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Small-scale Bolivian farmers to see revenue rise with support from IDB

A $62 million loan will help Bolivian farmers increase their revenue and reduce their food insecurity

The Inter-American Development Bank (IDB) approved a loan so that small-scale farmers can adopt technologies that will boost their farm output, the value of their production and their efficiency in Bolivia.

Direct support will finance the distribution of non-refundable vouchers to cover partially the costs of adopting different farm technologies including mechanized irrigation, dehydrators, mills, huskers, electrified fences and greenhouses, and overall tecnical assistance.

The program aims to benefit 45,500 small-scale, low-income producers from indigenous communities. The operation hopes to promote the participation of farm women by facilitating contact with associations of women who work the land and providing gender-specific technical assistance, among other kinds of aid.

This is the second initiative in Bolivia that seeks to use IDB support to boost productivity and competitiveness in the sector by furnishing farm technologies.

Evaluation of the impact of the first such program showed that it increased income of the targeted households by 36 percent. It also eased the risk of food insecurity by at least 32 percent. Agriculture is a key part of the Bolivian economy.

It accounts for nearly 13 percent of GDP and provides jobs for approximately 30 percent of the workforce, and 62 percent in rural areas.

Still, despite the expansion and high potential of the farm sector, Bolivia has one of the lowest levels of productivity in the region. According to the Food and Agriculture Organization of the United Nations, farm output of grain and tubers is about 43 percent of the average in the rest of South America.

The total cost of the program is $62 million and will be financed by the IDB with the blended loan approach. A total of $49.6 million will come from Ordinary Capital resources, with a 30-year repayment period, a grace period of six years and an interest rate pegged to the LIBOR. The remaining $12.4 million will come from the Fund for Special Operations, with grace and repayment periods of 40 years and an interest rate of 0.25 percent.

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The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.