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DRAFT April 19, 1996

I. Basic Features of the Sector
A. The Ministry of Agriculture
B. Technology Institutions
C. Agricultural Training Institutions
D. Regional and Local Government

III. Description of the Principal Issues and Constraints Facing the Sector
A. Central Government and Decentralised National Institutions
B. Community Governance, Administrative Decentralisation and Public Participation
C. Producer and Marketing Organisations
D. Financial Institutions

IV. Sectoral Objectives

V. Policy Recommendations and Their Technical Justifications
A. Central Government and Decentralised National Institutions
B. Community Governance, Administrative Decentralisation and Public Participation
C. Producer and Marketing Organisations
D. Financial Institutions

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I. Basic Features of the Sector

Many local, national and international institutions and agencies are directly or indirectly involved in the agricultural sector. For reviewing the institutional framework of this sector, these institutions were classified into six broad groups:

- The Ministry of Agriculture

- Institutions involved in technology and training

- Producers, processors and marketing associations

- Regional and local government's institutions

- Banking and financial institutions

- International organisations

- Other support service institutions and agencies

Table 28-1 shows a list of the institutions classified in the above-mentioned groups, and the roles they are performing within the agricultural sector.

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A. The Ministry of Agriculture

The Ministry of Agriculture remains at the centre of the institutional make up of the sector. As the primary governmental and general support institution, Ministry of Agriculture is expected to:

- provide overall policy direction for the sector;

- ensure, on one hand, the coordination of functions between a large number of public sector institutions involved in agriculture and on the other hand, between those institutions and the private sector;

- monitor developments in the sector, provide current information and develop long-term plans;

- manage the project cycle and negotiate external financing for agricultural projects;

- collect and process data, carry out analysis, and disseminate relevant information;

- respond to emergencies in the sector in areas such as a sudden crop or livestock loss as a result of pests and disease or weather.

Table 28-1

Institutions and Agencies Supporting the Agricultural Sector
Type or Function Public Sector Wider Public Sector International

NGO and Private Sector

Technology development and transfer - Ministry of Agriculture - NARI




Technical assistance - Ministry of Agriculture









- Input Suppliers
Training - UGFA




Finance - Ministry of Finance - GAIBANK /GNCB - IDB

- World Bank




- EC


Administration/ coordination/ Regulatory/ policy - Ministry of Agriculture

- Ministry of Regional Development

- Regional Democratic Councils

- NDCs

Marketing - Ministry of Trade - NGMC


Marketing associations


Production - Ministry of Agriculture (Mon Repos

livestock farm)





The Crop and Livestock Department is the largest of the six departments of the Ministry of Agriculture, the others being as follows:

- Lands and Survey Department

- Fisheries Department

- Hydraulic Department

- Hydrometeorology Department

- Planning Department

The Crops and Livestock Department of the Ministry of Agriculture is primarily responsible for the provision of technical and extension services to the farming communities. These services, as presently organised, focus on particular crops and livestock on a national basis. The crop programmes include vegetables, coconuts, root and tubers, quality seed production, nursery development, and programmes for plant protection. There is a general livestock programme which is related to providing services to farmers for animal health and animal production and a specific programme for the development of the poultry industry.

Associated with the Ministry of Agriculture's extension activities are the following organisations and units that are all functioning far below their optimum and need to be rehabilitated if extension capabilities are to be enhanced:

- The Agricultural In-service Training Communication Centre (AITCC) developed in the late 1970s as a centre to produce agricultural information material for the farming community, and to provide residential training to farmers and extension personnel.

- The Veterinary Diagnostic Laboratory developed in the early 1980s to carry out Parasitology, Haematology, Pathology, Microbiology and other diagnostic support to the livestock rearing community. This Laboratory is currently not operational.

- The livestock farm at Mon Repos, originally designed as a centre for livestock research in the Ministry of Agriculture.

A review of the literature reveals a broad understanding of the problems affecting the extension service. These problems can be summarised as follows:

(a) Organisational problems:

- poor linkage with agricultural research and other related organisations in agriculture;

- poor policy direction;

- lack of an infrastructure to support extension;

- limited transportation and other support facilities;

- scarce material resources;

- weak monitoring and evaluation of extension officers and the overall programme.

(b) Extension programme problems:

- a top down approach to programme planning;

- poor linkage between extension officer and farmers;

- programmes that do not respond to the real needs of farmers and do not encompass the whole commodity system;

- not enough focus on the marketing component.

(c) Staff problems:

- a poor remuneration package;

- rapid turn over and consequent shortage of staff;

- poor support service in respect of information and training;

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B. Technology Institutions

1. National Agricultural Research Institute

The National Agricultural Research Institute (NARI) was established by an Act of Parliament (Act No. 19) in 1984.

During 1982 the Government had commissioned a study to identify alternatives for the management of agricultural research in Guyana. The study was undertaken by the Netherlands-based International Service for National Agricultural Research (ISNAR).

The proposed alternative policy choices were as follows:

(a) A research programme that concentrated on sugar and rice but included on-farm testing for most of the other crops or a programme in which some research was going to be done on sugar and rice, but that also included adapted and applied research on several other crops; and

(b) A large research unit that would have included extension and perhaps some input-supply services, or a small central research unit that would depend on other organisations for the implementation of field trials and the dissemination of results.

Based on the recommendations of the ISNAR Report and views and opinions from the farming community and from agricultural scientists, the then Minister of Agriculture set up a team of senior agricultural scientists to investigate the issue further and to advise the Ministry appropriately.

