J. 9Current IEE PDF EG.pdf

INITIAL ENVIRONMENTAL EXAMINATION

A P P R O V A L F A C E S H E E T

USAID/ZIMBABWE ECONOMIC GROWTH PORTFOLIO

PROGRAM/ACTIVITY DATA:

Program/Activity Number: (TBD)

Country/Region: Zimbabwe/Africa

Program/Activity Title: Poverty Reduction and Food Security – Crop Development and Poverty Reduction and Food Security – Livestock Development

Funding Begin: FY 2014 Funding End: FY 2019 LOP Amount: $ 32,000,000 Sub-Activity Amount: $

IEE Prepared By: John Macy Current Date: January 12, 2015

IEE Expiration Date: 9/30/2020

IEE Amendment (Y/N): No If "yes", Filename & date of original IEE

ENVIRONMENTAL ACTION RECOMMENDED: (Place X where applicable) Categorical Exclusion: ___X___ Negative Determination: ___X___ Positive Determination: ________ Deferral:

ADDITIONAL ELEMENTS: (Place X where applicable)

CONDITIONS X EMMP:__X__ PVO/NGO:

2012 Zimbabwe EG PERSUAP (Zimbabwe EG PERSUAP):

http://gemini.info.usaid.gov/egat/envcomp/repository/doc/39786.docx

Zimbabwe EG WASH DGP IEE, approved Aug. 6, 2014:

http://gemini.info.usaid.gov/egat/envcomp/document.php?doc_id=41031

SUMMARY OF FINDINGS:

Purpose and Scope of IEE

This Initial Environmental Examination (IEE) covers new agricultural development activities planned for DO2 managed by USAID/Zimbabwe’s Economic Growth Office. N e w program activities will provide training and technical assistance to smallholder farmers, farmer organizations, and small agribusinesses, as well as provide loan guarantees under one or more Development Credit Authority loan guarantee agreement(s). The envisioned programs http://gemini.info.usaid.gov/egat/envcomp/repository/doc/39786.docx http://gemini.info.usaid.gov/egat/envcomp/document.php?doc_id=41031 complement those currently being implemented by USAID/OFDA and USAID/FFP. This document does not supersede IEEs drafted for complementary programs being conducted by USAID/OFDA and USAID/FFP. Programs implemented by these offices operate under their own stand-alone IEEs and/or environmental assessments.

The Mission commenced new WASH activities, covered by a separate IEE, in October 2014.

In addition to assessing potential environmental impacts of activities that fall under the EG strategy, outlining mitigation and monitoring requirements, and recommending determinations, this IEE establishes project-level procedures to ensure compliance with USAID regulations and USG law. These procedures are intended to ensure that the IEE findings and conditions are implemented as a matter of routine project implementation.

Therefore, the procedures are a general condition of approval for the IEE, and their implementation is therefore mandatory.

This IEE provides additional details about the activities, potential impacts, mitigation measures, and monitoring requirements.

Recommended Determinations and Actions

The recommended determinations and actions for activities included in this Zimbabwe EG IEE are summarized in the following table. For the purposes of this IEE, the activities have been categorized per the following:

• Business Development Activities

• Training Activities

• Provision of Agricultural Inputs

• Rehabilitation or Construction of Infrastructure

• Financing Activities

Intervention Category Categorical

Exclusion(s) Negative

Determination(s) Positive

Determination(s) Link to full analysis

1. Business Development Activities (w/ conditions) Click here

2. Training Activities (w/ conditions) Click here

3. Provision of Agricultural Inputs

4. Minor Rehabilitation or Construction of Infrastructure (w/ conditions) Click here

5. Financing Activities

General Implementation & Monitoring Conditions. In addition to the specific conditions enumerated in Section 4, the negative determinations recommended in this IEE are contingent on full implementation of a set of general monitoring and implementation requirements specified in Section 4 of the IEE.

These require, in summary: (1) IP Briefings on Environmental Compliance Responsibilities; (2) Development of environmental mitigation and monitoring plans (EMMPs); (3) Integration and implementation of EMMPs in workplans and budgets; (4) Integration of compliance responsibilities in prime and sub-contracts and grant agreements; (5) Assurance of sub-grantee and sub-contractor capacity and compliance; (6) Health Team environmental compliance monitoring; (7) 22 CFR 216 documentation coverage for new or modified activities; and (8) compliance with host country requirements.

As required by ADS 204.3.4, the USAID/Zimbabwe EG Team Leader, in consultation with Mission COR(s), AOR(s), activity managers, implementing partners, the Mission Environmental Officer (MEO), the Regional Environment Officer (REO), and the Bureau Environmental Officer (BEOs), as appropriate, will actively monitor ongoing activities for compliance with approved IEE recommendations, and modify or end activities that are not in compliance or deemed to be harmful to the environment. In the event that unforeseen environmental impacts are determined or that mitigation and control measures are insufficient, the EG team will consult promptly with the Regional Environment Officer in USAID/Southern Africa. If additional activities are added to this program that are not described in this document, an amended environmental examination will be prepared.

