Agriculture

A Colorful Basket

Agriculture

With its troublesome weather, the future of the country's agricultural sector relies not on cash crops but on producing a diverse basket of goods for the international market.

The Dominican Republic is often referred to as the “breadbasket of the Caribbean,” not necessarily because it farms wheat on a scale like India, Russia, or the US, but because it can produce everything needed on the proverbial standard kitchen table: coffee, sugar, dairy products, eggs, rice, beans, potatoes, bananas, beef, and so on.

As well as being fertile and diverse in its produce, the Dominican Republic is also forced to be rather resilient in the face of regular batterings from the hurricane belt. Although the country enjoys a tropical maritime weather pattern, with little seasonal temperature variation across its rugged highlands and fertile valleys, between June and October the country is subject to severe storms, occasional flooding, and periodic droughts. Strategists have plenty to deal with, with the adverse weather conditions causing soil erosion and deforestation, both requiring sophisticated policies for the promotion of sustainable agriculture, and risk management strategies.
For example, in November 2016, four straight weeks of torrential rain resulted in the death of at least 15 people, as well as damages to agriculture and infrastructure that tallied up a bill of around USD5 billion.Unsurprisingly, these weather patterns have a huge effect on the agricultural sector. The flooding from November’s downpours left nearly USD64.5 million in losses to the banana sector. According to the president of the Dominican Banana Association, Simeón Ramírez, 35% of banana plantations had collapsed from flooding.

However, even despite this hefty bill for the weather, the economy is expected to grow at least 6% despite the flooding damage. This is rather impressive considering Caribbean countries in the last 20 years have spent between 1 and 9% of their GDP dealing with the effects of poor weather.

The government is prioritizing food security and the growth and development of the agricultural sector through sustainable practices, and one such example of that policy being put into schematic action is the EU-funded Banana Accompanying Measures (BAM) program. The scheme is designed to make the banana sector more robust, opening up markets, encouraging entrepreneurialism, and encouraging the adoption of productivity-boosting measures. One of the targets is to increase the number of banana farmers that produce seven tons of bananas per acre from 23 to 80%, and increasing the contribution of non-banana crops to GDP from 8 to 10%. At the moment, the country devotes around 270,000ha to banana production, which is a sizable amount considering that according to a survey in 1998, only 195,000ha of land in the country was being farmed. Today, more than 80% of Dominican bananas are both organic and exported, a position that the country seeks to build upon.

After Cuba, the Dominican Republic is the second-largest Caribbean producer of sugarcane, which is often described as the nation’s most important commercial crop, even though it only made up 0.96% of the value of the country’s exports in 2014 (behind rolled tobacco, which made up 5.3%, bananas 4%, and cocoa beans 2.1%).
Spanish colonizers introduced the first sugarcane plantations in the beginning of the 16th century and one of the benefits of a strong sugarcane-producing heritage is the equally strong, and more famous Dominican product, rum. Unlike rolled tobacco, which is not widely consumed locally, rum is enjoyed both home and away. Exports generate USD140 million worth of sales each year, while the domestic rum industry is estimated to be worth almost USD1 billion. That being said, if capacity is developed, the export figure should rise with the growing demand for rum from Russia and China.

Coffee is another robust commodity, and one for which the world’s thirst shows no sign of abating. The government has supported efforts to strengthen the sector, and in 1H2014 a USD677,000 fund was set up to pay for the regeneration and restoration of aged and neglected plantations. Given the diversity of the country’s microclimates and topography, its 50,000 coffee growers produce coffee all year round. Most coffee producers are small-scale farmers, with 92% of them cultivating the beans in areas smaller than 3ha.

The other commonly cultivated bean is the cocoa bean, and like their coffee cousins, cocoa producers are being pushed to boost yields. In fact, they are expected to triple cocoa yield between 2017 and 2027 as part of a program developed by the UNDP and the National Cocoa Commission. The two have been in partnership since 2013 and have developed a 10-year national action plan. At the moment the country exports around 60,000 tons of cocoa beans per year, roughly 90% of its production. There are roughly 40,000 cocoa farmers, 10,000 of which are organic farmers. The plan, like others, is to encourage farmers to adopt sustainable measures, whilst also dramatically increasing yields and efficient use of resources.