In 1984, NARI, "a new public institution," took over the physical assets (fixed and movable) and staff of the then Department of Research of the Ministry of Agriculture.

The present functions of NARI are to:

(a) advise on, and develop, appropriate systems to promote balanced, diversified and sustained agricultural development and optimise agricultural production through adaptive and investigative research; and

(b) facilitate the use of improved production technology by agricultural producers, and establish adequate feedback systems for them in order to achieve and maintain national self-sufficiency and export capacities in food and fibre.

For carrying out its functions listed above, the Institute has power to:

(a) carry out applied agricultural research, including research into appropriate systems of mechanisation, to provide answers to current and foreseeable problems facing crop, livestock, forestry and fisheries production;

(b) evaluate under local conditions scientific findings in other countries;

(c) determine, develop and popularise mechanisms, programmes and activities by which the agricultural potential of Guyana may be realised, and

(d) collaborate closely with all other agencies and institutions engaged in agricultural and related research.

Apart from the establishment of the Institute, the NARI of Guyana Act 1984, also established an Agricultural research Committee (ARC). The ARC has the following functions:

(a) to advise the Minister on matters of policy relating to agricultural research;

(b) to supervise and control the functioning and activities of the Institute;

(c) to ensure that the activities of the Institute are consistent with the policy and objectives of the Government and the national priorities, relating to agriculture and agricultural research;

(d) to approve, oversee and evaluate on a continuing basis the programmes being implemented by the Institute, and

(e) to give general and technical advice and guidance to the Director of the Institute.

Over the past ten years the more significant outputs from NARI have been:

(a) the release of the rice variety Guyana-91 (which is resistant to blast and gives higher yields than the standard blast-susceptible variety, rustic);

(b) the development of a technique for controlling mealy bugs in pineapples;

(c) the production of disease-free planting material (although on a small scale) in pineapple, cassava, sweet potato and plantain, using tissue culture technology; and

(d) expanding the production and distribution of clean basic planting material to farmers.

Despite the short list of achievements, there have been many research reports written over the years. This fact points towards a strongly held view by some policy makers and technicians, that much research has been done on topics that are not relevant to farmers' needs. Typically the research appears to be driven by scientific prowess in specific areas rather than for sustainable economic activity of the farmer.

A direct result of the general dissatisfaction with the impact of NARI's research programme is seen in the fact that the recently created Guyana Rice Development Board (GRDB) has been given the responsibility for both rice research and extension. GRDB takes a tax on all rice exports, the proceeds from which are used to finance developmental activities within the rice sub-sector. It is now left to be seen whether this further fragmentation of the national research capability will in any way reduce the focus on other sub-sectors. There is no simple answer to this issue. However, it is suggested that with the removal of rice from NARI's mandate, the institution may be better able (with its present resources) to do more meaningful work in the "other crops" and livestock sub-sectors.

To achieve better technology transfer, a much closer integration of the national agricultural research and extension services is needed. One possibility, which has been mooted in government circles, is that of unifying both services (and also marketing) under a single institution. This, in itself, may not solve the problem of poor linkages but would certainly provide for closer contact between the two fields. As important as the institutional fusion of the two services is the need to reform the roles of the various actors in the system. The differing status levels of "researchers" and "extensionists" must be removed through a process of reformulation of the objectives that govern the institutions. Further, these objectives must be firmly based on a recognition of the producer and the community as the main resources and not merely as a "target" for the forcible "transfer" of knowledge.

Indeed, the very debate over the need for effective linkages between research and extension, signifies the breakdown in the purpose for which the system was established in the first place. A system of technology generation and transfer has little meaning if there is not an organic link between its component parts, on the one hand, and between the system and the farming community, on the other. Any programme for the reform of the system must include approaches that involve the participation of the farming communities at all levels of operation. Such approaches have been experimented with in Asia and other regions and have shown significant results. Participatory systems for research and extension are particularly appropriate to small-farmer communities since they involve self-diagnoses of community problems, and the setting up of systems under which the communities themselves are empowered to carry out their own experimentation and access technological support.

2. National Dairy Development Programme

A Cabinet Decision established the National Dairy Development Programme (NDDP) in January 1984. The establishment of the NDDP in the early 1980s was consistent with Government's objective of national self-sufficiency in the production of milk and the reduction of foreign exchange expenditure on milk imports.

The self-sufficiency strategy embraced the following measures:

- Increase in the national cattle herd population.

- Improvement in the genetic potential and thus the quality of herds.

- Reduction of milk imports in correlation with increased local production.

- Improvement in cattle rearing technology and animal husbandry practices.

- The promotion of improved animal nutrition by the introduction of improved pastures.

- Improvements in milk collection, processing and distribution systems.

At its inception, the overall objective of the NDDP was to achieve national self-sufficiency in fresh milk by 1988. However, as of 1988 the mandate of NDDP was expanded, and its mission statement was subsequently modified to read as follows:

"To spearhead the development thrust of a self-sustaining, self-regulating, economically viable cattle industry within the context of national self-sufficiency in milk and dairy products, beef and beef products and the export of these commodities."

3. New Guyana Marketing Corporation

The original Guyana Marketing Corporation (GMC) was created by Order No. 97 of 1963 made under the public Corporation Ordinance (No. 23 of 1962). The order states:

"There shall be established a Public Corporation . . . it . . . may take over the assets and liabilities . . . of all the units now comprising the Marketing Division of the Ministry of Trade and Industry and which are more specifically described in the first schedule hereto."

