Rehabilitatinga DegradedWatershedA Case Study from China’s Loess Plateau

Learning series on sustainable water and land management

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T he Loess Plateau Case Study describes the transformation of a large area of degraded watershed in China. It is largely based on the two Loess Plateau Watershed Rehabilitation Projects, funded by the Chinese Government and The World Bank and implemented from 1994-2005. The two projects restored a vast area of degraded watershed and improved

the wellbeing of millions of rural households, the majority of whom lived in poverty prior to the projects.

Told as a story, the case allows the reader to easily absorb key lessons about watershed restoration that can be applied in other parts of the world. Viewed through the eyes of a farmer who returns to his hometown after a long absence, the case study begins by describing the changes in a poor rural county that have taken place during the decade of project implementation. Farmer Zhang is shocked to see a verdant, tree-filled landscape has replaced the brown barren hills of his youth and that his family members and their fellow villagers have escaped poverty and are engaged in a variety of profitable and sustainable ventures.

The study continues by analyzing how the project interventions broke the vicious cycle of environmental degradation and unsustainable farming practices and helped catalyze a virtuous cycle that has restored the watershed and enriched the lives of its inhabitants. It outlines the challenges facing Chinese project director, Huang Ziqiang, and World Bank task team leader, Juergen Voegele, in designing an effective project and systematically describes the steps taken to transform the environment. The study is divided into three parts: Part A, “Living on a Moonscape” describes the project area before the project begins; Part B, “The Transformation” gives the reader a glimpse of the changes that have taken place; and Part C, “Seeking Solutions under a New Approach” explains the key elements that enabled the transformation in detail.

The case study uses the Harvard University Case Method pedagogy, and pilots its use in teaching the management of natural resources. A teaching note is available for those wishing to teach in a face-to-face setting. Teaching is enhanced by a series of film clips edited by the WBI team from movies produced by Environmental Education Media Project, which filmed changes over the life of the Loess Plateau projects. The case study and supporting materials will be made available online by WBI.

The case study is a module of a learning program from the Climate Change Unit at the World Bank Institute (WBI). The objective of the program is to improve the capacity of client countries to improve land-water management and cope with climate change. The Loess Plateau case illustrates the link between land and water management, soil-water conservation and livelihoods in watershed management. It is particularly helpful in demonstrating the necessity of addressing food security and poverty reduction hand-in-hand with ecosystem restoration.

-The Case Study Team

Forward

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Sadly, Zhang Junyou bid farewell to his family and began the day-long trek to the town where he could catch the long-distance bus to the city. There, he would join millions of other migrants seeking work. As

the oldest child, he had made the painful decision to leave the land his family had farmed for generations, so he could earn money to send home and give his parents and siblings a better life. Finding ways to put food on the table was an ever-increasing worry for the family. It was 1990 and while most of China was transforming, and land reform was greatly lifting productivity, these changes had scarcely touched the land where Zhang lived.

Zhang was born in a small village in the hills of Ansai County, Shaanxi Province, on China’s vast, desolate Loess Plateau, where 50 million people struggled to survive on one of the most degraded ecosystems on earth. For many, dwellings were simply candle-lit caves. Typical of households on the Plateau, Zhang’s family lived below the poverty line, earning less than US$75 a year. All their time and energy was taken up in the struggle to feed the family with what they could grow on eroded hillside slopes, some so steep they could barely stand up. Each year the family had to rely on relief grain to supplement their meager harvest of drought-hardy millet, buckwheat and beans. To find grazing for their goats, they had to go further and further afield. Year after year of

drought squashed any hope of planting more lucrative crops. There were no surplus goods to sell, and with dirt-track roads almost impassable in winter and in time of floods, the village was isolated from any possible market.

China’s Loess Plateau covers four provinces (640,000 square km), an area bigger than Kenya. It was created two million years ago by the deposition of wind-blown dust and by glacial till, called loess, which was left behind by retreating glaciers. Loess is good agricultural soil but prone to wind and water erosion, which has carved deep gullies into the Plateau, transforming it into a maze of sub-watersheds. For thousands of years, the ancestors of farmers like Zhang had felled trees so they could plant crops on steep slopes, and their sheep and goats had grazed the vegetation bare. As a result, what little rain fell in the wet season ran straight into the gullies, taking fertile topsoil away with it. With no protection from the wind, dust storms whipped across the seemingly uninhabitable moonscape, depositing a dirty yellow film on buildings as far away as Beijing, some 500 km away. Up to four billion tons of soil, sand and mud ran off the Plateau each year, having a disastrous effect on the downstream reaches of the world’s sixth largest river - the Yellow River.

