Transcript Agriculture Sub-sector Committee

PARTNERSHIP ARRANGEMENT FOR
ENHANCING AGRICULTURE RISK
MANAGEMENT AND PRAEDIAL
LARCENCY AGENDAS IN THE
REGION.
DR. VINCENT LITTLE
COORDINATOR,
IICA’s CARIBBEAN TECHNICAL AGENDA
TABLE OF CONTENT
 Background
 CARM Strategy
 Agricultural Insurance Agenda
 Praedial Larceny Agenda
BACKGROUND
 Caribbean Region is comprised mainly of:
 Small Island Developing States (SIDS) and
 Low Lying Coastal States (LLCS)
 Second most prone region in world to natural disaster
 Region experiences regular annual losses due to
natural events in the order of US $3.0 billion.
DAMAGE DONE TO THE
AGRICULTURAL SECTOR
COUNTRY
DISASTER
ESTIMATED VALUE
DOMINICA
Luis and Marilyn (1995)
US $ 12 million
GRENADA
Ivan (2004)
US $ 36.6 million
GUYANA
Floods (2004/2005)
US $ 54.5 million
Floods (2005/2006)
US $ 22.5 million
JAMAICA
Gilbert (1988)
J $ 1.66 billion
ST. KITTS/NEVIS
Luis (1995)
US $ 15 million
ST. LUCIA
Allen (1980)
US $ 16.9 million
Dean (2007)
US $ 10 million
MAJOR HURRICANES IN THE
CARIBBEAN BY DECADE, 1970-2008
CATEGORIES 1970OF
1979
HURRICANE
CATEGORY 3
CATEGORY 4
CATEGORY 5
TOTAL
19801989
19901999
20002008
9
3
3
7
7
3
11
12
2
10
12
7
15
17
25
29
INCREASED ECONOMIC COSTS TO
THE SECTOR DUE TO:
 Increased capital assets accumulation within the sector
 Strengthened inter-sectoral linkages
 Increased persistent poverty
 Continued demographic growth and shifts
 Migration towards coasts and river-beds of mega-cities
 Increased probability of occurrence of severe weather
events
THE JAGDEO INITIATIVE
 In 2003, President Jagdeo asked IICA and FAO to
assist in the development of a framework for a
regional agricultural repositioning strategy.
 25th CHG (July/04) – Heads endorsed the
Framework Proposal, which contained the Jagdeo
Initiative’s vision, scope, focus and process.
 The Initiative is the main vehicle for the
implementation of the CARICOM CAP, with a
focus on addressing 9 Key Binding Constraints
to the development of agriculture.
NINE KEY BINDING CONSTRAINTS OF
JAGDEO INITIATIVE
1
LIMITED FINANCE AND INADEQUATE NEW
INVESTMENTS
BARBADOS/CDB
2
OUTDATED,INEFFICIENT AGRICULTURE
HEALTH AND FOOD SAFETY SYSTEMS
TRINIDAD AND
TOBAGO/CARICOM
3
INADEQUATE RESEARCH AND DEVELOPMENT
ST. LUCIA/CARDI
4
FRAGMENTED AND DISORGANIZED PRIVATE
SECTOR
ST. VINCENT AND THE
GRENADINES/CABA
5
INEFFICIENT LAND AND WATER DISTRIBUTION GUYANA/FAO
AND MANAGEMENT SYSTEMS
6
DEFICIENT AND UNCOORDINATED RISK
MANAGEMENT MEASURES, INCLUDING
PRAEDIAL LARCENY
ANTIGUA AND
BARBUDA/FAO
7
INADEQUTE TRANSPORT
ST. KITTS AND
NEVIS/CARICOM
8
WEAK MARKETS AND MARKET DEVELOPMENT
AND LINKAGES
JAMAICA/CABA
ESTABLISHMENT OF TMACs
 ESTABLISHMENT OF A TECHNICAL MANAGEMENT
ADVISORY COMMITTEE (TMAC) FOR EACH KEY BINDING
CONSTRAINT (KBC) CHAIRED BY THE MINISTER OR
NOMINEE.
