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1. Project Summary and Relationship to China's Agenda 21

The project seeks to fully utilise the superior natural conditions in Hainan province, set up new types of economically efficient tropical agriculture suitable to local natural resources, develop the regional economy, increase income for local peasants, wipe out poverty, so as to maintain economically efficient, harmonised and sustainable development between the agricultural production economy, environments and society.

The project is based on programme areas 11A, 11D, 11E, 6B, 6C and 6D of China's Agenda 21, and is related to programme areas 11B, 11F and 11G.

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2. Background

There are special superior prospects for the development of the economically efficient tropical agriculture in Hainan province. Hainan is located in the northern fringe of the tropic zone and most of China's tropical resources are concentrated in this region. It has 34,200 square kilometres of tropical land (42.5 percent of China's tropic land). There are still 0.4 million hectares of land suitable for cultivation waiting to be developed and utilised. Hainan has a good reputation as the ìgreat natural greenhouse" and is especially suitable for the growth of many kinds of tropical crops. It has developed into the biggest production base for anti-season fruits and vegetables, southern seed strains and tropical crops. Hainan province has 2 million square kilometres of sea waters and 10.1 percent of China's coastline. Marine resources are rich and varied with more than 60 bays and 0.27 million hectares of shallow waters, tideland and inland waters suitable for raising aquatic products. However, so far six seventh of the water area remains unexplored. The breeding time for fries in Hainan province is 40 to 60 days earlier than in inland provinces such as Guangdong province, so Hainan has an obvious superiority and potentials in developing cross-winter fry than China's other regions. The beautiful tropical landscape, peculiar Li Minority customs and long coastline, have made Hainanís tropical agriculture valuable for tourism. Hainan, therefore, enjoys wide prospects for the development of tropical economic agriculture, ecological agriculture for tourism and tideland agriculture. Hainan is also the most concentrated residential area of the Li Minority. As a result of low education level, backward agricultural technology and low utilisation rate of tropical agricultural resources, many of the areas are still poor and backward. So the training of the Li Minority and the raising of their abilities both in agricultural technology and natural resource management are important means to develop agriculture in Hainan province.

Economically efficient tropical agriculture has been a pillar industry in the development of regional economy by the government of Hainan province and has been listed as a priority development project in the Ninth Five-Year Plan and the Long-term Targets for the Year 2010. The government will give major support and assistance in terms of capital, manpower and management.

Hainan is the biggest special economic zone in China; preferential policies and favourable investment environments are beneficial for wide-range international cooperation and development of tropical agricultural economy. Currently, businessmen in the world have realised that it is of low risk and high profit to invest in agriculture in Hainan province and are active in investing there. So the process of industrialisation, scale production and mechanisation of economically efficient tropical agriculture in Hainan has been accelerated and its agricultural products and by-products are more suitable for international and national markets. Corresponding preparations in terms of organisation and capital have been made by the government. International business circles, and other international organisations are all welcome to invest in its tropical agriculture. Large sums of capital have been put into infrastructure construction such as transportation, water and power supply, farmland capital construction in the economically efficient agricultural development zone and thus a good foundation has been laid for the investment by international business circles.

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3. Objectives

3.1 Long-term Objective

To raise the levels of agricultural technology of local peasants, maintain economically efficient and sustainable utilisation of tropical agricultural resources, bring about positive cycle of ecological environment, and achieve sustainable development of agricultural and rural economy.

3.2 Immediate Objectives

• To formulate a sustainable development plan of Hainanís economically efficient tropical agriculture and set up an a international training centre for sustainable utilisation of tropical agricultural resources;
• To disseminate and apply agricultural technologies, and increase level of science and technology in agricultural production;
• To devote major efforts to developing economically efficient tropical economic agriculture, ecological agriculture for tourism and tideland agriculture, and set up corresponding development models and prototype farms to achieve sustainable development for agricultural and rural economy, and economically efficient utilisation of resources; increase opportunity for employment, raise income for peasants, wipe out poverty, and bring about a higher standard for all in the countryside before the year 2000.