LIST OF ANNEXES

1. List of Acronyms

2. Environmental Review Form and Procedures for Sub-Awards

3. USAID GMO and Biosafety Procedures

4. Map and Description of Natural Regions in Zimbabwe

5. Standard Legal Agreement Environmental Language

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INITIAL ENVIRONMENTAL EXAMINATION

USAID/ZIMBABWE ECONOMIC GROWTH PORTFOLIO

1. BACKGROUND AND PROGRAM/ACTIVITY DESCRIPTION

1.1 Background

Prior to 2000, Zimbabwe was the breadbasket for Southern Africa. Zimbabwe was the third largest exporter of tobacco in the world, the largest beef exporter in Africa, and was a major producer of milk, sugar, fruit, and horticultural products. Agriculture was the mainstay of the economy, including the manufacturing sector, given the huge demand for processing of agricultural products.

The forward and backward linkages that agriculture had to manufacturing and services were the engines of growth for the economy. Agriculture in 2000 represented 51% of total export earnings;

however, this fell to 29% in 2008. Presently, agriculture contributes between 15-20% of overall

GDP.

Since 2000, Zimbabwe has experienced a series of economic, political, and social shocks (especially the Fast Track Land Reform movement and hyperinflation) resulting in loss of livelihoods, increasing poverty and human displacement, and reduced food security. The formal economy virtually ceased to function in 2007, 2008 and 2009. With few opportunities for formal employment, which is estimated at less than 20 percent of the workforce, most Zimbabweans engage in subsistence agriculture or other informal employment. Agricultural production declined by 79 percent between 2002 and 2008, and gross domestic product (GDP) fell by more than 50 percent between 2000 and 2008. The 2008/2009 crop year saw the country’s worst crop failure in history due to economic mismanagement, lack of access to seeds and fertilizer, and uneven rainfall.

Since 2009 the economy has begun to recover from the crisis as a result of the installation of a multi-currency regime which quickly brought inflation under control, as well as liberalization of certain agricultural markets. Economic growth rebounded from 2009 through 2013, with GDP growth ranging from 10% to 12% in the early recovery years to 3% or less in 2013. Store shelves, which were largely empty in 2007/2008, are now well-stocked. Agriculture also enjoyed strong growth ranging between 15-17% during the recovery period, but production levels in most value chains remain far below levels achieved in the late 1990s.

The steady and precipitous decline in the agricultural sector from 2000 to 2009 had a devastating impact on the country. The agricultural sector has been severely affected by an exodus of entrepreneurs, management, and skilled labor due to forced evictions, more favorable opportunities in other countries, and lack of profitability and business incentives. Liquidity, both within the agricultural sector and the financial sector, is at very low levels, creating a shortage of credit and very high interest rates for those who are able to secure credit. Many agri-businesses and banks are very weak and under-capitalized. Agricultural input producers, including suppliers of fertilizer, chemicals, and feed, are operating at well under 50% of their capacity because of the collapse of the sector, although inputs are generally available in the market place. In addition, poor infrastructure, high costs, extremely high levels of corruption, the country’s indigenization policy, weak rule of law, weak business enabling environment, and a perception of high country risk combine to dramatically reduce the level of foreign direct investment in Zimbabwe.

Due to high poverty rates and lack of investment in rural areas, a high percentage of rural households lack access to improved water sources and/or sanitation facilities. In some districts open defecation is common. Resulting from this lack of improved water and sanitation facilities are high rates of diarrheal diseases, poor absorption of food nutrients, and malnutrition and stunting. According to the Demographic Household Survey (DHS), approximately one-third of all children (32%) are stunted (DHS, 2010/11), with very little progress made over the past 10 years.

While the average is 32 percent, in some districts stunting rates exceed 40 percent. Acute malnutrition rates have declined by roughly 50 percent over the last decade through intensification and scaling up of nutritional programs. However, the MDG goal of reducing the under-weight population by one half will not likely be achieved by 2015. The latest figures from 2010 indicate that one out of ten persons is underweight. Currently, an estimated 161,105 children die before their fifth birthday (under-five mortality rate (U5MR) of 84/1000)1. Although the causal factors are many, malnutrition is one of the leading underlying causes of under-five deaths. Prevalence of micronutrient deficiencies is high across all age groups of the Zimbabwean population. Vitamin A deficiency affects 35.8% of pre-school children and 20% of pregnant women2. About 58% of pre-school children and 47% of pregnant women are anemic (DHS (2005-06)), and about 16% of school children have an iodine deficiency (MoHCW & UNICEF (2009)). In addition to the nutritional and stunting problems mentioned above, the burden usually falls on women to obtain water for the household, often walking long distances on a daily basis to fetch water.

