GoI & World Bank sign USD 210 million loan agreement for Maharashtra’s Agribusiness

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New Delhi : The Government of India, the Government of Maharashtra, and the World Bank on January 24, 2020, signed a loan agreement of USD 210 million to support small holder farmers participate in competitive agriculture value chains, facilitate agri-business investments, increase market access and productivity in focus commodities, and build resilience of crops to recurrent floods or droughts in Maharashtra.

The USD 210 million Maharashtra Agribusiness and Rural Transformation Project will help build capacity of the nodal departments and institutions; increase private sector investments in agricultural value chains; remove constraints for producers and entrepreneurs in accessing emerging domestic and export markets; build the capacity of the state to respond to commodity-price fluctuations by providing access to timely information on markets and production trends; and enhance adoption of climate resilient production techniques in the state, according to a PIB release.

“Foreseeing the future risks of climate change, the Government of India is implementing several programmes under its National Action Plan on Climate Change. In agriculture, it promotes the use of less water and adoption of climate-smart practices and technologies,” said Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance. “This project in Maharashtra is a significant step towards transforming the state’s rural economy through sustainable agriculture practices and empowerment of farmers by connecting them directly to the markets,” he added.

The loan agreement was signed by Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India and by Junaid Kamal Ahmad, Country Director (India), World Bank, on behalf of the World Bank. The project agreement was signed by Eknath Dawale, Secretary, Department of Agriculture, Government of Maharashtra, and by Junaid Kamal Ahmad, Country Director (India), World Bank, on behalf of the World Bank.

The project will be implemented in all 36 districts of Maharashtra. Over one million farming households will directly benefit from the project. At least 43 percent of farmers and farm-workers participating in project activities are expected to be women. Specific focus will be given to women-led enterprises and the participation of women in the decision-making processes of farmer producer organizations.

“The Government of Maharashtra aims to double agriculture exports from the state and transform the sector into a stable source of sustainable growth and economic development,” said Junaid Kamal Ahmad. “This project will serve as the nucleus to fulfil the state’s much larger vision of an agriculture-based rural transformation,” he said.

Such an agricultural transformation is already under way in Maharashtra with an upsurge in the production of high value crops such as fruits and vegetables, pulses, and maize and soybean for animal feed. The state has emerged as one of the country’s largest producer and exporter of fruits, vegetables, pulses, cotton, and soybean. Whereas the area under cultivation for cereals such as rice and wheat has been declining since 2000.

The USD 210 million loan from the International Bank for Reconstruction and Development (IBRD) has a 6-year grace period and a maturity period of 13.5 years.