Announcement of 2.2 Million Credit for Livestock Development in Guyana on November 25, 1970

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STR[ET. N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 !J)A Pr~ss Release Mo. 70/53 Subject: $2.2 million credit for live~ thve:nbe.r 25, 1970 stock development in Guyana A credit of $2.2 million, announced today by the International Development Association (IDA), will assist Guyana in developing a modern and efficient beef cattle industry, and add a promising agricultural cormnodity to its two basic agricultural products, sugar and rice. The project is the first stage of a li.ve- stock development program of the Guyana Government. It involves the development of 27 large ranches with a combined area of about one million acres and initially 60,000 head of cattle. At full development, output from these ranches will iu- • crease Guyana's beef production by 45%, reducing the need for imports • Guyana, on the northeastern Atlantic Coast of South America, has a popula· tion of some 700,000, most of whom live in Coastal areas on about 3% of the land- More than a third of the people earn their living from agriculture. There are considerable expanses of land suitable for beef production, primarily immediately behind the coastal areas of East Demerara, Berbice and Corentyne and the Rupununi Savannas in the southwestern interior; these regions now hold most of the p~esent ~attle population of 260,000. Development of Guyana's livestock potential has been held back by the lack of adequate expertise in modern ranching and animal husbandry techniques, commercialized ranching units, and the legal and institutional frame- work necessary for channeling finance into the sector. The project being assisted by the IDA credit encompasses all the elements designed to overcome these obstacles. J.ucluded is the development of 15 cooperative, company or private ranches, • each with lC.000 acres and 2,800 heac of cattle .;,.n the coastal area; 10 conu:nercial a~1d Am-er indiau tril)al ranches, each with about M., 000 acres a.:id 1,200 he;id cf /more IDA P.R. Ho. 7'J/5'j - Guyana-Livestock development - 2 - cattle, in the Rupunu.ni Savannas; and the development of t·wo rfmches belonging to • a ne,~ commerci~l enterprise, the Lives tock Development Company Ltd., owned by the Government and private interests. One is a 20,000-acre ranch at Mara in the coastal area, and the other, a 200,000-acre ranch at St. Ignatius in the Rupummi, edch with about 3,000 cattle~ Equipment for chain clearing of future grazing land oc the coastal ranches will be provided. The pr0ject also includes technic;.11, mdYketing and processing studies> and pilot studies for pasture establishment with tiopical legumes, animal production trials and the use of urea/molasses supple- ment~, and technical services for the execution of the project. An important development is the fonnation by small coastal cattle owners o.f comrr:ercial ranching enterprises into which they will put their stock and which rhey will own cooperatively. They will be on land that the Government will make avail- • able on long-tenn and renewable leases, and under professional ranch management, The main element of the. project is a credit program under which 12-year sub· loans will be made for pasture establishment and improvement, fencing, watet sup- pll~o, buildings, livestock, agricultural machinery and equipment, and 5-year sub· loe.ns for land clearance .. The credit program will be administered on behalf of the Government by the P.ark of Guyana, the central bank. A Livestock Development Fund and a Livestock Proj~ct Division are being set up in the Bank of Guyana for this purpose. The Banl.i: of Guyana will channel funds from the IDA credit for sub-loans to ranchers and a land clearing cont1;actor through five commercial banks operating in Guycma and the Guyana National Co-operative Bank. The participating banks will also pro- v:Lck part of the long-term financing and the necessary working capital from theit· own resources. This will be the first time these banks have provided such financing for countrywide livestock development. As the sub-loans are repaid) the IDA funds will be available to the Government for servicing the credit a~d for use in other public investments. The total cost of the project is estimated at the equivalent of $4.4 million. T~e I~A credit of $2.2 million will finance half the total and the remainder will be financed 1470 by the Government, and 187,. each by the conunercial banks and the ranchers. '.Lhe IDA credit to Guyana will be for a term of 50 yea.rs, includfog lO years • of grace. It will be interest-free but will include a service charge of 3/4 of 1% to cov':=r IDA's administrative costs. - 0 -