GUYANA TRADE and INVESTMENT SUPPORT II Quarterly Report December 1, 2009 – Februarysubmitted 28, By: 2010 CARANA CORPORATION

GUYANA TRADE AND INVESTMENT SUPPORT II Quarterly Report December 1, 2009 – FebruarySubmitted 28, by: 2010 CARANA CORPORATION

February 2010

This publication was produced for review by the United States Agency for International Development. It was prepared by CARANA Corporation under contract number EEM-I-00- 07-00006-00, Task Order 04.

GUYANA TRADE AND INVESTMENT SUPPORT II

QUARTERLY REPORT December 1, 2009 – February 28, 2010

DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

Table of Contents

Executive Summary ...... 1 Donor Harmonization ...... 2 Wood Products ...... 2 Planned Activities ...... 3 Aquaculture ...... 3 Planned Activities ...... 5 Agribusiness ...... 5 Planned Activities ...... 6 Ecotourism...... 7 Planned Activities ...... 8

List of Common Acronyms

ADP – Agricultural Diversification Program DFID – The United Kingdom Department for International Development FAM – Familiarization FPA – Forest Products Association of Guyana GFC – Guyana Forestry Commission GoG – Government of Guyana GSA – Guyana School of Agriculture GTIS – Guyana Trade and Investment Support GuyAC – Guyana Aquaculture Cooperative Ltd. IADB – Inter American Development Bank IICA – Instituto Interamericano de Cooperación para la Agricultura LVS – Legality Verification System MIF – Multilateral Investment Fund READ – Rural Enterprise and Agricultural Development USAID – United States Agency for International Development USFS – United States Forest Service VLO – Verification of Legal Origin

Executive Summary

Guyana’s challenge is to competitively offer higher value, differentiated goods and services in international markets, generating more wealth for its people, especially workers and the poor. Now 8 months in to implementation, USAID/Guyana’s Guyana Trade and Investment Support (GTIS) II Project has generated strong consensus and momentum around a market-led strategy for promoting investment and exports.

From May 2009 to February 2010, GTIS has succeeded in identifying dynamic external markets in which Guyana has the potential to compete with unique products and services, and has identified the critical bottlenecks in sub-sector value chains that are current constraints to competitiveness. By exhibiting at international trade shows and connecting with investors and buyers, GTIS II and its Guyanese partners have found continuous opportunities to improve and expand sustainable value-added forest products, export-oriented agribusiness, aquaculture, and ecotourism.

The key to this success has been the use of a market-led approach to value chain strengthening, which works with foreign investors, strategic buyers, and “anchor firms” in Guyana to invest in new capacity, technology, and standards, while strengthening overall sub- sectors. Through their interactions with GTIS, international firms have defined the market demand for Guyanese products and the upgrading required in order to satisfy those needs.

Anchor firms have now begun investing in infrastructure and services to meet demand. Because they offer access to attractive export contracts, the market insights and technical advice provided by these firms is much more effective than any number of consultant reports and workshops. GTIS has used this momentum generated by the private sector to identify further constraints to sustainable growth caused by outdated public policies and is working with Government of Guyana (GoG) counterparts to address them.

The GTIS project’s market-led approach has become the preeminent development model for Guyana. With the exception of forestry, the GTIS project has built new promising sectors with the capability of diversifying Guyana’s economy from the bottom up. The direct results of GTIS work to date include $2.8 million in new investments, $9.78 million in additional sales, and more than 170 new or enhanced jobs, based on environmentally sound value-chain development strategies. GTIS has placed particular emphasis on leveraging additional funding from the donor community, leveraging $1.85 million in donor contributions to date. In the ecotourism subsector where advertising is of vital importance to promote a new destination, GTIS has leveraged over $6.5 million dollars in articles, advertisements, and television shows on the country’s heretofore little known attractions.

These results are best seen on the ground where skepticism and pessimism have been replaced with vision and progress; where leading rice farmers in the country are now promoting and investing in aquaculture, ecotourism lodges are booked two to three years in advance, multinational forestry companies are making substantial investments in Guyana, and Israeli agriculture experts are introducing cutting-edge farm management techniques.

