Developing a Sustainable Agricultural Insurance System in the PRC

Strengthening Cooperative Institutions to Support Sustainable Livestock Production in Mongolia

Irrigation Project Cultivates Jobs and Incomes in Ningxia, the PRC

ADB's Ningxia project established 180 hectares of vineyards, rehabilitated 823 ha with improved farming practices, and planted 225 ha of shelterbelts. Photo: ADB

Shortages of water, poor agricultural practices, and unsustainable farming held back progress on poverty reduction in Ningxia Hui Autonomous Region, PRC.

ADB approved the Ningxia Integrated Ecosystem and Agricultural Development Project in December 2012 to expand water-saving irrigation and strengthen the partnership of enterprises with farmer households.

The project had strong development impact in terms of achieving water conservation and boosting rural incomes from improved agriculture production, as well providing jobs, almost half of which were taken up by women, and reducing greenhouse gas emissions.

Early in the 21st century, as much of the rest of the PRC was powering toward poverty eradication, Ningxia Hui Autonomous Region (NHAR) continued to suffer persistently high incidences of poverty in rural areas. Shortages of water, poor agricultural practices, and unsustainable farming held back progress.

Recognizing this, the NHAR government from the late 1990s promoted the development of horticultural crops—mainly goji berries, grapes and Chinese dates—to boost agricultural productivity and farmers’ incomes. The Ningxia Agriculture Reclamation Group (NARG), a commercialized state-owned enterprise, pioneered the growing of grapes for wine making. The result was higher value crops and greater employment opportunities for local people.

Since 2010, the Asian Development Bank (ADB) has supported NHAR’s campaign to better manage its agriculture. ADB approved a loan of $70 million for the Ningxia Irrigated Agriculture and Water Conservation Demonstration Project in December 2012 to expand water-saving irrigation and strengthen the partnership of enterprises with farmer households.

Sustainable farming practices

The project focused on improving irrigation systems, (vineyards and agriculture farms, grape processing capacity, and institutional and farmer capacity.

“The project was designed to promote sustainable farming practices and improve the agricultural value chain,” says ADB Senior Project Officer (Environment) Niu Zhiming. “The ADB project in Ningxia demonstrated water-saving technologies and climate resilient agricultural practices in modern farms, including irrigation scheduling and fertigation, which is adding fertilizers to the irrigation pipes, optimized cropping management, and high-value crops.”

The project replaced the existing irrigation network with higher efficiency systems and introduced drip irrigation and hose irrigation in the targeted vineyards and Chinese date orchards. It also supported the construction of water storage ponds, small pumps, on-farm water distribution pipe networks, and other facilities. The project exceeded its target by increasing the total irrigated area by 2,694 hectares (ha) while saving about 3.11 million meters in water.

The project established 180 ha of vineyards, rehabilitated 823 ha with improved farming practices, and planted 225 ha of shelterbelts. It also supported associated land leveling, windbreak shelterbelts, improved farming practices (including pest management and balanced fertilizer application, and conservation tillage), and access roads in the project vineyards and orchards.

At completion, the project also built a full grape processing capacity at two farms as planned, both equipped with a quality monitoring system. The processing systems including grape crushing, pressing, and juice storage facilities were put into operation in 2018.

Strengthening institutions

The project strengthened the capacity of the executing and implementing agencies to undertake the project and provided training to farmers on water-saving irrigation and new farming technologies. It also helped to improve monitoring systems for quality control and enhance its marketing.

“Following completion in June 2020, the water-saving irrigation and new farming technologies have been applied extensively in the project area, and the farmers’ capacity to use these technologies has been significantly strengthened,” says PRC Country Director Yolanda Fernandez Lommen. “NARG has adopted a quality monitoring and control system for its vineyards and wineries, and the water users associations are extensively involved in irrigation management.”

More than 8,600 farmers were trained in water and soil conservation, sustainable horticultural management, and plant disease prevention and pesticide management. Some 340 staff were trained from cooperatives and the water users associations were trained in sustainable horticultural management. About 40% of trainees in horticultural management were women.

Female farmers working at the state farm vineyard. Photo: ADB

Achieving gender targets

More generally, the project achieved its 16 gender targets, with more than 47% of the 17,500 jobs created under the project—totaling 11,872—were taken by women. Meanwhile, 4,908 women out of 8,612 farmers participated in various trainings, including water and soil conservation, sustainable horticultural management, and plant disease prevention and pesticide management.

