Announcement of 8.5 Million Dollars Credit for Agriculture in Ghana on July 1, 1970

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 70/37 Subject: $8.5 million credit for July 1, 1970 agriculture in Ghana The first stage of a national program to rehabilitate Ghana's cocoa industry -- ~l1c mainstay of the economy -- will be undertaken with the assistance of a $8.5 mil- l:i.C111 credit from the International Development Asso~ , ation. Ghana is the world's largest producer of cocoa. Cocoa accounts for about tw0·· thirds of export receipts, and Ghana will be, at least in the medium term, crit- ically dependent on cocoa for financing its development program. However, the industry has been beset by severe problems, with the result that production has • been falling since 1965. The Government's present policy is directed toward reversing this trend by encouraging the replanting of low-yielding farms and better control of pests and diseases. The $15.6 million project being assisted by the $8.5 million IDA credit is ex- pected to increase annual production of cocoa by about 19,000 tons in the Eastern Pe~ion by 1982. It is the first significant step toward improving the efficiency oi cocoa production in Ghana, and is designed to serve as a model for application in other areas of the country. It consists of the replanting of 36,000 acres with imrroved high-yielding cocoa varieties, and the rehabilitation of about 51,000 a~r~s of low-yielding cocoa by controlling capsids and improving farm maintenan;e. The project will include the provision of credit to cocoa farmers for the purchase 0f spraying machines, pesticides, fertilizers, improved planting materials and to co~rer the cost of hired labor; intensified extension services and the training of • farmers in modern cocoa production techniques; improvement of marketing coopera- tives and the establishment of 15 new cooperatives; and improvement of feeder roads. /mo1e IDA P.R. No. 70/37 - Ghana-Cocoa • - 2 - Execution of the project will be the responsibility of a special unit in the Ministry of Agriculture. A steering committee will be established to co- ordinate the work of other institutions involved, among them the Agricultural Development Bank which will channel credits to cocoa farmers, and the Ghana Cooperative Marketing Association. The IDA credit will finance the foreign exchange requirements of the project and part of local currency expenditures. The remainder will be fi- nanced by the Government and three local commercial banks. The IDA credit to the Republic of Ghana will be for a term of 50 years, including 10 years of grace. It will be interest free but will carry a ser- vice charge of 3/4 of 1%. 0 • •