The objective of achieving strong sustained growth requires that the chief priority of our economic policy must be to assist in creating vibrant and competitive enterprises in every sector of our economy.
The State can, and has been attempting to do so, by creating more enabling environments for businesses focusing largely on measures to reduce costs and to enable enterprises to realise reasonable rates of returns. We are also determined to provide our industries with tariff and other forms of protection up to the extent possible under our regional and international trade and economic agreements. We have also put in place special development finance institutions and regimes for every productive sector to ensure that capital is available to fund the creation of new enterprises and the transformation of existing ones. We have also provided special incentives to stimulate activity in selected areas where there is the prospect of growth, and have met the cost of technical assistance to our manufacturing sector and small businesses where technological changes have had to be met.
Financial and fiscal constraints do not allow us to do everything that needs to be done all at once. Hence in each year since 1998, I have presented new measures to support sectoral development within the policy framework I have just outlined, and I propose this year to continue the march forward.
1. Agriculture
There is no doubt that the agricultural sector is the most vulnerable of all of our productive sectors, and its circumstances will be made more difficult by the new trade arrangements which are set to be ushered in.
Agriculture is, however, too vital to our way of life for us to lose faith in it, or to allow it to vanish.
Consistent with our policy framework for supporting general sectoral development, we have, in recent years, made available to the sector a new Agricultural Development Fund, new incentives to stimulate activity in selected areas, tariff protection, new arrangements to provide it with an expanded local market, and have set out a framework for the reform of the sugar industry.
There is evidence that these measures have begun to have some desirable effect. There is, however, even more evidence that there has to be a greater nimbleness in implementing incentives, in stimulating activity in areas where there is strong local demand but falling local production, and to help contain the costs of production generally.
These matters will be the focus of the new measures now to be announced.
Sustainable Agricultural Development Act
It is clear that the legislation pertaining to agriculture bears no relationship to the needs of a modern industry. Most of it is focused on sugar, although that industry only now accounts for one third of agricultural output. Much of it is 19th century and is irrelevant. Above all, the incentives and other supports for the sector are not built into the law and hence are administered in a discretionary and sometimes indifferent manner.
Recently, we enacted a New Tourism Development Act encapsulating a broader approach to the development of the sector than was possible through the old Hotel Aids Act.
We seek now to put agriculture on a similar legislative footing, and as such, will, within 9 months introduce to Parliament and enact a new Agricultural Development Act.
National Agricultural Commission
We have determined that the best way to help agriculture is not by higher tariffs but by income transfers and special incentives.
It is, however, clear that the subsidies to agricultural enterprises are not being transferred nor are the incentives being implemented as fast as the situation warrants.
Hence, pending the new Agricultural; Development Act, a new Agricultural Commission comprising producers, services providers and officials of the Ministry of Agriculture to oversee the smooth implementation of all policies to support agricultural development will be created.
Access to a reliable water supply is perhaps the chief means at our disposal to increase agricultural productivity and to reduce costs to the farming community. Government will therefore -
Expend $ 2.5 million over the next three years to refurbish the irrigation systems at Ruby, Jackmans, Spring Hall, St. Patricks, Friendship, Marchfield, Marshall, and Poyer. Financing will come from the Agricultural Development Fund.
Establish ten new irrigation districts over the next three years at Three Houses, Sedge Pond, Diamond Valley, Bath, South District, Pine Basin, Burnt-House, Back River, Sweet Vale and Newcastle. It is estimated that the new irrigation districts will cost $3,768,000 and $425,000 for capital works and professional fees respectively. Some $1,198,000 will be required in the first year.
We will increase the rebates for use of mulch as a water conservation measure to 50%for individual farmers and 75% for registered farmers organisations.
The estimated cost is $150,000.
There are two major areas of activity where production has been falling while local demand has been rising. We seek now to reverse that.
Pork Production in Barbados declined significantly from
2,795,400 kg in 1997 to 1,402,500 kg in 2002 and continues to decline. Yet most
of us love "proper pork". Revitalisation of the pork industry is a must.
The Ministry of Agriculture, Barbados Agricultural Society and the Barbados
Pig Farmer Cooperative have agreed on strategies that will raise production to
approximately 1.98 million kilograms of pork by the end of 2003. Strategies include
designated technical assistance by the Ministry of Agriculture, Gilt Build Up
Programme to increase the breeding herds, expansion of artificial insemination,
farm mechanisation, training and financing.
This short-term programme is estimated to cost $585,000. In addition farmers
have made requests for $1,865,000 to facilitate reinvestment in the pig industry
and these will be accommodated through the Agricultural Development Fund and
the Rural Enterprises Fund.
