Document of The World Bank FOR OFFICIAL USE ONLY CX 0. O97- C: 4A Repert No. 7664-CIA STAFF APPRAISAL REPORT CHINA JJANGXI AGRICULTURAL DEVELOPMENT PROJECT MAY 19, 1989 Agriculture Operations Division Country Department III Asia Regional Office ITis document has a mtdcted dirbutkoo and may be ued by redpl only n tbe perfornce I * .M,, ,, .* J. I, - ., v p i .n-o.Iyl. CR2 RENY RUIVALEI Currency Unit - Yuan (Y) US$1.00 - Y 3.71 Y 1.00 - US$0.27 (As of Nay, 1989) FISCAL YEAR January 1 to December 31 WEIGHTS AND NEASURES 1 meter (i) - 3.28 feet (ft) 1 kilometer (km) - 0.62 miles 1 hectare (ha) - 2.47 acres 1mu - 0.067 ha 1 ton (t) - 1,000 kg - 2,205 pounds 1 kg - 2.2 pounds ABBREVIATIONS AND ACRONYMS ABC - Agricultural Bank of China ADC - Agricultural Development Corporation AI - Artificial Insemination BFO - Bureau of Forestry BOF - Bureau of Finance CEROILS - China National Cereals, Oils and Foodstuffs Import and Export Corporation CMIEC - China National Machinery Import and Export Corporation EPB - Environmental Protection Bureau ERR - Economic Rate of Return FRR - Financial Rate of Return FTB - Foreign Trade Bureau FTC - Foreign Trade Corporation GVAO - Gross Value of Agricultural. Output ICB - International Competitive Bidding ILS - International and Local Shopping JADC - Jiangxi Agricultural Development Corporation LCB - Local Competitive Bidding MFO - Ministry of Forestry MOA - Ministry of Agriculture MOC - Ministry of Commerce MOF - Ministry of Finance MOFERT - Ministry of Foreign Economic Relations and'. Trade PCC - Provincial Coordinating Committee PCR - Project Completion Report PO - Project Office SAIC - State Administration of Industry and Commerce SFF - State Forest Farm SH - Specialized Household SMC - Supply and Marketing Cooperative SOE - Statement of Expenditure SPC - State Planning Commission FOR OFFICIAL US ONLY CHINA JIANGXI AGRICULTURAL DEVELOPMENT PROJECT Credit and Proiect Suarv Borrover: People's Republic of China Beneficiary: Jiangxi Provincial Government Amount: SDR 46.2 million (US$60 million equivalent) Terms: Standard, with 35 years maturity. Relending Terms: From Central Government to Jiangxi Province: 15 years, including 5 years grace, with interest at 5.3% p.a. The Province would bear the full foreign exchange risk. End users would pay interest at the Agricultural Bank of China's prevailing rates for similar loans for similar purposes. Project Objectives and Description: The proposed project would assist the Jiangxi Provincial Government to accelerate and diversify agricultural development. It would improve the productivity and incomes of participating farmers and strengthen supporting services at the provincial, prefectural, municipal and county lev3ls, thereby moving farm operations from a subsistence level to commercial orientation. It would ,.lso utilize lands which are unproductive or unsuitable for grains and other crops. It would support a livestock development program featuring pigs and poultry on hilly lands unsuitable for grain cultivation, develop and intensify freshwater fish culture in low-lying areas and in lakes and ponds, rehabilicate low-yielding tea plantations and establish new commercial forest plantations. The project would also establish agroprocessing facilities to increase the value-added of project output, to provide feed for project livestock, and to demonstrate the organization, management and financing of such facilities. Benefits and Risks: At full development, annual incremental production would amount to about 12 million ducks and geese, 26,000 t of eggs, 300,000 pigs, 19,000 t of fish, 2 t of pearls and 5,300 t of tea. Over the 20-year project life, the forestry component would produce some 59,000 m3 of pulpwood, 579,000 m3 of logs and poles, and 88,000 t of resin. The value of annual incremental output would be about US$128 million annually. The project would increase incomes for some 18,650 farm families, create about 8,285 permanent jobs and provide annual employment of casual labor equivalent to about 540 man years. Ecological benefits, in the form of soil and water conservation, would be gained from the afforestation schemes and tea rehabilitation. No unusual technical, financial or organizational risks are anticipated; to minimize any risk associated with availability of livestock feed, an agreement would be reached that the provincial government would make available funds to procure raw materials domestically or abroad. This document has a restricted distribution and may be used by recipients only in the performance | of their official duties. Its contents may not otherwise be di-closed without World Bank authorization. - ii - Estimated Costs: Local Foreign Total ------------------($ mln)---------------- Livestock Fig production 6.2 1.7 7.9 Poultry production 6.7 0.8 7.5 Aquaculture 13.4 1.0 14.4 Forestry 3.8 1.2 5.0 Tea Improvement 9.2 2 6 11.8 Processing Feedhills 4.0 7.8 11.8 Pork processing 0.5 0.1 0.6 Poultry processing 4.8 3.8 8.6 Tea processing 6.3 1.8 8.1 Rosin production 0.8 0.2 1.0 Research, Training and TA 4.0 1.0 5.0 Incremental Working Capital 16.6 6.1 22.7 Base Cost 76.3 28.1 104.4 Physical Contingency 5.5 1.8 7.3 Price Contingency 7.3 2.7 10.0 Total Project Cost 89.1 32.6 121.7 Financing Plan: IDA 27.4 32.6 60.0 Provincial government 9.0 9.0 Municipal and prefectural governments 10.4 10.4 End-user contributions 17.6 17.6 Domestic loans 24.7 24.7 Total 89.1 32.6 121.7 Estimated Disbursements: Bank/IDA FY 1990 1991 1992 1993 1994 1995 Annual 5.0 16.0 22.0 9.0 7.0 1.0 Cumulative 5.0 21.0 43.0 52.0 59.0 60.0 Economic Rate nf Return: 39% --.. ... ............... CHIN JIANGXI AGRICULTURAL DEVELOPMENT PROJECT Table of Contents Page I. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A. Introduction .1 B. The Agricultural Sector .. C. Sectoral Objectives and Bank Lending . . . . . . . . . . . . . 4 D. Agriculture in Jiangxi ..6 E. Project Formulation and Rationale . . . . . . . . . . . . . . . 7 II. THE PROJECT AREAS .8 A. Location .8 B. Climate .8 C. Topography and Soils .8 D. Population and Land Use . . . E. Power and Transport. . . . . . . . . . . . . . . . . . . . . . .10 F. Research and Extension . . . . . . . . . . . . . . . . . . . . .11 G. Livestock Support Services . . . . . . . . . . . . . . . . . . .12 H. Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 III. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . .14 A. Project Objectives and Relation to Sector . . . . . . . . . . .14 B. Project Description . . . . . . . . . . . . . . . . . . . . . .14 C. Detailed Features. . . . . . . . . . . . . . . . . . . . . . . .15 D. Status of Project Preparation . . . . . . . . . . . . . . . . .22 E. ImplementaLion Schedule . . . . . . . . . . . . . . . . . . . .22 F. Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . . .22 G. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . .23 H. Procurement . . . . . . . . . . . . . . . . . . . . . . . . . .23 I. Disbursements . . . . . . . . . . . . . . . . . . . . . . . . .26 J. Accounts and Audits . . . . . . . . . . . . . . . . . . . . . .26 K. Environmental Impact . . . . . . . . . . . . . . . . . . . . . .27 IV. ORGANIZATION AND MANAGEMENT . . . . . . . . . . . . . . . . . . . .28 A. Project Organization . . . . . . . . . . . . . . . . . . . . . .28 B. Project Coordinating Committees and Project Offices . . . . . .28 C. Agricultural Development Corporations . . . . . . . . . . 29 D. Financial Management . . . . . . . . . . . . . . . . . . . .30 E. Execution of Project Works . . . . . . . . . . . . . . . . . . .31 F. Management of Production . . . . . . . . . . . . . . . . . . . .31 G. Monitoring, Evaluation and Reporting . . . . . . . . . . . . . .32 This report is based on the findings of a preappraisal mission to China in October 1988 and an appraisal mission in January 1989. Members of the preappraisal mission were N. Hill, P. Harrell, W. Price, C. Rees (Bank/IDA), M. Pedini, T. Lohavisavapanich (FAO/CP), C. Benigough, C.L. Cheong, J. Hald, W. Roeland, and T.C. Tso (Consultants). The appraisal mission comprised N. Hill, P. Harrell (Bank/IDA), M. Pedini, T. Lohavisavapanich (FAO/CP), J. Hald, and W. Roeland (Consultants). V. PRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . .33 A. Livestock . . . . . . . . . . . . . . . . . . . . . . . . . . .33 B. Aquaculture . . . . . . . . . . . . . . . . . . . . . . . . . .36 C. Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 D. Tea . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 VI. MARKETS AND PRICES . . . . . . . . . . . . . . . . . . . . . . . . .38 A. Market Prospects . . . . . . . . . . . . . . . . . . . . . . . .38 B. Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 C. Marketing Channels . . . . . . . . . . . . . . . . . . . . . . .43 VII.BENEFITS, JUSTIFICATION, AND RISKS . . . . . . . . . . . . . . . .45 A. Production and Benefits . . . . . . . . . . . . . . . . . . . .45 B. Employment . . . . . . . . . . . . . . . . . . . . . . . . . . .45 C. Financial Analysis . . . . . . . . . . . . . . . . . . . . . . .45 D. Incomes . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 E. Economic Analyses . . . . . . . . . . . . . . . . . . . . . . .47 F. Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 VIII. AGREEMENTS REACHED AND RECOMMENDATION . . . . . . . . . . . . . .49 TABLES IN THE TEXT 3.1 Project Cost Summary . . . . . . . . . . . . . 3.2 Procurement Profile . . . . . . . . . . . . . . 5.1 Incremental Production . . . . . . . . . . . . 7.1 Financial Rates of Return . . . . . . . . . . . 7.2 Economic Rates of Return and Sensitivity . . . ANNEXES 1. Background Project Area Statistics (Tables 1 - 3) Project Feed Requirements (Tables 4-8) Distribution of Project Works (Table 9) 2. Cost Data Cost Summaries and Expenditure Schedule (Tables 1 - 5) Working Capital Requirements (Teble 6) Disbursement Schedule (Table 7) 3. Training and Technical Assistance 4. Financial and Economic Analyses Financial Analysis - 4 sows and 60 fattening pigs (Table 1) Financial Prices of Inputs (Table 2) Financial Prices of Outputs (Table 3) Financial Results (Table 4) Fish Production Households - Annual Net Income (Table 5) Selected Conversion Factors (Table 6) Economic Prices of Inputs (Table 7) Economic Prices of Outputs (Table 8) Feed Financial and Economic Price Structure (Table 9) Economic Price Derivation (Table 10) Economic Analysis - 4 sows and 60 fattening pigs (Table 11) Economic Analysis - Whole Project (Table 12) - iii 5. Operating Guidelines for JADC 6. Trade and Prices National Annual Net Trade in Principal Project Outputs (Table 1) Jiangxi Annual Net Trade in Selected Project Outputs (Table 2) Procurement and Retail Prices for Selected Project Outputs (Table 3) 7. Key Monitoring Indicators Livestock (Table 1) Aquaculture (Table 2) Tea end Forestry (Table 3) 8. Procurement List of Equipment (Table 1) List of Materials (Table 2) List of Vehicles (Table 3) 9. Selected Documents and Data Available in the Project File LIST OF FIGURES A. Implementation Schedule 2. Organization Chart 3. Flow of IDA Funds 4 & 5. Procurement Schedule LIST OF M&A IBRD No. 21453 Project Locations in Jiangxi CHIN JIANGXl AGRICU;,TLJUL DEVELCPMENT PROJECT I. BACKGROUND A. Introduction 1.1 The Government of China has requested Bank Group assistance .n financing an agricultural development project in Jiangxi Province. The main objectives of the project are to accelerate and diversify agricultural development and increase incomss and employment in the rural sector. The proposed project has components for pig and poultry raising, fisheries, tea rehabilitation, afforestation and agroprocessing and would be concentrated in three regions of the province--the Jitai Basin, Poyang, and Jingdezhen. The project was first identifiel in December 1987. It was prepared by the Jiangxi Provincial Government with assistance of an FAO/CP preparation mission in April 1988. A preappraisal mission visited the project areas in October 1988 and appraisal took place in mid-January 1989. B. The Agricultural Sector 1.2 Agriculture in China, including crops, livestock, forestry and f'isheries, provides sustenance to over one billion people; it is an important source of income for some 190 million farm families and accounts for about 30% of the country's GDP. Only about 137 million ha of China's land area of 960 million ha are arable. Farming systems are intensive with heavy inputs of labor, chemical and organic ierrilizers, small machinery and water. Nearly half of the cropped area is irrigated. Foodgrains occupy about 70% of the cropland and account for about one-third of total agricultural output. This intensive system of production has allowed China to meet the basic food requirements of its population, about 22% of the world's total, and to produce an increasingly sophisticated mix of cash and commercial crops, from less than 11% of the world's arable land. 1.3 China's decade-long rural reform program has revitalized the agricultural sector through improved work incentives, decentralized decision-making, better exploitation of comparative advantages, decontrolled agricultural markets and prices, and technological modernization. The program has resulted in impressive growth of income and production and a remarkable diversification in family diets. The gross value of agricultural output (GVAO) increased by 77% in real terms during 1978-87, at an average annual rate (6.5%) more than twice that of the previous 25 years (3.2%). Grain production, one of the key indicators of China's agriculture, increased by about one-third (100 million tons) over the same period. However, several major problems have emerged in recent years. First, state investment in agriculture has declined, dropping from Y5.3 to 3.7 billion during 1978-86, or from 10.6% to only 3.1% of total state capital construction. The downturn in rural investment has contributed to increasing bottlenecks in infrastructure (roads, power, and market facilities) and a minor decrease in irrigated area. Second, of great concern to the Government, a 5% decline in giain production has occurred since the record harvest (407 million tons) of 1984. Most observers ascribe this development to continuing rigidities in the pricing of grain while liberalization of markets for high-valued products (fruit, meat, fish, eggs, milk, silk, shrimp, etc.) provides much stronger income incentives for farmers. 