LAST week, the inaugural CARICOM Agri-Investment Forum and Expo, organised by the Government of Guyana and the CARICOM Secretariat drew heads of state from across the region to Georgetown. The conference was geared towards encouraging investments into regional agriculture as a solution to reduce the regional food-import bill of around US$6 billion by 25 percent by the year 2025, while boosting food systems and championing food security across CARICOM. With Guyana’s new oil revenues steadily increasing, there is a heightened focus on agriculture as an investment that can help diversify the economy, reduce costs for households and create new spin-off industries from oil and gas.

For Guyana, the agricultural sector is a significant export earner that, in 2020, accounted for about 16 percent of GDP. According to the 2022 national budget, the non-oil economy is projected to grow by almost eight percent, and the government’s focus on agricultural investments could make that a reality. The sub-sectors of sugar and rice growing alone are projected to grow by almost 12 percent and 25 percent, respectively. Achieving regional food security has long been a goal championed by successive leaders of Guyana. Guyana is well placed to be the regional breadbasket with abundant arable land and favourable climatic conditions.
The government is proactively trying to steer investments into the agricultural sector, helping small farmers develop advanced skills to produce and market their products and diversify the economy as oil revenues increase. As Vice President Bharrat Jagdeo said, “I’ve seen President Ali go down on the ground, talking to the smallest farmers. You have to be that engaged if you want this to matter. You have to really understand what it takes and only then can you respond to the problems of people.”

Guyana’s growing oil-and-gas sector is also tightly linked with agriculture. Nitrogen fertilisers are the most used fertilisers in the world and account for roughly 45 percent of the world’s food production. Natural gas is used to produce two nitrogen-based fertilisers—ammonia and urea, and hundreds of other products such as pharmaceuticals, cleaning products and more.

The benefits derived from using oil and gas in agricultural production are numerous and are ultimately vital to food security. For example, in Sri Lanka, that country’s government banned the use and importation of synthetic fertilisers in a push to transition to organic farming. The effects were catastrophic and led to wide-ranging food security and economic issues, prompting a 20 percent collapse in domestic rice production and ruining the nation’s tea crop, which had served as the primary export and source of foreign exchange.

In Guyana, oil and gas could help finance new investments in agriculture and provide the opportunity to produce critical components such fertilisers, locally. The gas-to-power project will bring natural gas from the Stabroek Block onshore to be processed and used in various ways. Through the partnership with ExxonMobil Guyana on this project, the government aims to reduce electricity costs by as much as 50 percent and use any additional gas to supply Guyana’s domestic needs for the long term.

The industrial hub planned for the Wales Estate could eventually take advantage of excess gas to produce nitrogen fertilisers for domestic use and export into new markets. Cheaper electricity could also help Guyana climb the value chain of agriculture, moving into more profitable areas such as food processing that depend on reliable and inexpensive electricity to be economical.

The government’s push to diversify the economy with capital from the energy sector will positively impact the agriculture industry. Last week’s agriculture conference placed agri-business and food-security issues at the top of the national and regional agendas. This is in keeping with the broader push to build a resilient Guyana and a resilient CARICOM. At a seminar last month on Guyana’s future development trajectory, President Irfaan Ali said clearly, “Our development is about creating a broad platform for the future; a platform in which we are going to strengthen traditional sectors, make them more competitive… we’re going to go after new sectors.”