Kyrgyz Republic to Improve Dairy Farms Productivity, with World Bank Group Support

November 29, 2016

WASHINGTON, November 29, 2016 - A new project designed to improve the productivity of dairy farms in the country will reach approximately 24,000 households. The World Bank’s Board of Executive Directors today approved US$ 5 million in financing for the Kyrgyz Republic Integrated Dairy Productivity Improvement Project. It is aimed at enhancing dairy animal productivity and milk quality on farms in the country’s Issyk-Kul region. US$ 2.75 million of the financing is a concessional credit, and US$ 2.25 million is a grant.

Agriculture is an important sector for the Kyrgyz Republic’s economy, representing about 15 percent of the country’s GDP. The accession of the Kyrgyz Republic to the Eurasian Economic Union (EAEU) in 2015 has presented new opportunities as well as challenges for the country’s livestock production sector. Kyrgyz dairy products have a reputation for being organic and tasty because of the production model based on natural pastures. However, most local milk producers and processors are finding it difficult to capitalize on new market opportunities due to their inability to meet the animal health, food safety and quality standards of the EAEU.

“The Integrated Dairy Productivity Improvement Project will increase production and make the export of Kyrgyz dairy products more sustainable, increase incomes of dairy farmers, and create new jobs along the dairy supply chain”, said Jean-Michel Happi, World Bank Country Manager for the Kyrgyz Republic. “In the future, once total output of milk is increased and its quality is upgraded, exporting to other neighboring countries, such as China, Afghanistan, Pakistan, and beyond, should become possible.

To help address the industry’s constraints, the project will work to improve public and private services in the sector, enhance on-farm productivity, and promote farm-level investments. Specifically, the project will support cattle identification and registration in Issyk-Kul region, initiate establishment of a so-called “zone free of animal diseases,” and provide better artificial insemination services to improve the breed stock of dairy cows. The project will also introduce a concept of “model dairy villages” – to share good dairy farming practices, and facilitate access to finance for small farmers for equipment purchases.

“The project will benefit 12,000 household farms during its first phase of implementation, and another 12,000 households are expected to be reached as indirect beneficiaries. The starting point is linking farmers to processors through a milk collection agent and those who are interested in adopting new technologies,” said Sandra Broka, World Bank Senior Agriculture Economist and Task Team Leader for the Project.

The World Bank’s overall mission in the Kyrgyz Republic is to reduce poverty and promote economic growth and shared prosperity. Forty-five percent of the World Bank’s assistance to the Kyrgyz Republic is in the form of grants. The other 55 percent is credits with no interest and a 0.75 percent service charge. Credits are repayable in 38 years, including a 6-year grace period, while grants require no repayment. The Bank’s financial assistance to the Kyrgyz Republic since 1992 amounts to over US$ 1.3 billion in the form of grants and highly concessional credits.

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