Donor Harmonization

The GTIS II project continues to build its reputation as a critical counterpart for government or donor programs addressing competitiveness issues in Guyana. The project has worked hand-in- hand with these projects and has advocated for cooperation toward common goals. Related activities this quarter are as follows:

Cooperation with ADP GTIS II continues to work with representatives from the IDB’s Agricultural Diversification Programme (ADP). The project team has meetings with the ADP program on a regular basis to analyze the ADP’s work plan and identify previous programs that overlap with the ADP’s goals. As a result the implementers of ADP are convinced that the best way forward for the program’s aquaculture and agriculture components is to build on the momentum generated by GTIS II and to work hand-in-hand on matching goals. ADP recently adopted the legal framework for aquaculture proposed by GTIS II, and is now working in accordance with it.

Crop Insurance with the World Bank The project team will meet with World Bank representatives to provide guidelines for the creation of a crop insurance program for aquaculture livestock with the Ministry of Agriculture.

Cooperation with Farmer to Farmer GTIS II is coordinating with the USAID funded Partners of Americas Farmer to Farmer program to utilize assistance from a drip irrigation expert from the United States. The volunteer consultant is the former Chief Agronomist for Netafim Irrigation Inc., one of the principle firms responsible for the popularization of drip irrigation in the United States and throughout the world. The project’s aquaculture team is also having preliminary discussions to bring an expert in shrimp hatcheries and grow out.

Partners Meetings with the Ministry of Agriculture GTIS II has begun conducting fortnightly meetings with the Ministry of Agriculture’s Fisheries Department, the Forest Products Development Marketing Council, the Guyana Forestry Commission, the New Guyana Marketing Corporation, and the Rural Enterprise and Agriculture Development (READ) program. The purpose of these meetings is to update the partners on project developments and direction, discuss roadblocks, and coordinate on complementary goals.

Wood Products Efforts in the Wood Products sub-sector have focused on setting the groundwork for a Legality Verification System (LVS) in Guyana. The project 1) conducted an industry gap analysis to set a road map for this initiative, 2) coordinated a forum between representatives of the Forest Products Association of Guyana and the donor community to determine the cause of the downturn of the sub-sector and initiate a dialogue for future collaboration; 3) collaborated with the United States Forest Service (USFS), the Guyana Forestry Commission (GFC) and the Forest Products Development Marketing Council (FPDMC) to create a work program for sector development.

Gap Analysis

The GTIS project team conducted a comprehensive gap analysis to determine the current state of the industry and identify those areas most in need of assistance in order for the sector to reach its full potential and set the groundwork for LVS in Guyana. GTIS worked closely with private sector counterpart the Forest Products Association, public counterparts the Guyana Forestry Council and the Forest Products Development Marketing Council, and the Rainforest Alliance to get the initiative up and running. The resulting report prioritized the top five action items needed to unlock the global competitiveness of the forestry sector and will serve as part of the basis for the project’s Year 2 sub-sector work plan.

Donor Coordination Developments in Guyana’s forestry sector prompted GTIS to sponsor a discussion forum between members of the Forest Products Association and members of the donor community. Sudden policy changes initiated by the Guyana Forestry Commission (GFC) in 2008 inhibited production and caused nearly a 50% reduction in exports from previous years. The purpose of the forum was to educate the donor community as to exactly what policy changes took place and why, and to discuss opportunities to facilitate cooperation between the FPA and GFC.

Coordination with the United States Forest Service In collaboration with the USFS, GTIS held a series of meetings with the GFC and the FPDMC to create a work program for sector development based on information gathered and the above gap analysis. The information gathered from this activity combined with that from the gap analysis will serve as the part of the basis for the project’s Year 2 sub-sector work plan.

Planned Activities Participation in IWPA Miami The GTIS II team will accompany private sector stakeholders from 8 firms at the International Wood Products Association’s (IWPA) World of Wood Summit in Miami. This trade show will allow participants to stay abreast of market trends and network with potential buyers and investors. GTIS II will assist participants, who are enthusiastically sponsoring their own trips to the convention, to learn about the increasing global demand for sustainably harvested woods and receive more information about legality verification standards that can be achieved by the private sector.

Aquaculture Activities in the aquaculture sub-sector focused on establishing reliable production in order to fill unmet export demand for fresh tilapia by 1) engaging the donor community to harmonize project goals and resources; 2) providing the nascent industry with access to high quality inputs (seed and feed); 3) continuing its participation and support in the National Aquaculture Association of Guyana; 4) drafting the first aquaculture legislation in the country; 5) attracting three new investors to the industry and conducting due diligence potential for large-scale integrated farms; and 5) inciting the GoG to complete the necessary steps to keep export markets open for marine fish and aquaculture in the European Union.

