Jan 15, 2021 Letters
Agriculture is very critical to any economy especially for a country like Guyana whose comparative advantage is land and relatively cheap farm labour. Agriculture is perhaps the most resilient sector of the economy during the ongoing COVID pandemic. It must, therefore, be given priority as the country seeks to recover from the wreckage left behind by the preceding coalition regime.
The nation at large and farmers, in particular, recognise the significance of farming to the economy. The nation is grateful that this government has not neglected agriculture and that since August several measures have been implemented to encourage farm production. Farmers and the public say Agriculture Minister, Zulfikar Mustapha, has been very active on the ground, providing support to the farming community and encouraging farmers to ramp up production. He has received kudos from farmers all over the country for his work ethic and for his support to boost production. As I travel around conducting an opinion poll, farmers say he has been very engaging listening to them and implementing some of their ideas. Almost everyone gave the Minister a positive rating for his performance. This is in sharp contrast with his predecessor whose support for the farm sector was lacking.
In looking at the economy, from my interaction with people across all classes and ethnicities, it appears that construction, real estate, banking, and mining are among the most resilient sectors of the economy during the ongoing COVID crisis. Some planned construction is delayed because of the pandemic but will resume over time. There is not much demand for office space and high-end residential developments that are further weakened by mobility restrictions. Gated communities are planned as well as several name brand hotels. Oil and gas projects are proceeding as is some home construction. The challenge is people don’t have much spending power to purchase property or rehabilitate homes but surplus money is invested in construction. So investors are not really facing losses and their money is not fetching significant returns in a bank. Property value will increase when oil money flows and returns on investment would be high than in the bank. Mining products don’t rot and some minerals have instant market with the highest value per unit – gold and diamond, in particular. Those with surplus capital are proceeding with construction with the expectation that when the COVID eases and money starts to flow, people will purchase property.
People have to eat and as such need money. They tap into savings, utilising banking services with the banks making money through their fees. Since there is a demand for food, agriculture is sustained and remains perhaps the most resilient aspect of the economy. However, since many workers lost their job due to termination by the coalition government, closure of factories, COVID, and political and racial victimisation, many people have gone into market vending of agro produce to make ends meet. But money has not been circulating the way it did five years ago and so vendors are not earning much. In addition, there is a surplus of vendors accompanied by a shortage of funds by consumers to purchase food. So farmers are not earning much from their crops and most vendors are barely eking out a living.
Food is plentiful. And most farmers, except for some cash crops, are not losing money except through inclement weather conditions. Many consumers, especially in rural and hinterland areas, produce a lot of food for domestic consumption. Government must look to export of food in the Caribbean and in the diaspora, especially USA and Canada where there is huge demand for Guyanese produce. The two stimulus packages have provided much needed relief among the poorer sections of society especially during the end of year holiday and this New Year so far. People are observed spending creating a small spurt in the retail sector.
Agriculture is still the hope of the future. And it must be protected as a key indicator of economic activity. It could provide a platform for national recovery from the pandemic as the country waits for oil money not expected until three to five years hence. At any rate, so as not to become a victim of the oil curse, the country should continue producing food as a priority. The world needs food especially when greater amounts of land are devoted to real estate and industries. Government must encourage farmers to produce even if there is a surplus in the market. Prices of essential foods have not been decreasing although vendors suffer losses. Supply and demand are not working in Guyana’s agro market economy because of cost of production. Government must find a way to subsidize farming. There is a surplus of food especially vegetables and ground provisions; overseas markets are needed. Government has to find ways to help farmers to export food – perhaps through some arrangement with the airlines, which are flying very light over the last couple months at less than 50 percent capacity. Government could subsidize airfreight to New York and Toronto, where there is strong demand for all kinds of vegetables. Once the price is right, the diaspora would be attracted to Guyanese produce, which in turn would help to provide revenues to farmers in Guyana to sustain the economy as the nation awaits the oil funds.
Dr. Vishnu Bisram
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