Innovation and the agricultural sector

In his Budget 2017 presentation to the National Assembly, Finance Minister Winston Jordan’s report of the expected performance of the agriculture sector for 2016 painted a bleak picture. This was in sharp contrast to the theme of the 2017 Budget: ‘Building a Diversified Green Economy: Delivering the Good Life for all Guyanese.’

The performance of agriculture has been modest and uninspiring over the last five years or so, and any revitalisation of the sector is not likely to occur without some innovative measures being taken by the Ministry of Agriculture to address the known challenges to the key industries in the sector.

So far the Minister of Agriculture, Noel Holder, has not been quite the invigorating spark of which this most important of sectors seems to be in dire need. There has been a fair amount of criticism in sections of the media of this Minister’s performance, but President Granger has continued to repose confidence in him despite a few cabinet changes since coming into office.

In his own Budget speech, the Minister of Agriculture acknowledged that the 2017 allocation of $18billion by the government was “one of the largest budgets for this sector” which “contributes 16% to the economy.” Speaking on the sugar industry, the Minister did not do much more than highlight the known problems, with the now highly predictable and to be expected El Niño climate cycle being among the usual suspects trotted out to explain the sugar industry’s continuing decline.  He also referenced a cabinet sub-committee tasked with plotting the “way forward.”

In short, at the point of presenting the sector’s financial budget there was no engaging plan for the revitalisation or restructuring of the industry.

El Niño also helped to account for the decline in hectares cultivated in the rice industry, which is the other significant industry in the agricultural sector. Again, there was no significant plan put forward here, nor in the other sub-sectors in agriculture that the Minister touched on in his presentation.

Guyana has long been considered an agricultural economy and is suited climatically and geographically to being an agricultural powerhouse in the region. Outside of fish farming (aquaculture) which is still considered a relatively new concept in Guyana and the farms are not widely known, the Ministry of Agriculture over the years, including the period of the previous administration, has not been successful in birthing innovation in the sector as a whole.

In the meantime, other countries in the region have been eyeing Guyana’s extensive lands with the intention of constructing mega-farms here. Indeed, if entrepreneurs from other lands can recognise the incredible business potential that exists in the agricultural sector, it begs the question as to why local entrepreneurs are not at the forefront of establishing mega-farms in crops, beef and other agricultural categories.

If it is for lack of financing, this speaks to the banking sector’s assessment of our business community and also the possibility that most of our established businesses are more or less borrowed to the hilt of their available collateral. If it is, however, because successive governments of Guyana have not made this type of investment affordable and remunerative to the Guyanese investor, then this is a mindset that can stunt the growth of Guyanese entrepreneurship which is currently largely confined to certain industries within certain sectors.

Real growth in any country is fuelled mainly by innovation with new products and services coming on-stream and this is as true for the agriculture sector as for any other. If government, through the Ministry of Agriculture, charts a course that focuses on creating new opportunities within the sector and encourages and rewards innovation in terms of use of modern technology and methods and systems, the growth and modernization of the industry is assured.

With a level playing field, or preferably one slightly skewed to favour local capital, Guyana’s entrepreneurs and businessmen should be able to rise to the challenge and compete favourably with their counterparts in the region, such as Trinidad and Barbados which have a thriving value-added manufacturing industry based on primary agriculture products.

But all this will not be possible unless the government, through the Ministry of Agriculture, leads from the front, and sets the agenda for the local farmers and entrepreneurs, with clear criteria being established for land acquisition for agricultural development, among other important factors to be addressed among which would be included infrastructural development.

The agricultural sector in Guyana cries out for direction and with the sugar industry caught in a seemingly irreversible decline, the absence of growth in the other industries cannot augur well for the future of the sector.

In recent days Minister Holder has been on an outreach to farmers in the Mahaica area, and he has also been in talks with the Chinese government for assistance to the fisheries sub-sector. Well-meaning and necessary as his outreaches to farmers and conferring with diplomats on potential investments are, these must be done within the ambit of a clearly defined plan for the sector, with short, medium and long-term goals well established. It is not likely that ad hoc fixes will lead to any noticeable or sustainable growth in the sector.

Nevertheless, against the backdrop of all the kerfuffle that has characterized the administration’s march into 2017, it is good to see the Minister finally appearing to be willing to get things moving in the agricultural sector. But with sugar being a financial, political and social burden on the economy, and the fluctuating fortunes of rice exacerbated by the lack of sustained planning, development and new investment, with the growth potential of other crops and fishing not being aggressively exploited, and finally, with forestry declining and threatened by a British boycott, we must say that the Minister has his work cut out for him.

Around the Web