Ministry of Agriculture of Guyana

NOTES OF BUDGET DEBATE REMARKS 2008

- BY HON. ROBERT M. PERSAUD, MBA, MP MINISTER OF AGRICULTURE

Introduction

2008’s budget for the agriculture sector can be seen as a maintenance budget which aims to maintain and build on the steady growth achieved in the agriculture sector over the past year.

2007 has been a turbulent year for the world economy. After several years of robust growth the world economy is now facing some serious challenges threatening the sustainability of global economic growth in the coming years. World market prices for many food crops have risen significantly posing serious threats to global food security.

The most recent World Development Report of the Work Bank entitled ‘Agriculture for Development’ warns that the international goal of halving extreme poverty and hunger by 2015 will not be reached unless neglect and underinvestment in the agriculture and rural sectors over the past 20 years is reversed. This is a challenge for the agriculture sector globally. It also states, however, that for the poorest people, GDP growth originating in agriculture is about four times more effective in reducing poverty as GDP growth originating outside the sector.

This comes at a time when the global trading arrangements also shifted, mostly impacting negatively on economies such as ours. The EU Economic Partnership Agreements can have negative impact on our economies, particularly in Guyana’s case, sugar. This compounds the existing reality where EU price cuts for sugar resulting has started to bite as seen in a loss of about US$5M in earnings for 2007. And we continuously have to compete with high subsidises for rice in some markets.

The agriculture sector in Guyana faces some serious challenges ahead. However, as with all challenges, they also represent opportunities, and for Guyana, these challenges are an opportunity to diversify, grow and build on last year’s solid achievements.

Our achievements in the agriculture sector have been in keeping with the objectives of the People’s Progressive Party/Civic Manifesto and the National Competitiveness Strategy. Both the Manifesto and the Strategy focus on the importance of the non-traditional agriculture sector. Through the approval of the ADP and READ projects last year, support for this sector will be further enhanced resulting in the increase of exports of non-traditional products which have already increased by 42% this year.

The Manifesto and the Strategy also see the continued restructuring of our traditional sectors as important. The 2007 agriculture budget focused on increasing competitiveness of rice and sugar, which was achieved.

Overall, the performance of the agriculture sector has been in keeping with our mandate as I will now expand on.

Rice

Exports highest in last ten years, production declined by 2.9% due to heavy rain (298,198 mt)

Rice exports at end of December 2007 – 269,436 mt ( US$ 75,251,464.99) 31.7 % higher by volume and 37.9 % by value than 2006.

Reduction of excise tax on fuel from 50% to 10% to off-set rising acquisition costs.

VAT exempted from fertilizers, pesticides and machinery used in rice cultivation

The EU Rice Competitiveness Programme signed a grant contract of G$500 million with GRDB for seed production, diversification and value-added production.

The Agriculture Support Services Project established a Rice Seed Facility in Region 6 and improved the Laboratory at the Burma Rice Research Station for the sum of US$1.150 million

Greater protection for our farmers through the amendment to the Rice Factories Act.

The restructuring of the GRDB has commenced

Once abandon rice lands are being brought under cultivation

Sugar

266,482 tonnes of sugar produced – less than projected 285,000 tonnes due to poor weather and lower than planned labour turnout, reflecting an annual growth of 2.7%

Preparation of lands to facilitate mechanical harvesting

Infrastructure to support and promote private cane farming

Activities intensified on the Skeldon modernisation project and 95% of the SSMP factory construction has been completed.

10 MW diesel (HFO) power plant completed, in operation on 17 December

New markets entered for direct consumption retail sugars in Australia, New Zealand and UK

Packaged sugar and bagged Demerara Gold sales increased from 4,730 to 6,000 tonnes

Demerara White single serve sachets introduced to complement the Demerara Gold sachets

GuySuCo met all its 2006/2007 EU bulk sugar commitments and benefited from both permanent and temporary shortfalls from St. Kitts and other ACP countries

Fisheries

Fisheries Advisory Committee re-constituted and re-launched

Launching of Arapaima Management Plan

Re-certification to export Fishery Products to the United States

Provision of boats and engines as part of the Anti-Piracy Programme

Establishment of a G$5 million to start a revolving fund for assistance to victims of piracy.

