Announcement of Eleven Million Two Hundred Fifty Thousand Dollars Credit for Second Mechanized Farming in Sudan on April 27, 1972

rERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 72/32 Subject: $11.25 million credit for second April 27, 1972 mechanized farming in Sudan A credit of $11.25 million from the International Development Association (IDA) will help the development of about 435,000 acres of uncultivated land in the Sudan. The project is largely based on the successful experience of the first mechanized farming project in the Sudan, which was financed by a Bank loan in 1968, and has been completed a year ahead of schedule. The credit will help to create, over 5 years, about 280 farms of 1,560 acres each -- 180 at Umm Seinat and 100 at Habila. The farms will be leased to entrepreneurs, companies and cooperatives for mechanized cultivation. The main economic benefit of the new project will be annual production of 125,000 tons of sorghum, increasing exports by about 50,000 tons; and of 5,700 tons of sesame_. all for export. The annual gross foreign exchange earnings expected from the project will be about $5.0 million. There will also be unquantified benefits, such as expansion in internal trade and services following the opening up of new areas and the demonstration effect of improved ~ops and livestock, The economy of the Sudan depends heavily on agriculture. Mechanized rainfed farming has high priority in the Sudan's development planning. It economizes in the use of scarce farm labor, provides investment opportunities for private capital and produces basic food- stuffs at a reasonable cost. The project includes on-farm investments, mainly farm equipment, land clearing and expansion of the agricultural machinery training center at Tozi. The training center will increase annual turnout of machinery operators from the present SO to 250. This project, like the first, will be implemented by the Mechanized Farming Corporation (MFC). In the first Bank-financed project, for which a loan of $5.0 million was made, the Sudanese Government broadened its participation by making cleared land and credit avail- able to farmers. The first project, successfully completed, has in addition to the original area of 145,000 acres, been extended to a further 79,000 acres. The total cost of the project is estimated at the equivalent of $19.5 million. The IDA credit will finance the estimated foreign exchange cost of $8.4 million and $2.85 million of the local cost. The IDA credit is being extended to the Government of the Sudan for a period of 50 years, including 10 years of grace. It is interest free, but a service charge of 3/4 of 1% will be made to cever IDA's administrative expen~es • • - 0 -  • April 27, 1972 TECHNICAL DATA PROJECI': Second mechanized farming COUNTRY: The Demcratic Republic of the Sudan TOTAL COST: $19.5 million equivalent IDA FINANCING: $11.25 million equivalent OTHER FINANCING: The Government's and farmers' contributions. IMPLEMENTING ORGANIZATION: The Government of the Sudan and the Mechanized Farming Corporation (MPC) • PROJECT DESCRIPTION: The project comprises the creation of 280 rainfed farms • of 1,560 acres each for producing sorghum and sesame in the central clay plains .of the Sudan. It includes supervised credit for on-farm invest- ments mainly of farm equipment, land clearing and technical, agricultural and equipment maintenance services. Research and study of possibilities of further rainfed agriculture and expansion of the Farm Machinery Training Center at Tozi are also included. PROCUREMENT: Farm machinery - 280 tractors and disc harrows; about 100 coni>ine harvesters; road construction equipment such as motor graders, and about 100 vehicles, mostly four wheel drive. All contracts subject to international competitive bidding (total estimated value $6.3 million). COHStn..TANTS: Consultants would be employed to help with: i) the execution of and training in land development and farm layout; ii) the training in use and maintenance of comlne harvesters; iii) the development and introduc- . tion of commercial accounting system into MFC and regular accounting advisory services; iv) th~ feasibility study to identify further areas suitable for mechanized farming; and v) the Agricultural Machinery Training Center. ESTIMATED COMPLETION DATE: June 1978. - 0 - •