Washington, D.C., March 1, 2005- The World Bank today
approved a US$7 million
credit to improve rural access and increase agricultural output for rural
communities in the Kingdom of Bhutan. The Decentralized Rural Development
Project aims to reduce the time needed for rural people to reach roads and
increase food and cash crop production. Targeting selected communities, the
project will finance small rural roads and bridges, irrigation
infrastructure, agricultural extension, and sustainable management of
natural resources.
The absence of roads is a major contributing factor to poverty in this
landlocked Himalayan country, with only 40 percent of Bhutan's population
living within one hour's walk from a road. Daniel Sellen, World Bank Senior
Agricultural Economist said: "This project will increase access to education
and health services that are severely limited. In addition, efforts to
diversify into cash crops are not viable if markets are out of reach." By
supporting rural transport development, approximately 5,000 households will
have the walk time to a road reduced by half.
Despite the mountainous terrain and extensive forest cover, Bhutan has many
scattered areas of fertile soil and a good water supply. Agriculture is a
mainstay of the economy and contributes the majority of income, employment,
and food security for the majority of Bhutanese, particularly the poorest.
Cash crops, particularly fruit and horticulture, are widespread and offer
the potential to increase and diversify farm incomes, contributing not only
to food security but also to meeting needs such schooling. However,
increased levels of irrigation infrastructure and the strengthening of
agricultural extension
programs will ensure that farmers have knowledge of and access to new
technologies and inputs. Under this project, food crop production is
estimated to increase by 20 percent, and cash crops by 30 percent.
"In recent years, the Royal Government of Bhutan has taken big steps toward
the
goal of empowering communities with the resources and decision-making powers
so
that they can take charge of their own development," said Sellen. "Through
local elections and a nation-wide participatory planning exercise, it is
clear that most communities require access, food security, and greater
incomes from their farms. These demands have created high expectations for
both the Ministry of Agriculture and district governments, and we are
pleased to support them in meeting the challenge."
The project has three components:
· Rural Infrastructure: Responding to high demand for access to markets and
public services, approximately 89 km of new farm roads will be constructed
and
114 km of mule tracks will be upgraded to permit passage of power tillers.
Approximately 45 km of new irrigation channels and 231 km of rehabilitated
channels will also be financed.
· Renewable Natural Resources (RNR) Centers: Six RNR centers will be
financed
under the project. Through support to agricultural extension programs, an
estimated 1,200 farmer households will receive training, joint
experimentation,
and farmer-to-farmer field visits to learn how to increase production in a
sustainable manner and add value to farm produce.
· Institutional Strengthening: The project will finance capacity-building to
ensure timely submission of financial and physical reporting of project
performance and ensure a smooth transfer of funds to the local level for
project implementation. Particular emphasis will be given to environmental
screening and assessment procedures for rural infrastructure.
The Decentralized Rural Development Project supports the goals of the
government's Ninth Five-Year Plan. This represents the country's Poverty
Reduction Strategy, which has as a central goal the achievement of higher
rural
incomes and employment, improved food security, and sustainable natural
resource management. The US$7 million credit is from the International
Development Association, the World Bank's concessionary lending arm, and
carries a 0.75 service fee and is payable in 35 years, including a 10-year
grace period.
For more information about World Bank activities in Bhutan, please visit:
http://www.worldbank.org/bt