By most metrics, the agricultural sector of Trinidad and Tobago accounts for a tiny portion of the overall economy. It contributed an estimated 0.5% of GDP at current prices in 2014 – virtually all of which came from domestic agriculture (0.4%) and distilleries (0.1%), according to the UN’s Food and Agriculture Organisation (FAO). Meanwhile, agricultural exports contributed just 0.01% of GDP. In labour terms, the sector accounted for 3.5% of total employment in 2014, or some 22,300 jobs, Central Bank of T&T (CBTT) figures show, compared to around 60% for services. While this pattern is largely in line with other Caribbean island states, it nonetheless exposes T&T to a certain degree of vulnerability in terms of its import bill. To help mitigate this risk, the country has been working to bolster domestic production levels to achieve food security.
Track Record
Agriculture has not been a top contributor to T&T’s GDP since its days as a colonial exporter of sugar, and recent decades have seen a steady downward trend. In 1984 agricultural activity made up 4.2% of GDP, according to the Ministry of Agriculture, Land and Marine Resources, dropping to just 1% by 2004. In the same period, the number of people and hectares dedicated to such activities fell overall, by 37.5% and 35.4%, respectively, while Tobago alone saw declines of 50% and 65.3%. Agriculture’s share of employment similarly shrank, from 12.4% to just 5%.
The agricultural trade imbalance that resulted is clear from the data. According to figures from the UN Conference on Trade and Development, total imports and exports of food stayed more or less even from 1995 until 2000, but then diverged sharply: imports soared by 312% to TT$1.13bn ($174m) in 2013, while exports stayed relatively stable within a range of TT$ 206m365m ($31.8m-56m). This divergence swelled the food trade deficit to reach TT$840m ($129.5m) in 2013.
Priced to Move
Despite the sector’s relative decline, agriculture remains a central concern for T&T, especially as it has often seen double-digit inflation on foodstuffs. Food price inflation climbed as high as 39.1% in August 2010. This eased to 4.1% in the first quarter of 2014, marking the first time in 21 years that this figure stayed in the single digits for six consecutive months. Yet by the second half of the year, it had returned to nearly 20% due to lower domestic production. As of April 2015, food inflation had dropped back down to 9.1%.
Constraints
The agriculture sector has suffered from Dutch disease to a certain extent. Large-scale exports of petroleum products have driven persistent trade and current account surpluses, which have distorted the economy in general and the strength of the currency in particular. However, the fall in oil prices from mid-2014 has the potential to reinvigorate non-energy sectors like agriculture in the years ahead.
Comparatively unattractive labour conditions have been another constraint for the sector, driven partly by development in the energy sector, which tracked agricultural labour declines in the 1970s and 1980s. Indeed, by 1980 the rural labour force had been cut in half, according to a report by the US Library of Congress. Low agricultural wages relative to other sectors exacerbated this shift, with better pay and conditions available in construction and services, as did the higher-income opportunities provided by state social schemes.
While workers could in theory be recruited from CARICOM countries with lower incomes, in practice there is not yet free movement of unskilled and semiskilled labour in the common market. Further labour competition comes from seasonal farm work opportunities abroad. According to Isaac Bekele, dean of the Faculty of Agriculture at the University of the West Indies (UWI), many Trinbagonians are keen to work in Canada as seasonal farm labourers for industrial-scale operations. Would-be farmers are also recruited to related fields with better career prospects. As Bekele told OBG, the main jobs available for graduates are as extension workers, agricultural science school instructors, scientific and technical officers with the government, or in sales for agro-chemical firms. Many also pursue jobs overseas in academia, regional or international research and development agencies, as well as in the agri-food sector. The sector’s small size also means there are few meaningful economies of scale in international terms. “Most of the farms are small, but potentially profitable, 1.5-acre plots,” said Bekele. In addition, the local agricultural sector is subject to price controls, and farmers have to contend with systematic crop theft, particularly as harvest time nears.
