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A major challenge for both food and drink producers in the Caribbean region is the area's import dependency, with both land availability and climate limiting agricultural output. However, as discussed in the recently published Caribbean Food & Drink Report for Q110, a number of regional governments have started to focus on increasing food production in order to decrease their dependence on imports and vulnerability to spiralling global commodity prices.
In October, President Raul Castro of Cuba announced that he is allowing farmers to use fallow lands to grow crops for profit, in one of the biggest agricultural reforms to be implemented in the country in recent times. The dissolution of the Soviet Union in 1991 and the consequent loss of its major export market, led to a rapid decline in Cuban agricultural production. Today Cuba has to import around 80% of its basic food stuffs, such as rice, powdered milk and wheat. The economic problems that followed the collapse of the Soviet Union also triggered the start of Cuba's largely unsuccessful agricultural liberalisation. In the most recent reforms, Castro claims to have lent roughly 1.7mn acres of idle state land to 82,000 farmers over the last year in order to reduce the country's reliance on food imports, particularly from the US. Under the new model the state still sets the price of crops, but farmers are free to sell as much as they can of whatever they wish to grow, with higher quality produce fetching a better price. However, one factor that would limit productivity growth is the lack of credit and investment available for vital inputs, particularly fertilisers, seeds and modern machinery. Similarly, reports of inadequate supplies of electricity and pesticides further paint a picture of a government that is willing to provide the basic farming input - land - but little else. While this move represents a positive shift away from inefficient state-owned farms, we see little chance of Cuba making a dent in its huge food trade deficit until the sector is opened up further to outside investment.
The Jamaican government has also been looking to increase domestic production. In August it was reported that the country achieved a 22.3% year-on-year (y-o-y) increase in domestic food crop production in Q209. This success has been attributed to recent government initiatives, in conjunction with an enthusiasm by farmers to adopt the latest techniques. One of the main areas to be targeted will be postharvest care and farmer logistical support, as up to 40% of total crop production is currently lost or wasted after harvest through poor storage and distribution. While these investments are costly, they are also much needed - in 2008 the country exported food and drink products worth US$190.4mn but imported products worth US$1.03bn. Much of these imported goods are basic commodities with figures from the Statistical Institute of Jamaica revealing that Jamaica imports 61% of the items that make up the basic food basket used to calculate the country's standard of living.
Caribbean Food and Drink Report Q1 2010: http://www.companiesandmarkets.com/r.ashx?id=KEFS24I66193311&prk=52a981e0d646ba2d7fe638979c9664c6
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