The World Bank Agriculture Modernization Project (P158372)
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35. This sub-component will assist in this vital transformation by piloting establishment of intensive orchard farms
(with tentative budget of US$65 million)
36
. The aim of the sub-component is to establish demonstration/extension pilots
for intensive orchards in selected districts specialized in horticulture production, which will help, inter alia, with the
collective organization of an interested group of farmers, build up their technical and managerial capacities over time,
and assist with provision of finance as well as external agronomic and business inputs needed for the orchard farms to
succeed. Adoption of climate resilient technologies will be key to success of these investments. The pilots will involve
commercially-driven farmers and executed as turn-key services provided by competitively-recruited private companies.
36. Component 2: Supporting Investments in High-Value Horticulture Value Chains (US$200.0 million). The
objectives of this component are to support investments in crop diversification and high-value horticulture value chains,
facilitate farmers’ participation in investment opportunities created by economic liberalization, and enable productive
partnerships/clusters between farm groups and agribusinesses. These objectives will be achieved through a mix of
technical support, provided under sub-component 1.4, and two credit windows that would offer long-term financing
tailored to the needs of farmers and agribusinesses:
i.
Credit window for farm cooperatives and cooperation in horticulture sector (US$50.0 million): This window will
provide loans to horticulture farm cooperatives and participants of the cooperations in horticulture sector for
investments in infrastructure, machinery and equipment, and other assets to promote their collective actions.
Typical investments would be in intensive orchards and greenhouses, energy efficient irrigation systems; solar
water heating systems and water lifting using solar photovoltaic stations; adoption of other climate-smart
water-saving and mechanization technologies; and processing and storage facilities, including to reduce
exposure to extreme weather conditions. Farm cooperatives will be supported by sub-component 1.4 that seeks
to strengthen their business capacity and help them prepare bankable climate-informed business plans to
receive loans.
ii.
Credit window for productive partnerships (US$150.0 million): This window will provide loans to agribusinesses
- in trading, processing or final food industries - entering into formal contract agreements with farmers and
farm cooperatives by establishing productive partnerships, including the provision of advisory services to
farmers for amongst others better understanding of climate risks and available adaptation measures (e.g. use
of CSA technologies and practices) and mitigation opportunities (e.g. energy efficient irrigation systems; solar
water heating systems and water lifting using solar photovoltaic stations, support the conversion of some land
from production of annual cotton and wheat crops to perennial fruits and vineyards), investments in climate
resilient infrastructure, and value chain financing, e.g. working capital financing between businesses within a
supply chain. Farmers participating in productive partnerships could also borrow. Value chain financing can help
address the input credit constraint faced by small producers, who have contracts with processors or exporters.