CARIBBEAN DEVELOPMENT BANK

REPORT

ON

MEETING ON REGIONAL AGRICULTURE

Held at Headquarters of the Caribbean Development Bank

May 31 and June 1, 2002

Sector Analysis and Direct Lending Unit August 2002

CARIBBEAN DEVELOPMENT BANK

MEETING ON REGIONAL AGRICULTURE ____________________________________________________________________________________ BACKGROUND

Over the last three decades, the Region has experienced fluctuating fortunes with respect to its agricultural sector which traditionally has contributed significantly to social and economic development Changing food consumption patterns have also led to a situation where the Region moved from a position of an agricultural surplus area to where monetary value of food imports exceeded that of exports. The international food and petroleum crises in the early 1970s, created further difficulties not the least of which was increased food prices related to imports of expensive food products from the developed countries. While the Region continued to enjoy preferential access to European markets for its traditional exports e.g. sugar, bananas, and citrus, there was the ever-present threat that these marketing arrangements would change.

There was consensus among the heads of the governments of the Region, that the solution to the issues facing the agricultural sector were beyond the capability of individual countries. A collective regional approach involving pooling of resources represented a logical approach to address the situation.

Several initiatives have been attempted. The primary objective of these initiatives has been to enhance the integrity of the agricultural sector, ensuring that it continues to play an important role in the socio-economic development of the Region. Benefits of these initiatives were projected in terms of increasing production of a diverse range of food and other agricultural commodities, thereby, guaranteeing a higher level of food security, expanding market share for traditional and new commodities in international markets to augment foreign exchange earnings, and increasing employment opportunities to improve the quality of life and social stability, especially in the rural areas.

In 1975, the Heads of Governments approved the Regional Food Plan (RFP), as a new and comprehensive regional approach to agricultural development, and the establishment of the Caribbean Food Corporation as the main agency to implement the plan. The RFP was designed to address production-related aspects of the wide range of food crops, meats and milk, cereals and legumes, fruits and vegetables, fish and marine products, and condiments consumed in the Region. Projects that were regional in perspective and complementary or supplementary to existing national projects, would be designed, approved, financed and implemented to meet the objectives of the plan.

In 1989, the Governments of the Organisation of Eastern Caribbean States (OECS) approved the implementation of an Agricultural Diversification Programme composed of commodity-specific and supportive projects, sector policy recommendations as well as specific activities designed to foster joint marketing and coordination. The Agricultural Diversification Coordination Unit was established to implement the programme, with support from the regional institutions and agencies operating in the agricultural sector.

In 1996, Heads of Government, at a special meeting on agriculture, approved a Regional Transformation Programme (RTP) for agriculture. This approach was considered crucial in addressing the increasing challenges to marketing arrangements for agricultural commodities and the impending loss of preferential access to traditional markets.

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The international political environment has changed over the years, and the strategic geographic advantage which previously influenced development assistance flows to the Region, is of very limited importance presently, with consequential negative impact on such flows.

The issues which continue to impact the sector include:

(a) declining investment and development partner flows;

(b) stringent marketing conditionalities and increasing competitiveness for agricultural commodities in traditional markets;

(c) increasing concerns for food security and poverty reduction;

(d) reducing institutional capacity to service the sector; and

(e) land use policies and natural resource conservation.

Competitiveness studies undertaken in the OECS and Jamaica have indicated that these countries possessed strong potential competitive advantage in the production of certain tropical fruits, root crops and tubers. However, the farming communities have not exhibited high levels of confidence in producing and marketing alternative crops that have been recommended. The continued dependence on the traditional crops, the uncertain arrangements in the traditional export markets and falling prices have all contributed to the progressive declining production of most of the traditional exports, reduced contribution to GDP and loss of confidence among the farming population.

Over the period 1970-2001, CDB approved approximately 273.1 million (mn) United States Dollars (USD) in financial resources (loans, equity and grants) for projects in the agricultural sector of the Region. This amount represents approximately 13.4% of the total net financing approved by CDB for its borrowing member countries (BMCs). Approximately USD 161.5 mn or 59% of the total support to the agricultural sector in the Region has been channelled to intermediary financial institutions for on-lending to entrepreneurs in the sector.