1.4 The Government has responded to these problems by reversing the decline in state investment in agriculture which was increased to Y4.4 billion in 1987, with priority given to the rehabilitation and. expansion of irrigation. Objecctves for agriculture during the Plan period are to maintain per capita grain :onsumption at current levels while continuing to diversify the overall output structure to accommodate chaneing consumer preferences. This means increasing food grain output to 450 million t by 1995 to match population growth, boosting production of fruits, vegetables, meat, poultry, fish and cash crops, and exoanding output of processed products. To achieve sector growth, Chinese planners, on the one hand, are cailing for technology improvement and maintaining sown area at current levels, ard on the other, are supporting a series of systemic reforms which include: (a) allowing diverse forms of enterprise ownership and management to encourage growth of rural agroprocessing, transport, and commerce; (b) establishing legal guarantees to farmers regarding land use rights and ownership of assets; and (c) expanding marketing channels and introducing some measure of price decontrol. The Bank Group is supporting these reforms through a Rural Sector Adjustment Loan (Ln. 2967/Credit 1932-CHA). Livestock 1.5 Livestock comprised 15% of the GVAO in 1987. Of total meat production, pigs contributed about 88%, poultry 8%, and other livestock only 4%. As part of the government's efforts to improve cotiiumption patterns, targets have been set ror liveqtosk production. By the year 2000, the contribution of the livestock subsector to GVAO is projected to rise to 25%. The major means to achieve production targets would be more efficient production and management, a higher level of grain feeding, pasture improvement for ruminants, and the use of animals with superior genetic characteristics. Technical feasibility would depend on the availability of grain, grass and protein supplements; sustainable farmer incentives would also need to be introduced and maintained. 1.6 China is the world's largest pig producer. The year-end inventory for 1988 was 342 million head, the number of slaughtered pigs 275 million, and total pork production about 19 million tons. These figures indicate a recovery from the temporary downturn which occurred in the pig industry in late 1987 due to low state procurement prices and high feed costs which caused farmers to rush pigs and breeding sows to slaughter. The central provincial governments undertook a number of policies to increase pi duction, such as raising procurement prices for pork 30-40% to levels mparable to free-market prices and allowing farmers selling pigs to the state to buy grain, fertilizer, diesel fuel and compound feed at low state-fixed prices. From 90-95% of production is accounted for by farmers raising one to four pigs, with thosa raising -3. one or two generally able to rely solely on non-purchased feed resources (plant and food waste) and thus not affected by feed prices. Given the relatively low level of technology, poor feed quality and inferior breeds being raised by most producers, an average of 5 kg of feed is required for 1 kg weight gain versus a 3:1 ratio on modern Western swine operations. Government officials generally believe that a pig (live weight) to grain (paddy) price ratio of 5:1 is the minimum necessary for profitability: the prevailing ratio is 7:1. The Government -ontinues to en.co-rage breeding of lean meat pigs (for both domestic and export markets) through establishment of lean pig production bases, and in 1987, 21% of slaughter was lean meat pigs. Lean pig production is dependent on production of formulated feed with adequate amounts of both protein and energy components and availability of imported breeds for crossing with local breeds. 1.7 Poultry production, about 75% chicken, 20% ducks and the rest geese and other minor birds, is increasing very rapidly. Output of poultry meat rose to a record 2.3 million t in 1988, a 13% increase over 1987. The government has given special emphasis to poultry development because of poultry's superior feed conversion ratio relative to other livestock. Egg production is also expanding steadily. China produced nearly 6.5 million t of eggs in 1988, up 8% over 1987 levels. Fisheries 1.8 China is the world's largest producer of freshwater fish and the third largest fishing nation afte; the U.S.S.R. and Japan. The subsector, including culture and capture production from marine and freshwater sources, accounts for about 4% of the GVAO. Total aquatic production (including fish, shrimp, shellfish and seaweed ptoduced in Chinese waters and harvested by Chinese vessels in other waters through joint ventures with other countries) increased from 5.3 million t in 1983 to 10.5 million t in 1988, an increase of 98%. The structure of production was freshwater culture (36%), freshwater capture (6%), marine capture (46%) and marine culture (12%). While marine capture fisheries contribute the greatest volume, the high value fish, particularly off the China coast, are facing depletion and increasing amounts of the catch are made up of small fish with low economic value. Government policy since the early 1980s has aimed toward shifting the production structure from capture to culture fisheries by increasing unit output in the Yangtze and Pearl River deltas, areas where there is a long tradition of aquaculture, and by developirng wasteland to expand the area for fish farming. The existence of extensive unutilized land suitable for culture fisheries and the fact that significant increases in yields may be realized through application of new technology and management methods led the Government to adopt in the early 1980s a program to expand annual fisheries production to 11 million t by the year 2000; with prospects of achieving this level by 1990, the target has been revised upwards to 18 million t. A major unknown in the future development of aquaculture is the extent to which it will be economic to feed concentrates as opposed to more traditional feeds such as grass and pig and poultry manure. It is likely that a substantial amount of the incremental feed requirements of aquaculture must come from concentrates, which may be justified by rising real prices for aquatic products. 4- Forest= 1.9 The forest subsector accounts for 5% of GVAO and provides employment for some 2.2 million workers. Present forest cover is about 12t, which translates to a standing wood volume of 9.1 m3 per capita--compared to the world average of l0 m3 per capita. With annual wood consumption of some 400 million o3 and annual incremental forest growth of 300 million m3, China has had to increase imports, overcut natural forests, and open roeote forest stands. Since the gap betweon supply and demand is constraining develop-ent and jeopardizing China's remaining forests, the Government has drafted a plan to increase timber production and reduce imports; this plan calls for afforestation of 8 million ha by the year 2000. 1.10 Tea production grew at an an annual rate of 6.1% over the 1983-88 period to reach 540,000 t in 1988. About 80% of production is green tea, and 20% black tea; however, only 20% of the green tea is exported and about 90% of the black tea, mainly to Eastern Europe. Domestic consumption of about 0.3 kg per capita is expected to rise to at least 0.5 kg by the year 2000; this would require production of about 670,000 t to fill domestic demand. With about 1.1 million ha planted and 80% of this area picked, yields of refined tea are less than 0.6 t/ha--a low rate compared to other temperate climate tea producing areas where yields are in the range of 1.5 - 2.0 t/ha. C. Sectoral Objectives and Bank Lendine 1.11 For fisheries and livestock development, the Government's objectives are to increase production for domestic consumption and exports and provide an additional source of income for the rural population. High-valued aquatic products (shrimp, eel, pearls) and livestock products (meat, wool) are being targeted for export markets. The aquatic development strategy emphasizes establishment of fish culture systems on land unsuitable for crop cultivation--freshwater culture on swamps, floodplains, marshes and poorly drained interior land and marine culture on coastal lowlands, shoals and mudflats. The livestock development strategy emphasizes the provisior of superior breeding stock and good quality feed, industrial (stall-red) management systems, pasture improvement and development of new pasture species, the establishment of processing plants, and the provision of supporting services such as scientific breeding (with greater use of artificial insemination) and improved veterinary services. 1.12 The main objectives of the forestry subsector are to produce and supply timber in the most cost effective way and to substitute for rapidly growing imports. Since the rapid increase in forest production envisioned under the Seventh Five-Year Plan is critically important for the Chinese economy and since its earlier programs for plantation establishment have met with limited success, the Government has requested Bank Group assistance in providing access to state-of-the-art technology, expertise and funds to launch a massive commercially-oriented afforestation program and set up an institutional and managerial framework for efficient planting and silviculture. For this purpose, a Forestry Sector Loan is under preparation by the Bank Group for FY90. The Bank Group is also financing the Forestry Development Project (Cr. 1605-CHA), which is improving State Forest Farms in three provinces, and the Da Xing An Ling Forest Fire Rehabilitation Project (Cr. 1918-CHA). 1.13 The Bank's strategy for lending to Cnina's agricultural sector has supported government efforts to expand and diversify agricultural production through more efficient use of human and physical resources. Lending to date has covered a broad spectrum of geographic areas and subsectors, with an overall focus on land development, upgrading agricultural support services (such as research and credit), strengthening specialized product subsectors (such as tubber and fisheries), and, more recently, area development. The area development approach, which generally targets difficult development problems, combines in a single project assistance to land development and support services previously the subject of separate projects. Although focussed on specific geographic areas, many of the past projects represented initiatives of the central government. Over the past year the Bank Group has appraised a series of provincial projects in which the area development approach is being applied, but in which responsibility for proposing and preparing components and for repaying project funds rests with provincial governments and their lower level jurisdictions (prefectures, municipalities, counties and townships). This is a new direction intended to increase the efficiency of project management and execution and to expand the Bank's involvement in provincial agricultural investment programs, which now constitute the great bulk cf all investment in the sector. It takes advantage of increasing delegation of development planning and implementation to local government authorities in China, which has generated strong local commitment to the development of profitable and effective subprojects. The Shandong and Shaanxi Agricu-ltural Development projects have recently been approved by IDA. The present project would be the third of this series. 1.14 Implementation of most ongoing Bank Group financed projects in the agriculture sector is on schedule. Physical works have been completed on time or ahead of schedule. Disbursements for agricultural projects usually outpace those in other sectors. Notable features of all the projects are the high standard of project management, the enthusiastic participation of farmers and the effective collaboration of government authorities at All levels. The recently completed North China Plain Agriculture Project (Cr. 1261-CHA) demonstrates these features and also achieved economic benefits (an ERR of 56%) that far exceed those anticipated at appraisal. The second agricultural project in China, the Heilongjiang Land Reclamation Project (Cr. 1347-CHA) is now being completed. In only five years, it has succeeded in reclaiming 200,000 ha of bogs in an extremely difficult agricultural regiorn (near the Siber_an border) for the efficient production of wheat, corn and soybeans, while introducing modern large-scale mechanized land preparation and harvesting to China's northeast region. - 6 - D. Agriculture in Jiangxi 1.15 Jiangxi Province is located about 300 km inland from the southeast China coast, bounded by Zhejiang and Fujian provinces to the east, Guangdong to the south, Hunan to the west, and Hubei and Anhui provinces to the north. The southern and western regions of the province are mountainous and runoff is carried north by five main rivers emptying into Poyang Lake and from there into the Yangtze River which forms the northern boundary of the province. The total area of the province is 166,700 sq km (16.67 million ha), of which 36% is mountainous, 42% hilly, and 22% flat land and water surfaces. The total cultivated area (1987) is estimated at 2.36 million ha of which 1.84 million ha are irrigated. 1.16 Reflecting a high degree of multiple cropping, the area presently sown is about 5.5 million ha, of which 67% is devoted to grain--mainly double-cropped rice, 12% to industrial crops and the balance to other crops. In 1987, agriculture accounted for about 29% of the gross value of output, 65% of the total labor force, and about 60% of provincial exports. Agroprocessing enterprises, depending on raw mat_,rials from agriculture, dominate the light industry sub-sector and account for 65% of its output. Jiangxi's population numbers 35.6 million, of which 82% are rural. In 1987 prices, per capita income of the farming population was estimated at Y429, about 7% lower than the national rural average of Y463. 