The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) CHINA Green Agricultural and Rural Revitalization Program – Phase I (P177590) Final Technical Assessment March 4, 2022 Page 1 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) ABBREVIATIONS AND ACRONYMS ACG Anti-Corruption Guidelines BOD biological oxygen demand CEB Comprehensive Enforcement Bureau CH3 ammonia CH4 methane CO2 carbon dioxide COOP Market and Supply Cooperative CPF Country Partnership Framework COD chemical oxygen demand CPMO County Program Management Office DLI disbursement-linked indicator DLR disbursement-linked result EA Engagement Area EID emerging infectious diseases EPA Environmental Protection Agency EU European Union FA farmer association FC farmer cooperative FYP Five-Year Plan GAP green agricultural practices GDP gross domestic product GHG greenhouse gas GI geographical indication GRS Grievance Redress Service H2S hydrogen sulfide HURDB Housing and Urban-Rural Development Bureau IBRD International Bank for Reconstruction and Development IPF Investment Project Financing IVDP Integrated Village Development Plan MOF Ministry of Finance PDOF Provincial Department of Finance PDRC Provincial Development and Reform Commission MARA Ministry of Agriculture and Rural Affairs M&E monitoring and evaluation MEE Ministry of Ecology and Environment MNR Ministry of Natural Resources MIS management information system MWR Ministry of Water Resources MOHURD Ministry of Housing and Urban-Rural Development Page 2 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) NH3N ammonia nitrogen N2O nitrous oxide NPS non-point source NDRC National Development and Reform Commission O&M operation and maintenance PAP Program Action Plan PDO Program Development Objective PIU Program Implementation Unit PMO Program Management Office PforR Program for Results RA Results Area RF Results Framework RRP Rural Revitalization Program RRPL Rural Revitalization Promotion Law RRS Rural Revitalization Strategic Plan RPMO Regional Program Management Office SC State Council SORT Systematic Operations Risk Tool TA Technical Assistance TN total nitrogen TP total phosphorus VA verification agency WTS wastewater treatment system WUA water user association Page 3 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Contents I. Introduction .......................................................................................................................................5 II. Program Description ...........................................................................................................................5 A. The Government Rural Revitalization Program ............................................................................................ 5 B. The World Bank-Financed Program.............................................................................................................. 7 C. PforR Program Financing .............................................................................................................................. 9 III. Program Results Framework and Monitoring and Evaluation ............................................................. 10 A. Program Development Objective(s) (PDO) and PDO-Level Results Indicators .......................................... 10 B. Theory of Change ....................................................................................................................................... 11 C. Disbursement-Linked Indicators and Verification Protocols ...................................................................... 13 IV. Expenditure Framework Assessment ................................................................................................. 19 A. Expenditure Scope ...................................................................................................................................... 19 B. Program Financing ...................................................................................................................................... 21 C. Expenditure Performance .......................................................................................................................... 22 D. Financial Sustainability ............................................................................................................................... 25 E. Recommendations...................................................................................................................................... 26 V. Strategic Relevance and Technical Soundness .................................................................................... 26 A. Strategic Relevance .................................................................................................................................... 26 B. Technical Soundness .................................................................................................................................. 36 VI. Institutional and Implementation Arrangements ............................................................................... 63 VII. Economic and Financial Assessment .................................................................................................. 64 VIII. Capacity Building .............................................................................................................................. 70 IX. Program Action Plan ......................................................................................................................... 72 Annex 1: Program boundary ......................................................................................................................... 74 Annex 2: Funding sources for agricultural green development in Guizhou (2020) ........................................... 75 Annex 3: Funding sources for agricultural green development in Guangxi (2020) ........................................... 77 Annex 4: Funding sources for agricultural green development in Guizhou (2020) ........................................... 80 Annex 5: Funding sources for agricultural green development in Guangxi (2020) ........................................... 82 Page 4 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) I. Introduction This Technical Assistance (TA) has been carried out as part of the preparation of the Green Agricultural and Rural Revitalization Program – Phase I (GARRP, “the Program�). GARRP is based on Program-for-Results (PforR) financing. The purpose of this TA is to present the World Bank’s evaluation – undertaken with data and support from the national, provincial, and county governments – of program arrangements across four aspects: (i) strategic relevance and technical soundness, (ii) expenditure framework, (iii) results framework and monitoring and evaluation capacity, and (iv) economic justification. The PforR is anchored in the National Rural Revitalization Strategy, which is implemented in phases of five-year RRS plans. The national RRS plan provides the overarching rural development vision and broadly defined actions. The national RRS plan phase 1 (2018‒2022) focuses on consolidating and sustaining the poverty eradication gains and has four pillars: (i) green agricultural development, (ii) agricultural modernization, (iii) rural infrastructure and public services, and (iv) rural governance. The PforR will support a subset of activities based on the priorities and targets articulated in the Guizhou and Guangxi provincial RRPs. These activities contribute to enhancing environmentally sustainable agricultural and rural infrastructure development in selected areas of Guangxi and Guizhou. II. Program Description A. The Government Rural Revitalization Program In 2017, the Chinese government adopted an ambitious national RRP, which is implemented in phases of five- year RRS plans. The national RRS plan provides the overarching rural development vision and broadly defined actions. The RRS plan is framed around the “three rurals�: agriculture, rural areas, and farmers. The main objectives of the RRS plan are to sustainably increase rural income, increase access to rural infrastructure and public services, and improve the living environment in rural areas. The national RRS plan phase 1 (2018 ‒2022) focuses on consolidating and sustaining the poverty eradication gains and it has four pillars: (i) green agricultural development, (ii) agricultural modernization, (iii) rural infrastructure and public services, and (iv) rural governance. The national RRS phase 1 overlaps with the transition period (2021‒2025),1 which also coincides with the 14th FYP (2021‒2025). The green agricultural development pillar of RRS phase 1 has seven sub-programs. The latter are further elaborated in the 14th FYP (2021‒2025) for the National Green Development of Agriculture Plan.2 These include (i) strengthening the protection and utilization of agricultural resources ‒ including protecting and improving the quality of farmland, improving the efficiency of agricultural irrigation water use, and protecting agricultural biological resources; (ii) preventing and controlling agricultural NPS pollution ‒ including promoting a reduction in fertilizer use and increasing the efficiency of fertilizer and pesticide use, promoting the recycling of livestock 1 Transition from Poverty Reduction Program into the Rural Vitalization Program with the first phase of the RRS plan (2018‒2022) focusing on consolidating and sustaining extreme poverty alleviation gains, along with tackling pollution and greening the economy in the next five years. 2 A joint notice of the Ministry of Agriculture and Rural Affairs, National Development and Reform Commission, Ministry of Science and Technology, Ministry of Natural Resources, Ministry of Ecology and Environment, and National Forestry and Grassland Administration (Nong Gui Fa [2021] No. 8) issued in August 2021. Page 5 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) and poultry manure and crop straw, and strengthening white (agricultural plastics) pollution control; (iii) strengthening agricultural ecological protection and restoration ‒ including protecting and restoring farmland ecology, protecting and restoring agricultural ecosystems, and strengthening ecological protection in key river basins; (iv) building green and low-carbon agricultural industry chains ‒ including promoting green agricultural value chains, industrial agglomeration, and circular economy; and promoting pollution-free, green, organic, and geographical indication (GI) agricultural products; (v) improving the innovation system for green agricultural technology development ‒ including promoting innovations in green agricultural science and technologies, accelerating the adoption of green agricultural practices (GAP), and building green talents and skills; (vi) improving the governance systems and mechanisms for enhancing green development of agriculture ‒ improving the legal framework for green agricultural technology development and innovations, creating incentives and strengthening mechanisms for regulating agricultural inputs, and continuing with market reforms; and (vii) planning and implementing green agricultural development ‒ including strengthening organizational leadership and carrying out performance evaluations. Similarly, the rural infrastructure and public services pillar of RRS plan phase 1 has six sub-programs: (i) building an ecologically livable beautiful village ‒ including coordinating the management of landscapes and ecosystems, promoting rural ecological civilization, and building a clean living environment; (ii) improving rural habitat environment ‒ including constructing rural solid waste (garbage) and wastewater (sewerage) treatment systems, improving rural domestic waste collection and disposal systems, promoting classification and resource utilization (recycling) of waste, and promoting the “toilet revolution�; (iii) improving the appearance of the village ‒ professionally planning the layout of villages, rehabilitating village buildings to preserve original cultural (traditional) architecture, constructing rural and household roads, renovating public space and courtyard environment, and promoting rural greening and enhancing landscape of villages; (iv) improving the rural water infrastructure network ‒ building a network of rural water conservancy infrastructure for improving water saving, water supply, flood control, and disaster mitigation; improving rural drinking water quality and safety; and constructing, rehabilitating, and modernizing irrigation systems and drainage and pumping stations; (v) strengthening rural transport infrastructure ‒ constructing roads connecting rural areas to urban centers; upgrading rural transport logistic facilities; deepening reforms in long-term mechanisms for rural road O&M; improving public transport routes; and providing public transportation; and (vi) building a modern energy system in rural areas ‒ optimizing the energy supply structure; developing solar, biomass, water, and wind energy; improving rural energy infrastructure networks; accelerating the upgrading of new rural power grids; and promoting the extension of gas supply facilities to rural areas. The Rural Revitalization Promotion Law (RRPL) provides a legal framework for implementing the RRS plan.3 This Law is promulgated based on four key principles: (i) prioritizing the development of agriculture and rural areas, including guarantees for capital investment and rural public services; (ii) adhering to the dominant status of farmers, including protecting farmers’ democratic rights and other legitimate rights and interests, and safeguarding farmers’ fundamental interests; (iii) adhering to the harmonious coexistence of humans and nature, including coordinating the management of landscapes and ecosystems and promoting green development and ecological civilization; and (iv) persevering in reform and innovation, including letting markets play the role of resource allocation, continuing structural reforms, and promoting high-quality development of agricultural value chains. Rural Revitalization Administration (RRA) offices have already been set up at the national, provincial, and 3 Adopted by the National People’s Congress on April 29, 2021. Page 6 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) county levels to implement the RRP. RRS plan phase 1 is embedded in the 14th FYP (2021‒2025) and linked to the National Sustainable Agricultural Development Plan (2015‒2030). The 14th FYP emphasizes that economic and social development should be based upon sound management of the environment and ecosystems, and sustainable utilization of natural resources. It articulates the need to “promote green development to achieve harmonious coexistence of humans and nature.� The 14th FYP also emphasizes the need to (i) accelerate green and low-carbon development, (ii) improve environmental quality, (iii) improve quality and stability of the ecosystem, and (iv) improve efficiency of resource utilization. The National Sustainable Agricultural Development Plan (2015‒2030) focuses on (i) green agricultural development, targeting zero growth of fertilizer and pesticide; (ii) establishing standards and regulatory frameworks for livestock waste discharge and agricultural pollution; (iii) putting in place economic incentives for improving environmental performance (e.g., eco-compensation); and (iv) promoting circular economy (e.g., recycling of crop and livestock waste, bio-energy generation). Guangxi and Guizhou have developed their respective provincial RRS plan phase 1 by cascading and customizing the national RRS plan phase 1 to fit their local priorities. They both aim to address the most pressing agricultural and rural development challenges within the available fiscal space. B. The World Bank-Financed Program The PforR will support selected sub-programs under pillar 1 (Green agricultural development) and pillar 3 (Rural infrastructure and public services) of the government’s RRS plan phase 1 (2018‒2022), which overlaps with the 14th FYP (2021‒2025) (Table 1). The PforR will be implemented over a six-year period from FY2023 to FY2028. The PforR will be implemented in 12 counties in Guangxi (out of 111) and 15 counties in Guizhou (out of 86). In Guangxi, the selected counties/districts are Pinggui, Ziyuan, Luocheng, Tiandeng, Rong’an, Xingbin, Xincheng, Tiandong, Bobai, Yizhou, Mashan and Zhongshan. In Guizhou, the selected counties/districts are Bijiang, Sinan, Yinjiang, Songtao, Jinping, Shibing, Taijiang, Luodian, Guiding, Sandu, Libo, Xingren, Zhenfeng, Xiuwen, and Xifeng. These counties/districts were selected based on agreed criteria (see Annex 3). Table 1: Summary of the GARR PforR Program Boundary D Description Government’s Rural Revitalization Program/RRS plan Program supported by the World Bank’s phase 1 (under the 14th FYP 2021‒2025) GARR PforR Objectives4 1. To sustainably increase rural income, increase access To enhance environmentally sustainable to rural infrastructure and public services, and agricultural and rural infrastructure improve the living environment in rural areas. development in selected areas of Guangxi and Guizhou. Duration RRP (2018‒2035) FY2023‒2028 RRS plan phase 1 (2018‒2022)/14th FYP (2021‒2025) Geographic Mainland China – 22 provinces, 4 municipalities, and 5 Guangxi (12 counties/districts) and coverage autonomous regions Guizhou (15 counties/districts). These provinces are among the bottom 10 in terms of per capita income. 4 Aims to revitalize rural areas on all fronts: industries, human resources, culture, ecosystems, and institutions. Page 7 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) D Description Government’s Rural Revitalization Program/RRS plan Program supported by the World Bank’s phase 1 (under the 14th FYP 2021‒2025) GARR PforR Sub-programs A. Green Agricultural Development Pillar Green Agricultural and Rural (SPs)/ Results Revitalization PforR Ras 1. Strengthening the protection and utilization of Areas (RAs) agricultural resources • RA1: Strengthening institutional 2. Strengthening the prevention and control of capacity for governance (RRS plan sub- agricultural NPS pollution program #6) 3. Strengthening agricultural ecological protection and • RA2: Greening agricultural value restoration chains (RRS plan SPs #1, #2, #4, and 4. Building green and low-carbon agricultural industry #5) chains • RA3: Increasing access to rural solid 5. Improving the innovation system for green waste and wastewater services (RRS agricultural technology development plan SPs #9, #10, and #11) 6. Improving the governance systems and mechanisms for enhancing green development of agriculture 7. Planning and implementing green agricultural development B. Rural Infrastructure and Public Services Pillar 8. Building an ecologically livable beautiful village 9. Improving rural habitat environment 10. Improving the appearance of the village 11. Improving rural water infrastructure network 12. Strengthening rural transport infrastructure 13. Building a modern energy system in rural areas Overall • National program: total financing of US$960 billion • Total IBRD loan of US$320 million financing (22 provinces, 4 municipalities, and 5 autonomous • Government financing for a total of regions, 2022‒2025) US$4.696 billion for Guangxi and Guizhou (27 PforR counties/districts) The PforR will support three Results Areas (Ras) to be implemented in Guangxi and Guizhou: (i) Strengthening institutional capacity for governance, (ii) Greening agricultural value chains, and (iii) Increasing access to rural solid waste and wastewater services. These Ras are briefly described below. RA1: Strengthening institutional capacity for governance. RA1 aims at developing governance, training, and capacity-building frameworks needed to enhance the effectiveness of the government’s RRS plans. Activities under RA1 include (i) developing provincial regulations, standards, and guidelines for green agricultural development and rural infrastructure development; (ii) establishing provincial mechanisms for green agricultural development program budgeting, expenditure tracking, and reporting; (iii) establishing provincial mechanisms for M&E of rural infrastructure and public services; and (iv) developing provincial frameworks/action plans for nurturing green skills and talents in rural areas. The provincial regulations, standards, and guidelines will strengthen the legal framework for green agricultural technologies and innovations and mechanisms for regulating agricultural inputs and livestock and poultry waste management. The program budgeting and expenditure tracking framework is critical for transparently allocating fiscal resources based on delivery of verifiable results, and for enhancing accountability through the established M&E of results and reporting of expenditures. Similarly, the development of green skills and talents is key to accelerating the adoption of GAP to Page 8 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) reduce the environmental footprint. The provincial governance frameworks and institutional capacity-building action plans will be piloted in the 27 PforR counties/districts, scaled up province-wide, and shared nationwide. RA2: Greening selected agricultural value chains. RA2 aims to sustain and consolidate the poverty reduction gains by supporting environmentally friendly agricultural production practices and value addition activities to increase rural income (farm and off-farm). RA2 will support climate-smart agricultural practices in selected value chains. The aim is to achieve triple wins: increase productivity, build resilience to climate change, and reduce GHG emissions. Activities under RA2 include supporting activities aimed at (i) strengthening the protection and utilization of agricultural resources (i.e., building resilience), such as protecting and improving the quality of farmland and improving the efficiency of agricultural irrigation water use (e.g., rehabilitating irrigation systems and supporting drip irrigation); (ii) preventing and controlling agricultural NPS water pollution, such as reducing chemical fertilizer use while increasing the efficiency of chemical fertilizer use (e.g., through fertigation, deep placing, timing), low-residue pesticide use, soil testing and use of formula and organic fertilizer, recycling of livestock and poultry manure and crop straw/residues, and collection and recycling of agricultural plastics ‒ all aimed at reducing GHG emissions and sequestering carbon; (iii) building green and low-carbon agricultural industry chains, such as green, organic, and GI agricultural products; (iv) providing infrastructure needed for the development of green agricultural value chains (e.g., constructing/rehabilitating climate-resilient production/access roads, rehabilitation of irrigation and drainage systems, and construction/rehabilitation of cold-storage facilities to reduce food loss and waste); (v) nurturing green skills and talents in rural areas (e.g., training and capacity building of FCs, FAs, WUAs, input stockists, and agro-entrepreneurs); and (vi) enforcing green agricultural development regulations and standards (e.g., toxic pesticide use, effluent discharge standards, and burning of straw). These activities will be mainly implemented by farmers, FAs, FCs, WUAs, and agro-enterprises, with subsidies from provincial and county governments. RA3: Increasing access to rural solid waste and wastewater services. RA3 aims to improve living conditions in rural areas, reduce point and NPS pollution, and help to reduce GHG emissions. RA3 will also promote the rural circular economy (e.g., efficient use of treated wastewater, such as reuse for irrigation and compost material as a substitute for chemical fertilizer as well as using nature-based solutions to reduce pollution, including constructed retention ponds and wetlands to filter pollutants). RA3 activities include supporting activities aimed at (i) preparing spatial IVDPs, which will guide future rural investments; (ii) improving the rural habitat environment, such as constructing climate-resilient rural solid waste (garbage) transfer and wastewater (sewerage) treatment facilities; improving rural domestic waste collection and disposal systems, including sorting/separation and resource utilization (recycling) of solid waste and improving sanitation ‒ the “toilet revolution�; and (iii) providing training and capacity building in the O&M of wastewater and solid waste facilities. These activities will be implemented by the relevant provincial and county government departments. C. PforR Program Financing The total program financing is US$5,016 million, of which Guangxi will finance US$2,846 million and Guizhou US$1,850million, while the Bank will provide an IBRD loan of US$320 million (Table 2). The PforR will ensure that allocation of the IBRD loan to the various DLIs provides incentives to attract both public and private investment to reduce nutrient and pollutant loads (NPS pollution) emanating from chemical fertilizer use, livestock and poultry manure, as well as domestic wastewater entering waterways. These activities will generate both global (e.g., GHG emission reductions) and local environmental (e.g., improved water quality) benefits. Page 9 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Table 2: Summary of PforR Program Financing Plan Guangxi PforR Guizhou PforR Total PforR Amount Amount Amount Source % of total % of total % of total (US$ (US$ (US$ financing financing financing million) million) million) Government 2,846 95.0 1,850 91.6 4,696 93.6 IBRD 150 5.0 170 8.4 320 6.4 Total program 2,996 59.7 2,020 40.3 5,016 100 financing Note: Covers only 27 counties for Guangxi and Guizhou. III. Program Results Framework and Monitoring and Evaluation A. Program Development Objective(s) (PDO) and PDO-Level Results Indicators The Program Development Objective (PDO) is to enhance environmentally sustainable agricultural and rural infrastructure development in selected areas of Guangxi and Guizhou. The program is expected to contribute to the achievement of the government’s RRS plan phase 1 targets through (a) strengthening institutional capacity to govern rural development activities; (b) reducing point and NPS agricultural pollution (e.g., COD, NH3N, and TP) and GHG emissions (e.g., CO2, CH4, and N2O); (c) improving the efficiency of natural resource use (especially land and water); (d) building resilience to climate change and improving food safety (e.g., adoption of climate-smart agricultural practices and agro-product certification); I improving access to rural infrastructure and public services (e.g., solid waste and wastewater management facilities and value chain development infrastructure, such as production/access roads and improved irrigation and drainage systems); and (f) strengthening rural institutions (e.g., training and capacity building and subsidies/matching grants provided to FCs, FAs, WUAs, agricultural input suppliers, and agro-entrepreneurs). The following are the proposed PDO-level indicators: (i) Nutrient load reduction (NH3N and TP) achieved under the PforR in program counties; (ii) COD pollution load reduction achieved under the PforR in program counties; (iii) GHG emission reductions achieved under the PforR in program counties (RA2 and RA3); and (iv) Beneficiaries reached with assets or public services (disaggregated by gender and ethnic minority) under the PforR in program counties. The PforR’s contribution to global public goods from GHG emission reductions will be indirectly calculated during program implementation. This will be done at the mid-term and end of program (compared with the 2020 baseline values) by using M&E data on quantities of nutrient load reduction and pollutant load reduction achieved under PDO/outcome indicators (i) and (ii) above to calculate the tons of CO2 equivalent from mitigation measures. This approach would give third-party verification agencies sufficient time to verify the results using the agreed protocols. Additional GHG declines will be derived from adaptation measures, such as reduction of food loss and waste, adoption of climate-smart agricultural practices (e.g., technologies that increase water use efficiency ‒ drip irrigation and fertigation), returning crop straw/residues to soil, using green manure, and practicing crop rotation. Page 10 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) A summary of activities supported under the PforR that will substantially contribute to GHG emission reductions is provided in Tables 12 to 14. The PforR will ensure that incentives are realigned to attract both public and private investment to pollution loads (NPS pollution) emanating from livestock and poultry manure as well as domestic wastewater entering waterways. These activities will generate local environmental benefits. B. Theory of Change The PforR contributes to the achievement of the government’s RRP, which is implemented in phased RRS plans. The objectives of the government’s RRP are “to sustainably increase rural income (on and off-farm), increase access to rural infrastructure and public services, and improve the living environment in rural areas.� The government’s RRP aims to revitalize rural areas on all fronts: industries, human resources, culture, ecosystems, and institutions. The PDO of the PforR is “to enhance environmentally sustainable agricultural and rural infrastructure development in selected areas of Guangxi and Guizhou.