Smart Agriculture and the Fruit & Vegetable Industry, The New Face In Sustainable Economic Development

SMART AGRICULTURE
AND THE FRUIT & VEGETABLE INDUSTRY:
The New Face In Sustainable Economic Growth
BARBADOS
FRUIT &
VEGETABLE
INDUSTRY
KEELEY HOLDER
OCT 06, 2013

ACKNOWLEDGEMENTS
I began writing this document at the request of Dr. Chelston Brathwaite who wanted “a few
pages” on the fruit and vegetable industry to include in the White Paper on Agriculture
which he was preparing for the Barbados Ministry of Agriculture. The writing flowed and
next thing I knew, I ended up with a book! Since this book has not been accepted by the
Ministry, I have decided to publish it as a book.
This book would not have been possible without the contribution and support of many
people. Firstly, I wish to extend my sincerest gratitude to Dr. Chelston Brathwaite, mentor
and chairman of the National Agricultural Commission for providing me with the opportunity
to make such an important contribution to my industry.
My appreciation also goes to Mr. Pelekelo Mwikisa; thanks will never be sufficient for sharing
your impeccable worldview. To Ms. Lorna Barrow, whose mentorship and understanding of
all things business and not-for-profit is beyond compare, please accept my deepest
gratitude and admiration.
I wish to extend heartfelt thanks to Mr. Jethro Greene, Chief Coordinator of the Caribbean
Farmers Network for providing me with tremendous opportunities to participate in
agricultural fora at the regional and international level and to learn about best practices in
food crop production from around the world. I would also like to thank Mr. Darwin
Telemaque for sharing his knowledge of freight, logistics and international marketing.
I would like to thank Mr. Jeremy Stephen for my continued education in economics. I owe
particular thanks to Mr. Michael Forde whose insights and contributions have been more
than invaluable. I would like to extend a warm thank you to the following farmers and
tractor operators for their many contributions – Mr. Peter Waldron, Mr. Egbert Maloney, Mr.
Junior Phillips and Mr. Kervin Gooding.
Special thanks to Mr. Michael James from the Pathology Department, Mr. David Bynoe from
the Central Agronomic Research Station, Mr. Dwayne Nurse and Mr. Robert Saul from the
Agricultural Planning Unit and Mr. Adrian Trotman of the Caribbean Institute of Meteorology
and Hydrology. I would also like to acknowledge Mr. George Bayley and the Ministry of
Agriculture’s library staff for maintaining such a wonderful library and helping me to find
some very critical documents.
Finally, I wish to thank the council of the Barbados Society for Technologists in Agriculture,
Mr. Julian Dottin, President of the National Union of Farmers and all those who conversed
with me and helped to shape my thinking and vision for the industry.

ACRONYMS
AMSP Accompanying Measures for Sugar Protocol
AWIA Association for Women in Agriculture
BADC Barbados Agricultural and Development Corporation
BADMC Barbados Agricultural and Development Marketing Corporation
BAMC Barbados Agricultural Management Company
BANGO Barbados Association of Non-Government Organisations
BARP Barbados Association for Retired Persons
BARVEN Barbados Association of Vendors
BAS Barbados Agricultural Society
BCC Barbados Community College
BHTA Barbados Hotel & Tourism Association
BIDC Barbados Industrial Development Corporation
BMA Barbados Manufacturer’s Association
BMC Barbados Marketing Corporation
BMP Best Management Practices
BSTA Barbados Society for Technologists in Agriculture
BYBT Barbados Youth Business Trust
CAMI Caribbean Agro-Meteorology Initiative
CARICOM Caribbean Community
CARS Central Agronomic Research Station
CBI Centre for the Promotion of Imports from Developing Countries
CDB Caribbean Development Bank
CHF Canadian Hunger Foundation
CIDA Canadian International Development Agency
CIMH Caribbean Institute for Meteorology & Hydrology
CFCS Caribbean Food Crop Society
CNCD Chronic Non-Communicable Diseases
CRM Customer Relationship Management
CRNM Caribbean Regional Negotiating Machinery
CSME Caricom Single Market and Economy
DFID Department for International Development
ECDPM European Centre for Development Policy Management
ENSO El Nino Southern-Oscillation
EPA Economic Partnership Agreement
ERS Economic Research Service
EU European Union
FAO Food and Agricultural Organization
FAS Foreign Agricultural Service
FAVGA Fruit and Vegetable Growers Association
FSMA Food Safety Modernization Act
FDA Food and Drug Administration
GAP Good Agricultural Practices
GIS Geographic Information System
HACCP Hazard Analysis Critical Control Point
HBR Harvard Business Review
IATRC International Agricultural Trade Research Consortium
ICT Information and Communication Technology
IDB Inter-American Development Bank
IICA Inter-American Institute for Cooperation in Agriculture
IMF International Monetary Fund
IPM Integrated Pest Management

MAFFAW Ministry of Agriculture, Food, Fisheries and Water Resource Management
MDG Millennium Development Goals
MESA Men's Educational Support Association
MIF Multilateral Investment Fund
MIS Market Intelligence System
MoU Memorandum of Understanding
NAC National Agricultural Commission
NAFHCA National Agriculture Food Health & Control Agency
NCC National Conservation Commission
NCST National Council for Science & Technology
NNC National Nutrition Centre
NOW National Organisation of Women
NUF National Union of Farmers
NVQ National Vocational Qualification
PCB Pesticide Control Board
OECD Organisation for Economic Co-operation and Development
OGCA Organic Growers & Consumers Association
OMJ Opportunities for the Majority
RBPF Royal Barbados Police Force
SBRC Sustainable Barbados Recycle Centre
SDFA Scotland District Farmers Association
SGF-GEF Small Grants Fund of the Global Environmental Facility
SGFC St. George Farmer’s Cooperative
SIDS Small Island Developing States
SJPP Samuel Jackman Prescod Polytechnic
SKU Stock Keeping Unit
SPS Sanitary and Phytosanitary
STE State Trading Enterprise
TVET Technical and Vocational Education and Training
UCD University of California Davis
UF University of Florida
UK United Kingdom
UNDP United Nations Development Programme
USDA United States Department of Agriculture
USA United States of America
UWI University of the West Indies
WHO World Health Organization
WTO World Trade Organisation
YDS Youth Development Services
YES Youth Entrepreneurship Scheme
YWCA Young Women Christian Association

TABLE OF CONTENTS
1. INTRODUCTION.............................................................................................1
2. SECTION I: OPPORTUNITIES.........................................................................1
2.1. Global Industry Outlook – Fresh Produce............................................1
2.2. Global Industry Outlook – Value Added...............................................2
2.3. Economic Resilience through Fruit & Vegetable-Related Exports ........3
2.3.1. Changing Business Models ........................................................3
2.3.2. The Weakness of the Services-Only Mindset .............................5
2.3.3. A Robust Goods Producing Sector .............................................5
2.3.4. The Importance of Logistics & Trans-shipment .........................7
2.3.5. Success Factors in Fruit & Vegetable Exports............................9
2.4. Smart Agriculture..............................................................................11
2.4.1. Soil Management.....................................................................14
2.4.2. Pollination & Beekeeping ........................................................15
2.5. The New Strategic Positioning of the Industry ..................................16
2.5.1. Criteria for Selecting Key Export Products ..............................16
2.5.2. Current Export Demand...........................................................18
2.5.3. The Industry’s New Mission & Regional Priorities ...................18
3. SECTION II: CHALLENGES ...........................................................................20
3.1. The Business of Agriculture & Economic Development ......................20
3.2. The Domestic Market.........................................................................21
3.2.1. Food Import Bill ......................................................................23
3.2.2. Trade & Protectionism.............................................................24
Trade & Tariffs......................................................................26
Weaknesses in Barbados’ Trade Policies ...................................28
3.2.3. Market Coordination................................................................29

3.2.4. Export .....................................................................................30
3.3. Hawkers, Middlemen, Wholesalers....................................................32
3.4. Crop Theft .........................................................................................33
3.5. Farmers’ Capacity .............................................................................34
3.6. The Price & Business Relationship.....................................................36
3.6.1. Price Volatility.........................................................................36
3.6.2. Retail Pricing Strategies..........................................................36
Retail Pricing & Consumer Behaviour .......................................37
Retail Pricing & Gluts .............................................................38
3.6.3. Price & Quality of Produce.......................................................38
3.6.4. Price & Business Relationship .................................................39
3.6.5. Farmers’ Markets ....................................................................40
Wholesale Farmer’s Markets & Central Wholesale Facilities .........43
3.7. Support from the Ministry of Agriculture...........................................43
3.8. Pesticide Control Board .....................................................................45
3.9. Tractor Cultivation ............................................................................46
3.10. Sustainability & Growing Crops .........................................................47
3.10.1. Organic Farming.................................................................48
3.10.2. Greenhouses & Shade- and Net- Houses ............................48
3.10.3. Climate Variability & Change..............................................49
3.10.4. Food Safety ........................................................................50
3.11. Access to Resources..........................................................................51
3.11.1. Land ...................................................................................51
3.11.2. Water .................................................................................52
3.11.3. Insurance...........................................................................52
3.11.4. Financing ...........................................................................53
Financing & Information.........................................................53

3.11.5. Labour & On-Farm Human Resource Development.............53
3.12. Local Value Added (Agro-Processing) ...............................................54
Value Added & the Farmer......................................................55
3.13. The BADMC, A State Trading Enterprise ............................................59
3.14. Input Suppliers .................................................................................61
3.15. Farming Organisations ......................................................................62
3.15.1. Farmer Organisations.........................................................63
3.16. Inter-Agency Partnership & Collaboration ........................................64
3.17. Non-Commercial Gardening ..............................................................65
3.17.1. Household Food and Nutrition Security ..............................65
3.17.2. Hobbyist Gardeners............................................................66
The USA Master Gardener Programme .....................................67
3.17.3. Gardening & Experiential Learning.....................................68
3.18. Image, Youth Succession ..................................................................69
3.18.1. Image ................................................................................69
3.18.2. Attracting & Retaining Youth .............................................69
3.18.3. Youth Employment, Entrepreneurship & Leadership ..........71
Skills for Young Entrepreneurs in Agriculture ............................71
Efforts to Develop The Young “Agri-Preneur” ............................75
4. SECTION III: STRATEGIC OBJECTIVES & POLICY FRAMEWORK ..................77
4.1. Strategic Objectives ..........................................................................77
4.1.1. Transforming the Sector .........................................................77
4.1.2. Specific Sector Issues .............................................................77
4.2. Strategic Policy Framework...............................................................77
4.2.1. Strategies Related to Transforming the Sector........................77
4.2.2. Strategies Related to Specific Sector Issues ...........................78
5. SECTION IV: ACTIONS & RECOMMENDATIONS............................................79

