Trinidad and Tobago, Megnath Gosein, Carlisle Pemberton, Export Marketing, Agribusiness, Agribusiness,

Gosein, Megnath

English

Research Papers in Economics

AGRIBUSINESS POLICY IN 
TRINIDAD AND TOBAGO FOR EXPORT 
MARKETING AND AGRO-PROCESSING 
Megnath Gosein 
(Agricultural Economist, Agricultural 
Development, Bank, Trinidad, W.I.) 
  
Introduction 
The change in the economic fortunes of 
Trinidad and Tobago during the 1 atter half of 
the 1980's has led to a search for 'new' areas 
of economic activity to assist the country in 
its recovery process. This situation is not 
unique to Trinidad and Tobago and if one 
looks at our CARICOM neighbours, it is 
quite evident that reduced earnings from 
bauxite, sugar and tourism have forced 
various countries in the Region to diversify 
their economies. While Trinidad and To-
bago continues to be a petroleum based 
economy, and will undoubtedly remain in 
this mould for a long time, it is now widely 
recognized that future development will be 
heavily dependent on economic activity in 
other sectors. Tourism, manufacturing, food 
and the agriculture sectors are now increas-
ingly being viewed as the areas which can 
partly address two of the major problems 
facing this country and indeed the entire 
Region: 
(i)      a high level of unemployment. 
(ii)     the need to earn foreign exchange 
to redress existing balance of 
payments problems. 
The food and agriculture sector has re-
sponded to this challenge and is one of the 
few sectors to have shown positive real 
growth while the economy on the whole has 
shown negative growth. This growth can be 
partly attributed to the development of 
export markets for non-traditional crops 
and the growth of the agro-processing sec-
tor with increased usage of locally pro-
duced raw materials. The Draft Medium 
Term Macro Planning Framework 1989 -
1995 recognized that "agriculture must be 
developed as one of the key pillars of the 
overall strategy for the medium term. Major 
emphasis is to be placed on expanding non-
traditional exports while the agro-indus-
trial sector is to be developed as a vital 
  
  
March 1992  FARM & BUSINESS means of saving foreign exchange and creat-
ing new jobs". 
Export 
The export of primary agricultural products 
is not new to Trinidad and Tobago or to the 
CARICOM Region. Citrus, bananas, cocoa, 
coffee and nutmeg have been exported for 
many years and continue to be exported 
today. However, while these commodities 
continue to be exported, the focus is now on 
the non-traditional export crops, sea foods 
and tropical cut flowers for foliage. 
Non-Traditional Export Crops 
While vast experience in the growing and 
exportation of the traditional crops exists, 
efforts to successfully compete on the inter-
national market with non-traditional crops 
can benefit from new strategies and systems. 
The traditional export crops have been grown 
on large acreages and in recent times with 
increasing mechanization. In most cases the 
international marketing was undertaken by 
an organization which was established spe-
cifically for that purpose or where this func-
tion formed a major part of its overall opera-
tion. There were well established grading 
and pricing systems; the latter often receiv-
ing Government support. The markets were 
well established with quotas generally being 
granted. 
The export of non-traditional crops is being 
undertaken in a completely different sce-
nario. Much of the production is fragmented 
in relatively small acreages with little em-
phasis being placed on grades and standards. 
Because of the small size of holdings, mecha- 
nization is often difficult and cost of pro-
duction high. There are no quota systems or 
assured markets and none of these crops 
presently receives price support from the 
Government. Efficient communications 
systems vital to trade are lacking. 
Against this background, the strides made 
in the export of fresh fruit and vegetables 
over the past three years are very encourag-
ing. Export to North America, Canada, 
Europe and our CARICOM increased from 
TT$9m. in 1987 to TT$22m. in 1989. 
Much credit for this can be given to the 
pioneering work done by organizations 
such as the Caribbean Agricultural Trading 
Company (CATCO), the Princes Town 
Marketing Co-operative and several enter-
prising small entrepreneurs. 
Growing fresh produce for the export market 
requires a new breed of farmer, the mod-
ernization of agriculture, the use of special-
ized marketing skills and the existence of 
the necessary infrastructure to facilitate the 
production and export of these commodi-
ties. While most farmers responded mag-
nificently to the inward looking import 
substitution with protection through trade 
barriers and other policies, it requires a sig-
nificant step-up to produce commodities of 
the right quality, quantity and at the right 
price for the international markets. Export 
agriculture is a business which requires the 
right combination of management, techni-
cal and other inputs if it is to succeed. Many 
of the farmers who successfully produce for 
the domestic market may not be able to 
make what can be a giant step and a 'new 
breed' of farmers is needed for the export 
drive. 
  
