Contacts: In Washington: Rachel McColgan-Arnold (202) 458 5299 rmccolgan@worldbank.org In Dar es Salaam: Nicodemus Odhiambo Marcus (255-22) 2163246 nmarcus@worldbank.org Washington, June 11, 2009 - The World Bank’s Board of Executive Directors today approved an International Development Association (IDA) credit* of US$220 million to support implementation of Tanzania’s Accelerated Food Security Program (AFSP). The program responds to an urgent request from the Government of Tanzania to support its efforts to achieve greater food security by increasing food production and providing social protection for vulnerable groups and the rural poor. The request was spurred by rising domestic prices for food and farm inputs, which have persisted despite the recent moderation in global prices. The urgency is now heightened by the likely impact of the continued global economic crisis on the Tanzanian economy. The AFSP is a package of three operations. The first operation, a new emergency recovery loan for an Accelerated Food Security Project for US$160 million seeks to contribute to higher food production and productivity in targeted areas by improving farmers’ access to critical agricultural inputs. The second operation is an additional financing credit for the Tanzania Second Social Action Fund of US$ 30 million that seeks to improve access of the poor and vulnerable to enhanced socioeconomic services and income-generating opportunities. The third operation, an additional financing credit for the Agriculture Sector Development Program of US$ 30 million, seeks to promote sustainable agricultural productivity growth through scaling up of small-scale irrigation facilities and integrated soil management practices. Although the national food balance has been near or just over 100 percent in recent years, the prospect of serious weather shocks persists. The failure of the 2008/09 short rains in northern Tanzania mirrors the poor harvests and rising prices that followed similar conditions in 2004 and 2006, vividly underscoring the political risks inherent in a largely rain-fed agricultural economy. The failure of the short rains—which normally account for about 20 percent of national food production—occurred when the pressure on prices was already high because of rising regional demand. These factors will continue to affect Tanzanian prices, calling for a structural response to increase food supply. The government gives very high priority to stimulating a rapid supply response to deal with high food prices. The short-term strategy to achieve this goal is to intensify food production by giving farmers better access to inputs under the National Agricultural Input Voucher Scheme (NAIVS).The approved additional financing will complement the scaling up of the NAIVS under the Accelerated Food Security Project (AFSP). “Agriculture continues to be the foundation of the Tanzanian economy and of central importance for the welfare of the vast majority of the population,” said John Murray McIntire, World Bank Country Director for Tanzania, Uganda, and Burundi. In the medium term, this program is expected to raise agricultural productivity by fostering the adoption of agricultural technologies, strengthening input supply chains, and rehabilitating small-scale irrigation infrastructure. With these additional interventions, more food is expected to be available at lower prices in Tanzania. AFSP is expected to have a positive social impact in the next three years as the scaled-up voucher program reaches an expected 75 percent of poor smallholder households in high-potential food production areas, especially the Southern and Northern Highlands. Potential beneficiaries will be selected through participatory approaches at the village level. Simple, transparent criteria for eligibility will be published in the local media and broadcast on the radio. To reduce the potential risk of elite capture, the criteria are gender-sensitive and exclude better-off farmers who cultivate more than one hectare. “The major economic benefits of the AFSP result from increased productivity and yields of maize and rice in the target areas through better access to fertilizer and modern varieties,” said Madhur Gautam, the World Bank Task Team Leader for the AFSP. Eligible farmers will be supported for three years to encourage them to adopt modern inputs for sustained increases in productivity and incomes. The support for strengthening input supply chains will help widen the network of agro-dealers, bring them closer to the farmers and make them more efficient. The social impact of the program extends beyond the immediate group of farmers who will be able to use improved seeds and fertilizers, because the majority of rural households are net purchasers of food, and the availability of more food at lower prices will benefit them regardless of whether they use these inputs. The program will also potentially help address recurrent food shortages and chronic food insecurity in East Africa by helping Tanzania to increase the production and become a reliable supplier to the region. Tanzania has the potential in areas with higher and more reliable rainfall to significantly increase production of food and meet the growing demand from neighboring countries, both for humanitarian assistance to the least food secure areas and the rapidly rising commercial market for food. To the extent that this operation will increase national production in the short run, it is expected to immediately reduce food price inflation, which has been the major force raising overall inflation in 2008 and early 2009. A detailed description of the credit is contained in the AFSP Program Document, which is publicly available at the web link below, or by sending an email to nmarcus@worldbank.org, or by requesting a hard copy at the World Bank office in Dar es Salaam. ______________________________________________________________________________ *The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.5 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period. For more information on the World Bank’s work in sub-Saharan Africa visit: www.worldbank.org/afr For more information on the World Bank’s work in Tanzania visit: www.worldbank.org/tanzania For more information about the project visit: Accelerated Food Security Project |
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