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Document of

The World Bank

Report No: ICR2139

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IBRD-47730)

ON A

LOAN

IN THE AMOUNT OF USD100 MILLION

TO THE

PEOPLE‘S REPUBLIC OF CHINA

FOR THE

AGRICULTURAL TECHNOLOGY TRANSFER PROJECT

May 10, 2012

China and Mongolia Sustainable Development Unit

Sustainable Development Department

East Asia and Pacific Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective December 31, 2011)

Currency Unit = Chinese Yuan (CNY)

Chinese Yuan (CNY) 1 = USD 0.158

US$ 1.0 = Y 6.319

FISCAL YEAR

July 1 – June 30

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy

CPS Country Partnership Strategy

FA Farmer Association

FBPF Farmer Beneficiaries Participation Framework

GMO Genetically Modified Organism

ICR Implementation Completion and Results Report

IPM Integrated Pest Management

IRR Internal Rate of Return

M&E Monitoring and Evaluation

NGO Non-Government Organization

NPV Net Present Value

PAD Project Appraisal Document

PDO Project Development Objective

PMO Project Management Office

POCAD Provincial Office for Comprehensive Agricultural Development

SOCAD State Office for Comprehensive Agricultural Development

WTO World Trade Organization

Vice President: Pamela Cox, EAPVP

Country Director: Klaus Rohland, EACCF

Sector Manager: Mark Lundell, EASCS

Project Team Leader: Ulrich Schmitt, EASCS

ICR Team Leader: Ulrich Schmitt, EASCS/Josef Ernstberger, FAO

CHINA

Agricultural Technology Transfer Project

CONTENTS

Data Sheet

A. Basic Information

B. Key Dates

C. Ratings Summary

D. Sector and Theme Codes

E. Bank Staff

F. Results Framework Analysis

G. Ratings of Project Performance in ISRs

H. Restructuring

I. Disbursement Graph

1. Project Context, Development Objectives and Design ................................................... 1

2. Key Factors Affecting Implementation and Outcomes .................................................. 4

3. Assessment of Outcomes .............................................................................................. 11

4. Assessment of Risk to Development Outcome ............................................................. 17

5. Assessment of Bank and Borrower Performance ......................................................... 18

6. Lessons Learned............................................................................................................ 21

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners............... 23

Annex 1. Project Costs and Financing .............................................................................. 24

Annex 2. Outputs by Component...................................................................................... 25

Annex 3. Economic and Financial Analysis ..................................................................... 44

Annex 4. Bank Lending and Implementation Support/Supervision Processes ................. 52

Annex 5. Beneficiary Survey Results ............................................................................... 54

Annex 6. Summary of Borrower's ICR and/or Comments on Draft ICR ......................... 55

Annex 7. List of Supporting Documents .......................................................................... 59

MAP (IBRD 33846) .......................................................................................................... 60

A. Basic Information

Country: China Project Name:

Agricultural

Technology Transfer

Project

Project ID: P069862 L/C/TF Number(s): IBRD-47730

ICR Date: 05/10/2012 ICR Type: Core ICR

Lending Instrument: SIL Borrower: GOVERNMENT OF

CHINA

Original Total

Commitment: USD 100.00M Disbursed Amount: USD 100.00M

Revised Amount: USD 100.00M

Environmental Category: B

Implementing Agencies:

State Office for Comprehensive Agriculture Development (SOCAD)

Cofinanciers and Other External Partners:

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 11/05/2003 Effectiveness: 09/01/2005 09/01/2005

Appraisal: 09/20/2004 Restructuring(s):

Approval: 04/28/2005 Mid-term Review: 04/21/2008

Closing: 12/31/2010 12/31/2011

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Low or Negligible

Bank Performance: Satisfactory

Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Not Applicable

Quality of Supervision: Satisfactory Implementing

Agency/Agencies: Not Applicable

Overall Bank

Performance: Satisfactory

Overall Borrower

Performance: Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

Performance Indicators

QAG Assessments

(if any) Rating

Potential Problem Project

at any time (Yes/No): No

Quality at Entry

(QEA): None

Problem Project at any

time (Yes/No): No

Quality of

Supervision (QSA): None

DO rating before

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Agricultural extension and research 45 45

Agro-industry 20 20

Agro-industry, marketing, and trade 25 25

Information technology 5 5

Other social services 5 5

Theme Code (as % of total Bank financing)

Export development and competitiveness 17 17

Other rural development 17 17

Rural policies and institutions 33 33

Rural services and infrastructure 33 33

E. Bank Staff

Positions At ICR At Approval

Vice President: Pamela Cox Jemal-ud-din Kassum

Country Director: Klaus Rohland David R. Dollar

Sector Manager: Mark R. Lundell Mark D. Wilson

Project Team Leader: Ulrich K. H. M. Schmitt Iain G. Shuker

ICR Team Leader: Ulrich K. H. M. Schmitt

ICR Primary Author: Josef Ernstberger

Ulrich K. H. M. Schmitt

F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The development objective of the project is to develop and test innovative models for

agricultural technology transfer and application aimed to generate additional farm income

in high value markets with a potential for scaling up. By this way the Project aims to

give poor farmers a chance to participate in high value agricultural markets domestically

and internationally.

Revised Project Development Objectives (as approved by original approving authority)

Not applicable.

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Percent increase in farmer income of targeted farmers, particularly of resource

poor farmers.

Value

quantitative or

Qualitative)

Baseline of farmer

income provided in

individual sub-project

proposals at appraisal.

No target set at

appraisal.

Not

applicable.

Total discounted

Net Value Added

by stakeholder

group (in CNY

million and %

share): Farm

Households (478,

55%); Farmer

Cooperatives (196,

18%); Companies

(130, 27%).

Date achieved 06/09/2005 06/09/2005 12/31/2010 12/31/2011

Comments

(incl. %

achievement)

Based on data on economic performance of 91 sub-projects at completion, the

accumulated NPV generated by the project was computed as a practical indicator

to measure income increase and PDO achievement. The corresponding IRR is 26

percent.

Indicator 2 : SOCAD/POCAD investment in company-farmer partnership models in non

project sites in the province.

Value

quantitative or

Qualitative)

No baseline established. No target set at

appraisal.

Not

applicable.

More than 140

project-related

provincial

government policy

documents indicate

project-supported

innovations have

been mainstreamed

in agriculture

development

programs outside

the project areas.

Date achieved 06/09/2005 06/09/2005 12/31/2010 12/31/2011

Comments

(incl. %

achievement)

Indicator 3 : Percent of successful components/sub-projects as assessed by the Expert Team.

Value 0 70% Not 76%

quantitative or

Qualitative)

applicable.

Date achieved 06/09/2005 06/09/2011 12/31/2010 12/31/2011

Comments

(incl. %

achievement)

The Expert Team evaluated 108 out of a total of 113 implemented sub-projects.

49 were rated highly satisfactory, 50 satisfactory, 6 marginally satisfactory, and 3

unsatisfactory, which represents an overall success rate of 95 %.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Component 1: Adoption rate of technologies displayed in exhibition centers and

fairs by farm size.

Value

(quantitative

or Qualitative)

0 30% Not

applicable. 75%

Date achieved 09/08/2006 06/09/2005 12/31/2010 12/31/2011

Comments

(incl. %

achievement)

The adoption rate measured includes only farmers, which have received training

at the demonstration facilities. The adoption rate of visitors is unknown but likely

much lower.

Indicator 2 : Component 2: Percentage of successful farmer associations in service provision

to members as measured by member satisfaction rating.

Value

(quantitative

or Qualitative)

0 60% Not

applicable. 62%

Date achieved 06/09/2005 06/09/2005 12/31/2010 12/31/2011

Comments

(incl. %

achievement)

The indicator was measured as part of the satisfaction survey at project

completion. The benchmark for a satisfactory score was set at 4.0 on a scale from

0 to 5.0 and thus relatively high.

Indicator 3 : Percentage of successful sub-projects as assessed by the Expert team.

Value

(quantitative

or Qualitative)

0 70% Not

applicable. 88%

Date achieved 06/09/2005 06/09/2005 12/31/2010 12/31/2011

Comments

(incl. %

achievement)

113 sub-projects, which received financial support under the project, were

surveyed by the Expert Team. 95 percent of the sub-projects were rated

satisfactory or higher.

Indicator 4 : Component 3: Investments aligned with provincial policies and strategies.

Value

(quantitative

or Qualitative)

NA Satisfactory Not

applicable. Satisfactory

Date achieved 06/09/2005 06/09/2005 12/31/2010 12/31/2011

Comments

(incl. %

achievement)

As assessed by the Expert Team.

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual

Disbursements

(USD millions)

1 06/15/2005 Satisfactory Satisfactory 0.00





6 02/07/2008 Moderately Satisfactory Moderately Satisfactory 29.62




10 05/13/2011 Satisfactory Moderately Satisfactory 90.56


H. Restructuring (if any)

Not Applicable

I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

1. Beginning in the late 1990s, China‘s agricultural sector entered a phase of a

challenging structural transformation. Five major developments characterized this

transformation:

Agricultural Output and Incomes: Farm income growth had fallen alarmingly

behind overall income development. In response, the Government‘s policy

priorities shifted from concerns over food self-sufficiency and low consumer

prices towards promoting income growth for farmers and narrowing the growing

income disparity between rural and urban areas.

Natural Resource Pressure: During a phase of rapid agricultural output expansion

in the 1990s, farming had encroached on more fragile ecological environments

and had adopted unsustainable production practices, including inefficient use of

water, fertilizer and other resources as well as farming on steep sloping areas.

Changing Demand and Consumer Preferences: Fast growth in the non-

agricultural economy and rapid urbanization caused changes in food preferences

and consumption patterns. Demand for meat, fruits, vegetables, and other high-

value commodities (including ‗green‘ and organic food) increased sharply.

Agriculture and Food Enterprises and Processing Industry: Urbanization and the

differentiation in food consumption patterns demanded an advanced processing,

marketing and distribution industry. Enterprises in agro-food processing emerged

rapidly all over the country and were competing with small farmers on profit

margins in existing or newly emerging agricultural markets.

New Market Challenges and Opportunities: China‘s accession to the WTO

commanded a fast liberalization of trade practices, the further opening up of the

border, and improvements of production practices and food quality standards to

meet international standards.

2. At the time the project was conceived, the prevailing farming environment in

China was characterized by its highly fragmented production structure with tiny and often

unproductive farms. This farm structure made it difficult to: (a) expand the use of new

technologies and or access high value markets, which need a critical mass, farm size, or

contain other critical elements to reach economies of scale; (b) reach farmers through the

traditional extension system; and (c) for farmers to know about and respond effectively to

market signals. The slow transfer and adoption rate of modern technology, knowledge,

and innovation thus had emerged as a critical bottleneck for the structural transformation

and modernization of the agricultural sector in China.

2

3. Under this structural transformation agenda, the traditional government-based

research and extension system was seen as not being responsive enough to the new

challenges and opportunities and not effective enough to promote new agricultural

technologies and markets or cater to the increasing demand of farmers for knowledge.

On the contrary, it was considered supply-oriented as it was extending only the

government‘s programs and production targets while it had no effective means of dealing

with the constraints faced by small farmers in the adoption of new technologies or access

to new markets.

4. Bank involvement in China‘s agriculture transformation offered an opportunity to

help address some of the above mentioned strategic aspects concerning agriculture sector

modernization by providing a learning opportunity for developing innovative models for

public sector facilitation and support and for promoting new forms of public–private

partnerships in agricultural technology transfer. Recognizing that a single project would

only have a limited impact in a country as big as China, the project was designed as a

platform for the Chinese public agriculture development system to redefine and

strengthen the rationale for public funding and improve the efficiency and modus

operandi of public sector investments through partnership arrangements with private

sector players.

5. Within this context, the project design and objective were fully consistent with the

country‘s policies and with the restructuring and modernizing agenda in the agricultural

sector. The project supported all three of the Bank‘s Country Assistance Strategy (CAS)

themes, namely to: (a) improve the business environment and help accelerate the

transition to a market economy; (b) address the needs of the poorer and disadvantaged

people and lagging regions; and (c) facilitate environmentally sustainable development.

The project was also a key innovative lending operation in the Bank‘s strong and diverse

rural development project portfolio.

1.2 Original Project Development Objectives (PDO) and Key Indicators

6. The Project Development Objective was to develop and test innovative models for

agricultural technology transfer and application aimed to generate additional farm

income in high value markets with a potential for scaling up. By this way the project

aimed to give poor farmers a chance to participate in high value agricultural markets

domestically and internationally. The project‘s key performance indicators were: (a)

percent increase in farmer income, particularly of resource poor farmers; (b) change in

value-added and share of benefits to different stakeholders in supported commodity/value

chains, such that incomes for small farmers are increased; (c) SOCAD‘s investment in

company-farmer partnership models nationally; and (d) success factors and constraints

for different company-farmer models identified.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and

reasons/justification

7. The PDO and key indicators as approved remained unchanged.

3

1.4 Main Beneficiaries

8. The primary target audience and beneficiary of the project was the public sector

agricultural support and development system and, in particular, the State Office for

Comprehensive Agricultural Development (SOCAD) at the central level and the

corresponding Provincial Offices of Comprehensive Agriculture Development (POCAD)

at the provincial levels.

9. SOCAD is China‘s main funding institution for agricultural development and

disburses over one billion USD of central government funds annually of which two thirds

support the farming and primary production sector while one third supports agricultural

industrialization and agribusiness development. In addition, the participating farmers, in

particular smallholder farmers, of the four provinces of Anhui, Heilongjiang, Hunan and

Shaanxi as well as farmer associations and agricultural enterprises and related institutions

were to benefit from the project.

1.5 Original Components

10. The project was designed along three components (see Annex 1 for Project Costs

and Financing):

11. The Technology Transfer and Information Markets and Services Component

would support the establishment of technology transfer markets in or near the Yangling

Development Zone in Shaanxi to be used for exhibition and/or trade of agricultural

technologies and information. The technology market concept would build on modern

communication technologies and be designed to respond to farmer‘s demand for new

ideas, technologies and business opportunities.

12. The Promotion of Commercially Attractive Key Technologies and New

Institutional Arrangements Component included the following four sub-components: (a)

Researcher-Investor-Farmer Technologies which would involve the financing of

tripartite researcher-investor-farmer joint ventures with the objective of designing

partnership-based agriculture investment models; (b) Targeted Technology Transfer

which would finance agriculture technology transfers to farmer groups that did not have

adequate access to information, capital or decision making power to adopt new

technologies on their own; (c) Public Sector Support Programs which would finance

activities to enable and support the private sector to commercialize innovative and

successful technologies as well as directing public funds to technologies that had a clear

public goods nature but did not appeal to the private sector on commercial grounds; and

(d) Innovation Support Fund which would support a second round of proposals with

funds to be allocated on a competitive basis during implementation.

13. The Project Support Component would include a range of capacity building and

training activities such as: (a) policy capacity building; (b) monitoring and evaluation

(M&E); (c) training and study tours and research; and (d) other project management

activities, including the provision of vehicles and equipment.

4

1.6 Revised Components

14. No changes were made to the project components as appraised.

1.7 Other significant changes

15. The project was extended by one year from its original closing date of December

31, 2010 and closed on December 31, 2011. The purpose of the extension was to provide

additional time to the implementing agencies to consolidate relevant data and information

based on completed sub-projects relevant to the project‘s final evaluation and to allow for

some additional implementation time to complete a small number of sub-projects in

Shaanxi that had experienced delays in implementation. This restructuring also included

a reallocation of loan funds between disbursement categories.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

16. Project preparation from concept stage to Bank approval took about one and a

half years, which is considered adequate given the project‘s innovative nature and

complexity. The PDO was well formulated and realistic. The secondary aim of the

project – by this way the project aims to give poor farmers a change to participate in

high value agricultural markets domestically and internationally – remained slightly

ambiguous about targeting poor farmers versus smallholder farmers. In retrospect, a

clearer focus on smallholder farmers would have been more consistent with the project‘s

general design and intention.