Part A: Living on a Moonscape

Cave-dwelling

Loess Plateau (within red), China

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Degraded land upstream, disaster flows downstream

Until it cuts through the Loess Plateau, the almost 5,000 kilometer long Mother River—the Cradle of Chinese Civilization—runs clear. Downstream, it is the most sediment-laden river in the world, prompting the evocative name “Yellow River”. The river has over the years become a ‘suspended river’ – as in its lower reaches the riverbed is some 2 meters above the surrounding lands. Dikes have continuously been made higher to keep up with the rising riverbed, and breaches in the dikes have led to some of the world’s worst floods. It was clear that something would have to be done about the sediment entering the river from the Loess Plateau, but this was easier said than done.

Huang Ziqiang often lay awake at night worrying about how things might be changed. He was the director of the Bureau for Water and Soil Conservation, of the Yellow River Conservancy Commission, which falls under the Ministry of Water Resources. His Bureau was responsible for soil and water conservation; agriculture, forestry and livestock fell under other ministries. Huang was a well-respected water conservation manager, and an engineer by training. For twenty years, he had led the challenging task of promoting soil conservation on the Loess Plateau. His offices employed hundreds of China’s best engineers and soil scientists. But, despite their technical competence and relentless effort, the problems of the Loess Plateau were only increasing. As the population expanded, unsustainable farming practices led to ever-worsening ecological degradation.

Millions of dollars had been spent by various ministries and departments, but the efforts were not well coordinated and often worked at cross-purposes. To develop livestock, sheep and goats were distributed to farmers, but they ate the seedling trees provided by reforestation programs, and further aggravated soil erosion. As the degraded land

Severe soil erosion

Sheep grazing on slopes

Life on the barren land

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produced less and less grain, families were forced to farm higher on the slopes and graze more livestock on the slopes to avert hunger. This added to the problems Huang’s programs had been trying to address.

“The Government has tried just about everything: campaigns to terrace slope lands and to increase vegetation cover, tree planting, and building of dams to intercept sediment runoff and create flat land in gullies,” Huang reflected. “Literally every village had received funds at some point. But with population pressure, continued unsustainable practices, and such a large area to cover, these small investments were like scattering a handful of sesame seeds - there has been little visible impact.”

What were those trees for, anyway?

As various ideas were tried and failed, farmers like Zhang had become cynical. As the bus took him further from home, he recalled how village leaders had organized a yearly campaign to “green the Loess Plateau.” For weeks, the villagers hiked up the hills to plant tree seedlings and grass. The optimism he felt for this activity as a child was soon replaced by pessimism as an adolescent. The campaigns took valuable time that was needed to look after food crops and animals, and the results were always disappointing. The number of trees planted in his village alone would probably have turned the entire county green, had they survived!

The tree varieties planted were chosen to stabilize the soil, not to bear fruit, so farmers never saw them as a source of income. Despite various campaigns urging them to care for the trees, most villagers ignored any that survived. As the trees were planted on collectively-owned village land, any benefits from them would not necessarily go to the farmer who cared for them. What were those trees for, anyway? Who had extra cash to spend on fertilizer and pesticides to ensure that they grew properly? Who could afford to wait for many

years for any income in return? Besides, any investment in trees was likely to disappear into the stomachs of the many village goats.

Zhang also remembered other campaigns to reduce the erosion and increase farmland. Terracing was popular with the villagers, and could create areas of flat land up to three meters wide, far better for crops than the hillside. But, even if anyone could afford a tractor, the narrow, hand-dug terraces could only be worked by ox and plough. They crumbled easily in heavy rain and repairing them took much labor, effectively wiping out any gain. Since it was often not clear who the terrace belonged to, the chances of repair were low indeed.

Time for new thinking

Although farmer Zhang did not know it, in 1990 the Chinese government was preparing a new project, which would finally bring lasting change to the Loess Plateau. The motivation was another project – a proposed US$5 billion dam to provide flood protection for people living downstream of the Loess Plateau. But both the Government and the World Bank, a multilateral development bank which had been asked to loan funds for the dam, were concerned that upstream soil erosion in the Loess Plateau watershed would reduce the dam’s useful life. In response, both sides agreed to invest in the Loess Plateau Watershed Rehabilitation Project, to cover four provinces on the Plateau, in one more attempt to restrict the flow of sediment into the Yellow River and develop the local economy.

