Horticulture Value Chain Development Sector Project (RRP AFG 51039)

Social Safeguard Due Diligence Report

Project number: 51039-002 July 2018

Afghanistan: Horticulture Value Chain Development

Sector Project

Prepared by the Ministry of Agriculture, Irrigation and Livestock for the Asian Development Bank. This social safeguard due diligence report is a document of the borrower. The views expressed

herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and

may be preliminary in nature. Your attention is directed to the “terms of use” section on ADB’s

website.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CURRENCY EQUIVALENTS (as of 25 June 2018)

Currency unit – afghani (AF)

AF1.00 = $0.0141

$1.00 = AF70.68

ABBREVIATIONS

ADB – Asian Development Bank

LARP – land acquisition and resettlement plan

MAIL – Ministry of Agriculture, Irrigation and Livestock

MOF – Ministry of Finance

NOTE

In this report, “$” refers to United States dollars.

TABLE OF CONTENTS

A. Introduction ...................................................................................................................... 1 B. Representative Subproject: Arya Kabul Cold Storage Company (Tabasom) .................... 2 C. Representative Subproject: Tak Dana Dry and Fresh Fruit Process Co. .......................... 3

APPENDICES Appendix 1: Involuntary Resettlement Screening Checklist for Arya Kabul Cold Storage Company (Tabasom) .............................................................................................................. 4 Appendix 2: Evidence of Land Ownership of Arya Kabul Cold Storage Company (Tabasom) Subproject .............................................................................................................................. 5 Appendix 3: Map of Urban District 9, Kabul City ..................................................................... 8 Appendix 4: Google Earth Satellite Image of Arya Kabul Cold Storage Company (Tabasom) Subproject Location ................................................................................................................ 9 Appendix 5: Photographs of the Proposed Arya Kabul Cold Storage Company (Tabasom) Subproject Site ......................................................................................................................10 Appendix 6: Involuntary Resettlement Screening Checklist for Tak Dana Dry and Fresh Fruit Process Co. ...........................................................................................................................11 Appendix 7: Evidence of Land Ownership of Tak Dana Dry and Fresh Fruit Process Co. Subproject .............................................................................................................................12 Appendix 8: Map of Urban District 9, Kabul, City ...................................................................14 Appendix 9: Google Earth Satellite Image of Tak Dana Dry and Fresh Fruit Process Co. Subproject Location ...............................................................................................................15 Appendix 10: Photographs of the Proposed Tak Dana Dry and Fresh Fruit Process Co. Subproject Site ......................................................................................................................16

A. Introduction 1. The proposed Horticulture Value Chain Development Sector Project (the project) will help enhance the horticulture value chain in key high-value production zones in Afghanistan. Using the sector modality, items eligible for financing under the project will include, but not limited to, (i) establishment and/or rehabilitation of horticulture processing and packing facilities, (ii) on-farm and community storages for potatoes and onions, and (iii) greenhouses with drip fertigation systems, and (iv) intensive orchard development. The project will also assist the Ministry of Agriculture, Irrigation, and Livestock (MAIL) in preparing and implementing (i) the national marketing and branding strategies; and (ii) strategic crop diversification strategies considering both export promotion and import substitution to increase export of horticulture products to more export destinations other than India and Pakistan, and to reduce the import of horticultural products. 2. The proposed project will be implemented in eleven provinces: Bamyan, Ghazni, Kabul, Khost, Kunar, Laghman, Logar, Nangahar, Paktika, Paktya and Wardak—in the Central and Eastern region, covering a variety of agro-climatic zones. It will aim to help Afghanistan reap the full benefits of the horticultural sector (in terms of increased gross domestic product, foreign exchange earnings (trade balance), household employment and income for both men and women and food security, by helping to increase the production, productivity, quality and marketing of horticultural products. This will be achieved through value chain interventions supported by the project which will help overcome a number of bottlenecks. The project will support any horticultural crops that have export and import substitution potential, although priority will be given to grapes, apples, cherries, peaches, citrus, apricots, potatoes, onions, tomatoes, cucumber, bell pepper, and pine nuts. 3. The project will have two outputs: (i) horticulture value chain infrastructure and facilities improved, and (ii) national capacity developed for export expansion and import substitution. These outputs will result in the following outcome: production and marketing of horticultural products increased. The project will be aligned with the following impact: balanced economic growth through agriculture, resulting in stability and economic empowerment of women and men. It will be implemented using a sector modality in which subprojects that contribute to the overall objective will be financed under the project for both agro-business enterprises and on-farm improvements. 4. The project is categorized as C for involuntary resettlement safeguards as subproject sites will be located on beneficiaries’ own unencumbered land. Only subproject proposals that do not have any involuntary resettlement impacts (including impacts on third-party users on the land such as tenants, squatters, encroachers and/or other informal users of land) will be eligible. An involuntary resettlement framework will be applied for the project to screen out all sub-projects with involuntary resettlement impacts and to conduct appropriate due diligence.1 5. The Ministry of Finance (MOF) will be the executing agency and MAIL will be the implementing agency for the project. The selected subprojects will be screened by the implementing agency using the involuntary resettlement screening checklist for identifying subprojects for project assistance. A subproject investment report (that forms the basis of subproject approval) will include an involuntary resettlement due diligence report.

