Announcement of Joint Financing for Hinvi Agricultural Project in Dahomey on February 19, 1969

• INTERNATIONAL DEVELOPMENT ASSOCIATIOI'"~ 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 69/7 Subject: Joint financing for Hinvi February 19, 1969 agricultural proje~t in Dahomey The International Development Association (IDA) and the French Fonds d'Aide et de Cooperation (FAC), in a joint operation, are providing Dahomey with $9.2 mil- lion for a project which will make a major contribution toward increasing agri- cultural output. It will provide 4,000 families with food crops for their o"11 use an& enable them to earn an income from cash crops. Furthermore, in 10 years' time the annual value of export~ of oil palm products, cotton and groundnuts pro- duced under the project will be about $2.4 million -- equivalent to 2~ of the • annual value of Dahomey's entire agricultural exports in recent years • Agriculture is of prime importance to the economy of Dahomey accounting for almost half the gross domestic product and employing more than three-fourths of the population. Opportunities for industrial development so far have been limited and the country's hopes of increasing national income and improving its external trade depend on its expanding agricultural production for export in both primary and processed forms. Natural groves of oil palm are the main source of agricul- tural cash incomes and contribute about 2/3 of export earnings. Local consumption of palm oil is rising with population growth and domestic requirements are expected to double by 1975. If production is not increased Dahomey faces the prospect of having to import palm oil within the next decade. The project being financed is located in the Hinvi area of southern D~homey. It includes the preparation of 15,000 acres for the production of annual crops, ~ principally maize, groundnuts and cotton and the development of another 15,000 acres of oil palms; the construction of a palm oil factory with an ultimate /more IDA P.R. No. 69/7 - Dahomey - Agriculture - 2 - capacity of 70,000 tons a year, and of maize storage silos. Also included is the • purchase of about 300 head of cattle for the d~velopment of beef production, and the planting of teak and cassia trees as wind and firebreaks, and for the produc- tion of firewood and lumber. The project will be executed by Societe Nationale pour le Developpement Rural du Dahomey (SONA.DER), a govermnent-controlled company established in 1962 with re- sponsibility for developing agricultural production in Dahomey. SONADER is com- pletely staffed by Dahomey nation~ls with a high level of competence and efficiency both at the head office and in the field. It has already organized the planting of improved oil palms on a cooperative basis on some 33,000 acres. SONADER will establish 10 cooperatives in the project area and train key staff, both for managing the oil palm plantations and ~. )r providing extension services and super- • vising the individual,farmers on the blocks devoted to annual crops. FAC is making a grant equivalent to $4.6 million to the Government of Dahomey which will be relent to SONADER. IDA is extending a credit of $4.6 mil- lion to the Government of Dahomey for a period of 50 rears with 10 years of grace; it will be free of interest but a service charge of ~/4 of lt will be made to cover IDA's administrative costs. The Government will relend the proceeds of the IDA credit to SONADER for a period of 25 years, including 9 years of grace, with interest at 61. per annum. This will be the first lending operation by the World Bank Group in Dahomey. The Food and Agriculture Organization of the United Nations (FAO) assisted in the preparation and appraisal of the project under the Bai:,k/FAO Cooperative Program. - 0 - •