Since 2002, USAID has provided emergency humanitarian assistance in Zimbabwe. In 2009, USAID expanded to “humanitarian plus” programming, which included a more robust democracy program and a re-entry into agriculture and economic growth sectors. In FY 2009 and 2010, as part of the Mission’s early Relief to Development Transition (R2DT) process, USAID initiated economic growth, livelihood, and recovery activities targeted at increasing agricultural productivity and incomes to complement humanitarian interventions and provide a more comprehensive response. These programs included the Title II emergency-funded Promoting Recovery in Zimbabwe (PRIZE) project that aimed to improve resiliency and initiate the transition from emergency response to development. Additionally, USAID commenced eleven Economic Support Fund (ESF)-financed agriculture sector and livelihood development activities focused on increased production and expanded commercialization for viable farmers. One of the key livelihood grants was the dairy development activity implemented by Land O’Lakes from January 2010 to November 2013.

In October 2010, the Mission commenced two four and one-half year programs focused on agricultural development. Both programs will end between September 2014 and September 2015.

The Zimbabwe Agricultural Income and Employment Development Program (Zim-AIED) focuses on increasing incomes, food security, and employment for 150,000 poor rural smallholder households. Zim-AIED has developed more than 40 agricultural hubs which bring together demonstration plots, training for farmers in good agricultural practices and farming as a business, the development of market linkages with input suppliers and buyers, and facilitated access to credit through the Agritrade credit component.

The Zimbabwe Agricultural Competitiveness Program (Zim-ACP) focuses on improving the policy and enabling environment for agriculture. Zim-ACP accomplishes its objectives by strengthening

1 UNICEF, 2011, Information by Country Zimbabwe Statistics, DHS, 2010/11.

2 WHO (1999).

civil society organizations such as farmers unions and commodity associations, building their capacity to conduct high quality evidence-based analyses of policies and regulations, and strengthening their capacity to effectively advocate for appropriate policies and regulations which will support improved competitiveness in various agricultural value chains.

The Mission will commence new WASH activities, covered by a separate IEE, in FY 2015. These new WASH activities will be implemented at several of the agricultural hubs managed by Zim- AIED, and provide complementary interventions designed to reduce disease and improve nutritional absorption of beneficiaries. The WASH activities will addresses the lack of improved water and sanitation facilities in rural areas, and the consequent problems with diarrhea, poor absorption of food nutrients, malnutrition, and stunting. They are intended to complement the agricultural development activities implemented under USAID’s Zimbabwe Agricultural Income and Employment Development Program (Zim-AIED) with the goal of improving poverty, food security, malnutrition, and stunting in rural areas of Zimbabwe.

In June 2014, the Agency’s Office of Food for Peace initiated two five-year development food aid programs, Amalima and ENSURE, managed by the Mission’s Humanitarian Assistance Office.

These programs, implemented by World Vision and CNFA and their consortia partners, will work with vulnerable households in ten districts in Manicaland, Masvingo, and Matabeleland (see Annex B for specific districts) that have received food aid for the past several years and seek to develop resiliency and self-sufficiency in those households. The programs will rehabilitate or build community assets such as irrigation schemes and dip tanks, and promote conservation agriculture, market linkages, nutrition, hygiene, and community and household resilience among 500,000 individuals or approximately 100,000 vulnerable households. Amalima and ENSURE operate under their own stand-alone IEEs and/or environmental assessments.

New agricultural development activities currently under design are expected to continue many of the same activities and components as embodied in the Zim-AIED program and livelihood development activities described above. Additional activities will be designed in FY 2014 to replace the Mission’s current agriculture/economic policy and business enabling environment activities which are planned to end by September 2015 - Zim-ACP (part of DO 2) and SERA (part of DO 3) activities. Those new agricultural development, policy, and business enabling environment activities are covered under this new IEE. The scope of this IEE is expected to cover all currently planned agricultural development, agriculture/ economic policy, and business enabling environment activities.

1.2 Purpose and Scope of IEE

USAID’s Transition Country Development Cooperation Strategy was approved in FY 2013, and supersedes the strategy statement which was revised in June 2009. The USG’s objective, as articulated in the Transition Country Development Strategy, is to assist Zimbabwe in its transition to a democratic, peaceful, productive, multi-racial society able to take care of its citizens, abiding by the rule of law, respecting human rights, and contributing to regional stability and growth. The Mission’s Development Objective 2 (DO2), “Increased Food Security in Targeted Areas of Zimbabwe”, contributes to this goal through economic growth, reduced poverty, increased food security, and increased resilience among poor rural households.

The scope and nature of activities envisioned within USAID/Zimbabwe’s Economic Growth and

Agriculture Development (EG) strategy and within the Mission’s Transition Country Development Cooperation Strategy for 2013-2015 remain largely unchanged. The Economic Growth (EG) strategy has three key components: macroeconomic policy and business enabling environment, private sector development, and agricultural development. WASH activities have been added as a complement to the Mission’s Feed the Future (FTF) components to reduce the disease burden and enhance the nutritional status of agricultural development beneficiaries.

Those WASH activities are covered by a separate IEE.

This Initial Environmental Examination (IEE) covers new agricultural development activities planned for DO2 managed by USAID/Zimbabwe’s Economic Growth Office. N e w program activities will provide training and technical assistance to smallholder farmers, farmer organizations, and small agribusinesses, as well as provide loan guarantees under one or more Development Credit Authority loan guarantee agreement(s). The envisioned programs complement those currently being implemented by USAID/OFDA and USAID/FFP. This document does not supersede IEEs drafted for complementary programs being conducted by USAID/OFDA and USAID/FFP. Programs implemented by these offices operate under their own stand-alone IEEs and/or environmental assessments.