� The GARR PforR will also substantially contribute to global public goods (see Box 2). In addition, the GARR PforR will contribute to global knowledge by widely sharing the approaches and methodologies for measuring the GHG emission reductions from chemical fertilizer, livestock and poultry manure, and wastewater and solid waste management systems. The Theory of Change (TOC) with the results chain ‒ RAs, activities, outputs, and outcomes ‒ and how these contribute to the achievement of the PDO is shown in Figure 1.for Page 11 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Figure 1: Theory of Change for the GARR Program for Results RAs Program Activities Program Long- Program Outputs PDO Outcomes term The Program Development Objective (PDO) is to enhance environmentally sustainable agricultural and • Developing regulations, • Regulations, standards, and standards, and guidelines for guidelines for GAP and rural RA1. Strengthening institutional GAP and infrastructure infrastructure approved • Developing mechanisms for • Efficient • Program-based budgeting and capacity for governance To sustainably increase rural income, increase access to rural infrastructure and public services, budgeting, expenditure results-based expenditure reporting fiscal transfers rural infrastructure development in selected areas of Guangxi and Guizhou. tracking, and reporting frameworks are operational • Developing mechanisms for for green • RRS M&E platform; third-party M&E of rural infrastructure agricultural M&E and verification agencies and public services and rural are in place • Establishing frameworks for development • GAP training and capacity nurturing green development building frameworks are skills and talents developed and improve living environment in rural areas • Reducing use of chemical RA2. Greening selected agricultural value chains fertilizer and toxic pesticide, recycling plastic film, recycling • Agricultural pollution • Reduced livestock wastes and crop reduction achieved (e.g., for pollution from straws CO2, CH4, N2O, COD, BOD, TP, crop and • Adopting climate-smart TN, and plastic film) livestock agricultural practices— • Increase in productivity of production increasing productivity, selected agricultural value systems building resilience, and chains • Enhanced food reducing GHG emissions (CO2, • Agro-products certified (e.g., quality and CH4, N2O) green, organic, and geographic food safety • Training FCs, FAs, WUAs, input indication) • Enhanced rural suppliers, agro-enterprises, • Rural beneficiaries trained in households’ and rural extension staff green technologies and income (farm • Enforcing green agricultural business skills and non-farm) development regulations, standards and guidelines • Preparing spatial Integrated • IVDPs prepared and approved solid waste and wastewater RA3. Increasing access to rural Village Development Plans • Improved (IVDP) • Rural wastewater treatment access to • Constructing rural wastewater and recycling facilities wastewater management systems constructed and solid • Constructing rural solid waste • Rural solid waste collection, waste services sorting, and transfer facilities management systems • Reduced • Providing training in constructed pollutant loads • Rural people trained in O&M services operations and maintenance entering (O&M) of wastewater and of wastewater and solid waste DLI waterways solid waste systems systems s Page 12 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) The Bank’s PforR support focuses on three Results Areas: (i) RA1 : Strengthening institutional capacity for governance to improve institutional coordination and management frameworks for results-based green agriculture and rural infrastructure development (wastewater and solid waste management systems); (ii) RA2: Greening selected agricultural value chains to sustainably increase rural income by adopting environmentally friendly production practices; and (iii) RA3: Increasing access to rural solid waste and wastewater services to improve the rural living environment and reduce pollutants. The activities under each RA are described in detail in the section PforR Program Scope. The expected outcomes of implementing activities under these RAs are the following: (i) RA1: efficient results-based fiscal transfers to support green agricultural development and rural development activities; (ii) RA2: - reduced point and NPS water pollution from crop, livestock, and poultry production systems; enhanced food quality and food safety, reduced food loss and waste, and reduced risks of emerging infectious disease outbreaks; and increased rural households’ income (farm and off-farm); and (iii) RA3: improved rural living standards and access to basic public services, and reduced pollutant loads entering waterways. C. Disbursement-Linked Indicators and Verification Protocols The choice of disbursement-linked indicators (DLIs) for the PforR is based on four factors: (a) the importance of the indicator that signals a critical action/output along the results chain, critical to achieving the PDO; (b) assessed need to introduce a strong financial incentive to deliver the result; (c) practical aspects of verifying achievement; and (d) capacity of the borrowers to achieve the DLI during the implementation period of the PforR (Table 3). Other performance indicators are absorbed into the Program Action Plan and the PforR’s Results Framework. Table 3: Disbursement-Linked Indicators Disbursement-linked indicators Rationale for selection RA1: Strengthening institutional capacity for governance DLI1: Development and use of a This DLI aims to enable a region/province to develop a comprehensive rural comprehensive IT-based M&E system for revitalization M&E system as an integrated tool for recording, analyzing, and rural infrastructure, public services, and reporting the performance of RRP implementation. Once developed, this profile of rural villages system will be used by county governments to record, analyze, and report the performance of RRP implementation, and use this information to develop annual work plans. Thus, the IT-based M&E system is a decision support tool to help manage RRP implementation and evaluate performance. This includes the performance of transfer stations, storage facilities, treatment facilities, and financing and technical institutions to ensure that rural wastes are managed holistically from generation to sorting/separation, transfer treatment, and final placement or reuse; and contributions to GHG emission and pollutant reduction. DLI2: Development and use of an IT- This DLI aims to enable a region/province to develop an IT-based green based system for green agricultural agricultural program-based budgeting and expenditure reporting system that program-based budgeting and adopts RRS plan expenditure classification. County governments will adopt expenditure reporting and use the platform to integrate, consolidate, or pool earmarked budgets from various sources to finance priority sub-programs under RRS plans. The IT-based system is a tool for enhancing transparency of budget allocations to support green agricultural development and improving accountability of Page 13 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Disbursement-linked indicators Rationale for selection expenditures, aimed at achieving targets for GHG emission, nutrient, and pollutant reduction. DLI3: Adoption of local regulations, This DLI aims to enable a region/province to adopt the MARA’s national standards, and guidelines on green regulations, standards, and guidelines for green agricultural development and agricultural development and number of customize or tailor them to fit and meet regional/provincial conditions and agro-products produced in the program requirements. County governments will use the approved regional/provincial counties that are certified and/or regulations, standards, and guidelines to certify and register green, organic, registered as green, organic, or and GI agro-products. The standards and guidelines are therefore critical for geographical indication pursuant to said ensuring that agro-products meet the targets for GHG emission, nutrient, and regulations, standards, and guidelines pollutant load reductions prior to being certified as either green or organic products or being registered as GI agro-products. RA2: Greening selected agricultural value chains DLI4: Tonnes of chemical fertilizer This DLI aims to track the quantity and intensity of chemical fertilizer reduced due to the adoption of green reduction from selected value chains (e.g., rice, fruits, and vegetables). The technologies and sustainable practices in aim is to achieve regional/provincial targets for reducing agricultural NPS selected crop production systems in the water pollution and increasing the utilization rates set in the RRS plans under Program Counties the 14th FYP. The reductions can be achieved partly because of increased efficiency of chemical fertilizer use or decreases (e.g., by improving the rate, timing, placement, or precision of application) and partly by using substitutes, including organic, green, and formula (based on soil testing) fertilizer and fertigation technologies. These improved practices have been proven to substantially mitigate GHG emissions and reduce nutrient loads. DLI5: Percentage increase of treated and This DLI aims to track the quantities of livestock and poultry manure that are recycled livestock and poultry manure collected, treated, and recycled into organic fertilizer, biogas/energy from large-scale and small-scale farms in generation, and irrigation water. The aim is to achieve the regional/provincial the program counties comprehensive manure utilization rates and pollutant reduction targets set in the provincial RRS plans under the 14th FYP. Manure management activities contribute substantially to GHG emission reductions (e.g., by removing COD, BOD, and NH3N and efficiently using recovered gases and treated effluents from livestock and poultry production systems). DLI6: Percentage increase of recovered This DLI aims to track the quantities of agricultural plastics (e.g., mulch film, and recycled agricultural plastics in the greenhouse film, and fertilizer and pesticide packaging materials) pollution Program Counties reduction. The reduced agricultural plastics pollution can be achieved by increasing quantities that are recovered, treated, and recycled, along with increased use of substitutes, including biodegradable mulch film and crop straw mulch. The aim is to meet the regional/provincial agricultural plastics recovery rate targets set in the provincial RRS plans under the 14th FYP. Plastic mulch film is a major contributor to waterborne plastics pollution, which ends up in oceans and adversely affects marine ecosystems and biodiversity. RA3: Increasing access to rural solid waste and wastewater services DLI7: Number of Integrated Village This DLI aims to help regional/provincial governments to properly plan rural Development Plans approved by program infrastructure development under the phased RRS plan. The spatial IVDPs, counties which include settlement, farmland, forestry/protected land, recreation, social services, and infrastructure, would guide future rural investment to meet regional/provincial standards for improving the village living environment. Spatial IVDPs are the future investment decision support tools. Page 14 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Disbursement-linked indicators Rationale for selection Spatial planning would help to avoid land use changes and guide investment in wastewater treatment facilities and solid waste management systems. The recycling of treated waste would help to reduce GHG emissions and pollutants entering waterways. DLI8: Number of demonstration villages This DLI aims to track the improvement of rural wastewater treatment with newly constructed or rehabilitated facilities and solid waste management systems to prevent pollutants (e.g., existing climate-resilient wastewater COD, TP, and NH3N) from entering waterways and to improve living conditions treatment facilities and established solid in the demonstration villages. The treatment and recycling of wastewater waste collection, sorting, and transfer would contribute to a substantial reduction in GHG emissions. This DLI also systems contributes to the achievement of rural circular economy, including through the efficient use of treated wastewater (e.g., reuse for irrigation to build resilience to drought), use of compost material (e.g., as a substitute for chemical fertilizer), and use of nature-based solutions (e.g., retention ponds or constructed wetlands to filter pollutants). Verification of achievement of the eight DLIs will be carried out by a third-party agency based on agreed protocols. The provincial governments will prepare consolidated reports on the achievement of results using M&E data and information collected and reported by the county government agencies and/or third-party M&E firms hired under the program. All M&E data and information collected by the county government agencies and third- party M&E firms will be uploaded onto the MIS. The third-party verification agency will use the MIS data and information and field visits to verify the reported results. The detailed verification protocols for each DLI are presented in the TA report and summarized below. DLI1: Development and use of a comprehensive IT-based M&E system for rural infrastructure, public services, and profile of rural villages. DLI1 includes two sub-DLIs that aim at developing an IT-based M&E system at the regional/provincial level and for county governments to use and maintain the system. DLI1.1: Guangxi and Guizhou develop a comprehensive IT-based M&E system for rural infrastructure, public services, and profile of rural villages. The data collected, analyzed, and reported through the system shall include basic information on access to rural infrastructure and public services, such as wastewater and solid waste in all administrative villages in program counties, and village socioeconomic parameters. Verification protocol: A third-party VA verifies whether (a) the relevant provincial/regional RRBs have developed and installed the IT-based M&E system for rural infrastructure, public services, and profile of rural villages through on-site review of the system and the official/regular performance evaluation documents, or reports generated; (b) the system meets data security standards; and (c) the regional/provincial RRB issues guidelines for installing and using the system at the county level. A single disbursement is made upon achieving the results. DLI1.2: Program counties install and use the comprehensive IT-based M&E system to record, analyze, and report on implementation of rural infrastructure, public services, and profile of rural villages developed under DLI1.1. The county governments are expected to use the data and information for the development of annual RRS work plans and 15th FYP RRS. Verification protocol: The third-party VA verifies whether the IT-based M&E system has been adopted/installed and can generate the required official reports regularly in the 27 program counties. Scalable disbursement-linked results(DLRs) are defined requiring the installation and use of the M&E system by all 27 program counties by 2025. The scalable disbursements are made progressively against the number of counties that have first installed and Page 15 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) used the IT-based M&E system in the respective year to generate monitoring reports, including on the performance of the solid waste and wastewater facilities. These reports are key to informing the O&M decision- making processes in the program counties. DLI2: Development and use of an IT-based system for green agricultural program-based budgeting and expenditure reporting. This DLI is also subdivided into two parts. DLI2.1: Guizhou and Guangxi develop a program-based budgeting and expenditure tracking IT-based system for green agricultural development. The IT-based system shall be capable of performing the following functions: (a) capturing and integrating financial data related to green agricultural development from various sources; (b) identifying, processing, and transferring financial data from the government treasury system; (c) generating regular budget and expenditure tracking reports; and (d) ensuring financial data security. The regional/provincial DARA and/or RRB issues guidelines for the installation and use of the IT-based program budgeting for the 27 program counties. Verification protocol: The third-party VA verifies whether the IT-based program budgeting system is fully operational and capable of generating the required regular (quarterly and annual) financial reports. A single disbursement is made upon achieving the results. DLI2.2: Program counties install and use the program-based budgeting and expenditure tracking IT-based system developed under DLI2.1. The 27 program counties remain responsible for entering accurate and timely program- based budget and expenditure data in the IT-based system, and for preparing and submitting the required regular budget and expenditure reports. Verification protocol: The third-party VA verifies whether (a) the IT-based program budgeting and expenditure tracking system is being used; (b) the required regular financial reports are prepared; and (c) financial data and information are used for performance evaluation and decision-making processes in the 27 program counties. Disbursements are scalable and are made against the number of counties in a calendar year (until 2025) which have achieved for the first time the above results. DLI3: Adoption of local regulations, standards, and guidelines on green agricultural development and number of agro-products produced in the program counties that are certified and/or registered as green, organic, or GI pursuant to said regulations, standards, and guidelines. This DLI also has two sub-DLIs: DLI3.1: Guizhou and Guangxi adopt local regulations, standards, and guidelines on green agricultural development based on the relevant regulations, standards, and guidelines adopted by the MARA. Experience shows that some provinces (especially those targeting Greater Bay Area markets) have food safety standards that are higher than the national standards. The adopted/customized regulations, standards, and guidelines are approved by the relevant authorities at the regional/provincial level. The regional/provincial DARA issues official notice to the 27 program counties to use them. Verification protocol: The third-party VA verifies the approved documents (i.e., regulations, standards, and guidelines) and a single disbursement is made upon achieving the results. DLI3.2: Number of agro-products produced in the program counties certified as green, organic, or registered as GI using the regional/provincial regulations, standards, and guidelines. This sub-DLI aims to provide evidence that the program counties are (a) supporting agro-producers to meet environmental and food safety standards and (b) using the adopted local regulations, standards, and guidelines for the certification and registration of agro- products to help farmers/enterprises to fetch premium prices in the markets. Page 16 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Verification protocol: The third-party VA verifies the green and organic agro-product certificates issued by the regional/provincial DARA and GI registrations for agro-products issued by the MARA. Disbursements are scalable and are made against the number of agro-products that are certified or registered in a calendar year. DLI4 – Tonnes of chemical fertilizer reduced due to the adoption of green technologies and sustainable practices in selected crop production systems in the Program counties. The total reduction in chemical fertilizer use is achieved by: (a) reducing application intensity (e.g., quantity per unit area) and increasing utilization rate (e.g., timing, placement, or precision of application to enhance absorption by roots); and (b) deploying four substitute green technologies: application of organic fertilizer and green manure (nitrogen-fixing crops) and formula (based on soil testing) fertilizer and fertigation. The cumulative chemical fertilizer use reduction under (a) will be monitored using the MARA’s national platform. The cumulative chemical fertilizer use reduction under (b) will be estimated using conversion coefficients approved by the MARA (see details in Annex 3). It is difficult to calculate annual chemical fertilizer utilization rates because they are calculated from experimental data on fertilizer absorption by type of crop and over multiple seasons. The experiments use the MARA’s methodology to monitor fertilizer application rates and crop yields, and account for crop nutrient use.5 Therefore, the program counties will collect data only on the quantity and area (hectares) of chemical fertilizer use and substitute green technology use, and prepare annual reports. Reduction in chemical fertilizer use will be calculated from a decrease in application intensity and an increase in the use of substitute green technologies using the conversion coefficients approved by the MARA. Verification protocol: The third-party VA verifies (i) the cumulative quantity of organic fertilizer and area under the formula fertilizers, the green manure and fertigation practices in selected crops systems, which are monitored and reported annually; and (ii) whether the appropriate coefficients are used for conversion into pure tonnes of fertilizer through random sampling. The third-party VA checks whether the random sample results are comparable to the reported reduction in chemical fertilizer use due to the adoption of green technologies and practices. Chemical fertilizer reduction targets and budgets are spread over the 2024‒2027 program implementation period. Disbursements are scalable and are made against the number of target net tons of chemical fertilizer reduction achieved in the program counties in a calendar year. DLI5: Percentage increase in treated and recycled livestock and poultry manure6 from large-scale and small-scale farms in the program counties. The cumulative data on quantity of manure collected, treated, and recycled will be obtained from two sources: (a) large farms with on-site treatment facilities and (b) centralized treatment facilities for small and medium livestock and poultry farms, and centralized facilities for small-scale farms (Guizhou). The MARA has established a national platform for monitoring quantities of livestock and poultry manure produced, collected, treated, and used (e.g., as organic fertilizer, conversion to biogas/energy, and crop irrigation). Data from this platform enable the MARA and DARAs to scientifically calculate the comprehensive utilization rate of livestock and poultry manure. Supplementary data will be collected directly from the on-site ledgers of large- and medium-scale livestock and poultry farms, and through annual M&E socioeconomic surveys. Verification protocols: Quantities reported by the three sources of data will be verified by the third-party VA 5 In representative counties, field fertilization experiments for major crops are designed, fertilization rates and crop yields are monitored, and crop nutrient use is estimated using scientific methods. 6 This refers to the manure, urine, and sewage produced in the livestock and poultry breeding and production activities. Page 17 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) based on (a) random sampling of large- and medium-scale farms7 and the centralized manure treatment facilities and (b) by reviewing other supporting documents, such as inspection reports from county DARAs and annual M&E socioeconomic survey reports. Livestock and poultry manure treatment and recycling targets and budgets are spread over the 2024‒2027 program implementation period. The third-party VA verifies the results and estimates the annual manure treatment rates. Disbursement will be made against the proportion (percentage) of the target net tons of livestock and poultry manure collected, treated, and recycled that is achieved in the program counties in a calendar year. DLI6: Percentage increase in recovered and recycled agricultural plastics in the program counties. This DLI tracks the cumulative quantity of agricultural plastics (greenhouse film, mulch film, and chemical and fertilizer packaging materials) used and recovery rate. 8 The MARA has established a national platform for monitoring these two parameters. The platform mainly tracks the use and recovery of greenhouse and mulch film. Greenhouse film recovery is almost guaranteed because it involves large farms, and the residues are of high value. As a result, producers and suppliers of greenhouse film recover the residues. In contrast, mulch film, which is of low value, is not widely recovered. The program will focus more on increasing the number of collection centers and recycling facilities for this type of plastics. In addition to the MARA’s platform, data on agricultural plastic film collection will be obtained from (a) the inventories established at county and village collection centers or sites, (b) records (on- site ledgers) of agricultural plastics use by large farm enterprises and professional farmer cooperatives, and (c) records (on-site ledgers) from agro-input sale networks, solid waste sorting centers, and recycling centers, among others. Verification protocol: The recovery and recycling quantities will be verified by the third-party VA using random sampling methods and field visits to review the collection and recycling ledgers. Agricultural plastics recovery and recycling targets and budgets are spread over the 2024‒2027 program implementation period. The third-party VA verifies the results and estimates the annual agricultural plastics recovery and recycling rates. Disbursement will be made against the proportion (percentage) of target net tons of agricultural plastics recovered and recycled that is achieved in the program counties in a calendar year. DLI7: Number of Integrated Village Development Plans approved by program counties. The county RRB will collect data on the number of IVDPs prepared by hired professional firms. The IVDPs will be approved by the relevant county authorities for implementation at the county level to ensure that they meet the required technical, environmental, and social standards. Verification protocol: The third-party VA will verify the achievements reported by reviewing the minutes of meetings approving the spatial IVDPs and the final documents provided by the county/district RRB on a random sampling basis. Disbursements will be made against the number of IVDPs approved each year. DLI8: Number of demonstration villages with newly constructed or rehabilitated existing climate-resilient wastewater treatment facilities and established solid waste collection, sorting, and transfer systems. Data on the number of constructed or rehabilitated and operational wastewater treatment facilities and solid waste management systems will be collected by the relevant departments at the county level during the handover of 33 A large-scale animal farm is defined as 500 or more head of pigs, 2,000 or more egg chickens, 10,000 or more meat chickens, and 30 or more head of cattle. 34 The recovery rate of agricultural film = the amount of agricultural film recovered divided by the amount of agricultural film used times 100. Page 18 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) the facilities/systems. Verification protocol: The third-party VA will verify whether the facilities/systems are fully operational by random sampling of batches completed and accepted each year. The third-party VA will also verify whether the facilities/systems are meeting county effluents discharge standards. Disbursement will be made against the number of demonstration villages with waste management facilities/systems that are meeting the county effluents discharge in each year, based on the unit price. IV. Expenditure Framework Assessment The Expenditure Framework Assessment was conducted based on information provided by Guangxi and Guizhou governments, a review of public financial management regulations, and interviews with government officials during the field visits. The EFA included the following dimensions: (i) fiscal sustainability and resource predictability, (ii) well-functioning budget allocation and execution, and (iii) incentives for efficient service delivery and value for money. The duration of the PforR is from 2023 to 2027. The PforR covers 12 counties in Guangxi (out of 111 total) and 15 counties in Guizhou (out of 86 total). The total program financing is estimated at US$5,016 million, of which US$4,696 million will be financed by the government and US$320 million will be financed by the IBRD Loan (Table 4). Of the US$4,696 million in government finance, it is estimated that US$2,846 million will come from Guangxi Province and US$1,850 million will come from Guizhou Province. Table 4: Program Financing (2023‒2027) Guangxi Province Guizhou Province Total Source Amount Amount Amount % of total % of total % of total (US$ million) (US$ million) (US$ million) Government 2,846 95.0 1,850 91.6 4,696 93.6 IBRD 150 5.0 170 8.4 320 6.4 Total 2,996 59.7 2,020 40.3 5,016 Note: The exchange rate is US$1 = RMB 6.40. A. Expenditure Scope The program consists of three results areas. Table2 provides the breakdown of the program financing by RAs and by provinces (Table 5). Of the total program financing of US$4,695.5 million (RMB 30.1 billion), RA1 accounts for 10.6 percent, RA2 for 41.9 percent, and RA3 for 47.4 percent. RA2 and RA3 involve massive investment, while RA1 puts more emphasis on institutional innovations or improvement of management mechanisms, for which the budget expenditure is negligible. Therefore, the following EFA will mainly focus on the budget expenditure related to the program activities under RA2 and RA3, namely, promoting green agricultural value chains and increasing access to rural infrastructure and public services. Page 19 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Table 5: Program Financing by Results Areas (2023‒2027) 2020 actual (US$ million) 2023‒2027 estimated (US$ million) Results Areas Guangxi Guizhou Guangxi Guizhou Subtotal Share（%） RA1 41.6 58.0 207.9 290.2 498.1 10.6 RA2 192.1 201.9 960.3 1,009.3 1,969.6 41.9 RA3 335.6 110.0 1,677.9 550.0 2,227.9 47.4 Subtotal 569.2 369.9 2,846.0 1,849.5 4,695.5 The provincial governments in China adopt a uniform budget classification to prepare budgets and report government expenditures following the instructions of the central Ministry of Finance. Both Guangxi and Guizhou have developed an integrated financial management system to track budgetary expenditures. The Department of Agriculture and Rural Affairs (DARA) has the main responsibility for implementing the government program Agricultural and Rural Modernization and records the related expenditures under the budget item Agriculture and Rural Affairs (code 21301). The government Rural Revitalization Program is mainly implemented by the Rural Revitalization Administration and the related expenditures are recorded under the budget item Poverty Alleviation (code 21305). After achieving the goal of lifting all out of extreme poverty, China is transiting to pursue rural revitalization, but relevant expenditures are still recorded under the budget line Poverty Alleviation. The PforR expenditure program is defined as selected sub-items of the government program that cover RA2 and RA3 activities (Table 6). Based on the budget data of 2020, the PforR program is about 44.8 percent of the government program, 44.4 percent for Guangxi and 45.3 percent for Guizhou. Table 6: Program Expenditure Boundary 2020 (US$ million) Government PforR program program 15 12 15 12 Code Budget line counties counties Result counties counties of of s Area of of Guizhou Guangxi Guizhou Guangxi 21301 Agriculture and Rural Affairs 295.8 330.4 2130101 Administrative Operation 40.0 23.5 RA 1 40.0 23.5 2130102 General Administrative Services 1.4 1.8 RA 1 1.4 1.8 2130103 Agency Service 0 2.2 2130104 Business Operation 38.7 35.8 RA 2 38.7 35.8 2130105 Farm Reclamation Operation 0 0.0 RA 2 0.0 0.0 Technology Transformation and Promotion 2130106 11.2 40.7 RA 2 11.2 40.7 Services 2130108 Pest Control 3.7 15.4 RA 2 3.7 15.4 2130109 Agricultural Product Quality and Safety 0.4 1.3 RA 2 0.4 1.3 2130110 Law Enforcement Supervision 0.1 0.1 RA 2 0.1 0.1 2130111 Statistical