Announcement of Sweden and IDA Providing Ten Million Dollars for Food Grain Storage Facilities in India on August 20, 1971

0';·' E 1.01•.1,/;'l 11 . • INTERNATIONAL DEVELOPMENT ASSOCIATION ( Fn~ 1 l!!!t!J ) ·1:, +'- 1818 H STREET. N.W .. NASHINGTOl'J D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 71/37 Subject: Sweden and IDA Providing August 20, 1971 $10 million for foodgrain storage facilities in India Sweden and the Inten1ational Development Association (IDA) are concurrently providi.ng $10 million on concessionary terms to assist in the construction of modem foodgrain storage and handling facilities in India's wheat belt -- Punjab, Haryana, Rajasthan and Uttar Pradesh. The project, when completed in three years time, will help to reduce waste and spoilage of foodgrains and relieve strain on transportation. It includes provision for the training of silo personnel and for an all- • India study of foodgrain storage and distribution . The IDA credit of $5.0 million is the first operation for the Bank Group in the field of grain storage in India. Association's usual terms: The credit is on the it is repayable over 50 years, free of interest; a service charge of 3/4 of 1% a year is charged to meet IDAvs administrative expenses. The SwediEh credit, amounting to the equivalent of $5.0 mill.Lon, is for a term of 50 years with a 3/4 of. 1% service charge. The terms of the Swedish credit give support to the same objectives as are sought by IDA, namely, the transfer of development capital to the less developed countries on terms that will not impose too heavy a strain on their balance of pay- ments. The rising trend in India's food production, essentially through the use of much more productive types of seed in combination wl th increased inputs such as fertilizer, pesticides and water, and financial incentives, has underlined the need for increased and better facilities for foodgrain storage. The problem has become particularly urgent in Punjab, Haryana, Rajas than and Uttar Pradesh which together account for c!bout 75% of India's wheat production. /more IDA P.R. No. 71/37 -- India--· grain storage - 2 - Total foodgrain production in India is at present around 105 million tons, of which more than 38 million tons are marketed. Wheat production • - in the cotmtry amounted to 22 million tons. The project area accounted for some 15 million tons of which about 3 million tons were procured publicly. A large part of this was procured by the Food Corporation of India (FCI), an agency of the Central Government, for distribution thr..011gh fair price shops. Procurement of this magnitude requires storage capacity of about 1.6 million tons, compared to only 1.2 million tons of available public storage capacity in the area. FCI has hired additional capacity from the private sector, but this is also in short supply, making it necessary to use buildings such as schools for storage. iJi th public procurement of wheat in the area expected to grow in order to replace imports as local production increases, the need for additional public storage is acute. The project being assisted by Sweden and IDA will meet part of the need for additional public storage by providing FCI with 300,000 tons of storage capacity. The project consists of the construction of 10 silos, each with a capacity of 20,000 tons and 20 warehouses, each with a capacity of 10,000 tons in the four project states. slip-form construction method. The silos will be built by the modern The project also provides for the training • of Indian personnel to handle silos and a study of India's foodgrain storage and distribution systems. The project, when completed in 1974, will help to reduce losses result- ing from inadequate and substandard storage of foodgrains. India's savings on this accotmt is estimated at $3 million a year. It will lessen the strain on rail transport during the immediate post-harvest period and provide tangible assurance to farmers about the ability of FCI to purchase part of their crop and, therefore, about the stability of foodgrain prices. The project will be completed at a total estimated cost of $15 .O million. The Swedish and IDA credits will cover about 62% of the cost. The balance is being provided by the Government of India. The project will be carried out by F'CI. -o - •