Vice President Bharrat Jagdeo in his remarks to regional leaders on the expectations of meeting the 20 by 2025 food reduction target, cautioned that it could fail, as did his 2005 agricultural initiative, if an integrated, swift approach doesn’t start immediately, given that there are only two and half years to go and over US$7.5 billion in investments would need to be raised.
“This can’t be too big a task for leaders: you have to go down there [on the ground to meet the people] and you don’t sit in the high offices and ministries or else you can’t respond to the needs of the people and get the agriculture sector going. This process has to be driven by the heads who are here and in a very clear manner with clear direction,” Jagdeo expounded yesterday during a discussion, on day 2 of the Agri-Investment Investment Forum and Expo being held at the Arthur Chung Conference Centre.
“[You have to say] ‘I am going back to my country and within three weeks I am going to sit with the cabinet and say, ‘here is a list of fiscal concessions I am going to give to the investors who will come in to invest . That is to say to raise the US$7.5 billion of capital needed. Too, I am going to direct the Minister of Finance to ensure the budget for these support systems grow by 10% to 15% per year, and it is not so that it is ring-fenced in future years. I am going to work to make sure that I see the list of barriers to trade, and in three weeks work to see them removed’. That is when we will actually achieve 25 by 2025 otherwise we will fail again,” he added.
Addressing key binding constraints of agriculture growth, Jagdeo referenced a common agriculture policy proposal he had made and given to leaders of Caricom back in 2004 when he was serving as President of this country.
In 2004, a document entitled “A repositioning for Caribbean agriculture”, was submitted to the 25th meeting of the Heads of Caricom by Jagdeo.
“Since then the document itself, the vision and the spirit, has become a reference point for every time we need to think of Caribbean agriculture food security and rural development,” FAO Assistant Director General and moderator of the session Dr Julio Berdegué told participants yesterday.
Interventions
Jagdeo said that many of the leaders have already pointed out constraints and they were not new to what he had stated some 17 years ago. As then, he had “identified 10 constraints” and it included limited and inadequate finance and investments; outdated and inefficient health and agricultural systems; inefficient research and development; inadequate water and land distribution; inadequate transportation systems; inadequate research; a fragmented private sector; deficient and uncoordinated risk management measures including praedial larceny; inadequate transportation system particularly for perishables; weak marketing systems linkages; and lack of human resource skills .
He said that the leaders in Caricom had also established “a series of interventions should we need to address the constraints.”
But more than a decade and half later, he said that the region is far from addressing then and he feared that if the same attitudes are applied as then, there will come a time when another discussion will be had and the Caricom community will be facing even dire times.
“We have made some progress in addressing these constraints but we are far from addressing them as a system. And unless these are addressed , we would not have the ideal framework for the growth of food security in our region and a competitive agricultural sector… we have to return to these tasks with the recognition that we would not be able to address all of these issues within three years; the targeted period,” he stressed.
And like President Ali the day before, Jagdeo said that meeting the targets requires less talk and more action.
“We need to clearly define the problem. I am hoping that out of the discussions with the leaders, the technical people, and the investors, that we would go through the rest of the conference we will start addressing some more practical issues as to how we will address the outcome. …we have to be more practical as we move forward,” he underscored.
To frame the problem, he explained that the region’s food import bill is upwards of US$6 billon and if it is to cut that by 25% by 2025, it means that countries have to increase output by over US$1.5 billion in 3 half years.
“What scale of investment, both public and private, would it take to achieve a US$1.5 billion of output in this sector? If we work simply on a 20 per cent rate of return, for agricultural investment, that means over US$7.5 billion of investment coming from the private sector alone. And then, because these support systems are all vital for the success, what scale of investment does the public sector have to make to ensure that we create the framework, with drainage and irrigation, farm to market roads and infrastructure, research capabilities?” he questioned.
“It is a large amount of money and we are nowhere near, from the interventions that we have heard about what is available now to us and the timelines to access those resources and most directed at the public sector, this is from the development financial institutions, then we are a far away from mobilising the resources necessary. It means a massive outreach and a framework and a very practical one to crowd in this type of investment. What do we need to do, now in the short term to get this response where we can stimulate $7.5 billion of investment?” he further probed.
