1.Rehabilitatinga DegradedWatershedA Case Study from Chinas Loess PlateauLearning series on sustainable water and land management

2. 2 ForwardThe Loess Plateau Case Study describes the transformation of a large area of degraded watershed in China. It is largelybased on the two Loess Plateau Watershed Rehabilitation Projects, funded by the Chinese Government and The WorldBank and implemented from 1994-2005. The two projects restored a vast area of degraded watershed and improvedthe wellbeing of millions of rural households, the majority of whom lived in poverty prior to the projects.Told as a story, the case allows the reader to easily absorb key lessons about watershed restoration that can be applied inother parts of the world. Viewed through the eyes of a farmer who returns to his hometown after a long absence, thecase study begins by describing the changes in a poor rural county that have taken place during the decade of projectimplementation. Farmer Zhang is shocked to see a verdant, tree-filled landscape has replaced the brown barren hills of hisyouth and that his family members and their fellow villagers have escaped poverty and are engaged in a variety of profitableand sustainable ventures.The study continues by analyzing how the project interventions broke the vicious cycle of environmental degradation andunsustainable farming practices and helped catalyze a virtuous cycle that has restored the watershed and enriched the livesof its inhabitants. It outlines the challenges facing Chinese project director, Huang Ziqiang, and World Bank task teamleader, Juergen Voegele, in designing an effective project and systematically describes the steps taken to transform theenvironment. The study is divided into three parts: Part A, Living on a Moonscape describes the project area before theproject begins; Part B, The Transformation gives the reader a glimpse of the changes that have taken place; and Part C,Seeking Solutions under a New Approach explains the key elements that enabled the transformation in detail.The case study uses the Harvard University Case Method pedagogy, and pilots its use in teaching the management of naturalresources. A teaching note is available for those wishing to teach in a face-to-face setting. Teaching is enhanced by a seriesof film clips edited by the WBI team from movies produced by Environmental Education Media Project, which filmed changesover the life of the Loess Plateau projects. The case study and supporting materials will be made available online by WBI.The case study is a module of a learning program from the Climate Change Unit at the World Bank Institute (WBI). Theobjective of the program is to improve the capacity of client countries to improve land-water management and cope withclimate change. The Loess Plateau case illustrates the link between land and water management, soil-water conservationand livelihoods in watershed management. It is particularly helpful in demonstrating the necessity of addressing foodsecurity and poverty reduction hand-in-hand with ecosystem restoration. -The Case Study Team 3. Part A: Living on a Moonscape3Sadly, Zhang Junyou bid farewell to his family andbegan the day-long trek to the town where he couldcatch the long-distance bus to the city. There, hewould join millions of other migrants seeking work. Asthe oldest child, he had made the painful decision to leavethe land his family had farmed for generations, so he couldearn money to send home and give his parents and siblingsa better life. Finding ways to put food on the table was anever-increasing worry for the family. It was 1990 and whilemost of China was transforming, and land reform was greatlyLoess Plateau (within red), Chinalifting productivity, these changes had scarcely touched theland where Zhang lived.Zhang was born in a small village in the hills of Ansai County,Shaanxi Province, on Chinas vast, desolate Loess Plateau,drought squashed any hope of planting more lucrative crops.where 50 million people struggled to survive on one of theThere were no surplus goods to sell, and with dirt-track roadsmost degraded ecosystems on earth. For many, dwellingsalmost impassable in winter and in time of floods, the villagewere simply candle-lit caves. Typical of households on thewas isolated from any possible market.Plateau, Zhangs family lived below the poverty line, earningless than US$75 a year. All their time and energy was taken Chinas Loess Plateau covers four provinces (640,000 squareup in the struggle to feed the family with what they couldkm), an area bigger than Kenya. It was created two milliongrow on eroded hillside slopes, some so steep they couldyears ago by the deposition of wind-blown dust and bybarely stand up. Each year the family had to rely on relief glacial till, called loess, which was left behind by retreatinggrain to supplement their meager harvest of drought-hardy glaciers. Loess is good agricultural soil but prone to windmillet, buckwheat and beans. To find grazing for their goats, and water erosion, which has carved deep gullies into thethey had to go further and further afield. Year after year of Plateau, transforming it into a maze of sub-watersheds. Forthousands of years, the ancestors of farmers like Zhang hadfelled trees so they could plant crops on steep slopes, andtheir sheep and goats had grazed the vegetation bare. Asa result, what little rain fell in the wet season ran straightinto the gullies, taking fertile topsoil away with it. Withno protection from the wind, dust storms whipped acrossthe seemingly uninhabitable moonscape, depositing a dirtyyellow film on buildings as far away as Beijing, some 500km away. Up to four billion tons of soil, sand and mud ranoff the Plateau each year, having a disastrous effect on thedownstream reaches of the worlds sixth largest river - theYellow River.Cave-dwelling 4. 