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Government’s million $ question – pump money in, or step away

EditorialGovernment’s million $ question – pump money in, or step away

During the recent standoff between the largest cane farmer association, BSCFA, and BSI, which is majority-owned by the giant American company, American Sugar Refining, Inc. (ASR), BSI’s Director of Finance, Shawn Chavarria reminded the government that sugar is the only big agro-industry in the country that is in full sail at this time. Belizeans know the importance of the sugar industry, and every ear was tuned in to the meetings until there was a truce and the milling season got underway in full.

The agreement is only for two years. If the parties can’t find consensus on some critical differences during that time, they might lock horns again. While all were happy to see everyone at work, moving in the same direction in the industry, some questioned how the difference was resolved, particularly the usage of public funds to get farmers to sign the agreement. But, if any sin was there, it is venial. Governments all over the world use public funds and special legislation to support private businesses when they are in distress because, while the profits from private businesses go into the pockets of the shareholders, when they fail countries suffer economic collapse.

Last week, Agriculture Minister, Hon. Jose Mai shared with the nation the state of the other two backbone agro-industries, bananas and citrus. The report on the former wasn’t the best, and the latter, citrus, things are going so poorly in that industry that the Minister suggested that abandoned orchards might best be planted out with oil palms, a tree that has never been grown commercially in Belize. Farmed shrimp isn’t even being mentioned these days, the heyday of that industry, which was brief, ending over a decade and a half ago.

All governments wrestle to find solutions when industries are struggling. When the problem is extremely difficult to surmount, governments have to decide if they should pump in more money, or step away. No private entity takes off without major support from government, and when private businesses encounter difficult times, government has to decide on the extent of the support it will give.

Bigga circus than this kom an brok up da Belize. In the last century, our first banana industry, our first coconut industry, a farmed shrimp industry, a cacao industry that was heavily dependent on pesticides and chemical fertilizers, were major industries that experienced collapse; and minor industries such as cohune oil extraction, pine resin extraction, trawling for marine shrimp, and papaya production had to close shop.

Our present banana industry started in South Stann Creek in the 1970s with the introduction of Grand Nain (a variety of banana from the subgroup called Cavendish) which was tolerant to the Panama Disease that forced farmers to give up their Gros Michel plantations in the 1930s. Minister Mai pointed to climate change factors and the high price of imported chemical fertilizer as causes for the severely reduced production. Grand Nain is a very productive but fragile banana. Unfavorable weather and reduced fertilization of the fields (because of the price) led to an increase in leaf spot disease (Sigatoka), which led to the decrease in the production of marketable fruits. Fortunately, the price of imported chemical fertilizers is decreasing, but it will still take some effort, major financing over some months, to get the banana fields producing at old levels.

Banana growers could do with some luck. A deadly new strain of Panama Disease, Tropical Race 4 (Panama Disease TR4), was detected in Columbia in 2019, and this fungus could wipe out plantations in Belize if it reaches our soils. In 2023, QUT—Queensland University of Technology in Australia—announced that it had produced a genetically modified (GM) Cavendish banana that “had proven to be highly resistant to Panama Disease TR4”. But not everyone will be excited about eating a GM banana.

We don’t only depend on bananas for critical foreign exchange. Bananas are particularly nutritious, affordable on the local market, and the industry played a critical role in helping us through the Covid-19 pandemic.

Worldwide, the citrus industry has been in decline going on two decades because of the disease called Citrus Greening. Data from the Statistical Institute of Belize show that in 2013 Belize earned $114 million from citrus exports, and in 2022 that had fallen to $39 million. The number of bearing citrus trees in Florida is 50% of what it was in 2004, largely because farmers have cut down trees because of the disease. Some large farmers in Belize and a group from Jamaica have expressed interest in planting bamboo in the Stann Creek District, some of it on lands that once produced the best oranges and grapefruits in the world. And now Minister Mai is talking about oil palm.

Across the globe, some citrus farmers are holding on, and what is emerging is that hardy citrus is becoming a crop only for the biggest farmers, those ones who can afford the chemical inputs and practices that are now necessary to get sustainable production. Successive governments have pumped money into citrus, and maybe we need to pump in more. Bailout funds could help both small and big farmers stay in the industry. Citrus has been vital to our economy for over six decades. We are dependent on the foreign exchange the industry brings in, and citrus fruits are essential for our health.

Industries rise and fall, come and go, and the task is for the government to know when to hold on, and when to let go. History suggests that our governments have been too eager to give up on such industries. According to a 2008 7News report, Williamson Industries, the clothes-making factory which shuttered that year, had 700 employees at its peak. According to the Amandala, the company’s demise in Belize came about not because our workers weren’t producing quality clothing, but because the company had found workers in other countries who were willing to work for less pay. Textbook economists might argue that the story there is simple market reality. But could our government have found creative ways to keep the workers happy and so keep those jobs here?

In the early part of this century the farmed shrimp industry, led by Nova Shrimp Farm in Ladyville, had risen to the status of number one as a foreign exchange earner. The dream of one of the industry’s earliest investors, Keith Jackson, an American, that shrimp become as common as chicken on tables on Sunday, seemed to be on the verge of being realized. But in the midst of Nova’s expansion, a virus was introduced to the ponds and, simultaneous with plummeting production, the industry was faced with depressed prices.

The government of the day didn’t support Nova in its distress, even though the company hired up to a thousand workers at peak time and had shown such great promise. Some experts in the industry insist the farm, with its semi-intensive production system, could have survived.

And where are the children of the workers who lost their jobs when the government decided to let Williamson Industries and Nova Shrimp collapse? It is our great fortune that another boom industry, the call centers — Business Process Outsourcing (BPO)—was about to explode in Belize. But there are not enough call center jobs to absorb the blows if the government left the citrus and banana industries to fail.

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