•   INTERNATIONAL DEVELOPMENT ASSOCIATION

    1818 H STREET. N.W .. WASHINGTON   D. C. 20433   TELEPHONE:   EXECUTIVE   3-6360



     IDA Press Release No. 73/62                      Subject:      $7.5 million credit for
     July 2, 1973.                                                  cereal seeds project in
                                                                    Bangladesh.

          A credit of $7.5 million from the International Development Association (IDA),
     an affiliate of the World Banlc., will assist Ba.ngladesh in establishing a modern
     seeds industry, initially capable of producing about 12,000 tons of high-yielding
     rice and wheat seeds a year.
          The project is an important part of Bangladesh's efforts to increase agri-
     cultural production through the adoption of new agricultural technology and in-
     puts. The project, when completed in 1978, will help Bangladesh to increase its
     production of wheat and rice by 400,000 t.ons a year resulting in an annual foreign
     exchange savings of about $25.0 million.
          Agriculture is Bangladesh's most important economic sector, producing more
     than 55% of the nation's GDP and 80% of the employment. Rice cultivation pro-
     vides about 35% of the country's foodgra.in requirements. Wheat acreage~ still
     very small, has been growing rapidly and wheat· is likely to become a more signi-
     ficant part of foodgrain supply. Although the land is fertile and the farmers


•    industrious, an excessively high population density combined with traditional
     farming techniques result in food shortages and the necessity of using scare
     foreign exchange resources to import foodgrains.
          The Government of Bangladesh j~s evolving a development s tra t.egy which con-
     centrates on increasing foodgrai.n production through the accelerated spread of
     new high-yielding seeds, increasied application of agricultural inputs., parti-
     cularly chemical fertilizers, and e.."'CJ)ansion of irrigation primarily through
     tubewells and low-lift pumps.
          The project being assisted·by J])A includes the development of 17 farms
     of the Bangladesh Agricultural Development Corporation for the production of
     foundation and certified seeds; organization of a contract seed grower scheme
     covering about 5,000 acres in fiv-e areas; construction of six seec;l processing
     plants; provision of seed storage and marketing service:s; institution of a
     seed quality control service; further development of the Bangladesh Rice Re-
     search Institute; and provision c,f training programs and technical assistance.
          The total estimated cost of the project is $10.6 million. The IDA credit
     will finance all of the forei~n f~xchange costs ,a.atimated at $cio0 million and
     local currency expenditures amounting to $1.5 million.
          The IDA credit to the Gove,rnment of Bangladesh is for a tenn of 50 years,
     including a 10-year grace period. It is interest free, except for a service
     charge of 3/4 of 1% to cover Il)A's administrative costs. The Bangladesh Agri-
     cultural Development Corporation, an agency of the Ministry of Agriculture,
     will be responsible for the execution of the seed production, processing,
     storage and marketing components of the project. A Seed Certification Agency,
     to be established by the Government, will be responsible for seed quality con-



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     trol and the Bangladesh Rice Research Institute will be responsible for the
     implementation of the research component of the project.


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                                                        July 2, 1973


                                     TECHNICAL DATA

PROJECT:             Seed Production

COUNTRY:             Bangladesh

T0'1 AL COST:
   1
                     $10. 62 million

IDA FINANCING:      $7.5 million, 50 y~ars, including 10 years of grace,
      interest free, service charge of 3/4 of 11 to meet 1DA 9 s adm~nistra-
      tive costs.

OTHER FINANCING:     Government of Bangladesh

IMPLEMENTING ORGANIZATION:    Ministry of Agriculture; Bangladesh Agricultural
       Development Corporation; Bangladesh Rice Research Institute, Dacca,             •
       Bangladesh.

PROJECT  DESCllIPrION:  ·ro establish a mode.rn seeds industry in Bangladesh and
       to produce 12,000 't?ns of high-yielding rice and wheat seeds annually;
       development of 17 Government-owned and operated seed multiplication farms;
       eatablishaent of a private seed growers scheme involving about 5,000
       acres of land in five districts; installation of seed processing equip-
       ment, improvement of seed storage and marketing; establiabment· of a seed
       certification service; development of Bangladesh Rice Research Institute;
       and related training program and technical assistance.

PaOCUI.EHENT:    All contracts for machinery and equipment (with the exception of
       certain small item.a with a total value not exceeding $40,000) and all civil
       works contracts other than contracts·for land development will be·awarded
       by int~rnational competitive ·bidding. Domestic bids for machinery and
       equipment will receive a margin. of preference equal to 1.5-Z or the relevant
       cu·stoms d\~-ty, whichever is less.

CONSULTANTS:    Will be engaged to assist project implementation and to carry out
       a feasibility study for a possible second seeds project.

ESTIMATED CO~PLETION DATE:    1978


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