KOCHI: The Kerala government is negotiating with the World Bank for a $200-million loan for revitalising its agriculture sector, focusing mostly on farmer-producing companies and value-added products.
Senior officials are confident of clinching the loan, which will come to about Rs1,400-1,500 crore, and said it would take about six months to get the final approval. R K Singh, former finance secretary, Kerala, who was involved in the World Bank loan discussions told TNIE that the loan would require a no-objection certificate (NoC)/comments of relevant central government departments. “Appraisal and finalisation by the World Bank will probably take around six months more,” he said.
Singh said there would be no major conditions attached except performance-based, which include the creation of FPOs (farmer-producing organisations), and it will be disbursed over a period of three years. As per the broad contours of the loan agreement being worked out, the loan amount will be reimbursed based on the performance and money spent.
In the last budget, Finance Minister K N Balagopal announced that the state would use the information technology network to market agriculture products. For this, a pilot project shall be started this year in two districts in the state. Farmer producer companies, cooperative societies and agriculture markets would be included in this scheme, he had said. The finance minister also set aside Rs 10 crore for this. Regarding value-added products, the budget announced plans for such products using easily perishable crops like tapioca, other tubers, cashew, mango, jackfruit, different types of bananas, other fruits, spices etc.
The state budget also announced setting up five agro parks with the participation of farmers and the infra-funding agency KIIFB. The government also planned to start a factory for the production of value-added products using milk to strengthen the dairy sector. The government is likely to use the World Bank loan for these projects, it is learnt.
In June 2021, the World Bank approved a $125-million programme to support Kerala’s preparedness against natural disasters, climate change impacts, disease outbreaks and pandemics. That loan was under the ‘Resilient Kerala Program’.