The agricultural sector in the Region continues to be important, especially because of its impact in the rural areas where approximately 30% of the Region’s population live. Despite the issues facing the sector, efforts have to be made to determine ways in which they can be resolved and options identified and implemented to realise the sectoral objectives that have been established over the past thirty years.

CDB’s concern for the declining trend in performance of the Region’s agricultural sector precipitated a decision to assume a proactive stance in assisting the Bank’s BMCs to address some of the impediments to development of the sector. A small group of persons (list attached at Appendix 1) with extensive knowledge and experience of the sector and the environment in which it operates, agreed to meet to discuss issues in the sector and generate ideas for further development. DISCUSSION AREAS

The meeting was structured around presentation and discussion of the following five topics:

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(a) The Sugar Industry: Rationalising and Restructuring - Industry and Production Options;

(b) The Windward islands Banana Industry - Alternatives to or in combination with bananas;

(c) The Regional Rice Industry - Prospects and perspectives;

(d) The Regional Citrus Industry - Prospects and perspectives; and

(e) Institutional Capacity and the Re-configuration of Regional Agriculture. FINDINGS

The development agenda for the agricultural sector in the Region will be driven by the compelling events which are constantly arising in the international arena, especially in relation to production and trade in agricultural products. Arising from the presentations and discussion, the following five broad areas have been identified and proposed for initial focus.

(a) Developing regional policies - While structures exist for collaboration among the various interest groups in the respective agricultural industries, especially the traditional industries, greater regional cooperation is needed in developing common policies with respect to the production and trade in the respective commodities. Presently, the lack of a common regional policy on refining of sugar is resulting in the ineffective and inefficient production of refined sugar at three locations in the Region. Industries will, therefore, be encouraged to develop policies that are designed to facilitate regional production and trade in agricultural commodities.

(b) Institutional capacity - Extensive deliberations are taking place with a high level of

frequency in various fora, with respect to international trade. Amendments and changes to policies, rules and procedures are being proposed and implemented, regularly. Understanding the requirements, standards, rules, policies etc. by operatives with responsibility for production, marketing and administration is crucial to successful trade especially in international markets. Existing capacity is relatively low in the Region and effort is required to strengthen and expand this capacity in both public and private sector institutions in the Region. Considerable emphasis needs to be placed on strengthening public and private sector institutional capacity within the Region to facilitate trade in agricultural commodities, with particular focus on compliance with international standards for food safety, and quality control and developing regulatory frameworks for addressing these requirements.

(c) Production capacity - Improving the production and productive capacity of assets in the

regional agricultural sector should enhance competitiveness and viability of the sector. There is a need to address issues surrounding accessibility to natural resources, especially land and water, the quality of technical services including agricultural research and technology transfer capacity and accessibility to credit services. Producers also have to maximise the benefits of collective action as an essential component in improving production capacity and efficiency. Attention needs to be placed on strengthening and improving production capacity in traditional and other agricultural industries to maintain or improve market share and maximise opportunities available in respect of market access. Producers have to be sensitised to adopt commercial and business oriented attitudes towards their enterprises.

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(d) Information - While a considerable volume of data and information are available, critical information on specific areas that influence policy or investment decisions are not generally readily accessible. This is the type of information for which support will be directed in the short term.

(e) Competitiveness - Decisions have to be made with respect to the commodities to be produced

and the markets to be targeted. Undertaking a series of competitiveness studies on a range of commodities for both domestic and other markets will provide relevant data and information to develop policies and marketing systems that facilitate investments in these commodities.

Additional information on the discussion is presented at Appendix 2. AREAS FOR ACTION

Areas for possible action were identified in respect of each of the topics discussed. These are summarised below:

1. The Sugar Industry: Rationalising and Restructuring - Industry and Production Options;

(a) Undertake studies on the financial cost and economic and social benefits of the sugar

industries to:

(i) derive a better understanding of the contribution of the sugar industries;

(ii) facilitate a more regional approach to decisions on the industry;

(iii) identify areas for improving production and processing cost efficiency; and

(iv) provide data for exercises in re-conceptualising the sugar industry.

