PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Report No.: AB2417
Project Name
Agricultural Pollution Control Project
Region
EUROPE AND CENTRAL ASIA
Public Disclosure Authorized
Sector
General agriculture, fishing and forestry sector (100%)
Project ID
P100639
GEF Focal Area
I-International waters
Borrower(s)
GOVERMENT OF CROATIA
Implementing Agency
Ministry of Agriculture, Food and Water Management
Environment Category
[ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared
October 18, 2006
Estimated Date of
February 2007
Appraisal Authorization
Estimated Date of Board
May 2007
Approval
Public Disclosure Authorized
1. Key development issues and rationale for Bank involvement
The Black Sea has suffered severe environmental damage over the past decades mainly due to
eutrophication, coastal erosion, conversion of wetlands, increased nutrient run-off from agriculture,
invasion of exotic species, and inadequate resource management, all of which has led to a decline of its
biological diversity, loss of habitat and long-term ecological changes. Black Sea Environmental Program
(BSEP) studies reveal that 58% of the total dissolved nitrogen and 66% of the total dissolved
phosphorous flowing into the Black Sea come from the Danube river basin. More than half of all nutrient
loads into the Danube river originate from agriculture, about one-fourth from private households and
about 10-13% from industry.
Public Disclosure Authorized
In Croatia, the Danube river, as well as its tributaries, the Sava and Drava, drain sixty percent of Croatia's
territory (approximately 33,940 sq km out of a total of 56,538 sq km). The three rivers flow southeast,
through the Pannonian plains (labeled the breadbasket of Croatia) that comprise nearly half of Croatia and
make up the bulk of Croatia's agricultural lands. The fact that the entire Pannonian region drains into the
Danube river and its tributaries underscores the significant direct impact of the ongoing agricultural
practices in the region on the waters of the Danube. It is estimated that agriculture accounts for 53% of
the total nitrogen load in the surface water of the Croatian Danube basin. The Croatian agricultural sector
is characterized by intensive agricultural and livestock production, including inter alia, high fertilizer and
pesticide applications, narrow crop rotation, lack of mixed cropping, the use of limited number of breeds
and varieties, drainage of wetlands and their conversion to arable land, removal of hedges and trees from
agricultural lands as well as inadequate manure storage, handling and application. These have resulted
most notably in increasing water pollution, lowered agricultural productivity and efficiency, loss of soil
fertility, adverse health conditions for the rural communities, and a decrease in species and habitat
biodiversity.
Public Disclosure Authorized
Reduction of nutrient run-off into the Danube River from agriculture has been accorded priority status by
the government of Croatia and forms an integral part of the country's environmental strategy. The
government is a signatory to the Environmental Program for the Danube River Basin and the Danube
River Protection Agency and is committed to honoring its international commitments under these
conventions. The government's commitment to nutrient management also reflects the country's
commitment to moving towards EU accession by addressing the EU Nitrate Directive and putting in place
EU-compliant agri-environment policies, and measures for their enforcement. Candidate countries, such
as Croatia, are strongly encouraged to mainstream environmental considerations into agriculture policy
because the adoption of good agriculture practices is one of the key pre-conditions for absorbing EU pre-
accession assistance targeting rural development (SAPARD and future IPA programs) and would
ultimately strongly influence Croatia's CAP entitlement level upon becoming a member state.
Rationale for Bank Involvement. The Bank has considerable experience with projects related to reduction
and management of nutrient pollution from agriculture. Under the Danube-Black Sea Strategic
Partnership Program, several such initiatives are ongoing: Romania, Moldova, Turkey, and Bulgaria. The
proposed project also addresses an important concern indicated in the Country Assistance Strategy (CAS)
for Croatia, viz. protecting the environment. The CAS specifically points to the urgent need to address
environmental degradation by, inter alia, cleaning up contaminated rivers and water sources, restoring
marginal agricultural lands, and improving management practices for water. Project interventions will be
designed to address these environmental issues which will have the added benefit of improving the
livelihoods of populations in the affected areas. The proposed project is also consistent with the Croatia
CAS objective to assist the country to achieve its EU membership aspirations.
