Jamaica[84] (2024)

1 Introduction

1.1 Structure of the agriculture sector and contribution tothe economy

The total agricultural land area of Jamaica was 407 434 harepresenting 187 791 holdings at the time of the last agricultural census in1996. Eighty percent of the land is hilly or mountainous. The island is crossedby a range of mountains reaching 2 256 m at the Blue Mountain Peak (the highestpoint) in the east and descending towards the west with a series of spurs andforested gullies running north and south. Jamaica has a tropical climate.Daytime temperatures hover around 32.2°C, with nights about 9°Ccooler. The vegetation is mainly tropical.

Jamaica’s agrarian landscape is typified by inequities inland size and quality between small farms and plantations. Large plantations andpastures dominate the fertile coastal plains while small farmers are confinedmainly to the rugged interior. Small farmers - those with farms of five acres(2.02 ha) and less - constitute some 78 percent of the farming community andproduce mainly root crops, pulses and vegetables. Large-scale farms account forless than 1 percent of the total number but occupy about 39 percent of farmlands producing mainly sugar, bananas, coffee, pimento and, to a lesser extent,citrus and cocoa for the export market.

Between 1991 and 2000, agriculture’s contribution to GDPranged between 9.2 percent in 1995 and 7.1 percent in 2000. When agro-processedgoods are added, the contribution to GDP is about 16 percent. Agriculturalproduction has a multiplier effect on the economy as it links with otheractivities such as transportation, marketing, tourism and local commerce. InJamaica, agriculture continues to be integrally related to rural development.Its contribution to containing crime and maintaining social stability in bothrural and urban areas continues to be significant as it helps to reduce problemsof rural/urban migration.

Agriculture employs about 22 percent of the labour force(roughly 250 000 persons), supports 150 000 small farm families and contributesto the food security of the nation. In view of the problems of widespreadpoverty, high unemployment and the importance of agriculture as a major employerof labour, agriculture will continue to play a vital role in the country’soverall development.

1.2 Recent sector performance

Agricultural production in the period 1981-1990 with 1981 =100 fluctuated between a low of 90 points and a high of 110. This was followedby a steady increase in general agricultural production over the period1990-1996 during which the overall increase was about 52 percent. However, aftera significant decrease in 1997, production has continued to decline until 2000.In 2001, total production increased by 5.5 percent over the previous year. Floodrains experienced in May and June 2002 are expected to have a negative impact onproduction for 2002.

A number of factors contributed to the buoyancy in productionover the 1990-1996 period. This was notably a period in which the agriculturalsector was recovering from the devastation of Hurricane Gilbert. The Jamaicandollar was devalued considerably during this period. Increases were alsopropelled by the imperative to improve productivity in the face of increasedcompetition in the global economy.

Since 1996, the decline in production has been attributable toadverse weather conditions, high interest rates on farm loans and the consequentcontraction of investment in the sector as well as the overall decline in theeconomy. The impact of adverse weather conditions during a particular calendaryear continues to have an impact on successive periods of production as thetendency is for farmers to plant less in the ensuing years, possibly as a resultof reduced funds available for replanting. Also, during the 1996-2001 period,the surge in imports of agricultural products started to have an impact ondomestic production as some sections of the local market were replaced with morecompetitively priced and packaged imported products.

Exports of traditional commodities, mainly sugar and bananas,continue to dominate the sector in terms of foreign exchange earnings,contributing about 65 percent of total export earnings in the year 2000.Preservation of preferential trade agreements for these products is critical toJamaica’s short- to medium-term WTO strategy.

Non-traditional crops, e.g. tubers, fruits, vegetables andspices, experienced significant increases since 1990, owing to the positiveeffects of devaluation and aggressive marketing strategies adopted for papayas,yams, plantains, pumpkin and sweet potatoes. Irish potatoes and onions, however,were displaced to a large extent by imports as they were not competitive.Despite the increased competition on the domestic market, a number ofnon-traditional products were able to hold their own in the market. About 80percent of purchases of food items by hotels in Jamaica in 1997 consisted ofdomestically produced crops. This is an important linkage that needs to bestrengthened.

1.3 Policy changes and programmes over the last twodecades

During the 1980s and 1990s, Jamaica implemented extensivepolicy changes under World Bank and IMF-led structural adjustment programmes,which defined the parameters of trade liberalization in Jamaica. This course isnow being institutionalized by the WTO. The specific policy changesincluded:

• elimination of allquantitative import restrictions and the use of reference prices;

• adjustment of nominalprotection to make protection specific (no tariff to exceed 100 percent afterreductions);

• reduction of tariff rates overa 5-year period - for some products 3-7 years;

• elimination of all transfersto the Jamaica Commodity Trading Company;

• elimination of general foodsubsidies;

• removal of credit subsidiesand adoption of market-related credit terms;

• deregulation of severalCommodity Boards, e.g. Cocoa Industry Board, Coffee Industry Board, SugarMarketing Board and Citrus Industry Board;

• divestment of land andpublicly owned enterprises;

• in the sugar industry, sale ofgovernment-owned plantations and mills to private investors.

