The World Bank
Grain Storage and Information for Agricultural Competitiveness (P160570)
Combined Project Information Documents /
Integrated Safeguards Datasheet (PID/ISDS)
Appraisal Stage | Date Prepared/Updated: 03-Feb-2017 | Report No: PIDISDSA20784
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Grain Storage and Information for Agricultural Competitiveness (P160570)
BASIC INFORMATION
OPS_TABLE_BASIC_DATA
A. Basic Project Data
Country Project ID Project Name Parent Project ID (if any)
Mexico P160570 Grain Storage and
Information for
Agricultural
Competitiveness
Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead)
LATIN AMERICA AND CARIBBEAN 30-Jan-2017 24-Mar-2017 Agriculture
Lending Instrument Borrower(s) Implementing Agency
Investment Project Financing Secretaría de Hacienda y SAGARPA, ASERCA
Crédito Público (SHCP)
Proposed Development Objective(s)
Improve access to grain storage and information for agricultural producers in Mexico
Components
Grain Storage Infrastructure and Operation
Information for Grain Management, Markets and Monitoring
Financing (in USD Million)
Financing Source Amount
International Bank for Reconstruction and Development 120.00
Borrowing Country's Fin. Intermediary/ies 60.00
Local Farmer Organizations 15.00
Total Project Cost 195.00
Environmental Assessment Category
B - Partial Assessment
Decision
The review did authorize the preparation to continue
Other Decision (as needed)
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B. Introduction and Context
Country Context
1. The Mexican economy has been expanding at a moderate annual rate of 2.5%, similar to other OECD
(Organization for Economic Co-operation and Development) countries. Private consumption has
been the main driving force of economic activity on the back of stronger job creation, real wage
growth, and credit expansion. However, GDP (Gross Domestic Product) growth forecasts for 2017
have lowered from an average of 2.3% to 1.4%. A challenging external environment, including lower
oil prices, an uncertain policy environment related to the change of administration in the United
States (Mexico’s largest trade partner), and a slowdown of growth perspectives in emerging market
economies, has contributed to a significant depreciation of the Mexican peso, which over the past
two years has lost nearly 30% of its value against the US dollar and continues to fall. Inflationary
pressures and interest rates are on the rise.
2. Government priorities have been to maintain prudent monetary, financial, and fiscal policies to
create the conditions for stronger growth in the medium term, to be supported by the structural
reforms under implementation, aimed at raising productivity, competitiveness and potential output
growth. In the short term, fiscal austerity measures are creating the need for re-thinking the role of
the public sector in many economic activities and the prioritization of public spending across
competing needs. In early 2016 fiscal and monetary policy authorities announced supplementary
public expenditure reductions equivalent to 0.7% of GDP (Gross Domestic Product). In early 2017, a
process of redistribution of public resources from petrol price subsidies to social spending is
intended to further redirect public resources although coupled with social discontent.
3. Despite Mexico’s significant economic and social improvements, stagnant productivity and
insufficient inclusiveness are critical causes of persistent poverty, inequality, and regional disparities.
In 2014-2015, the poverty rate stood at 46% (about 55.3 million people), with a higher incidence in
rural and semi-urban areas. Between 2010 and 2014, annual income of the bottom 40 percent of
the population grew at a trivial 0.1%, while the annualized mean income growth over this period
was just 0.5%. Poverty reduction has been unequal across the territory; 5 of the 32 states (Chiapas,
State of Mexico, Oaxaca, Puebla and Veracruz) account for 56% of the extreme poor in 2014. Public
policy interventions can affect productivity to improve earnings; inclusiveness to make sure that the
poor and indigenous communities have access to services and market information; and
sustainability so that expansion of rural development does not deteriorate Mexico’s resource base.
4. In this context, the Government of Mexico is consolidating social assistance and support programs,
including in agriculture and rural development, to improve efficiency and effectiveness for poverty
reduction, promote productivity and leverage economies of scale. Agriculture and rural
development programs have represented between 0.5% and 2% of Mexico’s budget over the past
decade, similar to 0.8% to 2.4% observed in other OECD (Organization for Economic Co-operation
and Development) countries, and much less than other segments of the Mexican economy (7% for
housing and urban development or 3% for education, for example). Although spending in the sector
has been increasing in nominal terms, it has remained constant, as a percentage of the budget.
However, this pattern is changing as agricultural budgets have been significantly reduced in the past
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two years, forcing a process of prioritization of limited resources and a search for efficiencies in the
operation of current programs.
Sectoral and Institutional Context
5. Agriculture continues to be an important sector in the economy, accounting for around 13% of
Mexico’s GDP (Gross Domestic Product), when considering the forward and backward linkages
created through primary production, post-harvest agro-industrial processes and food systems. The
sector employs on average 13% of the formal labor force in the country (7 million people). Almost
one quarter of Mexico’s population (representing more than 24 million people) live in rural areas and
depend on agriculture for their livelihoods (45% of the employed rural labor force works in the
primary sector). The rural poverty rate (61.6%) is far higher than the urban rate (40.6%), with rural
poverty perpetuated by the low productivity of labor in the agricultural sector among other structural
factors.