Croatia's committed efforts towards EU accession, the favorable political climate and the recognition of
the links between sustainable agriculture and the environment provide an excellent window of
opportunity for the Bank and GEF to assist the country in undertaking a nutrient reduction program as
part of its EU-mandated AE Program.
2. Proposed
objective(s)
The development objective of the project is to increase significantly the use of environmentally friendly
agricultural practices by farmers in Croatia's Pannonian plain in order to reduce nutrient discharge from
agricultural sources to surface and ground water bodies. The project is envisaged as a pilot activity that
would assist the Government of Croatia to: (i) develop mitigating measures for nutrient reduction from
agricultural sources to surface and ground water bodies; (ii) implement select agri-environment measures,
including strengthening of national policy and enforcement; and (iii) undertake a public awareness
campaign that would disseminate the knowledge about the choices the farming community will have at its
disposal while responding to the more stringent requirements for reducing nutrient loads (nitrogen and
phosphorous) entering local water bodies.
Project Global Environmental Objectives: The global environmental objective of the project is to reduce
the discharge of nutrients into surface and groundwater in watersheds draining into the Danube River and
Black Sea. The project will implement priority actions identified in the Black Sea/Danube Strategic
Partnership - Nutrient Reduction Investment Fund, Black Sea Strategic Action Plan, Danube River
Strategic Action Plan and Danube River Basin Pollution Reduction Program supported by GEF.
3. Preliminary
description
The proposed project of US$15.0 million (GEF Grant US$5.0 million) to be implemented over four years,
will include the following components:
Component 1. Promotion of Mitigating Measures for Reducing Nutrient Loads to Water Bodies.
This component will assist the government of Croatia to promote improved watershed management
practices with the objective of reducing nutrient loads to the surface and ground water bodies of Croatia.
Activities under this component will also thereby assist Croatia to implement the EU Nitrates Directive
91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural
sources.
(a) Implementation of the EU Nitrates Directive. Over the project preparation phase, MAFWM and the
Ministry of Environmental Protection, Physical Planning and Construction (MEPPPC) will make the
strategic choice regarding the designation of nitrate vulnerable zones NVZs) i.e. whether the EU nitrates
directive will be implemented on the whole territory of the country, or in designated vulnerable zones. If
Croatia opts for the latter approach, the project, during preparation, would also assist the Ministries to
designate the NVZs and subsequently prioritize the NVZs to be selected for remedial interventions under
the project.
During the early stages of project implementation, this component will develop integrated action and
implementation plans, including investments, for remedial interventions, such as manure and compost
management, integrated cropping management, nutrient management, conservation tillage, etc. in each
selected NVZ (or for the entire country). Beneficiaries of these investments will include farmers as well
as small- and medium-sized enterprises (such as pig farms, poultry farms, slaughter houses, etc.).
Drafting of Code of Good Agriculture Practices: As part of the EU Nitrates Directive, this sub-
component will help the MAFWE to develop a Code of Good Agricultural Practices that incorporates
internationally- tested and proven good agricultural practices which are relevant for the Croatian diverse
topographic and climatic conditions, such as the planting of shelter belts, buffer strips, windbreaks,
nutrient management, conservation tillage, etc.
Support for Water & Soil Monitoring and Impact Analysis: As required by the Nitrate Directive, the
project will help align the national monitoring system for surface and ground waters with that of the EU.
The project will assist MAFWE's Water Management Department's ongoing efforts to adopt the EU's
surface and ground water monitoring guidelines and implement the required procedures in terms of
sampling frequency, sampling site selection, and timing. Project interventions will be monitored against
both process as well as stress reduction indicators developed at the start of project preparation. It will also
provide a data reporting system in accordance with EU requirements.
