core sector communique

World Bank Approves US$250 Million for Increasing Agricultural Production in West Bengal, India — 166,000 Farm Families Will Benefit More than 4000 minor irrigation schemes will be constructed in 18 out of 19 districts in the state WASHINGTON, October 4, 2011 — The World Bank today approved a $250 million credit and loan to the West Bengal Accelerated Development of Minor Irrigation Project (ADMIP) for increasing agricultural production of small and marginal farmers. About 139,000 hectares (ha) of irrigated area are expected to be developed under the Project, benefitting an estimated 166,000 farm families. Agriculture serves as the backbone of West Bengal’s rural economy. It accounts for about 20 percent of the state’s Gross Domestic Product (GDP) and provides employment to more than 55 percent of workers in the state. Agricultural growth over the past decade was on average about 3 percent per annum. Maintaining this growth rate requires infrastructure support, crop diversification and market access. There is, however, very little scope for increasing the current cultivable area with more than 93 percent of landholders belonging to small and marginal farmer categories with land areas of less than one or two ha respectively. “Average agricultural productivity levels are still low in West Bengal in comparison to that of advanced agricultural states in the country. Given the importance of irrigated agriculture for increasing agricultural growth and providing rural employment round the year, the government attaches high priority to expanding irrigation facilities in the state and optimizing the utilization of available water resources. The Project approved today will focus on investments targeted at strengthening community-based institutions for the management of minor irrigation schemes; development of surface and ground water based irrigation systems; and agricultural development along with improved support services to farmers to enhance agriculture productivity and income in 4,660 minor irrigation schemes to be developed under the Project,” said Mr. Venu Rajamony, Joint Secretary in the Department of Economic Affairs, Ministry of Finance, Government of India. “Irrigation will continue to be critical to increasing agricultural production, incomes, and rural livelihood. A recent World Bank study, ‘The Impact of Irrigation on Agriculture Productivity: Evidence from India,’ on the impact of irrigation on India’s agricultural productivity shows that irrigation has a strong and significant impact on land productivity, cropping intensities, and land prices,” said Mr. Roberto Zagha, World Bank Country Director for India. “The study makes the case for continuing support for investments in improving both access and quality of irrigation.” The absence of assured irrigation supplies inhibits the use of improved seeds, fertilizers, and other complementary inputs, which in turn affects production levels. In West Bengal, the average yield of paddy – which accounts for more than half the annual cultivated area in the state — is about 70 percent of the India average and less than half of what is obtained in more advanced agricultural states. An important reason behind the low productivity is that large cultivated areas are still rainfed and exposed to weather fluctuations. “The World Bank is well placed to assist West Bengal with an integrated approach that strengthens community-level institutions, develops small-scale irrigation infrastructure, and provides support services for the improvement of agriculture based livelihoods, said Mr. Joop Stoutjesdijk, Lead Irrigation Engineer and Task Team Leader for the West Bengal Accelerated Development of Minor Irrigation Project. The Water Users Associations (WUA) will be the focal point for both organization and implementation of all schemes. They will play an active role in the planning and supervision of the schemes, and the subsequent management, operation and maintenance of the systems. In West Bengal, the state’s commitment to the WUA approach is already very strong. As per a government order, the WUA has the right to charge irrigation service fees that can be kept with the WUA. For schemes constructed under the Project, the Government of West Bengal will transfer the responsibility of levying and collecting fees to the WUAs. The WUAs will use the fees for Management, Operation and Maintenance of these minor irrigation schemes. “There is sufficient basis to start the implementation of the Project with the full and active participation of WUAs,” Mr. Stoutjesdijk added. The Project will also support training of the WUAs and involve other line agencies (agriculture, horticulture, and fisheries) to implement targeted programs to help farmers get the maximum benefits of the water that will be made available. The credit from the International Development Association (IDA), the World Bank’s concessionary lending arm, has a 25 year maturity, including 5 years grace period. The loan from the International Bank for Reconstruction and Development (IBRD) has a repayment period of 18 years, including 5 years grace period.