The agriculture sector continues to be a sector of great importance for Grenada, despite its declining share of gross domestic product (GDP) relative to tourism, for example. The major strengths of the sector are its ability to contribute to income at the level of the working class, and the important multiplier effect that it lends to households and the economy in general. Grenada used to produce bananas in significant export quantity in the 1990s, but it has always had a greater comparative advantage in spices and cocoa (hence its fame as the ‘Spice Isle’), and this remains the case today. Accordingly, the agriculture component of the NES 2017–21 will focus on the specific niche markets in which there is a strong world demand and Grenada already has – or can easily create – comparative advantage. In the process of strategy development, the following sub-sectors were identified: cloves, cinnamon, soursop and cocoa. Along with nutmeg, for which a specific strategy already exists and which will therefore not be focused on in the new NES, these products represent the new area of comparative advantage for Grenada in the agriculture sector.
Fisheries constitute another important area of growth opportunities for the Grenadian economy. Grenada’s fish production and exports are quite strong relative to its Organization of Eastern Caribbean States (OECS) neighbors, and the country enjoys the distinction of being the only country in the OECS with a recognized competent authority for fish exports into the European Union (EU). In addition to its own individual performance in the world market, Grenada is therefore positioned to become a processing center for fish exports destined to both Europe and the USA.
The next section analyses the export performance of the agriculture and fisheries sector and sub-sectors in some detail, and is followed by value-chain and SWOT analyses of the sector and sub-sectors. These analyses form the basis of export policy and strategic considerations to be implemented for agriculture and fisheries, including specific interventions needed at the sub-sector level.
Table 1 Value and Volume Of Fish Exports, 2011 and 2014
While exports of agriculture and fishery products show the more promising prospects for Grenada, it must also be noted that these exports declined slightly in 2015 relative to 2014. It is consequently important to determine which products are good performers and which might be in decline at this stage, so that the sector’s export strategy can be focused and effective.
Recent trends in the fisheries sector show that while exports of fish have increased in volume terms, overall export value has declined – that is, the price per kilogram (kg) of fish has declined in major markets. The value of Grenadian fish exports for 2011 was some EC$14.4 million compared with EC$8.8 million in 2014, yet the volume of fish exports in 2011 was 587,008 kg compared with 693,037 kg in 2014 (see Table 1). It emerges that Grenada received an average export price of EC$24.49/kg of fish in 2011 compared with EC$12.68/kg in 2014.
Examining the date more closely, based on fish types as identified by the Harmonized System of Commodity Classification code (HS code), reveals that Grenada exported a larger volume of high-quality fish (HS 03034290) in 2011, the price of which increased in 2014. However, in 2014, significant volumes of low-quality fish (HS codes 03034190, 03023290, 03023210 and 03026990) were being exported relative to the high-quality fish; hence, the overall decline in export revenue.
In developing the export strategy for fisheries, it is therefore important that attention be given not only to increasing overall fisheries export volumes but also to a focused intervention that increases export volumes in the desired segment of the fisheries sector – that is, primarily HS code 03034290 rather than varieties such as HS codes 03023290 and 03021900, which attract a very low export price.
Nutmeg (HS code 09081000) has been experiencing a decline in export revenue owing to a decline in price between 2011 and 2014 (see Table 2). In 2011, Grenada exported 426,282 kg of nutmeg, grossing approximately EC$16.1 million in export revenue, compared with 450,640 kg in 2014, grossing approximately EC$14.7 million in export revenue. However, the average price of nutmeg declined from EC$37.82/kg in 2011 to EC$32.53/kg in 2014 – that is, by approximately 14 percent.
Nonetheless, it appears that another form of nutmeg (HS code 09081100) attracted a slightly better price of EC$34.54/kg in 2014 than the traditional variety (HS code 09081000). Accordingly, 15,003 kg of that nutmeg was exported in 2014, generating EC$518,262 in export revenue for Grenada. Long-term trend data were not available at the time of research to establish any predictions about this product, but the fact that the alternative variety sells for a better price than the traditional variety suggests that the nutmeg export strategy should focus on this newer variety going forward.