5.1. Prioritising Actions............................................................................79
5.2. Recommendation: Commercial Production ........................................79
5.2.1. Aim .........................................................................................79
5.2.2. How.........................................................................................80
Develop a New Agricultural Entrepreneur ..........................81
Change Management for the Ministry of Agriculture ..........81
Market Access through Private-Public Partnerships ...........82
Food & Nutrition Security ...................................................82
Institutional Strengthening of Farmer Organisations .........82
Inter-Agency Collaboration ................................................83
Grower Productivity & Competitiveness .............................83
Incentives & Trade Policies ................................................85
Access to Finance...............................................................85
Crop Theft ..........................................................................85
5.2.3. Employment Potential .............................................................86
5.2.4. Foreign Exchange Earnings & Savings.....................................87
5.3. Recommendation: Household Food Security......................................87
5.3.1. Aim .........................................................................................87
5.3.2. How.........................................................................................87
5.4. Recommendation: Value Added.........................................................88
5.4.1. Aim .........................................................................................88
5.4.2. How.........................................................................................88

1
1. INTRODUCTION
The fruit and vegetable industry (including root crops and nuts) while at first glance seems
like a very simple and straight forward industry, is a multi-dimensional industry which has
often been challenging to depict even by very capable professionals. In Barbados it is
characterised by two main types of farmers – commercial farmers and hobbyist gardeners.
The term “hobbyist gardeners” is used to provide a clear distinction between subsistence /
backyard farmers / hobbyist gardeners and commercial farmers. Hobbyist gardeners are
persons engaged in gardening on small plots (generally less than ½ acre) who are
motivated to produce food (1) primarily for household consumption, (2) exercise and stress
relief, (3) personal enjoyment in watching crops grow and (4) socialisation. These gardeners
may also sell excess produce and share with friends and family. Alternatively, commercial
farmers may be full-time or part-time persons who develop repeatable processes in crop
production to (1) make a profit, (2) generate optimal yields at lowest costs and (3) to
sustain their livelihood.
The situational analysis below specifically addresses the issues faced by commercial
farmers. The Non-Commercial Gardening section (3.17) addresses the issues specific to
hobbyist gardeners
2. SECTION I: OPPORTUNITIES
2.1. Global Industry Outlook – Fresh Produce
According to the World Bank, trade in fruit and vegetable products has been among the
most dynamic areas of international agricultural trade. For developing countries, trade in
these products has been attractive in the face of highly volatile or declining long-term
trends in the prices for many traditional export products.
World trade in fruits and vegetables, fresh and processed, has increased by 30% since 1990
reaching $71.6 billion in 2003. In 2001 fresh produce accounted for 63% of the total trade
compared to only 37% for processed fruits and vegetables. However an analysis of the
structure of world trade shows that many of the largest producers (e.g. China, India) are
not significant traders due to a combination of domestic demand and geographical and
logistical factors.
Today, fruit and vegetable exports from developing countries are now more
than double exports for tropical beverages, three times exports of grains,
three times exports of livestock products, five times exports of sugar, and
seven times exports of textile fibres.1
At the geopolitical level, the ongoing combination of food, energy, economic and
environmental crises in the last 4 years and the continued push for trade liberalisation of
food products have brought agriculture, and the fruit and vegetable industry to the forefront
of global talks with developed nations pledging billions of dollars in international assistance
to the most vulnerable countries as these events impact food, its production, its availability
and its output. Consistent with these global trends, food security has featured prominently
1
Source: Ndiame Diop & Steven Jaffee, Worldbank – Global Agricultural Trade and Developing Countries, Chp 13
(2005)

2
on the national agenda because of Barbados’ vulnerability as a net food importing country
and there is a strong demand for fresh fruits and vegetables in Barbados.
Consequently, these and other dramatic and transformational changes such as the global
economic reordering that are taking place as Brazil, China, and India surface as economic
powerhouses are all culminating to create a new business environment for the industry, one
that is based on competitiveness, creativity and innovation.
2.2. Global Industry Outlook – Value Added
Adding value is the process of changing or transforming a product from its original state to
a more valuable state. Value can be captured or created and each strategy offers specific
opportunities and risks that influence the success or failure of the value added venture.
Adding value to products can be accomplished in a number of different ways, but generally
is done through innovation or through coordination.
It is generally accepted that the largest value is usually not extracted from the beginning of
the supply chain but further along the path. Nonetheless, many fresh fruits and vegetables
have intrinsic value in their original state. One typical example is the use of cassava as feed
for livestock.
Because of the advances in technology and consumer-centric marketing, today’s fresh fruits
and vegetables are no longer being perceived as just primary products. In this modern era,
fresh fruits and vegetables are now themselves, processed goods undergoing sophisticated
operations in collection, quality control, packaging, storage, refrigeration and transport.
A number of forces in the developing and developed countries are driving changes in global
food consumption patterns, with income growth being one of the most important. Research
indicates that the growing demand for fruits and vegetables is also being fuelled by the
health and wellness mega-trend that is making waves all across the globe with pleasurable
‘high quality’ eating experiences expected to be the most significant long-term trend in
fresh produce retailing.2
Internationally, these market forces have led to greater opportunities for product
differentiation and added value because of (1) increased consumer demands regarding
health, nutrition and convenience; (2) efforts by food processors to improve their
productivity; and (3) technological advances that enable farmers to produce what
consumers and processors desire.3
What’s more, consumers are redefining value so that it is no longer functional and implicit
but rather purposeful and emotional. While value is still a function of price, quality and
quantity, consumers are now more concerned about wastage, necessity and the
gastronomical experience. In recent times, consumers are experiencing a newfound sense
of wanting to avoid wasteful living and needless consumption because they feel strongly
about having things go to waste and purchasing things that will not be used in their
entirety.4
2
Source: Roberta Cook, UCD – Consumer Trends and Fresh Produce Consumer Profiles (2010)
3
Source: J. Royer – Potential for Cooperative Involvement in Vertical Coordination and Value-Added Activities.
Agribusiness 11(5) (1995)
4
Source: Hartman Group – Redefinition Of Value: The Framework for Understanding Sustainability (2010)

3
In the UK, 83% of consumers say added value is the biggest decision making factor, not
price and in the USA, freshness is the single biggest driver of sales in fresh produce with the
fresh cut industry valued at US $5.4 Billion.5
Both in Europe and the USA, semi-prepared and packed
fresh produce, including pre-assembled salads, vegetable
dips, and sliced or mixed fruit products, is one of the fastest-
growing food product segments.6
Mixes of fresh produce that
has been trimmed, peeled, washed, cut and packaged allow
single consumers or small households to buy a large variety
of produce without worrying about waste or spoilage.
In Europe, frozen produce has also become the new premium. The nutritional content in
fresh produce declines once picked, hence, produce that was frozen within a few hours of
harvesting has a higher nutritional content than fresh produce that is several days or weeks
old.
These trends also extend to the Caribbean where in 2010, Jamaican sales to the EU for
processed vegetables and processed fruits were up 49% and 36% respectively, while sales
for fresh fruit were down 23% and sales for peppers and citrus were down 17% each.7
2.3. Economic Resilience through Fruit & Vegetable-Related Exports
Over the last 2-3 decades, traditional economic models for Small Island Developing States
(SIDS) such as Barbados have generally not emphasised the goods producing sector
(agriculture, agro-processing and manufacturing) as engines for economic growth. The
competitiveness of these industries has been challenged because (a) land and natural
resources are limited, and (b) the domestic market size is small and (c) economies of scale
are much harder to achieve.
The United Nations Conference on Trade and Development (UNCTAD) revealed that since
1990, the share of services in the gross domestic product (GDP) in developed countries
grew from 64% to 72%. By contrast, in developing countries, the share of services in GDP
grew from 46% to 50%, with services accounting for 37% of formal employment.8
Thus,
many economic policy analysts hold that the services sector was the key to economic
development in SIDS because (i) these figures suggest a large untapped potential for the
service sectors to advance development and (ii) SIDS were not able to compete with large
countries in the mass production of agricultural and manufacturing goods.
2.3.1. Changing Business Models
Nonetheless, while this model was being adopted by SIDS such as Barbados, the way in
which business was being done in the commercial centres of the world was changing. Mass
5
Source: Jane Milton – AgroFood Industry: EU Market – Consumer Trends & Buyer Purchase Considerations
(2010); Roberta Cook, UCD – The US Fresh Produce Supply Chain (2009)
6
Source: Ndiame Diop & Steven M. Jaffee, Worldbank – Global Agricultural Trade and Developing Countries, Chp
13 (2005)
7
Source: Lincoln Price, CRNM (2010) in Andre Gordon – Agro Food Industry Quality Infrastructure Requirements
& Food Safety Across Value Chains (2011)
8
Source: S. Panitchpakdi, Secretary-General of UNCTAD – Services Policy Review, Lesotho (2013)
“The fresh cut
industry is one of the
fastest growing
market segments in
the USA & Europe.”

