Country Profile - Grenada

In many ways Grenada's development opportunities and challenges reflect those of the Windward islands as a whole. The country faces a number of economic constraints in common with other small island economies: high per capita administrative costs; a narrow fiscal base; environmentally fragile natural resources; small-scale farming subject to international price fluctuations; significant unemployment accompanied by shortages of key skills and emigration; and high international transport and trade costs.

Grenada's traditional agricultural exports are bananas, cocoa, and spices (particularly nutmeg and mace), indeed Grenada was once known as the spice island of the Caribbean. But all these commodities now face market constraints: in recent years Grenada has lost a significant proportion of its nutmeg market to Indonesia. However the Nutmeg Association has just emerged from a period of financial crisis, but will require continuous prudent management to keep it viable.

Banana exports have dwindled due to the difficulties of controlling leaf spot in the rugged terrain and the World Trade Organization's ruling against preferential trading conditions with European countries has also hit banana growers hard. Many growers are being left with little choice but to diversify or grow bananas for a niche market - such as the small sweet finger bananas that are selling well in European supermarkets. However the break even cost of production of bananas at traditional yields - 7MT per acre - is 53 cents per pound, and at 10 MT per acre is 37 cents per pound. The highest price received by banana farmers 1985-1995 was under 33 cents per pound.

Cocoa is also an important crop for Grenada, but it too has suffered in the past years. Just under 70% of the fields are old, suffering from agronomic neglect and have been ravaged by pests and diseases. Only the most productive cocoa farmers, achieving yields of a least 750 lbs per acre can cover operating costs. One of the most devastating pests is the pink mealy bug which has also attacked a large number of trees, ornamental shrubs, fruits and vegetables. As a result of this invasion, Grenada's horticultural production has been severely affected in quantity and quality, with exports of fruit and vegetables being rejected by other Caribbean countries. Land that has been affected could perhaps be rehabilitated, but young people are moving away from farming and the rural-urban drift is on the increase. Agricultural wages are the lowest on the island and together with basic working conditions, few are being attracted into agriculture.

Despite these challenges Grenada has significant potential for agricultural development. One of the keys to exploiting this potential is tourism. Every week cruise ships bring hundreds of tourists from all over the world to the natural harbour of St George's. However, nearly all of these liners have made a previous port of call at Miami where they stocked up with food. Clearly, there is scope for providing from local resources a greater proportion of the food and drink consumed by visitors to the Caribbean. In addition, the food import bill remains high with an increasing contribution from agricultural products that could be produced locally.

As the Prime Minister said in his budget speech in December, "In a real sense, Grenada does not need to move out of one crop into another, but rather deepen and strengthen the existing diversified agricultural base and extend more deliberately into fruits, vegetables and flowers. Efforts at agricultural diversification must focus on the areas on which Grenada has a comparative advantage. In doing so attention is placed on every aspect of activity along the commodity chain - production, processing, packaging, marketing, among others." He added, "There is in the international market for agricultural products a rapidly expanding sector - that for organically cultivated products of various kinds. the returns on such products are significantly higher than those in other corresponding sectors, and continues to be so. Accordingly my Government will encourage organic farming."

In order to help Grenada achieve development of agriculture, a number of development initiatives have been put into place. The Eastern main road, significant for trade and tourism, is being rehabilitated and another project is improving farm roads throughout the different parishes of the country. This improved access permits farmers to reach their fields more easily and obtain higher returns from their produce by getting it to market with less spoilage. Also the Republic of China on Taiwan is expected to provide assistance in giving access to markets for fresh fruit and vegetables while Chile, Cuba and the EU have indicated they will help with technical support.

Stabex funds, arising from losses in export earnings from nutmeg, mace, bananas and cocoa, have been used to support agricultural development programmes in rural areas, in combating pests and diseases, and for adding value through crop processing. A nutmeg oil distillery and a Spice and Herb garden are good examples of the linkages that can be made between tourism and agriculture in Grenada. And research is being completed with a view to producing a new product - nutmeg butter. Another promising area for agricultural development is feed supplies for livestock and a Japanese technical team is assisting Grenada with tests on the utilization of fish waste, bananas and breadfruit for poultry and livestock feed.

A recent report instances the lack of policies at the macro economic and sectoral level for development of the agricultural sector and the fact that there are no incentives for investment in agriculture when compared with tourism and manufacturing. In the light of the Prime Minister's recent remarks there should be a greater commitment to develop the country's agriculture.

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