$40m ADB loan for high value crops | The Daily Star
12:00 AM, October 02, 2010 / LAST MODIFIED: 12:00 AM, October 02, 2010

$40m ADB loan for high value crops

The Asian Development Bank will soon ink a deal with the government for providing $40 million in soft loan to boost production of high value crops (HVCs).
The amount will help produce HVCs like vegetables, fruits and spices on 50,000 hectares of land in a bid to raise the poor farmers' income.
The loan will be disbursed under the Second Crop Diversification Project focusing on increased agricultural output and profitability, said an official at ADB Resident Mission here.
The ADB proposed credit will have a 32-year term, including a grace period of eight years, carrying interest rate of 1.0 percent per annum during the grace period and 1.5 percent thereafter.
The ADB loan of $40 million will finance 87 percent of the project cost of $45.81 million. Of the remaining $5.81 million, the government will provide $5.42 million to finance 12 percent of the project cost and the farmer communities to provide $0.39 million to finance one percent.
Department of Agricultural Extension and Bangladesh Bank are the executing agencies for the Second Crop Diversification Project, which is expected to be completed by June 2016.
The main focus of the project will be given on the proven market demand, high profitability and commercialisation of HVCs including fruits, vegetables, pulses, spices, cut flowers, potted plants and foliage production.
The direct project beneficiaries will include about 240,000 HVC-growing households, of which 175,000 will receive credit. More than 37,500 person-years of annual employment will be generated mostly among landless rural workers, including women.
The project aims to ultimately increase income by Tk 15,400 per household (40% increase) as the income of farmers will be increased by Tk 73,000 per hectare of HVC.
According to the project estimates, poor households growing HVCs will benefit from increased labour employment of Tk 3,230 per household and Tk 12,170 from increased crop income based on an average 0.167 hectares in HVC production per household.
Poor farmers will benefit from increased incomes due to returns from crop production and increased value addition through marketing interventions. The landless poor will benefit as agricultural labourers due to the creation of additional employment opportunities in HVCs and ancillary industries.
The project will target farmers in 27 districts of southwest and north-western parts of the country, including some of the poorest, least developed and most climate-vulnerable areas.
At present, over 75 percent of the country's population is involved in agriculture with rice being the prime crop.
However, the supply of fruits and other nutritious foods is not adequate that forces the country to rely on pricey imports. Given the situation, the government has put in place an agriculture development strategy to diversify crops, ensuring national food self-sufficiency and increased incomes for farmers.
With Bangladesh highly susceptible to extreme weather events due to its low-lying position along the Bay of Bengal, the new project will help test climate-resilient varieties of crops in drought and flood-prone areas.
The new project will build on the gains of an earlier ADB-assisted Northwest Crop Diversification Project and provide farmers in the targeted districts with the latest high-value crop production techniques, including 'green' technologies for organic manure.

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