Monitoring and Information Services 0.6 0.1 RA 1 0.6 0.1 2130112 Industry Business Management 0.1 1.3 RA 2 0.1 1.3 2130114 Foreign Exchange and Cooperation 0 0.1 2130119 Disaster Prevention and Relief 3.8 1.6 RA2 3.8 1.6 Page 20 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) 2130120 Stable Farmers’ Income Subsidy 0 0.0 2130121 Agricultural Structural Adjustment Subsidies 8.3 0.9 RA 2 8.3 0.9 2130122 Agricultural Production Development 65.0 53.0 RA 2 65.0 53.0 2130124 Rural Cooperative Economy 0.5 5.9 RA 2 0.5 5.9 2130125 Agricultural Processing and Promotion 4.0 2.7 RA 2 4.0 2.7 2130126 Rural Social Undertaking 2.3 10.1 Protection, Restoration, and Utilization of 2130135 24.7 13.2 RA 2 24.7 13.2 Agricultural Resources 2130142 Rural Road Construction 1.5 11.8 RA 2 1.5 11.8 2130148 Refined Oil Price Reform Subsidy to Fishery 0.9 2.3 Subsidy for College Graduates to Work at the 2130152 0 1.3 Grassroots Level 2130153 Farmland Construction 40 8.4 RA 2 40.0 8.4 2130199 Other Agricultural and Rural Expenditures 45.4 97.0 21305 Poverty Alleviation/Rural Revitalization 520.2 951.8 2130501 Administrative Operation 15.3 5.1 RA 1 15.3 5.1 2130502 General Administrative Services 0.7 11.0 RA 1 0.7 11.0 2130503 Agency Service 0 0.1 2130504 Rural Infrastructure Construction 110 335.6 RA 3 110.0 335.6 2130505 Production Development 270.5 283.3 2130506 Social Development 4.7 39.3 Poverty Alleviation Loan Awards and Interest 2130507 0.4 10.4 Subsidies 2130550 Poverty Alleviation Institutions 1.8 6.0 2130599 Other Poverty Alleviation Expenditures 116.8 260.9 Total amount 816 1,282.2 369.9 569.2 As percent of government program 45.3 44.4 B. Program Financing China is by far the most decentralized country in the world, with responsibilities for providing public services being highly decentralized to subnational governments (SNGs). As of 2019, SNGs accounted for 85.30 percent of total public expenditures. In particular, the local share of the expenditure on Agriculture, Forestry, and Water Conservancy is as high as 97.7 percent. On the revenue side, this is highly centralized. Tax rates are set centrally, and tax revenues are collected by the State Administration of Taxation and allocated to subnational governments in the form of shared tax revenues, general transfers, and earmarked transfers. The counties rely heavily on the transfers from upper-level governments to finance public services for local residents. For this PforR program, county governments will undertake RA2 and RA3 activities and the corresponding expenditures are recorded under the county government budget. Counties rely on upper-level government transfers to finance these activities. Page 21 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Three central government transfer items provide funds to county governments for carrying out program activities, namely, Transfers for poor areas, Transfers for central-local shared functions on agriculture, forestry, and water affairs, and Special transfers for agricultural, forestry, and water affairs, of which Special transfers for agricultural, forestry, and water affairs is an earmarked transfer and the other two are general transfers. As Table 7 shows, the amounts of the three funding sources are much higher than those of the expenditures listed in Table 6, which indicates that the budget funding for the program is overall adequate and largely predictable. The counties are also granted higher discretion in using the funds, with the earmarked transfers taking a much lower share. Table 7: Program Funding Sources (million RMB) Guizhou Guangxi Funding sources 201 201 202 2018 2019 2020 8 9 0 General transfers 10,42 12,74 1,87 3,34 3,42 Transfers for poor areas 8,496 4 3 5 7 2 Transfers for central-local shared functions on agriculture, forestry, and 10,64 11,20 1,61 1,68 0 0 water affairs 4 8 6 3 Earmarked transfers 20,17 13,86 10,52 3,24 2,71 3,47 Earmarked transfers for agricultural, forestry, and water affairs 5 5 9 5 6 3 28,67 34,93 34,48 5,12 7,67 8,57 Total 1 3 0 0 9 8 Share of earmarked transfers 70% 40% 31% 63% 35% 40% C. Expenditure Performance The quality of expenditure program management will be critical to achieving the program objectives. While the county governments are taking the main accountability for developing and implementing the program, the provincial governments incentivize and/or mandate the counties to deliver the expected results through (i) earmarked transfers that mandate the use of funds for implementing activities critical to the achievement of expected results, (ii) expenditure performance evaluation and rewards, and (iii) technical guidance and persuasion, etc. RA2 activities The expenditure framework for RA2 is found adequate with earmarked transfers and performance evaluation playing an instrumental role in steering counties to deliver green agriculture objectives. In both provinces, the funding for RA2 activities is managed by the DARA and several central and earmarked funding programs are well linked to the green agriculture development objectives. In both provinces, the earmarked funding programs for agriculture and rural affairs managed by the DARA are mainly the Agricultural Production Development Fund, the Farmland Construction Fund, the Agricultural Resources and Ecological Protection Subsidy Fund, the Sustainable Agricultural Development Fund, etc. Most of these funds are sourced from both the central and provincial governments, with the central share surpassing 70 percent (see Table 8). Page 22 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Table 8: Funding Sources for Agriculture and Rural Affairs in Guizhou and Guangxi (2020, RMB million) Guizhou Guangxi Funding program Total Central % Province % Total Central % Province % Agricultural production 1 5,004.4 4,325.9 86.4 678.5 13.6 7,135.9 6,454.1 90.4 681.9 9.6 development (APD) Farmland 2 construction 2,483.2 1,908.0 76.8 575.2 23.2 3,281.1 1,459.1 44.5 1,822.0 55.5 (FC) Agricultural resources and 3 ecological 453.8 325.0 71.6 128.8 28.4 463.6 462.4 99.7 1.3 0.3 protection (AREP) Sustainable agricultural 4 252.3 252.3 100 0.0 0.0 216.7 216.7 100 0.0 0.0 development (SAD) 5 Other (OT) 1,110.3 1,006.0 90.6 104.4 9.4 38.3 29.6 77.4 8.6 22.6 Total 9,304.0 7,817.2 84.0 1,486.9 16.0 14,925.1 11,555.8 77.4 3,369.3 22.6 Of all the earmarked funds for agriculture and rural affairs, the bulk has been allocated for green agricultural development or has been attached to green-related performance indicators (see Figure 2), details of which are provided in Annex 2 and Annex 3. Guangxi Guizhou 6000 8000 7000 5000 6000 4000 5000 4000 3000 3000 2000 2000 1000 1000 0 0 APD AREP SAD FC OT APD AREP SAD FC OT Green Non-green Green Non-green (A) (B) Figure 2: Earmarked Funds for Agriculture and Rural Affairs: Green vs Non-Green (2020) A series of documents on management of the earmarked funds has been issued by MOF, MARA, as well as DOF and DARA in Guizhou and Guangxi, according to which the funds shall be used only for the specified usages. The Page 23 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) allocation of the funds is factor-based or project-based, and the funds shall all be subject to performance evaluation. The performance evaluation results are taken as an important factor for fund allocation. Therefore, strong incentives exist for the counties to achieve the desirable objectives in green agricultural development and to ensure value for money. Taking an example of the biggest earmarked transfer program (cultivated land protection), the performance of the program is evaluated by, among others, several green agriculture indicators such as fertilizer usage level, rural ecological environment improvement level, comprehensive utilization rate of straw, etc. RA3 activities The subprogram for rural revitalization (RA3) is to be reoriented from currently almost exclusively focusing on rural roads and drinking water to covering other public infrastructure and services such as the renovation of toilets, the recycling and disposal of sewage, and the collection, classification, transfer, and treatment of garbage in rural areas, which are the main concerned services for this PforR. The Rural Revitalization Transition Fund (RRTF, the successor of the poverty reduction specialized fund) managed by the RRA is one of the most important funding sources for RA3 activities. The policy objectives of the RRTF are two: consolidating the achievements of poverty alleviation and supporting the transition toward rural revitalization. Activities that are eligible for using this fund include industrial development, rural living environment improvement, rural small-scale infrastructure construction, etc. As 2021 is the first year that the government program transits from poverty reduction to rural revitalization, the government puts high priority on consolidating the achievement of poverty alleviation. More than half of the RRTF is used for industrial development, with the main objective being to sustain farmers’ industrial income. Of the funds being allocated for village infrastructure and improvement of living conditions, the majority is spent on supplying rural drinking water, rural roads, and village revitalization (e.g., greening, lighting, house renovation, etc.), while the share of expenditures on rural toilets, sewage, and garbage (RA3 activities of the program) is less than 1 percent (Table 9). Table 9: Usages of RRTF Funds in Project Counties of Guizhou (2020) Unit: RMB million Guizhou Guangxi Program Subprogram Amount Share Amount Share Ecological poverty alleviation; leisure agriculture and Industrial rural tourism; planting, breeding, and processing 1,452.6 57.9 2,477 33.7 development services Village Rural road construction, power supply, and small-scale 488.7 19.5 2,873 39.1 infrastructure water conservancy facilities Health, education, finance, employment, and Poverty alleviation 266.0 10.6 303 4.1 comprehensive poverty alleviation Improvement of Safe drinking water supply and roads leading to houses 20.4 0.8 933 12.7 living conditions Reconstruction of kitchen, toilet, enclosure, etc. 5.8 0.2 3 0.0 Public welfare jobs supply, reconstruction of Other 276.9 11.0 752 10.2 endangered buildings, project management fees Total 2,510.3 100.0 7,341 100.0 Page 24 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Current government funding of RA3 activities is limited and less predictable. However, the RRTF has the potential to become the major source of funds to support RA3 activities. Because functions such as solid waste and wastewater collection and treatment as well as agricultural plastics collection and recycling have been viewed as the county governments’ responsibility, with support from the Bank PforR loan and good design of the DLI, it is possible to encourage project counties to allocate more funding to RA3 activities. If 20 percent of RRTF funds (RMB 500 million) could be allocated to RA3 activities each year in the project counties, during the program period (2023‒2027), the budget funding earmarked for RA3 activities could reach RMB 2,500 million. D. Financial Sustainability The overall financial situation in Guangxi and Guizhou is sound and stable (see Table 10), although the unfolding COVID-19 pandemic is expected to have a negative but short-lived impact on government finance. The total expenditures of the PforR account for only 23.6 percent of the general budget revenue in Guangxi and 20.0 percent in Guizhou. The additional expenditures required for achieving the program objectives, particularly for the delivery of disbursement-linked results, are assessed as being manageable. Most will have to be financed from reorientation of ongoing government programs. The governments are recommended to withdraw 25 percent of the IBRD loan proceeds as advance payment to ease the financing burden in the early stage of program implementation. Overall, financial sustainability is not deemed as a major concern for the program. Table 10: Financial Situation in Terms of General Public Budget in Guangxi and Guizhou Billion RMB As percentage of GDP Item 2018 2019 2020 2018 2019 2020 Guangxi Total expenditures 531.09 584.90 615.54 26.09 27.54 27.78 Local revenue 168.15 181.19 171.69 8.26 8.53 7.75 Transfers from upper-level governments 284.60 304.59 343.55 13.98 14.34 15.51 Transfers from GFB and others 29.44 57.87 56.97 1.45 2.73 2.57 Overall balance −48.90 −41.25 −43.33 −2.40 −1.94 −1.96 Change in cash balance 5.85 1.21 2.78 0.29 0.06 0.13 Withdrawal from reserve 9.49 7.84 6.14 0.47 0.37 0.28 Financing 33.57 32.20 36.11 1.65 1.52 1.63 Borrowing 84.99 48.14 81.67 4.18 2.27 3.69 Debt amortization 51.42 15.94 45.56 2.53 0.75 2.06 Guizhou Total expenditures 501.73 592.14 572.33 33.89 35.31 32.11 Local revenue 172.68 176.74 178.68 11.66 10.54 10.02 Transfers from upper-level governments 296.07 300.35 321.97 20.00 17.91 18.06 Transfers from GFB and others 36.21 58.57 55.58 2.45 3.49 3.12 Overall balance 3.23 −56.49 −16.10 0.22 −3.37 −0.90 Change in cash balance −3.74 3.30 −1.14 −0.25 0.20 −0.06 Withdrawal from reserve −2.71 13.21 −2.92 −0.18 0.79 −0.16 Financing 0.67 39.97 21.12 0.04 2.38 1.18 Borrowing 134.61 97.19 99.09 9.09 5.80 5.56 Page 25 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Debt amortization 133.95 57.22 77.97 9.05 3.41 4.37 Source: Department of Finance, Guangxi and Guizhou Province. Statistics are the number of budget executions. E. Recommendations The expenditure framework presents an adequate basis for the government to deliver green agriculture and village public infrastructure and services. Budgets appear largely adequate relative to expected results and aggregated fiscal sustainability issues were not identified as a core concern associated with the expenditures. The transfers that the project counties received from the central and provincial governments are stable and predictable. Both the central and provincial governments are committed to gearing more budget toward the poverty counties to cushion the impact of the COVID-19 pandemic. The expenditure framework is deemed adequate, with the following points needing to be addressed during implementation: • In green agricultural development, the central and provincial governments have adopted a variety of measures to steer county governments to deliver green agriculture results. However, the spending on activities that support green agriculture is not monitored and reported. This makes it impossible to assess the county governments’ effort. The Bank team recommends that the central and provincial governments consider (1) developing a green agriculture expenditure taxonomy and monitoring the expenditures on green agriculture, and (2) allocating the agriculture-related transfers among counties based on the achievement of green agriculture results to enhance the incentives. • In rural infrastructure and public services, although the funding is available to project counties, the governments need to allocate more funds out of the RRTF for wastewater and solid waste collection and treatment. To ensure expenditure efficiency and value-for-money, the governments should develop an integrated village plan to inform the annual project selection and budget allocation. The integrated village plan should be developed by considering (1) the connection of the villages to the county’s infrastructure network system; (2) the costs of the infrastructure assets over their life cycle, including capital expenditures and O&M; and (3) the financing constraint faced by the villages and their sponsoring county governments. Institutional capacity of the project counties needs to be developed and enhanced to appropriately manage the projects in these new areas. V. Strategic Relevance and Technical Soundness A. Strategic Relevance Green Agricultural Development China has one of the largest agricultural sectors in the world. In 2020, China’s agricultural GDP amounted to US$1.13 trillion (constant 2010 US$), equivalent to 7.7 percent of the national GDP. Agricultural GDP increased 4.5 percent per year on average over the past 40 years, driven mainly by higher total factor productivity (TFP), the introduction of new technologies, and large producer subsidies, mostly for rice, wheat, and maize production, which today exceed levels in the European Union and the United States. Despite its limited natural resource endowment, China produces about 18 percent of the world’s cereal grains, 29 percent of the world’s meat, and Page 26 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) 50 percent of the world’s vegetables. China also plays an important role in international agricultural trade. The country is the largest importer of soybeans, maize, beef, and aquatic products, and is the largest exporter of chemical fertilizer. As a large producer, consumer, and trader, China’s producer support and international trade policies have huge global implications. China is the largest global emitter of greenhouse gases (GHGs) from agriculture, accounting for 13 percent of the total. 9 The main sources of China’s agricultural GHG emissions are enteric fermentation from ruminant animals (28.7 percent), excessive or improper synthetic fertilizer use (21.8 percent), paddy rice cultivation (16.0 percent), and poor livestock waste (manure, sewage, and urine) management (10.5 percent). The agricultural sector emits an estimated 828 million tons of carbon dioxide equivalent per year.10,11 Climate models estimate that, without serious national mitigation efforts, agricultural emissions in China will rise to 1,350 million tons per year by 2050. In 2018, China’s agricultural sector accounted for about 11 percent of the country’s GHG emissions − the third largest source after energy and industry. At the same time, excessive use of chemical fertilizer is one of the major non-point sources of water pollution in China. The country is now the largest chemical fertilizer user globally, in both absolute terms and per unit of land. Most of this fertilizer is not taken up by the targeted plants, but instead is dispersed through the air, soil, and water. About 67 percent of monitored groundwater sites are polluted and 32 percent of major rivers fail to meet basic quality standards required for sources of drinking water supply. About 7 percent of irrigated lands are contaminated with polluted water. The National Sustainable Agricultural Development Plan (2015–2030) targets zero growth of fertilizer as part of efforts to combat NPS pollution and to GHG emissions. Since 2015, the amount of chemical fertilizer use has been declining. Nonetheless, the amount of fertilizer applied per unit area in China is still about five times that of the EU, three times the global average, and twice that of the United States. Thus, potential exists for cutting nitrogen applications by 30–60 percent without yields in China’s major grain-producing areas. Untreated manure from livestock and poultry operations is also one of the major sources of water pollution in China. In 2017, pollutants measured in terms of the country’s total chemical oxygen demand, total nitrogen, and total phosphorus were 21.44, 3.04, and 0.32 million tons,12 respectively. Agricultural sources accounted for 50 percent, 47 percent, and 67 percent of these pollutants, respectively. The livestock subsector is the major contributor of water pollution in China, accounting for 96 percent of the COD, 38 percent of TN, and 56 percent of TP. Since 2016, the government has implemented efforts to increase the treatment rate of animal manure, setting a target of 80 percent in the latest 14th FYP. In 2020, the recycling rate of livestock and poultry manure was 75.9 percent. The untreated livestock and poultry manure discharged into water bodies causes a sharp decline in soluble oxygen, leading to eutrophication and algae blooms. As a result, water quality is compromised, and aquatic biodiversity is altered. Untreated manure may also increase the concentration of nitrates in groundwater due to leakage of nutrients. Untreated manure is also a major source of air pollution in the form of hazardous 9 The main agricultural and land use changes in GHG emissions are carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). 10 According to China’s Third National Communication to the UNFCCC of December 2018. Although this is the official figure report ed by China, other sources such as Climate Watch put the level of China’s agricultural sector emissions closer to 730 million tons. 11 The social cost of carbon is a measure of the economic harm from those impacts, expressed as the dollar value of the total damages from emitting one ton of carbon dioxide into the atmosphere. The current central estimate of the social cost of carbon surpasses US$50 per ton in today's dollars. 12 FAO (Food and Agriculture Organization of the United Nations). 2021. FAOSTAT [EB/OL]. http://www.fao.org/faostat/en/#data,2021- 07-10. Page 27 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) gases (e.g., ammonia (CH3) and hydrogen sulfide (H2S)) and GHGs (e.g., CO2, CH4, and N2O), as well as stench and dust. The low rate of recycling of agricultural plastics is another major environmental challenge. China has the largest agricultural area under plastic film mulch in the world. This is mainly because of its rapid expansion into fruit and vegetable production – a response to dietary diversification locally and abroad. Over the past two decades, the area under plastic film in China grew more than 150 times and reached more than 20 million hectares, using nearly 1.2 million tons of plastic film. In 2020, the recovery rate of agricultural film was 80 percent. However, the recycling rate of plastic mulch was less than 60 percent (the 14th FYP target is 85 percent). The environmental impact of this practice is ambiguous. On the one hand, plastic film mulching has played an important role in China’s agricultural development because of its ability to warm soil, retain moisture, and pesticide residues in the soil. Over time, this has significantly increased crop yields (e.g., 20‒35 percent in grains and 20‒60 percent in cash crops) and hence farm income. On the other hand, the widespread use of plastic film mulching has generated large quantities of plastic waste. Improper collection, treatment, and disposal of agricultural plastics contributes to air, water, and soil pollution as well as ecosystem degradation. Large quantities of plastic film mulch have ended up in streams, rivers, and, ultimately, the World’s oceans, thus endangering wildlife. Although the policy framework regarding plastic collection and recycling, and the use of micro-thin plastics in agriculture, has recently tightened, enforcement in rural areas remains patchy at best. In 2019, the government put forth Opinions on accelerating the prevention of agricultural mulch pollution. 13 This document set several high-level targets, including that, by 2020, the area covered in plastic film would cease to grow and that 80 percent of mulch films would be collected and recycled. By 2025, the policy aims for nearly all agricultural membranes to be recovered and for plastic film residues to decline. In 2020, China introduced a roadmap for phasing out reliance on a variety of short-lived plastics by 2025. Its multiple prongs include measures to and replace plastics with degradable mulch, increase recycling rates, improve plastics management, and invest in science and technology.14 Agriculture not only contributes significantly to China’s GHG emissions, but it is also highly vulnerable to climate change. Despite this, agriculture is one of the few sectors for which China has not developed an overall strategy on climate adaptation. Increasing severity and frequency of extreme weather events (especially floods and droughts), rising sea levels, destruction of ecosystems, and loss of biodiversity will significantly weaken China’s agricultural production capacity. For every 1 degree increase in temperature from the historical level, global food production, including rice, maize, and wheat, will decrease by 3 percent to 10 percent.15 The mountainous areas of Guangxi and Guizhou are exposed to extreme events, such as heavy rains and floods, and to lesser extent longer dry spells on a seasonal basis, as well as climate variability. Guangxi is also characterized as having a high flood risk and medium water scarcity risk, especially in karst mountain areas, where most of the rural population is located. In both Guangxi and Guizhou, areas with medium water scarcity could potentially transition into more adverse conditions with climate-induced drought, thus affecting crops. Mountainous conditions combined with average annual rainfall of 1,500 to 2,000 mm could result in floods and landslides, which could damage rural 13 Opinions of the Ministry of Agriculture and Rural Affairs, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Ecology and Environment, and the State Administration of Market Supervision and Administration on Accelerating the Prevention of Agricultural Mulch Pollution. Release date: July 4, 2019. 14 NDRC (National Development and Reform Commission). 2020. “About the Ministry of Ecology and Environment of the National Development and Reform Commission.� 15 Challinor, A. J., Watson, J., Lobell, D. B., Howden, S. M., Smith, D. R., & Chhetri, N. 2014. A meta-analysis of crop yield under climate change and adaptation. Nature Climate Change 4 (4): 287‒91. Page 28 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) infrastructure. These climate-induced hazards may increase in the future because of climate change. Thus, the adoption of climate-smart agricultural practices would be critical for sustainably increasing agricultural productivity, building resilience to climate change, and reducing GHG emissions. In addition, construction of climate-resilient rural infrastructure will enhance sustainability. The Green Agricultural and Rural Revitalization (GARR) PforR will support China’s efforts to reduce the agricultural environmental footprint from the three major sources: (i) excessive or improper chemical fertilizer and pesticide use, (ii) poor livestock and poultry manure management, and (iii) overuse and improper disposal of agricultural plastics. These are the major sources of water (point and non-point source), soil, and air pollution in China. The GHG emissions from these activities also contribute to global warming and climate change. Additional co-benefits will be realized by adopting climate-smart agricultural practices, including technologies that increase irrigation water use efficiency (e.g., fertigation, drip irrigation) and return crop straw to soil. Thus, developing standards, regulations, and guidelines for green agricultural development, together with their enforcement mechanisms, is critical. Rural Infrastructure Despite China’s massive investments in infrastructure and public services, there is still a wide gap between urban and rural areas. Regarding key pollution-related risks, the priority is investments in rural solid waste and wastewater management. These are the priority areas under Results Area 3 of the GARR PforR. Additional needs relate to the shortage of agricultural processing infrastructure and cold storage, the value added in local food production and hence income-generating opportunities. In addition, public services such as animal health and veterinary services, extension and advisory services, business development services, and marketing services, including e-commerce, are inadequate. These needs are supported in the context of strengthening green agricultural value chains under Results Area 2 of the GARR PforR. One of the cross-cutting challenges in addressing rural infrastructure and service gaps is the low capacity for infrastructure planning, prioritization, and life-cycle operation and management of local infrastructure assets. Following guidelines issued by the State Council in 2019, the improvement of rural infrastructure at the village level is promoted through the development of Integrated Village Development Plans (IVDPs). The GARR PforR supports the development of such plans as a key instrument for addressing local needs in a differentiated way, building local capacity, and strengthening accountability to improve the management of public services. The GARR PforR also draws on prior experience in rural poverty reduction in building stronger IT-based M&E systems for the management and operation, as well as performance evaluation, of rural infrastructure assets. Rural Solid Waste Management Rural solid waste collection and treatment falls way behind the levels in urban areas. In 2019, waste generation was estimated at 0.76 kg/capita/day in rural areas. However, up to half of the rural solid waste may not be disposed of safely, thus turning into a major source of environmental pollution.16 Although urban waste collection is almost universal, in 2017, it was estimated that only 47 percent of the rural waste was disposed of according to the existing national standards.17 In 2018, the Ministry of Agriculture and Rural Affairs reported that rural solid waste was not properly managed in at least a quarter of the administrative villages in China, where open dumping 16 Urban and Rural Municipal Solid Waste in China and the Circular Economy, World Bank (2019). 17 China Association of Urban Environmental Sanitation, the China Municipal Waste Development Report (October 2017). Page 29 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) was normal and littering was ubiquitous.18 China is currently piloting the separation of rural solid waste into four categories (i.e., organics, recyclables, hazardous, and residual) at the source. In rural areas, kitchen (organic) waste is mostly used by households as animal feed and recyclables are partially collected outside the public service (e.g., by informal groups and the private sector due to the low profit margins and long transport distance). But residual waste and hazardous waste often remain uncollected and are littered into the environment, placed in informal dumpsites, or burned by the population. Separating rural solid waste at the source would also facilitate the collection and recycling of agricultural plastics (e.g., plastic mulch film residues, pesticide containers, and chemical fertilizer packages). China has put in place several policies and plans for improving rural solid waste management. In 2015, the Opinions on Comprehensive Implementation of Rural Solid Waste Management issued by the Ministry of Housing and Urban-Rural Development (MOHURD) and ten other ministries require localities to establish rural waste management systems that follow the management modality of “waste collection by villages, transfer by towns, and treatment by counties.