INITIAL ENVIRONMENTAL EXAMINATION (IEE)

PROGRAM/ ACTIVITY DAT A:

Implementing Partner (IP): Proximity Designs Program/Activity: Expanding Fann Advisory Services for Smallholder Farmers Project Country: Myanmar (Burma) Funding Period: September I, 2015 -August 15, 2018 Life of Project Amount: $3,012,000 IEE Prepared by: Carol Skowron, Mercy Corps Date: July 31, 2015 IEE Amendment/Supplemental (YIN): N

Environmental Action Recommended: (Place X where applicable)

Categorical Exclusion: --~X~- Negative Determination with Conditions: Positive Determination: _ __ _ Deferral : X

Purpose and Scope of IEE

x

Proximity Designs (Proximity) has applied for funding under the llmovation Investment Alliance AID­OAA-A-12-00044. This IEE covers activities to be funded with an award from Mercy Corps for Proximity's Farmer Advisory Services (FAS). The purpose of this IEE, in accordance with 22 CFR 216, is to provide the first review of the reasonably foreseeable effects on the environment, as well as recommended Threshold Decisions, for the following activities:

Proximity plans to scale their FAS program to 30 townships over a three-year period. They will use their current techniques of saltwater seed selection, pest and disease management, effective fertilizer use, and double cropping as core techniques, and build in new products and services that are developed through Proximity Lab, including direct seeders, rice seed production, crop insurance, and building linkages to farm finance services and mechanization options. To grow their operation, Proximity will also introduce and cmmnunicate teclmiques through multiple channels, including radio, video and, later, mobile platfonns.

This IEE provides a brief statement of the factual basis for Threshold Decisions for the activities managed under this program.

Background and description of activities

Proximity Designs, one of the leading social enterprises in Myanmar, is seeking to expand current FAS activities from a current pilot area of two townships to thirty townships. Over the past five years, Proximity has successfully increased rice fanners' yields and incomes through FAS activities in Myanmar's Ayeyarwady Delta. Proximity's team of field agronomists and hundreds of smallholder farmers have collaborated to innovate and implement "best fit" cropping practices, tailored to two townships in the "rice bowl" of Myanmar. Through the introduction of practical, simple techniques like double-cropping of rice in brackish water areas and seed selection using a saltwater solution, Proximity has been able to increase farmers' annual incomes, on average, by an extra US$200 per household.

With a skeletal and constrained government extension service, a huge vacuum exists today among Myanmar's farmers for independent and effective advisory services. Proximity is therefore planning to extend innovative services to help tens of thousands of farm families become more resilient. In addition, this next phase FAS represents an exciting opp01tunity to further innovate and reach sustainable scale by leveraging mobile and media technologies emerging in Myanmar.

Proximity will expand their best-fit techniques and services to around 250,000 new farm families in 30 townships nationwide by scaling Farmer Advisory Services through a two-pronged approach: (l) Introducing proven and innovative techniques, products, and information; and (2) Scaling impact through a multi-channel platform

I. Introducing proven and innovative teclmiques, products, and info1mation Initial FAS expansion activities will involve introducing these proven techniques, products, and information services to new farming communitfos in Myamnar:

• Saltwater Seed Selection-a simple technique that filters seed through a salt water solution to separate the good seed from the bad.

• Pest and Disease Management---expert training of peer-to-peer farmer networks on best-fit practices in agricultural pest and disease management and the _use of pesticides. Proximity promotes a range of simple techniques to help fanners detect the early warning signs of pest and disease to prevent outbreaks. Proximity first promotes a variety of clirnate-smait techniques to mitigate risk to crops-pesticides are always the last resort solution. For example, to prevent army worm infestations, Proximity teaches farmers how to use simple fishing nets to comb through their paddy fields and clean their crops; they use proper water management teclmiques to keep rice stalks dry and prevent infection. They also teach farmers how to identify pests and diseases early on in order to minimize damage - frequently through emergency on-call services, where farmers can call the team when they first see a problem. Proximity does not advocate the use of any . particular pesticide brand to maintain an impartial reputation. They work with each customer to calculate the correct timing and volume of pesticides necessary, so that they can reduce expenses on inputs that are not working correctly.