Huang Ziqiang was now given the task to look for a comprehensive solution to the degraded watershed, working with World Bank agricultural economist, Juergen Voegele, team leader of the Bank project. In 1991, Huang and Voegele spent three weeks traversing the hills and gullies of the Loess Plateau, in a mad dash to cover as much territory as their 4WD jeeps, and the washed-out roads, would allow. They were looking for anything that might give them hope that

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the moonscape could become green and fertile. “Someone, somewhere must have tried something that worked”, they thought.

But as they surveyed yet another barren and eroded watershed, and listened to more villagers recount their futile efforts to escape poverty, the enormity of their challenge was clear. “The Loess Plateau is the hardest bone to chew,” said Huang. “The region is far behind the rest of the country.”

Still, Huang knew that flat agricultural land in nearby areas could yield 10 tons of wheat per hectare, ten times as much as was produced on the steep slope land. The Loess soil had the potential to produce good crops, as long as water could be retained instead of running off. Both Huang and Voegele were deeply moved by the stories they heard. Voegele observed a thin, fragile-looking woman kneeling in a dry and barren field, a small basket at her side. When she told him she was collecting wild plants to feed her children, because she did not have enough grains to eat, he was moved to tears – and even more determined to find a solution.

Huang knew all too well about hunger on the Loess Plateau from his two decades of field work in the Bureau. The Watershed Rehabilitation project, with its emphasis on farmer livelihoods, enabled him to focus on breaking the vicious cycle of poverty and watershed degradation, and the intensive village visits and farmer interviews further strengthened his resolve. In the watersheds Huang and Voegele visited, literally every square foot of arable land was cultivated. It was shocking to see farmers risking dangerous falls by tending their crops on slopes close to 40 degrees.

The two men were also surprised to find that many farmers, who had the ability to make improvements on their land, were unwilling to do so. They met one skillful farmer who had planted orchard trees on steeply sloped wasteland and after several years managed to bring in a bumper crop. Huang asked

him if he would like to expand his operation on the plateau top, which was collectively owned. He responded that he preferred the wasteland, where he could be assured the harvest belonged to him.

When Voegele reviewed what they had heard in their weeks in the field, the problems seemed intractable. His thoughts kept coming back to three key dilemmas: How could the local economy be improved while at the same time conserving the land? How could poor farmers be encouraged to contribute to public goods like soil and water conservation? And how could they change mindsets and farming habits of thousands of years and show farmers a way out of poverty?

Out of these dilemmas, the “Loess Plateau Watershed Rehabilitation” project was born, with Huang and Voegele as its principal architects. It was clear that at the heart of the Loess Plateau problem was the vicious cycle of degradation that trapped the Plateau people. The key seemed to be finding a breaking point in the vicious cycle, and more critically, to turn it into a virtuous cycle. To do this, and to make a difference, both men knew they would need to come up with fresh thinking and a brand new approach.

Cultivation on slopes

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After 15 years away from home, Zhang Junyou returned in 2005 to a series of surprises. Arriving in the county center, Zhang was amazed to find he could now take a bus to his village. Instead of the dirt

track he remembered, there was a wide, gravel-paved road. The view from the bus window was unrecognizable – maybe he had boarded the wrong bus! The land had turned green for as far as the eye could see. The once-brown hills were now a forest of pines and bushes, and the formerly eroded gullies were covered with hardy shrubs and grass. The old slope land was now covered with neat green terraces, where wheat, corn and potatoes grew in abundance. It was odd to see no signs of drought – had the weather patterns changed during his absence? Even in the best of years the land used to be parched and the crops he remembered were always starved for moisture. He spotted apple trees and other trees he did not recognize on some of the terraces and on the hills, but there was no sign of the goats that he used to see on the nearby hills.

As the bus approached the village dwellings Zhang was in for more surprises. The old earthen caves of his childhood had been replaced by brick dwellings with tile roofs sporting antennas and satellite dishes! The villagers no longer needed to travel to get medical help; they had their own clinic in the village center. A newly-built school was packed with students – clearly more of the village families could afford school fees. Zhang’s first dinner at home was a joyous occasion. Large bowls of steaming wheat noodles had replaced the millet gruel he remembered from his childhood. His mother served more dishes than he had ever seen and most of them

contained meat – a prize reserved for only the most special occasions in the past

His parents had aged visibly, but this could not hide their enthusiasm for the changes that had occurred in their lives. Yields on their new terraces were double and sometimes triple what they had enjoyed in the past. Farming was easier now. Because they used tractors to plow their terraces, the family had time and resources to cultivate small groves of apple and pear trees.

