Announcement of Five Million Dollars Credit for an Irrigation Project in the Malagasy Republic on July 29, 1970

• INTERNATIONAL DE'lELOPMENT ASSOCIATION 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 70/43 Subject: $5 million credit for an irriga- July 29, 1970 tion project in the Malagasy Republic A $5 million credit from the International Development Association (IDA) will hel~ finance expansion, as well as diversification, of agricultural production in thP Malagasy Republic. The project involves the improvement and extension of irri- gation works in a rice-growing area covering approximately 29,700 acres, making y,~~r-round produccion possible on at least half this area. An experimental farm for crop diversification will also be established. Rice is the staple food of Madagascar's approximately 6.7 million people. One • of ~he major objectives of the Malagasy Republic's agricultural development plan is lo increase rice production, sufficient to satisfy growing demand in local and near- by foreign markets. The better quality rice varieties grown in Madagascar are find- ing increasing acceptance in neighboring countries. The planned increase in pro- <luccion is to be obtained mainly by bringing more farm lands under irrigation and hy intensifying existing irrigation schemes. The project area is in the southwestern part of the Lake Alaotra depression, in the central plateau of Madagascar, a region known for its export quality rice c~ops. Various irrigation schemes, covering some 34,600 acres have already been developed to the north and southwest of the project area. With the help of the IDA credit, irrigation and drainage networks on some 9,880 acres will be improved; irr-igation, drainage and road networks will be built on 14,800 acres of newly re- cltiimed land; and drainage works will be built on 4,940 acres of marshland. These • worKs will assure the supply of water during the months of October-January, the critical rice-sowing and transplanting period. Total rice production in the area /more IDA r"R. No. 70/43 _... Malagasy Republic-Irrigation - 2 - is expected to increase by about 26,000 tons over a 10-year period. creased production have been estimated at $1.1 million a year. At full development of the project, foreign exchange earnings to be derived from the in- • In addition to the irrigation works and the experimental station for crop diversification, an intensive extension service network, already existing in the region, will be extended to the project area. Also included in the project are on-farm development works, a rural development study to examine ways to facilitate permanent settlement in the project area, and procurement of operation and main- tenance equipment. The project was prepared by the Government of Malagasy, with the guidance of the Food and Agriculture Organization of the United Nations (FAO) under the Bank/FAQ Cooperative Program. The project is scheduled for completion in 1975 at a total estimated cost • equivalent to $8.2 million, of which $5 million will be covered by the IDA credit~ The remainder will be met by a loan from the Banque Nationale Malagasy de Developpement (BNM) and by a Goverrunent contribution, part of which will be covered by a grant from Fonds d'Aide et de Cooperation, an agency of the French Government. The improvement and extension of the irrigation works in the project area will be undertaken by the Rural Engineering Services (Genie Rural} of the Ministry of Agriculture. The on-farm development works, agricultural extension services, crop diversification experiments, and operation and maintenance of the ~roject will be carLied out by Societe Malgache d'Amenagement du Lac Alaotra (SOMALAC), an autoaomous organization. The Government will set up a committee to coordinate all aspects of the project~ The IDA credit will be extended to the Malagasy Republic for a term of 50 y2~rs, including 10 years of grace. It will be interest-free but will carry a service charge of 3/4 of 1% a year. - 0 - •