  
FARM & BUSINESS  38  March 1992    
  
While the present system of small, frag-
mented holdings has contributed to the 
significant increase in export of fresh fruit 
and vegetables during the past three years, 
it is questionable whether this is the best 
system to be adopted in an export drive. The 
larger agricultural holdings such as Caroni 
(1975) Limited, Palo Seco Agricultural En-
terprises and several private estates can 
enjoy economies of scale and better lend 
themselves to modernization resulting in 
lower production costs and produce of the 
right quantity and quality for the export 
market. 
Several small farmers who have attempted 
to produce and directly export their produce 
have not been successful. The time and cost 
involved in post-harvest handling and ship-
ping of the produce have often posed a 
problem for these farmers. The sorting, 
grading, packaging, storage, documenta-
tion and shipping along with the necessity to 
understand the international markets with 
their various trade agreements and barriers 
and the need to negotiate with international 
buying agents where $0.01 may mean the 
difference between profit and loss have been 
deterrents to many of these farmers. If small 
farmers are to produce for the export mar-
ket, it is imperative that specialized market-
ing entities be established to undertake the 
marketing of the produce and the farmers be 
allowed to concentrate on production. Co-
ordination of production is imperative if 
small farmers are to successfully produce 
for the export market. 
The necessary infrastructure must also be 
provided. Drainage, irrigation, access roads, 
packaging, storage facilities etc. must be 
available to the exporter. Once we continue 
to use passenger airlines for transportation 
of produce for the export markets, we will 
have to continue expecting cargo to take 
second place to passenger cargo. Until we 
begin to ship in quantities which can eco-
nomically justify the use of special cargo 
flights, we will have to continue using the 
passenger airlines. 
Opportunities for Export 
In December 1989, Trinidad and Tobago 
exported over 20 different types of non-
traditional fruits and vegetables. While this 
may suggest that there is great potential for 
a wide range of products it is important that 
in initial development of the export sector, 
that focus is on a few commodities. It will 
be very difficult and costly to develop a 
large number of commodities. We should 
follow the footsteps of New Zealand who 
concentrated their efforts on the Kiwi Fruit 
and have now established a major export 
market for this fruit. 
Existing data suggest that among the fruits 
and vegetables significant quantities of hot 
pepper, pumpkin, ochro, paw paw, mango 
and ginger have been exported. It may be 
advisable to focus on some of these crops in 
the export drive. Market niches have been 
found for these crops and it is important not 
only to maintain these niches but to widen 
them. We can develop on the experience 
that has been gained during the past few 
years. This does not however, mean that 
market research and development, should 
cease, for in the dynamic international 
markets, new opportunities arise almost on 
a daily basis. 
  
