DReVo

completed

- 2 - International Finance CorporationA Member of the World Bank GroupInternational Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name RUSSIAN FEDERATION: DReVoRegion EuropeSector Food and AgribusinessProject No. 8805 February 12, 19981. This project consists of establishing a cash crop (winter wheat, sugar beets, and sunflower seeds) production company through contractural arrangement with existing local farms in the black earth area of Voronezh about 500 km southwest of Moscow. DReVo will provide materials, equipment, and technical assistance to contracted farms eventually covering an area of 100,000 ha for a share of their crop production. The farms are relatively large ranging in size from 240 ha up to 5,800 ha. Activities include land preparation, planting, application of liquid fertilizer and agrochemicals, and combine harvesting. The first year of operations is the 1997/1998 growing season, and the number of employees will eventually total about 1000.2. This is a Category B project according to IFC’s environmental review procedure because a limited number of specific environmental impacts may result from this project. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor by IFC’s Technical and Environmental Department staff. The following potential environmental, safety and health impacts of the project were analyzed:· land cultivation techniques;· use and handling of pesticides and chemical fertilizers;· storage and disposal of containers and outdated materials; and· general employee health and safety, including training.The sponsor has presented plans to address these issues and demonstrate that the proposed project will comply with Russian Federation laws and regulations and applicable World Bank requirements. The information about how these potential impacts are addressed by the sponsor is summarized in the paragraphs that follow.3. The project will employ the latest large-scale West European arable farming techniques to farms historically operated as Soviet style collectives. The improved techniques include sustained agricultural rotation practices (fallows and pastures). Where possible, fertilizer will be applied in liquid form. Imported sprayers will use tram line techniques to apply pesticides and herbicides thereby increasing productivity and minimizing crop losses. All crops will be harvested with imported combine harvesters.4. DReVo will use direct fertilizer injection (at rates of approximately 100 kg/ha-yr) to minimize surface run-off and leaching of nitrates. A limited range of pesticides and herbicides will be used with all being permissible as per World Bank guidelines. Usage and application rates will be monitored and recorded. Fertilizers, pesticides, and herbicides will be clearly labeled and stored in locked, designated areas.5. Used agrochemical containers will be rinsed and returned to the manufacturer/distributor or safely disposed.6. DReVo will institute training programs on the correct handling, application , and use of agrochemicals. In addition, operators of agricultural machinery and equipment (including grain storage and silo operations) will be trained in safety procedures. Each machine will be equipped with health safety kits.7. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project will meet World Bank environmental, health and safety policies and guidelines and Russian requirements.8. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating monitoring reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.L:\WPEU\STEPHEN\ERS\DREVO.ERSFebruary 11, 1998 11:52 AM