MINISTER with the portfolio, Mr. Robert Persaud said Wednesday that, even though the global economic crisis has an impact on the local agriculture sector, it will not be of a destructive proportion.

He offered the forecast at a roundtable discussion, involving key stakeholders, on the effects of the financial meltdown, in Hotel Tower, Main Street, Georgetown.

Persaud reminded the forum that agriculture accounts for 34 per cent of the Gross Domestic Product (GDP) and is largely an export oriented.

He said Guyana, like many other countries, is not immune to the prevailing international circumstances and that the concomitant problems, their solutions and resulting market opportunities need to be examined.

Persaud pointed out that government has engaged the agriculture sub-sectors on the issue to identify possible investment opportunities that can be derived.

He said some of the measures which were taken to address the situation include the removal of the export commission from value-added forestry products and the slashing of it on rice by 60 per cent.

Persaud said his ministry has held discussions with the banking community to examine steps that can be taken to assist farmers in precarious positions.

In addition, he said the Administration is looking to mobilise more resources and put a framework and facilities in place to benefit those involved in crops and livestock.

Persaud assured that Government will continue to look at creative and innovative medium to long-term strategies for ensuring the sub-sectors of agriculture withstand the effects triggered by the international downturn.

Guyana is characterised as a small open economy, with exports accounting for 75 per cent of GDP and he said, because only a few commodities – sugar, rice, seafoods, gold, diamond, bauxite and timber- contribute to export earnings and are sold mainly in established markets of Europe and North America, they are susceptible to a high degree of volatility, both in trade volumes and the international commodity process.

Unlikely change
The demand for Guyana’s main agricultural export products is unlikely to change dramatically as a result of the crisis, given that the main ones exported are relatively income inelastic, Persaud said.

However, he pointed out that such as sugar may be impacted marginally as it is used in certain processed items that are considered luxury goods, like soft drinks and confectionaries.

Persaud said that slowing economic growth is also likely to dampen the demand for livestock produce, resulting in a weaker demand for feed.

In more differentiated sectors, like fisheries, it is likely that a shift towards cheaper varieties, away from higher value ones, will be observed, with the net effect depending on the respective quantities exported.

He said, too, that remittances from the diaspora, which provide households with a significant source of income, are another area negatively impacted by the crisis.

Persaud noted that, unlike many small economies which are likely to be affected by international banks suspending credit, the local banking system is not heavily integrated in world money, capital or bond markets and this has allowed it, so far, to go relatively unscathed.

Except for companies that may be indirectly exposed to the risks and turbulences of the financial mess, as the case with CLICO Insurance, he said.

Economic and Commercial Officer at the United States (U.S.) Embassy, Mr. James Plasman accepted that the crisis has come at a difficult time but presents opportunities for non-traditional crops area.

He suggested that Guyana begin focusing on niche markets, noting that the recession in the U.S. has made it easier to get good deals.

Plasman alluded to the stable shape of the country’s banking sector and said investors can still obtain loans, in contrast to other counties worldwide.

The diplomat proffered that farmers need to focus more on quantity and quality production, as overseas buyers pay premium prices for premium commodities.

He also said that farmers’ ability to meet quotas for export markets is another critical factor for them to not only be competitive but maintain their customers.

Plasman underscored the importance of identifying produce that can be grown cheaply and have available markets, in order to maximise profit and minimise production cost.

Innovative technology
He said, for farmers to remain competitive and heighten production, they will have to employ innovative technology and better infrastructure, geared to extend the shelf life of their produce.

Plasman acknowledged that, while agriculture diversification is not an easy task, it has tremendous opportunity and, given the climate here, availability of water and markets in the Caribbean, Guyana has a distinct advantage to be successful in such ventures.

Guyana Manufacturing and Services Association (GM&SA) President, Mr. Ramesh Dookoo said the economic downturn presents an opening for Guyana to be sold as an agriculture business destination.

He contended that the time has come to change whispers into construction talk and the development of strategies for action to position Guyana to shrug off the impact of the financial crisis.

However, Dookoo advised that the approaches devised must be carefully looked at before implementation, to avoid any drastic reaction and noted that brand must be protected in cost conservation.

Inter-American Development Bank (IDB) Resident Representative, Mr. Marco Nicola lauded the exchange and said it should be an ongoing feature to provide a greater understanding of the problems, as well as a chance to put forward solutions.