The government and the World Bank will be working towards minimising risks and offering insurance solutions to the rice sector, which according to Agriculture Minister Robert Persaud remains especially vulnerable to unpredictable weather and world market prices.
During a meeting yesterday with officials from the World Bank at the Agriculture Ministry, a member of that team, Vikas Choudhary, said there needed to be a “holistic view” of the various risks in the sector, in an attempt to better manage them and to ensure that insurance is provided in an appropriate manner. He noted that the rice industry, particularly in this region, is exposed to several risks.
Persaud, in response, said that the weather and the variable world prices for the commodity were two of the major risks that had been identified. As regards the weather, Persaud said the issue of water management is troublesome but said significant progress has been made in this area. Speaking about the current El Niño patterns, Persaud said the issue of water management was being well handled to the point that the expected losses of rice are to decrease significantly. He said that initially 10,000 acres of rice were expected to be lost due to the dry weather patterns but this projected loss has since dipped to about 3,000 to 4,000 acres. He said that this figure is likely to decrease further. He said that the latest projections mean that the exposure of the current rice crop will most likely be reduced from $3.5 billion to under $1 billion.
Meanwhile, Persaud said efforts were being made to increase the rice yield per hectare. Currently, the rice yield is about 5 tonnes per hectare, the minister stated. According to him, discussions are ongoing to introduce hybrid seed so as to increase the yield to about 10 tonnes per hectare.
In relation to the vulnerability to price movement, Persaud said that a strategy needs to be developed to counteract this. Officials from the World Bank pledged to help the government in this regard so that they can examine avenues that could be prioritised to help cushion the negative spinoffs of the unstable market prices.
Further, Persaud urged that in addition to looking at financial instruments the World Bank officials also look at risk management issues in some of the other areas in the agriculture sector. During the discussions, it was pointed out by an official from the World Bank that garnering insurance for livestock, fruits and vegetables would be difficult–an observation with which Persaud agreed, explaining that it was for this reason rice is the starting point for the initiative.
Persaud said the government is so strongly committed to minimising risks and offering insurance solutions to the rice and other subsectors in the agriculture industry that it will go ahead with the initiative “with or without the support of the World Bank.” He openly expressed concern at the pace with which the World Bank implements some of its projects. The minister said the Agriculture Ministry is, in the meantime, building its capacity to deal with the new project.