Donor Harmonization The GTIS project’s progress in the aquaculture sub-sector has drawn the attention and support of numerous other donor projects. In Year 1 the project accessed $165,000 in additional funding from the British High Commission, DFID, and the Ministry of Agriculture. The project also began landmark cooperation between the MASHAV Center for International Cooperation and

USAID/Guyana. Two experts traveled to Guyana to conduct inland aquaculture training for Guyana School of Agriculture students and alumni, National Aquaculture Association of Guyana (NAAG) farmers, representatives from the Ministry of Agriculture, and the Ministry’s Chief Fisheries Officer. The IDB has also preapproved an additional $750,000 in Multilateral Investment funding for Year 2. The GTIS aquaculture team collaborates regularly with the IDB’s Agricultural Diversification Program (ADP) in weekly meetings with its technical staff and with industry experts from USAID’s Aquafish CRSP program.

Provide Key Sub-sector Inputs The aquaculture sector’s capability to produce low cost, high quality inputs (seed and feed) is critical to establishing widespread growth in Guyana. Project efforts in the aquaculture sub- sector have culminated in the opening of a tilapia hatchery at Maharaja Oil Mills. Thanks to a donation of 1,700 breeding sets of supermale tilapia from DFID, the hatchery is now producing all-male brood stock for local farmers, a key input to globally competitive tilapia production. This brood stock has the potential to produce approximately $65 million dollars in aquaculture sales and create up to 1,700 new jobs.

GTIS also hosted an aquaculture feed expert from Israel who conducted an in-depth analysis of the current feed supply chain, provided the project top quality formulations based on ingredients available locally, and made recommendations for infrastructure improvements needed at Maharaja Oil Mills to produce internationally competitive feed. As a result the project now has a top quality formula to distribute to Maharaja Oil Mills and any other business capable of competitively producing this input. The project also worked with the Ministry of Agriculture to improve production practices at the aquaculture research station at Mon Repos.

Support for the National Aquaculture Association of Guyana (NAAG) Since GTIS began its sponsorship of NAAG in early 2006, the association has met every week to propel the development of aquaculture in Guyana and provide interested stakeholders with the information and services necessary to launch their businesses. During Year 1 several private investors from NAAG expressed their desire to form the Guyana Aquaculture Co- operative, Ltd. (GuyAC).

Support for Aquaculture Legislation In collaboration with the Ministry of Agriculture and the ADP project, GTIS discovered previously unknown draft legislation for post-harvest handling of fishery products and drafted legislation for aquaculture best practices. This legislation is currently under review by the Minister of Agriculture before it is submitted to Parliament.

Investment Attraction In Year 1 GTIS worked with three new investors interested in aquaculture farms, and continued to support current stakeholders securing $1.2 million in investments. The project also continued to support the Office of the President to attract large-scale investors in support of the Low Carbon Development Strategy. The GTIS team held a series of meetings with representatives from the Office of the President about large-scale project proposals from Tahal and IBT, which would integrate agriculture, aquaculture, and biofuel production.

EU Illegal Unreported Unregulated Fishing Act The EU’s Illegal Unreported Unregulated (IUU) fishing act requires that Guyana be recertified in order to export marine products to the EU, which will involve a reevaluation of the country’s marine fisheries practices. After working closely with representatives from the EU, the Fisheries

Department of the Ministry of Agriculture, the Office of the President, and the private sector, the GTIS project confirmed that the Ministry notified the EU of their competent authority, the first step necessary to continue exporting to this important market.

Planned Activities

Investment Attraction The project has invited one of the shareholders in Rainforest Aquaculture, one of the largest tilapia producers in Costa Rica, to tour Guyana in order to meet the major producers, explore the investment climate, and look for opportunities to market Guyanese aquaculture to his network of buyers in the United States and the Caribbean.

Additional Supermale Tilapia The project will facilitate the arrival of the second batch of 300 sets of supermales from Fishgen, an initiative funded by DFID to help establish a top rate hatchery in Guyana. These fish will join the first batch of 300 at the Maharaja Oil Mill Fish Hatchery which will produce millions of male fingerlings for the growing industry.

Agribusiness Project activities focused on creating a robust farming corridor along the Linden Highway by 1) identifying markets for non-traditional agricultural products where Guyana has a competitive advantage; 2) demonstrating modern farming techniques producing high yields with a reduced environmental impact; 3) establishing a number of potential sub-sector anchor firms to implement contract farming with small producers; and 4) sending test shipments of products to international markets stimulating demand for large orders.

