Announcement of Three Million Dollar IDA Credit to Jordan for Agriculture on May 3, 1967

• INTERNATIONAL DEVELOPMENT ASSOCIATION' 1818 H STREET, NW, WASHINGTON 25, D. C. 7ELEFHONE: EXECUTIVE 3-6360 IDA Press Release No. 67/6 Subject: $3 million IDA credit to May 3, 1967 Jordan for agriculture The International Development Association (IDA), an affiliate of the Worlu Bant~, has approved a c~edit equivalent to $3 million to the Hashemite Kingdom of Jordan to assist in financing the current lending program of the Agricultural Credit Corporationc The program is directed principally at the expansion of Jordan's productive land and water supplies with concurrent development of fruit and vegetable production. Agriculture remains the most important sector of Jordan's economy as far as employment is concerned. About a third of the lab0r force is engaged in farming • which contributes 25% of the gross national product; furthermore, farm products, chiefly tomatoes, melons and citrus fruits, constitute 55% of total exports. In view of Jordan's climate, with rainfall permitting only marginal production in some years, the Government has been systematically developing irrigated fanning through the comprehensive use of surface and underground water. Projects under way for the harnessing of the Yarmouk River and for the use of sm~ller water resources will sub-· stantially increase the present irrigated area of 180,300 acres. Most of Jordan's cultivated land, 2,964,000 acres, will, however, have to continue to depend on erratic rains. Crops with relatively small water requirements, especially stone fruit and olive trees and grapes, are therefore encouraged; dry farming in the areas close to the desert, where cereals can be grown with satisfactory yields in years of good rainfall, is being rapidly mechanized. Efforts are also being made • to increase protein foods by measures other than the traditional raising of sheep and goats. A substantial development of poultry supported by animal feed industries has taken place in recent years, and dairy and cattle farming are being expanded under the limitations imposed by the small production of fodder.  - 2 - The Agricultural Credit Corporation (ACC) .has responsibility for admin- istering Jordan's agricultural credit program within the Seven-Year Develop- ment Plan (1964-70) and has played an important role in the development of • agriculture in recent years. This is the second IDA credit for ACC's lending program. The first credit, granted in December 1963, provided $3 million of the $7 million lent to farmers by ACC during the following two and a half years. Since the program was started ACC made some 12,000 loans, of which nearly 4,000 were financed with IDA funds. About four-fifths of the invest- ments were for farm water supply, farm mechanization, land reclamation and livestock development. The IDA credit was fully disbursed a year ago and since then ACC has continued the program chiefly with the resources derived from loan repayments which are inadequate to meet the demand for credi~. • The IDA credit announced today will provide funds for ACC's lending pro- gram for up to four years during which it expects to lend about $15 million. The IDA-financed part of the program will involve loans to some 4,000 farmers amounting to about $5 million, to which ACC will contribute $2 million from its own resources. In addition, it is expected that the funds available to ACC from loan collections and profits will enable it to lend another $10 mil- lion. While the IDA funds will again be used for land reclamation and improve- ment, farm water supply and mechanization, there will be greater concentration on the establishment of tree crops and vineyards and on-farm development with- in Government irrigation schemes. Since the first credit, ACC has achieved significant improvements in its technical competence and administrative organization. To further strengthen its operations and improve its financial position, it now intends to employ a farm production economics expert to assist and train its staff in appraisal methods, and will take additional measures to improve loan collections. The IDA credit will be for a term of 50 years. Repayment Jf the principal will begin on August 1, 1977 after a 10-year period of grace. Thereafter, 11 of the principal will be repayable annually for 10 years and 3% will be repay- able annually for the remaining 30 years. The credit will be free of interest but a service charge of 3/4 of 1% per annum on the amm:nt withdrawn and out- standing will be made to meet IDA's administrative costs. The Government of Jordan will relend the proceeds of the credit to ACC; ACC will repay the Govern- ment over a period of 20 years, including a 10-year period 0f grace, with • interest at 3\% per annume ACC will in turn relend the funds to farmers at an interest rate of 6% per annum and at maturities appropriate to the individual projects.