In addition, there were other liberalization policies adoptedat the macroeconomic level that also had an impact on the sector, for example,the abolition of foreign exchange controls.

The general assessment of the impact of these changes on theagricultural sector is that the sector still needs to make further importantadjustments to become more competitive. The changes were accompanied by bothcosts and benefits for the economy and various interest groups. Some argue thatthe process of removal of tariffs and quotas, etc. should have taken place overa longer period of time (“they were too much and too fast”). A numberof small producers of crops such as onions and Irish potatoes were ruined as aresult of the superior quality and more competitive prices of the importedproducts.

On the positive side, liberalization assisted the CommodityBoards to adopt a more business-oriented approach generally, and more privateindividuals were able to participate in improving their management and generaloperation. As a result of increased competition on the domestic market, somesmall farmers became more conscious of standards generally as well as the needto improve the presentation of their products particularly in thesupermarkets.

Consumers benefited from some of these developments. Inparticular, imports of milk powder became more affordable for lower-incomegroups. The government’s policy to maintain a low- or single-digit rate ofinflation in the economy was also helped by lower prices of imported milk andother products. However, the domestic milk industry has been severely decimatedas a result of opening the domestic market to unfair competition from heavilysubsidized milk imports.

Importers and retailers generally were also big winners astheir businesses thrived while some small farmers lost market share and, in someinstances, were forced out of business.

The Government in its Agricultural Policy Framework hasreaffirmed its commitment to achieving the following goals:

• enhancedproduction and productivity in the various subsectors including sugar, banana,coffee, cocoa and citrus;

• increasing the levels ofexports of both traditional and non-traditional commodities;

• provision of support throughresearch and development and extension services with emphasis on improving cropcare services to farmers;

• increasing value-addedproduction through measures to improve agroprocessing;

• delivering businessdevelopment training to farmers;

• increasing the capacity of theMinistry of Agriculture for planning and policy analysis, and for negotiatingpartnership, financing and trade agreements in different forums.

These objectives guide and direct the trade policies that thecountry will seek to articulate, promote and defend in the WTO and othernegotiating forums.

1.4 Participation in regional and multilateral integrationefforts

Jamaica is committed to an open and liberalized trading systemand has participated actively in several rounds of multilateral tradenegotiation since becoming a Member of GATT in 1963. Jamaica participates inseveral trade arrangements including CARICOM, Caribbean Basin Initiative,Caribcan (Canada’s preferential trade agreement for the CommonwealthCaribbean), the CARICOM/Venezuela and the CARICOM/Colombia agreements on Tradeand Economic Cooperation, and the CARICOM/Dominican Republic Free TradeAgreement. Jamaica is also engaged in the FTAA process and in the ACP/EU tradenegotiations that commenced in September 2002.

Trade liberalization in Jamaica has been driven, firstly, bythe World Bank-led structural adjustment programmes in the 1980s and 1990s and,later, by the WTO agreements in 1994. These twin processes are having a strongimpact on the agricultural sector in Jamaica, which is faced with a reduction ofa*gro-exports and the risk of being displaced in the domestic market by increasedfood imports.

Negotiations on agriculture are in progress concurrently inthe WTO, the FTAA and the ACP/EU processes. The challenge presented by threeparallel and significant negotiations is quite daunting for a small developingcountry like Jamaica. However, they also present an opportunity to formulate abroad and consistent trade and economic policy for the sector as it interfaceswith both traditional and new trading partners at the hemispheric andmultilateral levels.

Traditionally, the country has depended on non-reciprocaltrade agreements such as the ACP/EU Lomé Conventions and the CaribbeanBasin Initiative to provide preferential arrangements for its agriculturalexports. As the global and hemispheric liberalization processes gather momentum,these traditional arrangements are likely to be transformed into reciprocal freetrade agreements provided for in Article XXIV of GATT. This process could resultin the reduction of preferential margins in traditional export markets as wellas further opening of the domestic market to imports from industrializedcountries such as the EU, US and Canada. This will pose a formidable challengefor a small country with a relatively weak and uncompetitive agriculturalsector. At the same time, Jamaica must continue to position itself to benefitfrom the expected increases in trade and investment flows that are likely toresult from these new forms of trade arrangements.

2 Experience with implementing the WTOagreements

2.1 Market access

Tariffs

During the UR, Jamaica opted to bind all its agriculturaltariffs at a ceiling of 100 percent. Other duties and charges were bound at 15percent except for a list of 56 products for which rates were bound at 80percent, while three sugar products were bound at 200 percent.

The applied tariff in Jamaica, which is the CARICOM CET rangesbetween 0 and 40 percent. The simple average applied MFN tariff on agriculturalgoods (HS Chapters 1-24) was about 20.2 percent in 1997.

Import licensing

There is an automatic licensing procedure for milkproducts.