Table 2 Value and Volume of Nutmeg Exports, 2011 and 2014
Table 3 Value and Volume of Cloves Exports, 2011 and 2014
Grenada exports cinnamon in two forms: as an unprocessed product (HS code 09061100); and as a crushed or ground product (HS code 09062000). The lion’s share of exports of cinnamon in both volume and value terms in 2011 was the crushed or ground variety (see Table 4). However, the demand for unprocessed cinnamon seems to be growing much stronger than that for processed cinnamon, with the price of unprocessed cinnamon surging from EC$14.62/kg in 2011 to EC$26.95/ kg in 2014 – that is, by approximately 84 percent – and export revenue increased from EC$6,154.21 in 2011 to EC$37,551.15 in 2014.
By contrast, the price for ground or crushed cinnamon increased from EC$37.42/kg in 2011 to EC$39.98/ kg in 2014 – that is, by approximately 6.8 percent. Corresponding export revenue for crushed or ground cinnamon decreased from EC$64,601.36 in 2011 to EC$38,899.11 in 2014, because of significantly reduced export volumes in 2014 relative to 2011. Therefore, from the point of view of the export strategy, the focus should be on further development and marketing of the unprocessed cinnamon, because there is a much stronger market demand for that variety.
Table 4 Value and Volume of Cinnamon Exports, 2011 and 2014
Soursop (HS code 08109040) is a non-traditional export for Grenada but has seen the strongest rise in demand between 2011 and 2014 (see Table 5). This resulted in the product’s export revenues surging from EC$58,440.15 in 2011 to EC$1,713,601.00 in 2014. Export volumes also increased significantly, from 22,505.87 kg in 2011 to 190,268.81 kg in 2014.
The demand for this product is likely to be sustained into the near future, because scientists have recently discovered its beneficial properties for a variety of sicknesses, potentially including cancer. Grenada would, therefore, do very well to prioritize soursop high on its agenda for exports of agricultural products.
Table 5 Value and Volume of Soursop Exports, 2011 and 2014
Cocoa (HS code 18010010) has been a traditional export from Grenada for several decades, but its performance in world markets between 2011 and 2014 is not encouraging (see Table 6). The price of cocoa collapsed from EC$9.68/kg in 2011 to EC$4.89/ kg in 2014 – that is, by approximately 50 percent. Grenada’s export revenue from cocoa grew from approximately EC$6.4 million in 2011 to EC$8.0 million in 2014, but this required more than a twofold increase in the volume of cocoa exported, from 659,829 kg in 2011 to 1,654,722 kg in 2014. Accordingly, if this trend were to be maintained, cocoa would not offer great prospects for Grenada going forward.
Table 6 Value and Volume of Cocoa Exports, 2011 and 2014
The export strategy for the agriculture and fisheries sector aims to effect significant growth in production and exports of the agriculture sector, based upon the products analyzed earlier and is based on the following factors.
The levers of export strategy (perspectives) In terms of the four levers of export strategy (perspectives) outlined above, we can summarise the overall issues facing the agricultural sector as follows.
- 'Behind the border’ issues
- Small-size firms (except for soursop, where some structure exists)
- Destruction of large quantities of nutmeg and cloves after recent hurricanes
- Antique farming methods (semi-mechanized agriculture, with some technology)
- Vulnerability to natural disasters and hazards in general
- Low culture for product clusters (but improving for some products)
- ‘Beyond the border’ issues
- Necessity of Hazard Analysis and Critical Control Point (HACCP) certification for all identified products
- Absence of strategic partnership between production and marketing
- Inadequate information and systems of grading crops
- Inability to produce to the requirement of market, especially in terms of size, quantity, etc.
- Limited capacity to meet documentary requirements for the USA
- ‘At the border’ issues
- Lack of refrigeration for transport and facilities at ports
- Lack of reliable and cost-effective transport to market
- Insufficient development of irrigation facilities
- Development issues
- Mismatch of skills available in rural communities with those needed in other sectors
- Seasonality of employment for production of most crops
- Low level of integration in most value chains
The GoG has prioritized agriculture as a sector with great potential since it developed the NES 2006–11 and it continues to do so. Based on the analysis undertaken in the development of the new NES 2017–21, and particularly having regard to the sub-sectors, it is recommended that the export strategy for agriculture focuses on the following priority areas.