6. Agricultural land represents 55% of the total land area of Mexico (or close to 112 million hectares of
arable land), with 5.5 million agricultural units devoted mostly to the production of cereals such as
maize, wheat and sorghum. One half of the agricultural land is under communal ownership (ejido),
which has important implication for land use, particularly in the south of the country. Although only
6% of agricultural land is irrigated, agriculture consumes 77% of water in Mexico and is a source of
increasing tension, in particular in the semi-arid northern states. Limited access to credit contributes
to hindering investments for boosting productivity, especially for the small producers across the
country.
7. There are important geographical differences in the structure and performance of the agricultural
sector in Mexico. In the South, agriculture plays an important social role for food security, while in
the North it is a key driver of economic development through commercial, export-oriented
agriculture. The average productivity of the sector is low in comparison with other OECD
(Organization for Economic Co-operation and Development) countries and differs across regions,
masking a sharp sector duality. Most agricultural producers (73%) are small (<5ha) and semi-
subsistent, employing traditional, rainfed production practices, and concentrated in the Center and
South of the country, working on 6% of the total arable land. Around 5% are large producers (>20ha),
well-integrated, and predominantly export-oriented. Farm units with more than 100 hectares represent
2% of the total units and concentrate two-thirds of the land dedicated to agriculture. This has
generated a heterogeneous sector where producers with high productivity profiles and strong market
orientation coexist with low income small and medium producers with minimal level of commercial
connection to local/national markets.
8. The current agricultural policy is on improving productivity, competitiveness, sustainability, and
equity, while safeguarding national food security. Agriculture sector policies are set out in both the
Agricultural Sectoral Plan and the Special Concurrent Program (Programa Especial Concurrente,
PEC). The Agriculture Sector Plan is aligned with the National Development Plan, and features two
overarching objectives: to guide the development of a productive agricultural sector and to ensure
food security. Ministry of Agriculture (SAGARPA, Spanish acronym) programs designed to advance
these objectives represented about one fifth of its 2015 budget. The plan includes five goals directly
related to agriculture and food security: (a) to boost food production through investment in physical,
human and technological capital; (b) to promote partnerships that generate economies of scale and
add value in food production; (c) to safeguard the food supply through risk-management mechanisms;
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Grain Storage and Information for Agricultural Competitiveness (P160570)
(d) to encourage the sustainable use of natural resources; and (e) to reduce the risk of food shortages
in rural areas. The PEC was created to combine different federal agriculture and rural development
programs and as a mechanism for implementing the 2001 Law of Sustainable Rural Development
(Ley de Desarrollo Rural Sustentable). SAGARPA (Ministry of Agriculture) oversees agricultural
sector policy and coordinates the PEC, but it does not have authority over other ministries involved in
executing PEC programs.
9. There have been fewer attempts to empower small producers to assume a more active role in the
commercialization of their grains and other agricultural products. This has been driven by their small
scale, diversity of production, high risk of compliance with market quality standards, and lack of
financing. Moreover, current storage infrastructure of agricultural commodities in Mexico is
insufficient and/or inadequate, lacking the necessary equipment and norms to determine and maintain
the uniformity of the quality of production. In 2013, the overall grain (dry) storage system capacity
was about 32.7 million tons, which resulted in an annual deficit of grain storage capacity when
national and import quantities were taken into consideration. This reduces the ability for
intertemporal arbitrage, for smoothing commercialization and consumption patterns of the grains and
for distribution to where demand is high at the national level. Furthermore, the use of traditional
storage has contributed to high levels of grain losses. According to SAGARPA (Ministry of
Agriculture) estimates, post-harvest losses in maize, wheat and beans range between 5% and 25% of
total production, due to grain humidity and related fungal and pest problems. At the micro level,
where home storage and traditional structures are used, losses range between 13% and 28%,
representing an important constraint to food security.
10. There are important grain storage infrastructure disparities between the central/southern states and the
states located in the North of the country, where most current storage infrastructure is located. As a
consequence, commercial surpluses, trade balances, financial and transportation costs affect
producers differently. The four states with major storage capacity are Tamaulipas, Jalisco, Sinaloa
and Guanajuato in the North. This infrastructure is complemented with modern storage facilities
integrated with semi-mechanized and mechanized equipment, with a storage capacity that goes from
5 up to 50 thousand tons. These facilities are also well integrated into upstream value chains such as
storage, packing, and distribution. In contrast, the states in the South lack the storage capacity and
commercialization conditions to meet current market demands. The majority of existing silos and
collection centers have not been modernized and lack the necessary equipment for grain conservation.