4Degraded land upstream, disaster flows downstreamUntil it cuts through the Loess Plateau, the almost5,000 kilometer long Mother Riverthe Cradle ofChinese Civilizationruns clear. Downstream, it is themost sediment-laden river in the world, prompting theevocative name Yellow River. The river has over theyears become a suspended river as in its lower reachesthe riverbed is some 2 meters above the surroundinglands. Dikes have continuously been made higher to keepup with the rising riverbed, and breaches in the dikes haveled to some of the worlds worst floods. It was clear thatSevere soil erosion something would have to be done about the sedimententering the river from the Loess Plateau, but this waseasier said than done.Huang Ziqiang often lay awake at night worrying abouthow things might be changed. He was the director ofthe Bureau for Water and Soil Conservation, of the YellowRiver Conservancy Commission, which falls under theMinistry of Water Resources. His Bureau was responsiblefor soil and water conservation; agriculture, forestry andlivestock fell under other ministries. Huang was a well-respected water conservation manager, and an engineer bytraining. For twenty years, he had led the challenging taskSheep grazing on slopes of promoting soil conservation on the Loess Plateau. Hisoffices employed hundreds of Chinas best engineers andsoil scientists. But, despite their technical competenceand relentless effort, the problems of the Loess Plateauwere only increasing. As the population expanded,unsustainable farming practices led to ever-worseningecological degradation.Millions of dollars had been spent by various ministries anddepartments, but the efforts were not well coordinatedand often worked at cross-purposes. To develop livestock,sheep and goats were distributed to farmers, but they atethe seedling trees provided by reforestation programs,Life on the barren landand further aggravated soil erosion. As the degraded land 5. 5produced less and less grain, families were forced to farm years for any income in return? Besides, any investment inhigher on the slopes and graze more livestock on the slopestrees was likely to disappear into the stomachs of the manyto avert hunger. This added to the problems Huangs programs village goats.had been trying to address. Zhang also remembered other campaigns to reduce theThe Government has tried just about everything: campaigns erosion and increase farmland. Terracing was popular withto terrace slope lands and to increase vegetation cover, treethe villagers, and could create areas of flat land up to threeplanting, and building of dams to intercept sediment runoffmeters wide, far better for crops than the hillside. But, evenand create flat land in gullies, Huang reflected. Literallyif anyone could afford a tractor, the narrow, hand-dug terracesevery village had received funds at some point. But with could only be worked by ox and plough. They crumbled easilypopulation pressure, continued unsustainable practices, andin heavy rain and repairing them took much labor, effectivelysuch a large area to cover, these small investments were likewiping out any gain. Since it was often not clear who thescattering a handful of sesame seeds - there has been little terrace belonged to, the chances of repair were low indeed.visible impact. Time for new thinkingWhat were those trees for, anyway? Although farmer Zhang did not know it, in 1990 the ChineseAs various ideas were tried and failed, farmers like Zhang had government was preparing a new project, which would finallybecome cynical. As the bus took him further from home, hebring lasting change to the Loess Plateau. The motivation wasrecalled how village leaders had organized a yearly campaign another project a proposed US$5 billion dam to provide floodto green the Loess Plateau. For weeks, the villagers hiked protection for people living downstream of the Loess Plateau.up the hills to plant tree seedlings and grass. The optimism heBut both the Government and the World Bank, a multilateralfelt for this activity as a child was soon replaced by pessimism development bank which had been asked to loan funds foras an adolescent. The campaigns took valuable time that wasthe dam, were concerned that upstream soil erosion in theneeded to look after food crops and animals, and the results Loess Plateau watershed would reduce the dams useful life.were always disappointing. The number of trees planted inIn response, both sides agreed to invest in the Loess Plateauhis village alone would probably have turned the entire county Watershed Rehabilitation Project, to cover four provincesgreen, had they survived!on the Plateau, in one more attempt to restrict the flow of sediment into the Yellow River and develop the local economy.The tree varieties planted were chosen to stabilize the soil,not to bear fruit, so farmers never saw them as a source ofHuang Ziqiang was now given the task to look for aincome. Despite various campaigns urging them to care forcomprehensive solution to the degraded watershed, workingthe trees, most villagers ignored any that survived. As thewith World Bank agricultural economist, Juergen Voegele,trees were planted on collectively-owned village land, any team leader of the Bank project. In 1991, Huang and Voegelebenefits from them would not necessarily go to the farmerspent three weeks traversing the hills and gullies of the Loesswho cared for them. What were those trees for, anyway? Who Plateau, in a mad dash to cover as much territory as theirhad extra cash to spend on fertilizer and pesticides to ensure 4WD jeeps, and the washed-out roads, would allow. Theythat they grew properly? Who could afford to wait for many were looking for anything that might give them hope that 6. 