By 1984, the activities of the GMC had become significantly reduced and a decision clearly had to be taken whether or not the Corporation should be closed down. Such action seemed to be very imminent. The policy choices open to Government were to:

(a) improve the competitiveness of the marketing system by creating better market access for potential participants and by distributing better information on prices and related variables for market participants; or

(b) provide the marketing services directly.

In 1985, after the Corporation took on a new role, it began to be called the "New" Guyana Marketing Corporation (NGMC). Through the establishment of the "New" GMC, Government opted to follow policy choice (a) above. The role of the "New" GMC was to improve market access and provide market intelligence, to analyse market performance and to instigate better post-harvest handling practices. While the name "New" GMC has been liberally used as from 1985, the Corporation is still legally named the Guyana Marketing Corporation. The "New" was affixed to the name by the General Manager (Designate) in the final drafts of the "Proposal of the new role of the Guyana Marketing Corporation," after the Ministry of Agriculture was clearly not mindful of a complete name change. The "New" which was intended to differentiate the new role from the old role of the organisation, was emphasised by officials, the public and the media and over time the name stuck.

The New GMC was set up with three units, for market intelligence, technology transfer, and commercial policy.

a. Market Intelligence Unit

The aims of the Market Intelligence Unit are to:

(i) reduce the risk involved in the marketing of agricultural products by:

- improving market transparency;

- improving efficiency and orderliness in the distributive system;

- facilitating reductions in price fluctuations;

- strengthening the bargaining power of farmers.

(ii) provide market information about crops and livestock products to agricultural marketing participants including producers, intermediaries and consumers to increase marketing efficiency and productivity;

(iii) provide market information to farmers and market participants so that they can more effectively meet market requirements, stabilise prices and reduce gluts and shortages;

(iv) provide market information to Government and other policy makers in order to ensure the greater degree of reliability and appropriateness of the decision making process.

b. Technology Transfer Unit

The objectives of the Technology Transfer Programme are to:

(i) develop and provide information on grading, storage, packaging, transportation and other related issues to market participants;

(ii) promote the production of non-traditional crops specifically for the export market;

(iv) develop and document the steps involved in exporting perishables to specified markets; and

(v) provide market extension services.

c. Commercial/Market Policy Unit

The aims of the Commercial/Market Policy Unit (CMPU) are to:

(i) provide a one-stop service for exporters of agricultural produce;

(ii) make available for sale specific kinds of information to aid users;

(iii) make available for sale directly or indirectly certain kinds of packaging containers approved for export; and

(iv) advise the Government on agricultural marketing policy, particularly for non-traditional produce.

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C. Agricultural Training Institutions

1. Guyana School of Agriculture

The Guyana School of Agriculture (GSA) was established thirty-two years ago and offers both a certificate and a diploma programmes in agriculture. The certificate programme is a two-year course with a strong practical bias and is intended for youths with a full primary education, who have attained the age of seventeen. It is designed to equip young people for successful farming careers. The diploma programme is a sub-professional two-year course designed for students with a secondary school background.

2. Regional Educational Programme for Animal Health Assistants (REPAHA)

The Regional Educational Programme for Animal Health Assistants conducts a diploma programme similar to GSA and is presently training students in Animal Health and Animal Production. Since its inception in 1975, REPAHA has graduated more than 350 Animal Health and Veterinary Public Health Assistants from seventeen countries in the Caribbean.

A survey carried out indicated that employers of REPAHA graduates want them to have some competence in animal production and agribusiness management also. This deficiency has been addressed and at the 1994 graduating exercise, the first group of students graduated in Animal Production from REPAHA.

3. The University of Guyana

The University of Guyana right now offers two programmes to the first degree level in agriculture. The Faculties of Agriculture and Education conduct them. The programme offered by the Faculty of Agriculture is a four-year course and leads to a general Bachelor of Science degree in Agriculture. The Faculty of Education also offers a Bachelor of Education degree with an option in Agriculture.

4. Overall Assessment

The human resources allocated to these three tertiary level training institutions are inadequate. There are vacancies at both the technical and the support staff levels. The recurring staff vacancies can be ascribed to poor remuneration packages. This is proved by the relatively lower number of vacancies at REPAHA, which provides a better remuneration package. All three institutions have used part-time staff to deliver some courses. It is estimated that during the 1993-1994 academic year approximately 80 percent of the courses at GSA were conducted by part-time lecturers.

A frequent opinion expressed is that the training received at the University of Guyana's Faculty of Agriculture does not equip students to perform in their profession adequately, particularly in the commercial and managerial realities of farming and agribusiness. The degree is in fact highly science-based and therefore equips students for higher training and specialisation, rather than more practical or commercially oriented agricultural pursuits. The diploma and certificate programme at GSA and REPAHA have produced graduates who are much more acceptable in the workplace. This may be related to the practical orientation of these programmes.

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D. Regional and Local Government

Each of the ten regions in Guyana is administered by an elected body of between twelve and thirty-six officials. Regional democratic councilors are elected through a system of proportional representation for a term of five years. Although each political party presents a slate of regional candidates at election time, the regional party leader has complete authority to choose who on the list will serve as a councilor after the elections.

