Caribbean Agrifood Business Session n°13

Opportunities in local and regional markets for Caribbean entrepreneurs

According to a 2023 study by Improving Economies for Stronger Communities (IESC), challenges for intra-regional agricultural trade in the Caribbean include low production, high logistics and transportation costs, and regulatory barriers that impede market access. Additionally, the low volumes of production inhibit economies of scale for agricultural commodities. Burdensome trade facilitation measures and the transport distance relative to the small market size of many Caribbean countries make them undesirable destinations for many shipping companies, which prefer to focus on major regional and global routes. These issues are intensified by policy and institutional barriers to trade in the form of sanitary and phytosanitary standards and technical requirements that limit market access.

Despite the numerous challenges, there are opportunities for Caribbean farmers to supply to high-value markets due to the growth in high-value food demanded by the growing tourism sector. An important element of food value chains in the region is their potential link with tourism and investments in agrifood processing. The growth of tourism in the Caribbean is significant because on average, it contributes 8% to GDP as a direct contribution and about 25% of GDP including indirect contributions. In Small Island States the total impact can be as high as 40% and in larger countries such as Jamaica the total share is as high as 30%. The opportunities for local agrifood chains for increased linkages between local agricultural production and tourism are abundant for supply to hotel and restaurant chains, cruise ships, and the yachting sector. The 2024 FAO/IDB study identified fruit and vegetable preparations or preserves made with vegetables such as onion, tomato, potato, beans, homogenized preparations, nut or shell fruit pastes (walnuts, coconut, etc.), pineapple juice and juice mixes, as products with potential for expansion of bi-regional agrifood trade. Beverages with, and without, alcoholic content are carbonated water with added sugar or another sweetener, malt beer, other fermented beverages, ethyl alcohol, rum and other spirits also present opportunities to expand trade.

In fresh or unprocessed products, vegetables, roots, and tubers show opportunities to expand trade specifically tomatoes, cauliflower, broccoli, chilies and peppers, beans, and cassava. Domestic cassava value chains have been singled out for their importance for bakeries, breweries, and poultry feed.

The prospects for increased global and intra-regional trade are positive considering major demographic changes, income, dietary preferences, and urbanization developments. In this respect, increased levels of agritrade in the Caribbean can help improve the availability and access to food and agricultural products. Moreover, as Caribbean farmers continue to tackle the adverse effects of climate change on agriculture, intra-regional trade can also contribute to food supply and the stability of food security. Caribbean agribusinesses are poised to take advantage of the trade opportunities that global food demand is creating but there is a need for a supporting policy to address existing challenges.