11. Access to finance is one of the biggest challenges for Mexican producers. Small and medium-sized
producers have limited access to financial resources given the heterogeneous agrarian structure also
linked to land tenure patterns, relying on non-traditional and informal financial services. Rural credit
services are provided mostly by entities that are not connected to the regulated financial system,
which implies higher financial costs for producers and also complicates the development of a credit
history that would allow them to participate in commercial or development banking services. In
recent years, financial services provided by commercial banks to the agricultural sector have been
reduced and many institutions dedicated to agricultural promotion have been disassembled. Credit to
the agricultural sector has decreased from 1.8% of GDP (Gross Domestic Product) in 1994 to 0.1% in
2012. Agricultural rural credit, training and technical provision is centered on FIRA ( Fideicomisos
Instituidos en Relación a la Agricultura) and FND (Financiera Nacional de Desarrollo). Beyond the
need of credit for rural production activities, there is also a need for other financial services to
strengthen agricultural value chains. Integrating financial products into existing agricultural
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Grain Storage and Information for Agricultural Competitiveness (P160570)
commercial systems can improve the socio-economic conditions of small and medium-sized
producers.
12. A well-functioning mechanism for the registration, licensing, oversight and inspection of warehouses
is an important element to ensure that warehouse receipts are acceptable collateral for financial
institutions; acceptable for commodity exchange related transactions; as well as to guarantee that
warehouses meet basic structural, operating and financial conditions. The actors responsible for
monitoring warehouses should be well defined but can vary, depending on whether local, regional or
national markets are involved. In less structured settings, the monitoring functions can be delegated to
value chain actors who have the incentive to perform it well, given the valued relations they have
created with producers, traders or processors. This is important in the context of Mexico where the
current structure of storage is very much skewed towards larger units and where small storage units
can also play an important role, especially in the South.
13. Added to these challenges is the structure and lack of transparency of Mexican agricultural markets,
especially for the main crops, such as maize, which inhibit the participation of small and medium size
producers. Spot price information for many agricultural commodities is very fragmented, and not
readily available within and across regions or on a daily basis. Currently, reference prices available in
Mexico are spot and futures prices from the neighboring USA. This has created significant
information asymmetries in the sector, which have contributed towards an oligopolistic behavior by
large warehouses (charging high storage costs) and a near oligopsony in the buying of grains, with 4
large companies (3 private and 1 public) dictating (low purchase) prices. Prices are set by negotiating
prices between buyers and sellers by region using the Chicago futures market as a reference. This
price negotiation establishes the price “basis�? in relation to Chicago, which is then reflected in the
forward contracts agreed between buyers and sellers. This negotiated price is a critical market
distortion and the main reason why there is no price formation in Mexico. Furthermore, the reference
price of Chicago is based on trading of yellow corn, while Mexico is the world’s largest producer of
white corn, including many native varieties that are valued for their distinctive features. The use of a
reference price from the Chicago futures market thus equalizes – and in many cases reduces – the
values of many Mexican corn commodities. These market-price distortions have important economic
implications as they reduce comparative advantages that Mexico can have in trading white corn with
other large consumers (such as many African countries), as well as limits the development of local
and regional markets for different corn varieties. Lack of a grain inventory database and user-friendly
climate information further exacerbate the ability of producers, private and public entities to make
decisions. This is true for maize and other important crops in Mexico.
C. Proposed Development Objective(s)
Development Objective(s) (From PAD)
Improve access to grain storage and information for agricultural producers in Mexico
Key Results
Number of beneficiaries (men and women) using project supported grain storage facilities
14. This indicator measures the participation of grain producers in the first stage of the grain market.
“Use�? will be measured by the physical delivery of grains to a project supported grain storage
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Grain Storage and Information for Agricultural Competitiveness (P160570)
facility.
Links to higher level objective on improving food security (reduction of post-harvest losses).
Number of beneficiaries (direct and indirect) accessing project enabled grain market information
15. This indicator measures the access to the key variables that the project will make publicly available.
“Access�? will be measured by the number of producers receiving the information either through
direct access to the information platform, or by other means/through other sources.
Links to higher level objective on improving competitiveness (reduction of transaction costs and
information asymetries).
Share of grain sold from project supported storage facilities
16. This indicator measures the turnover of stored grain and hence its integration further up the value
chain. It internalizes the development of infrastructure (including financing) as we as management
and quality aspects of the infrastructure investments, but focuses on the result – their use.
Links to higher level indicator of market integration and competitiveness.
D. Project Description
17. The overall goal of this project is to improve the access of small grain producers to storage facilities
and information, thus contributing to food security, market inclusion and competitiveness in
important grain producing areas of Mexico. Each of the proposed project components will
contribute to developing market conditions that enable producers to participate in a storage system
that incentivizes productivity through profitable commercialization practices, reduces losses through
post-harvest management, facilitates access to financial mechanisms, and differentiates prices
through symmetric information to compete in national and global markets.
18. Project design, as presented in the Legal Agreement, is presented here. Project Description is
provided in Annex 1.
Part 1. (Component 1) Grain Storage Infrastructure and Operation
19. Provision of support for the carrying out of Grain Storage Subprojects in Selected States consisting
of the following activities, including:
(a) the rehabilitation and/or upgrading of existing grain storage facilities, including collection
and trade centers, and purchase and installation of required equipment; and/or
(b) the construction of new grain storage facilities, including collection and trade centers, and
purchase and installation of required equipment.
