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Using Agriculture To Propel The Economy

Jamaica having achieved an average of 0.8 per cent economic growth over the last 50 years is, by any standard, an unimpressive record, especially for an economy with the vast potential to integrate with the global commercial system.

Given its locational advantage, climate, rich human resources, which speak English, the small-island economy of the Caribbean has a place in the global system of commerce and should have performed much better economically than it has over the last 50 years.

Lack of adroit management at both the macro and micro levels in the society has contributed in a significant way to our poverty. Going forward, we cannot continue to do things the way we have done them before and expect that we are going to have different results. Radical and bold decisions will have to be made in order to get the economy back on track. Important, however, it must be noted that getting economic stability at the macro levels will not deliver the expected economic liberation that so many persons are desperately looking for.

While meeting the conditions of the International Monetary Fund agreement is necessary for growth, as is commonly known by now, that's not sufficient for growth. For sustained long-run growth, there needs to be a structural reform of the local economy.

The economy, for far too long, has depended on only a few sectors for growth. These sectors are generally mature sectors in the global trading system, so they cannot deliver any rapid growth to move the country forward.

To move from the old way to new thinking will not be easy nor painless, but it will have to be done if we are to move the country forward. It is in this light that I wish to use the next few lines to articulate an alternative model to agriculture as an immediate growth pole to ease the burden of so many Jamaicans who are desperately looking for work.

Historically, almost all industrial countries have developed their agricultural sector as the base for driving early growth and then made the transformation from an agrarian society to an industrial one. What these countries have realised is that remaining an agrarian society will bring them so far and no more. In order for them to benefit from agriculture, they noticed that they have to move up the value chain - away from primary production into value-added goods, which, in essence, is an industrialisation of their agricultural sector.

Jamaica has to make this move in the farming. Agriculture has to depart from the subsistence model to one of wealth creation. It has the potential to do so.

subsistence level

At present, the vast majority of farmers in Jamaica are engaged at the subsistence level. They may have half- or quarter-acre of land and grow a variety of crops for local markets and to feed their families. While this is helpful, it will not lead to any robust growth in the Jamaican economy.

For agriculture to make a significant contribution to the growth agenda, it will require Big Money to be invested in it. There has to be a selective approach to this. Farmers with deep pockets will have to be invited to the sector and be given access to the best land and asked to produce at the highest standards of international competitiveness without much input from the state bureaucracy.

The concept of agro parks is in this general direction, but I am not convinced we have the deep-pocketed investors, all lining up to become players in the park. We will have to look not only to local investors, but international sources, if we are going to transform farming. The country's promotion agency needs to target wealthy farmers overseas and show them the tremendous opportunities in the sector and invite them to come in and make investments similar to what we have done in the tourism and ICT sectors. This transformation will see persons from peasant farms working on larger acreages and earning a better income, while having their own cultivation to complement their wages. This will be a win-win for both small and large farmers.

The current splintered farming that largely defines the agricultural sector will not lead to any serious growth in the Jamaican economy. The level of subsistence farming will render our agricultural produce highly uncompetitive in the marketplace and eventually drive the farmers out of business.

bigger picture

While we are trying to protect the smaller farmers, it is important that we set our sights on the bigger picture. Let us move the sector forward by selecting some large and deep-pocketed investors who can plough funding into modern technologies that can generate the yields that will make agricultural contribution to our national output much more substantial.

Government policy must steer small farmers in the direction of cooperatives in which they can generate scale and improve productivity rather than using scarce resources to provide extension services to them. Trying to reach so many small farmers with the limited resources will always pose a problem to the Rural Agricultural Development Authority (RADA), the government agency charged with the delivery of extension services to the farmers. At one point, it was estimated that there were more than 220,000 small farmers across the country. All these farmers will need extension services, but the limited budget of the RADA makes it impossible for everyone to get help, despite the best efforts.

It is time for a revolution in the thinking towards using agriculture as a significant growth pole to move Jamaica forward in the very near term. I will submit that no other sector has the potential to create a mass number of jobs in the very short term.

 

Densil A. Williams is professor of international business at UWI, Mona, executive director of the Mona School of Business and Management, and chairman of RADA. Email feedback to columns@gleanerjm.com and densilw@yahoo.com.

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