Limited Resource Countries and Agricultural Development: A Methodology Used for the Caribbean

Abstract

The primary objective of this study was to determine the optimal patterns of production, resource use and trade flows which would maximize agriculture's contribution to economic development in the smaller Caribbean islands. It is also aimed at outlining an appropriate model for development planning and the policy options consistent with these plans.

Lacking any commercially exploitable resources or the infrastructure necessary for the establishment of a substantial industrial sector, it is hypothesized that the best strategy for improving living standards and productivity of resources in the near future is through improvements in the agricultural sector. Economic development must therefore stem initially from advances made in the agricultural sector both from expansion of production and more importantly, from the minimization of the social costs of resources used. Over time, this will allow resources to be shifted out of the agricultural sector to finance expansion of the industrial sector.

A linear programming model using farm level data was developed to analyze the effects of various production, marketing, and resource supply possibilities on the levels of resource use and productivity in the small-farm agricultural sector.

The results of the model show that using no additional resources, agricultural output can be effectively increased to substantially reduce food imports under existing technology and agronomic practices. However, the attainment of the fullest agricultural potential would require the removal of such institutional impediments as an inefficient marketing system and inefficient distribution of farm inputs.

One implication of the results is the apparent comparative advantage of farms in the 5 to 10 acreage group, suggesting that this may be the optimal farm size for the small farm sector. This, however, requires further investigation given the limitations of this study in terms of model formulation, data and underlying assumptions.

Despite the suggestion from the results that both the surplus value and physical production can be increased substantially by reallocation of resources to more profitable activities, the risks of such reallocation may limit the feasibility of these plans. Nevertheless, the alleviation of the institutional bottlenecks would significantly decrease these risks, particularly those related to marketing and prices.

Consistency and commitment on the part of the government along with appropriate agricultural strategies are required for the successful implementation of the programs emanating from this research. Extension programs must be designed to provide farmers with the technical and agronomic information required to achieve the goals implicit in development. Overall dedication must remain the key to any sustained efforts at economic growth and development.