1.17 The provincial livestock sector is dominated by household production units raising pigs and poultry as a sideline to take advantage of family labor, excess grain and crop by-products, mainly rice straw and bran. It is estimated that individual households are responsible for more than 85% of pig production, specialized households about 9-10%, and state farms about 5%. Most rural families generally have 1-2 pigs and about 10 chickens or ducks. In 1987, the year-end inventory of pigs was a record high of 13.9 million. Growth to slaughter weight (90 105 kg) is slow, due to reliance on forage arnd low energy rice by-products. Poultry number 72 million and annual egg production under household production units is little more than 100 eggs per layer. Cattle and buffalo are used mainly as draft animals. Sheep numbers are very small. 1.18 Total fisheries production in 1987 was 225,800 t, representing a 17% increase over 1986. The province is endowed with a large number of streams, lakes and reservoirs and has a total breeding area of 254,000 ha. Poyang Lake covers some 5,000 sq km and is the largest freshwater lake in China with more than one hundred different fish species. Jiangxi is not considered to be at an advanced level of aquaculture development; modern pond culture practices have been introduced only recently (in part through the Freshwater Fisheries Project, Cr. 1689-CHA). Natural conditions in Jiangxi are favorable for freshwater pearl cultivation, and skilled workers have mastered the selection of the appropriate varieties of freshwater mussel and the delicate technique of tissue implantation for culturing pearls. 1.19 Forest cover in Jiangxi, according to the latest (1983) forest inventory, is about 33% or 5.5 million ha, comprising nearly 4.4 million ha of natural forest and 1.2 million ha of forest plantations. Another -7- 2.85 million ha are classified as "barren hills suitable for forestry." Between 1975 and 1983, however, total forested area diminished by 0.6 million ha due to overharvesting. Since then, the Bureau of Forestry (BFO) has instituted strict controls on felling and extraction, and wood output has declined from 3.0 million m3 in 1980 to 2.5 million m3 in 1987. Jiangxi's year 2000 targets are to increase forested area from 5.5 to 9.1 million ha (cover rate to increase from 33% to 54%), expand the standing volume of timber from 253 to 360 million m3, and increase the annual growth rate of trees from 5.8 to 7 percent. Chinese fir (Cunninghamia lancelota), Masson Pine (Pinus massoniana), slash or wetland pine (Pinus elliottii) and mixed broadleafs are the main tree species spread throughout the province ResinLI is now tapped only from Masson pine and some 15,000 t of its total output of 35,000 t is exported to Japan, Hong Kong and Western Europe. Slash pine, which is considered suitable for soil conservation in red soils, can also be tapped for resin, producing higher yields and better quality than that of Masson pine. 1.20 Tea plantations cover about 59,800 ha, of which 2,800 ha are classified as immature and 13,000 ha as well beyond economic productivity, thus leaving 44,000 ha of productive tea which accounted for the production of 17,000 t in 1987. About 75% of production is green tea, while 20% is black tea and 5% Oolong. Yields are low at 400 kg/ha, while the national average is 630 kg and the world average is 1,125 kg. Only 6,700 ha or 15% of the total area could be considered as economicallv viable, producing above the bench-mark yield of 750 kg/ha set by the Ministry of Agriculture (MOA). Though natural conditions in these areas are suitable for tea cultivation, yields are low because of poor cultural practices, inadequate plant renewal and inefficient processing. Tea production is mainly concentrated in three prefectures (Shangrao: 7,500 t, Jinjiang City: 3,000 t, and Jingdezhen City: 2,000 t). E. Project Formulation and Rationale 1.21 In formulating the project, the Jiangxi Provincial Government sought to select activities which would provide significant income increases for farmers, communities, and local governments; generate foreign exchange earnings; raise levels of technology and management (particularly in livestock, fisheries, and feed milling sectors) which would be dispersed throughout the project regions via the demonstration effect of higher incomes; and increase forest cover in the province. The project builds on the experience gained under the Nanchang component of the Freshwater Fisheries Project (Cr. 1689-CHA) and the Red Soils Project (Cr. 1733-CHA), particularly in the areas of smallholder livestock, aquaculture and project management. Lessons and experience gained from the proposed project could serve as a model for further agricultural development in the province. The Bank Group contribution, in addition to project design and finance, is in investment analysis to eliminate economically unviable components, a credit program design Lased on recycling funds to benefit increasing numbers of households, regional feed requirement planning for both project production and increases in production of livestock and fish, and technical innovation. particularly in relation to livestock breed improvement and feedmill and agroprocessing plant design and specification. LI Resin, tapped from living pine trees, is processed into gum rosin and gum turpentine for industrial use. -8- II. PROJECT AREAS A. Location 2.1 The proposed project areas are in the north, northeastern, and central parts of Jiangxi Province. Sites in the north are located in the low flood plain surrounding Poyang Lake. Activities in the Poyang area would focus on development of livestock, aquaculture, and agro-processing in 13 counties covering a gross area of 23,000 sq km and a population of 7 million. To the northeast. .n the hill country surrounding Jingdezhen city, the project would carry out tea and forestry components on about 7,000 ha in five districts which are under city administration. Additional project activities in livestock, aquaculture, forestry, and agro-processing would take place in central Jiangxi in the Jitai Basin to the west of the Gan River. The Jitai sites are located in eight counties and the city of Jian which altogether account for a gross area of 19,500 sq km and 3 million people. Project locations and area statistics are given in IBRD Map No. 21453 and Annex 1. B. Climate 2.2 The three project areas share a subtropical monsoon climate with dry, mild winters and hot, wet summers. Average daily temperatures range from a January low of 5 degrees C to 29 degrees in July. Annual precipitation averages from 1,900 mm in the north to 1,300 mm in central Jiangxi. Rainfall is distributed unevenly throughout the year with about 70% concentrated in the months of March through July. The frost-free period is about 300 days. Climatic conditions in the Jingdezhen area are good for tea production: the warm temperatures and frequent overcast skies and heavy fog during the growing season (April to October) are conducive to growth of high quality leaves. With respect to the slash pine plantations proposed for the Jingdezhen and Jitai areas, the prevailing climate is similar to that of the southern US where the tree originated. C. ToRography and4 Soils 2.3 The Jingdezhen and Jitai Basin areas are similar in topography: predominantly hilly terrain interspersed with broad valleys where rice is the main crop. Elevations in the Jingdezhen area range from 100 to 500 m above sea level; the Jitai Basin is slightly higher, ranging from 200 to 700 m. The Poyang area consists of a flat alluvial plain formed by the province's five major rivers. The Gan River, which intersects Jiangxi from south to north, flows into the Yangtze through Poyang Lake. The lake fluctuates in size during the year, growing to a maximum of about 5,000 sq km and a depth of 20 m at the height of the March-July flood season, and shrinking in winter by as much as ten m into several large, shallow lakes. These lakes are havens for waterfowl which concentrate on the shores with increasing density as water levels reduce during the winter. In 1983, the Ministry of Forestry (MFO) established a 22,400 ha wildlife preserve to the north of the project area near the confluence of the Gan and Xiu Rivers, primarily for the purpose of proLecting the wintering Siberian and other crane populations. l9- 2.4 Soils in the three project areas are mainly the visibly striking red soils. These soils are characterized chemically by their acid (low pH) condition and a relatively low nutrient status resulting from continuous leaching under the heavy rainfall typical of the regions where they occur. The soils are usually deep and well structured, except where erosion, either natural or man-induced, has truncated or otherwise impoverished the soil profile. With application of fertilizer, red soils are suitable for a wide range of tropical and subtropical crops, especially deep rooting perennials, or for forestry. D. Popuation And Land. Use 2.5 Poyang Lake Region. Some 1.4 million families live in the 13 counties in the Poyang project area, about 80% of them agricultural. Farm incomes are variable. 1987 rural incomes on a per capita basis for the three most populous counties, Poyang, Fengcheng, and Nanchang, were Y341, Y510, and Y517, respectively. The average farm household operates 0.4 ha, 80% of it irrigated. Of the total sown area of 1.4 million ha, two-thirds are planted with grain. Total grain production in 1987 was 4.1 million t or 585 kg/capita. Agriculture occupied 62% of 1987 GVAO (Y2.6 billion), livestock 19%, sideline activities 10%, fisheries 4% and forestry 2%. Livestock raising and fish farming have grown markedly in the Poyang area in recent years, by 10% and 20%, respectively, between 1981-87. The bulk of livestock income comes from meat production which has expanded rapidly in response to consumer demands. The greatest emphasis is on pork production: the 13 counties in the Poyang project _rea produced 177,000 t or over 20% of total provincial pork output in 1987. However, consumer demand for poultry and eggs is on the rise along with a marked preference for lean over fat pork. Consumption of poultry in Jiangxi as a whole increased 19% between 1986 and 1987. Major constraints to continued expansion of meat, poultry and associated products, are shortages of formula feed and the need for genetically improved breeds which are more efficient meat producers. 2.6 Fish farming at present in the Poyang area is primarily carp polyculture in lakes and artificial ponds. Area and production have increased rapidly since 1985; 1987 output stvod at 82,000 t, 36% of the total for the province. Yields from fish ponds average a low 1.7 t/ha. Yields from lake culture are much lower. Major constraints to better yields are lack of technical knowledge of modern pond culture practices and cage and enclosure culture, poor drainage facilities in an area vulnerable to flooding, and limited use of formulated fish feeds. 2.7 Jinedezhen. A total of 284,000 families, half of them engaged in agriculture, live in the five districts which comprise the Jingdezhen project area. The per capita income figure for Jingdezhen municipality as a whole was Y420 in 1987, close to the Jiangxi average of Y429. However, incomes in the tea-producing counties are considerably lower. An income survey of 187 tea households in the project area showed an average per capita income of only Y370. The average farm size in the Jingdezhen area is 0.2 ha with most of the sown area (68%) devoted to production of grain, primarily rice. Total grain output in 1987 was 435,000 t or 349 kg/capita, considerably lower than the rest of the province. Though tea plantations at present occupy only about 10% (6,600 ha) of all land under cultivation in Jingdezhen, the area's high altitude and humid climate provide ideal conditions for producing a high quality tea (variously known as Qihong, - 10 - I Gongfu, or Congou) noted for centuries as a Jingdezhen specialty product (see para 6.8). Yields in the best areas reach as high as 1.5 t/ha (refined); however, in most of the tea gardens, yields average only .36 t/ha due to inadequate plant renewal and poor management, particularly insufficient weeding and pruning, poor harvesting methods, and limited investment in nutrients. Wood prodtcts, mainly timber and rosin, are an important part of Jingdezhen's economy, accounting for 8% of GVAO in 1987. Some 29,400 ha have been afforested since 1983. 2.8 Jitai Basin. The average family landholding in the Jitai project counties is 0.5 ha, 90% of it irrigated. The area produces large quantities of grain, mainly rice; total 1987 output amounted to 1.5 million tons or 490 kg/capita. As in the Poyang area, in Jitai the availability of locally produced rice and rice products has given a boost to pig production. The 1987 year-end pig inventory was 890,000 head and pork output 60,400 t. At the same time--again like Poyang--the area must depend for its formula feed needs on feed grains and protein meals imported from other provinces. The climate and soils in the Jitai area offer considerable potential for expansion of tree plantings, particularly of the high-yield, fast-growing slash pine. Output of timber and rosin presently accounts for 8% of GVAO. Farm incomes in the Jitai counties are generally below average for the province. Per capita income figures for the three most populous counties, Jian, Suichuan, and Taihe, were Y430, Y358, and Y387 respectively in 1987. E. Power and TransRort 2.9 The provincial power grid serves the project areas and virtually all towns and most villages have access to electric power. As in the rest of China, the demand for power in Jiangxi exceeds supply. In 1987, total Jiangxi consumption was 10 billion kWh, up about 10% over the previous year. 2.10 The transportation network in Jiangxi consists of some 1,500 km of railways, 4,900 km of navigable inland waterways and 31,800 km of roads. There is also limited commercial air service out of the cities of Nanchang and Jian. Road network density in Jiangxi is slightly higher than the national average with major highways radiating out from Nanchang and linking the province with the neighboring provinces of Hunan, Zhejiang, Guangdong, Hubei and Anhui. However, the overall condition of the road network is poor. Less than 12% of Jiangxi's roads have asphalt or concrete surfacing and about 50% are dirt roads with limited utility during the rainy season. China's main north-south rail line cuts through the Jingdezhen project area; a north-south trunk line running between Nanchang and the Yangtze port city of Jiujiang is close to the Poyang area sites. Transport of coal, construction material, grain and fertilizer demand approximately 70% of Jiangxi's total rail freight capacity. 