� In 2018, the State Council issued a Three-Year Action Plan for Rural Living Environment Improvement (2018‒2020) promoting the establishment of a comprehensive and diverse rural waste management system centered around waste minimization and recycling. The plan also set the target of 90 percent coverage of solid waste collection facilities in administrative villages nationwide by the end of 2020.19 However, many provinces report that this target is yet to be achieved and that unauthorized dumping of waste continues at scale. Waste collection facilities (e.g., collection containers and pads) often remain idle because of the unavailable waste flow chain. The latter includes transfer stations, storage facilities, treatment facilities, and financing and institutional capacity that ensure that the waste is managed holistically from generation to final placement. Recognizing these challenges, the 14th FYP on Municipal Solid Waste Separation and Treatment Facilities Development Plan (National Development Reform Commission (NDRC)/MOHURD, 2021‒2025) envisages rural waste management gradually integrating with the urban system. In June 2020, MOHURD launched a nationwide program to pilot urban-rural integrated waste management and rural waste separation20 in 141 demonstration counties. In April 2021, MOHURD issued the Standards for Rural Municipal Solid Waste Collection, Transfer, and Treatment, setting up standards and technical specifications for the construction and operation of rural systems of segregated waste collection, transfer, and treatment, while considering diverse local conditions. Although the rural solid waste policy framework has been tightened in the past five years, enforcement remains a key challenge. This is partly due to the fragmented institutional authority over and responsibilities for rural solid waste services. MOHURD is responsible for planning, construction, and O&M of solid waste management facilities, service delivery, and data and information management. The Market and Supply Cooperative (COOP), a nationwide network, handles resource recycling in rural areas. The MARA organizes the treatment of agricultural wastes, including agricultural mulch film and plastic packaging. Environmental monitoring and compliance of solid waste management and resource recycling facilities is the responsibility of the Ministry of Ecology and Environment. Given that several institutions have different mandates, an effective institutional coordination framework is needed to better manage rural solid waste. The Green Agricultural and Rural Revitalization PforR will focus on rural solid waste collection and sorting in 18 http://www.xinhuanet.com/gongyi/2018-09/30/c_129964054.htm 19 Coverage of waste collection infrastructure (e.g., collection bins and pads) should not be confused with service coverage of the population, assessed to remain far below. 20 http://www.mohurd.gov.cn/wjfb/202006/t20200624_246034.html Page 30 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) villages, and transfer waste handling facilities to townships. The PforR will not support county-level solid waste treatment because incineration and landfills are activities with high environmental risk. The PforR complements a series of Bank-funded operations aimed at abating solid waste and plastic pollution in rural areas, as described in Box 1. Box 1. Evolution and Complementarity of IBRD Operations for Pollution Abatement in Rural Areas Point source pollution control in China has improved through significant investment in the collection and treatment of domestic wastewater, with the urban wastewater treatment rate increasing from 15 percent in 1991 to more than 95 percent in 2020. Most of these improvements have occurred in urban areas, in large cities. The situation is different in rural areas, where challenges remain in rural point source and agricultural NPS pollution, giving rise to persistent pollutants driving non-compliance with water quality standards – primarily organic matter (COD), nitrogen, and phosphorus. Plastic pollution, which is at the origin of the global marine plastics problem, follows similar patterns, with plastic collection and recycling improving in cities but lagging far behind in small towns and rural areas. Recently approved IBRD operations are focusing on helping the Chinese government and provincial and county authorities enhance solid and plastic waste management and wastewater treatment policies and institutions, and investing in physical pollution abatement in rural areas. The Hubei Smart and Sustainable Agriculture Project (P168061) approved in FY20 promotes integrated environmentally sustainable and climate-smart agriculture and agri-food quality and safety in targeted value chains and landscapes in Hubei Province. This includes preventing and mitigating pollution from heavy metals and plastics. The Plastic Waste Reduction Project (P174267) approved in FY21 improves plastic waste management at the national and subnational levels and reduces plastics pollution from municipal solid waste. This project will be followed by a second one in FY23, which would continue to improve the policy framework while also investing in plastic abatement in rural areas. The Food Safety Improvement Project (P162178) approved in FY21 supports food safety management at the national and targeted subnational levels and to reduce food safety risks in selected value chains, including due to contamination of soil and water through a range of contaminants, including plastics. The Yangtze River Protection and Ecological Restoration Program (P171644) approved in December 2021 improves institutional coordination, enhances ecological protection, and reduces water pollution loads in select regions of the Yangtze River Basin, including from uncollected or mishandled rural waste and agricultural plastics. A follow-on project is planned. The Yellow River Basin Ecological Protection and Pollution Control Program (P172806), under preparation and proposed for approval in FY22,is expected to improve institutional coordination, enhance ecological protection, and reduce water pollution loads in selected regions of the Yellow River Basin. This would entail reducing marine plastics pollution through improved collection and treatment of wastewater treatment, and improved agricultural practices. Rural Wastewater Management Rural wastewater collection, treatment, and recycling have increasingly become a major concern in China. In 2018, there were 2.45 million villages in China with a total population of 580 million.21 Simple pit latrines and flush toilets connected to septic tanks are commonly used in rural areas. But many villagers still face poor sanitation and hygiene conditions because of inadequate, outdated, and/or faulty sanitary facilities. The sewage generated in these villages each day is approximately 17.6 million m3, but the daily treatment capacity is only about 494,700 m3, which means that only 2.8 percent of the wastewater is treated.22 The untreated wastewater discharged into 21 Ministry of Housing and Urban-Rural Development of the People’s Republic of China 2018 Chinese Urban-Rural Construction Statistical Yearbook (2018). China Planning Press, Beijing (in Chinese). 22 Ibid. Page 31 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) the environment generates all kinds of health risks and NPS water pollution because of the higher content of COD, TN, TP, and ammonia nitrogen. China has several policies and programs for improving rural wastewater treatment systems (WTS). The Plan for Preventing Water Pollution, published by the SC in 2015, requires rural WTS to use the standard design for construction and management. These unified standards have led to over-designed rural wastewater infrastructure with little prospect for recouping investment and meeting the O&M costs. Going forward, rural WTS design standards need to be customized to fit local conditions. The 13th FYP (2016–2020) set a target for rural wastewater treatment rate of more than 60 percent23 by the end of 2020. However, despite increased subsidies and vigorous promotion from the central government, only about 25 percent of the villages in China have WTS.24 Many of these WTS are not fully functional because of unsuitable technology, insufficient financial resources for O&M, ineffective governance structure, weak institutional capacity for enforcing effluent discharge standards, and limited public participation. Because of the scattered villages and difficult terrain in some parts of the country, the logistics of transferring large volumes of wastewater remain challenging. The PforR is aligned with the World Bank’s Country Partnership Framework (CPF, FY2020 ‒2025) for China (Report No. 11785-CN),25 which was discussed by the World Bank Board of Directors on December 5, 2019. The CPF focuses on closing the remaining institutional gaps and supporting interventions that generate significant global public goods (GPGs). The PforR supports the implementation of the October 2021 updated Nationally Determined Contribution (NDC)26and is consistent with a range of recent climate policy commitments made by China, including the Glasgow Leaders’ Declaration on Forests and Land Use and a joint declaration signed by China and the United States in the margin of the UNFCCC COP26 providing, among other things, for incentives and programs to reduce methane emissions from the agricultural sector. The main GPGs supported by this operation are the following (Box 2): (i) GHG emission reductions; (ii) agricultural plastics recovery, treatment, and recycling; and (iii) biodiversity conservation and protection. The GARR PforR is directly linked to Engagement Area 2 (EA2) of the CPF ‒ Promoting Greener Growth. Under EA2, the Bank aims to support government efforts to (i) reduce air, soil, water, and marine plastics pollution; (ii) demonstrate sustainable agricultural practices and improve agro-food product quality and safety; and (iii) strengthen institutional capacity for sustainable natural resource (especially the efficient use of scarce arable land and water) management. The PforR is also aligned with the World Bank Group’s Green, Inclusive, and Resilient Development (GRID) framework and the World Bank Group’s Climate Change Action Plan (2021‒2025).27 23 In 2018, Zhejiang and Jiangsu provinces and Shanghai and Beijing municipalities had more than 70 percent of the villages with WTS. 24 National Bureau of Statistics of China 2018 China Statistical Yearbook (2018). China Statistics Press, Beijing. 25 World Bank Group. 2021. China ‒ Country Partnership Framework for the Period FY2020–2025. (Report No. 117875-CN) World Bank Group, Washington, D.C. 26 China updated its NDC targets to include the following: (i) carbon dioxide emissions will strive to peak by 2030 and strive to achieve carbon neutrality by 2060; (ii) by 2030, China's carbon dioxide emissions per unit of GDP will drop by more than 65 percent compared with 2005; (iii) the proportion of non-fossil energy in primary energy consumption will reach about 25 percent; (iv) the forest volume will increase by 6 billion cubic meters compared with 2005; and (v) the total installed capacity of solar power generation will reach more than 1.2 billion kilowatts. 27 Alignment with GRID and the Climate Change Action Plan 2021‒2025 is seen in the PforR’s focus on environmental sustainability objectives, while increasing resilience to climate change threats, mitigating emissions, and promoting inclusivity in economic opportunities. Page 32 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Box 2. Contribution of the PforR to Global Public Goods The PforR contributes to the following GPGs: (i) reducing agricultural plastics pollution; (ii) reducing GHG emissions and (iii) improving biodiversity protection and restoration. Reducing agricultural plastics pollution: The PforR will contribute to the reduction of plastics entering the main waterways and ending up in the world’s oceans/seas. Both Guizhou Province (upper reaches of Yangtze River) and Guangxi Province (upper reaches of Pearl River) are among the major contributors of agricultural plastics, which affect marine ecosystems and wildlife via entanglement, indigestion, and ecotoxicity. The PforR builds on an increasing portfolio of World Bank-financed programs and projects supporting the collection and removal of plastic waste, including agricultural plastic film that commonly ends up in waterways. The PforR will support the collection and recycling of agricultural plastic (e.g., plastic mulch film residues, pesticide containers, and chemical fertilizer packages) in the demonstration counties. Reducing GHG emissions: The PforR is expected to generate substantial climate mitigation co-benefits through the reduction of GHG emissions (e.g., CO2, CH4, and N2O measured in tons of CO2 equivalent) by (i) supporting the reduction of chemical fertilizer use; collection, treatment, and recycling of livestock and poultry manure; (ii) supporting the adoption of climate-smart agricultural practices (e.g., increasing water and land use efficiency; using improved seeds, breeds, and animal feeds; and increasing the use of formula and organic fertilizer and adopting fertigation technologies and integrated pest management practices); (iii) reducing food loss and waste from more efficient agricultural value chains; and (iv) supporting collection, sorting/separation, transfer, and treatment/recycling of rural solid waste and wastewater. Improving biodiversity protection and restoration: Guangxi and Guizhou are part of the Pearl and Yangtze River basins, respectively. These basins are globally significant biodiversity hotspots, as their waterways, floodplains, and wetland systems provide habitat to a range of endangered species. The PforR will indirectly contribute to the protection and restoration of biodiversity through a reduction in point source and NPS pollution (especially from chemical and high-toxic-residue pesticides and treatment and recycling of livestock and poultry manure and domestic wastewater) and through the promotion of IPM technologies (e.g., use of pest lamps and insect glue boards, biological pesticides, and low-residue high-efficiency pesticides). The activities under the PforR additionally contribute to improving food safety, reducing health risks related to China’s lar ge food exports, and through improved market infrastructure and livestock rearing and handling practices contributes to reducing the risk of zoonotic diseases. These impacts are not central to the theory of change and are thus not separately monitored. The GARR PforR aims to finance green agricultural and rural development activities that generate substantial climate co-benefits through both mitigation and adaptation measures. The PforR will generate climate co-benefits from mitigation measures in several ways. First, by reducing GHG emissions (e.g., CO2, CH4, and N2O measured in CO2 equivalent) from crop production systems through the reduction of chemical fertilizer use. Second, by reducing GHG emissions (e.g., removal of COD, CH4, and NH3N) from livestock and poultry production systems through the collection, treatment, and recycling of manure. Third, by reducing GHG emissions (e.g., COD, BOD, or COD5 and NH3N) through circular economy practices, including the efficient use of treated wastewater, such as reuse for irrigation to build resilience to drought, using treated sludge and compost material as a replacement of chemical fertilizer, and using nature-based solutions such as retention ponds or constructed wetlands to filter pollutants from rural solid waste and wastewater. Fourth, by supporting the collection, transfer, and recycling of agricultural plastics (e.g., mulch film residues, pesticide and chemical fertilizer packages) and the use of biodegradable mulch film. The GARR PforR will also generate climate co-benefits from adaptation measures. These include (i) the adoption of climate-smart agricultural practices (e.g., recycling of crop straw/residues, increasing efficiency of irrigation water use, fertigation,28 and water management in paddy rice); (ii) reducing food 28 Fertigation is the injection of fertilizer, used for soil amendments, water amendments, and other water-soluble products, into an irrigation system. Fertigation is related to chemigation, the injection of chemicals into an irrigation system. Page 33 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) loss and waste (e.g., through village-level cold-storage facilities and cold chains, improved postharvest handling technologies, and processing); and (iii) increased energy use efficiency (e.g., in primary production through new efficient farm machinery, use of renewable energy (solar and wind power for irrigation), and in value addition, such as conversion of biogas to energy). The climate co-benefits will be measured in CO2 equivalent of GHG emissions reduced from PforR-supported activities. Although it is relatively easy to measure the PforR’s contribution to the generation of the climate co-benefits, its impacts on biodiversity protection and restoration will be difficult to measure. However, experience from the Guangdong Agricultural Pollution Control Projects shows significant improvement in biodiversity (e.g., pollinators in fruit orchards and fish and amphibian species in paddy rice fields) in the farmland ecosystem due to the reduction of agricultural pollutants (especially chemical fertilizer and high-residue pesticide) and the promotion of IPM technologies (e.g., use of pest lamps and insect glue boards, biological pesticides, and low-residue high- efficiency pesticides). The reduction of pollutant loads entering waterways will generate local environmental benefits. These will mainly arise from the reduction of the point source and NPS water pollution (e.g., COD, TN, and TP) through the reduction and efficient use of chemical fertilizer (e.g., improving application rate, improving timing and precision of application) and increased use of formula and organic fertilizer, and treatment and recycling of livestock and poultry manure as well as rural wastewater. One of the key local environmental benefits would be the improvement of water quality, with associated improved health outcomes such as a decline in waterborne diseases in rural areas. The PforR draws lessons and experience from Bank-financed agricultural and rural development projects in China and the Transforming Rural China study. These include ongoing or recently closed projects in sustainable agriculture (Hubei Sustainable and Smart Agriculture Project (P168061) and Climate-Smart Staple Crop Production Project (P144531)); agricultural pollution control (Hunan Integrated Management of Agricultural Land Project (P153115) and Guangdong Agricultural Pollution Control Project (P127775, TF018176)); value chain development (Jiangxi Farm Produce Distribution System Project (P147009); and agriculture finance (Henan Green Agriculture Finance Project (P169758)) and food quality and safety (China Food Safety Improvement Project (P162178)). These projects are piloting new sustainable agricultural practices through a combination of Technical Assistance, public investment, green finance, and matching grants to farms and cooperatives. The PforR also builds on the long history of Bank involvement in poverty alleviation/reduction (Guangxi Poverty Alleviation Project (P153892), Shaanxi Poor Rural Areas Community Development Project (P153541), Poverty Alleviation in Poor Areas Project (P133326) ‒ International Poverty Reduction Center in China (IPRCC), Sichuan, Gansu, and Guizhou provinces, Guizhou Rural Development Project (P133261), and the Guangxi Poverty Reduction PforR (P163138), which have helped to target central and provincial budget transfers to achieve greater impact in poverty reduction, including by pooling funds from various budget lines at the local level and introducing the PforR instrument. The design of the PforR is also informed by the recently completed studies undertaken as part of the Bank’s Programmatic Advisory Services and Analytics (PASA) on Transforming Rural China – Greening Agricultural Modernization. The studies undertaken under the PASA include (i) Toward a Greener China – A Review of Recent Agricultural Support Policies and Public Expenditure; (ii) Rural Transformation and Policies in China; (iii) An Overview of Degradation and Restoration of Ecosystems and Landscapes in China; (iv) Agricultural Water Use Efficiency Experience in China; (v) Analysis of Farmland Policy for Greening Agricultural Modernization; (vi) Challenge of Agricultural Pollution in China; and (vii) Promoting a New Agricultural Research and Development Strategy for Greener Development in China. Page 34 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) The proposed GARR PforR presents an opportunity for the Bank to leverage this experience to bring poverty reduction and sustainable agricultural practices together in one design, while helping the government improve the effectiveness and results orientation of its Rural Revitalization Strategy. The value added of the Bank lies in introducing greater results focus into the substantial public investments made in rural areas and in helping to improve the coherence of activities across multiple agencies involved in the implementation of the RRS. The PforR instrument is thereby capitalizing on the evolving national and provincial policy frameworks (e.g., eco- compensation)29 for results-based fiscal transfers to improve a range of environmental outcomes. In leveraging budget resources under the RRS, the PforR instrument provides geographic coverage beyond that possible under the standard Investment Project Financing (IPF) instrument. A key contribution of the operation is strengthening institutional capacity and developing governance frameworks (e.g., regulations, standards, and guidelines for green development; and program budgeting, expenditure tracking, M&E, and verification of results) for implementing the RRS plan, which can be rolled out throughout the country or to other provinces (i.e., beyond the PforR’s geographic boundaries of participating counties). The PforR instrument can also help the government to repurpose its agricultural subsidies toward achieving green and sustainable agricultural development. Guizhou and Guangxi have requested Bank support based on their positive track record with past projects to help them increase the impact of their substantial RRS-related commitments. The proposed GARR PforR complements other Bank-supported operations in the management of solid waste and water resources prepared under the current CPF. The China Plastic Waste Reduction Project (P174267) approved in June 2021 builds on the tightened national framework for solid waste management to support plastic waste avoidance, separation, and recycling in two pilot cities, Chongqing and Ningbo. This work is now being extended to rural areas under a follow-up operation (P176989), planned for Board presentation in FY23. The GARR PforR complements this work by focusing on the avoidance and improved collection of plastic waste at the farm and village level. Issues of NPS pollution of waterways are also addressed in the Yangtze River Protection and Ecological Restoration Project (P178338) approved by the Board in December 2021, and the Yellow River Resilience Program (P172806). These operations focus on the inter-jurisdictional coordination issues involved in pollution abatement at the river-basin level. The GARR PforR moves further upstream to work directly with farmers on adopting greener agricultural production practices. The parallel and focused engagement on related issues working at the farm, village, county, province, and river-basin levels provides significant opportunities for knowledge exchange and learning that will facilitate the scaling up of successful experiences to the national level. Guangxi and Guizhou regional/provincial leaders are committed to addressing the environmental challenges related to overuse of chemical fertilizer, improper management of livestock and poultry manure, and inadequate recovery and recycling of agricultural plastics in the agricultural sector. The leadership of the two provinces has also expressed its commitment to tackle the challenges related to underdeveloped rural solid waste and wastewater services. These commitments are presented in the Guangxi and Guizhou “proposals on comprehensively promoting rural revitalization and accelerating agricultural and rural modernization.� This 29Eco-compensation is a system of payments for ecosystem services (PES). It aims at incentivizing local governments, private and state- owned enterprises, and farmers to adopt better environmental management practices to protect ecosystems. The Sloping Land Conversion Program (SLCP), or the “Green for Grain� scheme in China, is one of the largest PES in the developing world, with a total investment of more than US$69 billion. Its initial goal was to soil erosion, deforestation, and flood risk by restoring forest and grasslands. The scheme operates through cash transfers to farmers in return for reforesting marginal agricultural land. Payments are made only after verification that the trees planted have at least 85 percent survival rate. Additional subsidies are available for specific tree species. Page 35 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) presents an opportunity for the Bank to support the two provincial governments’ efforts to promote green agricultural and rural development activities through results-based financing. B. Technical Soundness Results Area 1: Strengthening institutional capacity for governance. RA1 aims at putting in place governance, training, and capacity-building frameworks needed to enhance the effectiveness of the government’s RRS plans. Activities under RA1 include (i) developing provincial regulatio ns, standards, and guidelines for green agricultural development and rural infrastructure development; (ii) establishing provincial mechanisms for green agricultural development program budgeting, expenditure tracking, and reporting; (iii) establishing provincial mechanisms for M&E of rural infrastructure and public services; and (iv) developing provincial frameworks/action plans for nurturing green skills and talents in rural areas. The provincial regulations, standards, and guidelines will strengthen the legal framework for green agricultural technologies and innovations, and mechanisms for regulating agricultural inputs and livestock and poultry waste management. The program budgeting and expenditure tracking frameworks are critical for transparently allocating fiscal resources based on delivery of verifiable results, and for enhancing accountability through the established M&E of results and reporting of expenditures. Similarly, the development of green skills and talents is key to accelerating the adoption of GAP to reduce the environmental footprint. The provincial governance frameworks and institutional capacity-building action plans will be piloted in the 27 PforR counties/districts, scale up province-wide, and be shared nationwide. The National 14th FYP Green Agricultural Development Plan outlines the directions and targets to be achieved, with emphasis on green agricultural value chains, that should be based on sound management of the environment and ecosystems as well as the sustainable utilization of natural resources. The concrete measures include (i) strengthening the protection and utilization of agricultural resources ‒ including protecting and improving the quality of farmland, improving the efficiency of agricultural irrigation water use, and protecting agricultural biological resources; (ii) preventing and controlling agricultural NPS pollution ‒including promoting the reduction in fertilizer use and increasing the efficiency of fertilizer and pesticide use, promoting the recycling of livestock and poultry manure and crop straw, and strengthening white (agricultural plastics) pollution control; (iii) strengthening agricultural ecological protection and restoration ‒ including protecting and restoring farmland ecology, protecting and restoring agricultural ecosystems, and strengthening ecological protection in key river basins; (iv) building green and low-carbon agricultural industry chains ‒ including promoting green agricultural value chains, industrial agglomeration, and circular economy; and promoting pollution-free, green, organic, and geographical indication agricultural products; (v) improving the innovation system for green agricultural technology development ‒ including promoting innovations in green agricultural science and technologies, accelerating the adoption of green agricultural practices, and building green talents and skills; (vi) improving the governance systems and mechanisms for enhancing green development of agriculture ‒ improving the legal framework for green agricultural technology development and innovations, creating incentives and strengthening mechanisms for regulating agricultural inputs, and continuing with market reforms; and (vii) planning and implementing green agricultural development ‒ including strengthening organizational leadership and carrying out performance evaluations. The National Rural Revitalization Strategic Plan articulates specific programs to strengthen rural infrastructure and public services management. The national RRS plan phase 1 (2018‒2022) focuses on consolidating and sustaining Page 36 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) the poverty eradication gains and has four pillars: (i) green agricultural development, (ii) agricultural modernization, (iii) rural infrastructure and public services, and (iv) rural governance. The national RRS phase 1 overlaps with the transition period (2021‒2025),30 which also coincides with the 14th FYP (2021‒2025). The RRS phase 1 programs involve (i) building an ecologically livable beautiful village ‒ including coordinating the management of landscapes and ecosystems, promoting rural ecological civilization, and building a clean living environment; (ii) improving rural habitat environment ‒ including constructing rural solid waste (garbage) and wastewater (sewerage) treatment systems, improving rural domestic waste collection and disposal systems, promoting classification and resource utilization (recycling) of waste, and promoting the “toilet revolution�; (iii) improving the appearance of the village ‒professionally planning the layout of villages, rehabilitating village buildings to preserve original cultural (traditional) architecture, constructing rural and household roads, renovating public space and courtyard environment, promoting rural greening, and enhancing the landscape of villages; (iv) improving the rural water infrastructure network ‒ building a network of rural water conservancy infrastructure for improving water saving, water supply, flood control, and disaster mitigation; improving rural drinking water quality and safety; and constructing, rehabilitating, and modernizing irrigation systems, drainage, and pumping stations; (v) strengthening rural transport infrastructure ‒ constructing roads connecting rural areas to urban centers, upgrading rural transport logistic facilities, deepening reforms in long-term mechanisms for rural road O&M, improving public transport routes, and providing public transportation; and (vi) building a modern energy system in rural areas ‒ optimizing the energy supply structure; developing solar, biomass, water, and wind energy; improving rural energy infrastructure networks; accelerating the upgrading of new rural power grids; and promoting the extension of gas supply facilities to rural areas. Following the national plans, Guangxi and Guizhou developed their respective green agricultural development plans and are drafting specific standards and guidelines to guide green agricultural development and rural revitalization at the subnational level. The two regions/provinces will employ the national green agricultural technical guidelines as a starting point and customize these to reflect local agricultural conditions for implementation. For green, organic, and GI agricultural products, the two regions/provinces have institutional arrangements from the provincial level down to the county level in charge of their application, registration, and management and they plan to expand the coverage of green, organic, and GI agricultural products. According to the Guangxi DARA, they had 431 green food products, 141 organic agricultural products, and 147 GI agricultural products in 2020, covering grains, vegetables, fruits, mushrooms, tea, and so on. 31 In Guizhou, 1,899 green, organic, and GI agricultural products were reported in 2021.32 Green agricultural skills are crucial to supporting green agricultural development through the program intervention. The high-competency farmer training program has been introduced by the government for years, but it faces challenges in terms of its relevance, quality, adequacy, and effectiveness. The training needs assessment on green agricultural skills is not carefully carried out to inform the development of a training plan and select qualified training agencies. The format, substance, and organization of training activities are not well designed by considering the profile of rural farmers who are older and less educated, and a large portion are female. The number of beneficiaries is quite small because of inadequate public inputs. The training program on rural extension staff is not well coordinated with the high- competency farmer training program. The M&E largely focus on process instead of the adoption of green 30 Transition from Poverty Reduction Program into the Rural Vitalization Program with the first phase of RRS plan (2018‒2022) focusing on consolidating and sustaining extreme poverty alleviation gains and tackling pollution and greening the economy in the next five years. 