Reducing the Region’s Food Import Bill by sector and by country: Who says you can’t “spot reduce”?

With a current Food Import Bill (FIB) in excess of US$4 billion, and projected to increase to $8 billion – $10 billion by 2020, CARICOM must act to curb spending of limited resources on food imports. A high FIB for CARICOM means that not only is scarce foreign exchange diverted away from crucial areas such as education and health services, but also that the Region’s food security is compromised. For CARICOM, the issue of food security involves not so much lack of food availability as inadequate access to proper food and diets.

While reducing the FIB may seem daunting at the macro-regional level, the possibility exists to target reduction at sectoral or country level using a strategy of “spot reduction”. In health and fitness, spot reduction is the concept that applies when persons target particular group of muscles with the aim of reducing fat in a particular area. For example, exercising the abdominal muscles to lose weight in or around one’s mid-section.

While fitness pundits remain divided on whether spot reduction with exercise is possible, it might well be worth exploring whether this strategy can be successfully applied in the area of the Caribbean’s food security.

The Food and Agriculture Organisation (FAO) indicates that CARICOM’s high food import bill can be attributed to imports which account for more than 60 – 80 percent of the food consumed. It would have surprised many when, just last week, Kirk Humphrey, Barbados’ Minister of Maritime Affairs noted, with some concern, that 80% of the fish consumed locally is actually imported!

In tackling the Region’s high food import bill, spot reduction can be used in the service of a food replacement strategy that would entail substituting imported processed foods with locally/regionally manufactured alternatives. The Journal of the Caribbean Agro-Economic Society for instance, identifies cassava as one of the crops with the immense potential to be one of the new pillars of development (2016). According to statistics from CARICOM and the FAO, wheat, maize and derived products are among the top ten major imports into the region, accounting for US$489 million in 2016. Not only could cassava replace at least 30 percent of the corn in poultry rations, but it also has the potential to replace other animal feed (Stewart, 2014). Further estimates show that cassava could replace approximately 1 million metric tons of imported wheat, which equates to 10 per cent of the regional food import bill.

Another potential import to target for application of the spot reduction strategy is sugar. The demand for sugar in CARICOM is 300 000 tonnes, of which Caribbean countries import approximately 200,000 tonnes from outside the trade bloc due to the absence of refined white sugar production in the region. The Sugar Association of the Caribbean (SAC) has offered its sugar reform proposal to CARICOM’S Council for Trade and Economic Development (COTED) indicating the Association’s plan to increase sugar production across the Region in the near future. One of its main recommendations is the imposition of a 40 per cent CET on all white sugar imported into the Region. Noting this may result in a higher price and unfilled demand for white sugar, the SAC assures that its members are capable of producing enough sugar to satisfy the market demand. The Association expects these recommendations to result in a significant reduction in sugar imports of between US$132.5million and US$271 million annually.

Some countries within CARICOM have also identified areas for spot reduction. The Organisation of Eastern Caribbean States (OECS) recently recognized the potential of aquaponics or the production of food that combines aquaculture (farming fish) with hydroponics (cultivating plants in water) as a means to reducing its FIB. An aquaponics facility and a mobile desalination plant have already been established in Saint Lucia to lead the way forward in aquaponics for the Region. Minister of Agriculture of Antigua and Barbuda, Dean Jonas, explained that “an aquaponics industry can facilitate the rearing of fish for high value protein concurrently with green leafy vegetables, beans, peas, radishes, onions, herbs and other produce which as an import substitution measure can help reduce dependence on these foreign imports.”

In St. Vincent and the Grenadines, the Minister of Agriculture, Saboto Caesar, announced plans to establish a production platform that serves to reduce several commodity imports including spinach, broccoli, carrots, black eye peas and peanuts. The Minister also disclosed that the country’s food imports have already dropped to EC$119 million for the period June 30, 2018, as compared to EC$123 million last year.

As CARICOM countries continue to strive towards lowering the import value of food into the Region, careful consideration must be given to its obligations within the multilateral trade system. As members of the World Trade Organisation, CARICOM members must abide by the prevailing Agreement of Agriculture which serves to establish “a fair and market-oriented agricultural trading system” through “reductions in agricultural support and protection”. According to these rules, countries would have to reduce or remove agriculture subsidies or other support mechanisms to agribusinesses that enhance local food production (through import substitution schemes), and protect domestic industries from the competition of imports. On the other hand, the Preamble to the Agreement makes particular mention of ‘food security’ and Article 20 of the Agreement also mandates that negotiations for continuation of the agricultural reform process should recognise that non-trade concerns, such as food security should be taken into account in the negotiations.

One developing country navigating the delicate balance between openness of its agricultural sector and ensuring food security, is India. In the ongoing Doha negotiations at the WTO, India has taken a strong stance as it seeks to protect its farmers’ interests and ensure food security for its poor through subsidies. India has been met with stiff opposition by some other members including Canada, the United States, and the European Union and even after several negotiations, including the last WTO Ministerial Conference in Argentina in December 2017, resulted in a stalemate on the issue.

As the WTO negotiations (mainly the Doha Round) remain tied up, CARICOM countries should continue to innovate their respective food and agri-business strategies with the aim of reducing their FIBs. While an all-encompassing Regional strategy to achieve is hopefully in the pipeline, the strategy of spot reduction seems to be working well to help in the interim.