E-273VOL.2

CHINA

SMALLHOLDER CATTLE DEVELOPMENT PROJECT

(P045264)

ENVIRONMENTAL MANAGEMENT AND

MONITORING PLAN

Prepared by:Task Management Team, EASRDAssisted by:Project Management Office and China Agricultural UniversityBeijing, ChinaJuly 1999Revised November 1999

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CONTENTS

PAGE

A~. lntr.otuction ..... . ,,,,,,1

B. Description of Project Activities .................................... ,,.,. .. 3

C. Environmental Impact Potential .......................o. 10

D. Environmnental Mitigationa Plan, ............................................................ I ,I1

E Envirornental Impact Monitoring ..........................,,...,,.,,,,.,.,,.,,,., .. , 19

F. Capacity Development and Training ................................. ., 21

G. Implementation Schedule and Cost Estimates .. .............................. 22

H. Integration of EMP with Project ........................... ,,,......,..,....,....,.. 24

TABLES

1 Breed Improvement Sub-component .............................,.,,.,,,.,.42 Phasing of Mineral Block Production Plant ... .53 Cattle Flow Diagram from Raising to Processing.................................,,,,,,,.64 Phasing of Household and Feedlot Cattle Production .................................. 7,,,,,,,,,....75 Pilot Cattle Market Establishment by Province ...............................,,,.,,,.,.,,,,,,,,.86 Participating Processing Enterprises ........................,.,,,,.,,,,.97 Environmental Mitigation Plan for Forage Balance Monitoring .................................. 128 Environmental Mitigation Plan for Household Cattle Productior . 139 Projected Phasing, Number and Location of Feedlots by Province . 1310 Environmental Mitigation Plan for Feedlot Production ................................................ 1611 Estimated Budget for Environmental Mitigation for Feedlot Production ..................... 1612 Environmental Mitigation Plan for Zoonotic Diseas ControL ..................................... 1713 Environmental Mitigation Plan for Slaughtering and Processing Enterprises .1914 Enviromnental Monitoring Measures and Indicators by Project Component ............... 2015 Environmental Impact Mitigation Training Programs ....................................,.,.,., .2116 Environmental M&E Training Implementation Schedule by Province and Budget. 23

Smallbolder Cattle Development ProjectEnvironmental Management and Monitoring Plan

A. INTRODUCTION

Project Overview. The project would assist the government's policy of developing its beef cattlesub-sector in response to emerging market demand for quality beef. The project would putspecial emphasis on assisting the smallholder level in the inland provinces of Henan, Hebei,Anhui and Shanxi. These areas have surplu.s labor and natural resources, but productvity andquality of cattle are low due to lack of technology and infrastructure. The project aims to increaseproduction and improve quality and marketability of small-holder produced cattle in order toenhance farmer incomes and reduce poverty. These objectives would be achieved through: (a)introduction of improved breeding, feeding and production technologies, (b) development ofcommercial infrastructure which would provide the linkages between production and markets: (c)increasing value-added to cattle production through processing, (d) strengthening animalhusbandry institutions to better provide support services to farmers and (e) upgrading ofregulatory services to include market incentive-driven grading and quality control. The projectwould promote the effective use of existing, low-value crop residues and bther natural resourceswhich are presently going to waste, foster the development of commercial cattle production andencourage the participation of women in production.

Environmental Assessment Process. Consistent with the provisions of the Bank's OperationalDirective 4.01, Environmental Assessment, the project was assigned to environrmental screeningcategory B due to the generally small scale nature of the investments to be made under theproject, the widely disbursed nature of the individual production units across the fourparticipating Provinces, the limited range of environmental impact potentials, the existence ofwidely available and well understood mitigation measures for these impacts and the fact that, forthe more substantive of these impacts, there arm existing and effective regulatory procedures inplace within China to deal with them.

In accordance with the provisions of the Environmental Protection Law of China, the project hasbeen subject of a full Environmental Impact Assessment Report prepared by the EnvironmentalImpact Assessment Center, China Agriculture Univesity of Beijing which is an A-rated Institutefor the purposes of local regulatory procedures. This report, supplemented by additional workcarried out by an environmental specialist acting of behalf of the Bank, led to development of theenvironmental monitoring and management procedures which have been incorporated into theproject design. The Report has been rcviewed and cleared by the provincial EnvironmentalProtection Bureaus (EPBs) of all four participating Provinces and the State EnvironmentalProtection Administration (SEPA).

Environmental Overview. The project is intended to have envirozunentally beneficial effects inseveral ways. On the production side, positive effects are two-fold: (a) the diversion of otherwisesurplus crop residucs from buming to cattle feeding, and (b) increasing production and recyclingof cattle manure as a valuable source of organic fertilizer. On the processing side, the principalpositive effect would be the production of safer food for wholesale and retail markets due toimprovement in hygiene in the beef processing chain, the quality of the beef produced from theproduction system and improved meat inspection procedures which will be promoted through theproject.

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Nevertheless, the project also has some adverse environmental impact potentials which, to theextent possible, have been minimized through project design in response to the fldings andrecommendations of the environmental assessments. Residual impact potentials will be addressedthrough the environmental monitoring and management procedures summarized in this report.

The main environmental safeguards incorporated into the project design include:

Livestock Breeding and Production Systems* the livestock breeding program includes provisions to protect the gene pools of indigenous

cattle breeds to ensure that they arc not lost during future development of the sector;* the project will not support range-fed production of cattle so as to avoid any potential to

contribute to over-grazing in the project provinces;* the focus of the project will be on small scale, household-based production using crop and

other residues (e.g. corn stalks) which, at present are burnt or otherwise disposed in wayswhich contribute to rural area environmental problems in China. The livestock productionsystem will convert these residucs into meat and livestock waste (manure) which will becollected and to be retumed to the farners' fields;

* the entire project design is based on Provincial and county level feed balances which haveindicated that crop residue resources will be sufficient to meet projected demands. Thesebalances will be kept under constant review as the project progresses to ensure that the rateof development remains consistent with the availability of residue resources in the field;

* small-scale household/village feedlots to be supported under the project must be pre-existing and will be restricted to sizes which are not subject of environmental permittingprocedures in the United States'. In addition, the assessment procedures for determiningthe eligibility of households/villages to participate in the program include provision forpreparation of site-specific environmental management plans to provide a basis fordetertnination of the acceptability of proposals This procedure is modeled on and exceedsprocedures recommended by the US Environmental Protection Agency (USEPA) forregulation of feedlots which fall below the regulatory thresholds set down in the NationalPollutant Discharge Elimination System (NPDES); and

* provisions have also been included to reduce the transfer of zoonotic diseases to theparticipating fiam families.

Livestock Processing* investments in improved livestock processing facilities will be focused on existing

enterprises which are already subject of regulatory control by Chincse EnvironmentalProtection Bureaus (EPBs);

* all participating enterprises must be capable of complying with relevant governmentenvironmental regulations after project supported investments and no disbursements willbe authorized without prior presentation of regulatozy clearances by the relevant EPBs;and

* current government-prescribed standards for occupational health and safety must becomplied with in all partcipating enterprises.

Overnll Project Mansgement* environmental monitoring units and budgets for environmental mitigation are in place at

all project management offices and project enterprises.