17. Project preparation and design was sound and took place in the form of a dynamic

and cooperative process. Intensive stakeholder interaction during preparation created a

strong buy-in for the project‘s technology and institutional innovation approach. Detailed

technical design created a sound foundation for successful project implementation later

on. During preparation and implementation, some 250 sub-project investment proposals

were jointly appraised by the Bank, SOCAD and the POCADs. The decision to take a

phased approach—designing and approving half of the project sub-project investments

during preparation and leaving the remaining sub-projects to be decided upon during

implementation—facilitated capacity building and allowed for the gradual transfer of

ownership of sub-project appraisal and decision making from the Bank task team to the

implementing agencies without taking unnecessary risks. The phased approach was well

chosen as it provided the needed time to allow emerging new farmer associations to

become operational and to enable them to participate in investment activities.

18. The appraisal process of individual sub-projects was thorough and involved

interviews with various stakeholders of each proposal as well as extensive field visits to

proposed field sites. This highly cooperative process proved to be very helpful in

establishing a common understanding of the project‘s objective and operating principles

among all stakeholders. This process was also important to develop and refine the

5

selection criteria and appraisal procedures for sub-project investments during the

implementation phase.

19. In the context of China‘s agricultural transformation, the project concept was

highly innovative. Instead of limiting itself to agricultural research, the project was

designed specifically as a technology-dissemination and diffusion project with the aim to

develop, test and apply a wide range of new approaches that had not been used in

previous agriculture-oriented development projects in China. These approaches included

the following:

First, unlike traditional public sector support projects, the project combined

public funding for research, extension, training, and institution building with

private investment. While the government (through the project) funded the

development and dissemination of public goods and services, these activities were

implemented by the private sector to foster the integration of public and private

investments.

Second, the project focused on technologies that increased smallholders‘ incomes.

Often public investments in agricultural research raise smallholders‘ productivity

but not necessarily their incomes.

Third, the project developed and funded new institutional models, in particular

various models of farmer cooperative associations. The project design was

forward looking in its approach to support such associations as a critical element

for improving the dissemination of new technologies and overcoming technology

bottlenecks and stakeholder imbalances in the agricultural value chain. The

project design promoted the development of farmer organizations when there

were very few such organizations in rural China and well before the stipulation of

the Farmers‘ Professional Cooperatives Law in 2007.

Fourth, all sub-project investments that involved commercial enterprises required

that at least half of the sub-project funding was used to directly support farmers

that provided the raw materials for the enterprises (production base or farm

outreach).

Fifth, given the public goods elements of many project activities, a broad range of

social and environmental aspects were integrated into individual sub-project

design.

Sixth, the project was specifically designed to provide an opportunity for China‘s

public agricultural development system to reassess the rationale for public

funding in agriculture and improve the effectiveness and practices of public sector

investments.

20. One weakness in the project‘s design was that two of the four key outcome

indicators were not particularly well chosen. One indicator—percent increase in farmer

6

income, particularly of resource poor farmers—was impractical for reasons of

aggregation, time, and attribution of income increases to the project. It would have been

more appropriate to select the aggregate net present value (NPV) across all sub-projects

to assess the project‘s economic impact on farmers. A second indicator—SOCAD’s

investment in company-farmer partnership models nationally—was beyond the

geographical and time scope of what could reasonably be assessed by the project during

its implementation.

21. In addition, no targets were set at appraisal for these two indicators. The

evaluation would have benefitted from clearer targets to be achieved.

22. The overall risk of the project was adequately assessed as moderate. A number of

risk mitigation measures were integrated into the design, notably: (a) measures to ensure

participation of smallholder farmers, (b) a component to target women farmers and to

support the mainstreaming of gender aspects across all main project activities, and (c)

selection criteria to work with financially strong and experienced private partners

committed to delivering public goods ensuring financial stability and delivery of social

and environmental benefits. These measures proved to be well chosen, highly effective

and relevant throughout implementation.

23. From an institutional perspective, the project was well placed within the Chinese

Government structure. The central implementing agency SOCAD is not only the major

public funds provider to the national agricultural development programs but also draws

on a fully developed organizational structure with offices at the national, provincial,

municipality and county/city levels. SOCAD fully committed its support structure,

dedicated project management offices and staff at all levels, and facilitated the in-depth

interaction and interviews with farmers, company representatives and local government

officials during preparation and implementation.

2.2 Implementation

24. Government commitment. The project was implemented under the leadership of

an experienced and well organized SOCAD Project Management Office (PMO). This

central PMO provided effective and timely guidance to the four provincial PMOs and

served as a reliable liaising partner for the Bank‘s task team. SOCAD‘s agreement to

provide 80 percent of the Bank loan to the provinces and lower levels in form of a non-

repayable grant (only 20 percent of the loan needed to be re-paid by lower levels to the

central level) was a strong demonstration of commitment to the project and allowed to

experiment with innovative public goods investments and public funding arrangements,

which would not have been possible if a full recovery of the loan from lower levels had

been required.

25. Implementation support through broad range of expertise. The project covered

four provinces and supported a total of 113 sub-project investments. Implementation was

exceptionally challenging because sub-projects were very different in technical and

institutional nature and demanded various technical and managerial skills from the

implementers, including strong capacity in a wide range of technical and financial

7

appraisal skills, procurement, supervision, and monitoring. A broad range of expertise

was drawn from both the government‘s line agencies and the Bank to support

implementation and proactively identify and solve technical implementation issues as

they emerged.

26. Eligibility criteria and flexibility. Public advertising of the project and agreed

eligibility criteria documented in the PAD provided the necessary guidance for sub-

project selection. The implementers and the Bank team provided continuous and

effective monitoring and were flexible in their responses to any unforeseen changes or

difficulties. This was particularly important because the project operated in a dynamic

market environment and individual participating enterprises often encountered changes in

their business environment which needed to be addressed. For example, some of the

initially accepted sub-projects proposals had to be dropped because the original

commercial business rationale did no longer hold while others required changes in the

business and investment plans and had to be revised. The approval authority for sub-

projects and fund allocation remained with SOCAD and the Bank team (on a no objection

basis). Both took active and timely actions to respond to a dynamic implementation

environment.

27. Out of a total of 130 sub-projects proposals that were originally approved for

implementation during the appraisal and implementation stages, 17 sub-projects were

cancelled before any investment was made because of changes in ownership or business

plans, change in land use and other factors the sub-projects were no longer deemed

eligible or promising. Funds were reallocated to other sub-projects. In total, 113 sub-

projects were implemented. Of these 105 were fully and successfully implemented while

eight sub-projects were only partially implemented.

28. A mid-term review (MTR) was conducted in 2008 confirming the project concept

and scope as well as its implementation structure and overall fund allocation. A

restructuring or other significant modification was not considered necessary. The MTR

also provided an opportunity to adjust the Results Framework and revise some of the

weaker indicators but this opportunity was not taken.

29. During 2008-2010, project implementation was affected by a Government internal

re-organization which particularly impacted Shaanxi. The organizational status of

POCAD, which housed the provincial PMO, as well as staff responsibilities remained

undecided for nearly two years. Project implementation was negatively affected for

about 1.5 years, affecting the implementation progress of several sub-projects in the

province. In 2010, POCAD was finally moved from the provincial poverty alleviation

office to the provincial finance department and implementation started to recover. To

make up for the lost implementation time and to improve performance, an action plan

was agreed and successfully implemented. However, the project could not fully catch up

on the delays in Shaanxi and a one-year project extension became necessary.

8

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

30. Project design fully recognized the importance of a sound quantitative as well as

qualitative M&E approach in supporting the learning objective of the project.

Nevertheless, the formulation of a Results Framework and M&E process that would

adequately capture the outcomes and lessons of such a complex operation was

challenging and two of the four key outcomes indicators were not optimally chosen.

31. One indicator—percent increase in farmer income, particularly of resource poor

farmers—was impractical because general farm income increases were difficult to

attribute to specific project interventions and counterfactual controls were difficult to

identify given the uniqueness of the partnerships supported. A second key indicator—

SOCAD’s investment in company-farmer partnership models nationally—referred to the

scaling-up of models in non-project areas but went well beyond what was intended. The

PDO aimed only for innovative models with ‗a potential for scaling up‘ as opposed to the

ambitious assumption implicit in this indicator that such up-scaling would already happen

during implementation.

32. In addition to quantifying measurable project outcomes, the design clearly

recognized the need for qualitative assessments to capture the ‗soft‘ aspects of

institutional innovation and technology diffusion. The M&E approach therefore included

an expert team, consisting of specialists from the Chinese Academy of Agricultural

Sciences, which was tasked to capture, analyze, and aggregate the project implementation

lessons based on qualitative assessments. In addition, each province engaged an

independent M&E team to analyze the outcomes from each sub-project investment.

33. Bank supervision missions spent significant time and effort in working with the

expert team and provincial M&E teams to sharpen the qualitative analytical focus and

quality of the M&E. In particular, a simplified results framework was rolled out to each

sub-project and agreed between the provincial PMOs and the individual sub-project

owner to record and monitor sub-project specific indicators and targets including: (a)

degree of innovative features, (b) income and income distribution, (c) environmental

impact, and (d) social impact. In addition, a broader M&E framework was developed to

extract and disseminate the lessons from the project to improve the understanding and

rationale for public funding (why and in what areas are public funds justified to be used

for agricultural development); and document effective procedures for the use of public

funds (contracts with private partners, working with farmer cooperatives/associations,

etc.).

34. The expert team mainly focused its efforts on assessing the incremental

measurable outputs and financial returns of various sub-projects but lacked the capacity

and rigor to explain sub-project performance and, more importantly, to derive a higher

level of understanding of why and under what circumstances public funding and public

private partnerships had yielded such results.

35. In hindsight, a combination of international and national expertise in the expert

team could have helped to improve the qualitative analytical aspects of the M&E work.

9

The PAD indicated that the expert team would draw on international expertise but despite

the availability of sufficient loan resources the Government decided during

implementation to use its own government funds for all M&E work and was unwilling to

recruit international technical assistance using loan funds or domestic counterpart funds.

A promising initiative to overcome this shortcoming was to organize an international

workshop on M&E and lessons learned with Bank co-financing and technical

contributions.

36. Unfortunately, such workshop failed to materialize due to funding constraints on

the Bank side. Likewise, the one-year project extension without injecting additional

external assistance did not significantly contribute to an improvement in the qualitative

analytical aspects of the M&E framework.

37. Overall, however, the project provided detailed and regular progress reports based

on the collected quantitative M&E data. It actively facilitated the exchange of

experiences among the provinces and sub-projects, allowed and promoted the continuous

learning from implementation, and promoted the replication of successful new models

during implementation. In particular, the provincial M&E teams that analyzed individual

sub-projects successfully documented a wide range of important implementation insights,

which were used as immediate feedback to improve local selection and supervision of

investments and stimulated a large number of research reports and policy studies around

project related subjects. Some success and failure stories were produced describing the

respective new institutional arrangements, technical innovations, and the social and

environmental benefits and were shared in newsletters from SOCAD, POCAD and at the

county levels and published on websites. Study tours were organized to visit sub-project

sites across project provinces and counties. M&E results were well utilized to inform

decisions and resource allocation. Well implemented sub-projects or counties were

rewarded with additional allocations while non-performing sub-projects were cancelled

or reduced in scope.

2.4 Safeguard and Fiduciary Compliance

38. The project was classified as a Category B project. Given the nature of the

project with its large number of various sub-project investments, a cautious approach was

taken during preparation in assessing safeguards issues. Because it was anticipated that

the various sub-projects would involve asymmetries in economic strength and power

among the participating stakeholders, such as large commercial enterprises and small and

often unorganized farmers, specific attention was given to social safeguards. A full

social assessment was conducted and a special Multi-Ethnic Groups Social Assessment

Report was prepared in conformity with the Bank‘s Operational Directive/ Safeguard

Policy on Indigenous Peoples (OD 4.20, revised as OP4.10). Social concerns were

integrated into the design of the project, including support to existing and new farmer

organizations and formulation of a Farmer Beneficiaries Participation Framework,

including the Targeted Technology Transfer sub-component. The rule to provide at least

50 percent of funds directly to farmers or farmer associations in any sub-project

involving agro-processing and marketing companies was effective and ensured a fair

10

sharing of value added. In order to guide any possible land acquisition or resettlement, a

Resettlement Policy Framework was prepared under OP4.10 (Involuntary Resettlement).

39. Environmental concerns were also integrated into the project design. This

included sub-projects supporting Integrated Pest Management (IPM), Food Quality

Testing and Certification and investments in food safety. Support for bio-technology,

Genetically Modified Organisms (GMOs) other than support for DNA sequencing

capacity and GMO detection, or otherwise controversial types of technology were

excluded.

40. Compliance with the Bank‘s social and environmental policies was monitored

during implementation and no issues were observed. No involuntary resettlement

occurred under the project.

41. Procurement procedures followed Bank policy and agreed procedures with no

significant issues reported. Procurement supervision was timely and effective despite a

heavy demand for the Bank‘s procurement staff in terms of prior and post reviews largely

due to the high number of different procurement activities and stakeholders involved.

Many participants, in particular private sector entities, were not familiar with Bank

procedures designed for public sector procurement, which initially delayed

implementation. Awareness building started already at the sub-project proposal stage and

combined with training and the experience of the central PMO helped to speed up

procurement over time and to avoid any major procurement related issues or delays.

42. Financial management was generally in compliance with Bank procedures.

Financial management arrangements were complex not only because of the large number

of project entities but also due to the different funding sources and different times of sub-

project approvals. This required funds from different sources to become available at the

same time while under different approval and accounting procedures. Counterpart funds

came from at least three different sources, government, private sector, and participating

households. The timely availability of government counterpart funds caused some

problems and was a regular issue noted in the Bank‘s financial management supervision.

2.5 Post-completion Operation/Next Phase

43. For many sub-projects the project provided only a start-up investment. At the

time of closing and many investors had already expanded their operations based on the

initial project funding. For example, the company that implemented the ‗safe pork‘ sub-

project in Yangling (Shaanxi), had expanded its operation by project completion by

setting up two large scale training and demonstration facilities and by introducing high

technology in pig breeding and fattening. This investment is now influencing production

standards of pig production in the entire province. Similarly, the Anhui Academy of

Agricultural Science implemented a sub-project that introduced GMO detection

technology. Because of its good performance it has been assigned a national reference

status and has become the national authority to determine GMO for Chinese national

food and feed stuff imports. All service providing investments are fully operational and

collect fees for the services sustaining operation and financial sustainability.

11

44. SOCAD has expressed a strong interest for a follow-on project. Such a project

would build on the experiences and lessons learned under this project and address

modernization and restructuring of the agricultural sector with a vision for an

Agricultural Sector in China how it might look in 10-20 years from now. The lessons

learned with regard to facilitating, directing and partnering in a network of private and

public partners would be a valuable foundation for such a second phase project. Other

projects, such as a possible Agricultural Income Generating Project in poor rural areas

proposed by the Leading Group for Poverty Alleviation, are expected to significantly

benefit from this project as well.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

45. The PDO and project design remained highly relevant and fully consistent with

national policy priorities and the Bank‘s Country Partnership Strategy (CPS) 2006-2011

that succeeded the CAS of the preparation period. The project continued to support four

of the five CPS pillars, namely to: (a) integrate China into the world economy; (b)

manage resource scarcity and environmental challenges; (c) reduce poverty, inequality

and social exclusion; and (d) improve public and market institutions. The Government‘s

11th

and 12th

Five Year Plans (2006-10; 2011-15) prioritized a harmonious society that

balances economic growth with income distributional and environmental concerns. Such

a society is built on a modernized and efficient agricultural structure that generates high

quality growth and a more balanced urban-rural development. From a national as well as

from an international perspective, the project concept and design were highly forward

looking. Stimulating technical and institutional innovation through public private

partnerships has become a focus and mainstream in agricultural development in

developing countries.

3.2 Achievement of Project Development Objectives

46. The project fully achieved its core objective of developing and testing innovative

models for agricultural technology transfer and application that can be scaled up and, in

addition, generated substantial economic benefits for the participating farmers, farmer

associations, and enterprises. (For outputs by component see Annex 2). The PDO

entailed four specific aspects, as discussed below.

