Agricultural Trade and Production: Comparing Adjustment Support in the Caribbean

This paper contrasts agricultural adjustment support programmes in some of the French overseas territories (Martinique, Guadeloupe and French Guyana) under the Common Agricultural Policy’s (CAP) Rural Development Programme (RDP) with similar efforts undertaken in the Caribbean ACP region in the context of the Sugar Protocol Accompanying Measures (SPAM). The comparison underlines the fact that the SPAM programme is not sufficiently private sector owned and market oriented, an observation that questions its ability to answer adequately to the qualitative shift of the global market for agricultural products. Indeed, in order to respond to competitive challenges, the EU’s underlying approach consists of shifting agricultural production away from bulk, undifferentiated production towards high-value added, specialised agricultural products. Given this approach, specific, targeted policy instruments are increasingly being designed to ‘pump prime’ production and trade adjustments to attain the goal of a globally orientated, price competitive, high quality, high value EU food and beverage industry. Against this background, 3 sets of tentative lessons are developed for the EU SPAM support to ACP agricultural producers:

• The need for a coherent and integrated approach to meeting the agriculture and food sector adjustment challenges faced, based on a strategic vision of the future trends of the agricultural market. The approach to supporting market-led production and trade adjustments then needs to combine instruments which address human resource constraints, physical infrastructure constraints and marketing constraints on pro-active responses, with interventions combining both private sector-led and public sector-led initiatives. Such a market led orientation does not seem always evident in the SPAM annual action plans in the Caribbean.
• The need to engage with private sector in countries where sugar production is not state run, in order to get to grips with the requirements of the adjustment process. This would appear to require a re- definition of the role of the state away from directing developments towards facilitating necessary production and trade adjustments. This observation also suggests the need to strengthen the capacity of local producers associations, replicating ‘Axis 4’ of EU programmes of agricultural adjustment.
• The need to clarify rules on what can and cannot be supported in pursuit of the attainment of underlying objectives and who can and cannot receive support from the public purse for the implementation of activities designed to achieve these underlying policy objectives. This need for clarification is especially felt when it comes to directly financing private sector based production and trade adjustment measures consistent with broader public policy objectives.