4
production went out of vogue as market segmentation, niche marketing and mass
customisation became mega-trends simply because consumer interests were changing.
These modern business trends are about giving consumers a unique end product when,
where and how they want it. During the last 15 years, choice has become an important
ingredient of consumer purchasing decisions. For example, within this timeframe the
selection of soft drinks increased from 20 to 90. Today, the US market alone offers
consumers 3,000 brands of beer, 50 brands of bottled water, and 340 kinds of breakfast
cereals.9
Mass customisation has become the new frontier in business competition for both goods and
service industries. Mass customisation actually seeks to fragment the market through
economies of scope. This is in contrast to a mass producer who seeks to consolidate and
reduce choice through economies of scale. At its core is a tremendous increase in variety
and customisation without a corresponding increase in costs. At its best, it provides
strategic advantage and economic value.10
Consequently, a mass customisation strategy
involves developing a system that rewards attention to detail and stresses the importance
of ‘zero mistakes’.11
Furthermore unlike mass production, there are no size
constraints to doing business in these modern markets. Bigger
companies can use economies of scale in terms of raw material
procurement and operations facility whereas smaller companies
can use their multi-tasking ability and flexibility of workforce to
ensure faster delivery of goods for higher valued segments and
niches.
This has created a new economic reality for SIDS such as Barbados because:
 Low costs and high quality are now being achieved through economies of scope
instead of economies of scale; where economies of scope are realised by the
application of a single process to produce a greater variety of products and services
more cheaply and more quickly.12
 Smaller companies can differentiate themselves from mass-producing competitors
and gain a differential advantage.
 Companies get to know their customers better and nimble companies can therefore
adapt to market environment changes more swiftly.
 Customer relationships can be built in a sustainable manner. Companies are sharing
information about their processes and their people which in turn is cultivating strong
customer loyalty, change behavior and drive messages.
 They have greater opportunities through market segmentation and niche marketing
to practice price discrimination and enhanced opportunities for growth, profit and
increased retention of customers.13
 Shopping has become an experience. Customers are emotionally tied to their self-
created products and can identify with them better. This has led to the phenomenon
of shopper advocacy where the customer has a deeply-rooted personal involvement
9
Source: A. Bhatai & R. Asai, WIPRO – Mass Customization in Apparel and Footwear Industry: Today’s Strategy,
Future’s Necessity (2007)
10
Source: B. J. Pine II – Mass Customization: The New Frontier in Business Competition (1993)
11
Source: S. Kotha, European Management Journal – From Mass Production to Mass Customization:
The Case of the National Industrial Bicycle Company of Japan (1996)
12
Source: B. J. Pine II – Mass Customization: The New Frontier in Business Competition (1993)
13
Source: Jim Riley, Tutor4U – Marketing: Consumer Segmentation (2012)
“Mass
customisation has
become the frontier
in business
competition.”

5
with a brand that elicits an active and emotional customer loyalty that they can now
share with others through social networks and mobile technology.14
Additionally,
shopper advocates together with shifters (consumers seeking new relationships) are
the two most valuable consumer segments that together comprise more than half of
the total retail consumers.15
In essence, SIDS such as Barbados now have a powerful value proposition for competing in
the export market because “small is beautiful”.
2.3.2. The Weakness of the Services-Only Mindset
Sadly, SIDS that have relentlessly pursued service-based economies with a singular mindset
at the expense of its goods producing sectors (agriculture and manufacturing) have found
themselves with a higher level of economic vulnerability because of large negative
macroeconomic externalities:
 They are now net importing countries, and particularly of food;16
 Freight costs on imported goods are now higher because the costs of returning the
empty containers are added in. Once a container has been unloaded, another
transport leg must be found as moving an empty container is almost as costly as
moving a full container and the longer the delay in repositioning the container, the
higher the cost.17
This has resulted in trickle effect of (1) a higher custom duty (2) a
higher inflation rate18
(3) a higher cost of living and (4) a higher cost of doing
business.
 Recoveries from economic downturns are longer because services unlike products
cannot be inventoried nor, for the most part, exported; they are only delivered when
domestic demand exists. So service providers usually wait until the customer is
present, for only then can they produce. For example, a restaurant will not produce a
meal before you are at the table.19
 The imbalance of trade has had a negative impact on their balance of payments.
2.3.3. A Robust Goods Producing Sector
It is true that no country can prosper today without an efficient service infrastructure. And it
is also true that having access to services is a pre-requisite for economic performance of
many fruits & vegetables and their agro-processed products. What is imperative however
for decision makers to focus on is that:
1. The goods-producing sector and the services sector are inseparable and
complementary. There is a deeply symbiotic, interdependent relationship between
the health of a nation’s good-producing sector and services sector: the health of one
sector greatly shapes the health of the other.
14
Source: Christopher Hollins, American Express – Retail Advocacy Report (2007)
15
Source: IBM Institute for Business Value – Shopper Advocacy, Building Consumer Trust In The New Economy
(2008)
16
Source: World Trade Organisation (2013)
17
Source: Jean.-Paul Rodriguez – The Geography of Transport Systems [Chapter 5: The Repositioning of Empty
Containers] (2013)
18
Inflation is the rise in the general level of prices of goods and services in an economy over a period of time.
19
Source: M. Olney & A. Pacitti, University of California Berkeley BEHL Working Paper Series – More Services
Means Longer Recoveries (2013)

6
2. The inter-sectoral relationship between goods and services generally show
asymmetrical dependence. Namely most service activities tend to depend on the
goods producing sector as a source of inputs to a far greater extent than vice versa
e.g. wholesale and retail, tourism, real estate, health and communications. In effect,
the capability of the service sector to generate and sustain a high level of
employment critically hinges upon its vital linkages with the goods producing
sector.20
3. The goods-producing sector has a greater multiplier effect than services. For
example, each dollar of US agricultural exports stimulated another $1.31 in business
activity21
and each dollar’s worth of manufactured goods (including agro-processed
goods) creates another $1.48 of activity in other sectors. This is twice the $0.58
multiplier for business and professional services.22
4. Exporting goods earns foreign exchange and has a positive impact on the
balance of payments. Foreign reserves are needed to help maintain the fixed
currency rate of a country and prevent a balance of payments crisis. Increasing the
export of goods reduces the current account deficit and can help to mitigate against
a devaluation of the currency.
5. Export of goods lead to greater employment growth and support high-
paying jobs. For example, within an industry, a 10% increase in sales due to the
export of goods leads to a 7% increase in employment, while a 10% increase in
domestic demand leads to just a 3.5% increase in employment.23
6. Exporting reduces the cost of inputs and makes export products more
competitive. Exporting large volumes of a single fruit/vegetable-related product,
creates economies of scale for local input companies so that they are able to import
large volumes of inputs and raw materials at bulk buying prices. It also results in
these companies moving stock faster which together leads to lower input prices for
the producers, and hence increased competitiveness.
7. Exporting builds trust and cooperation. A key driving force behind the lack of
trust between actors in the agribusiness sector is the fact that producers are all
competing in a small domestic market. Exporting to markets with massive demand
allow businesses to work together towards a common goal and in so doing build
economies of scale and scope.
8. The goods producing sector helps countries recover from economic
downturns faster. Goods producing businesses are not dependent on domestic
demand to increase production as the economy comes out of a recession. They can
produce in anticipation of increasing demand or in response to increased external
demand, hence making the economy more robust and resilient.24
9. Exporting goods reduces the cost of living. Exporting goods instead of empty
containers means that the exporter pays for the cost of the returning container
instead of the importer. Once a container arrives in port and has been unloaded,
another transport leg must be found as moving an empty container is almost as
costly as moving a full container and the longer the delay in repositioning the
20
Source: Se-Hark Park, ASEAN Economic Bulletin Vol. 10, No. 3 – Inter-sectoral Linkages between
Manufacturing and Services, New Evidence from Selected Pacific Basin Countries
21
Source: Gerden Meijerink & Pim Roza, Wageningen University – Markets, Chains and Sustainable Development
Strategy & Policy Papers: The Role of Agriculture in Economic Development (2007)
22
Source: US Bureau of Economic Analysis in National Association of Manufacturing – Facts About Manufacturing
(2012)
23
Source: Lori Kletzer, University of California, Santa Cruz – Imports, Exports, and Jobs: What Does Trade Mean
for Employment and Job Loss? (2002)
24
Source: Martha Olney & Aaron Pacitti, University of California Berkeley BEHL Working Paper Series – More
Services Means Longer Recoveries (2013)

7
container, the higher the cost.25
This has resulted in trickle effect listed above of (1)
a higher custom duty (2) a higher inflation rate (3) a higher cost of living and (4) a
higher cost of doing business. Thus, by having goods ready to export, the importer’s
freight is less which reduces the customs duty applied to imported goods, which in
turn reduces the cost of goods in the domestic market and hence the cost of living.
10. Global trade is based on goods, not services. A country cannot trade services for
most of its goods. According to the World Trade Organization (WTO), 80% of world
trade among regions is merchandise trade – that is, only 20% of world trade is in
services. If in the extreme case an economy was composed only of services, then it
would be very poor, because it would be very difficult to trade for goods.26
Ultimately, without a robust goods producing sector, it is simply impossible for almost any
nation, unless it is endowed with oil or other natural resources, to balance its trade – and
Barbados is no exception.
This is the supreme time for Barbados to move beyond its “either/or” approach to goods
and services and recognise that the health of the economy is critically dependent on the
health of the goods producing sector and specifically the fruit & vegetable and agro-
processing industry.
2.3.4. The Importance of Logistics & Trans-shipment
The geography of maritime transport shown
in the diagram on the right reveals that the
shortest path to circum-navigate the globe is
the “circum-equatorial route” using the
Panama Canal (red arrow), the Strait of
Gibraltar and the Suez Canal (yellow arrows)
and the Strait of Malacca (pink arrow). For
the northern hemisphere where the bulk of
economic activity takes place, this involves
the main connector route or middle ring of
circum-hemispheric circulation which links the
Eurasia and North American continents via the
Atlantic and Pacific Oceans.
In this age of globalisation, this simple
pattern remains a fundamental element
shaping global maritime routes and
consequently, global trade.
This is why the circum-equatorial route can be
perceived as a conveyor belt where high
capacity and high frequency containerships are assigned and interfaces with the middle ring
(main connector) at specific high throughput trans-shipment hubs.
25
Source: Jean-Paul Rodriguez – The Geography of Transport Systems [Chapter 5: The Repositioning of Empty
Containers] (2013)
26
Source: Stephen Ezell & Robert Atkinson, The Information, Technology & Innovation Foundation – The Case for
a National Manufacturing Strategy (2011)