Zhang’s younger brother, now married with his own family, was enthusiastic about his new sheep and cattle-breeding venture. One of his older uncles joined the party. He complained loudly that the mutton served at dinner was not as tasty as meat in the old days, when the sheep grazed freely. But even he reluctantly admitted that the sheep and cattle cared for by his son were very profitable. Zhang’s younger sister focused her efforts on fruit trees, and her family no longer bothered to grow grain. She had plenty of cash to buy what her family needed now that her trees bore fruit, and her husband had found steady work at a newly opened small fruit processing export factory located in the county center.

Zhang’s family’s new circumstances were not unique. By 2005, farmers throughout the project area were enjoying higher yields and more income-earning opportunities. For most, hunger was only a distant memory. The greening of the Loess Plateau, once just a slogan on billboards, had become a reality, thanks to the implementation of the Loess Plateau Watershed Rehabilitation projects. What had seemed impossible in 1990 was now delivering even more than had been hoped for when planning for the projects began.

Zhang was proud of his family and village for bringing about this change, and peppered them with questions to find out how they had done it, while his mind raced with plans for his own future. One thing was certain - he no longer needed to plan for a long bus ride back to the construction job in the distant city.

Part B: The Transformation

Land covered with terraces After projects - gullies covered with trees, hardy shrubs and grasses

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In the two years it took to prepare the Loess Plateau watershed rehabilitation project, the team led by Huang Ziqiang from the Upper-Middle Reaches Bureau of the Yellow River Commission and the team led by Juergen Voegele from the World Bank worked closely together

and visited all four provinces and numerous villages on the Plateau. Searching for solutions, they travelled through some of China’s poorest counties. Listening to farmers lament their difficulties putting food on the table drove home the point that the Government and the Bank must focus as much on improving farmer livelihoods as they do on solving the problems of ecological degradation.

At an old school house in Xiaochen Village in Pingliang Prefecture, Shaanxi Province, one village elder asked why they should keep trying to plant trees. “People can’t eat trees!” he shouted. Others agreed. “I have no time to spend on anything but the land!” exclaimed another. Asked whose families were forced to rely on Government relief grain supplies, most of the hands in the room shot up. “I work all day long in the field but the grain produced is only enough for half a year,” said a mother, “When it rains the earth comes loose and washes away. My land becomes smaller each year.” Another woman added, “We keep some goats for cash, but they don’t sell well. There’s less and less grass here.”

Voegele was puzzled when farmers said they had tried many times to build terraces to create flat land, but the terraces did not hold up well and were often more trouble than they were worth. He made a mental note to investigate the terracing issue further.

Small successes show the way

The teams of Voegele and Huang spent considerable time listening to the farmers. Despite the pessimistic tone of many of their meetings, there was some good news. In a small number of sub-watersheds around the Plateau, the Government had started experimenting with integrated watershed planning. These pilot programs seemed to be boosting farmer incomes. Wider terraces had been created to increase agricultural land. Orchards were planted on the less steep slopes; and shrubs and grasses on the steepest areas. Farmers seemed pleased with the higher grain yields and optimistic about their orchard trees.

Fruit orchards on slope land

Travel on new roads to market

New housing with solar dishes for cooking. Concrete paved yard collects rainwater for domestic use

Part C: Seeking Solutions under a New Approach

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One day in the spring of 1994, Huang and Voegele came to Shageduo village to learn about a successful project growing several hectares of walnut trees. The trees in front of them looked strong and beautiful, and the team took notes on growing conditions, costs and market opportunities. But Voegele could not take his eyes off the sheer gully below them. It was an oasis of green. In disbelief, he queried the young village chief, standing beside them: “The rest of the Plateau is yellow and barren…but it is green down there. You don’t irrigate here, do you?”

“It is green down there because of the walnut trees up here,” she replied with a smile. “When I first brought the seedlings from Beijing, the sheep and goats ate the young trees. So we had a choice: goats or walnuts.” She smiled again. “We chose walnuts.” Grazing had been banned in the village for some years. “We sold all the goats and sheep to stop them from eating our trees. We have no fertilizer, and no irrigation, but we also have no grazing. That is what has turned our gullies green.”