6the moonscape could become green and fertile. Someone,somewhere must have tried something that worked, theythought.But as they surveyed yet another barren and eroded watershed,and listened to more villagers recount their futile efforts toescape poverty, the enormity of their challenge was clear.The Loess Plateau is the hardest bone to chew, said Huang.The region is far behind the rest of the country.Still, Huang knew that flat agricultural land in nearby areascould yield 10 tons of wheat per hectare, ten times as muchas was produced on the steep slope land. The Loess soil hadthe potential to produce good crops, as long as water could be Cultivation on slopesretained instead of running off.Both Huang and Voegele were deeply moved by the storieshim if he would like to expand his operation on the plateauthey heard. Voegele observed a thin, fragile-looking woman top, which was collectively owned. He responded that hekneeling in a dry and barren field, a small basket at her side.preferred the wasteland, where he could be assured theWhen she told him she was collecting wild plants to feed her harvest belonged to him.children, because she did not have enough grains to eat, hewas moved to tears and even more determined to find aWhen Voegele reviewed what they had heard in their weekssolution.in the field, the problems seemed intractable. His thoughts kept coming back to three key dilemmas: How could the localHuang knew all too well about hunger on the Loess Plateau from economy be improved while at the same time conserving thehis two decades of field work in the Bureau. The Watershed land? How could poor farmers be encouraged to contribute toRehabilitation project, with its emphasis on farmer livelihoods, public goods like soil and water conservation? And how couldenabled him to focus on breaking the vicious cycle of povertythey change mindsets and farming habits of thousands of yearsand watershed degradation, and the intensive village visitsand show farmers a way out of poverty?and farmer interviews further strengthened his resolve. In thewatersheds Huang and Voegele visited, literally every square Out of these dilemmas, the Loess Plateau Watershedfoot of arable land was cultivated. It was shocking to see Rehabilitation project was born, with Huang and Voegele asfarmers risking dangerous falls by tending their crops on slopes its principal architects. It was clear that at the heart of theclose to 40 degrees. Loess Plateau problem was the vicious cycle of degradation that trapped the Plateau people. The key seemed to be findingThe two men were also surprised to find that many farmers, a breaking point in the vicious cycle, and more critically,who had the ability to make improvements on their land,to turn it into a virtuous cycle. To do this, and to make awere unwilling to do so. They met one skillful farmer who haddifference, both men knew they would need to come up withplanted orchard trees on steeply sloped wasteland and afterfresh thinking and a brand new approach.several years managed to bring in a bumper crop. Huang asked 7. Part B: The Transformation 7 A fter 15 years away from home, Zhang Junyoucontained meat a prize reserved for only the most special returned in 2005 to a series of surprises. Arriving occasions in the past in the county center, Zhang was amazed to find he could now take a bus to his village. Instead of the dirtHis parents had aged visibly, but this could not hide their track he remembered, there was a wide, gravel-paved road. enthusiasm for the changes that had occurred in their lives. The view from the bus window was unrecognizable maybe Yields on their new terraces were double and sometimes he had boarded the wrong bus! The land had turned green triple what they had enjoyed in the past. Farming was easier for as far as the eye could see. The once-brown hills werenow. Because they used tractors to plow their terraces, the now a forest of pines and bushes, and the formerly eroded family had time and resources to cultivate small groves of gullies were covered with hardy shrubs and grass. The old apple and pear trees. slope land was now covered with neat green terraces, where wheat, corn and potatoes grew in abundance. It was odd to Zhangs younger brother, now married with his own family, see no signs of drought had the weather patterns changedwas enthusiastic about his new sheep and cattle-breeding during his absence? Even in the best of years the land used venture. One of his older uncles joined the party. He to be parched and the crops he remembered were always complained loudly that the mutton served at dinner was not starved for moisture. He spotted apple trees and other treesas tasty as meat in the old days, when the sheep grazed freely. he