Announcement of One Hundred Fifteen Million Four Hundred Thousand Dollar Loan to Morocco on December 16, 1983

03ILTIT 14 11 FA~ ']L I ~. 4r World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. * Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 84/29 Contact: Fawzi Rihane December 16, 1983 (202) 477-3651 WORLD BANK TO AID MOROCCAN AGRICULTURE The World Bank will lend $115.4 million to the Agricultural Credit Bank of Morocco for an agricultural project which will help improve the living standards of about 580,000 farm families and create some 28,000 permanent jobs. About 60 percent of Morocco's 20 million inhabitants live in rural areas and about 52 percent of the labor force is employed in agriculture. In 1979-81, agriculture contributed about 17 percent to the country's gross domestic product and 29 percent of total exports. Arable land covers about 7.7 million hectares (ha), of which between 800,000 and 1,000,000 ha are under permanent irrigation. Productivity in most of the rainfed areas is low. Agricultural production has not kept pace with demand over the last 15 years. This has led o a rapid increase in imports. The value of food' imports has risen by about 21 percent a year during the same period, while that of exports has grown by some six percent a year. Development in agriculture has been uneven. Modern farming techniques and attractive producer prices have combined to increase production of sugar beet and cane, milk and vegetables. But production of crops such as cereals, cotton, pulses and edible oils has stagnated. In the 1981-85 Development Plan, the government has included among its objectives in agriculture, an improvement of self-sufficiency in staple foods, an increase in exports, And improvement in the value of agricultural produce through better processing and marketing. The World Bank-assisted project will cover all eligible investments which the Agricultural Credit Bank intends to finance between September 1983 and August 1986. They include: investments by small farmers and Agrarian Reform Cooperatives in livestock, draft animals, wells and pumps, and farm mechanization. Similar investments by medium and large farmers wil also be financed, as will investments in fruit and vegetable processing and packing, olive oil and milk processing, flour milling, meat processing, poultry farming, and cold storage. NOTE: Money figures are expressed in U.S. dollar equivalents The loan will finance construction rehabilitation and extension of the rural branches of the Agricultural Credit Bank. It will also support a staff training program and development of the bank's management information system. At full development in the project's tenth year, production of cereals is expected to increase to 176,200 tons, vegetables to 475,000 tons, fruits to 78,300 tons and meat to 27,800 tons. The Agricultural Credit Bank will provide $226.2 million towards the cost of the project. Other financing will come from the the participating farmers ($135.5 million); African Development Bank ($32 million); the Arab Fund for Economic and Social Development ($26 million); and Kreditanstalt fur Wiederaufbau of the Federal Republic of Germany ($24 million). The World Bank loan is for 17 years, including four years of grace with.a variable interest rate linked to the cost of the Bank's borrowing. It also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee of 0.25% on the amount of the loan. -0- 1)