“So things can grow here”, pondered Voegele. “Perhaps nature can re-grow on the Loess plateau, if only we people could give it a chance.”

However, farmers in the neighboring village didn’t think the absence of goats had anything to do with the improved pasture They thought the green gully must be a fluke of nature; perhaps a unique microclimate in that area produced more rainfall. It was a mistake to think that the meager soil could ever produce enough to feed the growing population, the farmers said.

Yes, trees must be planted. Soil retention structures must be built, or there would be no earth left in a few decades. But thinking about alternative farm activities was a recipe for disappointment, the officials said.

However Huang and his team in the Ministry were optimistic that they could break the vicious cycle of degradation that trapped the Loess Plateau people. Through the combined efforts of the Chinese Government and the World Bank, funding was available for this project: the question was how best to spend it to achieve both the poverty alleviation and watershed conservation goals. This was a complex problem with many inter-related causes. But the solutions must be simple, easy to understand and implement, and quick to deliver benefits to local people.

“The multi-faceted problem of watershed degradation required an integrated solution, and China’s institutions had not been designed to work cooperatively across sectors”, said Huang. It was time to work together and take an integrated approach to planning for the long-term management of the Loess Plateau watersheds, going beyond the successful pilots. “We needed to come up with something the Government could replicate locally over large areas at a reasonable cost if we were going to make a lasting difference to the region,” Voegele added. “That meant coming up with an integrated package – policies, legal, institutional and technical - to ensure that both incentives and technology were right.” Integrated planning would combine incentives to farmers with projects to ensure medium and long term gains for the environment, paving the way for necessary changes to patterns of land use going back thousands of years. It was a new approach.

Part C: Seeking Solutions under a New Approach

Wide terracesWide terraces

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Huang often compared the Loess Plateau dilemma to a giant person who had suffered a long illness. “Our past efforts focused on curing the symptoms (soil erosion, loss of water and surface flows), without paying enough attention to the fundamental cause of the disease (poverty, low productivity, and the vicious cycle).”

Breaking the vicious cycle: Wider terraces triple food yield

Juergen Voegele was adamant. “We must give something to the people right from the start. Farmer benefits first and then the environment. Improved grain yields are absolutely critical.” Because food security was utmost in farmers’ minds, there was little point in discussing any other aspects of integrated watershed management, until farmers could be assured of significant increases in grain yields. Breaking the vicious cycle would depend first on filling the bellies of the villagers.

Indeed, solving the food security problem by creating flat land that boosted grain production was the key first step in breaking the vicious cycle. Wide, well-designed terraces, constructed with earth-moving machinery, would prove to be integral to the success of the Loess Plateau project, yet they came about almost by accident.

Huang and Voegele decided to include machine-made terraces in the project when it was clear that there was not enough available labor to build new terraces by hand. But the impact of the 6-12 m wide terraces, 3 to 4 times the width of traditional hand-dug ones, surprised even the task team. Yields doubled or tripled, and remained stable in periods of drought. The moisture-conserving properties of the wider terraces meant nutrients were no longer flushed away during heavy rains. Better-yielding varieties of wheat, corn and potatoes could now replace the drought-hardy millet. As the compacted terraces withstood erosion, there was no need to rebuild them every season.

Returning to the project area one year after its start, Huang and Voegele were elated with the results: “With a minimum of 2 mu of terraced land per person, a family can grow enough grain to last the year; They can plant crops in the same season that the terrace is constructed, so within one year, their food supply is guaranteed.” Average annual grain yields increased by over 60 percent, from 365kg to 591kg per capita. On the broader terraces, farmers using machinery found that cultivating the land was much less labor-intensive. Zhang Kejian of Huigong village in Jixian County, explained that he could now plow over 20 mu in a day. In the past, using an ox-drawn plow, it was a very hard day’s work to plow and sow seed over just 2 mu.

“It took me 20 days to harvest wheat manually, and we used shoulders or an ox cart to carry the wheat… Now we use four-wheel tractors to propel the thresher harvester. Several hours are enough to harvest the field and it takes about 3 to 4 days from harvest to drying to storage.”

Farmers repeatedly told project officials how much they appreciated the time freed up by the new terraces, allowing them to earn income from other avenues. They could access new markets, new jobs and opportunities, because the machines brought in to build the wide terraces also created

Small dams together with terraces

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roads that connected once-isolated villages with each other and with distant towns and cities. The road network improved access to services such as education, electricity, and even encouraged tourism.

