therefore would be unable to compete against fresh fruit imports (when all costs included). However, the
positive profitability and DRC of 0.57 (for orange production that does not include the costs of
establishment) suggests that the impact of imports may exaggerate the trend towards simply harvesting
trees until death.
Table 4. Policy Analysis Matrix for orange production (value in TT$)
PAM- Full Costs PAM -- Establishment Costs Excluded
|
Revenue |
Tradable |
Non-Tradable |
Profits |
Revenue |
Tradable |
Non-Tradable |
Profits | ||
|
Private Prices |
11,564 |
3,664 |
_______10,042 |
(2,141) |
11,564 |
1,627 |
__________3,956 |
5,981 | |
|
Social Prices |
8,162 |
3,271 |
_______11,832 |
(6,941) |
8,162 |
1,432 |
___________3,863 |
2,868 | |
|
Divergences |
3,402 |
393 |
(1,791) |
4,800 |
3,402 |
196 |
______________93 |
3,113 |
Source: Hyacinth-Ash et al (2003).
Note: since orange fruits are not imported into T&T, world price was obtained by using the adjusted converted price
for orange juice imported from Belize.
Table 5.______Indicators of Policy Effects and Comparative Advantage for Oranges (% or TT$)
|
Indicators |
PAM -Full Costs |
PAM - Establishment Costs Excluded |
|
Nominal Protection Coefficient (NPC) |
1.42 |
1.42 |
|
Effective Protection Coefficient (EPC) |
1.62 |
1.48 |
|
Private Profits |
-$2,141 |
$5,981 |
|
Producer Subsidy Equivalent (PSE) |
0.42 |
0.27 |
|
Domestic Resource Cost (DRC) |
____________2.42_________ |
___________________0.57___________________ |
Source: Hyacinth-Ash et al (2003)
Note: since orange fruits are not imported into T&T, world price was obtained by using the adjusted converted price
for orange juice imported from Belize.
6. Conclusions and recommendations
The existing policy regime provides producers with restrictions on the importation of fresh fruits and
juice products and subsidies given in the establishment phase of the crop. Even under such favourable
policy regimes production and hectarage under cultivation is declining. This study has identified that
farmers are acting rationally since under the current conditions it is not profitable to establish new grooves
(requiring significant investments and a 5-year delay on returns). Profitability is achieved by managing
and harvesting existing trees.
The results suggest that orange production will further decline and disappear if the existing trade-
related protection and subsidies are reduced or removed. On the contrary, the recommendations for
building a competitive citrus sector would include:
• Reinforcing support to farmers to reduce costs in the establishment phase of the crop and
encourage planting of new grooves. This may be accomplished with enhanced subsidies and
concessionary financing.
• Improving productivity to enable higher levels of profitability per hectare and thereby
higher levels of earnings for farmers. This requires significant input from the research, extension and
plant protection services and more effective husbandry and management techniques, farmer support
services and resolutions to praedial larceny and pest and disease constraints. Increased yields also will