Announcement of Eighteen Million Dollars Credit for Cotton Production in India on January 28, 1976

World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 IDA NEWS RELEASE NO. 76/3 JANUARY 28, 1976 $i8 MILLION CREDIT FOR COTTON PRODUCTION IN INDIA A credit of $18 million from the International Development Association (IDA), an affiliate of the World Bank will help to finance an integrated cotton development project. in India. India plants about 25% of the world's cotton crop and produces around 10% of the world's supply. Poor quality seed, including varieties with low response to fertilizers, and inadequate plant protection have coritributed to low productivity. There is a high potential for increas- • ing cotton production in India • The project is designed to pioneer key improvements in three representative cotton growing areas in the States of Haryana, Punjab and Maharashtra. Introduction of high-yielding seeds, improved plant protection, better access to credit and increased ginning and process- ing efficiency will help to increase yields. Incremental output over 20 years will be about 800,000 tons of higher quality lint and 1.5 million tons of cottonseed with a gross value of about $750 million. About 120,000 farm families and 200,'000 landless laborers with very low incomes will benefit. The project is scheduled to be completed in 1981 at a total estimated cost of $36 million. The IDA credit will finance 50% of the total cost. The IDA credit to India is for 50 years, including a 10-year grace period. It is interest-free, except ~or a service charge of 3/4 of 1% to meet IDA's administrative costs. Note: Money figures are expressed in US dollar equivalents. Pora No.· 1121 • (9-75) T ECHNI CAL DATA PROJECT: Integrated Cotton Development COUNTRY: India TOTAL COST: $36 million IDA FINANCING: $18 million, standard IDA terms OTHER FINANCING: Government of India; Governments of Punjab, Haryana and Maharashtra, Agricultural Refinance and Development Corpora- tion; local lending agencies; and participating farmers. IMPLEMENTING ORGANIZATION: Integrated Cotton Development Coordinating Committee, Ministry of Food and Agriculture, Krishi Bhavan, Government of India, New Delhi, India PROJECT DESCRIPTION: . The project will deDYJnstrate practical and effective means o . increasing cotton yields and by-product recovery from ginning and cottonseed processing, and will be executed over five years. It involves the following components: (i) accelerated research to breed 'lllore suitable and higher yielding varieties; (H) improved production from the use of certified seed, more intensive plant protection services, and cultural practices; (iii) modernization and expansion of ginning and cotton- seed processing; (iv) provision of a revolving fund for incremental seasonal credit to growers; and (v) training. PROCUREMENT: Civil works and equipment amounting to about $5 million for various government agencies under the project will be procured on the basis of local competitive bidding and under procedures which have been reviewed by IDA and are satisfactory. The civil works involved are small and scatte~ed, and phasea over five years; the equipment for the Government will be procured by a dozen different agencies consisting of small items required over a five-year period. Ginnera' and cotton- seed processors' main requirements will be for equipment compatible with existing installations and prompt and effective after-sales services that only domestically based suppliers can provide adequately. However, both foreign and local manufacturers are represented by local agents, and competition is satisfactory. EOOMOMtC RATE OF RETURN: More tha11 100% • ESTIMATED COMPLETION DATE: 1981 - 0 -