Finalization of the Fisheries Management Plan

Implementation of Certificate in Fisheries at Guyana School of Agriculture

Aquaculture

Exports of the first commercial quantities of aquaculture products, namely tilapia, were shipped to market in the US in 2007

Commencement of construction of Hatchery for Tilapia fingerling production at Mon Repos

Crops

An enhanced Extension Unit was planned in 2007’s budget to enhance service delivery to farmers. The Unit has been established and has trained a number of extension staff. Extension Agents have been appointed and are currently serving in the Regions. IT staff have also been trained and IT services are available in Regions 3, 5, 6 and 10, soon to be available in the remaining Regions.

Non-traditional Crops

Total volume of non-traditional produce exported for 2007 was 7,394 tonnes –

G$ 1.87 billion (US$ 9.2 million), 42% more than corresponding 2006 period

Marketing Information Centre established servicing over 300 clients.

New GMC’s Central Packaging Facility was refurbished costing G$11 million

1,164 tonnes of produce was processed at the Packaging facility, 32% more than 2006.

State of the art Packaging facility is currently being constructed at Parika whilst facilities are planned for Charity and other locations such as Region if there is the demand

National Agricultural Research Institute

Shaded cultivation in combination with organoponics was introduced

Properties of the soils of Regions 2&3 were characterised and digital soil maps produced

A seedling house was developed for year round vegetable seedling production.

Over 500 farmers were trained on crop and livestock production.

Over 200 farmers were trained using the Mobile Agro-processing Facility on drying technology

Agricultural Diversification

Launching of Ministerial Advisory Group on Agricultural Diversification

Provision of technical support to the honey industry

NARI identified Butternut squash for export and production packages were developed.

Approval a US $6-million Rural Enterprise and Agricultural Development Project (READ) by the International Fund for Agriculture Development (IFAD).

Approval of US $ 20.9 Million loan by the Inter American Development Bank (IDB) to support Guyana’s Agricultural Export Diversification Programme. The Agricultural Diversification Program (ADP) aims to increase Guyana’s exports of non traditional agricultural crops.

Livestock

Importation of new breeding stock for the cattle and swine industries

Animal and Disease Prevention (Sale of Chicks) Regulation approved.

NARI increased its duck and sheep breeding activities

Production of NARI’s breeding animals doubled as did ducks and chickens hatched for farmers

National Dairy Development Programme

Birth of first crop of Brahman calves, increasing genetic capability of the industry through AI

Increased milk production by 700,000 gallons to 6,968,000 gallons in 2007

Guyana maintained status with the OIE of being free from FMD without vaccination

Highest calf birth in 5 years as a result of NDDP’s AI programme

Drainage and Irrigation

National Drainage and Irrigation Authority

75 miles of drains and channels rehabilitated and maintained (Regions 1, 2, 3, 4, 5, 6 & 10)

Revetment works at Cuffy outfall channel, East Demerara Water conservancy (Region 4) and Bellamy sluice (Region 5).

Construction and rehabilitation of culverts, kokers and structures in Regions 3, 4 & 6

Construction and rehabilitation of sluices in Regions 3 & 4

Purchase and installation of 2 mobile pumps in Region 4; 6 long reach hydraulic excavators, boat and engine and air boat, 2 pontoons, 2 punts, 2 – 4x4 vehicles.

Supply and installation of a new Communication and Response System

Outfall channels excavated in Regions 4 and 6

3 miles embankment and empoldering works undertaken in Regions 2,3,4 & 5

EU Rice Competitiveness Project

The project will result in improved D&I for 16,000 acres directly and 16,000 acres indirectly

Four long boom excavators were procured and deployed

Both Westbury and Golden Fleece sluices in final stages of completion.

