Microfinance Focus, November 21, 2011: The World Bank approved a US$49 million loan to support Uruguayan farmers tackle climate change. In their efforts, farmers are adopting environmentally sustainable practices to improve the resilience of their production systems in response to the effects of climate variability.
The program is called the Sustainable Management of Natural Resources and Climate Change. This 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.
The loan supports three main lines of action. First, it will establish 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.
Second, the loan is to help co-finance farm investments. This will allow farmers o strengthen their productivity, integrate natural resource management practices, reduce vulnerability to extreme climatic events and reduce GHG emissions from the agricultural sector. The third component is 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).
“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 US$340 million in losses in the agricultural sector.