20. Provision of support for the operation and sustainability of [the] grain storage facilities
[rehabilitated/upgraded or constructed under Part 1.1 above], including:
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(a) (i) the preparation of business plans ; (ii) the carrying out of capacity building activities for
grain storage facilities operators, including the preparation of capacity building materials, on
the operation, control and maintenance of grain storage facilities and required equipment
acquired under Gran Storage Subprojects; and
(b) the provision of support to grain storage facilities operators and Eligible Grain Producer
Organizations on the application of grain quality norms and standards through, inter alia: (i)
the carrying out of capacity building activities on, inter alia, grain quality control and
management on-farm; and (ii) the preparation of capacity building materials for grain
quality control and management in collecting and trade center.
Part 2. (Component 2) Information for Grain Management, Markets and Monitoring
21. Provision of support for: (a) the design, operation and maintenance of an information platform on
grain markets and management, including: (i) the purchase of required software and hardware and
(ii) the carrying out of related capacity building activities on the use of said platform and data
collection and exchange; and (b) the carrying out of dissemination activities on the information
platform, including the carrying out regular user surveys.
22. Strengthening the commercialization linkages of grain storage facilities through the following
activities, including: (a) the participation of members of Eligible Grain Producer Organizations in
agricultural fairs; (b) the carrying out of pertinent analysis on, inter alia, new market opportunities,
market segmentation potential, and other strategic needs to improve market penetration and
returns.
23. Provision of support for the monitoring and evaluation of the Project.
E. Implementation
Institutional and Implementation Arrangements
24. The Project will be implemented by SAGARPA (Ministry of Agriculture), through ASERCA. The Agency
for Services toward the Commercialization and Development of Agricultural Markets (ASERCA for its
Spanish acronym) is the best positioned institution to lead this work. ASERCA, a deconcentrated
agency of SAGARPA, has a mandate to: 1) promote the commercialization of surpluses of maize,
wheat, sorghum, soy and beans and 2) position Mexican agriculture products in global markets. The
main work of ASERCA includes providing incentives for the commercialization of commodities
through contract farming, production guarantees, risk coverage and incentives for storage. The
agency has a budget of roughly MX$10 billion per year, and reaches around 260,000 beneficiaries
per year (or 4% of those formally employed in agriculture), many of whom are large farmers.
25. Under Component 1, ASERCA will enter into sub-project agreements with eligible producer
organizations that are legally constituted and have experience in grain production and management.
Development banks (FIRA and FND) will support project activities through the provision of financial
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instruments, including partial guarantees for loans issued by commercial banks to producer
associations/organizations. Commercial banks will support project activities through the provision of
partial loans for rehabilitating/constructing storage infrastructure and/or for working capital for
storage facilities. CIMMYT (in coordination with the MasAgro Program) will provide capacity building
related to grain quality standards, grain management and traceability (under sub-components 1.2.
and 2.2), as well as to the information platform development (sub-component 2.1) and for project
safeguards monitoring (sub-component 2.3). FAO, Food and Agriculture Organization of the United
Nations) (through the PESA Program) will support the project with grain storage facility standards,
under sub-component 1.2. Furthermore, ASERCA will collaborate with other public sector agencies
(such as PROMEXICO, FOCIR, FIRCO) and private sector entities (AGDs) for the development of
project activities. Direct hire justifications for CIMMYT and FAO will be provided in the Operational
Manual.
.
F. Project location and Salient physical characteristics relevant to the safeguard analysis (if known)
The project will target small and medium semi-commercial and commercial agricultural producers, and their
organizations, in selected states, and support the rehabilitation and, where needed, construction, of small
scale grain storage infrastructure, including equipment and enabling services. Based on a methodology
developed to select project intervention states, prioritizing those with gaps in storage capacity, with large
number of small and medium producers, but with marked productivity and market potential, 7 States were
identified - Estado de Mexico, Michoacán, Veracruz, Guanajuato, Chiapas, Oaxaca and Puebla. Located in
the Central and Southern parts of Mexico, these states represent different agro-ecological and socio-
economic conditions, as well as structural characteristics of agricultural production and the potential for
storage and commercialization of grains. Although Component 1 will be implemented in these States,
information from all States will be considered for the development of the information platform under
Component 2, which will be available to the public at large.
G. Environmental and Social Safeguards Specialists on the Team
Angel Alberto Yanosky,Arelia Jacive Lopez Castaneda
SAFEGUARD POLICIES THAT MIGHT APPLY
Safeguard Policies Triggered? Explanation (Optional)
This project’s primary activities will be to a) increase
the storage capacity and stored volume of grains in
Environmental Assessment OP/BP 4.01 Yes certified collection centers, b) improve the quality of
these centers and the quality of grains, c) reduce
post-harvest losses through improved infrastructure,
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information and commercialization, and d) improve
the flow of information production and market
information. The project will not directly support
agricultural production decisions, but may influence
them through their integration into value-chains.