Taking Action
To combat the downtrend in agriculture and enhance food security, the government developed the National Food Production Action Plan 2012-15 under the aegis of the Ministry of Food Production, Land and Marine Affairs, later renamed the Ministry of Food Production (MFP). Responsibility for fisheries was reassigned to the Ministry of Land and Marine Resources in 2014. The strategy’s aims are to contribute to economic diversification; create sustainable, long-term employment; and curb food price inflation.
Other government programmes are aimed at improving the overall competitiveness of the sector. A new subsidy scheme was announced for establishing and refurbishing facilities for agro-processing of approved commodities, beginning January 1, 2015. Rebates of 50%, up to a maximum of TT$50,000 ($7710), will be awarded, as well as a 40% rebate, up to TT$150,000 ($23,130), to help cover the costs of hazard analysis and critical control points for agro-processors.
The budget also includes a TT$75m ($11.57m) allocation to the Agriculture Development Bank (ADB), with TT$1.33bn ($205.1m) for the MFP. In addition, eight farms will be rolled out under the commercial large farm programme, four of which are expected to be operational by the end of 2015.
In another bid to boost domestic agricultural output, T&T has been employing a strategy commonly used by energy-rich nations with vast agricultural needs – acquiring land in a nearby country. Through a memorandum of understanding signed in 2013, T&T plans to lease over 40,000 ha of land in neighbouring Guyana for agricultural purposes. This would increase T&T’s farmland by around 50% based on the most recent agricultural census, conducted in 2004, which reported 85,000 ha of farms, or 16.6% of the total land area.
Plan in Motion
In the medium term, the Action Plan aims to address the disparity between production and consumption. While T&T is broadly self-sufficient in vegetables, in 2011 it was highly dependent on imported meat, fish, citrus, other fruit and rice. The country’s food import bill stood at $833m in 2011, according to the FAO, or 20% of the Caribbean’s total, up from $300m in 2000 and $600m in 2007. This increase was largely due to a doubling of global food prices over the period, rising most dramatically in 2008, when they rose 43% year-on-year (y-o-y) in March.
Rice & Easy
In terms of rice, consumption exceeded production by nearly 14 times in 2011, the result of a marked decline in output since the 1990s, when T&T produced about 23,700 tonnes a year, according to the MFP. While the government had hoped to scale up production by a compound annual growth rate of 34.78% to reach 7500 tonnes a year by 2014-15, estimates from the US Department of Agriculture put production at just 3000 tonnes in 2014. To help bridge the gap, the plan envisages the identification and distribution of suitable land to farmers, with another 1700 ha needed for rice. Training is another crucial step, as is providing cold storage and curing facilities, and investing in research to develop varieties of rice, sweet potatoes, cassava and dasheen (a type of taro) that have higher yields and are more resistant to disease and pests. The plan also hopes to boost breadfruit production by promoting its use as a home garden and orchard crop.
Producing Produce
Although T&T is relatively secure in terms of vegetables, the Action Plan seeks to address persistent issues such as inconsistent supply and quality, and misuse of pesticides. The ministry is focused on developing post-harvest technology and infrastructure, encouraging the use of greenhouses, and improving the system of pest- and pesticide-free certification. The ministry is also working to develop the export market for pumpkins, dasheen, okra, tomato, peppers and cucumbers. To cut down on fruit imports and boost local production, it plans to increase hectarage by 1620 ha for citrus and 526 ha for avocado.
Herd Mentality
The plan’s livestock targets are also ambitious. The objectives include doubling cattle milk production to 8600 tonnes in five years and increasing local production of sheep and goat meat to satisfy around one-fifth of consumption. The ministry aims to achieve this by establishing commercial sheep and goat farms, developing breeding herds and distributing 100 pregnant dairy heifers per year for three years.
