Philippines - Smallholder Tree Farming and Forestry Project

FILE COPY I)Ocument of The World Bank FOR OFFICIAL USE ONLY Report No. P-2179-PH REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF THE PHILIPPINES FOR A SMALLHOLDER TREE FARMING AND FORESTRY PROJECT December 6, 1977 This document has retricted dIstrIbouton and mny be used by reciplents only In the performance of their official duties. Its contents my not oherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit - Pesos (I) p 1.00 - US$0.135 US$1.00 - P 7.40 PRINCIPAL ABBREVIATIONS AND ACRONYMS BFD - Bureau of Forestry Development BPI - Bureau of Plant Industry CRC - Cellophil Resources Corporation DA - Department of Agriculture DBP - Development Bank of the Philippines DNR - Department of Natural Resources PCARR - Philippine Council for Agricultural Resources Research GOVERNMENT OF THE PHILIPPINES FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY PHILIPPINES SMALLHOLDER TREE FARMING AND FORESTRY PROJECT Loan and Project Summary Borrower: The Republic of the Philippines Beneficiaries: Development Bank of the Philippines (DBP), Department of Agriculture (DA), Department of Natural Resources (DNR), Bureau of Plant Industry (BPI), and the Philippine Council for Agricultural Resources Research (PCARR). Amount: US$8 million equivalent Terms: The loan would be for a term of 20 years, including a grace period of 5 years with an interest rate of _ % p.a. Relending Terms: The Government would relend $4.3 million from the proceeds of the loan to DBP on the same terms as those of the Bank loan. Project Description: The project seeks to assist the Government in developing more effective programs of reforestation and of tree farming by farmers with small and medium sized holdings. The reforestation component of the project is designed to assist the Government in developing 3,000 ha of much needed pine plantations and in learning to deal more effectively with the problem of shifting cultivation and grazing in forest reserves. The tree farming component would provide credit and technical services to tree farmers to assist them in establishing commercially viable tree farms on marginal agricultural lands. Almost all the beneficiaries under the smallholder tree farming component would be farmers whose present incomes are lower than the absolute poverty level; the project would help to double their incomes in four to eight years. The main risks relate to the reforestation component of the project and include the need for adequate protection of plantation trees, possible resettlement of people in the project areas, and the responsiveness of the tree species planted to local growing conditions; the project has been designed to minimize these risks. This document has a restricted distribution and may be used by recipients only in the performance of their official duties Its contents may not otherwise be disclosed without World Bank authorization  Estimated Cost:/a Local Foreign Total