Improvements in grain volumes will be achieved
through the use of better management practices,
such as conservation agriculture, more suitable to
agro-biodiversity, and better post-harvest
management, hence reducing grain losses, rather
than through frontier expansion. No land use change
activities will be supported, and no native areas
(including primary forests) will be degraded,
traditional crops will not be replaced by high yielding
or GMO varieties, and no actions will be taken in
Conservation or Protected Areas, their buffer zones.
The activities related to the physical rehabilitation of
existing and/or construction of small storage
infrastructure may have some environmental
implications. The Environmental Assessment and
Management Plan developed by ASERCA identified
potential project impacts in the production areas
within the seven selected states, and produced a
series of recommendations. Plans were developed
instead of frameworks given the clearly identified
actions, beneficiaries and stakeholders within these
production areas. As a general conclusion, the
project will generate positive impacts and the risks
are minimal, with no irreversible, large scale or
cumulative impacts. Main risks are related to soil
and water pollution, waste and agrochemical usage,
and loss of agrobiodiversity. The Environmental
Management Plan and the Pest Management Plan
produced by ASERCA specify risks, actions and
mitigation measures such as management, training,
equipment, for fighting pests in grain storage, as
well as related issues such as mycotoxins (aflatoxins)
that affect human health. A series of measures are
proposed in terms of the application and reduced
use of chemicals and their thorough monitoring to
address any potential negative environmental
impacts. Good practices for post-harvest
management will positively impact production and
grain further commercialization.
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The EA has developed a list of restricted activities
and support, which will be incorporated into the
Operational Manual. Some activities related to
project interventions may result in indirect impacts
which were identified and special actions
recommended to be monitored, such as noise,
vibrations, water, soil and air pollution. The EA also
considers issues with organized crime in rural areas
and in relation with agriculture.
Project design has benefited from experiences from
the MasAgro program, and its work with small
producers in Mexico. CIMMYT will lead the
environmental and social monitoring during project
implementation, ensuring compliance with Bank
policies and bringing existent knowledge into the
process.
The potential impact of the improvement of
competitiveness on increasing the pressure on
ecosystems was also considered. Specific actions
were incorporated into the EMP to avoid impacts
through a potential expansion of the agricultural
frontier or by incorporating lands that are currently
not producing and potentially in the process of
regeneration.
The EA also assessed the potential loss of agro-
biodiversity due to the increase of the number or
percentage of producers that might focus more on
commercial grains in lieu of traditional crops. The
project will not support sub-project proposals that
threaten traditional maize varieties. Moreover, the
project aims to improve the commercialization of
traditional varieties, hence incentivizing their
production. This is expected to reduce the risk of
loss of agrobiodiversity.
Both the EA and the EMP were developed
incorporating the guidelines from the World Bank
Group on Environment, Health and Safety, also
borrowing from the expertise of CIMMYT in terms of
good management practices and quality norms.
Good practices, existent norms and regulations will
be specified in the OM such as construction and
rehabilitation norms, water and soil use regulations,
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air pollution norms, etc.
Consultations of the EA and the proposed EMP
resulted in a very broad acceptance of the project
activities; issues on production, storage, training,
markets, traditional crops, communications were
raised and incorporated into the EMP and project
design. A permanent consultation process through
the ASERCA regional offices and the joint work with
CIMMYT will secure implementation and monitoring
of potential risks identified in the process. A
checklist to secure continuous follow-up and
monitoring of considerations derived from the EMP
is included in the Operational Manual. The “Guion
Único para la Elaboración de Proyectos de Inversión�?
and the sub-project business plans to be presented
for funding will be screened against compliance with
environmental safeguards and especially designed
templates for each accepted proposal will be used
for monitoring and evaluation.
This project will not support activities that lead to
loss, conversion or degradation of natural habitats.
The project focuses on areas currently under
cultivation and with varying capacities of grain
storage and value-chain integration. The EMP has
identified all conservation areas in the seven states.
All institutions involved have agreed that no project
action would promote expansion that could directly
or indirectly induce land use change and hence
affect natural habitats. This safeguard is triggered to
Natural Habitats OP/BP 4.04 Yes ensure that these commitments are honored during
project implementation, considering that project
activities will likely take place in highly biodiverse
parts of the country. Key actions for project
compliance with this safeguard were identified and
incorporated into the EMP to avoid any unlikely
action affecting natural habitats, such as
identification of all key biodiversity areas and other
natural areas of concern where no actions should be
financed. This will be incorporated into the
screening process of sub-projects.
This project will not involve actions related to
conversion or degradation of forest areas or other
Forests OP/BP 4.36 Yes
natural habitats associated with forests, including
adjacent or downstream critical natural habitats.
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This OP is activated to safeguard native forests that
co-exist with rural areas where agricultural
production takes place and where collection centers
will be improved, rehabilitated and/or, constructed.
The EMP explains the clearance process to be
followed to secure protection of native forests that
coexist with agricultural lands where the project may
intervene, and this will be included in the screening
process for sub-project funding.