Contracts to construct the terraces were awarded, through a public bidding process, to the private sector. As a result, an army of construction teams bloomed in the region, increasing employment opportunities and stimulating the local economy in many ways. Hearing stories across the Plateau, Voegele mentally increased the projection for the project’s economic returns! However, he also knew that building terraces alone could not solve the environmental problems that kept him up at night.

Breaking the vicious cycle: Integrated planning and incentives

Terracing was only part of an integrated watershed plan that was designed to rehabilitate the ecosystem AND to give farmers the incentive to contribute to the solution. To join the project and benefit from the new terraces, villages must first contribute to an overall conservation plan, prepared from a detailed land-use map of each sub-watershed.

A crucial step was equitable distribution of productive agricultural land. Scattered slope plots were consolidated into larger terraced plots, built on land that ideally sloped less than 15 degrees. The principle was that every family would get at least 2 mu of arable land per person. Plots were publicly measured to ensure transparency. Valuable flat agricultural land was also created by small warping dams built in the gullies to trap sediment.

Because they now had higher-yielding land, farmers were encouraged to give up cultivating the steeper slopes, so that soil-retaining shrubs, and trees of economic value could be planted. This was a critical link, aligning the farmers’ financial benefits and the project’s ecological benefits.

Small dams together with terraces

Creating a virtuous cycle: Contracts and commitment

Huang had seen that farmers were reluctant to make any improvements to their land, even if they could afford to. Farmers were cautious about investing in the new, higher-yielding terraces. They often asked visiting project officials, “what if the land I work so hard to improve is reallocated?”

National land reform was well under way in China by 1990, redistributing collectively farmed land to individual farmers through short, medium and long-term leases. These reforms took longer to reach remote regions like the Loess Plateau. As Voegele had discovered in his first visits to plan the project, most Plateau farmers did not yet have secure long-term land-use leases, although many party leaders and provincial officials thought that they did.

Voegele and his team made it clear that secure land tenure was a “life or death matter” for the project. “If we are going to finance building sustainable terraces in the Loess Plateau with public funds,” asserted Voegele, “the farmers need to be given secure land tenure.”

Once Huang and Voegele took local government officials into the villages to talk to famers, and pointed out there could be no investment in the project without signed and sealed land-use contracts, the officials were quick to make sure this condition could be met. Farmers were given long-term leases to the improved terraces, slope land for tree cultivation, and areas behind the warping dams.

Tree planting

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This was formally documented in a little red booklet which detailed the size and co-ordinates of each land use lease, and was signed by the farmer and stamped by the local authorities.

Loess Plateau farmers finally had the right incentives to maintain their terraces, conserve their slope land for trees and shrubs, and care for stabilizing the soil on their land. In return, every farmer, even the poor, was committed to repaying the public investment that had been made to benefit their private interest through the Loess Plateau Watershed Rehabilitation Project. The terms for repayment varied: for activities that yielded a quick profit, such as terraces, loans were repaid in 2-3 years, while longer terms applied to investments in trees and shrubs. Repayment terms were softer in areas prone to severe drought.

Creating a virtuous cycle: A sense of local ownership

Large scale terracing, land tenure and detailed contracts were complicated. At first, local officials grumbled that work could proceed faster without the bother of detailed planning and contracting, and resisted some of the project conditions.

Once local people “owned” their project, this would change, Huang believed. While contracts and commitments were important, and required by the Bank, it was crucial that people saw how they could benefit from their involvement and input to the project. Only when officials at all levels understood the project belonged to them, could it be a success. Such ownership would only come about through local participation.

“We realized that this project belonged to us - the Chinese people. If farmers do not receive the maximum benefit, how can we justify the huge project costs, and repay the foreign loan? We must get the project right,” Huang repeatedly reminded his team.

Getting it right involved a great deal of time, as well as the involvement of millions of villagers, working on watershed projects with thousands of multi-disciplinary project teams, with the co-operation of a wide range of different agencies – but always with a local focus.

Project officials had to work intensively in each village, to craft a sub-watershed plan that met local conditions. For Huang, local ownership meant putting each project activity under a microscope to make sure it really worked for the benefit of the people of the Plateau and their environment. Sometimes this meant traditional practices used by the soil and water conservation bureaus needed to change. Other times, it meant convincing the Bank team to adapt their requirements to local conditions. At one memorable meeting, Huang convinced Voegele that Bank procedures needed to adjust so that Chinese counterpart funds could be accessed in an innovative manner –by pulling funds from different projects together under the comprehensive watershed plans, and the Bank team accepted.

