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IDB loan will boost sustainable agricultural productivity in Nicaragua

$40 million in financing will help raise family income in rural areas and will improve environmentally-friendly production practices

Incomes of rural Nicaraguan families are expected to increase by 30 percent within five years as the result of a program to boost sustainable agricultural productivity that is being financed with the help of $40 million from the Inter-American Development Bank (IDB).

The IDB’s long-term, low-interest financing will support the government's plans to promote research, innovation, and technology transfer to ensure the production of safe and healthy food through the use of techniques that can foster adaptation to climate change and increase environmental protection.

"Agriculture is critical to the Nicaraguan economy,” said Nancy Jesurun-Clements, the IDB’s project co-team leader together with Duval Llaguno. “It represents nearly 70 percent of the country’s exports, employs 30 percent of the workforce, and is the main source of income for rural families. However, low levels of technology adoption, health problems, and inadequate monitoring of natural resources reduce the sector’s productive and commercial potential,” she added.

The program will provide innovative solutions to these problems that should result in a 20 percent increase in productive sector sustainability in five years, not only in economic benefits, but also in environmental and social improvements.

In addition, the program will help to raise the yield per hectare by 20 percent and boost the net income of families engaged in cultivation of crops and livestock by 30 percent. The gains will be made largely as the result of technology transfer, training, and by strengthening links with the value chain with an emphasis on agro-ecological production practices.

The new technology should also produce a sharp drop in the percentage of animal and plant products that are rejected for sanitary reasons by the United States and the European Union. Another result will be a significant drop in the incidence of livestock diseases such as brucellosis and tuberculosis.

The IDB financing consists of a loan from the Bank’s ordinary capital for $20 million with a 30-year term, a grace period of 5.5 years, and interest ratefrom the Single Currency Facility; and a loan from the Fund for Special Operations for $20 million for a term of 40 years, with a grace period of 40 years, and an annual interest rate of 0.25 percent. The local contribution will total US$2 million.