Tariff rate quotas

Jamaica does not utilize tariff rate quotas.

Legislation regarding trade remedies

Jamaica is not able to use the special agricultural safeguardmechanism provided by the AoA.

The ceiling bindings on agricultural products are the onlyarea of policy flexibility available to Jamaica, and it has been used rarelysince the inception of the WTO. It is also the only effective instrument thatcan be used to defend domestic industry against dumped or subsidized imports.The classic trade remedy instruments of the WTO are not user-friendly for smalldeveloping countries, but Jamaica has made the arrangements to use them if itbecomes necessary.

Jamaica enacted the Safeguard Act in 2001. Under this Act, theGovernment is able to pursue safeguard action to protect domestic industriesagainst import surges which threaten or cause injury to those industries. ThisAct complies with the WTO general safeguard agreement. Prior to this, theGovernment updated the national anti-dumping legislation to make it consistentwith the WTO. This legislation provides for the establishment of an Anti-dumpingand Subsidies Commission and the imposition of anti-dumping and countervailingduties against dumped or subsidized goods.

Customs valuation

Preparations to implement the WTO customs valuation agreementin Jamaica have been in progress for some time. The new customs valuation systemis expected to commence operation soon. This system will provide for thevaluation of goods on the basis of the transaction or invoice value rather thanthe current system, which uses a reference price or a derived price which tendsto be higher than the invoice value. It is expected that the country will incurrevenue losses on a number of agricultural commodities, and therefore, theGovernment has agreed to increase the duty on chicken parts, except necks andbacks, and a range of vegetables to compensate for the anticipated revenueshortfall. These increases fall within Jamaica’s bound tariffs in theWTO.

2.2 Domestic support

A number of agricultural support services are provided by theGovernment in order to enhance competitiveness and develop the agriculturalsector generally. These services include research and extension, the developmentof technology, human resource and marketing, plant quarantine/produce inspectionand veterinary services.

The Government also provides income tax exemption for up toten years for farmers with approved farmer status. Agricultural productioninputs are exempted from general consumption tax payments, and farmers areeligible for a 20 percent duty concession on the importation of farmvehicles.

These policies fall mainly within the WTO Green Box measuresthat are exempt from reduction commitments. Government expenditure on roads,bridges and water would also fall under Green Box support measures. TheGovernment’s use of Green Box measures up to now has been sparing, comparedwith its use by the industrialized countries, and this difference is likely tocontinue because of the limited resources available to Jamaica. However,increased expenditure in this area will become necessary to assist theadjustment process in the sector if it is to increase production and improve itsefficiency and competitiveness in the future.

Jamaica did not indicate in its WTO schedule of concessionsany trade-distorting domestic support measures. This implies that all measuresfall within the Green Box or at least do not exceed the de minimisrequirement of 10 percent for developing countries for product-related AMSsupport and 10 percent for nonproduct- related AMS support. The flexibility touse trade distorting domestic support measures, which are currently used by manyother countries, should be available to Jamaica and not constrained by thecurrent de minimis limit. The emphasis here is on measures to support andassist the development process.

2.3 Export subsidies

Jamaica did not notify the WTO of the use of export subsidiesin its schedule of commitments. This implies a binding of export subsidies atzero.

2.4 Marrakesh Ministerial Decision

Jamaica is a net food-importing developing country andsupports the Marrakesh Decision on NFIDCs as well as efforts to operationalizethat decision. It might be necessary for both Government Agencies and NGOs toaccess any kind of financial assistance that might be provided for NFIDCs tooffset increases in the price of basic food imports. In Jamaica, basic foodimports are traded not by Government Agencies but by the private sector andNGOs. Jamaica would also have difficulties if this kind of funding were linkedto IMF-type conditionalities.

2.5 State trading enterprises

To the extent that state trading enterprises and other privatecompanies distort markets, they need to be regulated by the internationaltrading system. The issue of market dominance and distortions displayed by somemultinationals could be addressed under rules governing competition policies.Jamaica does not operate any state trading enterprises of significance, exceptfor the trade in raw sugar and a portion of its small pimento production. Theseoperations result in little or no market distortions. In any event, smalldeveloping countries might need to maintain state trading enterprises to attainsome level of efficiency in their trading operations and to compete with muchlarger global private and state companies.

2.6 Sanitary and phytosanitary measures

Jamaica has a Notification Point for matters related to SPSmeasures, as is required by the WTO. In the area of SPS measures, Jamaica hasencountered difficulties with the following:

• Yams exported tothe United States - the use of Imazalil as a chemical for the post-harvesttreatment of yams was not acceptable.

• Chicken exports to the UnitedStates were prohibited on the grounds that Jamaica has not submitted evidence tothe United States to demonstrate that Newcastle disease has not occurred in thecountry for the past 50 years.

• Jamaica is unable to exportdairy products to the EU until it has satisfied EU requirements for countriesexporting these products to the EU.