In general, the impact of this project is expected to
be positive. The EA considers the use of
agrochemicals as a risk, including other pest
management practices, as they relate to grain
storage. Based on the results of the EA, the EMP
provides a thorough analysis and action plan in the
terms of an IPMP to secure effective implementation
of this policy. This IPMP, as an integral part of the
EMP, provides an action plan for supporting the
adoption of best environmental practices and
Pest Management OP 4.09 Yes standards, complying with environmental/legal
requirements, evaluations or permits applicable, as
related to grain storage. The IPMP incorporates best
practices, technical assistance, and training aspects.
A specific analysis and recommendations are given
for insecticides used in storage practices, special
recommendations are also provided regarding
mycotoxins (aflatoxins). The experience of MasAgro
and CIMMYT were of high importance for
developing this Plan, and monitoring will be one of
the crucial activities during project implementation.
The project is expected to finance the upgrade of
existing grain storage centers as well as new
construction of small facilities. The EA indicates that
it is highly unlikely that any activity will have an
impact on objects, sites, structures, natural features
or landscapes with archeological, paleontological,
historical or any other aspect of cultural significance.
Physical Cultural Resources OP/BP 4.11 Yes Based on this, it is considered low risk that project
activities will have a potential impact on features of
cultural significance. A prior screening to sub-project
funding will include this policy and all bidding
documents, contracts, and work-orders for civil
works would follow standard environmental rules
for contractors, which include chance find
procedures for cultural property. The EA did not
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report landscapes potentially involving historical or
cultural significance where storage facilities located;
however, procedures and protocols to address
chance findings of archeological and cultural
resources during construction works, if any, will be
included in the OM, with a recommendation that
any chance finding be immediately communicated to
the INAH.
This policy is triggered given that indigenous peoples
are present in the project’s area of influence, and
could benefit from project activities. The project
seeks to increase the participation of small semi-
commercial agricultural producers. A Social
Assessment was prepared by ASERCA to assess
potential impacts on indigenous people and
strengthen the project’s performance under the
modalities that are more likely to affect these
indigenous peoples. The SA reports that the project
scope, i.e. the proposed 7 states for intervention,
comprise 59% of the indigenous population of
Mexico, with Oaxaca, Chiapas and Veracruz
accounting for the largest concentrations of
indigenous people. Areas with high concentration of
indigenous producers were identified to have limited
to no access to grain storage infrastructure.
While the project is not expected to have negative
Indigenous Peoples OP/BP 4.10 Yes
impacts on indigenous people, Indigenous Peoples
Plan (IPP), based on the Social Assessment (SA), was
developed and provides guidelines to improve
outreach and consultation with indigenous
beneficiaries, (e.g. language provisions, participatory
approaches, design and construction techniques).
The IPP seeks to provide enabling mechanisms for
indigenous people to access the social and economic
benefits of the project and receive culturally
relevant benefits without generating inequality with
other groups of social sectors of the population. It is
widely held that indigenous groups are primary
custodians of agrobiodiversity.
The SA elaborates on the information collected for
indigenous people in the project area and identifies
potential risks for these peoples. From the
organizational, communal, productive and
infrastructure point of view, several
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recommendations were made. The IPP proposes
three lines of actions: (a) reinforce participation and
reduce cultural barriers, (b) communicate in a
culturally appropriate way the opportunities of the
project, and (c) develop a grievance handling
mechanisms. The IPP also proposes a monitoring
and evaluation mechanism to ensure that activities
and recommendations are duly implemented.
A consultation process for the IPP was carried out in
agricultural production areas with high
concentration of indigenous people in the states of
Oaxaca and Chiapas. Among the participants were
producer beneficiaries of other government
programs, indigenous groups leaders, municipal
authorities, with the Consejo Consultivo from the
CDI being the initial point of contact with indigenous
leaders and invited to all consultations. Continuous
consultations at the regional or local level are also
planned given that the Consejo Consultivo will meet
again in the second quarter of 2017.
Potential negative impacts identified include: 1) The
support for grain storage near indigenous
municipalities can increase further the inequality of
these groups as: i) they rarely generate excess
production; ii) criollo maize is traditionally not
commercialized, but used for own consumption; iii)
the use of improved seeds may have limited results
without capacity building; iv) the risk of substituting
criollo for other higher value varieties; v) they need
maize for own consumption above all, and often
they don’t have enough of it; 2) To keep in mind: i)
their social structures of organization based on an
agrarian community or ejido; ii) given their
geographic isolation, improving logistics will support
the formalization of distribution and sale circuits,
reducing the power of the “coyote�? (middlemen).
Foreseen positive impacts identified include:
Reduction of post-harvest losses and better market
prices; the project may stimulate the interest by
indigenous groups to formally organize themselves
into producer associations to seek financing, to
participate in markets and limit the power of
middlemen, as well as to access “niche�? markets for
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their “specialty�? maize production; widely benefit
from capacity building related to production, storage
and access to finance and markets, as well as market
information.
The SA provides recommendations beyond IPs,
considering other vulnerable groups such as women,
youth, and the elderly. The project will collaborate
with the program MasAgro and use many of the
variables that MasAgro has been collecting,
including: gender inclusion, cultural relevance,
participation, technologies to improve maize
production, monitoring and farmer empowerment.
