PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB1853 Project Name

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1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB1853 Project Name India Sustainable Land and Ecosystem Management Country Partnership Program Region SOUTH ASIA Sector Forestry (50%); Crops (50%) Project ID P GEF Focal Area Multi focal area /Land degradation Borrower(s) GOVERNMENT OF INDIA Implementing Agency Ministry of Environment and Forests, Government of India Environment Category [ ] A [] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared September 27, 2005 Estimated Date of June 1, 2006 Appraisal Authorization Estimated Date of Board October 30, 2006 Approval 1. Key development issues and rationale for Bank involvement An estimated 72% of India population live in rural areas with agriculture being their main, if not only, source of livelihood. In fact, agriculture produces 23% of GDP, feeds a billion people, and employs 66% of the workforce. Because of the Green Revolution, India s agricultural productivity improved to the point that it is both self-sufficient and a net exporter of a variety of food grains. Yet most Indian farmers have remained poor with millions of households still engaged in subsistence farming. About 80% of the estimated 300 million poor people in India live in rural areas and depend on land as their single most important productive asset. There is clear evidence that the gains of the Green Revolution have been largely exhausted due to growing levels of land degradation. Hence complementary and coordinated policies and actions that promote sustainable land management practices are a necessary adjunct to improving rural welfare. The rising demand for food in India will need to be met through increasing production and sustainability of the 65 percent of land that is rain-fed and 35 percent that is under irrigation. While there is little scope for expansion of cultivable area, there are significant opportunities for improving land management practices in order to reduce degradation and improve productivity. The way land and the attendant ecosystem services are used and managed will determine their long-term productivity and sustainability. Profitable and sustainable land use and ecosystem practices are the principal means for protecting India s significant environmental assets and alleviating poverty in the largest and poorest segments of Indian society. At the national and state levels a number of Ministries and departments are engaged in implementation of programs and schemes addressing land management, including the Ministry of Rural Development, Department of Land Resources (DLR); Ministry of Agriculture, Department of Agriculture and Cooperation (DAC); and the Ministry of Environment and Forest which successfully implementing the Integrated Afforestation and Eco-development Project Scheme (IAEPS) and the Joint Forest Management Program (JFM). Despite considerable financial investments, studies indicate that the rate of degradation

2 of land in rainfed areas in the 1990s is likely to have proceeded at more than twice the rate observed in the 1980s. Moreover, drought prone area increased from 55.3 m ha to 74.6 m ha in the same period. The Bank has an appreciable investment in natural resources management in India and there are good practice examples to draw upon. Various investments in rural space have and are addressing SLEM through reform of irrigated agriculture and integration with livestock management, community-based rehabilitation of degraded lands, community-based forestry management, integrated watershed development, and measures to alleviate the drought impacts on rural households. While multilaterals and donor portfolios have and continue to provide potential for accessing incremental GEF resources to bear on the land and ecosystem degradation problems in India, this opportunity has gone largely unrealized due to the excessive processing burdens and difficulties associated with present piecemeal, project by project approach. There is an urgent need for (a) reducing the uncertainties of GEF funding, (b) reducing the transaction cost and delays in sourcing GEF funding, and (c) addressing the issue of fragmentation of programs across different institutions by recognizing the complementarities between forests, common property resources (e.g. pastures, wastelands, surface and groundwater) agriculture and conservation of global commons. The proposed India Sustainable Land and Ecosystem Management Country Partnership Program (the Partnership) aims to increase the effectiveness of rural and agriculture development interventions by fostering sustainable land management practices and removing the barriers for addressing issues of global concern as well as through GEF resources. It is proposed that a programmatic partnership approach would provide a flexible and systematic platform that links Bank and GEF resources in a manner that a) promotes local (i.e., socio-economic, political, institutional) and global environmental benefits, b) promotes sustainable poverty alleviation and development, and c) enhances the complementarities and impact of Bank, GEF and other agencies initiatives.. The main challenges to preventing land degradation or restoring degraded lands can be summarized as follows: The approach to land degradation in the country has not adequately focused on the factors determining the inter-linkages between environmental degradation property rights and poverty. Indeed land degradation projects have focused more on biophysical than socioeconomic and institutional issues. There is a need to understand the key issues affecting people, such as land tenure and their interaction with ecological systems. Many past efforts did not mobilize rural communities partially because they failed to produce an immediate return on investment and, in many cases, did not substantially improve their livelihood. There is a need to shift the approach of land and water conservation projects from soil conservation per se to one which reorganizes farm level incentives. It is of special importance that the technology to combat land degradation is low cost. There is a need to promote the use of new low-cost technologies to rural communities which should be presented as a basket of options rather than ready made solutions. This should be done by addressing knowledge gaps between local perception and those within governments, donors and researchers on ecological dynamics and socioeconomic issues. Many of the past projects have focused too much on rehabilitation of degraded natural resources rather than on measures to prevent degradation. It is necessary to anticipate the problem by taking actions to prevent land degradation in sensitive areas of high biodiversity and socioeconomic importance 1. 1 GEF OP15 recognizes that early intervention in areas vulnerable to land degradation such as ecologically sensitive marginal lands is essential in preventing and controlling land degradation.