With respect to imports, Jamaica has stepped up theenforcement of national food safety laws in relation to meat products andpoultry.

Jamaica recognizes the importance of the WTO SPS agreement forboth the export and import of agricultural and fish products. SPS measures areimportant for the protection of human, animal, or plant life or health, butcountries can also use these unfairly as barriers to trade. Developing countriessuch as Jamaica are sometimes at a disadvantage in the use and application ofthese measures as their scientific and institutional capabilities areconsiderably less developed than those that exist in the industrializedcountries.

Like many developing countries, Jamaica’s SPS standards,laws and institutions need to be modernized and strengthened in order to complywith the WTO SPS Agreement. The Government of Jamaica, through the Ministry ofa*griculture, has already instituted several steps which are part of a widerstrategy to improve export regulation and SPS systems. These initiativesinclude: legislation, such as the Aquaculture, Inland and Marine Products andBy-Products Inspection, Licensing and Export Act, 1999 and the Meat, MeatProducts and Meat By-Products (Inspection and Export) Act 1998; theestablishment of export “one stop” pre-clearance centres at NormanManley International and Sangster International Airports, respectively; theestablishment of a residue testing laboratory at the Ministry of Agriculture; aswell as participation in international agencies such as the Codex Alimentarius,the International Office for Epizootics, and the International Convention forPhytosanitary Protection. Government is also seeking to strengthen thecountry’s systems through the development of an umbrella organization - theJamaica Animal And Plant Health Inspection System - to administer thecountry’s SPS Programme.

Jamaica will need technical assistance from the internationalcommunity to continue the implementation of measures aimed at upgradinggenerally its SPS systems. Assistance is required in the areas of upgradinglegislation; development of human resources; provision of equipment forlaboratories; and institutional reorganization and strengthening.

It is recognized that, in future, countries might reduce theiruse of the traditional protectionist measures such as tariffs and variousnon-tariff measures, and that more emphasis could be placed on the use of SPSmeasures as a barrier to trade. This area of agricultural trade policy thereforeneeds to be monitored closely by Member countries in the variousstandard-setting bodies and in WTO to ensure that those countries that are moreadvanced in their scientific and technological capabilities do not use theseassets as a basis for frustrating the efforts of less developed countries toexpand their trade.

2.7 Dispute settlement system

As a result of Jamaica’s experience as a third party tothe EU-US et al. dispute regarding bananas, Jamaica was able to observeclosely how the WTO Dispute Settlement Understanding operated. As a consequence,Jamaica has identified certain weaknesses in the system from the perspective ofa developing country.

Jamaica agrees that the dispute settlement mechanism isessential to the effective functioning of the multilateral trading system. Thespecific weaknesses identified in the system concern:

• Legalrepresentation: Legal assistance provided by the WTO Secretariat is inadequateand needs to be strengthened.

• Participation of privatelawyers: If the WTO secretariat is unable to deliver the full legal supportrequired by developing countries, these Member States should be allowed toinclude private lawyers in their delegations both at the panel and appellatestages.

• Participation of thirdparties: As a small trading country, Jamaica could be involved in several casesas a third party and is therefore concerned that these countries be allowed toparticipate effectively in the panel and appellate stages of disputesettlement.

• There should be considerationat all stages of the dispute process involving developing countries, whether ascomplainant, respondent or third party, of the social and economic impact ondeveloping countries of the decisions that are taken by the WTO. We now refer tothem as non-trade concerns, and these are expected to attain prominence in thecurrent WTO negotiations on agriculture.

It is evident that, apart from the provision of legalassistance by the WTO secretariat, developing countries will need to developexpertise in international trade law to ensure that their interests can beadequately defended by their own lawyers. Therefore, technical assistance fromthe WTO should be committed to the provision of such training for thosedeveloping countries that require this form of assistance.

3 Review of food and agriculturaltrade

3.1 Macroeconomic context

The performance of the agricultural sector in Jamaica has beeninfluenced over the past decade by a number of macroeconomic variables as wellas the extensive trade liberalization programmes that have been implemented inthe sector and in the wider economy. The main macroeconomic factors influencingspecifically the production and trade environment include foreign exchangeliberalization, interest rate movements, inflation developments and the averageloan rate. Table 1 gives an indication of how these factors operated over theperiod.

Between 1990 and 2000, the foreign exchange rate for theJamaican dollar to the US dollar moved from 7.18 to 43.32, an increase of about600 percent. While this movement increased Jamaican dollar earnings for exportsof agricultural products, the cost of inputs such as fertilizer and rawmaterials for agroprocessing also increased and in turn pushed up productioncosts.

Table 1. Movement in key factors influencingtrade

Source: Bank of Jamaica, StatisticalDigest.

