Minister of Agriculture, Hon. Roger Clarke, says the recovery of the agricultural sector must be based on a return to traditional crops.
Addressing the Jamaica Stock Exchange’s 8th regional capital markets conference at the Jamaica Pegasus Hotel on Wednesday (January 23), Mr. Clarke said that there should be more focus on exporting crops that have proven to be successful on the international market in order for the sector to overcome some of the setbacks its has experienced since the 1960s.
He said the agriculture sector has declined nominally from a Gross Domestic Product (GDP) contribution of 13.4 per cent in 1963, to 5.6 per cent in 2011.
He pointed out that while the export of non-traditional crops such as dasheen, pumpkin, hot pepper and sweet potato has seen significant improvements, moving to US$135 million in 2011, and rising by 11.3 per cent for the first nine months of 2012, it is traditional crops that Jamaicans are accustomed to growing.
“As sexy as non-traditional appears to be, they simply cannot replace these traditional crops in terms of acreage,” he argued.
Therefore, he stated, to the extent that there are markets for these crops and the ability to move up the value chain, “it makes every sense in the world to fully exploit the potential of these crops”.
Citing the example of sugar, Minister Clarke said the country will, over the next three years, enjoy the highest export prices ever for the commodity, due to supply constrains worldwide.
“For the foreseeable future, even if we ignore the European market, Jamaica is well poised to satisfy its domestic demand, plus a significant portion of CARICOM’s demand from our local production,” he noted.
He said that with the divestment of the government’s shares in the industry, and the current restructuring of the regulatory and institutional framework, the way has been paved for the necessary investments to be made for the sector to fully realize its potential.
In fact, the Minister noted, since divestment in 2009, $15 billion has been invested in the sector, with the overhauling of factories, procurement of equipment, and expansion of sugar cane production by more than 5,000 hectares to date. Additionally, the European Union (EU)-financed cane expansion fund now stands at $1.7 billion, and will facilitate the planting and replanting of a further 3,000 hectares in the 2013/2014 crop year.
He informed that the plan is to move up from the current 1.5 million tonnes of cane to 3.5 million tonnes by the 2015/2016 crop year.
Minister Clarke said with significant spin-offs expected, the Office of Utilities Regulation (OUR) must now urgently address the matter of the pricing of renewable energy, to pave the way for the take-off of investments in co-generation in the industry.
Turning to cocoa, Mr. Clarke said, “the world is crazy about Jamaica’s cocoa,” and the government is aggressively moving to deregulate the marketing of the product, as well as divest its assets in the industry.
He said that there is a potential market for 1,400 tonnes of cocoa per annum at premium prices, and that this year, close to 500 tonnes will be exported. This is 300 tonnes more than was exported last year.
“Last year, we resuscitated some 1,960 acres of cocoa and under another programme we are posed to replant some 120 acres,” he informed.
As it relates to coffee, Minister Clarke said with the Mavis Bank factory successfully divested in 2011, the government is now finalising the divestment of the Wallenford facility, and that together, the two facilities account for close to 80 per cent of production.
It is our expectation that through divestment, we will garner the necessary investments as well as market diversification to allow for a second chance for the industry,” he told the conference participants.
The annual JSE conference seeks to examine ways in which economies can be positioned to benefit from opportunities, and how organisations can facilitate growth and development in the region.
Among other things, the conference brings together key participants in the financial services industry to discuss and present ideas on issues pertinent to the sector; and facilitates a forum for the development of strategies for the future growth of the sector in the region.