Announcement of Two Million Dollar Credit to Ceylon on June 6, 1968

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press ~elease No. 68/11 Subject: $2 million credit to Ceylon June 6, 1968 Ceylon's program to increase production of food crops will be assisted by a $2 million credit announced tRday by the International Development Assn- ciation (IDA). Irrigation will be brought to some 6,500 acres ~n the upland ar~a of the dry zone by 1~ lift pumping. Th~ main crops will be. chi.llies and onions, important items of the Ceylonese diet, which ar~ now imported at a cost equivalent to over $11 million annually. The project will re- duce foreign exchange expenditures and increase farm inc~~~s. • Agriculture employs over half the labor force in Ceylon 8.lld accnunts for ab~ut a third of gross d~mestic product and 901 of exports. Gnvernment policy 3itns at diversification and improved efficiency in the export sector, and the attainm~nt of self-sufficiency in food. To reduce the large imports of chillies and onions, irrigation is planned for about 40,000 Acr~s for the growing of these crops during the next five years. The develo~nt: of low lift pump irrigation to bring wat~r to the dry uplands, where the s1oil is well suited to their production, will prt";vide ..xperience for plftnnj,ng sub- sequent undertakings. Th~ credit to Ceylon will be for a term of 50 years. It will be free of interest, but will carry A service charge of 3/4 of 11 tn m~et 1:DA' s administrative costs • • / more  IDA Press Release No. 68/11 June 6, 1968 Ceylon - 2 .. The project being financed will be carried out on colonization schemes in four different areas of Ceylon where the Government has settled farmers • on Crown lands for the development of irrigated agriculture. These schemes have been in operation for several years. Each colonist occupies about five acres consisting of three acres of paddy land with gravity irrigation in the valley bottom and a two-acre dry-land house lot on the adjacent valley slope. Production on the homestead sites is negligible because of lack of water. Water will be pumped from the canals serving paddy fields to homestead sites at elevations varying from 15 to 50 feet above the canals~ The financial return from an acr~ of chillies and on1ons will be substantially greater than that from an acre of pAddy. Also includetl is a project for the settlement of unemployed educated young men aged 17-21. Adjacent to one of the colonization schemes, two areas totaling 400 acres of jungle will be cle~red for this purpose. Each youth will be allotted two acres of lift irrigated land for the growing of chillies and onions and provided with a cottage on a third acre. The Government initiated this type of youth settlement scheme in 1965 partly to contribute to solving Ceylon's unemployment problem. • The project is scheduled for completion in four years at a total estimated cost equivalent to $3.3 million. At full development, the annual net value of increased production will be Rs. 9 .4 million ($1. 6 million). The Ministry of Land, Irrigation and Power will be responsible for the design, constructi~n, operation a~d maintenance of the irrigation facilities and for land leveling. All work will be performed by the Mlnistry's own Rtaff with the necessary importetl equipment and materials being procured under international competitive bidding. The Ministry of Agriculture will be responsible for agricultural extension in the project area. The Fond and Agriculture Organization nf the United Nations (FAO) assisted in the id~ntif!~ation And appraisal of the project under the Bank/FAO Cc~trperative Progn'1ll. - 0 - • , ...... ,,.,,.,