This report is the result of a World Bank mission that visited Paraguay in June 2013 at the request of the Government of Paraguay. The mission’s objective was to identify, quantify, and prioritize agriculture risks that determine the volatility of agriculture gross domestic product (GDP), based on a methodology to assess sector risks developed by the World Bank. The methodology stipulates a two-phase process.

This report is comprised of two volumes: (i) volume one: risk assessment; and (ii) volume two: risk management strategy. Volume one continues with chapter one, which characterizes the recent performance of the agriculture sector, including agro-climatic and market conditions. It also identifies the productive systems used for this analysis. Chapter two describes the main risks in the agricultural sector, capturing market, production, and enabling environment risks along the value chains involved in the selected productive system typologies.

The present study is part of an effort by the World Bank and the State of Bahia to assess agriculture sector risks as a contribution to the strategic economic development and poverty reduction agenda of the state government. It is composed of two phases: an agricultural sector risk identification and prioritization (volume one) and a risk management strategy and action plan (volume two).

Developing regions' food system has transformed rapidly in the past several decades. The food system is the dendritic cluster of R&D value chains, and the value chains linking input suppliers to farmers, and farmers upstream to wholesalers and processors midstream, to retailers then consumers downstream. This study analyze the transformation in terms of these value chains' structure and conduct, and the effects of changes in those on its performance in terms of impacts on consumers and farmers, as well as the efficiency of and waste in the overall chain.

The efforts to adapt to climate change in developing countries are in their infancy, and hopefully CSA will be a major contributor to these efforts. But CSA itself is evolving, and there is a growing need to refine and adapt it to the changing realities. This section of the book focus on the implications of the empirical findings for devising effective strategies and policies to support resilience and the implications for agriculture and climate change policy at national, regional and international levels.

The topics addressed in this book are of vital importance to the survival of humankind. Agricultural biodiversity, encompassing genetic diversity as well as human knowledge, is the base upon which agricultural production has been built, and protecting this resource is critical to ensuring the capacity of current and future generations to adapt to unforeseen challenges.

This paper shows that the current generation of transgenic crop varieties has significant potential to improve economic welfare in low-income countries. These varieties might increase crop yields in low-income countries in cases when pesticides have not been used. They will reduce negative health effects of chemicals when they replace them. With low transaction costs, appropriate infrastructure, and access to intellectual property, multiple varieties of transgenics will be introduced.

For millennia, humans have modified plant genes in order to develop crops best suited for food, fiber, feed, and energy production. Conventional plant breeding remains inherently random and slow, constrained by the availability of desirable traits in closely related plant species. In contrast, agricultural biotechnology employs the modern tools of genetic engineering to reduce uncertainty and breeding time and to transfer traits from more distantly related plants.

Agricultural biotechnology and, specifically, the development of genetically modified (GM) crops have been controversial for several reasons, including concerns that the technology poses potential negative environmental or health effects, that the technology would lead to the (further) corporatization of agriculture, and that it is simply unethical to manipulate life in the laboratory. GM crops have been part of the agricultural landscape for more than 15 years and have now been adopted on more than 170 million hectares (ha) in both developed countries (48%) and developing countries (52%).

This article presents lessons from the rich adoption literature for the nascent research on adaptation. Individuals' adoption choices are affected by profit and risk considerations and by credit and biophysical constraints. New technologies spread gradually, reflecting heterogeneity among potential adopters, processes of learning and technological improvement, and policies and institutions. Adaptation is the response of economic agents and societies to major shocks. We distinguish between reactive and proactive adaptation.