To address gender issues, specific consultation and
participation mechanisms will be implemented to
ensure women are aware of the project, and
contribute with their input in the design. This is
integrated into the result framework of the project.
All of the sub-projects to be financed under this
operation will be carried out on private land, owned
or leased by the ultimate beneficiaries. Even if the
project would finance rehabilitation/construction of
Involuntary Resettlement OP/BP 4.12 No new storage infrastructure (which farmers
organizations can operate), there will not be any
land acquisition/resettlement, and this will be clearly
specified in the restrictive list of funding activities in
the OM.
No dams will be constructed or rehabilitated in this
project. Project interventions will not rely on the
Safety of Dams OP/BP 4.37 No performance of existing dams as smallholder
agriculture is generally rain fed. This safeguard is
therefore not triggered.
Projects on International Waterways There are no actions in international waterways. This
No
OP/BP 7.50 safeguard is therefore not triggered.
There are no areas in dispute in the territory
Projects in Disputed Areas OP/BP 7.60 No proposed for project interventions. This safeguard is
therefore not triggered.
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KEY SAFEGUARD POLICY ISSUES AND THEIR MANAGEMENT
A. Summary of Key Safeguard Issues
1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential
large scale, significant and/or irreversible impacts:
The activities related to the physical rehabilitation of existing and/or construction of small storage infrastructure may
have some environmental and social implications. Some risks in terms of soil and water management, waste
management and the use of storage agrochemicals, as well as implications for indigenous people, were identified.
Environmental impacts are limited given that the project will not support land use change activities and no native
areas (including primary forests) will be degraded, traditional crops will not be replaced by high yielding or GMO
varieties, and no actions will be taken in Conservation or Protected Areas or their buffer zones. The Environmental
Assessment (EA) has not identified any large scale, significant or irreversible impact. However, several provisions have
been made to secure that soil, water and air are not polluted, and agrochemicals are duly managed. Special
recommendations are given to allow the participation of indigenous people in the project and reduce any potential
social negative impacts.
2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area:
There are no long term impacts anticipated in the project areas; some indirect impacts due to rehabilitation and
construction could be related to noise and vibrations, air, soil and water pollution, residues, and erosion among
others. The increase in storage capacity and the need for a growing global market of grains, may pose a challenge to
the project areas to produce more and this may have implications in terms of natural habitats and also induce an
increase in the cultural gap with indigenous people. All these actions were carefully analyzed and described in the
environmental and social analysis with specific recommendations aimed at reducing the occurrence of these risks.
3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts.
The most important alternative to the expressed environmental and social situations is to bring existing experience in
the country. This is achieved through the intended collaboration with CIMMYT (the International Maize and Wheat
Improvement Center) and their role in the national agricultural program MasAgro, focusing on the use of better
production and management practices of crops by small agricultural producers in Mexico, and in particular in the key
project states. Their technical capacity, field presence, existing environmental and social dimensions incorporated in
their program activities and especially their sustainable technologies (traditional seeds, diagnostic tools, conservation
agriculture, and post-harvest technologies) gives the project a good alternative to reduce and altogether avoid risks.
4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower
capacity to plan and implement the measures described.
In recognition of its lack of capacity to address safeguard policy issues, and given the existing capacity and experience
within CIMMYT, ASERCA is planning to hire CIMMYT to support them with the oversight of environmental and social
safeguard policies and interactions with stakeholder and the productive sector. ASERCA acknowledges the importance
of safeguards and that competitiveness also implies practices which are socially and environmentally appropriate and
sustainable, and these dimensions and the interaction with CIMMYT will help increase the quality, the risk
management and the institutional development with respect to safeguards compliance. The role of CIMMYT as a
strategic partner to ASERCA for environmental and social performance is formally defined in the Operational Manual
of the project and mentioned in the Legal Agreement.
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5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies,
with an emphasis on potentially affected people.
Main stakeholders in this project are small and medium semi-commercial or commercial producers who already store
or are interested in storing their grains. Among them are indigenous people, living in areas related to gathering
centers (centros de acopio). Consultations were designed to be broad and extensive, with specific recommendations
noted and an action plan prepared based on producer inputs in two of the most representative regions of indigenous
people who are also maize producers - Chiapas and Oaxaca. Consultations were held with members of communities
selected by a methodology which combined existing and potential beneficiaries, production and access to gathering
centers, and logistics (access). Civil society organizations, institutes, sub-national governments and producers’
associations among other participated in the consultations. A national level encounter with broader members of the
stakeholder group was carried out in Mexico City, hosted by the CDI (the National Commission for the Development of
Indigenous Peoples). Most of the information gathered to prepare both the Environmental and the Social Assessments
and derived plans, was derived from the MasAgro Program experience, which helped mainstream lessons learnt and
best practices.
