Monthly Archives: December 2015

Should We Produce Our Own Food? by Peter Webster

I was amused by the recent comments of a World Bank economist reported in the news on Friday 25, January, 2008 that “It may be better for small states such as the developing countries of the Caribbean to de-emphasise agricultural production, import food and focus their attention on reducing poverty”.  These comments were nothing new as some of our regional economists have been saying the same misguided thing for years, but they reminded me of former USA President Ronald Reagan’s description of economists as “People who see something actually working in reality and still question whether it would work in theory”.

The developed countries of Europe and North America have subsidised their agriculture for over a hundred years.  Such direct subsidies currently amount to the equivalent of almost a trillion United States Dollars annually in the countries of the European Union, and the United States of America is not far behind. At the same time they also provide market protection for their producers. Why?  Subsidies keep their farmers gainfully employed on their land, promote food security, minimize food costs and contribute substantially to their country’s economy which is not drained by the cost of importing all of their food.  Research has also shown that every dollar spent in agriculture is recycled, on average, six times in the economy which is more than that occurring in any other sector.  The high multiplier effect of agriculture in an economy results from the fact that food is a necessity for everybody and agriculture largely involves the rural poor who may be described as the base of the economy. It also results from the value added component of agro-industry that would not exist in the absence of agriculture.

Agricultural production subsidies, especially for local markets, cannot be faulted whether in developed or developing countries.  Similar subsidies are now an accepted norm in many other sectors including education, health, housing, water, et al. Why not agriculture (food production)? The problems come with the surpluses the subsidies tend to produce and the implication that countries producing such surpluses are more efficient producers than anybody else – a myth. However, when these surpluses are dumped on the world market at half of the actual cost of their production, the destructive effect on farmers in countries without such subsidies or market protection is worse than any terrorist bomb.  This helps to explain why there are mountains of food in storage in some countries while millions are starving in others.

The continent of Africa was a net exporter of food up to the time (1960s) that economists started telling the new popular leaders of emerging African Nations the same nonsense quoted in the opening paragraph.  They imported cheap, subsidised food for their masses at the expense of their local farmers who then added to their countries’ problems by vacating their farms and moving to the nearest urban areas in search of jobs.  In so doing, the African countries were drained of scarce foreign exchange – the imported food may be cheap but it still costs foreign exchange – and they were also saddled with the attendant problems of increased rural poverty and servicing the urban spread.  Africa, once a “bread basket” for the world, now has starving millions, imports more than half of its food and is mired in debt and poverty despite a wealth of human and natural resources.  

The exceptions to the foregoing, South Africa and Zimbabwe, support the argument that the African countries’ agricultural decline was a major cause of their economic problems and not just poor leadership and corruption as popularly thought i.e. before Robert Mugabe destroyed his country’s farming community. Please note that the foregoing has been documented by many researchers.

A related issue is that the farm gate price of food is seldom more than 50% of the market price. Handling, transport, packaging, storage, distribution and marketing of food can account for 80% of the market price.  This value added is seldom recognized by commentators discussing food prices when they target production costs.

All of this at a time when the United Nations has been promoting the concept that if you “give a man a fish you may feed him for a day but if you teach him how to fish you feed him for a life time”.  In other words if you “give a man food you may feed him for a day but if you help him to feed himself you feed him for a lifetime”.

When questioned as to “why they think that the developed countries can justify their heavy agricultural subsidies but the developing countries cannot”?  Economists have responded simply that the developed countries can afford it but the developing countries cannot.  There can be no doubt why the developed countries can afford the subsidies while developing countries cannot and are unlikely ever to be able to afford it.  One builds while the other bleeds.

Can developing countries (large or small) afford not to subsidise their own food production?  The answer lies in how we classify the sector.  Is it productive or social?  It is understandable why there is a difficulty in justifying subsidies of activities in the productive sector, including export crops, but food production and related food costs are so closely associated with the social sector and poverty that the classification and justification is de facto.  Besides, the reported comments can only apply where there is full employment in more productive activities than food production and this has not yet happened in any country – developed or developing, large or small.

Peter Webster

Note:  Peter Webster is a retired Portfolio Manager of the Caribbean Development Bank and a former Senior Agricultural Officer in the Ministry of Agriculture.

