Monday, October 26, 2009

Forum on Food and Energy Self-Sufficiency

"There is enough land and manpower here to make Jamaica completely self-sufficient in food (except for grain to make flour) if only farmers could be assured of secure ownership of their land, protection from praedial larceny, provision of technical expertise and development of marketing systems." John Fletcher – winner of Gleaner Silver Pen Award for August.
“Thus in effect the tropics were held back by their need for a technological revolution in agriculture such as had been occurring in Western Europe over two centuries. ... Trade offers a one-for-all improvement, limited in this case by the low factoral terms. In contrast technological improvement is continuous. The tropics could not really hope to ‘take-off’ until technological change became embedded in their way of life.” W. Arthur Lewis. Growth and Fluctuations 1870-1913: p. 181

BlackJamaica wishes to explore the contention that Jamaica can become self-sufficient in food in a few short years by pursuing a policy of promoting domestic and export agricultural production by small and medium-sized farmers using advanced systems of technology and marketing and localized systems of alternative energy generation, primarily solar. Alternative energy generation using solar could also result in energy self-sufficiency, practically eliminating the oil import bill, which is by far the largest contributor to the national debt. We should insist, therefore, that no agreement be signed between the Government and the IMF that does not include a plan for food and energy self-sufficiency as a means of extricating ourselves from the debt trap of IMF-imposed Neoliberal “structural adjustment” policies.

David Cooke, the former Technical and Operations Manager of the defunct Agricultural Marketing Corporation (AMC), uses the two quotes above to launch the first salvo in what we hope will become a national debate and campaign for an alternative development path. We invite our readers to participate in this debate both in the pages of this blog, other media, their political parties and their respective People Sector institutions.

Time for a People-Based Technological Revolution

By David Cooke

"The common characteristic of all developed economies is their successfully carrying out a technological revolution".

Let's focus on this in Jamaica's case. We can simultaneously do this in both the energy (alternate energy) sector, and possibly in the small-farming-export sector, both of which are largely people-based and broad-based. Certainly we had begun to do that at AMC during the three years when I was there, before the incoming Seaga-led administration shut it down in retribution for losing the '76 elections. (He blamed the AMC for his loss and, in particular, the "special shops" as they were called, which really was not part of the AMC mandate to economically market farm goods).


Firstly, in respect to energy self-sufficiency, beginning with Solar-PV (Solar panels): Solar-PV lends itself to individual and multiple-home installations, these installations are ideally suited to the mechanical skills so prevalent among the masses in Jamaica. Care has to be taken as policy to ensure the home-installations are done exclusively by Jamaicans (even if trained by foreigners initially), and care also has to be taken not to restrict those who want to do-it-yourself as this is what fosters innovation. But to expand on this a little more:

By policy, if the "purchase price" for electricity using Solar-PV were set at say the Jamaican equivalent of 25 cents US per kilowatt-hr. when "selling" to JPS (householders) via a 20-year guaranteed tariff structure - necessary to ensure the PV systems are "bankable" as collateral for loan financing - each household would have the ability to earn on average the equivalent of US$100 monthly over and above their own usage requirements. If we couple that with equipment financing programs similar to those done for motor car purchases - the systems are roughly the same cost as a "deportee" if the import tax regime is set to exactly mimic JPS generation equipment rather than treating it as household appliances - then it would be available to every household that could afford a deportee motor car, which I believe are most households.

With this (around 5,000 watt per household) installation, room air-conditioners become practical as there is sufficient individual household generation to accommodate this without resorting to purchase electricity from JPS. Now you have created a burgeoning market for household PV equipment, installations, local installers (think of all the mechanics who would jump at this), add on air conditioning sales and services, and $100 US a month "remittance" per household (reminiscent of those who were making monthly money from World-Wise and Olint or whoever). Powerful incentive? Result: you have taken care of 50% of JPS generation, stabilized the price (unlike the wildly-fluctuating pricing of electricity you now have), for systems that will last 40 years (unlike the JPS generators with a 20-year life span), improved household comfort levels, and "diffused" the electrical generation across Jamaica into discrete generation thereby reducing the chance of massive block blackouts.

So instead of having to find replacement JPS capital of the order of 350 MW times US$2,500 per KW - that is US$2,500 X 350,000 every 20 years or US$875 million … you finish the sentence!

Now that you have household PV installations with excess generation capacity, it is natural to then foster the use of electric vehicles or electric-gas hybrids. Conversion of gas to electric engines lends itself to innovation by our mechanics and is already being done small-scale in Jamaica. Imagine driving your car without having to pay for fuel! (Your fuel is derived from your home PV generation.) No more monthly gas bill.


Solar thermal, using heat from turbines instead of solar panels, results in concentrated generation more akin to JPS generating stations. This will largely be the purview of foreign companies given the large capital requirements - of the order of US$50 million per 10-15 MegaWatt installation. "20-year guaranteed Feed-in Tariff structure" again required - say US 17 cents equivalent for first 10 years, moderated downward by yearly adjustments thereafter for next 10 years as system prices fall (as is done in Germany, I seem to recall). However, by policy we should ensure any foreign company wishing to undertake generation should partner with a Jamaican company, as we did with the bauxite companies - which saved our ass when Alcoa decided to pull out in the ‘80's.

Result: Blended cost around US 20 cents per KW-hr. (or higher initially if necessary, since we now save US$400 million each and every year of the national fuel bill, which would have gone for JPS oil imports). Stable fixed prices for electricity, predictable in advance, constantly dropping with improvements in system costs, should approach US 10 cents per KW-hr. in future years. (Presently we are close to 30 cents and constantly rising.) An environment for agricultural processing plants and manufacturing to thrive and grow?? JPS used as backup only, in case of shortfalls or partial blackouts. All generation, purchases, and payments go through JPS to maintain the integrity and orderliness of the transmission and generation systems.

