GEORGETOWN, Guyana, March 2, 2010 – The Government of Guyana, supported by the World Bank, will benefit from an assessment aiming to evaluate the risks faced by the agriculture sector, particularly those affecting the rice supply chain, and the feasibility of agriculture risk transfer and insurance solutions for the sector as a whole.
Agriculture is the most important productive sector of Guyana’s economy. Agriculture accounts for approximately a third of Guyana’s Gross Domestic Product (GDP) and 30 percent of the country’s employment. However, in the past five years, the sector has been affected by volatility in international commodity prices and extreme weather events, which have contributed to a challenging environment for agricultural sector development.
“To guarantee sustainable growth in the agricultural sector it is important to define and implement an overarching risk management strategy, which includes the development of instruments such as insurance, to reduce its vulnerability to frequent and extreme weather events and other sources of risks,” said Guyana’s Agriculture Minister Robert Persaud.
As the country’s preferential access to the European market is phased out, the Government of Guyana is seeking to diversify the agriculture economy and its production systems, with emphasis in fruits and vegetables, livestock, fisheries and aquaculture and other income generating activities.
“The agriculture sector in Guyana is not only vulnerable to increasingly unpredictable and extreme weather events but also to a wide range of production constrains that compromise the competitive development of the sector,” said Diego Arias, World Bank Senior Agriculture Economist. “Ensuring a competitive Guyanese agriculture sector, and the design and development of an effective risk transfer solution, such as insurance, are crucial for the country’s development,” he added.
The assessment of the rice supply chain will evaluate and prioritize risks, identify and rank areas of future policy interventions and investments needed for improving competitiveness.
The pre-feasibility assessment on agriculture risk transfer instruments, such as insurance, will be based on the analysis of the status of key areas for agriculture risk management, mainly technical, institutional, financial, and agro-meteorological infrastructure. This assessment will focus on the following priority value chains: rice, fruits and vegetables, livestock, and aquaculture.