47. Developing and Testing of Innovative Models. The project designed and

supported 113 sub-projects testing different institutional and technology transfer models.

About 95 percent of the 113 sub-projects (against a PAD target of 70 percent) provided

satisfactory or highly satisfactory results and yielded valuable lessons. The models

developed and tested are characterized by: (a) innovative institutional and partnership

arrangements, such as public sector research-company/ farmer association; researcher-

farmer; or researcher-company arrangements; (b) innovative funding arrangements; and

(c) innovative technologies fostered by new partnerships.

12

48. To abstract and consolidate the different types of models and nature of lessons

learned, an analysis and lessons learning framework was developed and applied. The

analysis not only shows the nature of innovative models developed and tested but also

provides an improved understanding and justification for the use of public funding for

agricultural development and for successfully overcoming market failures. Specific

achievements are as follows:

49. The project developed models that demonstrated how to overcome technology

adoption barriers caused by fragmented production and small farm size through

partnership arrangements between company and farmer or farmer association. For

example, organic food production and IPM technology were introduced and adopted in

several sub-projects in Anhui and Shaanxi.

50. These technologies could not have been adopted by individual farmers alone

without outside support because these technologies would have been too costly at the

individual farm level at start-up and farmers would not have been in a position to exploit

the commercial opportunities resulting from these innovations without the supporting

marketing infrastructure provided by the company partner.

51. The project showed through many sub-projects that organizing farmers in

company farmer arrangements or farmers in farmer associations allowed them to enter

into higher value production through product branding, product certification (such as

green/organic food), and/or access to new markets, including export markets. Such

innovations were undertaken by companies as the driving force or, in other cases, by

farmer associations alone which demonstrates that well managed farmer associations can

become drivers of innovation themselves.

52. Sub-projects demonstrated how public funds can be used to overcome temporary

market failures. Developing new products and markets often require a critical volume

and/or commitment of stakeholders over longer periods of time. A typical example is the

development of camphor production where a private investor sought support from the

local government and the project to organize farmers to plant the required number of

camphor trees and thus building a critical threshold volume of production required for a

viable processing facility.

53. The project introduced various contract arrangements between government and

private entities and demonstrated that the private sector can successfully play an

important role in delivery of public goods and services. Many sub-projects included

farmer associations or companies to provide (public) animal health services, training of

farmers or other extension services through private channels. Most sub-projects in this

area involved targeting of poor farmers or disadvantaged groups. Several sub-projects

involved innovative technologies and environmental services such as the treatment of

manure, waste or crop residues.

54. The project developed a partnership model with the China Women Federation

which successfully demonstrated for suitable agriculture technologies for women farmers

13

but also for managerial skills of women as farm operators and entrepreneurs. This was

specifically relevant given the large-scale out-migration of male labor from rural to urban

areas across China.

55. The project demonstrated the remaining important functions of the government in

important areas that cannot easily be taken over by the private sector. Such areas include

food safety, protection of intellectual and other property rights, development and

implementation of production regulations, and policy formulation. Successful sub-

projects with clear public service functions included, for example, the food quality

standards testing and certification sub-project in Yangling (Shaanxi), or GMO testing and

certification facility in Anhui.

56. Income Generation and Benefit Sharing. The project fully achieved its objective

of generating economic growth and additional farm income through integration into high

value markets with the added value shared fairly among different stakeholders. Nearly

194,000 farm households benefitted directly from the project through added-value

agriculture production, additional income or entirely new lines of businesses with new

products and markets. Instead of using (absolute) increase in farm income as indicator,

net present value calculations (with an estimated opportunity cost of capital of 12

percent) were performed as an alternative measurement of income generation. The total

aggregate benefit generated by the project is estimated at RMB 865 million (or US$137.3

million), showing an impressive additional value and investment efficiency of the project.

57. Most importantly this added value is well distributed along the value chain with

farmers generally receiving a higher share of the added value than company partners.

More than half (55 percent) of the project‘s value added income remained at the farm

household level, some 18 percent at the farmer cooperative level, and the remaining 27

percent at the company level. If only those sub-projects that involved farmers and

companies are being considered, 57 percent of the total generated benefit accrued to

farmers and 43 percent to companies. These results evidence a win-win result for

farmers and agro-business companies and validate the aspiration of the project design

both in terms of overall income generation and income distribution. (See Annex 3 for

Economic Analysis).

58. Potential for scaling-up – impact on national funding programs. The project has

clearly influenced a wide range of policy decisions and triggered changes in national and

provincial agricultural support procedures. Many successfully tested models are ready

for replication or scaling-up under national and provincial agricultural support programs.

Although the specific policy impact of the project is not quantifiable noticeable scaling

up results have been achieved. The large number of policy documents which document

lessons and recommendations for application in the national programs and which were

released during project implementation, give a fair picture of the policy achievements of

the project.

59. The project helped to develop a much more fundamental understanding of the role

and importance of farmer associations and cooperatives in the agriculture transformation

14

process. Although no direct link can be established, the project design recognized early

the need for new institutional models and critical importance of farmer organizations for

agriculture development and may have contributed to the formulation of the Farmers‘

Professional Cooperatives Law stipulated in 2007. Also noteworthy, decision makers of

the Hunan PMO were involved in the drafting of the provincial law and regulations on

agricultural development and farmer associations and were able to incorporate the lessons

from the project related to investment selection criteria and procedures into the provincial

regulations.

60. Identification of success factors and constraints. The project also fully achieved

its outcome indicator of identifying success factors and constraints, including the

following:

Working with the private sector requires strong partners (government, enterprise,

farmer association) which should be selected through transparent and competitive

selection mechanisms with a clear definition of eligibility criteria.

Public-private partnership arrangements can effectively deliver social and

environmental public goods. They need to be guided by a clear understanding

and definition of public good outcomes combined with specific contractual

arrangements with objectives, indicators and milestone based targets.

A combination of company and farm outreach support under a joint investment

helps ensure a fair benefit sharing of the added value and avoid the risk that

companies are using public funds to crowd out farm households.

Monitoring of public-private partnership contracts and performance and the

option to apply sanctions and to discontinue funding in case commitments are not

fully met are critical for the success of such partnerships.

3.3 Efficiency

61. A total of 91 sub-projects were financially analyzed with cash flow calculations

computed separately for each of the major stakeholder in the value chain, such as farmer

household, farmer cooperative and company. The additional income generated under the

project is impressive with an aggregated financial internal rate of return of 26 percent and

a net present value of RMB 865 million.

62. The quantification of project benefits focused on financial net returns and benefit

sharing leaving out other important benefits resulting from the learning aspects of the

project, for example the application of lessons for other public private partnership

arrangements, and social and environmental benefits generated by individual sub-

projects. In case, these are being included, the economic returns can be expected to be

higher. Such benefits are, however, more intangible and in most cases would have been

extremely difficult to quantify.

15

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory

63. The overall outcome is rated satisfactory. The project has demonstrated new

models of generating additional growth and rural incomes through organizational and

technical innovation combined with innovative funding and partnership arrangements in

China‘s rapidly transforming rural farm and non-farm sectors. The project has also

demonstrated that fair benefit sharing between companies and farmers including

disadvantaged and poor farmers is possible despite existing power imbalances. The

success rate of private sector investments and the innovation features emerging from the

project-supported investments have far exceeded expectations. The project has in many

ways stimulated the government‘s thinking on the future of its national and provincial

agricultural development and support agenda.

64. While project outcomes and lessons have exceeded the expectations at appraisal,

some of the success stories could have been analyzed and presented more systematically

through a more qualitative analytical approach to M&E drawing on international

expertise and best practice. In addition, the opportunity to gain in-depth insights into the

economic efficiency of public sector funding in agriculture has not been exhausted.

While it was sensible to expect the replication and up-scaling after the closing of the

project, the indicator included in the Results Framework to measure replication outside

the project areas was clearly too ambitious. However, all these latter aspects have been

beyond the scope of the PDO. A satisfactory rating of overall outcome remains well

justified.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

65. The total number of participating households is estimated at 194,000 (households

receiving project support) while some 7.4 million households benefitted from improved

services provided through the project (indirect beneficiaries).

66. Women farmers in particular benefitted from the project. According to the

project‘s beneficiaries‘ survey, the share of women among the directly participating

beneficiaries was about 70 percent and for the beneficiaries benefitting from improved

services the share of women was about 60 percent. They are a reflection of the changing

demographics in China‘s rural areas where many farms are de-facto operated by women

as the result of male labor outmigration. Women were quick in filling the gaps and were

willing to take significant entrepreneurial risk by adopting new technologies and engage

in new organizational arrangements.

67. In addition to these general trends, the project has specifically targeted women

farmers under a sub-component implemented by the All China Women Federation. This

sub-component focused exclusively on women beneficiaries and was entirely

implemented by women. It supported technologies (vegetable production, chicken

16

raising, handicraft) and managerial skills suitable for women farmers and entrepreneurs

and was one of the most successful sub-components in the project.

68. The income generating impact and the benefit sharing of value addition between

farmers and companies is described above. In addition, a number of sub-projects

received project funding as they targeted poor areas and poor farmers and thus were

selected based on their social public goods nature. Specifically, a number of companies

received project funding to develop raw material supply in poor areas. Examples are a

mulberry processing company in Yangling to develop production in poor mountainous

areas in Ankang County of Shaanxi and a company that invested in breeding the

genetically valuable ‗Wei Pigs‘ and targeted women headed households in a poor area

with limited farmland resources.

(b) Institutional Change/Strengthening

69. Most project activities included the development of new institutional models, as

discussed above. In addition, the project also supported the participation and integration

of public sector research institutions and researchers into the project-supported

agricultural investments. The two main arrangements implemented included: (a)

shareholding arrangements where an individual researcher became a shareholder of a

company or a farmer cooperative. Often the participating researchers provided additional

capital investments, and (b) contractual arrangements where the investing company or

farmer association entered into a long-term contract with a research institution or

individual researcher to support the investment or business operation.

70. The close linkage of research and production/processing business supported the

quick technology transfer and adoption as well as a direct feed-back into the research

system. In some cases the research institutions were engaged on a retainer basis to

provide technical support to maintain the company‘s competitiveness and product

quality, such as IPM in production of organic vegetables. Some of the supported sub-

projects facilitated a change in the operational model in reaching farmers. For example,

the IPM component in Yangling or the web-based Information Service System in Anhui.

Telephone and SMS and internet assisted interaction channels were opened between IPM

specialists and farmers thereby expanding the outreach of technical advice through

modern communication technology in a demand responsive way. A number of sub-

projects were also able to provide goods at the national level such as nationally approved

protocols for organic production of several root and tuber crops and vegetables

(Certification Center in Yangling).

(c) Other Unintended Outcomes and Impacts (positive or negative)

71. The project pioneered some of the thinking and influenced the World Bank‘s

agricultural development agenda as documented in a range of recent presentations and

documents, notably the Agricultural Innovation Systems Sourcebook (2012).

17

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

72. A satisfaction survey of members of farmer associations that had received project

support was conducted at project completion. The survey involved 45 cooperatives/

associations and included interviews with 875 farmers of which 623 were women. The

evaluation included questions related to technical service provision, importance of the

association for input supply, marketing, and price finding, relevance of the association for

individual farming decisions, and the general satisfaction of farmers with the work of the

associations. The aggregated satisfaction level of members with the work of their

associations was rated high, scoring 4.2 on a scale from 0 to 5. It is worth noting that the

technical services provider function of the associations was considered most important

while marketing and economic support functions were rated lower.

4. Assessment of Risk to Development Outcome

Rating: Negligible to Low

73. The project has successfully established models demonstrating how to generate additional

farm income in high value markets through technical and institutional innovation. These

experiences and lessons will remain valid even under the unlikely event of significant changes in

the macro-economic or political environment. There are good conditions that the project-

generated outcomes face a low or even negligible risk. The following specific risks to the

development outcome have been identified and are discussed.

Political risk: The political reform agenda in China continues to be highly

supportive to the project concept and its objective, and agriculture modernization

in general. Agricultural restructuring efforts continue to aim for the vertical

integration of production systems along the value chain through farmer-company

and farmer associations, and companies engaging in contractual arrangements.

Institutional risk: Farmer associations were supported as new institutional

arrangement under the project and are gaining increasing importance with a

plurality of organizational arrangements and functions. China‘s Law on Farmer

Cooperatives (2007) provides the legal foundation for such cooperatives.

Government policy also supports the role of the private sector in technology

development and service delivery and public research institutions are encouraged

to engage with the private sector.

Technical risk: All technologies introduced under the project are proven and well

tested. The project avoided supporting the more sensitive technologies such as

biotechnology and other technologies related to unclear of disputed intellectual

property rights.

Financial and sustainability risk: Most sub-projects were financially profitable

and well established in their markets at the time of completion. Service delivery

entities have a large and growing client basis and collect fees which are sufficient

to ensure financial sustainability. Some of the supported laboratory facilities have

18

already begun making investments in additional equipment in response to high

demand for such services.

International market risks: Some of the sub-projects are reaching international

markets (e.g. organic apple or mushrooms) and their revenues are subject to

currency exchange rate or other potential future foreign market access restrictions,

for example as a consequence of food safety concerns. However, those

enterprises are few and their foreign market dependency is low. In the event of

major access restrictions those few enterprises can shift towards national markets.

Social risk: Many sub-projects created social benefits through production in

remote poor areas. There is a risk that some companies may shift their production

base from these areas to more accessible areas to lower transaction costs. This

risk is expected to be low because many sub-projects involve perennial tree

cropping together with long-term infrastructure investments, which cannot be

moved easily.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry


74. The project objective and design were realistic, technically and institutionally

innovative, and fully consistent with the national and Bank policy priorities for

agricultural development in China. Social and environmental safeguards were well

integrated into project design. The Bank team included a small number of highly

experienced experts covering all relevant fields of expertise and played a vital role in

ensuring that the project design was sound and responsive to the sector challenges to be

addressed. The project was well prepared based on an intensive and interactive process

with all stakeholders which ensured the successful and high quality implementation of

vast majority of the selected sub-projects. The Bank team established a mutually

respectful and efficient working relationship with the client, and provided the inspiration

for mind-set change and innovation. The project established a rigorous and stringent set

of selection criteria for sub-project selection and approval. The Bank team also spent a

significant amount of time in visiting hundreds of often dispersed and remote sub-project

sites to interview the farmers, companies and other stakeholders. Appraisal of individual

sub-projects was sound and based on firsthand knowledge, and detailed advice and

guidance were provided to improve the proposals before approval and implementation.

A quality at entry review did not take place.

(b) Quality of Supervision


19

75. The Bank conducted supervision missions twice a year and provided additional

implementation support as needed through Beijing office staff, including financial

management and procurement. Supervision was demanding as it involved continuous

sub-project appraisal and re-appraisal of new or modified sub-projects proposals during

the initial years of implementation and, thereafter, intense supervision of a large number

of different types of investments scattered widely across the four project provinces. The

Bank team included highly qualified specialists covering technical as well as economic

and institutional aspects but Bank supervision resources were constrained and may have

been limited for supervising an intensive learning project. The task team drew on some

supplemental FAO resources which proved to be critical for the supervision. Supervision

missions regularly included fiduciary, social and environmental safeguards specialists.

76. The supervision strategy was based on a close Bank-SOCAD partnership and

joint supervision. In the field, timely decisions were made concerning the approval or

rejection of sub-project investment approvals as well as fund allocation and/or re-

allocation. Such decisions were made based on a consensus between the Bank team and

SOCAD and POCADs, which helped create trust and mutual respects.

77. Technical supervision of sub-projects was sound and the advice provided on how

to improve implementation was much appreciated. The supervision team documented its

findings and recommendations in well prepared aide memoirs which included time bound

agreed action plans and served as important reference documents for the implementing

agencies. Discussions with private sector investors were recorded in detailed field visit

notes filed as separate documents to ensure confidentiality. These field notes were very

helpful in terms of identifying issues and tracking progress and follow-up actions. This

method of documentation was introduced in the national system as good practice and use

for domestic supervision purposes.