If it hasn't hit you by now, these are significantly higher annual returns than the US$200 million that caused us to go to the IMF in the ‘70s.

Put another way, Bauxite/Alumina, our 3rd-highest foreign-exchange earner after Tourism and Remittances, returns US$1,700 million annually into our coffers (and that was before the demise of Windalco and Alpart) while we send it all out again as oil purchases! (JPS at 6.5 million barrels and now US$70 per barrel – that is US$455 million – is just 25% of our oil imports.) We need to stop this bleed, using imported high-price oil to make steam for turbines, rather than ignoring it and spending scarce foreign exchange while worrying 'bout “IMF needed”!

21st Century Agricultural Production and Marketing

I could expound similarly on using innovation with agricultural produce, both at the curing/storage/export levels and at the growing-yield level. Witness the agricultural "green houses" revolution now taking place where produce is grown in controlled climatic conditions, which would find fast traction if there were institutionalized export and local marketing for these “hydroponic” and vertically-grown phenomena, rather than it being left to the growers themselves to also be burdened with the marketing.

I remember well how the Southfield farmers innovatively started to charter small planes and export their fruits – ripe bananas to Cayman and vegetable to Panama – in the early '80's in return for foreign exchange, and how this innovative approach to earnings and "the good life" was disrupted by the Govt. because only the state was allowed to own foreign exchange!!. (I believe there was some jealousy, as Southfield farmers’ living standards would now be above a lot of technocrats’.) Some of these farmers told me of their aversion to house mortgage, determined instead to pay for their houses outright, unlike the technocrats who all had to struggle with mortgage payments.

Technological revolution, with massive returns(financial and human)? The biggest blockage to this is the state, with their lack of foresight and blinkered view.

The last part of Mr. John Fletcher’s core statement in his award-winning letter is where we were making inroads when I was at AMC: provision of technical expertise and development of marketing systems. This is what was driving the turn-around, with exports exceeding US$1.5 million back then in the late '70s along with our traditional local marketing, and many technological improvements taking hold, among them the curing of yams to improve their shelf-life (3-month shelf life for negro yams, and 4 months for yellow yams); large-scale controlled ripening of bananas; solar-dried onions with a 6-month shelf life; massive controlled cold-storage of potatoes with a 9-month shelf life; solar-dried in-shell peanuts with a 6-month shelf life; etc. All these programs were done every year consistently, creating markets for these products well beyond their natural growing periods – and allowing better farm prices for these sought-after out-of-season crops.

Then on the farming side, we were strengthening and each year expanding our contract-farming program with established farmers having 5 to 15 acres or more of irrigation-ready lands, supplying them with technical and agricultural inputs and advice along with bankable purchase contracts for their out-of-season production of crops at guaranteed prices higher than in-season prices. In this way we were developing a growing cadre of reliable farmers, while spreading the growing season for crops outside of their natural growing season, thereby reducing the cyclical perennial "glut-and-shortage" problem.

And on and on we were constantly adding new systems and new approaches in our drive, making sure that each one took root before adding new ones. As our technology improved, so did our "shrinkage", both agricultural and fiscal. Initiatives included:

• the thrust to reduce the "glut" nature of our hillside farmers’ production and spread the production over many months;
• the thrust to increasingly widen the contract-farmer program - and so influence their growing practices;
• the thrust to deepen the links with large established farmers such as Ken and Richard Jones’ farms in Portland and St. Thomas by taking off their slightly-bruised export bananas and control-ripening them for the local market;
• the thrust to increase and widen export of farm produce to such non-traditional places as Canada (everything) and Trinidad (potatoes) - AMC exports were up to a figure of US$1.5 million per year, not including exports done on behalf of 3rd parties;
• the thrust to "broker" additional exports on behalf of 3rd parties by doing all the functions on their behalf - buying farmers produce, sorting and packing, and getting it export-ready for delivery;
• the thrust to increase both the shelf-life and storage life of produce;
• the thrust to improve the export quality and quantity, and sell the left-over “almost-first-grade” on the local market;
• the thrust to improve the "freshness" of leafy green vegetables at farm market - largely achieved by having the AMC's refrigerated trucks directly in the field during reaping;
• the thrust to alleviate shortages in all geographic areas across Jamaica by having those items in over-abundance in one area supplied to the areas in short supply - via our 19 retail shops islandwide - and in the process make our retail outlets profitable and fully stocked;
• the thrust to eliminate imported produce by a coordinated effort with the Jamaica Hotel & Tourism Association (JHTA) to supply the hotels islandwide with produce - a multi-million annual sales partnership that needed improving;
• the thrust to take off the intermittent gluts and have these processed by our manufactures into long-storage items - such as the tomato glut that we got Grace Kennedy and others to process into ketchup and tomato paste;
• the thrust to eliminate the human baggage that the former political directorates - going back to the time of Hugh Shearer - had saddled us with and which was accounting for 70% of our total expenses. Many of them were "ghost" employees at the buying-branch level, and I include the then President of the JAS, Courtney Fletcher, in this group.

Given all these initiatives, any wonder why our need for budget support dropped from $7.9 million to $3.2 million in the three short years I was there? And we were clearly quickly headed for budgetary self-sufficiency and beyond.

But alas, then came Seaga and his blinkered political view in 1980, and the AMC was no more; sacrificed on the political alter for political retribution. And what did the “liberalized” PNP do about this act of malicious neglect on regaining power for the next 18 years? Roger Clarke, the PNP minister of Agriculture, seemed not to have a technology-led bent in his thinking toward agriculture.

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