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 Introduction
 Defining poverty and sustainable...
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 Economic growth and rural poverty...
 Implications for sustainable agricultural...
 Conclusion
 Reference






Group Title: International working paper series IW92-10
Title: Poverty reduction and sustainable agricultural development in the Caribbean
CITATION PAGE IMAGE ZOOMABLE PAGE TEXT
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00054796/00001
 Material Information
Title: Poverty reduction and sustainable agricultural development in the Caribbean the conflict and convergence dilemma
Series Title: International working paper series
Physical Description: 23 p. : ; 28 cm.
Language: English
Creator: Davis, C. G ( Carlton George ), 1936-
Publisher: Food and Resource Economics Dept., Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: 1992
 Subjects
Subject: Sustainable agriculture -- Caribbean Area   ( lcsh )
Rural poor -- Caribbean Area   ( lcsh )
Agriculture -- Economic aspects -- Caribbean Area   ( lcsh )
Genre: bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references (p. 22-23)
Statement of Responsibility: by Carlton G. Davis.
General Note: Title from cover.
General Note: "July 1992."
Funding: Electronic resources created as part of a prototype UF Institutional Repository and Faculty Papers project by the University of Florida.
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Bibliographic ID: UF00054796
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: aleph - 001750433
oclc - 26473698
notis - AJG3343

Table of Contents
    Title Page
        Title Page
    Introduction
        Page 1
        Page 2
    Defining poverty and sustainable agricultural development: A brief overview
        Page 3
        Page 4
        Page 5
    Defining the relationship between poverty and sustainable agricultural development
        Page 6
        Page 7
        Page 8
        Page 9
    Economic growth and rural poverty in the Caribbean
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
    Implications for sustainable agricultural development in the region
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
    Conclusion
        Page 20
        Page 21
    Reference
        Page 22
        Page 23
Full Text
i- -h 0/2-


IW92-10


POVERTY REDUCTION AND SUSTAINABLE
AGRICULTURAL DEVELOPMENT IN THE CARIBBEAN:
THE CONFLICT AND CONVERGENCE DILEMMA


by

Carlton G. Davis

IW92-10 July 1992


INTERNATIONAL WORKING PAPER SERIES


FOOD AND RESOURCE ECONOMICS DEPARTMENT
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida 32611







POVERTY REDUCTION AND SUSTAINABLE AGRICULTURAL

DEVELOPMENT IN THE CARIBBEAN: THE CONFLICT

AND CONVERGENCE DILEMMA*



Carlton G. Davis

(Food and Resource Economics Department, University
of Florida, Gainesville, Florida, 32611, USA)


INTRODUCTION


Poverty eradication or reduction is increasingly being

recognized as an important dimension of Third World economic

development. Also, with increasing attention being given to the

contemporary biospheric view of sustainable agricultural

development, there is seldom any dissent on the importance of both

poverty eradication/reduction and sustainable agricultural

development as vital constituents of social welfare gains. Despite

this movement towards some degree of consensus of opinion, Vyas

(1991, p2.) argues that ".. there is a discernible lack of clarity

on the nature of inter-relationship between rural poverty and

environmental constraints, which inhibit sustainable agriculture

and a good deal of confusion on how to tackle them simultaneously".



Paper presented at the Twenty First West Indies Agricultural
Economics Conference on, Sustainable Agriculture and Economic
Development in the Caribbean, Belize, Central America, July 14-18,
1992. This paper was written while the author was a Visiting
Professor in the Department of Agricultural Economics and Farm
Management, The University of the West Indies, St. Augustine,
Trinidad, during 1991-1992.







The major issues relating to the poverty reduction and

sustainable agriculture development nexus has to do with the

convergence or conflict questions on economic sustainability versus

environmental sustainability of present agricultural production

systems. It would appear that the increasing concern about the

agro-ecological or environmental sustainability of present mode of

agriculture stems from the two interwoven concerns: (1) increasing

population pressure on land resource base and (2) deteriorating

quality of the earth's resource, partly due to intensification of

agriculture (Vyas, 1991). Pomareda Benel (1990) argues forcefully

that within the context of the Latin American and Caribbean (LAC)

subregion: (1) rural poverty is a growing problem, and that little

is being done to attack its structural roots, and (2) an important

structural element of the increasing incidence of LAC rural poverty

is declining quality of human resource base and its growing

inability to cope with the challenges of living in a turbulent and

rapidly changing socio-economic environment, and growing

degradation of natural resources in rural areas.