 LEAD AGENCY RESPONSIBILITY FOR –
 ENSURING THE TECHNICAL AND REGIONAL
PERSPECTIVES AND SYNERGIES
 COORDINATING THE DEVELOPMENT AND
IMPLEMENTATION OF ANNUAL WORK PROGRAMME
CDEMA GOVERNANCE STRUCTURE
 Harmonization Council (CHC)
 Sector committees (5)
 Agriculture Sub-sector Committee (ASSC)
ASSC/TMAC COMMITTEE
 Amalgamation of the:
 TMAC of the Jagdeo Initiative and
 CDEMA ASSC Committee
THE COMMITTEE
 Minister of Agriculture, Lands, Housing and Environment of Antigua & Barbuda - Chair
 United Nations Food & Agriculture Organization (FAO) – Lead Agency
 Inter- American Institute for Cooperation on Agriculture (IICA) – Technical Support
Agency
 Caribbean Disaster Emergency Management Agency (CDEMA)
 United Nations Economic Commission for Latin America and the Caribbean (UNECLAC)
 Caribbean Agriculture Research and Development Institute (CARDI) – Technical
Support Agency
 CARICOM Secretariat
 Caribbean Community Climate Change Centre (CCCCC)
 Caribbean Institute of Meteorology and Hydrology (CIMH)
 University of the West Indies Centre for Resource Management and Environmental
Studies (CERMES)
 Caribbean Regional Fisheries Mechanism (CRFM)
 Caribbean Farmers Network (CaFAN)
 Some form of representation from the Insurance Sector
 Caribbean Food and Nutrition Institute (CFNI)
 Organization of Eastern Caribbean States (OECS)
WORK PROGRAMME OF THE
ASSC/TMAC
 Three- year Work Programme (2010-2012)
 D-Group
 Agricultural Insurance Symposium – June 2010
 Agricultural Risk Management Framework Developed
 Agricultural Insurance Plan of Action Developed.
 Praedial Larceny Agenda Evolving
COMPREHENSIVE AGRICULTURAL
RISK MANAGEMENT (CARM)
STRATEGY FOR THE CARIBBEAN
GOAL
Present a systematic and logical roadmap for
the implementation of actions aimed at
addressing agricultural risks at the regional,
national and community level through
effective and efficient programmes of
mitigation, , management, and coordinated
response to natural, technological and manmade hazards, and the effects of climate
change on the sector.
OBJECTIVES
 To enhance the institutional framework and establish an effective
mechanism and programme for agricultural risk management (ARM).
 To enhance the preparedness, response and mitigation capacity and
mechanism for risk management in the agriculture sector in Member
States as well as at the Regional level
 To provide emergency assistance in the management of invasive
species.
 To support the development and promotion of national agendas for
addressing praedial larceny in the region, including the legislative
framework and related information and infrastructure.
ELEMENTS OF THE STRATEGY
 Agri-business segmentation
 Risk assessment
 Institutional capacity building
 Risk financing.
AGRI-BUSINESS SEGMENTATION
Social vs. Commercial insurance
Traditional farming sector
Commercial farming sector
Emerging farming sector.
WHY SEGMENTATION
TO DETERMINE ISSUES SUCH AS:
 Capacity to implement best practices
 Degree of risk awareness
 Affordability
 Risk management culture.
AGRICULTURAL RISK ASSESSMENT
 Risk identification
 Risk quantification
 Risk prioritization
Probabilistic agricultural risk model
RISK, VULNERABILITY AND
CAPACITY ASSESSMENTS
Hazard analysis
 Exposure analysis to value assets at risk
Vulnerability analysis
Damage and Loss analyses
Three complimentary activities:
 Management and dissemination of knowledge on risk.
 Effective early warning systems, including for famine,
drought, hurricanes and floods.
 Communication and awareness promotion about hazard
threats
INSTITUTIONAL CAPACITY
BUILDING
COMPONENTS OF CAPACITY
BUILDING
 Data management
 Regulatory/supervisory framework
 Information and Education
 Technical expertise
 Programme administration and management.
DATA MANAGEMENT
Meteorological data archiving
Weather and climate forecasting and monitoring
systems
Packaging and transfer of data to end users for
decision making.
REGULATORY/SUPERVISORY
Establishing a stable legal framework for disaster risk
management
Strengthen national and regional disaster
management agencies and establishment of stronger
co-ordination mechanisms between relevant line
ministries
Linking community-level experience with nationallevel policy making
Strengthen building codes and land-use
INFORMATION AND EDUCATION
 Establishing/strengthening of the information infrastructure for
decision making, knowledge sharing and management of agricultural
risk in the region
 Standardization of existing educational and training materials for
agricultural risk management
 Establishing strategy and curriculum for building a culture of safety in
the region
 Developing agricultural risk management tool kit for farmers in the
region
 Developing and implementing communication/public awareness
programmes
TECHNICAL EXPERTISE
 Promoting technical and physical risk mitigation
 Developing agricultural risk management protocols and resource
facility
 Improving national and local capacities for disaster prevention and
mitigation, preparedness and response
 Enhancing national and regional capacities for the conduct of disaster
damage assessment and the design of rehabilitation/reconstruction
plans
 Providing emergency assistance in the management of invasive species
 Supporting the development and promotion of national agendas for
addressing praedial larceny
RISK FINANCING STRATEGY
 OBJECTIVES
 Identify the players and their potential contribution
(value added) to risk financing
Determine the risk bearing capacity of the
various players
Identify the financial instruments that are most
suitable to transfer the risks.
RISK INSTRUMENTS
 Agricultural insurance and reinsurance
 Catastrophic bonds (‘Cat bonds”)
 Weather derivatives
 Future markets
 Mutual funds
 Personal savings
 Natural disaster funds and other public instruments,
such as safety nets for the most vulnerable (micro-credit
and cash transfers)
 Public activities in agricultural mitigation and
adaptation.
