Announcement of Mexican Project to Raise Agricultural Productivity on June 29, 1984

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 84/107 Contact: Ciro Gamarra June 29, 1984 (202) 477-5320 MEXICAN PROJECT TO RAISE AGRICULTURAL PRODUCTIVITY Mexico is launching a project designed to raise agricultural productivity and production. This is, in turn, expected to boost farmers' incomes and exports, and improve self-sufficiency in food. About 580,000 people are expected to benefit directly, and foreign exchange savings will amount to about $140 million a year. The World Bank announced today that it is supporting the project with a loan of $300 million. The project will be carried out throughout Mexico, and will cost $764 million. Loans will be granted to farmers for crop and livestock production, and agroindustries. Funds from these loans will help finance land improvements and the purchase of equipment and machinery. Civil works will be carried out, including infrastructure for irrigation and storage. And fruit orchards and industrial crop plantations will be established. Financial assistance for the agroindustrial sector will be used for sawmills, fisheries, grain elevators, milk processing plants, and slaughter- house facilities. Low-income farmers will be given short-term loans to be used as working capital. At full development in about four years, the project is expected to result in increased harvests of crops such as maize, beans, wheat, rice, and sorghum. The total increase in the production of these crops is estimated at 900,000 metric tons a year. Annual production in cotton, soybeans, and safflower is projected to rise by 100,000 tons, milk by 16 million liters, beef and pork by 120,000 tons, and eggs by 110,000 tons. Besides the World Bank loan, financing will come from commercial banks and the Agricultural Trust Funds in Bank of Mexico. The farmers' own investments will total more than $100 million. The World Bank loan is for 15 years, including three years' grace, with a variable interest rate, currently 10.08 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.