78. In hindsight, a better resourced supervision approach could have helped to lead a

more comprehensive policy dialogue on strategic aspects of agricultural sector

transformation in parallel to project implementation and to address the shortcomings in

the qualitative M&E more decisively. As above, a quality of supervision review did not

take place.

(c) Justification of Rating for Overall Bank Performance


79. The project was highly relevant to country needs and fully in line with Bank and

country policies. It was well prepared, highly innovative and relevant, and contained all

the necessary safeguards. It was professionally and continuously supported during

implementation and corrective measures were taken whenever necessary.

5.2 Borrower Performance

(a) Government Performance

20


80. The government at the central and local levels was highly committed to the

objective and design of the project as the project was fully aligned with and reflected

national and provincial priorities in agricultural development. On-going agricultural

restructuring efforts during project implementation remained consistent with the project

objective. Government policies were particularly supportive when a new law regulating

the functions and modus operandi of farmer cooperatives was put in force in 2007. A

large number of high level Government officers visited project sites on many occasions,

which demonstrated ownership, helped to boost morale and implementation performance.

81. The government was willing to engage in policy dialogue at the preparation stage

and adopt innovative approaches despite the lengthy process to appraise and supervise

projects. The central government counterpart funding provision and partial loan

repayment through the central government was highly satisfactory and a crucial success

factor of the project.

82. The institutional arrangement and staffing at central PMO and three provincial

PMOs were highly satisfactory while the delays in the government restructuring in

Shaanxi province affected the implementation of some sub-projects in the province and

required an extension of the project.

83. While most provincial PMOs provided fully adequate oversight and

implementation support, the provision of government counterpart funds was delayed in

some provinces. Besides, the project would have benefitted from using a small portion

of the Bank loan for impact evaluation involving international expertise, as had originally

been envisaged in the project design.

(b) Implementing Agency or Agencies Performance


84. The central, provincial, and local PMOs worked with the Bank team

constructively and in close partnership. The central PMO in SOCAD maintained a good

control of all project activities. In addition to joint Bank-SOCAD supervision, the PMOs

conducted their internal regular field supervision missions throughout the implementation

period and emerging project management issues were addressed in a timely manner. In

addition, a large number of training workshops were organized by the central PMO and

the provincial PMOs. After some initial difficulties, the implementing agencies managed

this complex project professionally and with a strong commitment towards its objective.

The competitive selection of sub-project investments was a labor-intensive and

challenging process that was accepted and increasingly owned by all PMOs.

85. The capacity and effectiveness of the provincial PMO in Shaanxi was impacted

for about 1.5 years because of a delayed internal government restructuring but this did

not significantly impact overall implementation or final project outcomes.

21

86. No major fiduciary issues were observed during implementation. Financial

management remained a concern because of shortages and delays in government

counterpart fund provision, which in the end did not affect the project outcomes. Overall

the contribution from project beneficiaries, particularly private sector partners, more than

compensated for the shortages in public counterpart funds, ensuring the timely

completion of sub-projects.

(c) Justification of Rating for Overall Borrower Performance


87. Borrower performance was satisfactory throughout project implementation and, in

the most provinces, even highly satisfactory. Implementation delays in Shaanxi

negatively impacted the timely completion of a small number of sub-projects but these

delays were temporary. Using some of the Bank loan for high quality analytical work

and consolidation of project results of more qualitative nature would have added even

more value and would have justified a highly satisfactory borrower performance rating.

Because this was the only shortcoming on the side of the Borrower, overall borrower

performance is rated satisfactory.

6. Lessons Learned

88. The project was conceived and designed as a learning project and yielded a wide

range of important lessons relevant to agriculture sector modernization which can be

replicated within China and internationally. Lessons of interest and relevance to similar

operations (project specific lessons) and for wider general application in context of

agriculture sector reforms (general operational lessons) include the following:

Project specific lessons including lessons applicable to similar operations

89. Technology adoption constraints caused by fragmented production and small

farm size can be overcome with innovative partnership arrangements. The project

effectively demonstrated that technology barriers caused by fragmented production and

small farm size can be overcome through partnership arrangements between companies

and farmers or farmer associations. For example, it is challenging for individual

(smallholder) farmers to adopt organic food production and/or IPM technology because

the limited farm size does not allow to effectively exploit the commercial opportunities of

such technologies. Economies of scale in technology application can be realized through

partnerships and significant commercial benefits be generated for all partners involved.

90. Adding value in agricultural production with a fair distribution of benefits needs

effective organizational arrangements. Organizing farmers in company-farmer

arrangements or establishing farmer organizations allows stakeholders to enter more

easily into higher value production through product branding, certification, or access to

new and export markets because of scale effects. Companies as well as farmer

organizations can both serve as driving force for such value addition through innovation.

22

In both cases, support to farmer associations will allow for a fair sharing of the

incremental value generated.

91. Successful public-private partnership needs clear selection procedures, outcome

definition and contractual arrangements. Transparent competitive selection mechanisms

with a clear definition of eligibility criteria for public funding, well defined public good

outcomes, and sanctions are important success factors in public-private partnership

models. Under the project, outcomes and public funding modalities were agreed in

written contracts which were monitored for compliance and, in cases of non-compliance,

such contracts or sub-projects were stopped or restructured.

92. Public goods can be successfully delivered through Public-Private-Partnerships.

Private institutions can play an important role in delivering public goods and services in a

cost effective way and with high quality. Under the project, farmer associations and

companies entered into contractual arrangements with government to provide public

animal health services, training of farmers or other extension services.

93. In addition, such contractual arrangements allowed the government to specifically

target poor farmers and disadvantaged groups. Similarly, several sub-projects involved

innovative technologies and environmental services such as the treatment of manure,

waste or crop residues or the protection of valuable genetic resources, activities which

have a clear public goods character.

94. Public support can address market failures and help generate a critical mass of

raw material production with different stakeholders. Developing new products and

markets requires a critical volume and commitment of stakeholders to produce specific

crops or raw materials. Public funds are an effective tool to overcome temporary market

failures. For example, the development of camphor required organizing farmers as well

as farmers‘ commitment to plant camphor trees on a large scale to reach a critical

production volume required for a commercially viable processing facility. Public funding

provided the incentive to a private sector enterprise to partner with farmers and to invest

in long-term camphor production.

95. Structural social issues, particular gender, require attention and need to seek and

design specific solutions. The out-migration of male labor from many rural areas across

China has dramatically increased the demand for technologies suitable for women

farmers and requires a focus on developing and improving the managerial skills of

women as farm operators and risk taking entrepreneurs. The project developed a

partnership model with the China Women Federation, which successfully addressed these

needs.

Lessons for a general application

96. A critical analysis of the sectoral context is important for the design and

formulation of a clear objective. One of the important success factors of the project was

that it was based on a critical analysis of the sectoral context and it had a clear objective

23

that was based on a realistic development perspective for the agricultural sector. For

example, a conscious and explicit decision was made to aim for income and value

generation instead of quantity and productivity increases with far reaching implications

for the design and approval of individual sub-projects. Similarly, the recognition that

farm incomes had a high priority in the Chinese urban-rural income disparity context, an

explicit decision was made that investments should be farmer-based and be implemented

through farmer groups and/or in combination with enterprise investments.

97. Sufficient preparation time and resources are needed to allow for a change in

mind-set. The project had an ambitious objective of changing the mind-set of various

actors in the agriculture sector by introducing new models of cooperation between the

private and public sectors. The project took time to build the capacity and competence

with the SOCAD system at national, provincial and county levels and to change the way

SOCAD‘s representatives thought of agricultural development. In addition, the project

took a phased approach: an unallocated innovation fund allowed extra time for nurturing

and selection of emerging farmer associations and innovative investment proposals. It

also helped promote common understanding of the PDO and the ownership of

innovations.

98. Innovative learning projects require adequate funds for analytical work and

exchange opportunities. The Bank‘s regular supervision budget is generally not

sufficient to allow for supplementary analytical work in this kind of learning projects.

There are also difficulties in mobilizing additional funding for specific learning and

analytical tasks. In the case of this project, the presentation of the project outcomes and

impact of lessons learned might have benefitted from more resources for analytical work,

including a more structured exchange of experience. To exploit the full potential of

emerging lessons from the project, a defined mechanism to allow lessons to be absorbed

would be useful. This could take the form of stakeholder workshops, international

consultancy, and other ways.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

99. A summary of the borrower‘s completion report is included in this ICR in Annex6

(b) Cofinanciers: Not applicable

(c) Other partners and stakeholders: Not applicable

24

Annex 1. Project Costs and Financing

a) Project Cost by Component (in USD Million equivalent)a/

Components

Appraisal

Estimate

(USD millions)

Actual/Latest

Estimate

(USD millions)

Percentage

of Appraisal

1. Technology Transfer Information Markets and

Services 15.5 16.0 103.8%

2. Promotion of Commercially Attractive Key

Technologies

a) Research-Investor-Farmer Technologies 134.5 204.1 151.8%

b) Targeted Technology Transfer 1.4 3.4 246.4%

c) Public Sector Support Programs 5.5 12.6 229.9%

d) Innovation Support Fund b/ 16.7

Subtotal 158.0

3. Project Support 14.4 8.7 60.1%

Total Baseline Cost 187.9

Physical Contingencies 11.2

Price Contingencies c/ 7.7

Total Project Costs 206.9 244.8 118.4%

Front-end Fee 0.5 0.5 100.0%

Total Financing Required 207.4 245.3 118.3%

a/ Expenditures in RMB are converted with an average ex-change rate of 6.936 RMB/1 USD

b/ The ‗Innovation Support Fund‘ was not a sub-component, but contained unallocated funds for sub-

projects to be appraised during implementation.

c/ The price contingency provisions turned out too low. It is estimated that the average cost increased were

at least 20% largely explaining the cost overrun of the project.

(b) Financing

Source of Funds Type of Co

financing

Appraisal

Estimate

(USD millions)

Actual/Latest

Estimate

(USD millions)

Percentage

of Appraisal

World Bank IBRD Loan a/ Loan 100.0 100.0 100.0%

Companies 60.4 72.7 120.4%

Farmers 30.7 41.5 135.2%

Government 16.3 31.1 190.5%

Total 207.4 245.3 118.3%

a/ At appraisal an ex-change rate of 8.27 RMB/1 USD was assumed. The appreciation of the RMB during

project implementation, up to a value of 6.3 RMB/1 USD at the end of the project, caused a shortfall in

funding, which was in addition to the price increases balanced by additional funds from beneficiaries and

Government sources.

25

Annex 2. Outputs by Component

1. Technology Transfer and Information Markets and Services (USD16.0

million)

Under this sub-component the project supported 6 sub-projects:

Province Sub-project Total Investment

(USD mill.) Bank

(share in %)

Shaanxi Agricultural Products Market Phase 1, Xianyang 4.04 36%

Shaanxi Agricultural Products Market Phase 2, Xianyang 4.04 36%

Heilongjiang New Energy, Technology Demonstration, Hongqi 1.97 53%

Heilongjiang Dairy + Pig Technology Demonstration,

DeHaishun 2.94 48%

Heilongjiang Edible Fungus Technology Demonstration, YuFeng 1.48 49%

Heilongjiang Red Table Grape Technology Demonstration,

BinDong 1.57 70%

1. This component included the financing of demonstration and exhibition facilities.

These facilities were generally combined with applied research providing researchers

opportunities to test new technologies under real production conditions in a market

environment. About 640 research studies were carried out at these facilities during

implementation. At the same time these facilities were used (and continue to be used) by

farmers to visit and learn advanced technology packages. Among the visiting farmers,

some 3,200 have received specific training and about 75 percent of them have adopted

technologies demonstrated under the project. The development outcomes of these

investments show that facilities supported with public funds where new technologies can

be tested and demonstrated are a successful way for technology transfer. Two examples

are being described below.

2. In Heilongjiang, the project invested in the Agricultural Technology

Demonstrations Zone in Hongqi. The investment involved technology packages focused

on pig and cattle breeding, mushroom production, grape production and energy

conservation. The most impressive injection of innovative ideas and technologies was

probably done under the energy conservation activity where the private owner introduced

a wealth of ideas. These included energy regeneration, recycling of waste, combinations

of livestock and vegetable production in energy autarkic so-called ‗5-in-1‘ or ‗7-in-1‘

greenhouses, combining multiple functions, such as vegetable and fodder production,

livestock raising, biogas, waste composting, water recycling, thermal energy absorption

and storage, in one single greenhouse.

3. In Shaanxi, the component supported the construction of a large wholesale market

for vegetables in Xianyang. Today, this market is handling about 4.5 million tons of

vegetables annually with an estimated value of RMB 5billion. It serves as a major

distribution hub supplying about 90 percent of all vegetables consumed by a population

of about 15 million people of the city of Xian and delivers vegetables to a large number

of other provinces. An estimated 400-500,000 producers sell vegetables through this

26

market. By providing marketing security, the market allows producers not only to sell

their production but also to receive price incentives for premium quality, off-season

supply or diversified and niche market production (green food and organic vegetables).

4. The market significantly contributed to the downward diffusion of vegetable

production technologies and product quality. Based on the early success and importance

of this market, the project entered into a second phase investment to add a food safety

and quality testing laboratory to the market. The testing facility is well placed to monitor

and control food safety at the place of its highest concentration before products get

released to the consumer.

2. Promotion of Commercially Attractive Key Technologies (USD 220.1 million)

Research-Investor-Farmer Technologies (USD 204.1 million).

Under this sub-component the project supported a total of 99 sub-projects:

Province Sub-project Total Investment (USD

mill.) Bank (share in %)

