Turkey - Fifth Livestock Development Project

Document of The World Bank F c;?Y FOR OFFICIAL USE ONLY Report No. P-2812-TU REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF TURKEY FOR A FIFTH LIVESTOCK DEVELOPMENT PROJECT May 13, 1980 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authoriation.  TURKEY CURRENCY EQUIVALENTS Currency Unit Calendar 1978 July 1979 Jan. 1980 /1 US Dollar 1 = TL 24.28 TL 47.10 /2 TL 70.00 /3 TL 1 US$ 0.04 US$ 0.02 US$ 0.01 1/ Since January 1980 the rate is being adjusted for the differential inflation between Turkey and its major trading partners. TL70/$l was used for this report. 2/ Except for imports of crude oil, petroleum products and fertilizer raw materials, and exports of agricultural products benefiting from official price supports, for which it was TL35 = US$1.00. 3/ Except for imports of fertilizers and insecticides/pesticides, as well as raw materials and inputs for their manufacture, for which the rate is TL55 = US$1.00. FISCAL YEAR Republic of Turkey March 1 to February 28 TCZB, EBK and TYT January 1 to December 31 ABBREVIATIONS AI - Artificial Insemination CTSS - Center for Technical Support Services EBK - Meat and Fish Organization EDLD - Encouragement and Development Loan Division of TCZB FAO/CP - FAO/IBRD Cooperative Program GDANB - General Directorate of Artificial Insemination, Natural Services and Breed Improvement of MFAL GDVS - General Directorate of Veterinary Services of MFAL LDP - General Directorate of Livestock Development Projects of MFAL MFAL - Ministry of Food, Agriculture and Livestock SEE - State Economic Enterprise SOF - Special Operational Fund TCZB - Agricultural Bank of Turkey TSEK - Turkish Milk Industry Organization TYT - Turkish Wool and Mohair Corporation LA - Loan Agreement PA - Project Agreement  TURKEY FOR OFFICIAL USE ONLY FIFTH LIVESTOCK DEVELOPMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: Republic of Turkey. Beneficiaries: Agricultural Bank of Turkey (TCZB). Meat and Fish Organization (EBK). Turkish Wool and Mohair Corporation (TYT). Amount: US$51 million equivalent in various currencies. Terms: Seventeen years, including four years grace, at 8.25 percent per annum. Relending Terms: To TCZB: US$30.9 million equivalent for seventeen years, including four years grace, at an interest rate leaving TCZB at least a 2.5 percent net spread (paras. '49 and 60). The Government will assume the foreign exchange risk. To EBK and TYT: US$2.6 and 2.9 million equivalent, respectively, for ten years including two years grace, with interest at 10 per- cent per annum. EBK and TYT will assume the foreign exchange risk. Project Description: The proposed project is designed to consolidate and expand gains made under previous Bank-financed livestock projects which helped to improve the quality of the national live- stock herd, introduce modern livestock management tech- niques and initiate necessary efforts in artificial breeding, animal health, poultry production, meat pro- cessing and mohair exports. Supervised credit will be provided, through TCZB, to about 2,900 sub-borrowers for dairy cattle, Merino sheep and Angora goat production and breed improvement, village broiler production and poultry processing units. Other components include disease control programs, expansion of artificial insemination, meat processing and transport facilities, and a mohair processing factory. Technical services and training will be provided under each component. The project covers 32 provinces of Turkey and selected sites in 3 others. About 60 percent of beneficiaries will be small farmers, with incomes below the relative poverty level in Turkey. At full development, the total annual value of incremental production is estimated at US$113 million, with foreign exchange savings of US$17 million per year, besides general indirect benefits from the artificial insemination and animal health components and increased utilization of milk and meat infrastructure. This document has a restricted distribution and may be used by recipients only in the performance of their official dutis. Its contents may not otherwise be disclosed without World Bank authorizstion.  - ii - There are no special project risks. Village broiler house investment is expected to proceed in parallel with regional processing centers, but may be delayed if ade- quate coordination is not ensured. TYT will hire consul- tants to help it enter the exacting market for mohair tops (combed bundles of clean fibre). Other risks include the overall shortage of budget funds and staffing difficulties experienced in some earlier projects. Estimated Cost: Local /1 Foreign Total /1