March 1992  39  FARM & BUSINESS Having identified a few potential ventures, 
there are three issues which should be given 
some consideration: 
1.  Quite often exporters in Trinidad 
and Tobago, be it agricultural or 
other products, are encouraged to 
come together and market interna 
tionally because of the many bene 
fits that can accrue by marketing as 
Trinidad and Tobago. Is there not a 
case then for us to come together 
and market as CARICOM coun 
tries? 
2.  What is likely to be the impact of 
recent developments in Eastern 
Europe and the unification of Ger 
many? Exports to Western Europe 
are relatively small; how will the 
EEC members react as exports in 
crease? What will be the effect of 
Europe 1992? 
3.  If the focus is to be trade not aid, 
then is it to our benefit to have 
different Caribbean Heads of State 
flying to Western Europe, North 
America or Canada each week to 
negotiate trade agreements? What is 
the impact on these countries and 
on our own islands? 
Fish 
The export of fish products from Trinidad 
and Tobago increased from just under TT$9m. 
in 1987 to TT$17m. in 1988. There was a 
slight decrease in exports in 1989 but predic-
tions are that exports will continue to rise in 
1990. The fishing industry in Trinidad^and 
Tobago in the 1970's and early 1980's was 
built around a fleet of pirogues seldom 
exceeding 10m. in length. These vessels 
limited the area which could be fished to the 
inshore. 
Damage to the sea bed and fishing grounds 
by trawlers resulted in decreased catches in 
the mid and latter 1980's. This was accom-
panied by significant increases in the price 
of boats, engines, fishing gear and fuel and 
makes this artisanal fishing highly unattrac-
tive. 
Studies indicate that much of the fishing 
resources lie within the Exclusive Eco-
nomic Zone on the East Coast of Trinidad. 
The rough waters and the distances which 
have to be traversed make it impossible for 
the pirogue fleet to exploit this most lucra-
tive fishing ground. A new fleet of larger, 
better equipped vessels is being used to har-
vest fish in these areas. However, as is the 
case with crop production for export, a new 
breed of fishermen is needed if the full 
potential of the resources is to be realised. 
In most cases the operators of the pirogues 
are not equipped to handle the larger, modern 
equipped vessels. Neither can they make the 
necessary investment which averages over 
TT$0.5m. It is from this new breed of 
fishermen with their larger and better 
equipped boats that Trinidad and Tobago 
can increase its catches of fish and exploit 
the lucrative North American markets. 
The catching of fish is just one step in the 
chain which must be completed if fish is to 
find its way to the lucrative North American 
markets. Proper handling of fresh fish, a 
  
  
FARM & BUSINESS  40  March 1992 highly perishable product, is extremely 
important. While some on board processing 
can be undertaken, much of the handling, 
storage, packaging and shipping must be 
undertaken on land. Again it is important to 
determine whether specialized exporters are 
required. Co-ordination of the efforts of 
fishermen and sea food exporters is essen-
tial if exports of fish, shrimp and other sea 
food is to flourish. 
Agro-Processing 
The agro-processing sector in Trinidad and 
Tobago has traditionally been a large blender 
with semi-processed products being im-
ported, mixed and packaged using imported 
packaging material. The local value added 
and the benefit to the economy have been 
minimal. The downturn in the economy 
with its resulting problems has forced first, 
the adoption of an inward looking import 
substitution strategy and more recently an 
export oriented drive in the agricultural 
sector. 
The agricultural sector has been plagued by 
the age old 'chicken and egg' situation. 
Processors claim that there is not enough 
raw material produced locally for process-
ing and have invariably found a number of 
excuses to continue along the more lucra-
tive path of importing raw material. 
Primary producers on the other hand are re-
luctant to produce until they are assured 
there is a processing plant ready to absorb 
their products. Experiences such as that of 
the Cassava Processing Plant which was 
to be established by the Food and Agricul-
ture Corporation make farmers even more 
wary of producing before the processing 
plants are established. 
Another problem faced by the sector is the 
availability of appropriate techonology to 
suit the small scale of operation. Quite often 
the available plant and machinery are way 
above the required capacity and the re-
gional research institutes have failed to 
keep pace with the demand for small ma-
chinery and equipment. 
During the past five years there has been a 
proliferation of cottage industries produc-
ing a wide range of products primarily for 
the domestic market. A lack of quality 
control, poor packaging and poor market-
ing has resulted in failure for many of these 
industries. The 'new breed' of farmers has 
shown a willingness to produce for these 
processors but the lack of any contractual 
arrangements between producers and proc-
essors has often resulted in problems and 
mistrust. 
Some of the processed products have been 
successfully introduced in the export mar-
ket. Export of seasonings and herbs in-
creased from TT$2m. in 1987 to over 
TT$5m. in 1989. Fruit preserves, candied 
fruits and canned fruits have also been 
exported in small quantities. Processed 
products which have been identified as 
having good export market potential in-
clude tropical fruit juices, coconut by-
products, crystallized ginger, fruit paste 
and pulp and sea foods. The growing mar-
ket for specialized food items in the major 
metropolitan centres of Toronto, New York, 
Miami and London presents a host of op-
portunities for entrepreneurs to carve a 
niche for Trinidad and Tobago. 
  
