World Bank approved a USD 150-million Loan for Small Agricultural Producers to mitigate Droughts and Flooding
The Project will directly benefit 20,000 rural producers increasing their resilience to extreme weather events
The Board of Executive Directors of the International Bank for Reconstruction and Development (IBRD), member of the World Bank Group, approved a new USD 150-million loan aimed at the “Integrated Risk Management in the Rural Agroindustrial System Project”. The credit will have a 32-year maturity period, a 7.5-year grace period and a USD 37.5-million contribution by the National Government.
After the approval of the loan, the Minister of Finance Luis Caputo said: “This financing will facilitate risk mitigation for 20,000 small agricultural producers, increasing resilience in the face of climate events like draughts and floods”. Mr. Minister also highlighted: “This project is yet another demonstration of the confidence multilateral credit organizations have in Argentina”.
This way, the Project will develop and improve IT to strengthen agricultural-climate in formation systems and to improve commodities prices in the market. In this sense, the project will allow the interconnection of information systems of the Ministry of Agroindustry with other public and private organizations for producers to make decisions based on more accurate information. Likewise, the Project will include the improvement of access to risk information, adoption of climate-smart technologies and risk management practices, as well as a reform of the agricultural emergency system of the Ministry.
“As a long-term partner for Argentina, the World Bank reaffirms its commitment to the equitable development of the country with this new project focused on the most vulnerable rural producers. This initiative will contribute to a more resilient food system and to reducing the climate footprint of the agricultural sector,” said Jesko Hentschel, World Bank Director for Argentina, Paraguay and Uruguay.
The benefits of the Project will directly reach 20,000 small producers, 20% will be women. In addition, the indirect benefits will reach public institutions, enterprises and workers related between them along the value chain. The Project will also help the country with its commitment to reduce greenhouse gas emissions: it estimates a reduction of approximately 360,000 tons of CO2.
To date, public policies and programs for agricultural-emergencies management have focused on the recovery instead of the prevention and reduction of impact. This project will support the Government in its goal towards an integrated system of risk management. Improving risk management among small agricultural producers, the Project will contribute to the reduction of poverty, a better and more efficient agricultural production, as well as fiscal savings resulting from the reduction of costs of emergency assistance and recovery.