A parliamentary Act introduced the Regional Democratic system in 1980, with the aim of achieving the following objectives:

- to promote the development of Regions and their peoples;

- to encourage participation, at 'grass root' level, in the decision making process;

- to create self-reliant, productive communities;

- to mobilise people for production, cultural and educational activities;

- to produce the institutional channels for promoting the development of the Regions and for the continuous improvement of their living standards and quality of life.

Regional Democratic Councils (RDCs) do not possess policy making authority. They serve as quasi-administrative branches to carry out Central Government policies. They have supervisory authority over the Neighbourhood Democratic Councils (NDCs), although this authority and subsequent interaction vary profoundly from region to region.

In spite of the sound democratic principles outlined in the objectives of the RDC, the system as it exists today has many problems and weaknesses. Some of these may be defined as follows:

- Although the Ministries of Health and Education were decentralised (the Ministry of Agriculture being recentralised in 1994), the subject Ministries continue to maintain a direct link with the sector officers in the Regions. This dual control has made management and accountability at the regional level difficult since the Regions are not always informed promptly of the policies pursued by the Ministries.

- All personnel functions such as recruitment, transfer, and dismissals, are handled centrally by the Public Service Commission. The inability of the PSC to attract qualified personnel to fill vacancies has resulted in the upward mobility of unqualified personnel.

- An unattractive remuneration package offered to officers in the hinterland.

- Training opportunities at the regional level are almost nonexistent.

- There is an unsatisfactory level of technically skilled staff at the Regional level.

- The 'politicisation of the Administration' has also affected the proper functioning of the system.

The constraints and weaknesses defined above emphasises the need for the existing system of regional administration to be examined with the aim of a possible reorganisation to create a more democratic, flexible (responding to community needs), and technically capable institutional structure.

The existing structure is not seen as appropriate or reliable to form part of a system that would provide effective support services for the agricultural sector. This was in fact the rationale that actually led to the recentralisation of the agricultural sector, which also is not the most appropriate solution in the long run. The existing problems of limited interface with farmers and the resulting 'top down' approach to problem solving and decision making emphasise this point. A recommendable and more effective system would have the farmers as the key player. Technical support service programs should be demand driven (based on farmers' needs).

Within the existing Regional Administration system the recently introduced Neighbourhood Democratic Councils are thought to be an institutional structure through which plans and decisions can be made regarding the fulfillment of the needs of farmers and communities in general.

The amendment of the Local Democratic Organs Act in 1994 dissolved the existing local government system and replaced it with Neighbourhood Democratic Councils. According to Chapter 28.02, NDC jurisdiction includes tax collection, bridge and road maintenance, licensing and fees, market operation, rent collection, garbage collection, public playgrounds and day-care centres, in specific local communities. Theoretically, NDC operating costs are financed through self-generated revenue such as property taxes, while the Central Government provides capital improvement grants.

The council is made up of a chairman, vice-chairman and fourteen councillors, and the support staff that may include an overseer, an assistant overseer, a secretary, a pound keeper and a market caretaker. Each councillor has responsibilities related to activities in specific areas or wards. By law the NDCs are required to hold at least one meeting per month. NDCs are also required to create at least two standing committees: Public Works and Finance. Optional committees including Land Distribution, Health and Environment may also be formed. Between statutory monthly meetings, the chairperson of the NDC holds the power to decide and take actions on various issues on behalf of the council.

A District Development Officer (DDO) serves as the local government link between the RDC and the NDC. In theory the DDO should attend Council meetings and report to the RDC on community level perspectives are needs as expressed in these meetings. Annual budget and grant requests are submitted to the RDC through the DDO, where the proposal is approved or denied. In general, actions taken by the NDC are subject to approval by the RDC.

Though the NDCs are supposed to function as the organ for the integration of community level perspectives into the decision making process, in reality this does not happen. The limited amount of financing available to the NDCs and the 'red tape' involved in the accessing of funds through the RDCs severely limit the activities of the NDCs. This, in conjunction with the insufficient participation of NDCs in the planning and execution of regional programmes, is a major constraint on the efficiency of the activities of NDCs.

The lack of management and organisational skills among council members is also seen as a factor contributing to the inability of NDCs to realize their mandate.

The involvement of NDCs at community level is a factor that favours the integration of reformed and strengthened NDCs into any proposed institutional framework for the agricultural sector.

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III. Description of the Principal Issues and Constraints Facing the Sector

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A. Central Government and Decentralised National Institutions

The main institutions that deliver agricultural services are the Ministry of Agriculture (MOA) (crop and livestock extension and health services, planning, statistics, crop reporting, lands, fisheries, hydraulics), the National Dairy Development Programme (NDDP), the Guyana Marketing Corporation (GMC), the Guyana School of Agriculture (GSA), the Faculty of Agriculture of UG (UG/FA), the National Agricultural Research Institute (NARI), the Caribbean Agricultural Research and Development Institute (CARDI) and the Inter-American Institute for Cooperation on Agriculture (IICA). The Institute for Applied Science and Technology (IAST) also does work related to agriculture, particularly in relation to processing and mechanisation. In addition, the sector benefits from international donor funding through agencies such as the IDB, IFAD, the World Bank and the CDB.