The total annual greenhouse gas emissions reduction from the project is estimated at 3,874 tons of carbon dioxide equivalent starting from 2020, mainly from the increase in vegetation after the planting of vineyards and orchards and the ecological shelterbelts. The percentage of land under water conservation irrigation to total irrigated land in Ningxia increased from 19% in 2010 to 49% in 2020 under the ADB Ningxia Integrated Ecosystem and Agricultural Development Project.

The average per capita rural income increased from CNY4,675 in 2010 to CNY13,889 in 2020. In addition to the increased area of water-saving irrigation, the project supported high-value agriculture such as yellowhorn and protected agriculture in Binggou and Ma’anshan, which contributed to the increase in rural income.

“The project had a strong development impact in terms of achieving water conservation and boosting rural incomes from improved agriculture production, delivering its planned outputs effectively,” says East Asia Director General M. Teresa Kho. “It achieved its intended outcomes by increasing quality and value of horticultural crops in Ningxia. The project also made positive contributions to the ADB Strategy 2030 long-term organizational priorities.”

 Graham Dwyer

Graham Dwyer

Principal Communications Specialist, Department of Communications, ADB

This article is reproduced from Asian Development Bank.

FAR Sight Needed

Ensuring a constant level of grain production in the PRC and maintaining the country’s gains in eliminating poverty are put forward as twin policy priorities in the No 1 Central Document, released by the State Council in February. These priorities are consistent with various other government visions for the coming years, including the 14th Five-Year Plan for National Economic and Social Development (2021–2025), and will also contribute significantly to achieving the United Nations Sustainable Development Goals.

However, reaching these targets in a way that benefits farmers, agriculture and rural development (FAR), or san nong in Chinese, is far from straightforward, due to challenges such as soil pollution, the effects of climate change and the urban-rural income gaps. Addressing these challenges will make a far-reaching contribution to the country’s development agenda.

The first challenge is achieving a balance between the quality and quantity of food supply. The demand for more nutritious and healthy foods is increasing. For example, the production of meats is anticipated to increase by 15 percent from 2021 to 2025. An additional 30 million hectares of land is needed to grow the vegetables and fruits required to improve people’s diets. At the same time, conservation agriculture and fewer chemicals in farming may reduce yield in cultivated lands while benefiting the environmental quality.

Soil quality is another major challenge as a result of land degradation, chemical pollution and plastic residues. Although programs to combat soil pollution have had some success since 2016, there must be methodical efforts to remove existing pollutants from soils completely while preventing additional pollution from occurring. Also, resources such as water and fertilizers should be improved further to boost efficiency. The PRC’s overall water use efficiency is at a relatively low level and needs to be improved significantly to be compatible with the country’s sustainable development.

Extreme weather events such as floods and drought caused by climate change pose growing risks to crop systems. For example, flooding in the summer of 2021 damaged about 10 percent of the cultivated land in Shanxi province and about 6 percent in Henan province. Agriculture accounts for more than 10 percent of the PRC’s total greenhouse gas emissions. The stepping up of meat, milk and egg production during the 14th Five-Year Plan period may add about 330 million metric tons of carbon dioxide equivalent emissions. Increasing use of machinery in farming (from the current 70 percent to 75 percent by 2025) would also emit more GHGs into the atmosphere. Emissions on this scale may present an obstacle to the PRC’s pledge to peak its carbon emissions before 2030.

Although farmers’ incomes have grown steadily in  past decades, a further challenge is the still significant income gap between urban and rural residents. Incomes from crop growing are relatively low due to low grain prices and limited scale farming. Agricultural value chains need to be strengthened further to distribute more earnings to farmers.

Addressing these challenges can further the country’s development agenda and showcase promising approaches to balancing sustainable agriculture production with prosperous rural development. Here are four ways to help achieve this.

First, agricultural facilities and infrastructure need to be strengthened further.

The National High-Standard Farmland Development Plan aims to expand the area of high-standard farming lands to 71.7 million hectares by 2025 and to 80 million hectares by 2030. These lands need sufficient irrigation facilities, road and electricity connections, soil and water conservation measures, and better environmental management. Resilience to extreme weather events will also need to increase. Improved farmlands will mean that grains outputs can be maintained.

Second, sustainable land management and climate-smart agriculture should be expanded to improve soil quality and strengthen climate resilience.

Sustainable land management adopts integrated approaches to ensure land productivity while safeguarding its ecosystem services. It can address the interlinked challenges of food security and climate change by enhancing resilience and reducing emissions through less external inputs (such as energy, chemical fertilizers and pesticides) and increased organic carbon in soil. Climate adaptation can be enhanced through crop varietal selection, plant breeding, cropping patterns and ecosystem management. Climate change mitigation can be strengthened through reduced tillage, straw reapplication, improved fertilizer efficiency and restoration of degraded lands.

