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Paraíba State, Brazil Agriculture Global Practice TecHNICAL Assistance PAPER PARAÍBA STATE, BRAZIL AGRICULTURAL SECTOR RISK ASSESSMENT Diego Arias and Jorge Caballero WORLD BANK GROUP REPORT 100993-BR November 2015 THE WORLD BANK GROUP PARAÍBA STATE AGRICULTURE SECTOR RISK ANALYSIS Volume 1: Risk Assessment Volume 2: Risk Management Strategy © 2015 World Bank Group 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Email: [email protected] All rights reserved This volume is a product of the staff of the World Bank Group. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of the World Bank Group or the governments they represent. The World Bank Group does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. World Bank Group encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone: 978-750-8400, fax: 978-750-4470, http://www.copyright.com/. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank Group, 1818 H Street NW, Washington, DC 20433, USA, fax: 202-522-2422, e-mail: [email protected]. Cover images from left to right: Julio Pantoja, World Bank; Shell; Benjamin Thompson. ACKNOWLEDGEMENTS This report was prepared by the Team on Agriculture Sector Risk Management within the Agriculture Global Practice of the World Bank. The team was led by Diego Arias (GAGDR) and relied on technical support from Barbara Farinelli (GAGDR), Pablo Valdivia (GAGDR), and Sophie Storm (GAGDR). The international consultants that participated in the making of this report: Jorge Caballero (Main Consultant – GAGDR), Decio Gazzoni (Consultant - GAGDR), Jaime Estupiñan (Consultant - GAGDR) and Vitor Ozaki (Consultant - GAGDR). The Team would like to thank all those involved in the making of this report of the diverse sectors of the State Secretariat for Agriculture, Livestock and Aquiculture Development (SEDAP) for their invaluable contributions and enrichment of the document in their respective fields. The Team would also like to thank Mônica Alexandra Tavares de Melo and Ricardo Arlington from Project Cooperar, SEDAP, for their valuable on the ground field work that constantly contributed to creating a practical dimension of the technical discussions. Also, the team would like to express gratitude towards the different representatives of the value chains of the agriculture sector (producers, banks, processing firms, traders, exporters, amidst others), which contributed with their experience and knowledge regarding the sector, which allowed for a fuller and more comprehensive understanding of the reality of the diverse sectors. Asa Giertz (GAGDR) and David Tuschneider (GAGDR) met with the mission in various moments throughout the making and review of final version of this report. The Team extends their gratitude to them for their valuable contributions. This volume is product of the staff and consultants of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. ii CONTENTS ACKNOWLEDGEMENTS ...................................................................................................................................... ii CONTENTS ............................................................................................................................................................. iii ACRONYMS AND ABBREVIATIONS ................................................................................................................. vi LIST OF TABLES ................................................................................................................................................... xi LIST OF FIGURES ................................................................................................................................................ xiii LIST OF TEXT BOXES ..........................................................................................................................................xv EXECUTIVE SUMMARY ........................................................................................................................................ I INTRODUCTION AND CONTEXT .........................................................................................................................1 VOLUME 1: RISK ASSESSMENT ........................................................................................................................4 Chapter 1: PARAIBA’S AGRICULTURAL SYSTEM ............................................................................................5 Agriculture Sector Overview and Performance ......................................................................................................5 Agro-Climatic Conditions ......................................................................................................................................8 Agricultural Production and Market Trends .........................................................................................................10 Chapter 2: AGRICULTURE SECTOR RISKS ........................................................................................................12 Sugar Cane Supply Chain .....................................................................................................................................15 Overview of supply chain .................................................................................................................................15 Production risks – Climate risks .......................................................................................................................16 Production risks - Pests and diseases ................................................................................................................18 Price volatility risks. .........................................................................................................................................18 Enabling environment risks. .............................................................................................................................20 Fruticulture Sector ................................................................................................................................................20 Overview of Subsector .....................................................................................................................................20 Production Risks - Climate ...............................................................................................................................21 Production risks – Pests and diseases ...............................................................................................................22 Price volatility risk. ..........................................................................................................................................23 Family Agriculture in Semi-arid Zone .................................................................................................................25 Overview of Subsector .....................................................................................................................................25 Production risks - Climate ................................................................................................................................26 Production risks - Pests and diseases ................................................................................................................28 Price volatility risk. ..........................................................................................................................................29 iii Livestock Production Chains ................................................................................................................................31 Overview of Subsector and Supply Chain Profile ............................................................................................31 Production risks - Climate ................................................................................................................................33 Chapter 3: ADVERSE IMPACTS OF AGRICULTURAL RISKS .........................................................................37 Indicative
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