Markets for Non-traditional Agricultural Products In collaboration with Shigam Inc., the largest producer and exporter of fresh produce on the island of Antigua, GTIS identified large markets in the United States, EU, and Caribbean for high value products such as cantaloupe and honeydew melons, papaya, bell peppers, pineapples, butternut squash, tomatoes, and cherry tomatoes. Guyana’s natural resources, year-round growing season, and proximity to major export hubs give it a competitive advantage for sale of these products during the winter season.

Demonstration of Modern Farming Techniques In order to show potential project farmers firsthand the necessary management techniques, technology, and infrastructure necessary to become competitive in international markets, GTIS established a public private partnership with Shigam Inc., the Ministry of Agriculture, NARI, and investors from the Guyanese Diaspora in the United States to create Greenfield Farms, a commercial farm, demonstration plot, and training facility. To date more than 100 farmers have toured the farm and learned about GlobalGAP procedures, drip irrigation, and greenhouse cultivation techniques. The GTIS project and Shigam provided technical assistance to farm staff and met with training participants in order to find new interested project farmers.

Establishment of Potential Anchor Firms Throughout Year 1 GTIS concentrated on facilitating a potential $3 million investment by Shigam Inc. By leveraging additional assistance from the GoG and working with Shigam to find

local partners, Shigam ramped up expansion at their 200 acre plot along the Linden Highway and is currently in the process of preparing 20 acres of land for open field drip irrigation.

Recognizing the potential for export-oriented industrial farming demonstrated at Greenfield Farms, several potential anchor firms approached GTIS and Shigam Inc. to explore opportunities to invest in their own operations. Bounty Farm Ltd., the single largest poultry producer in the country, invested in one acre of greenhouses to grow test plots of high value crops such as cantaloupe and Galia melon, tomatoes, cherry tomatoes, and bell peppers.

After visiting the operations at Greenfield and Bounty Farm, representatives from a GTIS anchor firm from the wood products sub-sector, Toolsie Persaud, also expressed interest in establishing a greenhouse operation at Diamond and a large open field facility around Linden. GTIS also began negotiations with representatives from farming communities on the Linden Highway some with hundreds of acres of cultivatable land available.

International Test Shipments With technical assistance in production and post-harvest handling best practices from GTIS and Shigam Inc., Bounty, Greenfield, and a number of potential project famers from Berbice, the Linden Highway, and Canal 1 supplied the first test shipment of pumpkins, watermelon, pineapples, papaya, cantaloupe, and Galia melon to an interested buyer in Martinique. The buyer has expressed her satisfaction with the produce and is currently negotiating with project partners on export prices for air and sea shipments.

Planned Activities Farm Expansion Based on the success of trial greenhouse plots and direct access to markets with Agrexco in New York, Bounty Farm Ltd. has expressed interest in expanding operations to a 100-acre plot owned by the company along the Linden Highway. Bounty already employs contract farming with 30 poultry producers in the area and company representatives have expressed their desire to continue this model with fresh produce. GTIS II is also currently discussing plans with representatives from Toolsie Persaud to set up a greenhouse operation at Diamond and open field cultivation in the area of Linden. The harvest from these large firms combined with produce from contract farmers and cooperatives like Hauraruni Village will provide the critical mass needed to reliably fill large export orders with high value produce.

Increased Production In anticipation of the approach of large winter markets in the United States, Bounty Farm Ltd and Greenfield have requested additional assistance in production best practices in order to prepare for production on a larger scale. Bounty farm will plant 3,200 ft² of melons for export throughout the Caribbean and a trial 800 ft² of bell peppers destined for markets in New York. Greenfield farms will boost production of papaya and butternut squash for export to the United States and the Caribbean. This first venture into additional production will allow GTIS II and technical experts from Shigam Inc. to work with local counterparts on a daily basis and demonstrate best practices at all growth stages of the plants.

Long-term Technical Assistance With a number of new farms coming online in Year 2, the GTIS II staff predicts that there will be a great need for an experienced long-term farm manager to work hand-in-hand with these firms to teach production best practices, assure quality control, and train the first generation of

extension officers in modern farming methods. This expert would work directly with project beneficiary farm managers, teaching them such production best practices. This expert would also tailor protocols for best practices to the environment in Guyana, assuring that counterparts are fully engaged in every aspect of running a farm. GTIS will review potential candidates for a long-term technical lead for its agriculture team with USAID and discuss a viable timeline for mobilization.