AGRICULTURAL INSURANCE
REGIME
AGRICULTURAL INSURANCE
SCHEMES UNDERDEVELOPED
 Asymmetric information
 High administrative costs
 Mismatch between farmers preferences and capacity to
pay
 Distorted Government incentives and lack of political
will
 Reluctance of reinsurers to enter the market
RENEWED INTEREST IN INSURANCE
Increasing frequency and cost of natural disasters
Strong links between shocks and poverty
Need to increase agricultural competitiveness in light
of ongoing trade integration efforts and globalization
Promising advances in sensing technologies,
computing power, telecommunications, and
probabilistic risk modelling.
DESIRABLE CHARACTERISTICS:
 Cost effective (accessible to the producers)
 Easy to administer and operate
 Not subject to moral hazard: takes into account incentives and
strategic responses from producers
 Cover a wide range of risks
 Benefit payments are fast, effective and transparent
 Financially sustainable (access to international financial
markets).
AGRICULTURAL INSURANCE
PROGRAMME SUSTAINABILITY
COUNTRY
PERIOD
ANALYZED
COST vs.
PREMIUM RATIO
(A+I/P)
BRAZIL
1975/1981
4.57
COSTA RICA
1970/1989
2.80
JAPAN
1985/1989
4.56
MEXICO
1980/1989
3.65
PHILIPPINES
1981/1989
5.57
1999
3.68
1990/2009
0.83
USA
SPAIN
PLAN OF ACTION FOR INSURANCE
Assessing the general demand for agricultural
insurance by identifying objectives – social vs.
commercial and target audience.
Identifying those agricultural crops and producer
composition, infrastructure and perils for which cost
effective insurance is attainable
Conducting risk assessments, vulnerability
assessments and risk prioritization
PLAN OF ACTION FOR INSURANCE
Assessing the available products and supply of
insurance/reinsurance to support initiatives
Assessing the feasibility of up scaling existing
initiatives such as WINCROP to cover multi-perils and
crops
Assessing the role of Government in the provision of
administrative oversight, information systems, legal
and regulatory framework, etc.
PLAN OF ACTION FOR INSURANCE
Determining effective channels of distribution
Designing and implementing a regional catastrophic
risk facility for the sector (CCRIF or not)
Developing pilot schemes
Developing information and education programmes
PRAEDIAL LARCENY AGENDA
PRAEDIAL LARCENY CONSULTANCY
THE BEAST
 What we no longer see are desperate individuals trying to
satisfy themselves with a single act.
 What we are now seeing are expert ‘farmers and butchers’
who drive in vehicles and are well equipped to facilitate
their nefarious activities.
 Those engaging in Praedial Larceny are now highly
sophisticated and that their actions are causing despair for
the victims.
 Those victims of Praedial Larceny are men and women who
have invested their savings, who have mortgaged their
properties
REGIONAL COST OF PRAEDIAL
LARCENY
 Loss of crops and livestock
 In Jamaica - the annual loss to Praedial Larceny is estimated
at J $ 5.0 billion (US $ 60 million).
 Caribbean – annual loss is estimated at US $385 million
 Reduced levels of farmers profitability
 Loss of investments – disincentive for investments
 Threat to human health and safety
 Loss of good genetic material
ROLE OF PUBLIC – PRIVATE SECTOR
 Agriculture must take a holistic approach to address
Praedial Larceny
 Must involve all stakeholders – government, judiciary
and producers along the entire value chain
STRATEGY MUST INVOLVE:
 Public Awareness and Public Education
 Re –education of the police and Judiciary
 Strengthening of Existing Laws and Legislation
 The establishment of traceability system
Appointment of Chief Praedial Larceny Officer
RE-EDUCATION OF POLICE AND
JUDICIARY
 Resident magistrates and police must not treat thieves too
leniently
 Praedial Larceny must be seen as a crime. The real issue is crime
 Assets earned through Praedial Larceny must be included in the
Proceeds of Crime Act and treated the same way that assets from
drugs and other organized crimes are treated.
 Convicted praedial thieves must be bound to compensate their
victims
 Promotion of call in services
STRENGTHENING OF EXISTING
LAWS AND LEGISLATION
 Stiffer penalties to include:
 Increasing fines and sentences.
 Instituting a three strike system
 Reviewing laws and penalties for individuals who accept
stolen goods
 Implementing a mechanism for compensating farmers
from fines collected.
ESTABLISHMENT OF TRACEABILITY
SYSTEM
 Record keeping by farmers
 Registration of producers and vendors.
 Introduction of receipt books within the context of a Sale
of Produce Act
 Re-introduction or introduction of slaughter Register
 Certification of Abattoirs
 Mapping of Hot Spots
APPOINTMENT OF CHIEF PRAEDIAL
LARCENY OFFICER
 Establishes a Focal Point
 Gives impetus to the implementation of an aggressive
programme
THANK YOU