Project Name: China-Loess Plateau Watershed Rehabilitation Project
Region: East Asia and Pacific
Sector: Rural development
Project ID: CNPA3540
Implementing Agencies: Ministry of Water Resources
Date Prepared: October, 1993
Projected Board Date: February 1994
Available Project Documents

1. Taming the Yellow River and reducing poverty in its middle reaches remain among the highest political priorities of Chinese leaders. Although a series of flood control structures are currently under planning, including the Bank supported Xiaolangdi Multipurpose dam, long-term sustainable flood control in the Yellow River basin will ultimately only be achieved by a significant reduction in the amount of silt entering the river as it flows through the Loess Plateau. Besides providing flood control for about 100 million people downstream, reducing poverty remains a tremendous challenge in an area where poor resource endowment and high population pressure combined with unsustainable agricultural practices have resulted in widespread poverty that has remained stubbornly difficult to deal with over past decades.

2. One of the regions most seriously affected by poverty is the Loess Plateau of northwestern China, which has been subject over centuries to inappropriate conversion of steeply sloped pasture land to crop cultivation, and severe overgrazing. The Loess Plateau covers some 640,000 sq km, of which about 430,000 sq km is subject to severe erosion. The sedimentation and the flood water that carries it to the lower reaches of the Yellow River is of extreme concern to China's people. In the past, flooding from the Yellow River has resulted in enormous loss in property and human lives. More recently floods have been brought under control through strengthened river embankments and the construction of reservoirs, but silt continues to be deposited in the lower reaches and the river bed is rising at a rate of about one meter every ten years. In some reaches the river bed is more than 10 meters above the surrounding farm lands. Thus, the flood protection dikes have to be frequently raised and strengthened at great cost. Also, the high silt content of the river during the monsoon season causes silting up of irrigation canals which often have to be closed during periods of peak sediment flow. About 1.5 billion tons of sediment passes to the lower reaches each year. Soil conservation programs over the past 40 years have covered about 120,000 sq km averting some 300 million tons of potential sediment, but because of population increases and intense farming pressures sediment runoff remains a serious problem. Of the total area only about 11% (80,000 sq km) produce 60% of the annual 600 million tons of coarse sediment entering the river (it is the coarse sediment which causes the problem in the lower reaches). The project areas lie within this area of high sediment production and it is estimated that the project will reduce coarse sediment runoff by an average annual amount of about 50 million tons.

3. Farm incomes of Loess Plateau farmers have to be increased (per capita incomes in the project area are as low as US$40); increases normally result from farm practices that are based on improved soil and moisture management. Reducing rainfall runoff from the fragile soils of the Loess Plateau will result in less erosion, improved soil moisture, reduced drought risk, increased farm production and incomes, and reduced flooding. Such objectives can only be achieved if farmers fully participate in the program - and because of their precarious position vis a vis the environment, they are prepared to make the effort to convert severely degraded slopeland into more stable uses, thus, enhancing production and long term conservation.

Lessons from Previous IDA Operations.

4. IDA-financed agricultural projects have generally performed very well in China. A similar IDA operation in Gansu province was carried out on time and achieved its objectives. Lessons from the Gansu project and experience from other donors clearly indicate that the proposed project approach can be implemented successfully and can be sustainable, provided the local communities are involved in planning, design and implementation. The Soil and Water Conservancy Bureaus at the provincial level and below have played a leading role in project implementation and supervision and have contributed much to the success of earlier projects.

Rationale for IDA Involvement.

5. The proposed project will provide an important boost to an ongoing effort by central and provincial governments to accelerate development in this poor region. Bank involvement would meet the need for large amounts of finance to expand the successful pilot projects currently supported by World Food Program and others. It would also stimulate the search for innovative technologies that could be introduced subsequently, establish effective data collection systems, and improve other support services (demand driven contract extension work) to farmers. The project would have a special role to play in assisting in the development of lower cost approaches to the long term stabilization of the Plateau, and in encouraging their replicability.

