Project Signing: World Bank provides US$197 million support to boost incomes of poor farmers in Uttar Pradesh

Contacts: 
In Delhi:
Sudip Mozumder
(91 11) 2461-7241
smozumder@worldbank.org

In Washington:
Erik Nora
(202) 458 4735
enora@worldbank.org

NEW DELHI, July 20, 2009 ─ A Credit Agreement of US$ 197 million equivalent, for  the Uttar Pradesh Sodic Lands Reclamation III Project, was signed today by the representatives from the Government of India, the Government of Uttar Pradesh and the World Bank. The signatories to the Agreement were Mr. Anup K. Pujari, Joint Secretary, on behalf of the Government of India, Mr. Anoop Mishra, Principal Secretary and Industrial Infrastructure Development Commissioner, Government of Uttar Pradesh, Ms. Aradhana Shukla, Managing Director, Uttar Pradesh Bhumi Sudhar Nigam, and Mr. Rachid Benmessaoud, Acting Country Director, World Bank, India. 

The Uttar Pradesh Sodic Lands Reclamation III Project aims to reclaim 130,000 ha of predominantly barren and low productivity sodic lands, covering about 25 districts. This will help improve food security for thousands of poor farming households through increased productivity and cropping intensity. The project builds on the achievements of the first two sodic lands reclamation projects in the state which have already helped reclaim more than 250 ,000 hectares of unproductive land. 

“These projects have been very successful in raising the incomes of poor people in Uttar Pradesh,” said Rachid Benmessaoud, Acting Country Director, World Bank, India. “More than 425,000 poor families have benefitted so far, 93 percent of which are small and marginal farmers. Also 24 percent of the sodic land households have crossed the poverty line threshold income level. The new project is expected to directly benefit over 325,000 farm families.”

Nearly 80 percent of Uttar Pradesh’s 166 million inhabitants live in rural areas, and about two-thirds of them depend on agriculture for their livelihoods.  Poor households not only own very small pieces of land, but their land is often degraded and productivity is typically low. Ten percent of total cultivable area of the state comprises low productivity sodic lands, with yields less than one-third of the state average.
 
Beyond reclaiming sodic lands for sustainable agricultural use, the project also aims to boost agricultural productivity through introducing new technology, better agronomic practices, and more effective provision of key support services. In addition, it will improve the drainage networks in the project areas to remove excess rain and irrigation water from reclaimed land and adjoining areas.
 
“Local communities will play an active role in planning and implementing the project” said Animesh Shrivastava, World Bank Senior Agriculture Economist and project task team leader.  “This ensures that the project benefits reach the marginalized and most vulnerable people in the state. In fact, around 90 percent of the project beneficiaries are vulnerable groups, including women, scheduled castes, small farmers, and landless.”
 
A key component of the project is to mobilize these vulnerable groups, especially women, into Self Help Groups (SHGs). The project will support the formation of some 5,500 SHGs in around 2600 project villages. The previous projects have already supported around 15,000 SHGs, helping them pool savings and connecting them to the formal banking network.
 
The credit from the International Development Association (IDA), the World Bank’s concessionary lending arm, carries a 0.75 percent service fee, a 10-year grace period, and a maturity of 35 years.