31 Source: http://www.gxzf.gov.cn/gxyw/t6154130.shtml. 32 Source: http://gz.people.com.cn/n2/2021/0713/c222152-34818683.html. Page 37 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) agricultural technologies and practices. The GARR program will help strengthen the existing government programs to meet the increasing demand for green agricultural skills. It will support a series of training and capacity-building activities for farmers, cooperatives, input suppliers, agri-businesses, and rural extension workers, which will be organized and managed in a systematic and coordinated manner along the green agricultural value chain to increase its relevance, quality, adequacy, and effectiveness. Similarly, capacity building for administrating rural infrastructure and public services is an integral part of strengthening governance for rural revitalization. The national and provincial governments have increased investment in rural infrastructure and public services. However, the capacity for operations and management of rural infrastructure and public services is quite weak, especially for managing wastewater and solid waste systems effectively. This includes issues of inadequate staff, incentive mechanisms, public inputs, and performance management. The program will help the government strengthen capacity building through training local administrative workers and officials, thus especially enhancing wastewater and solid waste service delivery and management systems to improve the living environment and reduce rural pollution. This RA will enhance the efficiency, effectiveness, and impact of the expenditures by linking the disbursement of funds to the achievement of specific results. Through the PforR instrument, the fiscal transfers from the central and provincial governments to counties and rural areas can be directly linked to monitorable and verifiable results, including the amount or proportion of (i) reduced use of chemical fertilizer, (ii) increased treatment and recycling of livestock and poultry manure, (iii) increased collection and recycling of agricultural plastics, and (iv) increased collection, treatment, and recycling of solid waste and wastewater in rural areas. The PforR instrument is capitalizing on the evolving national and provincial policy frameworks (e.g., eco-compensation) for results-based fiscal transfers related to point and NPS water pollution control, GHG emission reductions, increasing water use efficiency, improving food safety, and improving landscape and ecosystem management, among others. The PforR instrument will strengthen institutional capacity to develop governance frameworks (e.g., regulations, standards, and guidelines for green development; and program budgeting, expenditure tracking, M&E, and verification of results) for implementing the RRS plan, which may help the government to repurpose its direct subsidies toward achieving green and sustainable agricultural development. Both Guangxi and Guizhou have supported several mechanisms for improved annual budget prioritization, budget planning, execution monitoring, and performance evaluation. Under the Bank’s Guangxi Poverty Reduction Program for Results (P163138), program-based annual budgeting plans and annual program-based expenditure reports were introduced. The Guangxi Region Department of Finance (DOF) has been using this program-based expenditure report to (a) track the progress of budget execution, (b) assess the strategic allocation of program funds, and (c) evaluate the performance of poverty counties. Lessons learned could facilitate the implementation of the activities under this area. Results Area 2: Promoting green agricultural value chain development The main objectives of RA2 are to increase rural income (farm and off-farm) and promote environment-friendly agricultural production practices. RA2 will promote climate-smart agricultural practices in selected value chains. The aim is to further increase productivity, build resilience to climate change, and reduce GHG emissions. Activities under RA2 involve (i) strengthening the protection and utilization of agricultural resources (i.e., building resilience), including protecting and improving the quality of farmland, improving the efficiency of agricultural irrigation water use (e.g., rehabilitating irrigation systems and promoting drip irrigation), and protecting agricultural biological resources (e.g., improved climate-resilient seeds and breeds); (ii) preventing and controlling Page 38 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) agricultural NPS water pollution, including promoting the reduction in fertilizer use and increasing the efficiency of fertilizer (e.g., fertigation, deep placing) and low-residue pesticide use, increasing soil testing and the use of formula and organic fertilizer, promoting the recycling of livestock and poultry manure and crop straw, and strengthening white (agricultural plastics) pollution control; (iii) building green and low-carbon agricultural industry chains, including promoting green agricultural value chains, industrial agglomeration, and circular economy; and promoting pollution-free, green, organic, and GI agricultural products; (iv) providing infrastructure needed for the development of green agricultural value chains (e.g., constructing/rehabilitating climate-resilient production/access roads, irrigation and drainage systems, wet markets, and cold-storage facilities); (v) nurturing green skills and talents in rural areas (e.g., training and capacity building of FCs, FAs, WUAs, input suppliers, and agro-entrepreneurs); and (vi) enforcing green agricultural development regulations and standards (e.g., toxic pesticide use, effluent standards, and burning of straw). These activities will be mainly implemented by farmers, FAs, FCs, WUAs, and agro-enterprises, with subsidies from provincial and county governments. Chemical Fertilizer Use In China, the total use of agricultural chemical fertilizer has shown a negative growth trend for five consecutive years since 2015, with an average annual decrease of 2.6 percent. Chemical fertilizer application intensity also dropped from 369.9 kg per hectare in 2015 to 313.5 kg per hectare in 2020, while the utilization rate for major crops reached 40.2 percent, an increase of 7.2 percentage points over 2013. It is projected that, by 2025, the utilization rate of chemical fertilizer for major crops will reach 43 percent. In Guangxi and Guizhou, however, chemical fertilizer intensity is significantly above the national average. In 2020, the pure amount of agricultural chemical fertilizer used in Guangxi and Guizhou was 788,000 and 2.479 million tons, respectively. In 2019, the fertilizer application intensity of major crops was about 400 kg per hectare for rice and 460 kg per hectare for maize, more than 1,000 kg per hectare for sugarcane, 600 kg per hectare for fruits, and 1,100 kg per hectare for vegetables. These high rates of chemical fertilizer application cause significant NPS pollution in waterways and contribute to GHG emissions and climate change. The high fertilizer application intensity is also a major concern for food safety. China has put in place national and provincial policies, regulations, standards, and guidelines for chemical fertilizer reduction and efficiency enhancement. A zero growth of chemical fertilizer use was adopted under the 13th FYP. The goal was to promote the green development of agriculture. The central government also issued a series of policy documents to promote the reduction of chemical fertilizer use and increase in efficiency or utilization rate. In 2015, the MARA issued the National Agricultural Sustainable Development Plan (2015‒2030). In 2017, the SC issued Opinions on Innovative Systems and Mechanisms to Promote Green Agricultural Development. In 2018, the MARA issued Technical Guidelines for Agricultural Green Development (2018‒2030). In 2020, six ministries and commissions jointly issued the Action Plan for the Tough Battle of Agricultural and Rural Pollution Control (2021‒ 2025). In 2020, a notice of work on Doing a Good Job in Replacement of Chemical Fertilizer with Organic Fertilizer Pilot Program in Fruit, Vegetable, and Tea was launched. In 2021, the 14th FYP for National Agricultural Green Development was jointly issued by the MARA and five other national agencies. At the subnational level, Guangxi and Guizhou have also issued a series of regional/provincial policies, regulations, and development plans. These include the Action Plan for Zero Growth of Fertilizer Use in Guangxi (2020); the 14th FYP for Promoting Agricultural and Rural Modernization in Guangxi; Guangxi's notice on Green, High-Quality, and Efficient Actions (2020); the Work Plan for the Protection and Improvement of Cultivated Land Quality; and the Negative Growth of Fertilizer Use in Guizhou Province (2020). Page 39 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) China has developed technical approaches and practices for fertilizer use reduction and efficiency enhancement. Four technical approaches are commonly used to achieve these goals. First is to promote precise fertilization. Based on the different agro-ecological soil conditions, crop yield potential, and comprehensive nutrient management requirements, the fertilization rates (kg/area) for each region/agro-ecological zone and crop type are established to reduce overuse of chemical fertilizer. Second is to adjust the composition of fertilizer use. The ratios of nitrogen, phosphorus, and potassium are optimized to promote the interaction of macro- elements and medium and trace elements. The optimization and upgrading of fertilizer products are complemented using high-efficiency chemical fertilizer. Third is to improve the fertilization method. This includes undertaking soil testing and developing formula fertilizer, mechanical deep placing of chemical fertilizer, integrating irrigation water and soluble chemical fertilizer (fertigation), using slow-release and high-efficiency fertilizer, and foliar fertilizer application. Fourth is to replace chemical fertilizer with organic fertilizer. This includes using organic nutrient resources and replacing some chemical fertilizer with organic fertilizer. Soil fertility and structure are improved by returning crop straw and residues to fields, planting green manure, and using biogas fertilizer and organic fertilizer from treated livestock and poultry manure. The national- and regional-/provincial-level chemical fertilizer use reduction and efficiency enhancement estimates are mainly based on field experiments. By soil testing and applying formula fertilizer in experimental fields, the fertilizer utilization rate of the main crops can be estimated, through the monitoring of fertilization rates and crop yields, and accounting for crop nutrient utilization. In addition, the amounts of chemical fertilizer reduction due to the use of substitute green technologies, including the use of formula fertilizer, organic fertilizer, fertigation, and green manure, are estimated using established coefficients (Table 11). Table 11: in Chemical Fertilizer by Substitute Technologies Technical approach Reduced chemical fertilizer use (pure tonnes) Formula fertilizer (ha) 0.03 Organic fertilizer (tons) 0.02 Fertigation (ha) 0.225 Green manure (ha) 0.09 Livestock and Poultry Manure Management By the end of 2020, the national stock of live pigs, cattle, sheep, and poultry was 406.50 million, 95.62 million, 306.55 million, and 6.78 billion, respectively. The MARA, by implementing measures to increase the utilization of livestock and poultry manure, helped the national comprehensive utilization rate of manure to reach 76 percent. During the 13th FYP, the General Office of the SC issued Opinions on Accelerating the Resource Utilization of Livestock and Poultry Breeding Wastes. The MARA issued Specifications for the Construction of Facilities for the Resource Utilization of Manure in Large-Scale Livestock and Poultry Farms, the Livestock and Poultry Waste Resource Utilization; and Poultry Manure Land Carrying Capacity Calculation Technical Guidelines. In addition, the MARA jointly with the MEE issued the Assessment Method for the Resource Utilization of Livestock and Poultry Breeding Wastes. In 2021, the MARA issued the 14th FYP for the Combined Construction of National Livestock and Poultry Manure Utilization, Planting, and Breeding. The plan focuses on returning and using livestock and poultry manure in the field, improving the quality of facilities and equipment, and strengthening extension services. The plan aims to integrate crop production and animal breeding RRS implementation. By 2025, the plan targets helping more than 250 pilot counties to construct livestock and poultry manure treatment facilities, establish demonstration bases Page 40 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) for returning manure to fields (including 11 in Guangxi and 9 in Guizhou), and promote the use of composted manure and liquid manure in accordance with local conditions. The plan also intends to support the construction of manure storage facilities and promote biogas fertilizer return to fields and other technical models, and the construction of manure and sewage transportation pipeline networks. The MARA strives to reach an 80 percent nationwide comprehensive utilization rate of livestock and poultry manure by 2025. Technologies for livestock and poultry manure resource utilization are in place. These are based on the Typical Model of Resource Utilization of Livestock and Poultry Manure issued by the Department of Animal Husbandry of the Ministry of Agriculture on March 22, 2017. It mainly includes the following models: (i) full collection and return of manure, (ii) specialized energy utilization of manure, (iii) solid manure composting, (iv) odorous fermentation bed, (v) fecal bedding reuse, and (vi) sewage standard discharge models. Guangxi prefers the odorous fermentation bed and solid manure composting models as the main technologies for the resource utilization of livestock and poultry manure. Guizhou opts mainly for the odorous fermentation bed, solid manure composting, specialized energy utilization, and full collection and return of manure to the field (water and fertilizer integration model) models. Guangxi has clear baseline and target values for the treatment and recycling of livestock and poultry manure. In 2020, the total livestock and poultry manure generation in the 12 program counties was 16.63 million tons, of which 14.81 million tons were treated and reused, with the comprehensive utilization rate of manure reaching 91.97 percent. Of the total amount of manure generated, 2.70 million tons came from large-scale livestock and poultry farms, of which about 2.55 million tons were treated and reused, with the comprehensive utilization rate reaching 94.18 percent. By 2027, Guangxi is targeting generating 20.73 million tons of livestock and poultry manure, treating and recycling 19.39 million tons, and achieving a comprehensive utilization rate of manure of 93.56 percent. Of this total amount, the quantity of manure to be generated by large-scale farms is projected to reach 3.29 million tons, the treated and reused amount to be 3.10 million tons, and the comprehensive utilization rate to reach 93.99 percent. Similarly, the amount of manure generated from small farms (households) is projected to reach 17.43 million tons, the treated and reused quantity to be 16.30 million tons, and the comprehensive utilization rate to reach 93.48 percent. Under the program, Guangxi is planning to construct 90 centralized livestock and poultry manure treatment and recycling facilities to cater to small farms’ needs. The upgrading of treatment plants for large-scale farms through output-based subsidies, together with the newly constructed centralized facilities, will increase Guangxi’s manure treatment capacity by 4.58 million tons and increase the comprehensive utilization rate of manure by 1.59 percent. The manure treatment capacity for large-scale farms will be increased by 552,000 tons, while the capacity of centralized facilities will be increased by 4.03 million tons. Guangxi has set annual targets for an increase in manure treatment and recycling. Consistently, Guangxi proposes to allocate program budgets in accordance with the increase in the amount of manure treated and recycled in each year of the program’s life. The budget proportions for the 2023‒2027 period are 19, 16, 21, 22, and 22 percent, respectively. Similarly, Guizhou has clear baseline and target values for the treatment and recycling of livestock and poultry manure. In 2020, the total amount of manure generated in the 15 program counties was 7.98 million tons, of which 6.71 million tons were treated and reused, achieving a comprehensive utilization rate of manure of 84.12 percent. Of the total amount, the quantity of manure from large-scale farms was 2.37 million tons, the treated and recycled quantity was 2.14 million tons, and the comprehensive utilization rate was 90.32 percent. The quantity of livestock and poultry manure from the small farms (households) was 4.63 million tons, the treated and reused amount was 3.81 million tons, and the comprehensive utilization rate was 82.17 percent. By 2027, Guizhou Page 41 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) projects the total output of livestock poultry manure in the 15 project counties to reach 9.77 million tons, the treated and reused manure to be 8.94 million tons, and the comprehensive utilization rate to reach 91.54 percent. Of the total amount, the output of manure from large-scale farms will be 3.96 million tons, the treated and reused manure will be 3.69 million tons, and the comprehensive utilization rate will reach 93.3 percent. Guizhou will also set up 24 new organic fertilizer processing plants, which will further increase the utilization of manure resources by 2.23 million tons and increase the comprehensive utilization rate by 7.42 percent. The large-scale farms will contribute 1.55 million tons, while the small farms (households) will add 543,100 tons. Agricultural Plastics Pollution Control According to the China Rural Statistical Yearbook (2020), in 2019, the use of agricultural plastic film nationwide was 2.41 million tons, a decrease of 2.32 percent from the previous year. The area covered by plastic film was 264 million mu, a decrease of 0.77 percent from the previous year. In the same year, the use of agricultural plastics in Guangxi was 47,500 tons, of which plastic mulch film was 34,100 tons, covering 6.42 million mu. In Guizhou, the use of agricultural film was 44,100 tons, of which plastic mulch film was 23,400 tons, and this plastic mulch film covered 5.24 million mu. In recent years, the MARA and other relevant departments have implemented a raft of measures aimed at increasing agricultural mulch film recovery and recycling, improving the quality or durability of plastic mulch film by increasing its thickness, and promoting the substitution of conventional plastic mulch film with biodegradable mulch film materials. At present, the national agricultural film recovery rate has stabilized at about 80 percent, while white pollution control measures continue to be implemented. According to the 14th FYP National Agricultural Green Development Plan, by 2025, the agricultural plastics recovery rate is expected to reach 85 percent. China has adopted policies, laws, regulations, and standards governing agricultural plastics use reduction. These include the Law on the Prevention and Control of Soil Pollution and the Law on the Prevention and Control of Environmental Pollution by Solid Wastes. The MARA, MEE, the Ministry of Industry and Information Technology (MIIT), and the State Administration for Market Regulation (SAMR) jointly issued Administrative Measures for Agricultural Films. In addition, the MARA, MIIT, and NDRC issued Opinions on Accelerating the Prevention and Control of Agricultural Plastic Film Pollution. The NDRC and MEE issued Opinions on Further Strengthening the Control of Plastic Pollution. The SAMR has revised the mandatory national standard for polyethylene blow-molded agricultural ground cover film to increase the thickness, build weather resistance, and improve the recyclability of the mulch film from the source. More recently, the national standards for Fully Biodegradable Agricultural Ground Covering Film have been released, which clearly stipulates (a) the technical specifications, (b) methodology for testing and evaluating fully biodegradable mulch film, and (c) guidelines for regulating the healthy development of the biodegradable plastics industry. The 14th FYP National Agricultural Green Development Plan aims to vigorously promote the recycling of agricultural mulch film. The plan emphasizes implementing a strict agricultural film management system, including strengthening the management of agricultural film production, sales, use, recycling, and reuse. The plan also calls for the use of sustainable plastic film mulching technology and for reducing the area under plastic film mulching. Strengthening market supervision and prohibiting manufacturers from producing and enterprises from purchasing and selling agricultural mulch film that does not meet national standards are also a top priority under the plan. The plan proactively promotes the use of environmentally friendly biodegradable plastic mulch film, treating and reusing waste plastic mulch film, supporting professional agricultural film recycling, developing machines for picking up plastic mulch film residues, constructing agricultural mulch film residue storage and treatment facilities, Page 42 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) and expanding the network of plastic mulch film collection systems in rural areas. The plan provides for piloting of the regional agricultural film recycling subsidy system and exploring the establishment of an extended producer responsibility (ERP) system for plastic mulch film. Finally, the plan emphasizes the need for establishing and improving sites for monitoring agricultural mulch film residues on farmland. The 14th FYP also promotes the recycling and disposal of agricultural chemical packaging materials. Strictly managing pesticide packaging materials and establishing the ERP system for the manufacturers of pesticides are a top priority. This is in line with the principle that whoever produces the pesticides shall also collect the waste packaging materials, and recycle them according to the national standards. Other measures such as a deposit system and paid recycling are encouraged to incentivize pesticide users to return packaging waste to input suppliers. Relying on the agricultural input suppliers’ network, the plan is to establish packaging material collection centers/sites, improve the pesticide packaging waste recycling system, and promote the harmless disposal of pesticide packaging waste. The plan also involves the strengthening of the supervision of pesticide packaging waste recycling and disposal activities. Finally, the collection, recycling, and disposal of fertilizer packaging waste is also one of the priorities of the 14th FYP. Fertilizer packaging materials with no use value will be included in the rural domestic waste treatment system for centralized treatment. The PforR is technically sound because it is geared toward helping Guangxi and Guizhou provinces to address their agricultural and rural development challenges. The Bank’s PforR support focuses on three Results Areas: RA1, RA2, and RA3, described earlier. The activities under each RA are described in detail in Section C (PforR Program Scope). The expected outcomes of implementing activities under these RAs include (i) RA1 – efficient results-based fiscal transfers to support green agricultural development and rural development activities; (ii) RA2 ‒ reduced point and NPS water pollution from crop, livestock, and poultry production systems; enhanced food quality and food safety; and increased rural household income (farm and off-farm); and (iii) RA3 – improved access to solid waste and wastewater services and reduced pollutant loads entering waterways. The three RAs and associated disbursement-linked indicators will significantly contribute to GPGs. These include (i) significant reduction in GHG emissions because of reduced use of chemical fertilizer and increased fertilizer use efficiency in selected agricultural value chains; (ii) reduction in point and NPS water pollution due to reduction in fertilizer use and treatment and recycling of livestock and poultry manure; (iii) reduced agricultural plastics pollution due to collection, sorting, and recycling of rural solid waste; and (iv) increased biodiversity in farmland due to reduced pollution from chemical fertilizer and pesticide. As far as possible, these co-benefits will be monitored, evaluated, and quantified. Their total estimated CO2 equivalent values will be included in the economic and financial analysis of the PforR. Tables 12 to 14 summarize the PforR’s mitigation and adaptation measures that are likely to generate substantial GHG emission reductions or climate co-benefits. To complement the pollutant reduction efforts, the PforR will support innovations. Specifically, fertilizer use reduction will be complemented by (i) improving soil nutrient management through deep placement of formular fertilizer; (ii) using formula and slow-release fertilizer; (iii) investing in fertigation facilities for vegetables and fruit orchards; (iv) mechanized fertilization; (v) using organic fertilizer from treated livestock and poultry manure and green manure to replace chemical fertilizer; and (v) crop rotation with green manure plants. Similarly, livestock waste management will be improved through (i) more efficient aerobic composting, bedding preparation, and matrix transformation for solid feces, and (ii) full-amount field incorporation upon storage or upon combined processing of storage and anaerobic treatment for liquid manure; and (iii) improved manure transport vehicles and facilities. Finally, plastic collection and reduction include measures to (i) replace, recover, and recycle plastic mulch and (ii) develop cost-effective degradable mulch. Page 43 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) RA3 aims to improve living conditions in rural areas, point and NPS pollution, and help to GHG emissions. RA3 will also promote the rural circular economy. RA3 activities include supporting activities aimed at (i) supporting IVDPs, which will guide future rural investments; (ii) improving the rural habitat environment, such as constructing climate-resilient rural solid waste (garbage) transfer and wastewater (sewerage) treatment facilities; improving rural domestic waste collection and disposal systems, including sorting/separation and resource utilization (recycling) of solid waste; and improving sanitation ‒ the “toilet revolution�; and (iii) providing training and capacity building in the O&M of wastewater and solid waste facilities. These activities will be implemented by the relevant provincial and county government departments. Integrated Village Development Plans IVDPs are a multi-dimensional planning tool for rural areas of one or several administrative villages. This is detailed planning forming a statutory basis for carrying out territorial space development and protection activities, implementing control over the use of territorial space, issuing planning permits for rural construction projects, and carrying out various construction activities at the village level. IVDPs will strictly (i) define the redlines (boundaries) for ecological protection, arable land, and permanent prime farmland; (ii) optimize land use by consolidated planning and spatial layout; (iii) promote cultural heritage with distinguished local features; and (iv) encourage phased development in the local context. Two program provinces have already developed provincial guidelines and specifications for preparing IVDPs. The IVDPs will be prepared by the qualified professional agencies for spatial planning with full consultation and participation from villagers based on the provincial guidelines. The County Natural Resource Bureau (CNRB) and Country Agriculture and Rural Affairs (CARA) will jointly approve the IVDPs, which should be properly disclosed to the public. The IVDPs should be followed by a detailed implementation plan in the next five years, including financing from the government and/or private sector. The guidelines will be updated with the experiences and lessons learned from their implementation in the demonstrated villages. The program will finance 348 villages to develop their IVDPs for program counties as pilots although more IVDPs are encouraged to be developed under the national Rural Revitalization Plan. The indicators will be verified upon IVDP approval and disclosing status upon the county government report and project MIS. Rural Wastewater Treatment With the rural toilet revolution in recent years, rural domestic wastewater increased rapidly, from 16.7 billion tons in 2013 to 23 billion tons in 2018. The national average ratio of household sanitary toilets reached 81.0 percent in 2017 (with 91.6 percent for Guangxi and 64.5 percent for Guizhou). On the other hand, rural wastewater management has remained very low, with a treatment ratio of 11 percent in 2015 as the national average in contrast to the urban wastewater treatment ratio above 95 percent in 2019 averaged nationwide. According to the environmental data disclosed by the provincial Department of Ecology and Environment, only about 11 percent of rural domestic wastewater is properly treated in Guangxi, while this is estimated at about 10 percent in Guizhou, although no official data are available given more difficulties for wastewater collection and treatment because of more settlements in hilly areas. Both the national level and provincial level indicate the importance of rural wastewater treatment for beautification of the rural environment. Guangxi set the target for the 14th Five-Year Plan: 35 percent of rural wastewater will be properly treated. Guizhou issued technical guidelines for rural domestic wastewater treatment in October 2021. Page 44 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Each province will develop a rural wastewater policy adapted to the local context for supporting, guiding, and leveraging funds for the development of rural treatment facilities. Technical guidelines will be developed by the provinces and adopted by the program counties. The guidelines should also include some procedures for estimating the ratio of wastewater treated/properly managed at the village level. The program will finance four villages of each program county to build, rehabilitate, and improve village domestic wastewater collection and proper treatment to avoid its direct discharge into the environment, resulting in water and soil pollution and health problems. The villages selected for financing will be chosen from those villages with IVDPs approved and in implementation. For those villages with distributed treatment facilities, the wastewater treatment ratio should be more than 50 percent because of successful achievement of DLI8 for the wastewater part. For those villages with full coverage of a wastewater collection network and centralized treatment facilities, the ratio should surpass 70 percent to meet the threshold of disbursement. In Guangxi, wetlands and ecological ponds will normally be adopted with combined treatment of physics, chemistry, and biology in natural ecosystems to remove pollutants, thus meeting the relevant standards. Since the quality of rural wastewater generally exceeds the influent water quality requirements of constructed wetlands, to ensure the stability of the constructed wetland ecosystem and increase the life and processing capacity of the wetland treatment system, the sewage must be treated before it enters the constructed wetland or ecological pond. The pre-treatment process prevents odor or blockage of sewage during storage and transportation, and prevents untreated sewage from polluting soil and groundwater or polluting plants, while decreasing sewage treatment load and ensuring the quality of effluent from constructed wetlands. For example, in Guangxi, for wetland, the water quality before and after wetland may be lower: Comparison of untreated and treated wastewater quality by wetland, in mg/L Wetland type BOD5 COD SS NH3-N TP Untreated wastewater 100‒250 250‒350 300‒350 ≤50 5‒8 Surface flow wetland ≤50 ≤125 ≤100 ≤10 ≤3 Horizontal submerged flow wetland ≤80 ≤200 ≤60 ≤25 ≤5 Vertical submerged flow wetland ≤80 ≤200 ≤80 ≤25 ≤5 Process diagrams for Guangxi rural wastewater treatment processes are summarized as follows. 