Announcement of World Bank Lends Sixty Million Dollars for Small-Scale Agriculture in Mexico on December 22, 1978

' ' FOR IMMEDIATE RELEASE , •World Bank 1818 H Stre'et, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/35 December 22, 1978 WO~LD BANK LENDS $60 MILLION FOR SMALL~SCALE AGRICULTURE IN MEXICO A $60 rni1~ion World Bank loan will help finance a small-scale agricultural infrastructure project ;n Mexico. The project is expected to increase substantially the earnings of 30,000 low-income farm familiesJ most of them living under poverty levels. With an estimated total cost of $143.7 million, the project will be executed in four years (1979-82). It consists of a series of about 250 irrigation, drainage, a~d livestock subprojects scattered throughout the country and covering an aggregate area of about 150,000 hectares. The project will assist in expanding the area under irrigation and drainage, and will result in increased production of basic foodgrains, oil- • seeds, milk, and meat. The agricultural output is expected to increase an estimated 222,600 metric tons, with a \·alue of approximately $22.6 million, annually at full development. The project wi 11 also make a substantial contribution to employment in the rural sector. It is expected to create approximately 8,300 man-years of permanent agricultural employment and an additional 11,700 man-years of temporary employment during the construction period. Most of the beneficiaries will be "ejidatarios/' or members of an ejido -- a form of communal land tenure based on usufruct. The average annual family income for beneficiaries of irrigation and drainage subprojects is expected to increase from about $500 to about $2,300, in four to five years .. Incomes of beneficiaries of the 1 ivestock development subprojects are also expected to increase from about $200 to about $1,400 annually, in eight to ten years. Beneficiaries will play an important role in the planning, execution, and operation of subprojects. A Users• Association managed by an elected committee of beneficiaries will participate in the planning of project wot~s and will be responsible for the operation and maintenance of the subproject. The $60 million World Bank loan to Nacional Financiera, S.A., a financial agency of the Mexican government, will be for 17 years, including 4 years of grace, with interest at 7.35% per annum. The loan 'vvi 11 ha-=v'-2. the • guarantee of the Government of Mexico • NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CAL DAT A PROJECT: COUNTRY: TOTAL COST: Small-scale Agricultural Infrastructure Mexico $ 14 3. 7 mi l 1 i on • BANK FI NANC I NG : $60 million, for a term of 17 years, including 4 years of grace, with interest at 7.35% per annum OTHER FINANCING: Government of Mexico, $70.2 million Beneficiaries, $13.5 million IMPLEMENTING ORGANIZATION: Secretar,a de Agricultura y Recursos Hidraulicos (SARH) lnsurgentes Sur 476 Mexico, D.F., Mexico PROJECT DESCRIPTION: It includes the execution of a) irrigation infrastructure on about 56,000 hectare (ha), drainage infrastructure on about 36,000 ha, and livestock infrastructure on about 58,000 ha; and b) the acquisition of equipment for hydrogeological studies, construction of civil and on-farm works, tubewells and pumping plants, and livestock farms. • PROCU.REMENT: Civil works contracts will be let through the government's ordinary procedures acceptable to the Bank. Equipment for engineering studies, as well as construction equipment will be procured through international competitive bidding; domestic manufacturers will be allowed a preference ~p to 15% of c.i.f. cost. Equipment for on-farm works, pumping plants and livestock development will be purchased in small quantities under local procedures. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 23% 1982 - 0 - •