Macro-economic framework for agriculture and food policy in the Commonwealth Caribbean
1989
Bourne, C. (West Indies Univ., St. Augustine (Trinidad and Tobago). Dept. of Economics)
A profile of macro-economic objectives of Caribbean governments was derived from budget presentations and policy documents. The Commonwealth Caribbean historically has been dependent upon imported supplies of food. The degree of dependence is readily indicated by the ratio of food imports to total food availability. Food prices are an important component of the cost of living in less developed countries. Normal wage rates are adjusted upwards in response to increase in the cost of living interacting dynamically with wage costs and the general price level. National food prices and inflation rate are highly sensitive to changes in the foreign currency price of imported foods and in the exchange rates. Food price inflation is politically explosive. The agricultural sector has an important role to perform in the alleviation of balance of payments pressures. The performance of the agriculture and food sectors is conditioned by the performance of the overall macro-economy. General price inflation can reduce farm profits. Governments have exhibited more willingness to regulate commodity prices for food and agriculture as anti-inflation policy than to constrain wage rates and other factor prices. Anti-inflation policy negates agricultural development policy. Much of the agricultural development failures in Jamaica during the 1978 to 1980 period is attributable to massive changes in debt servicing costs resulting from 1978 devaluation and its sequel of mini devaluations. Fiscal resources for incentives and support systems in agriculture are not stable. The agriculture and food processing share of the total public expenditure has not been successful in the politics of budgetary allocations.
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