WASHINGTON (Oct. 14)
The World Bank announced today that it has approved a $20 million loan in support of an agricultural credit program in Israel. The loan is intended to increase the production and export of high-value crops such as flowers, sub-tropical fruits and off-season vegetables. The lending program, to be assisted by the loan, will be carried out by three banks engaged in agricultural credit: The Israel Bank of Agriculture. Ltd. (IBA); the Yaad Agricultural Development Bank, Ltd. and Nir, Ltd. The loan will be guaranteed by the State of Israel. It will be for a term of seventeen years, including a four year grace period, with interest at 7 1/4 percent. IBA will relend part of the proceeds to its own customers and the remainder to Yaad and Nir for relenting to their customers. Loans to ultimate borrowers will be for terms of ten to fifteen years, including grace periods ranging from two to seven years with interest at nine percent.
The loans will be mainly to cooperative farm enterprises, including kibbutzim which are based on communal ownership, production and consumption, and to moshavim, each consisting of 50 to 150 individual farms. The export crops to be grown include roses, carnations and gladioli; subtropical fruit, avocadoes, mangoes, tangerines and grapefruit and such off-season vegetables as lettuce, carrots and artichokes. At full development in the ninth year, the annual value of the exports is expected to reach $17 million. The total cost of the program is estimated at $50 million. The $20 million bank loan will cover 40 percent of the total corresponding to the foreign exchange component of the credit program. The World Bank said in its announcement that farming in Israel has undergone great changes in the past 20 years during which new crops have been introduced and technological advances have resulted in increased yields.