• Effective Fertilizer Use-advice on the most effective use of fe1tilizers, including both green fe1tilizer crops and chemical fe1tilizers.

• Double-Cropping- a comprehensive approach to harvesting two rice crops within a year in brackish and saltwater inh·usion areas, effectively doubling incomes. This approach utilizes sh01t­life rice varieties and irrigates according to lunar tidal flows.

Proximity Lab: Proximity will expand and merge their current design functions into a new, interdisciplinary design team called "Proximity Lab." This group will conduct human-centered design research and iterate prototypes of and launch new teclmiques and services. Designers conduct controlled experiments in the design lab in Yangon to test different aspects of new products and services. The FAS team also has diagnostic equipment in their field offices to test and diagnose pest and diseases. Products and services are tested in the field, typically in multiple locations across the counh-y, to ensure that they are tested in each of the major geographic environments in which customers are based. These locations are chosen at random, as Proximity does not have designated fields specifically set aside for this purpose. The focus will be on new techniques and services that are high­yielding, environmentally safe, climate-sma1t, and affordable in local farming conditions. Two to three techniques and/or services are expected to be rolled out each year, depending upon need and location.

The pipeline of products and services include low-cost products to facilitate mechanization, rice seed production, tailored financial and agronomy h·aining, crop insurance, sensor technologies, water management infrash·ucture, and informational services on weather, market and consumer products. Techniques that are being explored during the first year of expansion include:

• Direct seeders- Proximity is collaborating with students from the Stanford school to re-design a direct seeder that specifically meets the needs of the Myarunar paddy. The research has focused on drnm seeders, which are conunon tlu-oughout South East Asia. The drum seeders that have been imported to Myanmar, however, are not ideal for local conditions. This form of direct seeder comprises of a series of small drums on a two-wheeled axle that disburses seeds t\u·ough evenly spaced holes in each drum. Proximity's team is exploring how these simple machines could be re­designed to meet Myanmar smallholders' needs. The environmental impacts of direct seeders are minimal. Compared to traditional broadcasting methods, the paddy is planted in much straighter lines with greater space around each plant. This ensures that the plants are much healthier, with greater access to nutrients. While there is greater -space for weeds to grow, farmers can reduce the number of weeds easily with a few simple techniques during the early stages of germination. If the field is too wet and uneven, Proximity does not reconunend using drum seeders, as it can be too difficult to operate in the mud, making the tetrnin more uneven.

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• Rice Seed Production- Proximity is working with Syngenta Foundation for Sustainable Development during the 2015 monsoon season to trial a model by which farmers diversify their rice crops into rice seed production, so they can sell rice seed to other fa1mers in their village tract. Proximity will connect farmers to certified local source seed from the Government seed fam1s, and provide technical advice on growing high quality and clean rice seed.

• Crop Insurance-The Fann Advisory team is collaborating with Syngenta Foundation for Sustainable Development to develop weather-indexed insurance products to help reduce farmers' exposure to some of these risks. Data collection will begin during the 2015 monsoon season, to feed into the design of tailored insurance products to be trialed during the 2016 monsoon season, in partnership with Proximity Finance.

• Linkages to farm finance services and mechanization options- Proximity will link farm adviso1y services with their farm finance services offered by Proximity Finance. A key focus of this will be to ensure that Proximity's customers have access to affordable working credit, as well as credit that helps facilitate mechanization, particularly during planting and harvesting.

2. Scaling Impact through a multi-channel platform In addition to the activities described above, Proximity will develop a multi-channel platfotm for farmers to receive and share valuable farming services, techniques, and infonnation with their peers efficiently. This multi-chatmel platform will include:

• Face-to-face services-Engagement with farmers during a field visit, to identify the local challenges and introduce a selection of Proximity's best-fit techniques to improve farmers ' yields and increase their resilience to pest and disease. During these visits, where typically 40 to 50 farmers will be brought together in a village, staff will also introduce other channels through which farmers can access Proximity's services, techniques, and information.

• Farmer-to-farmer clubs- Farmer clubs- groups of independent farmers organised by Proximity's field staff from local village communities- will promote farmer-to-farmer collaboration and information sharing, with the option to draw on Proximity staff expetiise.

