MercoPress. South Atlantic News Agency

World Bank loan to help Uruguayan farmers address climate change consequences

The losses of the 2008/09 drought have been estimated over 340 million dollars

The World Bank approved last week a loan for 49 million dollars to support Uruguayan farmers in adopting environmentally sustainable practices to improve the resilience of their production systems in response to the effects of climate variability.

The Sustainable Management of Natural Resources and Climate Change Project will benefit 16,000 Uruguayan farmers through co-financing of land projects to improve their production systems, the creation of a National Agricultural Information System and institutional strengthening and training.

“In Uruguay, the agricultural sector needs to adapt to and mitigate [the effects] of climate change, both to protect the country’s resources and to increase productivity” said Uruguayan Finance Minister Fernando Lorenzo.

“Government efforts always focus on the most vulnerable, for which reason one of the project objectives is to contribute to improving the production of smallholder farmers and to help them prepare for the effects of climate change,” he added.

In recent years, Uruguayan agriculture has been severely affected by increased climatic variability. Over the past decade, the country has suffered major droughts and floods, which have negatively impacted the quality of life and agricultural production of farmers.

For example, the drought of 2008-2009 caused more than 340 million dollars in losses in the agricultural sector.

“These types of projects not only support country efforts to address a problem, but also serve to generate knowledge and experiences that can subsequently be shared at the global level. Uruguay certainly has many good experiences to share” said Penelope Brook, World Bank director for Argentina, Paraguay and Uruguay.

She added that: “16,000 farmers are expected to directly benefit from the geo-referenced system.”

The loan supports three main lines of action that were identified and prioritized by the government:

(i) Establishment of an Agricultural Information and Decision Support System. A geo-referenced information system will be created to integrate and generate data such as forecasts and early weather warnings and monitoring and evaluation of vegetation, soil, water and other relevant variables for agriculture. This system can serve to develop programs to simulate the impact of new technologies.

(ii) Co-financing of farm investments will permit farmers to strengthen their productivity, integrate natural resource management practices, reduce vulnerability to extreme climatic events and reduce GHG emissions from the agricultural sector.

(iii) Training. This component includes training of small-, medium- and large-scale farmers and of technical staff from the institutions responsible for providing technical assistance in these areas. The component also includes technical assistance and support to staff of the Natural Renewable Resources Directorate (RENARE).

The World Bank Sustainable Management of Natural Resources and Climate Change Project is established in the 2010-2015 Country Partnership Strategy, whose pillars are:

i) reducing macroeconomic vulnerability and strengthening public sector administration, 

ii) improving competitiveness and infrastructure, iii) protecting the environment, mitigating the effects of climate change and strengthening family farming, and

iv) increasing social inclusion and equity.

This is a 20.5 year loan with a 15-year grace period and a variable rate of interest.