1 Resettlement Framework (accessible from the list of linked documents in Appendix 2 of the report and

recommendation of the President).

2

6. This report presents due diligence of two representative subprojects, which have been screened and selected for detailed feasibility study. These subprojects are: (i) Arya Kabul Cold Storage Company (Tabasom), and (ii) Tak Dana Dry and Fresh Fruit Process Co. B. Representative Subproject: Arya Kabul Cold Storage Company (Tabasom) 7. This is a modern private enterprise established in 1996, registered with the Ministry of Commerce. It operates out of privately owned properties within the Second Plot of Pol-e-Charkhi Industrial Park on the outskirts of Kabul, where it has been operating since 1996 as a raisin grading and packing facility together with warehouse facilities for packed goods awaiting sale that also is the administrative head office for the Company. It has an adjoining property where the initial processing of raisins is undertaken that includes a receival area for farmer produce (bulk dried raisins in both bags and bins). In this facility, deliveries undergo removal of foreign matter (stones, string, stems, rogue berries etc.) and are delivered into bulk handling bins ready for further processing in the adjoining plant. This building also contains storage for raw material that is held as a reserve for when farmer deliveries cease, and the plant is kept operational using stock on hand. It also serves as a means of securing cheaper supplies during the flush of the season achieving lower raw material prices for subsequent processing (limited to about 3,000 tons of produce). 8. The subproject site is somewhat removed from the Company headquarters but still within the industrial park. This site is where the proposed packing shed facilities will be established. Also, on the same site, is a significant cool storage facility. There is adequate space on this site for the construction of the proposed pack house. The cool room construction is expected to be completed by July 2018. 9. The proposed representative subproject is for the establishment of a packing shed and associated washing/grading and packaging equipment to complement the soon to be completed cool room facility. The size of the packing facility will be driven by the capacity of the cool room and the length of time product is likely to be held in storage. The multiple chamber design of the cool room together with access driveways for stacking and unstacking means the capacity will be less than the internal dimensions of the cool rooms. With judicious design, controlled atmosphere storage will be achieved in separated chambers that will enable maximum utilization of the facility given an intended selling program. The equipment to be installed in the packing facility will initially be suitable for both grapes and apples that will permit the processing of 10,000 tons of grapes and 22,500 tons of apples. At these levels, the existing capacity of the cool room will be utilized most efficiently. The diversified activities are likely to impact on over 2,000 farmers delivering to the facility (directly and indirectly). 10. Being a private entity, it cannot acquire land, which is a prerogative of the state. However, a private entity can purchase required land through negotiated settlement in a willing seller and willing buyer situation. But, with no additional land requirement, it is clear that the proposed subproject activity does not trigger ADB’s involuntary resettlement safeguards, and the subproject qualifies to be classified as category C for the involuntary resettlement safeguards. A screening checklist for this subproject is appended as Appendix 1. Confirmation of land ownership (copy of title) is presented in Appendix 2 and a map of the location within the industrial park is presented in Appendix 3 (Urban District 9 map) and Google Earth satellite photo in Appendix 4. Photographs of the proposed Tabasom Subproject site are included in Appendix 5.

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C. Representative Subproject: Tak Dana Dry and Fresh Fruit Process Co. 11. This family business was established in 2010 and is registered with the Ministry of Commerce and Industries, Directorate General of Central Business Registry and Intellectual Property. 12. The company engages in cleaning, sorting and packaging of fresh and dried fruit in their own facility at Pol-e-Charkhi Industrial Area in Kabul. The fresh and dried fruit include pomegranate, apples, sweet cherry, grapes, and apricots. They intend investing in cold storage facilities in their existing processing center. Land for the construction of a cold storage facility of 500 metric tons capacity is already available in their processing center premises. It is the property of the company that is without any encumbrance and they have the ownership deed (see below). 13. The main components of this proposed representative subproject include construction of a cold storage facility and back-up power generator and other electric circuitry, as well as an access road for loading and unloading and security gates to access the facility. 14. The activities to be implemented under this subproject include (i) survey and design, feasibility study, bid preparation and evaluation, and supervision of construction; (ii) construction of cold storage facility and equipment installation; (iii) conduct of technical support to operators for the installed equipment and the cold storage facility maintenance; and (iv) support for strengthened linkages between the trader/processor and raw material suppliers (farmers). 15. Being a private entity, it cannot acquire land, which is a prerogative of the state. However, a private entity can purchase required land through negotiated settlement in a willing seller and willing buyer situation. But, with no additional land requirement, it is clear that the proposed subproject activity does not trigger ADB’s involuntary resettlement safeguards, and the subproject qualifies to be classified as category C for the involuntary resettlement safeguards. A screening checklist for this subproject is appended as Appendix 6. Confirmation of land ownership (copy of title) is presented in Appendix 7 and a map of the location within the industrial park is presented in Appendix 8 (Urban District 9 map) and Google Earth satellite photo in Appendix 9. Photographs of the proposed Takdana Subproject site are included in Appendix 10.