  
March 1992  41  FARM & BUSINESS  
The agro-processing sector has tremendous 
potential for both domestic and export 
markets, however, there are some major 
factors to be addressed in the development 
of this sector. 
Raw Material 
There are five aspects of raw material 
availability to be addressed: 
(a) Quality 
To produce a good quality finished product, 
it is necessary to start with good quality raw 
material. The old adage that "what cannot 
be sold on the fresh market will be proc-
essed" is a prescription for failure. The 
production of high quality raw material 
begins when the farmer plans his produc-
tion. His choice of variety, crop husbandry 
practices and post- harvest handling all 
combine to determine the quality of raw 
material that reaches the processor. There is 
a need for closer coordination between the 
processor and primary producer to ensure 
the availability of raw material of the neces-
sary quality. 
(b) Quantity 
For processing plants to be economically 
viable, there are minimum quantities of raw 
material which must be available. While the 
raw material is sometimes produced, the co-
ordination which will get the produce from 
the farm to the processor is often lacking. 
The viability of a processing sector is de-
pendent on a minimum assured quantity of 
available raw material. 
  
(c)     Cost 
The perception by some primary 
producers that processors could or should 
pay the same price as prevails on the fresh 
market has been a constant problem in the 
agro-processing sector. Processors 
invariably cannot pay this price and it is 
therefore essential that they get produce at 
lower prices. This can be achieved by 
several means: 
-  Lower cost of production by 
farmers. 
-  Recognition by farmers that the 
trade-off for an assured market with 
lower marketing cost is the lower 
price which they receive. 
-  Vertical integration by processors. 
-  Large scale production to facilitate 
mechanization and economies of 
scale. 
(d) Location 
The fragmented agricultural production 
system with widely dispersed sources of 
raw material makes collection difficult and 
costly. Thus while it is often claimed that 
raw material is available based on national 
production data, the access to this raw 
material is difficult. 
(e) Timeliness 
Many of the tropical fruits and vegetables 
with the potential for processing are sea-
sonal. This can be addressed in either of 
three ways: 
   
  
  
FARM & BUSINESS  >42  March 1992 The establishment of multi-process 
ing plants which allows the flexibil-
ity of processing different raw 
material as they become available. 
-  The semi-processing of raw mate 
rial and storage to facilitate supply 
throughout the year. 
-  The identification and use of 
varieties which are not of a sea 
sonal nature. 
Quality Control 
The quality of processed products has often 
been a source of major concern. Protection-
ist policies do not serve to stimulate im-
provements in quality. While it is recog-
nised that quality must be high for the inter-
national markets, similar emphasis is not 
placed on products for the local markets. 
While there are a wide range of agro-
processing opportunities for both the do-
mestic and export markets, it is important 
that due emphasis be placed on quality if 
these enterprises are to enjoy any success. 
Marketing 
In planning any agribusiness enterprise it is 
important to include a comprehensive mar-
keting component. Small size of the busi-
ness does not preclude the need for market-
ing. The failure of many small agribusiness 
enterprises can often be linked to marketing 
problems. 
Conclusion 
Agribusiness opportunities for export mar-
keting and agro-processing abound in 
Trinidad and Tobago. The economic cli-
mate is ripe for such enterprises, however 
proper planning is essential before embark-
ing on any such agribusiness venture. Sev-
eral constraints and factors for considera-
tions have been raised but successful enter-
prises can be established in spite of these 
constraints. Finally, this paper does not 
include the cut flower industry. This consti-
tutes one of the major export opportunities 
that exist in Trinidad and Tobago. 
  
 

AGRIBUSINESS POLICY IN TRINIDAD AND TOBAGO FOR EXPORT MARKETING AND AGRO-PROCESSING

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