The average loan rate is a significant factor influencinginvestment in the sector. During the period under consideration, the rate movedfrom 34.5 percent to a peak of 62.34 percent in 1994 and was gradually reducedto 32.9 percent in 2000. This is still considered a high rate for many farmersand acts as a disincentive to investment. The inflation rate was reduced from40.2 percent in 1991 to more manageable levels in 1999 and 2000 of 6.8 percentand 6.1 percent, respectively. While the lower level of inflation augured wellfor the growth of the economy, the consistently high interest rate hascontributed to a general contraction in the economy. In an effort to alleviatethe situation regarding high loan rates, the Government established a specialinterest rate regime for loans administered by development financialinstitutions such as the Ex-Im Bank, National Development Bank and theAgricultural Credit Bank. This allowed exporters and specific subsectors of theproductive sector to access loans at between 11 and 13 percent.

Another significant factor which inhibits growth anddevelopment of the wider economy is the cost of servicing the country’sdebt. In the budget for the fiscal year 2002/2003, debt servicing will representabout 64 percent of Government’s total expenditure.

3.2 Agricultural and food trade balance

From 1990 to 1998, Jamaica’s agricultural exports grew byabout 28 percent, while imports increased by about 134 percent during the sameperiod. During the most recent 1996-2000 period, Jamaica has run a deficit onits agricultural trade (Table 2).

Table 2. Jamaica’s balance of trade on food products(US$ million)

Source: Planning Institute of Jamaica.

3.3 Exports

Exports of traditional crops for the period under reviewcontinued to account consistently for between 65 percent and 70 percent of totalexport earnings, and therefore, these crops continue to be important to thesector and the economy in general. Developments in the production and marketingarrangements for these products impact significantly on the country’s tradepolicies and programmes.

Exports of non-traditional crops over the period 1995-2000have been relatively stable, although these are expected to expand in future asthe country pursues further diversification policies and programmes. There hasbeen significant progress since the earlier period 1991-1995 with an increase intheir share from 15 percent of the total to 32 percent (Table 3). However, itcould require a long period as well as investment and Government support forthis group to replace or compensate for the earnings of the traditionalcrops.

Table 3. Value of selected agricultural exports,1991-2000

Source: Ministry of Agriculture,Jamaica.

Sugar

The traditional commodities, namely sugar, bananas, coffee,cocoa and citrus, continue to make the most significant contribution toproduction, employment, development of agro-industry, exports and, to a lesserextent, domestic food consumption in Jamaica. The sugar industry is the thirdlargest earner of foreign exchange in the Jamaican economy after bauxite andtourism. Sugar cane remains Jamaica’s single most important agriculturalcrop. The industry is the second largest single employer of labour and employsapproximately 41 000 persons during the cropping season and 28 000 persons outof crop. An estimated 200 000 persons derive their livelihood directly orindirectly from this industry. Sugar earns about US$100 million of foreignexchange annually, which is about 50 percent of the total value of thecountry’s annual agricultural exports. Approximately 40 000 ha of land areunder sugar cane cultivation, of which 46 percent are on estate farms and 54percent located on small and medium-sized independently owned farms.

The Jamaican sugar industry has contracted steadily over theyears since sugar production peaked at 523 234 tonnes in 1965. Since 1992, theindustry has had an output target of 300 000 tonnes per year but has fallen wellbelow that goal. In 1996, output was 239 192 tonnes, 186 978 tonnes in 1998, and204 634 tonnes in 1999. Production in 2000 was 216 869 tonnes. Despite thesedisappointing production figures, however, exports in the post-1995 period wereon average 20 percent higher than in the two earlier periods (Table4).

Table 4. Agricultural exports by commodity,1985-2000

Source: FAOSTAT.

The most striking feature of the industry is its lowproductivity in both farm and factory operations including low gross return perhectare, low labour productivity per capita, low sugar cane yield, and lowtonnes of cane per acre. A five-year sugar industry policy document (1999-2004)is currently being implemented to address these problems. The two main problemsfacing the industry are developments concerning preferential arrangements in theEU market for ACP sugar and the relatively high cost of producing sugar inJamaica.

About 65 percent of the sugar produced is exported to satisfyquotas in the EU-154 000 tonnes raw sugar and a minimum quota of 11 500 tonnesto the United States. The prices that Jamaica obtains from the export of rawsugar under preferential marketing arrangements are approximately three timesthat of the world market price. For example, the price of Sugar Protocol salesto the EU are US$631/tonne, for special preferential sugar sales to the EUaround US$521/tonne, and for US quota sugar sales, around US$466/tonne. Theprice of sugar on the world market is about US$198/tonne. Jamaica does not sellsugar to the world market.

There will be increased pressure on the continuation of the EUsugar preferences arising from the EU “Everything But Arms”initiative, which will allow 48 LDCs to export all their goods except arms tothe EU on a duty-free basis. Phasing out of import duties on sugar is scheduledfor 1 July 2006 to 1 July 2009. The current complaint by Brazil and others inthe WTO against EU sugar policy is likely to add to this pressure.

