A New Vision for Agriculture:

Transforming the Jamaican Agricultural Sector

Jerome Thomas

FAO Representative in Jamaica, The Bahamas and Belize

Presented at

Jamaica Stock Exchange Investments & Capital Markets Conference

22 January 2014

Introduction

The agricultural sector is a significant contributor to economic development and rural livelihood in Jamaica. It has been identified as a critical growth area for economic development and has been one of the few sectors to be recording growth within recent years. The importance of the sector has been recognized in the Vision 2030 National Development Plan where it has been identified as an important contributor to GDP, foreign exchange earnings and rural development. However, it has been noted that the sector has experienced numerous challenges resulting in overall decline in output and contribution to GDP (Table 1). The sector’s contribution to GDP has fallen from 7.3% in 1982 to 4.8% in 2008 but has rebounded to 6.8% in 2012. The variability of agricultural output has resulted, to a large extent, from increased frequency of natural disasters including hurricanes and droughts.

Table 1.Contribution of Agriculture, forestry and fishing to GDP

Year / % GDP
1982 / 7.3
2004 / 5.2
2005 / 4.8
2006 / 5.6
2007 / 5.1
2008 / 4.8
2009 / 5.6
2010 / 5.8
2011 / 6.6
2012 / 6.8

Source ESSJ

Despite this agriculture, comprised mainly of small and medium sized farms that are less than 5 hectares in size but account for the majority of the total agricultural holdings, remains an important factor of rural life in the country.

The sector has been characterized as vulnerable to international competition resulting mainly from trade liberalization and persistent low productivity. However, the general decline in traditional crops seems to have been buffeted by the recorded increases of the non-traditional crops (Table 2).

Table 2. Domestic Crop Production (tonnes)

2004 / 2007 / 2009 / 2011
Traditional Crops
Sugar / 181400 / 158000 / 126000 / 137800
Banana / na / na / 45334 / 46660
Citrus / 131364 / 124553 / 128241 / 106922
Coffee / 16459 / 15117 / 12456 / 8099
Cocoa / 710 / 768 / 463 / 200
Non-Traditional Crop
Yam / 136167 / 113124 / 124516 / 136620
Vegetables / 138468 / 149173 / 173589 / 223545
Legumes / 4700 / 5644 / 4820 / 5091
Condiments / 22680 / 28871 / 34313 / 44712
Fruits / 35235 / 39619 / 46768 / 38742
Cereals / 1601 / 1673 / 2359 / 2968
Plantain / 17760 / 19087 / 24621 / 35335
Potatoes / 25143 / 33531 / 42937 / 57424
Other tubers / 32436 / 35843 / 34936 / 48459
Sorrel / 598 / 749 / 812 / 1212
Total / 414788 / 427305 / 489672 / 592108

Source ESSJ

Livestock production has been mixed with a marked decline in beef between 2004 and 2011 while local goat meat has remained much lower than the national demand (Table 3). During 2013, production of pork has reportedly exceeded demand for several months of the year. The increase in pork production appears to have resulted from a number of factors including a vibrant farmers association, access to improved germplasm, improved livestock husbandry practices and policy support.

Table 3. Domestic production of livestock products

2004 / 2007 / 2009 / 2011
Beef / ‘000 kg / 10752 / 5539 / 5426 / 5621
Goat meat / ‘000 kg / 625 / 645 / 867 / 1316
Pork / ‘000 kg / 7468 / 7239 / 8958 / 7110
Mutton / ‘000 kg / 9 / 10 / 17 / 23
Poultry / ‘000 kg / 96475 / 107262 / 104502 / 101526
Eggs / Million / 125 / 115 / 128.5 / 137.5
Milk / Million L / 16 / 14 / 14 / 12.3

Source ESSJ

The performance of the sector,measured by the Agriculture Production Index, shows improved productivity for non-traditional crops during the period 2007 to 2011 while a marginal decline was observed for the traditional export crops (Table 4). Interestingly, during the prior period of 2003 to 2007, a significant decline in the production index for non-traditional crops was observed. It is important to note that the Agriculture Production Index of post-harvest activities has declined quite significantly from 2010.

