Announcement of Four Million Loan for Uruguay's Third Livestock Development Project (Supplementary) on June 14, 1971

INTERNATIONAL BANK FOR • RECOf\ISTRUCTIQN AND DEVELOPMENT' 1818 H STREET, N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 71/46 Subject: $4.0 million lo,an for Uruguay's June 14, 1971 third livestock development project (supplementary) A $4. 0 million World Bank loan to Uruguay will supplement a $6. 3 mill:!.on livestock development loan made in June 1970 in order to provide additional funds for an increased program of loans for ranch development in 1971. Labor and other reforms in the meat packing industry have enabled the packing houses to operate more efficiently and, thereby, to pay higher pricP-s to ranchers. As a res ult of this and other sector improvements, rancher • demand for development credit has increased, reflecting widespread acceptance of new pasture improvement and management techniques introduced under earlie= Bank projects. Originally, the 1971 program was expected to cover about 3,000 ranchers and to aim at the improvement of some 500,000 acres of pasture. Based on revised estimates, some 3,400 ranchers are now likely to borrow under the program. These ranchers will improve about 925,000 acres, nearly double the area originally contemplated. Uruguay's livestock industry is the mainstay of the country's economy. Exports of beef and wool and their by-products account for approximately 85% of Uruguay's export earnings. The sector, including meat packing industry, also accounts for about 10% of total employment. • /more  Be.11k P.R. No. 71/46 - Uruguay - livestock - 2 - Meat exports in 1970 reached 153,000 metric tons, worth a record • r $88 million, compared to 69,000 metric tons valued at $27.4 million exported in 1961. The World Bank made its first loan of $7 .O million to help live- stock development in 1959 and a second loan, of $12.7 willion, was approved in 1965. The present loan is a supplement to the third approved in June J.97()~ Based on the loan applications received from ranchers the 1971 credit program is now estimated at $21.4 million compared with the original $13.1 million. The foreign exchange component is put at $10.3 million compared with $6.3 million. The loan will finance the estimated increase of $4.0 mil- lion in the foreign exchange component, with Uruguayan official and rancher • contributions meeting additional local costs of $4.3 million. The Bank loan will be for 12 years, including a grace period of four years, at an interest rate of 7~%. Loan proceeds will be made available to the Central Bank Livestock Fund for relending through the Bank of the Republic and private banks to ranchers. The project is coordinated by the Comision Honoraria del Plan Agropecuario (Ciudadela 1471, Montevideo, Uruguay). - 0 - •