Agricultural policies

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Suriname’s agriculture booms

August 28, 2013

The WTO has published a Trade Policy Review (TPR) for Suriname, reporting that the countrys agricultural production increased in real value terms by 36% over the period 2006 to 2010. The WTO regularly reviews the trade policy of its member states, and these reports provide a valuable source of information not only on explicitly trade-related laws and regulations, but also on the broader determinants of trade, including levels of domestic production and the many macro-economic policies that have an impact on trade flows (such as the exchange rate).

Agriculture when expressed as a share of Surinames GDP has fallen from 14% in the 1990s to only 4% in 2010, primarily because the minerals and oil sectors have grown faster. However, despite its small contribution to GDP, agriculture in Suriname (as in many other ACP states) retains a greater importance than these aggregate figures would suggest because of its contribution to employment. It employs about 11,000 people, and most output (apart from bananas) is produced on small farms.

Despite growth in production since 2006, Suriname remains a net agricultural importer. The WTO report argues that there is great potential for agriculture to expand, with the government making this a central plank of its agricultural policy. According to the governments submission to the WTO TPR process, the government of Suriname has developed a policy of converting Suriname into a major food producer and supplier of the Caribbean. However, at present only about 120,000 ha of the 1.5 million ha that is suitable for cultivation is being utilised, and expanding production will require not only that the area under cultivation be extended, but also that deficiencies in agricultural support services be addressed. The latter, according to the WTO review, include poor services for research and development, plant/animal health and agricultural information, as well as weak infrastructure and an outdated tenure system [that] acts as a disincentive to investment.

One key trade policy issue arising from the review is that currently almost all of the countrys agricultural exports depend upon trade preferences. Rice and bananas account for nearly 80% of total exports of agricultural products, almost all of which are destined for the EU market. However, a hopeful sign is that the trend for both the value and quantity of exports for rice and bananas has been upwards in recent years, despite the erosion of the margin of preference for both products.

Import tariffs, meanwhile, continue to protect domestic agricultural production. The average applied MFN tariff for agricultural goods is 19.5% (considerably higher than for non-agricultural products), but varies widely between items many are duty-free, but some processed foods attract tariffs of 50%.