2013 OECS Essay Competition

NAME:

Gernic Soudine

AGE:

Eighteen (18) Years

COUNTRY: St. Lucia SCHOOL:

Sir Arthur Lewis Community College

TOPIC:

Agriculture is a viable booster for OECS economies. Discuss.

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The OECS economies have a history of growing a single crop year after year as their main source of income, while relying on costly imports to meet basic needs. A viable booster for an economy is something which can feasibly promote or stimulate growth and development and within the OECS, agriculture was once a viable booster. It contributed to a large percentage of these economies Gross Domestic Product (GDP) or the total market value of all final goods and services produced in a given year. However, these economies have moved away from their dependence on this sector and although agriculture is vital to any economy, it is highly unlikely to greatly contribute to or boost OECS economies today. The Organisation of Eastern Caribbean States (OECS) was established in 1981 when seven eastern Caribbean countries signed a treaty to cooperate with each other and promote unity and solidarity among their member states. It comprises of Antigua & Barbuda, Dominica, Grenada, Montserrat, St Lucia, St Kitts & Nevis and St Vincent and the Grenadines. It also includes Anguilla and the British Virgin Islands who were later admitted in 1995 and 1984. In the 1980s, agriculture provided between 14-32% of GDP for the OECS member states. This generated high levels of revenue and economies such as St. Lucia for example, benefited greatly from bananas. At that time banana was seen as “green gold” because of the relatively high value it held as an agricultural crop on the international market. However, towards the end of the 20th century, agricultural output as a percentage of gross national product decreased for the OECS economies, as seen in Figure 1 below.

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Figure 1: OECS Percentage Contribution of Agriculture to GDP

Data Source: OECS Secretariat

This decline resulted from trade liberalization and the erosion of preferential trade agreement which increased competition faced by OECS farmers. Consequently, many OECS economies diverted towards the service sector of tourism as visitors were attracted by the tropical landscapes and warm climate year round. In the OECS economies, agriculture can be seen as an important industry as it provides food security, employment for individuals, contributes to GDP, sustain environmental resources and contributes to other industries. The World Food Summit of 1996 defined food security as existing “when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life”. This would reduce the vulnerability of dependence on foreign sources and prepare the economy for unforeseen circumstances.

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Agriculture can also be used for products within the secondary industry and contribute supplies to the tertiary industry. Evidently, Dominica's small manufacturing sector is almost entirely dependent on agriculture, for example Dominica produces soap, essence and tropical fruit products. Further within the tertiary industry in St. Lucia, agriculture tourism linkages were formed where over 50 farmers provide agricultural produce to the Sandals Hotel branches, and Farmers’ market initiatives supplies fresh fruits and vegetables to restaurants, cafes and small manufacturing plants. To date, though OECS economies are still developing, they are more developed with their move away from the dependence on the agricultural sector and into the tertiary sector which generates higher levels of income. An economic booster is meant to greatly stimulate the economy but the many challenges and difficulties faced by OECS farmers limit agriculture as a viable booster for OECS economies. Not only are Caribbean farmers paid low for their products, but encounter issues such as competition, natural disasters, pests and diseases, and high production costs. Agricultural products are different from other manufacturing products. Agricultural products in their raw stage have no added value and with large quantities of the same products already on the market, farmers are not able to sell their products at high prices. Low prices for agricultural products are also as a result of the competition from imports which forces farmers to reduce their prices to gain sales for their products. Moreover, the erosion of trade preferences between the Caribbean Islands and the European Union (EU) has been blamed for the decline in the agricultural industry. Some Economists claim 4

