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The World Bank said Wednesday it had approved a combined
US$92.8-million loan package to support a project to empower Indonesian
farmers and help the government revitalize the country's agricultural
sector.
The total project will actually costs $123 million, with the government
making up the rest. Set to start in May, 2007, the project will target
400,000 farm households -- an estimated two million rural people in 71
districts -- to help them improve their productivity and incomes over
the next five years.
"Improving agricultural productivity remains, perhaps, the best single
measure to reduce poverty," World Bank country director Andrew Steer
said in a statement.
Citing a poverty assessment released by the Bank last year, titled
Making the New Indonesia Work for the Poor, Steer said that almost
two-thirds of the nation's poor were farmers.
Improving rural infrastructure, the quality of seeds, extension and ICT
services are some of the report's recommendations for improving
farmers' productivity and lifting them out of poverty.
The World Bank categorizes people living in poverty as those who earn
less than $2 a day. Currently, nearly half of Indonesia's 220 million
fall within that criterion.
The statement added that the project, to be executed by the Agriculture
Ministry, would develop a market-oriented agricultural services system
based on partnerships among farmers' groups, public agencies and
private-sector enterprises.
"Empowerment of farmers through improved information networks, enhanced
linkages and extension will result in increased diversification, and
higher farmer incomes and agricultural competitiveness," the Bank said.
The bulk of the funds -- some $41 million -- would be used to
strengthen agricultural extension services through capacity-building
for farmer organizations and support for a farmer-managed grant program.
"The project will empower farmers' organizations so that they can
improve their capacity to adopt new technologies in response to market
demand," explained Shobha Shetty, the Bank's economist for rural
development, natural resources and the environment in Indonesia.
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