Slide 1

PARTNERSHIP ARRANGEMENT FOR ENHANCING AGRICULTURE RISK MANAGEMENT AND PRAEDIAL LARCENCY AGENDAS IN THE REGION.

DR. VINCENT LITTLE COORDINATOR,IICAs CARIBBEAN TECHNICAL AGENDA

TABLE OF CONTENT Background

CARM Strategy

Agricultural Insurance Agenda

Praedial Larceny AgendaBACKGROUND Caribbean Region is comprised mainly of:Small Island Developing States (SIDS) andLow 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 COUNTRYDISASTERESTIMATED VALUEDOMINICALuis and Marilyn (1995)US $ 12 millionGRENADAIvan (2004)US $ 36.6 millionGUYANAFloods (2004/2005)

Floods (2005/2006)US $ 54.5 million

US $ 22.5 millionJAMAICAGilbert (1988)J $ 1.66 billionST. KITTS/NEVISLuis (1995)US $ 15 millionST. LUCIAAllen (1980)

Dean (2007)US $ 16.9 million

US $ 10 millionMAJOR HURRICANES IN THE CARIBBEAN BY DECADE, 1970-2008CATEGORIES OF HURRICANE1970-19791980-19891990-19992000-2008CATEGORY 3971110CATEGORY 4371212CATEGORY 53327TOTAL15172529INCREASED ECONOMIC COSTS TO THE SECTOR DUE TO:Increased capital assets accumulation within the sectorStrengthened inter-sectoral linkagesIncreased persistent povertyContinued demographic growth and shiftsMigration towards coasts and river-beds of mega-citiesIncreased probability of occurrence of severe weather eventsTHE JAGDEO INITIATIVEIn 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 Initiatives 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 INITIATIVE1LIMITED FINANCE AND INADEQUATE NEW INVESTMENTSBARBADOS/CDB2OUTDATED,INEFFICIENT AGRICULTURE HEALTH AND FOOD SAFETY SYSTEMSTRINIDAD AND TOBAGO/CARICOM3INADEQUATE RESEARCH AND DEVELOPMENTST. LUCIA/CARDI4FRAGMENTED AND DISORGANIZED PRIVATE SECTORST. VINCENT AND THE GRENADINES/CABA5INEFFICIENT LAND AND WATER DISTRIBUTION AND MANAGEMENT SYSTEMSGUYANA/FAO6DEFICIENT AND UNCOORDINATED RISK MANAGEMENT MEASURES, INCLUDING PRAEDIAL LARCENYANTIGUA AND BARBUDA/FAO7INADEQUTE TRANSPORTST. KITTS AND NEVIS/CARICOM8

9

WEAK MARKETS AND MARKET DEVELOPMENT AND LINKAGES

LACK OF SHILLED HUMAN RESOURCESJAMAICA/CABA

DOMINICA/UWI

ESTABLISHMENT OF TMACsESTABLISHMENT 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 SYNERGIESCOORDINATING 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 CommitteeTHE COMMITTEEMinister of Agriculture, Lands, Housing and Environment of Antigua & Barbuda - ChairUnited Nations Food & Agriculture Organization (FAO) Lead AgencyInter- American Institute for Cooperation on Agriculture (IICA) Technical Support AgencyCaribbean 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 AgencyCARICOM SecretariatCaribbean 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 SectorCaribbean 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 CARIBBEANGOAL 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 man-made hazards, and the effects of climate change on the sector.

OBJECTIVESTo 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 levelTo 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 SEGMENTATIONSocial vs. Commercial insurance

Traditional farming sector

Commercial farming sector

Emerging farming sector.

WHY SEGMENTATIONTO 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 modelRISK, VULNERABILITY AND CAPACITY ASSESSMENTSHazard analysis Exposure analysis to value assets at riskVulnerability analysisDamage and Loss analysesThree 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 BUILDINGCOMPONENTS OF CAPACITY BUILDING Data management

Regulatory/supervisory framework

Information and Education

Technical expertise

Programme administration and management.

DATA MANAGEMENTMeteorological data archiving

Weather and climate forecasting and monitoring systems

Packaging and transfer of data to end users for decision making.

REGULATORY/SUPERVISORYEstablishing a stable legal framework for disaster risk managementStrengthen national and regional disaster management agencies and establishment of stronger co-ordination mechanisms between relevant line ministriesLinking community-level experience with national-level policy makingStrengthen building codes and land-use

INFORMATION AND EDUCATIONEstablishing/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 EXPERTISEPromoting 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 INSTRUMENTSAgricultural insurance and reinsuranceCatastrophic bonds (Cat bonds)Weather derivativesFuture marketsMutual fundsPersonal savingsNatural 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 REGIMEAGRICULTURAL INSURANCE SCHEMES UNDERDEVELOPEDAsymmetric 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 marketRENEWED INTEREST IN INSURANCEIncreasing 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 SUSTAINABILITYCOUNTRYPERIOD ANALYZEDCOST vs. PREMIUM RATIO (A+I/P)BRAZIL1975/19814.57COSTA RICA1970/19892.80JAPAN1985/19894.56MEXICO1980/19893.65PHILIPPINES1981/19895.57USA19993.68SPAIN1990/20090.83PLAN OF ACTION FOR INSURANCEAssessing 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 prioritizationPLAN OF ACTION FOR INSURANCEAssessing 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 INSURANCEDetermining 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 programmesPRAEDIAL LARCENY AGENDAPRAEDIAL LARCENY CONSULTANCYTHE BEASTWhat 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 livestockIn 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 JUDICIARYResident 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 programmeTHANK YOU