2.11 Project products will be transported by road, rail, and waterways, but the bulk of tonnage will be moved by truck along roads of varying quality which extend throughout the project areas. Road freight traffic in Jiangxi has grown at an annual rate of 15 to 2" percent which results in doubling every four to five years. Ninety percent of the truck fleet in the province consists of medium to large vehicles with capacities of greater than four tons; in 1988, this amounted to approximately 68,000 trucks. Over the last few years Jiangxi has lagged behind most other - 11 - provinces in per capita investments in upgrading the road network. The Jiangxi Provincial Highway Project (Credit 1984-CHA), recently approved for Bank financing, would provide urgently needed capacity in the heavily travelled corridor between the provincial capital, Nanchang, and the important Yangtze River port of Jiujiang. The ton-km of road freight required by the project after full development is estimated to be less than one percent of the present provincial road transport volume. F. Research mnd Exte.ngion 2.12 Jiangxi has in place a well-established research and extersion network which has functioned effectively in the past, but which is increasingly constrained by lack of modern equipment and staff trained in new technologieE. The leading agricultural research organization is the Provincial Academy of Agricultural Sciences, a locally-funded affiliate of the MOA's Chinese Academy of Agricultural Sciences. The Provincial Academy operates a network of prefectural institutes specializing in various aspects of crop and livestock research--e.g., at the provincial level, a Horticultural Research Insitute, Forage Experimental Station, and Veterinary Research Institute. A Red Soils Research Institute which has a staff or 50 researchers and 120 laboratory technicians has been responsible for basic research on red soils improvement and its facilities are being strengthened under the Bank-financed Red Soils Project. 2.13 In forestry, Jiangxi has in place the standard research hierarchy: a provincial institute which has ties to MFO's China Forestry Research Institute, prefectural or municipal research units and, in each county, a forestry station which organizes demonstration activities but is more concerned with extension than research. The larger state forest farms (SFFs)--notably Fengshushan--support demonstration/extension stations as well. The main research focus in forestry is on (a) developing improved nursery and planting techniques, (b) conducting trials on new species, and (c) disease prevention. Fisheries research is directed by the Nanchang Fisheries Research Institute which is financed by the Bureau of Aquatic Products. A new operation with a staff of only 15-20 people, the Institute is currently carrying out some experiments in fish nutrition, but its primary work involves demonstration and extension rather than actual research. Jingdezhen City has a Tea Research Institute under its agriculture bureau staffed with 11 technicians. A limited number of demonstration activities are being carried out on 10 ha of experimental area, but the research program is generally weak due to lack of financing for equipment and staff training. 2.14 Formal education in agriculture is the responsibility of such institutions as the Jiangxi Agricultural University, the Yichun Agricultural Polytechnic, and the Animal Husbandry and Fisheries Technical School. In the area of non-formal training, the county agriculture bureaus operate a number of technical training and advisory units, including an agro-technical extension station which advises on farm management and coordinates short-term training courses with units specializing in plant protection, soil analysis, animal husbandry, and aquatic products. Typically, the county agro-technical station has a staff of 15-20 people, most of them graduates of specialized secondary schools and above. There are on average 17 agricultural technicians per 10,000 farmers in the project areas. Stations routinely conduct week or two-week long training 12 sessions which are available to all farmers during the off-season. In Taihe County (agricultural population-396,000), for example, about 12,000 farmers are trained annually in courses held at county stations or affiliated units in townships and villages. While in some provinces the agro-technical extension stations have been set up as financially self- supporting units, in Jiangxi, these stations provide free services to farmers. Extension services in forestry are provided by a similar network of units under the forestry bureau. Forestry technicians total about 3,000 or one per 400 ha of plantation area. Tea extension work in Jingdezhen is provided by 160 technicians operating city, county, and township stations. G. Livestock SUpRort Services 2.15 Jiangxi Province was one of four sites selected for special study in the Bank's 1986 survey of China's livestock sector. Since the final report, China: Th& Livestock Sector (Report No. 6589-CHA), was issued in early 1987, a number of the problems raised have been addressed, both in Jiangxi and nationally; namely, farmers are now paid a price premium for lean meat pigs, minimum standards for energy and protein content have been applied to formula feeds, and disease reporting has become mandatory. Other changes--e.g., in scale of production, farm management, and hygienic standards in agro-processing--are under way and would be furthered through the proposed project. 2.16 Veterinary stations e-ist in most counties, townships, and villages. Staff are for the most part technical middle school graduates whose numbers are adequate but whose knowledge of animal nutrition and breeding is often weak. The county Agriculture and Animal Husbandry Bureaus offer a regular disease prevention program for poultry (Newcastle's disease, Marek's disease, cholera, bronchitis, parasites) and pigs (cholera, Alljesky's disease, foot and mouth disease, and parasites). Vaccination of both adult and young animals is a regular part of disease prevention. Farmers are encouraged to have annual blood tests for their pigs through the county laboratories. Tissue samples are also submitted from abattoirs. Disease reporting from the local veterinary stations up to the province level is now routine. Data for Jiangxi for 1983-87 show mortality rates for pigs of 2-2.5% and for poultry of 8-12%, which are within the normal range for pig and poultry populations. 2.17 An estimated 85% of Jiangxi's pigs are produced under backyard systems in which farmers raise only 1-2 pigs; pig raising specialized households (SHs) account for another 10%, and state farms for about 5%. The backyard producers rely primarily on food waste, green feeds, and crop byproducts in fattening their pigs. In Jiangxi, China's largest per capita rice producer, these scavenger pigs may also count on being fed locally produced rice and rice products. An estimated 34% of livestock feed in Jiangxi comes from rice bran which has about 90% of the energy value and 130% of the protein value of corn. In the last few yearL, particularly in response to increased demand for lean meat pigs, there has been a perceptible shift from backyard production to the more efficient, larger- scale SH and state farm systems which must rely un purchased feeds. Feed mill output has correspondingly increased, from 870,000 to 1 million tons, for example, between 1986-87. Increased milling has put pressure on available supplies of corn, wheat, protein meals, and other ingredients of the formula or concentrate feed product. Analysis of raw material sources - 13 - for J'angxi shows that in 1987 about half of the required corn, soybeans, and wheat were procured from outside, mostly from surplus-producing provinces in the north and northeast. As long as Jiangxi is willing to pay market or near-market prices for these imported feedstuffs, it is expected that supplies will be assured even in the face of transport shortages and other constraints to interprovincial trade that exist in China at present. Projections for raw material supplies are shown in Annex 1, Tables 4-6. 2.18 Feed industry managemnt is one of the key responsibilities of the Jiangxi Provincial Grain Bureau (others are grain and oilseed procurement, processing, and distribution). The Grain Bureau works with the Provincial Planning Comission on projections for feed requirements and arrangements for purchase of essential feedstuffs from outside the province. Under the Grain Bureau, the Jiangxi Feed Company has been organized as an independent accounting unit to supply feed grains to farmers and mills, and to manufacture and distribute compound feedstuffs. The Feed Company manages most feed mills at levels above the county and provides technical guidance to the county-owned mills. A Feed Inspection Station under the Grain Bureau is responsible for monitoring feed quality. A Feed Association, under the Provincial Planning Commission, is responsible for approving applications to establish township mills and advises the provincial government on feed quality and supplies. Quality standards for concentrate, formula and protein supplement feeds as set by the Grain Bureau are somewhat lower than those used in developed countries, but appropriately accord with current local conditions (Annex 1, Table 7). H. Credit 2.19 The Jiangxi branch of the Agricultural Bank of China (ABC) began operations in 1979 and has at present an extensive network of prefectural central offices (11), county sub-branches (100), township offices (1,520), and savings offices (460). Associated with ABC are some 1,870 Rural Credit Cooperatives. About 80% of ABC's total staff of 15,000 are employed in county sub-branches and savings offices, the main operational units of the ABC. Its financial resources come from deposits, borrowings from the Central Bank and equity, which at the end of 1987, amounted to Y3.6 billion, Y2.2 billion and Y700 million, respectively. Although loan disbursements have expanded rapidly in recent years, ABC's dependence on the Central Bank for most of its longer term resources has limited its ability to lend for slow-maturing investments such as tea planting or afforestation. ABC has been able to operate profitably making consistently good profits, which amounted to Y96 million in 1987, more than double the level in 1984. However, expansion of operations is constrained by a shortage of qualified staff experienced in loan management, particularly financial evaluation and market analysis. - 14 - III. THE PROJECT A. Proiect Obiectives and Relation to Sector 3.1 The main objective of the proposed project would be to assist the Jiangxi Provincial Government to accelerate and diversify agricultural development. The proposed project is intended to improve the productivity and incomes of participating farmers, communities and local govenments and move farm operations from a subsistence level to commercial orientation. It also seeks to utilize lands which are unproductive or unsuitable for grains and other crops and to take advantage of sunk costs by making additional modest investments to improve productivity. It would focus on three regions--the Jitai Basin, the Poyang area, and Jingdezhen--with the aim of developing replicable technical and managerial models and generating additional fiscal revenue which could be utilized for subsequent development of other regions. 