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ffi z T a lfl1 7Ei_¢[L4- i.i'.t- -;.'' V -J~~~~~~~~~~~~~R0 T R 1rI C TrC ' r WIT"rM 7;S!)S1.}1'l;*;'}."I -s'S oNE WE:E I WH160 Vol. 2 Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do not orcent reponsibility for its accuracy or ornmleteness. The renort mn,v not be published nor may it be quoted as representing their views. i I INTFRNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized AN APPRAISAL OF THE DEVELOPMENT PROGRAM OF GUYANA (in five volumes) Public Disclosure Authorized VOLUME II AGRICULTURE April 21, 1967 Public Disclosure Authorized Western Hemisphere Department CURRENCY EQUIVALENTS G$l = US $0. 58 G$1 million US $583, 330 US $1 G$1. 71 US $1 million = G$1, 714, 290 VOLUME II. - AGRICULTURE TA-BI.E OF rOnTEV%TT Page No. Nap of Soils of Northeast Guyana BASIC DATA SUIMIARY AkID CONCLUSIONS ...c.ooo....ec..e ooo oCcecoe.s i - iii I. PBYSICAL CI-{ARACTERISTICS ee..-oec..e....eceeoc c II. PAST DEVELOPMENT AND PROBLEMS ... 2 Prod;ltion Trends c.e.o.c o Oc....c cocc 5 eeoc cc 3 Sugar . ec 0 c 0 4 Rice 0 0 .,.o.ec.cee..oa e ecuoeeooeceo h Otner crops eoae0oa .... 0 a .. 00 a 0 ae**@ee*** 5 Livestock S- ..-.. 0.. 00..oo- .e-.. .e.......e-e 6 Fisheries . ...... .......eo ece.. o.a . o eeoc. 7 Forestry ...... @0 OCO 3 oeoc.ce COO 000 7 Agricultural Exports and Imports ..... oo0ooo0e0o 7 Investment ocoo0 .............. ...o a cc eeo M Agricultural Credit 0oe.ecoo aso eo00 6o0oaee 9 Agricultural Labor Fbrce **cc...,...coc.o.coe.o 10 III. AGRICULTURAL POLICIES eeeccc.e. [email protected] 11 Price and Subsidy Problems and Policies ..... e.. ,... 12 Sugar ee eSo.cc..ec.e.e ccoecccSPC 12 Rice cooaaecco cc.cecc.ecaee.eeccca.cecCc.e 12 Livestock for beef s... ........... ..---e O 14 Crop Diversification and Import Substitution .e.... 14 Land Tenure Policy . .. *...eccec...... case. 15 Agricultural Investment Policy Criteria ee...ccec 15 IV. AGRICUnTURAL INVESIMENT .eco.ce04e-cc-oeoeooeo- 17 Alternative Investment Programs ... e...oce.eecceoccc.e 17 Storage and Marketing ccccc... .0.... ee.c... 19 Land and Water Development --............. 20 Research osseaco c.. eeoc c...e.c c eeeo.o .. 22 Conclusion ... .... ..naenan.......n..e..O.a.... 22 V. AQ,RTrOULWRRAL INSTITUTIONS. A~.-INJSE.ATION AND RESEARCH 23 The Nin-i.stry of Apri-culture-__ Agricultural Marketing Boards .eee..eco. ceo.o .ee. 25 ,AgricGultiural CrediTt O.....00G V 000000ev D * 4 X* * C e 0-.io 26 Guyana D;evelopiient Corporation ac eeaoooccceece. 27 STATISTICAL AP?r DDIX MAP OF THE SOILS OF NORTHEAST GUYANA I 0 10 20 30 40 50 V U i'iMILES CHAR'i<:\~ Low hurnic glevs of high base status, k m~~~~~~~~~~~~~rarinephase('Frontland Clay) Low huinic gleys of high and m,edium | base status, fluvio-marine phase 2 <1 t>\1 : P ; | | {~~~~~~~~~~~~~~~Riverain Soils) |2/~ ~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~~~~~~~~o oidOls,s peat anld .nicl phas--s base statuls SPRINsh A . ~~~~~~~~~~~~~~~~Low-hunmic gzleyvs of Ics <GA R D<j| P zoe | | ~~~~~~~~~~~~~~~includingground-ater laterites ancl | fv\ $> /} ¢ CL ~~~~~~~~~~~~~~~Grolund-ater latQritQs FJ~~~~~~~~~Ol /j75/ Low hulmic glevs nfIc , base stat,ls, < //1fi46PAR;KA. / - C,~tGEORGETOWN ~ ~ ~ ~~~ z alvagroundwate,- ol auiU l.ldn 71g/ m~~~~~~~~~~~~~~~~~(Wh te S wieandtphs) latosolsi ighit Lextui- - r | ~~~~~~~~~~~~~~~~Red-yellow | fYXf-. i 8§R < | I~~~~~~HLENphase (1Browr- Sarnds) ROSIGN~ I \2ACKENZIE S \ Source: FAO/SF: 191 RG1. JANUARY1917 IBRD-94'4 .,ACT mAn 'A Area (acres) Total (1952 census) 53,120,000 Coastal Plain 3,839,100 (Sugar Estates) (149 ,h400) (Farms) (,97 0 Forest 4) 979,300 Savannah ,301,oO0 Population 653,000 Total working population 193,000 Agricultural working population as a percent of total working population 37 percent Gross Domestic Product Average annual growth, 1955-1965 4-5 percent Agriculture, average annual growth, 1955-1965 3 percent Agriculture as a percentage of Gross Domestic Product 24.6 percent Foreign Trade Main agricultural exports Sugar, rice, shrimxp Main agricultural imports Dairy products, pro- cessed meat, potatoes Agrincultural exports as a Dercentage of gross commodity exports 55 percent Fbod imports as a percentage of total imports 17 percent oiu'.ARlC'?ThMIIhffATfl AAI1TYM COCLUION'f1Tf'T TTC-TfM?TC' 1. Guyana's agricultural sector poses critical financial and deveiLop- ment problerns. iLfficult ecological and technical conditions cause generally high production costs. Virtually all agricultural output - mainly sugar, rice, beef - is produced on the narrow coastal plain, lying below sea level and requiring costly dikes and drainage works to protect the lJnd. Seasonal dry spells also require expensive irrigation. most of tne rest or the country has only fair to poor soils. Coupled with inadequate and costly transport, this situation makes forbidding the prospect of any rapid vLable development of agriculture in the interior, 2. Agriculture provides employment to the largest segment of the population, and generates currently about one-quarter of GDPo Output over the past decade appears to have grown at a rate of about 3 percent, Sugar production expanded 25 percent, rice output nearly doubled, and beef, milk, poultry, fruit and vegetable production all increased substantially. Al:L of the increased sugar and the major part of the increased rice output went to export markets. This was true also of the dynamic shrimp fishing secltor. 