that without this preferential treatment, farmers would have been forced to increase their efficiency. Trade liberalization increased competition with top agricultural producing countries such as the United States and China with over 4 million km2 agricultural lands. These producers being larger than all OECS economies benefit from economies of scale, better quality inputs, advanced technology and better financial resources. This poses a great challenge to OECS farmers when competing on the global market. Unseasonal weather that is not usual or suitable for the time of year, places a strain on farmers as the weather can greatly affect the quality of their produce in times of droughts and even floods. Hurricanes are a common feature with most Caribbean islands and this could quickly wipe out their agricultural industry. For instance, in 2004, Hurricane Ivan devastated Grenada, wiping out their agricultural industry from its position as the second largest exporter of nutmegs at that time. Further, pests and diseases also impact agricultural food production whereby insects chew on crop plants, extracting plant juices and spreading plant pathogens, and diseases reduce the production and quality of plants. For example, banana producers such as Dominica, Grenada and St Lucia were affected by Black Sigatoka which is a leaf spot disease causing up to 50% lower yield of fruit. Farmers as a result have to pay for fertilizers, animal feed, insecticides, equipment, labour and transport which all add up to high production costs. Agriculture was once a major booster for OECS economies, generating large amounts of income and contributing to these economies national output.

However, to date, the levels of

agriculture have greatly declined and though it contributes vital advantages to these economies 5

it is insufficient as an economical booster. With low prices for products, the lack of advanced agricultural technology and the level of competition OECS economies face within the global market, the agricultural sector is unable to provide a significant contribution to OECS economies.

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References Cambridge University Press, Cambridge Dictionaries Online. (2013) Unseasonable. dictionary.cambridge.org. Retrieved March 24, 2013, from http://dictionary.cambridge.org/dictionary/british/unseasonable Caribbean Agricultural Research & Development Institute.(2011) Grenada. www.cardi.org. Retrieved March 24, 2013, from http://www.cardi.org/country-offices/grenada/ Gasiorek, M., & Haynes-Prempeh, M.(2006, January) Part 2: The Caribbean region and the OECS: an overview. r4d.dfid.gov.uk. Retrieved March 24, 2013, from http://r4d.dfid.gov.uk/pdf/outputs/ec-prep/epacaribbeanfinalreport2.pdf International Development Association. (2009, August) Eastern Caribbean States: Reducing Vulnerability and Supporting Growth and Competitiveness. siteresources.worldbank.org. Retrieved March 23, 2013, from http://siteresources.worldbank.org/IDA/Resources/IDA-OECS.pdf Kendall, P. (2005) The Current State and Future of Caribbean Agriculture. caribank.org. Retrieved March 23, 2013, from http://www.caribank.org/uploads/publications-reports/staff-papers/agripaper8-1.pdf Mathurin, L.( 2013, January 31) “Short Shipped”: the St. Lucia Banana Industry 1920-1945. www.cavehill.uwi.edu. Retrieved March26, 2013, from http://www.cavehill.uwi.edu/BNCCde/stlucia/conference/papers/mathurin2012.html Mlachila, M., Cashin, P., & Haines, C. (2010) Caribbean Bananas: The Macroeconomic Impact of Trade Preference Erosion. imf.org. Retrieved March 24, 2013, from http://www.imf.org/external/pubs/ft/wp/2010/wp1059.pdf Paul, R. (2005, December 30) Agricultural Transformation and Gender Considerations in Caribbean Economies. www.eclac.org. Retrieved March 26, 2013, from http://www.eclac.org/publicaciones/xml/1/26011/R.85.pdf Timms, B. (n.d.) Caribbean agriculture–tourism linkages in a neoliberal world. digitalcommons.calpoly.edu. Retrieved March 23, 2013, from http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1039&context=ssci_fac Visit-Dominica. (2013) Locally Made Products. visit-dominica.com. Retrieved March 26,2013, from http://www.visit-dominica.com/queryall2.cfm?Category=16 Worldstat info. (n.d.) India. en.worldstat.info. Retrieved March 24, 2013, from http://en.worldstat.info/Asia/India/Land

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Trading Economies. (2012) Agricultural Land (Sq. Km) in the United States. www.tradingeconomics.com. Retrieved March 25, 2013, from http://www.tradingeconomics.com/united-states/agricultural-land-sq-km-wb-data.html Trading Economies. (2012) Agricultural land (Sq. Km) in China. www.tradingeconomics.com. Retrieved March 25, 2013, from http://www.tradingeconomics.com/china/agricultural-land-sq-km-wb-data.html Iowa State University Extension specialists. (2013) Horticulture and Home Pest News: Banana - Black Sigatoka Disease. www.ipm.iastate.edu. Retrieved March 25, 2013, from http://www.ipm.iastate.edu/ipm/hortnews/2005/3-23-2005/banana.html

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