3.2 Various levels of government are addressing the issue of underemployment which has arisen in rural areas since the communal system of agriculture management was replaced by the production responsibility system. Programs have been devised not only to develop rural industry but also to promote specialized households (SHs, currently defined as households which devote at least 60% of their time to a single farming activity, market 80% of their farm output, and derive 50% of their income from those activities). Though most of the project's production activities would be carried out by SHs, the livestock and aquatic poultry components, in particular, would provide greater opportunity for individual households to receive financial rewards commensurate with the success of their operations and to plan for expansion of their operations; the main constraint to expansion of livestock production in the past has been insufficient investment capital for larger herds/flocks and working capital for feed and labor. The SHs in the project have generally been selected for their demonstrated initiative and management capability and would provide models for other farmers to emulate. B. Proiect DescriDtion 3.3 The proposed project would support a livestock development program featuring pigs and poultry on hilly land unsuitable for grain cultivation, develop and intensify freshwater fish culture (in some cases, integrated with livestock activities) in low-lying areas and in lakes and ponds, rehabilitate low-yielding tea plantations, and establish new commercial forest plantations. Agroprocessing facilities would be established or improved to facilitate and process the additional livestock and agriculture production, to provide formula feed for the project animals, and to demonstrate the proper methods to organize, manage and finance upgraded processing and handling facilities. The project has a short-term credit element which would cover those initial investment costs which could be recovered within one production cycle, e.g. day-old ducks and geese, fish fingerlings, sows, feed, labor and other production costs. These funds would then be available for recycling to other project participants and altimately to expand the scope of production activities. The geographical distribution of project activities is shown in Annex 1, Table 9. The main features of the project are: - 15 - (a) Livestock - provision of breeding farms, on-farm facilities, and initial working capital for some 12,900 SHs to produce pigs, ducks, geese, and specialty chicken ; (b) Aquaculture - construction and improvement of about 2,058 ha of ponds, 1,279 ha of cages, enclosures and barriers, establishment of 200 ha of pearl farming, and provision of initial working capital for some 3,300 SHs; (c) Forestry - establishment and maintenance of 6,705 ha of slash pine for both pulpwood and resin production; (d) Tea - rehabilitation of 4,bOO ha of old tea gardens; and (e) Agroprocessing - establishment or improvement of feedmills and facilities for processing pork, aquatic poultry, tea, resin and raw materials for feedmills, and provision of initial working capital; and (f) Training and technical assistance - facilities and programs for staff development and training to upgrade research, extension and project management. C. Detailed Features Livestock 3.4 Pigs - Investments in the pig industry would promote increased production of crossbred pigs which have a higher lean-to-fat ratio than native breeds. The project would provide for the import of foreign breeds for parent stock, expansion of three existing breeding farms (the Provincial Pig Breeding Farm, the Shangrao Prefectural Pig Breeding farm, and the Jian Prefecture Breeding Stock Farm), establishment of a provincial production farm under the guidance of the Agricultural Bureau, and setting up about 3,800 SHs with breeding sows, pig pens and initial working capital. The production farm would serve to popularize advanced pig raising technology, meanwhile producing annually about 9,000 market pigs for Nanchang and export and about 1,000 breeding pigs for sale to SHs. SHs for this component would be selected from locales which have hilly or mountainous waste lands (precluding large scale development of grain crops) and are accessible to water, electricity and transport. 3.5 Two models have been proposed for the project: a 4 sow/60 pig model and a 12 sow/180 pig model. It is planned that about 3,500 Slls would have the smaller model and about 300 SHs, already experienced in pig production, the larger model. On-farm facilities would include sheds and pens for sows and fattening pigs. In addition, the project would provide initial working capital for one production cycle (six months) in order that farmers would be assured of funds for purchase of sows, feed, veterinary services and other expenses. Housing for the SHs would not be provided under the project; the ability to borrow for housing would be one of the criteria for selection. Farmers would be required to use Artificial Insemination (AI) for breeding their sows, and veterinary and AI stations would be established for each group of 30-50 farmers. In most cases, the SHs would be provided with 0.3-1.0 ha of undeveloped hilly - 16 - land, the purpose of which would be two-fold: development of unutilized land and provision of silage material, both as a supplement to and as insurance against inadequacy of feed supplies. 3.6 Poultry - The project would provide for establishment or expansion of 23 breeding farm/hatcheries (2 for egg ducks, 10 for local Ma ducks, 9 for large meat ducks and 2 for geese) and setting up 9,150 specialized households (3,950 for duck raising and 5,200 for gee:e) with poultry sheds and initial working capital for one production cycle. Technical services, including veterinary facilities, would be strengthened in all participating counties and state farms. Breeding farms would be equipped with incubators, hatchers and emergency generating plants and would be isolated as far as possible from other poultry flocks to minimize the danger of infection. Four production models have been proposed for the SHs: egg ducks - 1000 birds/500 day cycle; local Ma ducks - 1000 birds/120 day cycle; large meat ducks - 1000 birds/70 day cycle; geese - 200 birds/120 day cycle. The project takes advantage of the adaptability of the local Ma duck to feed on paddy rice as well as formula feed and of geese to feed on grass areas along channels and ponds, while introducing and encouraging development of large meat ducks which have a higher meat content and faster growth rate, but which are dependent on formula feed. In addition, the blackbone chicken breeding farm at Taihe would be expanded to supply parent stock for local farmers and finished chickens for commercial use. Aouaculture 3.7 This component has been designed to expand fisheries production by constructing new ponds on waterlogged areas uiith no economic potential for crops and increasing the unit output in existing ponds through simple improvements in structure. The project would include construction of 1,167 ha of new ponds and improvement of 891 ha of existing low-yielding ponds, development of 1,100 ha of barriers, 276 ha of pens and 30,700 m2 of cages, establishment of 200 ha of pearl farming -rea and provision of initial working capital for some 3,300 households. 3.8 New ponds would be built in low-lying, waterlogged areas and provided with dikes for river flood protection and pumping stations for connection to drainage systems. The ponds are designted as modules of 1.2 ha, comprising 1.0 ha grow-out ponds and 0.2 ha nursery ponds. Separate inlets and outlets would be built, and the feeder canal would be common to two ponds. Ponds would be developed in aggregations ranging from 8 to 110 ha. Some 973 SHs would be involved, of which 638 would integrate fish farming with pig rearing and 266 with duck raising; the remaining 69 would produce only fish. 3.9 Pond improvement would take advantage of sunk costs and would be carried out by deepening existing ponds--requiring about 3,000 m2/ha of earthworks. Water supply, drainage and power would be provided where necessary and livestock sheds would be included. Some 891 SHs would be involved, of which 282 would integrate pond operations with pig rearing and 268 with duck raising; the remaining 341 would produce only fish. - 17 - 3.10 Fish barriers for extensive fish farming would be erected by fencing off protected bays in lakes and stocking fingerlings to utilize the natural productivity of the lake. The barriers would consist of 4 m wide net (3 cm mesh size) held in place by bamboo poles. Intensive farming would be carried out in 1 ha circular enclosures, likewise constructed with net and bamboo poles. Cages would measure 4m x 7m x 2 m and would be used for intensive monoculture of grass carp. Sinco experience with fish barriers, pens and cages is still relatively limited, the design of the technical packages (feed, cultivation, etc.) for enclosures and cages will be modified as the project progresses. 3.11 Pearl farming would be expanded on 200 ha, adjacent to another smaller freshwater pearl farm. The project would provide buildings and rearing infrastructure on land, equipment, production tools, initial rearing stock of implanted mussels and working capital. This activity would take place on a state farm and salaried workers would be hired for carrying out the operation. Forestry 3.12 The project would establish 6,705 ha of new plantations of slash pine with seedlings grown from imported superior quality seed; construct facilities for state furest farm staff, and strengthen BFO research capability. The project would provide seed, fertilizer, and labor to establish and maintain 2,246 ha of slash pine plantations on the Sanfang SFF in Jian County, another 2,246 ha on Taihe County's Tianmashan SFF, and 2,213 ha on the Fengshushan SFF in Jingdezhen Municipality. Selection criteria for planting sites include a soil depth of over 50 cm, soil gravel content of less than 20%, slopes under 30 degrees, and a minimum contiguoun area of 50 ha. Seedlings would be grown in SFF nurseries. Land preparation and planting would be caried out by hired labor, either from the SFF or nearby villages, on a contract basis. Holes would be dug six to eight months before planting to allow for weathering of the soil. Seedlings, encased in plastic containers, would be planted from January to March at a density of 1,650/ha (spacing of 2x3 m). The project would supply some 7,200 t of chemical fertilizer (35% F and 65% Urea) for use at the time of planting and for subsequent applications as required at weeding and thinning. To protect against fire, the project would provide 279 km of firebreaks (consisting of a 15-20 m strip of fire resistant trees) at a density of 1 km per 24 ha of plantation, and would construct 13 watchtowers and 5 forest service stations. The MFO plans to include Jiangxi Province in the Forestry Sector project now under preparation (para 1.12). To insure consistency of objectives and approach between the two projects, an assurance was obtained at negotiations that the standards and methods of afforestation of this project would be subject to consultation with the Bank Group from time to time; it was confirmed that the standards and methods applicable to the project's forestry component would be the Standards for Fast-Growing, High-Yielding Forest Plantations, developed by the Ministry of Forestry and modified for conditions in Jiangxi. 3.13 Tne project would provide for rehabilitation of 4,807 ha of seriously degraded and neglected tea gardens within the Jingdezhen area. - 18 - Tea production in the area has a number of comparative advantages, including favorable climate and soils and a long tradition of cultivation and processing of a specialty black tea. Under collective management systems in the pre-reform period, tea gardens were poorly maintained resulting in declining yields and low incomes for tea producers (para 2.7). The introduction of the production responsibility system has stimulated interest in tea productio- again, and, at the same time, there is a suitable technology for tea rehabilitation--mainly, severe pruning and regular fertilizer application. The project would provide credit for labor to cut back the tea bushes by pruning to ± 40 cm and for purchase and application of organic manure and chemical fertilizers. AgrODroroce ing 3.14 The objective of this component would be to build, equip and provide working capital to processing enterprises to provide inputs of formula feed for project livestock and fish, handle the increased production of raw materials from the project, demonstrate improved processing techniques, and act as a pilot for future processing investments in the province. The existing factories, many of which were established in the 1950s and 1960s, are inadequate to cope with the expanded production, technically outdated, and inefficient in design and operation. The proposed facilities are described below: (a) Feedmills - The feed supply system provided by the project would be based on a three-tier system for manufacture and distribution, as recommended by the Bank's Livestock Sector Study. Two existing large-scale modern mills in the province would deliver pre-mix feed/l to the two project concentrate/2 mills, which would in turn supply the 50 formula feed/3 mills located in the counties and townships. At full development, the annual formula feed requirement for project animals would be about 310,'30 t (Annex 1, Table 8). To meet these requirements, the project would include two large (20,000 t) concentrate feed mills and 50 formula feed mills--eight medium-sized (5,000 - 15,000 t) and 42 small (500 - 2,000 t). Total project demand would be met by eventually operating the mills for two shifts, by utilizing some spare capacity in the concentrate mills for production of formula feed, and by using some of the spare capacity in existing mills in the project area. With 270,000 t capacity available from project mills through double shifts, the 40,000 t balance could be met by existing mills. Since availability of raw materials has occasionally been a constraint to full utilization of capacity in the past (para 2.17), an assurance was obtained at /1 premix feed - a mixture of micro-elements such as vitamins and trace elements. Very small quantities of this material are mixed with other ground raw material and delivered to the concentrate mills. /2 concentrate - a mixture of premix feed (10% by weight) with protein materials (90% by weight) such as fish meal, soybean cake, rape seed cake. /3 formula feed - mixture of concentrate (in the proportions of 10% of final product weight for pigs, 15% for poultry, and 39% for fish) with "#energy" materials such as grains, corn, and soybean. - 19 - negotiations that the Jiangxi Provincial Government would ensure that sufficient funds would be available for procurement of raw materials to produce good quality feed for project livestock. (b) Fertilizer - establishment of an experimental facility to produce fertilizer at the Jiangxi Provincial Chicken Breeding Farm. The farm, which has 200,000 layers, 20,000 breeding hens, and an annual production of 120,000 commercial chickens, has the problem of disposing of 10,000 t of chicken manure each year. The new facility would provide for quick drying, sterilization, and processing into 7,000 t of raw material suitable for incorporation into coimercial feed for pigs and fish or use as fertilizer. Experimental evidence has shown that chicken manure is high in trace elements and can be used to fertilize some crops or, if properly treated, incorporated into livestock feed; a similar factory has been succissfully operated in Shanghai for three years. The project would provide civil works and equipment for drying only; the existing on-site feed mill would produce the livestock feed. (c) Bone meal - expansion of the Nanchang Canjiang Biochemistry Plant which produces bone meal, bone fat, peptone, and glue. Bone meal (tankage) is an important source of protein and can be subst4tuted in part for imported fish meal in livestock feed. It