In addition to assessing potential environmental impacts of activities that fall under the EG strategy, outlining mitigation and monitoring requirements, and recommending determinations, this IEE establishes project-level procedures to ensure compliance with USAID regulations and USG law. These procedures are intended to ensure that the IEE findings and conditions are implemented as a matter of routine project implementation. Therefore, the procedures are a general condition of approval for the IEE, and their implementation is therefore mandatory.

1.3 Description of Illustrative Activities

The EG strategy has several components: ( 1 ) to improve livelihoods; (2) to improve the macro-economic and micro-economic policy and business enabling environment; (3) to promote agricultural development and increased food security; (4) to promote private sector development;

and (5) to promote improved access to water, sanitation, and hygiene among rural beneficiary households and communities. Together, these areas of focus will increase employment and incomes, restore investor confidence, jump start the economy, and improve food security among the rural poor. Examples of activities covered by this IEE are summarized below.

Agricultural Development

Program Area: Agriculture Program Element(s): Agriculture Enabling Environment/Agriculture Sector

Productivity Illustrative activities include:

• Skills development through the provision of training and agricultural extension. This training will consist of training in good agricultural and animal husbandry practices (e.g., soil preparation, planting practices, proper plant spacing, timing of planting, weeding, mulching, harvesting, post-harvest handling, crop rotation, proper use of fertilizers, proper use of pesticides and herbicides, animal nutrition, fodder production, animal vaccination, etc.). Anticipated value chains will include high-value crops (e.g., vegetables, potatoes, fruits, and spice crops), staple food crops (e.g., maize, groundnuts, sugar beans, etc.), dairy cattle, and beef cattle. Training will most likely take place via a cascaded training approach incorporating training of trainers (typically lead farmers), demonstration plots, field days, etc.

• Training in farming as a business (e.g., record keeping, budgeting, profit & loss analysis, contract negotiation, honoring contracts, crop selection to improve profitability of farm, etc.).

• Training of irrigation management committees, milk collection center committees, and similar committees in proper management and maintenance of infrastructure, organizational management, etc.

• Provision of agricultural inputs (e.g., seed, fertilizers, pesticides, and herbicides) in small quantities for use on demonstration plots and to selected farmers (typically lead farmers) on a fully cost-recoverable basis. Quantities would typically be for less than one hectare per demonstration plot or lead farmer (usually one-half hectare). Anticipated number of lead farmers would be less than 1,000.

• Development of market linkages between input suppliers, farmers, and buyers.

• Training of farmers in nutrition and hygiene.

• Minor small-scale irrigation rehabilitation (e.g., cleaning canals of debris, rebuilding small segments of existing canals which are leaking using community labor combined with cement provided by project, etc.). No new irrigation scheme construction will be funded by this project or covered by this IEE. Should new irrigation scheme construction be considered by future activities, a separate IEE will be developed to cover that activity.

• Minor small-scale construction of cattle corrals, cattle crushes, and feeding pens.

• Minor small-scale rehabilitation of existing milk collection centers.

Financing

• The Mission will enter into one or more Development Credit Authority (DCA) loan guarantee agreement(s) with one or more financial institutions, commercial banks or microfinance institutions to increase access to finance in the agricultural value chains to fund working capital and capital expenditure requirements. The DCA loan guarantee may also guarantee loans to Microfinance Institutions (MFIs), women-owned businesses, and youth-owned businesses across a range of sectors. The loan portfolio guarantee will have an expected duration of seven years, and a cap of $50 million, of which approximately 50% of the principal loan amount will be guaranteed by the USG.

This IEE covers Agricultural Development, and Financing activities. Macro-economic Policy and Business Enabling Environment, Private Sector Development, and WASH activities are covered by separate IEEs.

1.4 Geographic Focus

USAID/Zimbabwe’s EG activities will be implemented throughout the country. However, agricultural development activities will be limited to agro-ecological natural regions III, IV, and V. See Annex 4 for a map and description of the natural regions.

2. COUNTRY AND ENVIRONMENTAL BASELINE INFORMATION

2.1 Zimbabwe’s Physical Environment

Zimbabwe has a total land area of 390,000 km2, and lies wholly within the tropics. Four-fifths of the country's land terrain is over 600 meters above sea level, and most of the country has a sub-tropical climate. Seasonal rainfall patterns are erratic with cyclical droughts often span several years. Monthly rainfall is much less reliable than the seasonal totals, and generally decreases from north to south. The national rainfall averages in the past decade have been considerably lower than the averages for this century. The country has no natural lakes and has only a few perennial rivers.

Although some 43 percent of Zimbabwe's land area is comprised of indigenous woodlands and plantation forest, much of this vegetation has been degraded. In many areas, remaining vegetation consists of little more than sparse grazing areas with scattered trees and shrubs. Fuel wood accounts for about 90 percent of national energy needs and the major source of energy in rural areas. There are vast tracts of indigenous woodlands and bushes that have been decimated to meet this demand.

