NEW DELHI, Oct 30 - In a significant development, the Government of India and the World Bank on Monday signed a USD 200 million loan agreement for the Assam Agri-business and Rural Transformation Project.
The project will support the Government of Assam to facilitate agri-business investments, increase agriculture productivity and market access, and enable small farm holders produce crops that are resilient to recurrent floods or droughts in the State, official sources said.
The agreement for the project was signed by Joint Secretary, Department of Economic Affairs, Ministry of Finance, Sameer Kumar Khare, Principal Secretary, Finance, Government of Assam, Ravi Kota, and Operations Manager, World Bank India, Hisham Abdo.
After the agreement, Khare said Assam is simplifying several regulatory procedures related to doing business, agricultural marketing, and fisheries, among others. He said the project will help the State increase agricultural productivity by strengthening the farming systems, raise private sector investments to promote agri-enterprises, which will create better job opportunities for the youth in the State.
The project will be implemented in over 16 districts of Assam. Over 500,000 farming households will directly benefit from the project. At least 30 per cent women are expected to participate in project activities. Specific focus will be given to women-led enterprises and their participation in the decision-making process of farmer producer organisations.
Speaking on the occasion, Abdo said the Government of Assam aims to double farm incomes and transform the State agricultural sector into a stable source of growth and economic development. This project will serve as the nucleus to fulfil the State�s much larger vision of an agriculture-based rural transformation, he said.
The focus on geographic clustering of the production base for certain commodities will help agro-enterprises take advantage of existing and future market opportunities that they may not necessarily achieve alone. The cluster approach will allow for combining efforts, making use of synergies, and pooling resources to increase the competitive advantage of these products, while at the same time share the risks involved in introducing improved products or entering previously untapped markets. Successful clusters will also continuously innovate and adapt �best practices� across agricultural value chains.
Senior agricultural specialist and the World Bank team leader for the project Manivannan Pathy said the value addition and market-led production systems supported through the project are expected to play a vital role in enhancing competitiveness in the sector. He said this will be done by facilitating policy reforms, fostering private-public dialogue and catalysing a wider private sector development in the agri-business ecosystem of Assam.
Another key component of the project will be to promote market-led production that can deal with the vagaries of climate change. Assam�s agriculture sector is highly vulnerable to climate variability and the State experiences recurrent floods and droughts. Currently, more than 50 per cent of the paddy growing areas are prone to flooding, submergence and drought. A market-led production system will take advantage of the rapidly changing market, introduce crops that are resilient to environmental change, increase production and manage risks for farmers.
The USD 200 million loan from the International Bank for Reconstruction and Development (IBRD) has a seven-year grace period, and a maturity of 16.5 years, said sources.