Announcement of IDA Provides Ten Million Dollars Credit to Tanzania to Expand Pyrethrum Production on April 21, 1980

--f OR IMMEDIAT( RELEASE- , ... ' a, .World ·sank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 80/43 Apri 1 21, 1980 IDA PROVIDES $10 MILLION CREDIT TO TANZANIA TO EXPAND PYRETHRUM PRODUCTION The International Development Association (IDA), the World Bank's affiliate for concessionary lending, has approved a $10 million credit to Tanzania for a project to increase the production of pyrethrum in the highlands of the Mbeya and lringa Regions in southern Tanzania. The project will, over a five-year period, help smallholder pyrethrum growers to expand their output of dried flowers by providing them with planting materials and improved research, extension, marketing, and road transport services. GThe pyrethrum- growing regions of Mbeya and lrtnga are relatively poor because of their isolation and limited physical resources. The average annual per capita income of pyrethrum-growing families was estimated at $80 in 1979, which is below the absolute poverty level . • Pyrethrum is a perennial plant which grows to about 60 centimeters in height. Its dried flowers yield an extract, the active ingredients of which (pyrethrums) have excellent insecticidal properties and are not harmful to man, beast, or the environment. Pyrethrums are used primarily in food-related industries, home and public buildings, and in ~nimal shelters, usually as a liquid spray or in aerosols. Under the project, the total cost of which is $12.7 million, smallholders will also be helped to improve pest control and use better flower-drying techniques. The Tanganyika Pyrethrum Board will be strengthened through incremental staff and short- term consultants. Its existing buying centers and stores wiil be expanded and additional ones constructed. It will also acquire additional transport vehicles to expedite the collection and shipment of pyrethrum. To this end, district and feeder roads in the project area will also be improved and maintained. The pyrethrum research program conducted by the Uyole Agricultural Center will be expanded. Farm incomes of some 37,000 pyrethrum producing families are expected to increase by about 17% to about $360 a year as a result of this project. Annual incremental pyrethrum production is expected to yield $1.6 million in foreign exchange by 1984/85. The $10 million IDA credit to Tanzania is for 50 years, with 10 years of grace. It is interest free but will carry a 3/4 of 1% service charge to cover IDA's administra- tive expenses. •-------------- NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T EC HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Pyrethrum Tanzania $12. 7 mi 11 ion • I DA FI NANC ING: $10 million, standard IDA terms OTHER FINANCING: Government of Tanzania~ $2.7 million IMPLEMENTING ORGANl7ATION: For smallholder production component: Tanganyika Pyrethrum Board P. 0. Box i 49, Ir i nga, Tanzania Cab 1e: PARETO, Ir i nga, Tanzania For expanded research program IMPLEMENTING ORGANIZAT10N: lyole Agricultural Center lyole, Mbeya Region, Tanzania For the road component: RoaL Improvement and Maintenance Unit Ministry of Works P.O. Box 9423 Dar es Salaam, Tanzania Cable: UJENZI, Dar es Salaam PROJECT DESCRIPTION: The project aims to increase the production of pyrethrum in the highlands of the Mbeya and -lringa Regions of • south e r n Tan za n i a . I t wi 1l f i nan c e (a ) a pr og ram to i nc re as e s ma 11 ho 1de r py re th rum production; (b) a program to strengthen pyrethrum research in Tanzania; (c) the strengthening of the Tanganyika Pyrethrum Board's organization and infrastructure; and (d) the improvement and maintenance of district and feeder roads. PROCUREMENT: Vehicles, road equipment, and associated spare parts financed under the project will be bulked as far as pos- sible and orders of $100,000 and above will be procured on the basis of international competitive bidding in accordance with Bank/lDA guidelines. In the evaluation of bids, qualified domestic manufacturers will be accorded a preference of 15% of imported goods or the existing rate of duty, whichever is lower. Procurement of vehicles and road equipment which cannot be bulked in packages of $100,000 will be procured in accordance with the borrower's competitive bidding procedures which are acceptable to IDA, provid- ed that the aggregate amounts of such purchases do not exceed $300,000. Tools, sprayers, insecticides, fertilizers, and nematocides for the smallholder production component, and tires, fuel, oils, and other materials and supplies for the road component will be bulked to the maximum extend possible and also procured in accordance with the borrower's competitive bidding procedures. Civil works contracts for the construction of buying centers/stores, offices, workshops, laboratory facilities, and staff housing will be too small and scattered to attract international interest; procurement for these will, there- fore, be awarded by contracts following locally advertised competitive bidding; foreign firms will be entitled to compete. CONSULTANTS: About 30 staff-years of internationally recruited long-term technical assistance and 20 staff-months of short-term consu 1tancy services wi 11 be financed under this project. The appointment and recru i . ment of such staff will be on terms and conditions satisfactory to IDA. ECONOMIC RATE OF RETURN: 17% ESTIMATED COMPLETION DATE: 1985 - 0 -