- Development perspective considerations
- Prioritize the training of the labor force to align its skills with the demand in the sector. (This is especially important for the sub-sectors analyzed.)
- Focus the skills-building effort on activities that will lead to further integration into the product value chains.
- Encourage farmers to undertake more initiatives for the formation of associations for production of identified crops.
- ‘Behind the border’ considerations
- Encourage farmers to introduce newer technologies for the production of crops.
- Diversify product offerings at the level of individual crops.
- Stimulate investment in the sector by encouraging partnerships between farmer associations in Grenada and potential product buyers abroad.
- Promote exchange programmes between Grenada and countries in which there are good practices for producing specific crops.
- ‘At the border’ considerations
- Invest in refrigeration facilities for use on farms, on trucks and at points of storage for certain crops.
- Create alliances with shipping lines and air cargo services to facilitate movement of goods from Grenada to export markets.
- Continue to implement trade facilitation measures to speed up the flow of exports from Grenada.
- Train farmers in specific areas of quality and standards required for destination markets.
- ‘Beyond the border’ considerations
- Undertake awareness-building campaigns with farmers about opportunities for export of goods into overseas markets under various trade agreements.
- Arrange trade shows at which farmers or their representatives can interact with buyers of their products.
- Create an online portal through which information about markets, opportunities and conditions can be made available to farmers.
- Develop export action plans and roadmaps for each target product.
At the level of the agricultural sub-sectors, the following strategic considerations are proposed in addition to the overall policy and strategy.
The issue of increasing Grenada’s production and export of soursop has been discussed and analyzed in detail by the GoG, resulting in a paper entitled A Strategic Vision for the Commercialisation of Soursop in Grenada using the Value–chain Approach1. The strategic actions proposed for the sub-sector are based upon the issues identified and recommendations made in that publication.
- Strengthen the National Committee on Soursop Commercialization by means of increased participation of critical stakeholder representatives, such as the IICA, Caribbean Agricultural Research and Development Institute (CARDI), NEFO, the Ministry of Economic Development, Planning and Trade (MEDPT), an agro-processor, a large farmer and traffickers.
- Retrain extension officers and farmers in soursop production technologies using the farm field school methodology.
- Undertake institutional strengthening of the farmers’ organization (s) by means of offering technical assistance to NEFO.
- Develop a five-year soursop industry plan, to include:
- specific annual targets
- a soursop production guide
- a soursop propagation guide, detailing (among other things) the characteristics for the selection of superior planting materials and procedures for good nursery practices
- guidance on the marketing and promotion of soursop and soursop products.
- Establish a National Research and Development Committee to include: a MALFFE agronomist; a MALFFE plant protection and quarantine specialist;a MALFFE agronomist specialising in condiments and spices; an extension representative; a CARDI representative; an IICA representative; a representative of the Bureau of Standards Grenada;and a representative from the Produce Chemist Laboratory.
- Strengthen systems for post-harvest management and improvement.
- Engage in market research into existing and new markets, and into perfecting existing products and the development of new products for medicinal purposes, food and biocides.
Figure 1 Soursop Sub-Sector Value Chain
- Increasing Grenada’s production and exports of cinnamon will require the following strategic interventions.
- Given that the product possesses some skin-sensitizing properties, it is important that research be undertaken – or existing research adopted – to address potential allergic reactions to the product among consumers in export markets.
- There are currently limited incentives to farmers and other stakeholders for value addition in relation to cinnamon. Provide farmers with incentives for the purchase of inputs, as well as assistance with labour supply to undertake to harvest of the product.
- Encourage farmers to undertake more value- addition activity in Grenada, including the processing of oils to create final-use products for the various areas of demand in the export markets in both the food and perfumery sectors. This may require partnerships between Grenada farmers and foreign companies with knowledge of the demand in specific markets.
- Given the growing demand for the product in Europe, encourage farmers to consider and aggressively pursue the creation of alliances with European firms and to leverage the benefits under the Caribbean Forum (CARIFORUM)–EU Economic Partnership Agreement (EPA) to secure greater market presence.
Increasing Grenada’s production and exports of cloves will require the following strategic interventions.
