$200m slash to food import bill


Tribune Business Editor


The Bahamas could slash its annual food import bill by $200m through focusing on the production of 77 organic items, a Cabinet minister said yesterday, adding: "We have another stab at this."

Michael Pintard, minister of agriculture and marine resources, told the Bahamas Business Outlook conference that "within three years" this nation could fully meet domestic and tourist demand for these foods, which were identified in an Inter-American Development Bank (IDB) report, if it properly commits to ensuring its food security.

Acknowledging that The Bahamas has "been here before", with food security and economic diversification treated as a major priority in the aftermath of the September 11 terror attacks only for the country to resume "business as usual" once the threat eased, Mr Pintard said COVID-19's devastation had again brought renewed focus to the agriculture and fisheries sectors.

Acknowledging that agricultural exports, and the enterprises that sustain them, have been contracting for the past 15 years despite demand increasing, he said his ministry and its supporting agencies were seeking to tackle long-standing obstacles to the sector's growth that include the difficulties farmers experience in accessing credit and suitable land.

Pledging that the Government was moving "to fix the gaps that exist all along the value chain", Mr Pintard said the Minnis Cabinet had already agreed to lift the moratorium on land leases. He added that the authorities were already experiencing "a substantial uptick" in lease applications, with many "coming to the table with resources".

Affirming the Government's desire to exit businesses that were more suited to being owned and managed by the private sector, the minister added that it was seeking to privatise both the animal feed mill and packing houses in a bid to create economic opportunities for Bahamians.

And he revealed that the Cabinet had also given the go-ahead to construct, with assistance from Israeli and Dutch expertise, to construct "agro villages" in Grand Bahama and New Providence, with the former scheduled to "break ground" in the 2021 first quarter - meaning before end-March.

Mr Pintard said these "villages" will feature "a cluster of sustainable farms" to highlight the industry's breadth of potential, with the Government's ultimate goal being to develop six across various islands.

Turning to The Bahamas' present $1bn food import bill, and the prospects for reducing this, he added that this nation currently ships in between $600m to $650m per year in fresh fruit and vegetables; proteins such as beef, pork, poultry and eggs; and other small ruminants.

Highlighting the need for import substitution, and replacing a portion of this bill with domestic production, Mr Pintard added that another $400m was spent by The Bahamas on processed and "value-added" foods, plus "small ornamentals".

"What is the potential revenue that we can earn from this sector? It's safe to say upwards of $1bn," he told attendees, while setting his sights lower to start with. Turning to the study that the Government collaborated on with the IDB, he said: "They identified 77 organic items that we can produce as a country, and produce cost effectively and in a competitive way.

"If we translate that into production, the earnings from those 77 items are around $200m on the low end. We have the capacity to produce those items at a price that is predictable and reasonable in the marketplace, and in a consistent and sustainable manner. We have the potential for import substitution somewhere in the range of $200m." The 77 foods referred to were not identified.

Slashing the country's food import bill, and replacing it with expanded agriculture and fisheries production, has been a key but seemingly elusive goal of successive administrations. The Bahamas' tourism industry, and seven million-plus annual visitors pre-COVID, present a large, sustainable consumer market but the necessary linkages with food-producing sectors have never quite happened.

Major hotels seemingly find it more cost-effective to import food items in bulk from abroad, or via local wholesalers who do this for them, especially since foreign producers are able to achieve greater economies of scale. There have also been frequent concerns raised about the ability of Bahamian producers to consistently deliver the price, quality and quantity demanded by the industry.

However, Mr Pintard and prior governments have never given up despite agriculture and fisheries' economic output contribution having fallen to around 2-3 percent of gross domestic product (GDP). The minister yesterday reiterated ambitions, first outlined by the Government's Economic Recovery Committee (ERC), to increase the sectors' combined GDP contribution to between 7-8 percent.

Yet he also acknowledged The Bahamas' past failures to capitalise on momentum for food security. "Let me say the obvious. We've been here before, but not to this extent," Mr Pintard said. "After 9/11, remember the discussion about the need to pay careful attention to agriculture and marine resources and ensure those two sub-sectors become very important to food security and wealth creation in The Bahamas?

"Shortly after the 9/11 catastrophe passed, we returned to business as usual. I'd like to lay out the case that it's absolutely imperative we do not emerge from this pandemic without some fundamental structural adjustments to our economy."

While tourism and financial services will continue to be the Bahamian economy's main drivers "for the foreseeable future", Mr Pintard argued it would be an error not to exploit the potential of other industries such as agriculture and marine resources.

He added that studies by the likes of the United Nations' (UN) Food and Agriculture Organisation (FAO) had suggested that The Bahamas could achieve self-sufficiency in poultry, especially broiler and meat products, plus eggs within three years.

Admitting that The Bahamas "has a long way to go" to realise its objectives, and that the country is producing less in food than it did 15 years ago, the minister conceded that it also has "one of the lowest inflows of credit to agriculture in the entire region".

The 'ease of doing business' and an elderly workforce, with the average of farmers and fishermen being around 60, present further obstacles to expanding these sectors. Mr Pintard said "policymakers" also need to adjust their approach, while investors needed to "adjust their mindset" on the potential returns from investing in agriculture and fisheries.

"We have sought to fix the gaps that exist all along the value chain with agriculture and marine resources because we believe they can become a significant pillar of the Bahamian economy that can easily eclipse the value of marine resources, which is over $80m," the minister added.

Barely mentioning the Fisheries Act, Mr Pintard referred to recent policy edicts requiring hotels, restaurants and food stores to source 40 percent of their needs from Bahamian producers. For government entities, this ratio is 75 percent, with the minister explaining that the Government was seeking "an amicable arrangement" for this.

He added that the Government was also seeking to establish a national laboratory for the testing of plants, animals and foods both produced in The Bahamas and locally. This is for health and quality control purposes, and is a vital component in cross-border trade.

The Government, Mr Pintard added, was also seeking to privatise the abattoir and create a national slaughterhouse system for livestock, and is aiming to expand the "subsidy package" offered to the industry to include animal feed, fertilizer and other farm inputs. Public-private partnerships (PPPs) with foreign investors will also be considered for the "seafood processing space".

Acknowledging that growth was only possible with "careful dialogue and collaboration" between the private and public sectors, the minister said: "We are confident the policy framework we are putting in place will pay dividends for these sectors, and they will be in a position to provide food security and sovereignty. We have a long way to go but I believe we're headed in the right direction.

"We believe it's within the realm of possibility that we can target 7-8 percent of GDP - others have been more ambitious - that agriculture and marine resources can contribute.... We have to be ambitious but very intentional... The Budget of the Government has to reflect its commitment to the sector, and I fully expect an increase in its commitment to the sector."


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