Jamaica’s ‘agro parks’ food initiative
21 January 2013
According to an article in the Jamaican press, support has been extended to a series of ‘agro parks’, under the EU’s sugar protocol accompanying measures funding. The agro park concept is conceived as ‘a cluster of related agriculture production and agroprocessing in one location, going as far along the value chain as possible’: infrastructure is put in place, primary investors are mobilised and value-added processing is undertaken by the private sector.
The report notes that private sector partners have been mobilised to expand onion production on the basis of supply contracts that provide a secure market for the output produced. In the fiscal year 2010, Jamaica produced some 721 tonnes of onions (7% of domestic demand), valued at J$64.46 million (€534,500), compared to only 455 tonnes in 2008. The ultimate aim is to replace 70% of onion imports, thereby expanding local employment.
Efforts are also under way under the agro parks initiative to expand Jamaican yam production, partially mechanising in order to reduce production costs, and the scope for production of new varieties of pineapple and sweet potato, and even for sheep rearing for meat, is being explored.
Hershel Brown, the CEO of Agro-Invest, the implementing body for the agro park initiative, is reported to be looking for ‘trade protection from central government so that local onions will be able to compete with imports’. He argued that the agro park initiative needs ‘policy support so that onions cannot be imported when local production is happening’. Attention is also being paid to expanding and upgrading warehouse facilities in line with demands under the US Food and Safety Modernisation Act.
The Jamaican government has also reported on its investment of US$8 million in the agro parks. Consideration is being given to the development of sorghum production as an input to production of animal feed and beer. The government is also collaborating with private sector companies in the production of maize, with 100 acres already planted and the possibility of a further 600 acres being added, although earlier 2009 joint ventures to produce rice failed to take off.
Commenting on the agro parks initiative, the Jamaica Gleaner recognises that land constraints in Jamaica will limit national capacity to competitively mass-produce grains and staples.
Editorial comment
Previous experience with similar initiatives suggests that there could be a danger from overdependence on the use of trade policy tools to sustain local production. In an era of rising food prices, initiatives to promote expanded local food production potentially have greater prospects for success, but also require a greater focus on building competitive production. This in turn will require a careful selection of the products to be promoted, based on an objective assessment of the realistic potential for competitive forms of production in these areas. Given the land constraints on competitive mass-production of grains and staples in Jamaica, this may well lead to a focus on specific horticultural products.
Attention will also need to be paid to strengthening the functioning of local supply chains by bringing mainstream distributors (retailers and wholesalers), as well as the hospitality industry, into close collaboration with the initiative to provide a secure market for fresh produce. Experience in Namibia under its horticulture development programme could offer some useful lessons in this regard (see Agritrade article ‘ Horticulture development programmes under way’, 28 August 2009). In the Caribbean itself, there have been a number of positive experiences with initiatives to bring all stakeholders together to identify ways of improving value chain performance.
The emphasis on moving as far up the value chain as possible needs to be seen against the background of periodic oversupply of targeted agricultural products. In November 2010, the Jamaican government established the Glut Management Fund to purchase fresh produce in times of oversupply. While developing value-added processing could avert periodic gluts and reduce post-harvest losses, close attention will need to be paid to enhancing product quality and ensuring stability of supplies, if competitive forms of production are to be developed in areas where even greater import competition exists than for fresh products.
Policy initiatives will also need to be consistent with Jamaica’s international trade policy commitments, both in terms of its ‘green-box’ commitments and the use of trade policy tools. While there appears to be scope within Jamaica’s WTO commitments for increasing tariffs to bound rates for certain products (e.g. for onions and shallots), the use of seasonal quantitative restrictions could face challenges under a variety of the provisions included in the CARIFORUM–EU EPA.