• On-call services/Call centre-This channel allows farmers to call Proximity's agronomists during a pest or disease outbreak to seek treatment advice or diagnostic assistance. During the program, Proximity will also look to expand their capacity to take and respond to these calls, through different fonns of innovative call centres.

• Mobile Platforms-As mobile connectivity and affordability rapidly improve in rural areas, Proximity will leverage mobile platforms to deliver farm advis01y services.

• Farm Radio Programs- A channel that can effectively reach a broad population to deliver information on a variety of topics of interest to farmers, including simple techniques, and weather and market information.

• Video Platform to promote farmer~to-farmer sharing of experiences and highly localised information, using a model similar to Digital Green. Videos are shot and edited in the field on iPads, and distributed on DVDs to farmer clubs, or shown on iPads or via a projector by Proximity's staff. Under this expansion, videos will be uploaded to social media, including a YouTube channel, and made available to farmer mobile devices or through the farm app.

• Lead farmers and village agents- Lead farmers in villages will demonstrate and share techniques with other farmers within their village tracts. Similarly, village agents, keen supp01iers of Proximity's techniques (either farmers, or running farm-related businesses), will promote Proximity's services to farmers in their area.

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Evaluation of Project/Program Activities with Respect to Environmental Impact Potential

The activities that will be conducted under the Expanding Farm Advisory Services for Smallholder Farmers program are of several types: communications, training, development and testing, and demonstration. The communications and training activities are not expected to have any direct impact on the environment, although some are likely to have indirect effects on the environment, especially training for agricultural pest and disease management and for fe11ilizer applications

Proximity Labs is expected to develop and test a range of products and services to facilitate improved agricultural practices.

• Specific products and services that facilitate water management to be tested include: o Sensor technologies to encourage the practice of precision agriculture. Two sensors that

Proximity has early prototypes of include the Betel Meter (measures soil moisture) and the Rice Shute (measures water in rice paddies). These sensors help farmers to understand when they are under- or over-watering their crops, helping them to improve their irrigation.

o Double-cropping technique which promotes precise water management in line with the tides to get two rice crops harvested in one year in salt-water intrusion areas.

o Techniques to encourage good water management to ensure that plants are healthy and reduce the risk of pest and disease infestations.

• Specific products and services that facilitate agricultural mechanization to be tested include: o Small Fam1 Equipment-Proximity has begun prototyping re-designed direct seeders to

help farmers mechanize during planting, a time when farmers are often struggling with labor shortages.

o Farm Equipment Leasing- Proximity is piloting a few models to support fanners in the purchasing of fann equipment to mechanize their harvests and to develop commercial rental businesses to increase access to machinery for farmers in their townships.

Table: Activities, Potential Environmental Impacts, and Recommended Threshold Decisions:

Activity/Description Potential Environmental Impact . Recommended IEE Threshold Decision

Saltwater Seed Selection This simple technique filters seeds Categorical Exclusion 22 through a saltwater solution, which CFR 216.2 (c)(2) (i) separates out the good seeds from bad, but only impacts the seeds.

Pest and Disease Management Promote a variety of techniques to Defenal mitigate risk to crops and manage crop pests with integrated pest management and, as a last resmt, with chemical pesticides

Effective Fertilizer Coach farmers in the appropriate Negative detennination application of fertilizers to improve with conditions yields while keeping the environment healthy.

Double-Cropping This technique, which enables two Categorical Exclusion 22 crops per year in the same fields where CFR216.2 (c)(2) (i) agriculture is already occuning, uses agricultural land more efficiently by enabling a second crop.

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Proximity Labs Designed as a research entity, there will Categorical Exclusion 22 be multiple teclmiques and designs CFR2 16.2 (c)(2) (i),(ii), tested (described above). Activities in and (iii) this lab environment will take place both in the lab in Yangon and at selected agricultural sites.

Direct seeders This piece of agricultural equipment to Categorical Exclusion 22 be tested works by creating small holes CFR2 16.2(c)(2)(i) and in the soil to drop a seed into. (ii)

Rice Seed Production Growing rice seed uses the same land Categorical Exclusion 22 that would be used for rice production, CFR 216.2(c)(2)(i) and as such is not expected to change the existing land use nor environmental impact.