The sugar and rice industries both have national institutional structures dedicated to their development. The institutional strength of these industries is not unrelated to the fact that both benefit from preferential markets (mainly in Europe) which offer prices significantly higher than those in world markets. The rice industry is served by the Guyana Rice Development Board (GRDB) which provides research, extension and trade-related services. GRDB's budget is fully funded by a commission on rice exports. A wholly government-owned corporation controls the bulk of the sugar industry. While government extracts a levy from the industry, the industry retains most of the preferential gain (Chapter 33). Gains from these preferential arrangements have not been specifically targeted to the development of other agricultural sub-sectors. While it is expected that these industries will continue to maintain their own developmental institutions, the support arrangements for "other crops and livestock" (which is basically a small farm sub-sector) remain fragmented and ineffective.

Poor definition of public and private sector roles hinders the institutions of the sector, leading to fragmentation of planning, policy analysis and project implementation capacity. Government institutions must ensure that the activities that they perform are those that the private sector cannot effectively perform. Because of the budgetary constraints facing the public sector, there have been some reductions in staffing and shedding of many services traditionally provided by MOA and other agricultural support institutions (e.g., extension services, input supply). There is, however, need for a more formal approach to rationalisation of service provision.

The capacity in MOA for policy review is weak, and a futher disadvantage is an orientation based on the management of centrally provided services (as opposed to community-based services). Low levels of emoluments in the public service definitely militate against the provision of high quality administrative and planning services. Severe financial constraints also have led to inadequate availability of equipment and supplies, further limiting the effectiveness of the MOA's staff.

In terms of agricultural products, there is a dualistic institutional structure characterised, on the one hand, by well-organised marketing and other support arrangements for the major export products and by fragmented, under-funded and, ineffective arrangements for "other agriculture" and small farm enterprises. There are generally poor linkages between institutions and poor communications between departments of MOA.

Agricultural technological services are often provided in a context in which important infrastructure and non-agricultural services are not in place. The lack of an integrated approach leads to poor absorption of technology. In addition, the Ministry's operations are characterised by a limited interface between clients and planning and executing services, leading to poor feedback and, consequently, a possible lack of relevance of plans and programmes.

A general concern in the provision of public agricultural services is that they are not well targeted on rural households of more modest means. Agricultural extension is the most obvious example. More well-off farmers can afford to, and do, bring in their own private extension advice regarding crops, varieties, planting and cultivating strategies, and so forth, but obviously this option is out of the question for the poorer farmers. Extension services are one hundred percent subsidised, and therefore the question must be posed whether that subsidy is justified in the case of large farms.

Similar observations can be made in the case of livestock services, assistance on the adoption of better post-harvest practices, and so forth.

These issues and constraints affect all public agencies that deliver agricultural services. Given the key role of technology development in agriculture, it is important to be specific about the constraints on NARI's research programme. They are as follows:

(a) Organisational constraints:

- little or no contact with farmers;

- poor linkage with agricultural extension and other related organisations in agriculture;

- poor policy direction;

- old and outdated infrastructure to support research;

- inadequate evaluation of research impact; and

- technical staff being averse to performing administrative tasks.

(b) Research programme constraints:

- frequently unrelated to the needs of the farming community;

- objectives of researchers are different from those of the farmers;

- many programs with too little resources, leading to a dilution of effort;

- inadequate consultation with related disciplines;

- insufficient consideration given to economic and marketing components;

- insufficient use of documented results; and

- insufficient validation of technologies prior to transfer to farmer.

(c) Staffing constraints:

- unattractive remuneration packages;

- low morale;

- high turnover; and

- absence of an agribusiness and marketing expert on the staff.

(d) Financial constraints:

- limited financial resources; and

- scarce material resources.

Constraints on the delivery of tertiary-level training include the following:

(a) Organisational problems:

- poor linkages with other agricultural institutions;

- poor research facilities;

- limited laboratories and other practical teaching facilities.

(b) Curricula problems:

- very scientific and lacking a strong practical dimension;

- a lack of courses in agribusiness management and marketing.

(c) Staff problems:

- poor remuneration;

- low morale.

(d) Financial problems:

- limited financial resources;

- scarce material resources;

- too few grants and scholarships offered to students.

(e) Other problems:

- poor perception of and attitude towards the agricultural profession by the general society;

- relatively low student intake;

- lack of basic textbooks.

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B. Community Governance, Administrative Decentralisation and Public Participation

From a viewpoint of effectiveness of programmes at the local level, over the years, the locus of development interventions and administration has shifted too much away from local communities towards Central Government. For the efficient and sustained delivery of agricultural and rural development services, there must be a vast improvement in the capabilities and autonomy of local government bodies along with the further development of non-governmental organisations, including associations of producers, and community organisations.

The regional system serves, not as authentic local government but as an extension of Central Government power and influence. Neighbourhood Democratic Councils have only a limited role in the mobilisation and disposition of resources(1)

and, under current legal and administrative arrangements, they cannot function effectively as providers of services at the local level. Local authorities, having been forced to operate through a narrow window of influence at the regional level, have been made to be responsible primarily to central and regional governmental structures and not to their constituents. The inherent ineffectiveness of local authorities in turn leads to lack of confidence in the newly formed NDCs. This issue is of particular concern in a sector like agriculture that is so dispersed spatially. A radical overhaul of the system of regional and local government is necessary to provide the basis for autonomous and authentic people-based community governance. Central Government has the duty to provide the legislative and support framework that will help in promoting such organisations, enabling them to access national and international funds for institutional strengthening and community empowerment. Central Government must therefore choose a policy of granting much greater autonomy to local authorities, primarily in the area revenues generation and expenditure authority. Thought should also be given to constituting the local authorities as statutory corporations.