This paper is an attempt to contribute to the debate by

examining and clarifying some of the key issues relating to the

question of the relationship between poverty reduction and

sustainable agricultural development, particularly within the

context of the Commonwealth Caribbean (Antigua and Barbuda,

Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica,

Montserrat, St. Christopher and Nevis, St. Lucia, St. Vincent and

the Grenadines, and Trinidad and Tobago).





DEFINING POVERTY AND SUSTAINABLE

AGRICULTURAL DEVELOPMENT: A BRIEF OVERVIEW


The Meaning and Measurement of Poverty

The concept of poverty in the general sense, and rural poverty

in the particular sense, is one which conveys a sense of an

individual's or group of individuals' command over financial

resources. Behrman (1990, p.28), defines poverty as "the limited

command over resources of individuals, often aggregated together

for many purposes -- including sharing of resources -- into

households or into other groups". The degree of an individual's or

households' command over resources is a function of factors,

including: (1) assets owned by the individual/households

(2) the prices for the use or sale of these assets (3) levels of

net transfers (money or in-kind) received by the individual/

households and (4) the price that individual/households must pay

for goods and services consumed (Behrman, 1990). FAO (1988, p.7)

defines poverty as "the incapacity to become inserted in the socio-

economic environment in a way that continually allows for the

satisfaction of basic necessities of life". The FAO uses the term

"poverty" and "marginality" synonymously, based on the argument

that the concept of marginality conveys a better sense of the

dimension of poverty as a form of being cut off from the main

stream of modern life (FAO, 1988, p.7).

There are a number of operational measures or indicators of

poverty. However, in many instances there are inconsistencies

among these indicators. The common feature is that poverty is

almost invariably defined in terms of some income threshold. FAO





(1988), in its attempt to highlight the marginalization process

associated with poverty status, used two related concepts of

economic deprivation destitution and absolute poverty.

Destitution is defined as that income level below which not even a

minimum food diet can be purchased. Absolute poverty is defined as

that income level below which a set of basic necessities cannot be

afforded. The World Bank (1990) has developed three operational

measures of poverty status among individuals. Two of these measures

appear to overlap with and provide specific income level thresholds

for the FAO destitute and absolute poverty concepts. The three

World Bank indicators are: (1) poverty status, (2) absolute

poverty status and (3) relative poverty status. Poverty status

persons are persons with less than $US 375 per year (at 1985

prices). In 1985 it was estimated that at least 380 million

persons worldwide fell in this category. Absolute poverty status

persons are persons with less than SUS 275 per year (at 1985

prices). The estimated number of persons worldwide in this

category in 1985 was about 663 million. Relative poverty status

persons are persons earning less that one-third of the national

average income of a country.

The World Bank's absolute poverty status appears to define the

FAO's destitute status, while the Bank's poverty status appears to

define the FAO's absolute poverty status. It is important to

recognize that poverty status is a dynamic phenomenon, with a time

component. As such, different categories of the poor are often

defined within two time-dependent dimensions: (1) the chronically

poor or chronic poverty status and (2) the transient poor or

transient poverty status. The chronically poor are those persons

4





who experience poverty for most, if not all of their lives, while

the transient poor are those experiencing poverty during specific

time periods. The transient poor can be subdivided into two

categories the cyclical poor, those experiencing poverty during

stages of the life cycle or at particular stage of the development

of the household (e.g elderly or children), and the seasonal poor,

those experiencing poverty during certain months of the year or

during natural disasters (FAO, 1988).


The Meaning of Sustainable Agricultural Development

No attempt will be made in this paper to undertake a

comprehensive discussion of the conceptual dimensions of the

sustainable agricultural development issues, since those dimensions

have being addressed in other papers presented at this conference.