8
Thus, it is no coincidence that the 2 most economically resilient SIDS – Singapore and Malta
which also boasts high income per capita27
, are trans-shipment hubs, being both located on
this circum-equatorial global shipping highway. Being trans-shipment hubs have allowed
Singapore and Malta to develop strong and robust agro-processing and manufacturing
sectors because they are receptacles for raw materials originating from various countries.
These 2 small countries have incredible opportunities to process
these materials into high value manufactured goods and put them
back onto ships without the ships having to leave the global
highway. Naturally the time and cost savings realised from not
having to move goods off the shipping highway helps businesses to
maintain their competitive edge. Of course it also helps that both of
these countries are geographically proximate to major commercial
centres in Europe and Asia.
As intermediaries in the main global shipping routes, Barbados and the Caribbean also have
the potential to benefit like Singapore and Malta from being trans-shipment hubs. The
geographical positioning of Caribbean countries at the crossroads of the main global north-
south and east-west shipping routes allow the region to benefit from the “spill-over” effects
of these routes. Additionally, Barbados and other CARICOM countries are signatories to a
number of international trade agreements such as the Caribbean Basin Initiative (CBI),
Caribbean-Canada Trade Agreement (CARIBCAN) and the Economic Partnership Agreement
(EPA) which makes their strategic positioning an even greater asset.
However, only Jamaica, Trinidad, Bahamas and the Dominican Republic have recognised
this opportunity to develop robust good-producing sectors by becoming trans-shipment
hubs. Sadly, most of CARICOM have spent so much time focussed on Jamaica and Trinidad’s
natural resources and comparatively greater land mass that they have failed to notice that
trans-shipment has been a key driver of these nations’ export thrust and the costs of their
goods and services.
Without knowledge of maritime transport, it is difficult to imagine why Freeport in the
Bahamas should be such an important trans-shipment hub. However, deeper research
reveals that Freeport, as the only foreign port close to the USA, is the entrance from where
27
Source: UNDP – The Growing Vulnerability of Small Island Developing States (2002)
“Being a trans-
shipment hub
increases
economic
resilience.”

9
cargo can easily be distributed to and from the US on non US-flagged vessels without the
restrictions imposed by the USA’s Jones Act.28
Thus, Freeport as a major trans-shipment
hub teaches us that the relationships of maritime transport are NOT linear, but are just as
complex if not more so than those of air and land transport.
There are many other spinoff benefits from being a trans-shipment hub. Having regular
shipping traffic results in the time and costs saving for SIDS that:
1. It increases access to and cost of raw materials needed to produce agro-processed
goods.
2. It reduces transport and freight costs as a percentage of exports which makes
exports more competitive.
3. It reduces the need and costs of having large stocks, which allows wholesalers and
retailers to decrease mark-ups and still be competitive. This in turn reduces the cost
of living, the cost of doing business and the rate of inflation.
4. More port traffic reduces the uncertainty of supply by reducing the incidence and
costs of transporting last minute goods more expensively by air which reduces
wholesalers and retailer costs and hence reduces the cost of living, the cost of doing
business and the rate of inflation.
5. It increases the efficiency of ports and in so doing reduces the turnaround time
which reduces the cost of doing business and the cost of living.
6. It increases growth in the economy which reduces transit times exponentially, which
reduces the uncertainty of supply.
7. It reduces the need for high import duties to be levied by customs by becoming a
high-valued goods producer which reduces the cost of living and the cost of doing
business.
8. It reduces the cost associated with repositioning empty containers which reduces the
cost of freight, the amount of custom charges, the cost of doing business and the
cost of living. (Currently Barbados’ percentage of freight and insurance charges of
product value are the second highest of the CARICOM islands.29
)
9. By having direct connectivity to the global shipping liner network, it reduces the time
and cost of inter-regional trade.
10. It increases innovation and research and development because proximity of industry
speeds the interchange of know-how which increases the output of skills
professionals.
2.3.5. Success Factors in Fruit & Vegetable Exports30
Many countries have experienced short-term spurts in fruit and vegetable exports; few have
been able to consolidate their early gains. Those that have done so invested in research and
adopted international technologies; expanded and upgraded logistical facilities,
strengthened vertical supply chains, developed industry organisations for collective action,
and built credible systems for quality assurance and food safety management.
Industry expansion induced the development of associated industries, such as packaging,
equipment supply, and technical consulting, which in turn contributed to the underlying
28
Source: R. J. Sanchez & G. Wilmsmeier, ECLAC - Maritime Sector and Ports in the Caribbean, the Case of
CARICOM Countries (2009)
29
Source: ECLAC (2005) in ECLAC – Maritime Sector and Ports in the Caribbean, the case of CARICOM
Countries (2009)
30
Source: Ndiame Diop & Steven Jaffee, Worldbank – Global Agricultural Trade and Developing Countries, Chp
13 (2005)

10
competitiveness of the industries. Further investments were made in the industries’
underlying assets, for example, through irrigation development and worker and
management training. Synergies have generally developed between export of fresh produce
and complementary industries such as domestic catering and tourism.
With certain historical exceptions, in most of the long-
standing industries the private sector dominates the
commercial dimensions of the business, while governments
play a substantial and multi-dimensional facilitative role. In
the early stages of industry development, the public sector
has been critical in improving transportation and port/airport
infrastructure, investing in research and farm advisory
services, facilitating access by investors and farmers to
suitable land, helping to transfer technologies and skills, and
advancing the broad array of policies that make for a
conducive investment climate.
Over time, other important functions for government have emerged, notably sanitary and
phytosanitary control, promotion of competition within the industry and in critical support
services, negotiation of favourable international market access, and resolution of trade
disputes.
With regard to explaining inter-country differences in export performances, there are three
common factors for explaining success in both fresh and processed export markets:
1. Literacy and managerial capabilities exert a strong, robust, and statistically
significant impact on export of fresh and processed fruits and vegetables.
2. Remoteness (that is, being landlocked) has a significant adverse effect on fruit and
vegetable exports, corroborating the literature on geography and trade e.g. countries
that are landlocked or remote from major markets tend to trade less than those that
are not.
3. Domestic market size comes out with a negative sign in almost all estimations
(although at a statistically insignificant level), apparently contradicting the usual
argument that exporting fruits and vegetables should be engaged in after having
developed the local market and having had experience in brand name
merchandising.
At the business level, successful exporting businesses understand the processes involved in
the export road map as illustrated below, and make sure they have completed all steps
before they develop their export plan:
“Literacy and
managerial
capabilities exert a
strong, robust, and
statistically
significant impact on
exporting.”

11
Export road map31
2.4. Smart Agriculture
The strides made in the use of technology in agriculture have changed traditional agriculture
from a natural resource-based system to a science-based system called smart agriculture.
This smart agriculture is not what is known globally as climate-smart agriculture, rather this
is business-smart agriculture. This author defines smart agriculture as:
“The new generation of agriculture that is heavily dependent on information and
communication technologies (ICTs), knowledge management, mechanisation and skilled
professionals.”
Smart agriculture applies to both the national level and the farmer level, recognising that
they cannot exist in isolation from each other. In this modern agriculture, the application of
knowledge throughout the agricultural sector is no longer an option, but rather, it is now a
necessity.
31
Source: Hans Verhulst, CBI Ministry of Foreign Affairs – The Role of BSO’s In Facilitating Exports of Fresh
Produce to EU Markets (2013)
Export
Audit
Best Market
Selection
Market Entry
Strategy
Matchmaking

12
At the farm level, smart agriculture in open field production (also considered as precision
agriculture) and postharvest handling has made significant gains in the last decade or so
and there are tremendous scientific- and technologically- based best practices that farmers
worldwide are utilising to predict and manage their production risks.
With research into crop life cycle analysis, it has been revealed that crop yields are
dependent on an estimated 43 variables (as seen below), almost all of which can either be
profitably managed or controlled.
(grey areas can be controlled, white are uncontrollable, but can be predicted)
Materials like plastic and fabric mulch and row covers are creating open field microclimates
(similar to greenhouses) that increase yield and influence earliness. In vessel composting
reduces the composting time and greenhouse seedling production guarantee uniformity and
high quality of seedlings.
In addition GPS tracking in tractors and precision implements for tractors such as bed
shapers, vacuum and belt seeders, transplanters, mulch layers with drip and fertilizer
applicators, and mulch lifters are together responsible for generating field uniformity, while
reducing costs and dependence on unskilled labour.
The use of climate and weather data in decision making, automated irrigation systems,
water storage tanks and agricultural tile drainage minimise and eliminate the incidence of
PollinationPollination

13
agricultural drought and flooding. Similarly mechanical harvesters and field aids reduce
harvesting times.
Integrated pest management (IPM) programmes that involve a balanced plant nutrition
programme, regular scouting, selection of appropriate pesticides at the right times,
selection of correct nozzles to reduce drift, selection of correct spraying equipment and
application by trained professionals are all part of the modern open field production and risk
management systems as shown below.
These are all proven technologies that not only substantially reduce cost but can also
increase yields. For example, the use of mulch reduces incidence of specific diseases,
reduces fertilizer runoff, reduces evaporation of water, reduces weeding costs by as much
InVessel Compost Seedling Production Row Mulcher Base Fertilizer
Bed Shaping Mulch Laying Transplanting Row Covers
Scouting Pesticide Application Mechanical Weeding Pollination
Field Harvesting Mechanical Harvesting Bed Mowing Mulch Retrieval