did not recognize on some of the terraces and on the hills,But even he reluctantly admitted that the sheep and cattle but there was no sign of the goats that he used to see on the cared for by his son were very profitable. Zhangs younger nearby hills. sister focused her efforts on fruit trees, and her family no longer bothered to grow grain. She had plenty of cash to buy As the bus approached the village dwellings Zhang was inwhat her family needed now that her trees bore fruit, and for more surprises. The old earthen caves of his childhoodher husband had found steady work at a newly opened small had been replaced by brick dwellings with tile roofs sporting fruit processing export factory located in the county center. antennas and satellite dishes! The villagers no longer needed to travel to get medical help; they had their own clinic in the Zhangs familys new circumstances were not unique. By village center. A newly-built school was packed with students 2005, farmers throughout the project area were enjoying clearly more of the village families could afford schoolhigher yields and more income-earning opportunities. For fees. Zhangs first dinner at home was a joyous occasion. most, hunger was only a distant memory. The greening Large bowls of steaming wheat noodles had replaced theof the Loess Plateau, once just a slogan on billboards, had millet gruel he remembered from his childhood. His mother become a reality, thanks to the implementation of the Loess served more dishes than he had ever seen and most of them Plateau Watershed Rehabilitation projects. What had seemed impossible in 1990 was now delivering even more than had been hoped for when planning for the projects began. Zhang was proud of his family and village for bringing about this change, and peppered them with questions to find out how they had done it, while his mind raced with plans for his own future. One thing was certain - he no longer needed to plan for a long bus ride back to the construction job in the distant city.Land covered with terracesAfter projects - gullies covered with trees,hardy shrubs and grasses 8. 8Part C: Seeking Solutions under a New Approach I n the two years it took to prepare the Loess Plateau watershed rehabilitation project, the team led by Huang Ziqiang from the Upper- Middle Reaches Bureau of the Yellow River Commission and the team led by Juergen Voegele from the World Bank worked closely together and visited all four provinces and numerous villages on the Plateau. Searching for solutions, they travelled through some of Chinas poorest counties. Listening to farmers lament their difficulties putting food on the table drove home the point that the Government and the Bank must focus as much on improving farmer livelihoods as they do on solving the problems of ecological degradation. At an old school house in Xiaochen Village in Pingliang Prefecture, ShaanxiTravel on new roads to market Province, one village elder asked why they should keep trying to plant trees. People cant eat trees! he shouted. Others agreed. I have no time to spend on anything but the land! exclaimed another. Asked whose families were forced to rely on Government relief grain supplies, most of the hands in the room shot up. I work all day long in the field but the grain produced is only enough for half a year, said a mother, When it rains the earth comes loose and washes away. My land becomes smaller each year. Another woman added, We keep some goats for cash, but they dont sell well. Theres less and less grass here. Voegele was puzzled when farmers said they had tried many times to build terraces to create flat land, but the terraces did not hold up well and were often more trouble than they were worth. He made a mental note to investigate the terracing issue further.Fruit orchards on slope land Small successes show the way The teams of Voegele and Huang spent considerable time listening to the farmers. Despite the pessimistic tone of many of their meetings, there was some good news. In a small number of sub-watersheds around the Plateau, the Government had started experimenting with integrated watershed planning. These pilot programs seemed to be boosting farmer incomes. Wider terraces had been created to increase agricultural land. Orchards were planted on the less steep slopes; and shrubs and grasses on the steepest areas. Farmers seemed pleased with the higher grain yields and optimistic about their orchard trees. New housing with solar dishes for cooking. Concrete paved yard collects rainwater for domestic use 9. 9One day in the spring of 1994, Huang and Voegele came toYes, trees must be planted. Soil retention structures must beShageduo village to learn about a successful project growingbuilt, or there would be no earth left in a few decades. Butseveral hectares of walnut trees.The trees in front ofthinking about alternative farm activities was a recipe forthem looked strong and beautiful, and the team took notes disappointment, the officials said.on growing conditions, costs and market opportunities. ButVoegele could not take his eyes off the sheer gully below However Huang and his team in the Ministry were optimisticthem. It was an oasis of green. In disbelief, he queried thethat they could break the vicious cycle of degradation thatyoung village chief, standing beside them: The rest of the trapped the Loess Plateau people. Through the combinedPlateau is yellow and barrenbut it is green