The contemporary concept of sustainable agricultural development

owes much of its intellectual heritage to the 1987 so-called

Brundtland Report (World Commission on Environment, 1987) and the

1988 FAO Council definition (FAO, 1991). The Brundtland Report

defines sustainable development as, "development that meets the

needs of the present without compromising the ability of future

generation to meet their own needs". The definition adopted by the

FAO in 1988 is, "The management and conservation of the natural

resource base, and the orientation of technological and

institutional change in such a manner as to ensure the attainment

and continued satisfaction of human needs for present and future

generations" (p.3). Davis (1992) in his review of the conceptual

dimensions of the sustainable development issues, argues that the

concept is intrinsically process-based. He arrives at that





conclusion from the fact that the concept: (1) explicitly states

that a key necessary condition for the attainment of that state of

affair is constancy of the natural resource assets between

generations and (2) explicitly requires the setting in place of a

set of sufficient conditions for its attainment. Davis (1992, p.8)

defines sustainable agricultural development as "a process in which

a sector or subsector is on a trajectory of receiving increases in

desirable social objectives, without consuming such large

proportions of the energy of the eco-system, whereby the eco-system

is unable to regenerate itself continuously".


DEFINING THE RELATIONSHIP BETWEEN POVERTY

AND SUSTAINABLE AGRICULTURAL DEVELOPMENT


The poverty characteristics of a country or sector can have a

profound impact on the ability of that country or sector to attain

sustainable development. Panayotou (1992, p.355) places the

poverty-sustainable development nexus in a pragmatic context when

he argues that, "Developing countries that are struggling to escape

poverty and meet the growing aspirations of their still-expanding

populations find the concern for sustainability an added burden on

what is already a Herculean task". He poses a number of thought

provoking questions regarding the poverty sustainable development

issue. One such question is whether sustainability means Spartan

living by the current generation of the poor so the next generation

of the poor will have a better standard of living and if that is

the case, where is intergenerational justice. Another question is

whether sustainability means that future generations should be able

to enjoy the same level of poverty as the current generation and if

6





that is the case, why sustain poverty. He takes the position that

sustainable development, "is meant to benefit both current and

future generations. It is not simply a matter of temporal

tradeoffs and intergenerational transfers" (p.356).

Within the context of sustainable agricultural development as

defined in this paper, a position is taken which is similar to that

of Panayotou. Specifically, it is maintained that rural poverty

reduction (enhanced income position) is a key constituent of the

gains in the set of socially desirable objectives that are

forthcoming as the agricultural sector moves along a trajectory of

sustainable agricultural development. Furthermore, such enhanced

rural income positions (reduction in rural poverty) cannot from a

pragmatic point of view, be obtained without sustainable economic

growth and growth benefit distribution. This position is also

consistent with that of Vyas (1991,p.8), who argues that,"there

cannot be any doubt about the fact that without growth poverty

eradication will not be a practical proposition". In short,

economic growth is seen as the key conduit for rural poverty

reduction, and the latter is critical for the attainment of

sustainable agricultural development.

In suggesting an interactive functional process of economic

growth rural poverty reduction sustainable agricultural

development, the position explicitly reject the notion that

economic growth (or non-growth) must necessarily degrade the

natural resource capital stock. This argument was developed more

fully in Davis (1992, p.25) who concludes that, "it is the source

and patterns of certain factors that accompany either path which is

the cause of decline in environmental assets. These combined

7





factors reflect either market and/or policy failure". It should be

recognized that the effects of economic growth on poverty reduction

would vary with the structural conditions of each economy or

sector. As such, the particular type and combination of market and

policy instruments designed to counter market and policy failures

would have to be addressed within the specific context of the

economy or sector that is of concern. As a general observation,

however, it would appear that at a minimum, successful growth-based

rural poverty reduction initiatives require that the methods used

to reduce poverty be consistent with: (1) overall growth and (2)

security and participation in the gains of growth by the non-poor

as well. This type of economic growth is referred to as

"inclusionary growth" (Sheahan,1990). Sheahan (1990, p.40) argues

that, "Inclusionary growth requires combinations of intervention

directed toward structural change, active social welfare programs,

and simultaneous attention to private incentives and macro-economic

constraints".

In examining the relationship between rural poverty and

sustainable agricultural development, it might be useful to be

reminded of a central principle of the sustainable agriculture

development debate which unfortunately, is too often overlooked.