(b) Review with the assistance of appropriate studies, the most effective way for refining sugar to meet regional market requirements;

(c) Undertake market studies for selected products that can be commercially derived

from the sugar industry;

(d) Promote the notion of a regional sugar industry, while strengthening those existing elements of regional cooperation in the industry and maximising their use in devising a structure for a regional industry; and

(e) Encourage networking among regional industries and fostering relations with others

internationally, for mutual benefit.

2. The Windward Islands Banana Industry - Alternatives to or in Combination with Bananas:

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(a) Undertake relevant exercises and studies to evaluate the results of initiatives that have

been taken in respect of agricultural diversification at either individual country or sub-regional levels;

(b) Provide sustained support in identifying commodities that have competitive

advantage, in both domestic and other markets and develop policies and marketing systems that facilitate investments in these commodities;

(c) Encourage the development of public education programmes that focus on

agricultural and economic diversification with considerable emphasis on adopting commercial and business attitudes towards the various enterprises;

(d) Encourage and support public sector interventions in establishing quality standards,

regulatory and other legislative capacity, on national or regional basis, to safeguard domestic agricultural industries; and

(e) Support activities that strengthen the managerial capacity of commodity or other

producer organisations involved in agriculture.

3. The Regional Rice Industry - Prospects and perspectives

(a) Assist the industry in carrying out market studies in the Latin American countries being targeted;

(b) Strengthen the capacity of institutions in the industry to plan the development of the

industry including requirements for technical support services, research support and market-related interventions;

(c) Encourage the expansion of the regional market for rice through a range of

promotional activity;

(d) Encourage the adoption of regional approaches to the development and implementation of policies in relation to rice production and distribution; and

(e) Examine options for further diversification of rice-based products for domestic and

other markets.

4. The Regional Citrus Industry - Prospects and Perspectives

(a) Encourage effort in developing policies that are regional in perspective for the citrus industry. The policies would address issues including quality standards, regulations and marketing arrangements;

(b) Assist the conduct of a study to profile the regional industry and recommend

approaches to enhance competitive advantage where appropriate;

(c) Facilitate the reviewing and updating of existing legislation and regulations that

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influence the citrus industry;

(d) Review arrangements for accessing research and other support services from entities in the Florida citrus industry and attempt to more effectively facilitate networking and access to relevant production-related information, between the respective institutions; and

(e) Encourage the conduct of a study that undertakes an inventory of agricultural

research capacity in the Region and how this can be improved to adequately serve research needs of the sector.

5. Institutional Capacity and the Re-configuration of Regional Agriculture

(a) Encourage regional administrations to consider to the extent possible, joint

collaborative effort in providing representation in regional and international fora;

(b) Encourage regional governments to support activities that strengthen producer organisations and encourage development of national advisory capacity in key areas that facilitate trade;

(c) Develop programmes that support policy analysis and formulation initiatives;

(d) Initiate activities associated with developing a framework design for identifying the

policy instruments and proposed action in respect of the various industries in the agricultural sector.

(e) Undertake studies that provide information to influence decision making, over a short

period of time, with respect to policy development in key areas of the sector.

APPENDIX 1

LIST OF PARTICIPANTS

Dr. Clive Y. Thomas Institute of Development Studies, University of Guyana, Guyana Dr. Carlton Davis University of Florida - USA Dr. Kusha Haraksingh University of the West Indies, Trinidad Dr. Chelston Brathwaite IICA - Costa Rica Dr. H. Arlington Chesney IICA - Trinidad Mrs. Ena Harvey IICA, Barbados Dr. Keith Roache Agri Business Consultant, Florida, USA Dr. Keith Archibald Agricultural Consultant, St. Kitts and Nevis Dr. David Forbes Watt FAO, Rome, Italy Mr. Joseph Johnson FAO - Barbados Dr. Ian McDonald Sugar Association of the Caribbean - Guyana Dr. P. I. Gomes Caribbean Centre for Development Administration - Barbados Mr. Bernard Cornibert Windward Islands Banana Development and Exporting Company -