There are presently no onvironmental regulations governing development and operation of concentratedanimal feeding operations (CAFOs) in China. In the absence of such rogulatons, the design and regulatoryguidelines applied by the US Environmental Protection Agency through the National Pollutant DischargeElimination System (NPDES) have been followed in development of the project concept.

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B. DESCRIPTION OF PROJECT ACTIVITIES

The description of project activities is based upon the infomation in Annex 2 in the ProjectAppraisal Document, as amended following appraisal in May, 1999.

Project Activities Summary. The Project would support the government's policy of developingits beef cattle sub-sector in response to the emerging market demand for quality beef. The projectwould have a strong commercial marketing orientation through the production, processing andmarketing of quality beef. The project would involve the four project provinces of Henan, Hebei,Anhui and Shanxi, These provinces have a combined population equivalent to that of the UnitedStates. In total, 17 prefectures, 73 counties and 326 townships would be directly involved, with atotal of 138,488 participating rural households. There are four main components of the project:

L Cattle Breed and Feed Improvement Component (USS2.00 million)Breed ImprovementFeed Improvement

U1. Cattle Production (USS132.53 million)Household Cow-Calf ProductionHousehold Cattle FatteningFeedlot Production

II. Marketing Development Component (USS25.45 million)Live-Cattle MarketsBeef Market Linkages

-Slaughterhouse Upgrading-Market Information System-Beef mrading, Quality Assurance and Meat Inspection-HACCP (Hazard Analysis Critical Control Point)

lV. Institutional Strengthening Component (USS19.88 million)Animal Husbandry Bureau StrengtheningTrainingResearch and DevelopmentStrengthcning of PMOs

The abovc-listed activities would be implemented as an integrated cattle production system,ranging from breed improvement through production, processing and supported by infastructuredevelopment, The Cattle Breed and Feed Improvement Component would ensure a supply ofcattle of improved genetic quality for breeding and fattening. Cattle feeding would be heavilydependent on the utilization of crop residues and oilseed cakes (rsidues from vegetable oilproduction), with only small amounts of com concentrate (8% of total feed quantity) for feedinglatepregnant and lactating cows and young calves. Young cattle produced by cow-calf raisinghouseholds under the Cattle Production Component would ensure that adequate cadle supplieswere available for project-supported slaughtering, processing and marketing. The MarketingLinkages Component would support the establishment of commercially-oriented cattle wholesalemarkets; assist in the improvement of cattle slaughtering and beef processing plants; and supportfood safety, beef grading, quality assurance and meat inspection progams, The InfrastuctureStengthening Component would support veterinary, extension and AI support services to bedelivered to the project by the Provincial Animal Husbandry Bureaus; provide training, supportresearch and development; and support project management through the strengthening of theProject Management Offices.

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I, BREED AND) FEED IPROVEMENT COMPONENT (USS2.00 MILLION)

Breed Improvement The sub-component would support the provincial-level breeding center inHenan and Anhui (the other two provinces alrcady have adequate facilities). Details are providedin Tablc 1.

At the Henan Provincial Cattle Breeding Center, the Project would support the expansion of bull

housing facilities, equipment for frozen semen production and embryo transfer; forage productionfacilities and storage; veterinary clinic; power and Dansportationr environmental protectionfacilities; and training. A total of 22 breeding bulls will be procured under the project.

At the Anhui Provincial Cattle Brceding Center, the project would support upgrading andexpansion of bull holding facilities; the importation of 20 breeding bulls; and the construction ofa liquid nitrogen plant.

Table 1- Breed Improvement Sub-component

Province Breed Improvement ProgramPY] to mid-PY2!

Haoasn Expansion of Provincial Cattle Breeding Ccnte through;--Construction of additional bull holding facilides;-Addition of scraw semcn ftezing facility--Establishment of embryo tnsfer unit--Institution of household breeding cow scleetion programs-Upgrading of existing indigenous Nanyang cattle herd--Training and TAActivity FYI 2 FY3 FY4 FYSHolding facilitiesScrnen freezing facilityEmbryo transfer unitNanyang upgrading program ___Household cow sclectioinTraining and TA

Anhui PYJ to mid=p2:Expansion of Provincial Cattle Brecding Center through:-Improvement and cxpansion of bull holding facilities--Construction of new liquid nitrogen plant-Importation of 20 brecding bulls--Institution of household breeding cow selection programs--Training and TAActivity FYI FY2 FY3 FY4 FYSHolding facilitiesLiquid Nitrogen plantBull procurementHousehold cow selectionTraining and TA

In order to balance indigenous breed improvement with the importation and crossbreeding of

imported cattle breeds, each province is committed to undertake two important activities underthe Project, using its own funds. These include (a) the upgrading of existing indigenous cattlebreed(s) to serve as a gene pool from which to develop suitable crossbreds, and (b) thedevelopment of a crossbreeding strategy which is responsive to producing stock adapted to localconditions. Ihese objectives are already being pursued wivd non-project funds, but the projectwould support training and TA to ensure that indigenous upgading programs would be in linewith the crossbreeding strategies to be undertaken and that an adequate gene pool supply is

ensured.

Feed Improvement

Sbanxi Mineral Block Plant. The Cattle Industry Services Center (CISC) under the ShanxiProvincial AHB wants to introduce mineral blocks into the cattle production areas, but these arenot currently available within the province. Some salt licks are manufactured at a plant inMongolia and are sold in Shanxi, but the Bureau wishes to research various mineral formulationsfor beef cattle production. The project would finance the establishment of a small, new pilot-scale 1.5 t/h block-making facility for testing the application of this feed supplement. Theproduction facility would comprise a material store, a processing mill, a boiler room, a laboratory,an office and a toilet. Equipment under the project would be limited to the power, heating and watersupply systems at the plant, the 1.5 th mineral block plant and a weigh bridge. The offices would beprovided with ofiTce equipment, a computer and internal quality control facilities. The project wouldprovide 2 trucks and 1 man-month of local training At full production, the plant would produce3,000 tlyear of mineral blocks. Considerable marketing would be required for this new product,veterinary stations, market offices and feed mills would participate as marketing outlets. Boileremissions would have to be controlled to levels mandated by environmental regulation. Total costis estimated at $653,000. Table 2 indicates the phasing and production output of the vitamin-mineral block plant throughout the project's life span.

Table 2 - Phasing of Mineral Block Production PlantYear 1 Year 2 Year 3 Year 4 Year 5 Total Output at

Full ProductionCattle Vitamin Mineral O 1,000 2,500 3,000 3,000 3,000 tons ofBlock Production cattle mineral

blocks

IL CArILE PRODUCTION COMPONENT (USS132.53 MILLION)

This component is divided into three sub-components: (a) Household Cow-Calf Production -128,156 households; (b) Household-Based Cattle Fattening - 10,332 households; and (c) FeedlotProduction - about 130 feedlots. A cattle flow diagram for the Project is presented in Table 3.

It should be noted that all of the data presented for the household-based production and fiatteingsystems are best estimates based on the feed balances developed for the purposes of project costestimating and economic and financial analysis. The numbers quoted represent the upper boundsof the development (since there will be insufficient funds to finance a greater level ofdevelopment). The actual numbers and the distribution of different sized production units willdepend on the proposals received from those households wishing to participate in the programand the case-by-case eligibility assessments made by the Project Management Offices based onthe acceptance criteria, including environmental criteria, which have already been agreed upon.

