Announcement of Rice Project in Madagascar to Receive Eighteen Million US Dollars IDA Credit on March 24, 1983

. FOR IMMEDIATE RELEASE •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 83/54 Contact: Pushpa Schwartz March 24, 1983 (202) 477-3294 RICE PROJECT IN MADAGASCAR TO RECEIVE $18 MILLION IDA CREDIT About 35,000 farm families living in eastern Madagascar will benefit from a rice project that will use an SDR 16.7 million ($18 million) credit from the International Development Association (IDA). IDA is the concessionary lending affiliate of the World Bank. The project area comprises the plains surrounding Lac Alaotra, which is the largest rice producing area in Madagascar, currently producing about 100,000 tons of paddy per year. Under the Lac Alaotra Rice Intensification Project, paddy production in the basin will increase by 51,000 tons annually by 1994, thereby reducing the country's rice import bill. Rehabilitation of irrigation networks covering 25,000 1hectares will allow improved water control, leading to better cultural practices. The provision of • inputs, including improved seeds and agricultural equipment, will also boost yields. In 1970, IDA approved a credit of $5 million for the irrigation of 12,000 hectares in a specific area of Lac Alaotra. The main civil works were completed on schedule, but on-farm development works were delayed by financial difficulties. Increases in paddy production were substantially lower than estimated at appraisal, primarily due to institutional problems and to technical difficulties in managing difficult peat soils. An independent evaluation team from the Bank which examined the completed project in 1977 drew a number of valuable lessons from it: the project agency's technical capacity and financial viability need to be carefully assessed, as management and institution building are critical to the success of such projects; IDA supervision has an important role to play in the management process; and there is a need to pay more attention to the motivation of beneficiaries. These recommendations have been taken into account in the design of this project. The thoroughgoing rehabilitation of the project agency, reinforced by technical assistance personnel, will ensure an effective and viable institution. The complex phenomenon of tenancy and share cropping in the area has been accepted as a fact of life; however, measures have been designed to remedy the shortages of physical inputs and of credit which tend to accentuate inequalities in these arrangements; the social setting has been taken into • account and emphasis is being placed on individual and community responsibility in credit, water management, and the production systems being promoted • NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amoutn of the IDA credit reflects the exchange rates existing at the time of negotiation of the credit. ••. I  - 2 - Technical assistance personnel provided by the ~vel(Jf.'.)teiit Agency for the Lac Alaotra region (SOMALAC), including agronomists and'itr:.r:gation engineers, will be succeeded by local staff. A major- training program is to be established for SOMALAC. The Caisse Centrale de Cooperation Economique (France) will provide a $10 • million loan to finance the major part of irrigation rehabilitation works. The Fonds d 'Ai.de et de Cooperation (France) will contribute a grant of $4.5 million in the form of technical experts. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but bears a small annual service charge (0.5% on the undisbursed balances of the credit and 0.75% on the disbursed balances). • •