B. Disclosure Requirements
OPS_EA_DISCLOSURE_TABLE
Environmental Assessment/Audit/Management Plan/Other
For category A projects, date of
Date of receipt by the Bank Date of submission to InfoShop distributing the Executive Summary of
the EA to the Executive Directors
09-Jan-2017 02-Feb-2017
"In country" Disclosure
Mexico
20-Jan-2017
Comments
Link to disclosed document:
http://www.gob.mx/aserca/documentos/sistema-nacional-de-almacenamiento-agroalimentario?state=published
OPS_I P_DIS CLOSURE_TA BLE
Indigenous Peoples Development Plan/Framework
Date of receipt by the Bank Date of submission to InfoShop
10-Jan-2017 20-Jan-2017
"In country" Disclosure
Mexico
20-Jan-2017
Comments
Link to disclosed document:
http://www.gob.mx/aserca/documentos/sistema-nacional-de-almacenamiento-agroalimentario?state=published
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OPS_ PM_D ISCLOSURE_TA BLE
Pest Management Plan
Was the document disclosed prior to
appraisal? Date of receipt by the Bank Date of submission to InfoShop
Yes 09-Jan-2017 20-Jan-2017
"In country" Disclosure
Mexico
20-Jan-2017
Comments
Link to disclosed document:
http://www.gob.mx/aserca/documentos/sistema-nacional-de-almacenamiento-agroalimentario?state=published
OPS_PM_ PCR_TABLE
If the project triggers the Pest Management and/or Physical Cultural Resources policies, the respective issues are to
be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP.
If in-country disclosure of any of the above documents is not expected, please explain why:
In-country consultations were held in Chiapas and Oaxaca and at the national level in Mexico City. Safeguard
documents' disclosure date at the local and national levels is January 20, 2017.
C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project
decision meeting)
OPS_EA_COMP_TABLE
OP/BP/GP 4.01 - Environment Assessment
Does the project require a stand-alone EA (including EMP) report?
Yes
If yes, then did the Regional Environment Unit or Practice Manager (PM) review and approve the EA report?
Yes
Are the cost and the accountabilities for the EMP incorporated in the credit/loan?
Yes
OPS_ NH_COM P_TA BLE
OP/BP 4.04 - Natural Habitats
Would the project result in any significant conversion or degradation of critical natural habitats?
No
If the project would result in significant conversion or degradation of other (non-critical) natural habitats, does the
project include mitigation measures acceptable to the Bank?
Yes
OPS_ PM_COM P_TA BLE
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OP 4.09 - Pest Management
Does the EA adequately address the pest management issues?
Yes
Is a separate PMP required?
Yes
If yes, has the PMP been reviewed and approved by a safeguards specialist or PM? Are PMP requirements included in
project design? If yes, does the project team include a Pest Management Specialist?
Yes
OPS_ PCR_COM P_TA BLE
OP/BP 4.11 - Physical Cultural Resources
Does the EA include adequate measures related to cultural property?
Yes
Does the credit/loan incorporate mechanisms to mitigate the potential adverse impacts on cultural property?
Yes
OPS_I P_COM P_TA BLE
OP/BP 4.10 - Indigenous Peoples
Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) been prepared in consultation with
affected Indigenous Peoples?
Yes
If yes, then did the Regional unit responsible for safeguards or Practice Manager review the plan?
Yes
If the whole project is designed to benefit IP, has the design been reviewed and approved by the Regional Social
Development Unit or Practice Manager?
Yes
OPS_F O_COM P_TA BLE
OP/BP 4.36 - Forests
Has the sector-wide analysis of policy and institutional issues and constraints been carried out?
No
Does the project design include satisfactory measures to overcome these constraints?
NA
Does the project finance commercial harvesting, and if so, does it include provisions for certification system?
No
OPS_ PDI_ COMP_TA BLE
The World Bank Policy on Disclosure of Information
Have relevant safeguard policies documents been sent to the World Bank's Infoshop?
Yes
Have relevant documents been disclosed in-country in a public place in a form and language that are understandable
and accessible to project-affected groups and local NGOs?
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Yes
All Safeguard Policies
Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of
measures related to safeguard policies?
Yes
Have costs related to safeguard policy measures been included in the project cost?
Yes
Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures
related to safeguard policies?
Yes
Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately
reflected in the project legal documents?
Yes
CONTACT POINT
World Bank
Svetlana Edmeades
Senior Agriculture Economist
Borrower/Client/Recipient
Secretaría de Hacienda y Crédito Público (SHCP)
Implementing Agencies
SAGARPA
José Eduardo Calzada Rovirosa
Minister of Agriculture, SAGARPA
jose.calzada@sagarpa.gob.mx
ASERCA
Alejandro Vazquez Salido
Director of ASERCA
alejandro.vazquez@aserca.gob.mx
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Grain Storage and Information for Agricultural Competitiveness (P160570)
FOR MORE INFORMATION CONTACT
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 473-1000
Web: http://www.worldbank.org/projects
APPROVAL
Task Team Leader(s): Svetlana Edmeades
Approved By
Safeguards Advisor:
Practice Manager/Manager: Garry Charlier 06-Feb-2017
Country Director: Jutta Ursula Kern 08-Feb-2017
Note to Task Teams: End of system generated content, document is editable from here.
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