Letter of the Day | Supply shortage stymies agribusiness
THE EDITOR, Sir:
I refer to your editorial dated Saturday, July 21, 2018, titled 'Local vs imported'.
I agree that Jamaica should be consuming more of the items that we produce. However, relative to the rest of the world, our production costs are too high. Economics teaches us that the more units you produce, the cheaper the unit cost. The capacities of most of our local factories are low, hence a high unit cost.
I recall a plastic bag manufacturer in the early 1990s who had to shut down his plant as the imported bags were coming in cheaper than his raw material (RM). Situations like these have caused many to come out of manufacturing and become merchants. I fully support eating more Jamaican products, but am also mindful of the fact that economics will always trump patriotism, especially where funds are scarce.
Limited Raw Materials
Our ackee, jerk seasoning and sauces are world renowned, but we can hardly fill the demand because of limited raw materials. We currently do not have the required raw material to sustain and grow the sector. The existing factories have excess capacity, but without the raw material, the machines become idle.
Last year, because of limited raw material, we were only able to fill approximately 55 per cent of pepper sauce orders. GraceKennedy, which must be commended, has now stepped up to address this shortfall through its subsidiary, Grace Agro Processors. We are hoping to have improved supplies by the end of the third quarter.
I am not aware of any new ackee trees being planted, so the processors have to compete for their share of the existing pie.This limits production. We have the same issue with pimento as we continue to harvest from the same trees that have been around for decades. New market opportunities are opening up daily for these products, and if we are not in a position to supply, the opportunities will be missed.
Agro-parks will have to play a more critical role going forward. It will provide the structure that is required to move to a sustainable agricultural sector. We need to do more research and development in the field of agriculture. Where is the next Dr T.P. Lecky?
We need to maximise our exports so that we can earn the USD to help pay for the imports. Farmers have to move away from planting on a 'square' of land. Instead, they should have access to adequate land, where they can plant and benefit from the economies of scale. Jamaica has the potential to achieve great things. However, as taught in school, potential energy is of no use, unless it is converted into kinetic (moving) energy.