Third, science-based technologies and approaches need to be promoted.

Currently, croplands using high efficiency water-saving irrigation totals about 23.3 million hectares and this is expected to expand to 34 million hectares by 2025. This will greatly improve agricultural water use efficiency. While stabilizing or reducing the use of chemicals, application of biofertilizers or organic fertilizers needs to be scaled up. More nature-based solutions should be applied to improve the agricultural environmental quality and enhance resilience, such as buffer zones, ecological ditches and vegetative erosion control. Science-based monitoring of key soil and environmental indicators will be necessary.

Last, farmers’ incomes should be boosted through the optimal scaling of croplands, which can promote good agricultural practices and improve management efficiency.

These will trigger greater labor productivity and promote the transfer of labor from farming to non-farming activities, resulting in the more efficient use of resources, such as water, fertilizers and machinery. Protected agriculture, including greenhouses, can also increase the economic output of the land. Opportunities should be explored to further develop value chains with greater reliance on higher-value crops and organic or green products.

In the end, the full engagement of farmers is crucial. Only with their awareness of new approaches and improved capacity to adopt them can the PRC achieve its aim of expanding prosperity and vitalizing rural society.

Zhiming Niu

Zhiming Niu

Senior Project Officer (Environment), East Asia Department, Asian Development Bank

This Op-Ed is reproduced from China Daily.

Saving Mongolian Forests with Finnish Expertise

Mongolia's forests are under threat. An ADB project, financed by the Japan Fund for Prosperous and Resilient Asia and the Pacific, is building resilience of forest ecosystems by boosting capacity for forest management.

Boreal forests cover 14.2 million hectares or 9% of Mongolia. With support from ADB, expertise from Finnish partners, and local participation, sustainable forestry is promoted to build the resilience of Mongolia's forests.

Improving the livelihoods of local communities through sustainable forest management would require policy changes. Mongolia is building resilient forests, restoring and conserving forest resources, as well as developing economic opportunities.

Famously known for its deserts and steppes, Mongolia is actually a forest nation too. Boreal forests cover 14.2 million hectares or 9% of this vast country. Compared with tropical forests, boreal forests store twice as much carbon per hectare, much of it below ground. They are the earth’s largest terrestrial carbon sink, a hugely important factor in the fight against climate change.

But Mongolia’s forests are under threat. More than 140,000 hectares of forest are lost every year to fires, insect pests, grazing, and illegal logging. Being one of the coldest countries in the world, Mongolia is already seeing the impacts of climate change, with average temperature increases of more than 2 degrees Celsius, and significant changes to once reliable precipitation patterns. Average annual precipitation in northern Mongolia is around 220 millimetres, less than a quarter of the globally averaged annual precipitation. Drier forests contain large amounts of deadfalls and debris, further increasing the fire risks.

Unsustainable and illegal logging poses another threat. The Government of Mongolia has enacted a variety of laws and policies to curb the loss of forest cover. One of these, the Law on Environmental Protection, was amended in 2005 to allow for the creation of Forest User Groups (FUGs), voluntary organizations of local citizens that are tasked with the appropriate utilization and rehabilitation of local forests in accordance with civil law. The implementation of FUGs has resulted in a significant decrease in illegal logging wherever these groups are active.

Sustainable Forest Management

In 2015, the Mongolian government and ADB signed a letter of agreement for a technical assistance (TA) project to improve sustainable livelihoods for local communities through sustainable forest management. The project, totaling $2.1 million, was financed by grants from the Government of Japan through the Japan Fund for Poverty Reduction, now Japan Fund for Prosperous and Resilient Asia and the Pacific. The executing agency was the Ministry of Environment and Tourism, represented by its Forest Policy and Coordination Department.

The project targeted building resilience of boreal forest ecosystems, supporting policies around forest protection while encouraging private enterprises and FUGs to get involved in forest management. “To achieve these goals, the project was designed to boost capacity of governmental forest management line agencies and to strengthen forest product value chains. It was also necessary to improve FUGS’ capacities to managing the forests for which they are responsible,” says ADB Country Director for Mongolia Pavit Ramachandran. “The project also demonstrates technology for wood processing systems.”

In 2015, NIRAS, a multi-disciplinary consulting company with its global headquarters in Denmark, was awarded a contract of $2 million to provide the technical assistance. NIRAS’ Finland office, jointly with their local partner MonConsult LLC., implemented the TA.

