PSOJ’s prescription

Joe Matalon, Contributor

“The private sector must be the productive engine of growth for the country, and the sustainability of the agricultural base must be linked to the nation’s trade policy.”

This is the view of the Private Sector Organisation of Jamaica (PSOJ), endorsed by Dr Christopher Tufton, minister of agriculture and fisheries.

With this in mind, the PSOJ, in collaboration with the Ministry of Agriculture and Fisheries, hosted two meetings earlier this year looking at the oppor-tunities for growth in the agricultural sector.

The first meeting was held on January 19 and focused on encouraging greater investment in the agricultural sector. The second, held on April 22, looked at improving the linkages between agriculture and tourism. These meetings were held against the background of improved performance of the agri-cultural sector despite numerous challenges facing the productive sector.

Some of the concerns raised by private-sector leaders included the need for improved infra-structure, for example, roads, supply of human resources at the farm-management level, a change in focus of players in the hotel industry to use more local produce, and the need to put in place more effective plans to contain praedial larceny.

Despite the increased demand for food in the tourism sector, producers of fresh agricultural products have been unable to capitalise on this due to certain industry constraints. Some of these include weak producer organi-sations which lack the requisite training and support to provide agricultural products to the hotels under a contract-farming arrange-ment, and lack of acceptable contracts between farmers’ groups and hotels. These are some of the issues that have to be tackled.

The PSOJ recognises that with the current GOJ (Government of Jamaica) debt-management stra-tegy, the productive sector expects lower interest rates over the long term to facilitate increased production, especially in agriculture. With returns on investment ranging from 25 per cent to 86 per cent, depending on the product, according to Minister Tufton, the private sector will be looking increasingly at the agricultural sector for viable investments with good rates of returns.

In order to facilitate this investment, there has to be increased access to financing, the required level of technical support, and improved market information and marketing arrangements, in addition to a streamlined tax system. Most important, there needs to be greater technological research and development in the agricultural sector, with a focus on commercialisation.

The PSOJ is encouraged by recent initiatives of the Government, including the recently launched Centre of Excellence for Advanced Technology in Agri-culture, the Agriculture Investment Corporation, as well as enhanced agriculture health and food-safety systems.

The National Export Strategy, an initiative of JAMPRO, in collabora-tion with stakeholders such as the PSOJ, has indicated the agro-processing sector as one of the eight priority sectors. Through agro-processing, agricultural commodities can be transformed into higher-value products which can then be branded and marketed at higher prices for increased revenues. This must be the focus of the agricultural sector as the path to prosperity.

Raw-material access

Jamaica’s agro-processing sector requires uninterrupted access to raw materials, regardless of the situation locally, in order to maintain contracts with overseas buyers who are only concerned about getting orders on time, in the desired quantities and with the required quality. This is critical to gain and maintain access to export markets. Without a vibrant export market, local farmers would have no market to sell much of their produce. Policies which damage the viability of export markets, no matter how well intentioned, could put the future of the agro-industry, including the very farmers they were intended to protect, at risk. Therefore, a careful balance has to be struck in terms of encouraging local production versus importation of raw materials as the situation requires.

Uninterrupted supply requires carefully planned production to ensure consistent demand, rather than peaks and troughs, and the provision of accurate and timely production information to agro-processors to allow efficient and reliable sourcing.

Periods of unavailability

According to some private-sector interests, at present, farmers plant crops in a manner that is not aligned with the needs of the agro-processing sector, resulting in periods of unavailability, while there is some industry scepticism regarding the information provided by the Rural Agricultural Development Agency (RADA). Consequently, the agro-processing industry is not fully confident in the data with which they are provided by the authorities for planning purposes.

This calls for strengthening the market-information system of RADA for more accurate and timely information, and a more flexible import policy by the ministry to allow for the provision of waivers to agro-processors at times when critical inputs are unavailable locally.

The PSOJ reiterates its commitment to working with the authorities to overcome the challenges facing the productive sector, especially with regard to agriculture, and looks forward to continued growth in the sector.

Joe Matalon is president of the Private Sector Organisation of Jamaica.