would utilize bone waste from slaughterhouses, estimated to be some 8,000 t annually. (d) Pork - expansion and improvement of an existing (30-year old) slaughterhouse (United Mea. Processing Factory located on the outskirts of Jian City) to increase capacity and improve hygienic conditions. The project would include rebuilding the slaughterhouse, constructing a new cutting/processing line, and installing a 20 t freezing room and 1,000 t cold storage unit. The facility would conform to standards and guidelines issued by the Ministries of Commerce and Public Health and the Inspection Bureau for Import and Export Commodities (under the State Council). These standards relate to site selection, design and layout of buildings, handling procedures for live animals and carcasses, and training and hygiene of workers. (e) Duck processing Dlants - establishment of five new processing plants and expansion of an existing plant to produce frozen duck, pressed salted duck, preserved eggs, and eiderdown. The project would provide for construction and equipping of the plants. Two large plants would be constructed, one in Shangrao and the other in Nanchang, each with annual production capacity of 3 million frozen ducks, 300,000 dried ducks, and 10 million preserved eggs. Two medium-sized plants would be constructed on Henghu and Hengfeng State Farms for producing 2 million frozen ducks each. A small factory would be established on Kangshang State Farm to produce 550,000 frozen ducks, 50,000 pressed salted ducks and 3 million preserved eggs. An existing facility, the Yilan Pressed Duck Plant in Suichuan County, would be expanded for producticn of 150,000 pressed salted ducks. Annual production of the six plants would be 580 t of pressed salted duck, 9,406 t of frozen duck, 30 million preserved eggs, and 120 t of processed feathers. - 20 - (f) Down Rroduc - expansion of the existing Suichuan Eiderdown Processing Factory (Jitai project area) to take advantage of the abundance of water fowl in the project area. The project would provide for construction of additional buildings and equipment (industrial sewing machines). With each duck providing 0.1 kg of feathers (8% down and 92% feathers) and each goose providing 0.2 kg (20% down and 80% feathers), the project water poultry component alone would provide 1,600 t of feathers. The eiderdown factory would clean the raw materials and manufacture quilts and garment&;. The feather handling capacity would increase from 250 t to 350 t resulting in the expansion of output from 45,000 garments to 100,000 quilts and 200,000 down garments, with much of the production for lucrative export markets. In addition to the Suichuan plant, there are four other down processing plants in the project area which could handle additional quantities of project-produced feathers. (g) I" - establishment of 47 new primary processing factories and expansion of seven refining plants to produce Gongfu black tea. The primary processing factories would each have an average capacity of 120 t/yr, which together with the existing capacity of 3,780 t/yr would be sufficient to handle project production. Each plant would be equipped with receiving, grading and storage areas, wilting troughs, rolling equipment, fermenting area, drying equipment and final storage facilities. The plants would be located within or close to the tea rehabilitation areas so as to minimize transport costs of fresh tea. Seven existing refining plants would be expanded and improved under the project to handle the increase from the primary processing factories. Equipment to be provided and installed would include drying, storing, rolling and screening machinery, tea cutters, sieves, shakers, grading, selecting and bagging/packing equipment. Since there are at present no box making facilities in the project area, the project would also provide for construction and equipping of a carton making plant with an annual production of 1.2 million tea cartons. (h) Resin - for processing resin into gum rosin and turpentine, a factory would be established in Jian County. The technology used is simple, involving two basic operations: cleaning to filter out impurities and steam distillation in which steam is used both to heat the resin and to facilitate fractionation by co-distilling with the turpentine vapors. The approximate composition of crude resin is 70-75% rosin, 15-20% turpentine and 5-10% debris and water. Thus the project plant's throughput of 4,080 t/yr crude resin is estimated to yield about 3,000 t of rosin and 740 tons of turpentine derivatives each year. The project would construct about 3,800 sq m of buildings including a boiler room, testing laboratory, storage area, and packing room. The plant would be equipped with dissolving and cleaning vessels, a filter, still, and rectifying tower. Raw materials would be provided initially by already mature slash pine stands in the Jian area, ultimately from the project slash pine planted at Sanfang SFF. Designs for the plant have been prepared and tested by the China Forestry Institute's Research Division for Chemical Industrial Uses of Forest Products. - 21 - Training and Technical Assistance 3.15 The project includes an extensive program of local and overseas training to strengtnen research, extension and project management capability in the project area and to provide specific skills training to participating households (Annex 3). About 20,000 months of local training would be provided. At the basic level, 12,400 months of training at the county training centers would consist of 15 day courses in animal husbandry, fisheries, farm management and other subjects applicable to specialized households and village and township technical staff. At a more advanced level, about 5,000 months of training at the prefectural stations would consist of one month courses for mid-level technical staff of the counties and State farms. In addition, 2,600 months of advanced training at the provincial and prefectural stations would be given by experts and scientists for mid- and primary-level technical personnel and extension staff. An understanding was reached at negotiations that the Project Office would encourage participation of farm women in project activities and that at least 25 percent of the trainees in the training programs for specialized households would be female. The project would provide for teaching equipment and construction or expansion of training centers in the participating prefectures, municipAlities, counties, and state farms and at the Jingdezhen Tea Research Institute. New construction would range from 500 m2 to 2000 m2 at each site and would include class rooms, laboratories, offices, dormitories, and dining halls. The county level facilities would be used for training farmers and specialized households; prefectural level facilities would serve primary and mid-level technicians attached to county and township extension stations. 3.16 A small number of technical staff would be given foreign language training and then sent abroad for three- to six-month non-degree training (about 57 months in total) in key subject areas. The project also includes 32 months of study tours to examine modern techniques of production, processing and distribution in advanced producing countries and 15 months, spread over the five-year implementation period, of the services of overseas consultants, who would be invited to hold workshops, seminars, and training courses in new technologies and management methods. Special emphasis would be given to training for staff of the Agricultural Development Corporations (ADCs) in financial management and market analysis in order to strengthen overall ADC performance in project execution. Where possible, e.g. for fisheries, an effort would be made to coordinate overseas training and study tours with technical assistance by contracting with an international training center to receive students and provide consultants to assist in setting up and carrying out research at provincial facilities. An assurance was obtained at negotiations that the training component would be carried out in accordance with a schedule acceptable to IDA. An understanding was reached that annually the Project Office would furnish to IDA for its review and comment a list of the overseas training and study tours proposed for the coming year, with the purpose, destination, criteria for participant selection, and names and titles of participants. Consultants would be selected under terms of reference agreed at negotiations. - 22 - 3.17 A contract research program would be initiated under the project to investigate specific topics aimed at improving efficiency, quality and marketability of project production. Contracts would be made with local scientific research institutes to carry out studies on such subjects as feed formulation for lean pigs and fish, vacuum packing methods for pressed salted duck, crossbreeding of egg and meat ducks, series formulation of feeds for different growth stages, color improvement of duck egg yolk, increasing egg production of meat geese, tea seedling selection and pest prevention, seedling selection for slash pine, and quality improvement of pearl cultivation. D. Status of Proiect Preparation 3.18 The project is at an advanced stage of preparation. Basic data have been collected for the livestock, fisheries, tea and forestry components; site surveys and soil tests have been carried out at all sites for tea and forestry. Sites for the aquaculture component have been approved by the provincial Bureau of Aquatic Products on the basis of surveys carried out by the county and prefecture engineers Site surveys and sol0. and water-quality tests have been carried out. Preliminary designs have been completed and final design and constri.ction drawings are being undertaken with assistance from Water Conserv,ancy Bureau engineers. Detailed construction drawings for civil works and buildings and engineering drawings for agroprocessing facilities have been prepared by provincial design institutes; cechnical and financial revieus were carried out by Bank staff during preparation and appraisal. E. Implementation Schedule 3.19 The project would be implemented over a period of five years beginning in late 1989 with completion in late 1994. The forestry, tea and agroprocessing components would take the full five years, while the livestock and aquaculture components are scheduled for completion in three years. A detailed implementation schedule is given in Figure 1. F. Cost Estimates 3.20 The total project cost in mid-1989 prices is estimated at US$121.7 million, with a foreign exchange component of US$32.6 million or 27% of the total. Taxes and duties are not included in the project cost; imported materials and equipment are exempt from duties. Cost estimates are based on quantities derived from the designs described in para. 3.18 and unit prices currently prevailing in the project area. Prices for materials and equipment are based on suppliers' quotations. Physical contingencies of 10% have been included for civil works and processing equipment and equal 7% of base costs. Price escalatiorn for both foreign and local costs when expressed in US dollars is based on annual international price escalation rates for all goods and services of 5.3% in 1989-90 and 4.1% in 1991-94; and when expressed in yuan, is based on price escalation rates of 15% in 1989, 10% in 1990-91, and 8% in 1992-94. Price contingencies would amount to 8% of total costs expressed in US dollars. Estimated costs are summarized in Table 3.1 and details are given in Annex 2. 23 - Table 3.1 - PROJECT COST SUMMARY Local For. Total Local For. Total FE Base (Y million) (US$ million) Cost Livestock Pig production 22.95 6.49 29.44 6.19 1.75 7.94 22 8 Poultry production 24.82 2.95 27.77 6.69 0.80 7.49 11 7 Aauaculture 49.71 3.60 53.31 13.40 0.97 14.37 7 14 Forestry 13.94 4.28 18.22 3.76 1.15 4.91 23 5 Tea Improvement 34.31 9.68 43.99 9.25 2.61 11.86 22 11 Processing Feedmrilis 14.85 29.12 43.97 4.01 7.85 11.86 66 1l Park processing 1.75 0.47 2.22 0.47 0.13 0.60 21 1 Poultry processing 17.69 14.18 31.87 4.77 3.82 8.59 44 8 Tea processing 23.31 6.57 29.88 6.28 1.77 8.05 22 8 Rosin production 3.06 0.86 3.92 0.82 0.23 1.05 22 1 Research. Training, and TA 14.86 3.83 18.69 4.01 1.03 5.04 20 5 Inc. Workin2 Cap. 61.57 22.77 84.34 16.60 6.14 22.74 27 22 Base Cost 282.82 104.P0 387.62 76.25 28.25 104.50 27 100 Phys. Contingency 20.54 6.61 27.15 5.54 1.78 7.32 24 7 Price Contingency 72.66 25.34 98.00 7.36 2.56 9.92 26 9 TOTAL PROJECT COST 376.02 136.75 512.77 89.15 32.59 121.74 27 116 G. Financing 3.21 Bank Group assistance would be an IDA Credit of SDR 46.2 million (US$60 million equivalent) and would cover 49% of total project costs, equivalent to 100% of foreign exchange costs and 30% of local costs. The Government would onlend the proceeds of the loan to the Jiangxi provincial government. The balance of US$61.7 million equivalent would be met from the provincial government (US$9.0 million), municipal and prefectural governments (US$10.4 million), enterprises and farmer contributions (US$17.6 million) and domestic loans (US$24.7 million). H. Procurement 3.22 Procurement arrangements are summarized in Table 3.2. Works vorth about US$51.4 million would be required for the project, consisting e' pond development for fisheries (US$10.5 million), afforestation (US$4.0 Tiillion), tea rehabilitation (US$7.1 million), site preparation for agroprocessing - 24 - facilities (US$1.2 million), and construction of buildings for on-farm livestock shelters and work sheds (US$15.6 million), processing plants and feedmills (US$11.4 million), and training centers (US$1.6 million). Except for the site preparation work for processing facilities and infrastructure, which would be contracted to local construction teams through contracts awarded following LCB, much of the civil works would be carried out by farmers (for the livestock and tea rehabilitation components) and village labor (forestry component). About US$17.1 million of civil works and buildings (33% of total works) would be contracted through LCB, using procedures accceptable to the Bank, and about US$34.3 million (67% of total works) would be carried out by farmers and village labor. The civil works and buildings proposed for LCB are scattered over a wide geographic area, phased over a five-year period, and would be too small to attract foreign contractors. 