AGRICULTURE IS VITAL by Basil Springer

“And a harvest of righteousness is sown in peace for those who make peace.” – James 3:18

In last week’s column we beseeched the social partners to unite under the leadership of the new Prime Minister of Trinidad and Tobago. Now, we wish that the youthful energy in the new Cabinet of the twin island nation infuses the entire Caribbean. This is indeed a gargantuan task but let us make a start with the agricultural sector.

People are our most important resource and have to be fed. Agriculture is a science which guides farmers as they cultivate the soil for the growing of crops and the rearing of animals to provide food and other products for local and tourist consumption. Agricultural goods can be grown for export, to reduce the massive agricultural import bill and contribute to net foreign exchange earnings.

Locally grown agricultural produce is more easily quality controlled and gets from farm to table in a much shorter time than imported produce. Many locally grown products reach the consumer at a cheaper price than imported products and selected products provide our full complement of nutrients.

Why then do we not have a comprehensive coordinated programme for agricultural development in the Caribbean rather than a piecemeal approach by territory. This approach has not produced a sustainable solution in the last 70 years since the Report of West India Royal Commission, also known as The Moyne Report, was published at the end of the second world war. Many billions of dollars of national and donor funds have been wasted.

Although not formally trained in agriculture science, I have been associated with the full spectrum of agriculturalists and the agricultural sector for my entire professional life and I am still involved in one way or another.

Having been trained as a Mathematician, Statistician and Operations Research scientist in Jamaica, Wales and at the Imperial College of Science and Technology in London, I interned as a Biometrician at Rothamsted Research, formerly known as Rothamsted Experimental Station, which is the longest running agricultural research station in the world, providing cutting-edge science and innovation for nearly 170 years.

The establishment of the Biometrics unit at the Faculty of Agriculture at University of the West Indies at St. Augustine Trinidad (1968) was my first professional assignment and it is still in operation today under the Caribbean Agricultural Research and Development Institute. I was President of the Caribbean Agro-Economic Society, the Barbados Society for Technologists in Agriculture and am currently Chairman of the recently launched Global Business Innovation Corporation which encapsulates the key components of the Caribbean Food Business Innovation Revolution.

In addition, I was an avid vegetable gardener at least twice in my life, have been involved in many agricultural development consultancies and given advice to many post graduate agricultural students over the years.

Eat Bajan Day this year is on October 9. This is managed by the Graham Gooding Trust of which I am a Trustee. Quite a lot has rubbed off from these experiences and if I do not know any specific detail in agriculture at least I know who to ask.

My primary interest is in shepherding businesses to sustainable success. Agriculture is a business and my continuing interest in the sector is to contribute to its success at the enterprise, national and regional levels.

I propose a simple 5M business system construct as follows:  The Model (Idea/innovation) is at the Core (Corporate Governance);  The Money (outlay) provides the Stamina (Investment Finance); The Marketing (sales) is the Life (Marketing); The Methodology (shepherding) is the Growth (Operations); and the Mind-set Change (shepherding) inspires sustainability (People Development). The high inherent business risks in the agricultural sector are associated with the above five business systems.

Corporate Governance risks – 3: (1) there is little or no focus on management meeting culture to structure the foundation of the business; (2) failure to observe legal and environmental laws reflecting society’s priorities or industry mandates; and (3) deleterious impact on the natural resource base.

Investment Finance risks -2: (1) little or no focus on credit rating culture; and (2) low equity input by the entrepreneur in the business.

Marketing risks – 4: (1) little or no focus on customer centric culture; (2) no proactive aggressive market led sales and distribution strategy; (3) unrealistic sales projections especially for start-ups, re-births, spin-offs and scale-ups; and (4) unpredictable prices and markets.

Operations risk – 7: (1) little or no focus on profitability culture; (2) use of low technology; (3) variations in output due to weather, pests, disease and value chain logistics/timing; (4) praedial larceny; (5) lack of crop insurance; (6) outdated ICT and administrative systems; and (7) weak net cash flows.

People Development risk – 4: (1) little or no focus on productivity culture; (2) poor time management practice; (3) the lack of positive affirmations of passion, perseverance and patience among personnel; and (4) selection, training and motivation issues centered around family members and employees.

These 20 risks are among the challenges that have to be addressed as we take on the agricultural sector.