Shaanxi Forest and Fruit Seedling, Yintai 1.92 42%

Shaanxi ‗Safe' Pork Production, Yangling 10.02 39%

Shaanxi Dairy Technology Support, Chengcang 2.32 45%

Shaanxi Qinchuan Cattle, Fufeng 2.29 50%

Shaanxi Strawberry Production & Processing, Gaolin

(cancelled) 0.04 100%

Shaanxi Flower seed balls, Yangling 4.73 49%

Shaanxi Water Saving Technology Demonstration, Yangling 10.05 38%

Shaanxi Dairy Technology Support, Yangling 2.88 51%

Shaanxi Apple seedling ,Yangling 2.95 44%

Shaanxi Grape and wine, Yaozhou 2.22 38%

Shaanxi Qinchuan Beef Cattle, Meixian 2.62 35%

Shaanxi Mulberry Fruit Production, Yangling 5.59 26%

Shaanxi Goat Dairy, Yangling 3.81 38%

Shaanxi Silkworm, Qianyang 1.10 34%

Shaanxi Goat Development, Yaozhou 2.57 38%

Shaanxi Apple Development, Tongchuan 2.75 60%

Shaanxi Goat Breeding, Fuping 3.40 43%

Shaanxi Dairy Development, Wugong (cancelled) 0.22 100%

Shaanxi Organic Vegetable Production, Taibai 4.27 40%

Shaanxi Mushroom, Baqiao 1.89 34%

Shaanxi Chinese Traditional Herbs Production, Yangling 3.79 43%

Shaanxi Chinese Herbal Medicine, Xianyang 1.40 47%

Shaanxi VOG, Yangling 1.25 55%

Shaanxi Big Cherry, Tongchuan 2.78 38%

Hunan Huilong Jiaotou, Changsha (Vegetable) 4.25 27%

Hunan Melon and Fruit Farm, Shaoyang City 5.58 27%

Hunan Beef Cattle, Lianyuan City 6.74 25%

27



Hunan Beef Cattle, Jiahua (cancelled) 1.78 47%

Hunan Zhenghong Pig Production 0.56 89%

Hunan Oil-Tea Project, Chaling County 6.10 31%

Hunan Cyclocarya, Suining 1.41 52%

Hunan Two-Line Super Hybrid Paddy 5.84 32%

Hunan Bamboo, Taojiang 0.56 37%

Hunan Staw Mats Cooperatives, Hengshan 0.37 48%

Hunan Nuisance Free Vegetable, Changsha county 0.16 46%

Hunan Herb Association, Liuyang 0.18 59%

Hunan Chengbu Off-season Vegetables 0.19 48%

Hunan Anhua Fruit 0.26 46%

Hunan Sanjiang Livestock Cooperatives, Taoyuan 0.21 55%

Hunan Gangtang Chinese Medicine , Shuangfeng 0.24 33%

Hunan Xinong Culture, Yanling 0.22 50%

Hunan Lotus Seed, Xiangtan 0.18 55%

Hunan Bamboo Shoot, Suining 0.23 53%

Hunan Bingtangcheng Orange, Yongxing 0.22 49%

Hunan Citrus Association, Shimen 0.17 50%

Hunan Ziyang District Potato, Yiyang 0.24 46%

Hunan Sweet-potato Vermicelli, Cili 0.34 31%

Hunan Sangzhi Culture 0.18 53%

Hunan Citrus Association, Mayang 0.16 60%

Hunan Ningxiang, Pig 1.37 48%

Hunan Purple Shale Date Production, Hengyang County 2.22 28%

Hunan Berkshire Pig, Loudi 1.60 40%

Hunan New Mulberry, Xiangxiang 2.90 27%

Hunan Cyclocarya, Suining 1.40 18%

Hunan Super Hybrid Rice, Zhuzhou 1.73 44%

Hunan High Quality Peach, Xu Pu 1.34 38%

Hunan Ningxiang Tea 3.25 28%

Anhui Pear Production & Fresh Keeping, Dangshan 4.62 34%

Anhui Duck Meat Project, Huaibei 3.82 31%

Anhui Native Cattle, Mengcheng (cancelled) 1.84 38%

Anhui Rice and Wheat Seed Improvement, Bengbu 2.86 31%

Anhui Broiler Chicken, Guangde 5.73 33%

Anhui Alpine Wild Rice Stem by Fuyuan Company, Yuexi 0.80 43%

Anhui Non-Polluted Sweet Potato and Beans, Chizhou 3.98 34%

Anhui Goat Producer Association, Yeji 4.68 39%

Anhui Organic Tea Production, Shexian 4.06 34%

Anhui Duck Production, ChenXin Company, Hexian 3.32 29%

Anhui Wei Pig Conservation by Antai Company, Guangde 1.91 51%

Anhui Duck Waste Treatment, Taiyang Company, Ningguo 2.30 42%

Anhui Gasification of Crop Residues, Wuhu 1.56 32%

28



Anhui Flower Seedling, Feixi (cancelled) 0.29 6%

Anhui Lean Meat Pigs, Dangtu 0.25 16%

Heilongjiang Silage, Shuangcheng 2.17 31%

Heilongjiang Breeding pig, Sanyun 1.45 51%

Heilongjiang Soybean Seed Improvement, Fujin 1.52 67%

Heilongjiang Soybean Seed Improvement, Hailun 1.59 72%

Heilongjiang Soybean Seed Improvement, Binxian (cancelled) 3.93 29%

Heilongjiang Seed Potatoes Production, Nehe 1.26 77%

Heilongjiang Manure Treatment Yinluo, Daqing 2.75 73%

Heilongjiang Pig Raising Technology, Jixi 1.89 31%

Heilongjiang Rabbit Production, Qiqihaer 3.65 29%

Heilongjiang Breeding Pigs, Big White Pig 1.92 30%

Heilongjiang Paddy Rice FA, Hailin 1.26 47%

Heilongjiang Manure Treatment, Suihua 0.89 36%

Heilongjiang Manure Treatment, Fuyu 0.95 32%

Heilongjiang Mushroom FA, Yichun 0.75 40%

Heilongjiang Agricultural Machinery FA, NingAn 0.43 35%

Heilongjiang Agricultural Machinery FA, QingAn 0.28 55%

Heilongjiang Agricultural Machinery FA, Aihui 0.24 62%

Heilongjiang Paddy rice FA, Jiamusi 0.76 35%

Heilongjiang Agricultural Machinery FA, Bei'an 0.52 51%

Heilongjiang Vegetable Seeding, ChangFa 0.57 35%

Heilongjiang Edible Fungi FA, Tongjiang 0.36 42%

Heilongjiang Paddy Rice FA, Huachuan 0.56 27%

Heilongjiang Non-polluted Rice, Hua'nan 2.10 6%

Heilongjiang Rabbit Raising, Fuyuan 0.60 23%

Heilongjiang Black Bee Conservation, Raohe 0.25 51%

Heilongjiang Antibiotics-free Milk, Hulan (cancelled) 0.25 100%

Heilongjiang Soybean Peptide, Binxian (cancelled) 0.16 100%

FA: Farmer Association

5. Project Agreements: Project agreements were introduced under the project to be

signed between the between the PMOs and the enterprise and farmer association partners.

These agreements stated the rights and responsibilities of each stakeholder, the financing

arrangements, and the expected public goods outcomes. They also included a number of

indicators to measure the outcomes. The vast majority of the private sector partners met

their obligations and 91 out of 99 sub-projects were implemented successfully. Eight

sub-projects (included in the table above) were cancelled during implementation because:

(a) the companies turned out to be financially or managerially too weak and could not

provide their counterparts funds according to their business plans (e.g. the Heilongjiang

antibiotics-free milk sub-project); (b) the private partners did not fulfill the public goods

outcome objective and shifted the focus of the investment exclusively towards

commercial purposes (e.g. Flower Seed Production in Feixi, the Dairy Development in

Wugong, or the Beef Cattle in Jiahua); or (c) unexpected external changes affected the

29

sub-project, such a rezoning of the production area of the Strawberry Development in

Gaolin into a an industrial development zone).

6. From a development perspective, it has been critical to guide the use of public

funds investments for private entities through clearly defined public goods outcomes.

Such outcomes were agreed in written contracts, which were monitored for

implementation progress and compliance with the agreements and which could have been

stooped in case of non-compliance.

7. Understanding the Nature of Public Goods: A large number of sub-project

investments under this component addressed public goods delivery in the agricultural

sector and demonstrated ways for accelerated innovation and technology transfer. While

it is not possible to describe each of these sub-projects in detail, some of the general

features of these sub-projects area as:

Overcoming technology and market access barriers caused by small farm size and a high

degree of fragmentation:

8. The project invested in a large number of sub-projects which involved a higher

level of organization of produces (horizontal integration of production). The project

provided management and technical training was well as start-up investments for a large

number of farmer associations. This allowed them to apply advanced technologies and/or

enter into higher value product markets. Different categories of farmer associations

emerged from the project: (i) Machinery associations, for example in Heilongjiang,

which increased mechanization levels, labor efficiency and farm productivity. Some of

the machinery associations were combined with land consolidation and cooperative

production arrangements. This permitted part of rural labor to take off-farm jobs and

increased the overall income. (ii) Special products associations, which were formed to

create a critical volume of a high value product. Examples included farmer associations

that produce and market straw mats, products from bamboo shoots, wild rice, lotus seed,

organic fruits or vegetables are. These farmer associations provide services, ensure that

production standards are being met, and market their products. (iii) Associations formed

as partners of companies (e.g. processors, traders, seed companies, etc.). Examples under

the project include numerous associations that produce seeds for seed companies or

livestock products for large processing enterprises.

9. From a development perspective, the project demonstrated that initial public

funding together with institutional and legal support for farmer associations can

successfully overcome technology adoption and market access constraints.

Overcoming market failures related to insufficient volume, time gaps and different

stakeholders:

10. The project supported a number of sub-projects that developed and introduced

new technologies and products which would not have been developed by market forces

alone. For example, the production of organic tea in Shexian (Anhui) or the development

30

of medicinal crop (Cyclocarya spec.) production in Suining (Hunan) required for the

processor‘s investment decision and assurance of sufficient volume of production years

before the processor would start investment. Typically in such situation individual

farmers were interested, but they were not sure that somebody will buy the product. On

the other side processors were unwilling to invest unless they had assurance of sufficient

raw material.

11. From a development perspective the project demonstrated that public funds can

usefully overcome this deadlock at the start-up phase of developing a new product.

Partnering with private sector entities to produce public goods:

12. The project invested in a range of sub-projects where private companies were

supported directly to deliver public goods in public-private partnership arrangements.

This included for example five waste treatment sub-projects with the objective to test

technical solutions and financial viability. A large-scale manure treatment plant (capacity

of treating manure from some 20,000 animal units) and two medium-size plants (200-400

animal units) in Heilongjiang using different fermentation/composting technologies were

supported. They proved the operational and financial viability of the technologies.

Similarly, in Anhui a large-scale treatment and composting facility for duck manure with

a capacity 50,000 tons from some 15 million birds was implemented as well as a

gasification plant using wheat straw and producing and selling gas to 300 connected

households. These investments were combined with operational arrangements of

collecting/ purchasing waste products from farmers and selling the produce (organic

manure, gas). While the gasification plant suffered from some co-financing issues, these

five operations delivered also important insights for future policy making including

environmental regulations.

13. From a development perspective, these investments did not only introduce and

test technical solutions but are also analyzed the commercial and financial parameters of

these technologies with the objective to find out how the competitiveness of the sector is

influenced, if for example manure treatment is made mandatory for the industry.

14. A different environmental concern was addressed by several genetic resource

protection sub-projects. These included indigenous pig and cattle varieties with the

objective to develop commercial interests for the protection of these resources. A typical

example is described in Text Box 1.

15. A similar public sector, company, and farm outreach approach was implemented

for the protection of Qinchuan Beef Cattle in Meixian (Shaanxi) where the genetic

resources protection was achieved by using the local cattle variety as a breeding line for

high value Wagyu beef production.

31

Text Box 1: Protection of Wei Pigs by the Anhui Antai Agricultural Development Co. Ltd

Issue: Modern pig breeding has led to a near extinction of many indigenous breeds in China. A

government breeding centre maintained a small stock of the rare Wei Pig variety to protect this

genetic resource. This was dependent on a constant public fund flow with a high risk of

sustainability.

Project Solution: A large private pig breeding company recognized an opportunity to develop a

business line based on this indigenous species for special high-end consumers. Production and

marketing risks were considered too high for a private investor and the company requested

support under the project. Project support was provided based on a contract detailing the

minimum stock of pure-bred pigs to be maintained by the company and the number of farmers

and targeting conditions in the out-grower scheme. The company set up an out-grower scheme

involving small and poor farmers focusing on women headed households in mountainous areas

combined with a company operated breeding centre under near nature conditions including a

visitor centre to receive consumers. The special environmental properties (protection of an

indigenous and rare species, near nature production system) and social properties (working with

small and poor farmers) were integrated in the marketing concept for the product and became part

of the product market price.

Outcome: The sub-project provided a triple win situation: For the Government it reduced the

burden of genetic resource protection by transferring responsibility to a professional and technical

competent private entity. For the company market differentiation and the new product line

provided a promising business opportunity. And for the contracted farmers a new source of

income was developed. Most interesting were however the interactions between the Government

and the company and the company and the civil society. The Government sees an opportunity to

transfer responsibilities of genetic resource protection, but also social, equitable welfare

distribution function to a private company. This was done mutually beneficial with the company

making this a product, price and marketing factor. This in turn is only possible because some of

the consumers in this society value these properties and pay higher prices for the pork.

16. In addition to environmentally related public goods, a large number of sub-

projects implemented by private companies or farmer associations addressed social

goods. In fact most of the sub-projects integrated the achievement of social goods, but

some were designed to address social concerns as their main focus. This was done by

supporting companies to source raw material from poor areas or disadvantaged farmers.

Most promising examples include: mulberry fruit production in Ankang (Shaanxi), rabbit

production in Qiqihaer and Fuyuan (Heilongjiang), mushroom production in Tongjiang

(Heilongjiang), organic vegetable production in Taibai (Shaanxi), and date production in

Hengyang (Shaanxi). In some sub-projects, a specific social issue was addressed. The

Mushroom Production sub-project in Xian supported a company to target farmers, who

were affected by losing their off-farm jobs due to the financial crisis, or in Huaibei

(Anhui), where the project used a company to address impacts from mining and

providing farmers with a technical package and a contractual arrangement to produce

ducks marketed by the company.

32

From a development perspective the project demonstrated in a large number of cases how

the private sector can extend technologies and production opportunities to socially

disadvantaged farmers. These farmers entered into long-term production agreements

with companies, which in turn provided technical assistance and secure markets for their

products.

Public Sector Support Programs (USD12.6 million)

Under this sub-component the project supported a total of 8 sub-projects providing

agricultural services:



Shaanxi Integrated Pest Management, Yangling 4.04 36%

Shaanxi Food Quality Advisory, Testing & Certification,

Yangling 4.04 36%

Anhui Agricultural Technology Extension, Maoji 2.94 48%

Anhui IPM for Rice Production, Nanling 1.97 53%

Anhui Feed Safety, Anhui Academy of Agriculture

Sciences 1.48 49%

Anhui Information Service System, Hefei Institute of

Physical Science CAS 1.57 70%

Anhui Genetic Identification of Purity of Seed, Anhui

Academy of Agriculture Sciences 4.04 36%

Heilongjiang Dairy Cattle Service, Fuyu 4.04 36%

17. The sub-component supported public sector service providers, introduced

advanced technologies, and improved services delivery. At the same time, semi-

commercial fee collection arrangements were introduced to ensure the financial

sustainability of service providers. Most of the services provided are in high demand.

The service providers also use innovative institutional arrangements and feature a high

level of advanced technologies. For example:

18. The GMO testing laboratory for food and agricultural raw material housed in the

Anhui Academy of Agriculture Sciences has received the status and national acceptance

as a reference laboratory for its DNA based seed identification laboratory. The Academy

has a strong scientific background in the development of gene markers and genetic

fingerprints for seed and food. Several of the Academy‘s developed gene markers are

patent right protected. The Academy plays an important role in providing services to the

seed and food industry both in terms of seed purity and the protection of property rights

of the breeder as well as in the testing for GMO for the food import industry

19. The Hefei Institute of Physical Science in Anhui started a separate program that

developed an agriculture focused web search engine that scans the web for relevant

articles and filters these both automatically and manually (using experts group) so that

33

the content is of high quality and relevance. The search engine is highly interactive with

the client farmers.

20. From a development perspective, the project demonstrated how existing public

sector agricultural service providers can be transformed in effective and sustainable

institutions providing tailored service in a modernized agricultural sector.

Targeted Technology Transfer for women farmers in Shaanxi (USD 3.4 million)

The sub component included support for one subproject providing targeted technology

transfer to reach women farmers.



Shaanxi Targeted Women's Component, Yangling 3.35 54%

21. In most rural areas in China male out-migration (men leaving in search of

employment in cities) has resulted in women being in charge of 80 percent of the

farming—from farm management to physical work and marketing. Often women have

lower educational standards than men and lack opportunities to access agricultural

technical knowledge and extension services. This project supported provision of focused

technology transfer to women especially in poor households where access to information

and capital is limited but where there is a potential to contribute to agricultural

development. The component was led by the Women‘s Federation of the Yangling

Demonstration Zone, a member of the All-China Women Federation. The work was

supported by the Women‘s Science and Technology Service Centre of Shaanxi (an

NGO).

22. The component trained 100 women in business management, 1,000 in technical

aspects and 10,000 women in villages for practical work as part of enterprise-farmer

arrangements. The Women‘s Federation office of the Yangling Demonstration Zone

worked with the district, county and township federations and applied a transparent

selection process for the women to be trained. For the last two categories (technical and

practical work) poor communities were targeted. Three product lines were supported:

home based handicrafts, egg production (in a demonstration base and by farmers), and

vegetable production in greenhouses supported by a grant to the farmers from the

Federation. Farmer associations were formed to assist these producer groups in technical

support and marketing. Participating women were also taken to other provinces to visit

and learn from similar project designs. In total, 23,000 women were trained.

23. The enterprises supported proved all to be profitable and to increase farmer

incomes. Especially successful was greenhouse production of vegetables, reaching an

average annual income of RMB17,000. Because of its success the women‘s component

was awarded additional resources.

24. The development outcomes of the project were clear: increased income of women

farmers; demonstration of a successful model of capacity building at scale of women

34

farmers in rural enterprises. Collective action through producer groups enabled

efficiencies and scale in marketing. Young women leaders gained skills and confidence

in leadership and some also advanced in their careers. Lessons learnt from this

component are very critical for the Bank‘s rural development programs going forward.

