In February, before Russia launched its unprovoked war on Ukraine, the Food and Agriculture Organization reported that world food prices were 20 per cent higher than at the same time in 2021.
Since the Russian invasion, prices of key food items have gone up even more.
Russia and Ukraine are two of the most important producers of agricultural commodities. In 2021, they were among the three largest global exporters of wheat, corn, sunflower seeds, and oil. Together they accounted for a third of all wheat exports, amounting to 59 million metric tons.
Corn is the basic ingredient in animal feed, thus any movement in its cost affects the price of chicken, pork and beef.
The war has caused reduced exports as production lines and logistics, including international shipping, have been severely disrupted. At the same time, global demand has remained unchanged. The upshot is price increases, which are already having a potentially crippling impact on Jamaica which has a food import bill hovering at US$900 million annually.
There’s no doubt that population growth and the increase in tourist arrivals have significantly impacted our food import bill. Given that imports are both cause and effect of inadequate domestic food production, we have consistently argued in this space that this issue needs greater focus.
An excellent example of what is needed on a national scale is the investment by Mr Gassan Azan and his partners in Lakes Pen, St Catherine, which, had they yielded to naysayers, would not have been in existence today.
Mr Azan’s Jamagro Tech Farms — an $11-billion state-of-the-art agricultural development on 400 acres of land — includes 25 acres of greenhouses, 50 acres of orchards and open fields in the first instance.
Mr Azan, a director of this newspaper, says the venture will also function as a mother farm through a network of certified small farmers who will be contracted to produce according to the highest marketplace standards.
The farm is already supplying produce to local supermarkets and, by mid-2022, hotels will be included among its clients. Also, by the middle of next year, they expect to start exporting to the United States.
Clearly, not everyone can invest at this scale, but it is obvious that the ‘eat what we grow’ message from successive governments is mere platitude.
The country needs more than talk. The relevant ministries and State agencies should already be down the wicket with strategies to generate investment in domestic food production at every level.
Financial institutions need to recognise that they, too, have a role. For, as this newspaper had reported last December, Bank of Jamaica data show that, up to the end of October 2021, total loans and advances from commercial banks to the agricultural sector were valued at $15.4 billion — a mere 1.5 per cent of the total loan portfolio of the banks.
In our report on Mr Azan’s project last December he argued that banks view agriculture “as extremely high risk”. He said that if the sector is not properly funded it will “go nowhere”.
We reiterate that the situation demands a rethink from the banks, especially if we are serious about reducing our food import bill.
There is talk of a food crisis looming. Crisis is both a challenge and an opportunity.