The context of this four part series will be done based on my reading of the Inter-American Development Bank (IDB) Report of July 2017 titled “Analysis of Agricultural Policy in Jamaica”.
In my previous article I opined that the lack of structured, flexible agricultural loans is one of the problems affecting agricultural productivity within the Livestock sub-sector. The conclusion was mad e by comparing the loan incubation periods in Jamaica (roughly three to six months) to the countries of India and Australia (2-3 years) for livestock projects.
In this article, we will discuss some possible reasons for the failure of small and medium size farmers growing to full commercial operations.
The IDB report highlights:
1. Only 18 % of the Jamaica population is employed in agricultural based employment, however 46 % of the population lives in rural areas.
2. Poultry production has been up 9% from 2014 and consistently rising.
3. Traditional crop exports have consistently declined, in contrast to non-traditional crop exports which have increased by 8% between 2008 to 2012.
4. Productivity in the agricultural sector is low but improving.
5. Development Bank Loans at 10% are used up mainly by the poultry sub-sector and agro processing.
The following questions must, therefore, be asked:
1. How does a developing country with 46 % of its population living in rural areas have only 18 % of its people engaged in agricultural production, given the high import food bill and the lack of jobs?
2. Why is the poultry sector eating up the majority of DBJ 10% loans?
Follow the money
Without having the actual figures, but based on my knowledge and information gained over the years, I know that majority of the DBJ monies are being absorbed by large commercial poultry farms that are collateralized and guaranteed by the two large agribusiness groups on the island.
This is by no means an attack on the growing commercial poultry industry. In fact all other sectors within agriculture should look at the poultry sector as a model to follow en route to commercialization.
However, it should be hypothesized that the sector is no longer at the developmental stage.
Development funds for development
More low interest loan capital needs to go to small independent farmers in subsectors of agriculture that are still in the developmental stage. If we are serious about food security and increasing employment in rural areas then instruments should be put in place by the Development Bank of Jamaica to allow access to more low interest loans for proven small farmers without collateral, and who don’t have the privilege of having big business guarantors.
Honestly, I feel that the development money for agriculture is being hijacked by big business. Our once booming sector was driven by small and medium size farmers has been suffering from a lack of capital injection, because the system is blocking them from the finances needed to be more productive. It’s no wonder traditional exports are down and such small portions of our rural population are engaged in agricultural activities as a means of employment.
The People’s Cooperative Bank (PC Bank), which was a solid defender for the subsistence farmers, is now the first point of rejection. The agriculture board which decides the policies of the bank seems out of touch with the realities of running a small farm business. They seem only interested in short term crop production (peppers, tomatoes, cabbage, etc), while leaving the pimento trees to become fire wood for jerk pork. They are only interested in six weeks chicken, while, goats and sheep are stolen because farmers cannot build proper housing.
Productivity in the sector is improving, because of the sheer determination of our farmers to provide food for the nation, despite the unfriendly economic conditions.
Let’s say thanks to the fulltime engineers and police officers, who take out loans against their salaries to plant crops on five-acre lots and to the bar owner who uses the round robin money to support the 12 cows shared between herself and her boyfriend. People like these are the driving force for the increased productivity in the sector.
The redemption strategy is not simple but necessary. It should be a mix of general support services such as farm road improvement and other necessary infrastructure developments and revisit of some direct support (resembling subsidies) that can force “production for production sake”.
The production for production sake concept will have to apply to long term traditional produce such as coffee, cocoa, beef, cattle, etc, which will need large intakes of capital without immediate returns, but is the key to sustainable agricultural production in the country.
Finally, with the growth of non-traditional agriculture providing us with an avenue to earn more without using up large land space by applying appropriate technology such as hydroponics and shade house farming, the opportunity exists for us to venture into the production of ornamental flowers, roses, garnish vegetables, which incongruously trending upwards in the recent years based on export numbers.