Zimbabwe faces a paradox of abundant and diverse natural resources abutting rural communities plagued with poverty, malnutrition, and under-development. Growing population pressures are exacting an increasing toll on wildlife habitats, due to land-use change caused by agricultural expansion. Also, wild animals traversing park boundaries wreak havoc on neighboring communities, damage their meager crop and livestock holdings, and further increase demands to eliminate marauding species. The competition and land-use conflicts between rural communities and wildlife habitats have created an environmental and development challenge.

2.2 Socio-Economic Profile

Since 2000, Zimbabwe has experienced a series of economic, political, and weather shocks (especially the Fast Track Land Reform movement and hyperinflation) resulting in loss of livelihoods, increasing poverty and human displacement, and reduced food security. The formal economy virtually ceased to function in 2008 and 2009. With few opportunities for formal employment, which is estimated at less than 20 percent of the workforce, most Zimbabweans engage in subsistence agriculture or other informal employment. Agricultural production declined by 79 percent between 2002 and 2008, and gross domestic product (GDP) fell by more than 50 percent between 2000 and 2008. The 2008/2009 crop year saw the country’s worst crop failure in history due to economic mismanagement, lack of access to seeds and fertilizer, and uneven rainfall.

As a result, in early 2009, humanitarian agencies provided emergency food assistance to approximately seven million people — more than half the nation’s population.

Dollarization, liberalization of agricultural markets, and a measure of political stability starting in 2009 brought about economic stabilization and initiated a recovery process. As a result, the economy enjoyed several years of growth, products returned to store shelves, and the number of people requiring emergency food assistance declined to 1.5 to 2.2 million people in 2012 – 2014 and to 655,000 in 2014 following the good rains of that year Although the economy has markedly improved since 2009, many significant issues remain. At least 80 percent of the working age population works in the informal sector. Agricultural production is still well below levels achieved in the late 1990s, and agricultural yields are very low. Poverty rates among rural households remain above 75%.

Meanwhile, despite flawed but violence-free national elections in July 2013, the threat of political violence, coercion, and manipulation remains as political factions wrestle for power in anticipation of a political succession after President Mugabe eventually leaves power.

2.3 Land Tenure and Use in Zimbabwe

Since 2000, there has been increasing political and social tension in Zimbabwe over land-distribution and compensation. In July 2000, President Mugabe stated that he would adopt a “fast track” land reform process in Zimbabwe where a national committee, the National Land Identification Committee, would identify tracks of land for redistribution. This fast-track model consisted of two approaches: model A1, to benefit 160,000 of the poor from the general landless population and model A2 aimed at creating 51,000 black commercial farmers.3 The process used has proven inefficient and has led to unsustainable farming techniques and over-exploitation of natural resources. Moreover, it has caused disruption to local communal and social structures by creating conflicts between indigenous people and individuals that have benefited from the land distribution or that have been displaced because of it. The land redistribution scheme has been all the more confusing and upsetting because it was not monitored by the judicial system and has resulted in human rights violations and increasing corruption. The agricultural development assistance covered by this IEE will not provide assistance to any farmers on A1 or A2 lands.

Assistance will only be provided to long-term farmers on communal lands.

2.4 Zimbabwe Environmental Policies and Institutional Framework

In contrast to many African countries, the environmental legislation of Zimbabwe is quite comprehensive. Acts relating to the environment are enforced by a number of different ministries.

There are almost 20 acts and twice as many statutory instruments (subsidiary legislation) for the environment in Zimbabwe. They include the Natural Resources Act, Forest Act, Parks and Wildlife Act, Trapping and Animals Control Act, Hazardous Substances and Articles Act, Atmospheric Pollution Prevention Act, Noxious Weeds Act, Plant, Pests and Diseases Act, Mines and Minerals Act, Water Act, Regional Town and Country Planning Act, Rural District Councils Act, Communal Land Act, and Communal Forest Product Act.

One of the most important pieces of legislation is the Natural Resources Act, which aims to control the use of resources. However, it cannot be applied in the communal areas, about half of the total land area of Zimbabwe, since it is enforced by way of legal title to land.

Generally the enforcement of the above acts is difficult due to the provision of exemptions, which allow companies to pollute. In some cases, the various pieces of legislation are conflicting, which leads to further problems of implementation.

Below is a summary of government agencies that have responsibility for environmental policy.

3 1 Human Constitutional Rights, 2002 4 African Development Bank Country Environmental Profile, Zimbabwe Environment and Social Policy Working Paper No. 2.

However, it should be noted that poor management and under-funding has severely weakened the effectiveness of these organizations.

The Ministry of Environment, Water and Climate, through the Environmental Management Agency (EMA). EMA is a statutory body responsible for ensuring the sustainable management of natural resources and protection of the environment, the prevention of pollution and environmental degradation, the preparation of Environmental Plans for the management and protection of the environment. It was established under the Environmental Management Act [Chapter 20:27] and made operational on the 17th of March 2003 through Statutory Instrument 103 of 2003.