These developments are a clear signal to the industry toreduce its costs of operation/production significantly to survive in the EUmarket competing against exports from the LDCs where prices could approximatethe world market price. Preferences for sugar could be eroded further bycontinued liberalization of agriculture trade in the WTO, the expectedenlargement of the EU, as well as by the conclusion of free trade agreementsbetween the EU and several Latin American and other countries.

Bananas

The banana industry makes a very important contribution to theJamaican economy. It is second only to sugar as an agricultural export and is avital component of export earnings and GDP. This industry is a source of jobsfor many Jamaicans and accounts for 12 percent of agricultural employment. An1995 estimate suggests that the industry provides employment for about 45 000persons. The majority of those employed are engaged in the production process,but employment is also provided for persons in boxing plants, on the wharves andin transportation.

Taking the five-year averages in Table 4, the export ofbananas appears to have flattened out in the most recent five-year period.However, since 1997, the volume of banana exported has shown a declining trend,and the volume exported declined from 88 917 tonnes in 1996 to 52 208 tonnes in1999 and to 41 000 tonnes in 2000. These export volumes represent the lowestoutput level for the 1990s. Consequently, Jamaica’s share of the UnitedKingdom market fell to 10.2 percent in 1999, down from 11.5 percent in 1998. Thepoor performance of the industry was attributed to the followingfactors:

• The impact of thedrought in 1998, which accounted for a loss of approximately 5 000 tonnes during1999.

• The removal of marginalproductive fields from production by some farmers in an effort to improvecompetitiveness of fruits in the European market;

• The exit of some farmers fromthe industry owing to the marketing uncertainty created by the ruling againstthe EU banana regime by the WTO.

Cocoa

Cocoa is a small-farm family crop, with the majority of farmsbeing under 2 ha. Larger farms (greater than 8 ha) are estimated to be only 1percent of all farms but account for 20 percent of total production. Productionand exports have been declining in recent years. This has been attributed to theunfavourable weather conditions in the latter years coupled with poorlymaintained fields and farmers’ dissatisfaction with prices. Also, a lack offunds has prevented the Cocoa Board from providing any major assistance tofarmers to enable them to rehabilitate their fields.

Citrus

The Jamaican citrus industry in 1999 employed approximately 18500 persons (industry-wide and inclusive of agro-processing enterprises) with 6012 employed by citrus farmers island-wide. The majority of growers have smallto mediumsized farms, and among the varieties cultivated are orange, grapefruit,ortanique and ugli. The total value of the citrus industry to the Jamaicaneconomy is estimated at $J2 849 282 760.00. The value of exports by variety in1995-1999 is shown in Table 5. Oranges constitute about 50 percent of totalcitrus exports, and the main markets are United Kingdom, Barbados, United Statesand Canada.

However, the domestic market continues to be theindustry’s main economic base and accounted for 87 percent of nationalproduction in 1998/99.

Table 5. Citrus fresh fruit exports by variety and value,1995-1999

Coffee

In the 1980s, deregulation and liberalization of the coffeeindustry were instituted as part of the general deregulation of the economy. Therapid deregulation of the industry resulted in an expansion in production ofBlue Mountain coffee and an increase in the number of producers who attainedgrower/exporter status and exported coffee in their own right.

During this period, the production of blue mountain coffeeincreased from 40 000 boxes in 1978 to 430 428 boxes in the 1996/97 crop.However, there was a large reduction in the production of lowland coffee from322 857 boxes in 1987/88 to 164 404 boxes in 1998/99.

Despite the financial problems of the Asian market, Japancontinues to be the major importer of Jamaican coffee. Without disrupting thetraditional trade with Japan, North America and the United Kingdom, the CoffeeIndustry Board will be actively pursuing penetration of new markets. This willinvolve sustained promotional programmes in the targeted markets for whichsubstantial funding will be required.

3.4 Imports

Jamaica is a net importer of agricultural products. The importstatistics for Jamaica demonstrate that for the decade of the 1990s, foodimports (US$1.64 billion) accounted for just over half of Jamaica’s totalimport bill (US$3.23 billion). Traditionally, the main imported products havebeen cereal and cereal preparations (just over 80 percent), fish and meat(approximately 12 percent), dairy products (just over 3 percent) and vegetables(less than 2 percent). More recently, there has been an increase in imports offruits and vegetables as a result of the reduction in tariffs and non-tariffmeasures in Jamaica. The US has been the major supplier to Jamaica of most ofthe vegetables, meat (including poultry) and processed foods. Several food itemsare also imported from the EU.

Over the period 1990-1998, total imports of food and beveragesincreased steadily from US$281.3 million to US$510.9 million. 1991 was the onlyyear in which a decrease in food imports was recorded. The figures for thisperiod also showed a consistent food deficit except for 1992.

Table 6. Agricultural imports by commodity,1985-2000

Source: FAOSTAT.