3 There has been little appreciation of how well suited pastoral production systems are for efficient resource utilization and livelihood security under arid and semi-arid conditions There is a need for more effective consideration of institutional sustainability. For example, the role of the Panchayati Raj systems and traditional management strategies need to be considered. Two key issues necessitate the adoption of an enhanced approach for sustainable land and ecosystem management in India with GEF support: (i) The extent to which major Indian watersheds of immense ecological value are facing increasing vulnerability threats. These watersheds provide ecosystem services and products that support hundreds of millions of people. The only viable approach to reduce further degradation and ensure the long-term viability of these watersheds is to move away from fragmented interventions toward the implementation of integrated landscape management approaches that clearly recognize upstream-downstream impacts and address them in a holistic manner. One indication of the severity of the crisis is that, according to the International Water Management Institute, large parts of India will suffer absolute water scarcity by This means, among other things, that they will lack fresh water needed to maintain current levels of irrigated agriculture and would have to shift water out of agriculture. (ii) The extent of degradation of land and loss of ecosystem functions and services. Various factors combine to accelerate the land degradation process including: inadequate policies and distorted incentives, inappropriate agricultural land use practices, inefficient irrigation management practices, inappropriate or expensive technologies, expansion on to fragile lands/ecosystems, and vulnerability to extreme weather events. 2. Proposed objective(s) The project s development objective is to contribute to poverty alleviation in India by promoting sustainable land management practices which would improve land and ecosystem productivity, and reduced vulnerability to extreme weather events (droughts, floods), including the effects of climate change. The global environment objective of the proposed India Sustainable Land and Ecosystem Management Partnership Program (SLEM Partnership) is to maintain and restore globally significant ecosystem functions and services. Specifically the Partnership is expected to achieve its objectives by providing support for: Preventing and/or controlling land degradation via restoration of degraded (agricultural and forested) lands and biomass cover in order to produce and utilize biomass in ways that maximize productivity as well as carbon sequestration, reducing vulnerability to and climate change adaptation, biodiversity conservation and sustainable use of water resources, including in major watersheds. Enhancing local capacity and institution building and strengthening for improved land and ecosystem management. Facilitating knowledge dissemination and application of national and international good practices in SLEM within and across states. Replicating and scaling-up successful integrated landscape and ecosystem management practices and technologies that maximize synergies across the UN Conventions on Biological Diversity (CBD), Climate Change (FCCC), and Combating Desertification (CCD) conventions.