St. Lucia Dr. Peter de Groot Fairfield Rice Inc., Guyana Dr. Havelock Brewster Advisor, Government of Guyana - Guyana Mr. Jose E. Alpuche Belize Commodities Secretariat - Belize Dr. Compton Bourne President, Caribbean Development Bank Ms. Ann Bramble Caribbean Development Bank Mr. Lionel James Caribbean Development Bank Mr. Peter Webster Caribbean Development Bank Ms. Egene Baccus Latchman Caribbean Development Bank

APPENDIX 1

MEETING ON REGIONAL AGRICULTURE

SESSION # 1

TOPIC: THE SUGAR INDUSTRY - RATIONALISING AND RESTRUCTURING: INDUSTRY AND PRODUCTION OPTIONS

LEAD DISCUSSANT: DR. C. Y. THOMAS ____________________________________________________________________________________ SALIENT POINTS FROM PRESENTATION

(i) Regional sugar production has been in decline after having peaked in the 1960s;

(ii) The sugar industries in the Region are all relatively high-cost in nature, when compared with international sugar industries. There is a wide difference in production costs between the industries and also within production units in any industry. Field costs are significantly high relative to factory costs, and exceed the international sugar price;

(iii) Industry data available is reflected mainly from an economic perspective and financial data is

not readily available;

(iv) Sugar production is primarily for preferential markets in the UK. However, considerable scope exists for regularising regional and domestic markets for sugar where prices are higher than that in the world free market;

(v) The Domestic Resource Cost analysis reflects the relevance of the sugar industries to the

economies, especially in respect of its net foreign exchange earning capacity;

(vi) International sugar stocks are increasing and this combined with changes in international currency rates, consumption, interest rates and fuel prices, influence the volatility of the international price of sugar;

(vii) World consumption of sugar is increasing at an average annual rate of 1.9%. As a percentage

of total annual consumption of 132 mn tonnes, this increase translates into over 2 mn tonnes which represents a significant quantity of capital and other resources and could have significant implications for the long-term sugar market.

(viii) Changes in the relative value of the United States dollar is a major element in the price of

sugar, outweighing the effects of actual price changes;

(ix) Price increases are more significant for white refined sugar than for raw sugar;

(x) The Belize and Guyana sugar industries, as the lowest cost regional industries are better

APPENDIX 2

positioned to be more efficient and survive in the long term;

(xi) Effort should be concentrated at improving efficiencies in the industries and reducing production costs in order to maximise benefits over the remaining period of preferential market access;

(xii) Increasing availability of financial data would permit further analysis and facilitate further

identification of target areas for improvement in production efficiency;

(xiii) Diversification of the product mix and identification of specialty products for niche marketing represent areas for continued market development focus; and

(xiv) Further development of the industry should be addressed from a regional perspective with

appropriate policies formulated and implemented to guide this development. Areas for initial focus include:

- financing and capitalisation of the industries; - development of regional marketing regimes; - rationalisation of regional sugar refining; and

- research and development activity.

DISCUSSION Comments and Observations

(1) The importance of the sugar industry is due to the tremendous social contribution that

it makes through the varied backward and forward linkages that it supports in national and regional economies;

(b) The very limited investment in the regional industry has constrained its capacity to be

more efficient in areas associated with the production and processing of sugar cane;

(c) In expressing the cost of sugar production, it is important to identify the varied components of the cost and there should be consistency in such expression for purposes of comparison within and between countries. There is also inconsistency in determining the overall contribution of the sugar industries to Gross Domestic Product estimations;

(d) The world-free market price is not considered a valuable and reliable indicator of the

price of sugar. The determinants of this price are too varied to be reliable. Volatility in sugar price is influenced mainly by sugar stock status, international exchange rates, especially for the US dollar and fuel prices. Sugar prices are also significantly influenced by that of non-sugar sweeteners;

APPENDIX 2

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(e) The world market price of sugar is a good indicator of the lowest cost of sugar production, because the relationship is fairly constant and one moves in sync with the other;

(f) The long-run trend in sugar prices on the free market is a fairly accurate guide to the

long-term trend in cost of production as the trend lines are parallel;

(g) The dictum that long-term world output of sugar closely tracks world consumption is not valid, as stock have risen dramatically to approximately 48% of global annual consumption;

(h) The existence of the industry is the result of judgement of the value and worth of the

industry in each country. The judgement has been based on criteria of economic contribution with limited focus on financial performance. There is need for greater transparency and consistency in reflecting on industry performance and contribution. Analysis of the overall costs in the industry is necessary to identify the commercial and non-commercial components associated with the cost of sugar production. Comprehensive cost/benefit analyses are needed to inform the industries and respective governments and facilitate their judgement in respect of the industry. Comparison with low-cost international producers should take into account distortions associated with devaluation, bonuses, cheap labour, debt service default and hidden subsidies;

(i) While structures are existing for collaboration among the various industries, greater

regional cooperation is needed in developing/adapting common policies on sugar. Respective governments, as leaders in the industry have to guide this process. The refining of sugar for regional markets represents an area that can benefit from such collaboration;

(j) Competitiveness of the sugar industry as determined by cost of production, is

influenced by the existing production structures and the productivity of the industries’ assets. There is a view that the regional industry will not be challenged to compete on the world market as preferential arrangements will, for the foreseeable future, influence regional trade in sugar. Improvements in the efficient use of production assets would increase net benefits in such an environment. Foreign exchange premiums, labour, ecology, demographics and employment contribution, must be considered in determining the comparative cost of production competitiveness and social cost/benefit;

(k) The agricultural sector continues to be viewed as a way of life. Structures and

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Page 4 practices in the sector have not changed and considerable political patronage continues to influence the sector. A more commercial approach is needed in the sector;

(l) Options for diversification within the sugar industry should be examined from the

uses of the basic raw material to a diverse range of end products. Some areas include - the use of select varieties of the sugar cane plant as feed stock for power generation, and the use of sucrose as a feed stock in chemical industry. Niche markets for specialty sugars should be identified. Rationalising the production of select products in a diversified environment may meet/satisfy the peculiar conditions in a particular country or production unit. Decisions in respect of such rationalisation would be more appropriate in an environment guided by regional policies;

(m) Cogeneration should be encouraged where suitable biomass is available year round

and where pricing policies are conducive to this type of power generation and use;

(n) The sugar industry should be re-conceptualised around greater regional cooperation, policy development and implementation. The modelling associated with such an approach would be extensively influenced by price prospects for the varied end products, financial data and information, trends and patterns in the international environment, capacity to mobilise financing from traditional and non-traditional sources including equity, the research and development capacity to plan for such restructuring of the industry and political support; and

(o) The regional sugar industry is heavily indebted at all levels. The debt and financial

health of the industry have been influenced by both public policy and business decisions. Public policy decisions would have contributed to revenue short-falls in some areas. Possibilities for identifying the influences of public policy on performance in the sugar industries would contribute to an informed appreciation of the effectiveness of the sugar industries.

APPENDIX 3

SESSION # 2

TOPIC: THE WINDWARD ISLANDS BANANA INDUSTRY -

ALTERNATIVES TO OR IN COMBINATION WITH BANANAS

LEAD DISCUSSANTS: MR. BERNARD CORNIBERT; AND

DR. ARLINGTON CHESNEY ________________________________________________________________________________ SALIENT POINTS FROM PRESENTATIONS

(i) The future of the banana industry in the Windward Islands (WI) can be secured if the industry is modernised and commercial business approach is taken in respect of all decisions in the industry;

(ii) Increasing production beyond levels of approximately 120,000 tonnes annually would

adversely impact prices and returns to producers;

(iii) There continues to be good support for WI bananas in the high-end section of the traditional UK market. This support can be sustained if market requirements are satisfied reliably and consistently;

(iv) Prospects for growth in the industry are slow, mainly because of the structure of the

industry and the overall capacity of the majority of its producers;

(v) Diversification should be intensified using the banana industry and its support systems and infrastructure as the pole for such development;

(vi) Experiences that have been gained from the developing the banana industry, must be

used to develop other agricultural enterprises;

(vii) A core critical mass of assets must be maintained in banana production to continue to derive benefits from existing arrangements and transiting to other activities;

(viii) Diversification should be perceived as wider than the agriculture base to encompass

the human and community dimension, culture and other social elements and be holistic in perspective;

(ix) Industries should focus on specialty value added commodities for low volume and

high-value niche markets;

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(x) Production should be driven by information and appropriate technology. Production

interests should network extensively and work cooperatively;

(xi) The main enabling environment should be characterised by unanimity of vision, purpose and approach;

(xii) Existing organisational structures should be assessed and improved with appropriate technical and management capacity;

(xiii) Support services in areas including research and training should be provided by both

public and private interests. Similarly supporting infrastructure should be reliable, functional and effective; and

(xiv) To the extent possible, communities should have access to information that allows

for understanding of the various initiatives to facilitate participation and development.

DISCUSSION

Comments and Observations

(a) The agricultural sector is structured around small farmers. Their contribution to the sector suggests that there are areas of inherent strengths which should be assessed for further development of the sector;

(b) There is dire need to “grow” domestic and regional markets for local produce. Any

focus on product diversification should be complemented by campaigns that are intended to increase domestic/regional consumption and market share for these products. A holistic approach is required to address issues related to the farmers, support institutions, technical support services, markets and investments. Appropriate infrastructure and other arrangements will be required for quality assurance purposes for products of both local and foreign origin. Similarly, the necessary administrative and legislative regulations have to be developed to support decisions and actions in the sector;

(c) While diversification is necessary, there tends to be an inverse relationship between

diversification and productivity, the latter being adversely impacted over the transition period. Interests in the process should be sensitive to this because of its impact on farmer welfare;

(d) Effort is needed to evaluate the outcomes of the several interventions that have been

APPENDIX 3

Page 3

made to diversify the agricultural sector. Expectations for adoption rates, low uptakes of product in the tourism industry and other monitoring indicators have to be examined. The lessons from such evaluation will be valuable in guiding further effort;

(e) More effort is needed in monitoring changes in the varied markets for agricultural

products. Continued assessment is needed in respect of market-related criteria including forms in which goods are being prepared and packaged for markets, types of products being demanded, trends in demand for organic products (especially as interest is increasing but growth in demand is slowing and prices converging);

(f) Incentive regimes and supplier-side protection in exporting countries could

encourage investments in appropriate technologies to improve production and efficiency;

(g) Examining and assessing agro-tourism concepts in which agriculture functions as

both a supplier of product and an element of touristic interest;

(h) Interests in the sector should be encouraged to develop closer working relationships, pool resources where appropriate and networking among and within their various interest groups. This is an attitudinal issue and interests have to be sensitised to the benefits that can be realised from such relationships; and

(i) Greater sustained effort is needed in all areas related to marketing in both regional

and other markets. These include issues of demand, supply, product standards, branding, niche identification and product development, support services, regulations, infrastructure, information, training and transportation.

APPENDIX 4 SESSION #3 TOPIC: THE REGIONAL RICE INDUSTRY: PROSPECTS AND

PERSPECTIVES LEAD DISCUSSANT: MR. PETER DE GROOT SALIENT POINTS FROM THE PRESENTATION (i) The regional rice industry is centred in Guyana and Suriname; (ii) Guyana’s rice industry is constrained by financial difficulties associated with heavy burden

of debt. The industry has been over-capitalised; (iii) Options for improving industry performance efficiency, reducing production costs and

capitalising on economies of scale are compromised by the difficulty in accessing either development and commercial loans or equity; and

(iv) Marketing activity is focused on the European market where preferential access continues to

be provided until 2007/8. Additionally, niche markets are being pursued for extra-long grain rice. Regional markets continue to be variable and inconsistent. New markets are being pursued in Latin America and Haiti. Links with companies already trading in these countries could provide an opportunity for marketing increasing quantities of Guyana rice.

DISCUSSION

Comments and Observations

(a) A common regional policy on rice should be developed to address issues associated with technical requirements and specifications, quality control regulations and arrangements for price determination. The regional market should be the most important one for the rice industry;

(b) The performance of the rice industry is impacted by the industry debt to the

commercial banking sector. Has any concerted effort been made to reconcile this issue in order that the industry can make its contribution to the economy?