3.23 Goods worth about US$50.4 million would be required for the project. Whenever possible, machinery and equipvment will be grouped into contracts valued at US$200,000 or more and procured through ICB according to Bank Guidelines. This will include the main agroprocessing machinery (US$12.3 million), construction materials (US$9.2 million), vehicles (US$2.3 million), tea packaging materials (US$1.0 million), and fertilizer (US$7.2 million) worth a total of US$32.0 million (64% of the total value of goods). Oualified domestic manufacturers would receive a preference of 15% of c.i.f. bid price or the applicable custom duties, whichever is less, in the bid evaluation. Contracts for goods valued at less than US$200,000 will be purchased through LCB using procedures acceptable to IDA; this will include accessory equipment for feed mills, hatcheries, breeding farms and processing plants, farm tools, small boats, and locally available breeding stock, totalling US$11.2 million (22% of goods), for which local manufacturing and supply capacity exists. Fish meal (US$7.0 million) and imported breeding stock (US$0.2 million), for which there are a small number of suppliers, constitute the remaining 14% of goods and would be procured through Limited International Bidding. Bids would be d4rectly solicited from all known suppliers, both local and foreign. A detailed list of goods is given in Annex 8 and a procurement schedule, showing packaging and timing, is shown in Figures 4 and 5. Training and technical assistance requiring foreign exchange (US$0.7 million) would be procured in accordance with the World Bank's Guidelines for the Use of Consultants and financed by the Bank. The remaining training requirements would be contracted for locally and financed by the Government. The project includes US$16.1 million of incremental working capital for specialized households to purchase formula feed, hire labor, and acquire other inputs for one production cycle. This element of the project would be handled as short-term credit. 3.24 Preparation of bid documents would be carried out by China National Machinery Import and Export Corporation (CMIEC), which has carried out this function for previous Bank group projects. Bid invitation and evaluation and award recommendations would be the responsibility of the procurement agency in consultation with the provincial authorities. An understanding was reached at negotiations that the agency will use a standard document acceptable to IDA for all ICB procurement. - 25 - Table 3.2 - PROCUREHENT PROFILE Procurement Method Total Project Element ICB LCB Other N.A. Cost - - - - - - - (US$ million) - - - - - - - Works: Civil Works 0.0 4.1 '8.7 0.0 22.8 (0.0) (1.1) (6.0) (0.0) (7.1) Buildings 0.0 13.0 15.6 0.0 28.6 (0.0) (4.1) (5.0) (0.0) (9.1) Subtotal Works 0.0 17.1 34.3 0.0 51.4 (0.0) (5.2) (11.0) (0.0) (16.2) Goods: Equipment 12.3 8.5 0.0 0.0 20.8 (11.0) (6.4) (0.0) (0.0) (17.4) liaterials 17X4 2.7 7.2 O.C 27.3 (15.3) (2.0) (6.3) (0.0) (23.6) Vehicles 2.3 0.0 0.0 0.0 2.3 (2.1) (0.0) (0.0) (0.0) (2.1) Subtotal Goods 32.0 11.2 7.2 0.0 50.4 (28.4) (8.4) (6.3) (0.0) (43.1) Training and Technical Assistance: 0.0 0.0 3.8 0.0 3.8 (0.0) (0.0) (0.7) (0.0) (0.7) Incremental Working Capital 0.0 0.0 0.0 16.1 16.1 (0.0) (0.0) (0.0) (0.0) (0.0) TOTAL 32.0 28.3 45.3 16.1 121.7 (28.4) (13.6) (18.0) (0.0) (60.0) Notes: 1. Figures in parentheses are the amounts to be financed by the IDA Credit. All amounts include contingencies. 2. A prior Bank review would be required for all ICB packages (estimated to be about 70% of total value of goods). 3. Other includes farmer and village labor (Civil Works and Buildings), LIB (Materials), and overseas training and study tours and consultants (Training and Technical Assistance). - 26 - 3.25 In order to facilitate startup of the project, the Government has proposed to use up to SDR 2.3 million (US$3.0 million, 5% of the credit) for retroactive financing of expenditures made after February 1, 1989, for setting up about 100 specialized households in livestock activities and for carrying out 100 ha of pond development, 50 ha of afforestation, and 50 ha of tea establishment. These advance procurements are being done according to procedures described above and are considered necessary in order not to lose the momentum generated by the project planning and preparation. I. Disbursements 3.26 Disbursements for vehicles, equipment and machinery for agroprocessing and feedmill facilities, breeding stock, construction materials, laboratory equipment, fishmeal, and fertilizer would be at 100% of the foreign exchange costs of imported items or 100% of the ex-factory price of locally manufactured items and 75% of local expenditures for othei items procured 1ocally. Disbursements for overseas training and study tours and consultant services would be 100% of total costs. Disbursements for pond development, tea renovation, forest establishment, on-farm works, buildings and roads would be at 32% of total expenditures. 3.27 Disbursements would be made against statements of expenditure (SOFs) in the case of LCB civil works contracts, overseas training, study tours, contracts for goods and services costing less than $200,000 equivalent each, and work carried out by farmers. SOEs would be supported by progress reports showing physical quantities and unit prices (the latter would be updated annually by the Project Offices and reviewed by IDA). Supporting documentation would be retained by the Project Offices and be made available to Bank Group supervision missions. 3.28 In order to provide for efficient disbursement, a special account would be opened in US dollars in a bank acceptable to IDA with an initial deposit of US$5.0 million which represents the average estimated four-month expenditures. Applications for replenishment of the special account would be submitted monthly, or whenever the special account is drawn down to 50% of its initial deposit, whichever comes first. 3.29 The project is expected to be completed by June 30, 1994 and the closing date would be December 31, 1994. The disbursement experience in China has been very favorable and better than Bank-wide and regional averages. The project disbursement profile is in line with that for specific investment loans in China. J. Accounts and Audits 3.30 Records of expenditures on civil works, equipment and materials, and land development would be maintained by the Project Offices (PO) in the participating counties and prefectures. These records would be forwarded to the provincial PO which would prepare consolidated accounts including their own records of expenditures on civil works and agroprocessing equipment. The - 27 - provincial PO would, in turn, compile a complete report on project expenditures for submission to IDA. Assurances were obtained at negotiations that the provincial PO would maintain the consolidated accounts for auditing annually by the State Audit Agency and that the audited accounts would be submitted to IDA within six months of the close of each financial year. The audited accounts would include details of withdrawals from the Credit account made on the basis of SOEs and the auditors' opinion as to whether such withdrawals were against expenditures eligible for reimbursement by IDA. K. Environmental Impact 3.31 Since Poyang Lake is the largest freshwater lake in China, receiving the discharge of all five major rivers in Jiangxi, the environmental aspects of all project components have been reviewed with particular concern for their impact, not only on the immediate surroundings, but also on the lake. The Poyang Lake Management Bureau, with assistance from the World Wildlife Fund and the Asian Wetlands Bureau, is preparing a Poyang Lake Management Plan involving a review of potential environmental impacts from lake-area development activities and recommendations on measures to inaure compliance with national environmental standards. Officials from the Poyang Lake Management Bureau and Poyang Lake Migratory Bird Reserve do not believe the livestock and aquaculture activities would unduly threaten migrant bird populations. The provincial Environmental Protection Bureau (EPB) would review the Poyang Lake Management Plan relative to possible adverse effects of project activities on water quality and the increased risk of disease transmission to migrating birds, particularly those considered rare and endangered. On the basis of its review, EPB would develop environmental design specifications and monitoring arrangements for project activities (particularly the agroprocessing plants) to ensure compliance with national and provincial environmental standards; an understanding to this effect was reached at negotations. The provincial government's preliminary plans for measuring environmental effects of project activities w.50 1 ha rehabilitation 15 12 sows, 180 pigs >50 Primary tea factory 17 Provincial pig farm 32 Refining factory >50 Pig breeding farm (120 sows) 15 Packaging factory >50 Pig breeding farm (292 sows) 33 Feed processing Aquatic poultry 20,000 t concentrate mill 33 3,000 local-type meat ducks >50 15,000 t formula mill 29 3,000 large meat ducks >50 5,000 t formula mill 31 1,000 laying ducks >50 2,000 t formula mill >50 600 meat geese >50 500 t formula mill >50 Black bone chicken farm 15 Animal protein plant 40 Chicken dung fertilizer 20 Aquaculture New pond, 1.2 ha 38 Aquatic poultry & meat processing Improved pond, 1 ha >50 3.3 million duck plant 27 Nets, cages, barriers 14->50 2 million duck plant 22 Pearl culture 44 0.6 million duck plant 34 0.14 million salted duck 25 Forestry Meat processing >50 Plantations 24 Eiderdown >50 Rosin factory 50 7.5 The financial rates of return (FRR) for livestock production carried out by SHs is >50% in all cases. The FRR for aquaculture activities ranges from 44% to >50% (with the highest FRRs reflecting sunk costs of existing ponds), except for fish barriers which have an FRR of 14%, indicative of the experimental nature of this component. The tea rehabilitation and forestry components have FRRs of 15% and 24%, respectively. FRRs for the agroprocessing, feed mills and breeding farms range from 15% to >50%. These FRRs indicate a strong incentive for project participation. Loan recovery periods range from one year for duck and geese SHs and five years (including one year of grace) for pig SHs up to 10 years (including five years of grace) for aquaculture. Most other investments would be recovered in 10 years, with grace periods of one to two years, except for forestry which would have a 20 year recovery period, with ten years of grace. Analysis of the cash flow of fish farms and households has been carried out to estimate the minimum - 47 - annual contract fee which could be levied on contract households in order to recover the investment loan and operating expenses; this fee ranges from Yl,100 for fish barrier households to Y7,200 for pond operators integrating fish production with livestock raising. The financial results are summarized in Annex 4, Tables 4 and 5. D. Inomes 7.6 At present, the provincial average per capita income in rural areas is Y429 (US$116), compared to the national rural income of Y463 (US$125). At full development in year 2000, the per capita income of specialized households would average Yl,100 (US$300) and range between Y480 (US$130) and Y4,600 (US$ 1,260). The national per capita income is expected to rise to about Y2,000 (US$540) by the vear 2000. Thus, Lbout 85% of the project beneficiaries would still have lower than nationul average incomes, but higher than the critical consumption level (CCL) of US$135. Household incomes and enterprise profits are shown in Annex 4, Table 4. E. Economic Analyses 7.7 An economic analysis has been carried out for the project as a whole and for each type of production activity. A total investment cost cc US$83.2 miliion, which includes physical but excludes price contingencies, was used in the economic analysis. Investment costs associated with project management, research, training and extension (US$ 4.8 million), were included even though the benefits would extend to a large number of farmers outside the project. All economic values were converted to local currency at the official exchange rate expected at negotiations of Y3.71 - US$1.00. The economic analysis uses an economic wage rate of Y4.0/man day. Other prices, conversion factors, and a typical example of the ecornomic analysis are given in Annex 4, Tables 6-11. 