Support for Training and Demonstration (T&D). The project will provide information and practical
training on, inter alia, nutrient remedial measures, EU principles on project financing, measures to obtain
funding support from non-Bank sources, etc. to both beneficiaries (enterprises and farmers). The project
will also provide support for demonstrations of good practices for nutrient pollution control.
(b) Organic Farming Regulatory Framework Upgrade: This sub-component will support the Croatian
Government in harmonizing the national regulations on organic farming and accreditation with the
relevant EU regulations and thereby enable the MAFWE to achieve its objective to progressively increase
the share of organic produce in the total agricultural output.
Component 2. Agri-environment policy implementation and enforcement. The project will provide
assistance to MAFWM to implement select agri-environment measures related to on-farm activities.
Towards this, the project will assist the Government of Croatia in harmonizing its legislation with the EU
Nitrates Directive as well as strengthening its regulatory and enforcement capacity. The project will co-
finance the initial implementation of the integrated action plans for nutrient reduction, including the code
of good agricultural practices. To enable accession of EU IPARD program funds, the project will assist
the Government of Croatia with accreditation of the IPARD measure titled "Agricultural production
methods designed to protect the environment and maintain the countryside" which aims at promoting
farming practices that are fully in line with the proposed objective of the GEF project. MAFWM has
already requested GEF support to the Croatian IPARD Agency1 in preparing the necessary details for
accreditation of this measure. The GEF resources will be used to mobilize national and international
technical assistance that would enable the Croatian IPARD Agency to meet the requirements of the
European Commission for the accreditation of this measure.
Component 3. Public Awareness and Replication Strategy. A local and nationwide public
information campaign will be undertaken to disseminate the benefits of proposed project activities and
achieve replicability of the same. The aim would be to familiarize the population with the project and its
benefits and thereby raise the interest of potential future clients. The project will provide for the
organization of national and regional workshops, field trips, visits, training, publication in international
agriculture and environmental journals and other activities to promote replication of project activities in
other similar areas of Croatia as well as Black Sea riparian countries.
Component 4. Project Management. The Project Implementation Unit (PIU) to be set up for the
Agricultural Acquis Cohesion Project, within the MAFWM Department for Policy, EU and International
Relations to manage the project, would also serve as the Project Preparation Unit (PPU) for the proposed
GEF project. The head of the PIU will also have overall responsibility for preparation of the proposed
GEF project. The Unit will be staffed with two technical specialists, a financial specialist, a procurement
Officer and an administration/secretarial support person to manage preparation of the GEF APCP.
MAFWM will have overall responsibility for implementation of the project. A Project Steering
Committee has already been established comprising representatives from the MAFWM, Ministry of
Environment Physical Planning and Construction, and Public Water Management Enterprises to provide
guidance and advice on effective and efficient implementation of the proposed activities.
4. Safeguard policies that might apply
The safeguard policy, OP 4.01: Environmental Assessment, category B, would be triggered by proposed
project activities.
No major environmental issues are envisaged under the project. Of lesser scope, the environmental
concerns under this project (component 1) may include leakage of manure from the village-level storage
facilities (if construction is not made according to specifications), inappropriate manure spreading in the
fields and improper cleaning of the individual manure storage tanks and large manure platforms. An
Environmental Assessment will be undertaken and mitigation measures to address the above issues will
be developed. An Environment Management Plan (EMP) will be prepared to ensure that activities under
this component will be closely monitored with regular inspections by the local environmental agency
(ies).
5. Tentative
financing
Source: ($M)
BORROWER/RECIPIENT 4
BENEFICIARIES 2
OTHER DONORS (EU, etc.)
4
GLOBAL ENVIRONMENT FACILITY
5
Total
15
1 The establishment of the Croatian IPARD Agency is a coordinated effort of the Croatian Government, EU CARDS
program, EU PHARE, Dutch bilateral assistance and the World Bank financed AACP.
6. Contact
point
Contact: Aleksandar Nacev
Title: Sr Operations Off.
Tel: (202) 473-0522
Fax: (202) 614-0337
Email: Anacev@worldbank.org