Belize Agriculture

Sugar

As the 1990s began, sugar was still the Belizean economy's single largest export earner. Sugar production involved a unique hybrid of agricultural and industrial activity. Sugarcane cultivation, on one hand, and the mechanical chemical transformation of cane into sugar, on the other hand, made for this peculiarity. Both processes needed to be coordinated because of the perishability of the crop.

In Belize small farms in the north produce the bulk of the sugarcane. In the early 1990s, the coordination of the agricultural aspects of sugar production and the organization of cane delivery were the responsibilities of the Cane Farmers' Association. Belize Sugar Industries Limited (BSIL) controlled the industrial segment of the sugar-production process. Overall the Belize Sugar Board exercised coordination of the industry.

Until 1985 Belize had two sugar mills: the Libertad factory in the Corozal District, opened in 1937, and the factory at Tower Hill near Orange Walk Town, opened in 1967. In July 1985, the Libertad factory was closed. By early 1989, Libertad had been reopened and leased to the Jamaican petroleum company Petrojam. Petrojam was to use Libertad for the production of molasses, which was then to be refined in Jamaica into ethanol. Ethanol had duty-free access to the United States market under the CBI arrangement.

The Belizean sugar industry, as elsewhere in the Caribbean, experienced large production and export swings. In 1981 an estimated 30 percent of farmland, formerly used for growing sugarcane, had been abandoned. Yet, at the end of the 1980s, the United States increased its quota for Belize at the expense of Guyana, which was not reaching its allotment, and in early 1990, BSIL reported its largest-ever bulk shipment (17,300 tons of raw sugar) to Canada.

Citrus

Citrus production, mainly oranges and grapefruit, occurs predominantly in Belize's Stann Creek District. The citrus trade began in the 1920s, but became significant only in the 1980s, when Belizean-produced citrus concentrate became exempt from United States tariff duties under the terms of the CBI. Exports of fresh citrus fruit to the United States were restricted because of infestation of the Mediterranean fruit fly. Citrus, much like sugar, underwent sharp price and production fluctuations, although overall export receipts from citrus concentrate markedly increased during the 1980s because of high prices.

In the early 1990s, two processing companies controlled citrus production. Founded by a Jamaican family, the Citrus Company of Belize had been controlled since 1984 by the Trinidad Citrus Association. Nestlé, the Swiss multinational, owned Belize Food Products, the second processor, until it was sold to a local consortium in 1990. Both processing plants were located near Dangriga on the Caribbean coast.

The future of citrus was uncertain. In 1990 only half of planted citrus hectarage was in production. There were indications that production could double within five years. There were worries, however, about the effect of competition from Mexico or Brazil through preferential access allowed to them via the proposed North American Free Trade Agreement or the EAI.

Bananas

Commercial cultivation of bananas began in the late nineteenth century, when United States and British investors first established plantations. Although the banana trade between British Honduras and New Orleans at first seemed promising, commerce was wiped out in the 1920s by an outbreak of the Panama disease. Another attempt to cultivate bananas was begun by the British during the 1960s, but the plantations were destroyed by hurricanes in 1975 and 1978. The subsequent takeover of banana cultivation by the Banana Control Board, a public enterprise, had the effect of further inhibiting production.

By mid-1985, the Banana Control Board had accumulated debts of US$9 million. The government reacted to the plight of the board by selling the 880 hectares under cultivation to the private sector. Five years later, banana production had almost tripled, and the cultivated area had increased to more than 2,400 hectares. The Banana Control Board was reorganized and retained the responsibility for marketing and research. In 1991 responsibility for the board was passed to the Banana Growers' Association.

Britain was the almost exclusive importer of Belizean bananas. Marketing of exports was handled by Fyffes International, a British subsidiary of the United States company, United Fruit. The special provisions of the Lomé Convention's Banana Protocol allowed Britain to guarantee artificially high prices for bananas to the beneficiaries of the protocol. These prices were above prices in the United States and Germany. The purpose of this special provision was to protect the central export crop of some of the islands of the Lesser Antilles, members of the Commonwealth of Nations, from ruinous competition from low-cost producers in Latin America.

The preferential access to EEC markets provided by the Lomé Convention was under advisement in 1991 by the EEC in connection with its single-European-market program. It appeared that Belize would be better prepared for a drop in prices than would the islands of the Lesser Antilles, as Belizean producers received far lower prices through the protocol than did their Caribbean neighbors.

New port facilities at Big Creek in southern Stann Creek District were expected to increase banana exports. Until 1990 Belizean bananas had had to go through Puerto Cortés, Honduras, which added to overhead. Fyffes then financed the construction of Big Creek, Belize's only deep-water port. This port was designed to serve as the main shipment point for Belizean bananas.

Between 1989 and 1991, banana production was hampered by cold weather and black sigatoka disease, but production was expected to double in 1992 because of the new port, better disease control, and improved drainage and irrigation systems. The susceptibility of bananas to disease and possible changes in Belize's preferential access to the British market were factors that could limit growth in this sector, however.

Other Crops

Crops other than sugar, citrus, and bananas played a very minor role in the Belizean economy in the early 1990s. Cultivation of nontraditional export crops were encouraged by the CBI as a way of lessening dependence on sugar and banana exports. Trade incentives were offered for nontraditional products, such as tropical fruits or winter fruits and vegetables. This strategy was only moderately successful, however.

Examples of failed attempts at agricultural diversification included AID's sponsorship of the Belize Agri-Business Company, whose purpose was to decrease the dependency of northern farmers on sugarcane by replacing it with cucumbers, okra, and bell peppers for winter export to the United States. The effort failed because of the farmers' reluctance to change and because of poor marketing. In 1987 the failure of Caribe Farm Industries, the most prominent nontraditional agricultural exporter in the country producing a variety of vegetables, added to the growing frustration with the diversification efforts. Difficulties were also experienced with tropical fruits. The Danish-owned Tropical Produce Company (TPC) had a 570-hectare mango farm in the Monkey River area of the Toledo District. Its produce was grown for the United States market, as well as for European importers, with whom TPC held a ten-year contract. But shipments were erratic because of Mediterranean fruit fly quarantines. For instance, from 1987 to 1990, there were no mango exports from the TPC farm to the United States.

Most production of import-substitution crops resulted from the efforts of two groups, the Maya and the Mennonites. Small farmers, primarily of Mayan descent, grew corn and beans in sparsely populated areas for their own consumption. The immigrant Mennonite community bought 40,000 hectares of forested land along the Hondo River in 1959, constructed a road to Orange Walk, and soon created a thriving business based on dairy products, vegetables, beans, and poultry. Yet, overall production swung widely over the years, closely following price subsidies. The Belize Marketing Board, which supervised production of import-substitution crops, was scheduled to function exclusively as a price stabilization agency by the end of 1992.