7.8 Using these assumptions and discounting costs and benefits over 23 years, the project's overall economic rate of return (ERR) is 39%, ranging from 21% for pig production to 72% for iivestock processing. At a discount rate of 12%, which is considered to approximate the opportunity cost of capital in China, the net present value of the project is Y 717 million (US$193 million). The ERRs were tested for sensitivity to cost overruns shortfalls from project yields or prices, increases in the economic cost of labor, and increases in operating costs. The livestock components are sensitive to production costs, namely relating to feed--either cost or quantity increases; however, it is likely that feed conversion rates will be reduced as feed quality improves under the project. Switching values (value of the variable tested at which the NPV of the project, with benefits and costs discounted at 12%, is reduced to zero) and NPV elasticity (the percentage change in NPVs due to a one percent change in the key variable) were calculated. No single variable proved crucial to the economic viability of the project as a whole or any major production activity. ERRs are shown in Table 7.2. - 48 - Table 7.2 Economic Rates of Return (ERR) and Sensitivity Base Case -------- Sensitivi$y ------------- Component ERR NPV Benefits Investment Operating Cost /a (%) (Y m) -10% +10% +20% +10% Pig production 22 27 9 20 19 12 Poultry production 31 56 12 29 27 13 Fishery production 50 135 34 45 42 39 Feed processing 40 93 17 37 34 22 Livestock processing 72 261 53 68 64 59 Forestry 23 93 21 22 21 22 Tea 23 48 17 21 19 20 Whole project 39 713 35 36 34 26 /a For pigs, poultry, fish and feed processing, the greater part of operating cost is for feed. F. Risks 7.9 The project faces no unusual technical, organizational, or financial risks. For the livestock components, the Jiangxi Animal Husbandry Bureau has demonstrated its capability to recruit and train specialized households capable of succeeding in pig and poultry production and in serving as effective models for other farmers to emulate. There is some risk, however, that adequate supplies of formula feed would be not be available when required by project farmers. To minimize this risk, agreement was reached with the provincial government that adequate funds would be made available to obtain raw materials domestically or abroad. Organizationally, the project is using the Jiangxi Agricultural Development Corporation which was established under the Red Soils Project; its performance in handling the earlier project has been satisfactory and it is being further strengthened under the proposed project. VIII. AGREEMENTS REACHED AND RECOMMENDATION 8.1 At negotiations, assurances were obtained from the Goverrnment that: (a) the standards and methods of afforestation of the project would be subject to consultation with the Bank Group from time to time in order to insure consistency of objectives and approach between this project and the Forestry Sector Loan under preparation (para 3.12); (b) the provincial government would ensure that sufficient funds for the procurement of raw materials to produce feed of suitable quality would be available for project livestock (para 3.14 (a); -49 - (c) the training component would be carried out in accordance with a schedule acceptable to IDA (para 3.16); (d) the provincial PO would maintain the consolidated accounts for auditing annually by independent auditors acceptable to IDA and that the audited accounts would be submitted to IDA within six months of the close of each financial year (para 3.30); (e) the provincial government would ensure that project activities would be carried out in conformity with national and provincial environmental control standards acceptable to IDA (para 3.31); (f) the project office would be maintained with staffing, functions and responsibilities acceptable to IDA (para 4.3) (g) project funds would be onlent to borrowers and sub-borrowers at interest rates no less than ABC charges on subloans for similar purposes with similar maturities, such rates to be reviewed with IDA from time to time in light of the cost of the funds to the ADCs and their financial viability, as well as changes in ABC's interest rates (para 4.9); (h) the "float", i.e. any net cash accruals by the ADCs due to differences in timing between subloan receipts and repayments to the Government would be used by the ADCs only for financing development activities similar to those undertaken under the project (para 4.10); (i) the JADC would submit to IDA an annual budget and work program for new construction for review by November 1 each year for the following year (para 4.11); and (j) the ADCs would maintain a sample survey of farm households for monitoring of farm budgets and family incomes (para 4.15). 8.2 Understandings were reached with the provincial government at negotiations on the followirg: (a) the Project Office would encourage participation of farm women in project activities and at least 25% of the trainees in the training programs for specialized households would be female (para 3.15); (b) the Project Office would furnish annually to IDA for its review and comment a list of proposed overseas training and study tours for the coming year with the purposes, destinations, names and titles of participants and the criteria for their selection (para 3.16); (c) CMIEC would use a standard document acceptable to IDA for all ICB procurement (para 3.24); (d) the provincial Environmental Protection Bureau would, on the basis of their review of the Poyang Lake Management Plan, develop environmental design specifications and monitoring arrangements for project activities (para 3.31); e so 0 (e) the provincial government would submit a copy of the Poyang Lake Management Plan, when completed, to IDA for its review (para 3.31); (f) the local training component for project participants in the tea and forestry components would include a program specifically designed to educate farmers in pesticide use and proper methods of application, i.e. techniques, appropriate clothing and equipment (para 3.32); (g) county level ADCs would not receive project funds until duly licensed by the SAIC (para 4.7); (h) ADCs would retain sufficient spreads to cover their transaction costs, including a reasonable provision for bad debts (para 4.7); and (i) the provincial government would make available funds to meet reasonable working capital needs of project participants in subsequent years (para 4.12). 8 3 State Council approval of the Development Credit Agreement would be a condition of effectiveness of the Credit. 8.4 Subject to the above conditions, the proposed project would constitute a suitable basis for an iDA credit of SDR 46.2 million (US$60 million equivalent) on standard IDA terms with 35 years maturity. The borrower would be the People's Republic of China. JIMW XI AGRICaATURAL DEVEL0PPrT PNJ.CT P.oj.ct Ar.. Stati.tic (1967) I I I I I I Tots l I I To Iol lA9r eUlIU t | Totul I hu a/ I Iu Vy I Yluv of OfWhich (ouhtut Ilue) I Totl Of ih n _i_ A,.. ~~~ Total 1. W I Total 1 u. k j. Aq,i.lt.-)I-------I------- - JeI...dl' --ag--- Project Ioul.t onl ulat,on t uoold l Households IL.hOru.. I Output IAp,i.ul trel Forestry IL n'odl Sidel,n. Fi4b ry I ar4 I Cr4in Cah O.r 000) o I (0000) (000) (000) (00) (Yooo) (Y000) (Y0 00) (YOoo) (Y7000) (YOOO) 1 00S1.) | I ca ------- - ------…----…--------… -------… ---… - -------- --------- … … … ……------ --(I-------.- - … … - 1. Jitai alsin 3124.00 I 2662.00 j 557 00 j 521.00 j 1169.00 1 961260.00 I 566210.00 I 77560.00 153100.00 141060.00 211100.00 l76.00 42.60 6.30 0.60 ______ I I I I I i t I I Jimon County I 46500 431.00 I 102.00 1 65.00 ; 1o2.00 1 157350 00 1 96110.00 D 9600.00 1 2630.00 2140.00 3610.00 106.00 7.40 1.60 1.10 Jiohui County I 424.00 1 3 3.00 8 64.00 1 74.00 1 162.00 1 150230 00 13040.00 1 9170.00 2130.00 2270 .00 32000 62.00 60 1.00 1.JO Ytnqfon Cmunty 335. 00 30.00 1 40.00 1 59.00 ; 131 00 1.31120D.00 6.00 6. 2 0 0.40 I.0 Xisjis.g County 1 142.00 1 121. 00 30 1 24.00 I1 5200 1 66310 00 44360.00 1 620.00 | 104J0.00 400.00 130.00 46.00 2.20 0.J0 1.10 Shuichumo County j 451.00 1 417.00 j 37.00 8 62.00 1 165.00 1 107470.00 j 55620.00 1 14140.00 1j6 6 00 IO66.00 21D0.00 ".OD I 3.0 0.15 0.66 Anfu County 348.00 2 204.00 1 72 00 I 54-00 124.00 1113b O.00 j 65460. O 1110.00 16170.00 16060.00 l.40.00 67.00 6.20 0.70 0.70 Tsilb County 444 00 1 39600 0 5.0 76.00 j 165.00 137690. 00 60840.00 1 6170.00 j 26690.00 1060.00 40.00 1 04.00 6.70 1." 1. a Lianhua County | 211 00 1 163.00 44.00 1 40.00 8 67.00 1 5260.00 30310.00 1 4090.00 6190.00 ff63.O 740.00 1 30.00 2.20 0.10 0.70 Jian Olunicipality 274.00 1 14.00 1 63.00 I 27.00 1 61.00 I 4820 00 2720.00 | 690.00 1 6470.00 I6620.00 0.00 I 2900 2.10 0.40 0.40 2. Jingd.zhn City j 1245 00 1 629.00 1 294.00 1 150.00 3 375.00 1 290370.00 175690 00 135.00 I 47090.00 6640.00 1210.00 462.00 10.30 1.60 3.40 l_ -- - --- -- - - - I I I I II 3. Poyana Lak* I 6997 00 M 6002.00 | 1436.00 1 1137.00 1669.00 I 5575860.00 1609760.00 54360.00 149156000 269.00 1inU.00 1489.00 *2.00 14.66 #6.16 *nehang County j 873.00 77m.O 132.00 1 162.00 | 253.00 33716O.00D 256100.00 1770.00 1743)0.00 166l60.0 20600.00 212.00 13U40 0.00 6.90 Xinjia. County l 543.00 1 478.00 1 110.00 1 93.00 1 146.00 1 187230.00 127870. CO 2760.00 1 38M.00 11630.00 61J0.00 82900 I .40 1.40 J.00 Nnchan Suburb 200.00 l 176 00 43.00 34.00 1 94.00 1 7S060.00 4970000 1 2190.00 j 6470.00 I12410.00 1030.00 as 00 1.70 0.212 1.20 Anyi County S 590. 0D 520.00 I 16o00 9 69.00 1 154.00 1 251000 00 142020.00 1690.00 1 320.00 7040.00 10 .00 13600 I .40 1.3 2. 70 Ji.ngimn County 66 00 l 46.00 1 16.00 I 10.00 I 18.00 1 20860 00 7490.00 3100.00 1 290.00 6#0.00 100.00 6.00 | 0.40 0 04 0.#3 Wini district | 291.00 1 197.00 j 61.00 36. 00 1 6.00 I 6560. 00 35240.00 I 300.00 I 33710.00 660.00 60.00 24.00 1 1 60 0.10 0W60 Wgnn,an County I 302.00 1 265.00 I 66.00 1 52.00 1 61.00 113740 00 1 62160.00 l 2110.00 | 1663.00 27660.00 2640.00 55|00 S. O0 0.0 1.40 Yugon County | 6W. 00 I 6500 j 134.00 109 .00 1 160.00 i 190 00 1 111170.00 ; 2300.00 1 31440.00 61140.00 12170.00 16.00 j 7.60 0.10 3.00 Boy-n County 1 1064.00 1 959.00 1 206.00 1 171.00 1 2S5600 1 299490.00 1 207670.00 1 13S90.00 140J40.00 292-.00 14360.00 190.00 1 12.30 J.0 3.20 Dean County I 159.00 1 122.00 j 34.00 1 21.00 1 38.00 1 5600 001 3453000 1 1770-00 720.00 3620.00 1360.00 2I.00 1|.S0 0 40 O.30 Fngchn9g County I 1040.00 1 657 00 1 216.00 1 166.00 1 265 00 I 43010. 00 92900C.00 I 13600.00 1 65700.00 6770.00 lO.00 20.00 14.40 2.00 6 6' C-oon County I 661.00 I 575.00 1 145.00 ; 112.00 I 189.00 1 305550 00 19660.00 5720 00 240.00 1 60110.00 SO20.O DO 171.00 10.40 2 60 i 3 70 Qinqjiung County ; 477.00 1 367.00 | 103.00 | 72 | lSO 1990600 124060.00 2660.00 60270.00 162.00 U40.00 19.00 | .W 0 S | 1 Total I 11366.00 | 9267.00 I 2277.00 1606 00 3 3415.00 6160 2353660. 00 1 145600.00 1691760.00 14460.00 1260.00 2467.00 144.60 22.#6 46006 _____I …… II I ……… II…---- - - - - - I I---- - - __ _ _ __ _ _ _ __ _ __ _ _ __ _ __ _ _ _ _ _ __ _ _ __I _ _ __ __II_ _ _ __ I_ __ _ _ __ _ __ _ _ _ _ _ __ _ _ _ _ _ _ __I_ __ _ _ I_ _ _ _ _ ___I_ __ _ _ _ _ oxI CHINA JIANOXI AUPICJLTtItAL DEVELIENT PRO.IECT Project Ares Statistics (1967) ____ __ I-__I _ I _ I-____I__ I _ I--I I Total I Total I Of Which I Land I Land ICultivated lIrrigated I Dry Land I per I I Project I Ares I Lend I Land I I Capit I Tonship I illop I Aroe I (Km2) I (OOOho) I(OOOba)I (OOOb) I (be)I I I 1. Jital Basin 19674.10 1 803.2 I 266.40 3 32.70 1 0.09 I 179 I g525 I _____ _I I I I I I I I Jiln County I 3096.901 60.61 46.00 I 4.60 1 0.091 201 420 Jishui County 1 2747.20 I 44.0 I 40.00 I 4.00) 0.10 I 24 J27 Yongfrns County l 2696.10 I 36.3 32.60 l 2.70 1 0.11 2 20 I 269 Xlnjlong County I 1237.40 1 21.2 1 20.60 I 0.70 1 0.15 12 1 100 Shuichunn County l 3101.90 I 27.1 i 24.00 1 6.10 I 0.06 s JO I 371 Anfu County I 2793.20 I 38.1 I 34.50 3.80 I 0.111 241 351 m Tslhs County I 2665.40 1 68.1 l 43.20 l 6.90 I 0.11 1 25 1 '° I Lianhus County I 1062.10 1 14.9 1 13.70 1 1.20 1 0.07 I 17 I 207 | Jian Municipality I 132.90 I 13.6 I 11.90 I 1.00 I 0.06 I 7 I 112 2. Jingdezhon City 5 5247.90 I 70.00 53.60 1 10.60 I 0.06 3 39 1 626 …___ ____ ___ I I I I I I II 3. Poyang Lake 1 23067.60 1 571.40 1 484.80 I 259.00 1 0.06 1 266 1 am I I I I I I I I Nsnchsng County I 1363.40 1 72.60 1 67.90 1 4.60 I 0.06 1 24 1 J23J Xinjisn County 1 2337.90 l 65.60 1 47.60 1 6.00 I 0.10 I 19 I 2 I Nanchang Suburb I 566.10 1 9.40 1 6.60 1 2.60 1 0.03 1 12 1 134 Anyi County 1 066.60 1 19.10 I 17.10 I 2.10 1 0.09 I 1i s 126 Jingxin County l 1971.00 6 57.40 l 35.60 l 21.00 l 0.10 I 27 n 276 Wenli distrlct 1 278.00o 3.101 2.301 0.801 0.06 71 s0 Wennian County I 1135.60 1 21.40 I 19.60 1 1.90 1 0.07 1C I 199I Yuosn County I 2330.60 0 47.50 I 40.90 I 6.70 I 0.07 I 29 I 429 Boyang County I 4214.70 I 75.70 I 55.60 I 20.10 I 0.07 I I 547 Dean County I 926.90 I 10.70 I 9.10 I 1.60 I 0.07 13 I 114 Fengcheng County I 2644.70 I 87.90 I 73.70 1 14.20 I 0.0 32 514 Gaoon County I 2439.80 1 .60 I 53.70 1 148.00 1 0.10 I 19 I JOI Qinqjinng County 1 1266.30 1 42.70 1 34.70 1 0.00 I 0.09 1 15 I 2C4 Total l 47909.60 l 944.80 l 764.00 l 282.60 l 0.06 I U64 l 6746 1 _____ - - - - - - - - - - I I I I I I I I …I,-.----I--- … , …,I----_------- 04DA JIANCXI ACaRICILTUT AL DVELM FDJCCT POjeet Are Stti,ti,a (197) … I-- - - -- - - - - - - ---- I-- - -- - -- --- -- ---… - - …I … I … I -- -- - -- -- - -- -- - -…- … - - -------- A- I ----.-I- Ofsid. To%& I I A.of DiI i '. - I Iea-e I iI ,ue vs ic iw. --…7 "I o I Sr_n Tte i dr o. I I_n Toa I___________ Pgt~" )SloItebr I Aejt.. I r -___ Pm.19y i -ut .1 Prj ect I Area , Yild I re, I Are. I Yield Citt1. )1.-no.y I Pe P_oltry I PedrFreb | "Mt PDr' Mt iastle. sho Ew A- I (O.) OOT) '0OOT) I (heO) I (Y1000) ('00O) I (' 000)0)O ) CT) (T) I mod r4.t Ti -- - - - --- - …---…-- -- -i …---- -- -- --I…-…------ 1 Jta I_in-- I 4260 00 1 1lSD4 00 I S 00 1 2110 00 1 5160 00 1 4S 00 1 21 00 tl72.00 6240 ao031 22.00 1 U654.00 6618 .80 9I.6D 106.60 476.90 J.e C.o.ty 74 00 i 24 .00 | 9 00 i 260 50 i 756 00 | 64 00 i 213.00 1S 00 i D 00 i 4.00 I 1i.00 10647 0O .40 2.60D 66.s6 J i.. C=ty I 6.600 I 254 .00 400 122 90 1 201.00 I 51 00 1 190 00 14S 00 700.00 1.00 I16O4I.60 10173.80 a. DM9. 0 404.60 Y..qfeo Co-rty 1 52 00 17600 2 00 39.0 55.00 1 4600 16 9lCO 00 570 00 2.00 10.00 SD ai 4Q.0m0 101.2i mAO Xi aj C...ty I S2 00 1270 Q 2 00 44.70 1 100 00 1 27. 00 1 00S 54500 390 00 I 4.00 80600 390:6 0 N.OD It O huoid,ocn Coooty 1 39 00 I 18 00 1 1 00 1 660 20 1 16 100 33 00 I 185 OD 10 00 780 00 2.00 I M.70 767. so 66.70 I '.M0 .40 An.U Co.t, I 53 001 192.00 I S 00 I 149 40 1 542.00 1 62 00 13 500 64Q00 740 00 2.00 67.00 610.00 21.0 44.30 D .Q0 Tai Co..tvy t 67.00 1 210600 1 9.00 1 414.2n 1 1301.O0 1 79 00 192.00 146 00 1240.00 *.00 i107.70 9411.40 6a.70 806 161O.lU L ah- C~~~~~~~~~~~~~~~~T W 3 OU,W -3 Bf - 308~~~~~~~~~~ ANGZHEJIANG H~~~~~~~~~XJ U NN - 80 ' ; FUJIANANCHANG HUNAN (.b- , TOCO.nq.0/ /X / PROJECT" mw~~~~~~~~~~~~~~~~~~~~~~~~~~~~.~~~~~~~~p 2 f s j~~~- - /t C -) ~~~Jiangxi Province 27~~~~n,{_Oslzn- y ucu 20~~~~ AGRICULTURAL~Fee DEVELaOPp.M' ENT JU00 /t H .O.'n.ng -PROJECT@d -~~~~~~~~~~~~ -28 by _ '0Xln-. < h rO Cfwn xi n / f - \JH f + Z H 1ZNJiangxiProvinc AI.. ; 21- -~ XI& T" '206000 mdo.'I.. T. chx.. - - -- -' 0 2~~~~~~~~ ~~~~~~~~~~~~~~0,m 20 7 1 | Lnizn I -zS > i Tvlv n O Suichang {) IJ75~~~~A Lo Thsn 10pt3 j | 'bAen ,i ,_ T * l.p,I" O sA N- D O K | Aki L ~~~~~~T i .. V.- 4, lt Ftkng | ¢)X 25- ~ -' ; 'Ku _ * ~~~~~~~~~~~~~~~~~~~~~~~>~~~~~~~~~~~~~~~- C.f y seg / (wk"wi p_ __-"~~°p~ G"gNzbou t ~GUANG DONG KILOMETERS