ARD is capturing these lessons learnt and featuring this component in the Gender in

Agriculture website and sourcebook.

3. Project Support (USD 8.7 million)

25. Under this component the project financed project administration and

management, capacity building and training including a number of national and

international study tours. The project has drawn significant attention from high level

political leaders and decision makers. Projects sites have been frequently visited and

project features and results have been discussed and evaluated by various government

delegations. This involved at least 33 visits of project sites by Central Government

Ministers, Vice-Ministers and provincial Governors or Vice-Governors, including

Premier Wen Jiabao.

26. The project, its individual sub-projects and individual features have stimulated a

large number of publication and scientific articles in China. A list of related publications

is shown in Table 2.

35

Table 1: Summary Evaluation of Sub-projects by Expert Assessment Team

(Status: November 30, 2011)

Number of subprojects Percentage

Hei

long

jian

g

An

hu

i

Hu

nan

Sh

aan

xi

To

tal

Hei

long

jian

g

An

hu

i

Hu

nan

Sh

aan

xi

To

tal

Overall Achievement 33 20 33 29 113

Highly Satisfactory 13 8 15 13 49 39.4% 40.0% 45.5% 48.1% 43.4%

Satisfactory 15 8 17 10 50 45.5% 40.0% 51.5% 37.0% 44.2%

Marginally Satisfactory 2 2 1 1 6 6.1% 10.0% 3.0% 3.7% 5.3%

Unsatisfactory 0 2 0 1 3 0.0% 10.0% 0.0% 3.7% 2.7%

not evaluated 3 0 0 2 5 9.1% 0.0% 0.0% 7.4% 4.4%

Innovation Objective


Satisfactory 16 8 19 11 54 48.5% 40.0% 57.6% 40.7% 47.8%


Unsatisfactory 0 2 0 1 3 0.0% 10.0% 0.0% 3.7% 2.7%

not evaluated 3 0 0 2 5 9.1% 0.0% 0.0% 7.4% 4.4%

Public Goods Objective


Satisfactory 17 9 15 13 54 51.5% 45.0% 45.5% 48.1% 47.8%


Unsatisfactory 1 0 0 0 1 3.0% 0.0% 0.0% 0.0% 0.9%

not evaluated 3 0 1 2 6 9.1% 0.0% 3.0% 7.4% 5.3%

Economic Objective


Satisfactory 16 11 18 11 56 48.5% 55.0% 54.5% 40.7% 49.6%


Unsatisfactory 0 0 0 0 0 0.0% 0.0% 0.0% 0.0% 0.0%

not evaluated 3 0 0 3 6 9.1% 0.0% 0.0% 11.1% 5.3%

Implementation Progress


Satisfactory 12 12 20 11 55 36.4% 60.0% 60.6% 40.7% 48.7%


Unsatisfactory 0 0 0 1 1 0.0% 0.0% 0.0% 3.7% 0.9%

not evaluated 3 0 0 2 5 9.1% 0.0% 0.0% 7.4% 4.4%

Source: Expert Assessment Team

37

Table 2. Selected List of Publications Directly Related to the Project

Place Publication Name of the Article Date

Anhui Hebei Agricultural Sciences Thinking of Anhui Agriculture Information

Service Status 2010.7

Anhui Journal of Agricultural Library

and Information

Selection on transaction costs and main supply of

the agricultural information services, 2011.3

Anhui Journal of Agricultural Library

and Information

Anhui farmers' information technology training

status and mode of exploration 2011.6

Anhui Microelectronics and

Computer

Visualization of the prices clustering of

agricultural products Based on GIS 2005.7

Anhui Computer Systems &

Applications

The elimination of the MD5 algorithm in

agricultural data heavy 2009.1

Anhui Computer Engineering and

Applications

The elimination of ARIMA model in agricultural

prices forecast 2009.4

Anhui Agriculture Network

Information

Agricultural FAQ retrieval system in shallow

semantic 2009.8

Anhui Agriculture Network

Information Agricultural market information search platform 2009.8


Applications

Agricultural prices and supply and demand

monitoring system based on Google Maps 2009.11


Applications

Design and Implementation of geographic

positioning of the agricultural market name 2009.3


Applications

The detection of abnormal price data of

agricultural products 2010.3

Anhui Pattern Recognition and

Artificial Intelligence A new complex adaptive search model 2009.22

Anhui China new energy network Straw gas station inject new energy for the new

rural construction

2007.8.

2

Anhui China Resources

Comprehensive Utilization

Straw gasification projects with gas-benefit

analysis and measures recommended 2011.11

Anhui Modern Agricultural Science

and Technology

World Bank Agricultural Technology Project

Transportation Management Model

1905.7.

2

Heilong

jiang

Northeast Agricultural

University (Social Science

Edition)

"Performance Evaluation of World Bank loans to

agricultural machinery projects based on

envelopment analysis"

2010

Shaanxi Journal of Plant Protection Dynamics of Apple Gold pattern miner

population of the Loess Plateau 2011.3

Shaanxi Journal of Zhejiang University Apple IPM Ecological Engineering building

ideas and strategies 2007.1

Shaanxi Northwest A & F University Behavior and control of Halyomorpha bug 2007.1

Shaanxi China Cattle Science Qinchuan cattle molecular genetics and breeding 2010-

2011

Shaanxi Soil Science and Plant

Nutrition

Release of nitrogen, phosphorus, and potassium

during the decomposition of apple (Malus

domestica) leaf litter under different fertilization

regimes in Loess Plateau, China

2011

Shaanxi Journal of Plant Nutrition

15Nitrogen study on absorption, distribution and

utilization of nitrogen applied in early summer in

Red Fuji apple (Malus domestica) in Loess

2011

38

Plateau, China

Shaanxi Grassland 2011,19 (1) :20-25

Influence of planting different kinds of grass

between the lines on photosynthetic

characteristics of young apple trees

2011

Shaanxi Grassland 2011,19 (5) :771-

775

Influence of planting white clover between the

lines on the photosynthetic physiological

characteristics of tree

2011

Shaanxi Agricultural Sciences in

China, 2011,44 (23):

Absorption and distribution of application of

15N-urea in soil on dwarfing interstock Fuji

apples in early summer

2011

Shaanxi Journal of Remote Sensing,

2011

Differentiation characteristics of soil moisture in

apple orchard of Shaanxi Loess Plateau 2011

Shaanxi Agricultural Research 2011

Influence of planting different kinds of grass

between the lines on soil characteristics of young

apple trees

2011

Shaanxi Fruit Science 2011,28 (6)

:1071-1076

The effect of 6-BA and GA4 +7 spraying

treatment and other measures on promoting

branch of Changfu 2 young apple trees

2011

Shaanxi Journal of Fruit Science

2011,28 (1) :108-113

Study progress on promoting the branch of

apple seedlings and young trees 2011

Shaanxi Northwest A & F University

2011,39 (6) :185-190

Influence of Provincetown Marin and stub

handle on the branch characteristics of 2-year-

old apple seedlings

2011

Shaanxi

Northwest University of

Science and Technology,

2011,39 (8) :158-163

Investigation and Analysis of Shaanxi Province

apple seedling quality 2011

Shaanxi Northwest Agricultural

Sciences 2011,20 (7) :123-126

Influence of branch angle on Fuji bud and

content of leaf carbon nitrogen 2011


Sciences 2011,20 (8)

Influence of NaCl stress on growth and

photosynthetic characteristics of four kinds of

Apple Rootstock

2011


Sciences, 2011,20 (7)

Research on Apple rootstocks Tissue Culture and

Rapid Propagation 2011

Shaanxi Northwest A & F University

Press

Domestic and international apple industry

development report 2011

Shaanxi 2008 Annual Cooperative

Economy Tongchuan Apple 2008

Shaanxi Chinese Food Meilingyang milk original milk management

mode 2008

Shaanxi Chinese Food

Picture News "The first organic vegetable base in

Shaanxi at the same time passing through the

Organic Food Certification of European Union,

the United States, Chinas built in Taibai"

2009

Shaanxi Modern Chinese Medicine Study on the Phyllanthus cultivation techniques

and medicinal quality

2006.10

.1

Hunan National Potato Conference

Papers

Layout characteristics of the potato production

area in Hunan Province 2009

Hunan Agricultural Systems

Engineering Research Papers

Cooperatives are the best choice for farmers'

income 2009

Hunan Chinese agriculture and Investigate the role of Hunan farmer specialized 2009

39

natural resources and

agricultural zoning

cooperative organizations on the new rural

construction

Hunan World Agriculture Development and enlightenment of Hunan

Hengshan mats professional cooperatives 2009

Hunan World Agriculture Key technologies of Borneol camphor cutting

propagation 2010.7

Hunan World Agriculture The road of the agricultural development of the

company + base + farmers + research units 2010.8

Hunan World Agriculture The experience and the results of the

implementation of World Bank loan of

agricultural science and technology project

2010.8

Hunan Modern Agricultural Science

and Technology

Problems and advice on the land transfer in the

rural comprehensive improvement 2010.9

Hunan World Agriculture Scientific and technological progress and

agricultural industrialization 2011.2

Hunan World Agriculture

World Bank loans of agricultural science and

technology projects achieve the win-win of the

ecological, the economic benefits in purple shale

area

2010.11

Hunan International Cucurbit

Symposium and 7th Australian

"Snow peak Xiaoyuhong" Small-sized

Watermelon Seedless Breeding 2005.9

Hunan "Chinese vegetables" 11th Five-Year Outlook and Recommendations

of China's melon industry 2006.1

Hunan "Chinese vegetables" Breeding of White melon Xuefeng honey No.2 2006.4

12-14

Hunan Cucurbifaceae

PROCEEDINGS

"Approaches to minimize the defects of seedless

watermelon"

2006.9

272-276

Hunan "Chinese vegetables" The breeding of Xuefeng Xiaoyu No.8 , black

yellow watermelon new varieties

2007.5

14-17

Hunan "Chinese vegetables" " The breeding of Xuefeng new flower leather

seedless watermelon new varieties"

2007.6

20-22

Hunan "Agriculture Science News

" The breeding of Xuefeng Xiaoyu No.9 , small

fruit flower leather red new watermelon

varieties"

2007.12

139-142

Hunan "China's seed industry "Watermelon physiological diseases prevention

and control

2008.11

46-47

Hunan "Chinese vegetables" "The breeding of Xuefeng honey No.3, the

muskmelon new varieties

2008.3

23-25

Hunan "China's seed industry

" High yield breeding technology of the

tetraploid parent seed in southern hills and

mountains

2009.6

61-62

Hunan "Chinese vegetables" preventive measures research on bacterial fruit

rot in Watermelon hybrid seed production

2009.2

41-42

Hunan China Agriculture Press "China Seedless Watermelon Research and

Application" 2009

Hunan Taiwan Strait Press Pumpkin varieties and cultivation techniques 2006

Hunan Golden Shield Press "How to improve the watermelons effectiveness" 2006

Hunan China Agriculture Press "Child-free watermelon research and application 2009

Hunan China's financial Provide industrial support for the new rural

construction—utilization of foreign capital 2007.1

40

implementation of industrial management of

Comprehensive agricultural development is

admirable

Hunan Comprehensive agricultural

development in China

Implement World Bank loan of science and

technology projects Support the development

of agricultural industrialization

2007.2

Hunan China Financial and Economic

News

Gold plow creates the road of innovation -

"secret" of the implementation of World Bank

loan of agricultural science and technology

project of the comprehensive agricultural

development attains the Year Award nomination

of the Bank

2007.4.

7

Hunan China Financial and Economic

News "Five 1 "mode, true" bull "

2007.10

.30

Hunan Yijie Chinese website Chaling Camellia low-change increase 2007.3.

2

Hunan Hunan Science and

Technology Press

Development and innovation of the rural

cooperative economic organizations 2010


Technology Press Cultivation technology of wild vegetables 2010

Hunan Central South University Press Practical technologies of rapeseed cultivation 2011

Hunan People's Daily Do everything possible to increase people's

income 2003

Hunan China News Agency Bamboo King Mo Yun Xiang's story 2006

Shaanxi Northwest A & F University Spatial structure analysis of the gold pattern

small moth larvae in apple tree crown 2009.3

Shaanxi Northwest Forest Structure distribution of insect community in

bagged apple orchard in August 2007.11

Shaanxi Anhui Agricultural Sciences Current Situation Analysis of pest management

standardization in Luochuan apple orchard 2007.9

Shaanxi Shaanxi Daily Qinchuan cattle industry development

Shaanxi Shaanxi Agricultural Science

and Technology News

Qinchuan cattle science and technology

information

Shaanxi Radio stations in Shaanxi

Province Jinhao network an exclusive interview 2010

Shaanxi Shaanxi Daily IPM standardization, information technology

Anhui Anhui Daily Bank projects to promote Information

Technology in Agriculture

2010.8.

23

Anhui Anhui Agricultural Science

Bulletin

The role and recommendations of the rural

cooperative economic organizations in the

implementation of the World Bank Agricultural

Technology Project - Anhui Province

2009.7.

2

Anhui Anhui Agricultural Science

Bulletin

Empirical analysis and policy recommendations

of the Ningguo duck manure treatment projects 2011.17

Anhui Anhui Agricultural Sciences

Innovation Mechanism and Model research of

the World Bank Anhui Agricultural Technology

Project

2010.18

Hunan

Essay commemorating the

21st anniversary of the

province's comprehensive

Reference to the bank's project management

experience, innovate comprehensive agricultural

development project management mechanisms

2009.7

41

agricultural development

Hunan Hunan Agricultural Sciences

Study on the evaluation index system of

comprehensive strength in the village in

choosing center villages

2009.8

Hunan Hunan Agricultural Sciences Reflections on the Government to invest in

agricultural projects assessed 2010.5

Hunan Hunan Agricultural Sciences

Study on agricultural product development

ideas and selection of species Hunan minor

characteristics

2011.1

Hunan Hunan Agricultural Sciences Relationship in Hunan's economic and social

development and land use 2011.6

Hunan Hunan Agricultural Sciences Study on current situation and problems of high-

quality rice production in Hunan Province 2011.11

Hunan Hunan Daily The Lianyuan World Bank Loan cattle project to

help farmers increase income

2007.5.

16

Hunan Hunan Red Net website To build the province's high quality Camellia

base

2006.3.

21

Hunan Hunan Daily

"Helm well, serving wonderfully (the Chaling

people-oriented using science and technology to

lead the famer rich)

2006.8.

30

Hunan Hunan Daily Breeding standardization of Ningxiang Liushahe

local swine

2010.12

.20

Hunan Hunan Agricultural Journal Sharon animal husbandry help Ningxiang pigs

take off

2011.12

.12

Hunan Xiaoxiang Morning A single giant of Agricultural fair settled in

Sharon Animal Husbandry

2011.11

.18

Hunan Xiaoxiang Morning

Animal Husbandry and Sharon were invited to

participate in the Chinese famous pigs (Lu

Chuan) Cultural Festival

2011.11

.3

Hunan Hunan Economic News Sharon Livestock Protect and Develop "National

Health Insurance" Ningxiang pig

2009.1.

22

Hunan Hong Kong's Wen Wei Po The Changsha quality pork stand in Hong Kong

market

2009.1.

23

Hunan Xiaoxiang Morning A02 World Bank a loan of $ 700,000 for local pig

conservation

2009.2.

15

Hunan Ta Kung Pao The Ningxiang swine popular river north and

south

2009.1.

15

Hunan The new communication Hunan migrant workers return home to regain

their dream of "land"

2009.2.

20

Hunan Xiaoxiang Morning C03 Happy Xi Li Shu-chu: local flower pork short

supply

2009.4.

24

Hunan Contemporary Business News

B3

Ningxiang local flower pigs successfully vied for

the Changsha supermarket

2009.4.