My firm belief is that there is no shortage of agricultural entrepreneurs in the Caribbean with the potential to grow the industry but we must establish an adequate user-friendly agricultural investment fund and secure the fund by a systematic shepherding process to mitigate the above risks as humanly possible.

Let us develop a healthy, robust agricultural community that lives right with God and enjoys its results. Let us do the hard work of getting along with each other, treating each other with mutual respect, dignity and honour.

(Dr. Basil Springer GCM is Change-Engine Consultant, Caribbean Business Enterprise Trust Inc. – CBET. His columns may be found at www.cbetmodel.org and www.nothingbeatsbusiness.com.)

 

A TSUNAMI OF HUNGER by Peter Webster

The World Food Programme estimates that there are currently around One Billion undernourished people on Earth.

The Barbados Sugar Industry has reached a major cross-road with growers’ costs being way more than what they are receiving for their product. Sugar Cane farmers are incurring heavy financial losses and many have reached the point where they have no option but to cease cultivation. Furthermore, they realise that such a decision is almost irreversible as the additional costs to restart operations will be prohibitive. Experience throughout the Caribbean and elsewhere is that once sugar cane operations cease they are seldom ever restarted.

This likely cessation of sugar cane production in Barbados along with the concurrent reduction in food crops is occurring at a time when experts around the world are predicting a “storm in food prices” that could generate a “tsunami of hunger”. Food prices that have risen by more than 50% over the last decade could reach exorbitant levels with more and more of the world’s poor being unable to afford food. There is and will still be enough food to feed everybody but it is the high prices and unaffordability of food to the poor that results in hunger.

Food price increases are currently being driven by six causes. These are:

  1. Increased demand through general population growth (the world’s population has more than doubled in the last fifty years) coupled with increasing food consumption which has doubled in the last thirty years;

  2. Reduction in agricultural subsidies in developed countries as a result of pressure from the United Nations Congress of Trade and Development (UNCTAD) and the United Nations Food and Agriculture Organisation (FAO). These institutions have claimed that subsidies result in unfair trade in agricultural products (food). Unfortunately, it is not the subsidies themselves that have seriously damaged farmers in developing countries who have no support or protection, but the dumping of surplus food produced by the subsidies on the world market at prices that are below production costs. Cessation of the subsidies will not necessarily stop the dumping and in any case is occurring fifty years too late after agricultural production throughout developing countries has been seriously damaged;

  3. Ongoing development worldwide has short-sightedly taken place mostly on agricultural lands reducing the availability of land for agriculture and ultimately depressing food production. That this has also occurred in other countries should not be a comfort to Barbadians. This reduction in available agricultural land has been balanced by improving technology (improved varieties and pesticides et al) that has resulted in increased yields and production. Unfortunately, this improved technology comes with a price tag that further adds to the production cost and increased prices;

  4. The high cost of energy has inflated production and distribution costs while creating a demand for alternative energy sources which is promoting a switch from food production to bio fuels;

  5. Developing countries’ inability to produce food after being damaged by cheap dumped food prices over the last fifty years is taking longer than expected and cannot be restored overnight. It will take many years for the “culture” and expertise that was formally handed down from generation to generation of farmers is recovered. One of the fallacies in the Caribbean is that almost anyone can be a farmer. In fact, project after project in the Caribbean (including Spring Hall Land Lease and the Land for Landless programme in Barbados) have shown that 80% of those who have tried farming have failed; and

  6. Increasing conflict worldwide is not only hampering food production but more importantly is affecting food distribution. Such conflict is at a higher level than at any time since World War II (1944) and the looming global conflict between the Judean/Christian peoples and Islamists, which is prophesied in the Christian Bible, could prove to be a catastrophe for food distribution. Note: 80% of the Biblical prophecies have come to pass so far and none of the rest has been proven wrong!

Unfortunately, such “doom and gloom” predictions have been with us for a long time and are largely ignored by our leaders (political and economic) who are now immune to what they consider to be emotional arguments. They now need more tangible evidence before they will take action to make preparations to avert the hunger crisis for the poor. In other words the disaster has to actually happen before they will start – too late – to prepare for it.

Peter Webster

Note: Peter Webster is a retired Portfolio Manager of the Caribbean Development Bank and a former Senior Agricultural Officer in the Ministry of Agriculture.