4 pumps and engines for Dawa procured from the Netherlands.

Mahaica Mahaicony Abary (MMA) Agricultural Development Authority

Abary/Berbice Area: Rehabilitation/Reconstruction of Primary and Secondary D&I Infrastructure

Mahaicony/Abary Area: Commenced D&I works to benefit 18,000 acres of agricultural lands south of MARDS.

Forestry

A decline of 11.1 % in raw output from the forest sector there has been an increase in value added activities which reflect enhanced efficiency

In 2007, emphasis was focused on increasing the level of efficiency and added value activities to boost the employment, foreign exchange capacity and range of products produced.

Export earningsof US$ 61.5 million compared to US$ 59.5 million in 2006 (3.25% increase)

GFC accessed funding to support community forestry in hinterland communities.

The International Tropical Timber Organisation financed a US$95,040 project, to test 15 targeted lesser used wood species and training in utilisation and promotion of these species

Legal Verification System developed to assure buyers on legality and sustainability of Guyana’s forest products.

Enhanced monitoring and managing of forestry activities and improvements in the GFC operations

Passage of the amended GFC Act

Hydrometeorological Service

Rainfall monitoring network expanded -35 additional manual rain gauges installed

A new Radar site was identified and Civil Works recommenced and progressing according to plan

Pesticides and Toxic Chemicals Board

The Pesticides and Toxic Chemicals Laboratory was opened on 8 th February 2008

Guyana acceded to the Rotterdam Convention

Increased educational work on safe use of pesticides

New areas for the Ministry:

Climate Change

The National Climate Unit was established on 1 st April 2007

Guyana participated in the 13 th Meeting of the Conference of the Parties to the United Nations Convention on Climate Change in Bali, Indonesia.

Key Climate Change Projects initiated including the US $400,000 Guyana Second National Communication to the UNFCCC.

Advancing President’s Jagdeo Initiative on climate change

Agro-Energy/Bio Fuel

High-Level Hemisphere Bio-Fuel/Agro-Energy Seminar

Presidential Working Group established to develop a national agro-energy strategy

Draft Agro-energy policy completed

Evaluation of Jatropha for biodiesel production ongoing.

11 proposals for investment in bio-fuels are under consideration by Go-Invest

Projects Implemented by the Ministry

EU Rice Support Programme

Financial Facility of G$1.625 billion, administered by GBTI, provides credit for working capital and investment support to farmers, millers, exporters and input suppliers.

By Dec. 2007, 111 loans had been disbursed valued at G$816 million.

128 loan applications totalling G&1.535 billion (94.5%) have been approved

RPA benefited from a loan to procure fertilizer for rice production.

Other activities

Working with other institutions (IAST) the project prepared a commercial business proposal for value added and/ or innovative product utilizing the biomass of the rice plant and/ or grain.

Poor Rural Communities Support Services Project (PRCSSP)

PRCSSP, a community based agricultural and rural development project seeking to alleviate poverty by increasing rural incomes in Regions 2 & 3, finished at the end of 2007.

Major achievements include:

Rehabilitation of D&I System: Rehabilitation of D&I systems in Regions 2&3, formation 3 Water Users Associations

Technical Support Services: Construction of Sample Processing Centre (MoA), rehabilitation of 2 Plant Nurseries. Supply of equipment and rehabilitation of the Fisheries Station (Anna Regina).

Credit Services: On Lending to Project Beneficiaries in Regions 2 & 3, through IPED

Community Development: Construction and supply of equipment to multi purpose buildings, Day care Centres, youth centre and rehabilitation of cattle pastures.

AGRICULTURE SECTOR PROJECTIONS FOR 2008

As I mentioned earlier, this year’s agriculture budget can be seen as a maintenance budget, maintaining the gains we have made in the sector over the past few years. However, it also seeks to go further and be a transformational budget.