29

Hunan Hunan Daily Farmers' specialized cooperative organizations 2006

Anhui Wuhu Daily Straw changing to the gas - the new rural energy 2008.12

.16

Shaanxi Sichuan name family Press Specialty vegetable varieties and cultivation

techniques 2004.3

Shaanxi Yangling News, Ankang News Brand-name products of Shaanxi, the farmers

having more than a rich road

2010.11

.6

42

Hunan Shaoyang Daily Chengbu vegetable cooperatives rich Miao

nationality

2009.08

.16

Hunan Shaoyang Daily Highlight the theme of the "three rural" flag 2009.10

.13

Hunan Economic Daily News Chengbu "vegetable basket" project 2009.12

.15

Hunan Shaoyang Daily Chengbu "private enterprises linking the village"

to boost economic development

2010.08

.29

Hunan Shaoyang Daily

Promoting economic and social development,

vigorously promote the people's livelihood and

well-being

2010.09

.15

Hunan Hunan Daily Chengbu alpine vegetables sale well National 2010.10

.17

Hunan

Chengbu office of further in-

depth study and practice the

scientific concept development

received "outstanding research

reports"

Talking about the operation and development of

Chengbu alpine-season vegetables project

2010.03

.31

Hunan "Zhuzhou daily" To build the province's high quality Camellia

base

2006.3.

1

Hunan "Zhuzhou daily" an increase of 10 times on average In rich 2007.3.

21

Hunan "Zhuzhou daily" Chaling Camellia low-change increase 2007.3.

9

Hunan "Zhuzhou daily"

Camellia well winning three million (Chaling

built 964 hectares high standards base in two

years )

2007.9.

4

Hunan

Zhuzhou City, the

comprehensive agricultural

development brief "4

To build the province's high quality Camellia

base

2006.4.

28

Hunan

"Zhuzhou comprehensive

agricultural development brief

" 7

The way of Chaling Camellia project

communities involved in the procurement

practice

2006.7.

15

Hunan

Zhuzhou comprehensive


8

National Agricultural Development check

Camellia Project in Zhuzhou

2006.8.

10

Hunan

Zhuzhou comprehensive


10

Let farmers' pocketbook bulge 2006.10

.16

Hunan Today Chaling

"Helm well, serving wonderfully (the Chaling

people-oriented using science and technology to

lead the famer rich)

2006.9.

1

Hunan "Chaling County Office

Bulletin" 12

Chaling Investigation and Consideration of the

Camellia project of World Bank loan

2006.11

.3

Hunan "Typical Profile of Chaling

three cadres meeting

To build the province's high quality Camellia

base

2007.3.

1

Hunan "Chaling new rural" four Camellia Project attain World Bank' certainly 2010.4.

20

Hunan "Chaling new rural" four Camellia: farmers "green bank" 2010.4.

20

43

Hunan Changsha Evening A2 Focus on holding training classes for Ningxiang

pig farmers

2009.2.

15

Hunan SanXiang A3 Farmers to return home and set up factories in

raising local flower Pig

2009.2.

17

Hunan Changsha Evening News The Ningxiang swine conservation farms

completed in the first half year

2009.4.

3

Hunan Changsha Evening A3 Campus reporter become the "swineherd" 2009.4.

22

Hunan Today Ningxiang Department of Commerce leading research

county meat processing enterprises 2009

Hunan Today Ningxiang Li Shu-chu, swine commander 2009.5.

14

Hunan Changsha Evening News Liu Shahe Spotted Pig Plan "appear on the

market" to build the pig brands County

2011.2.

16

Hunan Yiyang Daily Farmers' specialized cooperative organizations 2006

Hunan Yiyang Daily Taohuajiang bamboo products production

cooperatives develop water mats 2010

Hunan Yiyang Daily The Majiang seeds market 2011

Hunan Yiyang Daily

Taohuajiang bamboo products production

cooperatives attain award-winning at the

Shanghai World Expo

2011

Books:


Technology Press

Development and innovation of the rural

cooperative economic organizations 2010


Technology Press Cultivation technology of wild vegetables 2010

Hunan Central South University Press Practical technologies of rapeseed cultivation 2011

44

Annex 3. Economic and Financial Analysis

1. Financial analysis was carried out for a total of 91 sub-projects to capture the net

benefits generated by the project as well as the distribution of benefits among

stakeholders.

2. Methodology and Assumptions: The cash flow calculations used actual

investment costs and operational costs and revenues as observed in the field at the time of

data collection (end 2011). Based on the field data, cash flows were projected for a

period of 12 years for all sub-projects involving annual crops and livestock and for 18

years for sub-projects involving perennial fruit and tree crops. The analysis used actual

market prices for inputs and outputs up to the current date and constant prices for the

projection period. Labor was valued at prevailing wage rates observed in the project

areas. For all sub-projects involving different stakeholders along the value chain, a

separate cash flow analysis was prepared for each of the stakeholders: farmer, farmer

cooperative, and company or processor.

3. Results: The overall financial Internal Rate of Return (IRR) of the project is

estimated at 26 percent. The IRRs of individual sub-projects range from 9 to 45 percent

Assuming an opportunity costs of capital of 12 percent the project generated a Net

Present Value (NPV) of about RMB 865 million. About 55 percent of the NPV is

estimated to have been accrued at the farm/household level with an additional 18 percent

going to farmer cooperatives and the remaining 27 percent captured by marketing and

processing companies (see Table 3).

4. Further analysis was carried out to assess the distribution of net income under

different institutional arrangements. Using subsets of sub-projects involving farm

households and farmer cooperatives show that the benefits were shared in a proportion of

62 percent for individual farmers and 38 percent for cooperatives. In such cases where

individual farmers were linked to companies, the benefit sharing was 57 percent

(farmers) and 43 percent (companies). In those sub-projects that involved farmers,

cooperatives and companies the benefit sharing was 39 percent, 10 percent, and 51

percent, respectively (see Table 3). These results proved that a fair benefit sharing was

achieved under the project despite different economic powers of stakeholders. This was

largely achieved through the design of the project, which protected the interests of

farmers (cooperative support, mandatory combination of investments in production and

processing, etc.).

5. Some of the environment oriented sub-projects show a relatively low financial

rate of return (duck waste treatment 10 percent, gasification of crop residues 9 percent,

and cattle manure treatment with three sub-projects with IRRs between 14-15 percent).

This is partly explained by the fact that the environmental benefits for the society do not

figure into the financial analysis and that the economic rates of returns of these sub-

projects could be significantly higher. Such sub-projects have been included for gaining

a better understanding of: (a) the technical feasibility of residue treatment methodologies,

45

and (b) their financial viability and attractiveness. This way the project yielded valuable

lessons and showed that the applied technologies are proven and ready to be scaled up,

and the financial, albeit relatively low, is not completely unattractive for private

investment.

46

Table 3. Financial Benefits and Benefit Sharing by Subproject

No. Province

/Code Subproject Name

Total

Investment

of which

WB loan

NPV

(OCC

12%)

FIRR

Share of

NPV by

Farmers

Share of

NPV by

Cooperatives

Share of

NPV by

Companies

1,000RMB 1,000RMB percent percent

1 Anhui 01 Pear Production and Fresh Keeping,

Dangshan 砀山梨 25,010 10,942 16,312 36% 73% 27%

2 Anhui 02 Duck Meat Project, Huaibei 淮北肉鸭 19,520 8,128 12,920 36% 66% 34%

3 Anhui 04 Agri-tech Extension, Maoji 毛集农业 12,300 5,673 5,124 21% 100%

4 Anhui 05 Rice and Wheat Seed Improvement,

Bengbu 蚌埠水稻 16,870 6,231 19,522 38% 82% 18%

5 Anhui 06 Broiler Chicken, Guangde 广德肉鸡 32,710 13,175 18,042 24% 60% 40%

6 Anhui 07 Alpine Wild Rice Stem, Yuexi 岳西茭白 5,580 2,380 1,459 20% 33% 67%

7 Anhui 08 Non-Polluted Sweet Potato and Beans,

Chizhou 池州豆类 21,580 9,352 7,408 18% 49% 51%

8 Anhui 09 Goat Producer Association, Yeji 叶集山羊 28,470 12,533 2,263 17% 80% 20%

9 Anhui 11 Organic Tea Production, Shexian 歙县有

机茶 27,170 9,637 33,105 40% 85% 15%

10 Anhui 12 Standardized Duck Production ChenXin,

Hexian 和县肉鸭 18,050 6,582 6,754 23% 72% 28%

11 Anhui 15 Wei Pig Conservation by Antai Company,

Guangde 广德圩猪 12,240 6,692 10,447 35% 56% 44%

12 Anhui 16 Duck Waste Treatment by Taiyang

Company, Ningguo 宁国鸭粪处理 15,540 6,700 -191 10% 100%

13 Anhui 17 Gasification of Crop Residues, Wuhu 芜湖

秸秆气化 8,690 3,501 -1,449 9% 100%

14 Heilong. 01 Dairy&Pig,Haishun 海顺牛、猪 24,291 11,000 10,752 24% 55% 45%

15 Heilong. 01 New Energy菁菁太阳能 14,347 7,000 6,578 20% 53% 47%

47

No. Province


Total

Investment

of which

WB loan

NPV

(OCC

12%)

FIRR

Share of

NPV by

Farmers

Share of

NPV by

Cooperatives

Share of

NPV by

Companies


16 Heilong. 02 Mushroom, YuFeng玉丰食用菌 11,000 5,000 7,121 23% 11% 89%

17 Heilong. 03 Silage, Shuangcheng双城青贮饲料 10,120 4,600 35,636 30% 50% 50%

18 Heilong. 04 Breeding Pig, Sanyun 三元种猪 11,870 5,490 2,211 42% 19% 81%

19 Heilong. 05 Soybean Improvement,Fujin 富锦大豆 15,840 7,200 11,763 26% 67% 33%

20 Heilong. 06 Soybean Improvement, Hailun 海伦大豆 17,510 7,900 1,184 28% 52% 48%

21 Heilong. 07 Soybean Improvement, Binxian 宾县大豆 17,160 7,800 13,733 37% 50% 50%

22 Heilong. 08 Seed Potatoes, Nehe 讷河马铃薯 16,500 7,500 5,451 26% 53% 47%

23 Heilong. 09 Red table grape, BinDong 哈尔滨东金园

艺葡萄 17,600 8,000 49,410 33% 31% 69%

24 Heilong. 10 Manure Treatment Yinluo, Daqing 大庆银

螺粪肥 26,730 12,000 4,082 15% 100%

25 Heilong. 11 Dairy Cattle Services, Fuyu 富裕奶牛 4,077 2,000 2,764 25% 37% 63%

26 Heilong. 12 Pig Raising, Jixi 鸡西种猪 8,800 4,200 7,857 23% 56% 44%

27 Heilong. 13 Rabbit Raising, Qiqihaer 齐齐哈尔獭兔 16,720 7,500 10,910 25% 43% 57%

28 Heilong. 14 Breeding Pigs, Big White 大白猪选育 8,800 4,000 2,097 19% 100%

29 Heilong. 15 Paddy Rice FA, Hailin 海林水稻协会 6,280 4,000 1,560 16% 100%

30 Heilong. 16 Manure Treatment, Suihua 绥化粪肥 4,100 2,100 787 15% 100%

31 Heilong. 17 Manure Treatment, Fuyu 富裕粪肥 4,500 2,100 1,072 14% 100%

32 Heilong. 18 Mushroom FA, Yichun 伊春木耳协会 3,567 2,100 428 12% 100%

33 Heilong. 21 Agricultural Machinery FA, NingAn 宁安

农协 2,200 1,050 1,639 24% 100%

34 Heilong. 22 Agricultural Machinery FA, QingAn 庆安

农协 1,478 1,050 1,164 25% 100%

35 Heilong. 23 Agricultural Machinery FA, Aihui 爱辉 1,453 1,050 1,361 25% 100%

48

No. Province


Total

Investment

of which

WB loan

NPV

(OCC

12%)

FIRR

Share of

NPV by

Farmers

Share of

NPV by

Cooperatives

Share of

NPV by

Companies


农机协会

36 Heilong. 24 Paddy Rice FA, Jiamusi 万庆水稻 3,300 1,500 1,354 23% 100%

37 Heilong. 25 Agricultural Machinery FA, Bei'an 北安农

协 2,215 1,575 2,053 25% 100%

38 Heilong. 26 Vegetable Seeding, ChangFa 佳木斯直南

长发蔬菜 2,437 1,050 962 25% 100%

39 Heilong. 27 Edible Fungi FA, Tongjiang 同江市食用

菌协会 1,755 1,050 2,308 27% 31% 69%

40 Heilong. 28 Paddy Rice FA, Huachuan 桦川中星村水

稻协会 2,357 1,050 1,494 31% 100%

41 Heilong. 29 Non-polluted Rice, Hua'nan 桦南县绿色

稻米 6,024 1,050 2,654 17% 100%

42 Heilong. 30 Rabbit Raising, Fuyuan 抚远养兔 2,250 1,050 1,380 25% 100%

43 Heilong. 31 Black Bee Raising, Raohe 饶河黑蜂 1,348 1,050 1,648 37% 100%

44 Hunan 01 Huilong Jiaotou, Changsha (Vegetable)长

沙蔬菜 17,499 8,111 17,708 29% 94% 6%

45 Hunan 02 Melon and Fruit Farm, Shaoyang City 邵

阳瓜果 25,150 10,894 31,853 39% 98% 2%

46 Hunan 04 Beef Cattle, Lianyuan City 涟源肉牛 32,080 12,137 21,398 34% 98% 2%

47 Hunan 05 Beef Cattle, Jiahua 加华肉牛 13,337 6,829 21,080 24% 53% 47%

48 Hunan 07 Zhenghong Pig Production 正虹生猪 973 555 4,527 20% 80% 20%

49 Hunan 09 Oil-Tea Project, Chaling County 茶陵油茶 26,142 12,818 36,549 26% 100%

50 Hunan 11 Cyclocarya, Suining 新晃龙脑樟 9,168 4,447 13,880 42% 15% 85%

51 Hunan 12 Two-Line Super Hybrid Paddy 两系杂交

稻 22,185 11,571 13,269 28% 100%

49

No. Province


Total

Investment

of which

WB loan

NPV

(OCC

12%)

FIRR

Share of

NPV by

Farmers

Share of

NPV by

Cooperatives

Share of

NPV by

Companies


52 Hunan 13 Bamboo, Taojiang桃江竹制品 3,894 1,450 7,274 23% 50% 50%

53 Hunan 14 Staw Mats Cooperative, Hengshan 衡山

草席 2,550 1,228 10,530 43% 73% 27%

54 Hunan 16 Nuisance Free Vegetable, Changsha

county长沙藠头 1,127 547 1,345 34% 100%

55 Hunan 17 Herb Association, Liuyang 浏阳市中药材 1,242 720 2,302 39% 31% 69%

56 Hunan 18 Chengbu Off-season Vegetables 城步蔬

菜 1,314 634 5,321 44% 100%

57 Hunan 19 Anhua Fruit 安化果品 1,781 819 1,686 25% 100%

58 Hunan 20 Sanjiang Livestock Cooperatives,

Taoyuan 桃源养殖 1,478 814 2,872 34% 100%

59 Hunan 21 Gangtang Chinese Medicine , Shuangfeng

双峰中药材 1,915 784 2,623 31% 100%

60 Hunan 22 Xinong Culture, Yanling 炎陵兴农养殖 1,575 818 3,040 34% 47% 53%

61 Hunan 23 Lotus Seed, Xiangtan 湘潭湘莲 1,260 698 884 20% 100%

62 Hunan 24 Bamboo Shoot, Suining 绥宁玉兰片 1,552 820 7,793 31% 100%

63 Hunan 25 Bingtangcheng Orange, Yongxing 永兴县

冰糖橙 1,542 774 45,336 34% 100%

64 Hunan 26 Citrus Association, Shimen 石门柑橘 1,207 614 1,989 36% 100%

65 Hunan 27 Ziyang District Potato, Yiyang 资阳区马

铃薯凉薯 1,699 800 305 12% 100%

66 Hunan 28 Sweet-potato Vermicelli, Cili 慈利红薯 1,500 770 1,023 19% 100%

67 Hunan 29 Sangzhi Culture 桑植养殖 1,161 580 5,396 32% 82% 18%

68 Hunan 30 Citrus Association, Mayang 麻阳柑橘 1,179 735 4,385 34% 100%

69 Hunan 31 Ningxiang Pig 宁乡猪 9,100 5,376 5,447 23% 54% 46%

50

No. Province


Total

Investment

of which

WB loan

NPV

(OCC

12%)