If local communities are to be empowered, Government must seriously consider replacing the present regional system with one that is fully representative of local Government. One such proposal is that the Regional Democratic Councils should be made up of representatives of local authorities (NDCs, Amerindian Councils, etc.) possibly as councils made up of chair persons of local authorities. Regional budgets should, eventually, be funded both from local and national resources with the regional councils being fully responsible for the disposition of funds derived from local sources. The present legal and administrative framework imposed by the Central and Regional Government limits the scope of NDCs to execute their mandates. The NDCs operate through a small administrative window within the RDCs. They relate to the RDCs through local Government subcommittees and do not have any decision making powers within the RDC structure. See Chapter 24 for a fuller discussion of options in this area.

There are, in addition, several quasi-governmental entities (e.g., SIMAP) as well as non-governmental and other organisations (cooperatives, producer associations, etc.) which operate at the community level. All have a role to play in galvanising community action. Cooperatives and other associations of rural residents need to be provided with the appropriate legal and institutional support. Right now there is a confusing array of legislation covering cooperatives, friendly societies, associations, etc., which must be reviewed to produce a straightforward legal framework within which such groups may operate. In addition, Government should put in place support facilities (such as the community development field officer's system of the past) which would provide advice and information to these groups.

This view is supported by a recent AGRODEV study that states that "A notable absence in the policy frame of Government is the lack of policies related to non-Governmental, private sector and community-based organisations (CBOs). It is now widely recognised (in the development literature) that a vibrant mix of PSOs, NGOs and CBOs is an effective agent on the development process and essential for sustaining the results of development programmes for Governments. While there are specific policies guiding para-Governmental development boards, none exists for NGOs. A policy and specific legislation on NGOs would be an effective frame for enhancing, regulating and guiding the establishment of the NGO sector by defining the distinguishing characteristics of the different types of organisations, their roles, responsibilities, accountabilities, legal status and the required registration formalities for these organisations."

The end result is an insufficient empowerment of local communities to undertake their own development initiatives and insufficient participation of NDCs in planning local agricultural programmes and other activities.

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C. Producer and Marketing Organisations

Producer organisations serve an important function through representation of producer interests and the provision of services that can be much more effectively supplied by a group than by individual producers. The economic distance between an individual producer, especially a small farmer, and market outlets for inputs, credit channels, and markets for outputs is sometimes very great. Whereas a large farmer may have a truck with which to pick up wholesale loads of fertilisers, and carry the crop to market, a smaller farmer may have to pay someone else for those services, thus increasing his or her costs and reducing his or her gross margins. Even larger farmers can benefit from the economies of scale afforded by carrying out activities in larger volume. In this regard, producer cooperatives can play a vital role in increasing net incomes of farmers.

In Guyana, the history of producer organisations has been a chequered one. Apart from the Rice Producers Association, few organisations have demonstrated resilience. A review of several producers' and marketing organisations revealed that they are, for the most part, under-funded by their membership and often come to life only during periods of crisis.

Weak organisation among producers limits their ability to receive information, services and inputs. If the delivery of agricultural and rural development services is to improve, a policy environment conducive to authentic group formation must be created.

Cooperatives as a whole, have not been successful. Many were formed to acquire land and often served more as vehicles of the State than authentic people-based systems. In addition, there has been a poor level of consistent support from Government for these initiatives and at present, the Cooperative Department is not able to provide such support. Many groups are not legally registered. Complicating the situation further, there is a confusing array of legislation governing associations, cooperatives, friendly societies, etc., making it difficult for existing or potential groups to know where to register. Right now, the legal structure of cooperatives is not commercially oriented. This discourages members' contributions of both time and financial resources, because they do not have a kind of quasi-shareholding which would guarantee them a clearly-defined share of profits and long-run benefits.

Poor attitudes toward cooperation have exacerbated this situation among farmers and other rural residents conditioned by experiences with Government-imposed schemes that have not been based on the real needs of producers or their communities.

Overall, producer organisations are constrained by weak support from the public sector; unclear legislation regarding registration and structure of organisations; limited financial and human resources; limited training from agricultural institutions in management practices and formation of group skills.

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D. Financial Institutions

AGRODEV observes, "The supply of credit to the rural sector is limited by factors such as the risk linked to agricultural production and markets, the sector's small size, its informal nature and because of lack of experience of staff. Lending has been very low and restricted to the larger rice producers: rice is a sturdy crop in Guyana and the rice industry is relatively well structured but is, nevertheless, considered by lending institutions as risky. Non traditional crops are much more volatile (perishability, prone to transport and storage damage, without an established market network -- particularly export -- unstable prices) than rice and therefore particularly excluded from access to commercial bank credit."

The penetration of rural areas by commercial banks is low, leading to low savings mobilisation and delivery of credit. In addition, this inadequate interface and contact between the banks and the agricultural producers, coupled with the preference of commercial banks for asset-based lending (as opposed to cash-flow lending) results in an inflexible lending policy towards the sector. Only a small percentage of the banks' funds are lent while some 70-80 percent are held in special deposit accounts or Treasury Bills (see Chapter 15) and therefore are not available for productive lending to the economy. Lending rules, even within the Government-owned GNCB(2)

, effectively exclude from access to institutional and commercial credit, more than 80 percent of Guyana's farm households.