Dispelling the myths by Frances Chandler,

My New Year’s resolution was not to “sin my soul” but I would have to become a recluse to achieve that.  I have no axe to grind. I own no agricultural land, but I’m a Barbadian who knows the importance of agriculture and would hate to see it destroyed.  So, my blood boils when I see both foolish and unfair statements about the sugar industry and about agriculture in general reported  in various sections of the media.  

First, my question  to the  moderator who says he doesn’t like agriculture.  “What do you eat? Synthetic meals produced in a laboratory or foods originating from agriculture?” Then my response to the person who declared sugar cane wasn’t attractive to tourists and even  bush would be preferable. As I recall, he suggested  planting  tobacco and cotton.  Doesn’t he know that  tobacco was among the earliest crops grown in Barbados and was discontinued because the quality was  poor?

The  poor quality was  because  the growing conditions weren’t right , with  sea spray causing it to “crackle” when lit. I assume that’s why, in Trinidad, which is much  larger than Barbados ,  tobacco was produced  in the central part of the island. Apart from the fact  that it would seem foolhardy to grow tobacco, considering its effect on human health, tobacco  is an annual plant  requiring soil cultivation each year .This  would encourage soil erosion. Similarly cotton, although a valuable crop , is also an annual , so while our Sea island Cotton industry could develop if it were allowed to, cotton certainly couldn’t totally replace cane.  Furthermore, if one considers the state  of the cotton industry, replacing  cane  with it would be like “swapping a duppy for a dead”.

While the sugar cane picture is always clouded by  continued emphasis on slavery, there’s no doubt that sugar built Barbados and the true sequence of events  must be documented.  Peter Webster’s article entitled “History , His Story and Twistory” in the last Sunday Sun should be compulsory reading for all Barbadians, but I will  add my two cents worth, since, as he quotes Joseph Goebbels “if fiction is repeated long enough it becomes fact ” so we must  dispel the myths  being perpetuated.

To the person who asked Patrick Bethell  to account for the “subsidies” to the industry over the last twenty five years let’s get it clear that government is just giving back a part of what they took away from the industry over the years  for use in public projects. The importance of “saving for a rainy day” was recognised, so a levy, over and above  taxes, was put on sugar production  and the proceeds put in a fund  to  stabilise prices and improve factory and field operations. Unfortunately, these funds, ( $ 116 million between 1947 and 1979)  were  used by government  for  reasons  unrelated to the industry . I can’t think of any other industry on which  this “money grab” was inflicted.

But  the most disappointing statement came from our Prime Minister. He noted that the payment to the industry was no longer an issue, yet the saga which has continued  for months hasn’t yet been concluded. It seems he’s jumped on the Sandiford-Garner “non -issue bandwagon” . He also  laid  blame for the present state of the industry squarely on mismanagement by the private sector and said that government was “in the dock” although it was only involved since 1992 and asked where those in charge from the 1600s to 1992 were. Peter Webster dealt  with that issue well.  Admittedly,  not all management “dropped out of heaven”,  but the main fault of the owners, in my opinion,  was not representing themselves more aggressively in the past.

The Prime Minister also stated that the private sector hadn’t put forward  an alternative plan . One of our experienced moderators echoed this . An alternative  which would’ve cost a fraction of what is now being proposed, and wouldn’t have involved any “finder’s fee”, was in fact put forward. This would’ve accommodated the gradual  building of  acreage  to  produce a number of  marketable products (not including shipment of bulk sugar to the UK) but it wasn’t entertained.

Finally,  I doubt whether any of the 51 persons running this country could manage the sugar industry,  but I’m sure  one or two in the industry could run the country.

Dr. Chandler is a former independent senator. E mail: fchandler@caribsurf.com

.

EAT BAJAN DAY by Basil Springer

Wisdom is supreme—so get wisdom.”Proverbs 4:7

Once again, I join my fellow Trustees of the Graham Gooding Trust Fund in commemorating  the late E.G.B. Gooding (1915-1987) who was born in Britain of Barbadian parents and was educated at Harrison College and Cambridge University. He was a botanist, agriculturalist, food technologist and environmentalist and I was fortunate to have interacted with him and benefited from his wisdom on many occasions on my return to Barbados in 1974. He researched and published extensively on the ecology and flora of Barbados.

