EDITORIAL - Coaxing value outof agriculture

Published: Wednesday | November 11, 2009


IN THE early 1980s, Jamaica was not among the world's productive agricultural countries, but gross output for most crops was far better than it is today.

For example, annual sugar production was more than 300,000 tonnes and the island's dairy herds delivered over 25 million litres of milk. In normal times, the country produced more than 100,000 tonnes of bananas, and there was still a cocoa sector worthy of the designation.

It is notoriously so that things have changed dramatically in the past quarter of a century. The cocoa industry, effectively, is dead and Jamaican sugar factories struggle to produce 150 tonnes of raw sugar. The output of milk has slumped to 14 million litres and falling. Agriculture represents around eight per cent of Jamaica's output of goods and services and is set to dip further. There are two main causes for this decline in farm output, both of which are related and, really, are subsets of the country's long history of implementing inappropriate economic policies.

Agriculture not sophisticated

One part of the conundrum is the tendency to treat agriculture as social welfare rather than serious enterprise. So, there has not been a serious and sustained effort to lift agriculture substantially beyond earth-scratching, subsistent production.

The second factor is related to the first. Partially, it is driven by the failure to develop a social and economic philosophy around agricultural production, and, critically, a knee-jerk response to the country's economic stagnation.

By the late 1970s, the Jamaican economy was in free fall, the value of the domestic currency had declined, the country was forced to find accommodation with the International Monetary Fund (IMF) and inflation was in a sharp upward spiral. It was in that context that by the early 1980s, in the effort to combat inflation, Jamaica accepted United States food aid under Washington's PL480 programme, as well as started to open its market to agricultural products. In the language of the day, it was fighting inflation by "flooding the market with cheap imports".

But there was an unintended consequence: domestic agriculture, in the absence of a support system for transformation, declined. Dairy production slumped under the pressure of sachets of subsidised powdered milk.

A useful sector

There are two points to be made in the context of recent history and the country's economic circumstance, including a food import bill of more than US$800 million. Two years ago, the sharp rise in commodity prices began to concentrate minds globally about the dangers of food insecurity, a problem from which Jamaica is not immune.

Second, while the collapse of the alumina industry and a soft tourism sector are playing havoc with an already weak rural economy, agriculture, in the circumstance, provides an opportunity for rural employment and income generation.

No one, of course, expects that agriculture will become, as Prime Minister Golding put it, the corner-stone of the Jamaican economy. But it can be a useful sector, if it is approached in a philosophical context and with appropriate economic constructs.

If, indeed, Jamaica could replace 10 per cent of its food imports, and convert that into a value-added sector, that would be an industry worth over J$8 billion.

Rather than dismissing agriculture's production, the better strategy would be to explore and develop, where economically feasible, the sector's linkages with manufacturing and to build equity into the Jamaican brand. We must see agriculture as an exploitable asset.

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