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Table 3 - Cattle Flow Diagram from Raising to Processing (at Full Production)Housebold (BR) Heifer Bull Cattle BeefProduction Calves Calves Feedlots Markets Processors(a) Cow-calf Heifer calves Bull calves Finished in To be sold in Purchased byproduction: weaned Weaned 130 feedlots existing project

per year: Per year: markets slaughter128,156 including 9 houses andHouseholds 142,596 142,596 53,730 pilot project processors:raising per year head head head markets

110,000 head285,192 at 90% 92,596 Heifers ofmale and female End use: feedlot to be sold to project cattlecalves To be capacity farmers inside

fattened by and outside(ave. 2.1 iIs or in End use: projecthead/HHIyr) feedlots Slaughter

and_ processing

(b) Fattening HHs: Retained Finished cattle: Processors towitin 110,000 head convert

10,332 HHs project as to project 110,000Fattening per year Replacement processors project cattle76,469 heifers: 32,596 head into 23,200male cattle sold to other tons of(ave. 7.4 50,000 processors dressed beefheadlHWyr) head outside the and beefto be purchased project productsfrom cow-calf hhs _ - __ _

Household Cow-Calf Production Sub-component. The Project is designed to supportapproximately 128,158 households sprcad across all four Provinces in cow-calf raising to achieveProject self sufficiency in young stock supplies. On average, it is expected that a typicalparficipating houschold will raise 2 or 3 calves per ye, depending on local circumstances. Thehousehold incorporate one or two breeding cows although it would also be possible to includesome fattening cattle if so desired. Household participation would be phased to allow for thegradual procurement and availability of breeding cattle, synchronized to a parallel developmentof support services, forage preparation technology and AI services.

In all project provinces, cattle feeding will be based on nutritionally enhanced crop byproductsand other agricultural wastes which would be ensilaged or ammoniated with urea (to increasenitrogen content for conversion into protein) in silo pits covered by agricultural plastic. The.project will finance sub-loans to all participating houscholds for the purchase of breeding orfattening cattle, cattle production equipment, and urea and plastic for straw ammoniation.Indicative household and feedlot (see below) phasing is presented in Table 4.

The All China Women's Federation (ACWF) would assist county AHBs attached to local PMOsin selecting suitable households for participation in the Project. The ACWF would provideinformation to AHBs regarding the financial status of households; their prior experience withlivestock or cattle raising; training needs; and availability of savings.

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Table 4- Phasing of Household Production and Feedlot Cattle ProductionCattle Production Unit Year 1 Year 2 Year 3 Year 4 TotalComponent1. Households Total 43,933 58,286 24,2I0 1,630 128,156(Cow-call)

Anhui No. 8,220 18,600 10,830 1,630 39,280Hebei 16,263 16,263 32,526HUnan 9,450 9,450 9.450 28,350Shanxi 10,000 14,000 4,000 28,0002. Households Toial 2,460 2,666 3,109 2,153 10,411(fattening)Aouia No. 106 312 309 103 830Hebei 1,389 1.390 2,779Henan 900 900 900 2,700Shanxi _ 2,000 2,000 4,0003. Feedlou Total 30 90 10 0 130

Anhui No. 4 9 4 17200 head 4 8 4 16400 head 0500 head IHebei No 27 23 S0100 head 14 13 27300 hcad 9 10 19500 bead 4 _ 4Hienan100 head No. 51 51Shanxi 1500 head No. _ 6 6 12

Household-Based Cattle Fattening Sub-component This sub-component would support about10,322 households who already have adequate supplies of self-produced cTop by-products to setup small livestock fattening enterprises to enhance their incomes from cattle fattening. Fatteningmodels would vary from one to three fattening cycles per year. These households would purchaseyearlings from the cow-calf households and raise them for almost a year for sale to processingplants or cattle markets. The project would support participating households by financing the firstbatch of fattening cattle; the construction of cattle sheds; production equipment, and foragestorage facilities. Feeding regimes would be based on maximizing the utilization of ammoniatedor ensilaged crop residues, fortified with oilseed cake. The projected schedule is also shown inTable 4.

Small Scale Feedlot Production Sub-component. This sub-component would be instrumentalin providing linkages between cattle production and cattle markets and processors. Small-scalefeedlots would also provide an important market channel for absorbing young stock sold byhouseholds and would sell finished cattle to beef processors. Provision has been included in theproject for support to be given to 130 existing feedlots for expansion and/or upgrading. It isexpected that about one-third of these will be located in Renan and Hebei while the remainingthird will be divided about equally between Anhui and Shanxi. Feedlots would be activated andphased in accordance with increasing cattle supplies and the availability of suitable candidates fordevelopment. The estimated distribution of feedlot capacities used for project feasibilityassessment, and based on the best assessments of the concemed Animal Husbandry Bureaus, isshown in Table 4. It is expected that the majority (around 60%) of feedlots will be of around 100head capacity although provision has been included for proposals to be accepted for units of up to500 head capacity. Proposals for units greater than this size will not be considered. Feedlots may

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be owned by individuals, registered colloctives or registered enterprises and their existingcapacity would be expanded in accordance to proximity to and availability of, project cattle.

m. MARKET DEVELOPMENT COMPONENT (USS25.45 MILLION)

This component covers the essential linkages betwcn cattle production, marketing and slaughterand processing and the marketing of beef, and includcs the project investments necessary to linkproducers, cattle markets and commercial meat companies. The component would also ensurethat quality assurance and cattle identification and tracking systems (from breeder to producer toslaughterhouse to carcass) are in place to satisfy the industry at all levels. The component wouldfinance the following activities:

(a) Live-Cattle Markets(b) Beef Market Linkages

(i) Slaughterhouse Upgrading(ii) Market Information System(iii) Beef Grading, Quality Assurance and Meat Inspection(iv) HACCP (Hazard Analysis Critical Control Point)

Live Csttle Market Development. This sub-component aims to develop a pilot program for livecattle markets, which would be centers for trade and market information as well as places toaccess technical knowledge and veterinary services. The project would assist the AHB bureaus toupgrade a small number of existing cattle markets in project provinces, two markets in Anhui,and one in Henan and Hebei and five in Shanxi, The effectiveness of these markets would beassessed at the midterm review, and subject to the results of the review, up to 10 additionalmarkets might then be funded, where feasible. Investnents at each livestock market wouldinclude a simple marketing office with a veterinary room and a sale shed, and the construction ofwater troughs, rails and feed bins for cattle. A weigh scale with a print-out facility would beprovided for voluntary use by farmers and dealers. Staff from AHBs would be trained to collectprice and market information and track project cattle entering these markets. The establishment ofcattle markets is presented in Table 5.

Table 5 - Pilot Cattle Market Establishment by ProvinceProvince Hengn Ainhui Shanxi HebeiProject Year I 2 3 1 2 3 1 2 3 1 2 3Pilot markets 1 (3) 2 1 1Simple uprading 4 (7)

Numbers in brackets denote poaible fuhire upgrading following MTR in PY3.

Beef Market Linkages Development. This sub-component is designed to ensure that marketinglinkages exist between high-grade cattle production and markets for good quality beef products.This sub-component would include three parts; cattle slaughtering and processing, marketinformation system, and beef grading, quality assurances and meat inspection system.

Cattle Slaughtering and Processing. The project will finance the establishment, upgrading and/orexpansion of five slaughterhouscs as demonstation production operations. All The phasing andstart-up production of participating processing enterprises arc outlined in Table 6. Of the fiveenterprises to be supported under the project, one will be new, three will be upgrades of existingoperations and one will be an expansion of an existing operation.

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In accordance with Chinese environmental regulations, all participating enterprises will berequired to secure new operating permits to cover their altered operations. The first stage in theprocess involves review and clearance of waste treatment systems designs by the relevant EPBand project finds will be noi be disbursed until proof of that clearance is presented to the PMO.Subsequently, the commissioning of the treatment plants requires certification by the EPB andsubmission of periodic self-monitoring reports is mandatory.

oA&ket Information System. The provision of cattle prices and trading information to farmers,processors, feedlots and market managers is of great importance in the successful marketing ofcattle and beef products. The ihfonmation collection would involve principally cattle markets,feedlots, processors, and local Bureaus of Animal Husbandry and farmers.

Beef Grading, Quality Assurance and Meat Inspection System. Technical assistance will beprovided to develop a meat grading system and providc training to meat processors andinspectors. Participating beef slaughtering and processing plants will use their own resources towork towards achieving the RIACCP best practices level. This includes all aspects of enterpriseoperations and management, including plant hygiene, production flow, management, qualitymonitoring and evaluation, workers training and working practices, and business practices. Theproject will finance any equipment necessary to achieve HACCP status and bilateral funds willfinance the necessary training and technical assistance required to reach this level. Each Project-supported slaughter house or beef processing enterprise has an in-house environmentalmonitoring unit. In-house Project-financed technical training in quality control, product handling,business management and marketing, as well as study tours would enforoc quality control and theapplication of best practices in processing and management.

Table 6- Participating Processing EnterprisesI___________ Ouitput pe Year (Hd) Total InvestmentBank-Supported Present PYl PY2 PY3 PY4 PYS USS millionProcessors _ _ _ _ _ _ _ _ _ _ _

Hebei ProvinceQimghuangdao 0 0 0 7,500 30,000 30,000 S8.68

Shanxi ProvinceLunda Meat Co. 5,000 0 7,500 22,500 30,000 30,000 S4.67 slaughter line,

packing line,Henan Province equipment.Zhoukou Meat Co. 30,000 0 5,000 5,000 20,000 20,000

USS4.31 equipmentTang He Meat 23,800 0 0 2,500 10,000 10,000

US$1.60 equipmentAnhui ProvinceYumei Food Group 53,000 0 0 5,000 20,000 20,000 USS4.51 upgrading,

equipment, effluent________________ ________ _______~~~I plant,

Cumulative 111,900 111,800 124,300 154,300 221,800 221,800 Total S23.77Demand I

\1 - Catte ReqZcrmetx dircctly due to Bank support. Annual increases arm begt asimacs.

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IV. INSTITUnIONAL STRENGTHENING COMPONENT (USS20.33 MILLION)

This component would provide support for:

(a) Strengthening of the Bureaus of Animal Husbandry (AHB) to efficiently provide newand better cattle production-related support services to farmers.

(b) Training to participating households, AHB support services personnel, breeding stationstaff, project management staff, feedlot managers, and meat inspectors;

(c) Research and Development. Each project province would, through its agriculturaluniversity, academy of science or other research institution, support R&D related to cattleproduction;

(d) Strengthen Project Management Offices by upgrading equipment, facilities andproviding technical assistant and training

C. ENVIRONMENTAL IMPACT POTENTLAL

The project has both beneficial and adverse environmental impact potentials. Regardingbeneficial impacts; the overall concept of the project was to simultaneously:

(a) support the goveniment's policy of improving standards in the beef production sectorwhich, amongst other things, has significant public health benefits due to reductions inthe incidence of un-hygienically processed products passing through to retail outlet2;

(b) improve farm household incomes through increased beef production productivity; and,

(c) develop productive uses for existing crop production residues which otherwise go towaste or, even worse, are burnt, thus contributing to air pollution which is pervasivethroughout China.

Regarding (c), the predominant crop residue throughout the project provinces is corn stalkswhich, if ploughod into the fields, provide a low grade source of organic material and nutrients(mainly phosphorous) or, if burnt, provide a very low grade source of carbon (ash) and potassium(or a very low grade household fuel which is a major contributor to indoor air pollution). If theseresidues are ammoniated and fed to cattle, they are converted into meat, processing by-productsand manure. The manure, when applied to farmers' fields, provides a much-valued source oforganic material and nutrients, principally nitrogen, which can significantly enhance soil structureand fertility although, if produced in too large a quantity in any particular place, can also be asource of environmental problems.

2It should be noted that, notwithstanding such benefits, livestock development projects such as this havealso been criticized by some NGOs for: (a) contributing to increased beef consumption in China which mayadversely affect public health due to an increase in the incidence of circulatoy and related diseases whichhave been linked to incraue meat consumption; and, (b) diverting grain best used for human consumptionto cattle production. Regarding (a); per capita beef consumption in China is Iet than 3% of that in westemcountries and, in any event, the type of beef produced under the project will be low-fat due to the lack ofgrain feeding and rcliance on non-castrated males as store stock for fattening. Regarding (b), project feedbalances indicate that 92% of all feed consumed in the project will be com stalks, oilseed cake or bran;none of which are used for human consumption. In any event, gram feeding of cattle in China is notprofimble.

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The main negative impacrpotentials can be summarized as follows:

(a) The introduction of formign cattle breeds could contribute to adverse biodiversity impactsdue to reduction in the use and maintenance of domestic breeds which are best adapted tolocal environmental conditions. The project provinces of Henan and Shanxi, which arehost to indigenous cattle breeds, would continue to undertake, using non-project funds,indigenous cattle improvement programs, with project support for technical assistanceand training.

(b) The feed demand generated by cattle raised under the project may exceed the resourceproduction capacity of local environrments which, in turn, may lead to over-exploitationof natural resources. Depending on the types of resources concerned, this could lead tosoil erosion or even adverse impacts on biodiversity if the resources being used are underthreat. Carefully updated forage balance calculations by project county would be used asthe basis for incremental cattle production.

(c) Those activities of the project which involve concentrations of cattle (cattle markets andsmall scale feetlots and processing plants) would create sources of concentrated animalwaste production which represent a threat, primarily, to water quality and human healthand, to a much lesser extent, air quality. Strict guidelines, backed up by localenvironmental law enforcement, would ensure that no detrimental effects from waste oreffluent conctrations would negatively affect the environment or human health.

(d) Concentrations of cattle in household environments present a threat human infection byzoonotic diseases. Site detcrmination for household cattle raising has takcn this potentialhazard into account, and all cattle will be monitored for two of the most commonzoonotic diseases: TB and brucellosis.

(e) Those components of the project which involve manufacturing and/or processingactivities (the feed mills and the upgraded slaughterhouses) could lead to production ofwaste water and air pollutant emissions with attendant impacts. Compliance with theinclusion of budgeted mitigation measures is conditional to subloan approval for suchactivities and will be monitored closely throughout the project's lifespan.

D. ENVRONMENTAL MITIGATION PLAN

The project design includes a widc variety of measures which are intended to either completelyeliminate or substantially mitigate adverse impact potentials. In the following sections, theproject design, environmental management and environmental monitoring procedures proposed todeal with each of the above issues is described.

Loss or dilution of indigenous genetic resources. To balance indigenous breed improvenentwith the introduction of foreign genetic lines, the project will provide support to participatingProvinces in two important activities under the project; (i) upgrading cxisting indigenous breedsto serve as a gene pool from which to develop crossbreeds; and, (ii) developing a crossbreedingstrategy to maximize the adaptation of crossbred stock to local conditions. These activities arealready being undertaken but the project would support training and technical assistance tostrengthen the effectiveness of these programs. Monitoring of progress on these activities will beundertaken as part of routine project supervision by Bank staff.

Excessive feed demands. This issue has been addressed primarily through project design. Twostrategies have been adopted:

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(a) It was decided, following initial environmental assessment, that the project should notinclude activities dependent on the use of natural pastres or exploitation of communallymanaged land due to the presently over-grazed status of many such areas anduncertainties as to how to define and enforce stocking rates which would be sustainablein the long tern. Thus it was determined that the project should rely totally on stall fedproduction systems using crop residues which are otherwise unused; and

(b) The project design is based on County-based forage and grain balances prepared by therespective Animal Husbandry Bureaus3. These data will be utilized during supervision toensure that: (i) existing forage balances will support existing and incremental (non-project and project) ruminant populations; (ii) no seasonal imbalancs will result due toproject intervention; and, (iii) to plan the addition of participating cattle-raisinghouseholds. The forage balance table will be included in the Project Implementation Plan(PIP). During implementation, each county AHB would prepare, on a 6-month basis tocoincide with supervision missions, updated feed balances. These will be spot-checkedby the mission. The Monitoring and Evaluation Units (MEUs) attached to the local PMOswill be responsible for this work. The cost in terms of office support and data collectionwill be borne from Project counterpart funds assigned for this purpose. The estimatedbudgets, agencies responsible and monitoring schedules are set out in Table 7.

Table 7 -Environmental Mltigation Plan (EMP) for Forage Balance MonitoringActivity Agency(ies) Monitoring Objectives Budget

Responsible ScheduleForage and Local AHB rcport at 6 month -adequate crop byproduct supplies Y10,000/Grain Local MEU intervals -correct project household county/yr.Balance Local EPB distibutionMonitoring Superviscd by spot -seasonal crop byproduct supply Source:

checks and ex-post sustamability counter-reviews by Bank -verification of crop byproduct part findsmisions utilizaion

Waste production from household calf production. Environmental mitigation mesures relatedto household production need to take account of reduction of odors, dust and water pollution.The most important mitigation factors are twofold: (a) the small production size of up to twobreeding cows with three or four calves per household; and (b) the continuous disposal of all solidwastes as organic fertilizer of household plots. Disposal of liquid wastes will not be required assuch waste drains into the soil, Cattle sheds will not have hard-top flooring, with the exception ofhouseholds ruising ten or more fattening cattle, which will be required to achieve floorconstruction standards similar to small-size feedlots.

Notwithstanding the small size of individual production units, applicants for the program will berequired to provide certain pro-forma data relating to environmental aspects as part of thesubmissions to participate and these will be reviewed by the environmental staff of the PMO as aroutine activity. The mitigation plan is summarized in Table 8.

3 These balances are the foundations of the analysis which produces the very precise livestock numbersincluded in the project schedules developed by the local implementation agencics.

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Table 8 - Environmental Mitigation Plan for Household Cattle ProductionActivity Agency(ies) Monitoring Objectives Budget

Responsible Scbedule1. Apply for I. Househ MonitorinA indicators: Adequate public health Perhousehold PMO, local condidons householdpermit, government. -Compliance with EPB - Absence of air, water, Per year:2. Review and 2. PMO, EPA regulations. ground pollution.approve catle - Adequate manure Increased cattle Y500shed design. disposal. production efficicncy. (S60)3. Rcview crop 3. AHB, -Number of cattle . Compliance with EPBbyproduct household within permitted and Project standards. Source:availability. numbcs.4. Review 4. AHB, -Location of projectmanure diBposal household, EPA shed/cattle from human budget.method(s), dwellings.5. Clear S. PMO, EPA -Completion or statushouschold for of training.entry into -Understanding ofProject. regulations.6. Provide 6. PMO -Utilization of croptaining byproducts.7. Establish 7. PMO, EPAmonitoring Monitoringfreuency:indicators.8. Periodic S. PMO, EPA, -continuous;supervision. Bank supervision missions.9. Instirume 9. Localcompliance and govem=nt, PMO Rpenalty system

-6-month intervals,__ __ __ __ _ I________ _ based on spot checking. ___

Waste production from small scale feedlots, villages markets and veterinary stations. Theproject would support upgrading of about 130 existing small to medium sized feedlots dispersedacross the four project provinces. They will be phased in gradually, based on the gradual increasein incremental projeCt output of young feeder cattle and in response to actual demands. Thephasing adopted for the purposes of project scheduling is shown in Table 9 which indicates thatabout 60% of the feedlots will be very small (100 hcad capacity) while the remainder aredistributed fairly evenly between 200, 300 and 500 head units.

Table 9 - ProJected Phasi g, Number and Location of Feedlots by ProvinceFeedlots PY1 PY2 PY3 PY4 PYS Total

130Anhui 17200 head 4 8 4 16400 head 0500 head 1 1

1Hobei - - 50100 bead 14 13 27300 head 9 10 19500 bead 4 4

Henan100 head 51 51

Shanxi500 head 6 6 12

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In the absence of any domestic regulatory procedures covering such enterprises, the project hasrelied on criteria defined by the US Envirommental Protection Agency to determiine maximumanimal feeding operation production unit sizes and otherwise govem the development ofprocedures for evaluating these proposals as they emerge.

The 1972 Amendments to the US Clean Water Act cover regulation of emissions feedlot-typelivestock production systems. Within the general class of such "Animal Feeding Operations"(AFOs), a sub-class, referred to as Concentrated Animal Feeding Operations (CAFOs), isidentificd for the purpose of determining the need for permitting procedures. A CAFO is definedas:

(a) an AFO with a capacity of more than 1,000 animal units: or,

(b) an AFO with a capacity of between 301 - 1,000 animal units if it discharges pollutantsinto surface waters either directly (i.e. the surface waters which actually pass through thefacility) or indirectly via a constructed conveyance system (e.g. a pipeline installed forthe specific purpose).

In general, only CAFOs are subject to permining requirements under the US National PollutionDischarge Elimination System (NPDES) which prescribes the basic conditions under whichpollutant discharges may be made under the Clean Water Act.

As mentioned, China preserntly has no regulations covering animal feeding operations and, in theabsence of such rcgulations, the project design bas applied the US criteria in the following ways:

(a) the maximum capacity of AFO permissible under the project will be 500 animal units(the great majority; around 60%, are expected to be of around 100 unit size although thiswill be determined by individual participants); and,

(b) no AFO will be approved for financing undcr the project if; (i) there is a permanentstream passing through the site, and/or (ii) there is already or proposed any hydrologicalconnection between the AFO and any permanent stream.

In addition, the project design criteria go beyond the US criteria insofar as all AFOs to befinanced through the project will be subject of a project-based permitting process incorporatingthe supply by applicants of certain prescribed information and the evaluation of these by staff ofthe relevant PMO in consultation with the relevant EPB'. These applications also apply forvillage markets and veterinary service stations to be supported under the project. Local PMOswould have ongong responsibility for ensuring that feedlots and market comply with thetenms of their operating permits.