Crop lnsw·ance Crop insurance creates resilience to Categorical exclusion 22 shocks but does not alter the CFR 2 l6.2(c)(2)(i) agricultural techniques employed.

Linkages to fa1m finance services Financial services improve the Categorical exclusion 22 affordability of agricultural activities CFR 2 l 6.2(c)(2)(i) but do not alter the agricultural techniques employed.

Multi-channel platform, including This activity entails various methods of Categorical exclusion 22 on call, radio, video, mobile and conununication and is not expected to CFR 2 16.2(c)(2)(i), (v) organization of clubs have an environmental impact.

Recommended Threshold Dete1·minations & Mitigation Actions, Including Monitoring & Evaluation

a) Justification for Categorical Exclusion Request

Many activities described above warrant Categorical Exclusions, pursuant to 22 CFR §216.2(c)(2) (i), (ii), (iii), and (v), for which an Initial Environmental Examination, or an Environmental Assessment, are not required because the actions do not have a significant effect on the natural or physical environment.

Specifically, as cmTently planned, activities fall into the following classes of action that justify categorical exclusion: (a) education, technical assistance and training (216.2(c)(2)(i)); (b) controlled experimentation exlusively for the purpose of research and field evaluation which are confined to small areas and carefully monitored (216.2(c)(2)(ii)); (c) analyses, studies, and workshops (216.2(c)(2)(iii)); and (d) document and information transfer (216.2(c)(2)(v)).

Most are concerned with technical assistance, training programs, and inf01mation dissemination, such as the multi-channel platform or linkages to financial services, and are not expected to have any significant environmental impact. A few improve the agricultural activities that are already going on, such as soaking seeds in salt water or planting a different kind of seed, and as such will not create any new impacts on the land or water. The proposed type of farm equipment also falls into nonnal agricultural use.

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b) Deferral

A Deferral tlueshold determination is recommended for actions that include pest and disease management because there is not yet sufficient information to evaluate assistance for the procurement or use of pesticides in Proximity's activities.

The mandatory conditions for this Determination are that the Global Development Lab AOR/COR shall ensure that:

• No pesticides may be procured or used, or recommended for procurement or use, without first completing an amendment to this Initial Environmental Examination that addresses the requirements of 22 CFR 2 l 6.3(b) and includes a Pesticide Evaluation Report/Safer Use Action Plan (PERSUAP), which must be approved in writing by the USAID Global Development Lab Bureau Enviromnental Officer. This includes pesticides used in research for evenhtal dissemination. Once approved, the implementing conditions detailed in the PERSUAP will become conditions of the award to Proximity Designs.

c) Negative Determination with Conditions

A Negative Determination with Conditions tlueshold determination is recommended for actions that include the use of fertilizers.

The ma ndatory conditions for this determination are that the Global Development Lab AOR/COR shall ensure that:

• Training on, and promotion of, fertilizer technologies, and/or procurement, dissemination, use, handling, storage, and disposal of fertilizers must be consistent with envi.rorunental best management practices (BMPs) for agriculture and inigation. Such BMPs are available from USAID in the Sector Environmental Guidelines (available at http://www.usaidgems.org/sectorGuidelines.html) and partner materials should be consistent with these recommendations.

Monitoring, Evaluation, and Reporting

In addition to the specific conditions enumerated in the "Recommended Threshold Detem1inations" section of this IEE, the recommended threshold determinations will also require full implementation of the following general monitoring and implementation requirements:

I. Environmental compliance actions and results in USAID solicitations and awards. The Contract/ Agreement Officer shall include language and reference to this IEE in appropriate solicitations and awards. Suggested language for use in solicitation and awards can be found at the following link: http://www.usaid.gov/ads/policy/200/204sac

2. Implementing Partner (IP) Briefings on Enviro111,nental Compliance Responsibilities. The AOR/COR or Activity Manager shall provide the IP with a copy of this IEE; the IP shall be briefed on their environmental compliance responsibilities by their AOR/COR or Activity Manager. During this briefing, the IEE conditions applicable to the IP's activities will be identified.

