Lenworth Fulton.
March 19, 2025
Comparative advantage of Jamaica agriculture
DURING the 1990s, the concept of comparative advantage served as the economic foundation for agricultural production, guiding the cultivation of crops and livestock.
At the time, economists emphasised the importance of applying David Ricardo’s principles of comparative advantage, as outlined in his seminal 1817 work, “On the Principles of Political Economy and Taxation.” Ricardo’s theory posits that countries should focus on producing goods for which they have a relatively lower opportunity cost, thereby maximising efficiency and gains from trade.
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This means that local farmers must only produce the things that can be traded on the world market because cost of production is cheaper than other trading partners producing similar goods, and purchase goods that Jamaica cannot produce cheaper than other countries.
In this period, international lending institutions (IMF, World Bank and IDB) strangled the economy and forced thousands of farmers from growing certain crops such as red peas, onions, Irish potatoes, carrots, etc. As the grip tightened, animal products were affected, milk production fell from 40 million litres to 12 million litres currently.
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In the 1970s Jamaica was producing up to 70 per cent of local onion demand, but, now only 25 per cent is produced locally from the 10,000 metric tonnes consumed annually.
Up to a decade ago, Irish potato production had satisfied 80 per cent of local table Irish potato demand of 15 million kilogrammes annually, but with prolonged unfavourable weather conditions, production and yield of the crop have fallen significantly, much to the delight of importers. It’s important to note that the two major Irish potato growing zones of Guy’s Hill and Christiana are without irrigation systems and depend on rainfed water systems for this delicate crop.
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This trend is consistent with most agricultural products and threatened the viability of local farmers although their uncompetiveness is beyond their capabilities in most cases such as small land sizes to effect economy of scale, limited capital availability and high cost of capital, government import licence regime that caused unfair competition from foreign goods, lack of coherent and progressive agricultural policies and limited budgetary allocation to the sector.
The matter of production efficiency on local farms is hampered by poor infrastructure including roads and irrigation, inadequate land policy by using good agricultural lands for housing, low storage availability and weak market structure.
This conondrum places the farmers at great peril and forces them to produce small quantities for fresh food markets and leave the value addition sector adrift.
The correction to this system of agricultural production lies in the aforementioned shortfall and inadequacies mostly with government approach and overreach.
Ministry of Agriculture Fisheries and Mining (MoAF&M) published priority crops under the New Face of Food, but no mention is made of economic analysis to identify crops with economic advantage, leaving farmers to speculate and often face gluts caused by questionable import permits granted without factoring statistics of planting, reaping and sale of planting materials (seeds) data, etc. These import permits blindsided farmers who are put to the sword of comparative advantage pivoted by the recklessness of government import policy, which sentenced our farmers to perpetual poverty without parole.
In my opinion, the niche crops might be our best choice — Blue Mountain coffee, the spices, neutraceutical crops and yellow yam.
Government and the private sector needs to make the paradigm shift to new and emerging markets led by research and technologies to survive the new reality of the current USA drastic policy shift on international trading and hegemony.
Already the bauxite industry is threatened and with uncertainty around green card holders, visitor arrivals might dip and in the same direction as foreign exchange inflows which should nudge the policymakers on the pathways of emerging agribusiness expansion and import substitution or self-reliance.
Natural medicines are seen as healthy alternatives to laboratory made ones by ‘big pharma’, but need Government support to assist in the commercialisation of these crops (mints, ginger, lemongrass, dandelion, guineahen weed, ganja, etc.
This process is not new; canosol, an eye drop for glaucoma, was made from ganja. Lemongrass and cerasee are sold at various outlets. But there is no proper system to certify, market and to promote these products as viable non-food agricultural products, in as much as there is little effort to promote the production of best of our commonly used food types such as yams, vegetables and fruits and to shield them from politically imposed unfavourable competition like the removal of 15 per cent GCT on imported food stuff while keeping the GCT on locally produced table eggs.
These emerging businesses wouldn’t interfere with the traditional farmers doing root crops, vegetables, fruits and livestock and would aid agroprocessing development both from the food supplement and pharmaceutical sides. Besides, it would create a new class of farmers that could concentrate on high value and low volume crops on properly organized farms.
Trained agriculturalists from colleges and universities would be targeted especially since Statin reported that farmers illiteracy rate is 33.1 per cent which is higher than the national average of 12 per cent.
Small farmers in Jamaica have done relatively well with the constant neglect from government and discrimination from financial institutions, while under these conditions, farmers contributed eight per cent to GDP equivalent to about US$1.6 billion and in 2022/23 produced 210,000 tonnes of yam from which US$40 million was earned in foreign exchange. In the same time frame ackee and coffee earned US$30 million each.
Competitive advantage is not ‘pie in the sky’ concept but a means to an end — efficiency through improved productivity for emerging markets in multi-racial and diverse populations.
The need to put college trained agriculturalists to better use than extension services and other government employment is imminent and emerging industries require this type of expertise to chart a new course of economic growth and prosperity. Further, Jamaica’s agricultural sector must find common grounds to beat competition locally and internationally to put Jamaica and the Caribbean region on firmer footing at the negotiating table.
Lenworth Fulton is a past president of the Jamaica Agricultural Society.
