As the Caribbean struggles to conclude an Economic Partnership Agreement (EPA) with Europe, a matter has emerged which is just as likely to challenge regional thinking about governance, the economy and international relations. It is the issue of food security and how best to reduce prices without damaging agriculture and government revenues.
In the last few years the global prices of food have been pushed to record levels. There are a number of reasons for this. There is growing demand for more and better quality food from rapidly developing nations such as China and India; a rising global population; evidence that climate change is affecting levels of production in agriculture; an insatiable appetite for grain from the bio-fuel industry; unbridled speculation in foodstuffs; increases in transport costs as a consequence of higher oil prices; and a sharp depreciation in the US dollar.
The UN Food and Agricul-ture Organisation believes that these are structural trends and will push the cost of agricultural commodities in the next decade between 20 and 50 per cent higher than the last 10-year average.
All of which will require major short and longer-term changes in Caribbean thinking about the role of agriculture. It also suggests that new approaches will be required to everything from tariffs to tourism, especially as the era of cheap and plentiful imported food draws to an end.
In having to find new solutions the region is not alone.
In Britain the Cabinet Office is looking at the future of crop yields in the face of changing weather patterns, the increased use of food for bio-fuels and a shift in the size and location of the world population. Their report is expected to spell out for the Prime Minister the options for Britain and is likely to result in significant changes to agricultural and foreign policy.
Although it is too early to predict the outcome, responses may include radical changes in where food is grown, new approaches to EU farming policy and the rethinking of policies on higher-yielding genetically modified crops. It is also likely that food security will be incorporated into one of a number of radically slimmed down foreign policy objectives to be announced soon.
In Russia, the government has introduced export duties on wheat and barley and is discussing further tariff increases in order to reduce the domestic costs of food. Many food importing countries have started to look for ways to increase their domestic production or build stockpiles as a buffer against higher prices. Europe has suspended rules to avoid agricultural over-production of cereals. And in the hemisphere, Venezuela and Cuba have recognised the vital social and political importance of increasing food production.
Meanwhile, in the Caribbean, governments have also recognised that food security is an issue on which they must act quickly, not least because increasing food prices represent a ticking political time bomb with voters.
At a sometimes acrimonious and divided meeting in Georgetown on December 7, Caribbean Heads of Govern-ment agreed that Caricom duties on food imported from outside the region should be removed in order to reduce prices.
Speaking afterwards Bar-bados Prime Minister Owen Arthur, noted that heads had agreed that the appropriate regional response to rapidly increasing food prices was the amendment of the Common External Tariff (CET) that is levied on some extra regional imports. A regional task force would, he said, evaluate rapidly proposals for change with the objective that trade ministers should at the end of January make recommendations on how the CET should be amended to keep prices under control.
These measures are understood to apply only to those foodstuffs that are not significantly produced in the region or have a close substitute, and which attract the CET.
In addition to these short-term measures the George-town mini-summit identified longer term approaches aimed at trying to reduce the region’s alarming food import bill which is now put at around US$3.5 billion per annum.
A Caricom agriculture investment forum is planned in Guyana in early 2008 to spur investment in producing more food in the so called ’empty spaces’ in Guyana, Suriname and Belize. A team is to undertake a rapid assessment of the regulatory readiness of regional states to export selected food items and their preparedness to import from neighbours. And Caricom member states are to implement at a national level measures to contain prices “without compromising mac-roeconomic stability.”
In order to expand agricultural production Guyana has offered other Caricom states access to land. Emphasis is also to be placed on trying to increase local food consumption through branding and marketing Caribbean products.
But despite these decisions being welcome, resolving the underlying issues at an all-Caribbean level remains contentious and threatens to agitate all of the major fault lines in the regional integration process.
In arguing that the removal of tariffs on some imported foodstuffs would be an expedient response to high food prices, Caribbean heads were accepting that their already hard-pressed treasuries – they will shortly have to accommodate the fiscal impact of trade liberalisation through an EPA with Europe – will now have even less revenue from foodstuffs imported from elsewhere. They were also effectively accepting that they make the region’s high-cost agriculture more vulnerable to subsidised foodstuffs from the US and elsewhere.
The Caribbean heads’ response to this looming crisis also points to the inadequacies of some of the mechanisms for regional decision-making and executive implementation when it comes to the need for rapid decisions that cross the boundaries between finance, trade and other portfolios. At the meeting Prime Minister Arthur found himself having to point out that the Chaguaramas Treaty makes clear that issues relating to the Common External Tariff are the responsibility of Caricom trade ministers while other articles dealing with macro-economic policy give finance ministers the responsibility to develop policies to help moderate prices.
Thus it was not for Caribbean Heads of Government to involve themselves in taking precipitate decisions on prices.
More positively the recent Caricom Heads of Government Meeting suggested that if the region can recognise and implement a viable approach to food production for domestic or regional consumption and other related concerns like inter-regional transport are addressed, nations like Guyana, Belize, Suriname, Cuba and the Dominican Republic could see a resurgence in economic growth in rural areas, based on agriculture.
The agricultural world we have known for the past fifty years is about to change. The region needs to proceed urgently with the transformation of its rural economy and has in the model proposed by Guyana’s President, Bharrat Jagdeo, a first route map.
Food security is now affecting nations at all levels of development. The implication is that in all states, including those in Europe that have not been self sufficient in food for centuries, the time has come to think again about food and its domestic production as a strategic asset.
Previous columns can be found at www.caribbean-council.org
