Announcement of The World Bank's Support to India's Agricultural Growth on May 26, 1995

FOR IllEDIATE RELEASE The World Bank 1818 H Street, N.W., Washington, D.C. 20433, USA News Release No. 195/74/SAS Contacts: Paul Mitchell or Kerry Smyth Tel: (202) 458-1423 or (202) 458-9031 Fax: (202) 522-0321 Internet: pmitchelll@worldbank.org WORLD BANK APPROVES $126.6 MILLION TO SUPPORT INDIA'S AGRICULTURAL GROWTH WASHINGTON, May 26, 1995- The World Bank yesterday announced the approval of a $126 million credit to support the Government of India's efforts to reform the agricultural sector in the State of Assam by improving the incomes of poor farmers, particularly women, and improving their nutritional status. The credit is made through the International Development Association (IDA), the concessional lending affiliate of the World Bank. The eight-year project will assist the Government of India in the implementation of its strategy to improve water and land management, enhance the efficiency of irrigation and drainage networks, strengthen research services, increase attention to environmental protection, and improve rural infrastructure. Approximately 300,000 people in poor, rural areas will benefit directly from the project, which will increase their average annual income by about 60 percent. Project-supported construction works for the development of the road, fisheries, and irrigation infrastructure will generate about 75 million manpower days of seasonal and non-farm employment. The population's nutrition will be improved through increased production of fish, fruit, vegetables, and milk. India is the world's second most populous country, with a population exceeding 880 million and growing at an average rate of 2 percent per year. A large portion of the population is dependent upon the agricultural sector, so it remains important to the growth of the Indian economy. About 75 percent of India's populace live in rural areas, and about 64 percent are directly employed in agriculture. The growth rate of the sector has averaged 2.6 percent over the last two decades, but despite this modest growth rate, long- term issues for the development and sustainability of the sector need to be addressed. Recent reforms to liberalize the country's economy have resulted in an increase in exports, but reforms are greatly needed within the agricultural sector in order to alleviate poverty among the growing population. Agricultural Growth in India I of 2 Archives/Records Center, H B1-001 ( 1) The State of Assam is the largest of India's northeastern states; it is also the poorest state in the country. Assam covers an area of over 30,000 square miles, of which about 13,000 square miles (44 percent) are cultivable. The remainder is either forest or uncultivable. The project's objectives are to: * improve equity and alleviate poverty by offering better opportunities for poorer farmers and women to contribute to agricultural growth and income generation; * improve the nutrition of the poor in rural areas; * accelerate agricultural growth through improved use of resources, relieving infrastructural and technical constraints and providing an environment which facilitates the growth of private sector investments; * encourage resource use sustainability and environmental quality; * improve the Government of India's long-term capacity for strategic agricultural planning. The project hopes to achieve these objectives by targeting the poorest segments of the rural population. This is to be accomplished by: * supporting the Department of Agriculture's work program, including the extension services for horticulture, fisheries, and livestock to poor rural communities aimed at increasing their production; * improving institutional development to achieve enhanced planning and coordination; and * developing rural infrastructure, namely small scale irrigation and rural roads. These components will also include a number of studies considered necessary for improving the use of natural resources (soil and water management) and the marketing of highly perishable horticultural products. The World Bank has supported agriculture and rural development in India since the early 1950s. One hundred and thirty-three projects have received Bank financing totaling $10.6 billion. The most recent loan was approved on March 31, 1995 for $59.5 million and is designed to modernize India's agricultural sector by developing the skills and knowledge of the people working in the sector. The total cost of the project is estimated at $146.6 million, with IDA providing $126 million; remaining funds will be providing by the State of Assam. The IDA credit is made on standard terms with 35 years' maturity. NOTE- Money figures are expressed in dollar equivalent. Agricultural Growth in India 2 of 2