He was an innovative thinker and made many an important contribution in the areas of food production, sugar cane diversification and agri-business. He worked unstintingly for conservation of the island’s natural heritage through the Barbados National Trust and the Government’s Town and Country Planning Advisory Committee.

The Graham Gooding Trust Fund gives an annual Graham Gooding Biology prize at the University of the West Indies in Barbados and initiated the concept of “Eat Bajan Day” as an activity that builds on his legacy. This year Eat Bajan Day will be observed on Friday, October 9.

People are our most important resource and have to be fed. Eat Bajan Day sensitizes us about the importance of local agriculture and fisheries to our health and wealth and to the planet’s future. The Trustees are encouraging all to try to use only local food and beverage  for  meals on Eat Bajan Day. But why stop there? We should continue throughout the year.

Locally grown agricultural produce is more easily quality controlled and gets from farm to table in a much shorter time than imported produce. Many locally grown products reach the consumer at a cheaper price than imported products and selected products provide our full complement of nutrients.

Agriculture is a science which guides farmers as they cultivate the soil for the growing of crops and the rearing of animals to provide food, both fresh and processed, and other products for local, tourist and global consumption. In the process, the massive agricultural import bill can be reduced and a contribution made to net foreign exchange earnings.

As the local agricultural industry expands, we can benefit from economies of scale. There is the potential to increase quality and productivity and decrease unit price leading to greater competiveness.   Incidentally, I pose the hypothesis that praedial larceny will disappear with registration of vendors and farmers, the policing of the trade and reduction of unit price due to the expanded industry making it no longer a viable proposition for larcenists.

What are the results of our attempts at a comprehensive coordinated programme for agricultural development in Barbados?  No change,  primarily because of the high risks involved.

These risks are associated with the following:

(1) Corporate Governance – little or no focus on leadership and management to structure the foundation of the business; failure to observe legal and environmental laws reflecting society’s priorities or industry mandates; and a deleterious impact on the natural resource base.

(2) Finance – little or no focus on credit rating; and low equity input by the entrepreneur in the business.

(3) Marketing – little or no focus on cusumer satisfaction; no proactive aggressive market-led sales and distribution strategy; unrealistic sales projections especially for start-ups, re-births, spin-offs and scale-ups; and unpredictable prices and markets.

(4) Operations risk – little or no focus on profitability; use of low technology; variations in output due to weather, pests, disease and value chain logistics/timing; praedial larceny; lack of crop insurance; outdated ICT and administrative systems; and weak net cash flows.

(5) People – little or no focus on productivity; poor time management practice;  the lack of passion, perseverance and patience in the entrepreneur; and selection, training and motivation issues centered around family members and employees.

In order to state and pursue a policy of sustainable economic growth, the first order of business is to get the governance right. There has to be a clear understanding of the difference between leadership and management. Leadership is about doing the right things and management is about doing things right. Leadership is about vision and management is about action.

According to Forbes Magazine (March 23, 2014): “Today’s market environment places a premium on speed, flexibility and the ability to lead in uncertain situations. At the same time, the flattening of organizations has created an explosion in demand for leadership skills at every level.”

In developing an economy, wise leaders in government and the private sector have important roles to play. The relative roles of the government and the private sector have to be clearly delineated.

The role of the government should be to lead change by stating the policy for agricultural growth and supporting such policy by providing a dynamic enabling environment within which the role of the private sector should be to manage strategy and drive business growth.

On the subject of Eat Bajan Day, I would like to take this opportunity to remember my own mother, Rita Springer SCM, who passed away in January 2013 at the age of 98. She too was an advocate for eating local and indeed was the author of “Caribbean Cookbook”, first published in 1968. Her cookbook was re-launched in 2008, enhanced with photographs of the dishes under the name “Caribbean Cookbook  – A Lifetime of Recipes”.

You are invited to support the Trust’s fundraising fruit tree sale hosted by Carter’s General Store at Wildey on Friday, October 9 and Saturday, October 10.

May our agricultural leaders open their hearts to receive divine wisdom and act on it so that the people of this nation and our region can receive many more blessings all the days of our lives.

(Dr. Basil Springer GCM is Change-Engine Consultant, Caribbean Business Enterprise Trust Inc. – CBET. His columns may be found at www.cbetmodel.org and www.nothingbeatsbusiness.com.)