documents of these sub-projects will also be disclosed by the time of the second CARMAC project appraisal. IV. APPROVALS Task Team Leader: Name: Nicolas Ahouissoussi Approved By: Regional Safeguards Name: Agnes I. Kiss (RSA) Date: 07-Mar-2013 Coordinator: Sector Manager: Name: Dina Umali-Deininger (SM) Date: 08-Mar-2013 Public Disclosure Copy 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons.