Shanxi Inclusive Agricultural Value Chain Development Project

(RRP PRC 48358)

Due Diligence Report on Land Use Rights

Transfer and Land Acquisition and
Resettlement

Project number: 48358-001

August 2017

People’s Republic of China: Shanxi Inclusive

Agricultural Value Chain Development Project

Prepared by Zhiyang He for the Asian Development Bank

PRC: Shanxi Inclusive Agriculture Value Chain Development

Project

Due Diligence Report on Land Use Rights

Transfer and Land Acquisition and
Resettlement

(Revised on 25 June 2017)

August 2017
Zhiyang He, Land and Resettlement Specialist
 TABLE OF CONTENTS

1. Introduction .............................................................................................................................. 1
1.1 Project Background ....................................................................................................... 1
1.2 Tasks Assigned and Progress ......................................................................................... 1
1.3 Methodology and approaches ...................................................................................... 1
2. Land Acquisition and Resettlement Impacts Screening ............................................................ 4
2.1 Screening of LAR Impacts .............................................................................................. 4
2.2 Documentation Preparation on LAR ............................................................................. 4
3. Type and Scope of Voluntary Land Use of PACs ........................................................................ 6
3.1 State-Owned Land Occupation ..................................................................................... 6
3.2 Leasing of Collective-Owned Land ................................................................................ 7
4. Review on LURT Contracts ........................................................................................................ 9
4.1 Profile of LURT Contracts .............................................................................................. 9
4.2 Contract Counterpart, Voluntary Negotiation and Signature Status............................. 9
4.3 Contract duration of LURT Contracts ............................................................................ 9
4.4 LURT rental rates and Adjustment mechanism ........................................................... 10
4.5 Approval status of land use of facility agriculture ....................................................... 10
5. Compliance of Land Contracts with the PRC and ADB Requirements..................................... 17
5.1 Compliance review of Land Contracts based on documents review and KIIs with .......
PACs ............................................................................................................................. 17
5.2 Compliance review of Land Contracts based on HHs surveys and KIIs with villagers . 17
6. Capacity of the EA/IA and PACs ............................................................................................... 18
6.1 Overall Project Implementation Organizations and Structure .......................................... 18
6.2 Capacity of Management of LURT and Land Cooperation ................................................ 21
7. GRM and Monitoring Arrangements....................................................................................... 22
7.1 Responsibilities of Agencies/staff for the Proposed GRM ................................................. 22
7.2 GRM for Land Use Transfer and Land Cooperation Complaints ........................................ 22
7.3 Complaint and Grievance Redress Records ....................................................................... 23
7.4 Internal and External Monitoring Arrangement ............................................................... 23
8. Conclusions and Recommendations ....................................................................................... 24
8.1 Main Conclusions of DDR ....................................................................................... 24
8.2 Follow-up Action Plan .............................................................................................. 25
Appendices:..................................................................................................................................... 26
Appendix I: Collective land leased by PACs ..................................................................................... 26
Appendix II: Detailed TERMS OF REFERENCE for EXTERNAL SOCIAL SPECIALIST ............................ 27
Appendix III: Scanned Sample Copies of the LURT agreements and/or Land Certificates .............. 32
1. Introduction

1.1 Project Background

The Shanxi Provincial Government (SPG) requested the Asian Development Bank (ADB)
to help eradicate extreme poverty and improve livelihood in the poverty-stricken areas of the
province by capitalizing on the potential of agriculture sector in developing rural income-
generating opportunities. The SPG particularly requested help on the implementation of the
new rural development policy of the People's Republic of China (PRC) to promote agriculture-
based industry for local specialty agricultural products as part of its poverty alleviation and rural
development program. The Shanxi Inclusive Agricultural Value Chain Development Project (the
project) impacts will be (i) inclusive economic opportunities in the rural areas of Shanxi Province
increased, and (ii) poverty in the rural areas of Shanxi Province reduced. The project outcome
will be increased income-generating opportunities from selected local specialty agricultural
products. The project particularly aims at strengthening the value chains of local specialty
agricultural products with untapped market potential in 17 counties in 6 municipalities.1
The Project will be implemented by 19 Project Agriculture companies (PACs) specializing
in livestock and agricultural production and/or processing. Project implementation will be
overseen and coordinated by the provincial Project Management Office (PMO) and county level
PMOs (CPMOs).
The project outputs will be (i) agricultural value chain strengthened and (ii) Inclusive Business
(IB) mechanism piloted.

1. Output 1: Agricultural value chain strengthened. ADB introduced the value chain (VC)
approach to Shanxi for subprojects selection and project design, and the project will demonstrate
effective ways to advance the agriculture sector in Shanxi. Main activities will include: (i) capacity
building for PMOs and project agribusiness companies and cooperatives (PACs) on value chain
concept and approach for business plan development, subproject selections, VC action plan
formulation, and project design; (ii) financing for 10 PACs’ investment in value chain
strengthening; 2 (iii) advisory services for those PACs to improve their business model and
management, and their cooperation with upstream or downstream partners especially farmers;
(iv) implementation of AVC action plans to demonstrate model AVCs by at least eight PACs; and (iv)
dialog with services providers, such as financial institutions, and local government to catalyze
solutions to the common needs of players along model value chains.

2. Output 2: Inclusive Business (IB) mechanism piloted. To ensure farmers especially the low
income and poor groups adequately benefit from the agriculture sector development, the IB
concept and approach were introduced to Shanxi. The project will aim at piloting a localized IB
mechanism to promote private sector solutions to poverty reduction and sustainable development.
Key activities will include: (i) appraisal of companies and their proposals using a tailor made four-

1 Those local specialty products include primary and processed products of livestock and meat, coarse grains,
vegetables, fruits, mushrooms, flowers, and Chinese herbs.
2 The financing will be used to strengthen the model value chains for (i) better product quality, (ii) higher

production efficiency, (iii) greater value added through deep processing, (iv) richer diversity of final products to
meet different consumers’ needs, (iv) cold chain development and wider market coverage, and (v) greener
production.
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dimensional scoring tool for subproject selection and identification of potential IB companies; 3 (ii)
incubation of IB models, formulation of IB action plans, and ex-ante social impact assessment of
selected IB companies; (iii) implementation of IB action plans by IB companies and monitoring of
the action plan implementation by the provincial project management office (PMO); (iv) creation
of incentive program to promote IB practices such as interest rebates and IB awards; (v) advisory
services and training for IB model development and IB mechanism establishment; and (vi)
mainstreaming of IB mechanism into the government poverty alleviation and rural development
program.

3 Four dimensions comprise (i) market and value chain, (ii) financial performance, (iii) social impact of
investment, and (iv)innovation.
2
 Figure 1: Shanxi Project Counties/districts. Red circles denote project counties

A list of all the sub-projects as of June 22th 2017 is provided in table 2 below.

In order to avoid and/or minimize the involuntary resettlement impacts and develop
necessary mitigation measures if needed, the resettlement specialist conducted field survey
and documents review on various issues relating to Land Use Right Transfer (LURT) and/or
Land Acquisition and Resettlement (LAR) during the PPTA stage of this project. Consequently,
3
a draft final report has been prepared to summarize the latest progress and findings of LURT
and LAR review for the project.

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 Table2: Subproject Activities and Cost
No. Project Project Company Name Type of Subproject Activity Subproject Cost
Municipality County Subproject
AVC IB Group Product ADB loan (CNY
million)
1 Changzhi Qin Shanxi Qinzhouhuang Millet Group Co., Ltd. Crop + Processing Millet 10.0
2 Datong Guangling Guangling Beiye Edible Fungus Industrial Development Co., Ltd. √ Processing Fungus 31.0
3 Datong Datong Shanxi Phoenix Wine Industry Co., Ltd. √ Processing Wine 8.0
4 Jinzhong Taigu Shanxi Juxin Weiye Agricultural and Sci & Tech Development Co., Ltd. Crop Vegetables & fruit 39.0
5 Jinzhong Heshun Heshun County Lvhe Ecological Agriculture & Livestock Development Co. Ltd.
6 Linfen Fenxi Fenxi Hongchang Breeding Co., Ltd. √ Livestock Chicken raising 26.0
7 Linfen Fushan Fushan Guheng Husbandry Sci. & Tech. Co., Ltd. Livestock Pig raising 30.0
8 Linfen Quwo Quwo Lvheng Agricultural Development Co., Ltd. Crop Mushrooms 30.0
9 Linfen Xiangning Shanxi Qierkang Elaeagnus Biological Products Co. √ Processing Chi Guo 39.0
10 Linfen Yaodu Dist. Linfen Zhongde Farming Technology Development Co., Ltd. Livestock Pig raising
11 Luliang Liulin Fuzhongyuan Livestock Breeding Cooperative Livestock Pig raising 12.0
12 Luliang Shilou Shilou Shude Jujube industry Co., Ltd. √ Processing Red dates 18.0
13 Yuncheng Ruicheng Shanxi Tian Zhi Run Jujube Industry Co., Ltd. √ Processing Red dates 40.0
14 Yuncheng Xinjiang Xinjiang Hefeng Grain Planting Technology Cooperatives √ Crop Double season Huai 10.0
15 Yuncheng Xinjiang Shanxi Xinjiang Vegetable Industry Development Co., Ltd. √ Service Vegetable trade 38.0
16 Yuncheng Yanhu Shanxi Kaisheng Fertilizers Group Co., Ltd. Crop Mushroom cultivation 30.0
17 Yuncheng Yanhu Yuncheng Xinke Taifang Vegetable Trading Co., Ltd. 32.0
18 Yuncheng Yuanqu Shanxi Shanlihong Food Co., Ltd. √ Processing Hawthorn, apricot, tomatoes 20.0
19 Yuncheng Jishan Shanxi Jilong Cultivation Co., Ltd. Livestock Broiler chicken eggs

1
 1.2 Tasks Assigned and Progress
(1) Land Acquisition and Resettlement Screening
Based on the screening, it’s confirmed that no LAR will be involved for the proposed
components, including in the scopes of environmental protection of livestock raising PACs.
Thus, this project is categorized as C in term of resettlement and ADB’s Involuntary
Resettlement policies is not triggered in such an agriculture value chain develop project. There
is no need to prepare a resettlement plan (RP).
(2) Land Use Right Transfer
Land leasing is the main channel which the project has taken to obtain the use right for
relevant land for cropping, livestock farming, processing, storage and marketing, etc.
For such voluntary land use agreements or land use right transfer (LURT), due diligence
reviews have been conducted by land and resettlement specialist. Following key works have
been completed during these reviews:
a. Collected data on LURT for each subproject/PAC,
b. Reviewed LURT procedures and contracts; and assessed whether these are voluntary,
transparent, fair, beneficial to farmers, endorsed/verified/validated by a third party, and whether
these are in compliance with PRC laws and ADB guidelines/best-practices on voluntary
agreements;
c. Assisted the PACs to improve LURT in case any deficiencies are found;
d. Prepared a due diligence report (DDR) documenting the findings and any corrective
actions.
(3) other related works
a. Assisted the EA/IA for consultation and disclosure of DDR;
b. Provided necessary inputs to the draft RRP and its appendixes and linked documents
including the draft PAM;
c. Reviewed capacity of the EA/IA and PACs and provided training to their relevant staff;
d. Undertaken any other necessary tasks assigned by the team leader. The work has been
carried out following the ADB’s SPS and its procedural requirements regarding LAR.

1.3 Methodology and approaches

Followings methodology and approaches have been adopted to carry out the works
mentioned above:
(1) Document review
Collected and reviewed all the land lease contracts, meeting minutes, payment records,
complaint records (if any), etc. See details in table 3. See the sample land lease contracts
and/or land certificates in Appendix III.

Table 3: Documents collected and reviewed

No. Company Name land lease Land use right Facility Agriculture Farmers’ complaint
contracts Certificate land use permit authorization records
letters
1 Shanxi Qinzhouhuang Millet Group Co., N/A Y N/A N/A Not
Ltd. received
2 Guangling Beiye Edible Fungus Y Not obtained Y Y Not
Industrial Development Co., Ltd. received
3 Shanxi Phoenix Wine Industry Co., Ltd. Y N/A N/A N/A Not
received
4 Shanxi Juxin Weiye Agricultural and Sci Y N/A Y Y Not
& Tech Development Co., Ltd. received
5 Heshun County Lvhe Ecological Y N/A N/A Y Not
Agriculture & Livestock Development received
Co. Ltd.
6 Fenxi Hongchang Breeding Co., Ltd. Y N/A N/A N/A Not
received
7 Fushan Guheng Husbandry Sci. & Tech. Y N/A Y Y Not
Co., Ltd. received
8 Quwo Lvheng Agricultural Y N/A Y Y Not
Development Co., Ltd. received
9 Shanxi Qierkang Elaeagnus Biological Y N/A N/A N/A Not
Products Co. received
10 Linfen Zhongde Farming Technology Y N/A Y Y Not
Development Co., Ltd. received
11 Fuzhongyuan Livestock Breeding Y N/A Y Y Not
Cooperative received
1
 No. Company Name land lease Land use right Facility Agriculture Farmers’ complaint
contracts Certificate land use permit authorization records
letters
12 Shilou Shude Jujube industry Co., Ltd. Y N/A N/A N/A Not
received
13 Shanxi Tian Zhi Run Jujube Industry Y N/A N/A Not
Co., Ltd. received
14 Xinjiang Hefeng Grain Planting Y N/A Not obtained N/A Not
Technology Cooperatives received
15 Shanxi Xinjiang Vegetable Industry Y N/A N/A Not
Development Co., Ltd. received
16 Shanxi Kaisheng Fertilizers Group Co., Y N/A Not obtained Y Not
Ltd. received
17 Yuncheng Xinke Taifang Vegetable Not obtained N/A N/A Not
Trading Co., Ltd. received
18 Shanxi Shanlihong Food Co., Ltd. Y N/A N/A Not
received
19 Shanxi Jilong Cultivation Co., Ltd. Y N/A Not obtained Y Not
received

(2) Site observation

Among 19 PACs, 7 have been visited and observed in project sites by the land and
resettlement specialist to better understand the land types, land status, land ownership, and
land outputs which are involved in land lease. See details in Table 4.
Table 4 Site observation Progress
No. Project Municipality Project County Company Name Site
visited
so far
1 Changzhi Qin Shanxi Qinzhouhuang Millet Group Co., Ltd. N
2 Datong Guangling Guangling Beiye Edible Fungus Industrial Development Co., Ltd. Y
3 Datong Datong Shanxi Phoenix Wine Industry Co., Ltd. Y
4 Jinzhong Taigu Shanxi Juxin Weiye Agricultural and Sci & Tech Development Co., Ltd. Y
5 Jinzhong Heshun Heshun County Lvhe Ecological Agriculture & Livestock Development Co. N
Ltd.
6 Linfen Fenxi Fenxi Hongchang Breeding Co., Ltd. Y
7 Linfen Fushan Fushan Guheng Husbandry Sci. & Tech. Co., Ltd. Y
8 Linfen Quwo Quwo Lvheng Agricultural Development Co., Ltd. N
9 Linfen Xiangning Shanxi Qierkang Elaeagnus Biological Products Co. N
10 Linfen Yaodu Dist. Linfen Zhongde Farming Technology Development Co., Ltd. N
11 Luliang Liulin Fuzhongyuan Livestock Breeding Cooperative N
12 Luliang Shilou Shilou Shude Jujube industry Co., Ltd. N
13 Yuncheng Ruicheng Shanxi Tian Zhi Run Jujube Industry Co., Ltd. N
14 Yuncheng Xinjiang Xinjiang Hefeng Grain Planting Technology Cooperatives N
15 Yuncheng Xinjiang Shanxi Xinjiang Vegetable Industry Development Co., Ltd. Y
16 Yuncheng Yanhu Shanxi Kaisheng Fertilizers Group Co., Ltd. Y
17 Yuncheng Yanhu Yuncheng Xinke Taifang Vegetable Trading Co., Ltd. N
18 Yuncheng Yuanqu Shanxi Shanlihong Food Co., Ltd. N
19 Yuncheng Jishan Shanxi Jilong Cultivation Co., Ltd. N
Total 7
(3) Focus Group Discussion
Organized focus group discussions in communities in project areas to better learn about
the concerns, attitudes, willingness, opinions, options of involved household and other
stakeholders. See details in Table 5.
Table 5: FGDs on LURT and Land Cooperation in Field
No. Project Project Company Name Site visited FGD Participants
Municipality County in
Male Female
Field
2 Datong Guangling Guangling Beiye Edible Fungus Industrial Development Y Y 8 4
Co., Ltd.
3 Datong Datong Shanxi Phoenix Wine Industry Co., Ltd. Y Y 5 2
4 Jinzhong Taigu Shanxi Juxin Weiye Agricultural and Sci & Tech Y Y 6 2
Development Co., Ltd.
6 Linfen Fenxi Fenxi Hongchang Breeding Co., Ltd. Y N 0 0
7 Linfen Fushan Fushan Guheng Husbandry Sci. & Tech. Co., Ltd. Y Y 6 3
15 Yuncheng Xinjiang Shanxi Xinjiang Vegetable Industry Development Co., Y Y 10 4
Ltd.
16 Yuncheng Yanhu Shanxi Kaisheng Fertilizers Group Co., Ltd. Y N 0 0
Total 7 6 35 15

2
 Figure 2: FDGs on LURT of PACs
(4) Key Informant Interview
Interviewed the key informants to obtain key information on the local practices and
experiences of LURT in project areas, analyzed the potential risks and difficulties in LURT
and/or LAR, and sought for effective measures to overcome these challenges.
(5) Stakeholder Consultation
Organized the stakeholder consultations among involved households, local government
officials, community cadres, and owners of PACs to find win-win results on LURT.
(6) Questionnaire survey
Designed and conducted questionnaire survey on involved households to better know their
socio-economic status, as well as their attitudes, willingness, opinions, options on LURT.

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2. Land Acquisition and Resettlement Impacts Screening

2.1 Screening of LAR Impacts

As of 5th June 2017, all of the 19 PACs have submitted their land documents to PPTA
consultants. Based on the screening and review on available land documents, none will involve
in permanent nor temporary land acquisition, house demolition and constrain of resource
access. All these 19 PACs will use land through (i) existing state-owned land occupation, and
(ii) rural collective land leased from village committees and/or villagers. Meanwhile, no LAR
impacts is necessary in the scopes of environmental protection for livestock raising PACs
according to EIAs of all PACs. Therefore, all these 19 subprojects have been categorized as C
in term of Involuntary Resettlement as per ADB’s Safeguard Policy Statement (SPS, 2009).
See details in Table 6.
2.2 Documentation Preparation on LAR
As per the screening of LAR impacts of 19 PACs, they are categorized as C in term of IR.
Thus no documentation on LAR is necessary at project preparation stage.

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 Table 6: Screening on LAR impacts of subprojects
No. Project Project Company Name Land Acquisition House Demolition Constrain of Recourse Category of Remarks
Municipality County Access IR
Permanent Temporary Permanent Temporary Permanent Temporary

#1 Changzhi Qin Shanxi Qinzhouhuang Millet Group Co., Ltd. None None None None None None C Only existing SOL occupied
Datong Guangling Guangling Beiye Edible Fungus Industrial None None None None None None C Only COL leased
#2
Development Co., Ltd.
#3 Datong Datong Shanxi Phoenix Wine Industry Co., Ltd. None None None None None None C Land leasing
Jinzhong Taigu Shanxi Juxin Weiye Agricultural and Sci & Tech None None None None None None C Only COL leased
#4
Development Co., Ltd.
Heshun County Lvhe Ecological Agriculture & None None None None None None C Only COL leased
#5 Jinzhong Heshun
Livestock Development Co. Ltd.
#6 Linfen Fenxi Fenxi Hongchang Breeding Co., Ltd. None None None None None None C Only COL leased
Linfen Fushan Fushan Guheng Husbandry Sci. & Tech. Co., None None None None None None C Only COL leased
#7
Ltd.
Linfen Quwo Quwo Lvheng Agricultural Development Co., None None None None None None C Only COL leased
#8
Ltd.
Linfen Xiangning Shanxi Qierkang Elaeagnus Biological None None None None None None C Only COL leased
#9
Products Co.
Linfen Yaodu Dist. Linfen Zhongde Farming Technology None None None None None None C Only COL leased
#10
Development Co., Ltd.
#11 Luliang Liulin Fuzhongyuan Livestock Breeding Cooperative None None None None None None C Only COL leased
Luliang Shilou Shilou Shude Jujube industry Co., Ltd. None None None None None None C Only collective construction
#12
land leased
#13 Yuncheng Ruicheng Shanxi Tianzhirun Dates Industry Co., Ltd. None None None None None None C Only existing SOL occupied
Yuncheng Xinjiang Xinjiang Hefeng Grain Planting Technology None None None None None None C Only COL leased
#14
Cooperatives
Yuncheng Xinjiang Shanxi Xinjiang Vegetable Industry None None None None None None C Only COL leased
#15
Development Co., Ltd.
#16 Yuncheng Yanhu Shanxi Kaisheng Fertilizers Group Co., Ltd. None None None None None None C Only COL leased
Yuncheng Yanhu Yuncheng Xinke Taifang Vegetable Trading None None None None None None C Only existing SOL occupied
#17
Co., Ltd.
#18 Yuncheng Yuanqu Shanxi Shanlihong Food Co., Ltd. None None None None None None C Only existing SOL occupied
#19 Yuncheng Jishan Shanxi Jilong Group Feed Co., Ltd. None None None None None None C Only COL leased
Note: SOL=State Owned Land, COL=Collective Owned Land.

5
3. Type and Scope of Voluntary Land Use of PACs

The project involves voluntary land use by PACs involving a total of 19857.71 mu (1,323.85 ha) land.
Of this, the land use rights of 19,315.61 mu (97.3 %) have been leased from farmers. The remaining
542.1 mu (2.7%) is state-owned land.

3.1 State-Owned Land Occupation

Among the 19 PACs, 6 will use their existing state-owned land (542.1mu) to implement
entire or part of their subproject. They all obtained the state-owned land use right certificates
from local governments except Guangling Beiye Edible Fungus Industrial Development Co.,
Ltd. and Yuncheng Xinke Taifang Vegetable Trading Co., Ltd that are yet to complete their
process for land use rights certificates.
The process of state-owned land use right certificates of Guangling Beiye Edible Fungus
Industrial Development Co., Ltd. is still undergoing and will be obtained by the end of June,
2017.
Yuncheng Xinke Taifang Vegetable Trading Co., Ltd only signed the investment and land
use contract with local government in the end of 2013. And this PAC needs to obtain the formal
land use right certificate as soon as possible to ensure its land use is fully legal before the
implementation of the project.
It’s confirmed that no LAR impacts will be involved due to the state-owned land occupation
on the basis of the screening by PACs and land and resettlement specialist.
See details in Table 7.
Table 7: Details of State Owned land Use
State Any
period
Land owned LAR
Land Year of of
No. Company Name area land use impact Remarks
use type approval validity
(mu) right (Y/N)
(years)
certificate
#1 Shanxi existing 59.4 obtained 2008 50 N
Qinzhouhuang SOL
Millet Group Co., occupied
Ltd.
#2 Guangling Beiye existing 21 Not yet N/A N/A N Will obtain the
Edible Fungus SOL land certificate by
Industrial occupied the end of June
Development Co., 2017; lease
Ltd. collective land
meanwhile
#13 Shanxi Tianzhirun existing 55.44 obtained 2016 50 N
Dates Industry SOL
Co., Ltd. occupied
#15 Shanxi Xinjiang existing 19.5 Obtained 1992 50 N
Vegetable SOL
Industry occupied
Development Co.,
Ltd.
#17 Yuncheng Xinke existing 366.06 Not yet N/A N/A N only signed the
Taifang Vegetable SOL investment and
Trading Co., Ltd. occupied land use contract
with local
government in
the end of 2013
#18 Shanxi existing 20.7 obtained 2010 50 N
Shanlihong Food SOL
Co., Ltd occupied
Total 542.1

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 3.2 Leasing of Collective-Owned Land
Among the 19 PACs, 14 PACs have leased collective land from village committees and/or
villagers for their subprojects. Normally farm land was leased for crops planting, and barren
land and construction land was leased for livestock raising or agriculture productions storage,
processing and selling. For the later, if farmland was leased, agriculture facilities land use
certificate need to be approved by local land bureaus. See details in Table 8.

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 Table 8: Land Use Type and Scope
No. Project Project Company Name Land use type Land area Involved village HHs Persons Remarks
Municipality County (mu) involved Involved
#1 Changzhi Qin Shanxi Qinzhouhuang Millet Group Co., existing SOL occupied 59.4 none 0 0 Land use right certificate obtained
Ltd. already in 2008
#2 Datong Guangling Guangling Beiye Fungus Industrial COL leased+ existing SOL 98.8 Sanzhuang Village Huquan Town 21mu SOL plus 77.8mu COL
30 100
Development Co., Ltd. occupied leased
#3 Datong Datong Shanxi Phoenix Wine Industry Co., Ltd. COL leased 1790.5 Wujiawa Village and Liangzhuang 52 167 790mu (Barren hills)+1000.5mu
Village, Guayuan Township (farmland)
#4 Jinzhong Taigu Shanxi Juxin Weiye Agricultural and Sci & COL leased 774 Beiwang Village Beiwang Township Two land contracts
Tech Development Co., Ltd. 194 776
#5 Heshun County Lvhe Ecological COL leased 8300 Cuishangzhuang Village, 8000 mu of barren hills and 300
Jinzhong Heshun Agriculture & Livestock Development Co. Yangguangzhan Town, Heshun County 22 70 mu of farmland contracted with 22
Ltd. HHs
#6 Linfen Fenxi Fenxi Hongchang Breeding Co., Ltd. COL leased 40 Sunnanzhuang Group Shenfu Village 2 7 Barren hills , two land contracts
Yongan Town
#7 Linfen Fushan Fushan Guheng Husbandry Sci. & Tech. COL leased 200 Liang Village Zhangzhuang Town
19 61
Co., Ltd.
#8 Linfen Quwo Quwo Lvheng Agricultural Development COL leased 909.63 Anju Village Gaoxian Town Two land contracts
166 490
Co., Ltd.
#9 Linfen Xiangning Shanxi Qierkang Elaeagnus Biological COL leased 3360.52 Qiantai Village Guantou Township
511 2044
Products Co.
#10 Linfen Yaodu Dist. Linfen Zhongde Farming Technology COL leased 147.09 Xu Village Xiandi Town Two land contracts
32 139
Development Co., Ltd. 126.3+20.79mu
#11 Luliang Liulin Fuzhongyuan Livestock Breeding COL leased 100 Qinmaoshang Group Wangjiapo Village Leased from Yinong
Cooperative Chengjiazhuang Town 14 50 professional agricultural
cooperatives
#12 Luliang Shilou Shilou Shude Jujube industry Co., Ltd. collective construction land 35.2 Shilou County Cold Storage 0 0 collective construction land
leased Leased
#13 Yuncheng Ruicheng Shanxi Tianzhirun Dates Industry Co., Ltd. existing SOL occupied 55.44 N/A 0 0 Land use right certificate obtained
already in 2016
#14 Yuncheng Xinjiang Xinjiang Hefeng Grain Planting COL leased 3050.445 Xizhuang Village Beizhuang Town 765 2448 Lots of land contracts with HHs
Technology Cooperatives
#15 Yuncheng Xinjiang Shanxi Xinjiang Vegetable Industry existing COL occupied 19.5 Xiqu Village, Longxing Town 0 0 existing COL occupied
Development Co., Ltd.
#16 Yuncheng Yanhu Shanxi Kaisheng Fertilizers Group Co., COL leased 400.42 Donggu Village Beixiang Town 118.83+281.59
105 370
Ltd.
#17 Yuncheng Yanhu Yuncheng Xinke Taifang Vegetable existing SOL occupied 366.06 N/A 0 0 Land use right certificate not yet
Trading Co., Ltd. issued by local government
#18 Yuncheng Yuanqu Shanxi Shanlihong Food Co., Ltd. existing SOL occupied 20.7 N/A 0 0 Land use right certificate obtained
already in 2010
#19 Yuncheng Jishan Shanxi Jinlong Group Feed Co., Ltd. COL leased 130 Xiwei Village, Huodian Town 31 86
Total 6 Municipalities 17 counties 19 PACs 19857.705 1943 6808
Note: SOL=State Owned Land, COL=Collective Owned Land.

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4. Review on LURT Contracts

4.1 Profile of LURT Contracts

Among the 19 PACs 14 PACs involved in LURT and signed 835 land contracts for 19,315.61mu
(1,287.7 ha) land, within which 817 contracts with 4,503.745 mu signed directly with farmer
families, 16 contracts with 14,676.66 mu land signed with village committees, 1 contract with
35.2 mu land signed with another enterprises, and the remaining 1 contract with 100 mu land
signed with a farmers’ cooperative. See details in table 9.
Table 9: LURT and Cooperation Contracts
Land transfer and land cooperation

with other with Farmer

No. of Land area with Farmers with Village committee
No. PAC Name enterprise Cooperatives
Contracts (mu)
No. of No. of No. of Land No. of Land
Land (mu) Land (mu)
Contracts Contracts Contracts (mu) Contracts (mu)
#2 Guangling 1 77.8 1 77.8
Beiye
#3 Shanxi 53 1790.5 52 1453.3 1 337.2
Phoenix
#4 Juxin Weiye 2 774 2 774
#5 Heshun Lvhe 1 8300 1 8300
#6 Fenxi 2 40 2 40
Hongchang
#7 Fushan 1 200 1 200
Guheng
#8 Quwo Lvheng 2 909.63 2 909.63

#9 Shanxi 1 3360.52 1 3360.52

Qierkang
#10 Linfen 2 147.09 2 147.09
Zhongde
#11 Fuzhongyuan 1 100 1 100
#12 Shilou Shude 1 35.2 1 35.2
#14 Xinjiang 765 3050.445 765 3050.445
Hefeng
#16 Shanxi 2 400.42 2 400.42
Kaisheng
#19 Jishan Jinlong 1 130 1 130
Total 835 19315.61 817 4503.745 16 14676.66 1 35.2 1 100

4.2 Contract Counterpart, Voluntary Negotiation and Signature Status

Based on the documents review and KIIs, it’s confirmed that all the 835 contracts of 14
PACs were based on voluntary, equal and open negotiation between the two counterparts of
LURT and land cooperation. Agreements were reached on fairness and voluntariness (more
details will be provided and analyzed in final report). All contracts were in hard copies and
signed formally with the signatures of different parties.
Initially, 13 contracts of 9 PACs lacked the letters of authorization of LURT from involved
famer HHs. With the assistance of land and resettlement specialist, 13 authorization letters, in
which 8 with the signatures of both spouses of involved HHs have been provided for these
contracts signed with village committees rather than directly with farmer families.
Among the total 835 contracts, 825 have obtained the third-party certifications from local
county governments, town governments and their departments.
See details in Table 10.

4.3 Contract duration of LURT Contracts

9
 In the LURT contracts of above mentioned 14 PACs, the contract duration varies from 8
years to 70 years, with an average duration of 10.3 years. Contrary to the regulations on LURT
duration of farmland in PRC, the period of 3 contracts of 2 PACs would initially exceed the
remaining years of the second round farmland contract in project areas, including Fushan
Guheng and Linfen Zhongde. With the assistance of land and resettlement specialist,
supplementary agreements have been signed by the counterparts to correct the original
clauses of contract period. See details in Table 11.
4.4 LURT rental rates and Adjustment mechanism
The rental rates of all land leasing contracts are annually from 2 yuan to 150 yuan per mu
for barren land, 568.2 yuan per mu for construction land, and 300 yuan to 1260 yuan per mu
for farmland. The differences come from the different location, output, demand and other factors
of land contracted. 835 land contracts of 14 PACs have appointed the rent payment cycles,
such as one-time payment, annual payment, every 3 or 5 years payment, etc. While 7 contracts
of 5 PACs have established clear rental rates adjustment mechanism. The contracts that do not
clearly mention the rates adjustment have general provisions for review of terms in mutual
understanding of the parties involved. See details in Table 12.
During the due diligence review of land and resettlement specialist, 2 PACs have been
visited to assess the rental rates of land leasing through deep FGDs in field. The comparison
and findings are summarized in table 13. The evaluation of remaining PACs will be included in
final report.
4.5 Approval status of land use of facility agriculture
According to the land laws and regulations of PRC to protect cultivated land4, if farmland
will be used for agriculture facilities, such as shelter of livestock, greenhouses, facilities for
aquaculture, necessary storage and management houses, the review and approval must be
obtained by land user in advance. So in order to ensure all the PACs involved in agriculture
facilities can meet such requirements, the approval status of land use of facility agriculture has
been reviewed by land and resettlement specialist.
In sum, 9 PACs needed to obtain approval of facility agriculture land use from local land
bureaus, within which 7 PACs have obtained such approvals as of 5th June 2017, and the
remaining 2 PACs will complete the review and approval of facility agriculture land use as soon
as possible. See details in table 14.

4 Specified in Notice on some issues of improvement of the management of facility agriculture land, Ministry of
Land and Resources Management and Ministry of Agriculture, No.155, 2010
10
 Table 10: Contract counterpart, Negotiation and Signature Status of all Contracts
If the counterpart Consultation Voluntary Information Hard copies With the With the Corrective With the third Corrective
appropriate(Y/N) meeting Negotiation disclosed to kept by CV or signatures of signatures of action of party action of third
Company Contract Contract Corrective
No. organized (Y/N) all villagers Villagers(Y/N) involved CV or Spouses(Y/N) spouses certification(Y/N) party
Name No. counterpart actions taken
before (Y/N) Villagers(Y/N) signature certification
signature (Y/N)
#2 Guangling BY-01 Sanzhuang village Y(after correction) Authorization Y Y Y Y Y N TBD N
Beiye. committee from involved
farmer families
provided.
#3 Shanxi PW-01 to Mr. Ma Chao Y No need Y Y Y Y Y N TBD Y (local town
Phoenix 53 government)
Mr. Ma Fuquan Y No need Y Y Y Y Y N TBD Y (local town
government)
50 HHs in Dongping Y No need Y Y Y Y Y N TBD Y (local town
Village government)
Dongping Village Y No need Y Y Y Y Y N/A Y (local town
Committee government)
#4 Juxin Weiye JW-01 Beiwang Village Y(after correction) Authorization Y Y Y Y Y Y (in N
Committee from involved authorization
farmer families letter)
provided.
JW-02 Beiwang Village Y(after correction) Authorization Y Y Y Y Y Y (in N
Committee from involved authorization
farmer families letter)
provided.
#5 Heshun Lvhe LH-01 Cuishangzhuang Y(after correction) Authorization Y Y Y Y Y Y (in Y (local town
Village Committee from involved authorization government)
farmer families letter)
provided.
#6 Fenxi HC-01 Mr. Chen yuming Y No need Y Y Y Y Y N/A N TBD
Hongchang HC-02 Mr. Chen genshui Y No need Y Y Y Y Y N/A N TBD
#7 Fushan GH-01 Liang Village Y(after correction) Authorization Y Y Y Y Y Y (in Y(Land office of
Guheng Committee from involved authorization local town
farmer families letter) government)
provided.
Quwo Lvheng QL-01 Anju Village Y(after correction) Authorization Y Y Y Y Y N TBD Y (local town
Committee from involved government)
#8 QL-02 Anju Village Y(after correction) farmer families Y Y Y Y Y N TBD Y (local town
Committee (166 HHs) government)
provided.

11
 If the counterpart Consultation Voluntary Information Hard copies With the With the Corrective With the third Corrective
appropriate(Y/N) meeting Negotiation disclosed to kept by CV or signatures of signatures of action of party action of third
Company Contract Contract Corrective
No. organized (Y/N) all villagers Villagers(Y/N) involved CV or Spouses(Y/N) spouses certification(Y/N) party
Name No. counterpart actions taken
before (Y/N) Villagers(Y/N) signature certification
signature (Y/N)
Shanxi QEK-01 Qiantai Village Y No need Y Y Y Y Y N TBD Y (Agriculture and
Qierkang Committee economy office of
#9
local town
government)
Linfen ZD-01 Xu village Y(after correction) Authorization Y Y Y Y Y Y (in N TBD
Zhongde committee from involved authorization
farmer families letter)
#10
ZD-02 Xu village Y(after correction) (32 HHs) Y Y Y Y Y Y (in N TBD
committee provided. authorization
letter)
Fuzhongyuan FZY-01 Yinong Agriculture Y(after correction) Authorization Y Y Y Y Y Y (in N TBD
productions from involved authorization
#11 processing farmer families letter)
professional (7 HHs)
cooperative provided.
Shilou Shude SS-01 Shilou County Cold Y No need Y Y Y Y Y N/A N TBD
#12
Storage
#14 Xinjiang XJHF- 765 Farmer families Y No need Y Y Y Y Y N TBD Y(Local town
Hefeng 001 to government)
765
#16 Shanxi KS-01 Donggu Village Y(after correction) Authorization Y Y Y Y Y N TBD N TBD
Kaisheng Committee from involved
KS-02 Xigu Village farmer families Y Y Y Y Y N TBD N TBD
Committee (32 HHs)
provided.
#19 Jishan JL-01 Village Committee Y(after correction) Authorization Y Y Y Y Y Y (in TBD
Jinlong from involved authorization
farmer families letter)
(31 HHs)
provided.
Note: TDB=To be done before updating the DDR prior to the project construction.

12
 Table 11: Durations of land lease contracts
Land Type Duration Compliant
No. Company Name Contract No. Contract counterpart Land term Corrective actions taken Remarks
(years) (Y/N)
#2 Guangling Beiye. BY-01 Sanzhuang VC, Huquan Town Farmland 15 2014.5.8-2029.5.7 Y
#3 Shanxi Phoenix PW-01 to 53 Mr. Ma Chao Barren land 25 2013.10.18-2037.1.10 Y
Mr. Ma Fuquan Barren land 25 2013.10.18-2037.1.20 Y
50 HHs in Dongping Village farmland 8 2017.03.28-2025.03.28 Y
Dongping VC farmland 8 2017.03.28-2025.03.28 Y
#4 Juxin Weiye JW-01 Beiwang VC, Beiwang Township Farmland 15 2011.3.30-2026.3.29 Y
JW-02 Beiwang VC, Beiwang Township Low productive land 13 2013.3.30-2026.3.30 Y
#5 Heshun Lvhe LH-01 Cuishangzhuang VC 8000 mu of Barren land 70 2012.4.25-2082.4.27 Y(after Corrected to 2012.4.25-2027.4.27 Supplementary contract
and 300 of farmland correction) for farmland provided on 31 Mar. 2017
#6 Fenxi Hongchang HC-01 Mr. Chen yuming Barren land 50 2016.9.24-2046.9.23 Y
HC-02 Mr. Chen genshui Barren land 50 2016.9.24-2046.9.23 Y
#7 Fushan Guheng GH-01 Liang VC Farmland 30 2015.4.1-2045.3.31 Y(after Corrected to 2017.2.1-2037.1.30 Supplementary contract
correction) provided on 29 Mar. 2017
Quwo Lvheng QL-01 Anju VC, Gaoxian Town farmland 13 2016.5.23-2028.12.30 Y
#8
QL-02 Anju VC, Gaoxian Town farmland 15 2014.1.1-2028.12.30 Y
Shanxi Qierkang QEK-01 Qiantai VC, Guantou Township Wood land 29 2015.5.1-2044.4.30 Y
#9

Linfen Zhongde ZD-01 Xu VC, Xiandi Town farmland 50 2008.7.11-2058.7.10, Y(after corrected to 2008.7.11-2025.7.1 Supplementary contract
correction) provided on 21 Mar. 2017
#10
ZD-02 Xu VC, Xiandi Town farmland 49 2009.3.26-2058.3.25 Y(after corrected to 2009.3.26- 2025.3.26 Supplementary contract
correction) provided on 21 Mar. 2017
Fuzhongyuan FZY-01 Yinong Agriculture productions farmland 13 Y
#11 processing professional 2017.1-2029.12
cooperative
Shilou Shude SS-01 Shilou County Cold Storage Collective construction 21 Y
#12 2017.1.1-2037.12.31
land
#14 Xinjiang Hefeng XJHF-001 to 765 Farmer families farmland 10 2015.9.25-2025.9.25 Y
XJHF-765
#16 Shanxi Kaisheng KS-01 Donggu VC, Beixiang Town farmland 11 2013.7-2024.7 Y
KS-02 Xigu VC, Beixiang Town farmland 11 2013.7-2024.7 Y
#19 Jishan Jinlong JL-01 VC farmland 16 2017.1.1-2032.12.31 Y

13
 Table 12: Rental rates and adjustment mechanism in land leasing contracts
Land Type Rental rate Rental Payment Cycle Rental received by
Company Clearly Stated Adjustment
No. Contract No. Contract counterpart (per mu annually) villagers or CV in time Remarks
Name mechanism
(Y/N)
#2 Guangling BY-01 Sanzhuang VC, Huquan Town Farmland 800 every 5 years no Y
Beiye.
#3 Shanxi PW-01 to 53 Mr. Ma Chao Barren land 10 One-time no Y
Phoenix Mr. Ma Fuquan Barren land 6 One-time no Y
50 HHs in Dongping Village farmland 300 Annual no Y
Dongping VC farmland 300 Annual no Y
#4 Juxin Weiye JW-01 Beiwang VC, Beiwang Township Farmland First payment for 2 years, Y
600 then one payment for every 3 no
years
JW-02 Beiwang VC, Beiwang Township Low productive land 300 Same as above no Y
#5 Heshun Lvhe LH-01 Cuishangzhuang VC, 8000 mu of Barren land 2 yuan for barren land, 500 yuan for high every 5 years no Y
Yangguangzhan Town and 300 of farmland yield farmland and 300 yuan for normal
farmland
#6 Fenxi HC-01 Mr. Chen yuming Barren land 150 Not clear in contract No Y
Hongchang HC-02 Mr. Chen genshui Barren land 150 Not clear in contract No Y
#7 Fushan GH-01 Liang VC, Zhangzhuang Township Farmland Y
300 One-time no
Guheng
Quwo Lvheng QL-01 Anju VC, Gaoxian Town farmland 900 annual Increase 50 yuan per year Y
#8
QL-02 Anju VC, Gaoxian Town farmland 800 annual Increase 50 yuan per year Y
Shanxi QEK-01 Qiantai VC, Guantou Township Wood land 120 Kg wheat for first class land, and100 based on market price of Y
#9 annual
Qierkang Kg for second class land wheat
Linfen ZD-01 Xu VC, Xiandi Town farmland Based on the land leasing Y
450 Every 3 years
Zhongde market price after 6 years
#10
ZD-02 Xu VC, Xiandi Town farmland Based on the land leasing Y
450 Every 3 years
market price after 6 years
Fuzhongyuan FZY-01 Yinong Agriculture productions farmland based on negotiation every Y
#11 1260 annual
processing professional cooperative three years
Shilou Shude SS-01 Shilou County Cold Storage Collective construction Y
#12 568.2 annual No
land
#14 Xinjiang XJHF-001 to 765 Farmer families farmland Y
400 Every 3 years No
Hefeng XJHF-765
#16 Shanxi KS-01 Donggu VC, Beixiang Town farmland 1200 annual No Y
Kaisheng KS-02 Xigu VC, Beixiang Town farmland 1200 annual No Y
#19 Jishan Jinlong JL-01 VC farmland Annual market value of 350 Y
Market Value of 350 Kg wheat annual
Kg wheat

14
 Table 13: Evaluation of rental rates of 5 PACs visited in April 2017 by Land and Resettlement specialist
No. PAC Name No. of Land type Rental rates Local net AAOV of similar land 5 Local market price of land Review Remarks
contracts (yuan/mu) (yuan/mu) leasing6 conclusion
(yuan/mu)
Guangling 1 800 600 800 fair PAC will give priorities to involved HHs to rent their greenhouses after
#2 Farmland
Beiye. constructed
53 300 200 300 fair PAC will give priorities to involved HHs to get employed in their grape
#3 Shanxi Phoenix Farmland
base.
Total 54 6.5% of total 835 contracts

5 According to the FGDs with involved villagers and cadres of village committees.
6 According to the FGDs with involved villagers and cadres of village committees.

15
 Table 14: Approval status of land use of agriculture facility structure
Land Type Proposed Approval of land use of agriculture Time of Approval
No. Company Name Contract No. Contract counterpart
activities facility structure
#2 Guangling BY-01 Sanzhuang VC, Huquan Town Farmland Fungus Obtained in March 2014
Yes
Beiye. Processing
#3 Shanxi Phoenix PW-01 to 53 Mr. Ma Chao Barren land No need
Mr. Ma Fuquan Barren land No need
Wine Processing
50 HHs in Dongping Village farmland No need
Dongping VC farmland No need
#4 Juxin Weiye JW-01 Beiwang VC, Beiwang Township Farmland Vegetables & Yes Obtained in April 2017
JW-02 Beiwang VC, Beiwang Township Low productive land Obtained in April 2017
fruit Yes

#5 Heshun Lvhe LH-01 Cuishangzhuang VC, Yangguangzhan Town 8000 mu of Barren land and 300 of
No need
farmland
#6 Fenxi HC-01 Mr. Chen yuming Barren land No need
Chicken raising
Hongchang HC-02 Mr. Chen genshui Barren land No need
#7 Fushan Guheng GH-01 Liang VC, Zhangzhuang Township Farmland Obtained in March 2017
Pig raising Yes

Quwo Lvheng QL-01 Anju VC, Gaoxian Town farmland Yes Obtained in November 2016
#8 Mushrooms
QL-02 Anju VC, Gaoxian Town farmland Yes Obtained in November 2016

Shanxi QEK-01 Qiantai VC, Guantou Township Wood land

#9 No need
Qierkang
Chi Guo Planting
Linfen Zhongde ZD-01 Xu VC, Xiandi Town farmland Yes Obtained in June 2012
#10
ZD-02 Xu VC, Xiandi Town farmland Yes Obtained in June 2012
Fuzhongyuan FZY-01 Yinong Agriculture productions processing farmland Obtained in April 2017
#11 Pig raising Yes
professional cooperative
#12 Shilou Shude SS-01 Shilou County Cold Storage Collective construction land Red dates No need
#14 Xinjiang Hefeng XJHF-001 to 765 Farmer families farmland For the permanent structure, the approval has been
Crop Not yet
765 obtained on 19 May
#16 Shanxi KS-01 Donggu VC, Beixiang Town farmland Not yet To be approved by July 2017
Kaisheng Mushroom
KS-02 Xigu VC, Beixiang Town farmland Not yet To be approved by July 2017

#19 Jishan Jinlong JL-01 VC farmland Chicken raising To be approved by July 2017
Not yet

16
5. Compliance of Land Contracts with the PRC and ADB Requirements

5.1 Compliance review of Land Contracts based on documents review and KIIs with PACs
After the proposed corrective actions are basically taken by PACs with the assistance of
land and resettlement specialist, it can be confirmed that all the land contracts are generally
compliant with RPC’s regulations on land use and ADB’s requirements on voluntary land use
or voluntary settlement, on the basis of documents review and KIIs with PACs. See details in
Table 15.

Table 15: Compliance review of land contracts based on docs review and KIIs with PACs
No. of Transparent Consultation and/or Voluntariness Adverse Rent Fairness Hard Copy Records
No. PAC Name
Contracts discussion impact
#2 Guangling 1 Y Y Y N Generally, yes Y
Beiye
#3 Shanxi Phoenix 53 Y Y Y N Generally, yes Y
#4 Juxin Weiye 2 Y Y Y N Generally, yes Y
#5 Heshun Lvhe 1 Y Y Y N Generally, yes Y
#6 Fenxi 2 Y Y Y N Generally, yes Y
Hongchang
#7 Fushan 1 Y Y Y N Generally, yes Y
Guheng
#8 Quwo Lvheng 2 Y Y Y N Generally, yes Y
#9 Shanxi 1 Y Y Y N Generally, yes Y
Qierkang
#10 Linfen Zhongde 2 Y Y Y N Generally, yes Y
#11 Fuzhongyuan 1 Y Y Y N Generally, yes Y
#12 Shilou Shude 1 Y Y Y N Generally, yes Y
#14 Xinjiang Hefeng 765 Y Y Y N Generally, yes Y
#16 Shanxi 2 Y Y Y N Generally, yes Y
Kaisheng
#19 Jishan Jinlong 1 Y Y Y N Generally, yes Y
Total 835 Y Y Y N Generally, yes

5.2 Compliance review of Land Contracts based on HHs surveys and KIIs with villagers
Among the social survey of 205 HHs in April 2017 by social team, only 35 HHs are involved
in LURT with PACs. More HHs will be sampled and surveyed on LURT and land cooperation
by land specialist and his assistant while updating the DDR.

17
6. Capacity of the EA/IA and PACs

6.1 Overall Project Implementation Organizations and Structure

To prepare and implement the Project, relevant organizations have been appointed or
established to play their roles and take their responsibilities correspondingly. See details in
table 16 and figure 3.
Table 16: Project Implementation Organizations’ Roles and Responsibilities on Land Use
Project Implementation Organizations Management Roles and Responsibilities
Provincial Project Management Office (PPMO; On behalf of the executing agency, the PPMO will be responsible for
Poverty Alleviation and Development Office) overall coordination and supervision of land use during project
preparation and implementation, including:
Provide necessary assistance to land and resettlement specialist to conduct
DDR on LURT and LAR;
Review and confirm DDR on LURT and LAR;
Provide endorsement to implement the Follow-up Action Plan in DDR;
Appoint a focal staff to take the responsibility of coordination and
supervision of land use of PACs;
Organize necessary trainings to PACs on the land use policies and
requirements of PRC and ADB;
Engage external social specialist during the implementation stage;
Report the implementation status of land use, especially the Follow-up
Action Plan in DDR, to ADB regularly as per requirements of ADB.
County Land and Resource Bureaus Conduct land pre-examination for PACs;
County Land and Resource Bureaus of 17 Provide guidance for PACs on LURT;
project counties Review and confirm DDR on LURT and LAR of PACs;
Assist to address land disputes, in any, during project preparation and
implementation; and
Supervise the land use of PACs.
Implementing Agencies: Coordinate procurement for the subprojects;
County Project Management Offices Undertake day-to-day management activities during project
County Poverty Alleviation and Development preparation and implementation;
Offices of 17 project counties Ensure PIUs are in compliance with EMP, LURT Agreements, GAP,
SDAP, etc.;
Prepare (a) quarterly project progress report, (b) semi-annual
environmental and social safeguard monitoring progress report, and
(c) subproject financial statements to PPMO; and
Summarize project experience and promote project replication in the
county
Project Implementation Units Ensure environmental and social safeguards are complied with based
Established in 19 PACs on ADB’s Safeguard Policy Statement (2009) and LURT agreements
and social and gender action plans implemented;
Provide CPMO with inputs to (a) quarterly project progress report,
mid-term report and project completion report (b) semi-annual
environmental and social safeguard monitoring progress report, and
(c) annual subproject financial statements;
Establish and maintain the required project accounting arrangement
and other implementation recording systems; and
Implement the contracts signed with village committees/farmer
cooperatives/farmer households.
ADB Provide guidance to SPG to ensure compliance with loan and project
agreements;
Conduct regular loan review missions, a midterm review, and a
project completion review mission;
Monitor project implementation progress;
Update regularly the project performance review reports with the
assistance of EA and IA; and
Update regularly the project information documents for public
disclosure at ADB website, including the safeguard documents.
ADB = Asian Development Bank, CPMO = county project management office, EA = executing agency, EMP = environmental management plan,
GAP = gender action plan, IA = implementing agency, MPMO = municipal project management office, NCB = national competitive bidding, PIUs
= project implementation units, PACs = project agribusiness companies or cooperatives; PPMO = provincial project management office, RF =
resettlement framework, RP = resettlement Plan, RR = reimbursement request, SDAP = social development action plan, SFD = Shanxi Finance
Department, SPADO = Shanxi Poverty Alleviation and Development Office, SPG = Shanxi Provincial Government, WA = withdrawal application,
LURT=Land Use Right Transfer, DDR=Due Diligence Report.
Source: Asian Development Bank estimates.

18
Asian Development Bank

19
 Shanxi Provincial Government
Provincial Project Leading
Executing Agency
Group
Provincial Project Management Office
(SPADO)

Municipal Governments (6) (Yuncheng,

Lvliang, Linfen, Jinzhong, Datong,
Municipal Project Coordinating
Changzhi)
Group
Municipal Project Management Offices
(MPADO)

County Governments (17)

[Yuncheng (Yanhu District, Yuanqu,
Ruicheng, Xinjiang, Jishan), Lvliang
(Shilou, Liulin), Linfen (Xiangning, Fenxi,
Quwo, Fushan, Yaodu District), Jinzhong County Project Working Group
(Taigu, Heshun), Datong (Datong,
Guangling), Changzhi (Qin)

Implementing Agencies

County Project Management Office

(CPADO)

Project Implementation Units

22 PACs

Contractors, Suppliers, Service Providers

Figure 3: Project Organization Structure

Project agreements
Document Flow
Guidance

CPADO = County Poverty Alleviation and Development Office, MPADO = Municipal Poverty
Alleviation and Development Office, PACs = project agribusiness companies or cooperatives
PPADO = Provincial Poverty Alleviation and Development Office

20
6.2 Capacity of Management of LURT and Land Cooperation
(1) Capacity Evaluation
In general, EA, PMOs and IAs have good experience of project preparation, coordination,
management and implementation. For provincial PMO, this Project is their second ADB financed
agriculture project, so they are familiar with the requirements of ADB’s procedures and policies.
And the local PMOs and PACs own good experience of land use, including LURT and land
cooperation, for domestic project. However, PMOs and PACs are not well familiar ADB’s specific
and detailed requirements of voluntary settlement and on LURT and land cooperation. So, land
and resettlement specialist provided a training on related subjects to the staffs of PMOs and PACs
in the inception mission in January 2017.

(2)Capacity strengthening
In order to strengthen the capacity of PMOs and PACs on LURT and land cooperation, the
external social specialist, who will be recruited by provincial PMO, will also provide training and
consulting services for relevant organizations and staffs while monitoring the SDAP, GAP and
implementation of LURT and land cooperation agreements. See the TOR of the external social
specialist in appendix II.

21
7. GRM and Monitoring Arrangements

7.1 Responsibilities of Agencies/staff for the Proposed GRM

The PMO Social Officer will coordinate the GRM and will: (i) establish a registration system
to document and track grievances received; and (ii) report on progress of the GRM in the semi-
annual social monitoring and progress reports to ADB.

The MPMOs will coordinate the GRM at the city level. The CPMO social officers will (i)
instruct the concerned PACs of their responsibilities in the GRM; (ii) establish liaison with PACs
to ensure that all complaints received and immediately resolved by them are reported, and that
more difficult issues are referred to the CPMO and set up their own recording system for
gathering GRM data and passing it on to the PMO

The CPMOs will coordinate the GRM at the local level. The CPMO social officers will (i)
instruct the concerned PIUs and contractors on their responsibilities in the GRM; (ii) establish
liaison with PIUs and contractors to ensure that all complaints received and immediately
resolved by them are reported, and that more difficult issues are referred to the CPMO; and set
up their own recording system for gathering GRM data and passing it on to the PMO.

Prior to project construction, the CPMO will notify all relevant agencies about the project
and the GRM so that if these agencies receive complaints, they know to contact the CPMO and
follow up as necessary.

7.2 GRM for Land Use Transfer and Land Cooperation Complaints

Stage 1 (maximum 5 days). If a concern arises, the involved person or group submits a
written petition or oral complaint to the PAC or Village Committees. If the complaint is eligible
the following steps are taken by the PAC or Village Committees.

 Step (i) PAC or Village Committee receives complaint and assesses if the complaint
is eligible. Eligible is defined as if the (i) the complaint pertains to the project; and (ii)
the issues fall within the scope of social issues that the GRM is authorized to address.

 Step (ii) Within 2 days of receiving the complaint, PAC or Village Committee will
provide clear advice to the involved person or group on the proposed corrective action,
with a given date of action. The corrective action(s) will be implemented no later than
5 days from the issuance of the letter. For a verbal complaint, the PAC or the Village
Committee must take written records in a complaint register. If the complaint is
successfully solved, PAC or the Village Committee informs CPMO which records the
grievance redress process in its central register. If the corrective action cannot be
easily addressed by the PAC or the Village Committee then the complaint will be
referred to the CPMO and Stage 2 actions.

 Step (iii) The PAC or Village Committee submits all documentation on the case to
CPMO. This will include making a written record of any oral complaints.

Note, if a complaint is assessed as ineligible, the PAC or Village Committee meets

with the involved person and informs them and will ask the involved person if they
would like to be referred to relevant agencies.

Stage 2 (maximum 10 days). For complaints not resolved in Stage 1,

 Step (i): The CPMO social focal point meets with the involved person or group to
discuss the grievance and to seek a possible solution. The responsible agency (e.g.,
PAC, village committee, contractor) implements the agreed solution. The outcome is
reported to the CPMO within 5 working days of receipt of this advice.
22
  Step (ii): If step (i) is unsuccessful (i.e. no solution can be identified or the involved
person / group is unsatisfied with the proposal), the CPMO will refer the complaint to
the provincial PMO.

Stage 3 (maximum 10 days). For complaints not resolved in Stage 2, Stage 3 is initiated,
which follow the same procedures as stage 2. The provincial PMO will take lead to address and
solve the complaints, or coordinating with its level project leading group and administrative
bureaus.

Stage 4: If the above stages are unsuccessful, people adversely affected by the project
may submit complaints to ADB’s East Asia Department or Accountability Mechanism.

In any stage, involved persons can file an action in a court in accordance with the relevant
Laws of the PRC. Involved persons can decide to go through the legal system directly or may
decide not to use project level grievance channels. An aggrieved person may also express
grievance to the external monitor, who would then report to it to PMO and ADB. Alternatively,
the aggrieved person(s) may submit a compliant to the ADB project team to try to solve the
problem. If good faith efforts are still unsuccessful, and if there are grievances that stemmed
from a violation of ADB’s safeguard policy, the affected persons may appeal directly to ADB in
accordance with ADB’s accountability mechanism. 7 All agencies will accept grievances and
appeals from the APs for free, and costs reasonably incurred will be disbursed from the
contingencies.
7.3 Complaint and Grievance Redress Records
As of the end of May 2017, no complaint and grievance on LURT nor land cooperation is
received and reported by PACs and PMOs.
7.4 Internal and External Monitoring Arrangement
During the implementation stage of the Project, PACs and PMOs in different levels will
take the responsibilities of internal monitoring of LURT and land cooperation. The actual land
use and LURT situation, rental payment status, complaint and grievance records (if any) need
to be included in the progress reports as a separate section which will be submitted to ADB.
Meanwhile, an external social specialist will be recruited by Shanxi PMO during the
implementation stage to monitor and evaluate the status and performance of Social
Development Action Plan, Gender Action Plan, as well as LURT and land cooperation. A social
monitoring report, including the section of land use, LURT and land cooperation, will be
prepared and submitted by external social specialist to Shanxi PMO and ADB semi-annually.
See details in the TOR of external social specialist in appendix II.

See: www.adb.org/accountability-mechnaism
23
8. Conclusions and Recommendations

8.1 Main Conclusions of DDR

(1) No LAR Impact will be caused by the Project. The project is categorized as C in terms
of resettlement as per ADB’s SPS (2009) and IR requirements.

(2) 6 PACs will use their existing state owned land to implement all or part of their
subproject, within which 2 PACs (Guangling Beiye Edible Fungus Industrial Development Co.,
Ltd. and Yuncheng Xinke Taifang Vegetable Trading Co., Ltd.) will obtain the formal land use
right certificate in a timely manner to ensure its land use is fully legal prior to the construction
of this subproject.

(3) 14 PACs have leased collective land through LURT for their subprojects.

(4) Among the 19 PACs 14 PACs involved in LURT and signed 835 land contracts for
19,315.61mu (1,287.7 ha) land with farmer families, village committees, other enterprises or
farmers’ cooperative. The contract duration varies from 8 years to 70 years, with an average
duration of 10.3 years. In order to meet the requirements on duration of LURT in China,
supplementary agreements have been signed by the counterparts to correct the original
clauses of contract period of 3 contracts of 2 PACs.

(5) Based on the land location, quality, output value, market demand and supply situation
as well as other related factors, the rental rates of all land leasing contracts are annually from
2 yuan to 150 yuan per mu for barren land, 568.2 yuan per mu for construction land, and 300
yuan to 1260 yuan per mu for farmland respectively. All land contracts have appointed the rent
payment cycles, such as one-time payment, annual payment, every 3 or 5 years payment, etc.
While 7 contracts of 5 PACs have established clear rental rates adjustment mechanism. For
the contracts that have not clearly mentioned rates adjustment have general provisions of
review of terms in mutual understanding of parties involved.

(6) Based on the documents review and KIIs, it’s confirmed that all the 835 contracts of 14
PACs were based on voluntary, equal and open negotiation between the two counterparts of
LURT and land cooperation. Agreements were reached on fairness, legality and voluntariness.
All land contracts were kept in hard copies and signed formally with the signatures of different
parties.

(7) Three key issues were identified on basis of initial screening and review on original land
contracts, including: (i) 13 contracts of 9 PACs lacked letters of authorization of LURT from
involved farmer families; (ii) the period of 3 contracts of 2 PACs exceeded the remaining years
of the second round farmland contract in project areas, thus making the contact duration invalid
as per relevant laws of PRC; (3) 9 PACs needed to obtain approval of facility agriculture land
use from local land bureaus. With the assistance of land and resettlement specialist, the
necessary authorization letters from involved farmer families and supplementary corrective
clauses on inappropriate contract duration have been provided by PACs to resolve the first two
issues. Seven of 9 PACs have obtained approvals of facility agriculture land use as of the end
of May 2017, while the 2 PACs (Shanxi Kaisheng Fertilizers Group Co., Ltd. and Shanxi Jilong
24
Group Feed Co., Ltd.) will obtain the formal land use right certificate in time.

8.2 Follow-up Action Plan

(1) Complete the approvals of state-owned land use certificate and facility
agriculture land use in a timely manner

Guangling Beiye Edible Fungus Industrial Development Co. and Yuncheng Xinke Taifang
Vegetable Trading Co., Ltd will obtain the formal state-owned land use right certificate by the
end of June 2017 to ensure its land use is fully legal before the implementation of the project.
2 PACs, including Shanxi Kaisheng Fertilizers Group Co., Ltd. and Shanxi Jilong Cultivation
Co., Ltd., will complete the review and approval of facility agriculture land use by the end of
June 2017.

(2) Make the GRM Operational on Land Use under continuous operation during the
preparation and implementation stage of the project

GRM has been established in land contracts and this report. Such GRM on Land Use will
be put in continuous operation during the implementation stage of the project to ensure all the
potential disputes on land use can be redressed timely, legally, fairly and effectively. And all the
complaint and grievance records will be reported to Shanxi PMO and ADB in time.

(3) Strengthen the capacity of relevant institutes and their staff on management
and coordination of LURT and land cooperation

Focal persons will be appointed in PMOs in different levels and each PAC. Trainings on the
requirements of land use, LURT and land cooperation of PRC and ADB will be provided
continuously by the PMO’s social specialists for those responsible institutes and staff.

(4) Establish internal and external monitoring and evaluation system on land use
during the implementation stage of the project

For internal monitoring, the actual land use and LURT situation, rental payment status,
complaint and grievance records (if any) will be included as a separate section in the progress
reports of the project which will be submitted to ADB. Meanwhile, a social monitoring report,
including the section of land use, LURT and land cooperation, will be prepared and submitted
by external social specialist to Shanxi PMO and ADB semi-annually during the implementation
stage of the project.

25
Appendices:

Appendix I: Collective land leased by PACs

(1) Land leased by Datong Phoenix Company

(2) Land leased by Guangling Beiye Company

(3) Greenhouse of Juxingweiye Company

26
Appendix II: Detailed TERMS OF REFERENCE for EXTERNAL SOCIAL SPECIALIST

(National, 10 person months, intermittent)

I. BACKGROUND

1. The Shanxi Inclusive Agricultural Value Chain Development Project (the project) will
be implemented by 19 Project Agriculture companies (PACs) specializing in livestock and
agricultural production and/or processing. Project implementation will be overseen and
coordinated by the provincial Project Management Office (PMO) and county level PMOs
(CPMOs). The external social specialist will assist the PMO and CPMOs to monitor
implementation of the project’s social components, including the Social Development
Action Plan (SDAP) and the Gender Action Plan (GAP) as well as further verification and
monitoring of Land Use Right Transfer (LURT) agreements between PACs and farmers.
These terms of reference describe the requirements and tasks for this specialist.

II. SCOPE AND DURATION OF WORK

2. The social specialist will monitor the project’s social safeguards and social dimensions
to ensure that the project is implemented in compliance with ADB requirements. The
specialist will assist the PMO to monitor and report on the implementation of LURT
agreements, GAP, SDAP and other relevant social measures. The specialist will work with
the PMO and CPMOs; and will report directly to the PMO and ADB. The position is
intermittent over the entire project duration (five years).

III. QUALIFICATIONS

3. The specialist will have: (i) a graduate degree or higher in social science or related
field; (ii) at least 10 years of experience in social development and safeguards; (iii)
familiarity with ADB projects and ADB’s social development and safeguard policies; and
(iv) proficiency in spoken and written English, including an ability to prepare reports
meeting ADB requirements.

IV. DETAILED TASKS

4. The social safeguards specialist will be responsible for the following.

(Common Tasks)

(i) Maintain up-to-date information and database on implementation of LURT agreements,

GAP and SDAP through document review, fieldwork and meetings;
(ii) Provide guidance to the provincial project management unit (PMO) and county PMOs
(CPMOs) to develop detailed monitoring arrangements for LURT agreements, GAP
27
 and SDAP;
(iii) Formulate and deliver training to focal staff of the PMO, PPMOs, and PACs to monitor
implementation of the project’s SDAP and GAP and LURT agreements;
(iv) Provide guidance to the PMO and CPMOs maintain overall coordination for
implementation of the LURT agreements, SDAP, and GAP;
(v) Provide guidance to the PMO and CPMO to implement the grievance redress
mechanism (GRM) and to resolve any problems or grievances that may arise during
the project implementation;
(vi) Undertake periodic monitoring and prepare semi-annual monitoring reports on social
aspects, including implementation of LURT contracts, SDAP and GAP (with a good
quality of reports meeting ADB standards);
(vii) Assist the PMO in submitting semi-annual monitoring reports to ADB and address any
comments from ADB;
(viii) Ensure through monitoring that the grievance redress mechanism is functioning well
and issues identified during the monitoring are resolved on a timely manner; and
(ix) Undertake monitoring of other relevant social issues, as needed, and guide the PMO
and CPMOs to resolve the same.

(LURT- Specific Tasks)

(i) Monitor to ensure that agreements reached between farmers and PACs are
implemented according to the agreements that were signed between the
parties and that any grievances that might arise are resolved quickly and
effectively;
(ii) For LURT contracts that were not verified during PPTA, review and verify each
of these contracts to ensure that all contracts meet the LURT criteria for the
project. Please follow the LURT verification methodology.

(iii) Monitor to ensure that all parties that hold a leasing agreement fully understand
the consequences of the leasing agreements that were signed and reaffirm
they are willing to abide by the specific terms of the lease;

(iv) Where leases during PPTA investigations were proved to be only partially
compliant, monitor to ensure the leases are rectified before implementation the
subproject involving the respective land parcels;

(v) Provide on-the-job training to implementing agencies in facilitation of socially

inclusive consultations for all parties to the leasing agreement and
documentation of the consultations including the gender disaggregation of
issues raised during the consultation processes;

(vi) Monitor to ensure that when annual or periodic payments in cash or in-kind are
made by the PACs that all farming households that are parties to the lease are
either paid their proportionate share in cash or in-kind according the LURT
agreements;

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(vii) Provide training to the implementing agencies to ensure that they have the
capacity to monitor and evaluate whether farmers leasing land to the PACs can
retain and preferably improve upon their pre-leasing income as measured by
the cash paid or in-kind payments;

(viii) Provide guidance to the PMO to implement the GRM, including: (i) establish
and publicize the GRM; and (ii) collate and evaluate grievances received.
Provide training on GRM to stakeholders (implementing agency, PMO staff,
farmers, if required), ensure implementation of the GRM, prepare a reporting
and monitoring form on the GRM for the reporting by the PMO to ADB, and
ensure this information is included in semi-annual monitoring reports;

(ix) In the event that leasing agreements are breeched by either party to the lease,
guide the project to resolve the disputes according to the dispute resolution
provisions in the LURT or relevant regulations;

(Specific Tasks for SDAP, GAP, etc.)

(i) Liaise with the PMO social focal person at the provincial level and monitor the
appointments of county level focal points and the implementation of the SDAP,
GAP and other social measures.

(ii) Monitor social and poverty measures and ensure social and poverty targets in
the project planning documents are achieved during the project implementation
as stated in SDAP.

(iii) Monitor to ensure labor standards are upheld throughout project

implementation.

(iv) Working with PMOs social staff, maintain database on social aspects in a
consistent manner. Guide the PMO social staff to compile, review and store
social progress reports from the PACs, records of any grievances and any
other relevant issues. Maintain digital copies of all information. When
necessary, guide the PMO social staff to enter data into summary tables in
digital format (e.g. to transfer records of grievances from hard copy forms).
Monitor to ensure that all information is stored in the PMO filing system, backed
up, and can be easily retrieved.

(v) Monitor to ensure that villagers affected directly and indirectly by the project
have been actively consulted during all times of project implementation and
that 50% of those consulted are women and that all consultation processes are
adequately documented;

29
(vi) When necessary, provide training to the implementing agencies and village and
township authorities in the gender disaggregation of all project related activities
and ensure that adequate records are kept in accordance with good
implementation practice;

(vii) Monitor to ensure poor and vulnerable households are included in the project
including in value chains of each PAC and are offered opportunities to
participate in employment and other benefits resultant from the expansion of
the PAC activities, as stated in SDAP;

(viii) Monitor to ensure that women employed by the PACs are offered appropriate
facilities (e.g. separate toilets, bathrooms/ showers) which are considered
adequate by women and conform to occupational health and safety
requirements, as referenced in the GAP;

(ix) Provide training to the staff of the County Offices of Shanxi Poverty Alleviation
and Development Office (SPADO) and the All China Women’s Federation
(ACWF) enabling SPADO and ACWF to reach out and monitor poverty and
gender impacts of the project;

(x) Work with the PMO staff and other consultants to provide gender awareness
programs to the implementing agencies and to the PACs in coordination with the
Agriculture Bureaus and Animal Husbandry Bureaus as stated in GAP;

(xi) Prepare reporting and monitoring forms for the PACs and the PMO regarding
SDAP, GAP targets and indicators and ensure regular monitoring on these;

(xii) Guide the implementing agency to prepare regular reports on the progress of
GAP and SDAP activities to be provided to the PMO and ADB;

(xiii) Perform any other tasks deemed necessary by the project that are relevant to
social safeguard issues and social dimension as they apply to the project.

V. REPORTING REQUIREMENTS

Semi-annual social monitoring reports, using the template agreed with ADB.

VI. LOGISTICAL SUPPORT PROVIDED BY PMO TO THE SOCIAL Specialist

The PMO will provide the following to the specialist:

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(i) Hard and soft copies of the feasibility study reports, available survey data, loan and
project agreements, maps, and other supporting materials as necessary to ensure the
specialist can implement the tasks.

(ii) Vehicle transport, office materials, and other logistical support as necessary for the
specialist to visit the project construction sites and local communities.

(iii) Arranging meetings and distributing relevant materials.

Overall coordination, including review of the draft semi-annual monitoring reports and final
submission of the monitoring reports to ADB.

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Appendix III: Scanned Sample Copies of the LURT agreements and/or Land
Certificates

#1: Shanxi Qinzhouhuang Millet Group Co., Ltd. (Land Certificate of State-owned Land)

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#2: Guangling Beiye Edible Fungus Industrial Development Co., Ltd. (One sample)

33
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#3: Shanxi Phoenix Wine Industry Co., Ltd. (One sample)

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37
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#4 Shanxi Juxin Weiye Agricultural and Sci & Tech Development Co., Ltd.

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40
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42
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#5 Heshun County Lvhe Ecological Agriculture & Livestock Development Co. Ltd.

44
45
46
#6: Fenxi Hongchang Breeding Co., Ltd. (One sample)

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#7: Fushan Guheng Husbandry Sci. & Tech. Co., Ltd.

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#8: Quwo Lvheng Agricultural Development Co., Ltd.

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53
54
55
#9: Shanxi Qierkang Elaeagnus Biological Products Co.

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#10: Linfen Zhongde Farming Technology Development Co., Ltd.

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64
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#11: Fuzhongyuan Livestock Breeding Cooperative

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68
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#12: Shilou Shude Jujube industry Co., Ltd.

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#13: Shanxi Tian Zhi Run Jujube Industry Co., Ltd. (Land certificate of state-owned land)

73
#14: Xinjiang Hefeng Grain Planting Technology Cooperatives

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#15 Shanxi Xinjiang Vegetable Industry Development Co., Ltd. Land Certificate

75
#16 Shanxi Kaisheng Fertilizers Group Co., Ltd.

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#17: Yuncheng Xinke Taifang Vegetable Trading Co., Ltd. (Investment agreement)

80
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#18: Shanxi Shanlihong Food Co., Ltd. (Land certificate of state-owned land)

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#19: Shanxi Jilong Cultivation Co., Ltd.

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