4 To be effective, SLEM has to be seen by stakeholders to be contributing directly to poverty reduction at household and community levels, in addition to maintaining land quality and ecosystem integrity. The essence of the proposed Partnership is to catalyze incentives, knowledge and skills to bring about changes in land and ecosystem management in ways that are sustainable and are in line with the economic interests of farmers. Specific performance indicators of the program will be defined with more precision during the PDF-B implementation stage. However at individual project basis they are expected to measured by the outcomes related to: 1. Preventing and/or controlling land degradation via restoration of degraded (agricultural and forested) lands and biomass cover in order to produce, harvest, and utilize biomass in sustainable ways that maximize carbon sequestration, biodiversity, hydrological benefits. 2. Mainstreaming SLEM at national, regional and local levels through a nation-wide integrated approach by promoting the mechanism for ensuring coordination of SLEM activities. 3. Enhancing local capacity and institution building and strengthening for improved land and ecosystem management. 4. Facilitating knowledge dissemination and application of (national and international) best practices in SLEM within and across states. 5. Piloting and adapting models for SLEM that incorporate community-based land management techniques (based on indigenous knowledge and systems where relevant) into sustainable activities for community-based natural resource management. 6. Replicating and scaling-up successful land and ecosystem management practices and technologies that maximize synergies across the UN Conventions on Biological Diversity (CBD), Climate Change (FCCC), and Combating Desertification (CCD) conventions. 3. Preliminary description The SLEM Partnership is proposed as a long-term program that uses the process and resources under the Partnership framework to overcome past fragmentation and provide umbrella support for land and ecosystem management in India through strengthening the enabling environment and institutional capacity, and demonstrating viable investment models. There are several reasons why this approach offers the best possibilities to achieve lasting SLEM results: The challenges of land degradation cut across sectors. Only a coordinated and sustained multistakeholder partnership approach can achieve sustainable results. The implementation of SLEM would need to be supported by sizeable commitments of resources which need to be made upfront in a predictable manner. Such a commitment would be made at various levels: national and state governments, World Bank, UNDP, GEF, and other donors. Since most Indian states are at different levels of development and have varying land and ecosystem management challenges, the partnership approach would allow for states to design and pursue approaches which are suitable to their requirements and capacity while taking into account shared watershed needs. The Indian Government is committed to the approach promoted by the Partnership because of the magnitude of human dependency on land and ecosystem resources and services and the immense pressure on them. In addition, India s substantial World Bank and UNDP programs provide a viable opportunity for entry of an effective partnership approach. The partnership would specifically provide a framework to enable individual or cluster of states in India to:

5 provide support to the poor and vulnerable population who live in rural areas and depend on the land/natural resources for their sustenance; foster an enabling environment for sustainable rural growth; increase the awareness of soil degradation and depletion of water resources which are the major constraints on agricultural productivity growth and remain a major cause of deeply entrenched rural poverty; and provide a cost-effective and sustainable way to arrest land and ecosystem degradation and improve income and living standards through SLEM practices such as: soil and water conservation, integrated crop and livestock husbandry, agro-forestry, and the introduction of alternative livelihood options (e.g., new cash crops). Detailed Partnership design will be developed and negotiated in the course of the PDF-B implementation, including building on the results of on-going development programs and sector work undertaken by UNDP. The preliminary design envisions that the SLEM Partnership resources will be grouped in two windows: i.capacity-building Window to include resources for activity driven and targeted capacity building for SLEM, project preparation. This window will also support knowledge sharing and wider adoption of SLEM policies and good practices drawing on the lessons learned in the project. ii.investment Window to provide incremental financing for a range of options aimed at improving the management of land and ecosystems and achieving sustainable improvements. This might entail, but not be limited to 1) improving and sustaining the productivity of rain fed agriculture (through crop diversification, mixed cropping, crop rotation, water harvesting, drought insurance schemes, integrated pest management, innovations in market development and extension, etc), 2) promotion of small scale irrigation systems managed through user groups (e.g., water user associations) to improve water use efficiency and prevent salinisation and water logging, 3) improvements in the productivity and sustainability of range lands, including strengthening traditional land management systems, 4) improving the sustainability and economic productivity of forest, woodlands, and costal areas; 5) biodiversity conservation schemes; 6) energy efficiency in rural areas, and 7) reducing vulnerability to climate change. The SLEM Partnership would provide catalytic funding for promoting integrated landscape management and implementation of sustainable land management activities that are complementary to development and poverty alleviation initiatives. Assistance would focus on funding the incremental costs of those land management activities that create additional environmental benefits such as preserving the functional integrity of ecosystems, conserving biodiversity, or addressing climate change problems. Support will be commensurate with the expected environmental benefits of activities. Full details of the funding criteria will be developed in the PDF-B stage. It is envisaged that project support will be provided to activities with high and intermediate impact. High impact activities are those that confer significant and measurable global environmental benefits in at least one GEF focal areas, address priority environmental concerns identified by the Government, or deal with unforeseen environmental problems. Activities in the intermediate category generate significant local benefits in at least one GEF focal area and are a priority concern of the Government. Implementation arrangements and collaboration with donors: By design the Partnership aims to engage key stakeholders in implementation of SLEM policies. Close collaboration among GOI agencies and GEF implementing agencies (Bank, UNDP, FAO, ADB, UNEP etc.) is the prerequisite for achieving project objectives. The core elements of the Partnership will be handled jointly with UNDP, whereby specific

