The Agricultural Sector And Post Budget
While the rhetoric on the importance of the global agriculture sector continues, the domestic sector which mainly entails the production of root crops, fruits, vegetables and poultry seem to be perpetually plagued with dire challenges, while the export oriented sector involved in the production of sugar, cocoa, coffee, agro-processed products and fish has been in continuous decline.
Agriculture’s contribution to the nation’s Gross Domestic Product (GDP) can be considered insignificant at the least, measuring 0.6% of GDP for 2009 and 2010 with domestic agriculture accounting for most of agricultural output. Further, over the last decade, employment in agriculture has declined by nearly 50%. In 2009, agricultural employment accounted for just about 4% of total employment; further, the Central Bank’s Annual Economic Survey 2010 stated that an additional four thousand jobs in agriculture were lost in the first half of 2010.
Certainly the issues and challenges are well documented and there exists no shortage of solutions. Yet, while the economic potential of the agriculture sector has always been recognized, socio-political concerns have restricted efforts to truly promote this sector and develop agriculture as a profitable and sustainable business – a recent example being the battle for lands that were previously being used for agriculture now cleared for housing development.
The TT $1.9 billion allocation to the agriculture sector as announced in the National Budget 2011-2012 is the largest ever to the sector. While at face value this can be encouraging, the true value of such an allotment will be defined in the manner in which it is spent. The Budget however, mentions very few innovative initiatives to boost the sector. Included in the Budget package were basic initiatives such as the Agricultural Incentive Programme and the intention to further review the interest rate at the Agricultural Development Bank. The business community is encouraged by these incentives and look forward to working with the Government to identify more investment opportunities in this sector. The announcement to encourage the use of greenhouse technology is welcomed as productivity growth has to come through innovation and research in light of competing interests for land use. It is our hope that further innovative measures will follow with the introduction of new technologies. This will not only boost the productive capacity but also make it attractive and inviting to the younger demographic as a sector for job opportunities. We also would’ve liked to see linkages made to existing initiatives such as the mega farm project. Further, an assessment should be completed and made public.
The Budget has also mandated that the management of the Magdalena Grand Beach Resort (formerly, Tobago Hilton) collaborate with Tobagonian farmers and fishermen to provide the food needs of the Hotel. It stated that this will be the recommended model for all of Trinidad and Tobago with respect to greater purchase by hotels and restaurants of locally produced food. A very laudable initiative which will only be made a reality if measures are put in place to boost the productive capacity of the Tobagonian farmers so that they may take advantage of this opportunity. On the subject of local content, the Minister of Food Production has started to make headway by getting fast food chains to offer local produce, most notably selected KFC outlets offering sweet potato fries. We also recognize his challenge in re-tooling the sector so that farmers can begin viewing agriculture as a business. We look forward to his plans to have farmers operate at a commercial level and so be able to produce and supply certain products on a regular basis to international restaurants and local restaurants.
The Budget does not speak to the potential for agriculture to be a foreign exchange earner. Here however lies another basket of challenges. The agricultural sector in T&T (much like the wider Caribbean) has traditionally depended on preferential markets for most of its export earnings. Today access to preferential markets has been eroded or completely dismantled. Consequently, for agriculture to thrive and survive it must become globally competitive. It must also have the capacity to sustain competitiveness by becoming flexible, adaptable and resilient in a dynamic global market. Around 70% of the EU’s agricultural produce originate from developing countries. Empowering our local farmers to take advantage of the global opportunities is therefore crucial. The Ministry of Food Production needs to be staffed with the requisite skills, most obviously in the area of international trade to assist farmers in understanding the export requirements and regulations, particularly of the countries with which we have trade agreements.
Of course our reality is such that not all of agriculture can achieve global competitiveness. Many in the small farm sector are unlikely to become competitive due to limited resources and uneconomic size units. As stated in the Chamber’s Diversification Study, by focusing on agricultural commodities in which we have a distinct comparative advantage it is quite possible for T&T to capture a larger share of the global agricultural trade market, increasing agriculture’s current marginal contribution to GDP and export earnings. Further, diversification requires shifting the composition of exports from primary products to higher value added products. We are pleased to know that there are currently projects being undertaken by several organizations, including both the University of Trinidad and Tobago and the University of the West Indies to advance the cocoa sector and prepare it to capitalize on its potential on the global market.
While we must all identify our national initiatives the time has long arrived where the opportunities for regional cooperation in agriculture must be practically explored. In 2002, the Jagdeo Initiative was started as a strategy for removing constraints to the development of agriculture in the Caribbean and to build upon past regional efforts to develop a Common Agricultural Policy. Sadly there have been no tangible results of this initiative yet there remains great prospects for collaboration which can only be realized with political will among member states.
The Medium Term Policy Framework 2011-2014 is the document on which the National Budget 2011-2012 was predicated. It rightly acknowledges the need to address our nation’s food security in light of the fact that in 2010 our food import bill stood at $4 billion. Further the Food and Agricultural Organisation has predicted that the demand for food will increase by 50% by 2030 and by 70% by 2050. We do recognize that results oriented projects are being undertaken via institutions such as the Trinidad and Tobago Agri-Business Association. However the Policy Framework needs to identify specific actions and goals with defined time lines for achievement so that our next Budget Statement can announce an increase in agricultural production.
