Mark Beckford, Staff Reporter

( L - R ) Rickards, Stanberry

AT LEAST one sector leader has rejected a proposal by the president of Venezuela for Caribbean and Latin American nations to swap bananas and sugar cane for cheaper oil supplies.

But the Agriculture Ministry says the suggestion is worth pursuing.

Hugo Chávez made the proposal on Friday during a PetroCaribe summit in Cuba.

"We propose adding to the financed portion of the oil bill a method of payment that includes the supply of a series of local products and services," a Reuters report quoted him as saying.

President of the All-Island Jamaica Cane Farmers' Association, Allan Rickards, argued that the proposal was not viable in Jamaica, which is already struggling to meet the existing production target of 200,000 tonnes.

"We have to be producing 210,000-220,000 tonnes before we could meet the full export and local market requirements," he told The Gleaner.

As a result, he says Jamaica could not afford to supply Venezuela in the near future and, therefore, the possibility should be explored to barter other goods and services.

However, Donovan Stanberry, the Permanent Secretary in the Ministry of Agriculture, says the bartering proposal would open up additional markets for the sugar and banana industries.

"Any opportunity to sell more bananas and more sugar is welcome; we have the capacity to produce way above our current quota of 126,000 tonnes," he said.

Stanberry told The Gleaner that Jamaica would have to improve its output, but said it was workable because there was enough land and labour.

Chávez's barter deal would be fashioned off a similar reciprocation alliance Venezuela shares with Cuba, which provides thousands of teachers and doctors in exchange for crude and refined oil.

President of the All-Island Banana Growers Association, A.A. 'Bobby' Pottinger, also says the Chavez proposal is an excellent idea that could be adopted if the price was right.

In the meantime, economist Ralston Hyman has rubbished the plan, saying it is a "stone-age" philosophy. "It would not be practical," he argued, claiming that the major constraint would be the supply/demand factor which drives the market economy.

Jamaica, which is a signatory to the two-year-old PetroCaribe Agreement with Venezuela, is currently enjoying a two-year moratorium; however, the country's oil bill as at April 30 was $17.998 billion.

The PetroCaribe pact, part of Chavez regime's strategy to extend Venezuelan influence among Caribbean and Latin American nations, allows participating countries to receive oil and defer payments on 40 per cent of the bill for up to 25 years at an interest rate of one per cent.

The alliance membership has grown to 17, with Honduras joining on Friday. The majority of PetroCaribe countries have strong links with Washington, which has been rankled by Chavez's rhetoric in recent years.

The International Monetary Fund predicted in its last report on Jamaica that the PetroCaribe debt will amount to J$32 billion, or 4.1 per cent of gross domestic product (GDP), by the end of this fiscal year. It also forecast that the debt will rise to J$107 billion, or 9.8 per cent of GDP by 2011/12.

According to Chavez, PetroCaribe debts had hit US$1.16 billion, and are forecast to reach US$4.6 billion by 2010.

Venezuela also signed up farming, energy and finance agreements with Cuba on Saturday.