India: World Bank Project Seeks to Improve Agricultural Growth in Andhra Pradesh

WASHINGTON, April 19, 2007 ─ The World Bank today approved an US$189 million credit/loan to the Indian state of Andhra Pradesh designed to improve agricultural productivity and help community-based institutions manage tank systems effectively.

The Andhra Pradesh Community-Based Tank Management Project aims to improve the physical and operational performance of about 3000 tank systems with a command area of about 250,000 hectares, secure the safety of the tank structures, and improve on-farm water management and efficiency. It will also enable groundwater users in those tank systems that have groundwater stress to improve the management of their groundwater resources, thereby enhancing agricultural productivity and livelihoods.

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Despite robust economic growth, the recent performance of the agriculture sector in Andhra Pradesh has been a cause of concern. In the past six years, agriculture grew at 2.5 percent per year with almost all of this growth coming from the livestock and fisheries sub-sectors. The crop sub-sector, which accounts for about 60 percent of state’s domestic product from agriculture, stagnated. Overall, agriculture accounts for about one-fourth of the state domestic product but employs over 60 percent of the work force.

“Tank irrigation has historically played an important role in Andhra Pradesh, the state with the largest area irrigated by tanks in India,” said Fayez Omar, World Bank Senior Manager for the India Program. “However, the area irrigated by tanks has declined significantly over the last decade and a half. This project will help enhance tank systems, which is a vital instrument to improve rural livelihoods and enhance local capacities to cope with drought.”

The expected benefits from the project include: increased irrigated area; improved water availability for tail-end farmers; and increased agricultural productivity and production from tank systems. The project will also enhance tank-based livelihoods by increasing production, productivity and profitability of agriculture, horticulture, fisheries, livestock and other significant productive activities. This would be achieved through improvements in production technologies and management practices, better market linkages, more efficient and effective delivery of key support services, and increase of community-level productive capacities as well as infrastructure.

“The project will enable community-based institutions assume greater responsibility for tank system management,” said Deepak Ahluwalia World Bank Senior Economist and project team leader. “In each tank, a support organization will work with villagers to familiarize them with the project objectives, expected outcomes, and the processes of implementation.”

The US$94.5 million loan is from the International Bank for Reconstruction and Development (IBRD) and has 20 years to maturity including 5-years of grace period.

The US$94.5 million credit is provided by the International Development Association (IDA), the World Bank’s concessionary lending arm and has 35 years to maturity and a 10-year grace period.

Source: World Bank