14
as 75%, increases earliness by as much as 14 days and increases yields of several crops by
at least 3 times as much.32,33
With the exception of irrigation, the vast majority of Barbadian
farmers do not use these tools, technologies and techniques.
With regard to postharvest handling, pre-cooling techniques such as forced air cooling,
vacuum cooling, hydro cooling and package icing can reduce field heat swiftly and extend
shelf life but are generally not practiced by farmers. A rule of thumb is that:
“A one hour delay in cooling reduces a product’s shelf-life by one day”34
This is not true for all crops, but is true especially for very highly perishable crops during hot
weather. Additionally, determining produce load compatibility along with controlled
atmosphere storage, ethylene carbon dioxide and oxygen scrubbing, temperature and
humidity control all maximise storage life of fresh produce and increase competitiveness.
2.4.1. Soil Management
Fruit and vegetable production relies on healthy soils to produce quality crops. Soil must be
physically, nutritionally and biologically balanced be productive and stable. Soil structure
decline, soil acidification and soil erosion are common soil health issues with the potential to
severely restrict agricultural productivity on susceptible soil types, while erosion may also
contribute to downstream sedimentation and turbidity within water storages.
In tropical soils, organic matter decomposition rates are generally faster than in temperate
soils because decay of the more stable humic fraction is generally faster. Barbados soils are
thin with an average depth between 0.5 to 0.75 metres. Being thin, these soils are unable
to store large quantities of water and therefore dry out quite rapidly in dry weather.35
Most
Barbadian soils are self-mulching, high pH, heavy clay soils which can be very difficult to
work with if not managed properly.36
Five years of intense fruit and vegetable cultivation on Barbadian soils without soil
amendments significantly reduces soil fertility.37
Presently, average yields for fruit and
vegetable production are declining in current production systems. Regular addition of
organic matter is the most practical and cost-effective way to maintain the fertility and
quality of Barbadian soils. Organic matter is a natural form of fertilizer that not only
supports soil life but also soil structure (pore system), plant metabolism and crop
production. It is the basis of soil productivity.
Legumes such as peas are also instrumental in maintaining soil fertility and soil quality
especially in the tropical climate. Used as a crop cover or green manure, they add organic
matter to the soil and replenish nutrients in the soil. For example, in Canada field peas can
produce 80% of its nitrogen fertilizer needs which is the equivalent of 178lbs of nitrogen per
acre.38
32
Source: Michael Forde, Island Farms – Personal Communication (2011)
33
Source: Douglas Sanders, North Carolina State University – Using Plastic Mulches and Drip Irrigation for
Vegetable Production (2001)
34
Source: Hugh Fraser, Ontario Ministry of Agriculture, Food & Rural Affairs –Tunnel Forced-Air Coolers For
Fresh Fruits & Vegetables (1998)
35
Source: Coleridge Pilgrim, CFCS – Agriculture & The Government Agricultural Development Program (1982)
36
Source: Nazeer Ahmad – Soils in the Caribbean (2011)
37
Source: Atlee Brathwaite – Personal Communication (2011)
38
Source: Canada-Saskatchewan Agreement on Soil Conservation – Soil Improvements With Legumes (2005)

15
The Sustainable Barbados Recycle Centre (SBRC) receives over 800 tons of organic matter
weekly.39
This organic matter includes sheared tree parts from de-bushing activities,
coconut fibre from shells and manure from the poultry and equine industry. Of this,
approximately 515 tons are available weekly for farm use as follows:
 Green waste – 400 tons
 Coconut fibre – 85 tons
 Chicken/Horse manure – 30 tons
Additionally, the sugar factories generate large volumes of bagasse and filter press mud
which can be used as organic matter on farms. Currently, much of this organic material is
not being utilised and instead is being dumped.
These abundant sources of organic matter provide a great opportunity for a reconceived
fruit and vegetable industry to be able to amend their soils with organic matter at least
every 1-2 years.
2.4.2. Pollination & Beekeeping
Pollination by bees is an area in fruit and vegetable production that is frequently ignored,
but presents tremendous opportunities for enterprising individuals. It has been universally
recognised that a number of crops including cucumbers, pumpkins, butternut squash,
melons, eggplant, zucchini and tomato require insects for pollination.
Of utmost importance in watermelon pollination is the fact that at least 1000 grains of
pollen must be evenly deposited on the tree lobes of the stigma if a uniform melon is to
result. The number of bee visitors (8 or more) and time of bee visits (6am to 10 am)
influence the fruit set and by extension watermelon yield. Of more than passing interest is
the fact that most honey bees visit melon fields in the morning when the highest percentage
of fruit set is expected.40
Most pesticides are at least somewhat toxic to honey bees. However, the degree of toxicity
varies considerably from product to product. Insecticides are generally the most likely to
cause a bee kill while herbicides, fungicides, and defoliants present minor danger to bees if
used according to label directions. Nevertheless, pesticide poisoning of honey bees can
usually be kept to a minimum if the pesticide applicators and the beekeepers take the
necessary precautions.
Of course, while beekeeping does have its share of challenges such as pests (e.g. varrao
mite, tracheal mite and wax moth) and diseases (e.g. chalkbrood), in general is it is a
profitable industry because the natural spin off from keeping bees is the production of bee
products such as honey, royal jelly, beeswax, bee pollen. In other Caribbean countries such
as Grenada and Trinidad beekeeping is a thriving industry with strong export potential.
39
Source: Sustainable Barbados Recycling Centre (2012)
40
Source: S. McGregor, USDA Ag. Handbook Num. 496 – Insect Pollination of Cultivated Crop Plants (1976)

16
2.5. The New Strategic Positioning of the Industry
Competitiveness cannot be created out of thin air; it must be based on what you have and
who you are. The face of the Barbadian fruit and vegetable industry is fast changing, from a
sector that is often perceived as if its’ role was just that of providing a social safety net for
the poor; and emerging in its’ wake is a reconceived industry that is well positioned
strategically to be an export industry and a driver of economic growth because of the
following competitive advantages:
1. Barbadian thin coralline soils dry out quickly and enhance the flavour of fresh
produce thereby providing a uniqueness which strong brands can be built on;
2. A climate that is favourable for year round production;
3. While Barbados, has not been endowed with expansive land resources to be
competitive in the international ‘low-valued’ commodity crop markets (corn, wheat,
soybean etc) it does have ample and accessible land resources for ‘higher-valued’
products like fruit and vegetable production such that increased production can easily
outstrip domestic demand;
4. A long and illustrious legacy of excellence in large scale food production (thanks to
the Barbados sugar industry);
5. Demonstrated capability to manage harmful pests and diseases;
6. Sufficiently close proximity to the major buyers of fresh produce, namely USA,
Canada & Europe;
7. Well developed regular air and marine transport
network to major markets;
8. Free trade agreements within CARICOM – Caribbean
Single Market and Economy (CSME), Europe – Economic
Partnership Agreement (EPA), Costa Rica and soon to be
Canada (Carib-CAN);
9. A superior tourism reputation, a world renown culinary
tourism product with greater linkages to tourism
forming through the soon to be developed tourism host
programme;
10. Strong linkages and good access to international research and development centres
in the region and extra-regionally;
11. Excellent relationships with international developmental agencies;
12. Ability under international trading arrangements, to capitalise on Special and
Differential Treatment provisions, such as technical assistance from developed
countries, for the modernisation of the sector;
13. Significant successes in attracting foreign direct investment;
14. A powerful entrepreneurship push in Barbados in recent years that is starting to
generate a skilful class of knowledge-driven entrepreneurs;
15. Highly developed mobile and cable infrastructure in an industry that is being rapidly
reshaped by the exponential growth in technology, and specifically information and
communication technologies (ICTs) into “smart agriculture”.
2.5.1. Criteria for Selecting Key Export Products
As an unknown entrant into the modern export market, it will take time to build
relationships with buyers and so crops with long shelf lives are more ideal to withstanding
any fallout with buyers in the short-term. Based on past exporting experience and the new
demands of the modern consumer, crops for the international market should score high
based on the following criteria:
“Competitiveness
cannot be created
out of thin air. It
must be based on
what you have and
who you are.”

17
i. Strong demand with good growth rates in the international market.
ii. Products that are not too delicate, have a long shelf life and excellent storage
ability so that the quality is still outstanding on reaching the buyer.
iii. Low incidence of pest and disease problems, or ability to solve them relatively
easily, so that reliability can be assured.
iv. Products that are not taxonomically from the same plant families and can be grown
together in a crop rotation suitable for short-term fruits and vegetables. With no
winter season to break plant pest and pathogen cycles, crop rotation is critical in
the Barbadian climate if soils are to remain healthy and pest levels kept low.41
v. Must be able to complete a crop cycle in 12-16 weeks to ensure optimal rotational
land use.
vi. Suitability for optimal all year round production to ensure that excellent yields can
be attained at each harvest.
vii. Reasonable production costs and potential for field mechanisation so as to ensure
uniformity in planting, consistency of product, timeliness of operations and
reduced field costs.
viii. High potential for primary value addition (freezing, drying, fresh cut etc) so that
processed products can be developed once the quality, yields and production costs
of these vegetables reach the appropriate threshold.
Sweet potato, butternut squash and herbs (thyme & marjoram especially) are all crops
that meet these criteria. Additionally, because sweet potato and butternut squash are good
sources of complex carbohydrates, vitamins and minerals, in the event of a natural disaster
they would significantly contribute to the food and nutrition security of the nation as a
readily available and abundant source of food.
41
An example of a good crop rotation: [legumes  crucifers or bulbs  cucurbits  root crops]

18
2.5.2. Current Export Demand
2.5.3. The Industry’s New Mission & Regional Priorities
With this new strategic positioning, the new mission for the Barbados fruit & vegetable
industry will be:
“To be a prominent economic contributor to the Barbadian economy by
using a smart agriculture approach.”
From a CARICOM perspective, the repositioned fruit and vegetable industry will embody the
vision for agriculture in the region as presented under the Jagdeo Initiative in 2003:
 To make substantial contributions to economic development and economic, social
and environmental sustainability;
 To have a transparent regulatory framework at national and regional levels, that
promotes, attracts and facilitates capital and investments;
 To have significantly transformed its processes and products and stimulates
innovation and entrepreneurship;
 To enable the region to achieve an acceptable and stable level of food security.42
Already one member state, Jamaica has implemented in 2009 a comprehensive initiative to
realise the vision for regional agriculture through the launch of the Agro Investment
Corporation (Agro-Invest). Agro-Invest is the agribusiness facilitation arm of government
42
Source: Centre for Technical Agriculture (CTA) & ECDPM – Strengthening Agricultural Trade Strategies:
Towards A Caribbean Agenda (2008)
Just over a year ago, a number of key buyers in Europe and North America
approached Caribbean farmers about supplying them with fruits and vegetables.
These included a UK wholesaler who supplies a major UK supermarket. This firm
approached Caribbean growers indicating that they need 12,000 tons (667 20-ft
containers) of sweet potatoes annually and 4000-6000 tons (200-300 20-ft
containers) of butternut squash.
Another firm, a white potato processing company in Canada has also approached
growers in the Caribbean with a demand for 8.6 million lbs (239 20-ft containers) of
sweet potatoes annually. This is because white potato consumption has declined in
the major markets and demand for processed products is slowing down because the
markets are mature. Consequently, there is no real opportunity for significant volume
growth in processed white potato products. This is why three of the top four frozen
French fries companies in the world – McCain Foods (Canada), Cavendish Farms
(Canada) and Aviko (Netherlands) are all launching or have launched new lines of
sweet potato fries.
A few months prior to this, a USA based agency that manages OPIC funds issued a
challenge to regional producers for an initial supply of 10 tons of dried herbs.