The value chain for cocoa is still very much based outside of the Dominican Republic, with only 6% of national production processed locally. The local market is home to 10 million people, but American and European brands such as The Hershey Company, Mars, and Ferrero already dominate the market. There are some shoots of optimism for local chocolatiers though, with domestic players such as Munne SRL, Cotes Hermanos, Kah Kow, and Xocolat growing at 8% annually, compared to the average 6% annual growth of international brands, according to Euromonitor. The government’s support of the sector is not new, and has been traditionally rather proactive in trying to protect its industry. For example, the Ministry of Agriculture has banned the import of cocoa trees to protect the industry against diseases such as Witch’s Broom, which has never been present in the country.

The government also remains cautious over GMO. For countries that import agricultural products into the Dominican Republic, rising opposition against GMO products could pose a risk. For example, the total value of US imports of bulk agricultural products was worth USD1.1 billion in 2015. It represents an important market for US feed grains, oil seeds, and processed foods, a lot of which contain biotech ingredients. However, the Dominican Republic has passed legislation to limit the amount of GMOs that can be imported into the country and is a signatory of the Cartagena Protocol. However, the legislation is not being enforced across the board. For example, there are no labeling requirements for products made with biotech ingredients. Also, the Dominican Republic’s poultry, swine, and dairy industries already rely heavily on GM feed inputs for livestock.

At the moment, the country does not produce any GMO crops, and there are no plans to do so in the future. In 2014, mid-size local producers from the northern part of the country requested that the government approve the use of transgenic products to challenge the competitive issues posed by large-scale corn imports from the EU and US, but the ministry maintained its position on the matter, prohibiting the import of GMO seeds.

This hardliner mentality in government has greatly benefited the country’s forests, which cover 28% of the nation. It is the second-largest canopy in the Caribbean after Cuba, while Haiti has less than 4% forest, according to data from Mongabay, a forest protection organization. The causes are a combination of soil erosion and the charcoal industry. It is a big industry and tempting for impoverished farmers, despite its illegality.

President Danilo Medina himself has spoken out about the longer-term dangers posed by the charcoal industry, visiting the southwestern province of Elías Piña in August 2016 to launch a project aimed at restoring the forests in the mountainous areas. “Moving forward,” he told the crowds, “anyone who cuts down trees will be imprisoned.” His reforestation program is one of the largest public investments in the area, and more than 90,000 trees will be planted, including coffee and avocado plants, at a cost of more than USD700 million.

Changing preferences within the European market have contracted the region’s traditional exports of sugar, bananas, cocoa, and coffee, and the ministry of agriculture has embarked on a series of programs to encourage farmers to adopt a wider range of crops. Avocado and the papaya, for example, have made their way to the top of the country’s list of export crops. The country produces an average of 239 million papayas per year, a volume that has increased steadily at an average rate of 40% per annum between 2002 and 2014. As for avocados, the country is the world’s third-largest producer.

The next crop of the future is expected to be coconuts. Two decades ago, international demand for the locally grown nut was falling amid medical warnings about it contributing to cholesterol levels. But today, coconut milk is being marketed as a healthier alternative to cow’s milk and is being adopted with enthusiasm by the cross-fit crowd in Europe and the Americas. It is on track to become a USD4-billion industry by 2019, according to Technavio. Industry pioneer, Vita Coco, cracks about 1.6 million nuts a day to satisfy demand, and with stars like Rihanna and Matthew McConaughey among its celebrity sponsors, demand is only expected to rise.

One crop that might become less important is prime tobacco, which is traditionally grown in the Cibao and Yaque valleys, in the north of the country. Piloto Cubano, which is one of the country’s most famous tobacco varieties, was originally imported from Cuba half a century ago, and has since taken on its own, truly world-famous Dominican identity. Alongside Cuba, the Dominican Republic is rated as the world’s best location for growing cigar tobacco. The future of the entire industry faces more speculation following growing anti-tobacco legislation in Europe that is following the footsteps of Australia, which has significantly reduced the number of smokers in the country through regulation and taxation.

As agriculture becomes more internationalized, instead of farmers having to take stock of what the local town or market needs, in the long run farmers will need all the help they can get to access data about international food trends and demands to best capitalize on and sustain the sector. The progress so far in diversifying the agricultural economy has been impressive, and a more collaborative and intelligent approach to policy and strategy can only help further in the long run.

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