A breakdown of trends by commodity for selected importcommodities intended for final consumption is available from FAOSTAT. Inquantity terms, imports of poultry meat increased significantly in the post-1995period, while imports of wheat and flour increased post-1995 after declining inthe 1990-1994 period compared with 1985-1989. Dairy imports have fluctuatedconsiderably from year to year but were generally smaller in the later periodscompared with 1985-1989. Dairy imports peaked in 1997, although they were closeto that level again in 2000. The industry continues to struggle with competitionfrom subsidized imports of milk products and inefficiencies in domesticmarketing and production. Moreover, apart from poultry meat, where the unitvalue of imports was slightly smaller in 1995-2000 compared with the earlierperiod, the unit value of all the other commodities increased significantly inthe most recent period - milk by 26 percent on average, rice by 25 percent onaverage and wheat and flour by 40 percent on average. These increases in unitvalues help to explain the significant increase in expenditure on food importsthat took place in the post-1995 period (Table 6).

4 Food security

4.1 Trends in food security indicators

Jamaica’s food security in terms of the availability ofadequate food to feed the nation is provided by food imports, domesticproduction and the proceeds from exports to purchase food imports. Governmentpolicy in Jamaica is targeted at all three pillars of food security.

Growing competition on the world market for basic foodsproduced by agricultural surpluses (often subsidized) in the industrializedworld has led to a relatively cheap supply of food globally, particularly sincethe 1970s. It is arguable that this process has created dependencies andincreased the vulnerability of small producers. However, the cost of food toimporting nations was reduced, provided that they could generate foreignexchange to support these purchases.

Information on the trend in self-sufficiency ratios for someimportant imported foods shows that the ratios generally increased in the1990-1994 period, compared with 1985-1989, but declined again in the 1995-2000period. However, despite increased imports of poultry meat, domestic productionincreased more rapidly, allowing an increase in the self-sufficiency ratio forthis product in the most recent period (Table 7).

Jamaica’s capacity to pay for its food imports isexamined using two indicators. Food imports as a proportion of agriculturalexports fell somewhat between 1985-1999 and 1990-1994, but a faster growth offood imports in the most recent period widened the gap between food imports andagricultural exports, and the ratio increased again in the most recent period.The share of food imports in total merchandise export receipts follows the samepattern, with a sharp fall between 1985-1989 and 1990-1994, only to increaseagain in the most recent period.

Table 7. Evolution of selected food security indicators,1985-2000

Source: FAOSTAT.

The market-oriented approach to food security contends thatJamaica could maximize its use of scarce resources by purchasing imported foodcheaply rather than supporting or protecting uncompetitive food producers iftheir products can be grown elsewhere and imported more cheaply. Theisland’s scarce resources could then be better invested in commodities orservices, e.g. tourism, where a comparative advantage is identified to maximizeforeign exchange earnings. This argument is particularly persuasive when oneconsiders that both urban and rural poor have benefited from cheap imports ofpowdered milk and poultry meat among other products in Jamaica.

Jamaica has been very committed to this approach to foodsecurity as it seeks to contain the cost of living and food prices for both theurban and rural poor. The problem is that these cheap food imports have more todo with unfair advantage and privilege enjoyed by the industrialized countriesin the form of their own high levels of subsidies and other forms of protectionthan with comparative advantage.

Further programmes of liberalization in the globalagricultural sector are expected to increase the prices of certain food importsover time, and net food importing developing countries could then be faced withsignificantly increased food bills. In Jamaica’s case, this wouldexacerbate the already acute problems of a persistent food deficit and debtburden. In the 2002 Budget, Government announced that approximately 64 percentof its expenditure would be used to service existing debts. This budget has anallocation of about 2 percent for agriculture.

4.2 Poverty and undernutrition

Data on average daily calorie intake per head show that thisaverage dropped in 1990-1994 as compared with 1985-1989, despite the improvementin agricultural production during this period, but increased again in thepost-1995 period (Table 7). These data correspond to a recent assessment of foodsecurity in Jamaica conducted by the Ministry of Agriculture, which concludedthat between 1994 and 1996-1998, there had been a significant reduction ofpersons who can be regarded as food insecure in Jamaica. For 1996-1998, FAOestimated that 10 percent of the population or approximately 250 000 personswere undernourished. In 1974, the Caribbean Food and Nutrition Institute (CFNI)estimated that 783 000 persons were undernourished.

During the 1986-1998 period, several factors contributed tothe reduction of malnutrition in Jamaica, namely, the reduction in inflation,the reduction in poverty levels from 29 percent in 1994 to 15.9 percent in 1998as well as government programmes and policies aimed at reducing the level ofpoverty in the country.

On the negative side, the 1999 survey of living conditionsindicates that the pattern of inequity in consumption in the society persists.For example, in 1998, the lowest decile consumed 2.6 percent, while the highestdecile consumed 29.9 percent of total consumption.

