Announcement of World Bank Approves Fifty-eight Million Dollar Credit to Save India's Forests on March 31, 1995

F IMEDIATE RELEASE The World Bank 1818 H Street, N.W., Washington, D.C., 20433, USA IDA News Release No. 95/48/SA WORLD BANK APPROVES $58 MILLION CREDIT TO SAVE INDIA'S FORESTS WASHINGTON, March 31, 1995- The World Bank announced the approval today of an equivalent SDR 39.4 million ($58 million) International Development Association credit' to support the Government of India's efforts to prevent the continuing degradation of forest lands in the state of Madhya Pradesh. The International Development Association (IDA) is the concessional lending affiliate of the World Bank. The four-year project, which will cost an estimated $67.3 million, is expected to increase the production of wood, non-timber forest, and animal products. This will benefit the rural poor and improve the supply of wood to forest-based industries. The project will support a program of assisted natural regeneration for about 160,000 hectares of forest. Some 1,140 village communities, many of them tribal, will participate in the management of an estimated 75,000 hectares of forest. About 18.3 million person-days of employment will be generated for people in very poor and landless households. Approximately 22 percent of India's land area is covered by forest, and Madhya Pradesh, the largest state in India, encompasses 20 percent of that area. India's rising population has caused a severe scarcity in land, resulting in forest degradation and deforestation through over-exploitation and encroachment. The Government of Madhya Pradesh is dealing with problems in the forestry sector through policy reforms, legislation and afforestation. In 1988 a National Forest Policy was drawn up that treats forests as an ecological necessity, a source of goods for use by local populations (particularly focusing on non-timber forest products), and as a source of wood and other products for industries and other non-local uses. The policy also encourages industries to obtain raw materials from farm forestry. The IDA credit will assist the Government of Madhya Pradesh with the implementation of its strategy to develop and conserve forest areas. The objectives of the project are to: * develop the necessary human resources for the planning, implementation and monitoring of the strategy; * ensure that the Madhya Pradesh Forest Department, a public sector agency, has appropriate management procedures, an effective structure and efficient resource use; * assist in prioritization of various types of land through improved planning; 1 IDA credits are denominated in Special Drawing Rights (SDRs), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount reflects the exchange rates existing at the time of the negotiations of the credit. Archives/Records Center, H 81-001 ( 1) * increase both forest cover and productivity by developing management processes, taking into account the interests of tribal peoples and other disadvantaged groups; * adapt and improve existing technologies in the sector; * improve incentives for forest management and tree cultivation; and * promote the conservation of biodiversity. In accordance with the National Forest Policy, the IDA project will help the Government of Madhya Pradesh by forming the first stage of its long-term support program for the forestry sector. The project has four main components: Manapement and Development: Sector management will be improved by moving away from a centralized regulatory system and toward the involvement of local communities in the care and management of the forest resources. The skills of Forest Department staff will be upgraded to improve planning, implementation, monitoring and evaluation procedures, as well as management and geographic information systems. Forest Development: The project will promote natural forest regeneration, supported by enrichment planning, improved silvicultural practices and forest floor management over an area of about 160,000 hectares. A Village Resource Development Program based on planning and managing forest resources will be set up and integrated with activities to generate alternative incomes or resources to reduce pressure on the forests. Approximately 1,140 villages will be involved in managing an area of about 75,000 hectares of forest land; through the Village Resource Development Program, these communities will benefit from an improved agriculture sector. Extension, Technology and Research programs will improve the infrastructure for the development of research service centers in each ecological zone. These centers will provide a base for improved forestry extension services, enhanced tree seed programs, demonstration nurseries, and adaptive research trials. Biodiversity Conservation: Management plans and enhanced staff training, equipment and facilities will improve the management of 12 high-priority Protected Areas. Special funds for investments in alternative livelihoods will be allocated to communities in and around these Protected Areas. The Government of India will provide $9.3 million toward the project. The credit is made on standard IDA terms, with 35 years maturity. NOTE: All money figures are expressed in US dollar equivalent. For further information contact: Paul Mitchell or Kerry Smyth Tel: (202) 458-1423 or (202) 458-9031 Fax: (202) 477-1245 Internet: pmitchelll@worldbank.org