WASHINGTON, May 28, 2018 ¨C ľ¹ÏÓ°Ôº Board of Executive Directors approved last Thursday a new US$150 million project to support 20,000 vulnerable, rural producers in Argentina through improving risk management in the agricultural sector to increase their resilience to extreme weather events such as droughts and floods.
The Integrated Risk Management in the Rural Agroindustrial System Project will include improving access to risk information, adoption of climate-smart technologies and risk management practices, as well as reform of the agricultural emergency system.
¡°This financing will facilitate risk mitigation for 20,000 small agricultural producers, increasing resilience in the face of climate events like draughts and floods. This project is yet another demonstration of the confidence multilateral credit organizations have in Argentina¡±, said Luis Caputo, Finance Minister of Argentina.
In the last two decades, extreme weather events ¡ªmostly floods and droughts¡ª have caused losses estimated at US$12 billion. Extreme droughts have unleashed the largest number of agricultural emergencies in the country, with significant adverse effects on farmers. Furthermore, estimates indicate a moderate increase in droughts and water stress in the northeast in the future, while other parts of the country will experience increased rains and flooding.
¡°As a long-term partner for Argentina, the World Bank reaffirms its commitment to the equitable development of the country with this new project focused on the most vulnerable rural producers. This initiative will contribute to a more resilient food system and to reducing the climate footprint of the agricultural sector,¡± said Jesko Hentschel, World Bank Director for Argentina, Paraguay and Uruguay.
The project includes three main activities to address challenges in the sector:
- Strengthen information systems, to prevent and assess the risks associated with climate variability, climate change and market price fluctuations.
- Mitigate agricultural risks, via investments such as: (i) infrastructure works; (ii) forestation, reforestation and basin management; and (iii) incentives for the adoption of technology and climate-smart agricultural practices, from the deployment of tech irrigation systems to mobile apps to manage risks.
- Improve the agricultural emergency system at national and provincial level to cover more vulnerable producers. The project also anticipates the transfer of agricultural risks by way of financial instruments such as insurance.
The ¡°Integrated Risk Management in the Rural Agroindustrial System Project¡± will have a variable margin, a 32-year maturity period and a 7.5-year grace period.
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