World Bank Group Supports Agriculture Commercialization in Tajikistan to Increase Famer Incomes and Reduce Poverty

June 10, 2014

WASHINGTON, June 10, 2014 – The World Bank Board of Executive Directors today approved a US$22 million grant for the Tajikistan Agriculture Commercialization Project, which builds on the past reforms in agriculture and land, and further expands opportunities for farmers and enterprises to increase productivity and access to domestic and export markets. Agriculture accounts for 23 percent of GDP and 48 percent of employment in Tajikistan, so it plays a major role in economic growth and poverty reduction.

The new project is jointly supported by the World Bank and the International Finance Corporation (IFC) and is funded by a grant from the International Development Association (IDA) in the amount of US$22 million. A parallel direct investment by IFC of US$1.9 million brings the project value to US$23.9 million.  The joint efforts of IDA and IFC are expected to leverage private investment estimated at US$72 million.

“Through a set of complementary measures, including access to loans, grants and capacity building, the project will help small-scale farmers become successful private businesses. Also, more medium scale agribusinesses and producer associations will be able to market their products locally and internationally,” said Marsha Olive, World Bank Country Manager in Tajikistan. “The project puts in practice new World Bank Group Country Partnership Strategy for Tajikistan for 2015-2018, which seeks to strengthen the role of the private sector in the economy, thus increasing private investment and generating more jobs.”

The goal of the project is to increase the commercialization of farm and agribusiness products by improving the performance of selected value chains and strengthening productive partnerships through increased access to finance and training. It will also build the government’s capacity for policy and regulatory reforms and support market research and analysis, and modernize the curricula of educational institutions for commercial agribusiness.    

“Through this project, IFC will focus on increasing farmers’ access to finance through supporting financial sector to introduce new products and services unique to agri-financing. We will also work with supply chain aggregators to help them provide better services to farmers and foster private investments in agri-processing,” said Christopher Miller, IFC Tajikistan Country Officer.  In Tajikistan, most private businesses are small farmers and helping them secure access to markets and sustainable income is central to reducing extreme poverty and boosting shared prosperity.”

The active World Bank portfolio in Tajikistan consists of 12 projects with net commitments of US$199 million. The largest share of the portfolio is in agriculture and rural development (40 percent), followed by energy (18 percent), human development – education, health, and social protection (17 percent), public sector governance and economic policy (12 percent), water (8 percent), and private sector (5 percent).

Since 1997, IFC invested US$109 million to support 39 private sector projects in the financial, hydropower, retail, tourism, and manufacturing sectors. IFC’s program includes annual advisory services of approximately US$3 million in: improving the investment climate, promoting corporate governance, reforming tax administration, supporting the development of credit bureaus, supporting the microfinance transformation processes and improving the business environment for agribusiness.  As of March 1, 2014, IFC’s committed investment portfolio in Tajikistan stands at US$31.6 million.

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