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4. Outputs and Activities

4.1 Capacity building for economically efficient tropical agriculture in Hainan province

• Formulate a master plan for economically efficient tropical agriculture and set up GIS for resources utilisation;
• Establish training networks for peasants at the provincial, county and township levels, implement and popularise the training for local peasants in an organised way, especially the training in agricultural technology and natural resources management for Li Minority peasants.
• Set up an international training centre for sustainable utilisation of tropical agricultural resources in Tunchang county. The centre, supported by the Chinese Academy of Tropical Crop Research, integrates tropical agriculture training, technical demonstration, application, dissemination, scientific research and agricultural tourism, focuses on training of farmers, as well as technicians from other tropical developing countries. The centre will also invite experts and scholars from relevant international organisations and developed countries to participate in the cooperation.

Monitoring Indicators: a development plan of Hainan tropical agriculture, an information system for resource utilisation, establishment of a three tiers training network for farmers and an international training centre for tropical agriculture.

Implementing Agencies: Hainan Planning Bureau, Hainan Science and Technology Bureau, the Administrative Centre for China's Agenda 21.

Time Schedule: January 1997 - December 2000

4.2 Development model and demonstration of economically efficient tropical agriculture

• Establish bases for producing, processing, reserving and transporting pollution-free fruits and vegetables in the winter and spring seasons, plant 1850 hectares of fruit and vegetable each year and set up corresponding facilities for their processing and preserving;
• Build a 1,350 hectares demonstration farm for tropical fruit production and processing;
• Build a 130 hectares demonstration farm for precious tropical vanilla plantation and establish a processing factory for primary products;
• Plant 667 hectares (with about 800,000 trees) of large-fruited tropical hodgsonia and build a comprehensive processing factory which can process 200 tons of fresh large-fruited hodgsonia a day.
• Build a demonstration farm for aloe of 667 hectares, and a processing plant with semi-automatic operation for extracting aloe juice.

Monitoring Indicators: an anti-season fruit and vegetable base (1,850 hectares), a production and processing base for tropical fruits (1,350 hectares), a vanilla plantation base (130 hectares) and its processing factory for primary products, 667 hectares of large -fruited hodgsonia plantation and its processing factory, a 667 hectares of demonstration farm for and its processing plant with semi-automatic operation

Implementing Agencies: Hainan Planning Bureau, government of Tunchang and Changjiang counties, Hainan Dongdu Property Development Co. Ltd., Minfu Investment Group, Hainan Trade and Development Corporation for Township and village Enterprises

Time Schedule: January 1997 - December 2000

4.3 Development models and demonstration of economically efficient tropical agriculture and aquaculture

• Set up Nan Fan tropical freshwater breeding demonstration base (130 hectares for freshwater fry and 100 hectares for soft-shelled turtle);
• Set up a demonstration farm with 50,000 heads of pigs which integrates raising, reproduction and meat processing;
• Establish an ecological breeding demonstration farm with 15,000 heads of high quality beef cattle which can produce 5,000 heads of beef cattle each year, and build 5,000 hectares of ecological pasture;
• Set up 100 hectares of pool for European eel breeding. Currently, China has already mature breeding technology and sites but international investment and cooperative management are sought;
• Develop 2,000 hectares of grass cultivation and a processing plant.

Monitoring Indicators: 130 ha. of fishery for freshwater fry and 100 ha. of pool for soft-shelled turtles, 100 ha. of pool for European eels, a pig farm with 50,000 heads of pigs, 15,000 heads of high quality beef cattle for ecological farm with annual production of 5,000 heads of beef cattle, and 5,000 hectares of ecological pasture, 2000 hectares of grass planting and processing base.

Implementing Agencies: Hainan Planning Bureau,Tunchang county government, Hainan Xulong Corporation, Hainan Investment Company for International Tourism, Minfu Industrial Inc.

