Former Prime Minister Edward Seaga once said that Jamaica is a nation of samples. There is no area where our ability to produce samples is greater than in agriculture. It is time we move from a nation of sample producers and subsistence farming into a nation of serious producers of exotic foods on an industrial scale.

These include mangoes as fruit and for juice; avocados — a multi-billion US-dollar business for Mexico; coconuts for its juice (coconut water) and coconut oil, which is now being recognised as a healthy oil; ackee — not just for locals and Jamaicans in the Diaspora, but for the whole world; sorrel, ginger, and our potent spices — which can be grown in large volumes and prepared and presented in many forms, such as sauces, pastes, and powders; and tubers, legumes, and meats for import substitution and for export.

Agriculture and its twin sister agro-industry are two sectors that can make any country great, and it can make Jamaica great. Agriculture and agro-industry needs substantial and sustainable capital. But there is a misguided belief that capital should not be invested in old industries. Well, agriculture might be old, but it is not redundant and it will never become obsolete.

Another misguided belief is that capital should only go where it gets the highest return, and scant regard is given to placing capital where it does a greater good, like keeping us alive.

We in Jamaica have been floundering and puttering around agriculture for far too long. One of the reasons for this is the view that agriculture is labour-intensive grunt work that is best done by those who are intellectually less able. Another reason is a total lack of appreciation for the amount of capital needed to make agriculture work.

As a small chicken farmer I am well aware of the input costs to raise chickens in modest amounts. A tunnel coop that can house 35,000 chickens costs approximately $75 million. The purchase cost of 35,000 baby chicks is approximately $4.9 million, and to feed the chicks for six weeks costs approximately $19.25 million. When other costs, such as watering, farm husbandry, processing, and transportation, are factored in, it costs approximately $105 million to get out that first crop of chicken. That kind of money in any currency is not child’s play.

Other agricultural ventures are no less costly.

Readers of this newspaper should be aware of Gassan Azan’s $11-billion venture in Bernard Lodge, and that is hardly an industrial-scale operation.

Agriculture is vital to the food security of the nation, it is an industry that can employ tens of thousands of people and can earn or save billions for the country. But agriculture needs capital and our banks and other financial sector entities are not providing it.

The Government must wake up and do something. The neoliberal approach to economic development does not work anywhere and more so in agriculture.

We can no longer wait for the free market to invest in agriculture on its own initiative. Hell will freeze over before foreign direct investors will come to Jamaica to invest in agriculture in meaningful ways. And why would we want that anyway? What would be left for our people to do?

To act, Government must change certain ways of thinking. We also need to be less beholden to international financial institutions as sometimes they have ulterior motives for the proposals they make.

When President of South Korea Park Chung-hee took the strategic decision that South Korea would be a leading producer of steel they tried to dissuade him, arguing that South Korea did not have iron ore, coke, or limestone — main ingredients in steel production. President Chung-hee found alternative financing and went ahead with his steel manufacturing anyway. Today, South Korea is a leading producer of steel and the spin-off industries of ship building, auto and truck manufacturing are made possible because of the steel industry.

One of the changes the Government needs to make is to abandon the international financial institutions belief that governments should not target industries. They believe that the almighty free market, in the pursuit of profits, will make everything work. And if the private sector does not get involved then it is not worth doing.

That is nonsense thinking.

How many countries have the free market operating their water infrastructure? Does it make sense to have water? Well, after water the next need is food. It should be self-evident that it is dangerous to rely on others for the food we eat.

Therefore, the Government should declare that it is targeting agriculture, and it will do whatever is necessary to move capital to the sector.

The Development Bank of Jamaica’s (DBJ) initiative to provide low cost capital to small and medium-sized businesses by way of the banks is not working. The banks are of the view that the DBJ conditionality exposes them to unacceptable risks, so they are treading lightly with this programme.

Furthermore, the requirements to qualify for a loan are so onerous that few businesses will succeed with their applications, so that needs changing. The Government, through moral suasion or shaming, could get the banks to lend more to the agriculture sector. But I would not count on it. Our banks have no morals and they have no shame.

Here is what the Government should do: Create a whole new vehicle to channel capital to agriculture.

Take a page out of the book that North America and other countries use to get capital into real estate — real estate investment trusts (REITs). However, REITs in Jamaica are REITs in name only, and they are not what I am talking about.

REITs in North America have invested over US$3 trillion in real estate. This capital is used to build the gleaming skylines and cityscapes from Boston to Miami and from Atlanta to Chicago and Los Angles.

About 40 per cent of the real estate in these cities is developed through REITs. The same is true in Toronto, Montreal, Calgary, Vancouver, and all across Canada. REITs are heavily invested in residential rental units, malls, shopping centres, office buildings, and warehouses.

REITs are established by law and they may be private or public. They are able to raise money from the public, and a minimum of 75 per cent of the funds raised must be invested in real estate. At least 90 per cent of the income from these investments is passed through to the investors. As a result, the REITs pay no taxes and the income in the hands of the investors gets tax-favoured treatment.

The same can be done for agriculture.

The Government can pass laws enabling the establishment of Agricultural Investment Trusts (AIT). To make the investment attractive Government can go further than the North Americans have gone with REITs. It can make the investment in an AIT deductible from all other income (with limits if deemed necessary), losses, if any, should be deductible from any other income and have the ability to be carried forward for several years. And the income derived from the AIT should be tax free in the hands of the investors, if not for all time, then for a specified period.

This would be a generous gesture, and if these tax giveaways should result in revenue shortfall, then the gap should be closed by taxing other financial entities that are failing to do their jobs by providing meaningful financing to agriculture.

Setting up AITs would be best done in an environment in which Jamaicans are required to file annual tax returns, as is done in Canada and the US. That would better enable the Government to use fiscal policies to influence savings and investments. But that is for another article.

Investments that could qualify as AIT-related activities could be wide-ranging, such as providing agricultural loans for the usual agricultural activities, such as crop production and livestock rearing, and mortgages for land acquisition for agricultural purpose, such as building facilities for livestock rearing. Otherwise, they could build these facilities and earn rent from them.

The economic and social impact that this injection of money in agriculture would cause is innumerable. Rural employment would skyrocket and cause rural communities to shine like diamonds. It would also stem the rural to urban drift and this could have a direct, positive impact on our intractable crime problem.

Let’s do this for agriculture. We have been fooling around agriculture for far too long. It’s time to stop forming fools of ourselves and start farming food for ourselves.

Dorlan H Francis is the Jamaica Labour Party caretaker for St Andrew Western. He is also a personal financial adviser and author. Among his books is The Economic and Financial Crisis of 2007 — What Caused it, How to Avoid a Repeat. Send comments to the Jamaica Observer or dhfken@hotmail.com.