19
and it covers the investment chain from the identification of opportunities through feasibility
studies, due diligence and business planning to fundraising, project management, market
development, long-term business performance monitoring and technical support.
Agro-Invest has five (5) strategic objectives:
1. To achieve a positive return on investment in the Agro-Invest.
2. To enhance the utilisation of government owned agricultural assets.
3. To attract and retain new investors in the agricultural sector.
4. To increase the attractiveness of the sector to younger, skilled and trained
entrepreneurs.
5. To strengthen identified competitive and relevant agro-industries and sub-sectors. 43
Agro-Invest is a facilitatory agency that seeks to operate as a one-stop shop, except for the
credit component so that a prospective grower (investor) can walk into Agro Invest and get
a ready-made package. According to the CEO, Hershell Brown:
"Any investor who is willing to get into production, recognising it as a regular business
investment, we are willing to work with them, once it makes economic sense. Once the
investors approach and they meet the criteria, we assist them with all the other processes,
that is, to identify their market, put together their business plan and provide a sort of hand-
holding activity from project identification through to project implementation."
The Corporation has already created five of nine agro-industrial parks (agro parks)44
through funding in part by the European Union under the Accompanying Measures for Sugar
Protocol (AMSP), where they put together packages with good arable lands, provide
technical support and then invite investors to invest in specific production on these
properties. This has been touted as one of the early successes of the Corporation. In
addition, Agro-Invest provides infrastructure such as post-harvest facilities.
Agro-Invest also operate the “Young Farmers Project” which identifies graduates of tertiary
institutions, provide them with arable lands and assist them with technical support through
entities, such as the Rural Agricultural Development Authority (RADA).45
43
Source: Agro-Investment Corporation, Ministry of Agriculture Jamaica – About Us (2010)
44
Source: Jamaica Gleaner – Agro Investment To Ease Start-Up Burden (2010)
45
Source: Jamaica Information Service – $1.1 Billion Expected from Agro Parks This Financial Year (2013)

20
3. SECTION II: Challenges
3.1. The Business of Agriculture & Economic Development
Agriculture and by extension crop production has a multi-dimensional role in economic
development which becomes increasingly evident as a country develops.
In the early developmental stages, agriculture provides the basis for subsistence of the
population. In fact agriculture is a critical component in the successful attainment of the
Millennium Development Goals (MDGs), particularly MDG-1: “Eradicate extreme poverty and
hunger”. Agriculture contributes to MDG 1 and to food and nutrition security because it can
deliver more immediate and sustained gains by helping the poor grow their own food, and in
so doing meet their basic dietary needs and make a livelihood from selling the excess
produce.
As a country develops, agriculture must increase its outputs
and productivity to meet the requirements of the ever
increasing population, and agriculture as a business is
achieved by division of work and specialisation. Today only
part of the production process takes place on the farm, as
agriculture uses industrial products like fertilizer, pesticides,
machinery and equipment; the services of the tertiary sector
like banking, insurance etc. and hands its products over to
other sectors for packing, processing, and distribution.
This means that agriculture becomes deeply interwoven with other sectors of the economy.
It cannot produce anymore without their inputs and services, and acts itself as a customer
to these other sectors, thus providing work and income outside of agriculture.
In effect, agriculture then plays a major role in economic development through its backward
and forward linkages. Over 30 years ago, Nobel laureates Theodore Schultz and Sir Arthur
Lewis showed that not only was agriculture capable of productivity growth and responsive to
technological change (on which the “green revolution” was based), but also that the
agricultural sector could have significant growth multiplier effects and consequently growth
in the agricultural sector could be spread to other sectors in the economy. Indeed, empirical
studies have found that generally the growth multipliers from agriculture exceed those from
non-agriculture.
This is backed up with evidence from countries around the world including Malaysia and
India which showed multiplier effects greater than 1.8. Moreover, in 2009, the United States
Department of Agriculture (USDA) estimated that each dollar of US agricultural exports
stimulated another $1.31 in business activity.46
These changes in agriculture have consequences for the population because many people
from rural areas migrate to the city and fill the ranks of workers in the secondary and
tertiary sectors. For the remaining farmers, agriculture must then change from a way of life
to a profession in which technical know-how plays an ever increasing role. Frequently, the
structure and organisation of the farm changes with new forms like part-time farming being
more prevalent, fewer people become farmers and the average age of the farmer is above
46
Source: Gerdien Meijerink & Pim Roza, Wageningen University – Markets, Chains and Sustainable Development
Strategy & Policy Papers: The Role of Agriculture in Economic Development (2007)
“Business is a
repeatable process
that makes money,
everything else is a
hobby.”

21
50 years. Particularly under such conditions, agriculture must also adopt the role for the
preservation of nature.47
At the societal level, agriculture in Barbados is practiced by people from all walks of life as a
subsistence activity, as a hobby and as a business, and as a result it is treated like a public
good. With the government having not delineated subsistence agriculture / backyard
farming / hobbyist gardening from commercial farming activities, this has stretched meagre
government resources, and has also hindered society’s acceptance of the business of
agriculture as repeatable process that generates wealth. Agriculture is therefore still
regarded as a necessity-based activity that people with limited choices engage in.
What’s more, with a Barbadian society that psychologically still has deep seated identity
issues more than 45 years after independence, agricultural evolution is inextricably tied to
history which cloud the issues, intensify the problems and retard development of the sector.
For many Barbadians, agriculture is a strong reminder of poverty and colonialism that is
“best forgotten or ignored”. Hence, the business of agriculture has become a victim of the
country’s development and has suffered greatly because this evolution has not been
managed correctly.
Consequently, while there has often been short-term gains made in the sector, by and large
these have only been precursors to long-term pain.
In fact, agricultural business in Barbados with the exception of the poultry sub-sector, has
generally been declining for the last three decades. The overall profitability of the sector has
been eroded due to a number of inter-related issues including globalisation and international
trade policy, lack of technology transfer and adoption, insufficient research and
development, adverse weather, climate variability, reliable market access and weak
interactions within the sector.
3.2. The Domestic Market
In Barbados, the primary source of fresh fruits and vegetables for consumers are
supermarkets. 71% of Barbadian consumers purchase fresh fruits and vegetables from the
supermarkets while 37% of consumers purchase these items from wayside vendors.48
In the
tourism sector (hotels and restaurants), the primary source of fresh fruits and vegetables
for tourism are the wholesalers. However, the tourism sector is not a major recipient of
fresh fruits and vegetables since the estimated daily population of tourists in Barbados is
equivalent to approximately 5% of the population.49
Barbadian fruit and vegetable farmers grow produce almost exclusively for the domestic
market with a limited quantity grown for cruise tourism exports. However, competition from
imports is stiff accounting for BBD $50 million in 2011, a 21% increase over 2010. Fruits
account for 49.7% of this figure, vegetables 46.7%, nuts 3.5% and root crops 0.2%.50
Of
this, an estimated BBD $24.2 million can be suitably substituted locally, with 95% of these
47
Source: Frithjof Kuhnen, University of Göttingen – The Role of Agriculture in Modern Society (1978)
48
Source: Barbados Food Consumption and Anthropometric Survey (2000)
49
Sources: Caribbean Tourism Organisation Annual Report (2010) & Barbados Statistical Service Latest Socio-
Economic Indicators (2010)
50
Source: Ministry of Agriculture Planning Unit – Barbados Food Import Bill 2010 & 2011

22
crops being fruits and vegetables. Further analysed, the top 4 vegetables51
(broccoli,
onions, carrots, cabbage) account for 62% by value, while the top 4 fruits (oranges,
bananas, plantains, watermelons) account for 69% by value.
Nonetheless, while the dollar value from these crops is significant, the acreage required to
produce these items is only a small portion of the available arable land:
Box 1: Some Examples of Import Substitution Acreage Requirements
Vegetables
 Broccoli – 62 acres, harvested, 4 times per year
 Onions – 49 acres, harvested, 2 times per year
 Carrots – 33 acres, harvested, 3 times per year
 Cabbage – 11 acres, harvested, 3 times per year
Fruits
 Oranges – 160 acres52
 Bananas – 146 acres per year
 Plantains – 94 acres per year
 Watermelons – 23 acres, harvested 3 times per year
Consequently, a steady growth of agricultural production of fruits and vegetable crops soon
results in flooding of the domestic market. The minimal use of postharvest facilities means
that farmers have a small window in which to get their product sold before it spoils.
Ultimately, these gluts create a dysfunctional cycle of business that:
1. Attracts initiatives to increase production. (Boom)
2. Drives farmers of out of business, or cause them to reduce
their production; (Oversupply)
3. Reduces the market supply leading to shortages; (Decline)
4. Encourages greater production; (Recovery)
5. Start cycle all over again (Boom)
Thus, the underlying issue behind the fluctuation of supply and the frequent occurrence of
gluts and shortages is the limited size of the local market.
This precariousness of supply is further compounded by farmers not having timely
knowledge of weekly, monthly and annual demand for fresh produce and no knowledge of
the total value of the market annually. This forces them to speculate, often inaccurately,
which can lead to gluts during which time farmers have to dispose of produce that cannot
be sold; and shortages which pushes up the prices causing buyers and consumers to
51
Lettuce is actually ranked no. 4 by value and cabbage no. 5 with a difference in value between the two of 0.6%.
The lettuce category includes several types of lettuce which makes it difficult to generate an estimate for the acreage
requirement and so it was no used in the top 4 listing.
52
The acreage was calculated based on an average expected yield per acre after the 4th
year of planting.