down there. Youefforts of the Chinese Government and the World Bank, fundingdont irrigate here, do you? was available for this project: the question was how best tospend it to achieve both the poverty alleviation and watershedIt is green down there because of the walnut trees upconservation goals. This was a complex problem with manyhere, she replied with a smile. When I first brought theinter-related causes. But the solutions must be simple, easyto understand and implement, and quick to deliver benefits toseedlings from Beijing, the sheep and goats ate the younglocal people.trees. So we had a choice: goats or walnuts. She smiledagain. We chose walnuts. Grazing had been banned in theThe multi-faceted problem of watershed degradation requiredvillage for some years. We sold all the goats and sheep toan integrated solution, and Chinas institutions had not beenstop them from eating our trees. We have no fertilizer, anddesigned to work cooperatively across sectors, said Huang. Itno irrigation, but we also have no grazing. That is what haswas time to work together and take an integrated approach toturned our gullies green.planning for the long-term management of the Loess Plateauwatersheds, going beyond the successful pilots. We neededSo things can grow here, pondered Voegele. Perhaps to come up with something the Government could replicatenature can re-grow on the Loess plateau, if only we peoplelocally over large areas at a reasonable cost if we were going tocould give it a chance.make a lasting difference to the region, Voegele added. Thatmeant coming up with an integrated package policies, legal,However, farmers in the neighboring village didnt think theinstitutional and technical - to ensure that both incentives andabsence of goats had anything to do with the improved pasture technology were right. Integrated planning would combineThey thought the green gully must be a fluke of nature; perhaps incentives to farmers with projects to ensure medium and longa unique microclimate in that area produced more rainfall. It term gains for the environment, paving the way for necessarywas a mistake to think that the meager soil could ever producechanges to patterns of land use going back thousands of years.enough to feed the growing population, the farmers said.It was a new approach.Wide terracesWide terraces 10. 10Huang often compared the Loess Plateau dilemma to a giantperson who had suffered a long illness. Our past efforts focusedon curing the symptoms (soil erosion, loss of water and surfaceflows), without paying enough attention to the fundamentalcause of the disease (poverty, low productivity, and the viciouscycle).Breaking the vicious cycle: Wider terraces triple food yieldJuergen Voegele was adamant. We must give something to Small dams together with terracesthe people right from the start. Farmer benefits first andthen the environment. Improved grain yields are absolutelycritical. Because food security was utmost in farmers Returning to the project area one year after its start, Huangminds, there was little point in discussing any other aspects and Voegele were elated with the results: With a minimumof integrated watershed management, until farmers could beof 2 mu of terraced land per person, a family can growassured of significant increases in grain yields. Breaking theenough grain to last the year; They can plant crops in thevicious cycle would depend first on filling the bellies of thesame season that the terrace is constructed, so within onevillagers.year, their food supply is guaranteed. Average annual grainyields increased by over 60 percent, from 365kg to 591kg perIndeed, solving the food security problem by creating flatcapita.land that boosted grain production was the key first step inOn the broader terraces, farmers using machinery found thatbreaking the vicious cycle. Wide, well-designed terraces,cultivating the land was much less labor-intensive. Zhangconstructed with earth-moving machinery, would prove to beKejian of Huigong village in Jixian County, explained that heintegral to the success of the Loess Plateau project, yet theycould now plow over 20 mu in a day. In the past, using an ox-came about almost by accident.drawn plow, it was a very hard days work to plow and sowseed over just 2 mu.Huang and Voegele decided to include machine-madeterraces in the project when it was clear that there was not It took me 20 days to harvest wheat manually, and we usedenough available labor to build new terraces by hand. But shoulders or an ox cart to carry the wheat Now we usethe impact of the 6-12 m wide terraces, 3 to 4 times the widthfour-wheel tractors to propel the thresher harvester. Severalof traditional hand-dug ones, surprised even the task team. hours are enough to harvest the field and it takes about 3 toYields doubled or tripled, and remained stable in periods of4 days from harvest to drying to storage.drought. The moisture-conserving properties of the widerterraces meant nutrients were no longer flushed away during Farmers repeatedly told project officials how much theyheavy rains. Better-yielding varieties of wheat, corn and appreciated the time freed up by the new terraces, allowingpotatoes could now replace the drought-hardy millet. As the them to earn income from other avenues. They could accesscompacted terraces withstood erosion, there was no need tonew markets, new jobs and opportunities, because therebuild them every season.machines brought in to build the wide terraces also created 11. 