The World Bank will support the Government of Assam to facilitate agri-business investments, increase agriculture productivity and market access, and enable small farm holders produce crops that are resilient to recurrent floods or droughts in the Indian state of Assam.
The $200 million Assam Agribusiness and Rural Transformation Project, approved by the World Bank Board of Executive Directors on August 31st, will help the state increase private sector investments in agricultural value chains, build climate resilient production clusters which will not only give agri-enterprises better access to market, raw material and infrastructure, but also strengthen farming systems to cope with variations in climate.
The project will be implemented over 16 districts of Assam. Over 500,000 farming households will directly benefit from the project. At least 30 percent women are expected to participate in project activities. Specific focus will be given to women-led enterprises and their participation in the decision-making process of farmer producer organizations.
The state of Assam is simplifying several regulatory procedures related to doing business, agricultural marketing, and fisheries amongst others. The project will build on these initiatives to attract private sector investments in agricultural value chains and increase their capacity to create better jobs.
The focus on geographic clustering of the production base for certain commodities will help agri-enterprises take advantage of existing and future market opportunities that they may not necessarily achieve alone. The cluster approach will allow for combining efforts, making use of synergies, and pooling resources to increase the competitive advantage of these products, while at the same time share the risks involved in introducing improved products or entering previously untapped markets. Successful clusters will also continuously innovate and adapt ‘best practices’ across agricultural value chains.
“The value addition and market led production systems supported through the project are expected to play a vital role in enhancing the competitiveness of the agriculture sector. This will be done by facilitating policy reforms, fostering private-public dialogue and catalyzing a wider private sector development in the agribusiness ecosystem of Assam,” said Manivannan Pathy, Senior Agricultural Specialist and World Bank’s Team Leader for the project.
Another key component of the project will be to promote market-led production that can deal with the vagaries of climate change. Assam’s agriculture sector is highly vulnerable to climate variability and the state experiences recurrent floods and droughts. Currently, more than 50 percent of the paddy growing areas are prone to flooding, submergence and drought. A market-led production system will take advantage of the rapidly changing market, introduce crops that are resilient to climate change, increase production and manage risks for farmers.
The $200 million loan from the International Bank for Reconstruction and Development (IBRD), has a 7-year grace period, and a maturity of 16.5 years.