(c) The main markets in the Region comprise low-price consumer and offer very limited

scope for marketing significant quantities of premium rice;

(d) The decision to focus on the Latin American market is strategically important. Guyana on the border with Brazil can have access to border markets. Other markets in Mexico can be targeted. Of particular relevance in this marketing approach is the

APPENDIX 4

Page 3 relationship between the relatively small quantities of produce being considered for sale and the relatively large size of the target markets. This should facilitate the marketing effort. Appropriate market studies should be undertaken in these new target areas to more fully understand the mechanisms under which rice is imported. In Haiti, rice may be imported as a component of a food policy intervention with a third country. In Latin America, trade is generally value-added in nature and with a preference for commodities that are warehousable;

(e) While the price of rice to consumers is either static or increasing, that to the exporter

is decreasing;

(f) The business involved in the rice industry are mainly family owned and consequently there is limited scope for external equity participation;

(g) The rice industry has not benefitted from recent strategic or business planning;

(h) Options for further diversification of the rice industry through examination of the

market for rice-based cereal and fruit mixes, may be worth pursuing; and

(i) Issues related to incomplete land tenure arrangements, inadequate drainage and irrigation and other support services continue to adversely impact rice productivity.

APPENDIX 5 SESSION #4 TOPIC: THE REGIONAL CITRUS INDUSTRY - PROSPECTS AND

PERSPECTIVES LEAD DISCUSSANT: MR. JOSE ALPUCHE ________________________________________________________________________________ SALIENT POINTS FROM THE PRESENTATION

(i) The regional citrus industry is located in Belize, Jamaica and Trinidad and Tobago, with Belize being the most significant industry;

(ii) The industry in Belize has been expanding over the past 10-15 years, with the

industry being the largest foreign exchange earning in the country;

(iii) The global citrus market is over supplied. Consequently, declining prices are being realised for most citrus products;

(iv) A definitive regional policy approach is needed to address trading and other related

issues in the industry;

(v) Existing legislation and regulations are dated and require review and up-dating where appropriate;

(vi) Improvement is needed in respect of the delivery of support services, citrus research,

access to new technologies that influence productivity, pest and disease monitoring and control;

(vii) Sustained effort is needed in respect of continuous market assessment and

examination of options where comparative advantage exists for further diversifying the range of products from the industry; and

(viii) There is a need to continue promotional activity in neighbouring countries.

DISCUSSION

Comments and Observations

(a) The citrus industry is a beneficiary of preferential access to markets in the United States of America under the Caribbean Basin Initiative. The agreements under this initiative may be reviewed in the year 2008;

APPENDIX 5

(b) The major threat posed by expanding production in Brazil is associated

mainly with price reduction. Citrus may be placed on the WTO list of sensitive commodities in Belize;

(c) Product branding may constrain earnings by increasing the cost of product

delivery in an environment of declining prices. To the extent possible, market niches should be explored for specialty products in regional and other markets;

(d) It would be beneficial if regional approaches be taken to establishing

regulatory quality standards for both locally produced and imported products. Domestic and regional markets may be expandable on the basis of adherence to established quality standards;

(e) A comprehensive industry study should be undertaken to profile and position

the regional citrus industry and make recommendations for addressing any inadequacies in its functions;

(f) Legislation and regulations governing the industry are to be reviewed and

revised where appropriate. This would provide an opportunity to address issues associated with handling proprietary information and rights to research information;

(g) Despite the private sector character of the industry, a more effective business

planning approach to areas of its operation could lead to further improvement in production cost efficiency;

(h) Citrus intelligence is an important element in managing the industry. Access

to such intelligence is necessary to assist industry interests in strategic decision making;

(i) The Florida citrus industry has been tailor-made, subsidised and established a

wide network of research and other support services. While this level of subsidy is considered to be enormous, there may be lessons that can be learnt from this development for adaptation to the local/regional industry;

(j) Competitive advantage studies would assist the industry in identifying and

selecting those commodities that should be the focus of production;

(k) The industry should continue to build on the considerable assets at its disposal, including good relations with research entities in Florida. Possibilities should be explored for engaging in applied research in

APPENDIX 5

Page 3 collaboration with the industry in Florida and continue to develop good working relations that are mutually beneficial;

(l) The regional agricultural sector has not been supported by sustainable

research capacity. Inadequate funding has been the main reason for this situation. The Land Grant system has supported development of the agricultural sector in the USA. Can such a funding approach be adapted in the region? There has been some measure of progress with respect to establishing a Research Foundation in the Region; and

(m) An inventory of research capacity in the Region would assist in better

understanding and planning approaches to agricultural research in the Region.

