Announcement of Thirteen Million US Dollars Loan for Agriculture in India on June 11, 1969

'\ FOR. IMMEDIATE RE;LEASE NT 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/40 Subject: $13 million loan for agri- .June 11, 1969 culture in India Robert S. McNamara, President of the World Bank, today announced that the Bank is mak:f.ng a loan equivalent to US$13 million to increase agricultural pro- duction in India through a project to grow seeds of high-yielding varieties of foodgrains. At full development in five years the project will produce enough certified seeds to plant some 7 million acres annually. Noting that the Government of India since 1965 has given high priority to increasing agricultural production through investment in modern inputs such as .• f ert Hizer, high-yielding seed, better water use and improved credit institutions, Mr. McNamara .said: "This is an important step in the Bank Group's support of India's 'Green Revolution' which has already resulted in an impressive increase in the production of foodgrains. This loan is the first financing anywhere by the Bank Group in the field of seed production, which lies at the heart of the world-wide improvement in agricultural technology. The Bank Group hopes to play an active role over the next few years in India's program for further moderniza- tion of its agriculture." The loan will be made to the Government of India for a term of 30 years, including 10 years of grace, with interest at 6-1/2%. The high-yielding seeds will be grown on private farms in the Tarai area, a fertile belt about 60 miles wide and 12 miles long, lying between the foothills of the Himalayas and the open plains, in the State of Uttar Pradesh in northern • India. The soils, climate, water availability, transport facilities and /mot:e  ' • Bank P.R. 69/40 .. r·udia-Agriculc:.:re - 2 - entrepreneurial capacity of the farmers in the area are conducive to the succef3S of the project. Under the project, local adaptations of high-yielding dwarf wheat varieties, new hybrids of maize, sorghum and pearl millet and high-yielding rice varieties will be grown for seed. Some 46,000 acres will be developed for seed production. On~farm development will include provision of tubewell irrigation, land leveling, installation of underground water distribution systems in the fields, and more in- tensive mechanization of farming operations. Seed produced from the farmers' holdings will be proc·essed in two plants to be built and operated by the Tarai Development Corporation (TDC) in the project area. Credit to participating fa=ruers will be provided through the State Bank of India. TDC, a private corporation whose shareholders will include farmers, the • National Seed Corporation and the Uttar Pradesh Agriculture University (UPAU) will also be responsible for marketing the seed and for the provision of other services to the participating farmers. The UPAU, which will provide technical services, was largely responsible for organizing the project and bringing it to the attention of the World Bank. UPAU has been active in the development of new varieties of seedo, a.n activity which also owes much to the assistance of the Rockefeller Foundation. The total cost of the project is estimated at the equivalent of $22.4 million. The Bank loan will provide $13 million of this total and the remaining costs will be financed by the State Bank of India, TDC, farmers and dealers in farm machinery. The loan to the Government will be channeled to the project area through the Agri- cultural Refinance Corporation and the State Bank of India. The Food and Agriculture Organization of the United Nations (FAO) participated in the identification, preparation and appraisal of the project under the BarJc/FAO ~ Cooperative Program. - 0 -