Import Substitution: “Local Fruits And Veggies Can Feed Caribbean Economies”

Import substitution industrialisation (ISI) is a trade and economic policy that seeks to replace foreign imports with domestic production. According to 2012 estimates, the Caribbean imports 83 per cent of available food, on average (Dorodnykh). Replacing only ten per cent of imported fruits and vegetables with locally grown commodities in select countries in the region would conservatively save at least $33.3 million per year.

The Caribbean fruit and vegetable sector provides the greatest opportunities for foreign exchange savings and other economic benefits under an import substitution framework. Not only would this promote food and nutrition security, but it would also have positive health impacts. Ten percent import substitution of fruits and vegetables is expected to create at least 67,000 rural jobs, support rural communities and revive the region’s agriculture sector.

Dorodnykh suggests that on a regional level, ten per cent import substitution would benefit Trinidad & Tobago and the Bahamas most significantly. According to 2014 figures, Trinidad is one of the largest regional importers of extra-regional agricultural products. The Bahamas food import dependence ratio is 0.92, which is 21 percentage points above the regional average.

Many countries in the region have begun to incorporate import substitution strategies into their development paradigms. In January 2018, the Bahamas placed import bans on bell peppers and tomatoes in order to allow local supply to meet local demand. Saint Lucia partnered with Taiwan in 2020 for support in becoming self sufficient in key commodities.

Import substitution has played a major role in Saint Lucia’s economic strategy. According to Agriculture Minister Ezechiel Joseph, the country imports some $7 million in produce identified for the country’s Food Import Substitution programme; these are cabbage, lettuce, watermelon, cantaloupe, bell pepper, pineapple and tomato. Growth in production of these crops is being encouraged through incentives and technical support that are being facilitated through a partnership with Taiwan.

Barbados’ has received media attention for its well-crafted import substitution strategy. Minister of Agriculture and Food Security, Indar Weir, projects that the island’s food import bill can be slashed by reducing the imports of primary agricultural goods by 25% to 30% with an additional 10% each year thereafter under the government’s flagship farm development program, The Farmers Empowerment and Enfranchisement Drive (FEED). Produce identified under this programme include lettuce, onions, broccoli, cauliflower and an extensive variety of fruits.

In 2019, The Private Sector Organisation of Jamaica (PSOJ) argued that the solution to the volatility of the Jamaica dollar is through import substitution. According to Agricultural Economist, Donovan Stanberry, “the most worrying and disappointing aspect of [Jamaica’s] imports of plant-based foods relates to the importation of coconut products (US$8.2 million), coffee products (nearly US$2 million), cocoa products (US$10.3 million), and banana and plantain chips (US$9.2 million) – all products from traditionally strong export sectors that have declined significantly.”

The case of Jamaica is not unique. The displacement of locally grown products with imported foods is a problem that pervades throughout the region.

According to the Food and Agriculture Organization of the United Nations (FAO), “[This] not only has negative fiscal effects, but also social impacts, including loss of employment, decline in the general welfare of rural communities, neglect of rural infrastructure, and higher rural to urban migration causing increased stress on urban infrastructure and rising security concerns.” (2013)

In order to ensure the greatest economic impact, countries must be strategic in their choice of which produce to promote. From the perspective of crop selection, real economic impact would be felt through the substitution of potatoes, which comprise eight per cent of all imports to the Caribbean at a value of $54.5 million. (2012)

Another opportunity that exists is in the substitution of foreign-grown foods with indigenous foods. According to the FAO, cassava is a key food for substituting imports of wheat and corn in the region. This is particularly impactful as imports of wheat flour totalled $311 million in 2013.

Similarly, North American jams and jellies can be replaced with locally made guava jelly. Mangos could replace pears and peaches. The list goes on.

The significant role that the hospitality and tourism play in this paradigm must be highlighted. In Jamaica, for example, approximately 60 percent of food imports are supplied to the hotel, restaurant, and institutional (HRI) sector. This can be overcome. Tourism surveys show that tourists are ready to adapt to local versions of foods, once they are attractively presented and properly prepared.

The majority of Caribbean countries have been designated as net food importing due to their heavy reliance on imported foods. The decision put forward by CARICOM to replace a quarter of the region’s food import bill with increases in local production is expected to contribute positively to food and nutrition security, public health, community and agricultural development and employment.

Said CARICOM Chairman and Barbados Prime Minister, the Honourable Mia Mottley, “We believe that the people of the region, in the course of the next few years, can see a Caribbean that is committed to feeding themselves.”