Announcement of Eighteen Million Three Hundred Thousand US Dollars Livestock Loan to Colombia on December 10, 1969

r;9/11 INTERNATIONAL BANK FOR • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/71 Subject: ·$18.3 million livestock December 10, 1969 loan to Colombia A program to develop further Colombia's livestock industry -- a large and promising field for expansion -- will be assisted by a World Bank loan equiva- lent to $18.3 million, it was announced today. The modernization of the live- stock industry could play a key role in achieving sustained economic growth, with the possibility of livestock products becoming an important export. Agriculture accounts for nearly a third of Colombia's gross domestic product, three-fourths of total exports, and employs about half the labor • force. In order to lessen heavy dependence on coffee, the Colombian Govern- ment is giving considerable attention to diversifying exports. An appropriate focus for this effort is livestock development, particularly of beef cattle. Cattle raising now occupies some 70 million acres or about 90% of the land used for agriculture. In addition, vast areas suitable for cattle grazing in the tropical lowlands and temperate highlands await exploitation. Pro- ductivity on beef cattle ranches, however, has been relatively low, and Colombia consumes most of the beef it produces. In recent years the Govern- 1, ment has taken several measures to improve the prospects for meat exports. To be effective, however, these measures need to be accompanied by major improvements in ranch and herd management, more long-term credit, and tech- nical assistance. In mid-1966 the Bank made a loan of $16.7 million to help finance the • i.rtitial stages of a program to provide credit to operators for livestock /more Bank P.R. No. 69/71 Colombia-Livestock development. - 2 - Under this program over 600 loan applications have been apprc,ved: 530 were for beef production, 90 were for dairying operations and 7 for sheep • production. Th~ greater part of the loans were for beef cattle ranches in the North Coast region which has favorable prospects for increasing productivity and access to export markets through the slaughtering and shipping facilities of the port of Barranquilla. The loan announced today will assist in financing the program for another four years. About 700 beef ranchers, 250 dairy farmers and 20 sheep growers are expected to participate during this period. Basic investments will con- tinue to be for fencing, water supply, stock handling facilities, pasture improvement, machinery and equipment, farm buildings and breeding stock. To promote the development of a commercial sheep industry, the project includes the establishment of a Sheep Development Center, with breeding and training functions. The Government will channel the loan funds through the Agricultural • Financi.ng Fund of the Banco de la Republica to the Caja de Credito Agrario Industrial y Minero, a government lending institution. The Caja will organize and manage the project, with its Livestock Development Department as the authority controllint technical standards and implementation. The total cost of the project is estimated at the equivalent of $44.1 million. The Bank loan will finance 42% and the balance will be contributed by the Caja (21%) and the ranchers (37%). The ·Bank loan to the Government will be for a term of 18 years, in- cluding a 6-year grace period, and will bear interest at the rate of 7%. The tenns of the relending to the Caja will be the same except that the Caja will pay additional interest of 3% to the Government for assuming the foreign ex- change risk. The Caja, in turn, will make loans to ranchers. - 0 - •