A worker tends to bananas on a farm in St. Mary in this May 2005 Gleaner photo. Agriculture officials and regional institutions will make a case to donor agencies next month for funds to expand the agriculture sector. - File

Linda Hutchinson-Jafar, Business Writer

Caribbean countries facing a dwindling agricultural sector and a skyrocketing annual food import bill of over US$2 billion will meet with international lenders in June to weedle financial and technical assistance for expansion and diversification of the sector.

Some 53 projects costing US$296 million will be submitted for consideration at the Special Agricultural Donors' Conference which Caribbean leaders approved at their February inter-sessional meeting in St. Vincent and the Grenadines.

Fourteen regional projects submitted by different institutions are estimated at US$59 million while the 39 national project proposals by individual governments will cost US$237 million.

Institutions proffering proposals include Caribbean Agricultural Research and Develop-ment Institute (CARDI), the Organisation of Eastern Caribbean States (OECS) and Caricom secretariats, University of the West Indies, and Caribbean Agricultural Business Council (CABA).

Of the 39 national project proposals, 22 are earmarked for funding and implementation under a Food and Agriculture Organisation-sponsored regional project referred to as the special Caribbean Regional Project for Food Security (CRPFS).

The agricultural sector in the Caribbean has been a very important contributor to GDP, employment and exports in the 15-member Caricom and has been critical to poverty alleviation and food security in the past.

Its overall contribution in the future is seen as being even more critical.

Consistent decline

But in the last two decades, agricultural output as a percentage of gross domestic product (GDP) was reduced to less than 10 per cent for about seven countries in the region. In Jamaica, for example, the sector peaked at 6.7 per cent of GDP in 2001, but has declined almost consistently since to 5.2 per cent in 2005.

For the remainder it was greater than 10 per cent, and for at least three countries - Belize, Guyana and Haiti - it has remained over 20 per cent, according to a background document obtained by the Financial Gleaner.

For nine CARICOM countries, more than 15 per cent of their foreign exchange earnings from merchandise exports came from the agricultural sector and for six of those it was over 30 per cent as recently as 2003.

In terms of employment, the agricultural sector is even more critical as it accounts for greater than 15 per cent of total employment in 11 countries.

In six member states, it accounts for more than 25 per cent of employment.

Over the past two decades, the Caribbean agricultural sector has faced immense challenges both nationally and in the global economic environment.

Government support to the agricultural sector has declined resulting in a reduction in credit being available to farmers, weaker agricultural technology development systems and deterioration in production and marketing infrastructure.

At the same time, in the global economic environment, trade liberalisation has decreased the relative access and returns for the major agricultural commodities grown by Caricom countries.

Tariff rates declined and quotas to third countries increased.

In the Caribbean, there was a substantial decline in shares in global trade and in absolute trade.

According to the conference background document, Caribbean shares in world agricultural exports declined from 2.0 per cent in 1988 to 0.3 per cent in 2004.

Net agricultural trade moved from being a surplus of US$2.9 billion in 1988 to a deficit of US$2.2 billion in 2004.

In 2001, Caricom food imports amounted to US$1.82 billion, of which 30 per cent were livestock products, mainly dairy and meat.

Production of sugar and bananas dominate the sector, but in five of the six major sugar producers, cane output and exports of sugar declined between 1996 and 2004.

The reform of the EU Common Market Organisation for sugar, approved in November 2005, spells an increasing loss in market value for Caribbean sugar output.

Similarly, export volumes and values of bananas have seen sharp declines in the post 1993 period. In the Windward Islands, gross export revenues fell by a half between 1990 and 1996 and have declined consistently ever since.

Over the past three years, the Caricom Secretariat and member states, on their own, and with assistance from regional and international partners, have prepared regional and national projects to advance the development of the agricultural sector across the Community.

Another conference document stated that National Medium Term Investment Programmes (NMTIPs) for the agricultural sector have been prepared by each member state in order to identify priority areas for investment as well as gaps in available resources, especially funding.

The most frequent problems highlighted by the NMTIPs relate to an inadequate "incentive framework", associated with the lack of appropriate policies, financing terms and conditions for agricultural investments, low returns for crop and livestock products, trade and marketing bottlenecks, complicated land tenure systems and insufficient insurance coverage against risks.

They also identified deficient infrastructure, weak institutions in technology and training and underdeveloped organisations as needing support from public institutions even though the services might be supplied through the private sector.

The importance of ensuring the availability of services typically supplied by the private sector were also highlighted — transport, post harvest and agro-processing facilities.

At the regional level, projects fall into two general categories — institutional capacity building to provide coordination and technical services across all member states and projects that focus on specific agricultural production and marketing activities, especially where there are cross border linkages..

Regional projects seek to address the common needs related to institutional strengthening, information on best practices, the design of adequate policies, strengthening of technology development systems, risk management and praedial larceny issues.

The main sub sectors involved in the national projects include agricultural development and diversification, agro-industries, livestock, fisheries and forestry.

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