That principle is cogently articulated in Lipton's (1989, p.10)

statement that, "What needs to be "sustainable" is not a particular

form of farming, nor a particular use of this or that piece of

land. What has to be sustained is the capacity of people, country,

and the world to support decent livelihoods". Poverty status as

defined earlier, suggests the incapacity to sustainably support

decent livelihoods. In the context of sustainable agriculture

8





development issues, a growing proportion of poor persons are

located in rural areas either as limited resource farm owners or

landless farmers and farm workers. In the absence of inclusionary

growth strategies as defined by Sheahan (1990), but also inclusive

of micro-economic instruments to offset market and policy failures

(Miranda and Muzondo, 1991), poverty status could compromise the

integrity of agro-ecological systems.

One way that rural poverty can degrade the environment and

natural resource stock is via the pressures placed on private and

common rural property rights (Lipton, 1989). Land ownership and

land rental provide the basis for claims on private rural property

resources. Lipton (1989) argues that poor Third World rural people

are discouraged from making investment in long-term conservation of

private rural property resource by very high real interest rates

(25 50 percent) and that they find soil mining an appealing

alternative. By the same token, poverty and population growth

encourage degradation of common rural property resources. Common

rural property resources are "entitlement rights" by individuals or

groups to such things as fuelwood, water, grazing land or fishing

within a community. First, poverty increases the pressure of

entitled persons or groups to use up more common rural property

resources (e.g. intensification of grazing on communal lands).

Second, the number of poor persons or groups exercising entitlement

rights to common rural property resources within a community is

increased by population growth. Third, population growth also

increases the number of poor persons or groups in areas adjacent to

a particular community, thereby putting pressure for these groups





to encroach on common rural property resources to which they are

not entitled.


ECONOMIC GROWTH AND RURAL POVERTY IN THE CARIBBEAN


The FAO (1988, p.81) analysis of rural poverty in Latin

America and the Caribbean concluded that the major factors

contributing to relatively high poverty incidence among rural

inhabitants are: (1) the dichotomy characterizing the agricultural

sector in most countries, which is a consequence of the development

model adopted1, (2) financial adjustment, resulting from large

foreign debt, which has forced reduction in capital investment for

economic and social activities in rural areas, (3) government

policies which have not always been to the advantage of

impoverished groups and (4) overall deterioration of rural areas,

which has led to a high rate of unemployment and migration to the

cities. The study concludes that these factors are matters which

must be addressed in order to combat poverty. It further suggests

that a strategic approach," ...must not only be based on equity and

social justice, but on the need to step up economic growth in the

region" (p.81). The FAO (1988) study offers strong empirical

support to the argument that rapid and sustained economic growth is

critical to rural poverty reduction and sustainable agricultural

development. Within this context, we find it useful to examine some

of the available data on the economic growth performance and rural

poverty characteristics of Caribbean economies.



1 For a discussion of this factor as it relates to the
Commonwealth Caribbean countries see Davis (1992).

10




Table 1 presents an overview of selected socio-demographic

characteristics of Caribbean economies over the 1980-1989 period.

Table 2 shows the rural poverty characteristics of three CARICOM

countries (Grenada, Jamaica, Trinidad and Tobago) and two non-

CARICOM countries (Haiti, Dominican Republic) for the year 1980.

The 1980 time period and the selected Caribbean countries are those

for which comparable data are available. According to Table 1 the

aggregate annual real growth rate in GNP were positive in 9 of the

12 countries for which data are available, and negative in 3 of the

12 countries. The range in aggregate annual real growth rate in

GNP varied from a high of 6.8 per cent in Antigua, to a low of -6.0

percent in Guyana. The pattern exhibited in annual real growth rate

in per capital GNP was similar to that of the aggregate annual real

growth rate, since the per capital figure is simply an adjustment

for population change. However, the range in the per capital real

growth rate figures varied from a high of 6.6 percent in St.

Christopher and Nevis to a low of 7.3 percent in Trinidad and

Tobago. The average annual real growth rate in aggregate GNP and

the average annual real growth rate in per capital GNP was 2.7

percent and 1.6 percent, respectively for the twelve countries.

These low to negative growth rates would most likely have a

more far-reaching impact on the agricultural sectors of those

countries in which agriculture's share of GDP is relatively high.