3. The key to Guyana's agricultural development, in the future as in the past, is exports. Crop diversification for purposes of import subst'L- tution offers only limited economic promise and must assume secondary priority in agricultural development strategy. But the realization of the export potential also confronts problems that require prompt policy deci3ions and wise investment choices over the next few years. 4. The first set of policy problems has to do with the subsidized nature of Guvanese agriculture. Suear. still the main aericultural exDormt, depends entirely on the guaranteed external markets at preferential prices offered under the U.K. Commonwealth Sugar Agrenment and the .IJS.West Indies' quota. Rice exports are aided by the preferential agreement with the West Tndi es; and it i9 only lately that Guyana hns to sell about 0npe7'r_n+. nf' her crop in the free world market. Fortunately the outlook for continua.- tion of these oreferential Axnort market subsidies for snPgar and rice appears to be assured at least into the early seventies and world market demand nrospects fnr riG-ie ri-e eqnecninl1 good= Almost a 1egr cultural products, except for sugar, also receive substantial direct and indirect internal subsidies in a variety of forms. Particularly for rIce, but also for other crops these subsidies, constituting a serious strain on the budget, represent a snbstantial transfer of _ fom. the non-agricultural sector into agriculture. They amounted to about G$4 million in 1966. T'he Ge Marketin.g Board, RIce Development Corporation a Guyana Markeir. Corporation are all operating at a loss and are all saddled with short-term debt chiefl,y to the commercial banDZks Only in 1966 has the 4DB taken the courageous step politically of lowering by 14 percent the price paid to the rice farmers as a first move to4-- prove it fin,an,cial sItuation4 , thus initiating a program to reorganize the whole rice storage and marketing 3 JAs4,- - ii - El. Equall`if notI more perni c-ous, howe-v-er, 4.h tLefsclefet of these price and income subsidies are their effects as disincentives to far.mLers to seek higher productivity-, lower unit costs, and better qua ity, especially cf rice and beef. Unlike sugar, faced at best with long-run hlghl constant costs,Ilhere 1S Uvtr-y r-eason to be optimistic about the near- term prospects for reducing significantly both production and marketing costs for rice, through better agTonomic practices and better storage and milling techniques. New RViB policies of buying paddy from farmers, instead of milled rice, and of paying cash on delivery, are counted on to provide needed farmer incentives. Production of beef livestock appears susceptible more gradually to similar cost reductions and quality improvements, thus enhancing export prospects. 6. Public investment criteria and the coinposition and efficiency cf the Governmentis agricultural investment program require substantial improve- ment through proper policy decisions. Much past large-scale government investment, especially on drainage, irrigation and land development schemes, has been wasteful and rnisdirected. The potential for productive returns have often been far from realized; and the Government has failed to recoup from farmers even an adequate minimum financial return on its investments, through failure to collect the low land rents, water charges, and income taxes assessed on farmers. Farmer non-compliance is fed by irresoluteneas of the Government in settling its land tenure policy and issuing either titles or leases for the land in such major schemes as Black Bush Polder and Tapakuma. There are already signs of encouraging progress on this front. There is clearly a need, increasingly recognized by the Government, to assure more efficient exploitation of the productive potential of exist- ing land development/colonization schemes, and to put them on a more financially solvent basis, before undertaking additional public investments in big land schemes. Nevertheless some new land settlement projects will be required over the next 4-6 years to help absorb population and unemploy- ment. Care is there fore needed to select those projects promising the best and earliest returns. The greatest promise lies in selected coastaL or riverain areas, notably the bIA project, and Crabwood Creek South along the Corentyne River. Before additional expensive dams and canals are built, however, alternative sources of irrigation water, particularly groundwater potentials, should be fully explored.