Diversifying – the best option

A formal call has been made to local banana farmers to explore alternative means of production as the region puts a fresh focus on diversifying its agricultural exporting commodities.

Facing up to international competition and the new tariff-only banana import system in the European Union, Prime Minister Dr Ralph Gonsalves, Windward Islands’ spokesman on bananas, has made the call to local farmers to start looking at diversifying their production. {{more}}

After convening a meeting with Windward Islands Banana Development and Exporting Company officials and stakeholders in the agriculture sector earlier this month, the Prime Minister has reiterated the need for measures to be put in place to curb the problems with the industry.

He made mention of this while delivering his budget estimates to parliament last Tuesday. Dr. Gonsalves said he had been advised that the new tariff regime would allow the importation of bananas at 50 per cent on the basis of the licenses and 50 per cent on the First-come First-served basis, and from 2007 there may be a situation of a gradual diminution of the licenses system and more being allocated to the First-come First-served basis.

This new system will see the erosion of preference once enjoyed by Windward Islands farmers and the rest of the African Caribbean Pacific (ACP) Countries.

The Prime Minister said he had written to the European Commission and officials in the ACP on the administering of the tariff rate quota (TRQ) now being used by the European Union.

“There is not a unanimity on how this TRQ is to be administered, even within CARICOM there isn’t a unanimity on this system,” the PM said.

“Because the production in the ACP is about 960,000 tons now and which undoubtedly would increase… if you have entirely a First-come First-served basis with the Windward Islands only producing 70,000 tons, we would end up at the tail end of the year with bananas going in (the European Union) which we would have to pay tariffs. If that happens it would be an extremely difficult thing,” Dr Gonsalves said while clarifying the new tariff rate quota regime to farmers.

“I have also been advised that the 50/50 system, given our level of production, would not be unreasonable in our own interest,” Dr Gonsalves added.

“We have to carry out a programme of diversification around bananas and WIBDECO has to play an important role in this….This challenge which we have to meet is not one that is covered with any (political) party label. This is one where the rain falls equally on all the farm workers in the Windward Islands and in Jamaica and where we have to put an umbrella. It has to be over everybody, so all of us are in this one together,” the Prime Minister indicated.

While this is the case, Caribbean Community’s chair, Patrick Manning has made a bold assertion that Caribbean nations will soon have to abandon banana and sugar production because of the competition and lower European subsidies.

The Trinidad and Tobago Prime Minister told regional journalists that Latin American growers are producing and exporting bananas at a fraction of the cost of that of Caricom nations, an estimated loss of US $100 million annually to which analysts say would dampen the region’s economy.

Last year, local banana exports fell by 20.2 percent with output of 19,385 tonnnes compared to 27,812 tonnes exported to Europe and regional markets in 2004.