23
complain. In comparison, imports are predictable and reliable making them very attractive
to retail and food businesses.53
3.2.1. Food Import Bill
Barbados has always been a high import country with reports indicating that it “imported
most staples and necessities” in the 1930s and “from 1947 onwards imports out-ran
exports”.54
Indeed, Blades reports that in 1970, the nominal value55
of Barbados food
imports was EC $49.196 million (BBD $36.441 million) and when followed by a decade of
high inflation, the nominal value of food imports moved to EC $212.11 million (BBD
$157.119 million) in 1980, and accounted for 11% of CARICOM’s total food imports.56
To compare these figures to the BBD $629.264 million food
import bill of 2011, these values must be adjusted for inflation57
to reflect their true value in today’s economy. Thus, in real
prices, the food import bills of 1970 and 1980 when adjusted for
inflation are BBD $513.506 million and BBD $588.516 million
respectively.
Furthermore when population size is considered, food imports per capita was BBD $2167.69
in 1970, BBD $2381.41 in 1980 and BBD $2215.72 in 2011. Undeniably, these figures
corroborate previous reports that Barbados’ food imports are relatively stable.
The stability of food imports was proposed by Blades’ much earlier analysis of the
composition of the regional food trade, in which he surmised that “given the high proportion
of food imports in regional consumption, the inference is one of a relatively stable regional
food consumption pattern.” With regard specifically to fruits and vegetable imports
regionally, they ranged from 8.43% - 10.97% between 1970 and 1978. In comparison,
using the same classification, 2011 fruits and vegetables percentages accounted for 11.43%
of food imports, reaffirming the consistency of the structure of food imports.
This stability in food imports naturally begs the following questions:
 Does local food production show a similar stability?
 And if so, what are the real drivers behind this chronic relationship between food
imports and local food production?
 Are food imports really the culprits behind low local food productivity?
Nevertheless, there is undoubtedly a greater range of food items available in Barbados
today, especially processed foods and it is apparent to the long-standing citizens of
Barbados that it is importing more food than it did 30 or 40 years ago, albeit for the same
value.
How is this possible? Productivity growth in agriculture allows farm commodities to be
grown and harvested more cheaply by generating more output from the same amount of
53
Retail and food businesses refer to supermarkets, wayside vendors, hotels, restaurants, institutions and informal
food service businesses
54
Source: Delisle Worrell, Barbados Central Bank – The Barbados Economy Since the 1930s (1995)
55
Nominal value is simply the value of the food imports for that specific year. To compare it to today’s prices, this
value must be adjusted for inflation and this adjusted price is known as the real value.
56
Source: Hayden Blades, CFCS – Trade and Production of Food Commodities in Caricom Countries with Special
Reference to Fruits and Vegetables (1982)
57
Adjustment for inflation were calculated using Consumer Price Indices from Index Mundi (2012)
“In the 1930s and
“from 1947
onwards Barbados
imports out-ran
exports.”

24
inputs, thereby reducing the average cost of production. This benefits not only farmers but
also food and textile manufacturers and consumers because most of these cost reductions
are passed on to the ‘non-farm’ economy as lower commodity prices.
Productivity growth through agricultural research and development as well as strides in food
technology have been responsible for the dramatic increase in average yields by improving
machinery and equipment and increasing technological efficiencies, such as the use of new
fertilizers, feeds, seed varieties, automated irrigation management, life cycle analysis and
postharvest management.58
For example, in the year 2000 each farmer in the USA produced on average 12 times as
much farm output per hour worked as a farmer did in 1950. Between 1950 and 2000, the
average amount of milk produced per cow increased from 5,314 pounds to 18,201 pounds
per year, while the average yield of corn rose almost 4-fold from 39 bushels to 153 bushels
per acre.59
Economies of scale built on these gains in productivity have been responsible for the
significant decline in the real prices of global commodities and raw materials used by agro-
processors and consumers over the last 3 or 4 decades.
Thus, while the food import bill is not rising in real prices per capita, local perception is that
the range and quantities of food items imported have increased significantly even though
the population has only increased by an estimated 16.6% in the last 4 decades.60
3.2.2. Trade & Protectionism
The civilisation that can produce just enough of everything it and its people need to survive
is rare indeed. This is why trade is vital to the success of civilisation and why trade policies
can make or break an industry. Through globalisation, trade has evolved into a very
complex activity and countries with large economies have more experience in understanding
this complexity and therefore implementing effective trade policies.
Without a doubt, the global fruit and vegetable trade patterns are heavily influenced by a
range of trade-distorting policies.61
An example of this is the USA-Brazilian orange juice
trade dispute as detailed below in box 2.
Box 2: The USA-Brazilian Trade Dispute Over Orange Juice
The world market for orange juice is basically a duopolistic market
structure, with only two players, the United States (mainly Florida) and
Brazil, supplying roughly 85% of the world market. Over 95% of Brazil’s
production is exported, whereas more than 95% of US orange juice is
consumed domestically. Of the USA imports of concentrated orange juice,
some 90% comes from Brazil. Imported orange juice is mixed with US
58
Sources: Martin Painter, Journal of International Farm Management, Vol.3. No.1 – A Comparison of Farm
Incomes and Wealth in Canada (2005); Dr. Bruce Gardner, University of Maryland - Commodity Support,
Investment, and Productivity (2002)
59
Source: Keith Fuglie et. al., USDA ERS – Productivity Growth in US Agriculture (2007)
60
Source: Barbados Statistical Service Population Census 1970 & Latest Socio-Economic Indicators (2010)
61
Source: Jason Donovan & Barry Krissoff, USDA ERS – Trade Issues Facing US Horticulture in the WTO
Negotiations (2001)

25
juice to improve its colour and make up for seasonal supply shortfall.
This trade pattern reflects Brazil’s production cost advantages, which in
turn mirror lower labour costs in Brazil, reinforced in recent years by the
devaluation of the Brazilian dollar, the real.
The United States levies a tariff of 7.85 cents per litre on Brazilian orange
juice. In addition, an anti-dumping order remains in effect, with dumping
duties ranging from 2% to 27% on imports of the Brazilian product.
Furthermore, Brazilian exporters pay a “Florida equalizing excise tax” on
frozen orange juice concentrate, from which domestic producers in
Arizona, California, and Texas whose juice is also blended with Florida
orange juice are exempt. The proceeds of the tax are allocated by statute
to the exclusive promotion of Florida-grown citrus products. According to
one estimate, the combined tax and duty accounts for nearly 50% of the
cost of a ton of Brazilian concentrate.
Interestingly, the private sector has already taken pragmatic actions to
deal with these problems, through joint investments and joint production.
In an increasingly common tariff jumping tactic, the Brazilian producers in
the early 1990s began to invest directly in the Florida industry. It is
estimated that foreign, mainly Brazilian, companies own as much as 40%
of the Florida processing industry.
On the other hand, the USA presence in Brazil’s citrus industry started
much earlier in the 1960s, when winter freezes prompted USA growers to
seek out Brazil for planting.
With governments recognising how critical trade is to development, a multilateral
agreement called the General Agreement on Tariffs and Trade (GATT) was signed since
1947, to regulate international trade and aide in the economic recovery following World War
II. Its main objective was to reduce the barriers of international trade through the reduction
of non-tariff barriers, tariffs, quotas and subsidies. It was replaced in 1994 by the WTO.
At the Uruguay Round of trade negotiations in 1986, the Agreement on Agriculture was
signed to reform trade in the sector and to make policies more market-oriented. This has
been the most substantial trade liberalisation agreement in agricultural products in the
history of trade negotiations. The goals of the agreement were to (1) improve market
access for agricultural products, (2) reduce domestic support of agriculture in the form of
price-distorting subsidies and quotas, (3) eliminate export subsidies on agricultural products
over time and (4) harmonise to the extent possible sanitary and phyto-sanitary (SPS)
measures between member countries.
Specifically, it was agreed all countries would reduce key protectionism measures by (a)
converting non-tariff barriers into tariff barriers and (b) reduce tariffs on agricultural
products by 2004, with developed countries reducing by 36% and developing countries such
as Barbados reducing them by 24%. While countries have successfully converted to a
tarrification system, they have yet to follow through on reducing tariffs on agricultural
products as agreed.

26
Trade & Subsidies
Globally, government interventions for fruits and vegetables are significantly lower than in
other agricultural sectors. With regard to export subsidies, the WTO reports that unlike
many other agricultural sectors, the use of export subsidies is not pervasive in fruits and
vegetables. The export subsidy expenditures notified to the WTO in 2000 were generally
below those reported for other agricultural categories and were less than 2.5% of total fruit
and vegetable exports for all member countries with the exception of Switzerland.62
Consistently, domestic subsidies to farmers are relatively low in
Organisation for Economic Co-operation and Development
(OECD) countries. Of the major developed regions, only the
European Union (EU) reports a collective measure of support
related specifically to several fruits and vegetables, while Japan
and Canada indicate moderate levels of collective support for a
few commodities.
Indeed, while corn, soyabean, wheat, rice, cotton, peanuts, dairy and feed producers have
all demanded subsidies in the USA; from as far back as 1990 the fruit and vegetable
farmers have refused agricultural subsidies, citing their desire to be fiercely independent
and competitive in world markets.63
The WTO considers domestic support subsidies tied to production quantities as amber box
or trade-distorting domestic support and are subject to reduction commitments. For
members of developing countries, they must keep these subsidies within 10% of the value
of the country’s production for non-product specific support and a maximum of 10% of the
value of production for a specific crop. Hence, in today’s trade environment, it may be
difficult to directly tie subsidies to productivity without violating WTO rules.64
In comparison, domestic support measures with minimal impact on trade are called green
box subsidies and can be used freely. They include government services such as research,
disease control, infrastructure, natural disaster relief, marketing and promotion, inspection,
extension services and food security. They also include payments made directly to farmers
that do not stimulate production, such as certain forms of direct income support, assistance
to help farmers restructure agriculture, and direct payments under environmental and
regional assistance programmes.
As cited in the Success Factors in Fruit & Vegetable Exports section (2.3.5), it is government
support through such green box subsidies that has allowed exporting countries to
consolidate their early gains and expand their industry. Consequently, while the green box
measures in themselves do not directly impact trade, they do improve the productivity and
competitiveness of the industry which leads to reduced prices and hence impacts on trade.
Trade & Tariffs
The EU, Japan and the United States use to varying degrees, a similar set of tariff protection
tools: low but highly dispersed ad valorem (meaning according to the value) tariffs, specific
62
13 (2005)
63
Sources: Food Safety News – Why Fruits & Vegetables are Excluded from Farm Subsidies (2011); Farm
Commons - Grow Vegetables and You’ll Pay: Why Some Federal Farm Programs Prohibit Vegetable & Fruit
Production (2011)
64
Source: WTO – Domestic Support: Amber, Blue and Green Boxes (2004)
“From as far back
as 1990, USA fruit
& vegetable
farmers have
refused subsidies.”