Table 4.Agriculture Production Index (year 2007 = 100)

Year / Traditional Export Crops / Other Agric Crops / Animal Farming / Fishing / Post-harvest Activities / Total
2007 / 100.1 / 100.0 / 100.0 / 100.0 / 100.0 / 100.0
2008 / 79.3 / 94.8 / 103.2 / 93.1 / 111.6 / 93.7
2009 / 89.6 / 112.7 / 100.5 / 92.6 / 101.3 / 106.2
2010 / 98.2 / 113.8 / 99.0 / 101.1 / 70.2 / 106.6
2011 / 99.2 / 132.6 / 98.1 / 60.1 / 60.1 / 116.6

Source ESSJ 2011

Other challenges to the sector have been identified as including heavy reliance on imported inputs, use of inappropriate technologies; praedial larceny; an aging work force; difficulties in titling and transfer of lands; high cost and limited access to capital; and inadequate research and development.The sector is also extremely vulnerable to shocks including weather conditions, pest infestations, impact of natural disasters and changes in export market prices and trading regimes.

Transforming the Sector

Vision 2030 states that revitalization of the sector and its increased contribution to the national economy is contingent on its reorganization on the basis of modern technology and management in order to achieve greater efficiency and competitiveness. The reported long term vision is “for the dynamic transformation of the agricultural sector through a sustained, research oriented, technological, market driven and private sector led revolution which revitalizes rural communities, creates strong linkages with other sectors and emphatically repositions the sector in the national economy to focus on production of high value commodities and contribute to national food security”.

Demand Driven

Efforts to transform the sector should be demand driven if it is to be successful. Jamaica’s food import bill is reported to be almost one billion USD and an examination of the importation would indicate potential commodities for domestic production (Table 5). The importation of maize during 2011 was valued at US$ 82M while wheat was US$73 M. The heavy dependence on importation of animal feed and its high cost is a major concern to the livestock sub-sector particularly for poultry and pig production. We are already beginning to see a change in the sector as a result of the initial attempts by Jamaica Broilers to cultivate corn and Caribbean Broilers producing sorghum. We should remember that significant expertise regarding the production of corn and sorghum exists in Belize where farmers successfully produce the crops for the domestic and exportmarkets. It would probably be useful to seek technical expertise from that country to ensure that the projects in Jamaica are successful.

Table 5.Jamaica main Food Imports in 2011 (“000 USD)

Commodity / Value
(‘000 US$) / Quantity
(tonnes)
Maize / 82,060 / 260,208
Wheat / 73,282 / 194,562
Food Prep Nes / 54,680 / 4,892
Beverage Non-Alc / 51,815 / 45,406
Cake of soybeans / 41,892 / 91,822
Soybean oil / 36,000 / 24,200
Sugar raw centrifugal / 28,582 / 43,943
Sugar refined / 27,578 / 38,300
Chicken meat / 23,175 / 34,391
Hen eggs / 19,994 / 3,873
Cheese of whole cow milk / 15,718 / 3,111
Boneless beef / 15,133 / 3,312
Preparations of beef meat / 14,978 / 3,344
Sheep meat / 10,889 / 2,245
Beans dry / 9,074 / 9,297

Source FAOStat

Cassava

The new vision for agriculture would also involve the development of other crops that can be substituted for current livestock feed and human consumption. One example is the cassava. The Food and Agriculture Organization is proposing that the countries of the Caribbean Community (CARICOM) have a significant opportunity to effect a huge import replacement for food, flour, feed and beer that can be addressed by the development of the cassava industry which already has a production base in almost all of the countries of the region. It has been shown that the Caribbean currently imports, on an annual basis, nearly 900,000 metric tonnes (MT) of wheat for flour and 420,000 MT of corn (mainly for poultry feed). For Jamaica, the importation in 2011 was 260,000 MT of maize and 195,000 MT of wheat. Also, the regional beer industry imports nearly 100,000 tons of malt annually and has already tested and accepted as possible the utilization of locally produced cassava in its beer production. In Jamaica, Red Stripe has expressed its intention to use cassava in its beer production later this year.

