A COMPETITIVENESS STUDY OF FOUR RICE PRODUCTION SYSTEMS IN TRINIDAD AND TOBAGO

Denny Seecharan and Andrew Eliel Jacque

No 36948, 26th West Indies Agricultural Economics Conference, July 2006, San Juan, Puerto Rico from Caribbean Agro-Economic Society

Abstract: Rice imports into Trinidad and Tobago in 2005 represented approximately 95% of domestic demand. Local production has been declining since reaching a peak of 21,000 tonnes in 1992. Present production is 3,500 tonnes. Rice is produced under a variety of production systems and on farms of varying sizes, productivity and quality of output. This paper examines the competitiveness of four production systems used in Trinidad and Tobago, viz.: the transplanting system (ST), the broadcast seeded system (SB)(both being small farms and highly labour intensive), the partially mechanized system of medium sized farms (MM) and a fully mechanized large farm utilizing aerial technology in the production system (CRP). The methodology involved the collection of data on revenue and cost of production and analysis using the framework of the policy analysis matrix, which allowed estimation of the indicators of policy effects, competitiveness and comparative advantage. A scenario analysis of the MM system was done using improved farm outputs. Results of the analysis indicated that the labour intensive, small farm systems are not internationally competitive, unlike the mechanized systems of the medium and large farms. None of the four systems showed comparative advantage. All the systems had Nominal Protection Coefficient (NPC) values of 1.75 – 1.79, indicating that farmers derived positive protection from government policies of guaranteed pricing for rice paddy. The ST, SB MM and CRP systems had Effective Protection Coefficient (EPC) values of 2.38, 2.73, 4.56 and 3.68, respectively, also indicating heavy support to output prices and tradable inputs such as fertilizers and pesticides. The Producer Subsidy Equivalent (PSE) values were positive for all systems indicating net transfers to farmers. Both small-farm production systems had Domestic Resource Coefficient (DRC) values of around 4.5, whereas, the MM and CRP values were around 2.5 indicating higher levels of efficiency on larger farms. A scenario analysis of the MM system using improved outputs showed improvements to competitiveness and comparative advantage. To attain comparative advantage in the four production systems and the one scenario will require further improvements in technology, productivity and quality of paddy. The small farms had negative private profitability and prevailing conditions are unattractive for the continued existence of these farms.

Keywords: Agribusiness; Agricultural and Food Policy; Agricultural Finance; Demand and Price Analysis; Farm Management (search for similar items in EconPapers)
Pages: 14
Date: 2007-05
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Persistent link: https://EconPapers.repec.org/RePEc:ags:cars06:36948

DOI: 10.22004/ag.econ.36948

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