The food crisis: Jamaica's reality
published:
Sunday | June 15, 2008
Cedric Wilson
Not since the liberalisation of the Jamaican economy in the early 1990s, when inflation skyrocketed to unprecedented levels, has the standard of living of the ordinary Jamaican come under greater threat. After falling to 5.7 per cent in 2006, propelled by rising oil and food prices, inflation jumped to 16.8 per cent in 2007 and there seems to be no end in sight.
Erwin Burton, CEO of GraceKennedy Foods, last month indicated at the company's investor briefing that over a one-year period the price of rice has soared by 59 per cent to 90 per cent; corned beef prices have jumped by as much 120 per cent and dairy products prices have seen increases in the vicinity of 70 per cent.
The performance of the Jamaican economy over the last two decades has been pathetic. But while the economy on average has grown at a rate of 0.8 per cent per year since 1990, the incidence of poverty in Jamaica has declined. According to the Jamaica Survey of Living Conditions, in 1990 approximately 28.4 per cent of the population faced severe challenges meeting the basic needs of food, clothing and shelter; now roughly 14.3 per cent of Jamaicans fall in that category.
diaspora challenges
Of course, to a significant degree, this improvement is attributable to the dramatic growth in the volume of remittances in 'cash and kind' from Jamaicans in the diaspora. But now the diaspora is confronted with the same challenge of rising oil and food prices as the family 'back a yard', and this has the potential of putting remittance inflows in jeopardy. As such, the risk of more people falling below the poverty line cannot be ignored.
Tackling the problem of rising oil prices is difficult for a small, dependent, non-oil-producing country. Because the price of oil used in Jamaica is entirely determined by external factors. To make matters worse, energy consumption will not see any major reductions, even with steep hikes in oil prices. This is what economists mean when they say the demand for oil is relatively inelastic. At best, a solution for this problem exists in the medium to long term.
In this respect, the problem of rising food price is certainly less formidable. Intuitively, it is easy to understand - in a sense, the average person might find it easier to eat yam instead of imported rice rather than to save energy by not watching prime time TV.
The minister of agriculture, Christopher Tufton, much to his credit, has sought to address the problem of the food crisis. His answer is greater food self-sufficiency. In fact, by suggesting that cassava could be a possible substitute for imported rice, he has elevated the 'humble and forgotten' root into national focus. Indeed, cassava, a staple in the diet of the now extinct indigenous people of Jamaica, is now, for some, a symbol of self-reliance and for others the subject of a joke.
manley attempt to transform
But is there any basis for scepticism about achieving greater food self-sufficiency? While some three decades have passed, the memory of the Michael Manley Government attempts to transform agriculture has not completely faded. The word 'cassava', therefore, conjures up images of a brilliant star that faded in the night. The vision of agricultural transformation in the 1970s was based on both demand-side and supply-side economics.
On the demand side, there was an appeal to nationalistic instincts - 'eat what you grow and grow what you eat'. On the supply side, there was a programme for land reform that sought to increase the output of small farmers. Initially, greater budgetary allocations were made for the improvement of tertiary roads. This was to allow for an increase in the flow of goods from the farm gate to supply centres.
The Agricultural Marketing Corporation was an agency established to increase the market access of small farmers. Plus a number of other interlocking programmes. This agricultural thrust did enjoy a measure of success.
During the 1970s the contribution increased steadily, peaking at 9.5 per cent in 1978. However, in the end, many of what appeared to be good ideas dissipated in the clash of ideology and the politics of scarce benefits. Today, the contribution of agriculture to the national economy has fallen significantly. In 2007 it was 5.3 per cent, compared to 8.5 per cent in 1980.
On the demand side a frequently overlooked reason for failure of agriculture to expand beyond the marginal level that was achieved was the issue of taste. Historically, the plantation economy was based on a captive labour force totally dedicated to the production of sugar. Little or no attention was given to the development of a domestic agriculture for feeding the population. Therefore, the cultivation of crops to meet domestic needs was an alien concept.
Dr Christopher Tufton and Erwin Burton - File photos
attempts at self-sufficiency
At the end of slavery, many freed slaves took off to the hills and attempted to develop a self-sufficient agriculture sector. For plantations to be profitable, they required the supply of cheap labour. The self-sufficient farming pursued by ex-slaves was, therefore, inimical to the interest and viability of the plantation. As such, it was common practice for plantations to send military and paramilitary troops to destroy the crops of the peasants. This was to force the ex-slaves to sell their labour to the plantations in order to survive.
Consequently, this only served to entrench the appetite for foreign goods and create habits of dependency. Therefore, weaning Jamaicans from foreign goods is a Herculean task. The appeal to patriotism in order to get a population to consume a good can only be short-lived. Not even the abundance of charisma for which Manley was renowned could displace the fundamentals of the market.
The determinants of demand, among other things, are price, income and taste. These are factors that must be contemplated in the drive for improved food self-sufficiency. For people to 'eat what they grow' they must like what they eat. This highlights the need for research to gain insight into the Jamaican taste bud. Outside of that, any appeal to patriotism to increase domestic demand will fade and people will, over time, return to their old ways.
In his book The Poor and the Powerless, C.Y. Thomas, the Guyanese economist, was critical of Caribbean governments for their treatment of agriculture. Thomas argues that the orientation towards agriculture in the region "has probably been the most distinguishing and disastrous consequences of the nationalists' approach to economic and social policy". And he is right.
There is much more that can be done in Jamaica to make proper water systems available to the farmers; to increase the level of agricultural productivity; to provide better feeder roads to small farmers; to stem the migration of rural population into towns and cities; to put land into the hand of energetic people capable of boosting agricultural output; and to increase the level of research and development.
renewed focus imperative
In this context, renewed focus on agriculture at this time is imperative because of several reasons. First, increasing food prices have shifted the balance in favour of agriculture, making it more profitable. Therefore, the profit incentive should be sufficient to encourage agricultural expansion. Second, Jamaica has a vast pool of unskilled labour that cannot be adequately absorbed in the manufacturing and service sector. Hence, large-scale agriculture would increase the income-earning opportunities for the unemployed. Third, if the focus on the environment is coupled with agriculture it could promote sustainable growth. Fourth, with a dynamic agricultural sector, it could provide strong impetus for the expansion of the agro-processing industry.
There is now a need for a comprehensive agricultural plan. One that is visionary and practical - a blueprint that will not be placed to gather dust on a shelf after the ink has dried and grand speeches have been delivered. In the gathering storm of a world food crisis, maybe that is the only thing that will save many Jamaicans from sinking into severe poverty. The idea of greater food self-sufficiency is good. Minister Tufton should be encouraged; he has his eyes on the horizon.
Cedric Wilson is an economics consultant who specialises in market regulations. Send your comments to: conoswil@hotmail.com or columns@gleanerjm.com.