Firm commitment
Jagdeo said that a key task is removing barriers to markets.
“The farmers in Dominica are able to supply more food if they are able to get more markets. It means simply, address the issues that have caused so much worry and caused so many to be aggrieved:- the issue of trade barriers,” he said.
“We have to leave with a firm commitment from the delegations that are here, because much of this action would have to take place, not at the regional level but at individual jurisdictions. If we have the political commitment, what does each country have to do to ensure we have a response nationally and regionally? This means we have to have a champion in each country for these measures. It means intervention from the presidents of office of the PM of the regions. This cannot be driven simply by a Ministry of Agriculture because there are so many cross-cutting issues that need to be addressed that cannot be addressed by the agriculture ministries alone and they will need heavy intervention, on the part of the heads of government. We need to have them here and make that commitment that they will either form a unit, or within their offices they will drive this process,” he added.
Champions
Jagdeo singled out the issue of granting concessions also, saying that it was more a political issue and as such only those who can afford top lobbyists obtain the lion’s share of state concessions.
“There is one thing that we did not address and it is a more political issue. It is about who gets concession in a country. The sectors that have the greatest lobbying powers often are the ones that emerge in a national framework with the greater concessions,” he said, while pointing out that across the region, the tourism sector has walked away with “a ton of concessions historically.”
However, he reasoned that in that process of giving concessions, and given the fiscal framework in these countries, the amount of money they can lose can be through concessions and it is why each should work to ensure that farmers and ordinary people receive the same treatment.
“If there is no champion for the agricultural sector, the Ministry of Finance will continue to operate in the same manner that they have done in the past. They will give concessions only to those that have the greatest lobbying power. And farmers most often don’t have that lobbying power.”
He called on governments to be “champions” for the smaller man.
“It is why they need a champion in the government, to ensure that when the framework is established by the head of government… they will say for example… to ensure we achieve food security in my country, I will make sure the agricultural sector grow by 15 per cent from what it is every year in the future and it is not treated as a residual allocation. But that it is a primary allocation in the budget.
If you are looking to balance budgets then you are not cutting this ring-fencing sum. You need research in drainage and irrigation systems, soil types… that has languished. If you look at the scale of budget for agriculture in many countries it is very small.
And if one is to look at the regions’ loan profiles, very few requests would go in for agriculture. For this reason, he said that donor and international financial agencies should also take into account this factor. “We borrow, but very little for agriculture,” Jagdeo said.
Monopoly
And taking a swing at commodity retail magnates in the region, he posited that many times it is those business persons and not governments who press for numerous and cumbersome trade barriers under the guise of stringent sanitary and phytosanitary conditions.
“You need the strength and political will of the presidents or prime ministers’ offices to cut through what happens. Across the region, retail trade has a monopoly by a small few that has either a strong political influence or by the sheer presence in many of territories of the many years they have been there.
Further, he added, “It is hard to bring down costs… to get to open trade we will have to break that monopoly and many of them are the ones who lobby for and have deep connections within governments and the regulatory agencies and they almost push the introduction of the restrictive phytosanitary standards as a protective tool in many of these countries. As the tariffs go down, to protect the dominance they have, they start using the phytosanitary standards… someone needs to break that up. We have had that issue when we try to get out stuff out, the private sector is pushing the standard agencies in their countries to stop it.”
According to Jagdeo, it is easier to get ice cream from North America into some Caribbean countries than from Guyana.
“Then you have some ridiculous things, for example… they have to visit the factory if you are producing ice cream but won’t if it is coming from North America. If you are to start producing ice cream in Guyana and try to export it, they want to visit your country. This is all protectionist. We need to tackle this and it needs heavy lifting. We can’t leave here and not do so. This process has to be driven right up from the top and serious commitments made there,” he stressed.
Overall, Jagdeo advised that when building and planning for a strong agriculture sector, it should be tied into the country’s holistic development and adaptation strategy and it must be given prominence, as “unless closely linked to a national water and climate strategy” benefits to the country’s people would always be limited.