To take advantage of the opportunity for cassava production, it is essential to develop the entire value chain, from production and yields to processing and marketing technologies. The Food and Agricultural Organization’s Sub-regional Office for the Caribbean (FAO-SLC) in partnership with key regional and national agencies, is working with CARICOM to develop a regional plan and strategy for the cassava industry and is organizing a regional conference for February of this year.

Production for the Export Market

The main crops that Jamaica has traditionally grown for the export markets are sugarcane, coffee, citrus, cocoa and pimento. These crops are important as they contribute significantly to foreign exchange earnings and provide employment in rural areas. However, a review of the annual export has shown marked decline in value from US$155 M in 2004 to US$88 in 2011 (Table 6). Jamaican Blue Mountain coffee has significant brand identification in the export market and advantage should be taken of its recognition. This would require improving productivity and becoming more competitive. Importantly, the export value of non-traditional agricultural products has increased annually from US$ 90 M in 2004 to US$ 135 M in 2011. The non-traditional export food products include pumpkin, dasheen, sweet potato, yam, papaya, ackee, dairy products, fish,sauces and baked products. Placing increased emphasis on production of non-traditional crops for the export market offers an important opportunity for further development of the agricultural sector.

Table 6.Value of Agricultural Exports (US$’000)

2004 / 2007 / 2009 / 2011
Sugar / 98700 / 101246 / 75700 / 64300
Banana / 12814 / 9222 / 6 / 63
Citrus (fruit) / 2057 / 1847 / 1710 / 2097
Coffee / 38683 / 27158 / 33815 / 18326
Cocoa / 910 / 1985 / 1778 / 1108
Pimento / 2164 / 2077 / 1753 / 1835
Sub-Total
(Traditional Crops) / 155328 / 143536 / 114763 / 87729
Non Traditional / 90405 / 92146 / 119138 / 135137

Source ESSJ

Dairy

The dairy industry has recorded dramatic decline in milk production during the last two decades from 39 M litres in 1992 to 12 M litres in 2012 (Table 7). In the 1960’s, there were reported to be over 5,000 dairy farmers in Jamaica resulting in peak production being recorded in 1992. However, the productionlevel was challenged by the pervading trade policies of the era, that is, Trade Liberalization and Structural Adjustment Programmes. A current FAO assessment of the dairy industry has suggested that the demise has resulted in:

  • The sale for slaughter of more than 1500 milking cows.
  • The sale and slaughter of replacement heifers.
  • The departure of more than 550 small and medium size producers between 1990 and 2004.
  • Decline of national sufficiency levelsfrom 30% in 1992 to 9.5% in 2009.
  • Reduction in per capita consumption of milk from 64 kg. in 2001 to the current 34 kg.

There is a large local market for milk and milk products that can be penetrated if the efficiency of dairy operations is significantly improved. The industry requires significant Government support if it is to rebound and become competitive. As a result, The Jamaica Dairy Development Board has as its mandate: “the creation of an internationally competitive milk producing sector which contributes significantly to enhanced national wealth creation and food security through increased food self-sufficiency, while providing opportunities for sustainable livelihoods for the broad mass of small farmers who constitute the rural sector”.

Table 7.Total Annual Milk Production from 1991-2012

Year / Fresh Milk Production
(Million litres)
1991 / 28.7
1992 / 38.8
1995 / 25.7
1998 / 27.5
2000 / 25.5
2003 / 18.4
2005 / 14.6
2010 / 12.2
2011 / 12.3
2012 / 12.1

Agriculture – Tourism Linkage

An agriculture-tourism linkage study undertaken by the FAO in 2008 estimated that the percentage of the tourism industry’s demand that was met by local agriculture was approximately 30% with an estimated 70% imported. The report also noted that a significant percentage of the imports are regarded as high value items, commanding high prices. The annual demand for agricultural products including fruits and vegetables was estimated to be approximately US$ 178 million. Of this figure, 48% or US$ 85 million represented the demand for products that are produced locally, while 52% or US$ 93 million represented the demand for products that are normally imported since theyare not produced locally in any appreciable quantities due to climactic conditions, lack of viability or other factors. The report pointed out that many of the products that can and are grown locally are imported and compete with the local produce. A major reason often cited by both hotels and importers are the inconsistency of production and delivery among our farmers.