Under the Sea
Fisheries have been on a relatively unfavourable trajectory in T&T in the 15 years to 2010, with imports increasing rapidly and exports stagnant. Total production from marine capture fisheries averages 13,000-15,000 tonnes per year, with limited prospects for growth, according to the Action Plan.
Aquaculture, meanwhile, represents a growth opportunity for the country, particularly as more Trinbagonians are turning to fish as a healthier option. As the report noted in 2011, aquaculture of tilapia stood at 9-11 tonnes per year, compared to consumption on the order of 112 tonnes. Under the proposed aquaculture programme, production would rise to 90 tonnes in the first year and gradually increase to 457 tonnes by year five. However, as of early 2015, most aquaculture was focused on river conch and cascadura.
Making Waves
T&T’s fisheries are overseen by the Fisheries Division of the Ministry of Land and Marine Resources, which is also responsible for the management of 26 fish landing sites in the country, equipped with facilities like boat and net sheds, storage lockers and washrooms. There are a total of 65 landing sites in Trinidad and 41 in Tobago – the majority of which do not have the same calibre of facilities.
Since 1994, the division has been working with government and industry to update the legislation for fisheries. The latest rounds of negotiations, lasting nearly five years, have achieved consensus, though parliamentary approval is still needed. The division has also overseen subsidies to fisheries, as well as a value-added tax exemption for vessels, engines and marine accessories. Smaller operators in particular have taken advantage of petrol rebates, which have been made available despite relatively inexpensive fuel prices in T&T.
Deep End
The sector continues to face challenges, including overfishing in the waters off Trinidad, illegal fishing by foreign vessels, oil and chemical spills, and disruptive activities of the energy industry – namely, production and transportation – in fishing grounds. While vessels used to have access to a common fishing area south of Trinidad and north of Venezuela and controlled by both countries, this is no longer the case, which only spurs on illegal fishing and overfishing.
From an export perspective, both the EU and the US have erected some barriers to Trinbagonian products. Many of T&T’s processing plants do not yet conform to the EU’s sanitary standards, and shrimp exports to the US remained blocked. However, the US market is receptive to a variety of seafood, including chilled tuna and some frozen, smaller species. According to the Fisheries Division, this is because US authorities certify fish processing plants on a case-by-case basis, with some having already met the required standards, whereas T&T’s regulations on shrimp harvesting technology are not adequately enforced to comply with US environmental standards for turtle preservation.
Spoonful of Sugar
A substantial development in the sector was the closure of the state-run sugar miller Caroni in 2003, after enjoying more than 30 years of preferential treatment by the EU under the Sugar Protocol. With sugar production costs among the highest in the world, T&T elected to cease operations and repurpose Caroni’s land and staff, with the help of EU restructuring funds. In addition to retraining and pension plans, employees were allocated 0.8-ha plots as part of their severance package. However, without the ability to sublet these plots, commercial farming operations were not feasible and the land lay largely unused in agricultural terms until June 2013, when Caroni GREEN was formed.
The state enterprise was charged with leasing back the 0.8-ha plots and establishing commercial farming operations. In the 2015 budget statement from September 2014, Larry Howai, minister of finance, lauded the harvest of 290 tonnes of produce in six months under the Caroni GREEN initiative. However, unable to turn a profit, the company disbanded shortly thereafter, with the government announcing that employee land leases would be eligible for sale in the open market, and no longer restricted to agricultural use.
Caroni GREEN’s closure represents a setback for the sector, and has contributed to resurgent food price inflation. In November 2014 the CBTT said, “Rising food prices reflect lower domestic agricultural output partly due to the cessation of planting by Caroni GREEN.” The bank also cited heavy rainfall and flooding in parts of T&T as another likely contributor to rising prices.