4 Under US procedures, this is an opton for AFOs less than 300 animal units in size or for AFOs ofbetween 301 and 1,000 animal units in size which are not classified as CAFOs, depending on pardcularcircumstances and at the discreton of the relevant rcglatory authorty.

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The minimum information to be provided in an application for a feedlot, market or vet stationpermit is as followse: Assistance should be requested by permit applicants from local EPB staffwith the procedures leading to permit approval and subsequent compliance. Local EPB staff tobe involved in permit approval and environmental monitoring should receive relevant andadequate training beforehand.

(a) A darption of the proposed fedlot, market or veteuiary sation, iluding thenumbers of cattle to be maired throughout the year, the feedmg strategy to beemployed, the source of feed, te sources of cattle and the likely destination of the finishcattle.

(b) A site pla which shoud show the layout aid geeral composition of the feedlotincludig:'

(i) The general layout of the felot, market or vet staon with respect to adjacenthwusing, roads and ote physical features of note particularly surface waters;

(ii) The slope of the site with particular enpbasi on the idenfication of draiage andthe way in which water drains off the site;

(iii) The important construction features of the feedlot, market or vet station, such as thelocation of roofed areas and concrete siabs;

(iv) The location of manre storage asd handling and the manner in which drainag fromthis would be coolled; and,

(v) The location of any other import fetures of the site such as feed storage areas.

(tc) Site Investgats indicating what studies have been made in any site to idetify problem.tha might result from the use of the site. These should include, but not be limited to:

(i) Soil characteristics with specific emphais on soil texture (the proportion of sand, siltand clay) and the presence or absence of 6oil horizo (layers) that might impede thevertical movement of water;

(ii) Estimates of the water flow off the site as a result of rinfall and of day-to-daywateing and site cleaning activities; and,

(iii) Thc location of the chamels through which water would be expected to drain off thesite and the final destination of this water, particularly with respect to watr courses.

(d) The migation measures that are ircluded in the site design as a result of ftemvestigations undertaken m (iii) above and also any operaional prociedures that would beadopted in order to minimize enviroxnmeal problems. Particular attention must be givento the reduction of potial problems related to odor, flies, noise or dust,

(e) A maure and lqid waste managenit pln ihould be provided that identfies:

(i) the volumes of mamne and liquid wastes that would be produced through the year;(ii) fte volumes that would need to be stored between field disposal even;OHu) the manner in which the manure would be protecd form direct rainfall and in

which drainae from the mare stoage site would be controlled; and,

5 It should be noted ta the PPMO will provide guidelins to each of the PMOs on most of the following sothat it will be fairly ey for applcants to ievt* the necessary deuip crileria and fll out the form.

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(lv) the likely areas for the disposal of th Manure and the arrangemenu might be madewith fhrers, or others for he moval of te manure.

(f) Public Consuttion. A description of the conrmltadon with adjacem residents and of thirsupport or rejecdon of the feedlot, market or vet staion development plans.

Table 10 summarizes the environ=ental mitiption plin for feedlot producdon whe Table 11shows the budget allocations.

Table 10 - Eavirosemetal Ntlation Plan for Feedlot ProductionActivity Agency(ies) Monitoring &chedule Objective.

Responsible1 Prepare site 1. Feedlot *Supervie constuction for - No public health or safetyplan Applicant compliance with Permit bazard

2. Cary out site 2. Feetlot - Update frage balance for area -No discharge into ponds,investigation. application, with lakes,

EPA, PMO and - Prepare phasing in of catlo rivers, roads.local numbers and productiongovernment. scbedule - No air or noise pollution.Dept of Health

. Inspect completed feedlot -No ground water3. Develop 3. Applicant floors, dainage, prximity, con onmitigation EPA, PMO oveall building standardsmeasures -Sustainable arangunents

- Conduct training course for waste offiake by4. Prepare 4. PMO, EPA interested parties.manure and -Carry out 6-monthlyliquid waste inspections for. solid and liquid -no accumulation of liquidmanagement plan waste disposal or solid wastes.

5. Hae public 5. PMO, . Provide m1tigaion taining tocOnsultation Applicant, local feedlot management and workers

governmnent - Cary out periodic spot cbecks.

6. Obain 6. Applicant,cleaace for PMO, localbuilding erMit government I

Project budgets for feedlot establishment and management include: (a) construction, (b) training,and (c) M&E during implementalion. Charges are based on feedlot capacity.

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Table 11- Estimated Budglet fr vironmental to frelot ProductionFeedlot Size Construction U Triin X2 M&E Total Budget

._ _ Program\Yr. \3 (Yun) \4100-head Y4,000 Y0oo0 Y1,000 Y9,800

200.head Y6,000 Y800 YL,S00 Y14,300

3WShead Y7,000 Yl,000 Y2,SOO YIO,S00

400.head Y§,O-O Y1,000 Y3,000 Y25,OO0

5003 iead Ylo,000 YJ ,200, Y4,000 Y3 1,200

UConnciion would tail' pscked floors, liquid manure traiuge, solid manure arge.\2 Training: liquid and solid wate handling, public health aspecte, M&E prograrm compliance regulations\3 M*E program per Year: ofice suppon, report preparhion, data collection. Smff salaries am excluded.\4 Includes construction, trMining, and M&E for S PYs.

Zoonotic disease threats. Ruminants can transmit infectious diseases to humans when incontinuous close proximity to them, or when humans ingest or contact infectious discbarges. Twocommon zoonotic diseases are pulmonary and intestinal tuberculosis (transmitted from livestockand poultry) and Brucellosis (transmitted by large and small ruminants). To ensure thatzoonoticspread will not occur, the following measures will be taken:

* location of oattle sheds away from human diJellings* location of feedlots away from villages* adequate waste disposal to prevent direct conta and contamination of groundwater or

streams and rivers with seepage or surface rnmoff

Budgets and M&E measurcs are incorporated in those doaling diectly with feedloU. The locationof household sheds will be subject to initial evaluation and approval by local PMO upon theselection of project households, based on the evaluation of their facilities -and available land.Project cattle dying during implementation will undergo a post mortem examination to diagnosethe cause of death. This is done for insursaoe purposes and future disease prevention. Zoonoticdiseases are reportable diseases so that measures ,can be taken to prevent fartber spread. Themitigation plan for zoonotic diseases is shown in Tible 12.

Table 12 - Environmental Mitigation Plan for Zoonotic Disease ControlActvt Agency(ies) Monitoring Scheduie Objectives Budget

____ ___ R esponsible__ _ _ _ _ _ _ _ _ _ _ _ _ _

Zoonotic -Local PMO and Continuoui. -To prevent occurrnce of Mncluded indisease ARB zoonoses existing

. control -Regional Moniting figgered by To esure adequate Vetewinaryveterbay dh of catle, or dtiaosis public healh protecton Servicesdiagnostic lab in live cattle or humans. - To prevem spread of budgets.-Local health diagnosed zoonosesauthority Location of household

cattle sheds and feedl&s tobe approved as part of

I Ft into the project _.