Ecotourism

With hotels and resorts booking birding tours years in advance, as a result of the GTIS project’s birding tourism campaign, project implementation focused on the development of additional ecotourism niches to attract visitors throughout the low tourist season, increase the number of Amerindian and rural beneficiaries, and develop new revenue streams for the entire tourism value chain. The project’s implementation strategy was centered on an aggressive marketing campaign that included 1) participation in international trade shows to raise Guyana’s profile as an international tourism destination; 2) organization of familiarization tours that brought international tour operators, representatives from global media, and other key partners to experience Guyana’s tourist attractions; and 3) marketing of Guyana through printed and online media sources. The project also actively sought out additional resources from cooperating donor organizations to achieve its goals.

Trade Show Participation GTIS sponsored counterpart participation in international trade shows such as the Adventure Travel World Summit, Adventures in Travel Expo, and the Educational Tourism Conference, allowing the project and its counterparts to build relationships with international birding, educational tourism, adventure tourism, and general ecotourism tour operators as well as media and other partners (e.g., optics companies, conservation organizations); gather information on the latest market trends; and increase Guyana’s visibility in the international tourism market.

Familiarization Tours Utilizing contacts and information gained at such trade shows, the project organized a familiarization tour to Guyana so that international tour operators, representatives from global media, and other key partners could witness the country’s wealth of biodiversity and unspoiled beauty firsthand. Participants inspected local tourism facilities and advised firms on the required changes they had to make in order to host international tour groups. The familiarization tour differed from past initiatives in that it included a number of tour operators focused on adventure, educational, and general ecotourism. Feedback from the tour confirmed that guides and lodges were well equipped to handle birding tours but would need some additional investments and training in order to compete with other such international destinations. Hotels and lodges are reacting quickly to this feedback, investing over $300,000 this year to upgrade accommodations in response to market demands. These investments are already paying for themselves; industry representatives report $675,000 in additional revenues in 2009.

Media Resources Trade show participation and familiarization tours have generated tremendous excitement about Guyana in the media. The project’s marketing campaign has leveraged a total of $6.5 million worth of advertising media consisting of articles in industry magazines and newsletters, websites, press releases, and two television series on bird watching and sport fishing. In

addition, Guyana destination information has been published on the websites and in the brochures and newsletters of the 40 tour operators now promoting Guyana. GTIS is also developing an expanded website to focus on a broader range of tourism attractions including birding, general nature/wildlife tourism, adventure/sport fishing, and cultural tourism. The project expects to have the website ready to go live this spring. Simultaneously, the project collaborated with the Guyana Feather Friends Society to revamp their website: http://www.birdingguyana.gy/.

Donor Harmonization Cooperation with complementary donor projects was a high priority for work in the ecotourism sub-sector in Year 1, leveraging a total of $700,000. With the assistance of GTIS II, the Iwokrama International Centre for Rainforest Conservation and Development received a €300,000 grant to implement a natural resource management project with 17 indigenous communities from the Rupununi: Fairview, Surama, Wowetta, Rupertee, Annai, Aranaputa, Kwatamang, Crashwater, Rewa, Apoteri, Massara, Yakarinta, Toka, Kwaimatta, Katoka, Yupukari, and Nappi. These communities comprise approximately 5,000 Amerindians who are affected by extractive industries including commercial fishing, logging and mining and the resource use and cash consequences of these businesses.

GTIS also assisted Iwokrama to secure a grant of $145,000 from the IDB to create a consortium of export market-ready businesses, organizations and communities engaged in tourism to support and forward the development of a range of sustainable tourism experiences in the Rupununi region including sustainable birding, nature and cultural tourism.

Planned Activities

Documentary on Guyana Robert Arrington, the former host of the sport fishing show Reel Adventures is now represented by the largest agency in the outdoor industry which is currently negotiating a contract with Animal Planet, with opportunities for episodes featuring Guyana. Mr. Arrington has also secured a deal with www.costadelmar.com, to produce a film on how Rewa Village has moved to and adopted a conservation and sustainable tourism approach for their community. The story of Surama as the community leader overall in the Rupununi and their role in influencing Rewa will also be the supporting theme featured. Costa Del Mar’s film company, Costa Films, produces films that raise awareness about conservation issues around the world. In recent years, the company has produced films in the Galapagos, Florida, Belize, Alaska, and Panama, combining fishing adventure, local culture, and conservation.