Announcement of Thirty Million US Dollars Credit for Dairy Development in Karnataka, (Formerly Mysore), India on June 17, 1974

• INTERNATIONAL DEVELOPMENT ASSOCIATION l818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Pres£ lleleese No. 74/34 Subject: $30 million credit for dairy June 17, 1974 development in Karnataka, (formerly Mysore), India. A credit of $30 million from the International Development Association (IDA), an affiliate of the World Bank, will help to finance a dairy developaent project in India's Karnatak& State. The $6·4 million project will bring major economic and social benefits. At full development the project will contribute to an annual production inct"~ase of cne million tons of milk and 100,000 dairy heifers. The project will directly benefit 450,000 farming households, or about 2.5 million people, in the project area. A majority of these people farm less than two hectares or are landless. The project will also help to achieve better utilization of labor in the rural areas. • The project is an integrated program for increasing milk production in the rural areas and follows the patte1.'Il of the highly successful AMUL dairy farmerst cooperative in Gujurat State. The six-year program focuses on quality cross-breeding, animal health improvement, and the development of facilities for milk collection, processing and marketing. Under the project, village cattle (){fflers will be organized int .i 1,800 dairy cooperatives which in tum will be grouped into four milk producers unions. A Kamat aka Dairy Development Corporation will be £0111.ed to coordinate and implement the project and to operate farms for daill'Y research and for the production of purebred exotic breeding stock. The IDA credit of $30 million will finance about 47% of the project costs including the foreign exc~ange cost of $13.6 million. The remaining 53% will be financed by the Governments of India and Kamatako1. 11 the Agricultural Refinance Corporation of India, participating banks and farmers. The project is scheduled for completion in 1981. The IDA credit to the Government of India is for a term of 50 years, in- cluding a 10-year grace period, and is interest-free except for a 3/4 of 11a service charge to ~over IDA's administrative expenses • • Note: Money figures are expressed in US dollar equivalents.  TECHNICAL DATA June 17, 1974 • PROJECT: Dairy Development OOUNTRY: India TOTAL COST: $64 million IDA FINANCING: $30 million, 50 years, including 10 years of grace. It is interest free except for a s~rvice charge of 3/4 of 1% to cover IDA's administrative expenses. OTHER FINANCING: Government of India, Government of Kamataka, the Agricultural Refinance Corporation, participatft,g banks and farmers. IMPLEMENTING ORGANIZATION: Karnataka Dairy Development Corporation, Bangalore, Karnataka, India. PROJECT DESCRIPTION: An integrated program for increasing milk production in the rural areas through quality cross-breeding, animal health improvement a!!d development of facilities for milk collection, processing. and marketing. Project includes the establishment of about 1,800 dairy cooperative societies, four milk producers unions and the Karnataka Dairy Development Corporation; an artificial insemination program of cross-breeding the village cattle with high producing exotic breeds and associated program of fodder production, ,consultant services to assist the Dairy Development Corporatiaiin developing demonstration farms, applied research trials on pastures and milk marketing studies, and provision of credit to dairy farmers for the purchase of cross- breed cattle. PROCUREMENT: Th·e major portion ~bout $13.1 million) of materials and equipment required for milk processing and feed mill facilities will be procured on the basis of international competitive bidding with domestic bidders accorded the normal preference of 15% or customs duty whichever is lower. For dairy h·eifers, bulls, and frozen semen ($1 million) procure- ment will be through price quotations from suppliers in at least three countries. The remaining items will be procured locally due to the small amounts of individual items involved. ESTIMATED CCMPLETION DATE: 198le - 0 - •