Project Objectives

6. The primary objective of the project is to increase agricultural production and incomes on 15,560 sq km of land in nine tributary watersheds of the Yellow River. A secondary objective -- to reduce sediment inflows to the Yellow River -- is achieved by locating the project areas in the parts of the Basin with the most severe soil erosion. Success in this area would incidentally augment the river management performance of the Xiaolangdi dam, prepared for Bank financing. Factors such as poverty level and strong leadership and commitment at the local government level were also considered in the selection of project areas.

Project Design

7. The project will a) create sustainable crop production on high-yielding level farmland and thereby replace the areas devoted to crops on erodible slope lands, b) plant the slope lands to a range of trees, shrubs and grasses for the production of fuel, timber and fodder, and c) substantially reduce sediment runoff from slope lands and gullies in the nine watersheds. The project will consist of (i) a land development and erosion control component, (ii) procurement of construction materials, equipment and vehicles, and (iii) an institutional development component including training, study tours, applied research and a monitoring and evaluation program.

Project Description

8. The project would include nine major watersheds in seven prefectures (including 2,133 villages) in three provinces and one autonomous region. The watersheds are in Gansu (Malianhe watershed), Inner Mongolia (Hantai, Hashila and Husitai watersheds), Shaanxi (Yanhe and Jialuhe watersheds), and Shanxi (Xinshuihe, He-Bao-Pian, and Weifen watersheds). The project's main components are summarized below:

9. Terracing is planned for 85,000 ha and will be carried out on slope lands of less than degrees. Terraces reduce runoff by 90% and the higher moisture retention results in much higher crop yields. During severe drought, the terraces can still be productive whereas crops on slope land will fail completely. Terraces also allow the production of a wider range of crops, including high value cash crops that cannot be cultivated on slope lands. In addition, terraces significantly reduce sediment runoff. The labor required for the construction of terraces is generally available in the project areas or can be augmented by the use of small bulldozers at competitive cost.

10. Irrigation is planned for 6,200 ha of lowlands mainly in Inner Mongolia for the production of high value cash crops. This will mainly consist of numerous small scale irrigation systems along river embankments, warping areas and lower level terraces along the river beds.

11. Afforestation is planned for 270,000 ha. This will consist of a mix of shrubs (170,000 ha) and trees (120,000 ha) that have been found suitable for the various soil and topography conditions in the projects areas. Afforestation will be contracted out to farmers for tending and for controlled grazing. This component will increase the forest cover in the project area from 14% to 42% and it will significantly reduce soil erosion. It will help to relieve a shortage of timber, forage, fodder and fuelwood in the project areas. Particular attention wil be paid to the management of newly established forest areas. Participating villages will develop an area management plan and assign individuals to control livestock grazing particularly during the first few years after planting.

12. Orchards are planned for about 27,000 ha, of which 20,000 will be fruit orchards (mainly apple) and 7,000 ha will be planted to Chinese date and several nut species. Excellent quality fruit can be produced in the project areas and domestic demand far exceeds production. Shaanxi province ranks third in apple output but first in apple quality in China. Yields can be doubled or tripled using already successfully tested planting material on larger scale. To increase the market value, apple storage caves will be dug in Shaanxi province.

13. Grasslands, to be established on 155,000 ha, will greatly increase the fodder supply and hence increase the safe livestock carrying capacity of the project areas.

14. Silt retention structures are located in the deeply incised gullies typical of the loess landforms. Their main purpose is to retain sediment, control floods and create land, but the larger ones also serve as sources of irrigation water before they fill with sediment. The benefit of the dams will be to create about 5,500 ha of land, provide irrigation water and at the same time virtually eliminate sediment runoff from the watersheds they control. A feature of these dams is that they can be raised to add additional capacity after they are full of sediment by building on the upstream reservoir bed. Land will also be formed on the larger rivers by warping, i.e. diverting sediment-laden flood flows onto waste land. Warping is a cost-effective way of creating high-quality land that can easily be irrigated, providing crop yields eight to ten times higher than slope land.