Government must be proactive in encouraging banks to change their orientation towards agricultural and rural lending. In addition, a serious study should be undertaken of the possibilities for a linked system of small-scale rural credit unions, with local autonomy but central supervision and rediscounting facilities. Systems of this type appear to be well adapted for mobilising rural savings and lending to small farmers and are being implemented in a number of Latin American countries, including Nicaragua and Honduras.

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IV. Sectoral Objectives

Institutions that function well are central to the process of economic development. In conditions in which they cannot play their proper role, no amount of plans and individual efforts will suffice to lift the economy forward. In agriculture the institutional question is particularly complex, owing to the diversity of production and marketing conditions of the sector and its geographical dispersion. Accordingly, the principal objectives of policy in the area of national agricultural institutions are the following:

1. To develop an institutional policy framework that defines clearly the roles of the public and private sectors, focussing the former only on those activities that cannot be carried out by the latter.

2. To improve the efficiency of the delivery of public services in the sector.

3. To improve the relevance of public services to the needs of agricultural producers and marketing agents.

4. To improve the institutional basis for the development of the diversified small farm sector.

5. To give greater priority to the rural poor as beneficiaries of publicly supplied services.

In the area of community governance and public participation, the objectives are:

6. To help communities to become more self-sustaining by improving their capacity to organise, coordinate and administer technical and social services and project activities oriented at supporting production.

7. To encourage participation at the grassroots level in the decision making process.

8. To foster greater local government accountability as well as autonomy.

9. To improve the coordination between national, regional and local institutions so that local communities can access information and resources from other levels of government and so that programmes are more effective and more relevant to local needs.

Regarding producer and marketing organisations, the objectives are:

10. To improve the effectiveness of these organisations in providing economic benefits to their members.

11. To enhance the public sector's capacity to assist these organisations.

And regarding financial institutions, the objectives are:

12. To increase rural savings mobilisation.

13. To increase credit delivery to agriculture based on rural savings.

14. To increase the long-run viability of institutions for agricultural finance.

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V. Policy Recommendations and Their Technical Justifications

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A. Central Government and Decentralised National Institutions

As a first step, it is essential to intensify the process of policy review for key service areas and formulate policies aimed at focusing public sector interventions on the provision of basic public goods and assistance to disadvantaged communities and groups. The review should also identify new opportunities for improved cost recovery and the self-provision of services at the community level along with the appropriate institutional arrangement to support these developments.

MOA should produce a plan for the future direction of agricultural support services setting out priority Government functions, relationships with the private sector and communities as well as a cost management matrix for identified functions. The plan needs to include measures to improve the institutional and financial basis for the development of the diversified small farm sector.

A committee, led by MOA, but comprising representatives from various public and private sector bodies, should monitor and direct the evolution of the plan. The plan should then be presented for endorsement by parliament.

Besides raising the overall level of emoluments to public sector workers, there should be an identification of key posts that would attract enhanced salaries. There should also be a re-introduction of merit awards throughout the system.

One possible route for financially supporting the development of the small farm sector is to target specific proportions of the preferential gains from rice and sugar exports to the EU and USA. Another source would be receipts from higher rentals of State lands and from taxes on freehold land (see Chapter 29), portions of which could be set aside for support activities. The management of such funds should be carried out through a formal Small Farmer Support Fund governed by a board (reporting to the Minister of Agriculture) which would represent a wide cross-section of interests. Government should also encourage donor agencies to make contributions to the Fund and to take part in its management. The board would examine and approve project proposals from both public and private sector bodies as well as community groups and local Governments.

Another route would be to initiate a system of charges for larger farms for extension and other agricultural services, thus targeting the subsidy implicit in those services on smaller farms alone. The proceeds from such charges would also be channelled into the Small Farmer Support Fund.

Another thrust of the new policies is to integrate main related agricultural support services (research, extension, marketing and crop reporting) under a single institution(3)

that would adopt a multi-disciplinary approach to problem solving at the community level and, through its actions, would integrate services provided by ministries, semi-autonomous agencies, agencies outside the sector and non-Governmental agencies. The result should be an agency that operates in a development mode (as opposed to a discipline-centred mode) and places primary emphasis on promoting the empowerment of communities - through their organisations and local Governments - to access resources for their own development. It would operate primarily on a geographical basis through multi-disciplinary project teams, focusing sequentially on the development of identified communities. The new organisation would also engage in income generating activities for the commercial private sector and for communities, on a demand basis.

There is also need for a policy coordinating body or board that would support MOA by bringing together all agriculture-related agencies and would also have representation from other key bodies dealing, e.g., with transportation, education and trade. Alternatively, the new organisation would coordinate all agriculture-related institutions in that its governing body would include representatives from the sugar and rice industries, other agricultural and non-agricultural agencies, community organisations, local Governments, etc. The new organisation would require a completely different mind set at both managerial and operational levels from that which presently prevails. The identification of an appropriate management team would have to be done with an eye on the objectives of the organisation rather than on academic qualifications. In addition, training programmes to reorient staff to the required multi-disciplinary approach, would have to be accorded top priority.

By focusing on communities, the new organisation will facilitate the flow of information from communities to national organisations. It will also establish a modern system for accessing, managing, processing and dissemination of information relating to technology, marketing and trade, and finance.

The new organisation should be sufficiently well funded to attract and retain qualified management and staff. Consideration should also be given to guaranteeing it certain levels of revenue, e.g., from land rentals or land taxation.

There is also need to ensure that those personnel who remain in the traditional public service are adequately remunerated. This should be part of an overall rationalisation of the service.