As local ownership became a reality, trust also developed. Making sure project conditions were complied with called for a delicate balance of written contracts, moral persuasion and a long term view. Some farmers continued to plant on their slope land, in defiance of their contract, after new terraces had been built. As those farmers gained confidence in the higher yields from their new terraces, slope cultivation gradually stopped.

Apple orchard - medium term gains

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Creating a virtuous cycle: longer term investment

With the labor savings from the terraces, and their families well-fed within one or two seasons, farmers had more time and resources, and could consider medium and even long-term investments such as the planting and care of trees of economic value.

When farmers provided labor, the project provided free trees and shrubs but required that farmers sign “Use and Management” contracts. These began once the trees were well-established. The project experimented with contracting terms, as well as tree varieties and planting techniques to optimize survival rates and profitability in the long-term. China’s forestry experts introduced innovative methods and gave technical advice, while young villagers were trained in nursery and planting techniques.

Gao Shenggui of Xinmaotai village had three ha of low-yield agricultural land. With support from a project technician, he took out a loan to plant 3 ha of apple trees, which thrived and began to yield within three years. By 2005, buyers of his apples were coming from all over China, he had 10 seasonal employees and his annual income had risen to $15,000. Bai Xin Nian, of Bai Dong village, used a project loan to plant apple trees on what had been his wheat and maize fields. Within three years, his profit per hectare had increased 10-fold, and he used this income to build himself a new house.

Creating a virtuous cycle: The grazing ban

No amount of technical help could guarantee that trees would survive as long as goats, which ate everything in sight and ripped out the roots of the plants they consumed, were still grazing in the areas.

The project could only really see results when grazing was stopped, Voegele said. Controlling the free grazing of goats and sheep was the biggest challenge faced by the Government and the Bank team and it took a number of years of relentless work to achieve. Banning grazing right at the start of the project would have been unthinkable or impossible, but the project insisted its investments should be protected.

The solution was to combine incentives to move away from grazing with education about the damage goats did and close supervision. Whenever the

Pen feeding - sheep

Pen feeding –profitable new species

Grazing bans – land closure

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Bank team visited a project area, they would point out to villagers and officials if goats were still roaming the hills. Voegele recalled visiting one village, which had made sure the goats were “elsewhere, unseen”, though their droppings remained. Embarrassed, county officials tried to convince the Bank team those were the droppings of huge rabbits!

The Bank team did not give up, and kept raising the issue in the hope of finding that one County Chief or Party Secretary who might be willing to take a chance and ban free grazing. Five years into the first project, farmers were becoming more receptive to the idea of replacing free-ranged goats with penned sheep, and livestock was becoming more popular as an investment. To intensify livestock production, the project made loans to farmers to build sheep pens, cow sheds, and provided training. Feeding animals with harvested clover and alfalfa removed grazing pressure from the natural vegetation on slopes.

As traditional breeds of sheep and goats were prone to foot infections, breeds such as Shandong Fat-tailed Sheep and South African Boer Goats were introduced. These animals produced higher quality wool or milk, and thrived in a pen environment, so livestock income for local farmers tripled.

Local government officials were starting to change their mindsets – by now, they readily accepted that grazing management plans should be a prerequisite to project investments and be a part of all small watershed management plans. They also recognized that the natural re-vegetation that occurred when a large area was closed off to grazing was a low cost “investment” in the project, with big ecological dividends.

But the real breakthrough occurred half way through implementation of the second Loess project. At last, one county chief completely banned grazing over a large area in his home town. The grass grew tall after each rain and the place became a green oasis in the middle of the yellow barren hills. Local farmers were astounded. News of the transformation spread from village to village and county to county. Once officials from other counties saw the results, they began to enforce grazing bans in their own areas. National policy was evolving and made it easier to enforce the bans. New policies of the government encouraged “return of agriculture land to forest to allow regrowth”. One day after a long dry summer, Huang and Voegele took the Governor of Shaanxi Province to see one of the Loess Plateau project sites. The Governor stared for a long time at the lush grass waving in the wind. He turned and barked an order to his staff, “I want my whole province to look like this. I want all of you to work with our farmers to make this happen.”

