Announcement of Watershed Project in India will Protect Environment, Boost Food Production on March 8, 1990

FORIMMEDIATE RELEASE , World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK EWS RELEASE NO. 90/60 Contact: Richard Kollodge A NEWS RELEASE NO. 90/42 (202) 477-4507 WATERSHED PROJECT IN INDIA WILL PROTECT ENVIRONMENT, BOOST FOOD PRODUCTION WASHINGTON, March 8, 1990 -- Farmers in four states in India will be able to increase production of crops and livestock through a project designed to help prevent soil erosion and protect the country's watersheds. The project is being supported with a $13 million World Bank loan and a credit of SDR 56.8 million ($75 million) from the International Development Association (IDA), the Bank's concessionary lending affiliate. Population growth in the states of Jammu and Kashmir, Haryana, Himachal Pradesh and Punjab has resulted in increased pressure on farmland, especially on watersheds. Environmentally unsound farming practices have also contributed to deforestation, soil erosion and flooding. The project will help control these problems through measures aimed at strengthening environmental management of the watersheds and promoting agricultural techniques that will help farmers boost production while protecting the environment. As part of the project, farming technologies such as contour cultivation will be introduced in selected areas, nurseries will be developed to provide trees and vetiver grass for planting on degraded land, and government agencies in charge of agriculture and environmental management will receive technical assistance and staff training to help them strengthen and streamline their operations. Special efforts will be made to encourage women to participate in the project. The project is expected to increase production of wheat and maize in the region by about 50,000 tons a year and increase the availability of fuelwood and fodder. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.75 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. The IDA credit is for 35 years, including 10 years of grace; it carries no interest, but has an annual charge of 0.75 percent on the disbursed balance and a variable charge of up to 0.5 percent (currently zero percent) on the undisbursed balance. Note: Money figures are in U.S. dollar equivalents. 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 amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.