Time Schedule: January 1997 - December 2000

4.4 Development model and demonstration of tourism-oriented tropical ecological agriculture for tourism

• Build Hainan International Agricultural Exhibition Centre, with an area of 6 square kilometres and integrating plantation demonstration of tropical crops, aquiculture pasture, exhibition, scientific research, tourism, entertainment and trade;
• Set up a tropical brand-name orchard at the centre of Hainan province which will occupy 700 hectares of lands for production of 31 types of world famous fruits and develop tourism-oriented ecological agriculture;
• Build an air-conditioned storage facility for preserving agricultural products and by-products. The cold storage with a space of 28,200 m3 and a capacity of 6,000 tons will need a total investment of US$ 10 million. Annual profit will be US$ 4 million. It needs a total of US$ 4.5 million from external capital investment.

Monitoring Indicators: an international agricultural exhibition centre, a world-class tropical orchard.

Implementing Agencies: Hainan Planning Bureau, Shenzhen Libido Enterprise Ltd., Hainan Investment Company for International Tourism, Hainan Dongda Company of Agricultural and Local Products.

Time Schedule: January 1997 - December 2000

4.5 Development model and demonstration for tropical marine and tidal Land agriculture

• Set up a 2,667 hectares marine aquiculture farm. It will raise Mexico gulf scallop, spiral blood shell, striped prawn and kelp. The annual total output can be 60,000 tons with a value 300 million yuan;
• Build 3 sea-hatcheries which can produce 1,500 million fry annually. The total output value can be 45 million yuan a year;
• Build 2 two cold storage for marine products which can process 25,000 tons of sea products a year.

Monitoring Indicators: a marine aquiculture farm, 3 sea-hatcheries, 2 cold storage.

Implementing Agencies: Hainan Planning Bureau, Hainan Economic Development Corporation.

Time Schedule: January 1997 - December 2000

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5. Inputs

5.1 Chinese Inputs

Chinese inputs will be used for services, travel, office facilities, sites for training and experiment of domestic experts, researchers and managers, facilities and equipment for research and observation in China, relevant technologies and materials, construction of demonstrative projects, and research and training, etc..

5.2 International Inputs

International inputs will be used for technical advice, consultancy and personnel training, high technologies and materials for international tropical agriculture, advanced instruments and equipment, study tours on foreign tropical agriculture and investment in demonstration projects, etc..

5.3 Budgets

The total capital needed for this project is US$ 70 million. The Chinese participants will raise US$ 36.85 million from domestic sources, while foreign aid and investment will cover the other US$ 33.15 million.

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Table 1. Budget by Item (in million US dollars)

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Table 2. Budget by Output (in million US dollars)

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6. Benefits

The project, after its implementation, will greatly promote sustainable development of tropical agricultural and rural economy in Hainan province and it will train many of tropical agricultural researchers, managers and peasants (especially farmers of the Li Minority). Its development model will provide a scientific policy decision basis for the development of tropical agriculture in other areas. Economic benefits of the project after its implementation will be especially great and annual profit will reach 15 to 60 percent of the whole investment. The total investment can be paid back in 3 to 4 years. Per capita net income of the peasants will increase 1.5 to 2 times, and resources environment and economic growth can develop in a co-ordinated way.

It is peasants of the Li Minority and peasants in the demonstration, popularisation and application areas in Hainan province who will benefit from the project. Also researchers, managers, foreign investors, policy decision-making departments, industrial and commercial enterprises who invest in the agricultural projects will greatly benefit .

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7. Risks

The economically efficient tropical agriculture in Hainan province is a high input and high output item. It not only utilises sufficiently Hainanís superior tropical agricultural natural resources and develops rural economy, but also creates condition for the protection of its original ecological environments. So this project is an item of low risk and high profit. As the project involves agricultural cultivation, aquaculture, processing and tourism, etc., coordination among departments is a problem that needs to be resolved. Local governments should establish special execution and management agencies and expert consolation groups for successful implementation of the project.

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