Changes in the world economy, rising food prices, the effects of the EPA on our industries all require a need for Guyana to transform its agriculture sector, increase productivity and reduce reliance on a few traditional sectors.

That is why this year we are focusing heavily on diversifying our agriculture. Two new diversification projects, ADP and READ, will provide this drive for market led diversification, resulting in increased exports, rural incomes and employment. We are also transforming the agencies and departments tasked with leading these sectors.

Some projections:

Rice

With favourable market conditions rice production estimated to be 321,000 mt and exports 234,600 mt at a value of US $ 80 million. Thus Guyana will be able to satisfy all its preferential markets and also emerging markets in the Central and South America.

Varietals development through Burma Research Station will continue.

Quality Seed Production will continue to enhance quality & quantity of seed for farmers and the ASSP will award the contract for the construction of a new Rice Seed Facility

Farmer’s Field Schools will be expanded countrywide.

GRDB will work with RPA to reduce fertilizer costs.

GRDB will aim to expand our new and emerging markets ( Panama, African Coast)

Government will zero rate VAT on paddy and machinery, equipment or components used in the generation of renewable energy in the agriculture sector using agricultural by products

Sugar

290,000 tonnes of sugar is expected to be produced in 2008

Mechanized cane farmers expected to be on the ground in second quarter of 2008 as well as other field equipment to contribute to mechanized cane cutting

Land conversion programme will see increased lands accommodating mechanized harvesting. Work is ongoing with private farmers to mechanize operations to increase efficiency

The new Skeldon sugar factory, including the bagasse generating plant will come in to operation in 2008 and Skeldon output is expected to increase by 38.8%

Upgrading of the Enmore factory has started and will be completed in 2009 when it is expected to be the most modern and hygienic packaging facility in the Caribbean

Brining down cost of production; improving management efficiency and more stable industrial relations environment with greater worker-turnout

Fisheries

Plans are underway for Guyana to join the International Commission for the Conservation of Atlantic Tunas (ICCAT), allowing fishers to target deep sea Tuna and Tuna like species.

The Fisheries Department will be collaborating with external agencies in assessing the status of important fisheries resources, such as the Atlantic Seabob and the Grey Snapper.

Better service to our fishing bodies

Increased collaboration to tackle the scourge of piracy

Aquaculture

Completion of a Tilapia Hatchery at Mon Repos, to be completed in May at a cost of G$10 million, to provide Tilapia fingerlings to small farmers.

Upgrading of critical equipment at the Mon Repos Aquaculture Station (pumps, aeration equipment) to support aquaculture development.

Widening the aquaculture support through establishment of facilities at Onverwagt and Hampton Court

Creation of a dedicated aquaculture unit in the fisheries department

CROPS

Crops and Livestock Department

Production of safe and healthy foods (free of pesticide residues) and value added products (processed foods) will be emphasised.

Emphasis on importance of phytosanitary (plant) requirements needed to facilitate trade

Monitoring exports and imports of fresh fruit and vegetables and pest surveillance will continue

For the Hinterland Regions the main focus will be to ensure food security and nutritional value and increase production of organically grown foods

Non Traditional Crops

Fully operational Pack Houses at Parika, and Charity to complement the facility at Sophia. It is projected there will be at least a 50% increase in exports compared to 2007.

Continued organization of farmers into groups to facilitate production of specific commodities targeting the export market.

Completion of a farmers register in collaboration with the Crops & Livestock Department.

Monthly training programme and outreaches to be instituted in various farming communities

NARI

Implement Research & Development Strategy (2008 – 2012).

Continued refinement of production parameters for butternut squash, peppers, plantains, etc. for export market and promotion of value added products from these commodities.

Construction of a modern laboratory to provide efficient services to be used for training in crop protection to students, researchers and farmers.