These countries are: Belize (19 percent), Dominica (31 percent),

Grenada (21 percent), Guyana (25 percent), St. Christopher and

Nevis (10 percent), St. Lucia (16 percent), and St. Vincent and the

Grenadines (20 percent). These relatively low real growth rates of

Caribbean economies are of direct relevance to the issue of rural

poverty reduction in the region. Empirical evidence suggests that




the "trickle down" or "spread effect" of economic growth on poverty

reduction is significant when at least one of two conditions are

present. These conditions are: (1) a very high rate of real growth

in the economies (8-10 percent per annum) or (2) the existence of

some asset base among the poor (Vyas, 1991; FAO, 1988). In the

case of the Caribbean, the data suggest that condition (1) does not

exist and there are questions about the existence of condition (2)

in light of the increasing impoverisment of the rural economies

(FAO, 1988).

Table 2 provides some general overview of the 1980 rural

poverty incidence or concentration for the region. For the three

English-speaking countries for which data are available, the

incidence of rural poverty varies from a low of 25 percent in

Grenada to 51 percent in Jamaica. Trinidad and Tobago registered

a 40 percent rural poverty incidence. The source of the data (FAO,

1988) points out that rural-urban differences are quite blurred in

the English-speaking Caribbean. Haiti registered the highest rural

poverty incidence, where it reaches 95 percent of the total rural

population. It is interesting to note that the incidence of rural

poverty in the total population was closely comparable to the

incidence of poverty in the rural population in the case of Grenada

in the English-speaking Caribbean. However, in the case of Jamaica

and Trinidad and Tobago there was significant divergence between

the two sets of estimates. The poverty incidence estimates for

rural poverty in the total population was 25 percent in Jamaica and

34 percent in Trinidad and Tobago. The 80 percent rural poverty

incidence in the total population again places Haiti at the top of

the list of poor countries in the region.





TABLE 1: SELECTED SOCIO-DEMOGRAPHIC CHARACTERISTICS OF CARIBBEAN
ECONOMIES, 1980-1989


Coun- Real Popu- Real Agri- Daily Life
try Growth lation Growth culture's Calorie Expec-
Rate Growth Rate Share in Per tancy
in Rate in GDP Capita
GNP Per
Capita
GNP

1980-89 1980-89 1980-89 1989 1988 1989


Percent Calories Years

Antigua
and
Barbuda 6.8 0.4 6.4 6.0 2,222 73

Bahamas 4.2 1.9 2.3 NA 2,678 68

Barbados 1.8 0.3 1.5 7.0 3,228 75

Belize 3.2 2.8 0.4 19.0 2,649 67

Dominica 4.6 1.4 3.1 31.0 2,877 75

Grenada 5.9 0.8 5.6 21.0 2,979 69

Guyana -6.0 0.6 -6.6 25.0 2,373 64

Jamaica -0.4 1.3 -1.7 6.0 2,572 73

Montserrat N.A. N.A. N.A. N.A. N.A. N.A.

St.Christopher
and Nevis 5.6 -0.9 6.6 10.0 2,801 69

St. Lucia 6.6 2.0 4.5 16.0 2,821 71

St.Vincent and
Grenadines 6.0 1.1 4.8 20.0 2,818 70

Trinidad and
Tobago -5.6 1.7 -7.3 3.0 2,960 71


NA = Not available

Source: World Bank (1990). The World Bank Atlas 1990.
Washington,D.C. : World Bank, pp 6-9.





TABLE 2. RURAL POVERTY CHARACTERISTICS FOR SELECTED CARIBBEAN
COUNTRIES, 1980


Coun- Rural Rural Total Total Total Rural
try Poora Destitute Rural Rural Rural Poor
Popul- Poor Des- As
ation titute Prop-
ortion
of
Total
Popul-
ation

Percent Thousands Percent

Grenada 25.0 9.0 104 26 9 24.0

Jamaica 51.0 N.A 1,090 556 N.A 25.0

Trinidad &
Tobago 40.0 N.A 940 410 N.A 34.0

Haiti 95.0 86.0 4,381 4,162 3,768 80.0

Dominican
Republic 75.0 N.A 2,751 2,063 N.A 36.0


aDefinitions of these terms are discussed in the text

N.A. = Not available

Source: FAO(1988). Potentials for Agricultural and Rural
Development In Latin America and the Caribbean: Annex II
Rural Poverty. Rome, Table 2.4, p.14.


The general picture of the English-speaking Caribbean rural

poverty situation, is one of significantly lower levels than the

majority of Latin American and Central American countries.

