Clarke

There is a $900-million myth floating around the 'pundit sphere' unquestioned and unchallenged. It posits that Jamaica is missing out on the opportunity to grow approximately US$900 million worth of food now being imported into the country. This would make an extraordinary dent in our trade deficit and go a long way towards reviving the local economy. So the argument goes. So much blather has been mounted on this belief that it has been accepted by most as incontrovertible. But nothing could be further from the truth.

The reality is that the overwhelming bulk of the imports classified as food are processed, manufactured packaged goods in which primary agriculture represents no more than 10 per cent of their value. The remaining 90 per cent is the value added by the industrial production process. Our huge food import bill is, therefore, far more an opportunity for local manufacturing than it is for agriculture.

Against this background, it is incomprehensible that a new administration would be committing to an economic strategy aimed at de-emphasising industrial development and placing our stocks squarely on primary agricultural production. This may win political points with our rural community in the short run, but it will surely set them up for deeper poverty in the end.

Of the three broad areas of economic activity - agriculture, industry and services - agriculture offers by far the lowest potential for economic expansion and for lifting our rural population out of poverty. It was, therefore, very surprising that with the wealth of economic information and technical expertise available to him, our prime minister could have told last week's meeting of the hemispheric Ministers of Agriculture of the Americas, as reported in the press, that "... after almost half a century of pursuing alternative paths, which were felt could offer better returns, 'we are now finding that we have to look to the stone that the builder rejected and to recognise that for many countries like Jamaica, agriculture is the cornerstone to which we have to return'."

prosperity opportunity

Minister of Agriculture Dr Christopher Tufton inspects a pepper seedling during a tour of a farm in Bushy Park, St Catherine, earlier this year.

There is no doubt that in Jamaica's present state of underdevelopment, and in the absence of adequate alternative economic opportunities, our rural population now has little choice but to work the soil to survive. But scratching the hillside to eke out a living, which characterises the state of much of our agriculture today, cannot be held up to our people as our future. Government has a duty to create an environment in which people will have the best opportunity for prosperity. Primary agricultural production cannot provide that opportunity.

The prime minister himself seemed to have been acknowledging this fact when he went on to say "... if agriculture is to be the path for the future, it has to offer more than just subsistence and to do more than just put food on the table." This realisation should have at least led Golding to question the wisdom of the agriculture-led economic strategy, which he seems prepared to pursue.

Although agriculture is absolutely essential to mankind's existence, it represents only four per cent of the world's production today. The evolving sophistication of production methods, technology and commerce has created a world economy 25 times greater than world agricultural output. This has been driven by a dramatic change in mankind's desire and capacity to consume an ever-increasing range of complex and advanced goods and services, with basic agriculture satisfying a correspondingly shrinking share of his needs.

Our leaders need to understand the distinction between primary agricultural output, which is what they are encouraging our people to take up, and industrial output, which is what intelligent governments around the world are actively pursuing. Today, the competition among nations is to command as great a portion of the very large industrial and services segments of the global economic pie as possible. Poorer countries have instead been preoccupied with agriculture. It is, therefore, not surprising that agriculture now represents less than two per cent of the economies of the 25 most prosperous nations with an average per capita income of over US$50,000. The 25 poorest countries with average per capita income of under US$1,000, rely on agriculture for over 40 per cent of their GDP.

The wealthy countries are all engaged in industry and high-value services, the poor are left with basic agriculture and its low wealth quotient. This is what makes the position articulated by our prime minister, which suggests that Jamaica should reverse the quest towards industrialisation begun over 50 years ago, so shocking. To be told that we have tried to follow that development strategy and failed, and we should, therefore, turn back and pursue a strategy tying us to the least productive end of the world's economic spectrum, can only be seen as a condemnation of our people to a future of poverty.

This is taking place as the world stands on the threshold of a millennium of boundless industrial possibilities. But the visionless leadership under which we continue to suffer has set its sights on the shallow economic horizons of a world long gone. Agriculture is important; but yields relatively so little value, that around the world, it depends on subsidies from the productive bounty of industry to sustain it.

Industry is the basis on which agriculture acquires advanced technology, is modernised, and is subsidised to make it an attractive economic option for capital and for people. It is this fact that enables the average agricultural worker in industrialised countries to produce over 50 times more than his counterpart in countries with agriculture-based economies.

Most advocates of the agriculture-led development strategy justify it on the grounds of its potential for agro industry. But in today's globalised world, what makes agro industry viable is far less agriculture than it is industry. As agricultural products become more commoditised and internationally traded, countries no longer need their own agricultural production to develop successful agro industry. Trinidad hardly grows peanuts, but it is the leading peanut agro industry producer in the region. Switzerland grows no cocoa, but is among the world's leading producers of dark chocolate. Corn from the fields represents no more than two per cent of the price we pay for a box of cornflakes in our supermarket.

It is these facts that make it so remarkable that the prime minister is prepared to casually dismiss our country's so far unsuccessful effort at industrialisation, and offer as a solution, a return to the economic model all successful countries have left behind. True, our recent efforts at industrialisation appear to have failed. But they have 'failed' because the economic policy environment created by government has been hostile to industrial investment and production.

The PM seems to have missed the fact that our efforts at all productive activities, including agriculture, have also failed. Surely he and his economic advisers should realise that there are common causes to this common failure. And that it should be their top priority to identify these common causes and correct them. Singling out agriculture or any other sector to be the one to surmount these common problems is flawed reasoning.

Does the government think the agricultural sector is immune to the uncompetitive environment that afflicts the other sectors of the economy? Perhaps he would be willing to explain how it is that agricultural produce from halfway around the world can overcome freight costs, prohibitive protective import duties and limited shelf life and yet put competitive pressure on produce from our own farms.

But we should not be surprised. The prime minister signalled his commitment to this agriculture-led economic strategy over two years ago when he selected Christopher Tufton, the person who many believe he regards as his most capable minister, to take the agriculture portfolio. I would not question the PM's ability to judge human talent but must wonder whether he understands that deploying his best ministerial asset to five per cent of the economy with a low value-creating potential is not a very productive utilisation of a valuable resource.

industry linkages

A farmer tends his fields in this 2005 Gleaner photo. Agriculture is important but cannot be the foundation of a development strategy. - File photos

The economic multiplier potential of agriculture is limited, as it is not conducive to backward linkages; nor can it create new forward linkages to industry without government creating enabling and stimulating industrial development policies.

Now more than ever Jamaica needs a development agenda. We are drifting without a clear and coherent strategy capable of leading to economic recovery. But the vigorous debate on development policy which should be taking place at this time of crisis is not happening, as neither of our political parties seems to have a policy idea worthy of discussion.

The Opposition is not a credible voice to challenge the Government's backward-looking approach to development. Having presided over the demolition of the industrial sector during its term in office with policies it now seems reluctant either to reject or revise, the Opposition cannot with any conviction or credibility advocate a new strategy for deve-lopment. It is, therefore, not surprising that its ideas for development are reduced to tired, old refrains to "eat what we grow" and trivia, such as replacing the word 'salt fish' in the national dish with the name of something produced locally.

Tragically, the country is trapped in a Morton's fork: a government with no vision for the future and an opposition whose head remains buried in the sandpit of a failed past.

Claude Clarke is a former trade minister and manufacturer. Feedback may be sent to columns@gleanerjm.com.