Forestry a Finnish Specialty

As one of the most forested countries in Europe, with trees covering two thirds of its area, Finland has a long history of working for a balance between intensive industrial use of forests and sustainability. Until the 19th century, Finnish forests were heavily exploited for building materials and fuel as well as for exports, later for pulp and paper production. This was a concern for Anton Blomqvist, the father of Finnish forestry. Foresightful, he founded its first professional institution to train forest officers in 1862, the Evo College forest school, only two years after the establishment of Finland’s Ministry of Agriculture. In 1907, the Finnish forest management society (Tapio) was founded as the first nongovernment organization to assist with forestry management and the rational use of forest resources.

“We are proud to have played a role in promoting the importance of sustainable forestry and building related capacities in Mongolia,” says NIRAS Regional Director for Asia and Pacific Antti Inkinen. “NIRAS Asia, with head office in Manila, specialises in transferring our global expertise to the many countries NIRAS works in with ADB. In the case of Mongolia and forestry, this international expertise was firmly anchored in Finland, specifically applied in developing transparent fair value chains for forest products and services to generate new income and employment opportunities for the local community while securing protection of the natural environment.”

The project engaged in a variety of activities, including business management training; the integration of global information systems to capture related data in the planning of the sustainable forest management; and forest and non-forest product development. The Bayan Tunkhel Cooperative was created as a pathway for FUGs to derive economic benefit from harvesting forest products, utilizing wood processing technology, and providing biomass for heating.

The project found that improving the livelihoods of local communities through sustainable forest management would require policy changes. These would promote community-based forest management planning, the removal of ineffective timber quotas to allow FUGs to harvest more valuable products under controlled circumstances, and a greater sense of ownership that allows FUG members to derive economic value from their activities.

“The outcome from this TA puts forestry high up on the agenda in Mongolia,” says ADB Principal Environment Specialist Suzanne Robertson. “We see an increased environmental awareness and the role of forests within that, which, given the importance of forests in the fight against climate change is extremely welcome.”

Mongolia’s boreal forests act as ecological security buffers, being a source of food and fuelwood and livelihoods to local communities. By developing methods and tools, along with capacity building and knowledge sharing, the project has enabled FUGs to prepare sustainable forest management plans that restore and conserve forest resources, as well as develop economic opportunities. Continuing to support FUG’s is a good way to ensure the future of Mongolia’s boreal forests.

Providing Long-term Development Support

The ultimate goal of ADB’s support is to help achieve a climate-resilient, sustainable forestry sector which benefits local livelihoods. Achieving this requires a long-term commitment. In 2021, the Government and ADB initiated a follow-up project, the Forest Sector Development Program (2021–2023). The project is being funded by another generous grant ($0.8 million) from the Government of Japan through the Japan Fund for Prosperous and Resilient Asia and the Pacific. The program is in the early stages of implementation and will be reported on in the future.

ADB, Mongolia and Europe 

Since Mongolia joined ADB in 1991, ADB has been Mongolia’s largest multilateral development partner, supporting the country’s transformation to a middle-income, market-based economy. In those 30 years, ADB has committed sovereign loans totalling $3 billion, nonsovereign loans totalling $182.1 million, grants of $335.7 million, and technical assistance worth $187.1 million for Mongolia. The blueprint for ADB’s operations in Mongolia, the Country Partnership Strategy (2021–2024), focuses on fostering inclusive social development and economic opportunity, climate-resilient infrastructure to drive competitiveness and diversification, and resilience for sustainable, green, and climate-conscious development.

ADB’s European Representative Office, based in Frankfurt, Germany, works with companies and governments across ADB’s 17 European member countries to facilitate the application of European expertise in ADB projects in its developing member countries.

This article is reproduced from Asian Development Bank.

Sustainable Tourism Development Project in Mongolia

Improved facilities help transform Khuvsgul Lake and On-on Balj national parks as models of economically inclusive tourism and conservation.

Sustainable tourism development projects are scaling up in Mongolia with support from ADB.

Inclusive planning, waste management, enabling infrastructure, and improved park management are key solution to sustainable tourism at national parks in Mongolia.

The project aims to transform two national parks as models for economically inclusive tourism and conservation in these protected areas through improved park infrastructure, sanitation, and capacity to sustainably manage tourism growth.

