Money to be made in guavas, other tropical fruits – FAO report

If the July report of the Food and Agriculture Organization (FAO) is anything to go by, Guyana would do well not to allow its new-found and soon to be exploited oil resources to give rise to the temptation to significantly reduce its traditionally successful agricultural sector.

 This temptation will arise as seemingly more lucrative paid jobs and business development opportunities emerge as spinoffs from what promises to be an economy which, in perhaps a decade, will turn heavily on earnings from businesses tied either directly or indirectly, to the oil and gas industry. 

Contextually, it would be a good idea for the historically successful agricultural sector in Guyana to read the ‘tea leaves’ of the FAO report published early in July which reveals a staggering tripling of the global world food import bill since 2000 to reach US$1.43 trillion in 2017. For poorer countries, most vulnerable to food shortages, food import costs have risen five-fold over the same period. This, the FAO says, is indicative of a trend that has “been deteriorating over time, “portending an increasing challenge, especially for the poorest countries, to meet their basic food needs from international markets.”

The imminent exploitation of large deposits of oil offshore Guyana has not, up to this time, triggered, a mad scramble away from the land, but with public discourse now centred around the possible lucrative job opportunities that could be derived from an ‘oil economy,’ an admittedly muted but still audible conversation has already begun on the issue of consolidating the country’s agricultural production, even as the timeline for oil exploitation draws closer.

The FAO says that the global food import bill is likely to rise by around 3 percent to about US$1.47 trillion this year, the annual increase reflective of continually growing international trade in fish and cereals, two staples that are nutritionally bound to the nutritional well-being of the so-called Low-Income Food Deficit Countries (LIFDCs). It is a signal, analysts believe, that the fishing and cereals and grains sub-sectors in the agricultural sector of countries like Guyana could, for farmers, prove no less lucrative than oil and gas for investors in its spin-off sectors, as global prices for those commodities (fish and grain) continue to rise.

Taking a longer-term look at that trend in 2018, the FAO surmises that countries may find themselves paying more for less food, notwithstanding the fact that global production and trading conditions have been quite benign in recent years.

While overall food imports have risen at an annual global average rate of 8 percent since 2000, for the vast majority of poor countries the pace has been in double digits, the FAO says. It says that the share of cereals compared to higher-value foods in the import basket has not declined in poorer countries, while it has declined considerably in wealthier ones. According to the FAO, the food import bill now accounts for 28 percent of all merchandise export earnings for the group of least-developed countries (LDCs), nearly double the share of 2005. Developed nations, meanwhile, typically only spend around 10 percent of their export earnings on food imports. 

To put its own food production challenge into perspective, Guyana, long-perceived as the potential bread basket of the region, need look no further than the Caribbean Community (CARICOM) where the annual food import bill has been estimated at around US$400 million and where, just last month, a high-profile forum of the Organization of Eastern Caribbean States (OECS) held in San Jose, identified increasing food production in the Caribbean in order to reduce the region’s multimillion-dollar import bill and reduce poverty and enhance nutrition for the local population, as a regional priority.

 If there are as yet no signs of a shift away from the land in the face of the blandishments of oil and gas, the global demand for more food has not, up to this time, triggered a corresponding sense of urgency either in the local agricultural sector or within the Caribbean as a whole. Up to around three years ago there had been energetic intra-regional discourse on accelerating agriculture as a mechanism for regional food security. At the forefront of the discourse was a planned initiative involving Guyana and Trinidad and Tobago in which Guyana was to provide land for investment by Trinidadian entrepreneurs in mega farms. That initiative appeared to have collapsed under the weight of what was reportedly strong opposition from farmers in the twin-island republic, who reportedly took exception to finances from their countries funding large farming projects elsewhere.   

 While discussions on collaboration with Trinidadian investors had centred around the creation of mega farms on vast areas of arable lands in the country’s intermediate savannahs, a more recent engagement between Government of Guyana officials and Brazilian businesses, believed to be interested in large- scale farming in the hinterland does not appear to have borne any real fruit so far. However, unlike the earlier Trinidad initiative, the more recently envisaged Brazilian venture does not, at this stage, appear to be off the table. That being said, a healthy sign for Guyana reposes in the fact that there appears to be no slacking up in the volume of traditional farming which has served, historically, to ensure local self-sufficiency and, in some crop areas, generous levels of export capacity.

What would also be of interest to Guyana is the FAO’s World Food Outlook, published twice a year and which has recently focused on the increasing trade in minor tropical fruits, such as guava and lychees. While local fruit production has traditionally been limited to local consumption and modest export levels, it ought to be of interest to Guyana that in 2017 the global output value of these minor tropical fruits was around US$20 billion. This statistic is sufficiently significant to begin an energetic national discourse about the prospects of expanding non-traditional fruit cultivation. The FAO says that while these so-called “minor fruits are mostly consumed locally, and often contribute substantially to smallholder incomes and micronutrient needs, growing recognition of their contribution to a healthy diet is catalyzing a higher international profile, especially amid strong worldwide urbanization trends and growing health awareness.” Guava, local farmers may be interested to know, is the largest fruit in this category and only around 10 percent of production is currently traded across borders, though studies indicate that robust wholesale prices in the markets of developed countries point to ample commercial potential for exporters in low-income countries…like Guyana. However, the FAO says that  galvanizing that market opportunity “will take innovation in handling perishability, assurance of supply, price volatility and compliance with phytosanitary certification requirements,” areas in which the Guyana agricultural sector has faced challenges.

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