Wastes from mmnufaturingprocslng activities. Of the five enterprises to be supported underthe project one will be new, three will be upgrades of existing operations and one will be anexpansion of an existing operation. The schedule of pollutdon control investments required forthese enterprises is as follows:

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* Heboi Huaxing - new pollution control facilities to be installed;* Henan Tanghe (upgrade) - existing pollution control facilities to be upgraded as part of

general upgrade of the whole operation;* Henan Zhoukou (upgrade) - project will provide upgraded meat packing facilities which

will not change pollutant discharges. Existing treatnent plant is sufficient to handlewastes;

* Shanxi Lunda Meat Co. (expansion) - the existing treatment plant will be upgraded tohandle additional waste water flows; and

* Anhui Yumei Meat Co. (upgrade) - a new waste trcatnent system will be installed tohandle wastes from both current and increased production.

Establishment/expansion and operation of slaughterhouses are regulated under Chineseenvironmental regulations and all participating enterprises will be required to secure newoperating permits to cover teair altered operations. The first stage in the process involvespreparation of enviromnental impact assessments covering the proposed development which,subject to approval of the project concept, is followed by review and clearance of waste treatmentsystems designs by the relevant EPB. Project funds will not be disbursed until proof of thatclearance is presented to the PMO. Subsequently, the commissioning of the treatment plantsrequires certification by the EPB and submission of periodic self-monitoring reports ismandatory. These procedures finction effectively in China and there are numerous competentengincering design institutes ofering services in the design of small scale waste watcr treatmentplants as there are suppliers offering package treatment systems designed to comply with relevantnational standards even under the intermittent operational conditions of slaughterhouses.

The mitigation steps to be followed within the project are summarized in Table 13. Reports onthe environmental conditions in slaughtering and processing plants would be submitted on aquarterly basis to the appropriate county or city environmental protection bureaus in accordancewith normal procedures, The provincial environmental bureaus would also be appraised quarterlyof the environmental conditions associated with the operation of the project. Summaryenvironmental reports would be submitted to the CPMO on a six-monthly basis for review by theBank. These reports would document the levels of compliance achieved by the facilities, describethe situations in which it has not been possible to achieve compliance and the measures that are tobe taken to ensure that the provincial standards are adequately met.

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Table 13 - EnvIronmental Mitiation Plan for Slaughtering and Procesuing EnterprisesActivity Agency(ies) MoiingchedulF Objectives

Responsible1. Prepar BIA 1. Applicant, EPB 1. Follow Project EIA report and -EnvironmentallyReport. EMP guidelines. compatible operation.2. Obmin 2. P4O0, EPBclearance of the -Example of Beut PracticesReport. in environmental impact3. Apply for 3. Local mitgation.Operating govemmenLPermit Compliance with China4. Complete 4. Applicant, 4. In consultation with PMO and EPB laws and regulations.Expansion, PMO in accordance with allocatedincluding Project budgets. *In-bouse Quality Assurancepollution program for environmentalconrol system. monitoring to be interalS. Establish 5. Applicant part of Brand name-basedEnvironmental marketing sategy forMonitng Unit quality beef.(EMUY)6. Obtain 6. Applicant,training for PMOEMU.7. Establish 7. Applicant, 6. See outline of indicuors andindicators and EPB, PMO monitoring technique in EMP.monitoringsystem.8. Establish 8. Applicant, 8. Monitorig to be continuousreporting PMO as part of HACCP/ISO-9002system. program; reporting to PMO9. Establish 9. Applicant, quarterly. Full reports to beQuality PMO, EPB annexed biannually to BankAssurance supervision mission materials.systoms. .__ __ _ _ _ _

E. ENVIRONMENTAL IMPACT MONITORING

Description of Monitoring Measures 2ad Indicators. Environmental Monitoring measures andindicators have been developed for; participating housoholds; feedlots, markets, service stations,and slaughteing/processing plants. Some of tiese have already been refTrTed to in the text, but allhave been tabulated in Table 14.

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Table 14 - Environmental Monitoring Mesures nd Indicators b Project ComponentProject Monitoring Measure(s)fIhdicator(s) Unit/MeasureActivityHousehold Cattle Available crop byproductsProduction Number of cattle No. <lyr, >1 yr,

Shed design as per PMO formatEnvironmental impact bainig certificateVisits by EPB, PMO household surveyWaste disposal for fattening HHs verified before PermitManure disposal verified: conta or self-use

Zoonotc Disese Cattle proximity lo dwellings verifiedControl Public health Public Health Bureau reports

Diagnosis of reportable disea AIB reportFeedlots FeeLot capacity As agreed per permit

Actual cattle tumover/yr. Production reportEMU in place Supervision verificationTraining received Supervision verificationSolid and liquid drainage systems; Verification of operationPollutnts discharge into watersheds EPB report(s)Contruction quality Supervision verificationFeedlot managnment Supenion verificationPublic consultation Interviews with nearby dweller

Supervision reports EPB reportsWorkers' safety Verification of compensation

reportsConstruction/equipment for pollution cotzol Verification of budget utilizationm place and supervsion !spection.

Simightering! Air emissions )Processing Plants Solid wases )

Liquid effluents ) Relevant national standardsDust )Health & Safety procedures )Compliance with EPB reulations EPB report.Public consultation Survey from adjacent dwellers.Training received Supervision reports and verification.In-houae EMU functional Supervision verification.Constucion/eequipment for pollution control Verification of budget utlizationin place and supervision inspection.

Feed Mills Air emissions )Dust ) Relevant national standardsWorker and Health safety )Public consultaion Interviews with local residentsCompliance with EPB regulations EPB reportTraining received EPB reportIn-house EMU finctional PMO report.

Supervision verification/monitoringreports.

Consu,ction/equipment for pollution control Verification of budget utilzationin place and supervision inspection.

Monitoring and reporting procedures. EIA monitoring is divided into (a) the monitoring ofindustrial entities such as slaughter houses, processing plants, and feed mills, and (b) monitoringof catte housedold production and feedlots. Agencies responsible for monitoring we indicated inTables 7, 8, 10, 12 and 13.

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Organization. A technical environmental monitoring group would be established under theProvincial PMO of each project province and under local county-level PMOs, with responsibilityfor day-to-day management of environmental activities during project implementation. Seniorstaff of this group will be familiar with environmental issues related to agriculture and, generally,are expectcd to be seconded from local EPBs. Feedmills and slaughtering/processing plantswould have their own in-house Environmental Management Units as is current practice in China

The EMU's would:* review compliance of project funded facilities with the existing regulations,* undertake and/or supervise minor ongoing impact assessment activities for the establishment

of new feedlots or other facilities introduced later in project implementation, and* provide advice and design inputs to other project components on environmental issues (an

example of this would be in the desip, location and management of manure storage systems)* assist PEMO in reviewing and clearing construction permits* undertake all technical monitoring and reporting, and* prepare M&E reports at the appropriate time.

F. CAPACT DEVELOPMENT AND TRAING

Training Programs. Training has been arranged for all project participants in accordance withtheir technical needs. This includes environmental impact mitigation and monitoring, which willbe directed to the EMUs to be established in slaughtering/processing plants. In addition,participating households would receive basic training in environmental protection. The followingschedule provides information regarding training content and estimated cost. Training is to besynchronized just before the onset of project activities so that knowledge is fresh and up to date.The training schedules is shown in Table 15.

