Announcement of Program in Ecuador to Boost Potential of Agriculture as Leading Sector on October 24, 1985

FOR IMMEDIATE RELEASE INTERNATIONAL MONETARY FUND JOINT LIBRARY World Bank OCT 2 8 1985 1818 H Street, N.W., Washington, O.C. 20433, U.S.A. nnrn:·i[\T}(HH\L BA:r:~ t·'JR ~=cot-:JliiU::·~1Ci ·! idJ'.) D2V ~-~·)?ME?JT \'/i.. .Slll .. iGi'ON, D. C. 204,,)l BANK NEWS RELEASE NO. 86/28 Contact: Ciro Gamarra October 24, 1985 (202) 477- 5320 PROGRAM IN ECUADOR TO BOOST POTENTIAL OF AGRICULTURE AS LEADING SECTOR Ecuador will use a loan of $100 million from the World Bank to support a program of policy reforms in the agricultural sector. The program will include policies to improve the terms of trade of agriculture in relation to other sectors of the economy; liberalize prices; reduce tariffs and quantitative restrictions to trade; and reduce the government's participation in selected public or mixed enterprises. The program also aims at improving policies affecting the provision of agricultural credit to farmers at unsubsidized interest rates. Another objective is to raise the efficiency of the Ministry of Agriculture and related ins ti tut ions.. The program will be carried out over two years. The World Bank loan will help finance the importation of agricultural requirements during 1986-87, including fertilizer, machinery, trucks, and equipment for storage and transportation. Technical assistance will be provided to support the analysis of agricultural policies and investment criteria. And a set of studies will be done which could lead to the divestiture of some public enterprises and improvement of efficiency in others, and to setting up a framework for implementing policies related to enterprises in the public sector. The government's policy reforms are expected to boost the potential of agriculture to return to its role as a leading sector in the long-term growth of the economy. They will also help ensure improved living conditions for the country's poor, the majority of whom live and work in the rural areas. The World Bank loan is for 17 years, including four years of grace, with a variable interest rate, currently 8.82 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.