Nevertheless, the levels are unacceptably high in the larger

countries of Jamaica and Trinidad and Tobago which experienced

earlier winfall revenues from their mineral sectors. However, the

non-growth to negative-growth performance of the agro-economies of

CARICOM countries in the last fifteen years (Davis, 1992), plus the

potential for further negative economic shocks associated with

14





global economic changes and structural adjustment conditionalities,

provide cause for concern regarding rising rural poverty levels in

the region.


IMPLICATIONS FOR SUSTAINABLE AGRICULTURAL

DEVELOPMENT IN THE REGION


The Caribbean is confronted with what would appear from a

cursory assessment, to be a fundamental economic conflict between

on one hand: (1) finding an optimal developmental path directed at

the attainment of sustained high growth rates in rural incomes, and

associated reduction in rural poverty levels and on the other hand

(2) charting simultaneously, an optimal development strategy in

which their natural resource stocks are exploited at the scale

consistent with their regenerative capacity over time. It is argued

however, that an indepth assessment of the sustainable agricultural

development issues would suggest that such an apparent conflict

could in fact be illusory. Instead, the potential for a high level

of convergency between the two paths might be an analytically

correct assessment of the issues. The extent to which the potential

for convergency of the two paths might be realized is to a large

extent, a function of: (1) the choice or selection of the

sustainable agricultural development strategy, (2) the source and

pattern of the market and or policy failure spin-offs that might

accompany the development strategy selected, and (3) the

effectiveness of the attempts to mitigate the effects of market and

or policy failures by the establishment of new or recalibrated

micro-economic and macro-economic policy instruments.






Davis (1992) points out that the Caribbean appears to have

opted to pursue the interactive economic growth, rural poverty

reduction, agro-ecosystem sustainability challenge, via a strategy

of agricultural diversification. It should be recognized, however,

that the agro-ecological sustainability concern is a relatively

recent dimension of Caribbean agricultural diversification planning

and implementation strategy. The recency of the concern, and the

dialogue on this dimension is reflected in part by the conspicuous

absence of scholarly presentations on the subject at the Nineteenth

West Indies Agricultural Economics Conference, held in St. Kitts

and Nevis in 1988. The issues of environmental, productivity and

income sustainability only surfaced in summary statements of

critical issues arising from discussions during the course of the

conference (Pemberton, 1990, p.188). Davis (1990) argues that

conceptually, Caribbean agricultural diversification strategies can

be viewed in terms of the form and the function dimensions of the

effort. He defines form to include, "the shape, structure,

characteristics or configuration of the diversification effort"

(p.30). Function is defined as, "the specific mode of action by

which the diversification strategy fulfills its purpose" (p.31). He

identifies the three critical functional elements of Caribbean

agricultural diversification efforts as: (1) intensification of the

product of traditional crops by increased productivity and by

adding value through processing, (2) increased production of non-

traditional crops for national and regional consumption and (3)

increased production of non traditional crops for export to

extra-regional markets.





These three functional elements are suggested by Demas (1987)

as keys to the attainment of broadly-based production structures

and competitive production in the region. He argues that in

attaining this type of production structure the following

diversification objectives or goals would be met : (1) regional

food security, (2) foreign exchange savings and earnings, (3)

employment generation, (4) creation of production linkages and (5)

utilization of under-utilized resources. Given the fact that the

Caribbean has selected agricultural diversification as the

developmental strategy for attaining sustainable agricultural

development, two key questions that are directly relevant to the

potential for convergency of the high economic growth/poverty

reduction path and the natural resource sustainability path are:

(1) what are some of the sources and patterns of market and or

policy failures that are likely to accompany such a strategy?, and

(2) how can the effects of these types of failures be mitigated?

The key determinants of potential market and or policy

failures that are likely to accompany a drive towards high and

sustained economic growth rates with sustainable natural resource

assets are: (1) the nature of the growth path, (2) the source and

pattern of increased agricultural sector productivity and (3) the

level of efficiency and the avoidance of waste in resource use and

allocation within the agricultural sector. It is imperative that

the growth path to sustainable poverty reduction and sustainable

agricultural development passes through an undistorted,

competitive, and well- functioning market. Panayotou (1992), argues

that the prevailing configuration of markets and policies results

in dissociation between scarcity and price, benefits and costs,

17





rights and responsibilities, actions and consequences. Under the

configuration of existing markets (factor and product), within

which the agricultural diversification strategy is to be

implemented, many resources might actually be outside the domain of

the markets. In essence, the market configuration acts as a subsidy

by the general taxpayers to the excessive use, waste, inefficient

allocation, resource depletion and developmental degradation of

these extra market resources. Tax transfers prevent resource

prices from rising in line with growing resource scarcity and

rising social costs. As such, they dilute the cost of increasing

resource scarcity and foster the types of "dissociations" which are

the basis of market and or policy failures.

