Announcement of Nine Million Dollars Credit for Livestock Development in Afghanistan on March 22, 1973

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 73/15 Subject: $9.0 million credit for livestock March 22, 1973 development in Afghanistan A credit o[ $9.0 million from the International Development Association (IDA), an affiliate of the World Bank, will assist Afghanistan in increasing its production and exports of meat and in creating additional job opportunities in the country's dominant rural sector. The credit for livestock development in the Herat region is the largest single operation for IDA in Afghanistan, a landlocked country. With a population of 15 million, Afghanistan is one of the most populous of the 25 countries designated as "least developed" by the United Nations. It is also one of t..he poorest with a per capita income of about $80. The $11 million project, when fully developed in 1981, will bring major benefits to the country's economy. Export earnings from livestock will increase by about $7 million a year. The project will contribute towards increase in annual production of 2,800 tons of meat, as well as abvut 7,500 tons additional crop production. The project will create Qver 10,000 additional job opportunities in the rural sector. With about two-thirds of the Afghan population engaged in some form of livestock raising, the livestock sub-sector is an important part of the country's econorrw. Livestock contributes 10% of gross domestic product and 24% of exports. Despite its importance, the sector faces ~ number of problems. While the karakul trade has been doing reasonably weD~ under the leadership of the Karakul Institute, a non-profit organization, herdsmen and farmers who raise meat and wo 1 sheep have lacked similar guidance and support. The problems facing these producers include insufficient water supply, overgrazed pastures, widespread disease and malnutrition, inadequate animal husbandry and breeding techniques, and limited market outlets. The IDA-assisted project will tackle these problems in northwestern Afghanistan, which contains about one-fourth of the national sheep herd. The project includes the development of 1,200 sheep fattening and breeding farms, the establishment of an Experimental Range Improvement Center, the construction of a slaughter- house in Herat which will purchase the output of participating fanners and export meat to neighboring countries, provision of refrigerated transport equipment, the establishment of a 430-acre demonstration farm and the upgrading of access roads. The farm and slaughterhouse will be owned and qperated by the Herat Livestock Development Company (HLDG), a new Joint- stock Company which is being established. HLDG will serve as primary executing agency for the project. The Agricultural Development Bank of Afghanistan (AGBANK) will also participate in -the project. The main beneficiaries of agricultural credit will be farmers with reL:ttively modest land holdings. The project is scheduled for completion in 1978 at a total estimated cost of $11 million, including $6.7 million in foreign exchange. The IDA credit will finance a little over 80% of the total cost. The IDA credit to the Kingdom of Afghanistan is for 50 years including a 10-year grace period. It is interest-free except for a 3/4 of 1% service charge to cover IDA's administra- ..aive expenses. The Gov.ernment wil.1 relend a portion of the proceeds of the credit to the ~BANK which in turn will lend money to participating farmers and HLDG on appropriate terms. The Food and Agriculture Organization of the United Nations (FAO) joined IDA in identi- fying and preparing the project undar the Bank/FAO Cooperative Program. - 0 -  • March 22, 1973 TECHNICAL DATA PROJECT: Livestock development COUNTRY: Afghanis tan TOTAL COST: $11 million equivalent IDA FINANCING: $9.0 million, 50 years, including 10 years of grace, interest- free except for 3/4 of 1% service charge to meet IDA's administrative expenses. OTHER FINANCING: Go,..,emment of Afghanistan, Agricultural Development Bank and participat:lng farmers. • !MPLEMENTING ORGANIZATION: Herat Livestock Development Company, Herat, Afghanis tan. PROJECT DESCRIPTION: Supporting a four-year lending program through Agricultural Development Bank for financing: development of about 1,200 sheep fattening and breeding farms and establishment of a demonstration farm; construction of a slaughterhouse in Herat with a capacity of 3,000 head per day; engineering services for the design, procurement and supervision of construction of the slaughterhouse; establishment of an Experimental Range Improvement Center to develop management practicas for rangelands in Afghanistan; improvement of 44 miles of feeder roads; equipment for transporting fresh and chilled meat to export markets; and associated technical services for the project. CONSULTANTS: Expert and management services to be selected on the basis of proposals which will be requested from a list of qualified firms. ESTIMATED COMPLETION DATE: 1978. - 0 - •