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Project Signing: Government of India and World Bank Sign US$ 75 Million Agreement to Improve Incomes and Nutrition Status in Backward Areas of Andhra Pradesh

November 17, 2015

The project will target small and marginal farmers in the 150 most backward mandals of Andhra Pradesh covering 5,000 villages

NEW DELHI, November 16, 2015 – The Government of India, the Government of Andhra Pradesh and the World Bank today signed a US$ 75 million credit for the Andhra Pradesh Rural Inclusive Growth Project to enhance agricultural incomes of small and marginal farmers and ensure increased access to services related to health, nutrition, sanitation and social entitlements.  

The project will focus on increasing economic opportunities for small and marginal farmers, especially from Scheduled Caste (SC) and Scheduled Tribe (ST) households in the 150 most backward mandals (cluster of villages across gram panchayats) of the state. It will invest in developing a network of social enterprises for food, nutrition, sanitation and other social enterprises which operate at community and district level. It will also support the Government of Andhra Pradesh in its efforts at creating an enabling policy framework, and enhancing market access for farmers with real time analytics across sectors. Several Memorandum of Understandings (MoUs) with leading private sector organizations are being planned to enable farmers to better access markets. Investments will also be made in improving access to services in the areas of health, nutrition, and water and sanitation and increasing coverage and effectiveness of India’s social safety net programs.

“The project seeks to incorporate insights from national and international poverty reduction programs that have emphasized the value of linking such initiatives with small and marginal producers, using innovative approaches to human development, and improving coverage and delivery of social entitlement programs for the poor,” said Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Government of India. 

The credit agreement for the project was signed by Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; Sunitha Kolaventy, Finance Secretary, on behalf of the Government of Andhra Pradesh; and Onno Ruhl, World Bank Country Director in India, on behalf of the World Bank.  Solomon Arokiaraj, the Chief Executive Officer of Society for Elimination of Rural Poverty, the implementing agency was also present.

“Over the years women-led community institutions in Andhra Pradesh have made significant impacts in helping communities gain higher access to credit, education and assets, and in greater empowerment of women. However, despite these achievements, inclusion remains a challenge,” said Onno Ruhl, World Bank Country Director in India. “This new generation rural transformation program will strive to fulfill the aspirations of small and marginal farmers, especially among the SC and ST communities, to ensure shared prosperity and increase in the pace of poverty reduction.”

The Andhra Pradesh Rural Inclusive Growth Project, signed today, will help link small and marginal farmers to urban markets and make them competitive across the value chain so that they are able to take advantage of the potential benefits from allied sectors like horticulture, livestock, and fisheries. Investments will be made in increasing the nutritional content of products such as milk, vegetables and poultry.

The project will specifically support some 250,000 small and marginal farmers to raise their incomes by at least 50 percent by enhancing productivity and improving their access to markets. This component will work with those producers who have built up productive assets, have previously participated in productivity improvement, and have the potential to exploit growth opportunities for high value commodities such as red gram, milk, poultry, small ruminants, fisheries, turmeric, cashew, and coffee. It also aims to improve the coverage and service delivery of social protection entitlements for 500,000 poorest households.

“Most of the small and marginal farmers have limited access to extension services, good quality inputs like improved seeds, market services, and institutional credit. The mission-based approach, with a focus on inclusive growth and poverty alleviation, would provide the policy framework and an enabling eco system for the initiatives proposed in the project,” said Parmesh Shah, Lead Rural Development Specialist and the Task Team Leader for the project.

The project will use community led approaches to improve access to water and sanitation services in about 1,000 targeted villages to cover all households and rural institutions like schools, anganwadi centers, and health centers. These efforts will also be underpinned by significant investments in ICT and mobile-based service delivery systems.

The credit is from the International Development Association (IDA) – the World Bank’s concessionary lending arm – the Credit is on IDA terms with a maturity of 25 years, including a 5 year grace period.  

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