Govt all talk, no action

An economist has criticised government for not taking agricultural diversification more seriously. Dr Indera Sagewan was speaking on the findings of a report by the Economic Commission for Latin America and the Caribbean (ECLAC). The report which was published last December is titled “Policy actions to facilitate upgrading of the agricultural sector in TT.”

It focused on TT’s room for expansive productive capacity and diversification of exports in the agro-processing industry. The report said that while “TT has a comparative advantage in the input and processing segments, there is room to expand productive capacity and diversify exports in the agro-processing industry to improve foreign exchange earnings.”

Speaking with Newsday, Dr Sagewan said for many years there has been significant recognition and need for diversification, but it lacks implementation. She said, “Agriculture provides a good platform for this (diversification). While at the policy level and on paper there are commitments to agriculture and agro-processing as sectors for focus, it has not been supported with the requisite resources.

“It lacks institutional support that can actually create the transformation that is required.” Dr Sagewan added that the allocation in the national budget does not allow for the recommendations made by ECLAC as well as the government’s plans outlined in the National Development Strategy 2016-2030 to bear meaningful fruit.

“In the annual budget the Ministry of Agriculture has been allocated less than $1 billion. There is an understanding that it (agriculture) is important but there no backing for it. “Most of the budget allocation is used to pay wages and salaries and there is very little left over for the actual development of the sector,” she said.

The budget allocation for 2019 was $679,953,300 and for 2020, it is $758,916,840. Some of ECLAC’s recommendations included expansion and modernisation of ports of entry and exit, development and maintenance of road networks, increased collaboration between the port authorities and the business community and upgrade of all components of the national standards infrastructure to improve capacity.

They also recommended development of a standards architecture for targeted professionals involved in international trade, upgrade national laws to harmonise local standards with international standards and regulations, enhance the authority of the national standards body to enforce compliance with legally-mandated standards and regulation and to benchmark trade facilitation agencies and institutionalise international best practices.

The report also noted that while TT possesses a comparative advantage in the processing segment, particularly the beverages industry, it lacks significant competitiveness.

It said, “The brief has not unearthed a single primary agricultural product in which the country possesses global competitiveness. The reality is the country has virtually no trade competitiveness in the product segment of the Global Value Chain (GVC).

Dr Sagewan said, “We do have a strong food and beverages manufacturing sector however, and while the report suggested that we have the primary resource base to support a growing agro-processing industry, I beg to disagree.

“While I do believe that we have raw materials, if supported in the proper way can provide for that, but I do not think at this point in time that is happening.

“The agro-processing and the manufacturing sectors in fact depend very heavily imports of primary inputs.”

She added that the pepper industry, for example, is not supported by local farmers but rather imported raw materials from Latin America.

She questioned, “Why does TT boast about having four or five of the world’s hottest pepper but are unable produce the volume of peppers that is being demanded by the processing sector. Similarly, with cocoa and honey.”

Dr Sagewan identified a lack of land tenure, climate change, absence of managed planning, technical support, praedial larceny, sanitary and phyto-sanitary requirements, and skilled labour as some of the debilitating issues the agricultural sector faces.

Additionally, the ECLAC report noted that intra-industry trading with Central and South America, the wider Caribbean and Asia should be explored more aggressively to address foreign exchange and trade credit.