In summary, the issue of poverty alleviation is still apriority. It is believed that the agricultural sector has the potential tocreate additional employment, particularly in rural communities

Another important aspect of food security is the compositionof nutritional intake. According to the CFNI, there has been a major change inCaribbean dietary, nutritional and health patterns over the past three decadesas food availability has increased significantly while diets have become ladenwith saturated fats. On the positive side, there has been a decline inmalnutrition. On the negative side, there has been a dramatic increase inlifestyle-related chronic diseases in the Caribbean - heart disease, diabetes,hypertension, stroke, cancer, etc. According to a study conducted by the CFNI,these new epidemiological problems are primarily linked to a dietary pattern inwhich the consumption of food from animals and sugar and salt has beenincreasing steadily while the consumption of complex carbohydrates, such asfruits, vegetables, roots, tubers and legumes, is low or declining.

The CFNI report states that to address these contemporaryhealth problems, there is an urgent need to re-examine Caribbean foodavailability and dietary patterns and to ensure that agricultural policiesemphasize and encourage the expansion of domestic fruit, and vegetablesproduction and availability. These health and nutrition arguments support thecase for the development of the Jamaica food crop sector.

5 WTO negotiations on agriculture -implications for Jamaica

CARICOM, of which Jamaica is a member, is negotiating as agroup based on the fact that CARICOM is not only a customs union (the countriessharing a CET) but is currently in the process of deepening its integrationthrough the establishment of a single market and economy.

CARICOM has submitted eight proposals in the WTO negotiations, which cover the following topics:

• trade preferences;
• special and differential treatment;
• safeguards;
• non-trade concerns;
• food aid;
• market access;
• domestic support;

• Green Box measures.

Jamaica also supported a proposal submitted by a group ofSIDS.

Jamaica’s negotiating position is driven by the following policy objectives:

• develop a modern, competitive and sustainable agri food sector;
• maintain and expand market share for existing exports in existing markets;
• develop new markets and new products;
• develop agro-processing and intersectoral links;
• develop domestic production to meet rural development and food security needs;
• importation of competitively priced, healthy and safe foods;
• food security;

• links between WTO, FTAA and ACP/EU negotiations on agriculture.

Jamaica’s negotiating positions are influenced by theover-riding consideration of its small geographical and market size, relativelyhigh production cost, concentration of exports around a few products, highdependence on world trade, participation in a small percentage of world tradeand other structural characteristics that render the country highly vulnerablein a fully liberalized market. Jamaica shares these characteristics with itsCARICOM colleagues.

Special and differential treatment

Jamaica supports the emphasis on development, which wasmandated by the Doha Ministerial Council as an integral part of all elements ofthe negotiations on agriculture. Jamaica therefore supports the following,particularly for small developing economies (SDEs):

• generaldevelopment focus for the negotiations;

• sufficiently longer timeframes for adjustment and implementation of commitments;

• lower concessions in areas ofmarket access and domestic support, export competition, etc.;

• exemption, where appropriate,from reduction and other commitments;

• increased technical andfinancial assistance from the developed countries to assist with the adjustmentprocess.

Market access

• Existingnon-reciprocal preferences should be preserved in WTO.

• Margin of tariff preference tobe bound and maintained over a long period to allow for adjustment in theseeconomies.

• Small developing economiesshould be granted flexibility in tariff reduction commitments.

• Tariff reduction linked toreduction of tariff levels in other countries and after export subsidies andother trade-distorting measures are eliminated.

• Rebinding of low tariffbindings particularly on sensitive products of importance to food security andother non-trade concerns.

• Quota- and duty-free accessfor products from SDEs.

• Stricter disciplines andimproved transparency in the administration of tariff quotas.

• Elimination of tariff peaksand tariff escalation that render SDE exports uncompetitive.

• Exemption from furtherreduction commitments by SDEs which undertook liberalization underSAPs.

• Elimination of NTBs, includingunjustified use of SPS measures, which militate against exports fromSDEs.

Domestic support

• Expenditure topromote development objectives of non-trade concerns, poverty alleviation, foodsecurity and rural development should be exempted from reductioncommitments.

• Should not be restricted tode minimis level.

• To be divided into twocategories - exempt and non-exempt.

• Due restraint clause extendedindefinitely to cover support used by SDEs to deal with non-tradeconcerns.

Export competition

• Progressivereduction and long-term elimination of all forms of tradedistorting exportcompetition measures - export subsidies, credits, insurance programmes andguarantees, with special consideration for the needs of NFIDCs and countriesthat benefit from non-reciprocal trade preferences.

Others

• Establish asafeguard mechanism for SDEs to address import surges or decline in importprices.

• Provision for technical andfinancial assistance, and the strengthening of these commitments to make themlegally binding.

• Implementation of theMarrakesh decision on NFIDCs.

• Article XXIV of GATT should bereviewed to provide for special and differential treatment for SDEs enteringinto FTAs with developed countries.

• Appropriate provisions shouldbe developed with respect to products of interest to developing countries forinclusion in the disciplines in the area of geographical indications.

[84] This chapter is based ona longer case study prepared for FAO by Mavis Campbell, Ministry of Agriculture,Jamaica.