GSA, UG/FA and other agricultural training institutions, should reform their curricula such that significantly greater emphasis is placed on agricultural business. Government should also set up incentive packages for trained agriculturalists wishing to enter farming, particularly as for the provision of land. As proposed in Chapter 29, new lands in development schemes and excess GUYSUCO lands should be made available to poor rural households at prices per acre that are below market levels.

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B. Community Governance, Administrative Decentralisation and Public Participation

Government must state a clear policy of community empowerment and provide the resources for the support structures necessary to achieve this objective.

Government should commence the process by first issuing a directive outlining policy for local Government that would state that: NDCs would be given greater scope in the determination of resource use and that the role of Central Government should be one of support rather than control of the local government system.

Financing is crucial for the effectiveness of local government institutions. In this regard, the recent experiences of Guatemala, Bolivia and other countries of the Hemisphere are illuminating. They have earmarked a small percentage of Central Government revenues for local governments only, to be utilised as they see fit. This has given a large impetus to local participation in decision making and to locally selection and implementation of public works projects. It is recommended that a similar approach be adapted to the circumstances of Guyana, and that approximately 5 percent of the national budget be earmarked for the NDCs. See Chapter 24 of this Strategy.

It also is necessary to reform the current legal and administrative arrangements for regional and local Government making the regional structures fully representative of the local Government organs. One possibility is that the RDCs should be made up of representatives elected by the NDCs. The role of Central Government (ministry responsible for local Government) should be to support rather than control the activities of local Government.

There is need for a regulatory body (not a Ministry) for local Government -- an independent agency whose board should be made up partly of elected local Government officials, partly of NGOs and other community-based organisations and with limited representation from Central Government. There should also be an audit agency created for local Government and NGOs (similar to the Auditor General's Department) which would report directly to Regional Administrations and to Parliament. This will be essential in view of the proposed new funding mechanisms.

Appoint a committee representing the relevant institutions and individuals to do the following:

- review the present legal framework as it relates to local Government;

- review existing literature (research, commentary) to identify constraints;

- make recommendations on the future course of regional and local Government, and coordinate a national debate on the issues.

Carry out a programme that would provide technical training in legal issues, management, financial, budgetary and resource mobilisation procedures, etc., and other matters related to local Government activities.

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C. Producer and Marketing Organisations

Carry out a sensitisation programme that emphasises the economic and social benefits of cooperation, drawing on successful experiences in the Caribbean and elsewhere. This should be a collaborative programme between agricultural support institutions, the Co-op Department and other relevant institutions.

Review existing legislation and draft new legislation that would clarify registration procedures and would restructure agricultural cooperatives legally, putting them on a more commercial basis. The essential element of this reform would be to require that each cooperative member receive a certificate of economic participation that guarantees him or her a defined share of the net profits of the enterprise. Such certificates would have to be tradeable to assure that they have economic value, but potential new purchasers of certificates could be limited to farming families residing within a certain radius of the cooperative's offices, and existing members could be given the first option to purchase certificates of outgoing members. The certificates' value would rise with increasing success of the cooperative as an enterprise, thereby providing incentives for members to invest their labour and money.

Carry out a public relations programme to sensitize groups and potential groups as to the meaning of these new legal provisions and the opportunities and obligations that they bring with them.

Improve the Co-op Department through training and facilities. The new agricultural services institution should also be fully versed in group formation techniques.

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D. Financial Institutions

Government should consider giving incentives for the location of bank branches in certain rural areas. Consideration should also be given to the revival of a post office-based savings institution.

It is important to institute in rural areas the group guarantee schemes of the Grameen Bank type as used successfully by Scotia Enterprise in Georgetown. Also, it is urgent to explore the possibility of creating a linked set of rural credit unions, as mentioned earlier in this Chapter, both for mobilising more rural savings and for retaining more funds in rural areas through agricultural production and marketing loans.

Banks should be encouraged to link credit and savings services so that loan amounts will be determined in part on the basis of the client's savings performance. Loan officers should be trained to work more like agricultural extension officers to provide commercial banks with first-hand knowledge of loan applicants and their credit worthiness, and to judge the soundness of projects rather than relying only on collateral in making loan decisions.

It also would be useful to develop collaborative arrangements (term credit) between banks and equipment suppliers, the latter being in a better position to assess clients as to loan risk and to repossess equipment for resale in case of default.

It is a consensus of agricultural experts that Government and the Bank of Guyana should critically reexamine the current monetary policy to determine whether it is having the unintended effect of reducing the incentives for banks to seek out business in the private sector and in particular, in non-traditional areas such as agriculture. It seems that the current practice of issuing large amounts of Treasury Bills at high real rates of interest is having the dual effect of (a) increasing the cost of credit and thus of doing business; and (b) providing safe and easy returns for bank funds, prejudicing the amount of funding available for private sector activity.

1. 0For example, any expenditures by an NDC in excess of G$1,000 must first be approved by the Regional Democratic Council

2. 0 GNCB's general lending rules are as follows:

- a loan must be 100 percent secured with deposits (cash or quasi money) or 125 percent in the case of immovable property owned under registered deed or transport;

- project viability must be ascertained to the bank's satisfaction;

- loan amount should not exceed G$40m million or be less than $1 million (or credit required for 10 ha. of rice);

- group lending is possible only to legally formed entities.

3. 0 It is also proposed that the agriculture related work of IAST be integrated into the new institution.

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