Poultry Industry
The poultry industry in Barbados has an estimated total annual turnover of $128
million, with a capital investment of approximately $100 million. The industry
supports more than 400 farmers and provides more than 80% of the total poultry
consumed in Barbados. The implementation of trade liberalisation since April
2000 has resulted in increased hardship on the industry. Analyses show that
even with the bound rates and the Special Safeguard Mechanism, importation of
chicken leg quarters threaten to destroy the local industry. Similarly marked
increase in the importation of turkey wings, despite the 70% duty, has had a
negative effect on the local industry.
To rectify these problems -
The rate of duty on imported Turkey wings will be increased from 70% to 110%
to afford greater protection to the local industry, and
The BADMC's importation of all poultry products will be limited to a maximum
of 308, 000 lbs (140,000 kg) per month. This quota would include BADMC's importation
of products such as turkey wings and offals.
Development of the Scotland District
The Scotland District represents one seventh of our land area, and although
it possesses strong potential for production, agricultural activity in the area
has fallen into serious abeyance in recent years. The Ministry of Agriculture
has prepared a Plan for the agricultural rehabilation of the area. It will seek
to maximize the efficiency and profitability of agricultural activity in the
Scotland District, without increasing the environmental fragility of the area,
and to restore its pastoral charm.
The overall cost of the plan is $62.9 million dollars which includes $30.9 million
for the regular operations of the soil conservation unit over a five year period
Year one projects are expected to cost $8.7 million of which $2.9 million is
required off budget.
Export Agriculture
Not withstanding the apparent opportunities, fresh produce exports from Barbados
have declined dramatically. Data show that fresh produce, cut flower and foliage
plant exports declined from 1,769,253 lbs valued at $1,677,611 in 1996 to 77,396
lbs valued at $144,969 in 2000. The Ministry of Agriculture assigned priority
to hot peppers for export development. Government will therefore establish an
Export Development Fund to support agricultural exports. This fund will be initially
capitalized at $500,000. Resources will be derived from the Agricultural Development
Fund.
The Cotton Industry
During 2001 Government established a fiscal framework for the development of
the local cotton industry. The framework was predicated on the fact that cotton
offers the best alternative to replace some if not all of the sugar cane production.
The first order of business is to expand primary production. It is clear, however,
that the fiscal framework alone will not revive the industry .
Government will therefore establish the National Cotton Forum to act as a clearinghouse
for information on the cotton industry and promote functional co-operation among
stakeholders.
The Barbados Agricultural Development and Marketing Corporation will establish
a joint venture company with local growers, input suppliers and investors to
establish a sustainable production base for West Indies Sea Island Cotton.
The Cotton Ginnery will be relocated and upgraded and leased to the company
to be established by the Barbados Agricultural Development and Marketing Corporation.
The estimated cost of the ginnery recapitalisation is $ 2.0 million.
Government will continue to assist West Indies Sea Island Cotton Association
to establish its right to its trademark whilst at the same time facilitate the
reformation of that organisation into a contemporary corporate structure.
Barbados Cotton Growers' Association will be provided with a grant of $75,000
to re-activate the organisation.
Barbados Agricultural Development And Marketing Corporation
The Barbados Agricultural Development and Marketing Corporation is now largely
functioning as a State Trading Monopoly, concerned with the importation of chicken
wings and other such commodities.
BADMC will be converted into an institution that provides services to facilitate
greater investment in the agricultural sector, performing a role similar to
and beyond those which the Barbados Industrial Development Corporation provides
to manufacturing, and the Barbados Hotel Association and the Barbados Toursim
Investment Inc. to the Tourism Industry. Elements of the new BADMC role will
include making strategic investment on a joint venture basis in certain areas
of commercial agriculture, coordinating and organising the export of fresh agricultural
produce, establishing a market intelligence service to cater to the domestic
and export markets, assisting the stakeholders in meeting the benchmarks and
standards to be established for the sector, and assisting the Barbados Agricultural
Society in organising a farmer wholesale market, and generally spearheading
the implementation of the Scotland District Development Plan.
This restructuring will take place over the next 18 months.
Land Use
The Land for the Landless Programme was launched in 2001 and approximately 880
acres have been made available to farmers across the country. However, there
is an unsatisfied demand for 3040 acres to be distributed to 304 farmers. There
is a need for measures to make it attractive for landowners to make idle land
available to the Land for the Landless Programme. To accomplish this:
Government will assign public lands at Bath plantation
in St. John and River in St. Philip to the land for the Landless Programme.
In order to bring private land into the programme, Government will effect
tax reform. The threshold for access to the rebate on land tax to un- improved
lands and improved agricultural land is $100,000 and $300,000 respectively. These
will be lowered to $25, 000 and $75,000 so that more small farmers can benefit.
I now propose to waive the property transfer tax payable on the lease by private
owners of arable land to the Land for the Landless Programme or any private arrangement
registered with the Ministry of Agriculture where the lease is for a minimum of
10 years.