Commercialisation of soybean and cashew cultivation in the savannahs with EMBRAPA.

Development of model farms in collaboration with the private sector.

Working with the private sector to develop eco-farms as an agrotourism initiative.

Hope Estate

Actively pursue private investment for Hope Estate

Land allocations were made to farmers who have been displaced from Mahaica Creek

LIVESTOCK

The importance of sanitary (animal) requirements needed to facilitate trade will be emphasised. Abattoir improvement and vaccination programme of livestock will be continued

The Livestock Department will focus on revitalizing the Pig Industry by providing quality-breeding animals at affordable prices to farmers, developing the Bee Industry to reduce poverty through increased economic development and improved social conditions, and continue to target the export of beef and poultry products.

NARI will continue work on improving the duck and sheep breeding programmes.

NDDP will continue its routine activities of Artificial Insemination, farm visits, milk quality testing and pasture establishment and rehabilitation will be continued.

Agricultural Diversification

Plans for the US$20.9 million IDB funded Agricultural Diversification Programme (ADP) and the US$6.8 million IFAD and GOG funded Rural Enterprise and Agricultural Development (READ) project are aiming to be finalised by the second quarter of 2008.

The IDB funded ADP loan aims to increase Guyana’s export growth rate and reduce its volatility by focusing on developing commodity chains of non traditional agricultural products

The READ project aims to strengthen intermediary service providers, institutions whose services add value to production and marketing systems, and increase rural welfare. The project will work closely with New GMC, NARI, Rural Women’s Network and other entities.

DRAINAGE & IRRIGATION

National Drainage and Irrigation Authority

Construct and rehabilitate culverts and chokers at: Cosier and Supenaam (Region 2);Paprika backdam, Leguan and Waken am (Region 3);Encore and Buxton (Region 4);Pert Biabo main canal and Grove (Region 5);New Forest Canjie, Wellington Park, Moleson Creek (Region 6)

Construct groyne at Hope outfall

Construct and rehabilitate sluices at De-William (Region 3); Kuru Kururu and Soesdyke (Region 4)

95 miles drains and channels to be rehabilitated at Pomeroon (Region 2); Potosi (Region 3); Canals Polder, A-Line canal and V/Hoop to Parika (Region 3); Mahaica Creek to Plaisance, Mocha to Timehri (Region 4); Black Bush Polder, 52/74, Crabwood Creek (Region 6) and Linden (Region 10).

Excavate outfall channels at Canal #1, #2 and Pouderoyen (Region 3);Joppa, Eversham, Lesbeholden, #43 and Adventure (Region 6);Greenfield, Hope, Belfield and Victoria(Region 4)

10 miles embankment and empoldering works at Ituribisi and Pomeroon (Region 2); Boerasire conservancy and Palmyra (Region 3); East Demerara Water Conservancy and Kofi outfall channel (Region 4)

1, 500 ft. revetment works at Riverstown (Region 2); Golden Grove, Kofi outfall channel and East Demerara Water conservancy (Region 4)

Rehabilitate drainage pumps in Region 2 and 4.

Extension of communication net work

ASSP

Civil works – divided in to two stages which will be executed by the NDIA and the ASSP. NDIA will execute all Earthworks in the primary and secondary D&I systems with counterpart funding for the Government in four selected areas. The construction of structures, pumps and access roads will be executed by the ASSP with funding from the IDB

D&I Institutional Development:

Water User Association Support – The WUAs in collaboration with NDIA will provide training in D&I Best management Practices for the sustainability of rehabilitated works and also the management and administration of D&I fees collected

NDIA strengthening – establish 3 D&I Regional Offices and providing capacity building for NDIA

MMA

Improve the Abary Conservancy through heightening sections of the Conservancy Dam, maintaining the Abary River Seven Door Sluice and Main Canal Head Regulator (MCHR)

Construct Abary/Mahaicony Main Canal, construct secondary D&I channels in Abary/Mahaicony, extend Mahaicony Façade Drain from Cape Clear to Guiana Grove

New construction will include D&I structures (Gordon Table and Guiana Grove), construction of an off-loading Ramp (Little Abary outfall channel) and structure (Left Bank Abary)

In Abary/Berbice MMA will rehabilitation drains, canals and accesses

Forestry

GFC will focus on increasing efficiency, recovery rates, and utilization of a broader range of species, and on improving the quality of produce available locally and internationally.

