Announcement of Two Million Dollar Credit to Bolivia for Livestock Program on May 19, 1967

,.., 't· ,. " I. 0 p .,, Ii'",>- • INTERNATIONAL DEVELOPMENT ASSOCIATION ( ~) 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 67/9 Subject: $2 million credit to Bolivia May 19, 1967 for livestock program The International Development Association (IDA), an affiliate of the World Bank, has approved a credit equivalent to $2 million to Bolivia to help finance the first stage of a livestock development program. In addition to increasing the outo~lt of beef cattle both for domestic consumption and export, the project will promote the long-range development of Bolivia's beef cattle industry by demonstrating the ad- vantages of modern ranch management techniques and by strengthening i11Stitutional arrangements for providing financial and technical services to ranchers. Further- • more, it will be a step in the direction of lessening Bolivia's traditional depend- ence on minerals for its foreign exchange earnings. Bollvia has a land area of 420,000 square miles and a population of about four million. While the majority of the people are engaged in subsistence agriculture in the highlands, the lowlands, which cover about two-thirds of the land area and con- tain only 15% of the population, offer excellent opportunities for beef cattle development. Adequate funds for investment in ranch development and for the purchase of breeding stock, together with the technical services, will enable ranchers to make a fuller and more efficient use of pastureland, aud expand the size and improve the quality of their herds. At full development, increased exports of beef are expected to make a substantial contribution to Bolivia's foreign exchange earnings. The first stage of the livestock development program will take place in the Department of Beni because it has an immediate potential for livestock development ~ at higher returns than other regions in the lowlands and also better developed marketing facilities. In the first stage, development will be confined to 150 commercial beef cattle ranches in the Deni. The typical ranch will have about  - 2 - 600 head of cattle and approximately 10,000 acres of pastureland. Investment will be in fencing, corrals, water points, light equipment and tools, essential barns and • housing, selected pasture improvement and breeding stock. The project was prepared and appraised with the assistance of experts from the Food and Agriculture Organization of the United Nations under the Bank./FAO Coopera- tive Program. The project will be administered by Banco Agricola de Bolivia through a special livestock project division which is being organized. The division will assist ranchets in preparing ranch development plans, screen loan applications, supervise plans for which loans are made, and provide other technical services to participating ranchers. Complementary to the project, Banco Agricola will financially and technically assist in the development of several model ranches in the Departments of Santa Cn.1z and Tarija, conduct a land tenure survey in the lowlands, and carry out a national • beef and live cattle marketing study. These activities will help to provide the l1.1sis for a second stage of livestock development. The total cost of the project is estimated at the equivalent of $4 million. IDA credit of $2 million will pay part of the costs of on-ranch investment and tech- nical services. Banco Agricola will contribute appro~imately $1.5 million, of which part will be used for short-term credit to ranchers. The ranchers will invest the re- :naining $540,000. The IDA credit will be for a term of 50 years. Repayment of the principal will begin on May 15, 1977, after a 10-year period of grace. Thereafter, li. of the prin- cipal will be repayable annually for 10 years and 3% will be repayable annually for the final years. The credit will be free of interest, but a service charge of 3/4 of 1% per annum on the amount withdrawn and outstanding will be made to meet IDA's administrative costs. The Govermnent will channel the proceeds of the credit to Banco Agricola through the Central Bank. Loans to ranchers will be repayable in 12 years, including. four years of grace, with interest at the rate of 12% per anm.un. • This is the third IDA credit to Bolivia: two earlier credits, totaling $15 mil- lion, were made for the expansion of electric power facilities.