EU Preferential Partners in Search of New Policy Strategies for Agriculture: The Case of Citrus Sector in Trinidad and Tobago



farmers fertilize their groves, the majority of them fertilize haphazardly and
inadequately with resultant low impact on yield.

4. Regular tree management and maintenance activities for high yield and sustained
production. All trees must be cleaned removing birdvine, epiphytes, ants, termites and
dead and decaying branches at the end of harvest and before they begin to flush.

5. Competitiveness of orange production

5.1. Methodology used in this study

This assessment of the competitiveness and comparative advantage of orange production utilized a
methodology that comprised of understanding the production and marketing systems by combining the
information from knowledgeable persons operating in the field (researchers, extension personnel, and
personnel from the processing industry) with information sourced from prior studies of this commodity
system. The major prior study used in this work was completed by staff of the Ministry of Agriculture
comprising Hyacinth-Ash; Davidson; Carter, Yearwood, Baksh, and Clarke, with support from the FAO
consultant Jacque. This study was completed in 2003. Cost of production data and the social prices were
obtained from this 2003 study.

A subsequent aspect of the methodology comprised of data collection and analysis to determine the
competitiveness and comparative advantage of citrus production at the farm gate level. The analysis of
competitiveness and comparative advantage is conducted utilizing the framework of the policy analysis
matrix (PAM) that allows the estimation of indicators of policy effects, competitiveness and comparative
advantage (see Annex I).

5.2. Policy Analysis Matrix and indicators for orange production

The assessment of the competitiveness and comparative advantage of orange production at farm gate
level was undertaken using cost of production data from which was assembled two policy analysis
matrices (PAMs) with a set of derived indicators.

Table 3 provides information on the revenues and costs used in constructing the PAMs and
calculating the measures of policy effects and comparative advantage.

The revenue and cost for orange production were calculated on a per hectare basis. The farm-gate
was used as the location for comparing the market and efficiency prices for the commodity (oranges)
evaluated in this study. For the purposes of this study, the farm-gate is regarded as being located in the
central part of the country and therefore this is reflected in the adjustments to transport charges.

Data is presented in terms of revenue, costs and profits for an average year in the life of the orchards.
It was assumed that trees/orchards have a fifteen-year life of which the first five are considered as an
establishment phase (no yields but investment and operational costs) and the last ten as a productive phase
giving commercial yields and having operational costs. In order to present information on the average
year, costs incurred in the establishment phase are treated as a loan at 10% interest with interest
capitalized during the establishment phase and repayment during the ten-year productive life of the
tree/orchard. Private Revenue is calculated based on the assumption that 50% of the harvest is sold on the
fresh fruit market at a price of TT$1.30 per kg and 50% to the processing plant at a price of TT$0.65 per
kg. This 50/50 split is the market distribution position for the total output in the country. Of course there
are several (in particular small) farms that sell 100% of output on the fresh fruit market.

The social revenue for fresh orange fruits(the output of farms) was calculated as a derived value from
the import of concentrate juice. Fresh orange fruits are not imported into Trinidad and Tobago due to plant
quarantine restrictions. Therefore the social price of fresh oranges was calculated from the CIF (cost
insurance freight) price of concentrate orange juice, which is imported into the country. The price of
oranges was calculated at TT$0.66 per kg at the factory gate given this social calculation of the import
parity price.



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