GFC will accelerate efforts to promote value added activities and reduce log exports.

Community forestry will continue to be a major project area not only in terms of coordination of more Community Forest Organizations, but providing technical support to them.

Monitoring will continue to be a priority. An additional 50 forest rangers have been recruited and each large concession will have a minimum of 2 officers to monitor harvesting activities

It is hoped that the new forests bill will be passed in 2008.

Hydromet

Install Doppler Radar near CJIA. The EU is moving ahead with the provision of four radars to the Caribbean. The MoU with EU has been signed. Installation very likely in 2008

Provide staff with operational office at CJIA Meteorological Office.

Enhance the current observation, data collection and data base operations.

Maintain a standard National Network by providing rehabilitation of the stations established under the El Nino Emergency Response Assistance Project and SIDS Project.

Continue to co-ordinate Guyana’s programmes as they relate to the World Meteorological programmes, International Hydrological Programme, the Montreal Protocol and ACTO.

Upgrade meteorological and hydrological stations to reduce dependence on human operators

CONCLUSION

This year’s budget has been developed in a time when World market prices for many food crops have risen significantly (especially wheat, soybean meal and maize). These present opportunities for our farmers and the sector.

There have also been the accompanying challenges, climate change resulting in changes to the weather; escalating fuel prices, fertiliser and other in-puts.

Effects have been felt in Guyana. Imported food priceshave increased, however the Government has removed consumption tax (30%) and replaced it withVAT (16%) and many foods are exempt. The Government will continue to encourage production of locally produced food.

As Guyana is already self sufficient in poultry and other meats, fish, eggs, fruits and vegetables, the effects of rising food prices have not been as severe as in other countries. With this budget the Government remains committed to maintaining food security and ensuring there are no steep rises in the cost of food commodities produced locally.

We will also further the drive towards market led development of non traditional sub-sectors to enable diversification leading to enhanced exports, incomes and employment.

Agricultural development in the CARICOM region also remains very important to us. To address binding constraints in agricultural development, the Government will continue take the lead within the context of the wider regional programme under the Jagdeo Initiative.

We will continue to support and work towards the recommendations of the recent CARICOM Heads of Government meeting to ensure the adequate supply and distribution of food intra-regionally. As such the Government will continue to make land available for CARICOM nationals for agricultural production and agro-processing to facilitate increased regional food production. Thus, we are committed to maintaining and increasing national food security and facilitating the food security of the region of which we are a part.

The emphasis on public safety and national security is very relevant to all Guyanese as it is to the farmers. While sector our allocation had been reduced from the 2007 level, we recognise that the nature of farming requires a safe and secure environment and as such resources must be so prioritised. It is simple - every time a farmer is targeted, we take food away from all our tables.

Finally, small farmers in Guyana will continue to face constraints such as rising fuel prices (increasing the cost of agricultural inputs such as fertilizer, and transportation costs); limited access to financial products; climate change; and changing global trade regimes.

This budget will continue to address these and other constraints by supporting small farmers through the Ministry of Agriculture’s programmes. The removal on VAT on peanuts, paddy and essential equipment and gears for the fisheries sector will bring enormous benefits for the sector.

The vision is not only help to cushion the impacts of these constraints but help to expand Guyana’s agricultural frontiers and transform the sector in to one that is diverse, thriving and productive, acting as a bigger critical growth centre for the economy as a whole.

more bulletins