The World Bank's Board of Executive Directors approved a US$100
million loan to improve the living standards of dairy farmers in
parts of China's Heilongjiang Province and to experiment with
solutions to reduce greenhouse gas emissions from dairy farms.
Although Heilongjiang Province in China's inland rural northeast
accounted for about 20 percent of the country's milk production in
2002, dairy farms there suffer from low productivity and high risks
of price fluctuations due to inconsistent milk quality. Seventy to
80 percent of milk in Heilongjiang is produced by smallholder
households with an average herd size of 2 to 5 cows.
These smallholders – and other potential dairy households --
have little or no access to formal financing for investment in
dairy production. The six-year Heilongjiang Dairy Project would
address that problem by helping increase the scale, efficiency and
quality o f milk production in Heilongjiang through household and
dairy park-based production programs. This effort would also help
improve the quality of the dairy herd by improving its genetic
base.
"This project aims to help rural farmers increase their incomes
and gain more income security," said Mohamed Noureddine Ben Ali,
Lead Operations Officer for the World Bank. "This is particularly
important for poor households who have no cows and will now have
the chance to dramatically improve their families' standards of
living."
The project would also encourage further development of farmer
associations to help protect farmer interests in the sector which
has been dominated by milk processors. It would also help improve
agricultural extension services to help farmers improve production
and quality. This effort supports the Heilongjiang government's
plan for improving the dairy industry and the province's rural
economy.
Finally, a US$5.5 million grant from the Italian Trust Fund for
Environment in China would help test innovative technologies to
reduce greenhouse gas emissions and increase carbon sequestration
from dairy farms.
The US$100 million loan from the International Bank for
Reconstruction and Development is repayable in 20 years with a
five-year grace period.
(China.org.cn January 25, 2006)