11roads that connected once-isolated villages with eachCreating a virtuous cycle: Contracts and commitmentother and with distant towns and cities. The road networkimproved access to services such as education, electricity,Huang had seen that farmers were reluctant to make anyand even encouraged tourism. improvements to their land, even if they could afford to. Farmers were cautious about investing in the new, higher-Contracts to construct the terraces were awarded, through ayielding terraces. They often asked visiting project officials,public bidding process, to the private sector. As a result, an what if the land I work so hard to improve is reallocated?army of construction teams bloomed in the region, increasingemployment opportunities and stimulating the local economy National land reform was well under way in China by 1990,in many ways. Hearing stories across the Plateau, Voegeleredistributing collectively farmed land to individual farmersmentally increased the projection for the projects economic through short, medium and long-term leases. These reformsreturns! However, he also knew that building terraces alonetook longer to reach remote regions like the Loess Plateau. Ascould not solve the environmental problems that kept him Voegele had discovered in his first visits to plan the project,up at night. most Plateau farmers did not yet have secure long-term land-use leases, although many party leaders and provincial officials thought that they did.Breaking the vicious cycle: Integrated planning andincentives Voegele and his team made it clear that secure land tenure was a life or death matter for the project. If we are goingTerracing was only part of an integrated watershed planto finance building sustainable terraces in the Loess Plateauthat was designed to rehabilitate the ecosystem AND to givewith public funds, asserted Voegele, the farmers need tofarmers the incentive to contribute to the solution. To join be given secure land tenure.the project and benefit from the new terraces, villages mustfirst contribute to an overall conservation plan, prepared Once Huang and Voegele took local government officials intofrom a detailed land-use map of each sub-watershed.the villages to talk to famers, and pointed out there could be no investment in the project without signed and sealedA crucial step was equitable distribution of productiveland-use contracts, the officials were quick to make sure thisagricultural land. Scattered slope plots were consolidated condition could be met. Farmers were given long-term leasesinto larger terraced plots, built on land that ideally slopedto the improved terraces, slope land for tree cultivation, andless than 15 degrees. The principle was that every familyareas behind the warping dams.would get at least 2 mu of arable land per person. Plotswere publicly measured to ensure transparency. Valuableflat agricultural land was also created by small warping damsbuilt in the gullies to trap sediment.Because they now had higher-yielding land, farmers wereencouraged to give up cultivating the steeper slopes, sothat soil-retaining shrubs, and trees of economic value couldbe planted. This was a critical link, aligning the farmersfinancial benefits and the projects ecological benefits.Tree planting 12. 12 Once local people owned their project, this would change, Huang believed. While contracts and commitments were important, and required by the Bank, it was crucial that people saw how they could benefit from their involvement and input to the project. Only when officials at all levels understood the project belonged to them, could it be a success. Such ownership would only come about through local participation. We realized that this project belonged to us - the Chinese people. If farmers do not receive the maximum benefit, how can we justify the huge project costs, and repay the foreign loan? We must get the project right, Huang repeatedly reminded his team. Getting it right involved a great deal of time, as well as theApple orchard - medium term gains involvement of millions of villagers, working on watershed projects with thousands of multi-disciplinary project teams, with the co-operation of a wide range of different agencies This was formally documented in a little red booklet which but always with a local focus.detailed the size and co-ordinates of each land use lease,and was signed by the farmer and stamped by the localProject officials had to work intensively in each village, toauthorities. craft a sub-watershed plan that met local conditions. For Huang, local ownership meant putting each project activityLoess Plateau farmers finally had the right incentives tounder a microscope to make sure it really worked for themaintain their terraces, conserve their slope land for trees benefit of the people of the Plateau and their environment.and shrubs, and care for stabilizing the soil on their land. Sometimes this meant traditional practices used by the soilIn return, every farmer, even the poor, was committed to and water conservation bureaus needed to change. Otherrepaying the public investment that had been made to benefit times, it meant convincing the Bank team to adapt theirtheir private interest through the Loess Plateau Watershed requirements to local conditions. At one memorable meeting,Rehabilitation Project. The terms for repayment varied:Huang convinced Voegele that Bank procedures