The progressive extension of the grazing ban to all counties in the Loess Plateau became the most cost-effective natural resource conservation measure ever enacted effectively in the region. By 2005, the grazing bans had been expanded to the entire Loess Plateau region.

Before project in Jixian County, 2002

Same site after project, 2005

15

Afterwards

By its completion in 2005, the Loess Plateau Rehabilitation Projects had benefited over 3 million people, the majority of whom lived in poverty at the start of the project. Solving the food security problem by creating flat land that boosted grain production and retained water was a key link that enabled the vicious cycle to be broken. Visitors to the project areas could now see the broad terraces and densely planted wheat, corn and potatoes that were evidence of bountiful harvests, making hunger a distant memory. Nature had been given a chance to re-grow and had responded more quickly and dramatically than anyone had dared to hope. The once-bare gullies were now green and full of plants and animals thought to have long disappeared from the area. In just one gully, Voegele once counted more than 50 species of trees, shrubs and grasses. Soil erosion had been curbed on 920,000 hectares of land, and soil losses reduced by 60 million tons a year. “It would have been the same useless land if not for the Loess Plateau projects”, said Zhang Junyou, back in his fields. Zhang built a new house in 2005, having made more than $4,000 that year. “I never earned that much working in any city, and I don’t need to leave home for city work again,” he smiled.

The Loess Plateau projects had as much impact on national policy as they did on the lives of local people. The World Bank investments restored an area of close to 10,000 km2, a size half of Rwanda. More importantly, the impact of the Loess projects has extended far beyond their borders. Watershed planning and project management methods, as developed under the Bank projects, are now used for soil and conservation work in the entire Loess Plateau and as of 2008, more than 240,000 km2 or 50% of the degraded area has been restored, an area almost the size of Uganda. Beyond the Yellow River basin, the Ministry of Water Resources has adopted the approach for the Yangtze and Pearl River Basins.

Director Huang could not contain his smile when he made his annual report to his bosses at the Ministry of Water Resources in Beijing: some tributaries of the Yellow River were now flowing clearer.

Same site in 2005Before project in Shanxi, 1999

References

The World Bank; Internal Documents - preparation, appraisal, supervision and completion documents for “Loess Plateau Watershed Rehabilitation Projects I & II”; 1992 – 2005

Chen Shaojun, Wang Yue, Wang Yijie; Case study of “The Loess Plateau Watershed Rehabilitation Project”, for “Scaling Up Poverty Reduction: A Global Learning Process and Conference, Shanghai, May 25-27, 2004”

The World Bank; Internal Documents, supervision reports for DFID funded “China Watershed Management Project”, 2007 - 2008

Environment Education Media Project (EEMP), films - “The Lessons of the Loess Plateau”; “Hope in a Changing Climate”; “Earth’s Hope” by John Liu For additional information on the Loess Plateau Watershed Rehabilitation Project, please visit the World Bank’s project website at: http://go.worldbank.org/RGXNXF4A00

©2010 The World Bank Group, All rights reservedThe statements, interpretations, and conclusions expressed in this case study reflect only the views of the authors, and do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent.

Arial view of the Loess Plateau

Produced by:

World Bank Institute (WBI), Climate Change Unit

Case Team:Mei Xie (Team leader, WBI); Julia Li, Nigel Asquith,Janet Tyson (consultant case writers); Alyson Kleine, and Yu Huan (WBI)

Special thanks:The authors are grateful for the valuable contribution of the following Chinese experts, officials and farmers whom the case study team interviewed. He Xingzhao, Wang Huanzhu, Qi Yongxin, Feng Sheng, Du Qing, Wang Xingzhong, Liang Jianhui (Yellow River Upper-Middle Reaches Bureau for Soil and Water Conservation); Fan Deming, Wang Shandong, Tong Xinqi, Han Zhenming, Li Hongping, Huo Bin, Zhang Junyou, Zhang Fang (Shaanxi province); Yan Jinmin, Tian Fulong, Yang Yinjiang (Shanxi province) The authors would like to thank the case advisory group: Juergen Voegele, Anis Wan (World Bank); Wang Yue (Ministry of Water Resources, China); Huang Ziqiang (Yellow River Conservancy Commission, Ministry of Water Resources, China); and Sheng Li (WBI). The group provided critical input to the conceptualization, shaping and review of the case study.

The French Government and the Bank Netherlands Water Partnership Program provided generous support through financing the development of this product.