The tendency of market configuration to generate these

"dissociations", can be comprised by institutional reforms and

policy intervention mechanisms. Panayotou (1992, p.357) argues

that, "A market failure is nothing but a policy failure, one step

removed". As such, Caribbean agricultural diversification strategy

must give high priority to policy mechanisms that addresses the

following areas: (1) elimination of direct and indirect subsidies,

giveaways, and public projects that promote environmental

degradation, (2) ensure that the cost of environmental degradation

is borne by those who generate the degradation and derive the

benefits, rather than by the general taxpayers, (3) develop the

appropriate institutions for the efficient functioning of

environmental and resource markets (i.e security, enforcement and

transfer of property rights), (4) create and ensure market-based

economic incentives and disincentive structures to internalize





externalities and mitigate other market failures and (5) subject

public projects to rigorous scrutiny and environmental assessment.

With respect to the source and pattern of agricultural sector

productivity gains, the challenge to Caribbean agricultural

diversification strategy is to develop and implement a technology

policy that will increase the productivity of natural resources

during the current time period, and simultaneously preserve their

quality, under conditions of severe financial and human capital

constraints. It should be recognized that the orientation of

agricultural technology practices is not neutral with respect to

either the incidence of rural poverty or the level of environmental

degradation. Current agricultural technology practices are heavily

oriented toward increases in productivity (in terms of yields) of

crop and livestock systems, via chemical intensive energy (such as

chemical fertilizers, pesticides and fungicides). Little attention

is given to the development and adoption of resource management

agricultural technology practices that would generate sustained

increases in productivity, with decreasing dependency on chemical

energy. Some of the non-chemical sources of energy are, organic

fertilizers, solar energy, biomass energy, and human energy.

Failure to develop and adopt a sustainable economic growth and

development oriented resource management and technology policy,

could place Caribbean agricultural diversification strategy at risk

of neither reducing poverty nor attaining sustainable agro-

ecosystems. Pomareda Benel (1990) argues that commodity-oriented

chemical intensive technology attempts to indirectly increase the

marginal productivity of rural labour by the displacement of labour

from rural areas. This is accomplished by the substitution of

19





chemical energy (such as herbicides) for human energy. This

technology orientation is directly related to the level of rural

poverty, since it could generate increased levels of unemployment

and impoverishment. He goes on to point out that, The

complementarity between human and non-human energy is a key element

in the sustainability of agriculture" (p.6). Caribbean

agricultural diversification strategy must include a resource

management and technology policy that will substantially increase

the amounts of energy provided by non-chemical sources. This type

of technology policy, when used in harmony with other measures to

negate market and or policy failures, are more likely to bring

about convergence between increased real incomes, rural poverty

reduction, and environmental asset sustainability.


CONCLUSIONS


Caribbean economies are confronted with the urgent task of

finding development strategies that would address the interrelated

problems of: (1) low economic growth rates, (2) increasing rural

poverty and (3) non-sustainability of the agro-ecological systems.

The region has opted to pursue the tripartite problems via an

agricultural diversification strategy, which includes maintenance

and enhancement of production and value of traditional export

commodities, and simultaneously initiating and or increasing the

production and value of alternative commodities.

It is argued that rural poverty reduction and sustainable

agricultural development are converging objectives, and that

sustained high rates of economic growth are the conduit for the

attainment of convergency. The notion is rejected that rapid

20





economic growth (or non-growth for that matter) is the cause of

environmental degradation and ultimately unsustainable

agro-ecosystem. Instead, it is the source and pattern of market

and or policy failures, and the orientation of the agricultural

technology practices that are impediments to convergence of high

growth rates, effective rural poverty reduction, and sustainability

of the regenerative capacity of the agro-system. In pursuing an

agricultural diversification strategy of sustainable agricultural

development, Caribbean economies must pay close attention to and

put in place those market, policy, technological and institutional

mechanisms that. will ensure convergency of developmental

objectives.





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