Strengthening the agriculture-tourism linkage and targeting of the hospitality sector provides another opportunity for the agricultural sector. However, heavy rains particularly during the wet season generally result in conditions which restrict the production of vegetables on a continuous basis. This environmental condition sometimes results in complete loss of crops and the inability of farmers to deliver produce in a timely manner. This places severe constraints on the reliability of the sector to supply vegetables in a reliable manner. The use of protected cultivation allows the production of high quality crops during periods when there is limited production on the ground. Jamaican farmers have developed significant greenhouse production forlettuce, tomato, sweet peppers and cucumbers for which there is always need in the hospitality sector.

A review of local greenhouse production shows a general annual increase for lettuce, tomato and sweet pepper (Table 8a). However, there have been reports of greenhouse farmers’ being unable to compete with open field farmers when over production exists. Interestingly though a market opportunity exists during the second half of the year when open field farmers can experience very challenging environmental conditions. It has also been observed that the country imports high level of cauliflower and broccoli (Table 8b). It is suggested that research support be provided for the development of these crops under greenhouse condition.

Table 8a.Local Greenhouse Production (Tonnes)

2007 / 2008 / 2009 / 2010 / Total
Lettuce / 99 / 161 / 186 / 173 / 619
Tomato / 69 / 103 / 193 / 153 / 518
S. Pepper / 38 / 38 / 106 / 164 / 346
Total / 206 / 302 / 485 / 490 / 1483

Table 8b.Imports Cauliflower and Broccoli (tonnes)

2007 / 2008 / 2009 / 2010 / Total
Cauliflower / 70 / 88 / 46 / 54 / 258
Broccoli / 101 / 141 / 101 / 219 / 562
Total / 171 / 229 / 147 / 273 / 820

Jamaica Greenhouse market study 2012

Clusters

A major challenge facing farmers is the limited and costly access to required inputs including land, machinery, water, transportation, extension service and market. However, farmers can address some of these major challenges by working together in groups such as cooperatives or associations. One new approach that can assist farmers to access inputs and markets is the agro-parks concept.

An agro-park has been defined as an area of intensive agricultural production which seeks to integrate every facet of the agricultural value chain from pre-production activities (irrigation, drainage, road and land-clearing activities) to production, post-harvest handling and marketing. The agro-park concept provides an opportunity for the farmers/investors, marketing entities and Government to work together and significantly impact on the food import bill. To be successful, it is critical that all links of the value chain be implemented and monitored.

The agro-parks can make a significant contribution to the strengthening of the local economy in the areas immediately surrounding the parks, given the strong multiplier effect of these investments.In addition to the income and earnings to be derived, the agro-parkscan play a critical role in rural development and rejuvenation.

Conclusion

Transformation of the agricultural sector requires a strategic policy that supports the vision for the sector. Vision 2030 states that revitalization of the sector and its increased contribution to the national economy is contingent on its reorganization on the basis of modern technology and management in order to achieve greater efficiency and competitiveness.Additional incentives are required to support investments that can replace an increasing proportion of imported food, livestock feed and other agricultural inputs with national substitutes. Continued support is required for primarily agricultural products but also to encourage the emergence of new, value-added, agro processing industries, along the whole food supply chain. Private sector investment should be encouraged, recognizing that the financial and economic returns to both governments and entrepreneurs can be increased when they work together. The agriculture- tourism linkage should be strengthened so as to maximise the large opportunities that exist to provide locally grown products to the growing sector. Farmers working in clusters can jointly address many of the constraints and accelerate the sector’s transformation.

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