Washington, D.C., January 15, 2014 - The World Bank’s Board of Executive Directors today approved new funding to improve irrigated agricultural production systems in selected Central coastal and Northern mountains provinces in Vietnam, which will help another 243,000 farming families with better irrigation and drainage service and farming techniques by 2019.
The funding of US$180 million will go to the Irrigated Agriculture Improvement Project, which is expected to benefit farmers and rural households, irrigation and drainage entities, and water users organizations/associations in the Central Coast Region (Thanh Hoa, Ha Tinh, Quang Tri, and Quang Nam provinces) and the Northern Mountainous Region (Ha Giang, Phu Tho, and Hoa Binh provinces).
The project will include the development of climate-smart agriculture to increase farm productivity and incomes, and make agriculture more resilient to climate change, while also mitigating Green House Gas (GHG) emission. The project will support farmers in adopting climate-smart farming techniques, including systems of rice intensification and crop diversification, use of bio-fertilizer, integrated pest management, and crop residues to reduce emissions. It is expected that the project, when completed, will serve another 83,400 ha of agricultural land with better and reliable irrigation services.
This project is expected to help the people in the 7 target provinces increase the water productivity and land-use efficiency; improve access to quality water services; enhance agricultural quality, productivity, and diversification; increase farmers’ incomes; and reduce their vulnerability to adverse climatic events.
The funding comes from the International Development Association, the World Bank’s lending arm for low-income countries, with blend terms (25 years final maturity including a 5-year grace period). The total project cost over a six-year implementation period is estimated at US$210 million, of which the World Bank will provide US$180 million. The Government of Vietnam will cost share the remaining of US$30 million
To date, irrigation and drainage investments have had a strong impact on agricultural intensification, diversification, and productivity. Around 4.5 million ha of cultivated land, or 46 percent, is irrigated and about 2.5 million ha or 26 percent has drainage. In 2012, milled rice exports exceeded 8 million tons, making Vietnam the world’s second largest rice exporter. However, over half of the irrigation and drainage systems are deteriorating or operating below their potential capacities. Rates of water productivity are below international standards and this poses a threat given increasing impacts from climate change and increased competition for