1. Wetland processes 2. Combined process of anaerobic ponds and wetland Page 45 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) 3. Combined process of hydrolysis acidification pond and wetland 4. Hydrolysis acidification/contact oxidation/constructed wetland treatment process 5. Combination process of artificial wetland and ecological pond 6. Combined process of ecological pond with artificial wetland wastewater screen Ecological pond Artificial wetland Effluent Debris removal 7. Treatment process of ecological combined pond Page 46 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) In Guizhou, some centralized wastewater treatment stations will be built for villages with large populations. For small villages with less population, ecological treatment technologies without power (or with low power) will be used, such as 3-cell septic tanks + anaerobic tanks and/or small-scale wetlands, where the effluent can be used for fertigation. The effluent from wastewater treatment facilities should meet the relevant standards based on the technologies adopted and environmental conditions for receiving the treated effluent. Rural domestic wastewater is divided into black water and gray water, for which black water refers to high-concentration domestic wastewater used for flushing feces in toilets and gray water refers to low-concentration domestic wastewater such as kitchen water and laundry and bathing water other than toilet flushing water. Black water can be used in agricultural production after composting, with a three-grid septic tank, purification biogas tank, and other treatments to reach agricultural standards. Gray water can be used for farmland irrigation or reused after technical treatment such as artificial wetlands, stabilization ponds, and land treatment, or it can be directly discharged. Agricultural use must meet the water quality standard for farmland irrigation, reuse must meet the reuse water quality standard, and discharge must be differentiated according to the different receiving water bodies. It is necessary to meet the regulations in the pollutant discharge standards for urban wastewater treatment plants. When the effluent is introduced into rivers and lakes with less dilution capacity as urban landscape water and general reuse water, the Class A standard of the first-level standard shall be implemented. When the effluent is discharged into GB3838 surface water class III functional waters (except for the designated drinking water source protection areas and swimming areas), GB3097 seawater Class II functional waters, and closed or semi-enclosed waters such as lakes and reservoirs, the Class B standard of the first-class standard shall be implemented. When the effluent is discharged into GB3838 surface water category IV and V functional waters or GB3097 seawater category III and IV functional sea areas, the second-level standard shall be implemented. Rural Solid Waste Management The program will finance four villages of each program county to set up their comprehensive solid waste management system, which will include the following: - Closure and clearance of all existing informal dumpsites of domestic and agricultural solid waste; - Full coverage of solid waste collection services in all natural villages of the pilot administrative village; - Collection of waste plastic film at 90 percent ratio and full separation from other domestic solid waste; - Source separation of plastic wastes, hazardous wastes, and kitchen wastes to minimize transfer and final disposal. - Include informal solid waste pickers in the solid waste management system for proper training, sorting, Page 47 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) and separation of solid waste. The technical specifications for those facilities financed under the program are summarized as follows: - The principle of selecting the location of SW collection facilities should minimize the negative impacts on the surrounding living environment. The distance between the outer wall of the collection point and adjacent buildings should be greater than 5 meters. The selected location can facilitate the operation and temporary parking of sanitation vehicles, and nearby municipal facilities should be opposite each other. The location should be convenient for daily cleaning and leachate collection. - The SW collection facility can serve 500 to 600 residents with a closed SW container plus several SW bins according to the standard. - The collection facility (building) should have a roof cover. - The construction form of the SW collection facility can be specified by county and the materials such as the access door and roof cover of the discharge port of the SW collection facility should be stainless steel 304 and other anti-corrosion materials. - Leachate interception and drainage ditches shall be set up for the collection facility, and the leachate shall be collected and treated with rural wastewater or discharged into the municipal wastewater pipe network. - Water faucets should be installed in the domestic garbage collection points and sanitation and cleaning measures should be standardized, with cleaning at least twice a week and regular spraying with disinfectant and mosquito-killing drugs. - The area of the sinking-type collection facility should not be less than 6 square meters, with its inner wall lined with materials that are easy to clean. Tap water and drainage facilities should be provided. At least one centralized transfer station for domestic waste needs to be built in each natural village, and the construction area should be calculated and determined according to the actual amount of domestic waste generated and the frequency of collection and transportation in each village. The transfer station shall be properly designed based on local conditions, with good technology and cost-effectiveness meeting relevant HSE standards. For site selection and scale: Meet the requirements of the overall planning of the village. The size of the transfer station shall be determined according to the amount of waste transfer. The amount of waste transshipment shall be determined according to the actual data on the average daily output in the high- yield months of waste in the service area. The service radius of a small transfer station that collects garbage with manpower collection vehicles should not exceed 0.5 km and the service radius of a small transfer station that uses small motor vehicles to collect garbage should not exceed 2.0 km. When the garbage transportation distance exceeds 20 km, large- and medium-sized transfer stations should be set up. Building construction and environment: The general layout of the transfer station should be economical and reasonable according to the local conditions. The operation area should be arranged in the downwind direction of the dominant wind direction. The layout of buildings and structures in the transfer station shall comply with fire protection, hygienic regulations, and various safety requirements, and the architectural design and external decoration of buildings and structures shall be coordinated with the surrounding residential buildings, public buildings, and the environment. For equipment and facilities: The transfer station should use different methods and equipment to load the garbage Page 48 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) onto the transport vehicles according to different regions and different conditions. The number of pieces of equipment at the transfer station shall be determined according to the transfer volume. To adjust the relationship between the working efficiency of the transfer station and the frequency of vehicle calls, garbage storage tanks should be set up as needed. The depth of the container pit should ensure that the upper edge of the container is flush with the indoor floor or not higher than 5 cm above the indoor floor. The distance between the outer wall of the container and the pit wall should be kept at 15‒20 cm and a positioning device should be installed. The container should match the capacity and box of the garbage truck. The transfer station shall be provided with auxiliary rooms for workers on duty, for changing clothes and storing tools and materials. The transfer station should be equipped with an emergency power supply and a corresponding machine room should be considered. Telephone or other communication facilities should be set up in the transfer station. Only when the full range of SW collection and transfer services are provided for all natural villages within an administrative village are the criteria for the relevant DLI met. For pilot villages, wastewater and solid waste management services shall be well set up and accessible to the villagers above the threshold documented in the verification threshold. O&M arrangements should be in place with evidence of designated operation staff and sufficient financing. O&M Plan and Capacity Building An overall training plan for O&M management shall be developed for the entire program implementation period as well as on an annual basis at the end of each calendar year. The trainees should cover the facility management people, operators, and formal or informal staff (villagers), with at least 50 percent females. The table below summarizes the DLIs, program activities, outputs, intermediate outcomes, (final) outcomes, and verification protocols. Page 49 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) DLI1 Program activities Program outputs Program intermediate Program outcome outcome DLI1.1 Develop a comprehensive IT-based A comprehensive rural revitalization An IT-based M&E system, a Strengthened Development and M&E system for rural infrastructure, M&E system developed as an decision support tool to institutional use of a public services, and profile of rural help manage the RRP integrated tool for recording, analyzing, capacity for comprehensive IT- villages by provincial and regional and reporting the performance of RRP implementation and governance and based M&E system governments implementation. The system used by evaluate performance enhanced for rural county governments to record, analyze, developed and effectiveness of infrastructure, Install and operationalize the system and report the performance of RRP operationalized. the government’s public services, and in 27 program counties. implementation, and using the phased RRS plans profile of rural information to develop annual work villages plans. Verification Protocol for 1.1: A third-party VA verifies whether (a) the provincial RRB has developed and installed the IT-based M&E system for rural infrastructure, public services, and profile of rural villages, through on-site review of the system and the official/regular performance evaluation documents, or reports generated; (b) the system meets data security standards; and (c) the provincial RRB issues guidelines for installing and using the system at the county level. A single disbursement is made upon achieving the results. Verification Protocol for 1.2: The third-party VA verifies whether the IT-based M&E system has been adopted/installed and can generate the required official reports regularly in the 15 program counties. Scalable disbursement-linked results (DLRs) are defined requiring the installation and use of the M&E system by all 15 program counties by 2025. The scalable disbursements are made progressively against the number of counties that have first installed and used the IT-based M&E system in the respective year to generate the monitoring reports, including on the performance of the solid waste and wastewater facilities. These reports are key to informing the O&M decision-making processes. DLI2 Program activities Program outputs Program intermediate Program outcome outcome Development and Develop an IT-based system for green An IT-based system developed for green Program budgeting and Strengthened use of an IT-based agricultural program-based budgeting agricultural program-based budgeting expenditure tracking institutional system for green and expenditure reporting by and expenditure reporting. framework established that capacity for agricultural provincial and regional governments. could transparently allocate governance and program-based The system used by county fiscal resources, based on enhanced budgeting and Install and operationalize the system governments to track, evaluate, and delivery of verifiable results; accountability of expenditure in 27 program counties. report expenditures in a transparent and for enhancing the government’s reporting and efficient manner. accountability through the phased RRS plans. Page 50 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) established performance. Verification Protocol for 2.1: The third-party VA verifies whether the IT-based program budgeting system is fully operational and capable of generating the required regular (quarterly and annual) financial reports. A single disbursement is made upon achieving the results. Verification Protocol for 2.2: The third-party VA verifies whether (a) the IT-based program budgeting and expenditure tracking system is being used; (b) the required regular financial reports are prepared; and (c) financial data and information are used for performance evaluation and decision-making processes in the 15 program counties. Disbursements are scalable and are made against the number of counties in a calendar year (until 2025) that have achieved for the first time the above results. DLI3 Program activities Program outputs Program intermediate Program outcome outcome Adoption of local Develop and adopt local regulations, The provincial regulations, standards, Strengthened legal Strengthened regulations, standards, and guidelines on green and guidelines for green agricultural framework for green institutional standards, and agricultural development. technologies and innovations, and agricultural technologies capacity for guidelines on green mechanisms for regulating agricultural and innovations, and governance and agricultural Develop green skills and talents to inputs and livestock and poultry waste mechanisms for regulating enhanced development and accelerate the adoption of GAP to management developed. agricultural inputs and effectiveness of number of agro- reduce the sector’s environmental livestock and poultry waste the government’s products produced footprint. The regulations, standards, and management. phased RRS plans in the program guidelines adopted by 27 program counties that are Support the practitioners to certify counties. A total of 255 agro-products certified and/or and/or register their products as produced in the program registered as green, green, organic, or geographical A total of 66,680 farmers, input counties have been certified organic, or indication production. suppliers, enterprises/agri-businesses, and/or registered as green, geographical and extension staff trained in green organic, or geographical indication pursuant agricultural technologies and practices. indication using the to said regulations, approved regulations, standards, and standards, and guidelines on guidelines green agricultural development. 80% of trainees adopted green agricultural technologies and practices. Page 51 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Verification Protocol for 3.1: The third-party VA verifies the approved documents (i.e., regulations, standards, and guidelines) and a single disbursement is made upon achieving the results. Verification Protocol for 3.2: The third-party VA verifies the green and organic agro-product certificates issued by the regional/provincial DARA and GI registrations for agro-products issued by the MARA. Disbursements are scalable and are made against the number of agro-products that are certified or registered in a calendar year. DLI4 Program activities Program outputs Program intermediate Program outcome outcome Tonnes of chemical 1. Increasing the quantity of organic 1. Quantity of organic fertilizer used in Nutrient load reduction GHG emission fertilizer replaced fertilizer used in selected crops in the selected crops in the program counties (ammonia nitrogen, total reductions due to the program counties. (tonnes/year = 0.02 pure tonnes). phosphorus) achieved under achieved under adoption of green the PforR in program the PforR in 2. Increasing the soil testing and the 2. Quantity of formula fertilizer used in technologies and counties. program counties. quantity of formula fertilizer used in selected crops in the program counties practices in selected crops in the program (tonnes/year = 0.03 pure tonnes). selected crop counties. production systems 3. Area under fertigation in selected in the program 3. Increasing the area under crops in the program counties (hectares counties fertigation in selected crops in the = 0.225 pure tonnes). program counties. 4. Area under green manure in 4. Increasing the area under green selected crops in the program counties manure in selected crops in the (hectares = 0.09 pure tonnes). program counties. 5. Number of beneficiaries who have 5. Increasing the beneficiaries who been trained and have adopted the have been trained and have adopted green agricultural technologies and the green agricultural technologies practices (farmers, input suppliers, and practices (farmers, input enterprises/agri-businesses, extension suppliers, enterprises/agri- staff), disaggregated by gender businesses, extension staff), (number). disaggregated by gender. Verification Protocol: The third-party VA verifies (i) the cumulative quantity of organic and formula fertilizer and area under green manure and fertigation practices in selected crop systems, which are monitored and reported annually; and (ii) whether the appropriate coefficients are used for conversion into Page 52 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) pure tonnes of fertilizer through random sampling. The third-party VA checks whether the random sample results are comparable to the reported reduction in chemical fertilizer use due to the adoption of green technologies and practices. Chemical fertilizer reduction targets and budgets are spread over the 2024‒2027 program implementation period. Disbursements are scalable and are made against the number of target net tonnes of c hemical fertilizer reduction achieved in the program counties in a calendar year. DLI5 Program activities Program outputs Program intermediate Program outcome outcome Percentage of 1. Increasing the ratio of manure 1. Proportion of manure generated by large Chemical oxygen GHG emission livestock and treated on-site to manure farms that is treated in the program counties demand (COD) pollution reductions achieved poultry manure generated by selected large farms (percentage). load reduction achieved under the PforR in generated that is and in the program counties. under the PforR in program counties. 2. Proportion of manure generated by small treated and program counties. 2. Increasing the ratio of manure and medium-scale farms that is treated at recycled in the treated at centralized manure centralized manure treatment facilities program counties treatment facilities to manure constructed for small and medium-scale generated by small -scale farms in farms in the program counties (percentage). the program counties. 3. Capacity of centralized manure 3. Increasing the capacity of treatment facilities constructed for small and centralized manure treatment medium-scale farms in the program counties facilities constructed for small and (tonnes/year). medium-scale farms in the 4. Capacity of manure treatment facilities program counties. constructed for small-scale farms in the 4. Increasing the capacity of program counties (Guizhou) (tonnes/year). manure treatment facilities 5. Quantity of organic manure produced by constructed for small-scale farms the manure treatment facilities in the in the program counties (Guizhou). program counties (tonnes/year). Verification Protocols: Quantities reported by the three sources of data will be verified by the third-party VA based on (a) random sampling of large and medium-scale farms and the centralized manure treatment facilities, and (b) by reviewing other supporting documents, such as inspection reports from county DARAs and annual M&E socioeconomic survey reports. Livestock and poultry manure treatment and recycling targets and budgets are spread over the 2024‒2027 program implementation period. The third-party VA verifies the results and estimates the annual manure treatment rates. Disbursement will be made against the proportion (percentage) of target net tonnes of livestock and poultry manure collected, treated, and recycled that is achieved in the program counties in a calendar year. Page 53 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) DLI6 Program activities Program outputs Program intermediate Program outcome outcome Percentage of 1. Increasing the ratio of 1. Proportion of agricultural plastic film Reduction of agricultural GHG emission agricultural plastics agricultural plastic film used by used by famers that is recovered and plastic residues entering reductions achieved used that is recovered farmers that is recovered and recycled in the program counties waterways achieved in under the PforR in and recycled in the recycled in the program counties. (percentage). the program counties. program counties. program counties 2. Increasing the ratio of 2. Proportion of agricultural chemical agricultural chemical (fertilizer, (fertilizer, pesticide, fungicide) packaging pesticide, fungicide) packaging materials used by farmers that is materials used by farmers to that recovered and recycled in the program recovered and recycled in the counties (percentage). program counties. 3. Cumulative number of agricultural 3. Expanding the network of plastics collection sites in the program agricultural plastics collection sites counties (number). in the program counties. 4. Tonnes of biodegradable agricultural 4. Increasing the use of plastic film used by farmers in the biodegradable agricultural plastic program counties (tonnes/year). film by farmers in the program counties. Verification Protocol: The recovery and recycling quantities will be verified by the third-party VA using random sampling methods and field visits to review the collection and recycling ledgers. Agricultural plastics recovery and recycling targets and budgets are spread over the 2024‒2 027 program implementation period. The third-party VA verifies the results and estimates the annual agricultural plastics recovery and recycling rates. Disbursement will be made against the proportion (percentage) of target net tonnes of agricultural plastics recovered and recycled that is achieved in the program counties in a calendar year. DLI7 Program activities Program outputs Program intermediate Program outcome outcome Number of Integrated Hire a professional firm to develop A total of 336 spatial IVDPs developed by Rural infrastructure Improved rural Village Development the spatial IVDPs, considering professional firms and approved by development under the infrastructure and Plans approved by settlement, farmland, program counties. phased RRS plan public services and Page 54 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) program counties forestry/protected land, properly planned and village living recreation, social services, and functioning as future environment. infrastructure that would guide investment decision future rural investment to meet support tools. the regional/provincial standards for improving the village living environment. Project counties review and approve the IVDPs. Verification Protocol: The third-party VA will verify the achievements reported by reviewing the minutes of meetings approving the spatial IVDPs and the final documents provided by the county/district RRB on a random sampling basis. Disbursements will be made against the number of IVDPs approved each year. DLI8 Program activities Program outputs Program intermediate Program outcome outcome Number of Constructing or rehabilitating A total of 112 demonstration villages Increased access to rural More ecologically demonstration villages existing climate-resilient have constructed new or rehabilitated solid waste and livable and with newly wastewater treatment facilities existing climate-resilient wastewater wastewater services, beautiful villages. constructed or and establishing solid waste treatment facilities and established solid with the percentage of rehabilitated existing collection, sorting, and transfer waste collection, sorting, and transfer rural domestic climate-resilient systems in the selected pilot systems. wastewater facilities in wastewater treatment villages based on approval of the demonstration villages Guidelines for O&M of wastewater and facilities and IVDPs. meeting effluent solid waste management in rural villages established solid discharge standards Developing and implementing the developed and implemented in 27 waste collection, increased from 60 to 80, guidelines for O&M of wastewater program counties. sorting, and transfer and the percentage of and solid waste management in systems A total of 49,311 people trained in O&M rural domestic solid rural villages. of rural village wastewater and solid waste and agricultural Providing training to people in waste management systems. plastic film in O&M of rural village wastewater demonstration villages and solid waste management that is collected, sorted, and transferred increase Page 55 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) systems. from 20 to 80. Verification Protocol: The third-party VA will verify whether the facilities/systems are fully operational by random sampling of batches completed and accepted each year. The third-party VA will also verify whether the facilities/systems are meeting county effluent discharge standards. Disbursement will be made against the number of demonstration villages with waste management facilities/systems that are meeting the county effluent discharge standards in each year, based on the unit price. Page 56 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Table 12: RA2: Greening Agricultural Value Chains: Eligible GHG Emission Reduction Activities Category Eligible activity Screening criteria 1. Agriculture: GHG emission • Reduction of non-CO2 GHG • This includes activities that shall demonstrate a substantial reduction in net GHG reductions emissions from agricultural emissions or carbon intensity (e.g., tCO2e/unit of outcome). practices or technologies • Potentially eligible activities under the PforR include more efficient nitrogen fertilizer use (by improving the rate, type, timing, placement, or precision of application, formula and organic fertilizer use); manure management including anaerobic digestion, drainage management, improved crop breeds, and biotechnology that reduce emissions; and water management in paddy rice. 2. Agriculture: carbon • Agricultural activities that • This includes activities that shall demonstrate a substantial increase in the sequestration contribute to increasing the above- or below-ground carbon stock. carbon stock in the soil or • Potentially eligible activities under the PforR include degraded land avoiding loss of soil carbon rehabilitation, erosion control measures, reduced tillage intensity and cover through erosion control crops, crop rotation, higher inputs of organic matter to soil, processing and measures application of manure/digestate preferably with biogas capture for energy, perennial cropping systems, cultivation of deep-rooting species, circular/integrated activities that enhance carbon stock, fire management, and peatland restoration and conservation. 