APPENDIX 6 SESSION #5 TOPIC: INSTITUTIONAL CAPACITY AND THE

RECONFIGURATION OF REGIONAL AGRICULTURE LEAD DISCUSSANT: DR. P. I. GOMES _____________________________________________________________________________________ SALIENT POINTS FROM THE PRESENTATION

(i) Institutions are by definition enabling, with their functions being linked to a purpose,

goal or need in historical, social, cultural and political circumstances;

(ii) Institutions should not be seen as fixed entities, but may warrant abolition, re-invention, restructuring or otherwise in relation to changing circumstances;

(iii) Specific areas for institutional capacity assessment include:

- structure and operational modalities of public institutions;

- planning and policy analysis capacity;

- functioning of private producer organisations;

- cost-efficiency in undertaking research.

(iv) Approaches to assessing institutional performance include:

- cost-benefit studies in relation to policy-making, marketing advocacy etc.;

- mechanisms for performance management audits and “value for money” studies;

- tracer studies on deployment and effectiveness of trained personnel; and

- determination of new areas of specialisation for policy making, advocacy,

negotiations. DISCUSSION

Comments and Observations

(a) There is considerable demand on the limited human resource capacity in the

APPENDIX 6

Region to meet the varied needs of the agricultural sector. Demands of the varied national, regional and international negotiating fora are stretching the limited resource capacity in the Region. Approaches to addressing this limitation have not been generally widely accepted or practices. Some of these include:

- regional pooling of resources and rationalising the assignment of

responsibilities;

- increasing the level of trust to facilitate the use of available capacity within the private sector;

- broadening catchment area to include networking with interests in the Diaspora;

- increasing the level of coordination; - increasing the intensity of training to meet specific needs; and

- examining and changing, where appropriate, the incentive systems to sustain capacity.

(b) Within the policy domain, emphasis should be placed on policy formulation

and ensuring that policies for the agricultural sector are consistent with the overall macro-policies. Unrealistic targeting could lead to ineffective use of available resources and poor policy implementation. The agriculture sector, influenced by a range of biological processes, tends to be influenced by long gestation periods in obtaining results. This characteristic should be relevant in developing policies, regulations and targets for the sector. Policies should be informed by in-depth analyses and areas for policy development should be urgently prioritised;

(c) The capacity of the beneficiary of institutional interventions, has to be

acceptable to realise the objectives of the varied policies. Literacy levels, attitudes to adherence to rules and regulations, work ethics are essential elements of beneficiary capacity. Inadequacies in these areas have to be addressed through training, exposure and involvement with peers.

(d) The effectiveness of service providers is critical in realising the changes

needed in the sector. Options include strengthening the capacity of individual service providers, producer organisations to meet their needs from within the entity and improving research capacity to inform service providers;

APPENDIX 6

Page 3 (e) Effective institutional capacity building should be done by greater level of

coordination, and collaboration and inter-linking, especially of available research capacity. Minimum consideration should be given to proliferating new entities.

(f) Necessary policy instruments and policy actions to drive the regional

agriculture have not been developed. Statements are principally, descriptive in nature. A framework design needs to be developed to elaborate the objectives, instruments and actions needed for each component of the agricultural development programme spanning commodities for both export and domestic consumption. There are compelling developments in the Region which will drive the regional agenda. These include issues impacting on the regional sugar, banana and rice industries, diversification of the agricultural sector and meeting trade requirements for agricultural commodities.

(g) Approach to addressing human capacity needs for the sector:

- determine requirements for specific industries in the sector;

- focus on private sector for training purposes, because of higher level of permanence;

- provide training to all industry stakeholders, utilising distant education systems as extensively as possible;

- attempt to develop a commonality of vision throughout the education systems, in order to establish a structured human capacity building approach for the sector;

- explore all opportunities for collaboration and coordination especially in the area of research;

- develop cross-accreditation systems to facilitate movement of academics in the Region;

- ensure stakeholder participation in developing policies for the respective industries.