Announcement of Seven Million Two Hundred Fifty Thousand Dollars Credit to Malawi for Agriculture on May 6, 1971

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHON~: EXECUTIVE 3-6360 ---·-------------------------------------·--·---·----------- IDA Press Release No. 71/16 Subject: $ 7. 25 million credit t May 6, 1971 Malawi for agricultun. The International Development Association (IDA) has approved a $7. 2.5 million credit to Malawi for the second phase of an agriculture program that is increasing output, raising farmers' incomes, improving the human environment of the project area, and benefitting the foreign exchange position. The project will expand the Lilongwe Land Development Program the • first phase of which was initiated in 1968 with the assistance of IDA . This first phase project covered approximately 280,000 acres of farm land. Physical targets will be completed almost a year ahead of schedule. Crop yields have doubled in w..ost cases and a significant improve- ment in living standards has resulted. Moreover, land reorganization has encouraged farmers to devote more effort and money to improving their land. The second phase, covering 1972-1975, is planned along the lines of the first and will develop an additional 240,000 acres of farm land. An innovation in the secon<l phase will be a 161,000 acre ranch to provide upgraded feeder stock for fattening by program-area farmers to take advan- taee of the area's livestock potential. The project will cost an estimated $8.59 million and includes con- stru~tion of roads, drainage ditches, boreholes and service centers and • continuati.on of extensi.:m, creJit and marketing services in the area developed under both phases. /more IDA P.R. No. 71/16 - Malawi - agriculture - 2 - 'lbe Program is expected to result in increased production of maize, • groundnuts and beef resulting in annual foreign exchange savings or earnings equivalent to about $5 million at full development. It will also halt soil erosion, improve water conservation and reduce water borne diseases. The net income of the typical participating farmer should almost double. The IDA credit will finance the foreign exchange costs of the project and about three-quarters of the local costs. The balance of the financing will be provided by the Government and participating farmers. The credit is being mad~ to the Republic of Malawi and is for a period • of 50 years, including 10 years of grace. It is interest free but carries a service charge of 3/4 of 1% to meet IDA's administrative expenses. The Program is being implemented by the Ministry of Agriculture and Natural Resources (Zomba, Malawi). It is based on a plan prepared with the help of the World Bank's Permanent Mission in East Africa and the United Nations Food and Agriculture Organization/World Bank Cooperative Program, and on a pilot scheme financed by the United Kingdom in 1965. - 0 - •