Announcement of Nepal Receives Eight Million US Dollars IDA Credit for Agriculture on February 5, 1981

FORI-SE • 'World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 . IDA NEWS RELEASE NO. 81/44 February 5, 1981 NEPAL RECEIVES SOR 6.3 MILLION IDA CREDIT FOR AGRICULTURE The International Development Association ( IDA), the World Bank's affiliate for concessionary lending, has approved a credit of SDR 6.3 mill ion ($8 mil lion) to Nepal for a project to increase food production in four western Hi 11 districts. The project was prepared by the Department of Agriculture, with assistance from the Food and Agriculture Organization of the United Nations/World Bank Cooperative Program. • Under the project, farmers in Gorkha, Lamjung, Syanja, and Tanahu districts will be provided with appropriate advice and increased support services to undertake low-cost farming practices. The practices selected would be those which would have an immediate impact on raising food produc- tion, increasing availability of livestock feed, and improving animal health. To provide service and advice to the farmers, the project will improve agricultural extension and livestock services through provision of staff, and construction of 20 Agricultural Service Centers. Staff train- ing wil 1 be provided for other institutions, such as the Agricultural Develop- ment Bank of Nepal, the Agricultural Inputs Corporation, and cooperatives. The project also wil 1 finance import of fertilizer, improvement of irrigation and marketing, and upgrading of trails and bridges to facilitate the movement of agricultural inputs in the project districts. Technical assistance wi 11 be provided in the fields of agronomy and field experimentation, exten- sion training and communications, design of minor irrigation schemes, as well as monitoring and evaluation. About half of the 147,000 farm families in the project area are expected to raise their agricultural production. At full development in 1990, the production of main crops is expected to increase by 34,300 tons NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which • are valued on the basis of a 11 basket 11 of currencies. The U.S. dollar equivalent of the SOR amount of the IDA credit reflects thts;! exchange rates existing at the time of negotiation of the credit.  2 to 197,700 tons, ra1s1ng farm incomes by about 20%-26%. Besides improving soil fertility, the promotion of fodder legumes will increase the supply of animal feed and thus reduce overgrazing and consequent soil erosion. The construction work to be carried out under the project will create about four mi 11 ion man-days of employment. • The United Nations Development Programme is expected to provide $0.85 million as a grant to cover the cost of technical assistance. The Government of Nepal will contribute $0.85 million to the ·$9.7 million total cost of the project. The IDA credit is for 50 years, inc}uding 10 years of grace. It carries no interest but will bear a 3/4 of 1% service charge a year to cover 1DA 1 s administrative costs. - 0 - • • FORM NO. 1121 (5-76) T ECHN I CAL D A T A • PROJECT: COUNTRY: TOTAL COST: Hill Food Production Project Nepal $9. 7 mi 11 ion IDA FINANCING: SOR 6.3 million ($8 million), standard IDA terms OTHER FINANCING: Government of Nepal, $0.85 million; United Nations Development Programme, $0.85 million IMPLEMENTING ORGANIZATION: Regional Director of Agriculture, Western Region Ministry of Food and Agriculture Kathmandu, Nepal PROJECT DESCRIPTION: The major project components are: (a) construction of 20 Agri- cultural Service Centers; (b) improvement of agricultural extension and livestock services through provision of staff; (c) strengthening of the • Agricultural Development Bank of Nepal, the Agricultural Inputs Corporation, and coopera- tives by providing training for staff; (d) provision of fertilizer; (e) improvement to marketing, through introduction of regular market days; (f) development and improvement of irrigation for about 3,000 hectares of land; (g) upgrading of about 70 kilometers of trails and construction of about 34 bridges to facilitate movement of agricultural inputs; and (h) establishment of a monitoring and evaluation program. PROCUREMENT: Fertilizer, equipment, furniture, and vehicles involving con- tracts above $100,000 (totaling about $1.2 million) will be procured on the basis of international competitive bidding, in accordance with World Bank/ IDA guidelines. Orders for goods which cannot be bulked into packages of $100,000 or more (totaling about $0.3 million) will be purchased under government local tender procedures, satisfactory to IDA. Because of the remoteness of the project area and small size of most civil works (totaling $4. 1 million), they will be undertaken by the ministry concerned, using local labor, or by local contractors, in accordance with government local procure- ment procedures, satisfactory to IDA. CONSULTANTS: About 90 man-months of technical assistance will be needed for this project as follows: agronomy and field experimentation (44 man-months), extension training and communications (20 man-months), identification and design of minor irrigation schemes (20 man-months), and monitoring and evaluation (6 man-months). Both national and international experts will be considered for these , assignments. Funds will also be provided for training of specialists at international • research ce~ters and short training visits to extension and research programs in South Asia . ECONOMIC RATE OF RETURN: 58% ESTIMATED COMPLETION DATE: 1987 - 0 -