FIRR

Share of

NPV by

Farmers

Share of

NPV by

Cooperatives

Share of

NPV by

Companies


70 Hunan 32 Purple Shale, Hengyang County 衡阳紫色

页岩 9,449 412 14,790 39% 85% 15%

71 Hunan 33 Berkshire Pig, Loudi 湖南黑猪 9,059 4,388 5,210 35% 85% 15%

72 Hunan 34 New Mulberry, Xiangxiang 湘乡桑树 9,568 4,380 11,561 45% 42% 58%

73 Hunan 35 Cyclocarya, Suining 绥宁青钱柳 4,680 1,800 686 11% 56% 44%

74 Hunan 36 Super Hybrid Rice, Zhuzhou 株洲超级杂

交早籼稻良种繁 9,523 4,812 8,357 24% 78% 22%

75 Hunan 37 High Quality Peach, Xu Pu 溆浦优质桃 9,104 4,340 24,003 45% 99% 1%

76 Hunan 38 Ningxiang Tea 宁乡富硒茶 12,657 6,307 15,538 39% 88% 12%

77 Shaanxi 01 Forest and Fruit Seedling, Yintai 印台苗

木 14,503 6,720 15,462 29% 95% 1% 4%

78 Shaanxi 03 'Safe' Pork Production, Yangling 杨凌安

全猪 49,382 27,930 18,608 15% 8% 92%

79 Shaanxi 05 Qinchuan Cattle, Fufeng 扶风秦川牛 13,615 5,600 3,757 15% 81% 19%

80 Shaanxi 06 Targeted Women's Component,Yangling

杨凌妇女 21,696 13,090 10,456 27% 42% 58%

81 Shaanxi 08 Flower Seed Balls, Yangling 杨凌花卉 31,601 14,770 6,285 26% 2% 32% 65%

82 Shaanxi 10 Dairy Production, Yangling 杨凌奶牛 20,143 10,290 20,135 25% 42% 58%

83 Shaanxi 12 Grape and Wine, Yaozhou 耀州葡萄酒 15,670 6,090 23,878 29% 30% 6% 64%

84 Shaanxi 13 Qinchuan Beef Cattle, Meixian 眉县肉牛 21,560 9,800 29,594 21% 54% 1% 45%

85 Shaanxi 14 Mulberry Fruit Production, Yangling 杨凌

桑椹 37,538 10,920 10,764 23% 33% 67%

86 Shaanxi 16 Silksworm, Qianyang千阳蚕桑 4,673 2,660 3,385 22% 99% 1%

87 Shaanxi 17 Goat Development, Yaozhou 耀州肉羊 15,470 7,490 3,764 19% 98% 2%

88 Shaanxi 18 Apple Development, Tongchuan 铜川苹 20,947 13,300 16,129 20% 47% 53%

51

No. Province


Total

Investment

of which

WB loan

NPV

(OCC

12%)

FIRR

Share of

NPV by

Farmers

Share of

NPV by

Cooperatives

Share of

NPV by

Companies


果

89 Shaanxi 19 Goat Breeding, Fuping 富平奶山羊 21,113 9,600 13,239 21% 57% 3% 39%

90 Shaanxi 24 Organic Vegetable Production, Taibai 太

白蔬菜 20,368 10,490 3,412 15% 66% 34%

91 Shaanxi 27 Chinese Traditional Herbs Production,

Yangling杨凌药材 20,473 11,200 10,941 25% 30% 1% 68%

Total of 91 Sub-projects 1,086,757 498,271 864,896 26% 55% 18% 27%

Table 4: Benefit Sharing under Different Institutional Arrangements

No. of sub-

projects

included

Benefits Shares

(weighted average NPV by sub-project investment

volumes in the respective category)

Farmer Cooperative Company

Farmer plus Farmer Cooperative 23 62% 38%

Farmer plus Company 29 57%

43%

Farmer plus Famer Cooperative plus Company 6 39% 10% 51%

52

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty

Lending

Sun Chongwu Senior Environmental Specialist EASCS Environment

Yi Dong Senior Financial Management

Specialist EAPFM

Financial

Management

Gregory Eliyu Guldin Consultant, Anthropologist OPCQC Institutions

Josef Ernstberger Consultant, Senior Agriculture

Economist EASCS Agriculture

Zongcheng Lin Social Safeguard Specialist EASCS Social Safeguards

Eija Pehu Adviser ARD Biotechnology

Jinan Shi Senior Procurement Specialist EAPPR Procurement

Iain Shuker Lead Agriculture Economist EASRE Task Team Leader

Juergen Voegele Sector Director ARD Task Team Leader

Ross Wallace Consultant EASRE

Anis Wan Operations Officer EASSD

Ouyang Li Program Assistant EACCF

Supervision/ICR

Yi Dong Senior Financial Management

Specialist EAPFM

Financial

Management

Josef Ernstberger Consultant, Senior Agriculture

Economist EASCS Agriculture

Xiaowei Guo Senior Procurement Specialist EAPPR Procurement

Feng Ji Environmental Specialist EASCS Environment

Zongcheng Lin Social Safeguard Specialist EASCS Social Safeguards

Eija Pehu Adviser ARD Biotechnology

Iain Shuker Lead Agriculture Economist EASER Task Team Leader

Ulrich Schmitt Senior Natural Resources Economist EASCS Task Team Leader Jinan Shi Senior Procurement Specialist ESPPR Procurement

Ross C. Wallace Consultant ECSS1 Agriculture

Meixiang Zhou Social Development Specialist EASCS Social Safeguards

Anis Wan Operations Officer EASSD

Patria Consuelo M. Morente Program Assistant EASRE

53

(b) Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including

travel and consultant costs)

Lending

FY00 6.52

FY01 37.03

FY02 113.97

FY03 230.67

FY04 284.04

FY05 130.46

Total: 802.69

Supervision/ICR

FY06 75.85

FY07 103.22

FY08 175.03

FY09 114.14

FY10 126.08

FY11 93.33

FY12 66.71

Total: 754.36

54

Annex 5. Beneficiary Survey Results

Summary Results: Farmer cooperative satisfaction survey

Number of Cooperatives/Associations covered: 45

Total number of farmer members interviewed:

875

Of which: male: 252 female: 623

1 What is the extent of technical services provided by the associations? Average

very low

very high score

0 1 2 3 4 5 4.202

2 How important is the association for input supply and/or marketing?

not important

highly important

0 1 2 3 4 5 4.005

3 Are you getting better prices by selling/buying through the association?

not better

much better

0 1 2 3 4 5 3.959

4 How dependent is your farming from the association?

not dependent

very dependent

0 1 2 3 4 5 3.846

5 How satisfied are you with the work of the association?

not satisfied

highly satisfied

0 1 2 3 4 5 4.199

average score 4.042

Cooperatives/Associations scoring 4.0 and higher: a/ 28 (62%)

Cooperatives/Associations scoring lower than 4.0: 17 (38%)

a/ Prior to the survey the benchmark for rating a cooperative or association as

providing ‘satisfactory’ services was set at 4.0.

55

Annex 6. Summary of Borrower's ICR and/or Comments on Draft ICR

[The following text provides and unedited summary of the Borrower’s assessment of the

project.]

The World Bank Loan Agricultural Science and Technology Transfer Project

（hereinafter referred to as the project）. The World Bank sent groups to do project

evaluation in 2005, and negotiation in Jan. 2005. In Jun.2005, Chinese government

signed ―Loan Agreement‖ and ―Project Agreement‖ on this project with the World Bank,

and began implementation in Sept.2005. The project began medium-term adjustment in

Jun. 2008, and applied to the World Bank for one-year extension and got the World

Bank‘s approval in 19th

July 2010. The project closed the account on 31st Dec. 2011. The

total investment of project evaluation is estimated to 1.8194 billion Yuan, of which, the

World Bank loan is 827 million Yuan ( 100 million USD), local financial matching funds

413.5 million Yuan, enterprises and farmers self-raised funds 578.9 million Yuan.

Through six years project construction, the total implementation of subproject is 115,

overall investment is 1.6980217 billion Yuan.

This project is organized by the National Agricultural Comprehensive office and

project sites are in Heilongjiang Province, Hunan Province, Anhui Province and Shanxi

Province.

1． The Achievement of Project Implementation

The project creates new models in many aspects such as advanced agricultural

technology development, technology transfer and application development as well as 115

project development and introductions. Demonstrating and promoting over 540 quality

new varieties and advanced applicable technologies suitable to leading industries

development, each subproject is over 3 items of the assessment on average. The advanced

applicable technology penetration rate of leading industries is 90%, over 85% of the

assessment. The project area farmers‘ per capita training time in science and technology

is 23 days, over the 20 days of the assessment.

The contribution rate of adoption and promotion of high-tech to agricultural

economic growth in project areas is up to 40%, over 30% of the assessment. Leading

industry output value reaches 55% of project area‘s total agricultural output value, over

50% of the assessment. The per capita net income of farmers in the project area has

increased 34% on the existing basis after project completion, over 20% of the assessment.

Through various forms of horizontal and vertical integration and introduction of new

technology and new mechanism as well as public-private partnership arrangement, this

project provides the opportunity for poor farmers to share agricultural product high value-

add.

The project has accumulatively completed technical demonstration 646600 mu,

technology promotion 5434600 mu, seed base 772200 mu, the area of agricultural

56

transaction hall, exhibition hall and all kinds of warehouse is 103497.94 square meters,

11974.00 sets of equipment, technical training 52565 (whether need to change 772864)

person-months, planting industry production base 561200 mu, forest production base

157000 mu, animal husbandry production base 363900. The project has accumulatively

expanded seed planting area 1364600 mu, new gross agricultural machinery 101600

kilowatts, the new output value 137575400 Yuan, the new added value 491424900 Yuan,

profit and tax 100969300 Yuan, directly beneficiary farmer household 356738, directly

beneficiary agricultural population 1008083.15 which the female beneficiary population

accounts for 60.38%, the total increased of annual net income of directly beneficiary

farmers 691137800 Yuan, farmers‘ average income is 13710 Yuan.

2．Impact of the Project

The successful implementation of the World Bank Project provides precious and

valuable experiences for agricultural comprehensive development project, creating far-

reaching impact.

2.1 Transparency management of the Project

The selection of the World Bank Project must be released in related newspaper and

website, and can only be implemented through initial review of project units and the

World Bank assessment. Comprehensive development of agricultural industrialization

project in Hunan and other provinces have learned from this successful experience.

2.2 Competition mechanism for selecting sub-project

The World Bank Project adopts competition mechanism for selecting sub-project to

check project quality from the source so as to promote project selection. The vast

majority of provinces have learned from this experience.

2.3 Elimination mechanism for implementing the subproject

The World Bank Project applies elimination system to fraud projects or those

projects that progress are slow to ensure project implementation effect during

implementation.

2.4 Timely Adjustment of the subprojects

If project construction content were found to be inappropriate during

implementation progress, the World Bank Project would do timely investigation, research

and analysis as well as provide adjustment countermeasure, so that the construction

content would meet the specified requirements. The country has generally adopted this

experience.

2.5 Regular Inspection of the subprojects

The World Bank Project inspects once or twice a year and test results would be sent

to project implementation units in the form of memorandum to facilitate project better

implementation. Now domestic projects have taken project supervision and inspection

system once a year.

57

2.6 Forum System for project management

The World Bank would hold forum on project construction content regularly or

irregularly with the people in charge of project construction units and project

management units to ensure that the construction content is reasonable. Some individual

provinces have begun to implement this system.

2.7 Fund Performance Tracking System

The World Bank Project adopts strict fund performance tracking system to ensure

effective and safe using of the project fund. Domestic projects are studying the pilot

implementation of the system.

3. Evaluation on the cooperation of construction units and the World Bank

During the project preparation and implementation of the project, the construction

unit and The World Bank developed a positive, harmonious and effective cooperation.

3.1 A clear division of labor and a close cooperation

Powers and responsibilities of The World Bank, the National Agricultural

Comprehensive Development Office, the local project management organization, project

implementation units and farmers were clear, and were orderly implemented in

accordance with the 《Project Agreement》, the 《Loan Agreement》 and the relevant

systems and management methods. In the process of the procurement, implementation,

withdrawal reimbursement and the inspection of the project, parties actively cooperated

with each other. In the face of difficult problems, they consulted each other closely, in

order to effectively ensure the smooth implementation and completion of the project, and

create significant economic, social and ecological benefits.

3.2 Complement each other, and learn from each other

The World Bank is a global financial organization, has extensive experience in

agricultural project management and has accumulated the cases of successful projects

around the world. The World Bank provided a range of help and support for China's

implementation of the project in terms of the evaluation, management, supervision and

inspection of the project. China is a large agricultural country in the world. Agricultural

development has experienced an unusual course, but also has accumulated many valuable

lessons and experience with Chinese characteristics. China, as a borrower, is able to

organize effectively, implement efficiently, cooperate actively and provide a wealth of

material and effective help for The World Bank. In the implementation of the project, the

project implementing agencies of The World Bank and China learned from each other,

and achieved good results promoted by mutual progress.

4. The lessons of the project implementation and improvement measures

The Shaanxi project management institution reform and management personnel

replacement led to the slow pace of the entire progress of the project implementation. In

the future implementation of the project, the communication with the project provinces,

which are selected as candidates, should be strengthened at first, and give priority to the

58

project provinces in which the project management organization can be quickly set up

and orderly work.

The World Bank replaced the project managers for three times who were responsible

for the project, and it brought a certain degree of difficulty to the implementation of the

project. Hope that during the project implementation, The World Bank avoids the

replacement of the project managers.

59

Annex 7. List of Supporting Documents

Agriculture Technology Transfer Project Project Appraisal Document - , 2005;

Aide memoires, ISRs and Midterm Review;

Various monitoring and evaluation reports prepared by SOCAD and the Expert

Assessment Team;

Borrower‘s Completion Report

NEIMONGOL

NIN

GX

IA

T IANJIN

XINJIANG

QINGHAI

XIZANG

GANSU

SHANXI

GUIZHOU

GUANGDONG

SHANDONG

JIANGSU

JIANGXI

HONG KONG

FUJIAN

TAIWAN

HAINAN

LIAONING

JIL IN

HENAN

HEBEI

HUBEISICHUAN

YUNNAN

CHONGQING

SHANGHAI

GUANGXI

ZHEJIANG

SHAANXI

HUNAN

ANHUI

HEILONGJIANG

Qujing

Shilin

Leshan

Yichang

Huangshi

Xiangfan

Guilin

BEIJING

URUMQI

XINING

CHENGDU

CHANGSHANANCHANG

HEFEI

KUNMING

LHASA

GUIYANG

WUHAN

ZHENGZHOU

XI'AN

TAIYUAN

HANGZHOU

SHANGHAI

JINAN

SHIJIAZHUANG

SHENYANG

CHANGCHUN

HARBIN

NANJING

NANNING

HAIKOU

FUZHOU

GUANGZHOU

YINCHUAN

HOHHOT

LANZHOU

TIANJIN

CHONGQING

THAILAND

LAO PEOPLE’S

DEM. REP.

V IETNAM

MYA

NM

AR

MYA

NM

AR

REP. OFKOREA

DEM. PEOPLE’SREP. OF KOREA

M O N G O L I A

KAZAKHSTAN

KYRGYZREPUBL IC

TAJIKISTAN

NEPAL

UZBEKISTAN

PHIL IPP INES

MACAO

R U S S I A N

F E D E R AT I O N

Huang He

Chang Jiang

Y e l l o wS e a

S e a o f J a p a n

E a s t

C h i n a

S e a

HuaiHe

70 80

30

20

40

50

100

90

80

110 120

20

30

40

50

90 100 110 120 130

CHINA

AGRICULTURAL TECHNOLOGYTRANSFER PROJECT

IBRD 33846

FEBRUA

RY 2005

0

0 100 200 300 400 Miles

200 400 600 Kilometers

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endorsemen t or a c c e p t a n c e o f s u c h boundaries.

Selected Cities

Province Capitals

National Capital

Province Boundaries

International Boundaries

Project Provinces

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