3. Agriculture: energy efficiency • Reduction in energy • This includes activities that shall demonstrate a substantial reduction in net GHG consumption in operations emissions, carbon intensity, or energy intensity against a selected benchmark. • Potentially eligible under the PforR include increasing energy efficiency of crop production and increasing the use of energy-efficient equipment for agricultural processing and storage. • Examples of operations are traction, irrigation, pumping, harvesting, crop cooling, storage, and transportation. 4. Livestock: GHG emission • Activities that reduce • This includes activities that shall demonstrate a substantial reduction in net GHG reductions methane or other GHG emissions or carbon intensity (e.g., tCO2e/unit of outcome). emissions from livestock • Potentially eligible activities under the PforR include manure management with biodigesters, wastewater management, improved feeding practices, feed production with reduced GHG emissions, investments in reducing feed losses along the value chain, sourcing low-emission feeds or forage to increase feed Page 57 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) conversion efficiency and reduce methane emissions, and efficiency improvement measures to reduce the herd size. 5. Livestock: carbon • Livestock production activities • The eligible activities shall demonstrate a substantial increase in the above- or sequestration that improve carbon below-ground carbon stock. sequestration through • Potentially eligible activities under the PforR include improved pasture rangeland management management to increase soil carbon stocks and reduce erosion, improved grazing management, circular or integrated activities that enhance carbon stock, promotion of silvo-pastoralism, and nitrification-inhibiting practices in pastures. 6. Food and diet: resource use • Activities that reduce food • This includes activities that shall demonstrate a substantial reduction in net GHG efficiency loss or waste or promote emissions or carbon intensity (tCO2e/unit of outcome). lower-carbon diets • Potentially eligible activities under the PforR include food waste utilization (circular economy systems), policy interventions resulting in reduced food waste, and investments in avoided food losses along the value chain (e.g., better-managed cold-chain infrastructure to reduce crop or food spoilage). Page 58 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Table 13: RA3: Wastewater Management: Eligible GHG Emission Reduction Activities Category Eligible activity Screening criteria 1. Energy and resource efficiency • Greenfield and brownfield • This includes activities that shall demonstrate a substantial increase in energy and GHG emission reductions projects that promote efficiency or a substantial reduction in net GHG emissions. in wastewater management improved operation and • Potentially eligible activities under the PforR include (i) training programs that maintenance to reduce emphasize wastewater leak detection and prevention, improved maintenance, wastewater leakages, or energy efficiency improvements; and (ii) programs ensuring that the levels of promote energy savings, or removal of biochemical oxygen demand or five-day biochemical oxygen meet or exceed wastewater demand, chemical oxygen demand, or nitrogen33 reach or exceed their targets. treatment targets 2. GHG emission reductions in • Greenfield projects that • This includes activities that shall demonstrate a substantial reduction in net GHG wastewater management reduce methane or nitrous emissions. The treatment system shall remove BOD. If there is no treatment of oxide emissions through the collected wastewater, fecal sludge, or septage, that is, no BOD is removed as wastewater, fecal sludge, or part of the project, the activity shall not be eligible. septage collection and • Potentially eligible activities under the PforR include (i) the treatment systems treatment that remove BOD. If there is no treatment of the collected wastewater, fecal sludge, or septage, that is, no BOD is removed as part of the PforR, the activity shall not be eligible; (ii) anaerobic treatment activities that generate an appreciable amount of methane and use it in energy generation or production processes, or, if the use of methane is not economically viable, flare methane to release carbon dioxide; and (iii) appropriate mitigation measures are put in place to minimize and control methane leakage. 3. Emission reduction in • Greenfield or brownfield • This includes activities that shall demonstrate a substantial reduction in net GHG wastewater collection projects that improve latrines emissions once treatment of the collected material is considered. or collection of wastewater, • Potentially eligible activities under the PforR include (i) gravity-based collection fecal sludge, or septage systems in greenfield projects are eligible if they result in near-zero energy- related GHG emissions due to a lack of energy use; (ii) building or improving latrines with reduced anaerobic conditions compared to the baseline scenario; and (iii) investments in wastewater, fecal sludge, or septage collection that lead 33For wastewater, fecal sludge, or septage systems that are ex ante expected to result in net GHG emission reductions through collection and treatment, reaching or exceeding their targeted levels of BOD, BOD5, COD, or nitrogen removal is necessary for ensuring net emission reductions of methane or nitrous oxide. Page 59 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) to a substantial reduction in net GHG emissions through collection and treatment. 4. Efficient use of wastewater • Wastewater reuse • This includes activities that shall demonstrate a substantial reduction in net GHG emissions between the wastewater reuse activity and the expected activity to be replaced or prevented. • Potentially eligible activities under the PforR include (i) gray water and black water reuse at the building or local level, (ii) treated wastewater reuse for irrigation, (iii) treated sludge as a fertilizer replacement, and (iv) nature-based solutions using retention ponds or constructed wetlands as part of integrated flood risk management. Page 60 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) Table 14: RA3: Solid Waste Management: Eligible GHG Emission Reduction Activities Category Eligible activity Screening criteria 5. Waste collection and • Separate collection and • The activity shall support recovery of eligible materials aimed at preparing them transport transport of source- for reuse or recycling, including recovery and valorization of bio-waste. segregated waste fractions • Potentially eligible activities under the PforR include the deployment or operation of (i) waste collection equipment, e.g., bins and containers (including underground systems); (ii) waste collection and transport vehicles; (iii) technological equipment and applications of information and communication technologies, e.g., for collection route optimization, pay-as-you-throw schemes, product tracking, and take-back systems; and (iv) construction or operation of infrastructure for separate waste collection, e.g., civic amenity centers, vehicle depots, and vehicle washing, maintenance, and repair facilities. 6. Waste storage and transfer • Temporary storage, bulking, • The activity shall support recovery of eligible materials aimed at preparing them or transfer of collected for reuse or recycling, including recovery and valorization of bio-waste. separately source-segregated • Potentially eligible activities under the PforR include construction or operation waste fractions of temporary storage, bulking, or transfer facilities and ancillary equipment and vehicles. 7. Material recovery from solid • Material recovery from • The activity shall be aimed at recovering secondary materials from waste in waste separately collected or pre- preparation for reuse or recycling. sorted waste involving • Examples of typical feedstock used in this activity are plastic and rubber waste, processes other than spent oils, lubricants, solvents, and other chemicals produced by households mechanical processes and businesses. 8. Recovery and valorization of • Anaerobic digestion of • Bio-waste means biodegradable garden and livestock waste; food and kitchen bio-waste separately collected bio-waste waste from households and wholesale and retail markets; and comparable waste from food-processing plants. • Potentially eligible activities under the PforR include (i) greenfield projects ‒ construction or operation of new plants and small-scale units for anaerobic digestion of bio-waste, for biogas treatment or utilization, or for the treatment of digestates for use as fertilizer or soil conditioner; and (ii) brownfield projects ‒modification, replacement, or upgrading of existing facilities resulting in improved methane yield from the anaerobic digestion process (e.g., by enabling co-digestion of bio-waste with other biodegradable feedstock such as agricultural residues and manure); - reduced methane leakages (e.g., sealed Page 61 of 84 The World Bank Green Agricultural and Rural Revitalization Program -Phase I (P177590) digestate storage tanks); enhanced biogas utilization (e.g., through biogas conversion to bio-methane and its compression for use as a fuel or injection in a natural gas grid); or enhanced digestate utilization (e.g., through additional composting and storage). 9. Recovery and valorization of • Composting of separately • The bio-waste shall be segregated at the source and collected separately. bio-waste collected bio-waste • The compost produced shall be used as a natural fertilizer or soil conditioner or, when it can be demonstrated that there is no market for such use, it shall be used for other purposes (e.g., as backfilling or cover material), but shall not be incinerated. • Potentially eligible activities under the PforR include (i) greenfield projects ‒ (a) construction or operation of new composting plants, including equipment for the conditioning of compost for use as fertilizer or soil conditioner; and (b) deployment of household and community-based composting schemes; and (ii) brownfield projects ‒ modification, replacement, or upgrading of existing facilities resulting in a reduction of methane emissions from composting plants (e.g., equipment for active aeration of windrows) or improvements in compost quality (e.g., equipment for compost conditioning and valorization). Page 62 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) VI. Institutional and Implementation Arrangements The relevant regional/provincial government departments and program counties will be responsible for implementing the PforR and delivering results under the DLIs. Their PforR implementation will be coordinated by the regional/provincial government departments. Guangxi and Guizhou will each establish a provincial-level Program Leading Group to be chaired by the vice governor responsible for implementing the phased RRS plan, and drawing members (at the deputy director general level) from the provincial Development Reform Commission, Department of Finance, RRB, DARA, HURDB, Natural Resource Bureau, Water Resource Bureau, Ecology and Environment Bureau, and other relevant departments, to provide strategic guidance and oversee the PforR implementation. Guangxi Province. The Guangxi DARA, which will be primarily responsible for implementing activities under RA2 (Greening selected agricultural value chains) in the province, will also serve as the location for the Regional Program Management Office. The RPMO will be responsible for the overall coordination, M&E, and reporting of PforR implementation, and delivery of the following results: DLI2, DLI3, DLI4, DLI5, and DLI6. In addition, a regional-level Program Implementation Unit will be established under the RRB. The PIU will be responsible for coordinating, monitoring, and reporting to the RPMO on the delivery of the following results: DLI1, DLI2, DLI7, and DLI8. The RRB will work closely with other departments responsible for rural wastewater treatment facilities and solid waste management systems development: DARA, WRB, HURDB, EEB, NRB, and the Comprehensive Enforcement Bureau, among others. An expert panel will be established to provide Technical Assistance to the RPMO/PIU. The regional-level institutional arrangements will be replicated at each of the participating county/district government levels. Guizhou Province. The provincial RRB, which will be primarily responsible for coordinating implementation of RA3 (Increasing access to rural infrastructure and public services), will also serve as the location for the Provincial Program Management Office. The PPMO will be responsible for the overall coordination, M&E, and reporting of PforR implementation, and delivery of the following results in the province: DLI1, DLI7, and DLI8. The provincial RRB will work closely with other departments responsible for rural wastewater treatment facilities and solid waste management systems development: DARA, WRB, HURDB, EEB, and NRB, among others. Similarly, a provincial-level PIU will be established under DARA. The PIU will be responsible for coordinating, monitoring, and reporting to the PPMO on the delivery of the following results: DLI3, DLI4, DLI5, and DLI6. The PIU will coordinate the activities of relevant divisions/stations responsible for crops (chemical fertilizer and pesticide reductions, straw management), livestock (manure and other waste management), and training and capacity building (members and leaders of FCs, FAs, WUAs, input suppliers, enterprises, and extension staff). An expert panel will be established to provide TA to the PPMO/PIU. The provincial-level institutional arrangements will be replicated at each of the participating county/district government levels. The National Rural Revitalization Administration (NRRA), through the International Poverty Reduction Center in China (IPRCC), will remain engaged with Guizhou and Guangxi during the program implementation. The Bank team will also continue to engage with NRAA/IPPRC to ensure knowledge dissemination and scaling-up of lessons, approaches, methodologies, and good practices developed in Page 63 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Guangxi and Guizhou. VII. Economic and Financial Assessment Rationale for public sector financing of the PforR. The GARR PforR will strengthen institutional capacity for governance, generate public goods (both global and domestic) due to pollution reductions, and provide basic rural public services. The program will directly contribute to GPGs through (i) reducing GHG emissions by supporting measures to chemical fertilizer use and increase efficiency; collection, treatment, and recycling of livestock and poultry manure; and adoption of climate-smart agricultural technologies and practices; (ii) supporting investments in treatment and recycling of rural wastewater and solid waste; and (iii) supporting investments aimed at increasing the collection, transfer, and recycling of agricultural plastics. The GARR PforR will also indirectly contribute to the protection and restoration of biodiversity in the farmland ecosystem through the reduction of agricultural pollutants (especially chemical fertilizer and pesticide) and promoting integrated pest management technologies. Further, the GARR PforR will improve the efficiency and effectiveness of public goods delivery through strengthening institutional frameworks or governance systems (e.g., M&E and program budgeting and expenditure tracking) and capacity building at the regional/provincial and county levels. This will help the regional/provincial governments to adopt results-based fiscal transfers to finance activities aimed at achieving green agricultural and sustainable rural development objectives, which are set in their respective 14th FYP and phase 1 RRS plans. Value Added of the Bank's Support The Bank's involvement will help expose the counterparts to the international experience and good practices in green agricultural development, climate-resilient rural public infrastructure, and environmental and ecosytem protection and management. In addition, the Bank involvement can incorporate into the government’s RRS the lessons learned and experience gained from other Bank- financed agricultural and rural development projects in China and related knowledge products. The recently completed studies undertaken as part of the Bank’s Programmatic Advisory Services and Analytics (Transforming Rural China – Greening Agricultural Modernization) are particularly relevant for both informing the GARR PforR design and for its implementation (see Section C). The Bank’s involvement will help leverage its vast international experience and good practices in green agricultural development, rural wastewater and solid waste management, NPS water pollution control, and environmental/ecological restoration. In addition, the Bank has supported the implementation of several projects related to ecosystem restoration and water pollution control in China, and conducted analytical work, including through the Country Water Resources Partnership Strategy, the Water Governance Strategy, and studies on eco-compensation mechanisms. Lessons learned and good practices generated from these projects and analytics can be readily used to enhance the effectiveness and impact of the GARR PforR during its implementation. Assessment Methodology The economic assessment compares a scenario of “no government program� to a scenario of a government program, including the Bank’s support. This approach is used because, under a PforR, government and Bank funds are combined to achieve results, with virtually no distinction at the activity level between government-financed and Bank-financed achievements. This approach can determine Page 64 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) whether the overall program ‒ which the Bank financing partly supports ‒ is socially beneficial after considering economic benefits and economic costs. Given the wide range of the program’s interventions, the economic assessment has been conducted by RAs, using different methodologies. Results Area 1: Strengthening institutional capacity for governance RA1 will strengthen institutional capacity to develop and improve governance frameworks (e.g., regulations, standards, and guidelines for green development; and program budgeting, expenditure tracking, and M&E) for implementing the RRS plan; effectiveness and impact of the public expenditures will be enhanced by linking the disbursement of funds to the achievement of specific results. RA1 will also improve the transparency and accountability of governance systems. Although not directly generating benefits itself, RA1 will create an enabling environment for the implementation and enhance the impact of activities under RA2 and RA3. Furthermore, it will help to upscale green agricultural development and rural public services province-/region-wide, far exceeding the program’s scope. As such, no separate analysis is needed for activities under RA1. Results Area 2: Green agricultural development RA2 involves support to farmers, cooperatives, and enterprises in the form of matching grants or output- based subsidies. The support to green value chain (VC) development generates both private (increased productivity/income) and public (reduced GHG emissions and nutrient/pollutant loads entering waterways) benefits. The adoption of new CSA technologies and practices promoted by the program is partly dependent on the profitability of the farm operations/VCs. Economic analysis: Cost-benefit analysis has been conducted to assess the economic viability of RA2 by aggregating activities in crop production (VCs) and manure treatment interventions, per physical targets as contained in DLI4 and DLI5, and based on crop production and manure treatment models in financial analysis. The incremental economic costs include (a) investment costs for the technical package adoption, (b) operational costs for agricultural production, and (c) training and capacity-building costs. The major benefits included in the analysis are (a) incremental crop production and price premiums from quality improvement, (b) savings from reduced agricultural input costs, including fertilizer, agrochemicals, diesel, and irrigation water; (c) income from bio-gas, electricity, and organic fertilizer generated by manure treatment; and (d) benefits from GHG emission reductions. Other substantial positive externalities (e.g., reduced pollution of water and soil and biodiversity improvement) are not included in the analysis as they are not readily quantifiable. The following assumptions have been applied for the analysis: (a) carbon shadow prices are set following the guidelines of the World Bank “Guidance note on the shadow price of carbon in the economic analysis� (November 2017)34; (b) program life of 20 years; (c) ) the discount rate adopted by the analysis is 6 percent, chosen according to guidelines from the NDRC, which is in line with the World Bank’s guidance for discount rate35; and (d) taxes, duties, and subsidies are not included as they 34 According to the World Bank’s guidance note on the shadow price of carbon in economic analysis issued on November 12, 2017, projects’ economic analysis should use a low and high estimate of the carbon price, starting at US$40 and US$80, respectively, in 2020 and increasing to US$50 and US$100 by 2030; the low and high values on carbon prices are extrapolated from 2030 to 2050 using the same growth rate of 2.25 percent per year that is implicit between 2020 and 2030, leading to values of US$78 and US$156 by 2050. 35 World Bank. 2015. Technical Note on Discounting Costs and Benefits in Economic Analysis of World Bank Projects . The discount rate is recommended to be 6 percent for investments with long-term unquantified E&S benefits. Page 65 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) represent transfer payments instead of real costs or benefits to society as a whole. The results of the economic analysis: Cash flows of benefits and costs for RA2 are projected over a 20- year period to estimate its economic rate of return (ERR). The ERR with GHG reductions is estimated at 13 percent (with low carbon shadow price) and 14 percent (with high carbon shadow price) and ERR without GHG reductions at 11 percent, which are all above the discount rate of 6 percent, indicating that RA2 is economically viable. Financial analysis: The financial benefits of the project are analyzed based on the incremental benefits and incremental costs of the program from the perspective of farmers/cooperatives. Assumptions for the analysis are the same as for the economic analysis except that (a) subsidies for farmers/manure treatment facilities are treated as income and (b) the GHG reduction benefits are excluded as they cannot be internalized by farmers/owners of manure treatment facilities. Major crop production models targeted for fertilizer reduction are selected for the financial analysis with the results as shown in Table 15. Table 15: Results of Financial Analysis for Major Crop Value Chains Technical packages to be adopted Main crop FIRR with FIRR without subsidies (%) subsidies (%) Formula fertilizer and/or organic Paddy rice 14 11 fertilizer and/or green manure Fertigation and/or formula fertilizer Vegetables 18 15 and/or organic fertilizer Fertigation and/or formula fertilizer Fruits 17 14 and/or organic fertilizer The crop financial analysis shows that, in the long term, the green agricultural technologies and practices are financially viable even without subsidies. However, the subsidies are justified during the initial years for the following reasons: (i) promoting the adoption of new technologies and practices; (ii) compensating farmers for their contribution to public goods generation (e.g., GHG emission reductions and nutrient and pollutant reductions); and (ii) providing upfront financial incentives to hedge against the risks associated with switching to new technologies and practices. Experience has shown that, once the new technical packages are proven to be financially viable, farmers will continue to use them even without subsidies. For manure treatment, a new construction of centralized livestock and poultry manure treatment and recycling facility has been adopted for analysis. The facility will adopt “odorous fermentation bed� technology with annual treatment capacity of 500,000 tons of manure (roughly for 7,000 standing pigs annually). Based on estimated capital investment, operational costs, and revenues, the facility will have a FIRR at 4 percent without subsidies and at 11 percent with subsidies for construction costs. The financial analysis of the manure treatment facility shows that it is not financially viable without subsidies. 36 Because the centralized facilities will provide manure treatment services to small-scale livestock and poultry farms and generate substantial public goods by reducing the quantity of pollutants entering waterways, there is strong justification for the program to provide subsidies for construction. The analysis also shows that, with subsidies, the facilities could run profitably. In fact, Guangxi has 36This is supported by the analysis in the government ICR for the Guangdong Agricultural Pollution Control Project, in which, out of 21 pig farms, only 3 high-rise facilities are financially viable without subsidies. Page 66 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) demonstrated that the centralized facilities, after completion, could be managed by a private entity on concessional arrangement for profitable operations. No sensitivity test is warranted because (a) conservative values of outputs and income are used in the analysis throughout the program’s life and (b) significant unquantifiable positive externalities (e.g., water, soil quality, and biodiversity improvement) are not included in the financial analysis. Results Area 3: Increasing access to rural solid waste and wastewater services RA3 involves the preparation of IVDPs, which are the planning tool for guiding public services investment at the village level. IVDPs will contribute to the efficient allocation of resources as one of the economic benefits. However, the main activities are related to the construction of the village-level wastewater and solid waste treatment and recycling facilities. Their economic benefits include improvement in health outcomes (e.g., reduced incidences of waterborne diseases) and fewer pollutants entering waterways (i.e., improving water quality), which are not easily quantifiable. Given the mountainous topography of Guangxi and Guizhou with small natural villages scattered all over, the construction or rehabilitation of decentralized rural wastewater and solid waste management facilities is seen as the most cost-effective way of delivering public services. This is because, in the long term, the cost of transferring rural waste to centralized township treatment plants is higher than that of constructing or rehabilitating decentralized rural facilities. Maximizing Finance for Development The PforR will support the creation of an enabling environment for attracting private investment in greening agricultural value chains. China has an established system of mobilizing private capital to support agricultural development. Under its agricultural industrialization (Chanye Fupin) policy, Guangxi and Guizhou provincial governments will provide incentives to agro-enterprises (often called Dragon Head Enterprises, DHEs) with productive partnership/contractual arrangements with farmer cooperatives to invest in the production, value addition, and marketing of branded agro-products. The DHEs become responsible for the quality and safety of the agro-products, which means they are liable for enforcing standards. Incentives provided include performance-based subsidies, allocation of land for agricultural production and processing facilities, construction of industrial parks, and tax rebates/holidays. For example, large pig farms investing in high-rise production and manure treatment facilities are given an output-based subsidy (e.g., CNY 800/m2) to offset a portion of the investment costs upon the facilities becoming operational and meeting environmental standards. Similar performance-based subsidies are provided to the medium- and large-sized livestock and poultry farms that are investing in livestock waste management (e.g., collection, treatment, and conversion into organic fertilizer or energy/biogas). Such farms are required to receive waste from small livestock and poultry farms to help smallholder producers with manure management. The PforR will encourage the Guangxi and Guizhou provincial governments to expand the scope of such support to private enterprises willing to invest in green agricultural value chains and the management of rural waste and to reduce pollution. Citizen Engagement The proposed PforR has been promoting citizen engagement through wide stakeholder consultation during the environmental and social systems assessment, including local communities and benefiting farmers. The citizen engagement mechanism during project implementation will include the following: (a) contact details of persons from project management offices receiving feedback and complaints will be Page 67 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) made public during the disclosure process in all project townships and project counties as part of the grievance redress mechanism and (b) participatory approaches will be used under DLI7. Records of people participating in the planning and implementation of the IVDPs will be kept at the village level. Citizen engagement will be used as a tool for transparency and accountability, including full disclosure of plans, budgets, expenditures, and results. In addition, a comprehensive GARR PforR communication strategy will be developed and implemented to inform the wider public of the achievement of results and to share widely lessons learned and approaches and