The $5m funding – a $2.75m concessional credit and a $2.25m grant – is aimed at enhancing dairy animal productivity and milk quality on farms in the country’s Issyk-Kul region through the Kyrgyz Republic Integrated Dairy Productivity Improvement Project.
Agriculture is an important sector for the Kyrgyz Republic’s economy, representing about 15% of the country’s GDP.
The World Bank says that the entry of the Kyrgyz Republic to the Eurasian Economic Union (EAEU) in 2015 has presented opportunities and challenges for the country’s livestock production sector.
It adds that most local milk producers and processors have difficulty capitalizing on new market opportunities due to their inability to meet the animal health, food safety and quality standards of the EAEU.
Potential for exports
Jean-Michel Happi, World Bank country manager for the Kyrgyz Republic said that the project will increase production and make the export of Kyrgyz dairy products more sustainable, increase incomes of dairy farmers, and create new jobs in the dairy supply chain.
“Once total output of milk is increased and its quality is upgraded, exporting to other neighboring countries, such as China, Afghanistan, Pakistan, and beyond, should become possible,” Happi said.
Model villages
The funding aims to help improve public and private services in the sector, enhance on-farm productivity, and promote farm-level investments.
The project will support cattle identification and registration in Issyk-Kul, establish a ‘zone free of animal diseases,’ and provide better artificial insemination services to improve the breed stock of dairy cows.
The project will also introduce ‘model dairy villages’ – to share good dairy farming practices, and facilitate access to finance for small farmers for equipment purchases.
Sandra Broka, World Bank senior agriculture economist and task team leader for the project, said that it will benefit 12,000 household farms during its first phase of implementation, and another 12,000 households are expected to be reached as indirect beneficiaries.
She said that the starting point is linking farmers to processors through a milk collection agent and those who are interested in adopting new technologies.
Reducing poverty
The World Bank’s mission in the Kyrgyz Republic is to reduce poverty and promote economic growth and shared prosperity.
Credits are repayable in 38 years, including a six-year grace period, while grants require no repayment. The bank’s financial assistance to the Kyrgyz Republic since 1992 amounts to more than $ 1.3bn in the form of grants and concessional credits.