The Barbados Agricultural Society (BAS) is keeping a close watch on rising geopolitical tensions in the Middle East, warning that any disruption to global supply chains could sharply increase the cost of feed, fertilisers and other essential agricultural inputs.
But the farmers body is holding out hope that government intervention would cushion any sharp increases.
Chief executive officer James Paul said on Tuesday that while agriculture remains stable for now, it is vulnerable to global disruptions, particularly given Barbados’ heavy reliance on imported inputs.
“We import a lot of the inputs for agricultural production, be it livestock or crop production,” Paul told Barbados TODAY, pointing to feed, fertilisers and pesticides as key areas of concern.
Any increase in the cost of these inputs would have a direct impact on farmers and could eventually be passed on to consumers, he said.
Roughly one third of the world’s seaborne fertiliser trade – about 16 million tonnes a year – moves through the Strait of Hormuz, a key chokepoint between the Persian Gulf and the Gulf of Oman. Iran has maintained a tight stranglehold on the channel, attacking tankers and freighters.
While acknowledging that the state’s ability to intervene may be limited, the BAS chief nonetheless expressed hope for government action to drive down prices.
“What we are saying is that government, where possible, should cushion the impact, because the truth is we think that there could be some cushion that can be provided,” he said
Paul argued that agriculture should be prioritised in any response, given its importance to national food security.
“To the extent that they can, I think that the agricultural sector should be given first preference, especially because of its importance in terms of food security.”
He noted that while farmers have not yet reported major cost pressures, the situation remains fluid and could change rapidly.
“We have to be on the alert, because it is a situation where things will change in a moment,” Paul said. “The system can change almost instantly, so you’ve got to be aware and start to do something about it.”
The BAS head said the best-case scenario would be minimal impact on prices but warned that prolonged conflict and damage to infrastructure abroad could disrupt supply chains and lead to higher costs locally.
“That in itself might mean that, yes, there could be some impact in terms of prices.”
Paul pointed to previous global shocks that significantly affected the sector, noting that supply chain disruptions during the COVID-19 pandemic and the Russia-Ukraine conflict drove up local feed prices and increased production costs for farmers.
Those increases placed pressure on livestock producers, with some scaling back operations while others passed on higher costs, contributing to rising food prices locally.
In response, the government intervened in 2021 with $4m in price support for poultry and livestock farmers after Pinnacle Feeds signalled price increases of up to 26 per cent.
Further pressure emerged in October 2022, when Pinnacle Feeds indicated plans to increase prices by as much as 21 per cent because of rising grain costs, prompting a $2m government subsidy to stabilise the sector.
These interventions played a critical role in maintaining stability and competitiveness within the industry, Paul said.
“I really think that there are times when things as these happen, governments have to stabilise industries,” he said. “Certainly it helped to stave off an increase in price, which was necessary, and of course it helped to keep the local agriculture sector competitive.”
He added that any future intervention must be carefully managed to ensure that public funds are used effectively while protecting the sector from external shocks.
“You’re trying to ensure that you protect the local agricultural sector from what is happening within the international environment.”
As global uncertainty continues, Paul said the BAS would continue to monitor developments while preparing for potential impacts.
“We’re hoping that those prices don’t escalate to the point where they have to go up too much,” he said.
When contacted, Jonothon Hart, managing director of Roberts Manufacturing, the parent company of Pinnacle Feeds, declined to comment.
(SZB)
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