methodologies for upscaling nationwide. Climate Co-Benefits The PforR will generate both climate change mitigation and adaptation benefits in the two provinces in line with China’s NDC. For climate change mitigation: The PforR will generate mitigation co-benefits through (i) reducing GHG emissions by promoting the reduction in chemical fertilizer use; collection, treatment, and recycling of livestock and poultry manure; and adoption of climate-smart agricultural practices; and (ii) supporting investments in treatment and recycling of rural domestic wastewater and solid waste. For climate change adaptation: The PforR will also generate adaptation co-benefits: (i) adoption of climate-smart agricultural practices (e.g., recycling of crop straw/residues, increasing efficiency of irrigation water use, fertigation, and water management in paddy rice); (ii) reducing food loss and waste (e.g., through village-level cold-storage facilities and cold chains, improved postharvest handling technologies, and processing); and (iii) increased energy use efficiency (e.g., in primary production through new efficient farm machinery and using renewable energy, solar and wind power, for irrigation), and value addition, such as conversion of biogas to energy. GHG emission reductions accounting. The estimates from the EX-ACT tool show that the GARR PforR is expected to reduce GHG emissions by 9.0 million tons CO2-e over a period of 20 years (including 5-year implementation). Net GHG emissions are quantified by focusing on activities under RA2 and RA3. Specifically, four sources of quantifiable net GHG emission reductions from mitigation measures have been assessed: (i) GHG emission reductions from reduced fertilizer use and improved application practices, (ii) treatment and reuse or use of livestock and poultry manure, (iii) recovery and recycling of agricultural plastic film and packaging materials, and (iv) treatment and recycling of wastewater and solid waste. The net GHG emission reductions are most likely to be higher than the 9.0 million tons CO2-e presented here because of the net GHG emission reductions due to adaptation measures. In addition, the 9.0 million tons CO2-e net GHG emission reductions represent only the mitigation attributable to the IBRD’s financing. Finally, the calculations of net GHG emission reductions are limited to the 27 program counties. Thus, huge potential exists to scale up these activities in the two provinces. Gender Gap Analysis As Chinese women increasingly participate in farming activities, they have limited access to information and agricultural extension services, which affect their uptake of climate-smart agricultural practices and productivity growth in green agriculture value chains. According to the White Paper Gender Equality and Women's Development in China in 2015, women account for about 70 percent of the agricultural labor force. In the past decades, a significant number of people have migrated from rural to urban areas for jobs, and most of them were men. Women, especially those between the ages of 36 and 50, tended to remain in rural source communities and spend more hours on the farm. As a result, the role of women has increased both in participation in farm labor and in the duties that women take on in the daily management of farms. Notwithstanding the increasing farm participation of women, it is still the men Page 68 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) who make the major decisions on rural affairs because of their better access to agricultural technologies, knowledge, and information. In China, agricultural extension is still an important driver in technology introduction and adoption. However, research suggests that the top-down approach followed by the extension services in China through a men-dominant decision-making system further reinforces the social norms in knowledge dissemination, which in fact prioritizes men in technical training and capacity-building activities. As a result, women’s technology adoption rates are affected by their limited access to resources, including their lesser access to credit and information, and discriminatory practices in the dissemination of new technologies. The program presents opportunities to improve female farmers’ access to agricultural services and market information through better usage of internet technologies and mobile applications. In the past several years, digitalization of the agricultural economy has developed rapidly in China. Online retail sales of agricultural products accounted for about 30 percent of the retail sales of rural commodities in 2019. Under the COVID-19 pandemic, the digital economy continues to expand, and the government plans to further promote the development of the grassroots e-commerce network and services. As e-commerce platforms rapidly transform the agricultural value chain from production to supply, it is vital that the proliferation of digital technologies does not exacerbate pre-existing gender inequalities, and that female farmers acquire sufficient knowledge and skills to use emerging digital tools and services for better access to extension services, financial resources, market information, and new job opportunities. As a core part of the program plan to nurture green skills and talents, training and capacity-building activities shall target female farmers, building their essential knowledge and skills to take advantage of digital technologies for green agriculture, for example, online learning, certification and branding of green production, livestreaming and other e-business models, and know-how for mobile-based payment and billing services. In addition, as county governments establish local digital platforms for the management of rural infrastructure and public services, gender information needs to be incorporated so that the platform will capture, monitor, and report sex-disaggregated information in the planning and implementation of agricultural services. Such information is vital in ensuring gender equality and can be a practical tool in guaranteeing and monitoring the budgeting, resource allocation, and delivery of services from which both female and male farmers can benefit equally. For example, when the government subsidizes agro- enterprises and farmers’ cooperatives to incentivize green agricultural value chain development, the platform with a gender component would be able to track and report how many resources are allocated to women-headed households and family farms, and how many women are becoming trained and employed for green jobs created. Output-oriented indicators will be used to evaluate, monitor, and report the gender activities under the program. Specifically, the program will measure the number of female farmers newly registered as e- commerce vendors of green agriculture products in the program demonstration counties and/or the increase in the sales of green products by female farmers on major e-commerce platforms. In terms of the county-level digital platforms that are established and functioning, regular information will be reported on the number of green agricultural jobs newly created in the production, processing, packaging, and marketing of green products, and how many of them are obtained by female farmers. Results Monitoring and Evaluation M&E capacity will need to be strengthened during the PforR implementation. Each province will prepare an M&E plan, specifying the units of measurement, baseline values, targets, data sources for each Page 69 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) indicator, methodology, and responsibility for collection and reporting. The provinces will recruit third- party M&E agencies to collect, analyze, and report survey-based data. Administrative data will be collected by the relevant county government departments implementing the PforR activities.37 The M&E data will be stored in the MIS for the PforR. The M&E of the livestock and poultry manure pollution reduction and wastewater treatment and recycling will be based on the already established monitoring and verification system under the MEE/EPA. Similarly, the M&E of chemical fertilizer reduction will follow M&E protocols established by the MARA. This will provide a solid basis for official recognition and credibility of the PforR’s disbursement-linked results. The M&E system will be linked to the IT-based platforms for rural infrastructure management and the IT-based program budgeting and expenditure reporting system. This will enable the provinces to not only evaluate the results and performance of the PforR activities but also analyze the cost-effectiveness of various activities implemented to generate the results. The regional/provincial PMOs will prepare and submit to the Bank consolidated semi-annual progress reports (including findings of third-party M&E reports), a mid-term review report, and an Implementation Completion Report. The regional/provincial PMOs will periodically submit to the Bank the third-party VA’s verification reports on the achievement of DLRs to enable IBRD loan disbursements against the DLIs. The regional/provincial PMOs will be responsible for consolidating reports from provincial agencies participating in the PforR and submitting them to the PDOF, copying the CPMO. IBRD loan disbursements will be made periodically upon receiving and accepting the third-party verification reports on the DLRs for the respective DLIs. The amount of submitted withdrawal application will depend on the verified results. Some annual allocations are scalable and non-fixed, meaning that the Bank can disburse for over- performance up to the DLIs’ total allocation. Over-performance will enable the PDOFs to bring forward disbursements from Years 4 and 5 to Years 3 and 4, respectively. The PDOFs can apply for disbursements as soon as the provinces achieve the results and provide the necessary evidence verified by the third- party VA to the Bank, and the Bank accepts the evidence in a formal notice to the MOF specifying the eligible disbursement amounts. VIII. Capacity Building As indicated above, the technical capacity of the region/provinces in green agriculture and rural infrastructure is generally adequate. Both the central and provincial governments are paying high attention to training and capacity building of farmers and extension workers, and developing rural talents. During the 13th FYP period, the Ministry of Agriculture and Rural Affairs launched a five-year program to develop new-type occupational farmers who will be equipped with a wide variety of skills ‒ from soil management and crop production to marketing and business planning. In addition, the Department of Human Resources and Social Security (DHRSS) is also organizing short-term training for farmers and returning migrant workers. Under the PforR, technical assistance and outreach program through training and demonstration will be provided, based on needs assessment for the various categories (farmer, input 37The DRCs are responsible for fund allocations based on an evaluation of county achievements, which relies on data provided by sector departments. The DOFs are responsible for monitoring the management and disbursement of funds. The respective DWRs are responsible for monitoring ecological flow compliance and providing data on water resource management. DEEs are responsible for monitoring water and air quality. HURDs are responsible for monitoring wastewater services. DARAs are responsible for agricultural plastic film and NPS pollution. Page 70 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) suppliers, enterprises and extension workers), development of the training modules, outsourcing the delivery of the training activities, and evaluating the adoption rates. Given that the responsibility of delivering most of the DLIs is with the counties, capacity building for planning, budgeting, implementation and M&E and reporting will be needed. Overall, capacity gaps remain on how to design and implement specific activities to achieve the expected results, conduct effective M&E of the results, and strengthen the linkages (better manage the results chain) between inputs, outputs, and outcomes to achieve the PDO of the PforR. The TA will also be needed to strengthen the capacity for program-based budgeting and expenditure reporting (including compliance with fiduciary requirements), management of the rural infrastructure (wastewater and solid waste management), and handling of the environmental and social safeguards issues (e.g., assessment of impacts of rural investments and putting in place acceptable mitigation measures) at the county level. The value added of the Bank financing is to bring in international experience in these aspects, especially with the program- based budgeting and expenditure tracking, and results-based fiscal transfers to the counties and rural areas. The PforR also incorporates training and capacity building (nurturing green skills and talents) to the beneficiaries, including members of the FCs, FAs, WUAs, input suppliers, extension workers, and agro- enterprises. The RF includes intermediate indicators to measure the performance of training and capacity building activities. Page 71 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) IX. Program Action Plan Action Description Source DLI# Responsibility Timing Completion Measurement 1. Issue an official notification Fiduciary Systems RPMO/PPMO Other No later than 1. Issue an official notification that no that no contract will be loan contract will be awarded to either a awarded to either a firm or an effectiveness firm or an individual appearing on individual appearing on either either the World Bank’s debarred list the World Bank’s debarred list or under temporary suspension list. or under temporary suspension list. 2. Regularly inform the World Fiduciary Systems RPMO/PPMO Recurrent Semi-Annually 2. Regularly inform the World Bank of Bank of any credible and any credible and material allegations material allegations of fraud of fraud and/or corruption regarding and/or corruption regarding the PforR’s activities as part of the the PforR’s activities as part of overall PforR’s reporting the overall PforR’s reporting requirements. requirements. 3. Guangxi and Guizhou to Fiduciary Systems RPMO/PPMO and relevant Due Date 31-Dec-2022 3. Guangxi and Guizhou to Issue Issue updated policies related government agency updated policies related to funds to funds integration and integration and budget performance budget performance evaluation measures that increase the evaluation measures that discretion of the county governments increase the discretion of the to utilize funds in line with their county governments to utilize development plans and priorities. funds in line with their development plans and priorities. 4. Implement measures to Environmental and DLI 8 PHURDD, county HURDBs Recurrent Continuous 4. Implement measures to improve improve rural solid waste Social Systems rural solid waste transfer stations by transfer stations by enhancing enhancing leachate and odour leachate and odour management facilities and providing Page 72 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) management facilities and PPE, sanitation and resting facilities providing PPE, sanitation and for workers. resting facilities for workers. 5. Undertake measures to Environmental and DLI 8 PEEDs, county EEBs Recurrent Continuous 5. Undertake measures to ensure ensure availability of Social Systems availability of adequate operations adequate operations and and maintenance (O&M) funding for maintenance (O&M) funding the wastewater treatment facilities. for the wastewater treatment facilities. 6. Prepare and implement Other RPMO/PPMO and CPMOs Recurrent Yearly 6. Prepare and implement detailed detailed training and capacity training and capacity building plans: building plans: (a) GA skills (a) GA skills training plan; (b) training training plan; (b) training plan plan for the O&M of the rural solid for the O&M of the rural solid waste and wastewater facilities; and waste and wastewater (c) capacity building plans supporting facilities; and (c) capacity the achievement of DLIs. building plans supporting the achievement of DLIs. Completion Action Description Source DLI# Responsibility Timing Measurement Action Description 1. Issue an official notification Fiduciary Systems RPMO/PPMO Other No later than 1. Issue an official notification that no that no contract will be loan contract will be awarded to either a awarded to either a firm or an effectiveness firm or an individual appearing on individual appearing on either either the World Bank’s debarred list the World Bank’s debarred list or under temporary suspension list. or under temporary suspension list. Page 73 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Annex 1: Program boundary RA3 RA 1 RA2: 3. Increasing access to rural 1. Strengthening institutional 2. Promoting green agricultural value infrastructure and public services capacity for governance chain development (1) Developing regulations, (1) Decreasing use of chemical fertilizer and standards, and guidelines for green toxic pesticide, recycling plastic film, recycling (1) Preparing spatial Integrated agriculture and rural roads livestock wastes and crop straw Village Development Plans Program (2) Developing mechanisms for (2) Adopting climate-smart agricultural (2) Constructing rural wastewater activities budget consolidation, targeting, practices − increasing productivity, building management systems and reporting PforR program resilience, and reducing GHG emissions (CO2, (3) Constructing rural solid waste (3) Developing mechanisms for CH4, N2O) management systems results-based transfers, third-party (3) Training FCs, FAs, WUAs, input suppliers, (4) Providing training in O&M of M&E, and verification agro-enterprises, and rural extension staff wastewater and solid waste (4) Establishing frameworks for (4) Enforcing green agricultural development systems nurturing green development skills regulations, standards, and guidelines and talents Twelve out of 111 counties in Guangxi: Pinggui, Yuanxian, Luocheng, Tianetang, Rong’an, Xingbin, Xincheng, Tiandong, Geographic Bobai, Yizhou, Mashan, and Zhongshan boundary Fifteen out of 86 counties in Guizhou: Bijiang, Sinan, Yinjiang, Songtao, Jinping, Shibing, Taijiang, Luodian, Guiding, Sandu, Libo, Xingren, Zhenfeng, Xiuwen, and Xifen Various activities concerning “agricultural and rural modernization� and “rural revitalization� according to the following documents: Proposals on comprehensively promoting rural revitalization and accelerating agricultural and rural modernization Program (national) activities Implementation proposals on comprehensively promoting rural revitalization and accelerating agricultural and rural Government modernization (Guangxi) program Implementation proposals on comprehensively promoting rural revitalization and accelerating agricultural and rural modernization (Guizhou) Geographic Guangxi and Guizhou boundary Page 74 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Annex 2: Funding sources for agricultural green development in Guizhou (2020) Guizhou Project counties Earmarked transfer program RMB million Share RMB million Share Agricultural production development 3,695.3 52.6 422.8 37.9 Central Cultivated land protection 2,876.3 40.9 215.3 19.3 Farmland construction 398.5 5.7 155.2 13.9 Agricultural green development 68.1 1.0 3.6 0.3 Agricultural technology 60.5 0.9 17.2 1.5 Farmer training 65.3 0.9 7.5 0.7 Fertilizer reduction 20.0 0.3 0.2 0.0 Provincial 0.0 Comprehensive agricultural green development 95.4 1.4 4.2 0.4 Agricultural technology 55.2 0.8 6.1 0.5 Cultivated land protection 0.0 0.0 0.0 0.0 Quality and safety of agricultural products 25.0 0.4 5.2 0.5 Pest control 15.0 0.2 2.4 0.2 Fertilizer reduction 10.0 0.1 1.0 0.1 Farmer training 6.0 0.1 4.9 0.4 Agricultural resources and ecological protection 319.3 4.5 68.8 6.2 Central 0.0 Cultivated land protection 149.5 2.1 31.7 2.8 Agricultural green development 32.8 0.5 24.8 2.2 Agricultural non-point source pollution control 28.1 0.4 6.0 0.5 Provincial 0.0 Comprehensive agricultural green development 66.5 0.9 4.6 0.4 Agricultural non-point source pollution control 32.3 0.5 0.4 0.0 Agricultural ecological environment protection 5.0 0.1 1.4 0.1 Cultivated land protection 5.0 0.1 0.0 0.0 Sustainable agricultural development 252.3 3.6 62.2 5.6 Central 0.0 Page 75 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Agricultural non-point source pollution control 252.3 3.6 62.2 5.6 Agricultural ecological environment protection 0.0 0.0 0.0 0.0 Animal epidemic prevention 153.4 2.2 4.5 0.4 Central 109.0 1.6 2.5 0.2 Provincial 44.4 0.6 2.1 0.2 Modern agricultural supporting system 28.0 0.4 0.0 0.0 Central 0.0 Agricultural ecological environment protection 28.0 0.4 0.0 0.0 Disaster relief 65.0 0.9 7.9 0.7 Central 0.0 Pest control 65.0 0.9 7.9 0.7 Rural toilet revolution 30.0 0.4 35.0 3.1 Provincial 0.0 Toilet revolution 30 0.4 35.02 3.1 Total 7,026.4 100 1,116.1 100.0 Page 76 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Annex 3: Funding sources for agricultural green development in Guangxi (2020) Guangxi Project Counties Earmarked transfer program RMB million Share (%) RMB million Share (%) Agricultural production development 3,606.2 74.7 502.9 88.2 Central 3,501.4 72.5 485.9 85.2 Geographically marked agricultural products 29.0 0.6 4.0 0.7 Cultivated land protection 3,210.6 66.5 443.9 77.9 Fertilizer reduction 20.0 0.4 0.0 0.0 Agricultural technology 93.6 1.9 15.1 2.6 Agricultural green development 72.0 1.5 11.3 2.0 Farmer training 76.2 1.6 11.6 2.0 Provincial 104.8 2.2 17.1 3.0 Three products and one standard certification subsidy 6.0 0.1 0.7 0.1 Construction of supervision system for harmless treatment of dead 1.2 0.0 0.2 0.0 livestock and poultry Resource use of fecal sewage 21.0 0.4 6.0 1.1 Demonstration of safe use of cultivated land and soil 1.0 0.0 0.5 0.1 Construction of R&D service capacity of grassroots agricultural 2.6 0.1 0.0 0.0 scientific research institutions Construction of modern ecological breeding demonstration farm for 10.0 0.2 1.0 0.2 cattle and sheep Positioning and early-warning monitoring of heavy metal pollution in 4.5 0.1 0.7 0.1 farmland soil and agricultural products Agricultural technology extension and service 19.0 0.4 4.2 0.7 Agricultural resources and ecological protection 9.5 0.2 0.3 0.1 Integrated demonstration of green prevention and control of crop 23.0 0.5 3.0 0.5 diseases and pests Regional dynamic monitoring of crop ecology 2.0 0.0 0.0 0.0 Page 77 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Major pest observation site 5.0 0.1 0.5 0.1 Agricultural resources and ecological protection 455.3 9.4 36.2 6.4 Central 455.3 9.4 36.2 6.4 Comprehensive use of straw 37.3 0.8 7.5 1.3 Agricultural resources and ecological protection 417.9 8.7 28.7 5.0 Sustainable agricultural development 216.7 4.5 14.2 2.5 Central 216.7 4.5 14.2 2.5 Resource use of fecal sewage 135.2 2.8 0.0 0.0 Construction of large-scale pig farms 81.5 1.7 14.2 2.5 Subsidy for rural residential environmental improvement 140.0 2.9 10.0 1.8 Central 140.0 2.9 10.0 1.8 Rural residential environmental improvement 140.0 2.9 10.0 1.8 Subsidy fund for core demonstration area 95.2 2.0 0.0 0.0 Central 95.2 2.0 0.0 0.0 Subsidies for the implementation of tasks for safe use of agricultural 95.2 2.0 0.0 0.0 land Toilet revolution 77.0 1.6 3.8 0.7 Central 42.0 0.9 1.3 0.2 Toilet revolution 42.0 0.9 1.3 0.2 Provincial 35.0 0.7 2.5 0.4 Toilet revolution 35.0 0.7 2.5 0.4 Rural energy construction subsidy 47.6 1.0 7.5 1.3 Provincial 47.6 1.0 7.5 1.3 Biogas treatment of rural organic waste 47.6 1.0 7.5 1.3 Funds for safe use of agricultural land 39.0 0.8 0.0 0.0 Provincial 39.0 0.8 0.0 0.0 Agricultural land soil risk control 39.0 0.8 0.0 0.0 Fund for prevention and control of Spodoptera litura 33.5 0.7 4.4 0.8 Central 33.5 0.7 4.4 0.8 Fund for control of Spodoptera litura 33.5 0.7 4.4 0.8 Page 78 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Rice pest control fund 32.0 0.7 4.3 0.8 Central 32.0 0.7 4.3 0.8 Rice pest control fund 32.0 0.7 4.3 0.8 Rural revitalization subsidy fund 30.0 0.6 3.8 0.7 Provincial 30.0 0.6 3.8 0.7 Comprehensive use of straw 30.0 0.6 3.8 0.7 Subsidy for rural residential environmental improvement 30.0 0.6 0.0 0.0 Provincial 30.0 0.6 0.0 0.0 Supervision and incentive of rural residential environmental 30.0 0.6 0.0 0.0 improvement (autonomous region) Subsidy for classification of cultivated land soil environmental quality 15.7 0.3 0.0 0.0 in counties and districts Central 15.7 0.3 0.0 0.0 Subsidy for classification of cultivated land soil environmental quality 15.7 0.3 0.0 0.0 in counties and districts Modern agricultural supporting system 8.5 0.2 0.0 0.0 Central 8.5 0.2 0.0 0.0 Improvement of animal and plant protection capacity 8.5 0.2 0.0 0.0 Total 4,826.6 100.0 570.1 100.0 Page 79 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Annex 4: Funding sources for agricultural green development in Guizhou (2020) Guizhou Project counties Earmarked transfer program CNY million Share CNY million Share Agricultural production development 3,695.3 52.6 422.8 37.9 Central Cultivated land protection 2,876.3 40.9 215.3 19.3 Farmland construction 398.5 5.7 155.2 13.9 Agricultural green development 68.1 1.0 3.6 0.3 Agricultural technology 60.5 0.9 17.2 1.5 Farmer training 65.3 0.9 7.5 0.7 Fertilizer reduction 20.0 0.3 0.2 0.0 Provincial 0.0 Comprehensive agricultural green development 95.4 1.4 4.2 0.4 Agricultural technology 55.2 0.8 6.1 0.5 Cultivated land protection 0.0 0.0 0.0 0.0 Quality and safety of agricultural products 25.0 0.4 5.2 0.5 Pest control 15.0 0.2 2.4 0.2 Fertilizer reduction 10.0 0.1 1.0 0.1 Farmer training 6.0 0.1 4.9 0.4 Agricultural resources and ecological protection 319.3 4.5 68.8 6.2 Central 0.0 Cultivated land protection 149.5 2.1 31.7 2.8 Agricultural green development 32.8 0.5 24.8 2.2 Agricultural non-point source pollution control 28.1 0.4 6.0 0.5 Provincial 0.0 Comprehensive agricultural green development 66.5 0.9 4.6 0.4 Agricultural non-point source pollution control 32.3 0.5 0.4 0.0 Agricultural ecological environment protection 5.0 0.1 1.4 0.1 Cultivated land protection 5.0 0.1 0.0 0.0 Sustainable agricultural development 252.3 3.6 62.2 5.6 Central 0.0 Page 80 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Agricultural non-point source pollution control 252.3 3.6 62.2 5.6 Agricultural ecological environment protection 0.0 0.0 0.0 0.0 Animal epidemic prevention 153.4 2.2 4.5 0.4 Central 109.0 1.6 2.5 0.2 Provincial 44.4 0.6 2.1 0.2 Modern agricultural supporting system 28.0 0.4 0.0 0.0 Central 0.0 Agricultural ecological environment protection 28.0 0.4 0.0 0.0 Disaster relief 65.0 0.9 7.9 0.7 Central 0.0 Pest control 65.0 0.9 7.9 0.7 Rural toilet revolution 30.0 0.4 35.0 3.1 Provincial 0.0 Toilet revolution 30 0.4 35.02 3.1 Total 7,026.4 100 1,116.1 100.0 Page 81 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Annex 5: Funding sources for agricultural green development in Guangxi (2020) Earmarked transfer program Guangxi Project counties CNY million Share (%) CNY million Share (%) Agricultural production development 3,606.2 74.7 537.1 85.6 Central 3,501.4 72.5 519.9 82.9 Geographically marked agricultural products 29.0 0.6 4.0 0.6 Cultivated land protection 3,210.6 66.5 478.0 76.2 Fertilizer reduction 20.0 0.4 0.0 0.0 Agricultural technology 93.6 1.9 15.1 2.4 Agricultural green development 72.0 1.5 11.3 1.8 Farmer training 76.2 1.6 11.6 1.8 Provincial 104.8 2.2 17.2 2.7 Three products and one standard certification subsidy 6.0 0.1 0.7 0.1 Construction of supervision system for harmless treatment of dead livestock 1.2 0.0 0.3 0.0 and poultry Resource use of fecal sewage 21.0 0.4 6.0 1.0 Demonstration of safe use of cultivated land and soil 1.0 0.0 0.5 0.1 Construction of R&D service capacity of grassroots agricultural scientific 2.6 0.1 0.0 0.0 research institutions Construction of modern ecological breeding Demonstration farm for cattle 10.0 0.2 1.0 0.2 and sheep Positioning and early-warning monitoring of heavy metal pollution in 4.5 0.1 0.7 0.1 farmland soil and agricultural products Agricultural technology extension and service 19.0 0.4 4.2 0.7 Agricultural resources and ecological protection 9.5 0.2 0.3 0.0 Integrated demonstration of green prevention and control of crop diseases 23.0 0.5 3.0 0.5 and pests Regional dynamic monitoring of crop ecology 2.0 0.0 0.0 0.0 Major pest observation site 5.0 0.1 0.5 0.1 Agricultural resources and ecological protection 455.3 9.4 40.6 6.5 Central 455.3 9.4 40.6 6.5 Comprehensive use of straw 37.3 0.8 7.5 1.2 Page 82 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Earmarked transfer program Guangxi Project counties CNY million Share (%) CNY million Share (%) Agricultural resources and ecological protection 417.9 8.7 33.2 5.3 Sustainable agricultural development 216.7 4.5 15.2 2.4 Central 216.7 4.5 15.2 2.4 Resource use of fecal sewage 135.2 2.8 0.0 0.0 Construction of large-scale pig farms 81.5 1.7 15.2 2.4 Subsidy for rural residential environmental improvement 140.0 2.9 10.0 1.6 Central 140.0 2.9 10.0 1.6 Rural residential environmental improvement 140.0 2.9 10.0 1.6 Subsidy fund for core demonstration area 95.2 2.0 0.0 0.0 Central 95.2 2.0 0.0 0.0 Subsidies for the implementation of tasks of safe use of agricultural land 95.2 2.0 0.0 0.0 Toilet revolution 77.0 1.6 4.2 0.7 Central 42.0 0.9 1.7 0.3 Toilet revolution 42.0 0.9 1.7 0.3 Provincial 35.0 0.7 2.5 0.4 Toilet revolution 35.0 0.7 2.5 0.4 Rural energy construction subsidy 47.6 1.0 7.5 1.2 Provincial 47.6 1.0 7.5 1.2 Biogas treatment of rural organic waste 47.6 1.0 7.5 1.2 Funds for safe use of agricultural land 39.0 0.8 0.0 0.0 Provincial 39.0 0.8 0.0 0.0 Agricultural land soil risk control 39.0 0.8 0.0 0.0 Fund for prevention and control of Spodoptera litura 33.5 0.7 4.4 0.7 Central 33.5 0.7 4.4 0.7 Fund for control of Spodoptera litura 33.5 0.7 4.4 0.7 Rice pest control fund 32.0 0.7 4.3 0.7 Central 32.0 0.7 4.3 0.7 Rice pest control fund 32.0 0.7 4.3 0.7 Rural revitalization subsidy fund 30.0 0.6 3.8 0.6 Provincial 30.0 0.6 3.8 0.6 Comprehensive use of straw 30.0 0.6 3.8 0.6 Page 83 of 84 The World Bank Green Agricultural and Rural Revitalization Program – Phase I (P177590) Earmarked transfer program Guangxi Project counties CNY million Share (%) CNY million Share (%) Subsidy for rural residential environmental improvement 30.0 0.6 0.0 0.0 Provincial 30.0 0.6 0.0 0.0 Supervision and incentive of rural residential environmental improvement 30.0 0.6 0.0 0.0 (autonomous region) Subsidy for classification of cultivated land soil environmental quality in 15.7 0.3 0.0 0.0 counties and districts Central 15.7 0.3 0.0 0.0 Subsidy for classification of cultivated land soil environmental quality in 15.7 0.3 0.0 0.0 counties and districts Modern agricultural supporting system 8.5 0.2 0.0 0.0 Central 8.5 0.2 0.0 0.0 Improvement of animal and plant protection capacity 8.5 0.2 0.0 0.0 Total 4,826.6 100.0 627.1 100.0 Page 84 of 84