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World Bank loan aids agriculture
(China Daily)
Updated: 2005-04-30 08:38

The World Bank has approved a loan of US$100 million to help China improve the efficiency and speed of its agriculture industry's technological development, the bank announced on Friday.

The Agricultural Technology Transfer Project is aimed at developing and testing innovative models of agricultural technology to generate additional farm income.

Analysts said the loan comes at a time when the Chinese central government is attaching increasing importance to agricultural development and upping farmers' income. Premier Wen Jiabao listed the finding of solutions to agricultural issues a "top priority of all our work" in his report to the National People's Congress in March.

"This project is typical of a new generation of innovative projects that the Chinese Government is asking the World Bank to finance," said Iain Shuker, World Bank task manager for the project. "In this project, the government is financing public goods in partnership with commercial entities, thus making more efficient use of public financing for new technology development and transfers."

He said China's agricultural sector has entered a phase of urgent and challenging structural transformation. Four major developments indicate such a transformation, including the slow growth in farmers' income, mounting pressure on natural resources, changing demand and consumer preferences for food products, and the pressure applied by China's accession to the World Trade Organization (WTO).

The World Bank believes a critical bottleneck for the needed transformation of the agricultural sector is the slow transfer and adoption rate of modern science, technology and knowledge-intensive agriculture.

The current farming environment in China is characterized by a highly fragmented production structure, which makes it difficult to expand the use of new technologies, and for farmers to know of and respond effectively to market signals, the World Bank said.

The World Bank project aims to help China tackle these challenges with novel approaches to bring about environments for agricultural technology development and transfers, as well as create partnerships between technology generating institutions, private sector industries, and small farmers for the purpose of increasing rural incomes, according to a World Bank press release.

The State Office for Comprehensive Agricultural Development is the domestic agency responsible for the project.

The loan for the project will mature over 20 years, with a five year grace period.

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