needed tofor activities that yielded a quick profit, such as terraces,adjust so that Chinese counterpart funds could be accessed in an innovative manner by pulling funds from differentloans were repaid in 2-3 years, while longer terms applied projects together under the comprehensive watershed plans,to investments in trees and shrubs. Repayment terms were and the Bank team accepted.softer in areas prone to severe drought. As local ownership became a reality, trust also developed. Making sure project conditions were complied with calledCreating a virtuous cycle: A sense of local ownershipfor a delicate balance of written contracts, moral persuasion and a long term view. Some farmers continued to plant onLarge scale terracing, land tenure and detailed contractstheir slope land, in defiance of their contract, after newwere complicated. At first, local officials grumbled that work terraces had been built. As those farmers gained confidencecould proceed faster without the bother of detailed planning in the higher yields from their new terraces, slope cultivationand contracting, and resisted some of the project conditions.gradually stopped. 13. 13Creating a virtuous cycle: longer term investmentWith the labor savings from the terraces, and their families well-fed withinone or two seasons, farmers had more time and resources, and could considermedium and even long-term investments such as the planting and care of treesof economic value.When farmers provided labor, the project provided free trees and shrubs butrequired that farmers sign Use and Management contracts. These began oncethe trees were well-established. The project experimented with contractingterms, as well as tree varieties and planting techniques to optimize survivalrates and profitability in the long-term. Chinas forestry experts introducedPen feeding - sheepinnovative methods and gave technical advice, while young villagers weretrained in nursery and planting techniques.Gao Shenggui of Xinmaotai village had three ha of low-yield agricultural land.With support from a project technician, he took out a loan to plant 3 ha of appletrees, which thrived and began to yield within three years. By 2005, buyers ofhis apples were coming from all over China, he had 10 seasonal employees andhis annual income had risen to $15,000. Bai Xin Nian, of Bai Dong village, useda project loan to plant apple trees on what had been his wheat and maize fields.Within three years, his profit per hectare had increased 10-fold, and he usedthis income to build himself a new house.Creating a virtuous cycle: The grazing banPen feeding profitable new speciesNo amount of technical help could guarantee that trees would survive as long asgoats, which ate everything in sight and ripped out the roots of the plants theyconsumed, were still grazing in the areas.The project could only really see results when grazing was stopped, Voegelesaid. Controlling the free grazing of goats and sheep was the biggest challengefaced by the Government and the Bank team and it took a number of years ofrelentless work to achieve. Banning grazing right at the start of the projectwould have been unthinkable or impossible, but the project insisted itsinvestments should be protected.The solution was to combine incentives to move away from grazing witheducation about the damage goats did and close supervision. Whenever theGrazing bans land closure 14. 14 As traditional breeds of sheep and goats were prone to foot infections, breeds such as Shandong Fat-tailed Sheep and South African Boer Goats were introduced. These animals produced higher quality wool or milk, and thrived in a pen environment, so livestock income for local farmers tripled. Local government officials were starting to change their mindsets by now, they readily accepted that grazing management plans should be a prerequisite to project investments and be a part of all small watershed managementBefore project in Jixian County, 2002plans. They also recognized that the natural re-vegetation that occurred when a large area was closed off to grazing wasBank team visited a project area, they would point out toa low cost investment in the project, with big ecologicalvillagers and officials if goats were still roaming the hills. dividends.Voegele recalled visiting one village, which had made surethe goats were elsewhere, unseen, though their droppings But the real breakthrough occurred half way throughremained. Embarrassed, county officials tried to convinceimplementation of the second Loess project. At last, onethe Bank team those were the droppings of huge rabbits!county chief completely banned grazing over a large area in his home town. The grass grew tall after each rain andThe Bank team did not give up, and kept raising the issue in the place became a green oasis in the middle of the yellowthe hope of finding that one County Chief or Party Secretary barren hills. Local farmers were astounded. News of thewho might be willing to take a chance and ban free grazing.transformation spread from village to village and county toFive years into the first project, farmers were becoming morecounty. Once officials from other counties saw the results,receptive to the idea of replacing free-ranged goats withthey began to enforce grazing bans in their own areas.penned sheep, and livestock was becoming more popular as National policy was evolving and made it easier to enforcean investment. To intensify livestock