3. J?cvelopment of Environmental Mitigation and Monitoring Plan (EMMP). For activities that are subject to one or more conditions set out in the "Recommended Threshold Detenninations" section of this IEE, the IP shall develop and provide an EMMP for review and approval by the USAID AOR/COR and Global Development Lab BEO, documenting how their project will implement and verify all lEE conditions that apply to their activities.

The EMMP shall also identify how the IP shall assure that IEE conditions that apply to activities supported under subcontracts and sub-grants are implemented. (In the case of large sub-grants or subcontracts, the IP may elect to require the sub-grantee/subcontractor to develop their own EMMP.)

4. Integration and implementation ofEMMP. The IP shall integrate the EMMP into their project work plan and budgets, implement the EMMP, and submit to the USAID AOR/COR an annual report, which

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(i) describes how the IP implements the EMMP and (ii) includes the results of the monitoring program as an element of the IP's regular project performance reporting.

The IP shall assure that sub-contractors and sub-grantees integrate implementation of IEE conditions, where applicable, into their own project work plans and budgets and report on their implementation as an element of sub-contract or grant performance reporting.

5. Integration of environmental compliance responsibilities in sub-contracts and grant agreements. The IP shall assure that sub-contracts and sub-grant agreements reference and require compliance with relevant elements of the IEE and any attendant conditions.

6. Assurance of sub-grantee and sub-contractor capacity and compliance. The IP shall assure that sub-grantees and subcontractors have the capability to implement the relevant requirements of this IEE. The IP shall, as and if appropriate, provide training to sub-grantees and subcontractors in their environmental compliance responsibilities and in environmentally sound design and management (ESDM) of their activities.

7. Implementing Team monitoring responsibility. As required by ADS 204.3.4, USAID will actively monitor and evaluate whether there are new or unforeseen consequences arising during implementation that were not identified and reviewed in accordance with 22 CFR 216. USAID shall also monitor the need for additional review. If additional activities not described in this document are added to this program, an amended environmental examination must be prepared and approved.

8. New or modified activities. As part of its initial Work Plan, and all Annual Work Plans thereafter, the IP, in collaboration with their AOR/COR and Activity Manager, shall review all planned and ongoing activities to determine if they are within the scope of this IEE.

If any IP activities are planned that would be outside the scope of this IEE, an amendment to this IEE addressing these activities shall be prepared for USAID review and approval. No such new activities shall be unde1taken prior to formal approval of this amendment.

Any ongoing activities found to be outside the scope of the approved Regulation 216 environmental documentation shall be halted until an amendment to the documentation is submitted and written approval is received from USAID. This includes activities that were previously within the scope of the IEE, but were substantively modified in such a way that they move outside of the scope.

9. Compliance with Host Country Requirements. Nothing in this IEE substitutes for or supersedes IP, sub-grantee, and subcontractor responsibility for compliance with all applicable host country laws and regulations for all host countries in which activities will be conducted under the USAID activity.

The IP, sub-grantees, and subcontractor must comply with each host country's environmental regulations unless otherwise directed in writing by USAID. However, in case of conflict between host countty and USAID regulations, the latter shall govern.

Revisions If during implementation, project activities are outside of those activities described in this document, an amendment shall be submitted. Pursuant to 22CFR216.3(a)(9), if new activities are added and/or infonnation becomes available which indicates that activities to be funded by the program might be "major" and the Program's effect "significant," this determination will be reviewed and revised by the Implementing Partner, in collaboration with the AOR/COR of the project, and submitted to the Mi.ssion Environmental Officer and Lab Bureau Environmental Officer for approval and, if appropriate, an enviromnental assessment will be prepared.

Limitations This IEE does not cover activities involving:

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• Assistance, procurement or use of genetically modified organisms (GMOs), which will require preparation of a biodiversity assessment (review) in accordance with ADS 20 l.3. l l.2(b) in an an1endment and approved by the BEO

• Development Credit Authority Agreements • Activities involving procurement, transpmt, use, storage or disposal of toxic materials • Procurement and use of Asbestos. Lead and Mercmy containing materials (i.e., piping and

roofmg, paint, etc.) Polychlorinated Biphenyls (PCB) or other toxic/hazardous materials prohibited by US EPA as provided at http://www.epa.gov , international environmental agreements and conventions, e.g. Stockholm Convention on Organic Pollutants as provided at http://chm.pops.int .