The Department of Natural Resources is responsible for the promotion of standards for environmental quality and the provision of information on the environment. This department is the institution in charge of mitigating adverse environmental impacts of projects.

The Department of National Parks and Wildlife Management has responsibility for the management of parks and wildlife, and for the sustainable use of animal resources. The Communal Area Management Program for Indigenous Resources has facilitated sustainable wildlife production, and reduced the degradation of land by offering a viable alternative to the farmer. The revenue generated by the Communal Area Management Program is turned back to the local community and utilized in accordance with community-identified development priorities.

The Ministry of Lands Agriculture and Rural Resettlement implements its mandate through the Agriculture, Technical, and Extension Service (AGRITEX). AGRITEX has extension workers all over the country, and through its extension work, land use planning and soil and water conservation are emphasized. Therefore, the Ministry of Lands, Agriculture and Rural Resettlement has considerable influence on environmental matters. AGRITEX has established its own Soil and Water Conservation Unit.

The Ministry of Local Government Urban and Rural Development (MLGURD) is responsible for community development in a broad sense through the Department of Rural Development. The Ministry works with district and local authorities and village development committees to implement projects. The Ministry of Local Government Urban and Rural Development controls the District Development Fund.

Other ministries responsible for environmental related matters include The Ministry of Energy and Water Resources Development which implements the Water Act, and gives advice on issues related to surface and ground water.

3. POTENTIAL ENVIRONMENTAL IMPACTS & RECOMMENDED

DETERMINATIONS, INCLUDING CONDITIONS

The majority of activities to be implemented under the Mission’s EG Strategy are unlikely to have direct and serious negative impact on the environment. However, some of the proposed activities present potential concerns for the physical environment and human welfare if proper mitigation measures and best management practices are not implemented. See below for an environmental impact analysis.

3.1 Capitalization, Training, and Technical Assistance to Micro-Finance Institutions

(MFIs), Group Savings and Loans Schemes, and Development Credit Authority

The potential, cumulative environmental impact of micro, small, and medium enterprises may include pollution of air and water, drawdown of communal water resources, and poor management of organic wastes. Without environmental due diligence in loan-making and technical assistance, increased finance for and technical assistance may increase the numbers of enterprises that have potentially significant adverse impacts, however this is unlikely as the DCA legal agreement clearly forbids activities which have an adverse impact on the environment.

As described above, USAID/Zimbabwe will enter into DCA guarantee agreements with one or more banks and/or microfinance institutions to encourage greater lending to the agriculture sector, as well as to women-owned and youth-owned enterprises. Specifically:

• The DCA will result in increased access to finance in the FTF value chains of dairy, beef cattle, staple food crops, and horticultural vegetables and other high-value crops. It will be used to facilitate increased access to credit by farmers, agrodealers, traders, processors, service providers, etc. for all activities along these value chains (production inputs, tillage service, marketing, processing, storage, etc.). By supporting credit to underserved groups (farmers, SMEs), it will reduce inequity in access to credit. Some of the farmers and entities benefiting from credit support will receive complementary technical assistance.

• It will also support increased commercial lending to women-owned and youth-owned micro, small, and medium enterprises regardless of sector.

3.2 Potential Adverse Impacts and Considerations Regarding Recommended

Determinations

As described above, the types of activities to be supported by DCA-backed loans may cover the full range of activities across the agricultural and other value chains. As such, the activities supported could have multiple of the impacts described in section 3.1.

The specific intent of DCA credit guarantees is to stimulate lending (and thus the activities supported by that lending) that would not otherwise take place. Thus, even in situations in which USAID will not exert direct control over the loan-making process or over Borrowers’ use of USAID-backed financing (i.e., how guaranteed funds are put to use on the ground), USAID bears partial responsibility for adverse impacts. DCA loan portfolio guarantees include the standard language that withholds DCA credit guarantees/ coverage from environmentally “high risk” activities (cases where Reg. 216 requires an EA and activities restricted by sections 118 & 119 of the Foreign Assistance Act), except with USAID prior review and approval. That is, if such a loan is made without first obtaining approval, DCA provides no coverage in case of default.

This provision sends a clear message to financial intermediaries regarding the importance of environmental due diligence. It also provides important legal protection for USAID.

3.3 Agricultural Crop Production Activities

It is important to distinguish between activities that build capacity in analysis and agricultural extension and those that seek to promote specific agricultural practices.

Activities in the former category do not of themselves have the potential for significant environmental impact; however, activities in the latter category do have such potential. In general, improved agricultural practices are intended to result in more sustainable farming methods and higher-yields. Inappropriate activities could result in soil depletion, salinization, other types of land degradation, eutrophication, nutrient pollution of water bodies, introduction of invasive species, and intensification of production or new cultivation on marginal lands. Each of these could have considerable impact. For example:

• Even if USAID-funded activities are of only limited scale, they may be intended to result in or support a much wider adoption of a particular action.

• Because much of the land in Zimbabwe is already degraded or marginal, further degradation is likely to have very significant impacts on rural welfare.

