| Project Detail |
The project will provide a loan to the Kyrgyz Republic to channel through qualified participating financial institutions who will on-lend to horticulture-related value chain businesses for investments in refrigerated vehicles, cold storage facilities, primary processing equipment (grading and/or sorting platforms, washing facilities, packaging equipment) and value addition processing equipment together with associated fixed assets such as warehouses and buildings. The project will address the critical constraint of providing long-term financial resources for agri-business in the Kyrgyz banking system. In parallel, it will provide support to value chain participants to consolidate the delivery of quality horticultural produce from participating farmer groups and key members of identified value chains. As the horticultural subsector generates high value produce, the project will contribute significantly to creating sustainable enterprises, increasing employment, and improving household incomes.
Project Name Climate-Resilient Agricultural Value Chain Development Project
Project Number 51276-001
Country / Economy Kyrgyz Republic
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Under the National Development Strategy of Kyrgyz Republic for the period of 2018-2040, agriculture is expected to (i) provide the population with high-quality food; (ii) supply environment-friendly organic products to world and regional markets; (iii) overcome the countrys limited competitive status on foreign markets; and (iv) implement an international standard quality control system for production, storage and processing of agricultural products. Its agrarian policy is to (i) promote agro-clusters to (a) supply raw materials for processing including milk, meat, walnuts, medicinal herbs, fish, cotton, wool and leather; and (b) improve farmer-access to modern resource-saving technologies; (ii) study issues associated with agro-logistic centers and create conditions to enable their establishment; and (iii) expand irrigation networks and introduce new technologies to enhance agricultural productivity.
Within the horticultural subsector, the realization of these objectives is compromised by the large number of small-scale producers. Consequences include (i) few opportunities for more efficient mechanized production, (ii) tradeable quantities are often small and difficult and costly to assemble and invariably are of mixed quality and variety, (iii) low farm-gate prices provide little incentive for farmers to introduce higher productivity systems, (iv) market signals are masked by extended value chains, many participants being opportunist traders motivated by short-term profit, and (v) farmers are unwilling (and unable) to invest in modern production systems. The widespread fragmentation over large geographic area of these farms render aggregation of perishable goods a high-risk activity. Other constraints include (i) the declining availability of water resources under climate change and competition for arable land from expanding urban settlements, (ii) limited access to suitable development finance for all participants along the value chain, (iii) a reliance on imported planting material (genetically superior being free of virus and disease), and (iv) lingering low productivity traditional production systems.
Climate change impacts are likely to trigger an increased frequency and intensity of natural hazards and exacerbate existing vulnerabilities across all socioeconomic sectors in the Kyrgyz Republic. The risk of disasters such as landslides, mudflows, and floods will increase the most as a result of rapid glacial melting due to temperature rise and increase in winter and spring precipitation. The increase in the number of hot days and heat waves will, on the other hand, increase the risk of droughts in the country with the water scarcity risk being considered as medium. Under the median range of simulations for representative concentration pathways (RCP) 4.5 and RCP 8.5, future climate projections demonstrate (i) a warming trend across the country with an annual average temperature rise of 2.0C by mid-century in comparison with a reference period of 1986-2005, increasing the risks of heatwaves, glacial melting and drought in the country; and (ii) a 1.6-2.6 millimeters increase in monthly precipitation by 2040-2059, mainly in winter and spring, increasing the risks of floods, landslides, mudslides and mudflows, especially in the mountainous regions. A projected decrease in precipitation during the summer season, on the other hand, may lead to droughts.
Impact
Poverty reduced through improved rural productivity and income-earning activities created |
