Announcement of IDA Assists Cooperative Dairy Development in India on June 12, 1978

- - . FO'R IMMEDIATE R8:LEASE •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 3·J3-6360 IDA NEWS RELEASE NO. 78/87 JUNE 12, 1978 IDA ASSISTS COOPERATIVE DAIRY DEVELOPMENT IN INDIA A national dairy development project to increase India's milk production and rural incomes through cooperatives covering about 3.5 mill ion subsistence farmers will be assisted by a credit of $150 million from the International Development Association (IDA), an affiliate of the World Bank. The European Communities (EEC) is also donating surplus skim milk powder and butter oil to be used by India in assisting to finance the project. At full development, the $364 mill ion project will help to improve the incomes and living standards of some 20 million people who have average annual per capita incomes of about $50. This is about a third of the national ~ average of $150 per year. The project will help to increase milk production by about five mili ion 1 iters a day, leading to an !ncrease in annual farm income of $230 mill ion. It will generate additional employment opportunities in the rural sector. Increased milk production will give a significant nu- tritional benefit to a large number of consumers, particularly children. The project is helping to promote a technology most appropriate to Indian conditions - the successful AMUL cooperative union in Gujarat State. Members of the cooperative are provided with a package of services, including veterinary health coverage and training, concentrate feed, and fodder seed. The Gujarat experience indicates that significant social benefits will also be derived. Milk producers' cooperatives have consider- ably increased the incomes of its members through the development of effec- tive technical and marketing services. Increased revenue from milk sales is being used to augment or initiate village development schemes involving education, health, family planning and minor public works, as well as in- • creased crop production. Investment in animal husbandry - a labor-intensive process in India - helps to absorb surplus labor in the rural areas. NOTE: Money figures are expressed in U.S. dollar eo·.dvalents.  • - 2 - Three previous IDA credits totaling $74. 1 mill ion are assisting AMUL type of dairy development projects in the states of Karnataka, Madhya Pradesh and Rajasthan. They are designed to increase the incomes of some 4.7 mill ion people. The projects are progressing well. Farmer response has been excellent. Some 1,500 cooperative societies have been organized so far, and the volume of milk collected and consequent revenues have sub- stantially increased. The new IDA credit of $150 mill ion will help to increase milk production in 20,000 villages in selected milk shed areas of the country. The project, which will be implemented over seven years, consists of the establishment of some 20,000 cooperative societies grouped into cooperative dairy unions and milk marketing federations; construction of dairy processing facilities with a total additional capacity of five mill ion liters per day; provision of packaging, distribution and transport; storage, training, re- search and technical assistance. for milk. The project is part of India's efforts to meet the growing demand The project represents the first phase of India's plan to develop about 33,000 dairy cooperatives and their related unions and federations in • selected milk shed areas in India. The market includes the four major cities Bombay, Delhi, Calcutta and Madras in addition to 150 smaller urban centers and rural towns. The IDA credit to India is for 50 years, including 10 years of grace. It is interest free, except for a service charge of 3/4 of 1% per annum to meet IDA's administrative costs. The Government will channel the proceeds of Lhe credit through the Indian Dairy Corporation to dairy coopera- tives and through the National Dairy Development Board for training and re- search. - 0 - • FORM NO. 1121 (5-76) T EC HN I CA L D A T /\ • PROJECT: COUNTRY: TOTAL COST: National Dairy Development India $363. 8 mi 11 ion IDA FINANCING: $150 mill ion OTHER FINANCING: European Commun,ties (EEC) through commodity donations Indian Dairy Corporation (IDC) Government of India Dairy Cooperative Societies IMPLEMENTING ORGANIZATION~: National Dairy Development Board (NDDB) The Indian Dairy Corporation (IDC) Da rpan, R. C. Dutt Road Baroda 390 005 Gujarat, India . • PROJECT DESCRIPTION: The major components of the project are: (a) the establish- ment of 20,000 dairy cooperative societies grouped into cooperative dairy unions and cooperative milk marketing federations; (b) the construction of dairy processing facilities with a totai incremental capacity of about five million 1 iters per day; (c) the provision of packaging, distribution and transport facilities to handle the marketing of project milk; (d) the provision of storage and long-distance transport facilities to support the establishment of a buffer stock of dairy products; (e) the strengthening of training and research facilities of the National Dairy Develop- ment Board, and provision for technicai assistance. PROCUREMENT: Major items of machinery and equipment for the milk dis- tribution system will be procured by international com- petitive bidding (ICB) in accordance with IDA guidelines. Local manufacturers will re- ceive a margin of preference in bid evaluation of 15% or the prevailing customs duty, whichever is lower. Contracts for civil works for construction of dairy processing plants, stores, and administration buildings \-·.till be individually small, dispersed in time and place, and not warrant ICB procedures. CONSULTANTS: 63 man-years of technical assistance will be provided under the project, including some 50 man-years of exµerienced dairy plant managers to assist newly established dairy plants in getting off to a sound start . • ECONOMIC RATE OF RETURN: ESTIMATED COMP LET I ON DATE: 25% 1985 - 0 -