15. Institutional Development and Research and Technology Transfer. A network of training centers will be established and provide training to more than 100,000 farmers and project staff. The project will encourage a more demand driven approach to technology development and transfer. Research priorities will be determined by provincial and watershed technical panels focussing on the real user needs. On-farm research of an interdisciplinary nature including the design of livestock management plans and integrated pest management (IPM) techniques in fruit orchards will be encouraged. The project will invest in a standardized system of data collection and analysis to track regularly the physical, economic, social and environmental impacts of the investments. Other costs include support for survey and design work, management, equipment.

16. The total cost (end 1993 prices) estimate is US$9 million. This is subject to a final adjustment during negotiations.

Project Implementation

17. The project will be implemented by the Ministry of Water Resources through its Upper and Middle Reaches Bureau (U&MRB) and the provincial level Water and Soil Conservation Bureaus (WSCB) over a period of 8 years. The Central Project Management Office (CPMO) will be located in the U&MRB which will provide technical overview, financial management, and coordination of procurement, research activities and progress reporting. The provincial WSCBs will operate under the direction of a leading group headed by a Vice Governor and composed of representatives of all relevant agencies. This arrangement will be repeated at the prefecture and county levels. The county WSCB will work closely with the township/village leaders and households in the planning and design of the project. A detailed plan has been, or will be, prepared for each project village to specify the changes in land use and the measures to be adopted.

Environmental and Social Impacts

18. The project will lead to significant changes in land use. Large areas of waste and unused land carrying poor quality grass, shrubs and trees will be planted to more suitable and productive varieties. The overall effects of these land use changes will be to preserve the land resource, and increase productivity in an environmentally sustainable manner. The land under forest and shrubs will increase from 210,000 ha to 590,000 ha. Of the area of 430,000 ha presently devoted to field crops, about 110,000 ha of the more steeply sloping land will be converted to forests. The remaining 320,000 ha under crops will mainly be on higher-yielding lands which will be terraced to improved standards. There will be a small increase in the area of grassland, but much of the existing grassland will be replanted to grasses with higher livestock carrying capacities, and will be managed by individual farmers or farmer groups. The key dams and warping dams will intercept virtually all of the sediment from the areas they control, and this will have significant downstream benefits; the dams will eliminate destructive flash floods, provide water for irrigation and other uses, and the sediment deposited upstream of the dams will form high quality farm land.

19. The project has been planned and designed in close consultation with those villages with the right to cultivate the land being developed. The increased productivity is estimated to increase per capita farm incomes by 200% at full development. Thus, the project has a significant impact in terms of poverty alleviation. There is no relocation of population. The submergence areas of the dams and the unused land to be newly developed are uninhabited. The provinces and the Middle Reach Bureau of the YRCC have prepared detailed environmental impact assessments in accordance with the Bankþs guidelines. These EIAs demonstrate that the projectþs environmental and social impacts are wholly beneficial and there are no adverse impacts. It will be ensured that women will fully participate in all leading groups, research and technical panels and that priority access to training is granted to women farmers, particularly in female headed households.

20. There are no natural forests, grasslands or wetlands in the project areas, and thus wildlife resources are meager. The project will, however, through an increase in forest cover lead to a higher and more diverse population of birds and small mammals. The higher standards of crop management will not lead to any increase in the runoff of fertilizers (herbicides and insecticides are seldom used in field crops) since most of the crop land will be terraced. The expansion of orchards will lead to some increase in pesticide use, but an objective of the project is to disseminate techniques for safer and more efficient use of chemical controls.

Special Operational Emphases

21. The project directly contributes to poverty reduction in one of China's poorest areas. It is environmentally beneficial by reducing soil erosion and increasing the vegetation cover on an area of 15,600 sq km from 10 percent to 42 percent mainly through reforestation and establishment of shrubs and pastures.

Project Benefits

22. Benefits will be substantial in four areas: <0l>