• Infrastructure and construction activities which are likely to have significant adverse effects on the environment, including any of the following:

• River basin development • Significant in·igation or water management activities

Agricultural land leveling Major drainage projects

• Large scale agricultural mechanization • New lands development • Resettlement projects

·-·.. Penetration road building or road improvement projects • · -Construction of power plants or industrial plants • Large scale potable water & sewage projects • Activities which would result in the loss of forest land

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APPROVAL OF RECOMMENDED ENVIRONMENTAL ACTIONS:

Technical Office (Economic Growth Office)

Clearance Daniel Swift (Acting) Date

Mission Environmental Officer:

Clearance AungNaing Date

Program Office:

Clearance Warren Harrity Date

Resident Legal Officer:

Clearance Julie Southfield Date

Regional Environmental Advisor, Southeast Asia and Pacific:

Clearance

Deputy Mission Director:

Clearance

APPROVAL: Mission Director:

Approval

CONCURRANCE:

Aaron Brownell

Michael Ronning (Acting)

Chris Milligan

Bureau Environmental Officer, lobal Development Lab:

Approval

CCed: William Gibson, Bureau Environmental Officer, Asia Bureau AOR/COR Files MEO Tracking

Date

Date

Date

Approved: Disapproved:

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APPROVAL OF RECOMMENDED ENVIRONMENTAL ACTIONS:

Technical Office (Economic Growth Office)

Clearance ~ Daniel Swift (Acting)

M~s;on EnvU-onmental Offie<rk Clearance

AungNaing IJ. A8'5w.\- \$.

Date

M ; At- M~{''\ ~ IC.,""

11 { ~ 0)' -,.)- ( c; Date

Program Office:

Clearance

Resident Legal Officer:

Clearance g. I 1- 00!\J' Julie Southfield Date

Regional Environmental Advisor, Southeast Asia and Pacific:

Clearance

Deputy MJssion Director:

Clearance

CLEARANCE: Mission Director:

Approval

CONCURRANCE:

' ~·

Michael Ronning (Acting)

Bureau Environmental Officer:

Approval Daniel Evans

CCed:

Date

~ lr+/-zc.>..~ 1 1

Date

Date

William Gibson, Bureau Environmental Officer, Asia Bureau AOR/COR Fi les MEO Tracking

Approved: 0 Disapproved: 0

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Willis, M egan

From: Sent: To: Cc: Subject: Attachments:

I Iello Megan,

Aaron Brownell <abrownell@usaid.gov> Tuesday, August 18, 2015 2:21 PM Willis, Megan Paing, Kyipyar Phyoe Re: Proximity IEE for clearance Proximity Designs IEE_Final asb.doc

Thank you for the email. Yes, the bomb was quite shocking and the USAID family are safe and sound.

Seeing you have already received general agreement with with the BEO on the threshold decisions and he is working closely with tbe partner, I concur with the IEE for proximily with the minor suggcsled edits in track changes.

Please proceed with MD approval and BEO concllrrence.

If you have any questions, please let me know.

Many thanks,

Aaron Brownell Regional Environmental Advisor, Southeast Asia and the Pacific l iSAID

On Tue, Aug 18, 2015 at 1:48 PM, Willis, Megan <WillisEM@state.gov> wrote: Hi Aaron,

Are you back in Bangkok now? We are all following the news out of Bangkok closely and arc quite shocked by all of this. I hope the USAID family is all safe and sound!

I'm attaching the IEE that came up while you were on TDY - it's been cleared by everyone befor,e you on the clearance list. If you have a minute, we appreciate your review and electronic clearance. I'll take care of getting Dan Evans formal approval (he worked on it directly with the partner) and will be sure to CC William Gibson. Thanks!

Megan

Megan Willis Agriculture and Private Sector Development US AID/Burma Office: 951-536-509 ext. 4997 Mobile: 095-419-650

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