Sector View
Much of the sector is overseen by the MFP, which encompasses a wide variety of state agencies and statutory boards that serve a combination of sector-wide and segment-specific interests. Established in 1839, the Agricultural Society of T&T is the sole national organisation representing farmers, while the National Agricultural Marketing and Development Corporation (NAMDEVCO), created in 1991, is charged with promoting the broadly defined agribusiness sector. NAMDEVCO’s most important mission is to implement the ministry’s food security goals. Since September 2014 the agency has worked in partnerships with government schools and hospitals to increase the amount of local food staples consumed in their respective nutrition programmes. In schools, it is substituting papaya for potatoes and increasing the use of cassava flour for bread products. NAMDEVCO also provides market intelligence on food prices, is responsible for the quality assurance certification of farms and operates a packinghouse facility at Piarco, near the airport, to facilitate exports of fresh agricultural products. The packinghouse is operated on a toll basis and is available to any exporter of produce sourced from certified farms. NAMDEVCO also runs several farmers’ markets and manages all five wholesale markets in the country.
Take it to the Bank
Perhaps the most important of the sector-level organisations under the MFP is the ADB. One of five systemically important financial institutions identified by the CBTT, the ADB is a classic agricultural development lender, providing soft loans to farmers and agribusiness. The ADB funds its operations through retained earnings and transfers from the state, and provides loans both for capital investment, such as land and equipment, and working capital. Furthermore, the bank will lend against leasehold land, which accounts for the majority of farmland in T&T.
According to Wendy Samsundar Beharry, corporate manager for business development, the ADB’s traditional definition of agribusiness has been broad but still development focused. For example, it has granted loans to caterers who provide free school meals to children from low-income families. “They provide backward linkages to our farmers by way of a marketing channel for them to sell local produce. This is of significance to local development as well as nutrition and food security,” Samsundar Beharry told OBG. Over the years, however, a combination of sector challenges, economic contingencies and change in government strategies have shifted the ADB’s focus to traditional farmers. This has resulted in a decline in lending to new entrants in 2010-14. Nonetheless, demand for loans continues to exceed their availability, Samsundar Beharry said.
Mixed Results
A few years into the Action Plan, the sector has seen improvements in some areas. In the government’s “Review of the Economy 2014” agriculture was forecast to grow by 0.8% at constant prices in 2014. While some volatility is to be expected in such a small sector, this represented a marked deceleration relative to the 5.1% expansion of 2013, but a far cry from the 19.1% decline witnessed in 2012. Export agriculture growth slowed from 9.6% in 2013 to an estimated 8.8% in 2014, while domestic agriculture was set to contract by 3.3% following on an expansion of 3.6% in 2013. Notable gains were made in the six months to the end of March 2014 in rice production, which was up 50.3% y-o-y to 2332 tonnes, due to an initiative by the MFP to increase hectarage dedicated to the crop, as well as higher quality seeds. Thanks to good weather, pineapple production increased by 20% to 299 tonnes, while honey yields were up 233% at 200,000 litres and papaya rose by 22.5% to 144 kg. Coffee production more than tripled to 1555 kg due to outreach on the part of the MFP. Conversely, inclement weather caused a 61% drop in cocoa bean output and lower production levels for many vegetables.
While mutton production increased 70% to 62.6 tonnes, the presence of Johne’s disease in the goat population caused meat production to halve and the number of goats sold to fall by nearly one third. Domestic pork production declined by 9%, while poultry farming saw a 1.2% increase in broiler meat production to 32.4m kg, with the number of broilers sold up 75%.
Outlook
Given some of the limitations to increasing local agricultural output, imports will continue to play a central role in T&T’s food supply for the foreseeable future. However, some external market factors, such as weaker oil prices, are likely to reinforce efforts to enhance food security and reduce the country’s substantial food import bill. While self-sufficiency in staples like rice may still be a ways off, production of certain commodities is likely to see an increase in 2015, with favourable weather conditions prevailing in the early months of the year and progress being made on the Guyana land deal. This was reflected in lower food price inflation, which reached 9.1% y-o-y in April 2015. Indeed, according to the Economist Intelligence Unit, agriculture’s contribution to GDP could reach 2% by 2016.
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