There is a lot of talk about Barbados’ food import bill and the need to produce more local food, without reference to the findings.
The non-sugar agriculture sector struggled for decades in the face of Barbados’ dependence on sugar production. The sector comprises vegetable, root crops and livestock and dairy production. The latter two outperformed vegetable production, as poultry and egg production met domestic consumption needs.
The struggle in vegetable and root crop production intensified when agriculture formally became part of the General Agreement on Tariffs and Trade (GATT). The expectation was that given the decline of sugar, non-sugar agriculture would have become a viable option for farmers. This never quite materialised. The reasons are similar to those experienced in the Organisation of Eastern Caribbean States: (1) fragile ecosystems and their location in the Atlantic hurricane belt; and (2) alternative attractive employment options in the formal and informal sectors have led to the migration of young people out of agriculture.
In addition, according to the Food and Agriculture Organisation, structural barriers such as small domestic markets, high production costs (labour, inputs and utilities), difficult access to new technologies, inefficient inter-island transportation system, lack of adequate irrigation systems, and scarce water resources have discouraged investment in the sector.
Notwithstanding the problems, it is important to note that the value added in food crop production is extremely high and equally impressively, the operating surplus is high in local value added. Once the non-economic conditions are right, the chance to make a profit is high in the absence of praedial larceny “which has become a deterrent for local farmers to engage in vegetable production”, according to the Barbados Economic And Social Report 2012.
Over the last two decades, non-sugar agriculture as a percentage of real GDP declined. Local vegetable production ranged from a high in cucumbers to a low in beets, with tomatoes, lettuce and sweet peppers being among the major crops. At the start of the 2000 decade, carrots, string beans and cabbage were among the major crops.
The dramatic changes in the output levels of the major vegetable crops in some cases may be explained by weather patterns and other acts of nature.
However, policy initiatives were introduced at the local, regional and international levels that might have affected production and consequently the importation of some commodities. These initiatives include the GATT and free trade agreements with some non-CARICOM countries in the region.
Even though it is not in the index, butternut squash is one of three major local produce that are sold to the tourism sector in significant quantities – the other two are melons and sweet peppers. For reasons related to quality control, certainty of supply and standardisation of sizes, local vegetable production has not been able to significantly penetrate the tourism market. In this market, the emphasis seems to be on quality control and not necessarily price.
For example, two leafy vegetables like cabbage and lettuce suffer especially from quality control issues with respect to local production. They are vulnerable to certain types of pests. It is argued that the presentation of these two products pales in comparison to their imported competitors. While an imported iceberg lettuce may cost more to purchase, its leafy nature gives it an advantage with respect to the amount of servings. In essence, it may in fact cost less per leaf, which along with its presentation quality makes it effectively cheaper.
On the other hand, the fact that the tourism sector accounts for about 60 per cent of imported vegetables suggests that there may be some opportunity to forge greater linkages between the sector and non-sugar agriculture. This observation is naïve if it does not take into consideration the non-price factors that influence the demand for vegetables in the tourism sector. These factors appear more important, which may very well explain the reliance on imports in spite of the high tariffs that are applied to vegetables being sourced from non-CARICOM countries during the local growing season.
The common external tariff and other duty charges, which amount to 110 per cent duty, do not contain demand for imported vegetables. Even when low prices trigger the bound rate, the demand is still healthy. The days of non-tariff barriers are over.
The reality is that Barbados’ food import bill is not a major economic problem. In fact, reducing imports will compromise economic growth and Government revenue. Let us face the real problem, that the country needs to earn more foreign exchange.
• Dr Clyde Mascoll is an economist and Opposition Barbados Labour Party adviser on the economy.
