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World Bank Approves $US25 Million Credit to Improve Agricultural Production and Improve Rural Livelihoods in Papua New Guinea

April 30, 2010

Washington DC - April 30, 2010 --- The World Bank’s Board of Directors has approved a $US25 million IDA Credit to support the Papua New Guinea Government’s efforts to improve rural incomes and livelihoods in key coffee and cocoa producing areas of the country.

The credit will fund the Productive Partnerships in Agriculture Project (PPAP) which aims to increase the contribution of coffee and cocoa to the livelihoods of rural communities and improve the performance and sustainability of the coffee and cocoa industries. The project will ensure local roads are upgraded to improve market access for communities in the project areas.

With more than eighty percent of people in Papua New Guinea living in rural areas, supporting agricultural production and helping improve the lives of rural households is an important priority shared by the Government of Papua New Guinea and the World Bank,” said Ferid Belhaj, Country Director for the Papua New Guinea.

This project aims to make a significant impact on the livelihoods of smallholder coffee and cocoa producers. The project reflects the excellent level of dialogue reached between the PNG government and the World Bank, and opens the way for stronger cooperation and understanding.”

Agriculture accounts for approximately a third of gross domestic product in Papua New Guinea. The sector is dominated by smallholder farming systems such as coffee and cocoa, with over thirty percent (coffee) and twenty percent (cocoa) of the total national labor force in the country involved in the production, processing and sale of these crops.

The PPAP aims to undertake a number of measures to support smallholder coffee and cocoa farmers, including: strengthening links between smallholder farmers and agricultural businesses; increasing access to farming technologies and services; improving coordination of agricultural institutions; providing critical infrastructure for market access; and enabling the introduction of efficient and sustainable farming techniques which will lead to increased smallholder income.

The project will focus on areas dependent on coffee and cocoa productions such as East New Britain Province, the Autonomous Region of Bougainville, Eastern Highlands Province, Western Highlands Province, Jiwaka Province and Simbu Province, with possible expansion to other areas subject to review.

The six-year PPAP project will be implemented by the Department of Agriculture and Livestock; the Coffee Industry Corporation; and the Cocoa Board and will be officially launched later in the year.

In addition to the $US25 million IDA credit, the PPAP will be co-financed by the International Fund for Agricultural Development (US$ 14 million), the Government of Papua New Guinea (US$ 1.5 million) and the private sector ($US 5.8 million).

The project is a product of extensive consultations with community representatives, local level government, grower associations and cooperatives, youth and women’s groups, extension workers, the private sector, and other key stake-holders.

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