Announcement of Five Million Dollars Credit for Agriculture in Papua and New Guinea on January 14, 1970

\'• ,· ttl.Ot• I .\"I.} ·!~·,.,~ , . INTERNATIONAL DEVELOPMENT ASSOCIATION (~) ~ 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 70/2 .:r&nuary 14, 1970 Subject: $5 million credit for agri- culture in Papua and New Guinea The International Development: Association (IDA) has approved a credit of ~5 million for the further development of agriculture in Papua and New Guinea. hojects to be fi.nanced involve the cultivation of oil palms tn produce palm cil for export, a relatively new activity in ~he Territory, cattle breeding ~Lich has a most promising future, and the planting of coconut palms to main- tein the chief export, copra. The credit is being extended to The Administration of the Territory of ~ ?apua and New Guinea for a term of 50 years, including 10 years of grace. It ·~ilJ be interest-free but a service charge of 3/4 of 1% will be made to cover IDA's adiT!i.nistrative costs. The Territory is administered by Australia which is preparing it for self-determination and spending large sums for its development. The economy of Papua and New Guinea is almost completely agricultural, with ~~st of the population engaged in subsistence agriculture. There is an abundance Qf fertile land, including about 10 million acres of good grazing grassland, un- J~vtloped or underdeveloped, which could be economically exploited. The Admini- ~cration is actively encouraging the development of oil palms and livestock, ente:;: .. µ~jqes well suited to the country, to diversify exports and also to provide meat whi.ch is now imported in large quantities at considerable cost. The projects being assisted by the IDA credit include the planting or • ~.~?Lanting of 10,000 acres on existing coconut estates; the development and /more  L~iA P . . R. No. 7Q/2 - Papua and New Guinea • Agriculture - 2 - --stocking of 150,000 acres of private beef cattle rar-s:hes and the im1,ro\yemcnt of gcoernment services to the b~ef cattle industry; the establishment of 980 small- boiders to grow 7,840 acres nf oil palms; and the constructitm of a wharf at Ki.robe on the is land of New Britain to serve the a:cea being developed for palm ~~1 production. An IDA credit of $1.5 million was granted a year ago to cstab- li.sh 580 smallholders for the growing of 4,600 acres of oil palms. This has rrogressed most successfully and the new credit will support the seco11d phase. The AdrninistratiQn 1 s Department of Agriculture, Stock and Fisheries and the r~pua and New Guinea Development Bank (PNGDB), an autonomous institution set up ~~ 1967, will jointly be responsible for the execution of the coconut, beef c:Qttle and oil palm projects. The construction of the Kimbe Wharf will be .supervised by the Australian Department of Works. &t Apprt,ximntely $2.5 million of the IDA credit will be on-lent to PNGDB for 25 years with interest 1\%. PNGDB will in turn make 1oans to coconut planters, oil palm small- • holders and beef cattle ranchers for periods of up to 20 years~ at interest r~les suited to their types of operation. The total cost of all the projects is estimated at the equivalent of $8.76 million. The IDA credit will cover the estimated import com~onent; the remaining costs will be met in part by the Administration ,ind in part by cattle ranchers and coconut planters. - 0 - •