Announcement of Mexico to Use World Bank Loan of One Hundred Fifteen Million Dollars for Agricultural Marketing Program on April 21, 1983

,.. . ~ FOR . 1MMED1A . TE RELEASE - •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 83/ 66 Contact: Ciro Gamarra April 21, 1983 ( 202) 47 7-5320 MEXICO TO USE WORLD BANK LOAN OF $115 MILLION FOR AGRICULTURAL MARKETING PROGRAM Private sector participation in Mexico's food iistribution system will be encouraged through a World Bank-assisted project to modernize the country's agricultural marketing system. Both consumers and producers will benefit from improved handling of perishable food and from lower marketing costs. The International Bank for Reconstruction and Development (IBRD) has approved a $115 million loan to assist the project, the first of its kind in Mexico. Con~umption of perishables (fruits, vegetables, meats, and eggs) has increased in recent years. There is much wastage because of the lack of modern facilities such as refrigeration for transporting these products from grower to consumer. Because of inadequate marketing and pricing information, • producers are not able to plan their production to meet consumer needs • The Agricultural Marketing Project for Perishables will provide a line of credit to support the improvement of marketing facilities at the producer, wholesaler, and retailer levels. Credit will be provided for imoroving or expanding collection centers, packing plants, warehouses, small stores, and retail centers. The $227 million project, to be carried out over a two-and-a-half year period, will also support a National Market Information System based in Mexico City linked initially to eight central wholesale markets to aid the private and public sectors in decision-making. Agriculture employs about 40% of Mexico's labor force and accounts for about 17% of total export earnings. Because of the importance of agriculture and rural development to Mexico, some 46% of Bank lending has been for this area, amounting to $2.68 billion under 26 loans. The Trust Fund for Marketing Development (FIDEC), the Agricultural Trust Funds of the Bank of Mexico (FIRA), and the Trust Fund for Credit in Irrigated and Rainfed Areas (FIGART) will carry out the project, and will supplied with technical assistance and staff training. Feasibility studies for central wholesale markets, as well as assessments of the transportation services and marketing of perishable commodities will be financed. The govenment of Mexico and project beneficiaries will provide $68.2 million and $43.8 million, respectively, toward project costs. • The IBRD loan is for 15 years, including three years of grace, at an annual rate linked to the cost of Bank borrowings. The loan also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee of 0.75% on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar eq ui. vale nt s.