Announcement of Mozambique Receives US20 Million Dollars for Market Led Smallholder Agriculture Development Project in the Zambezi Valley on June 20, 2006

Mozambique Receives US$20 million for Market Led Smallholder Agriculture Development Project in the Zambezi Valley Contacts: In Washington: John Donaldson (202) 473 1367 jdonaldson@worldbank.org In Mozambique: Rafael Saúte 258-21-482324 rsaute@worldbank.org WASHINGTON, June 20, 2006 – The World Bank Board of Executive Directors approved today an International Development Association (IDA) credit* of US$20 million to support the implementation of the Market Led Smallholder Agriculture Development Project in the Zambezi Valley. The Market Led Smallholder Development project aims to increase the incomes of smallholder farmers in selected districts of the Zambezi Valley Region in central Mozambique. This will be achieved by direct support to smallholder groups and other supply chain participants, and also through the strengthening of local level capacity to undertake and manage agricultural services delivery within the context of the Government’s decentralization policy. “The long-term environmentally sustainable agricultural intensification among small holders farmers is key for continued macroeconomic growth,” said Jeeva A. Perumalpillai-Essex, the World Bank Task Team Leader for the project. She added that the project “is consistent with the Government’s priorities in the sector as well as on the broader rural development agenda, and will help lift out of poverty a great number of rural poor in one of the most populated areas, with the greatest agricultural potential in the Zambezi Valley (or in Central Mozambique). The project is also considered a ‘pilot’ and with positive and quick results could be scaled up to other areas of the country.” The first component of the project -- Community Group Organization and Local Institutional Strengthening -- aims at empowering and building the social capital of farmer groups, women’s groups and other supply chain participants in areas such as marketing, agribusiness development, and district agricultural staff. The empowerment of groups will ensure that district planning process has the participation of key stakeholders in the rural community. A second component -- Agricultural Production and Marketing Development -- will provide technical support for market driven, broad-based sustainable agricultural development. Through strengthened extension services and technical assistance to stakeholders involved in production, marketing and processing of agricultural products. A third component -- Community Agricultural and Environmental Investment -- will provide financial resources and technical assistance to support agriculturally related public and private investments such as, communications and storage infrastructure, small water reservoirs and irrigation systems; small-scale productive investments in agriculture, livestock, aquaculture and agro-processing; and investments in improved natural resources management. The Project Management, Coordination and Monitoring and Evaluation component will ensure that Directorate of Rural Development within the Ministry of Planning and Development will effectively manage the project. The implementation mode of the project will be congruent with the government’s decentralization policy that makes districts the focus of development. The project will utilize existing public administration and community participation arrangements such as the national and provincial inter-ministerial steering committees and the district consultative councils. Activities will include support to planning, financial management, procurement, monitoring and coordination functions at district, provincial and national levels. This project will build upon structures and capacities supported by Bank financed Decentralized Planning and Financing Project (DPFP) and will develop synergies with other Bank financed infrastructure projects namely, the Second Roads and Bridges Project, and the Beira Railway Project which will contribute to open up access to the Zambezi Valley and thus improve conditions for the Project’s success. * The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period. ### For more information, please visit on the World Bank’s work in sub-Saharan Africa www.worldbank.org/afr For more information on the World Bank’s work in Mozambique www.worldbank.org/mozambique