Approaches to Eradicate Absolute Poverty in Guangdong Province, the PRC

Multidimensional Evolution of Rural Development Policy in the PRC

Scaling Natural Capital Investments in the Yellow River Ecological Corridor

Three Cities of Guangxi Realizing Their Potential in Regional Networks

The Guangxi Zhuang Autonomous Region is one of the less developed provinces in the PRC, yet holds massive potential at the intersection of two regional cooperation programs.

Development of three of the region’s cities—Baise, Chongzuo and Fangchenggang, which are at strategic positions on the regional transport corridors of the Greater Mekong Subregion Economic Cooperation Program—was needed to support economic transformation.

An ADB project has accelerated urban development of three cities in Guangxi as part of the national development strategy to integrate this less-developed southwestern region with the international market through transport networks.

The Guangxi Zhuang Autonomous Region of the PRC is among the country’s less-developed provinces. Yet it holds massive potential for growth due to its relationship with two major regional economic initiatives—the Greater Mekong Subregion Economic Cooperation Program (GMS) and the PRC-Association of Southeast Asian Nations (ASEAN) Free Trade Area.

Guangxi is the only western province or autonomous region in the PRC that has both deepwater seaports and land ports at its international borders. Through intensive investment in construction over the past two decades, Guangxi has built a well-developed expressway system that directly connects Yunnan and Guizhou—two landlocked and less-developed western provinces—with Guangxi’s seaports at the Beibu Gulf and its land ports at the international border with Viet Nam.

Regional Potential

Further development of three cities in Guangxi—Baise, Chongzuo, and Fangchenggang, which sit at strategic positions on the GMS’s regional transport corridors—was needed to foster the region’s economic transformation. To achieve this goal, the government proposed a development project as part of the ADB’s support for accelerated urbanization in the area and balanced economic development to alleviate regional poverty.

In 2010 ADB approved a loan of $150 million for the Guangxi Southwestern Cities Development Project to improve living conditions in three cities of Guangxi, the PRC while strengthening their ability to benefit from regional economic cooperation and integration. Work included construction and upgrading of roads; improvement of municipal services such as water supply pipelines, drainage and sewage systems, and lighting and traffic control; landscaping; and the building of coastal dikes and public education facilities to promote mangrove and lakeside environmental protection.

“The project has accelerated urban development not only through creating jobs away from agriculture for poor farmers from the surrounding counties, but also as part of the national development strategy to integrate this less-developed southwestern region with the international market through transport networks,” says Director General of ADB’s East Asia Department Teresa Kho.

Dramatic Growth

From 2008 to 2019, each of the three project cities showed dramatic growth in their per capita gross domestic product (GDP). Fangchenggang increased its per capita GDP from $3,680 to $13,784; Chongzuo’s GDP increased from $1,620 to $8,246; and Baise’s GDP increased from $1,580 to $11,213.

About 4.4 million residents have directly benefited from ADB’s project in three cities of Guangxi, the PRC. Some 22,300 jobs were created, with two thirds of the jobs filled by ethnic minorities. One third of the created jobs were held by women.

“Minorities had the opportunity to participate fully in all phases of the project cycle through information disclosure, and community consultations and meetings,” says ADB Senior Project Officer Niu Zhiming. “The project provided scope for women’s effective project participation and access to employment opportunities through training and capacity building activities. These have contributed to changing the traditional way infrastructure projects were carried out in the project cities, bringing a focus on gender equality into the mainstream.”

With new or improved roads, increases in traffic speeds ranged from 14% to 65% across the three cities (against a target of 5%). Improvements in urban roads and related infrastructure have in turn contributed to the project cities’ overall development.

Environmental and Economic Benefits

The project also generated significant environmental benefits. An almost 4-kilometer coastal dike built at Fangchenggang provides once-in-30-years flood protection for 520 hectares of land. It forms a barrier protecting the mangrove forest from urban development as well as providing recreation space for residents. In Chongzuo, environmental improvements at Shuikou Lake significantly reduced pollution flowing into the lake and saw water quality improve from Class III at appraisal to Class II of Ambient Surface Water Quality in 2020.

Walkway along the coastal dike in Fangchenggang, part of the city’s environmental protection.

“The project created significant social and economic benefits during implementation and since completion, and these have continued in the three cities,” says ADB’s Country Director to the PRC Yolanda Fernandez Lommen. “It helped to improve local people’s living standards and create a convenient transportation environment. The project also contributed to sustainable socioeconomic growth and regional integration development.”

 Graham Dwyer

Graham Dwyer

Principal Communications Specialist, Department of Communications, ADB

This article is reproduced from Asian Development Bank.

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