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

The orchard modeled in this study uses a spacing of 18ft. x 18ft. which is equivalent to 130 plants per
acre. However at the planting stage 150 plants are required per acre to cater for plants that die. 1 box of
fruit weighs 40 kg. National Average Yield is 1.5 boxes per tree; Returns per box is $26 (at the factory)
which is equivalent to $0.65 per kg; It is assumed that 50% of production is sold to the factory and the
other 50% is sold on the fresh fruit market at double the factory price; Transport cost from roadway to
factory/market is $3.00 per box

Table 3. Revenue and Cost of Production Data (TT$ per Hectare) Used in Constructing the
PAM for Orange Production in T&T

The two PAMs (Table 4) differ in that the first considers the full cost of orange production while the
second considers the scenario of production that does not take account of the costs of establishment.
Table 5 provides some indicators derived from the two PAMs. It was expected that differences between
these two scenarios would help to explain observations of declining production, hectarage under
cultivation and increasing age of trees.

The results indicate that orange production is not competitive (profitable) when full costs are
considered (-$2,141 private profit is realised). However, production is competitive when establishment
costs are excluded (+ $5,981 private profit is achieved). This suggests that farmers are acting rationally by
not planting new grooves and instead simply managing and harvesting existing trees.

The NPC of 142 suggests that current policies affecting the output market (orange fruits) favour
producers, since they obtain a price on the output that is 42% higher than what would prevail in a free
trade scenario. The EPC greater than 1 (1.62 for full costs and 1.48 for exclusion of establishment costs)
indicates that the combined effect of policies in the output and the tradable input markets substantially
protect farmers (i.e., by 62% and 48% respectively on value added). The PSE greater than zero (42% for
full cost and 27% for exclusion of establishment costs) indicates that trade and domestic policies on net
contribute positively (42% and 27% respectively) to farm incomes. The negative social profits and DRC
of 2.47 for full cost production indicates that orange production lacks comparative advantage and

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