According to a 2017, World Bank report agriculture contributes less than 0.5 per cent of GDP and employs an estimated 4.0 per cent of the population of T&T.
The energy industry has historically overshadowed the agricultural sector due to its higher returns and greater employment opportunities. Why has the T&T agriculture sector endured such incredible challenges and seems unable to attract significant investment?
Despite successive governments offering a multitude of incentives over the years agriculture, especially for export, continues to struggle. The major challenge faced by local agriculture for export is a lack of competitive advantage. International trade, increasingly so in this globalised and technology-driven era, is built on the premise of competitive advantage.
Competitive advantages are conditions that allow a company or country to produce a good or service of equal value at a lower price or in a more desirable fashion. These conditions allow the productive entity to generate more sales or superior margins compared to its market rivals.
It is all about protecting your sales from your rivals; no one is buying from T&T when they can get better quality or a lower price elsewhere. This is business and too many involved in the agriculture sector appear to have a romanticised view of exactly what that means.
“Build it and they will come” only works in the movies.
“Grow it and they will buy it” is just as fanciful.
There is a reason why the major conglomerates and other deep-pocketed investors have not flocked to the agriculture sector. T&T lacks advantages of scale, cost, technology, wages coupled with the fact that much of our workforce do not view agriculture as viable when there are more attractive options in the energy and public sector.
This factor has even been a challenge in many developed countries where people have migrated to more urban areas and away from agriculture.
A competitive advantage must be defensible to be of any relevance and that simply does not exist here. There are two agricultural products produced in T&T that have any semblance of a defensible advantage; scorpion peppers and specialty cocoa.
According to the World Intellectual Property Organisation (WIPO), annual cocoa production has plummeted from 30,000 tons of beans a century ago to just 500 tonnes in recent decades, but a new generation of cocoa entrepreneurs have sort to change that. According to one such entrepreneur, T&T produces some of the world’s highest-grade cocoa beans.
‘Trinitario is one of the most flavoursome cocoa you can get,” he explains.
Bred for disease and pest resilience in the 17th century, Trinitario is a combination of Criollo and Forastero varieties. These three varieties are used to produce chocolate. Criollo and Trinitario varieties are generally considered high-grade, “fine” or “flavour” beans, and Forastero is considered a lower-grade “ordinary” or “bulk” bean for mass production. The genetic diversity of Trinitario in T&T is second to none.
“We have over 100 strains of Trinitario here. The plant’s genetic diversity on the islands is unique,” he observes.
This is what competitive advantage looks like.
The Trinidad Scorpion pepper is a Capsicum Chinese cultivar that is among the most piquant peppers in the world. The Trinidad Scorpion Butch T pepper was, for three years, ranked the most pungent (hot) pepper in the world according to Guinness World Records. A laboratory test conducted in March 2011 measured a specimen at 1,463,700 Scoville heat units, officially ranking it the hottest pepper in the world at that time.
Even the competitive advantage of being the hottest pepper in the world didn’t last long, because in August 2013, Guinness World Records recognised the Carolina Reaper as the hottest pepper in the world, at 1,569,300 SHU. Even with these advantages, specialty cocoa and scorpion peppers still face a severely challenging global market and local policy issues will have to be worked out as these crops begin to expand.
The major policy issue to be discussed is just how much of limited, available arable land will be used to enhance local food security and how much will be used for profitable export? Even in countries with much larger land space this has become a problem. Several years ago, the United States had a corn issue.
Historically, corn in the US has been used as animal feed and to feed its people.
Today American corn is mainly used for biofuels (roughly 40 per cent of US corn is used for ethanol), only an extremely small fraction is used to feed its people and much of that is processed into high-fructose corn syrup.
It got to the point where corn for ethanol was fetching a higher price than corn for feed or food. The same corn.
Also, consider the introduction of locally produced marijuana into the discussion and one is left wondering how can they all coexist? With an improvement in local food production, T&T will be able to lower its food import bill and reduce the demand for dwindling foreign exchange.
How do we balance these competing needs when there is already a lack of scale advantage in export agriculture?
These are difficult questions to answer but questions government must consider, an appropriate land use policy would circumvent myriad problems down the road. Local production of food should be given priority but also assistance given to farmers that produce viable crops for export. Local agriculture is a complex and challenging industry and many of its problems have resisted solution for many years. Policies need to consider the realities of the world economy and prioritise land use to meet our most pressing challenges.
Policy must strike a balance which gives our farmers the best chance to succeed while providing our country the ability to feed itself.