• These impacts arise out of design or implementation failures; an agricultural program designed to identify and promote sustainable agricultural techniques in the specific circumstances of Zimbabwe should, by definition, prevent such impacts.

Specific activities that could be problematic:

• Introduction of exotic species: It is widely accepted that introducing a non-native species to a new ecosystem must be done with great care. Quarantine laws are set up to avoid potential adverse consequences. Introduced exotic species may spread diseases, out-compete native species for resources, become feral, act as predators or pests, or interbreed with native species. Lack of local competition or predators may give rise to “weed species.”

• Soil erosion: Unsustainable practices (such as badly managed open-furrow agriculture, a crop grown in the wrong way or place, deforestation, or draining wetlands) can cause soil erosion, which leads to less rainfall being absorbed and, in turn, excess runoff.

This runoff removes the fertile topsoil necessary for crop production and can have disastrous off-site consequences, including gully formation, landslides, siltation and sedimentation of water bodies, downstream flooding, and damage to productive infrastructure.

• Reduction of soil fertility: Soil fertility is dependent on three major nutrients (nitrogen, phosphorous, and potassium), various trace elements, and organic matter content. A productive soil contains sufficient quantities of each of these factors. The factors can be removed by repeated cropping without fertilization, rainfall leaching, lack of a restorative fallow, and removal or burning of crop residues. The subsequent decline in soil fertility often occurs in conjunction with soil erosion, with each problem exacerbating the other.

• Reduction in water quality: Incorrectly applied agrochemicals, fertilizers, or manures can migrate from a farmer’s field to local water sources, causing environmental harm and adversely affecting human health and activities.

5 Animal manure transported from fields into water bodies through rainfall, runoff, or irrigation can pollute local drinking water sources and spread human and animal diseases. Nutrients from manures/fertilizers can also cause nutrient loading in local water bodies, resulting in degraded water quality, reduced wildlife populations, and toxic algal blooms. Moreover, reduced water quality can impact drinking water, sanitation, fishing, aquaculture, recreation and tourism, and other farms.

• Food processing: Food processing workers often use too much water when cleaning equipment and food materials. This may cause others in the community to have less water and decrease the enterprise’s own future access to water. It may also mean that water costs are unnecessarily high, even with use of a well. New wells may have to be drilled more frequently as groundwater levels drop.

3.4 Livestock Production Activities

Properly managed, livestock production can enhance land and water quality, biodiversity, and social and economic well-being. However, when improperly managed, livestock production may cause significant economic, social and environmental damage. As described in the Livestock Production chapter of the Environmental Guidelines for Small Scale Activities in Africa (EGSSAA), following are the types of environmental problems often associated with livestock production:

• Land degradation;

• Habitat damage and reduced biodiversity;

• Harm to vegetation.

Livestock product processing can also have negative impacts on the environment. Leather processing, for example, is a particularly problematic activity associated with livestock production, as described in EGSSAA “Chapter 4.3 Leather Processing: Cleaner Production Fact Sheet and Resource Guide.” Environmental problems commonly associated with leather processing include the introduction of toxic chemicals into the environment through the waste stream, use of large quantities of water, worker health hazards, odor, and overproduction and inappropriate management of waste.

3.5 Procurement of Agricultural Inputs (including fertilizers and pesticides)

Agricultural inputs (seeds, fertilizers, herbicides and pesticides) will be used and may be provided by the project activities to smallholder farmers in small quantities on a cost-recoverable basis. These high quality inputs have been demonstrated to significantly improve yields and profitability to farmers. In general, the Mission seeks to encourage the purchase of inputs by farmers through agrodealers, or the provision of inputs by contract farming organizations to smallholder farmers in their contract farming programs. However, the Mission may provide inputs for centralized demonstration plots or demonstration plots on lead farmers’ lands as a way of demonstrating to farmers in the surrounding area the benefits of using high quality inputs in adequate quantities. Typically these demonstration plots are approximately 0.5 hectares in size, and the Mission anticipates having less than 1,000 lead farmers, with demonstration plots

5 The impacts of pesticides on the environment are discussed in the Guidelines chapters on integrated pest management and safer pesticides.

http://www.encapafrica.org/EGSSAAsectionsJan04/Env%20Guidelines%20Chapter%2011%20Livestock.pdf http://www.encapafrica.org/EGSSAAsectionsMarch2003/Env%20Guidelines%20MSE%20Chapter%204%20Leather.pdf http://www.encapafrica.org/EGSSAAsectionsMarch2003/Env%20Guidelines%20MSE%20Chapter%204%20Leather.pdf equivalent to no more than approximately 500 hectares in total spread across many sites. Other than for the centralized demonstration plots (of which there will likely be less than 50), all other inputs that are supplied to farmers will be on a fully cost-recoverable basis – farmers will be required to reimburse for the value of the inputs after harvest.