production, the projectthe bans. New policies of the government encouragedmade loans to farmers to build sheep pens, cow sheds, andreturn of agriculture land to forest to allow regrowth. Oneprovided training. Feeding animals with harvested clover and day after a long dry summer, Huang and Voegele took thealfalfa removed grazing pressure from the natural vegetation Governor of Shaanxi Province to see one of the Loess Plateauon slopes. project sites. The Governor stared for a long time at the lush grass waving in the wind. He turned and barked an order to his staff, I want my whole province to look like this. I want all of you to work with our farmers to make this happen. The progressive extension of the grazing ban to all counties in the Loess Plateau became the most cost-effective natural resource conservation measure ever enacted effectively in the region. By 2005, the grazing bans had been expanded to the entire Loess Plateau region.Same site after project, 2005 15. 15 Before project in Shanxi, 1999 Same site in 2005AfterwardsBy its completion in 2005, the Loess Plateau RehabilitationThe Loess Plateau projects had as much impact on nationalProjects had benefited over 3 million people, the majority ofpolicy as they did on the lives of local people. The World Bankwhom lived in poverty at the start of the project. Solving the investments restored an area of close to 10,000 km2, a size halffood security problem by creating flat land that boosted grain of Rwanda. More importantly, the impact of the Loess projectsproduction and retained water was a key link that enabled thehas extended far beyond their borders. Watershed planning andvicious cycle to be broken. Visitors to the project areas couldproject management methods, as developed under the Banknow see the broad terraces and densely planted wheat, corn and projects, are now used for soil and conservation work in thepotatoes that were evidence of bountiful harvests, making hunger entire Loess Plateau and as of 2008, more than 240,000 km2 ora distant memory. Nature had been given a chance to re-grow50% of the degraded area has been restored, an area almost theand had responded more quickly and dramatically than anyonesize of Uganda. Beyond the Yellow River basin, the Ministry ofhad dared to hope. The once-bare gullies were now green andWater Resources has adopted the approach for the Yangtze andfull of plants and animals thought to have long disappeared from Pearl River Basins.the area. In just one gully, Voegele once counted more than 50species of trees, shrubs and grasses. Soil erosion had been curbed Director Huang could not contain his smile when he made hison 920,000 hectares of land, and soil losses reduced by 60 million annual report to his bosses at the Ministry of Water Resources intons a year. Beijing: some tributaries of the Yellow River were now flowing clearer.It would have been the same useless land if not for the LoessPlateau projects, said Zhang Junyou, back in his fields. Zhangbuilt a new house in 2005, having made more than $4,000 thatyear. I never earned that much working in any city, and I dontneed to leave home for city work again, he smiled. 16. Arial view of the Loess PlateauReferencesProduced by:The World Bank; Internal Documents - preparation, World Bank Institute (WBI), Climate Change Unitappraisal, supervision and completion documents for LoessPlateau Watershed Rehabilitation Projects I & II; 1992 Case Team:2005Mei Xie (Team leader, WBI); Julia Li, Nigel Asquith,Janet Tyson (consultant case writers);Chen Shaojun, Wang Yue, Wang Yijie; Case study of TheAlyson Kleine, and Yu Huan (WBI)Loess Plateau Watershed Rehabilitation Project, for ScalingUp Poverty Reduction: A Global Learning Process and Special thanks:Conference, Shanghai, May 25-27, 2004The authors are grateful for the valuable contribution of thefollowing Chinese experts, officials and farmers whom theThe World Bank; Internal Documents, supervision reports case study team interviewed. He Xingzhao, Wang Huanzhu,for DFID funded China Watershed Management Project, Qi Yongxin, Feng Sheng, Du Qing, Wang Xingzhong, Liang2007 - 2008 Jianhui (Yellow River Upper-Middle Reaches Bureau for Soiland Water Conservation); Fan Deming, Wang Shandong,Environment Education Media Project (EEMP), films - Tong Xinqi, Han Zhenming, Li Hongping, Huo Bin, ZhangThe Lessons of the Loess Plateau; Hope in a Changing Junyou, Zhang Fang (Shaanxi province); Yan Jinmin, TianClimate; Earths Hope by John LiuFulong, Yang Yinjiang (Shanxi province)For additional information on the Loess Plateau Watershed The authors would like to thank the case advisory group:Rehabilitation Project, please visit the World Banks project Juergen Voegele, Anis Wan (World Bank); Wang Yuewebsite at: (Ministry of Water Resources, China); Huang Ziqianghttp://go.worldbank.org/RGXNXF4A00(Yellow River Conservancy Commission, Ministry of WaterResources, China); and Sheng Li (WBI). The group providedcritical input to the conceptualization, shaping and review of2010 The World Bank Group, All rights reserved the case study.The statements, interpretations, and conclusions expressedin this case study reflect only the views of the authors, The French Government and the Bank Netherlands Waterand do not necessarily reflect the views of the Executive Partnership Program provided generous support throughDirectors of The World Bank or the governments they financing the development of this product.represent.