- Given that the process of growing cloves is very labor-intensive for farmers, the GoG should consider granting a special exception for labour imports from other CARICOM regions that would participate exclusively in this sector.
- It is necessary to employ skilled labour that is not generally easily accessible in Grenada. Again, the GoG should granting special exception to employment policy and allowing skilled labour specific to that sector to be readily imported into Grenada.
- Given that the delicate nature of plants leads to an inability to quickly regenerate after harvest, there is a need to plant various cycles of cloves at different gestation stages such that while some plants are recovering from harvest, others are becoming available and still others are at embryonic stages, thereby ensuring a continuous availability of the product for processing and export.
Figure 2 Cloves Sub-Sector Value Chain
According to data available from stakeholder consultations, the value chain for cocoa is as illustrated in Figure 3:
Figure 3 Cocoa Sub-Sector Value Chain
- It costs about EC$2.65 to produce 1 lb of cocoa. Farmers add a profit margin of around EC$3.75 and sell to Grenada Cocoa Association (GCA) handlers for about EC$6.40/lb.
- GCA handlers have two channels through which they can get cocoa to the end-user:
- they can sell directly to traders after adding EC$5 in value for a price of EC$11.40/lb; or
- they can sell directly to chocolate manufacturers after adding EC$5.25 in value for a price of EC$11.65/lb.
- Traders will add a value of EC$6 and sell to chocolate manufacturers for EC$17.40/lb. The cost of cocoa to chocolate manufacturers will therefore range from EC$11.65/lb to EC$17.40/lb, depending on whether they buy directly from GCA handlers or via traders.
- In addition, traders add value of EC$15 to cocoa that is sold to chocolatiers for a price ranging from EC$26.65/lb to EC$32.40/lb.
- Finally, consumers pay approximately EC$112/ lb of chocolate products.
Grenada’s fish exports are competitive in the USA, Canada, European Union, UK, and other Caribbean countries. However, improved transportation services will make Grenada’s fish even more competitive in those markets. Grenada also faces technical barriers to trade in the USA and these can be overcome by means of improved communication with various stakeholders in the air transportation sector. There is also a need to improve communication between the airport authorities in Trinidad and Grenada as it relates to the handling of fresh fish when it arrives in Trinidad, especially if Grenada continues to utilize small Amerijet aircraft.
Figure 4 Fisheries Sub-Sector Value Chain
Since fish is transported primarily by air and most of the aircraft coming to Grenada are passenger aircraft, the quantity of fish that can be transported is necessarily limited and as a result of this, coupled with seasonality issues in production, it is sometimes difficult to meet the required cargo quantity. There is, therefore, a need to identify alternative means of air transport to get fish out of Grenada on demand to major export markets.
Cost of electricity is also a major issue for fish production and Grenada’s cost of electricity is a hindrance to the development of the fish industry. Ice and cold-storage appliances are a major component of the value chain to ensure that fish are properly stored to preserve quality. There is, therefore, a need to implement a policy action to reduce the cost of electricity used in the sub-sector.
As it relates to measures that could be introduced to increase the value retained in Grenada by reducing leakage in the national component of the value chain, three areas of intervention were identified during consultations with stakeholders:
- explore prospects for local enterprises to secure production inputs and services locally;
- explore opportunities to maximize the involvement of local personnel in the operations of foreign-owned firms, and expand the scope for foreign-owned firms to reinvest profits in the national economy.
Regarding the scope for expanding output and export capacity, there is great potential, because the industry can exploit other species for export. However, it is important that other components of the value chain – that is, the fishing fleet, processing plants, and other industry players – grow at the same rate, to mitigate against insufficient cold-storage capacity or insufficient airlift support for fresh fish export. There is, therefore, a need to implement a policy to support the overall growth of the fish value chain in Grenada to increase overall output and export.
Concerning the development dimension of the industry, the sector currently employs approximately 2,500 fishers, with three major companies engaged in exports. There is, therefore, a need to introduce a policy to increase the number of companies engaged in production and exports, thereby increasing the number of employees in the sector.
 Prepared by the Inter-American Institute for Cooperation on Agriculture (IICA) for the Government of Grenada (date unknown).