Fostering growth through the rural economy

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Fostering growth through the rural economy

Michelle Charles

Sunday, July 05, 2020

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A key feature of development is a model that is inclusive of all cross sections of societies. In recent times we have seen exponential deployment of capital. During a quick drive through Kingston we see evidence of this massive capital deployment. Over the last four years we have seen heightened investments in the infrastructure network across Kingston, providing linkages between this city and other areas of the country. As such, the commute time between Montego Bay and Kingston has been tremendously reduced.

Massive investments in infrastructure oftentimes increases the attractiveness of a country for investments, bringing employment and much-needed income for individuals, and, by extension, improving the standard of living of these individuals over time.

The Jamaican economy has several layers that are not being fully utilised to their fullest extent. One area that has the potential for further growth and development is the rural economy, an important bedrock of the Jamaican economy. A common economic feature of rural Jamaica is agriculture, and with the right capital deployment in the area of infrastructural development this sector can fast-track real development within these communities.

The St Thomas countryside, for example, is covered with farmlands. Farming allows men and women living in St Thomas to put food on their tables. In 2008, before Tropical Storm Gustav, banana farming was the sector in which many farmers strived. The storm destroyed Eastern Banana Estates, rendering useless over 3,000 acres of land that would have normally been under banana cultivation. The closing of the estate put nearly 500 farmers out of work and shattered the market.

The recent closure of Golden Grove Sugar factory is also having a negative impact on the parish. Farmers there are now fearful of what their future may hold. How do we build a new day in Jamaica with agriculture at the centre of rural development?

About 47 per cent of the Jamaican population live in rural areas and 16.5 per cent live below the poverty line. The agriculture sector mainly comprises small and medium-size farmers, who account for 85 per cent of total agricultural holdings. In general, agriculture-dependent parishes have the highest incidence of poverty in Jamaica.

At current output levels the agriculture sector contributes around 7.3 per cent of Jamaica's GDP, which gives it a valuation of US$1.15 billion, using 2019 numbers. At current levels the sector is responsible for 20.1 per cent of the current labour force, thus highlighting the important role it plays in the overall economic growth agenda.

The first stage of building out an environment that facilitates economic growth should be centred on fostering growth through the agriculture sector. But the question is how do we go about fostering that growth?

The first area that should be given attention if we are to expand the capabilities of the rural economy is the modernisation of the infrastructure. A quick drive across many rural communities highlights ageing infrastructure. This serves as a disincentive for greater investments by private sector players, who could further stimulate growth in these communities. Improving infrastructure such as farm roads and the roads leading to these communities could lead to greater levels of output. It would also open up these farmers to new markets, which could be facilitated as commute times would be significantly reduced and farmers would be better able to get goods in a timely manner to their designated markets, thus reducing loss via spoilage.

With the effects of climate change becoming more prevalent, the issue of irrigation needs greater focus. It is no secret that water is a well-needed input material for the proper functioning of farming systems. Over the years, due to the change in weather patterns, we have begun to experience longer droughts and unpredictable weather patterns. For sustainable development within the agro sector there needs to be greater investment in irrigation systems and wastewater catchment equipment to reduce water shortage in times of drought.

There needs to be a public-private partnership that develops forward and backward linkages between the various sectors of the economy. At current levels, 45 per cent of what the local hotel industry uses for food consumption within their operations can be produced locally. Creating a public-private partnership with the aim of creating linkages within the economy would give rise to additional markets for local farmers. This public-private partnership could be extended to the creation of a credit revolving fund and greater knowledge of the opportunities that exist for farmers and potential farmers regarding funding accessibility.

Access to capital has been a major detriment to small farmers. Creation of a credit revolving fund dedicated to small farmers would increase their ability to expand operations and substantially grow their income.

The minister of agriculture is on the right path, as indicated in his June 18, 2020 release that $1 billion will be available to support farmers and fisherfolk. The path to full economic growth is one that centres on a growth strategy which underpins all cross sections of the Jamaican society; it is a path on which prosperity continues to be inclusive, as we have begun to see. Jamaica would thrive if we promote agriculture as a way by which people can make a decent living.

Dr Michelle Charles is a dental surgeon and Jamaica Labour Party coordinator for St Thomas Eastern.


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