New models needed to encourage FDI in agriculture

The agriculture sector, which makes a significant contribution to the Gross Domestic Product (GDP) in many Caribbean economies, must look at new financing models to encourage foreign direct investment (FDI), as it seeks to rebuild from the fallout of the COVID-19 pandemic.

At the latest webinar sponsored by the Food and Agriculture Organisation (FAO) in collaboration with the Caribbean Community (CARICOM) Secretariat, which looked at Private and Public Sector Partnerships in Agriculture and Fisheries, Chief Executive Officer of the Ministry of Agriculture in Belize, Jose Alpuche, noted that the industry in his country had done quite well during the pandemic.

“Although the pandemic forced the Caribbean to re-examine itself in terms of food security, I must say that in Belize we were not too adversely affected since we had a diversified input. We recognised our storage capacity was an issue, and we set up a COVID-19 response team comprising private and public sector interests to look at food stock availability to ensure we could feed our local population, and we also looked at what we were exporting,” he explained.

“Now, our government has cut its budget by 40 per cent across the board, but we had an agricultural continuity plan in place so we kept on producing despite the curfews and other restrictions.

“In terms of our future, we must see agriculture as a business and therefore we need to create an environment that will encourage both local and foreign direct investment into the sector,” Alpuche added.

Ralph Birkhoff, Chief Commercial Officer at Alquimi Renewables, a US-based company involved in several agricultural projects throughout the Caribbean, stressed that “investors look at long term returns on their investments, as well as short term revenues to cover their initial expenses”.

“They also look at matters such as scalability – that is, room for expansion – and there are other factors they take into consideration in the Caribbean, such as hurricanes, crop pests and praedial larceny,” he said.

Birkhoff, whose company specialises in hydroponics farms that use hurricane- and earthquake-resistant greenhouses, added that the overall food import bill for the Caribbean had reached US$6 billion in 2020 – up from US$2 billion in 2000 – and $1.6 billion of that alone was in fresh produce.

President of the Jamaica Promotions Corporation (JAMPRO), Diane Edwards, said agriculture comprised 7.1 per cent of Jamaica’s GDP, and a significant portion of manufacturing, which was about 8.5 percent of GDP, was agro-processing.

In terms of investment opportunities, she said: “We are currently getting big companies to build greenhouses, as well as creating orchards and divesting sugar lands and using them for other crops. We are also working with a company in Washington to create vehicles for Jamaicans in the diaspora to invest in agriculture; that is, we are encouraging those Jamaicans living overseas who may have parcels of land back home lying idle to plant crops on them. We are also working with another company in New York that is encouraging them to invest in agricultural projects.”
(DH)