6 arrangements will be developed in greater detail during preparation. Eligible projects would be prepared, approved, and implemented following standard project cycle. However, project approval by the GEF would be streamlined through delegation of approval authority to GEF CEO. At a national level, MOEF has already established Partnership coordination cell and a GEF Empowered Committee for project preparation coordination between ministries and relevant agencies. However, full Partnership implementation/execution arrangements will be negotiated and finalized in the course of the PDF-B implementation. The exact responsibilities for CPP implementation and modalities of collaboration among the lead implementing agencies (Bank and UNDP, including other agencies) will be defined during the implementation of PDF B. In particular the Bank and the UNDP will collaborate to define the scope of the Partnership and write the project document. However, given the progress made by the Bank and the current schedule of submission of the application for PDF-B preparation, the Bank will submit the PDF-B application, with inputs from UNDP as early as feasible. 4. Safeguard policies that might apply The SLEM Partnership focuses on promoting environmental conservation and management of land and water resources. It is expected that individual projects eligible for GEF support would endorse the same approach which would translate in investments for sustainable land and ecosystem management through integrated management of landscape elements. To be effective, SLEM has to be seen by stakeholders to be contributing directly to poverty reduction at household and community levels, in addition to maintaining land quality and ecosystem integrity. The essence of the proposed Partnership is to catalyze incentives, knowledge and skills to bring about changes in land and ecosystem management in ways that are sustainable and are in line with the economic interests of farmers. Overall the Partnership is not expected to have negative environmental and social impacts. The following Safeguard policies apply: Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) The SLEM Partnership provides an umbrella instrument designed to enhance adoption and implementation of SLEM through a number of stand-alone operations. The stand-alone operations which may be eligible for incremental funding under the proposed Partnership are likely to have varying levels of environmental and social impacts depending upon the location of these operations, and scale and nature of activities. Under the umbrella Partnership framework an Environment and Social Safeguard Framework (ESSF) will be developed to screen proposed projects for adverse environmental and social issues and to determine, through consultation and other due diligence measures that: (i) the proposed activities provide sufficient incentives for resource users to continue good resource management practices post project implementation, and (ii) appropriate economic benefits flow to the resource users. In addition, the ESSF will include an exclusion list of activities which can not be supported by SLEM such as involuntary resettlement, non-integrated use of pesticides, and introduction of exotic or genetically modified species. Each identified investment will then be processed using the regular Bank project cycle commencing with PCN which will identify project specific environmental and social development impacts and develop appropriate environmental mitigation plans. Natural Habitats (OP/BP 4.04) operations eligible for SLEM Partnership resources identified. For individual projects this policy

7 Safeguard Policies Triggered Yes No TBD may be triggered and mitigation plans will be developed under the specific project. Forests (OP/BP 4.36) operations eligible for SLEM Partnership resources identified. For individual projects this policy may be triggered and mitigation plans will be developed under the specific project. Pest Management (OP 4.09) Cultural Property (OPN 11.03) operations eligible for SLEM Partnership resources identified. For individual projects this policy may be triggered and mitigation plans will be developed under the specific project. Indigenous Peoples (OD 4.20) Will be determined once SLEM Partnership design is more developed and project implementation area identified. Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) operations eligible for SLEM Partnership resources identified. Projects on International Waterways (OP/BP 7.50) This legal policy may be triggered in some watershed management projects and will be dealt with under the specific projects. Projects in Disputed Areas (OP/BP 7.60) Will be determined once SLEM Partnership design is more developed and project implementation area identified. For individual projects this policy may be triggered and mitigation plans will be developed under the specific project. 5. Tentative financing over a 10 year period Agency Amount (US$M) GOI/States 300 Local Beneficiaries 50 GEF 150 WB/ Bilaterals 950 Total (GEF plus leveraged funds) 1, Contact point Contact: Adriana J. Damianova Title: Lead Environmental Spec. Tel: (202) Fax: (202) Adamianova@worldbank.org