Table 15- Environmntal Impact MitigationTraining ProgramsComponent Training ProgramsHouseholds -feeds and feeding

-composting; anmoniated straw production; ensilaging-basic animal healthiygicnc

_____ _____ _____ ____ -manure handlingService Centers -animal health; hygiene

-water contamination-zoonotie diseases

FeedActs -feedlot m-anageinent-feeds and feeding-manure disposal.animal hygiene-worker safety-recording and reporting

___________________-EMUs: environmental monitoring

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Proceusing Plants -plant hygiene-HACCP/ISO-9002-meat inspection-beef gading-packing and storage-plant mangement-worker safety-EMU': environmental monitoring

Fecd Mills -noise, air pollution-worker afety-plantmanagement-dust control-fire protection.EMU's: environmental monitoring

Local EPBs, PMO/BMJ -.review procedures for compliance with localenvironmental regulations and laws- implementation of the Environmental Management Plan

Procurement of Civil Works, Equipment and Supplies. Current Bank guidelines for theprocurement of environmentally-related civil works and equipment, and the use of standardChinese bid documents, would apply to all Project-related procurement. All civil works,equipment and supplies associated with pollution control would be procured by NCB forcontracts over SIOO.OOO with direct shopping for contracts below that amount. NCB contractsbetween S400,000 and S2,000,000 would be subject to the Bank's prior review. Ex-post reviewsof statements of expenditure for expenditures not subject to prior review would be carried out aspart of procuromcnt supervision. The PPMOs have already established qualified procurementstaff at county and higher level PMOs. A Bank procurement review has been completed andcleared. Procurement would proceed in accordance with the time schedule presented in Table 16.

Organizational Changes. No organizational changes are envisaged in the implementation of theProject's environmental pollution control measures. EMUs will be attached to all local andprovincial PMOs. Review measures for permits are in place. Staff is being appointed and trained,and environmental mitigation will be dealt with during the Launch Workshop. Reportingmechanisms are in place.

G. IMPLEMENTATION SCHEDULE AND COST ESTIMATES

Implementation Schedule. Thc implementaion schedule for environmental training, monitoringand evaluation (M&E) is presented in Table 16 and follows the overall training schedule set outin the PIP (Table 9). Part of the budgets listed under Trining are also dedicated to training forpurposes other than environmental skills development, but have been isolated as much aspossible. This is especially the case for the training of households. Environmental M&E budgetshave been presented as cumulative (i.e. recurmnt) budgets from PY1 through PY4,

Recurrent and Capital Investment Cost Estimates. Rocurrent M&E cost estimates have beenextended throughout the project's life span through PY4. Standard training costs andenvironmental pollution control equipment or construction for feedlots and service centers havebeen standardized per unit (see notes, Table 16). Training costs have also been standardized perperson trained.

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Table 16- Environmental M&E Tr ng_lmplementation Schedule by Province & BudgetActivity Unit Qty PY2 PY3 PY4 Total Value PY2 PY3 PY4 Totsl

FYI Qty PY1 Y'OOOHenan Total 4993.4Civil woks:Sevice centes No, 101 101 50.5 50.5Pecdlots No 51 Si 204.0 204.0Procesing Unit 2 2 394.5 394.5

'uquipatent: Servie cents No. 101 2 2 101.0 2070.0 2171.0Processing Units .

Irsinin _ _Houscholds No. 12150 12150 12150 36450 607.5 607.5 607.5 1822.5Service ceters Persons 505 101 MS.5 50.5Foedlotr Persons 102 102 20A 20.4Pcessing Persons, 20 20 20.0 20,0

M&E Tohl Y T W0 1- 7.0 -2 2600 260.0* - 81 7.0Cum. Costs Ytyr.

Hebei Total 3350.2Civil works:Serviee centr No. 57 39 96 28.5 19.5 43.0Fccdlots Nc. 23 24 52 96.0 48.0 144.0Processing Unlts 2 2 166.0 414.0

Equipment: -

Service cenrers No. 57 39 96 57.0 39.0 96.0Proccsuing No. 2 2 267.0 _ _ 267.0

Training - -

Households No. 18489 18489 36973 924.5 924.5 1149.0Semice centers Pesons 235 195 480 19.5 4S.0Feedlots ?erODs I1f 78 196 1S.6 39.2Proccsing Pcnons 20 20 20.0 20.0

AMff Totl Y'O _ 119.0 102.2 102.0 102.0 425.0Cum, Cons Y/yr.Anhui Total 2813.7Civil works:Servic ccnr No. 42 27 17 9 95 21.0 135 3.5 4.S 47.5Feedlots No. 4 12 12 2 30 6.4 52. 46.4 20.0| 125.6Processinx Units 1 1 15.3 - 15.3

Equipmnent: - -

Service centers No. 42 27 17 9 95 42.0 27.0 17.0 9.0 95.0Processg No, I I 1 -9 - 4,9

Households No. 8361 19154 13523 2866 43904 413.1 975.7 676.2 6.6 2076.6Service enter Pesons 210 135 aS 45 475 42.0 27.0 17.0 9.0 9S.0FeedJots PCrsons 16 72 56 20 164 3.2 14.4 11.2 4.0 32.8Proceaing Persons 10 10 10.0 - 10.0

MU - Tota Y 'uu 53.0 77.0 1 1 131,1 379,UCumL Costs Ytyr.

Shanxi 425 .8Civil works:Servicecnt r No. 113 113 56.5 56.5Feedlots No. 6 6 12 60.0 60.0 120/0P Units 2 2 51.8 51.8

Equipment:Service centers No. 113 113 113.0 113.0Processing No. 2 2 1552.5 - - - 1552.5

Training.Households No. 20000 4000 6000 2000 32000 1 D00.0 200.0 300.0 100.0 1600.0Scrvicc =ntcrs Pereons 565 565 113.0 113/0Feedlots Persons 60 60 120 12.0 12.0 24.0Proccssinu Pe irs n 20 20 20.0 - 20.0

MAE Total 119.0 137.0 1155.u 155 . 155.u 6-U1Cum, Coss Y/yr.

Notes - see next page

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Costs are unified by activity across provinccs, with the cxccption of civil works and equipmcM for proCessing plantsand feed mills. Markets arc includcd undcr Scrvicc Ccnters.Civil Works unit costs: service centers YSOO; fcdlos; 100 hed Y4,000, 200 head YI,600, 300 hoad Y7,000; 400 headY9,000; 500 had YIO,000.Equipment: service centers Y1000, feedlots: 100 head Y2000; 300 head Y2000; 500 bhad Y5000.Taining costs: Tnaining cost /household Y50/penon. Households pay one-half of cost.Average persons/service sation trained: 5 pemons @Y100 each.Persons/feedlot nained: 100 hd -2 persons; 200 hd -4; 300 hd - 5; 500 hd- 10. Cost/person: Y200 each.10 persons trained per processing plant @ Yl,000 each. Paid by enterprises.3 perns trained per feed mill e YS00 each. Paid by enterprises.M&E coswyT.: Service centers: YI,000; Feedlots; avg. Y2,000, processing plants: Y3,000. Cumulative budget/yr. toPYS.

H. INTEGRATION OF EMP wiTh PROJECT

As indicated, the onset of environmental pollution control parallels project implementation,beginning at construction, and will be closely monitored byPMOs and EMU's. Subloan approvalwould be conditional to the completion of required completing the necessary documentation andaction related to pollution mitigation.