With global food prices hitting a record high last month and with prices forecast to increase, the Ministry of Agriculture is pursuing initiatives to cushion the impact locally and also benefit economically from higher earnings from agricultural exports, Minister, Robert Persaud says.
Reuters reported on January 6th that record high food prices are moving to the top of policymaker agendas, driven by fears it could stoke inflation, protectionism and unrest and dent consumer demand in key emerging economies. The report said that analysts say African and Caribbean economies dependent on food exports could be particularly hard hit, helping to prime unrest and potentially pushing governments towards imposing export bans and expropriating foreign-owned farmland.
World Bank President Robert Zoellick has urged governments in a newspaper opinion column to avoid protectionist measures as food prices rose and called upon the Group of 20 leading economies to take steps to make sure the poor get adequate food supplies, the article reported. It added that French President Nicolas Sarkozy has asked the World Bank to conduct urgent research on the impact of food prices ahead of G20 meetings later this year.
The FAO said sugar and meat were at their highest since its records began in 1990. Prices were at their highest since 2008 crisis levels for wheat, rice, corn and other cereals. Most experts expect upwards price pressure to continue, particularly if countries slap on export bans and further squeeze supply, and short-term investors again buy into agricultural commodities as they did in 2008.
Cushion
Asked what Guyana is doing to position itself to take advantage of rising food prices, the Minister emailed a document entitled ‘Increasing price for food on the world markets: Impacts and Policy Responses for Guyana’. The document said that Guyana is expected to cushion the effects and in fact stands to benefit economically from increased earnings from agricultural exports.
This was attributed to the Grow More Food initiative and the ability of the Ministry of Agriculture to engage in systematic climate-smart agriculture to ensure that local agricultural outputs are available to all sections of the local population and expand its market share regionally and extra-regionally.
It was noted that there are certain items which Guyana does not produce and these when imported can see some movements. Further, the weakness of the US dollar, in which most food commodities are denominated, has also contributed to higher prices. “Guyana will continue to ensure we prepare to cushion these effects and continue to plan and structure our agriculture systems to capitalise on the global demand for food and rising prices”, the document says.
It says that the Guyana Marketing Corporation is set to work with supermarkets and various manufacturers to ensure that more local products are on sale in these stores. And as part of the Ministry’s mandate, the National Agricultural Research and Extension Institute (NARIE) in collaboration with the Rural Enterprise Development Project (READ) and the Agriculture Export Diversification Programme will undertake a number of projects to improve the production and productivity of the four P’s (plantain, pumpkin, pepper and pineapple). These would include the acquisition/importation of improved varieties that meet market demands.
Additionally, new varieties of cassava would be acquired and distributed to farmers. Work programmes would also be developed in collaboration with various fruit and vegetable clusters.
The document also refers to efforts to improve productivity in coconuts and to produce value-added products from this crop, among other initiatives such as continuing to expand spice cultivation, primarily in hinterland communities.
Volatility
To reduce Guyana’s vulnerability, the policies being adopted will improve market functioning and equip local stakeholders to better cope with the adverse effects of any extreme volatility, it says. It noted that in past episodes of extreme volatility on the global market, policy interventions have frequently been successful, as budgetary allocations and the sheer scale of price increases have generally allowed for meaningful success at stabilization.
Accordingly, interventions have been short term, limited to the micro level such as targeted consumer subsidies and safety net programmes, or even counterproductive, such as export restrictions which compounded uncertainty and undermined the negative role that trade may play during these prime periods. Guyana will continue to use food reserves to buffer volatility, as these have proven manageable, inexpensive and effectual, the document says.
“Instead of engaging in isolated measures, the Ministry of Agriculture will seek better coherence and coordination in its policy responses.
These must yield both greater assurances of unimpeded access to global supplies, and improved confidence and transparency in market functioning, especially in the major commodity exchanges. An improved public surveillance system on export availabilities and import demands will help temper uncertainty and enable the population to equip themselves better before the full impacts of crises transpire. Such measures would also help stabilize the local agricultural market”, it said.
The Ministry said that through its various agencies, it will explore and reinforce measures to protect the most vulnerable. These agencies will not try to fight volatility, but to mitigate its consequences by providing poor people direct access to food. In the long run, Guyana will lower its vulnerability by continuously raising agricultural productivity for a diverse set of crops that proves both competitive and sustainable, as well as by promoting dietary diversification.
Higher international wheat prices are seen as increasing pressure on the local flour producer to raise prices here.
SN’s reportage on the Grow More Food campaign has detected lukewarm responses from farmers who have catalogued a series of ongoing problems including the absence of markets, low prices and vulnerability to middlemen.