Appendix 1 4

Appendix 1: Involuntary Resettlement Screening Checklist for Arya Kabul Cold Storage Company (Tabasom)

Probable Involuntary Resettlement Effects

Yes No Remarks

Involuntary Acquisition of Land

1. Will there be land acquisition? ✓

2. Is the site for land acquisition known? Not Applicable

3. Is the ownership status and current usage of land to

be acquired known?

Not Applicable

4. Will easement be utilized within an existing Right of

Way (ROW)?

Not Applicable

5. Will there be loss of shelter and residential land due

to land acquisition?

Not Applicable

6. Will there be loss of agricultural and other

productive assets due to land acquisition?

Not Applicable

7. Will there be losses of crops, trees, and fixed assets

due to land acquisition?

Not Applicable

8. Will there be loss of businesses or enterprises due

to land acquisition?

Not Applicable

9. Will there be loss of income sources and means of

livelihoods due to land acquisition?

Not Applicable

Involuntary restrictions on land use or on access to legally designated parks and protected areas

10. Will people lose access to natural resources,

communal facilities and services?

✓

11. If land use is changed, will it have an adverse

impact on social and economic activities?

Not Applicable

12. Will access to land and resources owned

communally or by the state be restricted?

✓

Information on Displaced Persons:

Any estimate of the likely number of persons that will be displaced by the Project? [ ] No [ ] Yes ✓Not Applicable

If yes, approximately how many? ______________________

Are any of them poor, female-heads of households, or vulnerable to poverty risks? [ ] No [ ] Yes ✓Not Applicable

Are any displaced persons from indigenous or ethnic minority groups? [ ] No [ ] Yes ✓Not Applicable

5 Appendix 2

Appendix 2: Evidence of Land Ownership of Arya Kabul Cold Storage Company (Tabasom) Subproject

6 Appendix 2

Appendix 2 7

Appendix 3 8

Appendix 3: Map of Urban District 9, Kabul City

Arya Kabul Cold Storage

Company (Tabasom)

Subproject

9 Appendix 4

Appendix 4: Google Earth Satellite Image of Arya Kabul Cold Storage Company (Tabasom) Subproject Location

10 Appendix 5

Appendix 5: Photographs of the Proposed Arya Kabul Cold Storage Company (Tabasom) Subproject Site

Above – Site for the planned pack house with existing

power transmission station

Below – Planned site for pack house in relation to

existing cool room facility

Above – Drainage channel alongside the northern extremity of

the proposed location

Below – Site for the planned pack house with existing power

transmission station

Appendix 6 11

Appendix 6: Involuntary Resettlement Screening Checklist for Tak Dana Dry and Fresh Fruit Process Co.

Probable Involuntary Resettlement Effects

Yes No Remarks

Involuntary Acquisition of Land

1. Will there be land acquisition? ✓

2. Is the site for land acquisition known? Not Applicable

3. Is the ownership status and current usage of land to

be acquired known?

Not Applicable

4. Will easement be utilized within an existing Right of

Way (ROW)?

Not Applicable

5. Will there be loss of shelter and residential land due

to land acquisition?

Not Applicable

6. Will there be loss of agricultural and other

productive assets due to land acquisition?

Not Applicable

7. Will there be losses of crops, trees, and fixed assets

due to land acquisition?

Not Applicable

8. Will there be loss of businesses or enterprises due

to land acquisition?

Not Applicable

9. Will there be loss of income sources and means of

livelihoods due to land acquisition?

Not Applicable

Involuntary restrictions on land use or on access to legally designated parks and protected areas

10. Will people lose access to natural resources,

communal facilities and services?

✓

11. If land use is changed, will it have an adverse

impact on social and economic activities?

Not Applicable

12. Will access to land and resources owned

communally or by the state be restricted?

✓

Information on Displaced Persons:

Any estimate of the likely number of persons that will be displaced by the Project? [ ] No [ ] Yes ✓Not Applicable

If yes, approximately how many? ______________________

Are any of them poor, female-heads of households, or vulnerable to poverty risks? [ ] No [ ] Yes ✓Not Applicable

Are any displaced persons from indigenous or ethnic minority groups? [ ] No [ ] Yes ✓Not Applicable

12 Appendix 7

Appendix 7: Evidence of Land Ownership of Tak Dana Dry and Fresh Fruit Process Co. Subproject

Appendix 7 13

14 Appendix 8

Appendix 8: Map of Urban District 9, Kabul, City

Tak Dana Dry and

Fresh Fruit

Process Co.

Appendix 9 15

Appendix 9: Google Earth Satellite Image of Tak Dana Dry and Fresh Fruit Process Co. Subproject Location

Appendix 10 16

Appendix 10: Photographs of the Proposed Tak Dana Dry and Fresh Fruit Process Co. Subproject Site

Above – Exterior of existing cool room

Below – Waste disposal pit adjoining pack

house building

Above – Interior of existing cool room

Below – Driveway to proposed cool

storage facility

Above – Interior of existing pack house

Below – Planned site for proposed cool

storage facility