27
duties, seasonal tariffs, tariff escalation, and preferential access along with tariff-rate
quotas. Tariffs for a specific range of products depend on numerous factors, including the
date of entry (seasonality factor), the degree of processing (escalation phenomenon), and
the relationships with exporting countries (preferential agreements and regional and
bilateral free trade agreements (FTAs)).
For example, the EU uses a complex tarrification system called the “minimum entry price”
system to apply tariffs to protect growers of 15 types of fruits and vegetables from
imports.65
Under the system, the EU calculates an entry price for each of the commodities
covered by the programme. The tariffs levied for each item depend on its import price
compared with the calculated price66
.
Fruits and vegetables imported at prices equal to or greater than the established entry price
are only charged an ad valorem duty of up to 20%. Produce valued below the entry price
are charged a specific tariff in addition to the ad valorem duty. In the latter case, two
situations are distinguished: if the import price is more than 8% below the entry price, a
large specific tariff (called the maximum tariff equivalent) is levied against the shipment,
most likely prohibiting its importation. If the entry price stands between 92% and 100% of
the entry price, an additional specific duty is levied.
Through this system, applied tariffs are actually linked to the delivered price and the
season. For instance, fresh tomatoes imported between June 1 and October 30 and priced
8% below the reference price of €52.6 per 100kg face tariffs amounting to 57% of the
import price.67
The entry prices are generally highest during the EU production season and
lowest during the offseason, and the difference can be very large. The entry price for
zucchinis, for instance, increases from a base level of €450 a metric ton to €730 a metric
ton in April and May. The EU in-season rate for oranges, which runs from December 1 to
March 31, exceeds the out-of-season rate by nearly 11 fold. Hence, this system strongly
restricts an exporter’s ability to increase market shares in the EU based on lower prices and
efficiency, especially during the European production season while still encouraging farmer
competitiveness.68
The protection structure just described does not apply equally to all
exporting countries. Regarding Barbados, the EU maintains a complex
system of preferential access to the African, Caribbean and Pacific
(ACP) countries, through a FTA called the Economic Partnership
Agreement (EPA). The EPA is a key element in the Cotonou
Agreement (which replaced the Lomé Convention) and is designed to
provide privileged partners with favourable entry without undermining
the protection of domestic producers.
In comparison, Barbados protectionism measures have been less versatile. Prior to 2000,
the Barbadian government protected local farmers by using measures that were designed to
65
Source: Linde Goetz & Harald Grethe, University of Goettingen, Germany – The EU Entry Price System For
Fresh Fruits And Vegetables – Paper Tiger Or Powerful Market Barrier? (2008)
66
An importer can choose one of the three following methods to calculate entry price: the standard import value
(SIV), calculated daily by product and by origin and published in EU’s Official Journal; the f.o.b. price of the
product in the country of origin; the effective resale value of the shipment concerned.
67
Source: Hilde Brans, USDA FAS GAIN Report #E21058 – European Union Agricultural Situation, EU Fruit and
Vegetables Regime (2001)
68
13 (2005)
“Trade
policies can
make or
break an
industry.”

28
reduce the flow of imports (non-tariff barriers). Some examples of these measures are (a)
the setting of import quota limits, (b) changing the rate of import duties, (c) only importing
through State Trading Enterprises (e.g. BADMC) and (d) discretionary import licensing i.e.
not issuing licenses when there was an abundance of local produce.
However, to keep in line with WTO obligations, in 2000 all non-tariff barriers were converted
to ad valorem taxes designed to raise the prices of imported good (tariffs barriers) and
maximum tariff levels called bound rates were set for each item imported. The non-tariff
measures were converted in such a way that they provided more-or-less equivalent levels of
protection i.e. if the previous policy meant farmer prices were 75% higher than world
prices, then the new tariff could be around 75%.69
Additionally, Barbados is one of only 39 World Trade Organisation (WTO) member countries
and the only CARICOM country that can invoke a special safeguard (SSG) provision on
sensitive items. The Barbados SSG is a price trigger mechanism that allows Barbados to
apply a minimum price to an imported item when there is a fall in the import price below a
specified reference price. This reference/trigger was determined on the basis of 1986–1988
average import prices (as per the rule). Since 2002 the SSG has been applied and remains
in effect for a total of 37 products including 18 vegetables (tomato, onions, shallots,
cabbages, cauliflower, lettuce, carrots, beets, cucumbers, pigeon peas, string beans,
eggplant, okra, pumpkin, sweet corn, sweet peppers, hot pepper, sweet potato) and 2 fruits
(melons, papaya).70,71
Weaknesses in Barbados’ Trade Policies
Unfortunately, neither banning of imports nor the indirect subsiding of the sector through
such one-dimensional tariffs and special safeguards has served to increase the farmers’
market share in Barbados. Rather, they have been perverse incentives for unscrupulous
importers to circumvent customs duties and border control in creative ways all in an effort
to make an exceptional profit and to get cheaper imported produce to their customers.
Furthermore, high prices for imported agricultural produce have also been perverse
incentive for farmers because while it encourages increased production, it does not
encourage increased productivity.72
Because this indirect subsidising using trade protection
measures has not been directly linked to increased productivity, farmers have not
significantly improved their price competitiveness.
Sadly, neither the WTO nor the Barbados government considered that if local farmers’
productivity was not increasing on par with exporting countries productivity, then the price
difference for each item would grow bigger than the tariff bound rate. For example, while a
75% tax in 2000 would have made imported prices equivalent to local prices, in 2010
imported prices with a 75% tax may now be lower than local prices because of that
country’s increased productivity for that product. When this is added to the fact that the
SSG mechanism is based on a static set of average import prices derived from 1986-1988,
it is no wonder why this remedy has not been adequate in checking the surge in imports.
69
Source: WTO – The Agriculture Agreement: New Rules & Commitments (2004)
70
Source: Ramesh Sharma – Effective Special Safeguard Mechanisms in J. R. Deep Ford et. al., FAO – Agricultural
Trade Policy And Food Security In The Caribbean, Structural Issues, Multilateral Negotiations & Competitiveness,
Chapter 6 (2007)
71
Source: Ministry of Agriculture Planning Unit – List of Special Safeguards (2013)
72
Source: Agricultural Planning Unit/UNDP-FAO Project Bar 73/005 – Structural Constraints of Being A Small
Island (1977)

29
What's more, this price difference gap also increases when there are fluctuations in
exchange rates such as when countries devalue their currencies (e.g. Jamaica, Trinidad,
Guyana) or regulate them to maximise trade opportunities (e.g. China).
Because the real value of a static/nominal price is eroded over time through inflation, then
where domestic price levels have generally risen year on year as is the case for Barbados,
this value becomes lower each year until eventually resulting in it being low enough that
even when the SSG duties are applied, the imported item remains cheaper in the local
market. For example, the trigger price of $0.50 is applied to an item and the resulting price
in the domestic market is $2.00 which is still lower than the local item which is priced at
$4.00.
Alternatively, global inflation would cause world prices to also
increase over time, so even as imported items are much
cheaper than the corresponding local item, the SSG would not
trigger because the item is now priced above the trigger. For
example the trigger price for an item is $0.50, however, the
imported price is always $1.00 so the price does not trigger
and normal duties are applied resulting in the price being
$3.00 on the local market, while the locally grown item costs
$5.00.
Furthermore, even as WTO negotiations have stalled and Barbados’ high tariff regime
remains in effect, FTAs with CARICOM, Europe (EPA), Costa Rica and soon to be Canada
(Carib-CAN) has resulted in Barbados agreeing to allow certain products from these
countries to enter Barbados at lower tariff rates.
Finally, the simple-mindedness and single-mindedness of using price competitiveness as the
key determinant in trading when price is but only one component in consumers’
determination of the value of fresh produce, means that even with products that are equally
priced, imported products can still have a greater value in consumers’ minds. This is
because these products may have other value propositions such as high quality, consistency
of supply, uniform sizing, convenient and attractive packaging, strong brand characteristics,
food safety certification and aesthetic appeal.
Michael Porter has long been established that a competitive advantage not based on
strategic positioning is almost always short-lived because rivals can increase productivity
and quickly copy any operational advantage.73
Certainly, if farmers are to experience long
term success, they cannot rely on the solitary static intervention of an ad valorem
tarrification system that is not linked to local competitiveness.
3.2.3. Market Coordination
While there are some gains to be made from coordinating the production of local crops for
the local market, there will always be a margin of unpredictability due to the nature of crop
production, the market forces, the price and business relationship and the weather, which
creates production overlaps and gaps during seasonal shoulders.74
The small market size
means that there is also a high chance that the costs of market coordination may outweigh
the benefits.
73
Source: Michael Porter, HBR – What is Strategy? (1996)
74
Source: Roberta Cook, UCD – Volatility and Fresh Fruits and Vegetables (2010)
“A competitive
advantage not
based on strategic
positioning is
almost always
short-lived.”

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