As mentioned above, herbicides and pesticides will be used and potentially procured in Mission activities described by this IEE. Pesticides have a large number of potential impacts, including, but not limited to, damage to non-target ecosystems, adverse effects on health, and development of resistance (and therefore resurgence) in the pests they are meant to control. Environmental impact of pesticides cannot be evaluated without specific information about proposed use and chemicals. A Mission-wide PERSUAP covering a variety of agricultural chemicals was approved by the Bureau Environmental Officer on October 29, 2012 (http://gemini.info.usaid.gov/egat/envcomp/repository/doc/39786.docx). As required by the PERSUAP, each activity that trains, promotes, procures, or uses pesticides or potentially hazardous agricultural chemicals will prepare an Integrated Pesticide & Pesticide Management and Safer Use Action Plan (IPPM-SUAP) which satisfies the expectations of an Environmental Monitoring and Mitigation Plan (EMMP) per the conditions identified in the PERSUAP.

The use of fertilizers poses a number of potential impacts, principally related to long-term health of soil and to water quality. These impacts are preventable with protocols that assure appropriate use. Such protocols should be a part of any “sustainable agricultural program,” as discussed above.

Aspects of environmental impact from fertilizers can be illustrated as follows:

Because fertilizers and pesticides could be resold by beneficiaries, appropriate use of fertilizers (even beyond the immediate beneficiaries) must be addressed.

3.6 Physical Rehabilitation or Expansion of Enterprises and Markets

Agricultural development activities may lead enterprises to engage in construction of infrastructure. Agricultural development activities covered by this IEE may also facilitate small-scale rehabilitation of existing irrigation schemes or milk collection centers. In addition, activities may facilitate the installation of new small-scale, simple cattle handling facilities such as corrals, cattle crushes, or feedlots for use by smallholder beef cattle producers. Finally, activities may facilitate the installation of a small quantity of new wells or boreholes for use at irrigation schemes or cattle feedlots.

Small-scale construction has the potential for a set of impacts such as erosion, contamination of water supplies, depletion of standing timber/deforestation, damage to protected areas, and creation of habitat for disease vectors. Experience shows that these impacts are controllable with safeguards to assure 1) appropriate siting, 2) appropriate sourcing of materials, 3) appropriate designs, and 4) appropriate construction/worksite practices.

In addition to potential impact arising from construction, Mission implementing partners must consider any environmental consequences posed by the economic activity to be undertaken within the constructed facility, even if USAID’s role ends upon completion of the infrastructure.

Markets and transport yards (two key parts of “market infrastructure”) have significant potential environmental and health impacts associated with their operation. These facilities generate significant quantities of wastewater as well as human and organic waste, which, if improperly managed, can contaminate water supplies and/or provide ready habitat for disease vectors such as flies, mosquitoes, and rats. The result is an increase in disease. These potential impacts are controllable, and must be addressed with proper design (e.g., adequate provision of latrines, wash water, and drainage) and with proper operation and maintenance.

Agribusiness enterprises, particularly agricultural processing, can be the source of significant adverse environmental impacts, particularly Biological Oxygen Demand loading of surface waters, water source depletion, odor, and creation of habitat for disease vectors through improper waste disposal. Storage and sale of agricultural inputs poses hazards associated with improper disposal of containers (including chemical contamination of soil and ground and surface waters, worker and customer hazards, etc.).

Without appropriate environmental management practices at the facility level, assistance that increases the scale or number of such enterprises will tend to result in/increase such adverse impacts.

Based on the discussion above, this section presents both recommended threshold decisions for each action entailed in the Economic Growth and Agriculture Development Program, and recommended conditions/mitigation actions pertaining to recommended negative determinations.

3.7 Categorical Exclusions

The following activities are categorically excluded pursuant to:

• 22 CFR 216.2.c.2(i): “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.)” and/or (xiv) “Studies, projects, or programs intended to develop the capacity of recipient countries to engage in development planning.”

• 22 CFR 216.2.c.2(ii): “Controlled experimentation exclusively for the purpose of research and field evaluation which are confined to small areas and carefully monitored.”

• 22 CFR 216.2.c.2(v): “Document or information transfers” and/or (i) “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.).”

3.8 Negative Determination with Conditions

• Technical assistance to, training of, and other support for business development. The conditions are:

o Where assistance to specific enterprises is contemplated, a condition of support is that the enterprise employs (or will employ as a result of the assistance) adequate environmental management techniques.

o These techniques must, at a minimum, satisfy obligations under Zimbabwe’s law.

o Where no such requirements exist, the enterprise must employ appropriate, common- sense practices to safely dispose of waste, minimize pollution of surface or groundwater, and safely store inputs and commodities.

• Construction or rehabilitation of markets, cattle handling pens, and other similar or related infrastructure, except roads and irrigation. The conditions are:

o The implementing partner must identify and implement standards and procedures to ensure 1) appropriate siting, 2) appropriate sourcing of materials, 3) appropriate designs (e.g., for drainage and sanitation), and (4) appropriate construction/worksite practices.

o All construction activities shall be conducted following principles for environmentally sound construction, as provided in Chapter 3: Small Scale Construction of the USAID Environmental Guidelines for Small-scale Activities in Africa, which can be found at www.encapafrica.org.

o For the rehabilitation of existing facilities,…