Announcement of Seven Million Dollars Loan to Uruguay on December 30, 1959

··i,t._·'· FOR l,MMEDIAT~. ~ELEASE WORLD 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEFHONE: EXE.CUTIVE 3-6360 PRESS RELEASE NO. 617 SUBJF.cT: $7 million loan to Uruguay December 30, 1959 The World Bank today made a loan to Uruguay equivalent to $7 million for a program to foster the use of improved methods in pasture development and livestock production. In three years, the resulting increased output should add. from $3 to $4 million annually to the income of the 600 farms participating in the program; since nearly all the new production will be sold abroad, export earnings should rise nearly as much. If these modern t·echniques of pasture management are widely adopted, Uruguay's pastoral production could be greatly expanded over a ~ period of time. Inrpro-vement of livestock production is of the greatest potential importance to the Uruguaye.n economy. Meat, wool and other pastoral products represent about 58% of the value of Uruguay~ s agricultural production and_Bo% of all e~--ports. ~ore than 90% of the agricultural area of 42 million acres is used for grazing cattle and sheep. Despite exceptionally favorable physical conditions for pastures, pastoral p:roduction ha.s grown but little since World War II. In 1950, interest in modern techniques of pasture development and management was stimulated by the recom- mendations of' a mission sponsored jq;i.ntly by the Bank and the Food and Agricul- ture Organization of the United Nations at the request of the Uruguayan Government. SiQ.ce then, some of the more progressive farmers, on their own initiative and with • some help from the Governr:~nt .,, and. FAO have successfully adopted the new techniques • The program now being undertaken will provide the necessary technical and :financial assistance to livestoqk 'Owners on a pilot group of 600 farms with a • - 2 - combined area of about 1. 5 million acres. The program provides for the improvement of pastUJ.·es and soil fertility by fertilizing and re-seeding; the sub-division of the farms by additional fencing to permit controlled rotational grazing; the prov:!.sion of additional water points in sub-divided pastures; the conservation of forage fo1" supplemental feeding; and better control of livestock dj_seases . A significant feature of the program now being undertaken is that the special extension services to participating farmers will be directly supported by the finance necessary to put the improved practices into effect. The program will be administered by the Honorary Commission for the Livestock Plan, a quasi-autonomous body in the Ministry of Livestock and .Agriculture. On the recommendation of the Commission, the Bank of the Republic will extend credits to farmers participating ip the program from a special Livestock Fund established for • this purpose. The Livestoclc Fund will be made up of a loan of 4 million pesos from the Banl~ of the Republic and the proceeds of the ·world Bank loan, supple- mented by other resources to be provided by the Uruguayan Government. The total cost of the program during the three years is estimated at the equivalent of approxirm~tely 110 million pesos ($11 million equivalent); the p3.t"ticipating farmers will themselves provide about 30 million pesos and the re- mainder will be financed from the Livestock Fund. The World Bank :L,Q9.n -..< ·: l cover most of the foreign exchange requirements:- during the three-year peri:)d~ Equip- ment and materials will be imported through normal tr~cie channels. The World Bank lC1an is for a term of 12 years and bears interest of 6% including the 1% commission which is allocated to the Bank's Special ReserYe. Amor~ization ,v111 begin in December 1963. After ha:·f:'iJ::.i been approved by th~ Bank's Executive Directors, the loan • documents were signed by ,His Excellency Julio A. Lacarte, Ambassador for Uruguay in the United States, on behalf of the Government of Uruguay, and by Mr. Iliff, Vice-President, on behalf of the World. Bank. w. A, B.